I moved to Moncton, NB, where a house can be had for under $200,000.
Did Canadian banks receive a secret bailout?
Actually no. My understanding is that the government purchased some mortgages from the banks. Ultimately, the government got paid 100% or more on the dollar.
except TD and RBC have the highest cet1 ratios.
maybe some, but I'd say most know how big they are but still think they know something the big boys don't and thus try to outsmart the market (but fail).Lol.
So much I could say, so much I wouldn’t even be sure how to articulate/explain. And I have to assume since leaving the industry, there have been changes.
3.7B in shorts
/chuckle. That’s pocket change.
The book I ran, at its height, I was short 6B in equites. The 5 schedule A banks, being heavily weighted in the Index, were by far, and I do mean by far, my largest shorts. I forget actual weights, but at a guess, combined, they comprised roughly 10-20% of my short positions. And, in the grand scheme of things I was a gnat, a bit player……And the shorts weren’t bets on market direction.
I can suggest reading up on derivatives and structured products. Things like Swaps, Equity Swaps, Credit derivatives, life derivatives. Indexes and Indexers. And then spend some time looking at the global derivatives markets. Just how freaking, mind boggling eye popping large the notional value is.
And then understand it’s like a massive ball of twine that’s a birds nest. With all players, big and small exposed to each other. If one of our sched As, wobbles just a bit, the dominoes would be…………….
you should also read a book. This one. Largely factual when our industry was still pretty much in its infancy.
When genius failed.
See also
See also
.OTC derivatives statistics at end-June 2022
The notional value of outstanding over-the-counter (OTC) derivatives rose to $632 trillion at end-June 2022, up from $598 trillion at end-2021. This marks a continuation of the moderate upward trend evident since end-2016. The gross market value of outstanding OTC derivatives, summing positive...www.bis.org
No offence guys, to anyone. But Johnny Q public investor……just doesn’t know who your playing against.
Truth.
SVB was a different situation more than 75 percent of its bond portfolio was in the HTM category (held to maturity) and thus didn't need to be marked to market.
Truth.
The dominoes would be catastrophic. Might as well drop a nuclear bomb in the heart of TO and likely the centers of some other major areas.
/edit
Buy the book “when genius failed”. Given a lot of posters here obviously have interest in the markets. For a mere $25 investment it will help hobbyiest (Johnny Q public) get just a wee, superficial idea of who and what you’re playing against. And it should give an idea about the massive birds nest and how all professional players are exposed to one another.
That happened in the 90s. When our industry was in its infancy. Notional values globally were nowhere near 600 trillion…..
And long before many other geniuses thought of new ways, new things.like super computers and bandwidth with direct access to the exchanges and high frequency trading….While Johnny Q is at home on his/her Mac thinking their execution speeds are fast
Anytime, anyone that’s not a player in Capital Markets says, or thinks, or whatever..My simple question is “then why don’t you already own your own private island in the tropics”….
And not even considered” petty cash…might need to add another zero..I think you'll be surprised how easily things can come apart during a recession, trust me, the risk management right now at Canadian banks is not good at all, I think they got too greedy during covid. Mortgages were being given out to a lot of people that shouldn't have, along with car loans. On top of that, other things I can't mention, I think IF there is a recession, you'll see at least one big Canadian bank go down, my money is on TD.
and why don’t you own your own island in the tropics already? And if you know better, why aren’t they paying you big money to do it??? And do you not understand that players can farm that risk out using
richeymay.com
en.m.wikipedia.org
Anytime, anyone that’s not a player in Capital Markets says, or thinks, or whatever..My simple question is “then why don’t you already own your own private island in the tropics”….
Besides high frequency trading, which has those in the business executing trades while Johny Q is still reading the first word of the headline….
There’s volume, liquidity and so very much more. I doubt anyone despite wanting/needing to move a few hundred shares……has ever watched a million dollars disappear in a second….when players are moving tens of thousands of shares of “TD bank”…Been there/done that….
Anywho.
That book is not only a fascinating read. It’s informative….”just saying”
When I first read it. Sometime not long after Y2K. It was recommended to me by a honest to god, financial genius. At the time I’d been in the derivatives world for about 8-10 years. If you know anything about Nikkei put warrants I worked with the people that created them around 1990 or so.
