Canadian bank loan loss provisions | General financial discussion | Discussion forum

Totally agree with the article. Canada has had almost 2 decades since a redistribution of wealth and debt has soared in that time.

Not sure what you mean, Vatox, about distribution of wealth. From what I can see, we've been redistributing it upwards. But maybe that's the problem?

Personally, I don't know whether these folks are right or wrong, but they were singing the same tune a year ago.
https://business.financialpost.com/business/why-perpetual-clouds-around-housing-could-weigh-on-big-banks-second-quarter-results

As I understand it, when you short something, you are betting it will do badly. This, in turn, helps it to do badly. Then you make money off that when your prediction comes true. The more you spread the word and get people to agree with you and to do likewise, the more you will make off it. I'm sure someone will correct me if I'm wrong.

I'm certainly no expert on this, but I seem to recall that this was what happened a couple of years ago with Home Capital (Oaken). I think, but am not sure, that Michael Lewis, who now says he's "involved" with Home Capital, whatever that means, was part of that. I may be misremembering, but his name rings a bell somehow and there was certainly a move afoot to strike fear into investors by shorting HCG. On this very forum, there we was a veritable deluge of unintelligible charts posted heralding HCG's imminent collapse, trying in no uncertain terms to get us to keep our money far far away from HCG's clutches. We were told somebody-or-other was shorting HCG. Was it Lewis?

If it was not him, then it was some similar person who was an American, did not appreciate our markets or our regulatory systems or HCG's business model very well. I believe he lost money in the end and went quietly away when HCG pulled itself up with the help of Buffett, who seems to have clearer vision, and made lots of money by investing, not trying to destroy HCG.

I think I prefer ambulance drivers to ambulance chasers.
Thus, if Buffett yells May Day, then I might be more inclined to listen as he has demonstrated a good understanding of our banking sector.

On the other hand, complacency is never a good attitude in a CEO, and certainly not a bank CEO. It's always a risk, especially if you are blinded by the apparent invincibility of a granite-infused history and a corner suite in a high glassy tower overlooking the lake and pretty much the whole city and beyond.
I've been at meetings in some of those board rooms and the view is indeed so splendid and the chairs so comfortable as to make you think you are living in another world. (No, I never worked for a bank, but sometimes high-placed bank officials hold other meetings there.)
If they are ignoring something important, then that might be significant. But, really, it would be hard to miss. It's not like there has never been a news report expressing concern over our housing market before! And they have batteries of economists and analysts of various sorts to help them out.

When banks do fail, for whatever reason, especially big ones, the unlikely event is often greeted with shouts of "I don't believe it!", "I can't imagine..." etc.

But is that really new, Kidd? Isn't that the way the banking system always operates? Isn't that why we have mandatory reserves and, I think more recently (not sure if it got passed) some provision that preferred shareholders would be on the hook somehow?

The one thing that I can say about the Big Banks that is guardedly favourable is that they have their hooks into all kinds of businesses around the world, so, if one goes slack, the others can potentially keep them going. But I know nothing about the details or the numbers.
I think this is a fundamental problem, that none of us know all the details, and I don't imagine they want us to know, so we won't.

canadian.100, exactly! But along with always voting for ever-increasing spending without tax increases to pay for it, it's also way more easy and fun to blame "big banks", "politicians", "greedy rich capitalists", etc for our voting choices. So please stop spoiling our fun!

Re income distribution, my observation is that the top class is way wealthier than in the past, the middle folks are wealthier (e.g. no-one went to Florida in winter or had a backyard pool in my middle-class neighbourhood when I was a kid), the poor are wealthier too. But it's the politics of envy at work, i.e. if the rich guy has $1 million more and I've got $500K more, well then things are getting worse for me, it's not fair, right?