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alex yesikov

The 10 Banks Which Pose the Greatest Systemic Risk - Seeking Alpha - 1 views

seekingalpha.com/...ose-the-greatest-systemic-risk

Systemic Risk USA Banks Top 10 Future

shared by alex yesikov on 30 May 11 - No Cached
  • cently described the process that NYU uses to generate their results: The first step that Engle and colleagues propose is to calculate what they call the Marginal Expected Shortfall (MES) associated with a given financial institution. This is an estimate, based on recent dynamic variances and correlations of observed stock prices, of how much the stock valuation of a given institution would be expected to fall today if the overall market were to decline by more than 2%. This is essentially a time-varying tail-event beta, details of whose estimation can be found here.
Chris Li

U.S. will be Canada's top export market in 2040 - The Globe and Mail - 1 views

www.theglobeandmail.com/...article2044537

Trade USA Canada Export

shared by Chris Li on 03 Jun 11 - No Cached
  • ed. The United States accounted for 75 per cent of total exports last year, down from 85
  • The United States accounted for 75 per cent of total exports last year, down from 85 per cent in the mid-1990s.
  • United States will still be our dominant merchandise export destination in 2040
  • ...2 more annotations...
  • “Despite the rapid growth in emerging economies, the United States remains a large and wealthy market that is right next door to Canada, whereas emerging markets are a significant distance away,”
  • the U.S. is also Canada’s leading source of foreign direct investment, or FDI. In 2010, the stock of U.S. investment here was $306-billion.
Dmitri Tkachenko

Surprise: Low interest rates seen sticking around - The Globe and Mail - 0 views

www.theglobeandmail.com/...article2032075

Low Interest Rates Bonds Financial Industry Inflation Stock Market

shared by Dmitri Tkachenko on 25 May 11 - No Cached
  • Dmitri Tkachenko on 25 May 11
     
    "Interest rates have recently being going somewhere unexpected: down. With the United States government bumping up against its debt ceiling, inflation ticking upward, and a growing debt crisis in Europe, most expected interest rates to be increasing.If so, it will mean pain for savers, but good news for borrowers .A drop in interest rates is equivalent to a sale on the price of money, and corporations are already rushing to take advantage of the easy lending conditions, even if they're in no immediate need of funds. Mortgage rates have fallen, too - good news for homeowners looking to refinance. But lower rates have not turned out so well for some of the market's savviest players, including Bill Gross, the founder of Pimco, the world's biggest bond fund. Earlier this year, he sold his U.S. Treasuries, because he thought interest rates were poised to rocket higher, which would drive down prices of bonds. Oil has been trading consistently around the $100-a-barrel level, thereby lifting inflation, another bond-market negative. Investors are getting nervous and growing more willing to buy super-safe government bonds."
naheekim

TheSpec - Average Canadian family $100,000 in the red - 0 views

www.thespec.com/...dian-family-100-000-in-the-red

consumer debt mortgage debt Personal loan household debt

shared by naheekim on 31 May 11 - No Cached
  • The average Canadian family has joined the $100,000 club, but it’s one they most likely don’t want to belong to.
  • Average Canadian household debt has hit $100,879. That’s close to twice as much as we owed 20 years ago, according to a study by the Vanier Institute for the Family
  • At the same time, the rate at which Canadians save has dropped
  • ...7 more annotations...
  • In 2010, that savings rate has dropped to 4.2 percent — about $2,500 per household.
  • the recession has shaken out the labour market. “We’re experiencing a gain in jobs, but people are now in jobs that paid less than what they did.
  • Mortgages account for about two-thirds of the $100,879 owed by the average household, or about $63,126 per household, with 55 per cent holding mortgages and 45 per cent mortgage-free. The other third is consumer debt, which includes credit cards and personal loans.
  • “The debt-to-income ratio is concerning … but recently, (mortgage) credit demand has slowed and consumer credit demand has slowed considerably as well. It’s now at less than 5 per cent, which is half of what we saw in the previous five years on average.”
  • Personal debt consolidation and restructuring expert Jim Ferguson said the most common reason people are getting into overbearing debt is the ease of availability of credit
  • Canadian debt levels, relative to income, are still meaningfully below peak U.S. levels, but that a further sizable increase would be worrisome.
  • “Household financial assets are also growing fast due to the strong stock market, which dampen concerns about the debt, but assets can vanish more quickly than debts.”
Benjamin Gray

Age of outperformance ends for Canadian banks - The Globe and Mail - 0 views

www.theglobeandmail.com/...article2034967

leverage

shared by Benjamin Gray on 03 Jun 11 - No Cached
  • Between 1990 and 2010, the Canadian prime rate declined by more than 10 percentage points, while inflation fell significantly. The result was a near-perfect environment for financial assets, pushing values for stocks and bonds ever higher.
  • Empowered by the regulator, the Canadian banks have leveraged their massive size and distribution powers to dominate virtually all the financial services sector.
  • The combined outcome was an explosion in trading and market-sensitive revenues, which grew by more than 15 per cent a year for two decades, and today are approximately 20 per cent of gross revenues. Although the process is not quite complete, the banks are also well on their way to dominating the domestic mutual fund business.
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