Today on BNN’s SqueezePlay Kevin O’Leary suggested that the Canadian banks might catch the same “second leg down” disease that the American banks have now. Rather, Kevin suggested he might start to worry about that possibility. He didn’t actually say he thought the possibility was probable right now, just that it had come onto the horizon of possibilities.
Basically, there is NO value in the US banking system right now. The whole function of the TARP funds has been to basically keep the banks in existence. Citigroup and Bank of America haven’t failed yet, so TARP has been a success. It hasn’t created added value for shareholders.
I really hope the Canadian banks don’t “catch the disease.” But why should they, unless they’ve been openly deceiving the public for over 6 months about their balance sheets and investment exposures? I’ve personally witnessed interviews with the heads of TD, Royal, and a representative from Scotiabank basically declaring their safety. So the question seems to be whether these CEOs will turn out to be as honest and knowledgeable as the trusty CEOs to the south.
And what CEO worth his/her position WOULDN’T know what their investment exposure risk is? (Those with MBAs, please jump in here….)
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