7. March 2009 by Dan Walkow, CFA, CMT.

James Kwak wades into the banking crisis on why the discussion isn’t explicit. This a good thread building on my prior post.

Worth a read here.

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7. March 2009 by Dan Walkow, CFA, CMT.

A comment in Barrons todays gives a little perspective!

“While the U.S. has the resources to bail out its financial institutions, the same may not be said for many other governments,” says Jonathan Golub, a former Bear Stearns strategist who now runs his own firm, Golub Market Insights. Belgium’s short-term bank liabilities are roughly 285% of its gross domestic product, while the figure is 260% for Switzerland, 156% for Great Britain and 60% for France and Germany — versus 15% for the U.S.

Credit default swaps (CDS) are a type of insurance on debt securities and the pricing of these swaps builds in a forward looking market view of the risk of default. A piece in Baseline Scenario notes the the price of CDS swaps are back up to mid-October levels.

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7. March 2009 by Dan Walkow, CFA, CMT.

Over the course of the past few weeks many financial publications and analysts have reported on how Canadian Banks are the envy of the banking world with beefed up capital ratios and conservative lending practices.

Have they escaped the market carnage? In relative terms to other banks around the world maybe, but in absolute terms no. The Royal Bank of Canada’s stock price is down almost 52% from May of 2007 closing Friday at $ 29.40.

The question is, despite reasonable valuation metrics and elevated dividend yields at current prices, have we seen the high water mark for earnings this past quarter and moreover are Canadian banks simply lagging the rest of the financial world?

Toronto-Dominion Bank chief executive Ed Clark said Wednesday that while “I’d like to prove myself wrong,” the first quarter would likely be the best for Canadian banks. “In both Canada and the U.S. we see PCLs (provisions for credit losses) going up. I don’t see how they couldn’t be going up,” he said.

Disclosure: I own Royal Bank personally and we own it in client accounts.

Read more here.

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7. March 2009 by Dan Walkow, CFA, CMT.

ETF assets declined in 2008 as markets tanked, but the business ushered about $175 billion through the door last year, while actively run mutual funds saw heavy outflows.

Exchange-Traded Funds continue to grow in popularity versus mutual funds, even in this market environment.

Why? Click here to get the latest.

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