本文发表在 rolia.net 枫下论坛Bigger worries than subprime on horizon
John Greenwood, Financial Post
Published: Tuesday, July 29, 2008
Andy Clark/ReutersCanadian banks in Toronto's financial district.
Canadian banks may have escaped the full force of the subprime mortgage storm, but they now face a new and potentially more serious threat from the declining U.S. economy, analysts say.
"What's happening now in Canada is really besides the point," said Michael Goldberg, an analyst at Desjardins Securities. According to Mr. Goldberg, it is only a matter of time before the economic winds that are sending shivers through the U.S. economy make their way north into this county.
The big picture in Canada's largest trading partner is not pretty: Unemployment is moving up, the banks are still mired in their credit woes and consumer confidence is at a 16-year low. Then there's the housing slump. According to figures released Tuesday, the S&P/Case-Shiller home price index slumped in May to its lowest level since the index was created 21 years ago.
"The big question is whether 2009 will be another difficult year or whether it will be a back-to-normal type year," said Mr. Goldberg, adding that the latest numbers "have not been good."
Of major concern is the ongoing contraction in U.S. employment, since in typical downturns it sheds about 2-million jobs.
"If you have that many job losses and you add to that falling house prices, lower equity markets and higher gas prices" then the likelihood of a recession is going to increase.
Since the onset of the subprime crisis last summer the Canadian banks have all taken their lumps -- some more than others. Canadian Imperial Bank of Commerce and Bank of Montreal, the worst hit, are both down more than 25%, though all six have suffered significant declines.
But the deteriorating economy is a greater threat because the banks are directly exposed.
So far the Canadian economy has mostly held up, but the weakness in the U.S. housing market is starting to spread north. As well, commodity prices -- a key factor in Canada's comparatively strong performance last year -- are showing signs of coming back to earth. Add to that the continuing carnage in the manufacturing sector and a worrying picture starts to emerge.
"It's not as bad in Canada as it is in the U.S. but the key thing we will be watching for is credit deterioration," said an analyst who asked not to be named. "The Canadian consumer has so far held up because employment is still strong but as soon as you see that start to weaken, that becomes a concern."
But the bank's business side is beginning to show signs of stress, as corporate clients respond to challenges in the economy by paying down debt and cranking back on their borrowing.
"It's the business metrics that are showing signs of tightening," he said. "The story up to now has been challenging credit markets, but now you're seeing more signs of strain in the banks' core businesses. The ones with the direct exposure to the U.S. through subsidiaries there are the biggest near-term concern."
The current quarter for the banks winds up July 31. Analysts are anticipating that the results, to be released around the end of August, will provide an indication how they are being impacted by the slowing economy.更多精彩文章及讨论，请光临枫下论坛 rolia.net
John Greenwood, Financial Post
Published: Tuesday, July 29, 2008
Andy Clark/ReutersCanadian banks in Toronto's financial district.
Canadian banks may have escaped the full force of the subprime mortgage storm, but they now face a new and potentially more serious threat from the declining U.S. economy, analysts say.
"What's happening now in Canada is really besides the point," said Michael Goldberg, an analyst at Desjardins Securities. According to Mr. Goldberg, it is only a matter of time before the economic winds that are sending shivers through the U.S. economy make their way north into this county.
The big picture in Canada's largest trading partner is not pretty: Unemployment is moving up, the banks are still mired in their credit woes and consumer confidence is at a 16-year low. Then there's the housing slump. According to figures released Tuesday, the S&P/Case-Shiller home price index slumped in May to its lowest level since the index was created 21 years ago.
"The big question is whether 2009 will be another difficult year or whether it will be a back-to-normal type year," said Mr. Goldberg, adding that the latest numbers "have not been good."
Of major concern is the ongoing contraction in U.S. employment, since in typical downturns it sheds about 2-million jobs.
"If you have that many job losses and you add to that falling house prices, lower equity markets and higher gas prices" then the likelihood of a recession is going to increase.
Since the onset of the subprime crisis last summer the Canadian banks have all taken their lumps -- some more than others. Canadian Imperial Bank of Commerce and Bank of Montreal, the worst hit, are both down more than 25%, though all six have suffered significant declines.
But the deteriorating economy is a greater threat because the banks are directly exposed.
So far the Canadian economy has mostly held up, but the weakness in the U.S. housing market is starting to spread north. As well, commodity prices -- a key factor in Canada's comparatively strong performance last year -- are showing signs of coming back to earth. Add to that the continuing carnage in the manufacturing sector and a worrying picture starts to emerge.
"It's not as bad in Canada as it is in the U.S. but the key thing we will be watching for is credit deterioration," said an analyst who asked not to be named. "The Canadian consumer has so far held up because employment is still strong but as soon as you see that start to weaken, that becomes a concern."
But the bank's business side is beginning to show signs of stress, as corporate clients respond to challenges in the economy by paying down debt and cranking back on their borrowing.
"It's the business metrics that are showing signs of tightening," he said. "The story up to now has been challenging credit markets, but now you're seeing more signs of strain in the banks' core businesses. The ones with the direct exposure to the U.S. through subsidiaries there are the biggest near-term concern."
The current quarter for the banks winds up July 31. Analysts are anticipating that the results, to be released around the end of August, will provide an indication how they are being impacted by the slowing economy.更多精彩文章及讨论，请光临枫下论坛 rolia.net