Post by
cupricity on Apr 25, 2023 12:15pm
Market Malaise
I think the market is really focused on the risk of mortgage defaults with raising rates and potentially declining house prices. Of course while the market is supposed to be a forward looking mechanism it generally works in reverse assuming whatever happened will continue to happen that way.
In the case of CWB with western Canadian focus and a large amount of equipment lending the underlying assets are likely less risky than other big banks. RY for example has a lot of Ontario real estate as well as oil patch lending. I think we are close to support for CWB and this is an excellent entry point, especially as I see interest rate drops as early as Q3 23 as the economy buckles under AI driven deflation and 16 year high interest rates.
Comment by
malx1 on Apr 27, 2023 4:41pm
Banks with O&G exposure are benefitting from it. You're right, exposure to overvalued RE has put some banks at greater risk than others. Would not want to be the owner of leveraged downtown office towers right now. Neither would the bank!!
Comment by
bubba9 on May 25, 2023 1:34pm
CMHC and OSFI have been saying for20 years that Canada is in a housing bubble and set to burst . Sure glad I didn't listen to them 20 years ago. Some day, inevitably, they will be right and I can hear them now saying----We told you so----