CM has lots of downside leftU.S. banks are now trading at less than 1.5X book value virtually across the board. This phenomena only occurred in the past year. For most of the past 25 years, U.S. and Cdn banks trade at roughly the same P/BV. 15 years ago U.S. banks P/BV were somewhat higher and 3 years ago Cdn banks were higher. But the gap never much more than 0.5X differential points.
Harder to make money shorting U.S. banks becaus they are so close to book value. A recovery (in 12-24 months) could see a major rebound back above 2.0X BV.
But CM's direct CDO exposure is just as bad as MER and worse than JPM, BAC, etc. CM's BV is $33 - so trading at huge P/BV. Many U.S. banks have taken writedowns, though more to come. BUT CM in danger of mammoth $5B writedown in coming months. Even with normal profits BV could fall below $30 by summer. At 2.5X book (should not be higher) that's a share price of $75. But a negative push downward can get shares below $70....and it wil still have a P/BV way higehr than any U.S. bank.