Sprott Bearish on Canadian Banks

[Jack]

-Eric Sprott, the investor whose flagship $900 million fund has beaten 89 percent of Canadian rivals since 2003, said he’s betting against domestic bank shares because he expects loan losses to soar as the global economy heads into a depression. -“There are so many job cuts and output cutbacks it’s shocking,” Sprott said yesterday in an interview. “That’s not a recession, that’s a depression. I look at the data points and they just scream at me that we are off the cliff.”
-The 64-year-old Sprott, whose Toronto-based firm Sprott Inc.http://http://www.bloomberg.com/apps/quote?ticker=SII:CN managed C$5.6 billion ($4.6 billion) as of Sept. 30, said he’s been selling short shares of the country’s six biggest lenders for four months.

-“We are shorting the Canadian banks,” Sprott said in his Toronto office. “Look at their assets: Subprime, credit cards, asset-backed commercial paper, there is hardly one asset class that hasn’t gone down 10 percent. The equity is skinny.”

-“I don’t believe the Canadian banks are in that much better shape” than U.S. or European banks, he said. “We’ve just been oblivious to what’s going on in the world.”

http://www.bloomberg.com/apps/news?pid=206...mp;refer=canada

 

[Thomas Beyer]

and Jack bearish on ..


ANYTHING ..

What are you bullish or optimistic about, Jack ?

 

[housingrental]

I`ll go against Jack for this one
Canadian banks - 70% higher 4 years from now? I`d hope more likely than lower?

 

[mcgregok]

ishare XEN (financials) definately looks bearish on the 5 and 10 year charts long term . Won`t bet the farm on the banks going long.

 

[Jack]

QUOTE What are you bullish or optimistic about, Jack ?

I`m not sure that there`s much to be bullish about with today`s economy and real estate market. Only those who are able to fool themselves by spinning things so far to the positive have anything to be excited about.

Buying opportunity? Maybe. But I thought last winter was our buying opportunity, because "things will be picking up around spring time again. `Take Action` while the deals are still out there!" Remember those sentiments?

Fact is, there`s no liquidity in the marketplace, and consumer confidence is at dangerously low levels. This is not a good combination; think deflation. Think consumers not wanting to part with their cash, so producers are forced to lower prices, which also lowers wages and causes layoffs, and still product isn`t moving, etc. If this was a recession, no big deal. A recession is a perfectly normal function of the economic cycle. Alas, this is a lot worse. This is the worst crisis since the `30s. And the scary thing is that we haven`t even really felt much of it yet!

Tell me what there is to be bullish about!

 

[mcgregok]

QUOTE (Jack @ Dec 20 2008, 05:46 PM) I`m not sure that there`s much to be bullish

Tell me what there is to be bullish about!


People are litteraly rolling in the money shorting the market. 10-15% dividends being paid. Oil at $25 per barrle ho,ho, ho mary christmas with dividends going through the roof.

 

[Thomas Beyer]

QUOTE (Jack @ Dec 20 2008, 05:46 PM) I`m not sure that there`s much to be bullish about with today`s economy and real estate market. ...
Isn`t there more to life than RE or the economy to be optimistic / bullish about ?

Your health perhaps ? Your studies ? Your friends ? Your youthfulnes ? Your energy level ? Your lack of cancer ? Your family ? Is nothing optimistic / positive in your life, Jack ?

lowest point of consumer confidence = lowest point of the stock or real estate market = point of lowest risk = buying opportunity !

highest point of consumer optimism (say spring / summer 2007) = highest point in stock or real estate market = point of highest risk = selling opportunity !

 

[EdRenkema]

QUOTE (thomasbeyer2000 @ Dec 20 2008, 09:04 PM) Isn`t there more to life than RE or the economy to be optimistic / bullish about ?

Well said Thomas and just what I was thinking prior to reading this post.

I`m in a tough spot right now but have been way worse off (89/90 year turnover).

I`ve participated in many endurance and combat sports and when one feels oneself faltering, readjust the pace, draw on reserves, and strategize.

There are incredible opportunities right now and if they were readily apparent everyone would be implementing them.

 

[GarthChapman]

QUOTE (EdRenkema @ Dec 21 2008, 01:43 PM) I`ve participated in many endurance and combat sports and when one feels oneself faltering, readjust the pace, draw on reserves, and strategize.

Great advice Ed - especially at this time of year, when many of us are taking stock of where we are and where we go from here. Your advice is also effective when we are doing well as we often tend to get ahead of ourselves - in both scenarios.

 

[Jack]

QUOTE Isn`t there more to life than RE or the economy to be optimistic / bullish about ?

Of course, but I`m a REIN member because of these two things (real estate, economics), so when I`m here, I`ll try and focus on these things.

I don`t think anyone particularly cares about the great things that are in my life right now! And there are a lot of great things, as there is for everyone, given that we live in Canada.

 

[Thomas Beyer]

QUOTE (Jack @ Dec 21 2008, 03:51 PM) Of course, but I`m a REIN member because of these two things (real estate, economics), so when I`m here, I`ll try and focus on these things.

I don`t think anyone particularly cares about the great things that are in my life right now! And there are a lot of great things, as there is for everyone, given that we live in Canada.
Such as ? People actually do care, Jack !! (yes, you may find this hard to believe with your overly negative view .. but ) most REIN members have a generally caring / "let me help you" / "let me learn about your issues" attitude !!