RBC Calls Out Canadian Banking Nightmare and TD, BMO etc.

Sep 18, 2024 #Toronto #Economy #Crash

RBC Calls Out Canadian Banking Nightmare. The CEO called it an oligopoly! Get 3 months FREE from my VPN provider Express VPN: https://www.expressvpn.com/marketmania..

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TRANSCRIPT 

the RBC CEO has come out and said the

0:04

Canadian banking system is an oligarchy

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and we've also got another bank that is

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severely stressed right now and has just

0:11

been fined again so let's get into what

0:14

is going on here so Canada's Banks Under

0:16

Pressure to Growing competition in

0:19

ruthless oligopoly RBC chief executive

0:23

say so very interesting and just in case

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you don't know what that means even I

0:28

had to look it up it's a market struct

0:30

with a small number of firms none of

0:32

which can keep others from having

0:34

significant influence so obviously very

0:37

similar to an oligarchy so anyway very

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interesting stuff Canada's banks are

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facing a flurry of competition from each

0:45

other a suddenly ruthless oligopoly that

0:49

is putting unexpected pressure on profit

0:51

margins says Royal Bank obviously that

0:53

doesn't mean good things when you

0:55

consider the amount of loans being

0:57

written off now are at highs going back

1:00

decades especially at Banks like bimo

1:02

you've got loan loss Provisions that

1:04

they're beefing up but a miles away from

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the loans that are being lost and will

1:09

be lost and then you've got them

1:11

obviously all competing with each other

1:13

for less and less people in the mortgage

1:16

Market because the amount of lending

1:18

that's going on is at one of the lowest

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levels in the past couple of decades

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because the demand is just not there and

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we're seeing that in the housing market

1:27

as we discussed on Monday too so the new

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Dynamic is most obvious in the mortgage

1:32

Market where banks are jockeying to keep

1:34

or increase their share of customers

1:37

some of whom are renewing home loans and

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looking for the lowest interest rate to

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ease the shock from rising payments but

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it is also playing out in a race gather

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deposits which are typically a cheap

1:48

base of funding to make those loans but

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are costing Banks more to attract so

1:53

this is interesting the way that the

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globe has actually framed The Narrative

1:58

around this because this s sounds more

2:00

like distressed Banks than it does about

2:03

them just competing with each other and

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it just being like competition

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essentially you know it's just the

2:08

competition they just want more market

2:10

share especially if they're desperate

2:12

for those deposits and obviously we've

2:14

seen the repo Market volumes which have

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gone Sky High over the past couple of

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months and when you put two and two

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together it doesn't take a genius to

2:23

work out that they need that cash so why

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do they need that cash infusion in terms

2:29

of deposits in terms of going into the

2:32

retail Market it's because something may

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be going on at these Banks or one of

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these Banks or multiple of these Banks

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we just don't know banks are very very

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good at hiding things so they talk about

2:45

Canada as being an oligopoly it is a

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ruthless oligopoly at the end ruthlessly

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competitive Mr McKay said very

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interesting that he used that word I'm

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sure he's a big fan of the

2:58

channel I'm just joking obviously and

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then the financial post is coming out

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here and saying the Bank of Canada could

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cut rates to

3:07

2.5% by next year economists are saying

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so that's very interesting I mean I

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think it could even be more than that

3:15

next year because the economy is in such

3:17

dire straight I don't see them keeping

3:20

rates high for much longer and I think

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you're going to see the US drastically

3:24

reducing rates soon as well so anyway

3:27

the Bank of Canada cut interest rates

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for third consecutive Time by 25 basis

3:32

points obviously this was weeks ago

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leaving its Benchmark lending rate at

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4.25% and then they're saying about a

3:39

cautious approach it's interesting to

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think about where rates are going to be

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next year really it's hard to say I mean

3:46

looking at the yield curve they're going

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to be a lot lower than they are right

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now and then RBC plans to sit out Bank

3:54

consolidation wave in the US McKay says

3:57

but I want to show you exactly why I

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think is the root cause that they're

4:02

doing that and it's not what they're

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saying here with Royal Bank of Canada

4:05

Chief Executive Dave McKay has aist of

4:08

reasons why he won't be shopping for a

4:10

bank in the US anytime soon and I'll

4:12

give you those reasons right now TD was

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just slapped again last week with a 28

4:19

million us fine for consumer credit

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reports so bank provided inaccurate

4:24

information about customers credit to

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reporting agencies so TD Bank is not

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looking in a good position right now

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obviously they've just been ordered to

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pay that and recently also they were hit

4:37

with a $2.6 billion money laundering

4:41

probe so TD Bank is just getting

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absolutely shacked right now by us

4:48

Regulators so is it any wonder that

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you've got RBC coming in and saying hey

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we're going to sit this one out I I

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think it's more to do with that than

4:58

anything else and obviously if TD's got

5:01

money laundering issues RBC is going to

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have money laundering issues times two

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because they're even bigger than TD Bank

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so very interesting and then going on to

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more things to do with the economy

5:12

tourism takes a hit in the Okanagan

5:14

region it's been very slow and this

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isn't just a thing that's happening in

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the Okanagan region it's happening

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across Canada and this comes off the

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back of guys remember earlier this year

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the mainstream media was saying how the

5:27

majority of Canadians plan to stay close

5:30

to home this year obviously this was

5:32

released in May after some surveys so

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the 2024 summer travel Outlook by deoe

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found that 74% of those surveyed plan to

5:41

stay in Canada close to their home

5:43

region on their summer road trip many

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are also looking at summer road trip as

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a means to save on expenses the survey

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also found that 35% said they won't be

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traveling at all because they can't

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afford it or they would rather use their

5:58

money for other purposes so again that's

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interesting because then you take a look

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at what's going on domestically and

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actually tourism has gone down

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domestically so that says the economy

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has got a lot worse than since they did

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that survey which I'm guessing around

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April March time is going to be when it

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was done so the Okanagan is a tourist

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hot spot but this year has many in the

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hospitality industry in Colona BC asking

6:26

where were all the tourists this season

6:29

recession

6:30

recession recession it's been down it's

6:33

definitely a soft season in terms of

6:36

Tourism said Andre Thomas who owns and

6:38

operates Memphis Blues Barbecue House

6:41

Thomas said business has been down by

6:43

around 15% so obviously contraction

6:46

there going on not a good sign obviously

6:48

shows you what's going on in the economy

6:51

and this is not just something that

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we're seeing in Canada you're also

6:55

seeing this happen in the tourist

6:57

hotpots in Mexico which is very very

6:59

interesting so Port of AA Mexico August

7:03

has marked a concerning turning point

7:05

for Mexico's major tourist destinations

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showing the largest decline in

7:10

international passenger traffic this

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year according to the latest report from

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the sustainable tourism Advanced

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Research Center God that's a mouthful

7:19

International passenger traffic at Key

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airports including Cancun Port Vata and

7:24

Los Cabos has contracted by

7:27

13.6% compared to the same month in 2023

7:30

this decline signals a break in the

7:33

growth Trend that has characterized the

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early part of this year so obviously

7:37

that is showing more of a global economy

7:40

problem obviously the number one tourism

7:43

visitor in Mexico is US tourists and

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that's again showing you how the US

7:48

economy is breaking down and obviously

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the US economy breaking down as we've SE

7:53

with the yield curve uninverted is not

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going to lead to better things in the

7:57

economy in Canada so so if you were

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hoping the economy in Canada was going

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to improve well unfortunately I've got

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bad news for you it looks like it's

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going to get a lot worse before it gets

8:09

better and obviously with this whole

8:11

thing that we've had going with tourism

8:13

this is discretional spending people

8:15

haven't got the money which shows

8:17

distress really among the consumers

8:19

we're seeing that with defaults credit

8:21

card debt and many other alarming

8:24

statistics that we've been through like

8:25

the Equifax report that we went through

8:28

last week and now I just want want to

8:29

show you what David Rosenberg said about

8:32

the economy here because very

8:33

interesting it's what we've been saying

8:35

the whole time anyway the Canadian

8:37

economy is on very shaky Foundation as

8:40

absent the population Boom the economy

8:42

would be contract at a minus 2.4% annual

8:47

rate so if you just subtract the

8:49

population growth in Canada the economy

8:52

would be deep into recession territory

8:55

right now and it is in reality in

8:58

recession territory that short-term

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growth is not going to amount to

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anything more than fluffing up the

9:04

numbers to make the Canadian economy

9:05

look like it's in recession so by the

9:07

time it goes into a technical recession

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we will be in a depression so it's not

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very good at all when you see all these

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things going on and also when you're

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seeing the bank stress go on at places

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like TD Bank and places like bimo where

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you've also got stuff going on at other

9:24

Banks you've also got distress that is

9:26

going on clearly in the repo Market

9:29

right now and that does not mean good

9:32

things it means the banking system is

9:34

extremely stressed and obviously that's

9:36

a given when you consider the consumers

9:39

are totally screwed right now businesses

9:42

are screwed and that means you're going

9:44

to see more layoffs increasing downward

9:46

pressure on the economy and it's not

9:48

going to lead to good things

9:49

unfortunately guys so anyway if you've

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