Men in Tights

Sep 21, 2021 | Mark Ryan


Happy election day.


At the final whistle of my first official soccer game, the goaltender on my own team must have felt threatened by the new kid. He stormed over, unprovoked, and tried to bump me to the ground, announcing: “I knocked the wind out a guy once!”

Interesting. My sister beat me up every day, for which I’m forever grateful. She unwittingly kept me sparred, honed, short-fused. This meant the thing with the goalie was… brief.


Coach pulled me off him and said we should settle it with a footrace. The Gentlemen’s Code. But Sir-coach-a lot was the goalie’s dad, and at “Go!” he grabbed the back of my jersey, giving not-a-real-boy a 25-yard head-start. The gap was too much to make up, and coach had the audacity to fist-pump the false win – all while making flirty-eyes at my mom. I should have thwacked him right there. But I was 10.


Which reminds me of the Canadian election. I want so badly to blame the PM, but I’ve seen this sort of ugly from all sides over the years. Tight election? Let’s bash the banks! Yeah, punish them. Raise their taxes. Handcuff’m.


In October 2009 – as the world was emerging from the GFC (Great Financial Crisis), our nation was proudly boasting a survey from the World Economic Forum, which determined: “Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia.” Unlike many other western nations, we didn’t have a single bank failure during the crisis, no sub-prime scandal, no bailout, and no senior executives absconding with the cash. More than our national psyche, this core strength benefitted every Canadian family who might have otherwise been dragged along with the brutal credit tightness that followed elsewhere – they called it a “lost decade” in the states.


We shone again during last year’s covid setback. And on June 30 this year, after more than a year with restrictions on our dividend increases, despite strong profits, bank regulators took the uber-cautious step to delay the removal of dividend restrictions. Regulators (the OFSI) said: “We judge the level of financial uncertainty as diminishing, but not to a level where returning (increased dividends)… is prudent. So, we’ll just monitor that uncertainty and act accordingly.”


It’s as if – after weathering another crisis, the bank regulators stacked up their carefully-earned profits on Canada’s kitchen table, looked it over, sighed, and then took the extra-uber-super-duper careful step of leaving it there for a rainy-day – then the PM swooped into the kitchen and said: “Oh hi, I’ll take that!” They’re paying Canadians with bank shareholder profits, and even named it the “Canada Recovery Dividend.” My tummy hurts.


So… Did we banks do something naughty since the great financial crisis when we were celebrated as the best in the world? No.


Are bank shareholders uniformly some sort of elite class, sipping tea in Cottage Country lording over their underlings? No. Bilking bank dividends is a tax on nearly every Canadian with savings -- whose mutual fund, RSP, or pension fund is almost certainly seeded with stacks of bank shares.


I know what you’re up to -- that whole fighting for the underdog thing. I could even see you in tights (I feel like maybe I have, but I’ve supressed the memory). But, good sir, you are not that righteous archer of Sherwood fame. You see, our man Robin Hood was a tax rebel. And that makes you Prince John… In tights… Without a bow… Just a cheesey, cheshire smirk.


Take note: This year global markets have increasingly punished Chinese stocks as the communist regime there wrestles back control over things with Maoist beligerence. When the coach thinks it’s about him, the whole game loses.




Germany: A change of tack? – Europe’s largest economy may be poised for a shift in its political leadership, with broad implications beyond the country’s borders for European Union policies including fiscal integration and economic regulations. We look at the potential impacts on financial markets of various coalition scenarios.


The silver lining in September’s U.S. stock market weakness: The seasonally weak September should come as no surprise to investors, and we point out that the weakness typically gives way to the calendar’s most attractive window of returns.


Regional highlights: Canada’s labor market continued to recover in August; UK inflation accelerates ahead of consensus; Regulatory overhang on Macau casinos.


More here: Global Insight Weekly


Have a good week!