Short Cdn Banks

I have been shorting Canadian Banks for three years, and I've been dead wrong! The rationale for my short position has been that interest rates will rise, the housing bubble will implode, mortgages will go sour, and the banks will get killed.

I am not alone in my concerns...see here...

https://www.youtube.com/watch?v=B1WhlQxTVlQ

And here...

https://www.youtube.com/watch?v=OkfpTEVIcM8

Basically, Canadian banks are not setting aside sufficient reserves for loan losses, and are booking that cash as profits instead. According to Eisman, in 2018, 90% of their profits came from NOT booking properly against risk. When they start to book more cash against risk, profits will drop, and share prices will fall.

In "short", this will not end well. 

Note - almost no one agrees with Eisman's thesis...like almost no one would admit there was a housing bubble in the USA in 2007...like almost no one would admit that high tech companies' share prices were overvalued in 1999. 

You get the picture.

I think the trigger for a major share price drop of all bank shares will be more restrictions on foreign buying of Canadian real estate, which has super-charged our housing bubble. 

When this happens, especially nationally, house prices will fall and banks will have to devote more cash to their reserves, forcing them to book less profit. Their shares will drop as a result.

Note that foreign buying restrictions have already started. In Vancouver, where foreign buying has been restricted by way of taxation and other methods, prices have already dropped 4% this year.

The way to play this is HFD on the TSX. It is a double inverse exchange traded fund on Canadian banks.

Do your own due diligence!

Dershowitz Doctrine

Trump's main defences to the charges he faces, both before and after the start of the Impeachment trial, have so far consisted of the following...

1. There was no "quid pro quo".
2. This is a frame-up by the Democrats - a witch hunt. There is no truth to this whatsoever.
3. Trump intended to withhold the cash as he was concerned about corruption, and not as a "quid pro quo".
4. If there was a "quid pro quo", then what he did was not a crime, and because persons can only be impeached for committing crimes, Trump cannot be impeached.

And the latest which appears to have surfaced today from one Republican Senator... 

5. OK, there was a "quid pro quo", but we should let the American people decide Trump's fate in the next election rather than impeach him.

Of course, if the "let's let the American people decide in the next election" defence wins the day, then there is no reason to have an impeachment provision in the US Constitution, as there will always be another election.

Trump's defence lawyer, Alan Dershowitz, introduced a sixth defence this week.

He advised the United States Senate that the American President was within his rights to try to coerce Ukraine to investigate his political opponent, Joe Biden, in order to gain a political advantage that could see him re-elected, if Trump truly thought his re-election would benefit the American people. This is a "mens rea" type of defence - as long as the intent was to get re-elected in the belief that doing so would benefit Americans, anything goes.

On the issue of what would warrant impeachment, Dershowitz though that only if he committed an outright crime, like taking kickbacks from the building of a hotel, could Trump be impeached.

Given that every leader everywhere would assert that their leadership is for the benefit of the people, the Dershowitz Doctrine would leave the President of the United States largely beyond what we know as modern political ethics.  

Let's look at recent attempts at impeachment. 

Would Nixon have been impeachable if he could argue that Watergate was OK because he was trying to get re-elected and that his re-election would benefit the American people? It is at least debatable. The break-in was a crime, but no one has ever proven he knew about it. 

Clinton would have a hard time arguing against his impeachment by outlining how lying about getting fellacio from his staff in the White House was in aid of getting re-elected for the benefit of the American people. However, if he did actually try to explain it, no doubt millions of people would still believe the silver-tongued devil!

The Dershowitz Doctrine (DD) would really make its mark on those things for which the President has discretion.

Certainly, using the portion of the country's treasury that Congress has allowed the President to spend in his own discretion, in order to pay people who will help him get elected, and to punish those who will not is perfectly fine via the Dershowitz Doctrine. 

One is reminded here of Robert Mugabe who starved sections of the country that did not vote for his party by withholding food aid - that could be 100% OK under the DD, if he had simply said this was about getting re-elected for the benefit of the people.

As well, hiring only those who would vote for and support a president, and firing anyone in government employment who did not would also be OK.  

Could Trump arrest political opponents as long as he said it was in aid of his re-election which he truly believed as for the benefit of the American people? Well, he is the chief law enforcement officer in the country, now isn't he, and enforcement is a discretionary activity.

The list goes on...

The Dershowitz Doctrine has not been accepted, but if it were, it would represent a revolution in American public life. 

Unlike what some have written, I do not think that the DD would put the president above the law and effectively make Trump into a monarch. Dershowitz seemed pretty clear that presidents cannot actually break the law, and monarchs are - by definition - above the law, so the DD would not go that far. But in the murky world of "ethics", just about anything would be OK as long as Trump could say that he thought that his re-election was to the benefit of Americans.

Hmmm...do you think Donald Trump would say that his presidency has benefitted America, and that America needs four more years of him???

It is a distinct possibility.

Bolton Bolts! Giuliani Jolts!

OMG! He wrote a book!

Bolton seems determined to tell what he knows about Ukraine-Gate. 

So far, press reports regarding his new book indicate that he has personal knowledge that Trump ordered cash for the defence of Ukraine withheld until an investigation by Ukraine of the Biden's was announced.   

Crime or not, this essentially destroys Trump's defence, which is that his phone call to Zelensky was "perfect" and he did nothing wrong.

About 20 other people have confirming the story of "no investigation, no cash" via their sworn testimony, but Bolton is different. He is a conservatives' Conservative. What he has to say matters, which is why Republicans do NOT want him to testify.  

Bolton clearly puts something above his loyalty to Trump. That "something" may be respect for tradition, the law, and his love of country - things that used to animate every true conservative.

His book may be available to be read into the record in the Senate.  If this is the case, the Republicans may have to call contrary evidence to rebut Bolton, perhaps in the form of testimony from Giuliani.

This Giuliani...

https://www.thedailybeast.com/fox-and-friends-desperately-tries-to-end-rudy-giuliani-interview-repeatedly-fails

I think it is now clear that Trump used his office to try to get a foreign government to investigate a political rival. Given this essentially reality, Trump would have to show that asking for that investigation was legitimate - that the Bidens are corrupt and took massive bribes in Ukraine. 

But no one in the US security or criminal investigation establishment is claiming this. Here is what the New York Times says Biden did in Ukraine...

https://www.nytimes.com/2019/11/10/us/politics/joe-biden-ukraine.html

Trump will not go down without a fight so get ready for the Rudy Giuliani Show!!! 

Giuliani now claims that Biden took $8 Million in bribes in Ukraine. If he can't prove it - and he likely has to prove it in the US Senate - Trump could now be in very big trouble.

Wow....



  

The Problem With A Faux Trial

Here is a brilliant editorial in the Washington Post on the probable outcome and fall-out from the Impeachment "trial".  

https://www.washingtonpost.com/opinions/the-impeachment-evidence-will-catch-up-to-republicans-and-trump--whether-they-ignore-it-or-not/2020/01/24/c06e9246-3ec3-11ea-8872-5df698785a4e_story.html

The essential problem for the Republicans is the simple fact that the guy is guilty, and they know it.

Clinton was charged with lying under oath and obstruction of justice related to trying to hide the fact that he had sex with a subordinate. What Trump has obviously done makes Clinton's crimes look petty in comparison. 

Trump should be removed from office.

For the record, I am not rabidly anti-Trump - I thought Clinton should have been removed from office as well.  As guardians of the law, lawyers can't ever lie under oath, and if they are caught doing so, the maximum penalty should be rendered against them. (NB - Clinton was disbarred, and prevented from ever again practising law in Arkansas after the impeachment trial, based on the fact that he lied under oath.)

Presidents like Trump, and Clinton before him, are why the Impeachment Clause exists in the United States Constitution.

Et Tu Fox??

This, on FOX!

https://www.businessinsider.com/fox-news-andrew-napolitano-ample-uncontradicted-evidence-trump-impeachment-2020-1

The only way that any commentator on Fox would be allowed to express a contrary opinion to Trump's standard impeachment line of "this is not a crime"m and he new one "Trump held back the cash because he thought Ukraine was corrupt", is if the people who run Fox are having second thoughts about the man.

And - Shiff's masterful summation of the case against Trump is going viral - he is beating Trump in the world of Social Media, which is a very bad omen for the man.

Trump will still win the Impeachment Trial. But, as noted here previously, he may come out the other side of this so damaged that he cannot win the presidency again - this will separate him from the rest of the corrupt pack of politicians in the USA in the eyes of Americans. and effectively destroy his career. 

Fox and Shiff both played a role in bringing this about in the last 24 hours.


  

REPO!!!

Here is the continuing REPO madness explained...

https://www.fxstreet.com/analysis/its-repo-madness-202001152228

Guys like Harry Dent are always wrong until the aren't, and when they aren't, the world bends and breaks almost exactly as predicted.

Definition of Trial and Farce

Simple definition of "Trial"...

"The purpose of a criminal trial is to shed light on the circumstances surrounding a crime. At the trial, evidence is presented to a judge, or sometimes to a jury, to determine if the accused person committed the crime."

Simple definition of "Farce"...

"...a comic dramatic work using buffoonery and horseplay and typically including crude characterization and ludicrously improbable situations."

There is a cave. You are in it and you cannot leave. The Puppet Showmen are busy in the Senate. Look at the shadows on the wall. Call it the truth. KAG!!

Courtesy: https://faculty.washington.edu/smcohen/320/cave.htm