if one were to be told that a bank has a Tangible Common Equity ratio of under 2%, the logical response would be that said bank is a goner. Yet both Credit Agricole and Deutsche Bank are precisely there (1.41% and 1.92% respectively), and both happen to have total “assets” which amount to roughly the size of their host country GDPs
Read the whole thing. The post is primarily about precarious Canadian banks.
What you should be looking for in this environment is a very prudent bank located in a solvent country. That is the equivalent of finding an unclipped coin during the Kipper- Und Wipperzeit.
READER COMMENTS
david nh
Aug 19 2011 at 9:35am
I’m a bit confused about his data. This reports puts the Canadian bank’s TCE ratios in the 9.5% – 11.4 % range:
http://www.ritceyteam.com/pdf/Canadian%20Banks%20Quarterly%20Overview.pdf
Yancey Ward
Aug 19 2011 at 11:52am
Unicorns?
Peter
Aug 19 2011 at 1:47pm
Tyler Durden, you know, is Brad Pitt’s character in Fight Club.
GIVCO
Aug 19 2011 at 6:43pm
Your advice is good. The governments will soon shovel huge money into the tottering banks, who will use the money to buy up little solvent banks at premium prices.
Kevin H
Aug 19 2011 at 10:03pm
The comments section indicate the data was from 2009
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