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Foresight Newsletter

FORESIGHT is a complimentary quarterly newsletter which is written in lay language to help clients understand the investment world.

Our library of past Foresight articles has been moved to our new Investor U website. It contains comprehensive investor information on a variety of topics of interest to TRIVEST customers, as well as links to other sources of information.

Current Issue: Spring 2010

Editorial

The Financial Olympics

The Canadian banks are the leading survivors in the ‘Downhill’ financial competition that has been taking place in the global banking Olympics over the last couple of years. Our banks deserve to step up to the podium to be awarded the Gold Medal for this feat. The rest of the world’s financial institutions are shaking their heads wishing that they had followed the more prudent capital requirements adhered to by the Canadian banks. Undoubtedly, higher regulatory capital requirements for global banks would have provided more of a buffer to absorb financial losses. Global regulators are now proposing stricter capital rules, allowing for a transition period. Expect more ‘new issues’ of global bank shares to be offered to the world’s equity markets to provide more capital.

There have been very few changes to Global financial regulations since the 2008 financial crisis, and in the US, banking lobbyists and Republicans are working hard to block any reforms. But as the snow melts in the East, a reform package no doubt will emerge from the slush. New European Union rules are crystallizing as well to regulate hedge funds and private equity groups. The regulatory agenda is being driven by the G20 Group of leading nations, which should provide more synchronized global rules. Welcome changes are in order that would prevent a repeat of the trillion dollar hi-jinks that greatly benefited a select few and left the cost burden with so many others.

Conference Highlights

Stephanie attended the Annual TD Ameritrade Conference in Orlando during the first week of February. Impressive Canadian speakers included Canada’s General Rick Hillier, former Chief of Defence of the Canadian Forces, Ed Clark, President and CEO of TD Bank, and Don Drummond, Chief Economist, TD Bank. Most noteworthy US speakers were George W. Bush and Bill Clinton (who was hospitalized the following week). The smaller breakout sessions also provided interesting insights.

There was a consensus that the world is emerging from the global recession; the synchronized contraction of world output has given way to a synchronized increase. However, there are still looming concerns. The huge loss in US household wealth will continue to constrain the pace of consumption recovery. The uncertainty as to new banking regulations will keep the financial markets on edge. There is insecurity over the credit-worthiness of sovereign debt, notably Greece’s, and uncertainty as to how the European Union will manage to keep its membership rules intact. The world’s economies still have to face the eventual pullback of stimulus programs.

2010 no doubt will go down in history as the year of putting financial houses in order, from the individual level to the national level. But for now, Canada is just savouring its Gold medals!