Some people don’t realize that marketing for financial newsletters is at least as much about finding successful pitches that will catch your interest as it is about touting the latest and greatest stocks picked by a particular newsletter pundit. They often come up with a new ad to sell their newsletter when they’ve discovered an exciting new pick with a good story behind it …
… but at least as often, they simply continue re-sending the same marketing letter for years regardless of whether the stocks being teased are still the favorite pick of the newsletter editor (and in a few rare cases, we’ve even seen stocks teased in heavy promotional barrages that readers have told me aren’t even in the newsletter’s portfolio anymore). The goal is to get your attention and get you to sign up for a newsletter… so when they find a spiel that works, most of these publishers will milk it until it’s dry.
Today is a case in point — Michael Lombardi runs several newsletters, and for this Investing with Michael letter he’s been promoting his “New Swiss Bank Account” idea very consistently since he first ran the ads (or at least, since our network first detected them). That was in January, 2012, almost three years ago … and I continue to see them every few months.
Including today. And yes, the ad is virtually the same as it was in 2012. He’s still implying that this investment is on par with a “Swiss bank account,” with higher yields, and is backed by precious metals and other natural resources, and that’s still quite an exaggeration in my book. So for this teachable moment we’re just re-running that article.
And frankly, it’s still pretty accurate — the yields on these investments are similar to what they were then, mostly a bit lower now since they’ve gone up in price more than the dividend has been raised… and they’ve been pretty boring. It’s still remotely possible that he might have been teasing the preferred shares of these banks instead of the regular common equity, but I don’t think so — partly because there’s little chance for capital appreciation with preferreds and he teases potential for substantial gains beyond the yield they provide.
Over the last three years they’ve been relatively steady investments. Their dividends have not grown dramatically, and the stocks have not performed spectacularly well (they’re mostly up between 20-30%, ignoring the dividend, in the three years since this article first appeared, which is dramatically worse than the 60-80% returns you would have gotten from a basket of US bank stocks or from the S&P 500 during that time). And they still trade largely as a group, though not in complete lockstep.
But yes, the pitch is the same — want to see if you find it interesting?
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What follows has not been edited, updated or revised since it appeared on January 23, 2012. We’ve kept the original comments appended in case you find them interesting.
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The latest pitch from Michael Lombardi is for one of those “limited to our best customers” newsletters, something he calls Investing with Michael, which seems to mostly be a safety-focused large cap stock picking service. If that’s true then a thousand bucks a year is a bit steep, but certainly not unheard of — and that’s after they have, of course, “slashed” the price for you, their very most special-est customer.
Lombardi says that he’s an “investor, not a trader,” and that this service will supply at least six conservative investment picks per year… along with two special reports.
The report that’s catching the eye of my readers lately is called The New Swiss Bank Account: How Canadian Safe Haven Investments Pay 5.1% Every Year on Top of 44% Returns — so what’s he talking about?
Well, he starts off with a long diatribe about how Canada is the new Switzerland — with a stronger bankings system, better regulations, a pro-business government, great natural resources wealth to back their currency, no ties to the weak euro, etc. etc.
Here’s a taste from the ad:
“Yet, there’s a tiny group of investors who are not worried about the euro, dollar or any other crisis.
“That’s because they have their money safely tucked in the ‘New Swiss Bank Accounts.’ At this moment, they are enjoying safety, privacy, and security, along with Treasury-busting yields of 5% per annum and returns on capital exceeding 44%.
“That’s why …
“The Guardian Declares These Investments ‘The Envy of the World’
“‘This is the last safe country on Earth,’ I explained to a business associate on one of my recent trips to Europe. ‘Nobody is talking about this place, but you won’t find a safer place for your money—not even in Switzerland.'”
More? You asked for it!
“You also get privacy. This nation ranks nearly the same as Switzerland in banking privacy, according to the Heritage Foundation.
“And security. Though relatively tiny in population—with a smaller population than Spain and Poland—you won’t find a more stable and secure nation on the planet. It has a long history of pro-business regimes, from colonialism to independence.
“Not only are these ‘bank accounts’ backed by gold and silver resources, but they are also backed by oil and deposits, timberland, and mineral wealth. You can feel safe knowing your money is backed by precious metals and other valuable commodities.”
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He then goes on to “let the cat out of the bag” in case you hadn’t guessed, and clarify that yes, this “New Swiss Bank Account” is something to do with the Canadian financial system. Here’s some more:
“… unlike bank accounts in Switzerland—which are complicated and cumbersome to open—opening a New Swiss Bank Account is easy.
“You put your money into a special ‘bank account’ based in Canada. It’s 100% legal, and can be accomplished using your normal brokerage account (including your online brokerage). It takes only 30 minutes, and you can open a New Swiss Bank Account starting with as little as $49.
“You don’t even have to be Canadian citizen.
“I should also be clear that opening a New Swiss Bank Account is NOT opening a regular bank account at a Canadian bank, such as a savings account. It’s NOT buying a guaranteed investment certificate or certificate of deposit from a Canadian bank. It’s also NOT buying Canadian Treasury bonds.
“These fixed income investments might be safe, but they only pay measly rates of 1.2% to 2.4%.
“Nowhere near the 4% to 5% you’d get from a New Swiss Bank Account. And you’d lose out on the benefits that you get with the New Swiss Bank Account, such as the opportunity to have your investment increase in value. Because, unlike a regular bank account, your New Swiss Bank Account can increase in value, just like a stock….
“New Swiss Bank Accounts are a very special kind of financial instrument, fully backed by Canadian banks, paying yields exceeding 4%.”
So which investments are being teased here? One last clue:
“The top two New Swiss Bank Account companies in Canada today (in terms of biggest current yields). One of these companies will pay you 4.4% and another pays you 5.1%, guaranteed for the next 12 months. I’ll also tell you why I expect these payments to increase in the coming years.”
Well, we toss all that into the mighty, mighty Thinkolator and, considering those clues, have to accept the answer that comes out the other end: these “New Swiss Bank Accounts” are … common shares of Canadian banks.
Not as sexy as we thought, eh? Still, hard to argue with the performance the big Canadian banks have shown since the financial crisis (and, frankly, during the crisis — at least compared to US and many other global banks). And the big five Canadian banks do generally have solid yields, good reputations, and prospects for dividend growth. So what are the “top two” from Lombardi?
Well, it’s pretty clear that he’s picking the top two yielders among the big “safe” banks, so that would be Bank of Montreal (BMO) and Canadian Imperial Bank (CM), both of which yield about 4.7% right now, though 4.4% and 5.1% would have been possible effective yields in recent months (Lombardi’s ads don’t necessarily stick with “up to the minute” numbers in their teasers).
Those are also the two Canadian banks that did worst in the financial crisis, though most of the group trade pretty closely together, and they’ve slightly outpaced some of their peers in the last couple years. You can find lots of articles extolling the virtue of Canadian bank stocks for safety and dividend growth, and for a generally less risky play on the North American financial sector that doesn’t come under all of the same regulatory, housing, and bailout-connected upheaval that causes shares of big US banks to be so volatile.
There are still risks, of course — plenty of folks think Canada is headed for a housing slump, perhaps even a crash (though sentiment seems to be that the overpriced, crash-threatened segments of Canadian housing are localized in a few hot areas), and Canadian banks, though not as global as US banks, certainly are susceptible to the same kinds of macro forces that are making most bankers quake in their boots these days … even if Canada’s economy is more resilient than many. That resilience, of course, does have a bit of cyclicality to it — Canada has both a big manufacturing sector (including lots of auto manufacturing) and a large reliance on oil exports to the U.S. and commodity exports, particularly lumber and agricultural commodities, to the rest of the world. So if the world gets sicker, we might expect Canadian exports to suffer, though they’re not necessarily as directly tied to the health of one economy as Australia is to China, for example.
The other banks? The ones you’ll hear mentioned (and which trade in the US) are all large, here they are along with their ticker, their dividend, and their trailing PE ratio and current price/book ratio, all according to Yahoo Finance:
- Bank of Montreal (BMO) 4.7% PE:12 P/B:1.5
- Imperial Bank (CM) 4.7% PE:11 P/B:2.1
- Bank of Nova Scotia (BNS) 3.8% PE:12 P/B:2.1
- Toronto-Dominion Bank (TD) 3.4% PE:12.5 P/B:1.6
- Royal Bank of Canada (RY) 4% PE:17 P/B:2.1
(FYI, number six on the list, in terms of size, would be National Bank of Canada, which is far smaller with a market cap near $12 billion and isn’t listed in the US).
BMO and CM, in addition to being the two highest-yielding, are also the smallest (market caps between $30-40 billion, so not really “small”). Each of the banks has different books of business across different provinces to some degree, and the big Toronto standard-bearers (TD and RY) seem to be priced at a little bit of a premium, as you might expect. The variations in Price/book value stand out to me and make BMO and TD look a bit more appealing (TD has also had the best dividend growth among the Canadian banks in recent years, averaging around 8% annually), though it’s hard to delve into the distinctions between these banks without better understanding their balance sheets and geographic exposure … and I’m not going to do that, because digging into bank balance sheets makes my brain heat up so much that my hair starts to hurt. Suffice to say that Lombardi seems to be teasing some big Canadian bank stocks as the equivalent of the “New Swiss Bank Account” … and that most of the laudatory quotes he uses (like that one from The Guardian) are from 2009, when Canadian banks started to really pants the US financials in the rebound.
So what do you think? Do you think these big Canadian banks are still hot picks a couple years after they proved optimistic investors right following the financial crisis? If so, would you also go for the two highest yielders and single out CM and BMO, or do you have other favorites? Let us know with a comment below.
I’d say too late to jump in that train… Unless you want to get slaughtered…
Some insight on the almighty canadian banks:
http://www.zerohedge.com/news/next-domino-fall-canada
Buy the stock of these new Swiss banks, the Canadian ones, but don’t open an account in one if you are hoping to escape the eagle eye of the IRS. Both the Royal bank where I bank and my accountant who does my personal income taxes for both the U.S. and Canada has warned that the Canadian banks share information with Canada Revenue and my accountant has warned me that Canada Revenue and the IRS share information.
Gumshoe, thanks as always for your excellent website. Lombardi could also be pitching Canadian bank preferred shares. I’m not sure what Lombardi is talking about when he says it only takes 30 minutes and $49 – even in Canada, we get faster execution and better prices than that.
Anyhow, I think you are right on target with respect to housing here, as we have valuations that exceed US valuations at the peak of your bubble, and more debt as well. The strong Canadian dollar is also problematic for the economy, and a correction there makes investing in Canada more risky for foreign money (not to mention the tax inefficiency).
Thanks again, love your website!
TEMPLE
Gummy. Are you certain he is pitching stocks and not some other bank investment. I no of no stocks that guarantee 4.7 and 5.1 GAURANTEED. Denny
If one is looking for secure deposits with higher interest rates, I can suggest a number of Indian banks which offer in the region of 8.5% per annum. To date, Indian banks have never defaulted and are very safe, quite unlike US/EU banks. If one is willing to take some risk, banks in Urkaine offer 18% (yep, 18%!) on local curency. Converting hard currency to UAH and back again is not a problem. In the last 2 odd years they too have made good on their promises.
How would one go about depositing in Indian banks? Are there any tax implications?
Thanks,
Raja
I’d also like to learn which Indian banks to invest in AND how to invest.
Please send that info to me at lp115lp@yahoo.com – subject: ‘Investing w/Indian Banks’
Thanks; Larry
would like more information on these banks.
Hi Bharat: Can you please give me the info? Which Bank? How to go about it? Tax/ currency change implications? Thanks Suresh
I would like additional information of banking options. (India, Ukraine, etc.)
How does this impact currency exchange, and what plat form do you use to trade?
If u are of indian origin, go to any indian bank’s website – ICICI Bank (icicibank.com), Citibank, State Bank of India — and you wills e ethe details in the NRI (Non-resident Inia) section – 9.5% tax free,
What is the Symbol of the New swiss bank account
There are 5 banks each with their own Symbols, see above:
TD, BNS, CM, BMO, RY
The symbol is “KAKA”
I am NOT happy with Lombardi’s service.. They never answer my questions and He puts on two faces.. One of doom and gloom and one of Buy now!!!
I have the same problem with Lombardi”s he gives the info and asked me to contact him immediately. I did and no one came back to me. I’ve sent another email asking what I paid for but no answer! This is very disturbing!
When I watch the videos it is always – pay upfront!!!!!! tsk!
I bought a decent amount of BMO in March 2009 so I’ve done quite well. I have always liked Canadian investments and about 50% of my portfolio is invested in Canadian companies, mostly on the Toronto exch. BMO hit a peak at 66.50 USD on 4/27/11. As it’s at 60.60 right now, I wouldn’t be a buyer till it dropped somewhere near it’s recent low around 52.50 but, then again, I enjoy bottoms.
Travis, I don’t usually have much use for these “secret plays of the day” but, darn if they aren’t fun to read. Thanks
I watch the HGTV real estate series “Property Virgins” and “House Hunters International.” In my opinion, the cost of homes in Toronto and Montreal is absurd. I don’t know how or why young people are paying $600,000 plus for hideous, old semi-detached houses with three bedrooms, 1 bath, and open plan kitchen, dining and livingroom. These houses are 1,600 to 2,000 sq. ft. I have been watching these programs because I have wanted to invest in Candian banks, and I like to see how prices are changing in Europe, since many Europeans have most of their assets in their houses. (The rest of their money is taxed to death.) I truly am concernd about property bubbles in Canada from what I’ve seen on TV, so I am not investing at the moment.
Housing markets are very localized. You pay a premium to live down town. You pay a premium to live near a subway or commuter line, so you can avoid traffic. Once you get into the rural areas, prices are less inflated. Some commutable towns are expanding.
Big cities like Toronto have an over population problem. People live there regardless the price. They pay for the life of the city 🙂 . Compare Winnipeg it has always been the same only rising slowly.
Everyone says Canadian banks are healthy but the way they stay making record profits year after year is by nickel and dimeing us to death. That saying should be changed to loonie and twonieying us to death.Don’t forget we are linked at the hip to the U.S. I think that Canada is the land of milk and honey and there are better income investments than the banks up here.
if you put your IRA in Fidelity You will not pay any canadian tax.
Such as?
Several Canadian stocks look inviting due to their high dividend yields; however, none of the prognosticators ever factor in the 25% – 35% foreign withholding tax that dramatically reduces the actual realized yield. This is especially true if you hold these stocks in an IRA where you cannot take advantage of the foreign tax credit on your tax return. Depending on your tax bracket, you may do better with US stocks generating less yield.
…Hey Abbbbbooooaaaat!!! Duh the tax was 15%. It still is 15% as far I know on any Canadian shares held in US accounts that are not tax sheltered. As explained below with the exception of CEFs almost all with holdings have ended in US IRA accounts for the rest of this year. So CURRENTLY AGGZF has a 6.9% yield or a 5.87 effective yield, VNRCF has a 6.2% yield which is a 5.25 effective yield, and ACAZF has a 7.5% yield which is 6.38% effective yield. But then as far as I know the foreign tax credit has not yet been eliminated so you get to claim those with holdings on a US tax return. BUT..if you were mugging up on some of these Canadian strong dividend themed stocks back in the market swoons of Oct and even the mini correction of mid Dec which were coincident with a .96 to .975 Loonie , then your distributions are now 3% -4% higher than what they were against the cost basis. In the early Aug and late Oct market swoons ATGFF/ALA.TO was available at a steep discount like many other US stocks. With a near ~US$24.50 handle. The yield now is only 4.7% because it has rallied to ~US$29, the yield against a $24.50 cost basis is 5.8%. In six months the Commodities currency has rallied back to 40% of the gap from it’s high – Low of 1.06 & .949 respectively. Why did it go to 1.06 in 2011? why would it not eventually go to 1.10 in the next year or two? Why is the REAL up 9.5% YTD? Brent is near $120 and that is what provides more than 50% of the feed stocks to US and Canadian East coast refineries, WTI is pushing up against $105, Soybeans have moved from $11 in Dec to now a $12.75/BSL handle, & gold is up 10% YTD. It looks to me like ZIRP now revealed lately as ZIRP everlasting is working. It is not all peaches and cream MCQPF has gotten hit hard by management over stepping too aggressively on acquisitions that were fixer uppers requiring additional capital to the acquisition costs, coupled with a large increase in a pipeline TAX (there you go those crazies with their taxes to pay for their spending) /royalty increase for their Nat gas supply to their principal co-gen plant. MCQPF now priced for a 50 to 60% dividend cut but management is still being foolish and paying out 14%. So there is a special situation I am watch listing as when the dividend cut when announced will probably drive the shares down 15 to 20% from the current value. The stock will tank even as management makes a move to a dividend policy that is earned and sustainable. Starting out in DEc ’09 with 25 shares ~US$1000 of GG I have round tripped that stock three times for gains of +US$1000 and built the position to 150 shares. That position is currently ahead by 5.5%. I am happy to get those dividends which most Precious metals ETFs do not pay out. Even delighted as they are small but then quite substantial distributions as measured against ZIRP everlasting. I do not mind paying the Canadian tax and then claiming the tax credit. I am happy when some shares go away at +$54, mostly for LT gains which are tax advantaged. Basically GG pays a 1.1% yield which is equivalent to a 5 yr CD rate. Except!!! In the US CD interest is taxed as interest, at 100% and my GG distributions are qualified dividends. So which country has the unreasonable taxes? You could sign up to be one of the schills in the back of the room at one of those Vacation points program sales seminars that promise free gifts for attending that turn out to be worthless. The guy in the back who grouses about his time share and exaggerates the fees, costs and values just enough to make him plausible. The presenter claiming to be a baptist minister from South Carolina who does the presentations on a part time basis. He talks about his wife and children and how they have enjoyed near free cruises . If you believe all of what you hear and most of what you see then you may be panicked when 50% discounts are offered to the first 3 couples to sign up. Panicked when two couples almost immediately yell bingo. The urgency to buy that last remaining discount not sucked up by the two schill couples also in the room, is almost irresistible. A young attractive sales associate sitting down with you for an interview claiming to be a student at a local State college but who has no college ID to show. Unless you believe nothing of what you hear and only half of what you see you could be just another Doyle Lonnegan. Grifters have to be so nice and appealing, just like Henry Gondorff. Depending on the reality vs your perceptions you just might do better in some Canadian stocks with higher yields. You might do better escaping rather than participating in financial repression and the policies of ZIRP everlasting harvesting the savers, the elderly CD holders, prudent homeowners, Pension & insurance company trust funds, and local property tax payers for the unintended Medium and LT consequences of ZIRP everlasting that are driving up the cost of every thing except labor. Driving down real wages in an attempt to put a floor under US housing prices so as to save the TBTF banks from having to write off their HELOC and other second subordinated mortgage loans in the $100s of billions, seems counter intuitive. And of course it is as zirp is a zero sum game. Elderly forced into 20% commission reverse mortgages to provide 4.3% jumbo mortgage loans to the well heeled. Insurance cost going up on houses by +20% a year as the Insurance companies receive little or no returns on their “safe” reserves. Heating oil and A/C costs escalating, Property taxes still rising even as town employee staffs are cut, the costs of fuel, insurance, pension contributions rising to meet underfunding , the falling home values causing the tax rates to rise to generate enough revenue to pay for the trimmed services. Non-public pension plans are cutting pensions by adopting high ten calculations in lieu of high 3-5 years . ZIRP no solution for the Demographics that fundamentally will not support higher housing prices in most parts of the US. ZIRP has not resuscitated housing in the last 5 years so now we are converting to ZIRP everlasting until it does work? Housing was a bubble that still deflates as the ancillary costs of home ownership beyond a low mortgage rate that most have insufficient incomes or job histories to qualify for, continue to dramatically rise.
Well being a resident of Northern Alberta and working in the oilpatch there are so many great investments that are making people rich. Check out Sunshine oilsands, they have over 1 million acres of heavy crude and will be using steam assisted gravity drainage. They go public in a few weeks. Or check out Canadian ticker symbol XEG , its a great ETF with major oil players, good growth and dividends.
Do you know which banks have the largest percentage of home mortgages and the greatest exposure to the euro? I really appreciate your column. Thanks.
Nothing is marked?
I bought BMO a few months ago on the recommendation of Stephen Leeb’s The Complete Investor. It has essentially treaded water since then: bought at $59.56, now at $60.17. At least it’s not down.
As per my other posts we can see that BNS and RY are spanking BMO on the 6 month chart. RY and BNS up nearly 10% in that period and BMO up only “aboot” 4%. BNS with the 3.9% and RY with the 4.1% yields respectively lagging a bit behind BMO’s 4.8% yield, but BNS and RY with the way outperformance on total return. I have a “wish” limit order for RY . You never know when we will get another flash crash, or market low as achieved last Oct.
The market is judging BAC as insolvent as based on their med term bonds selling below par and yielding over 6% . My favorite bank stock is the INTEREST paying HPCCP which is pending the ex date. I have sold80% of my position into this +$27 valuation. HPCCP is the subordinated debt of HBAN which sits on a commodities economy footprint. HPCCP structured as a REIT issuance so the distributions are not tax advantaged. HPCCP working best in an IRA type tax sheltered situation. HPCCP with a longer call date than some of those BAC senior medium term notes selling below par, is judged by the market to be an investment backed by a prospering and solvent issuer. Maybe S&P is right about rating BAC BBB+ and HPCCP as Baa3 but the market does not think so.
Banks seems interesting play this year. I like US Bank, GS, MS, WFC, and JPM. I am just not comfortable buying an European bank. What is your opinion? Mostly, I am believe in gorilla trading and exist quickly which shows up on my blog. It will be good to know from banking experts if bank sounds like a good long-term profitable option.
Please visit my blog at mywealthyoptions.blogspot.com. I offer new position alerts and track them to closure. Any suggestions are welcome!
IF YOU GET BURNED, Ripped off, taken advantage of on an investment, CONTACT CLIENT FIRST LLC AT http://WWW.CLIENTSRFIRST.COM
anyone know about this gold fountain inc
I made 30% last month on Bank of America. Is that the New Monaco?
As far as Indian banks the HDB has been having a great 2 month run but then so are the US markets. I believe the with holding on Canadian corporations in IRAs has been suspended pending the sorting out of the technicalities of the tax treaty with the US. So until Jan 2013 those of us holding Canadian corps (LLCs) in our IRAs are not being with held at all. There are some exceptions for LPs, REITS, and CEFs, some of which are still being with held in US IRA accounts. The tax changes pending are to resolve the conversions from CanRoy Trusts that a lot of energy companies and utilities undertook as the tax rules for CanRoys changed beginning in Jan 2011. Basically the Canadians want to restore taxing LLCs that were converted from Canroys. When the conversions took place the distributions declared after the tax change date were and have been tax free in my IRAs. So you have these REITS like MFCSF which are now organized as LLCs. BRPFF converted to a Limited Partnership. A CEF like ENDTF in an IRA is still being with held but there is no with holding on the former Canroy ute MCQPF. But MCQPF is not just a ute it is defined by the corporation as being an infrastructure company that also invests in water works and central city heating plants. For now no with holding in an IRA account that is ditto for BLIAF, ATGFF, FRTSF, AT, and even BRPFF in IRAs. AT then with held in a margin unsheltered US account. So it is complicated because Fortis always was a LLC and was never with held in the US IRAs by tax treaty. But now it may be subject to with holding when these issues are researched and the tax treaty with the US is addressed. Just like ZIRP ever lasting the tax changes for Canroys bourne out of the Halloweenie massacre as orchestrated by Jim Flaherty., have had unintended consequences for Canadian revenues. The US holders of Can roys in IRAs immediately became the holders of LLCs when most of the Canroys converted. This meant the distributions declared after 1/1/11 were no longer subject to Canadian tax when as per the existing law, Canadian LLC distributions held in US IRAs were not subject to with holding. Some US RIAs realizing this had their clients mugging up on some of these Canroys even as they were being knocked back to ridiculous valuations on the conversion fears. The unintended consequence then that the revenue streams from US holders of Canroys’ in US tax sheltered accounts ended. UTohhh.. so now they are scrambling to get this all figured out and do the legal beagle work to undo the tax break they inadvertently have given US share holders with tax sheltered accounts. CWSRF/CSH.UN is in fact a REIT that is a “Trust” of some kind but is now not being with held the Canadian with holding it was being with held before 1/1/11, in my IRA. CIBC as mentioned in this thread was a principal scoff law in this transition and for the securities it was transfer agent for. It continued to illegally with hold after the conversions . At the end of last year I had all of those with holdings restored to my account as CIBC finally got the message and refunded these. So until 1/1/13 we can invest our IRA money in the LLCs as well as a bunch of other REITS and LPs with out being with held. Maybe we will owe tax to Canada at the end of the year? Maybe if you have more than a certain limit in Canadian Dividends we might be required to file a Canadian tax return of some kind. In the meantime there are some resources on the web at the Canadian Revenue administration for registering yourself as a US taxpayer IRA account holder certifying that you actually reside in the USA, to file for a with holding exemption.
So then I have RY and BNS as stronger balanced sheet companies than either BMO or CIBC. . CIBC probably the weakest of the 5or 6 majors in Canada. We can also if seeking yield in a commodities currency where we are looking for a little currency leverage against the LOONIE which “soared” to over 1.06 in 2011, take a look at CNPF which is “aboot” 70% issuances of Canadian banks.
BAC 6%s of 2019 sell below par. They are BBB+ rated but the market rates it as Junk. 7 year YTM of over 6%? So good luck with BAC and their overhangs of the second mortgage/HELOC loan issues that are twice the billions in mortgage origination ROBO loans liabilities they are still trying to get sorted out. A large percentage of their secondary mortgages when marked to market will come up as having ZERO as in ZIRP equity in them as their claims are subordinate to the original first mortgagee. So YES! BAC is the new casino~ horse/”dog” track. It will end the same as when the music stops there will not be enough chairs or lifeboats to save everyone, or post the bail out nation with out any prosecutions, save anybody.
Ugly Americans who do not under stand that these tax issues in Canada arise out of the fact that these Banks are very safe and solvent. That is because Canada has taxes to pay for their spending and social safety nets. We have Mediscam Prescription-B with every Congressman vowing to save it, with out ever raising a penny in taxes to pay for one penny of it. They are slapping themselves on the back in celebration of the scrapping of Obamascare, and planning for some defense spending cuts that will not fall on their districts. The GSEs that buy the solvent mortgage originations by BAC are insolvent and that is not even calculated into the $15 Trillion in national debt. Canada does not print pray and delay, they collect taxes instead. That is so wrong! Those dividends are currency leveraged as well as the stock prices. GACHF closes in the next week or two. The Japanese carry trade in commodities has arrived in North America. Daylight Energy already gone to the block for another nice premium. Look what Teck paid for Fording. KNOOC taking out the Come-by-Chance sour crude refinery. Pretty nice 3 month chart on that ATGFF and the Loonie now pushing up against 1.01. Stay away! Warning Will Robinson!!! ATGFF/”PNG” Pacific Northern Gas/Kitimat and the alternative route for the “Keystone pipeline”?
It is not just bank accounts they are shy of opening for US citizens they really get nervous if you ask to open a safe deposit box. You might want to put a hundred gold Maple leafs in there, to save weight get a few hundred palladium maples as well instead of the silver ones? Stuff that would never show up on your US tax return but in case they add a space or line for you to declare your holdings not just your gains, they are going to want to know about that.