Loonie closes above $1.01 US on commercial paper deal

[TrogL]

Source: CBC

The Canadian dollar was trading at a one-month high above $1.01 US Monday following a deal to restructure billions of dollars in short-term debt.

The loonie closed at $1.0152 US — up more than three-quarters of a cent from Friday's close.

Late Sunday, a group of investors announced an agreement to restructure about $33 billion worth of third-party asset-backed commercial paper (ABCP).



Read more: http://www.cbc.ca/money/story/2007/12/24/loonie.html

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Note that this is probably the total Canadian non-bank exposure to the sub-prime mortgage fiasco. The regular banks are in good shape because Canadian banking regulations wouldn't allow some of the bullshit then went on down South.

[SpiralHawk]

1. Nice piece of work, Commander AWOL. Not

Commander AWOL & republicon cronies with their pretend "conservativism" have trashed the economy of the USA, and the greenback value, as never before.

What a pack of losers, and how much sorrow have they brought upon the USA?

[tabasco]

10. When the dollar is worth 50 cents ...

please put George Awol Bush's picture on it.

Thanks,

George Washington.

[madrchsod]

2. it`s wrecking the Canadian economy

canadian business is leaving for mexico and china for cheaper wages and material costs...

[Subdivisions]

3. The whole fucking world economy is going to come crashing down soon. n/t

[daleo]

4. I wonder if there is any government involvement (i.e. loan guarantees)

I read in the G&M Report on Business that this could become a Harper bailout (a lot of the people with the ABCP are in Quebec).

[dantyrant]

6. Caisse Desjardins was hit hard, from what I've heard...

But then, so were BMO(which I owned at the time) and CIBC...

[TrogL]

7. OK, I didn't realize there was that much involvement

When I applied for a mortgage, subprime wasn't even on the radar. I paid my 10% down like everybody else.

Did they buy into US SIVs?

[dantyrant]

8. Yeah it wasn't so much subprime mortgages....

More just financial institutions buying ABCP and other MBSs which were AAA-rated but ultimately didn't perform.

Here's a long article from the Globe: The ABCP Black Box Explodes

And here's a more recent article about CIBC and bond-insurer ACA: CIBC faces bigger hit over subprime -- CIBC _does_ have considerable exposure to the subprime mortgage market, as opposed to the Caisse, which just seems to have bought into dodgy securities.

Canadian Imperial Bank of Commerce set the stage Wednesday for a $2-billion (U.S.) writedown on its subprime mortgage exposure, although many analysts believe the figure will be much higher.

The bank and a number of other financial institutions bought themselves some time late yesterday by reaching an agreement with troubled bond insurer ACA Capital, which is struggling to avoid bankruptcy.

That scenario could force CIBC and a number of other banks that hold complicated securities guaranteed by ACA to collectively swallow tens of billions of dollars in charges. Yesterday's forbearance deal, which was reached just hours after credit rating agency Standard & Poor's downgraded ACA, will see the bond insurer's 30-odd lenders hold off on any calls for collateral in a bid to buy it some time.

CIBC has about $3.5-billion (U.S.) worth of U.S. subprime real estate exposure that's hedged with ACA. The bank has more than $6-billion in additional exposure that's hedged with other counterparties.

[TrogL]

9. Ok, so what about exposure to SIV's?

...and what happened to some of the banks other than Caisse, BOM and BNS eg. TD, RBC?

[L0oniX]

5. I feel better already.