PSA still stable at $50 as no banks have exploded yet under the weight of rising yields and loan defaults. π₯Ή
this post was submitted on 20 Oct 2023
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Was that something you were expecting?
Bank implosion or PSA being stable at $50?
I'd say either banks implosing, especially Canadian banks since there is no real fixed long term mortgage here, or PSA not being able to stick to it's $50 price point.
Right. Well, I was a bit worried when the American implisions happened earlier this year. Also knowing that some of our banks are now exposed a lot to the American market (TD AMCB). Also I have no idea how robust our banks are. I wouldn't put bank runs out of the question here.
While I'm no expert, I think the big Canadian banks (I'd say Big 6 + Desjardins in Quebec) are well capitalize and more regulated than their American counterparts, while a failure of a smaller bank shouldn't have much impact since it could be absorbed easily through CDIC or provincial equivalents.
Also, when it comes to mortgages, our banks are way less exposed to risk, as all mortgages are in fine variable rate since you can't get a longterm fixed rate mortgage in Canada, so most of the risk has been transferred to customers. And due to the concentration in the banking industry, the government would IMO be there to support the banks anyway should something happen.
So, maybe I'm biased, but I don't think there is much risk, even though things are going to get tougher with the current economic situation, so we may see individuals and companies defaults rising, and banks taking part of the hit.
A bank run is never out of the question, but with government support and CDIC coverage, most people should be covered anyway. Should something happen though, the government/CDIC could easily increase coverage as it worked well in the US to stabilise things out and printing money is much cheaper than having to go through a paradigm shift in the finance industry.
Good points. I think savings accounts ETFs in particular like PSA might not end up being protected by CDIC.
You're right, but according to this page, PSA money is held with National Bank, Scotiabank, CIBC and BMO, with a few treasury bills. Those 4 banks are considered domestic systemically important bank, and a failure of any of them would have a serious impact on Canadaβs economy, and probably warrant governmental intervention, so I personally wouldn't worry that much.
You're probably right. :)
At least, I hope so, otherwise, I'll lose all the money I have in CASH.TO ;)
Not a "this week" result, but a change in our vehicle use has borne fruit. This is the second month in a row where we've spent about $400 less than usual.
We live 20 km from the village where we get our mail, library books, and basic groceries. Instead of going in 2-3 times a week, we now go just once a week.
We live 150 km from a small city with groceries and other supplies that are not available in the village. Instead of going in twice a month, we go in once a month and coordinate that trip with a trip to town for mail and library books, cutting out a separate trip.
We live 250 km from a bigger city with yet more selection and supplies and our medical care. We've committed to holding the line on trips only for medical appointments and bundling our other shopping needs into those trips. It remains to be seen if we can successfully eliminate accommodation expenses from those trips.
There are some other things that go into our savings. More research has led to more online purchases of hardware and other non-grocery supplies and those purchases are put off until the threshold for free shipping is reached.
If we can hold the line over the long term, the savings should pay for some other stuff, like installing a heat pump, relegating our pellet stove to very cold weather and backup use. I don't know if that comes with lower average cost of heating/cooling, but it would be less physically demanding, something that will be important if we are to age in place (we're 66).
Great, congrats! Cars are really expensive, so reducing their use is always a great way to save some money. I just hope it doesn't affect your day-to-day life too much.
While it may be a stretch, have you considered an ebike to go to the village? Depending on your local situation, a 20km trip should take around an hour, and the electric assistance makes it much easier physically.
Thanks!
It shouldn't have too much impact on daily life. As part of embarking on this, we decided that running to the village for takeout from the cafe wouldn't count nor would running to the next village over to craft store or lumberyard. We don't do either often enough to matter.
As for an ebike, I really like the idea. I used to be a pretty hardcore cyclist, even cycling year round. (I actually used to ice race motorcycles!) But gravel roads (speed limit 80 kph), especially in winter, aren't something I should be taking on at my age. :) I'm a hobby manufacturer and one of the things I'd like to tackle is an e-trike. But I probably never will, because I just don't think it will safely mix with traffic anywhere I'd ride it.
Haha, I will admit I was worried when I bought my ebike for the same reason, but it was nice to see that I was wrong, and that a vast majority of people will do their best to leave you as much clearance as they can. While there is still the occasional moron, I now feel way safer than when I started, and my trips are getting longer. I now mostly use my ebike if the trip is 15km or less. I even got snow tires last year, and it went better than expected, although I'm now contemplating going with studded tires when the road gets icy.
Given my age (66) I probably shouldn't be riding gravel roads too much. I've done a lot of it in my life and am pretty confident in my skills, but I don't have the reflexes, the bones, or the recovery time of a teenager anymore! :)
I gave up my trials bike and my mountain bike a few years ago due to more frequent falls and injury. If I ever do build that e-trike, I'll build it with a 50km range so I can run to town and back, but I'm not sure how often I'd actually do so. In some ways, a trike might be more challenging than a bike because of the probability that one wheel will always be in a gravel ridge.
Late, but big up for me:
I went against a VP on a major project I expected to fail. They started compiling documentation against me and Iβve been anticipating getting fired the last few weeks.
Shit just hit the fan with that project (in the exact way I expected) and my going against the grain made us the only team on schedule and weβre way under budget. So now instead of having my head locked into the guillotine Iβm being asked to share our strategy and get the other teams back on track
Haha, nice one, congratulations ! It's awesome that things went your way !