Is Scotiabank About to Fail?

With Canada and countries around the globe suffering a deep recession months into the coronavirus shutdown, one Canadian bank that is causing controversy in the headlines is Scotiabank. Known for being a financial institution with the largest international exposure of any bank within Canada, Scotiabank has many business arms in Latin American and Asian countries that have been hit hard by this global recession. Since CEO Brian Porter took over the realms from his previously growth oriented predecessor Rick Waugh, the two have taken the Bank far from it’s conservative days of CEO Peter Godsoe. Rob Pittfield who seemed to be the more appropriate and conservative fit to replace Waugh when he retired but was overlooked by current CEO Brian Porter and has since retired. The leadership has moved the organization far to the right compared to it’s previous era in Canadian Banking.

Recently Scotiabank was ordered to pay $127.5 million fine for manipulating the metals market by the US Department of Justice and the Commodity Futures Commission. Shortly before that they had announced they were getting out of the Precious Metals business and shutting down one of it’s oldest arms in the banking business. Since then gold and silver prices have soared. With a surge in deferrals of mortgages payments (blamed on the coronavirus outbreak) Scotiabank leads the country with the most number of customers who have stopped making mortgage payments at over 300,000. With clients over leveraged due to lax lending standards, this makes the 2008 US subprime meltdown look like a walk in the park. With divisions in highly unstable Latin American countries know for their troubles with the Illicit Drug Trade and Drug Lords, Scotiabank is a far cry from their steady as she goes days by making stable acquisitions like good old National Trust and so forth. Known to be a laggard in their Wealth Management and Mutual Funds division, they have missed out on the biggest rally in history of the stock market over the recent decade to be a leader in that part of the banking business.

Scotiabank has been a leader (among the Big Canadian Banks) in scaling back hours of operation at their branches, closing branches, reducing employee hours, layoffs as well as drastically raising services fees to boost profits. Head Office employees have been ordered to work from home until 2021 due to the coronavirus. With such a high employee count and fat management structure, how can the bank afford to maintain such a large payroll if the economy get’s worse with the current credit bubble the country is in? With their credit loss provisions soaring and very high risk portfolio is Scotiabank at risk of being Canada’s largest bank in history to fail?

Is the Coronavirus part of an Elitist Agenda?

We are now over 5 months from the initial government ordered Coronavirus lockdown (in March) but questions are yet to be answered around the honesty in the policies of global governments in their swift control over their citizens to address the virus. Some interesting things that have happened over the period:

• Most people who have been classified as died from coronavirus causes had underlying health issues that were the main factor responsible for their death
• Most US hospitals were on the verge of bankruptcy before this pandemic
• Ditto for pharmaceutical companies
• US Hospitals get funding for every coronavirus diagnosis or death
• US has had a history of over-diagnosing diseases
• A lot of health insurance companies (in the US and Italy) null and void a person’s life policy if someone dies who had pre-existing medical conditions, reckless lifestyle, suicide, AIDS, etc. so coronavirus death diagnosis is a sure payout
• Although many small businesses were ordered shut in the initial Stages of the coronavirus, large corporations like Walmart, Costco and other large retail chains were allowed to remain open
• Sales of Coronavirus signs, advertising, masks, face shields, plexi-glass barriers installed at tellers/cashiers, cleanings services/supplies have been sky rocketing
• Billionaire Bill Gates (a University drop out) has been using his foundation to instruct society and government how to deal with the issue and vaccinations
• tech companies have been benefiting from setting up work from home environments for employees of corporate offices as well as pharmaceuticals from funding for vaccinations and their products
• the government has been passing very quickly bailouts and very fascist policies while people are distracted with the coronavirus hype from the media

It makes you wonder. How could these policy experts so quickly devise all these policies unless they were pre-planned? Who  has benefited the most from these coronavirus goverment policies? The wealthy elite and the companies they own. Is the Coronavirus part of an elitist agenda?

Beware of Digital Currencies

In recent years the central banks of many different countries have proposed a digital currency to replace cash.(see central bank article links at bottom). Whether they will succeed in this plan, and whether each country will issue their own digital currency or whether some international bank or corporation will issue such currency is anyone’s guess.

There are good reason to be skeptical of any proposed switch, and whether it will wind up being voluntary, by force, or some slow-going process where cash is eliminated one retailer or service provider at a time until it is viewed with suspicion and then ultimately worthless. A slow process would be preferable of course, to a sudden reset where everyone starts again at zero (save for the ultra-rich who have plenty of land and assets).

Under a digital currency, unlike with cash, every transaction can be taxed. Consider all the smaller exchanges people make on a routine basis that we don’t generally think the government should get a share such as paying a baby-sitter, garage sale items, second-hand items sold via Craiglist/Kijiji, and so on.

On top of the taxes, each transaction will be skimmed by the payments company. Already, many people are charged each time they use their debit card for a purchase. Well guess what? So is the retailer! Imagine the amounts raked in by a payments company charging a percentage of a sale amount on every thing you and everybody else buys. In Classical Economics this was referred to as ‘rent-seeking’ (https://www.investopedia.com/terms/r/rentseeking.asp)

With digital currency every transaction can be tracked. You might not care, but at least consider the potential downsides. All your spending habits can be then be analyzed, a psychological profile built from the data put together, which can then be potentially used to manipulate you as an individual in ways you might not be able to imagine or anticipate. Your purchases might indicate a person who is health conscious for example, only to be bombarded with marketing material trying to sell you dubious supplements. Or, shopping at particular stores might get you lumped into a political category based on wider demographics, when your own views might be the opposite.

More worryingly, people can be controlled under such a system: comply or be excluded from economic activity altogether. “Sorry sir, the transaction for your purchase has been declined because of your negative social media comment about the mayor.” A governmental body or a corporation, wanting to protect itself from potential lawsuits, might decide you purchased too much beer this month, or ate at Burger King too many times, and decline your purchase. Think this can’t happen? Once a governing body figures it has a right to make decisions for you, where do you think it will draw a line?

People’s money can disappear. Bitcoin “wallets” are already routinely hacked. Sure, you don’t have much recourse if you lose a wallet full of cash, but most people can take reasonable precautions and exercise a degree of control over where they choose to keep their wallet. With a digital wallet, you are ever more reliant on others maintaining security for you. Sure, you’ll probably be able to purchase some form of insurance, but that’d just be yet another hidden cost.

Your digital money could disappear via legal means, such as high or ever-increasing transaction fees. Already people pay monthly fees to have an account. Negative interest rates, which are also currently being proposed or tested out in different countries, will further eat away at any savings you might have. The biggest beneficiaries of digital currency will be those who live paycheck to paycheck, rather than the savers. You might wind up losing whatever you don’t spend in a given period after a deposit. Credits might be good for a specific time duration – similar to closing ‘dormant’ bank accounts, a person might not ever be able to save, they’d have to use up their credits by a specific date or lose them altogether.

One thing people need to understand about so-called “class war” is that the ruling class does what they can to anticipate and prevent anyone who might be a threat to their own position. The ruling class is comprised mainly of wealthy families who’ve passed their wealth and power and connections and assets down from one generation to the next. It is in their interest to ensure that families lower down on the socio-economic ladder cannot build such ‘legacy” wealth for themselves and their descendants. Take away or limit other people’s ability to accumulate and pass down savings to the next generation, and they’ve eliminated a potential competitive threat.

Money and savings are how a person can remain relatively independent from the state, corporations, etc. Remove the ability to save enough, and there goes that person’s ability to be independent.

Digital currencies in the works:

In America
The Office of the Comptroller of the Currency has appointed Brian Brooks, chief legal officer at cryptocurrency exchange Coinbase, as first deputy comptroller, the agency’s second highest position.
https://news.bloomberglaw.com/banking-law/bank-regulator-taps-coinbase-executive-for-no-2-spot
https://www.occ.treas.gov/news-issuances/news-releases/2020/nr-occ-2020-33.html
DAVOS calls for US digital dollar: https://www.cnbc.com/2020/01/23/davos-calls-for-a-us-digital-dollar-as-china-works-on-digital-yuan.html
DAVOS/World Economic Forum unveils digital currency governance consortium
https://www.finextra.com/newsarticle/35155/davos-2020-wef-unveils-digital-currency-governance-consortium/
In Canada:
https://www.bankofcanada.ca/2020/02/contingency-planning-central-bank-digital-currency/