On a silver platter...

[Cardboard]

Anyone else short Genworth MI Canada? The stock price is up a fair bit since the end of its Dutch auction to repurchase $325 million worth of shares. I am sure that Genworth Financial was quite happy to see $187 million of cold hard cash coming in the door.

 

Canadian housing is clearly cooling down and fast. Sales down 45% year over year in many bubbly areas. First we heard it was due to the end of tax credits, then it was due to harmonized sales taxes in B.C. and Ontario. What is going to be the next excuse to explain the decline? The average Canadian homeowner is more levered in housing than the Americans were at the top. We keep hearing that it can't happen here, but it seems to be in progress.

 

Even if we have no collapse, a slowdown is not good for MIC. They need new policies since showing earnings by only using unearned premiums is not creating any cash. Also, how can they compete with CMHC without offering lower policy pricing and accepting lower quality profiles? Time will tell, but reading the Annual Information Form gave me good data on their competitive situation vs CMHC.

 

Cardboard

[Smazz]

I will add it seams Carney has a love affair with trying to raise rates any chance he gets - makes absolutely no sence but works into your thesis.

 

Cardboard are you looking at straight up shorting or puts?

[Partner24]

I wish I could find a very cheap protection against the price declines of housing price decline in Canada (like FFH bought few years ago with their CDS).