Interesting post. Is your source the same one who claims that Elvis is alive and working at Burger King? According to Mr. Flood and Mr. Bailie, the merger is full steam ahead. Once again, let me know if you have a contact or if this is just your own gut feel. Gee, if stock markets tumble, those with investment banks get hit. When stock markets rally, investment banks take off. Do not make this CIBC specific, check out Banker's Trust, Merrill Lynch, Lehman Brothers, DLJ and good old Citicorp. At least CIBC has a small exposure in Latin America,(Chile had to devalue this morning) unlike Scotia which has an exposure of over $7 billion (basically their entire common equity). If you think Asia was bad, Latin America is a bigger time bond (with Brazil potentially, note I say potentially, being the nuclear blast).
In regards to the merger, the ratio is stuck at 1.318. The only breakout clause in the agreement is if one side loses 20% of their Tier 1 capital (ie Common Equity and Retained Earnings). Otherwise, to get out it is a $400 million exit fee. |
