Short Sellers Wait and Wait and Wait for Canadian Banks to Sink

Canadian households are wallowing in debt. Home prices are falling. Credit growth, the key driver for bank earnings, is hovering close to its slowest pace since 1983, Bloomberg News reported. All of which should be bad news for the country’s lenders -- and good news for investors betting against them. “Should” being the operative word. Even with danger signs piling up, the shares of the six biggest Canadian banks have stubbornly refused to drop, instead surging 9.4 percent this year -- and frustrating short sellers hoping to make money on stock-price declines. “This is a process, not an event -- that’s how I think about it,” said Bradley Safalow, whose firm PAA Research LLC advises investors to short companies including Canadian Imperial Bank of Commerce and Royal Bank of Canada, and who has short positions in those banks himself. Read more

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