January 15, 2007 (LPAC)--Some people might consider it a sign of weakness that the big banks have been reduced to begging for capital wherever they can find it, but to the bankers, all that begging is actually a sign of strength! To quote Duncan Mavin, writing in today's Financial Post of Canada, "Canadian bank chiefs say recent injections of billions of dollars of funding into the struggling banking sector around the globe and in Canada are a sign of strength in the industry." Mavin then proceeds to quote some of these visionary bankers, starting with Royal Bank of Canada CEO Gord Nixon, who asserted that the spate of injections "shows there is a lot of capital support out there for major financial institutions." Bank of Nova Scotia CEO Rick Waugh said the injections "should give confidence in the marketplace," adding: "To me it's a very good sign."

These comments were occasioned by the announcement yesterday by the Canadian Imperial Bank of Commerce that it had arranged a $3 billion bailout to offset $3 billion in losses. It is obvious that the bankers are lying through their teeth here, so the question is, have they become so divorced from reality that they don't understand that such blatant denial will only make people more nervous?