If financial institutions were characters on a soap opera, the show would unfold somewhat like this: Scene 1 — The bank and an insurance product are in a dark hallway where they can't be seen. They're about to embrace, but the insurance product stops short.

House prices continue to deflate in Canada. They fell 5.8% during the 12 months to March, according to the Teranet–National Bank National Composite House Price Index. Last month the 12-month decline was 4.1%.

Many people are suspicious of the rally in U.S. bank stocks. Some even go so far as to suggest the market is being manipulated to allow insolvent banks to recapitalize by issuing new shares to investors.

The 19 largest U.S. banks may now be off the critical list thanks to billions of dollars in government support, stage-managed “stress tests,” and a raft of equity issues floated into the rather suspicious-looking doubling in financial stocks over the past two months. But what about the 8,000 or so ...

Financial stocks in the United States have rallied mightily over the past two months. The table below shows the gains for 5 financial exchange-traded funds (including leveraged ones) since the low of March 6:

On Friday, the Federal Reserve issued a white paper outlining the methodology behind the stress tests that examiners used to assess the ability of the 19 largest U.S. banks to cope with baseline and “worse case” macroeconomic scenarios for 2009 and 2010. They will make the findings of the stress ...

Bull markets climb a wall of worry, they say. That’s the old rule of thumb that leads many investors to buy stocks when a few green shoots appear under the black clouds. The fact that stocks historically turn up several months ahead of time also provides reassurance.

The capacity of the banks to shock and outrage seems infinite these days. The impression I get now is that the financial sector is out of control and needs to be reined in. Stop them before they kill the economy again. Let’s deal with two recent items.

A recent Deloitte study has issued some warnings about the level of indebtedness in Canada. Here are the main points:

Yesterday’s market crash was triggered by the U.S. and European financial sectors reporting tumbles in earnings and asking for billions more in aid from governments. The need for capital infusions is still so overwhelming -- despite the hundreds of billions already poured in -- that it appears there will be ...