Hoodlum
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Posts posted by Hoodlum
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Here is an initial estimate for Acapulco Hurricane damage. Not sure what the insured costs would be.
https://www.insurancejournal.com/news/international/2023/10/26/745851.htm
QuoteAcapulco likely suffered an economic impact of $10 billion to $15 billion, according to Chuck Watson, a disaster modeler with Enki Research. There will be added losses because the region’s high season for tourism is December to March.
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I hope that the residents had enough time to find cover.
https://www.artemis.bm/news/high-probability-mexico-cat-bond-loss-will-be-50-62-5m-from-otis-plenum/
QuoteMoreover, what sets this hurricane apart is its rapid intensification in the last 24 hours. Indeed, hurricane Otis formed only 3 days ago, on October 22 2023, in the Eastern Pacific, close from Mexico. The storm then remained a low intensity storm (tropical storm) for the following 2 days. Only 12 hours before landfall the storm began to intensify at a very rapid rate. Within 12 hours, the storm intensified from a tropical storm into a category 5 storm, which represents the fastest intensification of a hurricane in Eastern Pacific history (according to Chicago State University).”
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1 hour ago, Jaygo said:
Acapulco Mexico got hit very hard overnight from a cat 5. It looks like major damage from wind and surge.
Not sure if it has any financial effect on these insurers but it does show the hurricane season is not over for North America.
The closest comparable would be Hurricane Pauline hitting Acapulco as a Category 4 Hurricane in 1997. That hurricane caused $9.7B in damage although I don't know how much of that is covered by insurance. My highly pie in the sky guestimate is that this could be $20B+ for the Category 5 hurricane now. But total insured amount will likely be much less than that.
I don't think this will be a big insurance event although it will help contribute to an ongoing hard market.
I believe this is the latest in the year that we have seen a category 5 hurricane hit North America.
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Brett is slowly coming around.
https://www.morningstar.com/stocks/fairfax-financial-raising-our-valuation-cad-970
QuoteWe are increasing our fair value estimate for no-moat Fairfax Financial FFH to CAD 970 per share from CAD 790, after reassessing the company’s prospects on the investment side given recent changes in capital market conditions. The company is navigating the current environment well, but we would note that Fairfax’s investment performance has been spotty over time and includes some substantial losses along with impressive gains. Our fair value estimate equates to 0.9 times the book value at the end of the second quarter and 1.2 times the tangible book value. While we have raised our fair value estimate, we still see shares as a bit overvalued at the moment.
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UBS says Hurricane Idalia could cost insurers $9.36 bln. I don’t know what Fairfax’s exposure to the Florida market would be.
https://www.reuters.com/world/us/hurricane-idalia-could-cost-insurers-936-bln-ubs-2023-08-30/
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19 minutes ago, Parsad said:
Pacific hurricanes are expected to be higher.
I expect a very busy wildfire season as well...take a look at the massive fire near Halifax...some 60+ fires burning near Calgary...and BC is already seeing a large number of wildfires this season.
Cheers!
But haven't the Atlantic Hurricanes had the most impact on the insurance business.
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It looks like Hurricane season will be closer to normal this year, less active than the last few years. This El Nino effect will likely continue for the next 2-3 years.
https://www.noaa.gov/news-release/2023-atlantic-hurricane-season-outlookQuoteThe upcoming Atlantic hurricane season is expected to be less active than recent years, due to competing factors — some that suppress storm development and some that fuel it — driving this year's overall forecast for a near-normal season.
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I am thinking that most of the sellers have dried up over the past couple months. So volume is not needed to drive up the price which is still well book book. The possibility of a BIAL IPO could be driving some speculation of an increase in book this year. I just wish I had bought more when it dipped below $10.
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It looks like the IPO was approved on Friday.
QuoteInsurance regulator Irdai on Friday gave the final approval to Go Digit General Insurance for listing on stock markets, reported CNBC TV-18.
Also, another positive development for the Insurance sector.
QuoteInsurance regulator Irdai's proposal to allow private equity (PE) funds to promote insurance companies will result in significant capital inflows into the sector. Opening the doors for private equity funds was part of a wide range of reforms announced by Irdai on Friday, including reducing the capital requirement for insurers on some social insurance schemes.
During liberalisation insurance companies from developed markets were key investors in the sectors, however, private equity funds are the ones with deep pockets currently. Till now PE funds could not promote insurance companies, and there was also a cap of 10% on a single investor. The Irdai on Friday said that special purpose vehicle (SPV) route was optional for PE promoters, indicating that they could now invest directly. Also, investors can now pick up to 25% of the paid-up capital without being treated as promoters.
"The increase of threshold to 25% from 10% stake for being treated as investors and making SPV structure optional will bring the sector on the road map of a wider base of institutional investors," said Nithya Easwaran, MD, Multiples Alternate Asset Management. "The 'fit and proper' criteria will ensure that high quality, responsible, and experienced institutional investors will become significant stakeholders and partner with the companies through the transition to a more open architecture and innovative industry structure," she added.Sequoia Capital MD Ishaan Mittal said, "The relaxation for funds will help attract a higher flow of capital to India's insurance sector, resulting in greater innovation, deeper insurance penetration, and better offerings."
"The amendments will make the sector a hotbed for investments and make it more investor-friendly in the coming years," said Digit Insurance chairman Kamesh Goyal. Digit Insurance is promoted by Prem Watsa's Fairfax Group and Goyal.
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FL Gov...If Walmart is open, school should be open.
100% agree. One of the greatest scams of the government shut down, one that certainly many lobbying dollars supported, was the fortification of big business. It dawned on me a couple months ago while NJ was shut down. My son and I every Friday(pre Covid) used to go to the local toy store and he'd see, and play with, and pick out a toy car or truck. So a few weeks into lockdown, he noticed this hadn't happened and asked why we hadnt gone in a while. I loosely explained the world to him and he asks "where can we get toys". I thought, holy shit. Walmart and Amazon. While the little mom and pop store, with great, quality Bruder trucks and imported toys, was forced shut despite, "maybe" seeing foot traffic of 2-3 people AN HOUR. How in the world is it that in the name of public health and safety, and keeping large crowds from gathering, forcing everyone to go to a high traffic super center box store is deemed safer than simply letting a business that sees a dozen customers a day stay open? Oh, lets say only "essential" businesses. Great, but then why are the "essential" businesses allowed to sell "non essential" items? Its a total load of shit and more evidence of a crooked system. This is also, not to be confused with bars and shit like that, which is entirely different.
Similarly, I saw a taxidermist who had similar thought. "I work out of my shop, and sit by myself working on mounts all say. I might get 4-5 customers stop by, PER WEEK! Why cant I work? I have to pay my bills."
Welcome to America.
Walmart is one of the worst stores setup for handling the virus. Here is Canada they have the entrance and exit backwards so that you have to cross people going in the opposite direction between the 1st and 2nd set of doors. After 4 months they still haven't figure this out. Not to mentioned they are the only large retailer in Canada that doesn't offer tap for payments and no one is cleaning off the machine between customers purchases.
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Canadian Prime Minister mentioned today that it would be months before they consider relaxing protective measures.
He cautioned that it would be a “few months, probably” before Canada is in a position to consider relaxing protective measures in place that have most Canadians staying at home and many businesses shuttered or working at partial capacity.
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Thx
I rather go with Canadian index to buy put against.
It has less liquidity but don’t want to convert to USD now.
And I think I am more bearish on Canada than the US
Yeah, I'm more bearish on the USA, because--regardless of what no_free_lunch seems to be saying--the Canadian response has been far superior to that of the USA. BC, Ontario, and Quebec have put in preventative measures that will cause the infection numbers to fall, peaking probably next week or sooner. Trudeau's economic response has been mediocre (he shouldn't have tried to shove payments to individuals through the EI system), but I think over the next few weeks, the virus numbers will be driving things, and Canada has done way better than the USA on the virus. The economy's going to suck for everyone.
(Of course, all this is speculative--I'm betting on the SPY, but I'd also bet that the divergence between the S&P 500 and the TSX won't be huge....)
I agree that it's a terrible time to be converting CAD to USD.
It's also worth noting that I see light at the end of the tunnel. So I'm only very short-term bearish based on future infection numbers, but medium- and long-term bullish.
I don't know what is happening in the US. In Canada we are testing over 20,000 per day yet it looks like the US is testing 40,000 per day?
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Testing is not just hindsight. Right now there are thousands, ten thousands, hundreds of thousands, millions (https://www.news5cleveland.com/news/continuing-coverage/coronavirus/ohio-department-of-health-says-100-000-ohioans-are-carrying-coronavirus)
Of people in the US with a variety of symptoms. Perhaps people who had coronavirus and are recovering. Testing confirms whether they have coronavirus or not, whether they are recovering, how long those periods last, and a bunch of other information that a viral professional is probably more aware of than I am. Essentially, it builds a more robust dataset of infected individuals.
Right now we just have the worst-case groups being tested so your sample set it biased.
That's all fine and dandy. But we don't exactly have an oversupply of tests....so wouldn't it be best to put them to the most efficient use? High risk individuals.
It all starts from the top. Trump has decided he doesn't need to be tested or go into self-quarantine after being in contact with someone who now has the virus. I believe actions speak louder than words and Trump is not considering this as a serious threat. So you will see large segments of the US that won't take it seriously since the government is providing the leadership. This is not going to end well in the US.
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This is a tragedy in the making and all along intelligent people are saying "just the flu" and "nothing we can do". Due to weeks delay in severe symptoms/mortality from onset/catching this thing, we are being lulled into a false sense of security. We may be in the calm before the storm... :-\
Intervention helps and it's up to U.S. citizens to push for it:
S Korea Deaths % of cases: ~0.7%
Italy Deaths % of cases: ~7% Seven. Percent.
And that's after S Korea had initial surge due to cult members spreading this. Management of this outbreak matters.
The below is a better indication of where are based on closed cases. There is currently a 6% death rate for closed cases wordwide with 10% of open cases in serious/critical condition. It does not look good after extrapolating this out.
https://www.worldometers.info/coronavirus/
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Banning flights from Europe (except UK) for 30 days. $50 billion to SBA and trying to get congress to do the payroll tax relief. It'll be interesting to see how the market reacts tomorrow.
Downwards if I had to bet.
LOL! You are a fierce betting-man LC :)
It does start to feel like a real deep shit swamp and maybe it's time to start to consider buying.
Why? We are only at a 12 month low. I don't think we are close to the bottom.
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Cigar, thanks for taking the time to post. I am not an insurance expert and find your posts to be helpful :-)
I am back on the sideline with Fairfax. Their equity portfolio is getting hit pretty hard.
But shouldn't their bond gains be offsetting this?
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The big difference between a stock bubble and a housing bubble is leverage. First time housing buyers today are highly leveraged. IF we get a correction of 20-30% first time buyers will get cleaned out.
The scary thing is that a 20-30% drop just brings us back to Jan 2016 in Toronto. We would need a 50% drop just to get back to 2012 levels.
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Unbelievable. I have no idea when this will end.
B.C. offers interest-free loans up to $37,500 to first-time homebuyers
The B.C. Home Owner Mortgage and Equity Partnership program will provide a maximum of $37,500 — or up to 5 per cent of the purchase price — with a 25-year loan that is interest-free and payment-free for the first five years.
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More likely getting they are getting grouped in with the rest of the insurance industry who are getting killed on their long bonds.
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Here is the full quote.
“We’ve sold 90 percent-plus of our Treasury bonds and we’ve made the point that the uncertainties in the U.S. election are the reason," Watsa, chief executive officer of the Toronto-based company, said on the third quarter conference call Friday. “We don’t know who’s going to win the elections, but you could have significant infrastructure spending, a drop in corporate tax rates, and while we think it might work in the short-term, in the long-term we have questions about that. We wanted to take that risk out."
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I suspect we are only scratching the surface with these issues. According to an article from yesterday students would only need 35% down in order to apply for a mortgage with no income.
"Nine students with no apparent source of income bought $57-million worth of single-family homes in Vancouver’s tony Point Grey neighbourhood over the past two years"
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If they will bend the rules in real estate I think Canadians should demand a bending of the rules in other areas, like maybe interest expense deduction on non-dividend paying stocks, lower capital gains taxes, maybe even a principal position stock position exclusion? :)
Well they sort of have that with the TFSA but only if you don't have larger gains. Otherwise the tax department will take you to court. ::)
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Either this will end ugly or really ugly now.
It's no longer a question of if but when. A few years back I was saying the government needed to intervene before it gets to this stag but it is too late now.
Q3 results
in Fairfax Financial
Posted · Edited by Hoodlum
Below is from Scotia Bank analyst.
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-mondays-analyst-upgrades-and-downgrades-for-oct-30/