Those favourable base effects we've been writing about worked their magic in February.

Annual inflation dove from 5.9% to 5.2%—the lowest in over a year—largely because February 2022 inflation (which just dropped out of the annual calculation) was so high by comparison. And we've got another helpful comp coming up this month, as this charts depicts.

With markets in a tizzy about deposit runs and bank failures, OSFI felt it necessary to put Canadian minds at ease Monday.

"Canadians can be confident that we have a sound and effective regulatory and supervisory foundation that works to protect depositors and creditors," the regulator wrote in a statement yesterday.  

Rarely do you see the country's banking overseer feeling the need to clarify something so assumed. Clearly, OSFI doesn't want more depositor and investor fear to creep over the border.

Mortgage Hall of Famer Boris Bozic began as a mortgage broker before building one of Canada's most successful mortgage finance companies, Merix Financial. After selling it to MCAP in 2021 and transitioning the company over, he departed Merix last month.

MLN wanted to interview him before he sailed off into the sunset, for two reasons. One, he's one of the smartest people we know in the Canadian mortgage space. And two, he knows how to run a highly profitable mortgage business and there's a lot we can learn from his experience.

In the video that follows, Boris shares pearls of wisdom on lender funding, optimal broker models, online competitors, the viability of broker commissions, building a salable business, arrears risk, trailer fee economics and more. If you're serious about mortgage origination, you won't want to miss it.

"Until last year, most fixed-rate borrowers didn’t even consider anything other than a 5-year term," says MCAP SVP, Megan McDonald. But with rates doing a moonshot, she says brokers "have been looking for an alternative to 5-year terms."

So MCAP gave it to them — in the form of a 4.64% four-year promo. As this is being written, it's the lowest mortgage rate in Canada from a national lender.

Markets are struggling to price unknown tail risk in the banking system. The financial system is facing a confidence problem, not as extreme as the Global Financial Crisis, but unlike anything we've seen since then.

As a result, inflation fears have temporarily taken a back seat to risk management. Global investors herded into safe U.S. Treasuries today on existential concerns about Credit Suisse, a Global Systemically Important Bank (GSIB). Capital Economics notes that "Credit Suisse is in principle a much bigger concern for the global economy than the regional US banks."

To some investors, Credit Suisse's troubles are reminiscent of Bear Stearns, circa 2008. Coincidentally enough, tomorrow marks the 15-year anniversary of the former global investment bank's epic collapse, an event that led off the GFC.

An extra day of reflection has investors believing that the probability of a banking apocalypse is less than they calculated Monday.

"Based on the information available so far, we think wider liquidity events are unlikely," Oxford Economics stated in a research note Tuesday.

But "unlikely" hasn't stopped massive deposit outflows, the likes of which contributed to Moody's downgrading the entire U.S. banking sector—despite the government's emergency backstop.

They say the Fed hikes until it breaks something.

Well, this qualifies.

"The SVB saga has created an almost unprecedented black swan event for the bond market," RBC Capital Markets wrote today. "The 3-day decline in 2-year U.S. yields is a 7-standard deviation event back to 1984..." — i.e., incredibly rare.

Bond yields were holding up Sunday evening, despite fear that Silicon Valley Bank's failure might be a canary in the coalmine.

And then came Goldman Sachs. Arguably the world's most prestigious investment bank, it issued this ominous statement:

"In light of recent stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its March 22 meeting with considerable uncertainty about the path beyond March."