Thursday, January 10, 2008

Canadian Bankers Association now calling for bank mergers....good grief.....why am I not surprised?

Globe and Mail: No-merger rule ‘out of step,' bank group says

Sure, why not strike when the iron is hot?.........Harper is in the business of wrecking the country and passing out favours... what the hey....he takes all his marching orders from the bank/lifeco dominated CCCE anyway.

Just as was the case when the CCCE got their way on the income trust issue and the reversal of the interest deductibility measure. (Opposing changes to interest deductibility was a complete exercise in hypocrisy, since preserving interest deductibility is simply preserving the right to service interest on debt with pretax cash flows. Corporations want desperately to preserve that feature, but certain of their kind are hell bent on preventing the parallel arrangement to exist with income trusts.)

Apart from the banks themselves, (read: shareholders and employee stock option holders), this has got to be good for Manulife and Power Corp who can parlay this bank merger thingy to their benefit and expand into banking themselves. Goodbye the former " four pillars " of finance. Let's have bank mergers followed by massive layoffs in a field of high paying jobs, with high multiplier effects. That way it’s easier for Goldman Sachs and Wall Street to fill the newly created void. Do you suppose Mark Carney is supportive? He’s a newly minted banker now.

Hey, here's a really dumb idea. Let's consolidate more risk into the hands of fewer institutions , that way CIBC can bring the economy to the brink instead of just themselves every five years or so, along with the other added virtues of less competition and less need for innovation. Who knows, maybe ATM fees can even go up? That should give Jack L’ATM-fee a real sense of accomplishment. Jack does some of his best work for the CCCE, even though he's too thick to even realize it, or attempt to understand it .

Here’s a novel thought. If we've had five major banks for the past 30 plus years, and the country has grown by 50% over that time, why do we need fewer banks going forward? Doesn't compute. Meanwhile how do Canadians possibly benefit from the argument for bank mergers, that they need to be able to expand internationally? What does that do for the Canadian back on the farm, apart from expose our Canadian banking system to the ways of international banking. Subprime mortgage lending anyone? Enron off balance sheet lending anyone?

Has anyone in Ottawa ever heard of the concept of "if it ain't broke, don’t fix it?".

Soon Flaherty's work will all be done. Meanwhile Canada will have gone down the drain. Here's an idea. Why don't the banks dividend out their excess earnings to shareholders who can reinvest it in our own country in the manner they think best serves their needs? Oh yeah, they're only the owners and not the omnipotent managers.

No-merger rule ‘out of step,' bank group says
Globe and Mail Update
January 10, 2008 at 9:47 PM EST iness/

1 comment:

Dr Mike said...

"Why don't the banks dividend out their excess earnings to shareholders who can reinvest it in our own country in the manner they think best serves their
needs? ".

OMG--this would be a novel idea for any corporations.

See that flash in the distance--must be lightning about to strike for the second time in the same place--these clowns are just about as likely to fork out their hard earned dollars to the poor SOBs who pay the freight as lightning is likely to hit me twice in the same day.

On one hand we have the centers of Canadian greed hoarding every penny they can for their own use while the little guy on the street is "nickle & dimed" to death by fees that these guys claim are necessary just to make ends meet.

On the other hand we have income trusts that pass their profits on to the real owners , you & I , to be used by us for what we deem necessary.

Banks are eliciting huge profits & pay out diddly as a dividend claiming that they need their profits to grow the business to make them productive unlike those slack , economy killing income trusts.

Give me a freaking break!!

Banks are supposed to be the elite investment entity in this country--why do they write-off so many losses so often , from bad loans to foreign countries to involvement in the ABCP or Sub-prime scandals plaguing the US.

The reason is poor accountability--a perfect fit for this present government in Ottawa--should be a no-brainer for Flaherty to give his Ok to this one.

Kill one of the most efficient business models in favor of one of the "crappiest".

I am sure it will make sense to Jimmy.

Just not to the rest of us.

Of course we are just stupid trust investors who don`t know a coupon clipper when we see one.

Dr Mike.