Friday, January 11, 2008

Globe and Mail: How a nasty rumour can ruin an investor's day

In today’s Globe article entitled “How a nasty rumour can ruin an investor's day” we learn how TD Bank found itself on the nasty end of a rumour that TD Bank was exposed to the Sub Prime meltdown, when in fact it was not.

I’m not sure if this is supposed to be some kind of human interest story centered on TD Bank CEO Ed Clark, since his visage is prominently displayed alongside the story of woe that TD suffered for about one heart wrenching day back in December.

Evidently Ed Clark doesn’t like being on the wrong end of a false rumour that affects his personal finacial holdings. If that’s the case, then why is the TD bank so active in its promulgation of the false rumour that income trusts cause tax leakage. That’s a concept that has never been proven to exist, and has in fact been refuted by many credible sources including HLB Decision Economics, PricewaterhouseCoopers. BMO Capital Markets, RBC Capital Markets. Deloittes etc.

My understanding was that TD Bank was consulted by Flaherty before he made his fateful move on October 31, 2006, although I have no direct evidence of that. Who needs direct evidence since it's obvious that TD Bank benefited from the elimination of income trusts since they have no active retail distribution network to speak of which meant they were no where in the income trust “league tables.”

In addition, TD bank sent the following policy statement to its clients where they are of the view that they prefer the "market certainty" that has arisen from Flaherty’s act of betrayal. If the TD Bank is such a big fan of market certainty, what was wrong with the absolute market certainty that prevailed after Stephen Harper got elected into office on the basis of promising to "never tax income trusts”.

Meanwhile the banks are jumbo issuers of what is known as Trust Capital Securities that are publicly listed trusts. Why aren they not being taxed at 31.5% as well?

Perhaps the Globe can write a real article about a much larger rumour that has been promulgated by the likes of TD Bank that has now persisted for the better part of 14 months:.

Perhaps the title could be: “How a nasty rumour can ruin an retiree's life”

Meanwhile my tears for the falsely maligned sub prime offending TD Bank will only be crocodile tears. TD Bank: Where Banking can be this self serving

Dear Mr. Marshall,

Thank you for your recent email addressed to Mr. Ed Clark regarding the
Federal Government’s income trusts proposal and the Tax Fairness Plan.
I understand your concern about the changes affecting income trust
investments, as this is an issue that has been raised by others as well.

As you already know, the Minister of Finance’s plan is based on the
assertion that the federal treasury has lost millions in tax revenue,
and the belief that the growing popularity of income trusts would likely
result in greater future losses of tax revenue to the federal treasury.
As I’m sure you are aware, the Government of Canada began a review of
the income trust sector in September, 2005, leading to a great deal of
uncertainty on this issue. TDBFG considers the fact that there is now a
greater measure of certainty in the marketplace on this issue as being

I would like to thank you for taking the time to share your perspective
with us.


Sarah Kendall
Manager, Executive Response Team

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