In these troubled times of financial market uncertainty, it's always good to reflect upon the wise advice of Jim Flaherty, who remarked to a senior financial advisor at a bank owned dealer earlier this year, concerning the major losses on income trusts experienced by his clients, that:
“You can’t be much of a financial advisor if you don’t know that you don’t have a loss until you sell”.
As Finance Minister of Canada, I wonder if Jim Flaherty has ever heard of margin calls?
Perhaps Jim could give Henry Paulson a call and suggest he use that line with the holders of virtually worthless Bear Stearns paper:
“It’s only a loss, blah , blah”
I also wonder whether Jimbo has used that pristine logic of his on Purdy Crawford in resolving the Asset Backed Commercial Paper fiasco:. Something along the lines of :
“You can’t be much of a corporate lawyer and financial restructurer if you don’t know that you don’t have a loss until you sell”.
Meanwhile we are now entering a phase of the markets to which Jim Flaherty is tempermentally ill suited. Jim Flaherty is prone to panic when things look bad. Rather than gather the facts he is prone to rash action and reckless conduct.
Flaherty will gladly blame anyone, including premiers of provinces for his personal failings. Flaherty will even blame income trust investors for believing and taking stock in his income trust lies. Too bad we aren't buying his lie about tax leakage, as easily as people bought his lie about never taxing income trusts.
Just like back on Halloween 2006 when he panicked and responded to the pressure from those who had privileged access to him as recounted here is glory detail.
Income-trust crackdown: The inside story
I love Flaherty's fear mongering part about "clear and present danger". Sorry to say, but Flaherty himself is the "clear and present danger", not the threat to preserving BCE as a public company in the hands of tax paying Canadians, as opposed to a leveraged buyout rag tag basket case in the hands of private equity, which is the pathetic end result that Flaherty's ill-conceived income trust policy forced on to Canadians and one of Canada's iconic companies.
Monday, March 17, 2008
Flaherty’s sage advice for Bear Stearns investors
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4 comments:
If Jimmy O`Flaherty was the last pirate on earth , I would not ask him for advice on financial matters of any sort.
I guess that if he had come out with a goofy hat , an eye patch , & a stuffed parrot on his shoulder , we would at least have known that he is nothing more than a guy ready to steal our money.
It was the suit & tie that threw us off.
Dr Mike.
I feel the pain of Bear Stearns investors, employees and others who will be directly affected by this tragedy.
Back on November 1, 2006, Income Trust investors were also summarily given “back-of-the-hand” and “slap-in-the-face” treatment, not by perilous “free market” economics, but by their own CONservative government, who promised repeatedly, both orally and in writing, “not to raid Canadians’ nest eggs” - a treacherous and treasonous act that caused the loss of $35 Billion of Canadians’ hard-earned money and savings.
Who needs devastation caused by free markets when a CONservative government will do it in one fell swoop for you.
First year accounting student Forrest Gump responds to Jimmy Flaherty:
“You can’t be much of a Finance Minister if you don’t know that you have a loss, whether it's realized or not”.
Dim-Jim responds:
"It's all Dalton McGuinty's fault, not mine."
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