Saturday, August 9, 2008

The Globe's ABCP tear jerker, non sequitor


You have to love the hypocritical Globe and Mail.

Today they have a feature article on the ABCP mess, attempting to falsely portray it as “retail investor” problem, when in fact this market is predominantly an institutional market. Otherwise the Public Sector Pension Plan wouldn’t have lost $1 billion on ABCP and the Caisse wouldn’t have lost, what, $1.9 billion?

The Globe’s ABCP focus on retail is all part of a campaign to falsely position this issue in the minds of the public in advance of a government bailout. Why? Well, we have learned from the income trust issue just how sacrosanct the savings of pension funds are, which is why Flaherty gave them an income trust “carve out”, creating a tax arb between the pension funds and average Canadians who save through RRSPs. His idea of “leveling the playing field”?

The Globe has quite the track record of falsely positioning financial issues in the minds of the public. Just look at the hatchet job that Eric Reguly of the Globe did on income trusts over a two year period leading to Halloween 2006.

Do these stories strike you as anything resembling “balanced journalism”?

Capitalism for slobs.

By Eric Reguly. March 2005 Report on Business
Income trusts are turning Canadian CEOs and investors into coupon-clipping couch potatoes
Income trusts are the glazed doughnuts of the financial world, and the investors who gorge on them are becoming fat and happy. Soon, they will become lethargic, their arteries and brains clogged with trust lard. And what's bad for investors is also bad for corporate Canada.

Trust lobbyists, that's enough of your fury

By Eric Reguly. December 2006 Report on Business
Someone should encase income trust lobbyists in concrete and fling them off a bridge into deep water. On second thought, forget it; even that wouldn't stop the misguided creatures. Houdini-like, they would somehow break free and call for Jim Flaherty's head the moment their lips broke the surface. They are unstoppable and insatiable.
Still, the trusts lobbyists are lusting for blood, as if it's their god-given right to determine tax policy. They should be ignored.

Trust lobby had no hope against Flaherty

By Eric Reguly. February 1, 2007 Report on Business
If the expanding array of income trust lobby groups were to emboss their stationery, they might consider the image of Sisyphus, the symbol of hopeless labour. The lobbyists keep pushing the rock up to Jim Flaherty's door only to have it roll back upon them with great squishing sounds. Repeat process, repeatedly.
There’s no arguing with the man (Flaherty), and the trust’s disjointed effort only made it easier for him to say no

Rather than maligning income trusts and income trust investors, the Globe should be maligning ABCP and ABCP investors. Anyone who put their life savings in something they didn’t understand is certainly setting themselves up for disappointment. Like Alan Jones who stated on the front page of the Globe “If you were say investing in a mutual fund or something like a bank stock, and you knew what you were buying, you’d know the possibility that it was going to lose money. But in this case we weren’t informed”.

So what’s his point? He’s not at fault? If so, he stole that line from Jim “It’s not my fault.” Flaherty.

So where are the Globe’s cries of “ponzi scheme” and “you weren’t properly diversified”? These charges are aptly applied to ABCP investors, and not to income trust investors, to whom the Globe solely directed them.

Contrast ABCP to the income trust investor, who was investing prudently in real businesses to generate their much needed retirement income and not through some black box financial concept called ABCP.

The only risk these investors imprudently took was relying on Stephen Harper’s false promise.....not knowing that the Globe and every other media outlet in Canada would subsequently hide the truth behind Stephen Harper’s false premise for breaking that promise, namely the allegation that income trusts cause tax leakage.

The Canadian media are as bad as ABCP. In fact worse. Black box financial instruments are replaced by black box journalism.

However, as with all things "unnatural", that house of cards will soon collapse, as well. Thanks to the internet.

7 comments:

Dr Mike said...

Three reasons why I no longer subscribe to the Globe & Wail :

Eric Reguly

Eric Reguly

Eric Reguly.

Dr Mike Popovich.

Robert Gibbs said...

Eric Reguly:

Then, as always - Supreme "Dick" Of The Globe And Mail, with his professionally bankrupt capacity of "Journalism For Slobs."

Anonymous said...

I am not sure who is more fraudulent as a journalist, Reguly or Corcoran.
They both lack integrity, professionalismm, honesty, etc. Canada needs some new business journalists.

Dr Mike said...

Wasn`t it our buddy Corcoran who wanted Brent "vaporized".

A brilliant thing for a journalist to write.

So much for impartial business commentary.

He & Reguly represent the worst in business reporting for they lack the ability to stand back & judge the issues for their net worth.

The Jerry Springers of the business world.

Dr Mike Popovich.

Kephalos said...

What dat effing eff? Don't nobody know how to do calcs and check numbers?

Purdy Crawford said when he realized that 1800 retail investors were caught in ACBP, it blew his mind. Wow! what an expensive acid trip?

What's $33 billion divided by 1800 investors?

Can you believe $18 million?

What dat effing eff? What's your reality, Purdy man?

Anonymous said...

Kephalos makes a good point about the token number of retail ABCP investors, who the Globe is trying to leverage off, to advance the agenda of the non-retail ABCP investors.

The Globe’s slogan is “‘Perspective is Everything’, and yet they offer none of their own, apart from the one that serves their corporate agenda.

How’s this “perspective” for starters:

Number of retail income trust investors : 2,500,000
Number of retail ABCP investors: 1,800

Size of income trust market: $225 billion
Size of ABCP market: $30 billion

Proportion of Income trust market held by retail: 90% plus
Proportion of ABCP market held by retail: less than 10%

Loss sustained by income trust market: $35 billion
Loss sustained by ABCP market: $10 billion

Cause of loss in income trust market: Government intervention
Cause of loss in ABCP market: Lack of government regulation

Tears cried by Globe for trust investors: zero
Tears cried by Globe for ABCP investors: endless

Characterization of Trust Investors by Globe: Coupon clipping, glazed donut eating, ponzi scheme loving, insufficiently diversified, tax avoiding lazabouts , causing irreparable harm to Canada’s economy
Characterization of ABCP investors by Globe: Hardworking salt of the earth Canadians in urgent need of a taxpayer subsidized bailout

Brent Fullard

Anonymous said...

As long as we're naming those with questionable motives and integrity, I would add Barry Critchley of FP to the list. No worse gossip monger.