Wednesday, August 13, 2008

Keeping score on Andy Willis

Maybe Andy Willis of the Mail and Globe should remind his readers about how “income trusts were packaged and sold” by the CONs.

Andy is having a very difficult time letting go of all of his support (tacit and otherwise) for Harper’s false premise for the tax.

Andy darling: Where’s the leakage? That’s what the legislation was passed on. The premise of tax leakage. Not the premise of ponzi schemes. Time to listen to someone other than DUI: Diane Urquhart Influence.

Approach the issue scientifically, not dogmatically, for example:

“Prove the case or drop the tax.” Diane Francis

Keeping score on income trusts

Andrew Willis, today at 5:05 PM EDT

For those interested in tracking the ups and downs of income trusts, a web site devoted to the sector posted a scorecard this week on distribution hikes and cuts over the first half of the year.

A total of 38 trusts bumped up the cash they hand out to owners in the first six months of the year, according to data assembled by and published on Tuesday. The average distribution increase was 16.4 per cent, with the energy trusts supplying much of that joy on the back of record oil prices.

Seven energy trusts hiked distributions by an average of 33.9 per cent. Meanwhile, the business trusts raised payouts by an average of 12.5 per cent.

The study by IncomeTrustResearch showed that the trust hall of shame picked up 16 members through the first half of 2008. That's how many funds cut or halted distributions. Including the five trusts that resorted to complete suspensions, these trusts averaged 61-per-cent reductions in their distributions.

Those wondering why there's so much focus on trusts that cut distributions should recall how most of these companies were packaged and sold.

With a few exceptions, such as commodity play SKF Pulp Fund, trusts were marketed by the Street as income-generating investments. Many investors were sold on trusts as replacements for bonds in their portfolios at a time when interest rates were at historic lows. When these trusts fail to deliver on what was promised, that's going to attract attention.


Robert Gibbs said...

Strange how the "S&M" newspaper suddenly publishes a few articles referencing Diane Whoever, shortly after recent related CAITI posts.

May be just a coincidence, but strange, very strange.

Anonymous said...

Apart from Andy Willis, what kind of silly, superficial journalist would ever confuse this with a bond?

Pantera Drilling Income Trust Announces Results for the Second Quarter and Expanded 2008 Capital Program and Declares August Distribution

CALGARY, Aug. 14 /CNW/

The Trust today declared a cash distribution relating to the period
August 1, 2008 to August 31, 2008, in the amount of $0.03 per trust unit
payable on September 16, 2008 to unitholders of record on August 29, 2008.

Cash distributions are not guaranteed and will fluctuate with the
performance of its operating entity, Pantera Drilling LP, which is dependent
upon oil and natural gas prices, the level of activity in the oil and gas
industry, seasonal weather patterns, competition, major customers, third party
suppliers, key personnel and workforce availability, among other risk factors.