Thursday, May 7, 2009

Dominic D'Alessandro creates $250 million + of tax leakage


Dominic D'Alessandro of Manulie is the gift that keeps on giving, for those of us who are opposed to the end policy of his lobbying and a keen interest in the truth.

Dominic lobbied Ottawa to kill income trusts and to ostensibly “level the playing field”, which was code for killing the competition by any arbitrary and unjust measures that were available.

Tax leakage became the fraud on which Flaherty brought about this bespoke tax policy for the Life Insurance companies. How ironic. How serendipitous too, since Manulie launched a new product the very week of Flaherty’s Halloween massacre of income trusts, named ironically as Income Plus.

Dominic’s greed based decision NOT TO HEDGE Income Plus turned this product into a major Income Minus, and saw Manulie lose $1 billion in the latest quarter with a $1.146 billion write down due to credit impairments because of this product that Flaherty had made possible and the losses that Dominic personally engineered.

This $1 billion write down will mean that Manulie will shelter an equal amount of earnings in the future from taxes. This is the same reason that BCE is NOT TAXABLE, as they have huge writedowns from past failed acquisitions to shelter their earnings for many many years to come> It is also why BCE was paying no taxes at the time of Flaherty’s Halloween Massacre that he “justified” by saying the conversion of BCE would result in the loss of corporate tax revenue? Hard to lose something that wasn’t even being paid, but understand this is Jim Flaherty we are dealing with here, our Flim Flam Minister of Finance

The bottom line, is that Manulie has caused about $250 million in tax leakage from their failed foray into phony fixed income investment products like Income Minus.....sorry Income Plus, and the associated write down of $1 billion.

3 comments:

CAITI said...

Brent,

They actually lost $2B in the quarter less $1B tax recovery leaving an after tax loss of $1B. The $2B loss provides the $1B write off. The press release only includes a balance sheet and income statement which are two of the three GAAP reports that comprise a set of quarterly financial statements. They have left out the third and equally important Statement of Cash Flows.They will have to file it with the regulators. The following is from their press release and notice how they talk about cash from operating activities of $2.5B compared to earnings of $803Mand the accounting charges of $1.1B. The differences between these numbers are very crucial information that cannot be determined without the Statement of Cash flows. It will eventually show up, just not in the press release.

Also if the wrote off $1B they also lost another $1B from operations to get to the $2B before tax loss.

Harry

The quarter's net loss was primarily driven by continued declines across all equity markets, particularly in the U.S. Reserve strengthening for segregated fund guarantees resulted in an accounting charge of $1,146 million and credit impairments were $121 million. Also affecting earnings this quarter were fair value adjustments of $277 million primarily for declines in commercial real estate values, $255 million of equity related charges and $72 million related to credit downgrades. Earnings for the quarter, excluding these items, totaled $803 million and cash provided by operating activities of $2.5 billion reflected the non-cash nature of these charges.

Anonymous said...

Caption of Dominic picture:

I want to squeeze the life out of those Income Trusters,

They didn't buy my stock - and I'm entitled to my golden parachute

Plus I hate competition, makes me work too hard

Sunstone

Dr Mike said...

Good old "greedy guts" Dominic just wanted it all but he forgot one important thing as sometimes you get exactly what you wish for.

He wanted the market to himself , so he had the competition removed with some help.

This allowed him to sell stacks of dollars worth of a conveniently placed product & was rolling in the dough.

Tough luck trust investors .

The "Dom" got greedy & didn`t hedge.

How many ways can we say "bitten in the Ass" by a snake he himself created.

All I can say is bummer.

It could not have happened to a nicer guy.

Dr Mike Popovich