[as originally posted 01/25/09 on my formerly free thinking blog http://tworippingarseholes.blogspot.com ]
"The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy."[President Abraham Lincoln -
1863]
"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it."[John Kenneth Galbraith,
Money: Whence it came. 1975, p29.]
"This is January; named for Janus. Janus looks forward; but Janus also looks backwards. And if you don't look back, you don't know what might be hitting you on the other side."[Rep. Stephen Cohen (D) -
January 2009]
Does anyone
remember our
friggin' Finance Minister
Flaherty telling us last October how our
"High banking standards have kept Canada's financial institutions afloat and out of the kind of trouble that has sunk many of their international peers"? Anyone??
Well, fellow travelers, a lot has changed since then. As such, We Two Arseholes are taking a look back in order to divine what may be about to smack us upside our collective heads in Dim Jim's upcoming Budget. Now, we are not going to dwell on the gum-flapping moron's infamous fall declaration saying there would "
be no deficit on his watch, even on a temporary basis". Face it, this week's
confirmation by the Tories that they will run a
$64-billion deficit over next two years shows they were always lying on this count.
No, what we are talking about is the salient part of that day's story; the positive part, the reassuring part - the truthful part. You see, in October, Dim Jim was lauding Ottawa's strong regulatory system as the prime reason our
"banking industry [was] more secure than financial sectors in the United States". And, for once, he was right. Compared to other G-8 countries, our prudent banking rules have been instrumental in insulating us from the fiscal nadir and bankruptcies others are experiencing. And today?
What of today?
Well
now it seems
Harpo & co. are about to undo that which has spared us from the horror show we are witnessing in the US, to wit:
THE BANK ACT (CANADA) - Section 401.2 (1) Constraining registration: Crown and foreign governments - No bank shall record in its securities register a transfer or issue of any share of the bank to:
(a) Her Majesty in right of Canada or of a province or any agent or agency of Her Majesty and in either of those rights; or
(b) the government of a foreign country or any political subdivision of a foreign country, or any agent or agency of a foreign government.
Now, in true Orwellian fashion, we are being told to buy into the new
Bizarro-
Harpo-Vision - to see the world anew.
Now, what once was good - is bad; and what once was strong and
true about Section 401.2 - is
now, apparently, weak and
false. You see, Dim Jim has
now been told by
Harpo: "You don't believe in the merits of strict regulations barring foreign ownership of our banks anymore. No Simple Jim, what you now believe is something else altogether different."
"Huh, boss?" Jim dithers as he asks, "say that again?"
"Well, you see
Jimbo, we've decided you are no longer a staunch defender of Canada's current 'high banking standards' that bar other countries from buying up our banks. In fact, you are now to say that Section 401.2 is a barrier to recovery. Got it?" Dim Jim nods. "And you are going to reaffirm that we will buy up $75-billion or so of Canadian bank mortgages with Canadian tax dollars."
So why are the Tories going to gut our banking regulations during this crisis? Well, the answer to that is simple: the greed of Canadian bankers knows no bounds and Tory desperation knows no limits. In short, Harpo would rather appease Canada's usury bankers who want to play Russian Roulette with our tax dollars than stand up for the the ideal that our banking industry should be sovereign and free from undue foreign influence.
Canadian Bankers, sense they can use Canada's collective 'sky-is-falling' angst to their advantage. They are preying on the insecurity of the consumer as they seek to proffer a Grand Narrative which argues for access to new capital investment from anywhere and everywhere -
even if it comes from the same foreign fiscal interests who got us in this mess to begin with. Place this greed imperative in the same room with
Harpo's politically reptilian impulse to survive at all costs; and what we have is every likelihood that the Banker's will get what their amoral-dividend-seeking-hearts desire most -
even more Canadian tax dollars on Tuesday, with the added bonus of now being allowed to access untapped capital from sovereign wealth funds.
You see, thanks to
Harpo & co.'s December brain-fart, the banks have come to realize that they are the one's truly in the driver's seat on the economy. And, as such, they have decided to force Ottawa to think the unthinkable, to allow the
un-allowable, and to endorse the reprehensible: To repeal Section 401.2 to facilitate foreign purchases of Canadian domestic bank stock; thereby doing away with the very safeguard that helped shield Canada's institutions from the virus plaguing other western banks. What they want, amid the confluence of today's stress, strain and panic, is to forge is an unholy union with the very capital markets that wrought the current plague. 'But Arseholes," you say, "how can you possibly know this?"
Well, this week, as the entire world was focused on
Obama's Inauguration, a little-big story entitled:
"Rule change would allow Ottawa to buy bank stock" appeared in the
Report On Business. Quoting
Friggin'
Flaherty, it highlighted what
Harpo & co. really want to do is to change "little-known rules that prevent governments from owning shares of Canadian banks and insurers". A move, incidentally, that would allow Ottawa "to inject capital into banks ... [and] make it easier for Canadian financial institutions to pull off foreign takeovers, and ease the way for sovereign wealth funds to invest in institutions here."
Hmmm, We Two Arses wondered? Why would
Harpo & co. do this now? Given present global market conditions this doesn't sound like a very desirable state of affairs for the Canadian tax-payer or depositor . Hmmm.....
Well,
we read here that recommendations generated by Finance Minister Jim
Flaherty's "working group made up of officials from the chartered banks, government and Crown lenders" to fix the commercial paper market are likely "to find their way into Tuesday's budget."
Hmmm... interesting? Does anybody else wonder if these recommendations might include a move to repeal Section 401.2? Might this be
the poison pill Flaherty is going to bury in the textual ass of next Tuesday's budget?
Hmmm? Are we crazy?
Maybe not. When the President of the Canadian Banker's Association (
CBA), Nancy Hughes Anthony scolded the Globe & Mail in November for missing the point in its story "
Ottawa Bows To Banks To Keep Credit Flowing", she wrote "The real headline is that both the banks and the federal government share a common goal and continue to co-operate to find solutions that are in the best interests of Canadians".
Hmmm, but maybe she neglected to tell us everything about the 'solutions" the
CBA were advancing. Maybe, what she meant to say is: the
CBA would only play ball if it was promised that those "solutions" included new provisions for access to foreign capital investment. Maybe, the fact is that Canadian bankers have been slow to vociferously back the Tory stimulus scheme because they want
Harpo's parrot,
Friggin'
Flaherty, to first grant rule changes that would give Canadian Banks unfettered access to what they see as a cash infusion bonanza from foreign governments.
Maybe, this is the price the
CBA has exacted from
Harpo & co. in order to be seen as onside with the Tory's massive new 'stimulus' programme. Could it be that
Friggin'
Flaherty is willing to sell out Canadian taxpayers and depositors at this time because Canadian bankers have made regulatory change the price for their full participation in
Harpo's recovery scheme?
Oh,
Harpo, say it ain't so! Say it loud and say it in the Budget.
But, alas, We Two Arseholes fear that, in fact,
Friggin'
Flaherty and
Harpo have already made the deal. We fear there is every chance that a formal announcement of Ottawa's intent to change the regulatory laws will be this Budget's
poison pill.
So let's recap and posit. Our Bank Act currently prohibits “the government of a foreign country or any political subdivision of a foreign country, or any agent or agency of a foreign government” from owning shares in any Canadian bank. Okay, seems like sound policy to us. After all, who wants foreign governments having any say in how much capital OUR BANKS can, or, cannot lend to OUR business and consumer sectors. And who wants foreign interests influencing, or, having a direct hand in setting what OUR domestic banks set as their prime-lending rates? Certainly not us. Bad enough that
Flaherty has
already spent $33-billion of our tax dollars to buy up Canadian mortgages and plans to "
buy up as much as $75-billion" overall to "free up" lending capital for Canadian Banks? Do we really want offshore sovereign wealth funds having a say in the amassing of more such mortgages just so they can then turn around and sell them to OUR federal government to improve THEIR stockholder value? No.
Ironically, the $33-billion
Friggin'
Flaherty has already spent is equal to the size of the announced deficit for this budget. But nobody is talking about this. Nobody seems to see a problem here. We mean, what else does our government have to do for our "sound banking system" in the current crisis? Must Ottawa now start buying stock?
Jesuz-Christos! You'd figure that committing $75-billion Canadian tax-dollars to purchase the bank's mortgage holdings would be enough of a stimulus for the industry - no? Also, you'd figure that foreign investors in Canadian banks should be barred from benefiting from this questionable use of OUR tax dollars. No?
Now it might well be that what our banks really want is to secure our tax dollars because they will help "make it easier for the country’s banks and insurers to make foreign acquisitions". Even if this is the case, the whole premise seems like folly to us. Speculating on and purchasing stock in 'cheap' US banks when their domestic market is in the toilet hardly seems in to be in the best interests of the average Canadian. The only group served by this action would be our Bankers. While their portfolios would be enhanced - it would hold little upside for the rest of us.
As an editorial in this weekend's
The Daily Observer noted the Tories are about to give Canada "
a budget that will be a full course meal for the banks and industry, with the average taxpayers getting the table scraps." To save his own skin,
Harpo is about "
raid the piggy bank, mortgage our future then give it to the very people who have put us in this mess to begin with." Egad, what
will it take to save Canadian's from this fate - a
second coming?
Hell, if the repeal of Section 401.2 does indeed show up as
the poison pill in Tuesday's Budget, we hope that
Friggin'
Flaherty shows up in the House with a halo and beard to match his new pair of sandals, because he is not only going to have to turn an awful lot of water into wine to get us to swallow it. He's also going to have to walk on the water to get us to believe it!!
[**
n.b. Since reading the original ROB story on Tuesday last, I (Fat Arse) have made numerous calls to various organizations trying to ascertain their views on a 'poison pill'. Regrettably, it has been impossible to get a formal response from either the national NDP or LPC party offices in this regard. I did have a nice conversation with a NDP 'caucus office(?)' employee who took notes and promised to get back to me on Friday - but he never did. As for the LPC, on Wednesday morning I was directed to talk with Mr. Lauzon about the matter. Despite leaving numerous messages asking if either he, or his subordinate, could clarify the Liberal position on any poison pill in the Budget surrounding foreign ownership of Canada's Banks - my calls were not returned. However, I would like to thank the very professional and engaging media chap at the Canadian Bankers Association who took the time to answer my questions and helped direct me to the appropriate places on their website to research their public pronouncements since October - thanks Andrew.]
Coming posts?:
Monday: "How the CBA pressured Harpo to force Flaherty to suck on their Grand Narrative.";
Wednesday: "Friggin' Flaherty and The Making of a Fiscal Apocalypse."
19 comments:
I have always found this blog a great read, but with this post, you have crossed the Rubicon in terms of transcendent originality. Ripping fantastic!
Ha! You guys are crazy! Love it!
Maybe what we need is some good post-apocalyptic chaos to separate the strong from the week and get human evolution back on track!
Nice. I've always thought of doing a blog post that would stand as a trail guide to the Manitoba blog scene. You've done me one better!
Jesus!
And I thought my outlook was bleak...
Can't wait for part II!