How To Build A Sailboat

The mysteries of life ...... market maker Tembec

The note below was posted on the blog progressive economic forum in response to about Henri Paul Rousseau before the Board of Trade of Metropolitan Montreal. If he accepts the burden of historical losses of the Fund, the former leader is nonetheless permitted to rely on forces beyond his control to explain the extent of damage in 2008. Yet the question of the importance of investments of the Fund ABCP - to the point where it accounted for nearly half of these securities in circulation in Canada - remains for him a "mystery of life". I tried to explain to my fellow progressives here how the ROC can sometimes take us for fools and get away so that we can add insult to injury. The political crisis

Around the fund's dismal performance continued to haunt The Political scene in Quebec. Urged to explain how one billion dollars up to 40 Might Have Been Lost history Düring Management Fund ex-director Paul Henri Rousseau Largely blamed The Economic and Financial Crisis, Factors Beyond His Control. Asked Why and How the Fund ended up with so much ABCP in its books in the weeks leading up to the credit crunch (more than half of non bank ABCP) Rousseau replied that it remains “one of the mysteries of life”.

Some mysteries are more easily solved then others.

When Rousseau was called to the helm of the Caisse by PQ Prime minister Bernard Landry (and self-styled third way social democrat) he explicitly underscored his desire to change the Caisse’s dual mandate from the active pursuit of economic development and financial returns to a new mandate inspired by financial market efficiency theory: what’s good for financial markets must be good for economic development. Armed with this new mantra Rousseau asked that the Caisse’s operations and investment decisions be “neutralised” politically and that the mandate to develop Québec’s economy and protect “Québec INC’s interests” be scrapped. It took a provincial election and the rise to power of the (neo) liberal party of Jean Charest for the mandate to be changed. Progressives and left wing nationalists have argued since that the Caisse has not only deserted Québec’s economy as a major investor, but that it has tacitly supported neoliberal policies such as P3’s.

What does this have to do with ABCP ? I’ve argued in the francophone press (an op-ed piece in the Devoir) and media that in fact the Caisse did have a new mandate of economic “development”. Given it’s size in Québec’s economy and in Canada’s financial system, a decision to limit the Caisse’s investment strategy to the pursuit of highest possible financial returns condemned the Caisse to develop Canada’s …. financial markets. The Caisse owned at least a 10% stake in Coventry, a major provider of non bank ABCP, it also controlled the Montreal exchange, who’s derivative activity is intimately tied to the development of non bank ABCP, and it works closely with National Bank, a major reseller and broker in the non bank ABCP market in Canada back in the good old days when these constructs where assimilated to highly liquid, highly secure, highly profitable “money market” instruments. All the evidence I’ve stumbled on seems to point to the Caisse acting as “market maker” in this situation, why ? Because developing this new segment was highly profitable in a context of low returns on stock, because it supported the Montreal exchange’s bid to become an important player in the derivatives scene, because it dovetailed with the National bank’s strategy, and on the whole the Caisse seemed, back then, to help Montreal’s insignificant financial district become a significant player again.

Progressives in Québec are arguing that in times of economic crisis and crunched credit markets the Caisse should be available as policy tool to help our beleaguered manufacturing sector weather the storm and more importantly Lead With A Public Investment Strategy Towards a greener economy o and more socially sustainable growth. The Current Government Instead of thinking IS HAVING The Fund finances P3's that The Private Sector can not fund ... More of the Same to come?

How Do I Get A Job At A Strip Club

The new: the end of a "model"

modified version of an article published in the journal The Black Sheep
, Nov.-Dec. 2008.

There is now a year, the Forest Tembec announced the closure of a major recapitalization plan, a plan which involved a reorganization of the financial structure of the company to "ensure the continuation of its operations and improve its long-term value. " In the eyes of financial analysts, the large debt that Tembec had accumulated from the 1990s, combined with market outlook bleak, lead stock of the company and kept it "on the merits of the court": the title of company, having been traded at around $ 18 in 2000, now flirting with junk securities, and shrinking operating margins made daily more imminent crisis of solvency more difficult to refinance its borrowings. That's why this recapitalization plan was first referred this element of financial structure: in fact the conversion a slice of U.S. $ 1.2 billion of debt into shares of the company which was conducted in February 2008. After this transaction, 95% of the shares of the "new" company that would fall within the portfolio of its creditors, the remaining 5% being distributed proportionately among all shareholders earlier. Senior management of the company presented the transaction as a technical matter, primarily concerning the capital structure of the company.

Now, more than a mere accounting trick, the financial recovery plan sounded nothing less than the end of a business model and initiated major changes within Tembec changes we have witnessed in recent months. Indeed, this financial operation of converting debt into equity has meant that U.S. creditors from whom Tembec had contracted large loans in recent years have become, by the reversibility of financial engineering, the new majority shareholders company. This operation has been for at least two major reasons.

First, because Tembec has long been cited as a "model" Quebecois co-management business, a model that was based on the participation of employee ownership and administration of certain economic aspects of the firm. It will be recalled that after its closure in 1972 by the multinational CIP plant Témiscaming was bought by some of its executives and workers, which ensured a kind of anchor in the business community. This original, which was however mitigated over the years, was finally buried with the recapitalization, which shifts control of the capital of Quebec Tembec in the hands of American high finance. Even former pd-g. Frank Dottori and his friend Emanuele Saputo, the largest shareholder of the company before the commencement of the plan, have publicly opposed the transaction. In its edition of December 20, 2007, Le Devoir recounted indeed Dottori's reaction to the plan, which was still in draft: "I do not agree with giving the company to American investors and to pack, no matter how it is presented, shareholders, employees and people who have spent 20 or 30 years to build the company ... I have great difficulty accepting that ". Two weeks before Dottori not worry about these, Emanuele Saputo resigned from his post at AC Tembec and presented a refinancing plan "alternative" had advised that BMO Capital Markets team of James Lopez, the new pd -g. Tembec. This alternative was rejected, however, the top management of the company having clearly decided to seize the opportunity offered by this plan to rebuild a new Tembec, a break with the legacy of the years Dottori that sought to maintain the supply of Saputo.

Understand that this recapitalization plan is important for another reason, corollary to the first, or he has ushered in a new business model at Tembec, a model based on the ongoing restructuring of its productive activities. Indeed, the new shareholders of Tembec's new at the time of the closure of this plan, were no more than three U.S. hedge funds - Wayzata Investment Partners , Bear Stearns Asset Management and Trilogy Capital - who are known for their ability to drive major transformations within the management of controlled undertakings. Being in the hedge fund and private equity , two strategies of business management based on the substantial increase in financial returns of the company, these three new shareholders are part of the constellation of powerful financial organizations that show very pro-active "about the directions of the companies they hold. That means they have probably done everything to ensure that strategic decisions taken by the executive of Tembec comply with their best interests money managers , That is to say, the need to maximize the cash available (through increased cash flow and operating margins), and maintain a good credit rating of the forest with financial analysts. Tembec has become for these financial organizations an "asset" among others in their portfolio, an asset that must retain a significant document for possible liquidated in the market.

course, among all the means available to management to meet these expectations and sending positive signals to the community of financial observers, restructuring, plant closings and asset sales have been the easiest ways at the same time the most effective. In the current context of crisis in the majors forest industry, the arrival of these financial players at the head of Tembec has coincided with increasing rationalizations whose profits were, in essence, channeled to the company's financial interfaces. It is indeed the new Tembec, rather than trying to mitigate the effects of the crisis in the industry on the communities in which it operates, has resorted to these "traditional" means to improve the liquidity of the company: since the entry into force of the recapitalization plan a year ago, the closure announcements have shaken up, the brand new factory Amos closed last September, to the indefinite shutdown of operations of the pulp mill hardwood Matane, through the facilities ultimate Pine Falls, Manitoba, owned by its employees not so long ago.

Beyond the fact that the financial situation of Tembec will be (slightly) improved with the recapitalization, relieving the corporation of a debt financing costs had become prohibitive, it seems to blow ale bar also referred to habituate to practices now "standard" Tembec: applied at a decisive moment in the history of the company, medicine shock administered last few months is probably the clearest sign that the partnership model developed since the 1970s will now be up to management strategies "sticky" as close to the conventions produced by the market, a market now structured by new financial players.

Images Of Cancer Of The Tonsils

Quebec and Montreal Exchange Fund losses

Excerpt from the Globe site and Mail:

The leadership contest at the beleaguered Caisse de depot et placement du Quebec just got a whole mot more interesting, as the widely respected Luc Bertrand stepped down Thursday as head of the Montreal Exchange.

After nine years at the helm of the successful derivatives exchange, Mr. Bertrand will leave the deputy CEO job at TMX Group in June. He was a candidate for the top job whe the Montreal and Toronto exchanges merged last year, but the board brought in an outsider, Thomas Kloet.

“I now feel that it is a good time for me to move on to other challenges and opportunities,” said Mr. Bertrand in a press release. As a proven manager with international experience, Mr. Bertrand is often mentioned as a candidate for the top job at the Caisse, which is in disarray after losing $40-billion in 2008, and seeing it CEO Richard Guay retire. Mr. Bertrand has declined to comment on whether he would want the job - current Caisse CEO Fernand Perreault is not in the running - and he would certainly have his pick of positions at financial institutions.

But for an executive with an interest in public policy – Mr. Bertrand's undergraduate degree from the University of Ottawa is in political science – the challenge of turning around the Caisse would be enticing.

Other candidates for the top job at the Caisse include Jean-Guy Desjardins, CEO and co-founder of Fiera Capital and TAL Global Investment Management, and Christiane Bergevin, the head of SNC-Lavalin's finance division and a fund director. Mr. Desjardins is in. His mid-60s.