Friday, December 30, 2005

Day 2: Goodale's Income Trust debacle / Globe and Mail story

Today, there is a flurry of activity in Canada's political election campaign. The flurry centres around what may be the collapse of the Liberal party. As Bourque notes, the Liberal party has been dogged with problems: "the dog doo-doo's, the popcorn, the RCMP criminal investigations, etc".

The latest SES research poll shows a dead heat. Considering that it is rolling polling (that kinda rhymes, don't it?), either today's numbers represent an anomaly or the Liberals seem to be sinking everywhere in Canada, with only the lone two holdouts Quebec and Ontario.

ON THE ISSUE OF income trusts, the Globe and Mail headlines this story: "Trading offers few clues for RCMP."

Is this really the right title for the story?

Exhibit 1: this statement by one Bay Street exec:
"You would have to be pretty stupid not to figure out what's happening." The evidence bears this out.

Exhibit 2: It took less than a week to figure out what was going on based on public knowledge that everyone could access.

Exhibit 3: There are many clues that can be followed up. Here are some simple layman suggestions:
  1. Find out who profited/traded Income Trusts in high volume the day before and the day of the Income Trust announcement.
  2. Analyze phone records from the PMO and Goodale's office. Who were they calling? When?
  3. Try to establish links between communication with these offices and big firms.
  4. Find out what went on during the closed door meetings Goodale had with Bay Street in the days prior to the announcement.
  5. Trace messages indicating that Goodale would be "levelling the playing field" before the announcement.
Its just a start. Is the Globe trying to lower our expectations? "A look at the trading records shows that different brokerage firms led the trading of each stock, suggesting there was no concentrated pattern." Could it be possible - gasp - that more than one firm had leaked information?

Besides, the RCMP aren't looking for patterns per se. Is the Globe suggesting that there is no merit to the suggestion that 35x increase in the average volume of Paul Martin's Physicians' Medisys Trust was guesswork? Look at the statistics and decide for yourself.

Volume for MHG on the TSX:

Nov 25 12.000 12.000 11.700 5,053
Nov 24 11.500 12.000 11.200 9,045
Nov 23 11.020 11.200 11.000 6,220
Nov 22 11.000 11.000 10.800 203,953
Nov 21 10.800 10.800 10.650 5,714
Nov 18 10.600 10.620 10.600 1,530

1 comment:

cardinal47 said...

Good stuff. The Liberal campaign is off the rails. Goodale should resign (for why, see my blog)