Hydro One sell-off a BIG CON JOB?

By: Keith M. Summers

I am not an expert on whether or not Hydro One needs new management or if we would all be better served if Hydro One were not 100 per cent owned by the people of Ontario. But I do know that for $9 billion, the new shareholders should get somewhere around 30 per cent of the company, not 60 per cent.

Why is this a bad deal?

Because it is a bad price.

Investment people — like the people who have agreed to help Queen’s Park unload its majority stake in Hydro One — value companies based upon a couple of different factors. Sometimes the value of a company is based on the value of its assets: land, factories, intellectual property, and brand name recognition. The thinking being that better management of those assets might generate higher profits. Sometimes the value of a company is based on its profitability. A stable stream of income is worth paying good money for. Some companies are valued on their assets, others are valued on their earnings; sometimes it’s a little of both.

Hydro One is a stable generator of profits. It has been profitable since it was created out of the breakup of Ontario Hydro. Its profits have grown by 6.3 per cent per year for the last 14 years. It reported earnings of $749 million for 2014 — all of which belong to the people of Ontario. You and me.

Now, we all know that the province is in debt. $284 billion. That’s the bad news. The good news is that investors love to buy government bonds. Investors are so eager to buy Ontario bonds that they compete as to who will accept the lowest interest rate. In March, bond investors lent Ontario money for 10 years at a rate of 2.1 per cent. Our average interest rate on all our existing debt is only 3.8 per cent (and falling).

So, we have some numbers to work with: 1) Hydro One earns $749 million. 2) The province pays, on average, a 3.8-per-cent interest rate on its outstanding debt and 3) the province can borrow new money at rates as low as 2.1 per cent for 10 years. So here’s the question: how much should we, as Ontarians, receive for selling this $749-million income stream?

One way to calculate it is to say that $749 million pays all of the interest on $20 billion in existing government debt at a rate of 3.8 per cent. So, to accept anything less than $20 billion in cash is a bad deal.

Another way is to say that $749 million will pay all of the interest on $36 billion of new government debt at a rate of 2.1 per cent. So, to accept anything less than $36 billion in cash is a bad deal.

The number that doesn’t make sense is $15 billion. That’s the value that the premier has put on Hydro One. (If 60 per cent is worth $9 billion then 100 per cent is worth $15 billion). That is the number that Bay Street has convinced the Premier to accept for selling a profitable and growing business that earns $749 million with an earnings growth rate in excess of 6 per cent.

Why is she doing this?

I don’t know. But I can tell you why Bay Street is pushing this deal.

Greed. In addition to buying a blue-chip electricity monopoly at a rock-bottom price, they hope to make money by “underwriting” the deal. They intend to charge us a fee for selling our Hydro One to themselves at a terrible price. And a deal of this size could be worth hundreds of millions of dollars in fees.

I have a lot of respect for investment bankers. They are the guys (mostly guys, anyway) who help companies “go public” by convincing ordinary Main Street investors to buy shares in newly public companies. That takes a lot of work and is not without some risk.

What will not take a lot of work for them and involves no risk is selling Hydro One at a ridiculous, giveaway price.

This deal is the biggest con I’ve ever seen.

Source:

Keith M. Summers is a former hedge fund manager and was convicted of fraud in 2014. He is currently serving a three-year sentence. His book, Conned: How Wall Street rips you off and How to Fight Back will be published this fall.

http://www.thestar.com/news/queenspark/2015/05/18/why-kathleen-wynnes-hydro-one-sell-off-is-a-sellout-cohn.html

Carding, itself, can be defined as a valued public safety reason.

In any day or age and especially in these times of worldwide terrorism, coupled with the disrespect for life, law, order and discipline, a civil society’s overall public safety through policing which involves the prevention and protection of all communities is not best served through a policy of speech precondition statement (you have the right to walk away) for interaction by the police with the public within Toronto is the wrong choice for overall public safety and policing on our streets or within our communities.

Toronto's former police chief Blair should be congratulated, not bullied and harassed by the media, for standing firm on behalf of the majority of law-abiding citizens against the demands of media activists and others who continually advocate against carding and other police policies that are valuable public safety measures used in protecting the public at large in these precarious times.

Watering down by strangling the public’s essential rights to public safety by restricting the policy of carding for all, through a policy of speech precondition interaction by police is wrong.

We all enjoy the right to remain silent after being arrested for a crime. In a civil and free society, it is also our civic duty to openly cooperate and respect a non-confrontational link between police officers doing their duty as members of the community to serve and protect us all.

No individual or group has the right to claim ownership of a city or community as Shawn Micallef of the Toronto Star would have you believe. Crimes of murder, theft, sexual assault, robbery, break and enter, stolen vehicles, drug charges etc are hourly reported throughout the city and communities. 

These daily occurrences of breaking laws by individuals regardless of their skin colour are red, white, blue, purple, black, green or yellow, necessitates the occasional arbitrary stops and sometimes intrusive questions of residents on our streets. And remains a very valid policy of public safety in protecting and serving citizens, residents and tourists within Toronto.

Toronto’s pressure group activists vow to go to court if THEIR reforms for police carding practices are not implemented by duly elected officials should be a clear indication to law-abiding citizens just who is attempting to be the puppet master of policing and public safety in our communities!

Watering down by dismissing the public’s essential rights to public safety with a policy of speech preconditioning interaction by police is wrong.

Source:

http://www.thestar.com/life/2015/04/17/police-carding-policy-has-made-this-column-a-sham-micallef.html

http://www.thestar.com/opinion/editorials/2015/04/15/carding-reform-should-be-left-to-torontos-next-police-chief-editorial.html

Sanctions a Cowards Declaration of War and Insincere Approach to Diplomacy

Should the USA supply arms to the Ukraine government in addition to sanctions already applied against Russia, which is itself a form of a declaration of war, could lead not only Europe but the US itself into a nuclear WW3.

The U.S. has imposed sanctions, unilaterally or with other nations, far more frequently than any other nation in the world, or any multinational body in the world, including the United Nations.

Economic sanctions violate Just War principles and do not affect a country's military power but rather directly affect a nation's citizens.

Sanctions do NOT protect the innocent lives of civilians or preserve conditions necessary for decent human existence and definitely do not secure the basic human rights of a nation's people.

Further, on the basis of proportionality, the damage inflicted by sanctions is far greater to the populace of a nation than questionable offences being avenged. And in no way do sanctions present any probability of success when the outcome of sanctions not being known shall be futile.

The EU by joining following the Americas and British sanctions against Russia have in effect declared an economic war against Russia.

Sanctions as a means of peacekeeping and international governance, effectively escape ethical analysis as we do not judge them by the same standards we judge other kinds of harm done to innocents.

Yet, concretely, the hunger, sickness, and poverty which are ostensibly inflicted for benign purposes affect individuals no differently than hunger, sickness, and poverty inflicted out of malevolence.

Using or describing sanctions as a means of "peacekeeping" or "enforcing human rights" is an ideological move, which, from the perspective of concrete national experiences throughout history is simply counterfactual.

Sanctions are, at bottom, a bureaucratized, internationally organized form of siege warfare, and should be seen, and judged, as such.

The EU and indeed the Americans perhaps have awakened the Russian sleeping bear and the world not just Europe this time is in grave danger of an all-out nuclear war, thanks to sanctions and the arming of Ukraine with USA weapons.

Additional Info 

http://www.publications.parliament.uk/pa/ld201415/ldselect/ldeucom/115/11502.htm

http://www.publications.parliament.uk/pa/ld201415/ldselect/ldeucom/115/115.pdf

The Germans should reflect on their own history concerning Greeks odious debt.

As in the aftermath of World War II, the Allies, remembering the disastrous consequences of German reparations after the First World War, did not insist on their pound of flesh as Germany and the EU does now with Greece. 

The entire Nazi public debt, amounting to over 600 per cent of German GDP, was written off.

Further the German Federal Republic itself, after 1989, did not condemn former East Germany to austerity as a remedy for its fictitious communist economy. Instead, Chancellor Helmut Kohl allowed the eastern states to exchange their nearly worthless Ostmarks for Deutsch Marks at the inflated rate of 1 to 1, and then poured the equivalent of more than a trillion Euros into the reconstruction of the eastern economy.

Germany lived well beyond its means during the Nazi era, plundering the rest of Europe as well. If Germany had practised what they are now preaching for Greece, Germany today would be a much poorer country.

So now let’s couple Greek budget and tax reform with a large infusion of funds for economic modernization and public improvements in the spirit of the Marshall Plan and how it helped Germany after WW2?

Not with more funds but by writing down the Greeks EU debit by half so today and in the future Greeks young and old, instead of looking at 40 per cent unemployment, could gain productive jobs. 

And the entire Greek economy would gain a big macro-economic boost and a path to greater competitiveness within the EU. 

Similar to how Germany handled the East Germany unification bailouts and relief.

Most importantly, the EU would gain the moral authority to work with Greeks on politically awkward reforms. It’s one thing to grudgingly tolerate technocrats who are bleeding you dry in order to satisfy bankers—quite another to work with development specialists who come to Greece bearing gifts.

As has been said the EU and the ECB could call it the Merkel plan, so that Chancellor Angela Merkel might be remembered not as the jackbooted German who destroyed Greece but as the wise European leader who tempered austerity with sensible mercy.

The time is here for the IMF, World Bank and ECB to immediately recognize and understand that Greece, like other poor countries or developing ones, that have enormous unsustainable odious debts, has very little capacity to repay such a debt.

Further, it is morally and economically appropriate for Greek to refuse and question or recognize the legitimacy of this odious debt forced upon the Greek people and their economy.

Greece its government and citizens must not be held in this position of having to borrow more just to service debt, and no longer be asked to service such a debt when it has little to no trade surpluses.

The one way to keep Greece and the EU economically and financially together and for Greece to get out from under its debt is similar to that of how Germany got out of its debts after World War 2.

The current Greek repayable amount must be reduced by 50% and stretched out over 35 years. Also, such a new agreement must state that repayments on this reduced loan are due only when Greece has a trade surplus and that repayments be limited to 5% of export earnings.

This would give the E U countries, the Euro Zone central bank and all creditors a powerful incentive to import Greek goods and thus greatly assisting Greece's new reconstruction. 

 http://www.neweconomics.org/blog/entry/the-ecbs-quantitative-easing-programme

The Greek Peoples Odious, Enormous and Unsustainable Debt.

The IMF, World Bank and ECB must immediately recognize and understand that Greece, like other poor countries or developing ones that have enormous unsustainable odious debts have very little capacity to repay such a debt.

Further it is morally and economically appropriate for Greece to refuse and question or recognize the legitimacy of this odious debt forced upon the Greek people and their economy.

Greece its government and citizens must not be held in this position of having to borrow more just to service debt. And no longer be asked to service such a debt when it has little to no trade surpluses on an annual basis.

The only way for Greece to get out from under its debt is similar to that of how Germany got out of its debts after World War 2

The current Greek repayable amount must be reduced by 50% and stretched out over 35 years. Also, such a new agreement must state that repayments on this reduced loan are due only when Greece has a trade surplus and that repayments be limited to 5% of export earnings.  

This would give the E U countries, the EU central bank and all creditors a powerful incentive to import Greek goods and thus greatly assisting Greece's new reconstruction. 

Article

http://www.euractiv.com/sections/euro-finance/germany-presses-new-greek-leaders-maintain-reforms-311572

Radical Imams Preaching Extremism and Religious Hatred Do Not Represent Islam.

They are criminal jihadists misfits and thugs or self-professed radical extremist Imams and guilty of Islamic blasphemy equal to or greater than their followers of barbaric radical and criminal jihads.

That today around the globe, represent one of the major problems facing all civilized societies, democracies and religions throughout the universe.

They are just as radical and barbaric as their jihads criminal killers of men women and children. They are the ones who daily propagandize their own warped and criminal interpretation of Islam.

By preaching racial and religious hatreds toward all civil societies and call for or support the cowardly barbaric assignations, killings, terror, beheadings and suicide bombings in the name of Islam against men, woman and children be they Muslim or non-Muslim.

Such extremist radical Imams ignore the basic penal laws of Islam and criminally misinterpret the writings of Islam. Islamic law and teachings forbid terrorism. Terrorism is above all murder. 

Murder is strictly forbidden in the Qur’an. Qur’an 6:151 says, “and do not kill a soul that God has made sacrosanct, save lawfully.” (i.e. murder is forbidden but the death penalty imposed by the state for a crime is permitted 5:53).

If the motive for terrorism is religious, it is impermissible under Islamic law. It is forbidden to attempt to impose Islam on other people. The Qur’an says, “There is no compulsion in religion. The right way has become distinct from error.”

In the Islamic law of war, not just any civil engineer (Imam) can declare or launch a war. It is the prerogative of the duly constituted leader of the Muslim community that engages in the war. Nowadays that would be the president or prime minister or the elected head of state, as advised by the mufti or national experts (judges) of law. Not an Imam.

A true Muslim believer and follower of Islam is moderate, not an extremist, is truthful, not dishonest, is humble not arrogant, is dignified and decent not graceless. Where are these Imams and Muslims today?   

As the vast majority of the so called moderate Muslims who daily attend mosque are closing their eyes and not dealing with these imams and the radicalization happening right in front of them on a daily basis. It is not enough that these so called moderate Muslims express regret and while complaining about racial profiling by law enforcement.

Who is monitoring these radical Imams in North America, Europe, and the Middle East or throughout the world? Not Muslim communities or a majority of any of the moderate Muslims often mention by the press.

Why it is that law enforcement is barred from investigating in mosques in order to prevent this radicalization by extremist Imams before it goes too far?