Gulf Spill still not Plugged

31-May-2010 | Reggie | Commodities Oil & Gas

For a while it looked as though BP’s efforts to inject mud into the spewing well was going to stem the flow of oil into the Gulf of Mexico.  Unfortunately, BP has failed yet again to put a stop to the ecological disaster that is now the worst oil spill in history.  After the giant cement box and the mud both failed, BP’s next attempt will be to cut off the broken piece of pipe with a robot submersible.  People aren’t holding much hope that it will work and sadly the best possible option to put a stop to the leak is to drill a relief well.  The estimated completion time for that is August.

As a reaction to the massive public outrage stemming from this ecological disaster, President Obama has put a moratorium on all off-shore drilling in the United States.  Before the leak started, approximately 20% of all US oil production came from off shore drilling.  Putting an end to this source of Oil will put a huge amount of pressure on the price of Oil since demand for energy in the US has proven to be quite inelastic in the past.

The huge cost associated with off shore drilling has kept it as a project for only the most wealthy and well funded of energy companies.  The one thing these businesses dislike the most is seeing their revenue and total production fall.  As these businesses refocus their efforts on more traditional sources of production, we will see a shift in how and where our Oil comes from in the world.  It seems as though Ed Stelmach and the rest of Alberta’s provincial government has chosen a good time to lower the royalty rates back among the lowest of the country.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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National Regulator

27-May-2010 | Reggie | Canadian Investing Government

The prospect of a National securities regulator in Canada has been on the table since the early 1970s.  Unfortunately for proponents of the united system, the provinces that make up Canada have always been a little more than reluctant to relinquish any of their powers.  This has left Canada as the only major nation without a national regulator.  Instead of having 1 regulator with 1 set of rules and regulations, institutions wishing to operate nation wide would have to observe and meet the requirements of 13 different regulators, each with slightly different rules and regulations.  Many feel that this has left Canada at a disadvantage to the rest of the world.  Finance Minister, Jim Flaherty agrees and the economic melt down of last year has given him an excellent opportunity to take another run at creating a national regulator.

From a quick outside glance, it is pretty easy to see the advantages of having 1 regulator for an entire nation.  13 independent regulators that try to keep up with a quick and ever changing global economy does not strike itself as the most efficient model ever.  Having to only change 1 set of rules makes it much easier to protect Canadians.  Also very important, is the easier environment for international investors wanting to invest and/or do business in Canada.  The costs of registering and complying with the provincial regulators puts a serious strain on many businesses as they struggle to comply with the maze of regulations.

Unfortunately, it doesn’t sound like the new entity will truly be a national one.  It shouldn’t come as a surprise that both Quebec and Alberta seem ardently opposed to giving up their power to the new regulator.  Alberta politician, Ted Morton fears the regulator could result in a brain drain eastward to Toronto where the national regulator would likely be housed.  He also cited concerns over how regional systems such as Junior Capital Pools which are a very popular way to raise funds for Oil & Gas exploration would be treated by the new system.  The other major concern for both Alberta and Quebec is the mere prospect of giving any provincial authority up.

To deal with the Alberta and Quebec the national regulator would be a join if you want to sort of system.  Although it wouldn’t technically be a national regulator it would save a lot of trouble of political battles and still drastically simplify the regulatory system of the country.  It will be tough to tell if the new system will make the country a much safer place, but it will certainly make it a much more simple place to do business.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Obama’s Tax on Wall Street: Most popular legislation ever?

15-Jan-2010 | Reggie | Economy Market Strategies New Announcements

The proposed tax on Wall Street that Obama hopes will help to repay the massive amount of taxpayer money that went towards the bailouts is being met with open arms.  The proposed tax on banks, insurers, and depositories may prove to be the most popular and uncontested piece of legislation ever.

Bankers are not finding many willing to come to their defense.  While they pour outrage over how they are being unfairly targeted and blamed, they are being met with crocodile tears by the general public, who generally get paid a small fraction of what many Wall Street bankers make.  While some may fear reprisal from the big banks, there isn’t much the banks can do except put their heads down and take the beating.  Banks around the world are seeing a similar fate as politicians see hitting the banks up for money as just good populist politics.  The United Kingdom and France both announced their intention to put tax on bank bonuses last year.  Bankers there will be seeing 50% of their bonuses disappear to the tax man thanks to the new bill.  Normally these kind of taxes are scene as being unfair, and are a good way for countries to lose some of their biggest tax revenue as corporations move away from high tax regimes.  However, with all major financial centers following suit, there doesn’t seem to be much concern.

As for the tax itself, the US administration hopes to recoup all of the $117 billion that went towards the TARP program is recouped.  In order to do this, they propose placing a tax of 0.15% on covered assets.  It is hoped that this will help to discourage excessive risk taking through using high leverage.  The tax will only apply to institutions with atleast $50 Billion dollars in assets which works out to 50 firms total.  While nailing the big guys like Citigroup, Goldman Sachs, JPMorgan & Chase, and other heavy-weights, it will also hit foreign owned subsidiaries.  This means banks like TD Canada Trust, Bank of Montreal, and the Royal Bank of Canada will be hit by the tax as well.

So far, the Canadian government has said they have no interest in adding additional taxes to Canadian financial institutions seeing as they stayed out of trouble for the most part.  Some industry analysts are saying that the tax wont end up hurting the financial institutions much at all and that the tax will likely end up flowing through to customers as the banks, insurers, and depositories raise their fees accordingly.  Only time will tell for sure, but it seems likely that any attempt to raise fees will be met with a strong reaction by President Obama, who hasn’t hesitated to lay the hammer down.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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White Collar Crime Crackdown

25-Nov-2009 | Reggie | Canadian Investing Economy The Wise Investor

For many years those who engaged in white collar crimes got off with barely a slap on the wrist.  White collar crimes constitute a very small portion of the total number of crimes committed and are usually done by intelligent and affluent individuals that often have unmonitored access to large sums of money.

There are a few theories on why white collar criminals were able to get off scott-free, or at worst, a slap on the wrist.  Some think it is because of the perpetrator’s access to the best lawyers, friends in the right places, and the view that many of their acts are largely victimless crimes and non-violent.  Many of the crimes are hard to track and prove by traditional policing so very little in resources is spent trying to do so.  Andrew Fastow was one of the of the master minds behind the Enron scandal that lost investors billions.  He was sentenced to 9 years in prison.  The RCMP closed their investigation of the Bre-X scandal in 1999 after laying 0 charges.  They say they were too underfunded and understaffed to pursue any.

Most recently, the treatment of white collar criminals has changed dramatically.  Politicians and legal authorities have been pushing heavily for a serious crackdown on any and all white collar criminal activity.  The economic collapse has exposed many ponzi schemes that were unable to meet the obligations of withdrawals with no new money flowing in.  Thanks to the public outrage, these kinds of investigations are given much more media attention and the resources required to prosecute and hopefully prevent future acts from occurring.  Bernie Madoff was sentenced to 150 years in prison for his gigantic ponzi scheme that cost investors billions.  AIG paid a fine of $1.6 billion for their illegal payoffs and rigged bids for insurance contracts.  Bernie Ebbers was sentenced to 25 years for his part in the WorldCom scandal.  These serve as evidence that these kinds of crimes are being treated far more seriously than they were in the past.

To combat these crimes policing authorities have been lending significant resources to create a specially trained force that is able to investigate and deal with these kinds of cases.  Our government, led by the Honorable Jim Flaherty has been pushing hard to create a single securities regulator in hopes to increase efficiencies and improve the quality of regulation facing the industry.  The corporate culture has been working hard to accept and promote whistle blowing to keep these types of cases from happening in the future.  With these kinds of actions, maybe we can all sleep a little easier.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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