Income Trusts... Harper's "Joe Clark" Moment?

Flaherty’s surprise announcement of income trust tax changes yesterday has erased anywhere from 10 to 20 billion dollars from Canadian stock markets. The “hot” investment class for so many investors, from every day families right on up to massive hedge and pension funds, this big hit to the trust market will be visible on everyone’s statements.

Collateral damage in other non-trust investment classes is also there, although they will recover more quickly.

What of the timing? As the press has speculated, election timing has a lot to do with it – get the bad news out of the way now, in case of a spring election. But not mentioned in the press to my knowledge is the fact that the carnage won’t be visible on October’s statements, and those who get quarterly statements won’t see the damage until early January.

Implication? This might have been done now, in case of an election forced in the very near future.

Some component of the carnage is overdone and there will be some eventual recovery, but the pain people feel over the next few months will be real. How fast the market will rebound can’t be easily predicted – depends a lot on how much U.S. money is fleeing our trust-dominated capital markets north of the 49th parallel.

Although I haven’t seen all the details as yet, I’m not opposed altogether to the changes, but think that the change could have been handled better.

One thing is certain: Flaherty and Harper are betting that this will become a non-issue by the time an election is called.

Brave, or foolish?

Perhaps this is Harper’s “Joe Clark” moment. Some will remember the time and recognize the similarities between Clark’s proposed 18 cent per gallon tax (a large amount at the time!) and then Finance Minister John Crosbie’s distinctive voice which said the measure was short term pain for long term gain.

Clark’s government went down to a vote of no confidence… brought forward by none other than Bob Rae (who was then a NDP MP).

Spooky, no?

Clarke on Intel "Failures"

Richard Clarke, the former White House anti-terrorism advisor to Clinton, and Bush for a period of time until pushed out – is on a speaking tour promoting his book. Caught just now on CPAC:

Pre war intelligence was handled in a very un professional way, analytically. Basic procedures we should follow, were not. We didn’t follow process by: a) saying clearly what we know, how we know it and when we learned it, and then b) saying what we don’t know. That basic process of analysis was not performed.

There are inescapable conclusions to be made.

Its hard to escape the conclusion that several intelligence agencies “stood by”, silently, or approvingly, while leaders said things they knew not to be true while exaggerations and distortions were made.

And its hard to avoid the conclusion that for all of its expertise most intel agencies failed to warn adequately that the occupation of Iraq would be a mistake, would be disastrous in fact.

When will Bush and Cheney be censured by Congress and impeached? Perhaps even tried for war crimes? They should both be locked up.