David

What the hell is Super Bowl Sunday?

@J

This blog is not about you but seeks to capture a general perception by some Barbadians.

Anonymouse,

Yes, some companies are too big too be allowed to fail. This is especially true of financial institutions, and even moreso in the Caribbean.

Makaveli wrote “You don’t cure alcoholism by giving more booze.”

But sometimes you have to stabilize a heroin addict by giving him methadone.

@Brutus: “Yes, some companies are too big too be allowed to fail. This is especially true of financial institutions, and even moreso in the Caribbean.

IMHO, this is an unproven assertion often presented as a truism.

Through the lenses of both evolution and raw capitalism, those that fail should die.

So the question is, why are “financial institutions” somehow exempt from this most basic of heuristical context?

Some answers which might be presented to the above question are along the lines of “think of the investors et al!”.

I would argue that at the true end of the day, raw capitalism (and evolution) is heartless.

This cuts both (and all) ways….

I would like to contrast all that is being excitedly commented on by White Barbados about Clico Trinidad, and that of BS&T. Can we do that? Somebody will have to work real hard to convince that
1: there is no glee, precelebration, and a urgent wishing on the part of some white bajans (BFP) to see CLICO Barbados impacted by what is occuring in Trinidad.
2: Can it be said that their patriotism is to themselves first and only?

How does this news out of Trinidad compare to what occured with BS&T a couple years ago? Another way to look at this is is Which of the two Barbados companies are likely to be effected first by the bad global economy?

In the case of a financial institution, the concern is not for investors but rather for depositors. The concern is also for the stability of the overall financial system as I am sure you all well know. Even the best run and most efficient financial institution is vulnerable to a run on its cash reserves and may fail if there is a general loss of confidence in the financial system.

I have no problem however qualifying my original assertion. “Too big to fail” in this context refers only to sudden or catatrophic failure. Clico Investment Bank will be allowed to fail but there is an attempt to manage the failure in a way that minimizes the impact on the rest of the system.

Brutus is this corrent news? I was of the opinion, base on my reading of news out of trinidat that the government is injecting money into the trouble company, this is similar to action being taken around the globe by governments with companies that are not covered under some government back gaurantee such as most commericial banks in the US are, under FDIC. It would be a mistake to let it fail. The US made that mistake with Lehman Brothers and that resulted in fear amongst banks and other lending institutions to the point that even as the economy may be begining to turn around, the fear of Toxic assets on the balance sheets of financial institutions and the possibility of the government deciding not to underwrite or bailout any particular company, they are leary of lending to each other and to consumers, and this is causing all the current problems.

Adrian Hinds is something else. He can deduce our colour on the internet. Guess what? who cares unless you are ashamed of what you are.
The facts are that Clico did bad business. Any company can fail. However, some need support to manage them to a less difficult position because of the fall out on their employees if there was sudden, total collapse. In that case there needs to be some sympathy and support but carefully and with security. The employees need the protection not the company management.
Let’s mopt keep getting race into everything – Mr Obama has taken this road, we shou.d try to follow a good example not live using the past as a crutuch.

Hindssight,

As I understand it, all of the deposits and investments (except related party ones) of Clico Investment Bank will be transferred to First Citizens Bank (which is owned by the Trinidad Government). So depositors are being bailed out. However once that process has been completed Clico Investment Bank will be closed down. I assume that in all this there is a risk or a likelihood that the shareholder(s) of Clico Investment Bank will suffer a loss.

There is deposit insurance in Barbados, but I will have to check what the limits are and which financial institutions are covered.

@Brutus
Thanks for your clarity and hopefully you can shed light on Barbados bank deposit insurance.

@BU/DAVID:
We have with purpose highlighted the company One Caribbean Media (OCM) to illustrate the importance of implementing a regional regulatory governance structure. BU has been a harsh critic of the concentration of media ownership in Barbados given the importance of the Fourth Estate in a working democracy. The recent bailout by the T&T government now sees OCM being 23% owned by the government of Trinidad which will immediately entitle them to seat bodies on the OCM Board. We leave it to the BU family to study the implications in the absence of clear codes of governance in the prevailing climate.

NO LIE NO LIE

Govt takes major stake in Express House
Published: January 31st, 2009
The Government of T&T is set to become the largest shareholder of One Caribbean Media (OCM)—parent company of the Trinidad Express, CCN TV-6 and the Nation newspaper in Barbados—as a result of its bailout of Clico, the country’s largest insurance company. According to OCM’s 2007 annual report, Clico owns 15.3 million shares in the media group, making it the largest single shareholder in the company, which is listed on the stock exchanges in T&T and Barbados. Clico’s stake in OCM was equal to 23.1 per cent of the company, as at the end of 2007. It could not be determined whether the insurance company had changed its ownership stake since then.

Explaining the intervention by the State on Friday, Central Bank Governor Ewart Williams said Clico had a sizeable statutory fund deficit, and that CL Financial had agreed to divest “additional assets” to help fund this deficit. The Government has committed to providing additional funding that is needed by Clico, said Williams . “Government funding will be provided in exchange for collateral and an equity interest in Clico,” he said. This means that when the Government takes control of Clico, it will automatically inherit the insurance company’s 23 per cent stake in OCM. The Government is also likely to inherit the directorship held by the CL Financial group on the OCM board.

For nine years, former treasurer of the ruling PNM, Andre Monteil, was the representative of CL Financial chairman Lawrence Duprey on the board of Caribbean Communications Network, the predecessor company to OCM. At the end of 2007, Monteil was replaced by CL Financial’s group financial director Michael Carballo on the OCM board. Carballo and Monteil accompanied Duprey to Friday’s news conference. One Caribbean Media Ltd was established three years ago in January, 2006, as a result of the merger the CCN group and the Barbados Nation. OCM owns ten radio stations in T&T, Barbados, Grenada, St Lucia, St Kitts, Antigua and Monsterrat.

Contacted last night for comment, Information Minister Neil Parsanlal said:
“I am not aware of the extent of Clico’s interest in the OCM group. Therefore, it would not be appropriate for me to comment on that. “It is too early in the game for that, as we are concentrating on assuring the public that their deposits and policies are safe.” Prime Minister Patrick Manning accused the media, last year, of being hostile to the Government, and stormed into an urban radio station on October 25, because he was upset that the announcers were adding negative comments to a news story. During a post-Cabinet news conference on November 6, the Prime Minister lamented the fact that none of the country’s 34 radio stations, seven television stations or three daily newspapers pursued a pro-government agenda. The Prime Minister said:

“What is worse, is that too many of the commentators, either in the newspapers or on the radio, do not respect our institutions. “It is a question of being disrespectful to institutions and authority and pursuing a course of action that can cause the image of these institutions and individuals to be tarnished in the minds of those in whose interest they are set up to serve.” Last week, the Sunday Express reported that the Government was planning to merge NCC-TV with Government Information and CNMG, which has four radio stations.

very appropriate

Brutus // February 2, 2009 at 3:27 pm

From a press release from the Central Bank Governor in Sep 2008:
(http://www.centralbank.org.bb/WEBCBB.nsf/vwNews/899CCA8722E94B92042574CE007CB9E8?OpenDocument)

“In Barbados, deposit insurance is also in place up to an amount of BDS$25,000 per depositor per bank. This was put in place in 2007. It applies to Part III companies, as well (that is, Merchant Banks, Trust and Finance Companies).
==========================
Thanks Brutus
That may not be enough to stop a run on a bank, but it should be publish and aired to head off undue panick and concern in Barbados. Obviously this bit of news would hardly have an impact on the 1 or 2 % of those invested and gleefully so, in the fall of Clico Barbados.

In the US the insurance gaurantee was pegged a 100k for a very long time. When Indymac ran into trouble depositers had lined up to get their money. The Feds then initiated an increase of the FDIC to 250k and the lines and run went away. It is said that FDIC is one thing that has made the dIfference between 1929/30 and todays uncertainty.

GBL Blog // February 2, 2009 at 4:05 pm

@Adrian Hinds

Why are you so obssessed with race my man? You make good points sometimes but it’s hard to take you serious when you go off on these racial tangents, many of which seem underscored by a conspiracy theory only you seem to believe in.
===========================
I have no real interest in responding to you, so unless you can pull out one of the “racial tangents” and demonstrate how you came to define it as such, please leave me be, and dismiss me as yet another conspiratorial kook.

David:

So if we let private company’s deliver their profits to their foreign parents in the good years, but the public must underwrite their losses in a bad climate to protect our financial system….is the system really worth saving as it currently operates or should we be designing a more transparent model.

@David: “We agree with Chris that to allow businesses to fail in the belief that stronger companies will emerge may not be relevant to our small markets.

David… With respect, you have mis-read me.

I believe that companies which have failed to perform should die.

However, with a nod to Brutus, this should be done in a rational manner. Managed. Without panic.

Fundamentally, a great many failures have occured. “Reset buttons” are being pressed. (Or, at the very lease, being asked for…)

A personal request: Can we please all get a *whole* lot more serious? At least for a little while?

We have a lot to do.

Please let us get it all over with once and for all.

Now.

@ Adrian Hinds

Just one example. (there are others)

Adrian Hinds // February 2, 2009 at 12:38 pm

I would like to contrast all that is being excitedly commented on by White Barbados about Clico Trinidad, and that of BS&T. Can we do that? Somebody will have to work real hard to convince that
1: there is no glee, precelebration, and a urgent wishing on the part of some white bajans (BFP) to see CLICO Barbados impacted by what is occuring in Trinidad.

========================

Seriously. Glee? Pre-celebration? urgent wishing? wtf is your beef with white people? you get horn or sumthin?

NOONE in Barbados will be happy because there is NO GOOD that can come of a financial collapse of the magnitude of what was put out into the public domain about CL Financial.

Further to that.. where is this glee and pre-celebration being exhibited by “White Barbados”? Do you base this on a blog entry by BFP? If so, which one?

Do you base this on articles printed in the media? Please link me to them, or give me the dates they were published.

You don’t just single out ‘BFP’ who you now seem to be at odds with for some reason, but you brand all Whites in Barbados. Hardly seems fair, or reasonable.

Anyhow, if you could help us out with some data regarding “White Barbados” hoping for Clico’s downfall, it would be appreciated.

Thanks.

@Adrian Hinds – here is a racial tangent from your words – “I would like to contrast all that is being excitedly commented on by White Barbados about Clico Trinidad, and that of BS&T. Can we do that?…” but if you do not recognise one then so be it. There was nothing about “race” prior to your interjection about “white Barbados”. Your input can be of assistance but not with this line.

@ ST:

What are you advocating? If the approach of the GoB is to quiet the fears of the country about Clico, what to your mind are they doing wrong, and what should they be doing? I don’t think i heard your approach out of this mess.

Not like me lol! You aint easy wha you dont behave yourself! LOL!

@ David, ST and CH
Elsewhere there has been speculation about what could occur on Monday morning in Barbados as result flamed fear and panic in absence of openess and transperency about CL trinidad and CL barbabos. Close of business for the day has past in Barbados, has there been any lines, (longer than usual) at Banks and other financial institution on the rock?

@Anon
I am attracting the good (you) and bad to BU, and David may tire of me over this. Todate this is one of two blogs/forum that i frequent and that i have had it “ding dong’ with the owner on some topic or the other, and i am still allowed in (thanks David) Uh mean i have given it to him just as good as i have done at BFP, but we know who thin skin and who’s is thick. But aint uh thing nuh! ha ha ha ha haa

Carson C. Cadogan

I don’t know which is the bigger liar, you or Adrian Hinds. I have read the BFP article on the CLICO crisis including all the posts, twice. No where do I see any indication of gloating, implied, inferred or otherwise. What I see is a number of people who are very concerned about their money which is as it should be.

Quote:
“They are hoping that it fails and “teach those black people to know their place”.
Your above statement is indicative of a petty mind that is still enslaved. Free yourself Sir, free yourself, do!

AH:

Tha’ some good stuff yu’ got ther’.

Doan unastan nuttin ya say cept

TILIS……and I agree

Carson et al it would behove you to ignore this person. We bajans got name fuh people who does walk bout carring yuh name. She real DECEITFULL yuh hear! I would hear them say, and there after they would learn to ignore and not be seen her company.

This woman is an eyesore. ha haha

PiedPiper
January 27, 2009 at 12:01 am
Marcus, I can’t say with any certainty that BU knew all along that BWWR was Iain Deane but I do know for a fact that they knew that BWWR was not a woman but a man. They foolishly let that slip in one of their posts and hoped no one would notice.

PiedPiper
January 27, 2009 at 3:25 am
Jason, I’ve been struggling a little with myself here because I didn’t want this post of mine to be perceived as “BU bashing” but lately BU seems to have taken a strange “turn”. I refer not only to it’s supportive position of BWWR but also it appears to have been taken over by some die-hard Bible thumpers, some people with no medical training or background making the most wild and ridiculous statements about how vaccines were invented by whitey to kill off the black race, and that the crash of the U.S. Airways jet into the Hudson River is all a big conspiracey of some kind. I used to read and post to both blogs equally but the more I read over there, the less I am inclined to contribute because I do not like to debate with people who can not provide any proof of their beliefs but merely say “they know” it is so.