CLICO Bailout NOT Forgotten

Posted to Afra Raymond’s website

On Friday 30th January 2009, the CL Financial (CLF) bailout started, so today – 30th January 2019 – is the ten-year anniversary of that fateful decision to commit Public Money to bailout the Caribbean’s largest conglomerate. The companies which were to be bailed-out were: CL Financial Ltd (CLF); Colonial Life Insurance Company Ltd (CLICO); Caribbean Money Market Brokers Ltd (CMMB); Clico Investment Bank (CIB) and British American Insurance Company (Trinidad) Ltd (BAICO).

The mismanagement of this bailout has exceeded any mismanagement which led to the collapse of CLF, that is my view.

Follow full text on Afra Raymond’s website.

25 comments

  • A Massive Land Fraud and PONZI that started in Barbados!

    Like

  • David

    Today, there is a report that a Japanese pension fund has lost 136 billion. We have previously told you that all pension systems are in real problems and are likely to be things of the past.

    However, this may represent the mole which becomes catalytic, triggering contagion and the recession now well-forecasted for this year. Let’s watch it!

    May have implications for your BERT.

    Liked by 1 person

  • What are the options Pacha?

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  • David

    Sorry boy. We have not the answer. We’re still struggling to understand the deepening problems.

    Liked by 1 person

  • If what you suggest is on the horizon then you do right to let this pass.

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  • but didnt that fund gain 12% in 2014 made 70 billion in 2016 they have been on a tear so why the sky falling attitude, they ( pension funds ) invest long term dont they . Is this a paper loss or a real loss

    Liked by 1 person

  • What is the latest with Clico bailout for Barbados? We know the decision to stall bond issue when the government defaulted on debt.

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  • Vincent Codrington

    @ Lawson at 11:33AM

    Since it is a pension fund it will be a paper loss OR should I say a digital loss.

    Liked by 1 person

  • So Vincent if they havent sold the stock they have not lost anything but the valuation of it. The problem arises if things are bought on margin or speculation and it drops then if you are forced to sell or pay up to hold on to the stock you may be in trouble.

    Liked by 2 people

  • Vincent Codrington

    That is what portfolio management is about. It is about nerves. But surely the the technical analyses, on which the decision to buy was based , was backed up by a fundamental analysis of the company/ government. A pension fund should have a longterm horizon and hold onto the stock. Of course I do not have an intimate knowledge of this particular pension fund nor its investment goals. So we may both be wrong.

    Liked by 1 person

  • They changed the way they did business investing in riskier investments to maximize profits to compete with other players that were enjoying the stock market rise instead of the steady investment of bonds. But it’s all good I do not see pension plans collapsing everywhere Canada’s pension plan is very secure.

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  • Vincent Codrington

    @ Lawson at 5:33 PM
    By definition a pension plan’s objective is to reduce the risks of a beneficiary losing his flow of income in his old age. What is the rationale for the investment managers to engage in high risk speculative investments? It is not about large profits it is about a smooth ,guaranteed ,steady flow of income to meet future pension liabilities.
    Historically Canadians avoid speculative risk management.

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  • Christopher Hunte

    It is high time that pension risk management is practise and methodologies placed to mitigate from such risk exposure.

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  • vincent is competition if you are returning 3.2 % and the next guys fund is returning 9% the money is going there., you have to compete to grow. Slow and steady wins the race is lost in boom times.As for canadians not having risky investments we put money into barbados lol

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  • Vincent Codrington

    @ David BU

    In the referenced article the share prices fluctuate. At the end of the quarter, the accounts reported a fall in value of the shares in the portfolio. If the fund managers do not sell at this low price it is quite possible that next quarterly report the values may rise again . If the fund manager does not sell at the going price ,the loss is a paper or accounting loss at that point in time. A real loss only occurs if the Fund manager sells.

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  • there is a couple other things that can effect the fund there bylaws may cause the to get rid of a stock if it hits a benchmark drop or they may want to have losses to offset gains this stuff can get very complicated certainly above my pay grade.

    Liked by 1 person

  • Vincent Codrington

    @ Lawson

    Are we still talking about a pension fund where the pensioner is guaranteed a fixed sum per month? If he earns the agreed average return why is there a need to chase a speculative 9%?

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  • Vincent Codrington

    @ Lawson

    High rates of return usually have as their companion high risks of loss.

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  • Vincent a pension fund from what I think needs more people paying in and a increase on overall investments to survive. If more people are taking out money than paying in it will collapse. If more people are paying in and the investments are tanking again the plan will collapse So what you want is more people and a good return to make it viable diversity is the secret My plan owns the Chunnel
    License for instance

    Liked by 1 person

  • Vincent Codrington

    @ Christopher Hunte

    Investment is about risks and uncertainty. We can develop 101 mathematical models,but in the final analysis human behaviour and decision making is unpredictable. Yes. We do have guidelines and they track for a while but unexpected changes can cause a systemic collapse.

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  • @Vincent

    Thanks for the explanation. From an accounting requirement to reflect the value of the pension fund in the general ledger the profit and loss based on market value of the shares need to be recorded?

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  • Vincent Codrington

    @ David at 9 :37 PM

    You are quite right.The market value at the end of the financial year must be used. The narrative accompanying the Financial Statements may include mitigating factors that the BOD and the public need to know.

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  • vincent I got my pension statement recently , apparently I paid 250000 into it over the years thats principal and interest in the last 5 years I have collected 420000 and so have many of my friends and much more so if a plan is not growing members as well as a rate that can guarantee sustainability it will collapse. That is why japan I would think japan would take on riskier investments because of an aging population, and low reproduction.

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