By: Ross Hendin, Hendin Consultants
I'm going to make this entry shorter than usual because I've come to understand that this time of year (a few days before Christmas through New Years) is a time like August in Europe, when people just want to get away from work and aren't following the news.
My short entry, and your focus on family and holiday is probably what the Committee was hoping for when they announced a successful restructure and held a conference call on Christmas eve at 12.30 PM... who would still be in their offices to read the media reports by the time they came out? If it wasn't Christmas, the chances are much higher that the market would be focused on the story right now and asking a lot more questions than they had otherwise done.
If this were a one-off, it would be one thing, but since it's the second time that the Committee has chosen a time to report an update or deadline that is moments before people switch off for a break, it makes me think that they are either horrible with their PR strategy and the ways they want to bring their news to the market, or they are intentionally picking times to report when the media is most inconvenienced, and there is a much smaller audience. As they have chosen National PR to work with them, and David Weiner is a bright and accomplished partner in the firm (I've known him for a few years now, having worked with him in 2005 on two cases), I can only assume the timing is intentional. Which leads me to ask why would they want to report news, especially good news, when nobody is around to listen?
In doing litigation communication abroad, I've learned the hard way that releasing news that seems good at a time when people are not focused on work means trouble because people don't take time to question the news, they just assume it's as good as it sounds, and their attention switches to their personal lives again. If I was going to announce good news like this, I'd want the world to know and I'd ask National to help get the story out there as best they could.
IF it's intentional -and I'm not saying it is - it means that the Committee is operating in a way not consistent with the transparency they are trying to bring to the notes. If they are picking these times to report because they want to give the media access to the information as it develops, and those times just happen to be Saturday mornings and Christmas Eve, then we should thank them. They are sacrificing a lot to save this market, including their personal lives and off time, and we are very grateful for it.
Ross Hendin is CEO of Hendin Consultants, and is a Senior Advisor to the Canadian office of a leading multi-national PR firm. With strategic communication experience in more than 20 countries around the world, Ross specializes in litigation, financial and political strategic communication. He has worked in the ABCP niche since 2006.
Hendin Consultants is in Toronto and London, UK, and is on the web at www.hendinconsultants.com.
Email Ross at email@example.com.
MONTREAL — Quebec's public pension fund manager, Caisse de depot et placement, came under fire from opposition politicians Wednesday for taking what may be a multibillion-dollar stake in the troubled nonbank asset-backed commercial paper market.
Henri-Paul Rousseau, chief executive of the Caisse, Canada's largest pension fund, was scheduled to testify before the legislature's finance committee in Quebec City Wednesday afternoon on the extent of its holdings in the $35 billion market for so-called ABCP.
Before his testimony, however, Quebec's two main opposition parties demanded answers from the minority Liberal government on the Caisse's role in the frozen market for ABCP.
Mario Dumont, leader of the Action Democratique du Quebec, accused the government of washing its hands of the ABCP mess.
He criticized Quebec Finance Minister Monique Jerome-Forget for telling the legislature Wednesday that rating agency Standard and Poor's has lauded the government's policy of not intervening in the Caisse's management of investments.
“It's interesting that she cites Standard and Poor's. They said not to buy it -- commercial paper -- and the Caisse has $14 billion of it,” Dumont said.
Daryl Ching, head of Clarity Financial Strategy, which aims to educate corporations and professionals about the ABCP market, said there is plenty of interest in finding out exactly how much ABCP the Caisse holds.
“There have been guesses about their exposure of anywhere between $12 billion and $20 billion,” he said.
“If it's much higher than $13 billion, that'll be a shock to the market,” Ching added.
In Quebec City, Jerome-Forget told the legislature she had communicated with the governor of the Bank of Canada and Canadian Finance Minister Jim Flaherty on the matter, but Quebec would not intervene in the day-to-day management of the Caisse's portfolios.
“It's not that the Caisse has commercial paper, it's what is the quality of that commercial paper,” she said.
Gilles Taillon, finance critic for the ADQ, wanted to know if the Caisse's ABCP holdings could affect the solvency of some $27 billion of public employees' pension funds.
The Caisse, which manages Quebec's public pension and insurance funds, has $237 billion in assets under management.
It is widely believed to have been the biggest investor in that part of the ABCP market that is not run by the country's big banks.
That market faltered badly in August when investors balked at buying the securities because of fears that the assets backing the opaque instruments had hidden exposure to the default-ridden U.S. subprime mortgage market.
The Caisse led other key investors such as National Bank of Canada in signing the Montreal Accord, an agreement by those holding more than 80 per cent of the market to not trade the paper until a workout strategy could be put in place.
The deadline for that workout, which would seek to replace the paper with longer-term debt, is Dec. 14.