“Investors Are Being Swindled”: Canadian Accountants Slammed

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People “mistakenly believe their pension plans, mutual funds, and other investments are safeguarded.”

By Peter Diekmeyer, Canada, for Sprott Money:

Canada’s Finance Minister Bill Morneau was one of the country’s top pension fund management professionals before he went into government. But when he recently addressed Concordia University business students, not one asked about the country’s $4 trillion national debt, much of which is pension-related.

That’s not surprising – because, as the Fraser Institute notes, nearly three quarters of those debts are not included in the federal and provincial governments’ financial statements. So, Canadians have no clue how bad the country’s true financial situation is.

This lax reporting is spread throughout the system, including public companies, says one expert.

“Investors are being systematically swindled out of large amounts of retirement savings,” says Al Rosen, a forensic accountant and co-author of Easy Prey Investors, a recently-released book that details shortfalls of Canada’s lax reporting standards.

Accounting scandals abound

“Investors mistakenly believe that their pension plans, mutual funds, and other investments are safeguarded,” says Rosen. “In fact, they are suffering losses that are monumental, compared to individual publicized scams.”

A key challenge, says Rosen, relates to Canada’s use of International Financial Reporting Standards, which “assign excessive power and choice to corporate management, providing them the ability to inflate corporate profits.” Rosen cites a range of accounting scandals including Valeant, Nortel, and Sino-Forest as examples of Canadian laxness.

In one famous fraud case, Bre-X, auditors couldn’t be bothered to check if the company’s gold mine, its only major asset, actually existed. External accountants instead essentially relied on a manager’s claim that he had “found gold” in the core samples he presented to a valuation firm, when they signed off on the statements.




Bucephalous: creative pension assumptions

Those problems aren’t restricted to Canada, says Robert Medd, president of Bucephalus Research Partnership, which has produced research regarding “creative accounting” at Alcoa, Raytheon, UPS and a slew of other global businesses.

“Pension deficits continue to grow,” says Medd. “Investors have yet to focus on the detailed assumptions used by managements and how they might affect pensions’ solvency, valuations and corporate strategies.”

Medd says that assumptions about life expectancies, obligation discount rates, and forecast returns are key areas that management can adjust to (legally) underfund corporate pension plans and thus boost company earnings. “In many cases, pension discount rates and forecast returns have fallen, but nowhere near enough,” says Medd.

Medd cites lax independent auditors as enablers of the inconsistencies. “Given the small number of audit firms, actuarial tables and regulations, one would assume that the assumptions used would be similar,” says Medd. “However there are some startling outliers (and) expected returns have stayed high.”

Aggressive pension accounting strategies work particularly well because they enable managers and auditors to boost short-term fees and bonuses, and to simultaneously get out of dodge before the pension obligations become due.

Accounting lobby shields profession from litigation

According to Rosen, the 1997 Hercules Supreme Court of Canada decision essentially handed widespread legal immunity to financial statement auditors who approved misleading reports. “In essence, investors are being told that they should not be using audited annual financial statements for their investment decisions.”

The situation is roughly similar to that in the United States where provisions in the Private Securities Litigation Act, which was enacted under heavy pressure from the quiet, but exceptionally powerful accounting lobby, also make it very hard to sue auditors, though in recent years, a spate of lawsuits against US auditors are attempting to reestablish a balance.

Because Canadian accountants are a self-regulating profession, additional blame lies with the regulators, says Rosen, but they too have been asleep at the switch.

“(Canadian) Securities commissions (have) maintained their well- established practice of rarely investigating financial statement manipulations, deferring auditors to determine what is appropriate,” says Rosen. “As a result securities prosecutions have been uncommon, convictions rare, and penalties trivial.”

Morneau sets the (creative accounting) standard

Finance Minister Bill Morneau, when asked by an Alt-Fin writer about Canada’s accounting practices following the Concordia event, defended the government’s position by pointing out that similar practices are in place in other major economies. (One estimate of unfunded liabilities in the United States runs to more than $200 trillion).

In all fairness, Morneau inherited many of Canada’s shifty accounting procedures from the Conservative Harper Government, when the Liberals took power in 2015. That said, Morneau’s expertise on this issue and his position in government make him a natural leader on this issue.

By continuing to play along with those old practices, Canada’s Finance Minister is signaling to his Cabinet colleagues and to Canadian businesses that it is OK to cook the books.

Until that changes – investors had better watch out. By Peter Diekmeyer, Canada, for Sprott Money

“Foxes are in charge of the hen house.” Read…  How Solid are Canada’s Big Banks?




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  59 comments for ““Investors Are Being Swindled”: Canadian Accountants Slammed

  1. VarAway
    Jul 3, 2017 at 10:29 am

    🤓 Why, oh why do you think, the ECB is dripping saliva
    when looking at ABP, the Dutch retirement fund?
    World second largest pension fund, after the Japan
    pension fund.
    Right!
    Mario eagerly awaits the moment.
    He can already smell the € scent …..

  2. Gershon
    Jul 3, 2017 at 10:45 am

    Pension funds represent the last great untapped source of wealth to be looted by the oligarchs, who can count on the complicity of captured regulators, enforcers, and other “public servants”.

  3. Meme Imfurst
    Jul 3, 2017 at 11:42 am

    “use of International Financial Reporting Standards”. Now that is a joke worth repeating.
    Frankly, it scares me crazy to think the USA has such a time bomb, only much bigger, and the clock is ticking.

    • IdahoPotato
      Jul 3, 2017 at 1:00 pm

      Talking of International Accounting Standards and U.S. banks, this from today’s NYT editorial:

      “It’s entirely possible that the system is more fragile than the Fed’s stress tests indicate. By the Fed’s calculations, capital held by the nation’s eight largest banks was nearly 14 percent of assets, weighted by risk, at the end of 2016.

      “Alternative calculations of capital, including those that use international accounting rules rather than American accounting principles, put the capital cushion much lower, at 6.3 percent. The difference is largely attributable to regulators’ differing assessment of the risks posed by derivatives, the complex instruments that blew up in the financial crisis and that still are a major part of the holdings of big American banks.

      “The passing grades on the Fed’s stress tests pave the way for banks to pay their largest dividends in almost a decade. The hands-down winners will be shareholders and bank executives, who could see their stock-based compensation packages expand further.

      “But without continued bank regulation, and heightened vigilance of derivatives in particular, the good fortune of bank investors and bank executives is all too likely to come at the expense of most Americans, who do not share in bank profits but suffer severe and often irreversible setbacks when deregulation leads to a bust.”

      • Dan Romig
        Jul 3, 2017 at 1:53 pm

        Thank you for alerting Wolf Street readers to today’s NY Times editorial.

        Pam and Russ Martens of wallstreetonparade.com have a feature on it in their post today. Opening sentence: “We have frequently called out the New York Times for running sycophantic on the big, mean, untamed Wall Street banking behemoths …”

        Their conclusion is that the NY Times, “… needs to take a more strident tone using the mountain of evidence that readily exists showing that Wall Street has been anything but reformed.”

        http://wallstreetonparade.com

        • kam
          Jul 3, 2017 at 3:26 pm

          NYT has financial problems and they are expected to do the right thing? They wouldn’t do the right thing if they weren’t up to top of their eyelids in debt and they sure aren’t going to rattle any cages when they are bleeding cash.

      • Lee
        Jul 3, 2017 at 6:07 pm

        IIRC this week the Australian regulator, APRA, will announce new capital requirements for Australian banks.

        I can already see the scenario:

        The government told us we need to hold more capital so our costs have increased. Therefore we are going to slug the variable rate mortgage holders for the costs, increase the number of loans outstanding (so we can increase our profits), increase dividends to shareholders, and increase pay for executives – after all we are bigger now and have more assets…………

        The regulators have been unable to get the banks to actually reduce their mortgage books which would result in them having to have less capital.

        Even when increasing rates the banks have no competition here and the profits flow right to the bottom line.

        The most recent increase in interest rates on interest only loans (between 25 and 35 basis points) and the stinky little 5 to 8 basis point reduction in P & I variable rate loans has resulted in a guess that it will increase banks’ profits by another A$700 million over the next year.

      • Numerology
        Jul 3, 2017 at 8:58 pm

        An asset is a series of cash flows. Are the assets used to back up the banks based in inflated real estate holdings (which would fall with the markets) or is it low risk bonds?

  4. Meme Imfurst
    Jul 3, 2017 at 11:45 am

    Lets not forget that the head of Canada’s Central Bank is a goldman alumni. That has to be part of the big picture.

    • Canucklehead
      Jul 3, 2017 at 12:01 pm

      As far as I know, Stephen Poloz did not work for Goldman. The prior governor (Mark Carney) did.

    • TJ Martin
      Jul 3, 2017 at 12:03 pm

      Ahhh … so the Devil’s got his fingers into Canadian politics as well has he ? Perhaps tis time we do something here in the US about this particular ‘ Devil ‘ I mean … you cant take em all down at once … but one at a time ? Thats doable .

      • GaryB
        Jul 3, 2017 at 12:44 pm

        Thttp://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/ake one down and another will pop up in their place.

        If you take one down another will pop up in their place.

      • Frederick
        Jul 3, 2017 at 12:50 pm

        Why can’t you take them all down at once?

        • Dennis
          Jul 3, 2017 at 10:08 pm

          Because they own all the important politicians.

  5. Paulo
    Jul 3, 2017 at 11:45 am

    It must be private pensions and individual RRSP accounts that this article is referencing because public pensions in Canada are in extremely good shape due to self-governance and administration practices.

    From:
    http://ariapensions.ca/canadian-model-turning-heads-aria-post/#.WVpwwVGQzm5

    (May 3, 2016) A Boston Consulting Group study shows the strength of Canada’s top 10 pension plans, three of which are among the 20 largest funds worldwide. They have tripled in size since 2003, mostly due to impressive investment returns.
    Their success is attracting attention.
    “Have Canadian pension funds established a template to navigate a high volatility, low return world achieving impressive results while mitigating risk?” asks Joel Kranc, writing for Investments and Pensions Europe (IPE).
    The model is a relatively recent phenomenon, writes Kranc.
    “In 2006, the Canada Pension Plan Investment Board (CPPIB) … adopted an active management strategy to seek returns above those available from public market investing, by capitalising on our comparative advantages, which are structural – long-term investment horizon, certainty of assets, and scale – and developed,” Michel Leduc, a senior managing director at CPPIB, is quoted saying.
    “Together, these advantages provide us with greater scope and a different perspective than many other investors. We are not forced to seek short-term returns, and can pursue large, complex transactions where there is less competition.”

    I belong to a public pension that is well funded to the point of 105%, mainly because control was wrested from the Govt 30+ years ago; a Govt. that like to borrow from it for mega projects. I even enjoy a COLA which is implemented yearly. I also contributed over $1,000/month into it for 17 years, funds which were matched by my employer. However, the secret is independent governance and admin.

    This situation is in direct contrats to US public pensions. From CNN today:

    http://money.cnn.com/2017/06/29/investing/illinois-budget-crisis-downgrade/index.html

    “$251 billion pension time bomb

    While the budget impasse is throwing a spotlight on Illinois’s dire financial situation today, the fiscal problems go back at least to the 1980s and involve politicians from both parties.

    The most glaring evidence is the enormous pension crisis. Rather than dealing with the problem, Illinois continued to reward the state’s powerful unions with more generous benefits.

    The problem festered for so long that Moody’s estimates Illinois has unfunded pension liabilities totaling $251 billion. To put that into context, that’s more than the combined market value of four major Illinois companies: Boeing (BA), Caterpillar (CAT), United Continental (UAL) and Allstate (ALL).

    “The massive pension liability results from a chronic tendency to defer difficult decisions,” said Ted Hampton, who as a senior credit officer at Moody’s will help decide whether to downgrade Illinois into junk.

    Hampton said Illinois treated the pension fund as a “financial cushion” that could be relied on to provide fiscal relief. He also pointed to a tendency to delay paying bills and chronically underestimate spending needs.

    “All of these problems are governance and management weaknesses,” Hampton said.

    That’s a polite way of saying the political leaders broke the system. ”

    I did have past private investments, however, I invested through our local Credit Union which retains an investment advisor on salary who is not commissioned. I have never lost any money through this vehicle and am now transferring gains into a RIFF channeled to a tax-free savings account.

    regards

    • kc
      Jul 4, 2017 at 10:30 am

      Seriously? Canadian pension funds are heavily invested in other banks and Real Estate both internal and external to Canada. And that doesn’t concern you? These are the “fake news” good time’s …. do you really think 105% funded will stand up going forward? Not a bloody chance! I hope so as my wife’s Canadian pension is awesome …… for now.

      KC

  6. TJ Martin
    Jul 3, 2017 at 12:01 pm

    Pardon me .. perhaps I’m a bit uniformed when it comes to CDN financial practices but …

    WTF would anyone think their INVESTMENTs are in any way ‘ safeguarded ‘?

    Here in the Us be it stocks , bonds , mutual funds etc .. including 401Ks etc Investing is gambling … and in gambling regardless of how low the risk .. you inevitably lose now and again … and sometimes big time [ bigly ? sarc ]

    • Anon
      Jul 3, 2017 at 1:12 pm

      Read here about a “conservative” insurance investment that did not work out so well for its owner: http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html
      Canada does not have a national securities regulator comparable to the SEC in the US. Canada has had its share of investment scandals including the Atlantic Acceptance bankruptcy in the mid-1960’s. One of the major players in that scandal was Jack Tramiel who later became a successful tycoon with his Commodore personal computers in the US.
      Canada does not have a national pension benefit guarantor comparable to the PBGC.
      Canadian mutual funds have on average the highest fees among the G20.

      • TJ Martin
        Jul 3, 2017 at 1:54 pm

        Our bank in order to try and get our investments out of another firm who’s name I shall not mention [ suffice it to say they’ve advertised here ] as well as to get our cash reserves into one of their ‘ investment ‘ programs offered up something similar thru their ‘ investment side … whereupon I looked her straight in the eye and said … ” You’ve gotta be joking ” .. keeping our money right where it is

      • kam
        Jul 3, 2017 at 3:32 pm

        The list of scams in Canada is endless. Dome Petroleum? The Reichmans? BCRIC? You can’t count them.

        It is the same or worse than the US. It pays to be a financial criminal. Just put on your lizard skin and invent a lie.

      • Jul 3, 2017 at 6:10 pm

        Let’s not forget Canada also sold all of its barbarous relics……

        • Jul 3, 2017 at 6:12 pm

          Oh, and Kam, its the other way around….The lizards put on the human skin….

        • nick kelly
          Jul 4, 2017 at 12:49 pm

          Ya and we got about 400 per ounce.

    • SimplyPut7
      Jul 3, 2017 at 2:51 pm

      Re: TJ Martin Jul 3, 2017 at 12:01 pm

      Canada has not suffered a serious crash in any type of asset since the dot-com bust, I won’t really count the housing and financial crash experienced in the US and around the world in 2008. Canadian stock markets and banks recovered shortly after as oil went above $100 a barrel and gold went above $1,000. Our dollar was at par with the USD making traveling abroad and buying goods from the US affordable. Many social services including health care were paid for easily by various levels of governments due to the boom in commodities prices. College and University is affordable so there’s no large student loan crisis.

      If it were not for Michael Moore’s documentary ‘Capitalism: A Love Story’ and my relatives in Florida, I would not have noticed the US financial depression either. If I tell other Canadians about how bad things were in the US and around the world during the housing and financial crisis, they would tell me they didn’t notice it.

      The government in my country and other major media outlets could easily hide the downturn from people outside of their country. As social media became more popular, many alternative media outlets grew and provided a different point of view that help people in sheltered countries like mine, see how the economic downturn changed how people invest and do not blindly depend on the government or their workplace to provide for their needs.

  7. Canucklehead
    Jul 3, 2017 at 12:04 pm

    This story lines up with my beliefs. Probably an example of confirmation bias :) Canada gets far too much credit for withstanding the Great Recession. The credit binge and real estate bubble continued unabated. When, not if, the bubble pops the consequences will be apocalyptic.

  8. RangerOne
    Jul 3, 2017 at 12:33 pm

    Historically broadly diversified investments in bonds and equities are drastically better than a gamble.

    But your point may stand in the future. As global finances and companies become more intertwined, gains in company value due to shady accounting could lead to untenable short term losses for average people with their 401Ks.

    Safety of diversified investment kind of depends on not having every company move in concert by creating fake growth through quasi illegal behavior.

    • IdahoPotato
      Jul 3, 2017 at 1:07 pm

      U.S. financial institutions like banks take part whole classes of transactions not permitted under standards banking laws by creating “Edge Act Corporations” that come under international regulations. The Edge Act was specifically created to help them do this.

      Wrap your head around this. According to the Office of the Comptroller of the Currency:

      “A small group of large financial institutions continues to dominate derivative activity in the U.S. commercial banking system. During the fourth quarter of 2016, four large commercial banks represented 89.3 percent of the total banking industry notional amounts…”

      Those four banks are JPMorgan Chase with notional derivatives of $47.5 trillion; Citibank N.A. (the banking unit of Citigroup which received the largest taxpayer bailout in U.S. history in 2008) with notional derivatives of $43.9 trillion; Goldman Sachs Bank USA at $34.9 trillion; and Bank of America with $21.1 trillion.

      http://wallstreetonparade.com/

      • Dan Romig
        Jul 3, 2017 at 1:57 pm

        Oops, I did not read down to your second comment before posting mine a few minutes ago. I’m glad that the Martens have other readers!

        • IdahoPotato
          Jul 3, 2017 at 4:45 pm

          The Martens write about things the WSJ won’t. Hmm… wonder why.

      • kam
        Jul 3, 2017 at 3:37 pm

        Derivatives- insurance with no reserves. None, zippo.

        Each side of every transaction risk free. I can see why regulators sleep well at night. Brown paper bags on the doorstep and all.

  9. economicminor
    Jul 3, 2017 at 12:38 pm

    All those who have benefited by managing these pensions do not want to lose their high pay and bonuses.

    Those responsible to fully fund pensions can never come up with the money to actually pay their full value or bridge the deficits.

    Those receiving the pensions do not want the funds to severely reduce their promised incomes. Which in many cases been backed by the courts.. Promises made by governments must be met.

    When something is not solvable it is best to extend and pretend. The pension mess in the US goes back decades and anyone who has an IQ above 80 should be able to recognize it as a fraud. What no one knows is the time nor circumstances of their collapsing.

    There is a lot of pension money invested in stocks and bonds and CRE all of which appear to me to be in bubbles that are near collapse. I am wondering what happens first, a major collapse in the MBS? or stocks? or the Bond Vigilantes finally showing up? Or will it be something like Illinois or one of the other states that have such poor income to expense ratios m/l just collapsing?

    • cdr
      Jul 3, 2017 at 1:00 pm

      “All those who have benefited by managing these pensions do not want to lose their high pay and bonuses.”

      Sort of, but it’s a little more complicated. Most of those people thought they were getting fun jobs managing money. There was no ill intent. Many probably felt full of goodness. There was no reason to think otherwise.

      Then the concept of QE, managed low rates, and asset bubbles masqueraded as Bernanke’s wealth effect entered. Traditional safe investments that provided good yields went away. To make money you had to switch to risk management. The economics fad of the day offered a central bank put to asset prices. Everything in the text books was tossed aside in favor of new age central bank supported asset value oriented wealth.

      Pension managers went along and hoped for the best or saw actual yields drop. A hobson’s choice. Bet on human fallibility or bet on low rates and hope for the best. Don’t fight the Fed won. Both choices were losers … one over the short run and one over the long run.

      Don’t blame pension managers for Federal Reserve incompetence.

    • kam
      Jul 3, 2017 at 3:40 pm

      “backed by the courts.. Promises made by governments must be met.”

      Yes, government employees (judges) backing up their ilk.

  10. james wordsworth
    Jul 3, 2017 at 1:45 pm

    Good old Al Rosen. Is he still around. Man I remember him saying similar stuff back when I was auditing 25 years ago.

    Of course accounting and auditing are a scam. Always have been – in Canada and elsewhere.

    An interesting comparison in tersm of liabilities though might be Social Security in the USA with CPP in Canada. SS holds US government bonds. As SS starts to draw down it’s surplus this will have to be paid out of US current tax receipts (putting an even bigger hole in the deficit). In Canada the surplus is held in invested assets. http://www.cppib.com/en/our-performance/ Five year annualized return of 11.8%, 10 year of 6.7% (“The most recent triennial report by the Chief Actuary of Canada indicated that the CPP is sustainable over a 75-year projection period.”)

    • kam
      Jul 4, 2017 at 8:34 am

      james

      You are drinking the koolaid. The CPP investment board covers about 1/3 of future pension outflows. The rest comes from future taxation. 10% of all payroll deductions now go to CPP. You have to look real hard to find the truth.

    • Anon
      Jul 7, 2017 at 9:24 am

      Most of my Canadian relatives who are retired are not eligible for the Old Age Pension as their income is too high. Means testing will eventually come to US Social Security as well, but it won’t happen tomorrow or even next year. However, Medicare premiums are already based on income and more and more seniors are being subjected to premium surcharges, which effectively reduce their monthly Social Security benefits.

      If the US does not get a grip on its costly health care system, more jobs will be shifted abroad by cost conscious businesses. Repealing Obamacare (if it happens) will do nothing to make the US health care system more cost effective.

  11. SimplyPut7
    Jul 3, 2017 at 2:03 pm

    After the dot-com bust and Bre-X scandal, many Canadians decided to manage their own finances without the help of a financial advisor/adviser. Discount brokerages became more popular and the fees at bank owned discount brokerages dropped from $28.95 to $9.95 a trade, to compete with independent brokerages offering fees as low as $4.95 a trade.

    While many people save a lot of money on fees that don’t have to be paid to an expensive financial adviser/advisor, there are many other aspects of wealth management that have nothing to do with picking the right security that novice investors would not know to review, such as what type of pension they have (if any), how well funded is that pension and what is the going concern of the company funding those pensions.

    Creative accounting will always exist, very few accounting firms report fraud or unethical accounting to authorities. I would not want to rely on them to provide accurate accounting. Regulators should care but as shown with the Home Capital scandal, they really do not like to go after complex cases, even if it is in the best interest of shareholders or the public.

    Even if the pension has a fully funded or over funded status, the amount of money to be paid out in retirement is usually very low and does not cover all of the retiree’s expenses. I have met many young accountants who did not know our Canadian Pension Plan (CPP) does not provide a living wage in retirement. Also, many DIY investors do not know their pensions are based on the sponsor’s going concern. If the company does not exist in the future (e.g. Sears Canada) then the amount that will be received in the future by retirees will be less than expected and current employees of the soon to be gone company, will have to figure out how to save for retirement if the new company they work for, does not offer a pension.

    A good adviser/advisor should have the knowledge or ask a senior colleague with more experience, how to review a client’s total portfolio to incorporate future life events including evaluating a client’s pension fund(s). Many advisors at local bank are mutual funds salespeople and will not know how to do that. There’s a difference between an advisor and an adviser in Canada, the short answer is it’s complicated, as choosing one over the other doesn’t necessarily mean they know what they are doing or will act in your best interest.

    http://www.cbc.ca/news/canada/british-columbia/bank-s-deceptive-titles-put-investments-at-risk-1.4044702

    Higher interest rates will hopefully encourage Canadians to save for retirement, instead of putting all of their eggs in one basket by relying solely on real estate or their company pension plans to fund their in retirement. Access to free and easy to obtain financial literacy material needs to be addressed by the government and regulators, to avoid these bubbles from occurring in the future.

    I think Bill Morneau will address the lack of retirement funding after the housing bubble implodes, and the government can see how bad is the damage from that bubble, before dealing with the next crisis.

    • kam
      Jul 3, 2017 at 3:45 pm

      “Creative accounting will always exist,”

      Corporate collapses are usually fraud. Bre-X, never was any gold. Sino-Forest- never had any trees, but Chinese criminals got Canadian accountants and stock brokers to rip the public off for $4 billion anyway.

      Canada likes to sell the soft, polite story but ripping off the public is just a prolific as in the US.

      • SimplyPut7
        Jul 3, 2017 at 4:09 pm

        Yeah, they smile and say sorry and tell you not to worry. Even now with the downturn in the housing market. The media stopped reporting on it, leaving very leveraged home owners who bought into the idea that houses always go up forever and rates stay low forever, alone and very scared.

        Right now they are telling people that the stall in Toronto is similar to Vancouver just before prices shot up again.

        • WTFrogg
          Jul 3, 2017 at 4:14 pm

          Yep….and I have a slightly used bridge in Brooklyn for sale if anyone is interested. LOL

  12. Richard Graham
    Jul 3, 2017 at 3:08 pm

    Professionals do not regulate their professions with the benefit of society in mind. Like the police and politicians, they aren’t loyal to society, its laws, or any standard of decency or morality; they are loyal to the person in trench with them. This allows the creepiest to suggest disloyalty is the reason why any would blow the whistle on illegal activity. I’m reminded of Roger Boisjoly, who predicted the Challenger Space Shuttle disaster 6 months before it happened, and did everything to stop it. Instead of honour, he was driven out of the profession. Boisjoly was later awarded the Prize for Scientific Freedom and Responsibility by the American Association for the Advancement of Science, but no such recognition came from US engineers.

    • nick kelly
      Jul 3, 2017 at 7:10 pm

      One of the most shocking and almost unbelievable videos I’ve ever seen is the one of the several ‘almost’ failures of the O rings before it finally happened.

      To folks who don’t recall, each (2) solid fuel rocket was not one piece,it was built of sections each like a big piece of pipe, big as in wide but not very long.
      These sections were stacked on top of each other to form the rocket.

      They were joined by a flange of some type and a gasket or O ring (O because they are circular) that went between them something like the small rubber O ring in your hose makes a water tight seal.

      Note: the O ring was not metal, it was some kind of synthetic flex compound that was NOT FIRE PROOF!

      Oddly,this lash up worked, but if burning gas from inside EVER got past the O ring it would burn out and the joint would fail completely.

      In the video of several launches before the inevitable disaster, you can see a brief spurt of smoke coming from a joint.

      On the final launch, the weather was cold, which made the O rings brittle. Knowing this the rocket maker, Thiokol tried to stall but were pushed to allow the launch. And, at last, a ring let go.

      Some will say it was all about the cold weather, but the first time a joint was seen to be allowing gas past it in ANY weather, they should have gone back to the drawing board.

      • nick kelly
        Jul 3, 2017 at 11:55 pm

        It’s not entirely clear why this incident did not merit charges of criminal negligence.

      • kam
        Jul 4, 2017 at 8:37 am

        Government workers are never responsible. It is the law.

      • Jul 6, 2017 at 6:37 pm

        I was one of the few that surmized right after the challenger exploded and did short Morton Thiokol before the fact. Tv wasn’t high definition back then but I have a background in physics and judging by the explosion it led me to believe it was the O rings.

  13. WTFrogg
    Jul 3, 2017 at 4:12 pm

    CPP ( Canada Pension Plan) plus the combined OAS (Old Age Security) and GIS ( Guaranteed Income Supplement ) at age 65 w/o topping it up works out to $ 1,660 (approx) / month at the moment.
    Even with ZERO DEBT it’s touch and go for a single individual and expenses keep rising eg. Average 1bdrm apt goes for $ 1,000 / mo. outside of major cities. You do the math.

  14. Gershon
    Jul 3, 2017 at 10:09 pm

    Hard times are coming. I hope people rediscover what really matters in this life, i.e. how to look out for each other.

  15. nick kelly
    Jul 3, 2017 at 11:44 pm

    I think one of the biggest legal frauds occurs when a company borrows money to pay a dividend ( unless as with Apple the whole thing is tax driven)

    The text book says a dividend is part of the profit returned to the shareholder.
    If this money is borrowed, the shareholder isn’t getting anything. He is being paid with his own money. His share is worth less after such a fake dividend because the worth of the company is now less the amount of the loan. It’s a type of Ponzi scheme.

    I don’t know specifics but IBM looks like a candidate.

  16. Peter Diekmeyer
    Jul 4, 2017 at 5:45 am

    Just a quick note to thank you guys for all the comments.

    I told Wolf I’d reply to any readers who appeared confused or who had questions, but you guys really know your stuff.

    It’s the best comment section I have seen on Alt-Media.

  17. raxadian
    Jul 4, 2017 at 6:27 am

    State pensions are way safer, there is a reason the military in Chile refused the privatisation of their own pensions and why Argentina went back to state pensions.

    Sure state pensions might be low but they always end being paid. And if the state won’t even give you some help in your old age, why the hell are you paying all those taxes?

    Of course rich people doesn’t want state pensions or welfare state or anything like that. They don’t need it so they gladly oppress those lower in the pyramid.

    Canada healthcare might be way better than in the US, but sadly the private pensions scam got them too.

    They are bleeding money so much they are actually the ones who presume the state the most to raise the age you can retire.

    • Jul 6, 2017 at 6:42 pm

      Most company pensions give you the option of taking your pension as a lump sum. If the holding company is in jeopardy of going bankrupt like Sears only a total idiot wouldn’t take a lump sum first.

  18. Jon Laughing
    Jul 5, 2017 at 10:06 am

    You can’t blame Harper or Trudeau1 or Mulroney or Trudeau2 or their finance ministers – blame them all. Plus blame the accountants in particular, and the lawyers, the courts and the investment bankers. Useless financials, useless controls, and useless audits. It’s the Wild West and it has been for the forty years I am aware of. And as a ranking member of the accounting fraternity I blame it mostly on ourselves. No fundamental integrity at all.

  19. Peter Diekmeyer
    Jul 5, 2017 at 4:05 pm

    Thanks Jon.

    You are of course correct. Frankly, the case is likely understated.

    If “creative,” accounting is allowed at the corporate and government levels, then it gives further credibility to skeptics like John Williams of Shadow Stats that you can’t rely National Accounts data (GDP, CPI, unemployment) either.

  20. mean chicken
    Jul 5, 2017 at 4:37 pm

    “Canadians have no clue how bad the country’s true financial situation is.”

    It’s common to mistake the romantic view for the significant view. I don’t recall having bought anything made in Canada recently, nor US made for that matter…

    The significant view hasn’t garnered concern even in the aftermath of the financial crisis, demonstrating a spinelessness for holding public officials accountable and short of memory most people are.

    • Anon
      Jul 7, 2017 at 9:08 am

      Tilley hats, Manitoba shelled hemp seeds, Brita water filters – products which I use, all made in Canada and sold in the US.

      I am amazed that Canada has not set up something comparable to the Pension Benefit Guarantee Corp. in the US. Are the Sears Canada retirees eligible for payments from the Ontario government?

  21. Martin
    Jul 5, 2017 at 7:38 pm

    This is so friggin sad. There’s really NO place safe or guaranteed to put your money. If the SRDHTF like it’s predicted then the only thing that will keep us alive is our heart, drive and determination and the homesteading skills that our fore-fathers had 200 years ago. My wife is retiring next march and she’s already figured out how much she is getting from CPP. If we try to stay in this house for the long term, we won’t be able to afford all the bills.

    I say move out to the country, get a small manageable place with a wood stove and live simply. There will be no other way.

  22. SimplyPut7
    Jul 6, 2017 at 1:37 pm

    Sears Canada has a court hearing next week where the company will request permission to halt both its retiree benefit payments along with special payments it has made for some time to top up the underfunded pension fund.

    http://www.cbc.ca/news/business/sears-pension-severance-employees-court-restructuring-1.4191520

    • Jul 6, 2017 at 6:46 pm

      Sears has been on the brink of bankruptcy since the mid 1980’s. How they ever existed this long shows that zero interest rates are a curse to mankind as they keep zombie companies afloat far too long.

  23. Thomas
    Jul 6, 2017 at 7:45 pm

    Good old Canada can make anything look real 😁.

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