Paulsstuff has a post up in response to the article written by Paul Vieira of the Financial Post (TD warns that Ottawa’s forecasts are way off).
Paul’s post is titled, “What happens when TD economists have their facts wrong?”
Now I don’t pretend to even have a clue what Paul is talking about here. My eyes glaze over if too many numbers appear together at the same time. However, it would sure be interesting to hear from TD economists Don Drummond and Derek Burleton on this one. They have been all over the media today pushing their gloomy outlook.
In any case, the comments at the FP site are worth checking out:
JETSOLVER, Tuesday, Jun 2, 2009
This is the same TD that is providing the game plan and financing for the Liberal party of Ontario, and with reasonable extrapolation, the LPC?
RogersJi, Tuesday, Jun 2, 2009
The civil servant that put together the National Energy Plan works for the TD Bank, at a high wage. These are projections, best guesses. Both will be wrong, with the real question being who will be closer in the end. The federal Finance Department over the last 15 years has always under estimated but may be overly pollyannish to encourage private sector spending.
Any brilliant economists out there?
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Update: H/T to Lyle for this one – TD’s power of persuasion (Globe):
…The clout is baked into the bank’s corporate DNA, most notably in the formidable triumvirate of Mr. Clark, Mr. Drummond and Frank McKenna, three senior executives who were shaped by years of high-level government service. They remain among the most politically connected operators in Corporate Canada – particularly with the Liberal Party...
And this isn’t good for the Ontario Liberals – Ontario’s debt outlook ‘negative’ (Globe) Oops!
Upperdate: Government ‘incompetence’ might force election: Ignatieff – Canada.com:
…They’ve got no plan. Toronto Dominion Bank just announced that the deficit over five years will be $168 billion. That’s the biggest number anybody has ever heard of. The public finances of this country are not under control…
Wow. We sure didn’t see that one coming.
And check out Derek Burleton on BNN’s SqueezePlay. Amanda Lang’s great at interviewing Burleton, and gets him to admit that the situation would still be manageable.
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Wednesday Update:
TD traders probed in market-rumour crackdown – Globe:
…Two sources said the Financial Industry Regulatory Authority (FINRA), the main brokerage regulator in the U.S., is looking into the matter and the bank has suspended four employees. Sources said that three of the employees work on the New York sales and trading team at TD Securities Inc. The fourth is in the Canadian research department.
The employees were sent home about nine weeks ago, after a TD client contacted the bank’s compliance department about an e-mail it had received regarding a rumour involving a company in the oil patch, according to people familiar with the matter…
Great post Joanne. Don Drummond and Derek Burleton appear to have factored in program spending rising at between 6% to 8%, citing this has been the norm since the late ’90′s.
Only once in the past four years has program spending increased more than 6%, rising 6.8% in the ’07-’08 budget year. Even this figure is an anomoly as it is higher due to the federal government increasing transfer payments to the provinces. The just completed fiscal year saw program spending increase just 3.5%.
By the way, Drummond projected a fedeal deficit of just $10 billion last fall. He projected the Ontario deficit at $3 billion. On February 28th he projected an Ontario deficit of $13 billion.
And yet he runs around mocking others projections? Yep, he’s a Liberal all right.
Great catch Paulsstuff, on all counts.
And now Ontario’s credit rating is taking a beating. Where are all those expert Liberal advisers?
Why isn’t this a conflict of interest, I naively ask?
It is blatantly partisan politics and being bought, hook, line and sinker by fairly smart media people.
Whoops, scratch that.
Bec, exactly. These so-called experts are being introduced with an aura of non-partisanship when in reality they are far from it.
So if Tom Clark has Don Drummond on as an economic expert, he should really have someone there in a similar capacity that supports the Conservatives.
Well, let’s say the Liberals are welcome to Drummond’s financial expertise. He better hang on to his day job, he’s leaking credibility.
“…They’ve got no plan. Toronto Dominion Bank just announced that the deficit over five years will be $168 billion. That’s the biggest number anybody has ever heard of. The public finances of this country are not under control…”
And voila, the reason for this story being in the headlines becomes apparent. Could it be Drummond and TD are shilling for Ignatieff and the Liberal party?
Bring it on Iggy. From what I’ve heard those tapes the PM says they have of you saying some not so flattering things about your supposed homeland should relegate you to the bowels of Canadian political history, where you will be bunking with one Garth Turner.
MI will not force an election. He has no money, no support from the coalition partners, mixed poll results and no policy. If he gambles and loses seats then the lower political subsidy will crush Liberal finances. There may even be some of his own MP’s who feel vulnerable and unwilling to risk losing their seat(and gold-plated pension).
MI should be careful, he’s starting to sound like a chihuahua who thinks he’s a big dog – yap yap yap…yipe.
And voila, the reason for this story being in the headlines becomes apparent. Could it be Drummond and TD are shilling for Ignatieff and the Liberal party?
Exactly! Boy they must think we’re stupid.
TD goes on all day long with their bleak forecasts and say the Gov’t is wrong, and then tonight – voila! Iggy quotes TD and says the Gov’t is incompetent and he has to decide whether or not to bring the Gov’t down. (I guess the wishes of the other two parties are not important.)
Paulstuff
Yup. I hear the tapes are incredible. I have a strange feeling that the amendment deleting “minimum mandatory drug dealer sentences” scheduled to be voted on tomorrow could trigger a trip to have tea with the GG.
I’ve had a few other problems with TD…now more than ever is a good reason to cut personal ties with them.
We’ll be looking for a new bank to deal with.
Don Drummond Monday, March 16, 2009
The recession is going to force the federal government much deeper into deficit than it forecast in its last budget, according to the Toronto-Dominion bank.”The result is [an] all-time high deficit of $39.2 billion in fiscal 2009-10 and $42.3 billion in fiscal 2010-11,” said Toronto-Dominion chief economist Don Drummond in a statement.
Donny only missed by $11 billion in two months. Nice job.
Iggy says I am trying to make——–ect. What about his 76 caucus members. Are they not also trying to make things work. His whole stmt is I, I, I,. If we have an election in July/Aug will the isotopes start flowing, will the deficit disappear, will all auto workers have jobs, will EI be changed asap.
NO to all the above, but we will have an additional 300 million deficit (cost of election) all stimulus will stop, liberals will lose seats, Jack could be leader of the opposition, Iggy will go back to school.
First, I Iggy, has to get Duceppe and Layton to vote with him. He has to make sure all those other 76 mps show up to vote. He has thrown them all under the bus every time he says I instead of we to include all the liberals.
Do the powers that be really think that the liberals will keep all their seats and gain another 50 – 60 to get a minority.
And if the ndp/bloc support a motion, we will know that the coalition is alive and well.
If that is a sure thing, the Bloc will increase seats to have more power in said coalition.
And what seat in Calgary do the libs dream of winning.
MaryT, there are a number of Bloc MP’s who need 13 more months as a sitting MP to qualify for a pension. I’m guessing they won’t want to roll the dice on not being at the Canadian trough for the rest of their lives.
Duceppe, WON’T PLAY, is my vote!
He still needs ‘his kids’ pension entitlements, summer at the lakes and to figure out how to decimate Iggy, ON HIS TERMS.
That’s my prediction and the Crystal Ball, is up and running.
BULLETIN: Australia’s economy grows 0.4% in first quarter, beating expectations
Resource based economies will lead the global recovery.Canada may be out of recession already.
HARPER IS OUT OF CONTROL AND NEEDS TO BE STOPPED
Bec, on PP tonight Craig Oliver mentioned on his little ‘take’ that the Bloc might very well sit out a vote of non-confidence (i.e. not show up).
And that’s all it would take to let the Liberals and NDP play their little game without accidentally bringing the government down.
“And check out Derek Burleton on BNN’s SqueezePlay. Amanda Lang’s great at interviewing Burleton, and gets him to admit that the situation would still be manageable”
I have a confession to make Joanne. I’m quite smitten with Amanda Lang. Something about her smile just makes me ga-ga whenever I see her.
I had an account with TD some years ago. Nothing against the bank itself but I had heard about the Liberal connections.
At the time, with Don Drummond’s help no doubt, Paul Martin was manipulating tax shelters for himself and his sons for Canada Steamship Lines (CSL) and other Liberal mucky mucks who want to control Canada but not pay taxes here.
I moved my accounts to the Alberta Treasury Branch. At least the federal Liberals could not skrew with that as much.
Speaking of tax evasion – too bad Brian Mulroney didn’t ask Paul Martin and the PowerCorp group for a good place to park his Shreiber bucks.
They don’t pay taxes but wanted to crucify Mulroney for paying his late.
Don Drummond should NEVER be on talk shows pretending he is a non partisan expert. The media have to be pressured into outing him as Former Deputy Minister of Finance under Paul Martin and current financial policy advisor to the Liberal party.
Any other title they give him is dishonest and misleading don’t you think?
Things that make you go hmmmm
http://74.125.95.132/search?q=cache:JE5l0l3eUekJ:www.calgaryherald.com/Make%2Beasier%2Bcollect%2BBank%2Bfederal%2Bgovernment/1550364/story.html+Derek+Burleton+liberal+party&cd=68&hl=en&ct=clnk&gl=ca
Hmmm…..
Nice cache, er catch.
Here’s another little tidbit:
Martin is an enigma, according to John Gray, who wrote Paul Martin: The Politics of Ambition. Gray says Martin was terrible at speeches when he first arrived on Parliament Hill and his handlers were horrified at his clumsy ways during media scrums. When he became finance minister, an aide notes, Martin didn’t understand how RRSPs worked.
That didn’t matter, says Gray, because Martin was able to dominate the department through his fiery temper. He was known to have lashed out at aides. At a get-together at his home, Martin lit into one of his assistant deputy ministers, Don Drummond, during a debate over the GST. When the screaming match ended, Martin announced he needed help with his barbecue and nominated Drummond as his chef. Minutes later, Martin and Drummond were seen laughing together.
And we were already speculating on Drummond’s ties to the Liberal party back in September of last year.
Good Grief, those Liberals really needed to be stopped. Good thing they were.
It appears that it was only a matter of time, for them to regroup and come up with the same crap, from the same players, for the same purpose, themselves.
It astonishes me that a guy, so far from it all, for so long, took so little time to not be about ‘hopey and changey’ but bought into,’decades of samey’.
Really, doesn’t anyone wonder what sort of imbecile it must take, to support this level of corrupted interference?
A prominent Canadian economist says Stephane Dion’s “Green Shift” carbon tax plan is “a good start” that will leave the general Canadian taxpayer “better off.”
“The idea itself is very sensible,” Don Drummond, the chief economist at TD Bank, told CTV’s Canada AM on Friday.
Ugh. Is there any bank in Canada that isn’t supporting the LPC?
paulsstuff said @ # 18
“I have a confession to make Joanne. I’m quite smitten with Amanda Lang. ”
Co-sign..
I am a Royal bank man, so I am bias on this issue.
Frankly who still takes Don and TD bank seriously…
Even CIBC caned Jeff Rubin over bad numbers, and TD stays with there economic clowns..
Well I think it is safe to say TD is in the tank for the liberals…
More Drummond Liberal propoganda:
http://www.thehilltimes.ca/html/index.php?display=story&full_path=2008/july/21/carbon_tax/&c=2
JDot, you’re a Royal Bank man? Any Liberal bias there? I’m shopping around for a new bank.
Joanne @# 26
Yes, I believe there is, quietly.
Logically it only makes sense from a business POV, that if the vocals from the TD is so arrogantly obvious,that it is drawing attention from a competitive standpoint.
It only makes sense that the other CEO’s are watching this ARROGANCE, with interest.
BIG MISTAKE!
Paulsstuff, Drummond has been a great advocate of the carbon tax or anything that puts a price on carbon. I wonder if his interest is in the environment or if the whole carbon tax thing would be a profitable business for the banks?
Bec – Or at least they’re not so obvious about it.
Well, in any case I’m off to bed. With all this bad economic news from TD, I’m going to check out my mattress and see how much room there is in there for storage. Can’t trust the banks, that’s for sure.
I hate banks and I worked for one while in University. I’m with BMO and still are but only because it holds the business accts.I would leave them tomorrow otherwise.
I have had a wonderful experience with CIBC and would change everything over but my absolute preference is THE ATB. However, they are only provincial and if you are moved a huge hassle.
Joanne @ #32
Aww, that is a horrible feeling huh? I’m with you.
“HARPER IS OUT OF CONTROL AND NEEDS TO BE STOPPED”
I am sure that aak just trolled by and dropped that little bomb, but I would love to find out just how he figures Harper is out of control and what needs to be stopped.
If Iggy says the information the finance minister is using is wrong, why does he think his TD guys are using the right information, to predict that many years into the future.
What crystal ball are they using. And what will it do to confidence in the TD bank, when it turns out there are very very wrong.
I doubt if the Alberta Treasury Bank in Alberta is liberal dominated. But, it is only in Alberta.
It should be interesting to watch the opposition play -how to avoid an election and not support the government.
If we have one expect PMSH to campaign on the dangers of a coalition. I am sure Duceppe will be airing Iggy’s stmts on how wrong that would be for Canada. And the liberals can’t use them to try and convince the voters he would never sign on to a coalition.
It’s too bad that TD has gotten political. This will not serve them well in the long run. People used to stick with the bank their parents dealt with, just like people vote Liberal because their parents do.
Now we have a clear tie between the TD and the Liberals, I hope the TD understands the consequences.
Joanne, look for a Credit Union, you become a shareholder just by joining, and the dividends they pay can be quite good.
I’m surprised that the Liberal boosterism at TD is so blatant.
As an economist who once forecast exchange rates and interest rates for a major bank, I have some sympathy for Drummond. No one listens to you if you are at the consensus. Jeff Rubin at CIBC made a name for himself with extreme forecasts, which on a couple of occasions proved right. (Be very wary of his new book though.)
My suspicion is that Drummond had guidance from above to depart so significantly from the pack. He is, in fact, a very good economist. But his forays into policy, and this suspect forecast, have seriously compromised his credibility. Flaherty is right to ignore him. Quite simply, he is wrong.
TD can afford to be a little more reckless in the forecasting game because, unlike their competitors, they do not run full service brokerage houses.
TD Waterhouse is a discount brokerage and earns money on trades, not performance. In other words, they like the volatility greed and fear brings.
The full service brokerages cannot afford to be reckless and need balanced forecasting. Their brokers live and die based on the quality of their advice and performance.
If you want balanced research, pick an average of the other Banks. It is always in TD’s interest to be the outlier.
Steve @#38 – Interesting perspective. Thanks.
I actually am a TD customer (originally Canada Trust). This political bias is very disturbing to me. I am going to start looking for one that isn’t so blatantly partisan.
And here we have another TD bigwig pushing carbon pricing – Keeping ahead of the green curve.
- Mike Pedersen is group head of corporate operations at TD Bank Financial Group.
TD Waterhouse is a discount brokerage and earns money on trades, not performance. In other words, they like the volatility greed and fear brings.
Revanche, that is intriguing. Could you explain that a bit more for the numerically-challenged like myself? Thanks.
From a link at Steve’s blog:
…The Democrats’ evident determination to use global warming to mask a transfer of wealth from one part of the country to another mirrors the ill-starred Green Shift proposed by former Liberal leader Stephane Dion, which began as a means of fighting emissions and ended up as an anti-poverty pro-gram financed by Alberta for the benefit of more Liberal-friendly parts of the country…
I’m starting to see why TD may be pushing carbon pricing.
Looks like it’s safe to assume TD is rife with Liberal toadies. How could any self respecting Conservative give them any business? Guess there’s no such thing as conflict of interest with an employee of a major bank advising a political figure or party.
Those Liberals sure have their bases covered,with bank economists and media shilling for them,how did we ever manage to boot them out of power?
how did we ever manage to boot them out of power?
Answer: They crossed the line with Adscam.
I, also, am an unwilling TD client. I was with Royal Trust before it was taken over by Royal Bank. I switched to Canada Trust and then it was taken over by TD. When I retire and have time to shop around, I’ll switch banks. I would go with PC bank but I don’t like the idea of not having an actual bank where I can go if there is a problem. The “service kiosks” in SuperStore just don’t do it for me at this stage of my life. I do, however, use my PC Mastercard for points – free groceries are always a nice option.
I would go with PC bank but I don’t like the idea of not having an actual bank where I can go if there is a problem. The “service kiosks” in SuperStore just don’t do it for me at this stage of my life. I do, however, use my PC Mastercard for points – free groceries are always a nice option.
Actually, there’s no reason not to do both. You don’t need to have everything with one institution.
BTW, I notice that TD checks in here regularly so I invite them to set the record straight if they disagree with anything said here or at Paul’s blog. We would dearly appreciate a response. Thank you.
To set the record straight, TD provides discount, full service and institutional brokerage services. It is one of the few banks that still has an economics group at both the bank and brokerage levels. The other banks (Royal might be the exception) have only one economics group.
The difficulty with this is that in having two “chief economists”, TD can easily have two divergent official viewpoints on the economy. The advantage is that you can talk out of both sides of your mouth. The brokerage economists can take a more pro-market stance, appealing to investors, while the bank can stake out more liberal policy positions to appeal to the wider populace.
In general, I would tend to be more cautious with the brokerage viewpoint because they are pushing securities. For internal planning purposes, banks would tend to use a consensus view. Not sure what the benefit is in Drummond being far on the low end of the range, except to support the Liberals or maybe to boost employee bonuses when they blow away all their sales targets because the economy performs better than forecast.
Well, no TD bank will be handling our money, EVER. And quit being so blatantly political, guys, if you’re reading this. It is unseemly.
“Could you explain that a bit more for the numerically-challenged like myself? Thanks.”
At the end of the day, it’s marketing. Every now and then you want to differentiate yourself the others; therefore, offering up the occasional outlier is guaranteed to give you some headlines.
In the case of TD, I simply point out their main brokerage asset, TD Waterhouse, is an internet-based service catering to do-it-yourselfers. In other words, the machine doesn’t care if the client wins or loses, only that he makes trades.
At the end of the day, if Don Drummond wants to play the gloom and doom card for marketing purposes, he need not worry about a bunch of angry Brokers breaking down his door for spooking their clients…again.
Fair enough Steve.
Still, as a former broker, I feel for the full service guys at TD dealing with all those clients tossing Drummond in their faces this morning.
It’s always tougher when you take friendly-fire.
Thanks for the insight Revanche and Steve.