Friday, March 26, 2010

"Serving the Nation's Dreams..."

Did anyone else find irony in the [proposed] agreed acquisition of British National Lottery concessionaire, Camelot, by the Ontario Teachers Pension Fund? One wonders whether this presages the possibility that the hapless teachers will, in the future, find their benefits awarded as much by games of chance as by the investment acumen of their managers? "Serving the Nation's Dreams..." is Camelot's motto, though Teachers' beneficiaries will undoubtedly hope theirs are not left to similar spins of the wheel.

Leaving the tongue out of the cheek for moment, Teachers' are a clever lot. And there is much one might infer from such bids: that asset ownership of quality or monopoly concessions (call them utilities) are a better and safer bet than cash, bonds or government credit; that these assets have inherent properties that hedge (partially) against inflation since revenues (and hence margins) are nominally indexed; and that IF this given the safety profile, is a cash proxy, there are as few short-term yield-plays with asset-backed safety anywhere near those of such a deal. But as a quasi-government organisation, perhaps the most interesting and ironic inference (if the preceding is correct) is that is signifies a distrust and skepticism of government itself by government. Governments would be well-served to heed such growing sentiments of distrust, else they lose one of their most important assets: trust.


Tom Stone said...

A bit late for that here in the USA.

Greg said...

"Teachers are a clever lot" - Too clever by half in my experience.

Anonymous said...

Governments and Central Bankers lost crediblity when they bailed out the wealthy creditors and counterparties of the big banks.

If they want to regain credibility, they'll need to recoup bailout costs by a wealth tax on those with the highest net worth; i.e., Blankfiend's, Daemon's, Geithner's, etc clients.

Geithner, Summers, Bernanke, Dodd, Frank, etc plans to recoup bailout costs with inflation, taxes, a steep yield curve, and charges on bank customers are disgraceful. Hopefully, they burn in hell for their misdeeds.