Newsflash: Leak from Liberal war-room previews upcoming negative ad campaign against Harper?

In an email to select officials in the Conservative Party obtained indirectly by yours truly, an apparent leak has come from the Liberal war-room in the form of some photocopied documents mailed in a brown envelope.

The Liberal attack “storyboards” criticize Stephen Harper on a variety of issues while suggesting that Jack Layton is abandoning his principles and that Stephen Harper and Gilles Duceppe will form a “government”.

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In the first few storyboards, the Liberals attack Stephen Harper’s GST plan suggesting that it will only benefit the rich “While ignoring working Canadians”. They Liberals imply that the GST cut is regressive and suggest that it will only benefit the rich as they buy luxury items.

Liberals underestimate the intelligence of Canadians because the GST cut is a 2% cut on everything that is bought in stores. While it is true that a 5% GST would benefit the purchaser of a new Ferrari, the GST is applied to everything that is bought (including clothes, furniture, and Christmas toys). In fact, a consumption tax cut, such as Harper’s proposed GST cut, is the only type of tax cut that benefits the poorest of the poor including those that are below the personal amount on their income tax returns. A regressive tax cut it is not. The Liberals provide two quotes, the first criticizes a GST cut rather than an income tax cut. I’m sure that Stephen Harper’s cuts to income tax (via the childcare and sports benefits) make the Fraser Institute smile and I’m certain that we haven’t seen the last of Stephen Harper’s income tax cut announcements.

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Next the Liberals attack Jack Layton, pairing him in a coalition with Stephen Harper and Gilles Duceppe. This storyboard targets soft NDP support and suggests that Jack Layton will compromise his base’s principles for coalition power. “[Duceppe] wants to take Canada apart and [Harper] wants to let him”.

“Jack Layton talked a lot about making Parliament work. But he ran over to the Conservatives and the Bloc the moment he saw a chance to score political points. On November 28th he stood right by Stephen Harper’s side to bring down the government and force a holiday election. Now he has given Harper the chance he’s been seeking to remake Canada with his right wing agenda.”

First of all, how can you criticize Jack Layton for working with the majority of Parliamentarians in denouncing the revelations of massive Liberal corruption? In fact, Jack Layton was acting as a responsible parliamentarian in a minority Parliament by pulling the plug on corruption. This agenda was neither right wing, nor left wing. Jack Layton, Gilles Duceppe, Stephen Harper and their respective caucuses (even a couple of elected Liberals) chose right over wrong and ended the Liberal government. The attack also laughably suggests that Jack Layton would enable policies that he is fundamentally against. This is an attack on Layton’s credibility.

The attack continues:

“His other friend, separatist Gilles Duceppe and the Bloc Quebecois are motivated to get their cause back onto centre stage with a new provincial leader in Quebec. Jack Layton, who will win little support in Quebec, has given the separatists the opportunity to resurrect their ambition of leaving Canada.”

Paul, Paul, Paul… this election isn’t a Quebec referendum! And by framing it so, you endanger the unity of our country. The Liberals are giving up on federalist Quebec premier Jean Charest and closing the door on constructive dialogue with Quebeckers. Further, under the Liberal watch, the Bloc is now more powerful than ever before, pumped up by the Sponsorship Scandal. The Bloc’s current popularity is due to Liberal corruption and it is the Liberals that have given the separatists the opportunity to resurrect their ambition of leaving Canada. Stephen Harper the only Prime Ministerial candidate that is standing up for Quebec’s place in a united Canada as he has offered his voice to debate Gilles Duceppe where Martin wouldn’t.

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The next storyboard implies that Harper and Duceppe will form a coalition government and rule Canada. First of all, Duceppe and the Bloc are fundamentally against playing any part of any government. They have said that they will only support issues that benefit Quebec. Stephen Harper has also said that he will not form a coalition with any party and will maintain his role as Prime Minister by building consensus with parties (and members) on a case-by-case basis. As for the issues that the attack addresses, it is true that Harper – as a conservative – believes in a smaller federal government and believes that provinces should have more say over matters in which they have the constitutionally mandated jurisdiction (ie. education and healthcare). While it would be false to say that Duceppe believes in this type of ‘redistributed federalism’ as he is certainly not a federalist, Duceppe does believe that Quebec should have more of a voice over its own affairs.

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Next, the Liberals take on Mike Harris as a target… again. In the 2004 election, the Liberals took on the former Ontario premier, suggesting a common agenda. As Ontario will likely decide the outcome of the current election, the Liberals are targeting those that disapproved with Mike Harris and those that might be leaning towards Harper. While the Liberals blame Ontario’s fiscal and social woes on the Harris’ common sense revolution, they fail to note that many of Ontario’s problems were caused by the abandonment of the Common Sense Revolution by Eves and then by the election of Dalton McGuinty. Remember Dalton? He lied to Ontario about their taxes by raising them with his health care “premium”.

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Finally, the Liberals resort to the old song and dance about Stephen Harper and the Charter of Rights and Freedoms. They provide an old quote and a goofy picture of Stephen Harper. Harper expresses that “serious flaws exist in the Charter of Rights and Freedoms”. The Charter is a Liberal document with one serious flaw in my opinion: it is wrong that rights can be withheld by the use of the notwithstanding clause. This type of “just kidding” clause in a legal document that defines our rights remains a significant failure of Trudeau’s legacy. Stephen Harper has thankfully promised not to use the notwithstanding clause on the same-sex marriage issue. The truth is, Paul Martin wants to attack Stephen Harper on something the Conservative leader has refused to do. Martin does this while he asserts that anyone who doesn’t stand up for the Charter (read: same-sex marriage) is unfit for office. Meanwhile, 40 Liberal candidates are against same-sex marriage as Paul Martin holds a double standard.

Stephen Harper has been providing a positive vision for Canada with daily policy announcements and a plan that looks forwards instead of backwards. This preview of the Liberal strategy to attack Stephen Harper and the Conservative party shows that the Liberals haven’t got a record to run on and that they can only hope to retain power by providing fear to Canadians.

I suspect that the Liberal attacks will only get uglier.

UPDATE: Mike Duffy and Gloria Galloway have confirmed, from the Liberal warroom, that these ads are indeed real. However, the Liberals are dropping the Stephen Harper “rich get richer” ad and the Layton attack ad.

Did Martin orchestrate spat with Washington?

Kate and I have been investigating a tip that she received that suggests that Paul Martin did in fact orchestrate the recent fight between himself and the Bush administration. The proof may lie in the Liberal ads.

Consider the following timeline:
December 5th: The Liberals release three ads on their website. (1, 2, 3)

December 7th – Paul Martin at Montreal climate change conference: “To the reticent nations, including the United States, I say this: There is such a thing as a global conscience, and now is the time to listen to it, now is the time to join with others in the global community”

December 8th – Canadian ambassador to the US, Frank McKenna (a Liberal) reportedly receives a “dressing down” from the Bush administration over Martin’s comments on December 7th.

Kate notes: Norm Spector provides analysis from David Frum disputing this rebuke of McKenna.

“…the story of White House reaction to that speech turns out to have been wildly overhyped. The White House official who met with ambassador McKenna on Friday was not the Vice-President, not the National Security Adviser, not even the National Security Council’s Senior Director for Western Hemisphere Affairs: It was the head of the Council on Environmental Quality … Nor had McKenna been “summoned”: He had requested the meeting himself.

December 13th (morning) – US Ambassador to Canada, David Wilkins: “It may be smart election-year politics to thump your chest and constantly criticize your friend and your No. 1 trading partner”

December 13th (afternoon) – Paul Martin: Let me simply say to anyone who wants to question what I have been saying, beginning with (Conservative Leader) Stephen Harper, that I am the prime minister of this country, that our position on climate change will be determined by the government of Canada, that the fact is that we do expect our partners to honour their agreements — and I will defend Canada. Period.

December 16th – Liberals release new ads on their website (4, 5).

Here is the transcript of the 4th Liberal ad:

Keith White: “I think Paul Martin’s doing a fantastic job representing our interests… in America”

Neil Dhalla (Liberal MP Ruby Dhalla’s brother): “Paul Martin definitely has the ability to stand up to Mr. Bush”

Art Cowie: “Paul Martin’s taking a very strong stand on the lumber situation”

Bardish Chagger: “He has protected Canadians’ interests, he has fought for our softwood lumber.”

Nathan Van Beselacre: “It’s important to have good relations with our neighbours, but when there’s a problem you have to deal with it diplomatically. I feel he’s done so.”

This commercial seems reactionary to the events set in motion by Paul Martin’s hypocritical scolding of the US on their greenhouse gas emissions on December 7th.

However, the fourth ad (released Dec 16th) was filmed on the same day as second ad released on Dec 5th.

(click on pictures to enlarge)

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Dec 5th ad #2 (click for video)

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Dec 16th ad #4 (click for video)

The positioning of the parked cars are the same and the guys are wearing the same clothes in both commercials.

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Dec 5th ad #2 (click for video)

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Dec 16th ad #4 (click for video)

Note the pattern of the puddles over Dhalla’s shoulder. Also, check out the time on the clock in the background (ad 4 was filmed 7 minutes after ad 2)

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Dec 5th ad #3 (click for video)

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Dec 16th ad #4 (click for video)

Same clothes, same rainy day.

The ads obviously were filmed on the same day and sometime before December 5th.

The Liberal braintrust obviously thought that clips of “ordinary Canadians” (er, Liberals) would be required defending what would be future rhetoric of Paul Martin taking on George W. Bush and the USA.

If the recent diplomatic row with Washington was merely part of a partisan ploy to gain anti-american votes (as many observers have suggested), does the timing of the filming of these ads further confirm that the Liberals were preparing to sour Canadian-US relations for electoral gain?

Are these ordinary Liberals privy to any other electoral strategies that will affect international relations (or stock markets)?

Income Trusts – A Deeper Look

I posted earlier this week on the developing Income Trust scandal (ITScam) and described nine funds that suspicious trading activity the day before of the day of Ralph Goodale’s policy announcement on Income Trusts at 6pm (2 hours after market close).

Some point to a Bloomberg article posted at 4:14pm on November 23rd that provides a bang-on prediction (or dissemination) of Ralph Goodale’s announcement. The article shows that people did know of the details of Goodale’s announcement before it was made. The article was published to the public 14 minutes after market close yet, from my data, the evidence shows that the market experienced considerable volume from buyers that were supposed to be in the dark at that moment of time. At its worst, the article (regardless of what time it was published) shows that someone was in the know and sourced the Bloomberg article.

As the following data will show, if the information was truly public, we would have seen a considerable increase of trades along with volume. My previous data does show a large, and unusual, surges in volume prior to Goodale’s announcement. The question I look to answer here is this: Does the data show that the volume is indicative of publicly available information, or were only a select number of individuals aware of the details of the finance minister’s announcement?

My speculation:

(Click any graph to enlarge it)

Richards – shows full market reaction to income trust announcement. Notice high volume and low trades prior to Goodale’s announcment. Is this indicative of insider information?

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Medisys – shows relatively high number of trades on the 24th (after announcement). Shows about the same number of trades on the 3rd in comparison to the 22nd. However, the 3rd saw the movement of 37,280 units in 18 trades (average of 2,071 units per trade). Compare that to the 22nd where 203,953 units moved hands in 17 trades (average 11,997 units per trade).

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Keystone – This fund was obviously reacting to other variables not affecting the other funds under study as volume the number of trades for this fund on the 21st, the 22nd and 23rd were all higher than usual. However, on the 23rd when a considerable volume of shares traded hands, a lesser number of trades moved 804,843 shares than moved 158,400 shares the day before. Notice too that the price climbs as a reaction to a considerable number of buy orders prior to Goodale’s announcement.

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Sun Gro – This fund shows a huge volume of shares traded by relatively few transactions. We can see from the price-trade graph that the real value of this particular income trust was assessed the when traded resumed on the 24th after Goodale’s announcement on the 23rd (similarly here, here, and here). Note the difference in volume on the 22nd compared to the 24th. Compare also the number of trades between these two days. A few traders bought a lot of shares on the 22nd, while on the 24th, after the rest of the world knew the real value of income trusts (after the announcement), the asking price went up and so did the number of trades.

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Terravest – This fund shows a significant volumes of shares traded by a small number transactions on the 23rd, while the number of trades on the 24th represents global knowledge of the Income Trust announcement.

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ACS – Massive volume on the 23rd (price rises – people buying). However, only a few people are buying up all of these shares. The closing price reflects the buying on the 23rd and is relatively stable on the 24th as many many more trades are made.

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Two exceptions:
Granby – On further analysis this fund, while showing a huge volume on the 23rd, is probably not linked to the Income Trust scandal. The volume on the 23rd was actually a major sell-off, whereas anyone with advanced knowledge of Goodale’s announcement would be buying Income Trusts. Note that the number of trades corresponds well with the volume. This is indicative of what normal trading looks like (ie. with information public to the market community)

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Specialty Foods – This fund might also be removed from the pool of funds potentially linked to ITSCAM. This value of this fund did not receive any benefit from Goodale’s announcement as the price declined steadily. The massive spike in volume on the 23rd cannot be explained at this time. It is likely that other factors independent of Goodale’s announcement were affecting the price.

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Preliminary conclusions:

  • Thousands upon thousands of stocks, funds, trusts etc. are traded upon the world’s markets everyday.
  • In the realm of Canadian income trusts, 9 trusts showed unusual trading activity either the day before or the day of Goodale’s income trust announcement. Goodale made the announcement after the market closed.
  • Of these 9 trusts, 6 showed massive (and very unusual) volumes prior to Goodale’s announcement, showed a massive “buy” preference, and showed relatively few transactions.
  • Relatively few transactions (trades), massive volumes of purchases, and sustained profit (later increased value of trusts due to Goodale’s announcement) strongly suggests insider trading as publically available data immediately results in a finely adjusted and realistic asking price, which in turn has an effect on volume and number of transactions.
  • If, for example, I knew that Goodale’s announcement would increase the value of income trusts (and nobody else knew), the asking price wouldn’t affected and I could buy a considerable number of shares (high volume, low number of trades). In the counter example, if everyone knew that the value of income trusts increased, the asking price would go up. Because the knowledge is global, this increases the potential number of trades.

If you’ve got anything to add (or any corrections), please post in the comments section.