The biggest financial winner of the election
Posted May 13, 2009 by Sacha Peter - Link
Category: Analysis
Comments (22)
The biggest financial winner of the BC Election is shareholders of Plutonic Power Corporation.
When the UBC Election Stock Market decided not to hold a market on the BC Election, I was a bit sad since I knew it would have likely been a money maker – at the very minimum, the safest money would have been on the referendum on electoral reform – I am guessing it would have traded at around 15% probability to pass, which means that a $1000 investment could have transformed into about an 18% gain over the period of two months (the market was slated to open 60 days before the election).
There also would have been an opportunity on the NDP seat count (which would have been around 30% during the second week of the campaign), although identifying the correct buying opportunity would have been difficult.
That said, it turns out the best proxy stock for the British Columbia election was none other than Plutonic Power Corporation – most known as being the company behind the Bute Inlet run-of-the-river project. The shares of Plutonic jumped up about 20% on May 13th with no other news than the BC Liberals winning the election.
Even at the beginning of the writ period, Plutonic was trading around $2.10 a share, so if you had bought on at the start of the election, you would be sitting on a fat 67% return on investment at present, which is amazing.
In no way does this post constitute advice with respect to buying or selling any securities, and if you make financial decisions by reading other people’s writings on the internet, I wish you the best of luck. And a disclosure statement – I have not owned any Plutonic shares, nor will I be. If you must gamble on them, at least read their annual financial statements, management discussion and analysis, and their 2008 annual information form.
Time for a little market sobriety. During 2007 and 2008, the stock traded between $7 and $9 dollars, so if you had invested then, you’d still have a loss of half after today. Even look at the one-month chart; it was trading at $2 until the start of May when it started to rise. In the first few days of May (until the 6th), it rose 45%; the rise on the day after the election was only 15%.
I’m surprised that for someone who analyzes longitudinal polling stats, you’d analyze a stock on such an infinitesimally small snapshot of time, with no mention of any historic data, such as the basic 50 or 200 day moving average.
I think you missed the point of the post.
The point was that the outcome of the BC Election was a major market risk to Plutonic, and when this risk was resolved (with the re-election of the BC Liberals, which was obviously favourable to them), their stock shot up.
This post has absolutely nothing to do with the fundamentals of the company.
Plutonics is due for another jump (either way) once the BC Hydro power purchase contracts are awarded.
It was the assininity of NDP to claim that rivers are being stolen. No power project can ever be built without a BC Hydro’s PPA contract. And those you get from a tender.
The amount of stupidity and lies that came out from Carole James and her fascist buddy Rafe Mair on this count was phenomenal.
No wonder they lost, cause they thought BC citizens are so stupid to believe their lies. Its called contempt of the citizenry.
This is the largest plunder of natural resources in the history of BC. As Campbell’s plutocratic gang & share holders of PPC sell our collective soul for a dime, they too chisel away at the living systems their children and grandchildren require to stay alive.
The following link is to a five minute interview with one of BC’s most engaging political figures, veteran Kootenay NDP MLA Corky Evans. Evans shares some important thoughts on the grave challenges we face & tells it like it is in a way only he can.
Corky Evans – Taking Back British Columbia
Diamond, I just watched that whole five minute “interview.” It was a total waste of time. It’s repetitive and doesn’t offer any insight whatsoever. Corky just states his opinion over and over as he characterizes the activities of the Campbell government without explaining them or offering any examples.
Diamond – you gotta be a lefty idiot. There are only 40 IPPs in BC over 12,000 streams. There are no power produced on these streams (except for the 40), so the biggest waste is the fact that all this green energy is going to waste and society loses out. And then when a private party uses its own capital to develop a stream, and takes the risks, and hands the profit over to BC Hydro in a tender, the idiot ignoramus with zero understanding of economics calls that a heist.
Illiteracy and ignorance is the hallmark of the anti-IPP lefties and their fascist allies.
Must really hurt that voters shafted Carole James, ey?
Lefties are illiterate? Zing!
Could you, or someone, please compare the amount of increased market capital for Plutonic Power with the amount of their donation(s) to the BC Liberals? Then factor in the 75% credit on those donations, and give the resulting cost to Plutonic in relation to the market capitalization. Seems to me they more than got their money back, and raises the question as to whether CORPORATE donors should even GET that 75% kickback from the public kitty, considering the large return on such “investments”. Not that the Campbell Liberals are interested in any political funding reforms unless it cuts out all their critics from the equation…..
BTW in case nobody else has caught the allusion, the name “Plutonic” is a reference to the Greco-Roman god of wealth, and of the underworld. Funny that.
A few points here –
Glass, keep the personal insults off the site.
Skookum, corporations receive the following credit back for corporate donations:
75% of contributions up to $100
50% of contributions between $100 and $550
33 1/3% of contributions in excess of $550
… to a maximum of a $500 credit.
Basically the credits run out if the donation is above $1150, just like individuals. Anything donated in excess of this is directly out of the corporation’s bank account, with no further credits (it is not expensed for income tax purposes either).
Skookum – the name Plutonic is the rock strata bearing that name which dominates the geology. Plutonic people come from a mining background.
Some NDPer was complaining on IPPWATCH.com that the company should be condemned for choosing this name. And Skookum repeats that.
Clutching to straws these NDPers. They cant advance their case through fact-based arguments, like none of them have been able to show that IPPs are bad for the environment, so they go and condemn by name.
And they call themselves “progressive”?
Sorry Skookum, Pluto is the Roman god for the underworld and for mining. It is related to Hades the greek god for the underworld.
The wealth association is remote at best – but shows the obsession that NDPers have with wealth, or lack of it. Maybe if NDPers could get a proper job, they would not be so bitter and obsessed. Enuf said.
On the subject of privatized power generation, the claim that it, and many other privatized projects, somehow “save the taxpayers’ money” is a fraud, because all the investments, the carrying and service charges, and then the profits must come out of the taxpayers’ pockets, therefore there are no savings, but extra expenses over and above what publicly owned facilities would cost.
In neoclassical economics, the ecosystems of the planet are viewed as a subset of the economy. The most basic model of the economy is a circular flow between firms and households in which the households provide labor and purchase goods and services, and the firms provide salaries and sell goods and services. Upon inspection, flaws in these models become clear. In the first case, even a casual observer can determine that the human economy is embedded within the ecosystems of the planet. Without land, water, air, natural resources, and ecosystem services, there is no economy.
Though the environmental degradation is thought by many to be the worst factor in opening these private projects for a pittance of a fee, if one cares neither about the Salmon nor the forests, then one should (at the very least) care about money and maintaining control of our rivers. The Liberals claim that the rivers are only being controlled by the rich Americans for 45 years (at which time their contracts are up). In reality, under NAFTA, it will be next to impossible to take the rivers back. Our great-grandchildren will most likely continue lining the pockets of the Warren Buffet/General Electric empire.
If wealth could be created, big business wouldn’t have to oppose environmental protection, but they, and their political pimps, know very well where wealth must be taken from and how it is taken.
First of all, does anybody dare to ask the simple question: What are those increasing power demands for and where is that power going?
When we look at the incredible overcapitalization of all industries, we can see that the whole purpose is to divert the benefits of resource extraction into the pockets of the new global aristocracy, the multinationals, by replacing the half horsepower of a human worker with 25 or 100 hp of automated mechanization.
The old rule used to be “1 wage year investment into a job”. Today, even simple sawmill jobs are receiving 60-70 wage years of investment, causing the power demand rising to the sky.
Trucking and transporting resources and goods across countries and continents, because in the warped minds of economists it is “cheaper”, plus the collectivization of industries, farming, etc. also raises the oil and electric power demands, yet nobody dares to mention that when physical inputs are increased, the damage can only be covered up temporarily with phony monetary figures, which also have to rise ultimately…..E.g. The over 1,000% cost of living inflation over the past 35 years, the simple and obvious result of “cost cuttings”, by governments and industry.
The vast majority of jobs can be financed with very small investments and low energy inputs, but that would deprive the multinational corporate mafia from the control of the world and unlimited extortion rights, based on increased power demands and waste.
Since the FTA, NAFTA and the WTO have destroyed the productive sectors, Canada and BC survive on the sale of property and capital, and call it “income”, the most idiotic and self destructive form of economic theory. We have an economy of a factory that fires the production workers, but increases the office and janitorial staff and pays them from the sale of stock on the shelves, infrastructure and property.
Anybody can live high on the hog from the sale of house, or land, until the money runs out, but what then? Economies set up for exports are suicidal and bound to collapse sooner, or later, as the Chinese will also find out one day. The only solution for sustainable, “green” and sound economies is self sufficient local production to the highest possible degree, with exports and imports restricted to genuine trade between societies for resources not available at home.
An efficient product contains physically efficient or ideal amounts of energy and matter, regardless of numerical or monetary considerations. Monetary cost efficiency can not exist outside the concepts of physical efficiency and becomes a cost transfer on other sectors. Therefore it is not efficiency, but temporary convenience.
Nothing can be made “cheaper” than the limits of physical efficiency of “no waste”. Fiduciary money is a concept, not a reality and can not overrule the laws of physical, or ecological efficiency. Somebody, something, sometime, somewhere must pay the full costs.
Even if we’d go back to the genuine growth of the Canadian economy of the 50s and 60s, with small scale manufacturing springing up and producing the necessary goods, as we had it then, we’d be far better off, than basing our system on worthless GDP etc. figures that account an and everything as beneficial. E.g. the GDP of Manitoba will jump after the present floods, without any deduction for losses and the most polluting industries are racking up the best “growth” figures.
Like a million of his miseducated brethren, Campbell belongs to the Priesthood of the Money God. The pseudo religion of neoclassical economics is also based on such faith based dogmas that permit the destruction of the Earth and humanity, as long as somebody makes a profit. Our economy is controlled from abroad by the multinational corporate mafia, who’re taking over with the imaginary power of worthless US dollars, created from the air by a bankrupt economy, taking us for a ride and enslaving us with the help of ideologically warped and brainwashed politicians pimping for post politics directorships.
I am not a supporter of IPPs but strongly object to the NDP and their supporters taking a holier than thou position in opposing them.
Powerex the 3rd largest Hydro Company in North America was spun off BC Hydro by the Socreds in 1988, but never reintegrated into BC Hydro by the NDP when they came to power in 1991.
In fact the NDP created a second spin off called Columbia Power Corporation (CPC), a Crown corporation wholly owned and controlled by the Province of British Columbia, established under the Company Act in 1994 to own and administer hydroelectric power assets purchased by the Province in the Columbia Basin.
Mike Harcourt as Premier reduced the cost of water licenses for hydro production by 57% and he and Premier Glen Clark approved 17 of the 32 IPPs operating so far.
Before John Horgan was the current Energy, Mines and Petroleum critic for the NDP, he was part of a legislative committee that toured the province and at one of the hearings it is claimed he clearly indicated that he supported IPPs.
Likewise in the initial period before the NDP decided to oppose IPPs I had a converstaion with my MLA, Corky Evans, in which he told me it was hard for him to oppose “green” hydro power projects that replaced coal burning, natural gas, diesel and other fossil fuel energy production.
The distinct impression I got from Corky is that NDP opposition was going to be solely based on private versus public power production run of the river projects.
This is in line with their previous policy when in government in the 1990s when they created the Columbia Basin Trust, offering the people of the Columbia Basin $500 million in capital, provided they invested it in hydro production at Brilliant, Arrow Lakes (Hugh Keenleyside in Castlegar) and Waneta at seven mile.
In contrast my opposition to hydro expansion dates back to a report of a Commission formed by the NDP, but then disbanded by the same NDP government after the Commission recommended that instead of more power projects as many jobs could be obtained by retrofitting BC homes, commercial and industrial establishments creating a net energy saving of 25%.
Given that my partner and I have reduced our personal household consumption by 40% in the last three years I think 25% was and is quite doable. The local IPP in my rural area, I am an elected Regional District Director, will primarily produce power in the spring and summer whereas BC Hydro needs power in the winter and currently has a glut in the spring and summer that it needs to sell for export at the point when spot market prices are at their lowest. Meanwhile the Columbia River Treaty Dam, the Duncan, in the Lardeau Valley flooded productive forest land to a point that the local economy now loses $1 million in direct forest income, and it still has no generators on it.
The NDP track record on IPPs, when in government, was basically no different than the Liberals, except for preferring public projects spun off from BC Hydro. I therefore find the NDP and their supporters completely dishonest in their position.
glass- most ndp’ers are well paid unionized teachers, nurses, social workers, public administraters, and $80/hour auto workers, so glass are those real jobs
Glass, I’m well aware that the Plutonic name is MEANT to refer to the Coast Mountains Pluton. I was simply noting the original classical context of the reference, which was around for a lot longer than since geologists coined the term pluton. And I’m very right in my assertion that Pluto – and Hades – were the gods of wealth. What else is mining about than digging up wealth from the underground; the ancient world (like ours) was also obsessed with the idea of buried treasure. The irony, if not the intent, of the name, is very clear.
Wiki says…………. “Pluto was originally the Roman god of certain metals and, because these materials are mined, he also took on the role of god of the underworld. The name is the Latinized form of Greek Πλούτων (Ploutōn), another name by which Hades was known in Greek mythology, possibly from the Greek word for wealth, πλοῦτος (ploutos).” And since I’m too lazy to look into it further, I’ll take that as supporting Skookum’s comment…..
Are there more than ideological objections to private power projects?
We have a very large private project created in the 1950s at Kemano. It has resulted in the Alcan smelter at Kitimat, the community there, and many jobs during the past half century.
If Kemano had been a public power project, would there have been significant additional benefits to the province? What?
(I’m not interested in the controversy regarding the Nechako River, which would have been dammed whether the project had been private or public.)
If one assumes that the project is going to go ahead anyway, and if one is not interested in the environmental issues, and if one assumes that the project will be well built and maintained, and if one assumes that the market will determine power rates overall throughout North America, then the private/public distinction loses most of its importance……what remains is largely symbolic.
Profit is hardly symbolic.
The issue is whether those power revenues help support the public kitty, or are stashed into private accounts, ultimately somewhere else like New York or Geneva. WHOSE profit? – that’s the issue. BC Hydro’s ability to give better rates to citizens of BC than for export is also compromised, and market values in other less power-endowed areas will determine what people in BC pay. “then the public/private distinction loses its importance” is only deflection; and, if those profits are leaving BC, how exactly do they benefit our society? By a few construction jobs, then even fewer power-station operations jobs? And a public corporation responsible to its owners (the BC public) for environmental and fiscal acountability is a very different thing from an offshore-owned power corporation whose main interests lie elsewhere, and whose self-interest will always trump the public interest. Equivocating like that is on the order of looking back at the US election in 2000 and saying “aw, Gore and Bush are pretty much the same, there’s no real difference”. Yeah, uh-huh….
The giveaway of resource rights that we’re seeing lately is very reminiscent of the era of the Gold Colony; the theory that letting people come and pretty much strip the wealth of the place will “develop” it by incurring spending of it on goods and services, and on the development of infrastructure. Well, then as now, the infrastructure costs were born by the colonial, and then provincial, government; bankrupting the colony – and never returning in tolls and services like the Gold Escort what it cost to build, maintain and operate. And then all (well, most of anyway) the gold was gone, whether to the US, China or Britain didn’t really matter, and most of the miners, and we wound up with 1000 ghost towns. And we were stuck looking for a railway deal (also government funded, and wracked with scandal and also Yankee-diddling on the part of Sir John A.) so that we could bulk-export the rest of the resources, namely timber and coal. One consequence of the railway deal’s terms and policies like the Crow Rate meant that the development of heavy manufacturing in BC was never ALLOWED, and our position as a resource-export economy was retrenched and retrenched and retrenched, right through Barrett’s tenure, through MiniWac’s and Harcourts, and continues since. But really, honestly, what about once it’s all sold….er, given away? Then what do we give away in order to convince other people to invest money here? Hmmmmm….slaves, perhaps, we’ll see when the time comes…
The big happy-face pic of Campbell and Schwarzenegger together brought to mind for me that the private power developments are just another part of our long-time relationship with California, which likewise goes back to the very founding of the colony. In more pragmatic terms, we agree to provide California more power for California’s swimming pools, shopping malls and zillions of electronic devices and what-not. In exchange, the Schwarzenator backs down from trying to shut down the BC film industry (which provides more jobs, or can, than most people are aware of). There’s more to it than that, but since all this IPP stuff began there hasn’t been much at all about Hollywood griping about Hollywood North. Something Gord and Arnie must have talked about over cigars, no doubt, though not the central dish on the menu; water and power.
I still don’t get, given the implications for the NAFTA water-export provisions, why these developments aren’t an issue for politics nationally; I know why the Tories don’t want to talk about it, that’s easy enough to see. But I don’t get why it’s off the national radar, other than for the usual reason of keeping BC’s dangerous complexities and controversial double-dealings and sell-offs out of view in the rest of the country and in the national media.
And for the record, I’m from a Hydro family; and one thing I do know is that places produce power often don’t see development, other than the remains of the communities that were created to build them. This power will not be available for use by BC enterprises, it will be bought up and spoken for, forever, which is a LOT longer than the jobx will last that the projects take to build….
Here is a link to a video about who owns the water rights, etc when small hydro projects are developed by IPPs.
http://www.youtube.com/watch?v=ibVF8AwJFTo
or http://www.bcliberalsmedia.com/2009/barry.penner/hydro1/
On the subject of privatized power generation, the claim that it, and many other privatized projects, somehow “save the taxpayers’ money” is a fraud, because all the investments, the carrying and service charges, and then the profits must come out of the taxpayers’ pockets, therefore there are no savings, but extra expenses over and above what publicly owned facilities would cost.
In neoclassical economics, the ecosystems of the planet are viewed as a subset of the economy. The most basic model of the economy is a circular flow between firms and households in which the households provide labor and purchase goods and services, and the firms provide salaries and sell goods and services. Upon inspection, flaws in these models become clear. In the first case, even a casual observer can determine that the human economy is embedded within the ecosystems of the planet. Without land, water, air, natural resources, and ecosystem services, there is no economy.
Though the environmental degradation is thought by many to be the worst factor in opening these private projects for a pittance of a fee, if one cares neither about the Salmon nor the forests, then one should (at the very least) care about money and maintaining control of our rivers. The Liberals claim that the rivers are only being controlled by the rich Americans for 45 years (at which time their contracts are up). In reality, under NAFTA, it will be next to impossible to take the rivers back. Our great-grandchildren will most likely continue lining the pockets of the Warren Buffet/General Electric empire.
If wealth could be created, big business wouldn’t have to oppose environmental protection, but they, and their political pimps, know very well where wealth must be taken from and how it is taken.
An efficient product contains physically efficient or ideal amounts of energy and matter, regardless of numerical or monetary considerations. Monetary cost efficiency can not exist outside the concepts of physical efficiency and becomes a cost transfer on other sectors. Therefore it is not efficiency, but temporary convenience.
Nothing can be made “cheaper” than the limits of physical efficiency of “no waste”. Fiduciary money is a concept, not a reality and can not overrule the laws of physical, or ecological efficiency. Somebody, something, sometime, somewhere must pay the full costs.
The vast majority of jobs can be financed with very small investments and low energy inputs, but that would deprive the multinational corporate mafia from the control of the world and unlimited extortion rights, based on increased power demands and waste.
Since the FTA, NAFTA and the WTO have destroyed the productive sectors, Canada and BC survive on the sale of property and capital, and call it “income”, the most idiotic and self destructive form of economic theory. We have an economy of a factory that fires the production workers, but increases the office and janitorial staff and pays them from the sale of stock on the shelves, infrastructure and property.
Anybody can live high on the hog from the sale of house, or land, until the money runs out, but what then? Economies set up for exports are suicidal and bound to collapse sooner, or later, as the Chinese will also find out one day. The only solution for sustainable, “green” and sound economies is self sufficient local production to the highest possible degree, with exports and imports restricted to genuine trade between societies for resources not available at home.
Even if we’d go back to the genuine growth of the Canadian economy of the 50s and 60s, with small scale manufacturing springing up and producing the necessary goods, as we had it then, we’d be far better off, than basing our system on worthless GDP etc. figures that account an and everything as beneficial. E.g. the GDP of Manitoba will jump after the present floods, without any deduction for losses and the most polluting industries are racking up the best “growth” figures.
Like a million of his miseducated brethren, Campbell belongs to the Priesthood of the Money God. The pseudo religion of neoclassical economics is also based on such faith based dogmas that permit the destruction of the Earth and humanity, as long as somebody makes a profit. Our economy is controlled from abroad by the multinational corporate mafia, who’re taking over with the imaginary power of worthless US dollars, created from the air by a bankrupt economy, enslaving us and ultimately committing suicide with the help of ideologically warped and brainwashed politicians pimping for post politics directorships.
Biologists Say Planet is Undergoing Mass Species Extinction