Angry in the Great White North
Lies, Damn Lies, and Statistics? Add to that damning graphs
Tuesday, November 29, 2005 at 08:05 AM

Read other posts by Steve Janke published by the National Post
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BFI trading (click to enlarge)

The allegations of leaks and insider trading with the collusion of the Finance Minister Ralph Goodale's office continue to swirl.

Check out the chart showing the trading on BFI, the garbage collectors. I find this chart one of the strongest pieces of evidence that something rotten was going on.

On Wednesday, just before 6 p.m. EST, the federal finance department officially announced it would cut the tax on dividends and would leave trusts alone. That's the type of news that is always announced after stock markets close at 4 p.m. EST because it would give a boost to those types of securities.

But trading in many trusts and dividend-paying stocks became much heavier than usual in the hour or two before the market's closed on Wednesday, and share prices rose sharply.

At BFI, the trading picked up as early as 2pm. But look at the price per unit. Essentially flat. These buyers wern't reacting to a shift in the market that had happened. They were preparing for a shift that would happen.

Stock exchange re-opens the next day, and in the wake of the announcement not to tax trusts but to cut taxes on dividends, BFI leaps three dollars. There is a bit of profit taking, but the guys in the know hold on to their units instead of devaluing them by dumping them all at once.

That amounted to what looks like 350,000 shares moving for no apparent reason. Not earth-shattering, but a nice piece of change, especially if you didn't actually have to work at it.

The huge spike in pre-announcement volume, followed by signficantly reduced volume post-announcement, is going to be the kind of flag that regulators are looking for.

I wonder if they would care to know that BFI contributed $2,000 to Paul Martin's leadership campaign in May 2003. Probably just coincidence.

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