So the biggest telco in the country, which you'd think would be bulletproof, is in trouble. Seems absurd, given that it seems like a can't lose business. After all, people don't stop making phone calls (or, hopefully, reading this blog), and BCE's flagship subsidiary, Bell Canada, is the gatekeeper to the phone and internet network in Canada's two largest provinces. MTS, their counterpart here, is doing fine (their stock is only slightly below where it was a year ago, though they had a temporary dip today while BCE's stock was crashing). Nevertheless, if they've
Shares of telecommunications giant BCE Inc. remained deep under water early Wednesday afternoon, after plunging 40 per cent at the opening bell following a warning by the company that its massive planned privatization is in jeopardy.
The shares were trading at $25.09 on the Toronto Stock Exchange, down $13.26, or 34.6 per cent, from Tuesday's close, having earlier fallen as far as $23, or 46 per cent below the $42.75 price the would-be buyers, led by the Ontario Teachers' Pension Plan, agreed to pay in June, 2007.
The rout followed a pre-opening warning from BCE that its planned $35-billion privatization was in doubt because it had failed a preliminary solvency test conducted for the would-be purchasers.
Interesting things are arising as a result of all this chaos. Canadian Silver Bug has found an interesting site, the Free Lakota Bank:
The Free Lakota Bank is the world's first non-reserve, non-fractional bank that issues, accepts for deposit, and circulates REAL money...silver and gold. All of our deposits are liquid, meaning they can be withdrawn at any time in minted rounds.I have mixed views on this. I like the idea; it's great to see the Lakota nation reclaiming control of their economy (and I imagine that the Mohawks and others are watching this closely). And I do see some merit in the way they're doing it; fiat currency isn't looking particularly good right now. But I can't help but thinking that if full reserve banking worked as well as many precious metal enthusiasts think it did, someone would already be doing it. Not to mention, seeing them quote Ayn Rand sort of dampens my enthusiasm for the whole thing.
Then again, if you are going to try this, it's a very good time. Precious metals are down considerably from earlier this year, but I tend to agree with those who think they will increase dramatically in value as the US dollar devalues again.