It's not the banks I hate, it's their fans - Macleans.ca

It’s not the banks I hate, it’s their fans

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$39.8 billion: That’s how much Quebec’s Caisse de dépôt et placement lost in 2008.

After watching a quarter of its total value vanish into the ether, the Caisse naturally opted for the most reasonable course of action—it sought to reinsure nervous investors by preaching and exercising extreme caution in the face of what could very well have been a devastating economic and political crisis.

Wait, you didn’t believe that did you? Has AIG taught you nothing about the world of high finance?

What the Caisse did was throw themselves a big, expensive Christmas party—an even bigger one than the year before, when they’d registered a gain of 5.6%.

Of course, it’s not like the $56,099.31 they spent on food and drinks would have made much of dent in the investment fund’s bottom line. (Besides, a company rep insists that a “large portion of the total cost of these evenings was paid by the employees themselves.”) And you can hardly blame them for wanting to close out 2009 with a drink or twelve. Still, there’s something unseemly about doing it at a swanky, open-bar party for 500 people at Windsor Station, especially in light of what was going on around them.

In the days leading up to the party, three leading managers at the Caisse wrote an anonymous letter to media outlets complaining that “nervousness, fear, dysfunction and a lack of confidence” were spreading inside the fund’s ranks and a separate news report revealed the Caisse was implementing an especially low-threshold bonus program to top up its employees’ earnings. Most recently, the PQ registered its polite disapproval of the fact $4 million worth of bonuses were handed out to five senior managers at the Caisse.

In an open letter published yesterday by Le Devoir, Michael Sabia, the Caisse’s head honcho, insisted changes implemented over the past year were guided by “common sense” and a focus on “transparent investment vehicles of which we have a deep understanding.” In other words, pouring copious amounts of money into risky products no one really understands is being phased out as an investment strategy. Pity, that.

That said, there may yet be hope for Caisse employees—Sabia didn’t mention how “common sense” would impact preparations for this year’s party.