Signs of a recession?

When the financial crisis hit the US (and other part of the world), our Government ministers went on record to say that we are in no trouble, then later the Prime Minister went on TV to saying, “time to tighten your belts“. After that, Finance Minister Karen Nunez-Tesheira says that the crisis won’t last for ever.

Now on the heels of plant shutdowns and government cutbacks, we get breaking news – Government Bails Out Clico! It seems that CLICO Investment Bank (CIB) just does not have enough liquidity – basically no cash – unlike the other banks that have truckloads of the stuff (while I don’t). Not being liquid, especially in these turbulent times, opens the door for panic and even legal action.

I cannot understand a few things though:

  • CL Financial is a privately owned company, not under the scrutiny of the public eye or shareholders.
  • Lawrence Duprey is like a gagillionaire, and under this plan he reduces his liability (and probably loses little as well)
  • CLICO gives millions of dollars in sponsorship every year to sports, parties and fireworks shows, is it that they were being really supportive, or just didn’t know what the heck was happening.

So why are we pulling Clico out of this jam with taxpayer’s money? The CL Financial Group is the parent company of CLICO (Colonial Life
Insurance Company) and manages assets of over $38 Billion Dollars (I
assume TT), which is about a quarter of T&T’s Gross Domestic
Product (GDP). That’s a really huge chunk of moola we’re talking about,
so we really cannot afford for the group to fail, but at the same time, I hope that someone is held accountable for this, as I am sure that there was signs of trouble long ago.

The question is whether the recession is here? Well, technically no, although it’s pretty close. We define a recession as two quarters of consecutive negative grown (positive shrinkage?), so what we have is really a slowdown, and depending on how it is managed, we can get through the current world economic crisis without going into a recession. It is to be seen what will come and what the goverment and people will do. Our actions alone will determine how we get out of this, so act wisely.

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