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The first clandestine gathering of my Secret League of Extraordinary Risk Gentlemen was just conducted, however only Rick Nason was able to make it for lunch.

The future of risk management as you know it is subject to change without notice.

(And thanks for lunch, Rick.)

What is that expression about no publicity is bad publicity?

Giant Tiger, a discount retailer in Canada erred when it marketed Playboy branded underwear (thongs and bras) in its back-to-school flyer. Although the ad was aimed at the back-to-college crowd, some parent complained, Tiger Brand apologized and here we are writing and reading about Giant Tiger.

I suspect these are the same parents who complained last week about the Katy Perry/Elmo video.

Reputation risk or good marketing?

Toronto has long believed it was the Centre of the Universe. Well, in risk management circles, perhaps now it is.

Last week the Department of Finance Canada announced the creation of the Global Risk Institute in Financial Services or GRi. It will be an “independent, not-for-profit entity with a board of directors and an advisory research council comprised of senior leaders from industry, regulators and the academic community.”

Additionally “GRi will perform five key functions: (i) developing leading-edge thinking; and practical, policy-relevant applied research in the area of financial risk management; (ii) providing consulting and advisory services to governments, regulators and industry; (iii) providing professional risk education to senior industry practitioners; (iv) partnering with academic institutions and professional organizations to train new graduates; and (v) hosting international forums and conferences. “

The Globe and Mail is conducting a survey today asking respondents if they ever cheated on a test.

At the time this post was published, only 45% of people said Yes.  (Really!)

I find it very hard to believe that the answer isn’t 99%. I am no cheater but it’s pretty likely sometime in grade school you scribbled an acronym you couldn’t remember or a word you couldn’t spell on a desk  before the test; I bet in third grade you looked over at a neighbour’s sheet once.

For those self-righteous 55% of folks who claim they never cheated on a test, I bet more than 55% of you have cheated on your taxes or your spouses, lied on a résumé or a blind date. Isn’t that the same?

By the way, the best example of (clever) cheating I ever saw was in tenth grade Organic chemistry class when my friend Andrea wrote a phone number on her hand 482-0273 all in the hopes of helping her to remember that zero Kelvin or absolute zero was -273.

I reference a post by Beaumont Vance once where he suggests all risk managers should introduce themselves as fortune tellers as cocktail parties. In this recent blog post from Riskview, the author points out:

Criticisms of risk managers for not anticipating some emerging future are overdone. When a major unexpected loss happens, everyone missed it.

Risk managers do not have any special magic ball. The future is just as dim to us as to everyone else.

Have a read at Risk Managers do not know the Future any Better than Anyone Else.

Sometimes I am puzzled. I look around and see lots of people who are all basically made from the same genetic material as me, yet why is it that some of my genetic cousins are insane? (I apologize for casting aspersions on all people with genuine mental health issues so let me cast my aspersion on Pierre Curzi specifically.)

This fool, ce mangeur de hot-dogs and the Quebec opposition language critic, is trying to stir up the poutine by suggesting that the Government of Canada uses its control over the Montreal Canadiens Hockey Club to keep Francophone players off the roster. He believes the blue, blanc, rouge is some propaganda machine controlled by the Federalists. (This plot was no doubt hatched in the 1970s when Prime Minister Pierre Trudeau orchestrated the Habs signing of Toronto-born goalie Ken Dryden after he predicted he would become a Liberal MP 30 years later.)

The issue of Francophones players playing for les habitants comes up quite a bit. Guys like Martin St-Louis and Vincent Lecavalier are often identified as players the Habs should acquire. For starters they are very good and secondly they are hometown boys. To be honest, why would they want to play in Montreal? All Montreal players are under the microscope all the time and the pressure is exponential for guys like them. Why play in a fishbowl when you can live in Florida, make $10 million a year and walk through the mall without anyone recognizing you? Alternatively, it’s not easy for other players, namely Brian Gionta, an American, to move his wife and kids someplace where not they have to learn French as well. While it is certainly an honour playing in Montreal, it certainly brings with it unique challenges.

But to suggest it’s a plot, I say to M. Curzi, c’est la folie. Perhaps he should go back to acting and drinking his Labatt 50.

I had a chance to see Myron Scholes speak in Toronto yesterday. Scholes: from Black-and fame. The option guy. That Nobel Prize guy. (A Canadian by the way!)

Before I completed my undergrad in Finance, I studied a lot of nerd stuff in high school: physics, organic chemistry, math. In those fields you learn about guys like Galileo, Avogadro, Fibonacci. They all had one thing in common: they were all around before I was born. (And spoke Italian.)

When I started learning about finance, I immediately adopted the same thinking for the names I read in the text books: Modigliani, Miller, Merton, Markowitz, Friedman, Drucker, Black and Scholes. I was surprised to learn at that time that these guys were still around.

So there he stands at the Toronto Board of Trade, looking sharpe (sic) with a great suntan and nice hair speaking to a crowd of groupies like he was some kind of finance rock star.

He explained we should embrace uncertainty. Risk management is a misnomer and we should change our mindset and think of it as “managing under uncertainty”. But the key thing he noted is what Risckzar always advocates: risk management is more than just a bunch of values on a report; it’s about people and the conversations that the risk report generates. If we don’t learn something from the report, then it’s just a number on a page.

The house league page on Richmond Hill Phoenix Baseball Club’s website reads “House League is a recreational level of baseball for players of all skill levels and experiences… The focus at this level is to promote sportsmanship, fun and greater enjoyment of baseball.”

Well as the song says two out of three aint bad.

Over the weekend I witnessed one of the vilest displays of sportsmanship, courtesy of the League and the convenor of the peewee division & Secretary of the League, Olympia Pappas-O’Brien.

Team Orange showed up on Phoenix Day – the last day of the season – expecting to be playing in the final. After all, they went 8-0 in the regular season and 3-1 in the playoff round. The boys dominated the five other teams all season long and capped off their season with an exciting walk off win a couple of weeks ago against Team Blue. But when they arrived at the field, they learned that this was only a consolation game (3 vs. 4) and not the final. In spite of their near perfect season, somehow Team Blue was playing in the final versus Team Grey. How could they happen? (Read: WTF?)

Team Orange coaches tracked down the convenor, Olympia Pappas-O’Brien, on another field to get an explanation. She was seated in the bleachers to watch her son’s game. Did I mention that the Olympia Pappas-O’Brien’s son is on Team Blue?

The kids and coaches learned that Team Blue protested their loss to Team Orange a few weeks ago. A clandestine meeting was held by the league and Olympia Pappas-O’Brien where they overturned Orange’s victory over Blue. Team Blue argued that the final two runs which Orange scored crossed the plate 2 minutes after the 8:30 pm curfew time, so they didn’t count and therefore they reverted to the score of the earlier inning, when Blue was leading. This decision to reverse the win was done without any evidence and without anyone from Team Orange present at the meeting. It also reversed the decision of the umpire on the field. It was facilitated by the mother of the child whose team benefited from the change and a league executive.

In hindsight, a lot about that game and the dirty tricks Blue’s coach was using makes sense: In the final inning, they changed their pitcher twice, took their time sending a new one out and kids to the on deck circle, etc. They were hoping time would run out. But the irony is their tactics failed. Orange scored the winning run before 8:30 anyway. We knew it and the umpire knew it – who would have called the game if time had expired. (When you’ve been sitting in the cold for two hours watching a game, you watch the clock quite a bit, because although we love our kids, we really do want to get home.)

And in the end rather than deciding who wins and who loses on the playing field, in an entertaining and well fought contest, Olympia Pappas-O’Brien held a meeting and decided for herself. All the boys knew this was wrong and smelled the BS. My own son told me that if I had been the convenor and had done that, he would have hated me for it. Because even a 12-year knows the difference between right and wrong. (I wonder if Olympia Pappas-O’Brien’s son hates her?)

This event reminded me of the pledge which I took when I graduated from business school: “I will, to the best of my ability, act honourably and ethically in all my dealings, in the belief and knowledge that doing so will lead to a greater good; I will endeavor to act with moral clarity, grace and nobility; Above all, I will aspire to make a positive contribution to my society.”

This is how I conduct myself and my dealings. This is how most people conduct themselves with the exception of the leadership of Richmond Hill Phoenix Baseball Club.

With news coming out of Quebec City that billionaires are trying to get the Government of Canada to foot the bill for a new area (one that might lure the Nordiques back and be part of a future Olympic bid), this week’s story in the New York Times is very timely.

Ken Belson’s story describes how publically funded stadia rarely turn a profit and often leave the taxpayers footing the bill. What’s more, some stadia that have been demolished or no longer have a pro sports team and still carry debt.  For example, the Kingdome in Seattle was built in 1976, demolished in 2000 and has $83m in debt which won’t be paid down until 2016. And Giant Stadium in New Jersey owes $266m for another 15 years.

Have a read at As Stadiums Vanish, Their Debt Lives On.

This story in today’s Globe and Mail kills me. I guess it’s true what they say about death and taxes.

If you were looking at the financial data from Toronto-based funeral company, Arbor, you might think that people were dropping dead left and right in Canada recently. Is swine flu claiming lives? Are Leaf fans finally jumping off the Bloor Viaduct realizing their team has no chance of making the playoffs let alone win a Stanley Cup (ever)?

It seems the company reported a 242% increase in preneed funeral contacts. (Preneed is a funny term by the way sort of like “previously enjoyed” for used cars.) Why?

The primary driver of this increase: the new harmonized sales tax in Ontario and BC. It seems people wanted to get in and pre-pay before their provinces started charging 8% and 7% tax respectively on their services – previously, only a federal tax was charged on funerals. Is an additional 8% worth dying over?

Additionally, the Guaranteed Funeral Deposits of Canada, an organization that manages prepayment money from funeral homes, and receives about $3m to invest in a normal month, received a whopping $58m in June, or twenty times the usual amount. That just kills me.

On a $10,000 funeral, the new tax only ads $800 in Ontario to the cost. According to my math, if you plan on dying in the next eight years, this is a bad deal. You’d be overpaying. Investing your ten grand at 1% compounded for 8 years would earn you $828.57. After-tax it’s probably a wash.

Frankly, I’m shocked that so many people would rather part with their money today, so that their estates didn’t have to pay an additional 8% to the tax man.