Juggling Dynamite

As chairman of the Financial Stability Board from 2011 to 2018, former Bank of Canada head Mark Carney led escalating requirements for companies to include detailed climate change-related disclosures in their financial reporting to enable better business and investment decisions. Leaving the Bank of England in January, Carney is continuing the push for financial accounting reforms in a new role as the UN special envoy on climate action, as he explained on December 1st at the opening of the COP 25 climate change conference in Madrid:

“This provides a platform to bring the risks from climate change and the opportunities from the transition to a net-zero economy into the heart of financial decision-making.”

Growing up in the Canadian north, Carney has a unique understanding of Canada’s economy and vulnerability in this transition, and he pulls no punches on the business case urgency at hand, explaining in a speech last July:

“The most important thing is to move capital from where it is today to where it needs to be tomorrow.  Companies that don’t adapt – including companies in the financial system – will go bankrupt without question.”

Carney has international stature and his new UN role continues that, but it’s his Canadian roots and insider knowledge of financial markets that make him such an important resource for Canada.  Not to help maintain the status quo, but to help us manage the massive evolution urgently needed in our economy, public and private policies.  See The challenges facing former Bank of Canada governor Mark Carney:

He is in a position to make a forthright case for a far-sighted, planned transition away from fossil fuels, including a strategy to support laid-off Alberta oil-patch workers as they shift to new livelihoods.

Danielle was a guest with Jim Goddard on Talk Digital Network talking about recent developments in the world economy and markets. You can listen to an audio clip of the segment here.

Another day, another tragic story about too-good-to-be-true return hopes, financial loss and devasted life plans.  Ten percent is not a sustainable return objective, and far too risk-seeking for retirement funds.  Yet many people still make such presumptions.  This is a reliable path to pain and suffering. Read How 500 Ontario investors may have lost millions in Paramount Equity Financial collapse:

Rob McCormickk and his wife say their dream of a comfortable retirement was shattered after they lost nearly $350,000 with Paramount Equity Financial Corporation.

McCormickk, 63, from Keswick, Ont., was told about the investment opportunity by a friend and said he was swayed by claims of “fixed stable returns” and a “no-loss guarantee.”

“It’s been devastating,” said McCormickk, who runs his own advertising company. The investment opportunity was so appealing he threw in another $100,000 belonging to his mother.

“We lost over 50 percent of our life savings. This was supposed to be our retirement money, and we were looking forward to retire in the next two to three years.

“Now we’ll never be able to retire.”

…Global News has spoken with a half-dozen investors who say they have had their lives upended by the Paramount financial collapse. Some took out second mortgages to invest, while others say they may have lost their life savings, one investor says they were forced to sell their house.

Also, watch this video clip:  Ontario investor describes losing money in Paramount Equity Financial collapse.

If you, or someone you know, are considering whether to stop work and rely on income from savings and are presuming a withdrawal rate of more than 2% today, you are probably at risk of consuming principal.  If emailed your facts, I will offer some thoughts.  That said, people can be hard to help and often play a leading role in their financial hardship because magic money projections can sound more appealing than honest math.