Thursday, February 28, 2013

(No.232) The sensitive Globe and Mail plus some interesting numbers

"The sensitive Globe and Mail refuses correction -- 
and some interesting numbers"

by Alastair Rickard

The Globe and Mail (Toronto), Canada's self-described "national newspaper" is, in my experience, rather sensitive to letters pointing out its journalistic shortcomings. The following Feb. 21, 2013 letter I wrote to the editor of the Globe was not published. I was not surprised and the reader may be able to guess why.

"Sir: In spite of the fact that we are in an era of too much uncritical media focus on the results of unscientific polling (self-selecting, online, focus groups et al) as well as the unreliable results of supposedly scientific polling, q.v., Nate Silver's pre-election coverage of polling in the New York Times, a Globe story today injects another element: failing to qualify a manifestly inaccurate statement about specific poll results by pollster Nick Nanos ("War of 1812 extravaganza failed to excite Canadians") . 

"As in the contrived and superficial discussion of the same poll results yesterday on CBC News Network Nick Nanos wants the entire focus to be on the fact that "only about 15% [sic] of Canadians felt more patriotic as a result of the [federal government's 1812] celebrations".

"In fact: if the proportion of poll respondents who felt "somewhat more patriotic" are included then the result is actually 35+% of Canadian respondents whose feelings of patriotism were increased by the federal government's War of 1812 celebrations. A rather different picture.

"Instead of the puerile survey question presumably used for tabloid effect, the useful question might better have been along the lines of: "Do you think the federal government's efforts to mark the 200th anniversary of the War of 1812 were worthwhile/justified as a celebration of a key event in Canadian history?"

"In any case the Globe article should have reported the actual Nanos poll results before allowing the proprietor to misrepresent what the poll results actually were."


A TD Bank study in 2008 indicated that 50% of adult Canadians have trouble reading. Various studies of literacy in Canada indicate that something on the order of at least 25% of Canadians are illiterate or 40+% if the semi-literate are included.

This is a reality rarely mentioned by the tech groupies who joyfully point to the proportion of Canadians who do not read a newspaper regularly or at all but derive their knowledge from the internet, a fact perhaps even less encouraging when studies reveal that 22% of university graduates have inadequate levels of literacy.

A recent survey from RBC Wealth Management concludes that 37% of Canadians with investable assets of more than $1 million do not have a will. No life insurance agent or estate planner who has spent time with clients will be surprised. Indeed the proportion of Canadians generally without wills is estimated to be at least 56% in one recent study in which a major reason given by those surveyed for having no will was that they were "still too young".

This form of self-delusion is not as unusual as it may first seem. It involves the same psychological factor that is so important to the fact that most people will not on their own initiate the purchase of individual life insurance: to do so is to undertake something which is inseparable from a contemplation of one's own mortality.


For much of the 20th century American psychologists overwhelmingly embraced the principle that environment and not heredity is the greatest factor in determining the differences beween individuals. But the results of a landmark study between 1979 and 1999 which examined 137 pairs of twins separated in early childhood and raised in different households changed alot of opinions.

After thousands of tests involving the twins separated at birth the study's authors concluded that a huge number of personality traits previously thought  to be influenced by environment and upbringing were in fact driven by genes.

For example: birth twins Jim Springer and Jim Lewis who, although they were raised forty miles apart in Ohio, had both worked in law enforcement, were both hobbyist carpenters, drove Chevrolets, took holidays on the same beach in Florida, smoked Salems and drank Miller Lite; both had been married twice, first to women named Linda and then to women named Betty, and had sons with nearly identical names (James Alen and James Allen).

This landmark study and its conclusions are the subject of "Born Together -- Reared Apart: The Landmark Minnesota Twin Study" by Nancy Segal (2012).


Followers of international affairs will be familiar with the latest of the manifestations of the continuing and longstanding hostility between China and Japan. Many will understand why. A major source goes back to the Japanese invasion of China in the 1930s and especially to the 'Rape of Nanking'. During 6 weeks or so beginning in Dec. 1937 the Imperial Japanese Army massacred what historians agree were at least 250,000 -- 300,000 Chinese civilians. This was also known as the Nanking Massacre.

In the west we know that during World War II Japan had a very bad record in its treatment of prisoners of war: 30% of Western POWs captured by Japan died due to malnutrition and its attendant diseases, overwork as slave labour, torture and wanton killings.

But by far Japan's greatest crime vis-a-vis POWs was against the Chinese. On Dec. 7,1941, after several years of war in China, Japan held approximately 340,000 Chinese POWs. At the end of the WW II 56 [sic] remained alive; not 56,000, not 5600, not 560 but 56.

A new study of POWs in WWII is Craig B. Smith's "Counting The Days: POWs, internees and stragglers of World War II in the Pacific".


Many English-Canadian parents are anxious to give their children an edge by having them spend time in French immersion language programs common now for many years in the public school systems of most provinces outside Quebec.

Speaking more than one language is indeed an accomplishment. "Hyperpolyglottery" is the term coined to refer to fluency in 6 or more languages.

Supposedly the known leader historically in this field was the Cardinal Giuseppe Messofanti of Italy (1776-1849). It has been said that he knew 72 languages but a more soundly based estimate by historians is a still amazing 39 languages.


Many of us have read about the unreliability of eyewitness testimony in criminal trials. Even in death penalty cases in the U.S. such testimony has often been accepted by juries when, in terms of justice,  it should not have been. Perhaps it is partly the effect on juries of having seen too many movies and television dramas in which eyewitness identification of the accused is the key to achieving the 'right verdict'.

DNA testing has demonstrated, if any further demonstration was needed, the folly of imposing the death penalty since clearly it means the execution of too many innocent persons. Canada, in the absence of the death penalty since the government of John Diefenbaker, has a long list of innocent persons convicted of murder who would have otherwise been executed but ended up being exonerated, too often after many years of imprisonment.

Remember these ten famous Canadian 'murderers' who ended up exonerated (just a few among many)?

David Milgaard
Steven Truscott
Wilbert Coffin
Thomas Sophonow
Donald Marshall
Guy Paul Morin
Gregory Parsons
James Driskell
Robert Baltovich
William Mullins-Johnson

It is just such a list of the wrongly convicted that should convince even the most ardent defenders of the death penalty of its inherent injustice. In the U.S. the list of the wrongly convicted is much longer.

Because DNA testing makes it possible to measure the validity of eyewitness testimony in certain criminal cases a recent U.S. study of American cases is particularly interesting. Of 40 cases in which DNA evidence established the innocence of wrongly imprisoned people the study showed that 36 of them (90%) had involved mistaken eyewitness identification.




previous columns//blog archive: to access previous columns posted to go to the  blog archive links which are listed chronologically in the margin beside each column as it appears
on the RickardsRead website and use the links

to set a 'Google alert' in order to receive notice of new columns as they are posted on, go to



Sunday, February 24, 2013

(No.231) Sun Life's Asian operations: waiting for Godot

"Sun Life Financial's 2012 results and its Asian insurance operations: waiting for Godot"

by Alastair Rickard

Sun Life Financial's 2012 results have been released. Provided was the usual cornucopia of interesting numbers. The Sun Life reports for both the 4th quarter of 2012 and the full year can be accessed at

I note below several points of interest to me as a one time member (as a result of a Sun corporate takeover of my then employer) of Sun Life management who refused to drink his serving of senior management's Asian Kool-Aid (amounts are in Canadian dollars):

-- Sun's operating net income in 2012 increased dramatically from $34 million in 2011 to $1.679 billion. As I write this column Sun's common shares are trading on the Toronto exchange between $29 and $30. It was not all that long ago that they were around $13.

-- Sun's Canadian operations, led by president Kevin Dougherty, the 'small market' that former CEO Donald Stewart referred to in prefacing his oft-repeated views on the vast potential for Sun of Asia and the U.S., continued in 2012 to be by far the biggest contributor to the company's operating net income: $795 million, almost half [47.4%] of the company's worldwide operations total.

-- In Canada Sun's rank in 2012, based on its share of the individual life insurance market, increased to number 2, ahead of Manulife but behind Great-West which gets its top ranking based on a combining of the individual sales made by agents and brokers of London Life, Canada Life and Great-West Life.

An important factor in this improvement for Sun was another annual increase in the size of the company's Canadian industry leading career agency sales force to 3,713 ( a net gain of 119 for the year). Another plus was the contribution made by having a full year's availability for sale of Sun's new (i.e., rediscovered, belatedly) product type: a participating whole life policy.

-- Sun Life Financial CEO Dean Connor has identified Asia as an area of particular future concentration and growth, as his predecessor Donald Stewart did. However Connor also recognized Canada as a major part of its future as well as current focus and has wisely acted to rid the company of its problematic U.S. individual insurance and annuity business (see column No.225 on "Sun Life:dumping a can of worms", posted Jan.10, 2013). The Asian focus was recently underlined by Sun's purchase of a 49% interest in CIMB Avion in Malaysia as well as involvement in a joint venture in Viet Nam.

-- As for Sun's Asian operations becoming a major source of profit (including from its minority ownership interests in the Indian and Chinese life insurance companies which carry the Sun Life name), 2012 results indicate that the company is, like Samuel Beckett,  still waiting for Godot. Individual life insurance sales in Asia were flat last year and operating net income declined to $129 million (from $144 million in 2011), less than 8% of the Sun total worldwide.

-- Years after having given C.I. Investments bargain-priced, preferred access to its Canadian career agency distribution system, an arrangement which can be terminated by Sun Life with 12 months notice which could be given in less than a year from now, Sun is trying to gain more mutual fund business from its own career agents. (see the discussion of this subject in my previous column on No. 230: "Sun Life vs C.I. Financial: it could get messy", posted Feb.15, 2013.)

[I have received responses to that column on CI from a number of Sun Life agents. If others wish to share their views with me, please do so. I will be returning soon to the subject of Sun and CI in another column.]

-- Having sold its 37% interest in CI for $2.3 billion to the Bank of Nova Scotia in October of 2008 Sun Life has been trying to get more of its agents' mutual fund business to be placed with its own Sun Life Global Investment funds (SLGI). These SLGI mutual fund sales apparently did increase somewhat in Q4 2012 over Q4 2011 while total mutual fund sales were up in the same quarter by 41%. CI's net sales for the year were up only 9%, much of which can be attributed to business received from its 'loyalists' among the agents in the Sun Life sales force across Canada.

Casual followers of Sun Life Financial's operations in Asia, Canada and elsewhere have not had an easy time of it over the years getting a balanced report on the reality of Sun Life's operations, including the reality of its Asian operations, from the so-called experts in the financial media and associated financial services commentariat.

Just one example: Dow Jones reported Sun's 2012 financial success as based on "strong mutual fund sales and its Asian operations [sic]". One wonders whose numbers they looked at.

Still, even with the continuing tendency for Sun Life Financial and some of its followers in the 'expert community' to foresee an Asian financial profit cathedral  rising soon on what is still a chapel-sized foundation, several smart moves have indeed been made by CEO Dean Connor.

The Sun Life share price is beginning to return to a level it should be at based on the company's inherent strengths and its ability to actually operate an insurance business rather than a so-called insurance business based (as it was in too many North American insurance companies) on gambling with financial reinsurance and other less savoury aspects of what the public came to understand, post-2007, had become the focus of too much large insurance company activity.

My suggestion: keep one's eye on Sun's real strengths, not on projected visions of pie in the sky by and by.




previous columns/blog archive: to access previous columns on go to the blog archive links which appear chronologically
in the margin beside each column as it appears on the RickardsRead website
and use the links

to set a 'Google alert' in order to receive notice of new columns as they are
posted on, go to: 

Saturday, February 16, 2013

(No.230) Sun Life vs CI Financial: "it could get messy"

"Sun Life of Canada vs C.I. Financial: add in Sun Life's career agents and it could get messy"

by Alastair Rickard

In a recent column entitled "Sun Life: dumping a can of worms" ( No.225, posted Jan.19, 2013) I referred to the relationship between Sun Life Financial in Canada and the mutual fund firm CI Financial. Sun Life owned an approximately 1/3 interest in CI which it sold to the Bank of Nova Scotia.

I suggested that in order to gain an understanding of how the important continuing mutual fund sales relationships between many of Sun Life's career agents and CI were built (with Sun Life's co-operation and encouragement) readers should peruse the response -- disagreeing with an earlier column of mine -- from a CI-supporting Sun Life career agent who is successful in the mutual fund business (see, column No. 154 posted May 30, 2011.)

That same Sun Life career agent has responded to my Jan.19, 2013 column about Sun Life with some further interesting comments about Sun Life advisors and CI, particularly vis-a-vis Sun's desire to regain mutual fund business from its own agents.

"My feelings and loyalty toward CI have not changed since May, 2011", he wrote, "nor, do I sense, have the feelings of many of my peers. It may be [Sun Life Canadian president] Kevin Dougherty's perception that this new mutual fund company [Sun Life Global Investments] is in the best interest of shareholders but at this time it is NOT in the best interest of Advisors (and, by extension, their clients).

"I recently saw a chart chronicling the growth of Sun Life advisors' wealth books of business. The growth over the 5 years from 2007 to 2012 (which includes the 'fiscal crisis') was phenomenal!

"The number of advisors [i.e., Sun Life career agents] who manage books of over $10 million [of mutual funds] has almost doubled from about 250 to 480 advisors and the number of advisors who manage over $50 million has more than tripled from 6 to 22. The credit for this may not totally belong to the people at CI but they have certainly been great partners to advisors and great stewards of the money entrusted to them by clients.

"It takes more than some good funds to make a good (or great) mutual fund company. Sun Life's ability to support me and my business in an effective and efficient manner is light years behind that of CI. With no malice intended, comparing Sun Life Global Investments to CI at this stage is like comparing my golf game to that of Tiger Woods (trust me I am a very bad golfer).

"As you likely know a contract exists between CI and Sun Life outlining their business relationship. I, and many of my friends, are concerned with where Sun Life senior management goes with their relationship once that contract is terminated. I sense that Kevin D. would tear it up tomorrow if he could, but instead he will likely wait until the end of 2013 , which is the earliest opportunity he can terminate the agreement (by providing 12 months notice). You likely also know that the agreement is a public document found on CI's SEDAR site.

"I predict the fur will really begin to fly in 2014 or 2015 when Sun must reveal their hand to their advisors. To what lengths will Sun go to create a more advantageous playing field for their proprietary funds?  How much will they upset their senior advisors, who are happy with the status quo. in an attempt to gain more market share? Only time will tell but it could get messy." [end of Sun Life agent's comments]

The foregoing views of a Sun Life career agent of long experience and considerable mutual fund sales success should be regarded seriously not only as informed opinion but also as solidly indicative of the attitudes of many (if not most) of the most experienced and successful Sun agents in terms of the mutual fund sales by the members of the Sun Life sales force.

As I have indicated in previous RickardsRead columns, I made it part of my Sun Life role as, inter alia, an agency system advocate to be critical of the negative aspects of the Sun/CI distribution relationship. In particular I disliked the preferred access at too low cost it gave CI to the large, national, proprietary, high quality and successful career agency distribution system which Sun had acquired when it bought Clarica Life (the demutualized Mutual Life of Canada).

It was valuable access to effective distribution generating higher quality business (retention) than other distribtuion sources CI had. I recall one year early in the Sun/CI relationship in which well above half of CI's net new business came from the Mutual/Clarica/Sun Life career agency system.

The Mutual/Clarica career agency system replaced the inferior 'brokerage' system with which Sun in Canada had replaced its own mediocre (because of Sun management) career agency system. The Sun agency distribution system at the time of the Clarica purchase was already a distribution system not only insufficient (based largely on under-priced and overly compensated universal life product) in the Canadian market place but one that was in decline.

However the fact is that Sun Life's senior management having wisely acquired a superior career agency distribution system, then -- whether as the result of uninformed decision-making or incompetence --  handicapped future Canadian sales with its arrangemnt with CI. Today that back story is neither here nor there to the many Sun Life career agents whose loyalty in terms of mutual fund product and sales has been earned by CI and who regard CI as superior in product and agent support to Sun's own more recently created SGLI.

One can safely conclude, for example, that a significant chunk of the 41% Q4 2012 increase in mutual fund sales by Sun Life's career agency sales force in Canada went to CI whose net sales in Q4 of 1012 increased 9%.

In my view the Sun Life agent who wrote to me is correct in his conclusion: "it could get messy".



previous columns/blog archive: to access previous columns on,
go to the blog archive links in the margin beside each column as it appears on the website and use the links

to set a 'Google alert' for new columns as they are posted on, go to:


Monday, February 4, 2013

(No.229) Life, death & elections: some interesting numbers

"Life, death and elections: some interesting numbers"

by Alastair Rickard

Several months ago I wrote a column about the American presidential election and the excessive media reliance on political polling which was frequently inaccurate, a notable exception to which was the analysis of Nate Silver for The New York Times (see "U.S. election coverage: entertainment vs information", column No.219 posted to on Nov.13, 2012).

The exact voting results of the Nov. 2012 U.S. presidential election have continued to change. In addition to President Obama's overwhelming 332 to 206 electoral college victory over Mitt Romney, his popular vote has been steadily increasing as several states have completed their official counts.

Obama's margin of victory has increased from 2.3% (50.4% to 49.1%) to 3.8% (51.1% to 47.2%). In part this gradual increase for Obama is because so many ballots of Obama voters were challenged at a state level by his opponents.

It is now clear that nationally the President won 65.9 million votes while Republican Mitt Romney took 60.9 million. Obama is the first president to win 51% of the popular vote in two elections since Republican Dwight Eisenhower in 1952 and 1956 and the first Democrat since Franklin Roosevelt in four consecutive presidential elections.

Nate Silver, whose predictions of an Obama win were derided by some in the media -- especially by Republicans and their media cheerleaders, predicted every state correctly in the Nov. 2012 election. He had been  wrong about only one state in predicting the 2008 results.


There was a time when there seemed no shortage of people on the left side of Canada's chattering classes willing, even eager to defend the regime in Communist China and hold public chats lionizing Norman Bethune. I recall many years ago visiting a Bethune historic home in Ontario made into a sort of shrine to his 1930s activity with Mao's army. I referred en passant in the hearing of the guide to "Red China" and received a verbal 'tut tut".

For reasons I will not dwell upon here there has never seemed to be all that much interest in Canada in lumping Mao Zedong in the same league as Hitler and Stalin when it comes to having presided over the deaths of millions. But, quite apart from those many Chinese who were killed for reasons of ideology, he caused many millions more deaths from starvation as the result of his policies. Several studies published in recent years have detailed this (e.g., Frank Dikotter's "Mao's great famine: the history of China's most devastating catastrophe, 1958-62" (2011); Yang Jisheng's "Tombstone: the untold story of Mao's great famine" (2012).

The reference here is to Mao's so-called Great Leap Forward, a policy and program of his regime that resulted in the worst man-made calamity of modern times. Between early 1958 and the spring of 1961, between 30 and 45 million Chinese died.  This total dwarfed, for example, the estimated total of those in the Ukraine who, because of Stalin's deliberate policy in the early 1930s, starved to death. Estimates of the total of the starvation deaths in the Ukraine disagree but there were at least 3 to 3.5 million.


I think many schools in the U.S. are better at teaching students about their country's history than most schools in Canada are theirs. We have for many years now been turning out generations of graduates who are, in terms of this country's history and civics, mostly illiterate. Even those provinces that still require a high school graduate to have taken only one history course customarily offer only a socially 'relevant' stew dubbed something like 'social studies' or some such masquerading as a genuine history course.

Unfortunately to say this about Canada is to damn our American neighbours with faint praise.

For example, I suspect few Americans know much that is accurate about their country's war of aggression against Mexico in the 1840s or that this war actually had the second highest casualty rate of any U.S. war: 17% of American soldiers died in the Mexican War. The highest American casualty rate: the latest estimate by a demographic historian suggests that the total number of American Civil War dead (1860-65) was probably about 750,000 or approximately 25%.

See Amy S. Greenberg, "A Wicked War: Polk, Clay, Lincoln, and the 1846 US. invasion of Mexico (2012); and J.David Hacker, "A Census-based Count of the Civil War Dead," Civil War History, Vol.57, No.4 (Dec2011).


In the First World War (1914-1918) Canada with a population of only 7.2 million people suffered military deaths of 66,876; that total is increased to 66,546 if Newfoundland's 1570 deaths are included.

By comparison the military death toll of the United Kingdom was almost 900,000; France 1.4 million. The United States, which had a population of 92 million and did not enter the war until 1917, had military deaths of 116,708 being 0.13% of the American population. Canada's military death were 0.92% of its population.

I remember as a boy being told a story about some sort of victory parade in Washington to celebrate (so that anecdote went in the Ontario of my youth) the 'American victory' in the Great War. A small Canadian contingent was said to have been allowed to march near the end of the procession. It carried a banner on which were the words "Canada helped".

I think this story, almost certainly apocryphal, indicates the contemporary irony and even resentment with which some older Canadians in my youth, especially those of United Empire Loyalist heritage, regarded American participation in the Great War.


There are academically respectable historians who argue persuasively that the main reason the Allies defeated the Germans in World War II was the Soviet Union: i.e., Hitler's huge mistake in undertaking the invasion of Russia in June 1941 and the expenditure of millions of Russian lives (as well as German)  absorbing German war efforts and bleeding the German army and its resources which, along with the Soviet army's own huge war effort on the eastern front, enabled a successful Allied counter-invasion starting in Normandy.

Between 1941 and 1945 25-30 million people in the Soviet Union died in the war. The Second World War killed 40% of men between the ages of 20 and 49 and 15% of women in the same age group, removing a major part of the country's child-producing population.

This staggering loss is one of the major factors that has produced today's population crisis in Russia. Since 1992 deaths have exceeded births by a cumulative total of 13 million. The country's population declined by 6.4 million between 1991 and 2009.

Russia is still the 9th most populous country in the world with 143 million (2010) but the population is projected to drop further -- to 136 million by 2030 and 126 million by 2050. From the 4th most populous country in 1950 it is projected that Russia will have dropped to 18th by 2050.

Think about this Russian population crisis, rarely menitioned in the western media, as background and context the next time you read about President Putin's latest efforts to restore Russia to its former 'glory'.




blog archive: to access back numbers of RickardsRead, go to the blog archive in
the margin beside each column as it appears on the site and
use the links

to set a "Google alert" for new columns as they are posted on, go to: