Wednesday, July 31, 2013

Why are the Chinese gobbling up real estate and businesses in Detroit?

Why are the Chinese gobbling up real estate and businesses in Detroit?
Wed Jul 31, 2013 9:59AM
Michael Snyder,
Related Viewpoints:
Something very strange is happening to Detroit. Once upon a time, it was the center of American manufacturing and it had the highest per capita income in the United States. But now the city is dying and the Chinese are moving in to pick up the pieces.

Lured by news stories that proclaim that you can buy homes in Detroit for as little as one dollar, Chinese investors are eagerly gobbling up properties. In some cases, this is happening dozens of properties at a time. 

Not only that, according to the New York Times “dozes of companies from China” are investing in businesses and establishing a presence in the Detroit area. If this continues, will Detroit eventually become a city that is heavily dominated by China? 

At this point, not too many others appear interested in saving Detroit. Right now, there are approximately 78,000 abandoned buildings in Detroit and about one-third of the entire city is either vacant or derelict. People have been moving out in droves and there are only about 700,000 residents left. 

For many Americans, Detroit is about the last place that they would want to live. But to many Chinese, this sounds like a perfect buying opportunity. According to a recent Fox News report, real estate agents in Detroit are being overwhelmed with inquiries from China… 

Downtown Detroit is home to one of the worst housing markets in the country, as prices of homes have collapsed and foreclosures have soared in the city’s depressed economy. 

But some Chinese investors hungry for real estate are hoping Detroit’s losses will be their gain. After Detroit filed for bankruptcy July 18, Motor City property has been a hot topic on China’s social media platform, Weibo, according to a report. 

News of the bankruptcy, coupled with a Chinese TV report in March that claimed you could buy two houses in Detroit for the same price as a pair of leather shoes, has piqued investors’ interest. 

And these buyers appear to be quite serious. One buyer reportedly bought 30 properties recently, and other buyers say that they want to purchase even more homes than that… 

And it appears to be translating into real interest; Caroline Chen, a real estate broker in Troy, Michigan, says she’s received “tons of calls” from people in mainland China. 

“I have people calling and saying, ‘I’m serious-I wanna buy 100, 200 properties,’” she tells Quartz, noting that one of her colleagues recently sold 30 properties to a Chinese buyer. “They say ‘We don’t need to see them. Just pick the good ones.’” 

Meanwhile, according to the New York Times, dozens of Chinese companies are moving into the city… 

Dozens of companies from China are putting down roots in Detroit, part of the country’s steady push into the American auto industry. 

Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers. 

While starting with batteries and auto parts, the spread of Chinese business is expected to result eventually in the sale of Chinese cars in the United States. 

Of course this is not just happening in Detroit. The truth is that the Chinese are buying up real estate, businesses and natural resources all over the country. 

But they seem to have a particular interest in Detroit. 

Perhaps someone should tell them that Detroit is not actually a very safe place these days. The violent crime rate is five times higher than the national average, and the murder rate in Detroit is 11 times higher than it is in New York City. 

If you call the police, it takes them an average of 58 minutes to respond. And sometimes the people that are committing the crimes are actually Detroit police officers. In fact, one Detroit police officer was involved in robbing a gas station just last week… 

A Good Samaritan snapped photos of what appeared to be two men impersonating police officers involved in a pistol-whipping and robbery outside a Citgo gas station on Detroit’s east side on July 21. 

Once Fox 2 aired those photos, an even more disturbing picture developed. 

“Several unidentified police officers were working this particular robbery case, recognized one of the suspects in the photographs as being a member of the Detroit Police Department,” Chief James Craig said Monday. 

Now under arrest are two police sergeants, a 47-year-old officer and 20-year veteran of the Detroit Police Department and his 42-year-old buddy from the police academy, who is a former DPD cop and 17-year veteran of the St. Clair Shores Police Department. The later recently received a distinguished service award. 

“In fact, they were police officers, just not working on-duty at the time,” Craig said. 

Detroit is a dying, bankrupt city. There does not seem to be much hope of a turnaround for Detroit any time soon. 

So why are the Chinese gobbling up so much real estate and so many businesses in Detroit? 

That is a very good question.

Tuesday, July 30, 2013

Snowden: I never gave any information to Chinese or Russian governments

Snowden: I never gave any information to Chinese or Russian governments

As a new poll shows widespread American approval for him, the NSA whistleblower vehemently denies media claims
NSA whistleblower Edward Snowden: 'They're going to  say I aided our enemies' - video interview
NSA whistleblower Edward Snowden in Hong Kong. Photograph:
NSA whistleblower Edward Snowden, in an interview on Saturday and then again Tuesday afternoon, vehemently denied media claims that he gave classified information to the governments of China or Russia. He also denied assertions that one or both governments had succeeded in "draining the contents of his laptops". "I never gave any information to either government, and they never took anything from my laptops," he said.
The extraordinary claim that China had drained the contents of Snowden's laptops first appeared in the New York Times in a June 24 article. The paper published the claim with no evidence and without any attribution to any identified sources.
In lieu of any evidence, the NYT circulated this obviously significant assertion by quoting what it called "two Western intelligence experts" who "worked for major government spy agencies". Those "experts" were not identified. The article then stated that these experts "said they believedthat the Chinese government had managed to drain the contents of the four laptops that Mr. Snowden said he brought to Hong Kong" (emphasis added).
So that's how this "China-drained-his-laptops" claim was created: by the New York Times citing two anonymous sources saying they "believed" this happened. From there, it predictably spread everywhere as truth.
Shortly thereafter, the New Yorker – under the headline "Why China Let Snowden Go" - told its readers: "His usefulness was almost exhausted. Intelligence experts cited by the Times believed that the Chinese government 'had managed to drain the contents of the four laptops that Mr. Snowden said he brought to Hong Kong, and that he said were with him during his stay at a Hong Kong hotel.'" It was then repeatedly cited to demonize Snowden in venues such as DC gossip sheets, right-wing outlets, and diaries at Democratic Party sites.
But there was never any evidence that this was true. The NYT decided to publish this incendiary claim in a news article based purely on rank speculation from two anonymous sources. Obviously, Snowden's denial is not dispositive and shouldn't be treated as such. But it is the only actual evidence on this question thus far.
Americans, to a remarkable extent, seem able and willing to disregard these demonization campaigns. A new Quinnipiac poll released today show that Americans, by a large margin, have positive views of Snowden's actions despite all the demonization: "Fifty-five percent (55%) said Snowden was a whistle-blower in leaking details about top-secret US programs that collect telephone and Internet data . . . . thirty-four percent said he's a traitor." And: "the view of Snowden as a whistle-blower rather than traitor predominated among almost every group of respondents broken down by party, gender, income, education and age."
Moreover, "the poll also showed that by 45 percent to 40 percent, respondents said the government goes too far in restricting civil liberties as part of the war on terrorism. That was a reversal from January 2010, when in a similar survey 63 percent said anti-terrorism activities didn't go far enough to protect the US from attacks, compared with 25 percent who disagreed."
The polling firm's analyst, Peter Brown, provided some fascinating insight about these findings:

"The massive swing in public opinion about civil liberties and governmental anti-terrorism efforts, and the public view that Edward Snowden is more whistle-blower than traitor, are the public reaction and apparent shock at the extent to which the government has gone in trying to prevent future terrorist incidents . . . .The verdict that Snowden is not a traitor goes against almost the unified view of the nation's political establishment "
As usual, the US government, its establishment press, and both political parties have been almost completely united in its views and objectives in this episode. The American people, however, seem to have reached a much different conclusion than the one prepared for and fed to them.

Latin America fallout

As some US journalists assert that no new NSA stories have been published for some time, the controversy over the US spying apparatus in the actual world continues to intensify. Following the anger in Europe,revelations of NSA spying on millions of Brazilians have dominated the news cycle and political class of that country for days now, with formal criminal and Congressional investigations already under way.
Meanwhile, along with O Globo journalists Roberto Kaz and Jose Casado, I published another article in that newspaper on Mondaydetailing that the NSA's bulk collection of millions of emails and telephone calls extends to most of Latin America. The reaction throughout that continent is the same as we've seen in Europe and Brazil specifically: see this Reuters article entitled "Latin American nations fuming over NSA spying allegations" for the details.
I realize that some US journalists see the world as beginning and ending with American borders, but – as these events demonstrate – we have actually been continuing to publish extremely significant NSA stories that are prompting all sorts of debate, investigation and reform around the world.

Monday, July 29, 2013

Voice Of The Tibetan People

Francis: AntiChrist ?

The Storming Of The Western Front?

 A massive invasion and attack into North America, China and Russia storming the West Coast while China and a united Moslem host march into the Southeast Coast, known as “the Bible belt”, using the Bahamas and Cuba as staging bases.  Our Jesuit-controlled leaders carrying out the nation’s immigration policies, in establishing a huge resident “fifth column” of Chinese, Moslem, Hindu and Hispanic aliens within our borders, have betrayed us Americans. The heart-breaking result will be the subjugation of the last apostate bastion of the Protestant Reformation and will compel Europe to unite reviving the old Holy Roman Empire – under the Papal Caesar

Eric Jon Phelps Quote:
 So, here we’d have all of these Moslem troopers, millions of Moslem troopers will be landing in Miami, landing in New Orleans, landing in the South of the United States, coupled with a Cuban military force, coupled with, probably, also a Chinese military force coming from the West Coast, and coming up through the Panama Canal to unite with them in the attack of the American South. With the blood bath that will ensue, this whole coalition of nations: China, Russia, Cuba, the Arabs, they will carry out the destruction and annihilation of this North American population, WHICH INCLUDES CANADA; it definitely includes Canada.

Jesuits Controlling China: Eric Jon Phelps


The Desmarais Dynasty and China

The Jesuit controlled and powerful DESMARAIS Family of Quebec, Canada

Buffett Loses to Desmarais as Power Exceeds Return (Update1)
By Lisa Kassenaar – July 30, 2009 10:45 EDT
The Desmarais family
July 30 (Bloomberg) — Deep among the pine forests of rural Quebec lies a private estate the size of Manhattan, a refuge where French President Nicolas Sarkozy has gone to relax.
Former U.S. Presidents George H.W. Bush and Bill Clinton have played golf here, on 18 meticulously groomed holes with a bright-yellow cottage for respite at the 13th tee. Pheasant shoots are orchestrated from the hunting lodge; opera is performed in the music pavilion. An original of Auguste Rodin’s The Thinker and a statue of Thomas Jefferson adorn the rough, granite hills.
At the heart of the property is a grand residence surrounded by formal gardens called Cherlieu — which means beloved place — that’s modeled on a 16th-century Palladian villa. This is the home of Paul Desmarais Sr., a white-haired, Canadian billionaire whose obscurity outside Quebec masks his family’s vast connections and influence in global business and politics.
They keep a very low profile,” says Brian Mulroney, who met Desmarais in 1965 and, as Canada’s prime minister from 1984 to 1993, introduced him to President Ronald Reagan and Bush. “That’s the way they like it.”
Desmarais, 82, started out with a backwoods Ontario bus line in 1951. Now, he and his family control Power Corporation of Canada, a holding company headquartered in an unmarked, eight-story building on Montreal’s leafy Victoria Square. Paul Sr.’s sons, Paul Jr., 54, and Andre, 52, are co-chief executive officers. Together, the brothers govern a labyrinthine business empire that extends from Denver to Geneva to Hong Kong, with seats on 38 related corporate boards.
Bought Putnam
Power Corp. owns 66 percent of Power Financial Corp., a web of North American insurance and asset management companies with 2008 revenue of C$36.5 billion ($32.7 billion). In 2007, the Desmarais bought Putnam Investments, a once mighty, Boston-based mutual fund company that had been wounded by a trading scandal and weak fund performance.
The $3.9 billion deal closed two months before the Standard & Poor’s 500 Index peaked in October 2007. Power Financial’s biggest challenge is to make good on plans to renovate Putnam into a flagship for U.S. expansion, after the mutual fund manager’s assets were almost halved by the 2008 plunge in global markets.
In Europe, the Desmarais have been partners with Albert Frere, one of Belgium’s richest men, for almost two decades. Together, they hold stakes in Total SA, Europe’s third-biggest oil and gas company, based in Courbevoie, France; Paris-based Lafarge SA, the world’s biggest cement maker; and Paris-based GDF Suez SA, the world’s second-biggest utility. Paul Desmarais Jr. is a director of all three.
*China Connection
In China, the Desmarais own 4.3 percent of Hong Kong-based Citic Pacific Ltd., [Li Ka-Shing] a steel, mining and real estate development company with a market value of $7.2 billion as of July 13. Andre Desmarais joined the board in 1997.His father first ventured into China in the 1970s.
“Power Corporation is like an iceberg — large and largely invisible,” says David Beatty, a professor of strategic management at the University of Toronto. Beatty says he begins one of his lectures by asking master’s degree students about the careers of Jack Welch, the former CEO of General Electric Co., and Warren Buffett, CEO of Berkshire Hathaway Inc. Then he flashes a photo of the elder Desmarais.
“None of them knows who it is,” Beatty says. “And I say, ‘It’s Paul Desmarais, and he’s done better than the other guys.’”
Better than Buffett
Those who bet on Power Corp. in the 15 years from 1993 to 2008 earned slightly more than investors in Omaha, Nebraska- based Berkshire Hathaway, according to data compiled by Bloomberg. Power Corp.’s average annual return in the period, including reinvested dividends, was 14.5 percent. Berkshire, which pays no dividend, returned an average of 14.1 percent. The comparison is in local currencies.
The Desmarais also run a $1.6 billion, Paris-based private equity firm called Sagard Private Equity Partners. Investors include companies managed by the Frere family; Bernard Arnault, CEO of luxury goods giant LVMH Moet Hennessy Louis Vuitton SA; and Laurent Dassault of the French aviation family, who’s on Power Corp.’s board.
The unit is named for Sagard, Quebec, a French Canadian hamlet of 260 people that’s about 300 miles (480 kilometers) from Montreal and adjacent to Desmarais’s 15,000-acre (6,070- hectare) estate. Four years ago, Paul Sr. built the villagers a yellow, wooden Roman Catholic church. In December, he attended Christmas services there with the maids, cooks and gardeners who work on his property.
Cirque du Soleil
Some visitors to the estate arrive by helicopter. They come for quiet weekends or for enormous costume parties. Cirque du Soleil, the internationally acclaimed circus troupe started by Guy Laliberte, a former Quebec City busker, has performed there. Guests have included King Juan Carlos of Spain and assorted National Hockey League stars.
They rank with the best and most generous hosts in the world,” says Mulroney, 70, in an interview the morning after a four-day visit to Sagard. “The only thing they don’t do is tuck you in at night.
Paul Sr. also owns a home in Palm Beach, Florida, and another in New York. He was Canada’s eighth-richest man in 2008, worth C$4.1 billion, according to  “Canadian Business” magazine. That was a slide from fourth in 2007 — partly reflecting a plunge of 44 percent in the shares of Power Corp. as the global economy shuddered. Profit fell 41 percent to C$868 million in 2008, the lowest amount since 2002.
2008 Drop
At Power Financial, where shares declined 44 percent last year, net income dropped 35 percent to C$1.34 billion, hurt by lower fee income from its prime holding, Winnipeg, Manitoba- based insurance firm Great-West Lifeco Inc., and C$983 million in writedowns and other costs related to Putnam.
Power Corp. and Power Financial’s stocks, which trade in Toronto, have rebounded in 2009. Power Corp. stock traded at C$29.53 at the market close yesterday, up 26.4 percent for the year. Power Financial was at C$29.98, up 21 percent.
The family’s mystique is fed by its policy of avoiding the press. “No one really knows the full extent of their power,” says John Aiken, an analyst at Dundee Securities Corp. in Toronto who covers Canadian banks and insurers. “They are an enigma, and I think they like perpetuating that.” The father and sons all declined to comment for this story.
The parent company has no marketing or communications departments, and senior managers don’t foster relationships with institutional investors, Aiken says. “They say, ‘We stand by our results, and if you like us, great; if not, don’t buy,’” Aiken says. “You are at the whim of the Desmarais family.”
‘Magic Sauce’
The University of Toronto’s Beatty, a co-founder of the Canadian Coalition for Good Governance, says investors in family-controlled companies like Power Corp. gamble that the biggest stake-holders will guard their mutual interests.
“Part of their magic sauce is that the Desmarais are the ones there every day,” he says. “The CEO is not the imperial power; it’s the dominant shareholder who is.”
Like Berkshire Hathaway, Power Corp. relies on the insurance business for steady returns. Power Financial’s core companies have been built up with numerous small acquisitions. Last year, for instance, Great-West bought Edinburgh-based Standard Life Plc’s British payout annuity business for an undisclosed sum. It was the third such U.K. purchase in four years, says Jeffrey Orr, CEO of Power Financial.
The Desmarais keep cash high and borrowing low. Power Corp. had C$5.3 billion in cash on its balance sheet at the end of 2008 and just C$6.4 billion in long-term debt, according to Bloomberg data.
Craig Elsinger, who manages about 450,000 Power Financial shares at Creekdale Investments Inc. in Reno, Nevada, says he was “floored” when the company’s dividend rose twice in 2008, even as markets foundered. Elsinger bought his first shares in 1987. “I look at it like I’m lucky to be sharing at their banquet table,” he says.
Power Corp.’s dividend payout in 2008 was C$1.11 a share, up from 91 cents in 2007. That put the Desmarais’ dividend check at more than C$130 million. Paul Sr., directly and through holding companies, controls 48.6 million participating preferred shares of Power Corp., which carry 10 votes each. He also holds 72 million common shares, according to the company.
He doesn’t collect dividends from Power Corp.’s other publicly traded units: Power Financial; Great-West; IGM Financial Inc., Canada’s biggest mutual fund company; and Geneva-based Pargesa Holding SA, home of Power’s European investments.
Power Financial CEO Orr sits for an interview in a third- floor boardroom of Power Corp.’s Montreal head office. The walls are lined with paintings by Jean-Paul Riopelle, a Quebec-born abstract expressionist. Elsewhere in the building is a collection of 18th-century neoclassical French antiques and a filing cabinet said to have been used by Talleyrand, Napoleon’s foreign minister.
While earnings declined in 2008, Power Financial’s C$36.5 billion in revenue represented a jump of 27 percent, as receipts from Europe doubled, the company reported. “Our fundamental strategy hasn’t changed,” Orr says. He aims to grab market share in life insurance, retirement products and asset management as millions of households in North America and Europe, hurt by falling home and equity prices, set more money aside. “They are going to need to save,” he says.
Long-Term Analysis
Orr, 50, quit his post as CEO of Bank of Montreal’s investment bank in 2001 to sign up with the Desmarais, whom he’d observed for 20 years.
“People said I was crazy to leave the job I had, but I joined this group because of the way decisions were made,” Orr says. Before making an acquisition, the Desmarais examine how an industry will evolve over 10 or 15 years, he says. The family recruits executives who know their business, pays them in part with stock options with 10-year terms and then backs off until board meetings, he says.
The brothers, who took over as co-CEOs in 1996, go into deep detail at dozens of board meetings a year, Orr says. “They’re very active shareholders with active oversight, but they aren’t running the businesses themselves,” he says. “It’s a very fine line.” Paul Jr. is Power Corp.’s chairman; Andre is deputy chairman and president. The father’s only official title is chairman of Power Corp.’s executive committee.
Sprawling Tale
Paul Sr.’s saga is as sprawling as the family’s holdings. Desmarais was an original when he started out in the early 1950s: a French-speaking entrepreneur when almost all of Canada’s bankers, politicians and CEOs belonged to the entrenched, English-speaking establishment, says David Lank, professor emeritus of the Dobson Centre for Entrepreneurial Studies at McGill University in Montreal. His bravura as a dealmaker and his rush of acquisitions over 20 years shifted perceptions of Francophone business leaders.
“Paul Desmarais helped build the stage so that other people could tap-dance,” Lank says.
Desmarais grew to command the intersection of Canadian business and politics through close relations with four prime ministers. He was a backroom adviser, Lank says, to Pierre Elliott Trudeau, who was elected in 1968 and led Canada for 14 years. Mulroney worked as a labor lawyer for Desmarais before he headed to Ottawa. Paul Martin, Canada’s prime minister from 2003 to 2006, ran Power Corp.’s Great Lakes shipping operation before buying it from Desmarais in 1981.
Jean Chretien, prime minister from 1993 to 2003, is part of the family: Chretien’s daughter, France, is married to Andre.
Mulroney and Trudeau both did stints on Power Corp. advisory boards after they left office.
Force in Quebec
Paul Sr. is also a force in provincial politics, working to keep Quebec part of Canada as separatists push to create their own country. Power Corp. owns seven French-language daily newspapers in Quebec and Ontario, including Montreal’s biggest French-language daily, La Presse, which often backs a unified Canada.
Desmarais’s political connections have long spurred speculation he’s swayed government policy in his companies’ favor, Martin, 70, says. The former prime minister, who was also Canada’s finance minister from 1993 to 2002, says he was only ever pressured on one topic. “At no point did they try to influence me on any political issue except on national unity, where we were in complete agreement from the very start,” he says.
Loan from Undertaker
Paul Guy Desmarais was born on Jan. 4, 1927, in a French- speaking enclave of Sudbury, Ontario, a mining town 250 miles north of Toronto. He was 24 years old and a bored law student when he begged his parents to let him revive a small bus company once owned by his late grandfather, according to a Desmarais interview in “The Canadian Establishment,” a 1975 business history by journalist Peter C. Newman.
The buses carried workers to International Nickel Co. of Canada’s nearby Copper Cliff mine. The enterprise was bankrupt, with about C$350,000 in debt.
Desmarais scrambled to keep the buses running, cajoling a local monsignor and an undertaker for $3,000 loans to meet his weekly payroll. Desmarais sometimes drove the buses himself, and his wife, Jacqueline, counted the daily receipts on the kitchen table. Using his one bargaining chip — the fact that International Nickel needed its workers at the mine every morning — Desmarais finally negotiated a loan from the company to help pay creditors and back taxes.
‘Transaction Junkie’
He then began buying more bus lines in Ontario and Quebec, financing the deals with bank loans. In 1960, the family moved to Montreal, where Desmarais expanded into insurance, investment management and newspapers. He bought La Presse in 1967. “He was a transaction junkie at that time,” says John Reucassel, an analyst at BMO Capital Markets, Bank of Montreal’s investment bank, who covers Power Corp.
Desmarais was running a conglomerate called Trans-Canada Corporation Fund, or TCCF, when, in 1968, he acquired control of Power Corp. of Canada in a reverse takeover. That’s a maneuver in which a smaller company sells itself to a larger one and uses the money to buy the larger company’s stock. In this case, Power Corp. exchanged shares with TCCF, and Desmarais received preferred shares of Power Corp., which carried 10 votes each. He became chairman and CEO.
Power Corp. started in 1925 as an aggregator of small electric power companies and then spread into oil, pulp and paper and finance. The company owned a piece of Canada Steamship Lines, which built and operated Great Lakes and St. Lawrence Seaway freighters transporting grain, steel and other commodities. It was through Canada Steamship that Desmarais acquired his huge tract in eastern Quebec.
Separatist Manifesto
Desmarais’s rising prominence and support for a unified Canada made him a target of violent Quebec separatists. In 1969, the Front de Liberation du Quebec, a nationalist group, bombed the Montreal Stock Exchange. A year later, the FLQ kidnapped and murdered Quebec’s labor minister and named Desmarais as a target in a manifesto. He was then provided with round-the-clock security.
Through the 1970s, Power Corp. moved deeper into financial services. In 1970, Desmarais acquired Great-West. “Paul was attracted by the simplicity, or the cleanliness, of the balance sheet of an insurance company,” Mulroney says. “It provided good, solid cash flow.” Mulroney says Desmarais was an avid reader of financial statements. “You could mention almost any company of any note in North America, and he’d know about it because he’d read the balance sheet,” he says.
Early in China
Desmarais also traveled to China, convinced that opportunity lay in that country’s shifting relations with the West. In 1978 — the year that China’s paramount leader, Deng Xiaoping, began opening the country to investment  Desmarais helped found the Canada China Business Council to promote bilateral trade and investment.
The group’s offices in Beijing are in the same building as Citic Group, [Li Ka-Shing] the Chinese government’s investment arm. Citic’s first investment outside China was a pulp mill in Castlegar, British Columbia, a joint venture with Power Corp., according to a Power Corp. history.
“One of Paul Desmarais’s great talents was his insight into where the great developments were going to take place in the world,” Martin says. He also acted out of necessity. Desmarais’s home market, now 33 million people, was too cramped for a man of his ambition. “Canadians can’t build world-class businesses without looking outward,” Martin says.  China still remains a big investment for this family.
Frere Connection
In 1981, Desmarais looked to Europe, where he had earlier put C$20 million into Pargesa, a holding company with a major stake in Banque de Paris et des Pays-Bas (Suisse), a subsidiary of the French bank known as Paribas. When France nationalized Paribas, Desmarais used his proceeds to buy more of Pargesa. Frere, who was also a Paribas investor, did the same.
“I was struck by his integrity and reliability and his strategic sense of the business deal,” says Frere, 83, in an e- mail responding to questions about his relationship with Desmarais, which was formalized in a contract in 1990. “His extraordinary understanding of people and his affable charm were helpful to him in developing valuable relationships in Europe.”
The Desmarais-Frere partnership is a complex corporate matrix: Desmarais, through Power Financial, and Frere, through Groupe Frere-Bourgeois, each own 50 percent of a holding company called Parjointco NV, based in the Netherlands. Parjointco owns 54 percent of Geneva-based Pargesa, which owns 50 percent of Brussels-based Group Bruxelles Lambert SA.
GBL, which is publicly traded in Belgium, holds the group’s stock in Lafarge, Suez, Total and Pernod Ricard SA, a French spirits maker with brands such as Absolut vodka. Pargesa and GBL together hold a majority of Imerys SA, a Paris-based mineral processor.
Next Generation
Frere meets monthly with Paul Jr. to talk about Pargesa’s strategy, he says. “It is a matter of some pride to me, and I believe it is to Paul Sr. as well, to see that our business relationship and our friendship has extended into the next generation,” he wrote in the e-mail.
As Paul Sr. expanded abroad in the 1980s, he changed tacks. For decades, he’d financed rapid-fire transactions with bank loans and by selling stakes in his companies to each other to raise money. When inflation spiked and Canadian interest rates jumped to almost 20 percent, he swore off leverage.
In 1984, he created Power Financial and took it public. That IPO and subsequent share sales raised enough money to eliminate all of Power Corp.’s long-term debt by 1986, the company says.
Conrad Black
Power Corp. then sold off some assets. In 1989, Chicago- based Stone Container Corp. bought Consolidated-Bathurst Inc., a pulp and paper operation in which Power owned a stake, for $2.7 billion. Power’s portion of the proceeds was about $1 billion. The sale burnished Desmarais’s reputation for good timing: The newsprint industry later collapsed.
In 1996, Power sold its 22 percent stake in newspaper publisher Southam Inc. to Conrad Black’s Hollinger Inc. for C$294 million, reaping a pre-tax gain of C$75.2 million. Black is now in prison for looting company assets. The U.S. Supreme Court is reviewing his conviction.
The stock of CanWest Global Communications Corp., which bought the papers from Hollinger in 2000, plunged 99 percent in the two years ended on July 13.
“When they were looking at the world in the late ‘80s and ‘90s, they came to a few conclusions: They thought they had scale in mutual funds and insurance, and they sold forest products and got out of other ancillary businesses,’’ analyst Reucassel says. ‘‘That was the right decision.’’
Canadian Consolidation
In the past decade, Canadian banks, insurers and asset managers have sought scale to compete globally. Power Corp. played a big part. Largely paying cash, Power Financial bought London, Ontario-based London Life Insurance Co. for C$2.7 billion in 1998; Toronto-based asset manager Mackenzie Financial Corp. for C$3.9 billion in 2001; and Toronto-based Canada Life Financial Corp. for C$7.3 billion in 2003.
Power Corp. execs stumbled when they bought Putnam, Dundee Securities’ Aiken says. ‘‘The perception of their Midas touch in terms of acquisitions was definitely tarnished,’’ he says. Once the fourth-largest U.S. mutual fund manager, Putnam was already beleaguered; in 2003, regulators had accused some Putnam money managers of rapidly trading in and out of the mutual funds they managed for their own benefit.
In the three years through early 2007, assets under management tumbled by roughly half to about $200 billion. As of June 30, they were $103 billion. ‘‘Am I happy that the S&P went down 50 percent after we acquired it?’’ Power Financial CEO Orr says. ‘‘No. Of course, that creates a much more challenging environment.’’
Putnam Plans
The Desmarais have big plans for Putnam. In July 2008, they hired Robert Reynolds to captain a turnaround. Reynolds, 57, was previously chief operating officer of Boston-based Fidelity Investments, the world’s biggest mutual fund manager by assets. Reynolds says he was intrigued by the chance to revive Fidelity’s crosstown rival. First, he had to learn something about the new owners.
‘‘The question I had when they approached me was, ‘Who are the Desmarais and what is Power?’” Reynolds says. “I needed to learn more about them.”
Under Reynolds, Putnam has begun selling retail funds that target an absolute return — a certain percentage over Treasury yields — a product already sold to institutional investors. Reynolds has also linked fund managers’ pay more directly to their investment performance. Those with the best returns will get bonuses amounting to 5 to 10 times their annual salary; weak managers will get no bonuses, he says.
‘Challenges Fixable’
“Putnam’s challenges are fixable by having the right people,” Reynolds says over breakfast in Putnam’s glassy headquarters on Boston’s Post Office Square. “They are going to participate in the resurrection of a great investment firm.”
Reynolds is working with Great-West’s Denver-based U.S. operation, which includes the fourth-biggest record-keeping business for U.S. retirement plans. Great-West also sells life insurance and annuities in the U.S. and manages employer- sponsored defined-contribution retirement savings plans. Total U.S. revenue was about C$4 billion in 2008, according to Bloomberg data.
“The Desmarais have always coveted a large U.S. mutual fund company,” Reucassel says. “They like the wealth management business and they like to do business in the U.S.”
‘The Boys’
Paul Sr. began grooming his sons for the business when they were teenagers, and many Canadian bankers and executives still refer to them as “the boys.” Yet Paul Jr. and Andre have become fixtures in international economic and political affairs. Andre is a member of the Trilateral Commission, which was founded by David Rockefeller in 1973 as a forum on global economic and security issues.
Another member is former Federal Reserve Chairman Paul Volcker, who served on Power Corp.’s international advisory board from 1988 to 1997.
Andre is also on JPMorgan Chase & Co.’s international council with former British Prime Minister Tony Blair and Ratan Tata, chairman of Mumbai-based Tata Group. The brothers have attended the annual Bilderberg con-ference, according to people familiar with the matter. Bilderberg is an invitation-only gathering of business and world leaders that’s held in a different location every year.
The Desmarais also help host a hometown confab every June, the Conference de Montreal, which was attended this year by more than 3,000 people who listened to speakers such as World Bank President Robert Zoellick and GE CEO and Chairman Jeff Immelt. Paul Jr. is the conference’s chairman.
Elysee Palace
A third generation is in training. Paul Desmarais III, 27, is a banker in the special situations group at Goldman Sachs Group Inc. in New York. His brother Nicolas, 23, has worked at consulting firm Bain & Co. in San Francisco. Both are members of Young Canadians in Finance, which sponsored discussions at the Montreal conference.
While his sons and grandsons network with the intellectual and business elite, Paul Sr.’s power stretches to the Elysee Palace. Desmarais met Sarkozy through Frere in 1995, according to a June 2008 interview with Paul Sr. in Le Point, a French weekly magazine. They became friends at a time when Sarkozy’s public career was on the rocks after a falling-out with French President Jacques Chirac. While they walked in the woods of the Sagard estate, Desmarais recounted, he encouraged Sarkozy to stay in the game.
Master Builder
After Sarkozy was elected president in May 2007, he awarded Desmarais the Grand Croix de la Legion d’Honneur, an order of merit established by Napoleon in 1802. “If I am the president of France today, it is thanks in part to the advice, the friendship and the loyalty of Paul Desmarais,” Sarkozy remarked.
Paul Sr., in his ninth decade, now spends most of his time on his estate. He helped design the Sagard mansion, which was finished in 2003. The library is filled with architecture books, says Tom McBroom, the Toronto golf course designer who spent six years working with Desmarais on the meandering loop of fairways and greens strung out through the woods.
“I would stay over, and he would be up late at night in his housecoat going over the plans for the house,” McBroom says. Sometimes in the evenings, he says, Paul Sr. and Jacqueline would sit and talk about the old days–when they had no high-powered friends and Paul, to save money, would drive one of his buses.
Yet the dynasty was already in the making. Sitting in the back as the bus bumped along were Paul Jr. and Andre, who would grow up to inherit their parents’ business empire.

[ Keep your eyes on this Desmarais family in the future as they’re far more powerful than even the above article would let you know. You do not have the Emperor of the Holy Roman Empire, King Juan Carlos visit your mansion for no reason unless you have power or your one of his puppets he needs and uses. This part of the above article should have really given you a clue to their power. This family reminds me of the hidden House of Keswick in Scotland which many haven’t heard of at all but is basically your HSBC and Hong Kong connection just like this Desmarais. Remember the guy that started the connection with China was actually Knight of Malta Henry Luce then you had later, Knight of Malta George H.W Bush and of course this Paul Desmarais concluding the deals. The Worshipful Company of Mercers control China through the National Committee on U.S-China Relations along with the Chinese Peoples Institute of Foreign Affairs and finally the American-China Forum of the National Committee on U.S-China Relations.

Don’t be fooled by the upcoming Sino-Russian war with the U.S. its all an illusion with both sides being controlled by the Jesuits and their financier Mercers. Russia is controlled by leadership trained by the College Russicum in Rome whilst the leadership of the U.S. are trained at Georgetown University. Do a study of the true power of Carl Marcy who’s daughter in law, Kristine Marcy was trained at Georgetown University and she basically controls the United States under the Priesthood with her New Jerusalem bully boy Senior Executive Service and the National Academy of Public Administration.
Remembering that the Jesuits utilise their Crown Bar to continue the British Empire by proxy for the Roman Empire. This Empire uses the Crown Agents to control a lot of the finance and debt Worldwide under The Worshipful Company of Mercers. Just take a look at their CS-DRMS system for starters. The Empires never died and now Emperor King Juan Carlos controls them all under the Priesthood of Kronos aka the Aragon Templars aka the Jesuit Order run by Adolfo Nicolas SJ. Remembering Peter Hans Kolvenbach SJ is controlling the Middle East turmoil as he did in times gone by whilst Adolfo is more focused on the Far Eastern side of things. In truth today its the era of the two Generals not one but this isn’t meant to be known to the people and Kolvenbach wants to slip off into the darkness unseen after all my exposure from day one of him, making him one of the most talked about beings on the web in the conspiracy arena and quickly after being so unnoticed for such a long time.]