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The Liberal Party’s Green Shift announced on June 19th marked the most aggressive anti-poverty program in 40 years. The ‘shift’ will transfer wealth from rich to poor, from the oil patch to the rest of the country, and from the coffers of big business to the pockets of low-income Canadians. Ken Boshcoff Liberal MP
A number of bloggers have pointed out that at least Boshcoff is honest.
It is time for the West (and Newfoundland and Nova Scotia) to make it very clear to the Boshcoffs and the Dions that this sort of a revenue grab will have a single consequence: the end of Canada as a nation. I am old enough to have been around for NEP I and I saw the anger first hand in British Columbia and Alberta. Now Saskatchewan will join the party.
Think Bloc Quebecois in Parliament and an activist, separatist, movement at a regional level. Paint this revenue grab “Green” is not going to work simply because “Green” is not selling as it did when Dion was elected leader of the Liberal Party.
There will be a lot of industry solutions to this problem: reducing investment, reducing production, using carbon sequestration as a weapon (goofy as it is as science, its costs can be passed right along to the silly buggers in Ontario in the form of higher oil prices). But there will also be a final recognition that there is really very little Eastern Canada can do for the New West save sanctimoniously claim to be raping us in the name of Green rather than Greed.
Bye guys, best of luck; hope you can do something about that air pollution problem - you know the real one not the CO2 BS. But of course you are…you are losing manufacturing jobs. Fast. And you will, of course, lose more as investment in the oil patch decreases because (you morons) nearly 50% of that investment ends up in Ontario. So no body will be able to say that the Eastern Bastards are not doing their bit to be green: they are actually hollowing out their economy….Bravo, but excuse us if we are not willing to hollow out ours.
Written by jay on July 12th, 2008 with 6 comments.
Read more articles on "Global Warming" and CPC and Canadian Politics and Liberal Leadership and Liberals and business and economics.
Fun with German Packaged Food
via Andrew Sullivan whose Obama crush seems to be waning.
I tend to eat on the precepts of Michael Pollan, look for food which a) rots, b) your grandmother would recognize as food.
Written by jay on July 10th, 2008 with 2 comments.
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This clearly belongs in the rumor column for now, but it seems that Apple is pretty upset about how Rogers is handling the iPhone 3G plan situation. Apple is so unhappy, they say, that it is actually going to reallocate some of the stock that was originally planned for the Canadian market.
More specifically, rumor has it that Apple is going to “divert” a “large percentage” of their iPhone stock away from the Canadian market and into the hands of European distributors. As a result of reallocation, many Rogers stores may only have 10-20 units ready to go on launch day later this week. mobile magazine
I want an iPhone but I will not die if I don’t get it until Christmas with a reasonable data plan.
I rather suspect that Apple was none too pleased to get a gazillion emails from people who a) would have bought the iPhone, b) would have started looking at Apple’s other products.
Nice work Ted!
Written by jay on July 6th, 2008 with 3 comments.
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I spend a good part of my day looking at the communications needs of small cap Canadian stocks. While most of these companies have websites they tend to stop right there.
My pal Peter Norman just launched a Canadian Small Cap portal to let them go the next step. So, if you are interested in Canadian small cap stocks go take a look at the VCS Group Portal.
Written by jay on July 2nd, 2008 with no comments.
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watch the oil tankers bobbing about the Gulf. A popular flutter among the gambling rich recently has been to hire a tanker, fill it with oil (it will hold two million barrels) and park it in front of a refinery. Watch the price; if you lose your nerve, you can quickly dock and sell your cargo; but a $1 rise means you’ve netted $1.5 million. During the 1979–80 oil shock, 30 tankers were famously moored off Manhattan. Their owners spied on each other for any sign of movement until market spirits fell abruptly, and all 30 simultaneously raced to dock. the spectator
Tony Curzon Price writes a bit about oil prices and how the high price of oil is likely due to speculation. He takes The Economist to task on the basis that the “free market” is not working.
Mr. Price seems to be incapable of understanding the critical role speculators play in discovering price. He quotes George Soros “Oil prices are high because of a series of self-feeding beliefs, which, as George Soros says, are ‘intellectually unsound, potentially destabilising and distinctly harmful’. Soros has it about right and I have to bet he is short in the oil market.
Markets correct, often violently. The oil market is no different. Sometime in the next few days, weeks or months, the tankers will rush to port. When they do the price will fall and the shorts will make perhaps the biggest killing ever seen on the planet. And what they are being paid for is providing the needed correction to a market in which real supply and real demand are in rough balance but there is a perceived gap. That is the value of the short seller in any market.
Written by jay on June 22nd, 2008 with no comments.
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In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving an accurate resource assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951. The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels were present but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel. next energy news
My very old pals in Shaunavon Sask are sitting pretty because the Bakken forgot to stop at the Canada US border.
Written by jay on March 29th, 2008 with 2 comments.
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Bear Stearns was bailed out on Friday. Very much a temporary fix and very much part of an ongoing process of financial musical chairs in which, when the music stops, there is no chair left.
People like Jim Kunstler can barely contain their glee. After all, the potential collapse of the American financial system just proved that George Bush, the suburbs, greedy Wall Streeters and sleazy mortgage merchants are just as bad as Kunstler has been saying they are. Throw in the rising price of oil and the falling dollar and the end of economic life as we know it - at least in America - is just around the corner.
Now, as it happens, I don’t live in America and from where I am sitting the “marking to market” of the sub-prime mortgage market, assorted bundled credit card debt and mounds of leveraged buyout corporate paper seems both necessary and manageable. The decline of the American dollar - given the US trade deficit and ongoing budget deficit - is also necessary and can be controlled to a degree. A decade and a half of capital export has to be paid for and that payment will take the form of a significant reduction in Americans standards of living.
How big a reduction and how it is distributed is, at the moment, unknown. However, to take a simple example, if the American dollar continues to decline the price of oil in dollars will continue to rise (although there is an awful lot of speculative froth in the oil market). Gas will go to $5.00 a gallon and this will take a chunk out of people’s disposable income. Similarly, consumer goods made overseas will rise in price.
On the other hand, things like houses and rent are likely to fall and fall fast. Not good if you own a house with a big mortgage, but encouraging if you are renting and hoping to buy.
The real question is how quickly this all happens. If it occurs over a few years the dislocations will be painful but possible. However, if it occurs in a matter of months the foundations of the American economy will be threatened.
At this point the Federal Reserve is pumping money into the system to try and extend the adjustment period. The worry is that that extension may be purchased with bad decisions and that those decisions will further erode the currency:
Paper dollars are technically Federal Reserve Notes, which means they are liabilities of the Fed. When it puts newly minted notes into circulation it does so by buying assets, usually U.S. treasuries, which it then holds on its balance sheet to offset that liability. By swapping treasuries for mortgages, the Fed effectively alters the compilation of its balance sheet and the backing of its notes.
However, backing paper money with mortgages is nothing new. The French tried it in the late 18th Century, and it lead to hyperinflation. Assignats, which were first issued in 1790 to help finance the French revolution, were backed by mortgages on confiscated church properties. Although the stolen underlying collateral did have some value, the revolutionaries saw no reason to limit how many Assignats were printed, which resulted in massive depreciation. Within three years, price controls were introduced and failure to accept Assignats, initially an offence subject to six years in prison, was made a capital crime. By 1799 the currency was completely worthless. 321gold.com
Central bankers know this stuff. To a degree the Fed is willing to run the risk of holding potentially worthless collateral in order to preserve the overall system. As a “one off” the Bear Stearns loan is not completely idiotic; however, as a pattern such loans could sink the value of the dollar in a matter of months.
Canada is in an odd position in all this. Our banks, while they took on some sub-prime exposure, have not been lending recklessly. Our governments, federal and some provincial, have a decade and a half of zero deficits and, in many cases budget surpluses. We have relatively low inflation. We have a huge endowment of ever more valuable oil and gas.
While we are, of course, exposed to the economy of our largest trading partner, our economy has been decoupling from the American economy for years. Which can be seen in our dollar’s strength relative to the USD. There is no reason to believe that the pain in the US will cross the border.
The US is undergoing a reality check. It’s political and financial systems have to re-align themselves so that budget and trade deficits are first reduced and then eliminated. Lending into bubbles will cause trillions of dollars to simply be flushed from the system. However, at the end of this process America will still have a huge economy and a vast capacity to invent, manufacture, design, distribute and market high value goods and services. If America can get its financial and political house in order there is every reason to believe it can beat the bears and emerge as an economic, scientific and cultural powerhouse.
With intelligent, realistic, decisions the contraction and re-emergence could take a couple of unpleasant years. With the wrong decisions, or, worse, no decisions or panic, a decade could be wasted.
Update: blazingcatfur notes that JP Morgan has just bought Bear Stearns for $2.00 per share. It closed Friday at $30.00 per share. Marked to market indeed.
Update:
JPMorgan today agreed to buy Bear Stearns, the second- biggest underwriter of U.S. mortgage securities, for $240 million, less than a 10th of its value last week. In order to strike a deal before the opening of Tokyo trading, the Fed agreed to help JPMorgan finance up to $30 billion of Bear Stearns “less liquid assets.” bloomberg
Written by jay on March 17th, 2008 with 3 comments.
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Not a terrifically interesting budget.
Nice to see the CPC promising to pay 10 billion against the National debt. However, program spending still increases - though the bogus Program Spending to GDP measure shows it declining. (This because the GDP is growing faster than the increase in Program Spending.)
The big news in the Budget is the Tax Free Savings Account proposal. This will not kick in until 2009 but it is a good and, in principle, cheap idea. However, it will be fascinating to see what wheezes clever accountants come up with to shovel low priced assets pregnant with capital gains into these accounts. We’ll have to wait for the regulations. The arm’s length rules are supposed to keep the sillier transactions at bay but tax accountants are frustrated artists and the prospect of putting an asset notionally valued at $5000.00 but actually worth 50,000.00 into the Tax Free Savings Account will be mighty appealing.
And even more appealing as, on the face of it, the TFSAs are evergreen, you can just keep rolling assets through.
I have no problem at all with this because I don’t believe capital gains should be taxed at all; in fact I suspect that the economic effects of the Tax Free Savings Accounts will be positive for the Canadian economy as a whole. And, yes, it might even provide a small benefit for the average tax payer.
Written by jay on February 27th, 2008 with no comments.
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Canada’s Barrick Gold Corp. is so concerned about the worldwide shortage of the giant tires it needs for its massive mining trucks and loaders that it is lending a Japanese tire maker $35-million (U.S.) to help it finance a plant expansion. globe and mail
While people think deep, and pretty gloomy thoughts about the global economy, the people who are actually making stuff or mining are dealing with the scarcity which abundance create. Lots of 3 million dollar mining trucks + no tires = no mining trucks. Barrick is looking long term and that is very smart indeed.
Written by jay on January 31st, 2008 with no comments.
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