In January 2006, Ivanhoe-Cambridge
announced plans to build a $500MM, 1.4MM sf regional “destination”
shopping mall/entertainment facility, the largest in the Calgary region,
next to a new major horse racing facility planned by the UHA (United
Horsemen of Alberta) near Balzac on the Northern outskirts of Calgary.
While the track was to have opened for business in the spring of 2007,
& the mall later that year, the latter is now slated to open next
month & the former, “if the stars line up” (i.e. don’t hold
your breath), next spring. The reason for much of this delay was water.
The developer had expected to get it from the Bow River, the source
of water for much of traditionally rather dry Southern Alberta. But
the Province turned down its application; for the river is “tapped
out” (& the shrinking of the glaciers in the Rocky Mountains that
feed it raises questions about its future ability to meet the needs
of existing users, incl. the city of Calgary). Next it looked North
to the Red Deer River where it ran into opposition from locals who felt
that water is becoming a valuable commodity & that parting with
it now for a mess of pottage might limit the future development of their
region. Ivanhoe has now been bailed out by a Southern Alberta irrigation
district selling it 2,000 acre/feet of its ‘water rights’ (800MM
litres/year) for a one-time $15MM up-front payment (at 50¢/cubic
metre for ownership, this has to be a sweet deal
since the City of Edmonton, for instance, charges its retail customers
3x that amount for a single use).
But the developer lucked
out. For when issuing water withdrawal licenses the Province reserves
the right to suspend them if ever there were to be insufficient water
to meet all water drawdown entitlements & to do so on a “Last
in, first out” basis. So, if it had been allowed to tap into either
the Bow- or Red Deer rivers, the mall would have had a potentially insecure
source of water whereas, since the seller’s water rights go back a
century, it will now never be shut out. And while the UHA blames the
sub-prime meltdown for its inability to fund its project, the real reason
may be the dodgy outlook for horse racing. Once, when it was the only
way Canadians could legally gamble, owning a race track was a license
to print money. But in the past forty years competition for the betting
dollar has intensified to the point where now in many cases there would
be no horse racing but for the cross-subsidization at race tracks of
racing outside from the slot machines inside (at small Alberta tracks
prize money now is up to 10x the betting ‘handle’).
So now a value has now
been established for water rights in Alberta. This has two potential
consequences. Alberta farmers may find it more advantageous, as is already
happening in California, to lease their water rights than to use them
to irrigate crops. And it may prompt a technological leap forward in
irrigation technology since the state-of-the-art ‘pivot’ methodology
uses water very inefficiently : in hot climates over half the water
evaporates before it can do the plants any good, and only speeds up
the salinization of the soil. Water in the years ahead will become a
commodity more precious than oil. Much of the irrigation water used
in many countries is drawn from aquifers at unsustainable rates. Thus
in India’s Tamil Nadu state the water table has dropped by over 25
metres in the past decade. And Saudi Arabia recently announced it will
get out of the wheat growing business since its aquifers have for all
practical purposes been pumped dry (in 1970 it produced 3,000 tonnes
of wheat; then, after deciding to become self-sufficient in wheat, it
ramped up wheat output to 3.8MM tonnes by 1991 with the help of a hugely
subsidized irrigation scheme & became a wheat exporter. Output has
since declined to 2½MM tonnes & it now expects to be importing
3.4MM tonnes of wheat by 2016, i.e. a 6MM tonne turnaround, to feed
a population that has more than tripled from 7MM in 1970). And
the truly scary part from a global food security perspective is that
all over the world agriculture is running a distant third to urbanization
& industrialization when it comes to its access to the available
water (and in Pakistan 80%, China 70% and India & Indonesia 50%
of all grain produced is grown on irrigated land - and these countries
account for close to half the world’s population). Total global grain
inventories are now in the sixty-day range, their lowest level in
three decades and, while global per capita grain output between 1961
& 1986 increased by about one-third, it has since stabilized while
the demand is increasing as more grain is being fed to animals in response
to the changing dietary habits in the developing-, & the trend to
more ethanol production in the advanced-, economies.
GLEANINGS VERSION
II
No. 323SP - August
3rd, 2009
MAKE SURE YOU GET
THIS ONE RIGHT
(Absolute Return Partners,
Niels C. Jensen)
∙ This is not an
ordinary recession. We are witnessing the bankruptcy of the Anglo-Saxon
consumer-driven growth model that led to a rapid expansion of a financial
sector that is now contracting. Japan’s experience of the 90's suggests
recovery can be drawn-out & painful. While the Western governments
hope that buying time will let banks rebuild their capital base, similar
Japanese efforts failed miserably & set real recovery back years.
Another lesson from Japan’s experience : once in a deflationary
spiral, it’s hard to escape.
∙ Do we face a deflationary
spiral or (hyper) inflation? When the central banks flooded the system
with liquidity, the banks didn’t liquify their clients, as authorities
had wanted, intended & expected them to do, but used it instead
to repair their balance sheets; and for ‘quantitative easing’ to
be inflationary, lenders must lend & borrowers borrow, &, if
either or both don’t, no inflation. One way to assess the inflationary
risk is to compare credit destroyed (US$14TR so far in the US - as
much as its GDP) with the monetization & stimulus provided (US$2TR);
so there’s still a huge gap between capital lost & new capital
provided. Another is to look at the ‘output gap’ - that between
actual GDP & GDP at full capacity utilization; it too suggests that
inflation is a remote possibility (BCA Research says developed world
capacity utilization is now 72%, vs. 80%-90% in the past two decades).
∙ If there’s no
risk of inflation, then why are interest rates creeping up? First due
to a fear of the massive amounts of government debt coming down the
pike that will need to be financed & an accompanying fear of rating
downgrades. And secondly, because, while a flight to quality (a euphemism
for risk aversion) drove them down, now that the appetite for risk is
waxing again, money is flowing out of government debt into other asset
classes.
While he may be in
the deflationary camp, many others aren’t.
OIL OUTLOOK : DEMAND
UP BUT SURPLUS GRINDS ON (Reuters)
∙ Nine top oil-tracking
analysts expect that in 2010 global oil consumption will rise by 900,000
bbld. (1.1%) to 84.9MM bbld.(after declining 2½% from its 2007 high
of 86.2MM bbld).
Forecasters expect
China’s oil demand to grow by between one & four percent (i.e.
by between roughly 80,000 & 320,000 bbld). Given its embarrasment
of US$ riches, its building of a strategic oil reserve & its concern
about US$, it will likely be at, if not beyond, the upper end of that
range.
OIL, GAS SPIKE
WITHIN FOUR YEARS (Reuters)
∙ Christopher Moyes
of Dallas-based Moyes & Co. thinks the decline in oil & gas
exploration will lead to another price spike and that oil companies
turning their back on risky exploration “is bound to create a supply
crunch ... Sometime between 2013 and 2016 we will have another price
spike. The last three price spikes had a lead time of about 1,500 to
2,500 days. The bottom of the latest
price trough was in January.”
This is counter-intuitive
economics : failing to invest now boosts future profits.
OIL SANDS BOOM
COMING (EJ, Dave Cooper)
∙ Jeff Rubin, CIBC
World Markets’ former Chief Economist, told an Edmonton audience on
July 24th that oil prices will hit US$100 again next summer
since demand is skyrocketing in places like Iran, Saudi Arabia &
Venezuela where gasoline prices as low as 25¢/gallon cause consumption
growth of 7+% annually : “what ... cannibalizes the export capacity
of Saudi Arabia is what happens at its power plants” - its 27 desalination
plants, needed because its aquifers have been depleted, pay 7¢/gallon
for oil to produce electricity.
The present slowdown
in exploration & development will make it difficult to offset
the erosion of the productive capacity of existing oil fields
and provide for future demand growth.
OIL TO STAY IN
$60-$90 RANGE (Reuters)
∙ On July 28th,
as he announced 53% lower Second Quarter earnings due to lower oil prices,
BP’s CEO Tony Hayward said “we expect there to be continued short-term
volatility as supply and demand come back into balance ... $60-$90 is
probably a sensible range ... in the near term you would expect us to
be closer to the bottom end of that range.”
Sixty dollars would
be low enough to continue to keep causing financial stress, & hence
potential social/economic/political problems, for the Putins, Ahmadinejads
& Chavez’ of this world but not high enough to make the private
& state-owned oil companies more pro-active in their exploration.
PRODUCERS CONFIDENT
OF PRICE REBOUND (CH, Shaun Polczer)
∙ A Price WaterhouseCooper
(PWC) survey of 140 senior oil & gas executives found that 72% expect
prices to recover sufficiently within two years to have them boost their
drilling budgets while 28% thought it will take three years or more.
But they were almost split evenly between a small majority who said
the price would have to go to at least US$70 for them to consider doing
so & those for whom it would have to go decisively through US$80.
∙ In a report by
Moody’s , senior credit officer Terry Marshall forecast a more robust
oil sands sector once the recession eases & said it will prosper,
albeit at a more measured pace, which “Long-term makes for a healthier
industry.” He expects more consolidation & most deferred or delayed
projects to proceed, albeit in smaller, bite-sized chunks. On the other
hand, upgrading in Alberta is “unlikely to be revived in the near
to intermediate term.”
∙ A spokesman for
the Canadian Association of Petroleum Producers (CAPP) says that Moody’s
outlook for oilsands output growth is similar to its own (2MM bbld by
2013-14, up 50% from the current level) but that it expects to see more
upgrading done in Alberta with two-thirds of the total bitumen production
converted into synthetic crude North of the border after 2012 , but
that “Stand-alone upgrading is competing with empty refinery
capacity in the US (and) ... the integrated upgraders ... have
the best economics.”
The downturn has cut
costs in, & improved the long-term competitiveness of, the Alberta
oilsands.
$20 OIL PREDICTED
BY TOP ADVISER (Bloomberg, Grant Smith)
∙ University of
Calgary professor, one-time US government adviser & publisher
of the Petroleum Economics Weekly Philip Verleger in 2007
predicted oil would go through US$100. But he said in a phone interview
on July 16th that supply is now outpacing demand by 1MM bbld
& create a 100MM bbl crude oil surplus by yearend, straining global
storage capacity & sending prices to a seven-year low, that “if
the recession continues and it’s a warm winter, it’s going to be
devastating” and that “Prices would be much lower today, but for
the very large incentive to build inventories (because forward prices
are higher than spot prices) ... You need forward buyers, which
we had when people were fearing inflation, but as concern turns towards
deflation that will no longer be the case”
∙ But that very
same day Goldman Sachs issued a report calling for oil to rally to US$85
by yearend & recommended its clients buy December 2011 futures contracts.
Given Goldman’s
money-making track record & its position at the
‘heights of land’ in terms of information flows, a betting person
would likely chose to stick with them rather than Prof. Verleger.
NEXT CUTBACK? HAVING
CHILDREN (EJ, Garry Marr)
∙ According to Toon
van Beek of the Los Angeles-based IBISWorld “What we have seen in
previous recessions ..., in terms of the number of births, is that
during bad times there is a decline in the birth rate. This occurred
in the 1980's, in the 1990's, and again in 2001.”
This is the first
generation ever to be conscious of the cost of raising a child (which
IBISWorld claims is US$227,862 from conception to age 18); throughout
history people just had them while paying little, if any, attention
to the financial consequences thereof. This could be an area for
‘stimulus spending’ - Québec’s earlier experiment that gave parents
$8,000 tax-free money for a newborn did goose the birthrate - although
the payback period would likely be seen as too long.
AMERICANS FEEL
LESS STRESSED ABOUT DEBT (AP, Jean Aversi)
∙ An AP/GfK telephone
poll of 1,000 people from May 28th through June 1st
found that despite rising unemployment, tattered nest eggs, tanked
home values & total household debt, at US$13.8TR, only marginally
less than at its peak nine months ago, debt-related stress among Americans
is 12% less than a year ago. For they are spending less, saving more
& paying down debt (causing more people to see light at the end
of the debt tunnel) & gas prices are lower, and they think the worst
may be over & are feeling more in charge of their lives. But rather
interestingly while generally speaking Democrats felt less debt stress,
for Republicans it was sharply higher.
This appears consistent
with polls that found that, while a year ago only 18% of Americans felt
the country was headed in the right direction, today their number has
almost tripled, to 48%. Rather ironically the growth in the savings
rate - in May it jumped to 6.9% (US$769BN), from zero or less a year
ago - also means the recovery will be more
‘measured’ than expected. And if more people are paying down debt
while total household debt remains constant, this suggests that the
average quality of the national household debt portfolio is deteriorating.
BABY BOOMERS CURB
FREE-SPENDING WAYS (BW, David Welch)
∙ The Boomer generation
holds 79MM Americans. Once prosperous & confident that ever-rising
markets assured their future, and that, if there were ever any economic
hiccups along the way, these would be fleeting & the rebound quick
& strong, as they always had been, they spent, & borrowed, with
abandon, making them a key market for many purveyors of luxury consumer
products. But now, while once they considered ‘value-shopping’ beneath
their dignity, they have turned to it with a vengeance & have switched
from keeping up with the Jones to outsmarting them. They are also
working longer which means that it will take the Generation X (the 55MM
born between 1964 & 1980) longer to move into their prime earning-
& spending years. And the 14% unemployment rate among Generation
Y (the 81MM born between 1981 & 1994) restricts their buying power.
Some retailers are now scrambling to respond to this with what
is called “cheap chic”.
The effect of this
on the potential rate of growth of the dollar value of consumer spending
prompted the consulting firm McKinsey to cut its forecast of the US
economy’s future average annual growth rate to 2.4%, from the 3.2%
average of the last 50 years.
STRONG BANK RESULTS
MASK WIDER WEAKNESS (MSNBC, John W. Schoen)
∙ The long national
banking nightmare may appear over - but only for some. While Goldman
& JPMorgan reported ‘stunning’ Second Quarter profits, much
of the industry remains knee-deep in bad debts & rising defaults.
Stephen Roach, Chairman of Morgan Stanley Asia (& long Morgan
Stanley’s economic guru) told CNBC “The IMF is telling us that
by the end of this crisis $4 trillion worth of bad assets will be written
down. Thus far financial institutions have written off, at most,
half of that. So there is plenty more to come.”
∙ On July 17th
Bank of America reported better-than-expected Second Quarter earnings
but said it was plagued by losses from failed loans & Citigroup’s
reported US$3BN profit was solely due to its US$6.7BN gain on the sale
of its Smith Barney stake. The FDIC’s list of “troubled banks”
stood at 305 on March 31st (vs. 252 & 171 three &
six months earlier) & YTD it has been taking over failed banks
at a rate of two a week. As one portfolio manager put it “ We still
have deteriorating credit quality on real estate loans, commercial real
estate, and loans on credit cards and so the regional banks are
all still reeling.”
Goldman & JPMorgan
benefitted from some real ‘sweetheart deals’ during the Bush years.
U.S. REJECTS OIL
DRILLING DEAL IN ALASKA REFUGE (Reuters)
∙ In 2004 the Bush
Administration proposed a land exchange with the Fairbanks-based &
Athabasca Indian-owned Doyon Ltd that involved Doyon acquiring 440 hectares
of hydrocarbon-prone land in the Yukon Flats National Wildlife Refuge
& the mineral rights to another 3,800 hectares in exchange for surrendering
to the Refuge 6,000 hectares of bird-rich wetlands & future rights
to 22,600 hectares. Environmentalists feared this would open the door
to drilling in other protected sites, in particular the Arctic National
Wildlife Refuge North of the Yukon Flats, local Indians, many of them
Doyon shareholders, opposed it as a threat to their traditional way
of life, and hunting & fishing grounds, and even Doyon itself had
begun to doubt the deal made any sense. So on July 17th the
U.S. Fish and Wildlife Service rejected the deal on a preliminary basis,
with a final decision to follow early next year, due to new geological
information, a closer look at climate change impacts & higher-than-expected
opposition in the communities in the Yukon Flats area.
The Yukon Flats are
estimated to hold 175MM bbld of oil (i.e. 18 days of US oil imports)
& 5.5TCF of gas (about 70 days of US natural gas consumption)..
CLEANING UP GREAT
LAKES GET NEW ATTENTION (AP)
∙ Cameron Davis,
senior adviser to EPA chief Lisa Jackson, says “The President has
made restoring the Great Lakes a national priority”. So in his 2010
Budget he sought US$475MM for this purpose (supposedly a first instalment
on a US$20BN restoration plan proposed by government agencies &
nonprofit groups in 2005), with the House now having approved the full
amount & the Senate Appropriations Committee US$400MM.
The immediate goals will be to clean up contaminated river bottoms,
restoring wildlife habitat, preventing runoff & erosion, and preventing
more exotic species from entering its ecosystems.
∙ The latest biennial
US-Canadian “State of the Great Lakes” report, presented at the
State of the Lakes Ecosystem Conference in Niagara Falls, Ont., last
October, described the ecosystem’s status as “mixed”. The invasive
species problem is worsening but the lakes are getting less of the toxic
pollution that in the past had affected the reproductive capacity
of its animal life. But for categories like the condition of coastal
zones & aquatic habitat, the quality of drinking water & the
contaminants in game fish, and the micro organisms at the bottom of
the food chain, it said there was too little information to determine
the trend.
The status quo isn’t
good enough. And in any case, the real problem facing the lake
system is the giant sucking sound of water-hungry communities in the
Great Lakes Basin South of the border draining off its water to sustain
their unsustainable, world record water consumption.
TOP
STATE SENATE AIDE PLEADS GUILTY IN FORGERY CASE
(NBCNEWYORK.com)
∙ Indira Noel is
director of intergovernmental relations for the Democrat caucus in the
New York State legislature. Trying to get a colleague fired, she faked
his signature on a request for a transcript of his marks. To avoid jail
time, she cut a deal with the Albany County DA to plead guilty to a
disorderly conduct charge & pay a US$250 fine. A spokesman for Senate
President Malcolm Smith said she would face no further disciplinary
action.
On July 12th
she, & other senior staffers got big raises (in her case to US$118,000),
on the 17th
she was charged with forgery & on the 19th
she pleaded guilty in what was merely a
‘rap across the knuckles’ deal. Such molly-coddling of public figures
making bad calls induces voter cynicism towards the political system
& makes people wonder about the quality of their political decisions.
B.C. CLAMPS DOWN
ON TASER USE BY POLICE (CanWest)
∙ In October
2007 a Polish immigrant was tasered 5x by RCMP officers at the Vancouver
Airport & died. Captured on amateur video, the incident was
broadcast worldwide & prompted an international public outcry. In
February 2008 the BC government mandated retired BC Supreme Court Justice
Thomas Braidwood to report on the use of Conducted Energy Weapons (CEWs),
aka Tasers, in the province & on events that fateful day.
On July 24th he issued a 546 page report on the first, making
19 recommendations, among others that government “severely restrict”
their use by all law enforcement officers in the province & that
“the threshold for use ... (be) significantly revised from
‘active resistance’ to the much higher standard of ‘causing bodily
harm.’ “ (i.e. they should be used only on people who were violent,
rather than as a convenient way to subdue people who refuse to
do as they are told).
∙ In his subsequent
news conference he said his report “bluntly states the province had
abdicated its public responsibility to establish provincial standards
for the use of Tasers” (& “it is the duty of law enforcement
agencies to train their officers and deploy the weapons in accordance
with those policies”), that his researchers had found significant
under-reporting of their use, that CEWs “have the capacity to cause
serious injury or death” that rises with multiple uses & when
aimed at the chest area, and, the common sense observation, that
“the most effective weapon the police have in their arsenal is public
support.”
He did,
however, accept that they are a useful tool for law enforcement officers
under the right circumstances. But what received little media coverage
was his criticism of governments having permitted their use by police
forces solely upon unverified assurances by the manufacturer that the
weapons were “safe”. Now the wait is on for part 2, which could
be devastating for the RCMP, given the fact that the officers involved
appeared to have perjured themselves in the hearings.
THE TINY TOWN IN
QUÉBEC ... SITTING ON A GOLD MINE (G&M, Rhéal Seguin)
∙ Town of Malarctic,
600 kms Northwest of Montréal (& about the same distance North
of Toronto), in the past decade saw its mines & sawmill close, and
its population shrink by over 50% to 3,800. But it now is getting ‘a
new lease on life’ with the discovery that it is sitting on
an ore body containing as much as 10MM ounces of gold & the building
of an open pit mine that will create 800 jobs during its construction
phase & 465 ‘permanent’ ones during the ten-year life of the
mine. But this comes at a price. It will require 200 homes, the daycare
centre, a church, schools & an eldercare facility to be relocated
two kilometres away, at the other end of town. During the life of the
mine, starting in 2011, the operator will use 11 tons of cyanide a day
to process the ore. And when it’s all over, the town will sit on the
edge of a pit two kilometers long, 800 meters wide & 380 meters
deep.
Open pit operations
are to mining what clear cut logging is to forestry.
BRITISH ECONOMISTS
SEND APOLOGY TO QUEEN (AP)
∙ Last November,
at the London School of Economics, she queried why nobody had foreseen
the credit crunch. A group of prominent economists recently sent her
a 3-page response, after discussing it in June at a seminar attended
by a Permanent Secretary of the Treasury & Goldman Sachs’ Chief
Economist. It concluded : “In summary ... the failure to foresee the
timing, extent and severity of the crisis and to head it off, while
it had many causes, was principally a failure of the collective imagination
of many bright people, both in this country and internationally, failing
to understand the risks to the system as a whole.”
Nobody ever likes
the boy who says ‘the Emperor isn’t wearing any clothes’ , especially
when everyone is having fun & making tonnes of money. And at turning
points change always occurs at speeds no self-respecting expert would
have dared forecasting.
WITH DEMOGRAPHICS
SKEWED BY ONE-CHILD RULE, SHANGHAI WANTS MORE BABIES
(CanWest, Aileen McCabe)
∙ Xie Lingli, Director
of the Shanghai Population and Family Planning Commission, on July 23rd
told the Xinhua news agency it will launch a campaign to encourage young
married couples to take advantage of a rule that allows parents who
themselves are from one-child families, to have two children. For,
he said, “Shanghai has about three million people aged 60 and older,
21.6 percent of the population.” But this may fall on deaf ears due
the perceived cost of raising a child, never mind two, the objections
from “Little Emperors” in one-child families to having a sibling,
& worries it would be too burdensome to raise two kids simultaneously
with having to attend to the needs of one’s parents in their old age.
In all likelihood,
the one-child idea is now so engrained in the public psyche that it
will take more than persuasion (i.e. some real financial or social benefits)
to disabuse people thereof.
GOVERNMENT BY SLEAZE,
THEFT AND SELF-INTEREST (NP, Conrad Black)
∙ Thailand wins
the prize for political entertainment as its former Prime Minister first
abolished the capital gains tax & then sold his business for a US$1+BN
capital gain and, after being re-elected, was chased from office &
indicted for tax fraud only never to return home from a visit
to the Beijing Olympics. But it may be overtaken by Italy’s Sylvio
Berlusconi whose romantic life & disregard for what he deems
unctuous conflict-of-interest concerns didn’t stop him from having
his countrymen reaffirm their faith in the absurdity of politics.
∙ The prize for
rough & tumble politics goes to Guinnea-Bissau for combining despotism
& rule by assassination. It is the first country since the Soviet
Union to devote more than 25% of its GDP to the military. And this year
alone the country’s top general was blown up, the president assassinated
by a sniper, a former prime minister seized & tortured for no apparent
good reason, a presidential candidate murdered in his home & a former
defence minister killed in an ambush, and the roofs of both the military
headquarters & the presidential palace blown off. It’s so bad
that even the drug cartels have fled in terror!
∙ The best-governed
country, for the 64th year in a row, is Vatican City. It
has no corruption or violence, minimal taxes, immaculate civil liberties
& social services, great green areas & cultural facilities,
no public service strikes, and immigration by invitation only.
∙ The prize for
sleaze, vulgarity & misguided self-righteousness goes, again to
the US :
∙ in Nevada
the governor is being sued both for divorce by his wife
& for assault by a cocktail waitress, one of its Senators is trying
to explain why his parents paid hush money to one of his married
staffers with whom he had an affair & the lieutenant-governor is
charged with misappropriating money while state treasurer;
∙ the now ex-mayor
of Hoboken, elected to office only a few weeks ago after running on
his impeccable ethical track record, is among the four dozen
local politicians, Hassidic rabbis & smugglers of transplantable
human organs recently indicted for a range of offences, most notably
corruption & money-laundering;
∙ And the above
don’t include whatever may, or may not, have been above board in Obama’s
financial relationship with Tony Rezko, George W. Bush’s undisclosed
insider Harken Energy sale, Bush Sr’s commercial relations with Kuwait
& Bill Clinton’s securing export permits for defence-sensitive
technology & the Chinese contributions to his campaign (or whatever
the relationship may have been between Canada’s former Prime Minister
Brian Mulroney & Germany’s No. 1 sleaze bag Karl-Heinz Schreiber
whose recent extradition from Canada back to Germany may open a whole
new can of worms since under German law at the time bribery payments
were tax-deductible; so with the main charge against him being income
tax evasion, he may end up listing all his bribery payments - and the
names of the recipients - as tax-deductible expenses)
An interesting insight
by someone who himself is ‘doing time’
in a US jail for what by many standards would be a prima facie case
of “sleaze, self-interest and theft”.
AIRLINES OFFER
CHEAP FLIGHTS AS SALES SLIDE (FP, Scott Deveau)
∙ Last month the
International Air Transport Association (IATA) said the decline in air
travel might have bottomed. But its latest Quarterly Business Confidence
Survey says “Passenger travel numbers in May (down 9.2% MoM)
cast doubt on the view that a bottom to the travel decline has been
reached.” While lower fuel surcharges, the swine flu & business
travelers downgrading to economy class have been factors, excess capacity
is the main culprit as capacity cuts occurred at only half the rate
of the traffic decline.
And chances are that
once the economy recovers, traffic patterns won’t resume earlier trends;
for people are now into things like
“staycations”, cheap vacations close to home.
LUNG CANCER RISK
JUMPS WITH HYSTERECTOMY (CanWest, Sharon Kirkey)
∙ After caesarians
hysterectomies are the second most frequently performed surgical procedures
for women in Canada, over 36,000 of them in 2007-08, all but 10% for
non-cancerous reasons. And in 30% of the cases both ovaries were also
removed as well; for the common medical wisdom is that doing so during
a hysterectomy cuts the risk of ovarian cancer. But a study of
999 women by the Université de Montreal’s Department of Social &
Preventive Medicine at the 18 Montreal hospitals that diagnose 98% of
all lung cancers in the region, published in the International Journal
of Cancer, says that removing both ovaries increases a woman’s
risk of developing lung cancer by 92% (a study in the US involving over
29,000 women, made public earlier this year, came to a similar conclusion,
and also found a possible link to higher risk of heart disease). While
the Montreal researchers couldn’t explain this phenomenon, the US
study’s lead author suspects the “non-natural menopause”
brought on by removing both ovaries deprives the body of hormones that
might “protect your heart to some degree”, and possibly your lungs.
So few people appreciate
fully, & so many for convenience’s sake chose ignore, the fact
that every invasive medical procedure (& every drug taken) entails
an element of risk.
DAIRY MAY PROLONG
LIFE (AF-P)
∙ A team of researchers
led by a scientist at the Queensland Institute of Medical Research did
a follow-up of 4,374 people who in the late 30's had been children in
the over 1,300 families in England and Scotland surveyed for their dietary
habits. Their findings, published in the British Medical Journal,
found, contrary to the common wisdom, that a diet rich in milk,
cheese & butter didn’t lead to higher rates of cardiovascular
disease; in fact, it appeared that children with the highest in take
of calcium from dairy products in their youth later in life had a lesser
incidence of strokes.
So much of the medical
research that underlies the official approval of many chemicals lacks
such a long time perspective..
OLD-FASHIONED CANNING
SEES COLOSSAL COMEBACK
(CanWest, Misty Harris)
∙ Canning, a method
of preserving food dating back to the Napoleonic era, involves boiling
meat or produce & storing it in airtight containers to extend its
shelf life by months, if not years. For a generation for whom instant
gratification was its Leit Motiv, the growing popularity of this domestic
art that can be timed with a sundial is astounding : in May in Canada
sales of canning accessories were up nearly 70% YoY, & in June 88%.
Such growth numbers
can be deceptive; for if the base number is small
enough, even tiny volume growth can produce big percentage growth. Still,
it may be symptomatic of changing societal values. For people seem to
be starting to turn to activities that produce more self-satisfaction
for less cash outlay. But it may also be due to growing questions about
the quality & taste of food stuffs on supermarket shelves which
has spawned a trend towards ‘going organic’ and/or
‘buying local’ and/or ‘growing your own’ (of which the
‘100 Mile diet’ is the most extreme expression).Take rhubarb. If
one has a garden, growing it is like falling of a log &, if one
doesn’t, it’s often available for free from friends & neighbours.
It’s easy to can & during the offseason can be a tasty, high fibre,
high potassium addition to the fruit/vegetable part of one’s diet
that doesn’t have to be hauled thousands of miles from California,
Columbia, New Zealand, South Africa or wherever.
STRAWS IN THE WIND
∙ In 1992 the Province
of Saskatchewan was economically in the dumpster & its citizens’
spending on various forms of gambling, at $86, was the lowest among
Canada’s ten provinces. But last year, with its economy “on a roll”,
its people’s $825 per capita spending on lotteries, VLTs & other
gambling was the higher than in any other province.
This is a hall mark
of prosperity? Meanwhile hats off to the people in the Alberta town
of Rocky Mountain House : twelve years ago they voted overwhelmingly
to ban VLTs from the town because of the human misery they created.
But recently the town’s bar owners forced another referendum on the
issue because ‘they were losing business to bars in nearby towns with
VLTs’. But once again the hoi polloi voted it down by something like
a 3:1 margin. And there is something fundamentally wrong with the fiscal
structure in a major oil & gas producing province like Alberta when
it derives 25% more of its revenues from gambling (almost all from VLTs
& slot machines - for all intents & purposes the same except
that the former are located in bars & the latter in casinos - than
it does from either oil- or oil sands royalties, or from social transfers
from Ottawa.
Foreign aid in reverse
: poor country governments spend scarce resources training them, only
to have rich countries deprive them from a return on their investment.
∙ Once young adults
defined themselves by their cars. But now, when asked what would most
impress their friends, only 20% of people between the ages of 16 &
29, said a car & 70% an iPhone.
The Japanese term
for this translates into ‘a U-turn to de-motorization’. If
this persists, it would herald the end of America’s 100 year-long
‘love affair with automobiles’.
∙ Some analysts
believe that, due to the aging of the population, improving fuel efficiency
& a return of high oil prices, North American gasoline consumption
may have peaked forever.
So what? It won’t
go down much, if at all. In any case, it will be Third World demand
that will be driving the bus.
So this year the number of divorce
cases in the US is down 40% YoY.
