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August 11, 2009

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.    


No. 323SP - August 3rd, 2009 


(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.  


    ∙ 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. 


    ∙ 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. 


    ∙ 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. 


    ∙ 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. 


    ∙ 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.   


    ∙ 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.  


    ∙ 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.  


    ∙ 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. 


    ∙ 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).. 


    ∙ 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. 


    ∙ 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.  


    ∙ 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.  


    ∙ 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. 


    ∙ 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. 


    ∙ 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.  


    ∙ 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 :

      ∙  New York state lost its governor to a squalid prostitution scandal (& the first thing the lieutenant-governor who succeeded him did was to confess that he too had been unfaithful to his wife) & the state’s new majority leader (who has been the subject of more ethical inquiries than any living New York legislator) is awaiting trial for stabbing his girlfriend with broken glass;

    ∙  the Golden State of California is bankrupt;

      ∙  the governor of Illinois was removed from office for trying to sell a Senate seat (& his wife has raised money for his defence fund by eating a tarantula on reality TV);

      ∙  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;

      ∙  North Carolina’s John Edwards in last year’s Democratic presidential primary played on his wife cancer in his trolling for votes while he was cheating on her and  South Carolina’s governor travelled to Argentina at public expense for a tryst with a lady not his wife whom he subsequently described publicly as his “soul mate”;

      ∙  Congressional House Ways & Means Committee Chairman Charlie Rengel (D-NY) is accused of having five rent-controlled apartments in New York & filing incomplete tax returns to remain eligible for such accommodation (thus ripping off both the US Treasury & the city of New York); and

      ∙  a  Senate Committee Chairman, Chris Dodd (D-Conn), accepted a cottage in Ireland from someone whose interests his committee frequently affects.

    ∙ 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)

    ∙ Obviously this is no longer de Tocqueville’s America. 

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”. 


    ∙ 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.  


    ∙ 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. 


    ∙ 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.. 


(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.



    ∙ 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.


    ∙ There are more Ethiopia-trained doctors in Chicago than in Ethiopia. 

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. 

    ∙ Divorces are expensive (but some would say that’s because they are worth it).  

So this year the number of divorce cases in the US is down 40% YoY.

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