Tuesday, January 31, 2012

Verbatim: "It's All China, All The Time"

Terry Glavin recently in The National Post:  "Over the past decade, Canadians have sunk more than $20-billion of mostly public money into port, rail and highway infrastructure on the West Coast, all to expand Canadian trade into Asian economies. The whole point was to diversify our markets and reduce our reliance on the United States. But none of it has worked out like we were told. We’ve been hooped. Ten years and $20-billion later, it’s all China, all the time. China plays by its own trade rules and everybody’s let them get away with it. ... Canada’s collective $20-billion Pacific “gateway” investments have ended up transforming Canada’s West Coast transportation infrastructure into the portal that has enabled Beijing to flood North American markets with goods manufactured in sweatshops where they’ll chuck you in prison if you even wonder aloud what it might be like to belong to an independent labour union. As for free elections or political parties, don’t you dare even think about it. ... And now Canadians are being expected to provide Beijing with a steady supply of bitumen in a closed loop from Beijing’s own oil sands properties in Alberta, through Beijing’s own pipeline, to oil tankers, to its own refineries back in China, so that the black comedy of “world trade” can keep unfolding the way Beijing wants. Not only that, we’re all supposed to be grateful for it. ... The next time some Conservative MP tells you that we should all get down on our hands and knees and thank Enbridge for the $100-million behind its pitch to the National Energy Board for the chance to pour all that Alberta bitumen into China-bound oil-tankers, here’s a question you might ask: Just who’s paying for this? Put another way: “Why is foreign money fueling the oil sands fight?” Six years have passed since Enbridge first announced it had obtained $100-million to fund its planning, lobbying, studies and surveys for a twinned pipeline through the Rocky Mountains and across British Columbia to saltwater at Kitimat. First it was all PetroChina’s money, then we were told PetroChina got spooked, and then it was somebody else’s money, but we’re not allowed to know whose money it is. Do the Conservatives even know whose money is behind the Enbridge plan? If not, why not? If so, why aren’t they telling us? Stop and think about it for a second. After all these years, and after all the recent uproars about sinister American environmentalists, it took filings with the National Energy Board that were turned up only this month to reveal that Beijing’s very own Sinopec is accompanied by Suncor, Cenovus, Nexen and MEG among the Enbridge project’s big-money backers. That still leaves at least $40-million in boost-and-plan cash that’s coming from an unknown source. But before we even start asking questions about who came up with Enbridge’s final $40-million, a closer look at the $60-million stake we already know about reveals Sinopec is not the only Chinese government outfit that’s paying Enbridge’s bills. MEG is already partly owned by the Chinese National Offshore Oil Corporation. CNOOC also owns a third of Nexen’s Long Lake oil sands project, and CNOOC and Nexen recently formed a joint venture on several deepwater exploration wells in the Gulf of Mexico. The Enbridge-backer Suncor is a part-owner, with Sinopec and Nexen, of the huge oil sands Syncrude conglomerate. ... It’s gotten to the point that not a single politician in Ottawa will muster the impudence to wonder aloud whether this charade has gone on long enough. Right after Mr. Harper declared in his ritual year-end interview, “I am very serious about selling our oil off this continent, selling our energy products to China,” Beijing’s PetroChina spent $1.9-billion on a complete takeover of the MacKay River oil sands project. And right after that, Natural Resources Minister Joe Oliver allowed himself to be cajoled into making certain intemperate remarks about radical foreign “billionaire socialists,” by which he did not mean the unelected billionaires who run the Chinese People’s Congress in Beijing, but rather American matinee idols who enjoy heli-skiing vacations in the Kootenay Mountains. “The servility of Canada’s political leaders (municipal, provincial and federal) to the obvious manipulations of Chinese strategists who flaunt world trade and financial market principles and jail democracy-promoting authors for 10-year terms is a national disgrace.” I’ll say. It wasn’t some dweebish umbrage-taker from the Kitsilano Civil Liberties Union who wrote those words. It was Tony Campbell, the former head of the Intelligence Assessment Secretariat for the Privy Council Office. Remember the Richard Fadden controversy? Seems like only yesterday that everybody was screaming at the head of the Canadian Security Intelligence Service, demanding that he shut up. Fadden almost lost his job. Why? Among other revelations, Fadden reported that cabinet ministers in two provinces were under the control of a certain foreign government that Fadden thought it too indelicate to name, but he did go on to say that Chinese diplomatic missions are funding and organizing political activism in Canada. And I haven’t even got my boots on yet." (Verbatim articles are edited only as to length.)

Monday, January 30, 2012

PIIGS: The Never Ending Story


Societe Generale's Michala Marcussen explains why Portugal, the next euro sandal to drop, is a much dicier problem than Greece: "In our opinion, the Portuguese government will bite the bullet and deliver deep reaching structural reform and austerity in 2012. The risk, however, is that even a successful program may not be enough to secure a sufficient decline in bond yields. That would leave only two options: (1) a second official [ECB, read German, bailout - The Balf] package or (2) PSI [public sector involvement, ie. investors "taking a haircut" - The Balf]. A firm commitment from euro area policymakers that Portugal will not see PSI and, if necessary, funds would be made available would clearly be helpful and push bond yields lower (and thus reduce the risk that an official second package would be needed!). The ECB warned on the dangers of Greek PSI and have been proven correct." As Zero Hedge (link at left), Mistubishi UFJ, and others have warned, Portuguese bonds issued under UK law represent a far greater amount of the total notional outstanding than in the case of Greece, and whereas Greek creditor protections depend on Greecy whimsy, UK law is written in stone a thousand years old.  If you think the current Greek bondholder negotiations (yes, still ongoing, March 20 is D-for default-Day) have been difficult, Portugese ones will be impossible.  Of course, the Eurozone might not even get to Portugal if Greece undergoes a disorderly default - or Germany bolts for the new deutschmark, already printed and being stored in the basement.

Sunday, January 29, 2012

Weekender: Three Dimensional Horror

Nice pecs.
The problem with mirrors is that as soon as you get more than one going the picture changes - and in my case, not for the better.  Sure, I look great for my age (if I say so myself) in a full frontal mirror, ie, one dimension (see pic at the bottom of this page), but when I see myself from the side a different picture (beer gut, receding hairline, etc.) emerges that is, well ... pretty scary.  (If you think you look good, Buddy, try a sideways view.  Hint: three mirrors are even more devastating than two, Mr. Adonis.)  Hey, maybe I should buy one of those circus sideshow House of Mirrors curvy ones that make you look skinny.  Or maybe I'll just stick with looking at myself in one dimension, the one I like.

Saturday, January 28, 2012

Weekender: Virus Hoax Phone Calls!

I keep getting phone calls (at least one every two weeks, sometimes more, over the past six months) from someone claiming to have detected that my computer is loaded with viruses, and offering to clean it up online.  I'm  quite fastidious about computer security, so I know it's a hoax.  All the same, it's a royal pain in the butt.  Yesterday the guy (always the same East Indian guy) phoned theoretically from Washington state east of Seattle (area code 425, although often the number is hidden from display), and actually said he was from Microsoft for the first time.  How many other people are getting these hoax virus phone calls?  Is Microsoft going after these criminals?  I suspect that the next thing this tool asks for is your password, but I always tell him to ... um, take a hike - in no uncertain terms.  Unfortunately others may not.  Microsoft says in several places on their website that they never phone users of their software offering to do anything, so be forewarned.  I checked Snopes.com here and this hoax has been around awhile so it must be profitable.  Just the same I've reported this last call to the authorities.  (I'm not holding my breath.)

Friday, January 27, 2012

Florida Republican Debate

Earth to Stupid: we don't have the money!
Last night's Republican Debate at the University of North Florida, one of my favourite institutions, was interesting.  I was shocked to find out within minutes that Mitt Romney doesn't screen his own campaign ads.  Ron Paul sounded early in the debate like a 1960's peacenik - maybe he was one, and maybe that's what the U.S. needs more of.  Gingrich hit hard early as expected, but Romney was prepared for the attack on his investments when Freddie Mac/Fannie Mae were raised.  Ron Paul rose above the FM/FM dogfight, and instead would do away with both of them (and has been "trying to cut off their line of credit for ten years").  Santorum rightly castigated Newt/Mitt for their vicious personal attacks instead of addressing the issues.  (He had to or the whole evening would've been about the two frontrunners.)  Gingrich then tried to be magnanimous, and interestingly it was Romney who wouldn't let up.  Gingrich's optional flat tax rate sounded sensible.  Ron Paul sounded the Occupy Wall Street anthem; he wants to reward honest products - not Wall Street wizardry.  An audience question about the hobbling of NASA was well answered by Romney while Gingrich repeated his wacko promise to have a permanent manned US base on the moon within 9 years (that doesn't sound like budgetary restraint to me).  Santorum seemed to be the only one on the stage who disagreed with Ron Paul, perhaps because he's worried about who's next to get booted out of the race.  Ron Paul went on the attack only once, against Newt when latter claimed credit for 4 consecutive balanced budgets back then (Newt then conceded the definition of balanced budget needs to be revised).  The best healthcare suggestion was Santorum's "health savings account", basically self-insurance - an offshoot of direct reimbursement.  (I have a lot of experience in this area.  The problem with US healthcare is the insurance companies.  When you think about insurance, it is the perfect answer to catastrophic one-time events but a lousy answer to small recurring events like medical and dental care, but I digress ... )  Santorum was very aggressive on Romneycare, and actually made a lot of sense - Romney was back-pedalling pretty fast, a clue that he'll be shredded on this in November.  Santorum didn't let up (to his credit) but also showed a fatal character flaw: a short wick.  Ron Paul seemed the kindly old physician much of the time, almost to the point of looking nostalgic.  Santorum also looked strangely old-time with his black-and-white anti-communist rhetoric, and dogmatic approach to Cuba.  Ron Paul seems to think that if you respect other nations they will respect you and be less of a threat.  The U.S. has a lot of work to do in that area.  Gingrich and Romney agreed on Cuba.  On the Palestinian question: Romney answered well and so did Gingrich: no difference there.  In fact, there is very little difference between them on most issues.  Ron Paul said religion is a private matter, and is not as important as the oath of office.  Romney dodged the question and hid behind the constitution.  Gingrich is a religious wacko but I doubt he supports religious freedom for non-christians.  Santorum also referred to god-given rights (popular with southern religious crazies).  Needless to say, Ron Paul gets my (atheist) vote here.  Ron Paul's central message is freedom according to the constitution versus Obama's big government.  Can't argue with that.  Romney sounded too Wall Streetish IMHO.  Newt said he was running for his two grandchildren - nice touch, a real wordsmith this guy.  Santorum seemed to ignore the presence of Ron Paul twice in his final remarks - trying to marginalize his closest competitor, or was he treating Newt Romney as one and the same person?  All in all, a scary bunch except for Dr. Paul - the one without the trophy wife.

Thursday, January 26, 2012

Air Canada Abomination!

I can't help it.  If you're not in the mood for a rant today, it's time to change channels away from this one.  This whole pets-on-airplanes thing pisses me off.  First of all, I'm allergic to cats.  Second, I hate stinky four-legged house pets (although kept in the yard they're just fine).  And third, people who care more about their pets than their fellow man (in this case, paying airline passengers) are pathetic, self-centered a-holes.  Air Canada flight 603 from Halifax to Toronto on Wednesday morning was delayed for four hours after "Ripples" the cat got loose from its carry-on cage and hid inside the plane’s cockpit wiring.  The crew got all the passengers off the plane, and called maintenance crews into the cockpit to remove avionics panels and retrieve the cat.  They had to disassemble the cockpit!  Any damage caused by Ripples could have been potentially catastrophic if it occurred mid-air!  Some passengers were put on other flights, but many just had to wait - for four hours!  "Of course, the owner was primarily concerned about the safety of the cat,” said an Air Canada representative.  She should have been concerned about her own safety and the safety of her co-passengers!  "Ripples" was fine after his rescue and was allowed to join his owner and fly to Toronto when the flight finally took off.  I am not kidding you.  Air Canada allows passengers to bring cats or small dogs into the cabin area, provided the pet is in a carrier that is small enough to fit under the seat in front of its owner (except on flights to and from Hawaii).  (from an article by The National Post’s Jan Vykydal)  This is not funny folks, as the owner of this feline clearly thought it was in the interview that I saw.  Canada's air transport authority needs to put a stop to this madness NOW!  How many passengers were inconvenienced for FOUR hours by this bumbling idiot?  How many business meetings and personal appointments were missed in Toronto because of this cat?  How many business associates, family and friends waiting to greet the arrival of flight 603 were inconvenienced for FOUR hours?  What was the cost in dollars and permanently alienated passengers to Air Canada?  What was the dollar cost to the friends, families, and business associates of these passengers?  Stop the lunacy!  Join KPOP and KEEP PETS OFF PLANES!

Wednesday, January 25, 2012

Italy Attacks the Messenger (Fitch)

Guardia di Finanza
As Sophocles said, "No one loves the messenger who brings bad news".  Yes, it has always been considered tacky in the extreme - not to mention counter-productive - to attack the bearer of bad news.  But yesterday it wasn't the Greeks reacting to a credit downgrade (laughable as that would be given their present sovereign-default-that-can't-be-called-a-sovereign-default), it was the Italians. The Italian financial police ("Guardia di Finanza", no I'm not kidding) raided the offices of Fitch Ratings agency in a classic "shoot the messenger" scenario - and this time they did it pre-emptively.  From Thomson Reuters: "Fitch analysts have said they expect to cut their rating on Italy by up to two notches this month. “Men from the financial police are at Fitch in Milan,” Carlo Maria Capristo, chief prosecutor in Trani, told Reuters. Trani prosecutor Michele Ruggiero, who is leading the investigation and was in Milan for the police operation, declined to comment. An investigative source said that, after placing S&P and Moody’s under investigation last year, the prosecutors had extended their probe to Fitch for alleged market manipulation and abuse of privileged information. European policymakers struggling to contain a debt crisis have grown increasingly critical of rating agencies, saying they have been too quick to downgrade indebted EU states despite bailouts and austerity programmes. The Trani prosecutors allege that reports by Standard & Poor’s and Moody’s on Italy and its banking system provoked sharp losses on the Milan stock market. The probe was extended to S&P’s decision to downgrade Italy earlier this month, and now to Fitch’s threatened ratings cut. Last week’s search order for S&P’s offices, said S&P’s downgrade of Italy’s sovereign rating on Jan. 13 was based on “untruthful, tendentious, incoherent and unfair” assessments and dataIt also said news of the imminent downgrade was leaked when markets were still open, adding the agencies’ actions and reports on Italy caused “real damage to the financial market, with a slump in the share price of banks and/or of public debt.” S&P rejected the allegations. “S&P did not divulge any of its own ratings decisions on the sovereign debt of European countries before the official release of Jan. 13,” it said. It also dismissed as groundless the prosecutors’ assertion that its ratings decisions were based on incorrect information. Moody’s has said it takes the dissemination of market sensitive information very seriously and is cooperating with authorities. The probe in Trani, a small town in southern Italy, was opened after a complaint by two consumer groups. They said they had first contacted prosecutors in Milan and Rome but had been turned down. Judicial sources said Milan’s chief prosecutor believed there was not enough information to warrant a probe."  So a small town prosecutor is leading the charge after the big city boys wouldn't touch the case?  Hmmm ...

Tuesday, January 24, 2012

Schmallenberg: New Euro Mammalian Virus

While the markets continue their ridiculous "Eurofantasy" rally, it behooves us to take note of something else threatening The Continent (and perhaps ours as well very soon).  By Kai Kupferschmidt in ScienceNOW:  "Scientists in northern Europe are scrambling to learn more about a new virus that causes  malformations and stillbirths in cattle, sheep, and goats. For now, they don’t have a clue about the virus’s origins or why it’s suddenly causing an outbreak. The virus, provisionally named “Schmallenberg” after the German town from which the first positive samples came, was detected in November in dairy cows that had shown signs of infection with fever and a drastic reduction in milk production. Now it has also been detected in sheep and goats, and it has shown up at dozens of farms in neighboring Netherlands and in Belgium as well. “We are taking this very, very seriously,” adds Thomas Mettenleiter, head of the Friedrich-Loeffler-Institute (FLI), the German federal animal health lab located on the island of Riems. The virus appears to be transmitted by midges, and infections likely occurred in summer and autumn of last year, but fetuses that were exposed to the virus in the womb are only now being born. The first cases of lambs with congenital malformations appeared before Christmas. “Now, in some herds 20 percent to 50 percent of lambs show malformations,” Mettenleiter says. “And most of these animals are born dead.” Scientists are bracing for many more cases to appear, especially in cattle, because bovine fetuses infected in summer 2011 would be expected to be born in February and March. Comparisons indicate it is a member of a group called the orthobunyaviruses. “Orthobunyaviruses have been neglected for a long time, and we just don’t know a lot about them,” says Jonas Schmidt-Chanasit of the Bernhard Nocht Institute for Tropical Medicine in Hamburg, Germany. “The problem with orthobunyaviruses is that their segmented genome makes the emergence of new combinations very easy, just like with influenza viruses,” Schmidt-Chanasit says. Whether the Schmallenberg virus could sicken humans is unknown. At least 30 orthobunyaviruses have been associated with human disease. A risk assessment by the European Centre for Disease Prevention and Control in Stockholm, issued just before Christmas, concluded that “it is unlikely that this new orthobunyavirus can cause disease in humans, but it cannot be excluded at this stage.” The experts recommended closely monitoring the health of farmers and vets. (This story provided by ScienceNOW, the daily online news service of the journal Science.)  The virus has recently been confirmed in the U.K.

Monday, January 23, 2012

What Killed the Keystone XL Pipeline?

A cartoon is worth a thousand words.

Sunday, January 22, 2012

Weekender: Skijoring Whitefish, MT

Who would've thunk?  The 2012 World Skijoring Championships will be held January 27-29 at the Whitefish Municipal Airport, just east of town, as part of the Whitefish Winter Carnival.  Skijoring, previously addressed in this space, was included as a demonstration sport at the 1928 Winter Olympic Games in St. Moritz, Switzerland.  Its Montana debut in the early 1950's was "as part of the Whitefish Carnival script written on a napkin at Hell Roaring Saloon by Norm Kurtz, the manager of Big Mountain." ... "After a few near-disasters when local businessman Russell Street was nearly tossed through the window of The Toggery and a group of runaway horses rushed through a crowd of spectators, the event was moved to Mountain Trails Saddle Club on Wisconsin Ave., which is now the location of Stumptown Ice Den ... Skijoring continued until the mid-1970's when injuries occurring during the event made it uninsurable ... street broom hockey, snowmobile jumps, and the Great Bar to Bar Snowshoe Race were also dropped ..."  It was revived in 2003, and is now the biggest skijoring event in North America.  In 1999 the North American Ski Joring Association (NASJA) was formed to standardize the sport and make it as safe as possible (as safe as cowboy, horse, and skier/snowboarder can be going over jumps at top speed).  NASJA now has a 10-event circuit throughout the western U.S.  Last year 91 teams competed for $25,000 cash in three events: Novice, Sport, and Open.  "A Long Jump Competition is held at the end of the Open competition each day ..."  The public is invited to everything, including the Registration Party (with videos from prior competitions) held at the Black Star Draught House from 6-9 pm on Friday.

Saturday, January 21, 2012

Weekender: Slappiest Slapshot

Shea Weber
This from Scott Fitzgerald at The National Post awhile ago: "Cody Franson has an old friend with a famous shot. It burned through the mesh of an Olympic hockey net two years ago in Vancouver, and it has accidentally left at least three teammates with broken bones, making Shea Weber one of the most feared point men in the game. “It could hit you in the pad in your pants, it could hit your shin pad, you’re still getting a bruise,” Franson said. Franson has scorched the netting and shattered panes of arena glass, too, but with a vastly different approach to shooting the puck. Dr. Kevin Robinson at Belmont University in Nashville analyzed the techniques used by Weber, Franson and teammate Jordin Tootoo. The results raised an interesting question. He measured the speed with which all three players struck the puck from the top of their backswing. Weber clocked in with the fastest, at about 715 degrees per second, meaning if his stick was a spoke in a bicycle wheel, it would spin through two full rotations in a second. Tootoo was second (668 degrees a second), and Franson was third fastest (405). Both Weber and Franson have won hardest-shot competitions: Weber was clocked at 104.8 mph before last season’s NHL All-Star Game; Franson was measured at 95.4 mph before the 2009 AHL All-Star Game. “The difference in Cody’s shot is that, if you look at the top of the backswing for Jordin and for Shea, their stick is literally perpendicular to the ice,” Robinson said. “If you think of it like a clock face, with their sticks being at 12, Cody was more like 10. He barely gets his stick above parallel to the ice.” The question Robinson could not answer is how Franson generated as much power as he did behind those shots without as much of a backswing. Franson, who is an inch taller but about 15 pounds lighter than Weber, offered an answer. He uses a more flexible stick - “a whippier stick” - than Weber. That whipping effect, combined with his upper body strength and wrists, is what the Leafs defenceman says generates most of his power. The shorter backswing provides a quicker release, which can make Franson a threat in his own right from the point. “The whole thought process is to get it off quick enough where guys can’t get in my shooting lane and, secondly, to get it off before the goalie knows I’ve got it,” Franson said. “When a goalie’s got to move through traffic, he usually loses the puck for half-a-second. If I can get it off my stick before he picks up that I have it, he’s going to have a tough time finding it in a crowd.” Weber famously blasted a shot through the netting in Vancouver two years ago as part of the Canadian team, and he has accidentally injured a handful of teammates in Nashville, including Tootoo (broken foot) and David Legwand (fractured cheekbone). “If I’m a goalie,” Robinson said of Franson and Weber, “I don’t want to see either one.”

Friday, January 20, 2012

An Insider's View of the Keystone Caper

The following article was penned by "Tyler Durden", alias for my favourite Wall Street insider who prefers, for various reasons, to keep his/her/their real identity a secret.  (Tyler Durden was a Brad Pitt character in "Fight Club", I believe.)  That said, I have learned more about the inner workings of global finance by reading his/her/their Zero Hedge website than any other ten websites put together, and I highly recommend it to followers of this space.  (I only reproduce an edited version of ZH's work here because I know my audience, and their preference for brevity.)  "Keystone Aftermath Arrives: Canada Pledges To Sell Oil To Asia, As US Becomes Source Of "Uncertainty":  America's loss is China's gain. In the aftermath of the Keystone XL fiasco, which will see not only a number of jobs "uncreated" but a natural source of crude lost, Canada is already planning its next steps - which will benefit Shanghai directly and immediately. "Prime Minister Stephen Harper, in a telephone call yesterday, told Obama “Canada will continue to work to diversify its energy exports,” according to Harper’s office. Canada's Natural Resource Minister Joe Oliver said relying less on the U.S. would help strengthen the country’s “financial security.” The “decision by the Obama administration underlines the importance of diversifying and expanding our markets, including the growing Asian market,” Oliver told reporters." Ironically, it is diversifying away from the US, with its ever soaring, politically-predicated uncertainty, that is a source of stability and diversification. But it is not only crude. Wonder why no jobs are being created? Wonder why despite record low mortgage rates there is no bottom in sight for housing? Simple - nobody can plan one month, let alone one year, ahead for any US-based venture or business. The political risk is simply too great - whether it is contract law (see GM and Chrysler) or simple solvency (see record high levels of cash hoarded by companies), it is there, and as long as it is there, there will be no hiring, no capex spending, no growth, and no real improvement in the economy, the real economy, not that defined by where the Russell 2000 closes on any given day. More from the Keystone XL aftermath: ... Harper has said building the capacity to sell the country’s oil to Asian markets is in the national interest, and the government will review regulatory- approval rules for new energy projects so they can be done more quickly. Harper has also said he will look more closely into complaints that “foreign money” is being used to overload the regulatory process. Then there are those who have pointed out that in recent years the equity risk premium has soared to multi-year highs. There is a reason for that. It is called America. Yesterday’s rejection “certainly introduces new uncertainties into the economic relationship,” said David Pumphrey, deputy director of the energy and national security program at the Center for Strategic and International Studies in Washington. “This is a cornerstone of economic development for the country.” And as pertains to this story, it is a good thing that the American Strategic Petroleum Reserve is safe and untapped for every eventuality. Oh wait ..." [emphasis added]  So Obama's totally transparent political expediency is not just a shock to Canadians, but also to those Americans in the know.  Did I mention gutless?

Thursday, January 19, 2012

Gutless President Kills Keystone Pipeline

People appreciate men of principle.  Men who do the right thing.  Barack Obama has just done the wrong thing, and he knows it.  He has sold out at least 20,000 American jobs and a major step toward energy independence from the Middle East for a few votes from eco-terrorists and Hollywood flakes by rejecting the Keystone XL Pipeline project.  He has also slapped America's closest ally and trading partner in the face.  We've fought beside his troops in Afghanistan, smuggled U.S. diplomats out of Iran, and welcomed Americans (and their companies) into our midst.  As a right-of-center diehard Obama supporter until now, I have defended his policies almost without exception.  All that changed today.  This decision is indefensible.  It is a decision that will lead to more environmental degradation, not less.  More than 70% of Alberta tar sands oil is no longer strip-mined.  Oil sands technology is a far cry from what it was even ten years ago.  Obama made this decision without even bothering to go there, and he decided to ignore three years of environmental impact studies.  Today's decision means more oil tankers cruising the world's oceans and, inevitably, more oil washing up on beaches and killing marine life off the west coast.  Barack Obama has decided to sacrifice common sense on the altar of political expediency.  And when common sense returns to the White House (if ever) it may be too late - a pipeline to BC's west coast and contracts to sell ethical oil to the rest of the world may be in place.  A gutless decision, just plain gutless.  Barack Obama, welcome to OH2's Pall of Shame.

Wednesday, January 18, 2012

Geitner Raids U.S. Pension Piggy Bank

The cookie jar was empty
In an effort to (sort of) respect the U.S. government (apparently flexible) debt ceiling (actually breached back on January 5th), Treasury Secretary Timothy Geitner yesterday suspended contributions to the U.S. Government Employees Pension Fund.  Sort of like you or I deciding that the line of credit on our house is tapped out, so we'll just dip into the kids' education funds.  The market, of course, took immediate notice and sold off violently before recovering slightly at the close - otherwise your humble scribe admittedly might not have noticed.  Not to worry, says Timmy.  Geitner advises everyone that fund participants will not notice a thing.  Very reassuring, I'm sure, if you are a U.S. government employee.  And why did he choose the piggy bank now?  It's not only because the cookie jar is empty, the sock in the top drawer was cleaned out long ago, and there's nothing under the mattress (except that ubiquitous American handgun).  No, it's to crank up the pressure on Congress, of course - to raise the debt ceiling again.  (Recall from the recent video series reproduced in this space that the Treasury Secretary is, after all, the most powerful man in the U.S. government - and probably the world.)  Here we go again, Mr. Market!

Tuesday, January 17, 2012

NYSE Desperation Benefits CNBC

All it needs is the pole.
On the day construction commenced, several CNBC talking heads seemed genuinely surprised to find out that a new set was being built for them at the NYSE.  Not only right in the middle of the NYSE, but also apparently paid for by the NYSE.  Things have come a long way from the first days of live television coverage by CNBC's Maria Bartiromo, considered a pest back then - and subject to some pretty snide looks and remarks from floor traders.  Things have now come full circle.  Contrary to "Uncle Bob" Pisani's assertion that the new set is a sign of "the welcome integration of media" into the NYSE, I see it as a further sign of desperation by the old bourse as competitors steal traditional NYSE business, and trading volumes continue to plummet.  The fact is, after 2008 financial meltdown, the negligence of market regulators and ratings agencies, the advent of HFT (high frequency trading), the Flash Crash, multiple Ponzi schemes, and the Global MF mess, the NYSE and stock markets in general NEED television coverage just to survive.  Trading volumes are waaay down.  Mom and Pop investor are sitting on what's left of their cash and ain't coming back soon.  Trading floors are hoping TV will entice them back.  Good luck.  I hope the finished product looks better than this picture, because all lit up in blue like that makes it look like a pole-dancing stage at a strip club.

Monday, January 16, 2012

Europe: Immigrate, Austerity, Emigrate

NYSE 44-year veteran and UBS floor director Art Cashin on how austerity is changing Europe: "On Tuesday night, I had the pleasure of marinating ice cubes with a very bright friend who happens to be a successful hedge fund manager of Greek heritage. We were discussing the Euro-zone problems and how austerity programs are bumping up against cultural and local habits. I wondered aloud how these austerity programs would hold up when they clashed with the litmus test of life in the streets. That’s when my friend related the following story. He has relatives still living in Greece, several in Patras, the country’s third largest city and a key port on the west coast, facing Italy and much of the Mediterranean. Over the decades, immigrants from Afghanistan, Bangladesh and other poor nations would work their way to Patras. They would stay for days or weeks awaiting a chance to smuggle themselves on to a freighter headed for Italy. Once there, they could make their way north into Europe to find hope and opportunity and maybe a job. Last week his relatives told him that things were changing. The immigrants still come to their way station of Patras (hope still blooms). But now, after a couple of weeks in Greece, they are trying to hop ships going the other way. They are going back home. Life was better, or at least no worse, where they came from and they had friends and family for support back there. If that’s what’s going on in the initial days of austerity, what will the streets of Athens or Napoli or Marseilles look like when austerity really takes hold? This will not be settled in days or weeks or months - and its impact will be felt for decades." - Joe Weisenthal on Money Game, The Business Insider.

Sunday, January 15, 2012

Skijoring

Skijoring ('skē-jȯr-iŋ) is a winter sport where you are pulled on snowskis by a horse, a dog (or dogs), or motor vehicle.  It is derived from the Norwegian word skikjøring meaning "ski driving".  I well remember being towed at the end of a rope tied to the rear bumper of my Dad's Buick in the middle of some farmer's field outside of Lethbridge, Alberta, in the late 1950's.  Highly illegal these days of course, skijoring was only terrifying back then.  The fields were frozen stubble - great for the Buick, but not so great for skis with kids attached.  (From what I can tell researching the topic, skijoring is preferably done behind dogs or horses - not Buicks!)  Behind horses it can be done with either the skier guiding the horse via a harness, or a rider (with the rope attached to the saddle horn) guiding the animal.  And remember, as in the accompanying photo, long skirts for women and tailcoats for men are de rigueur.

Saturday, January 14, 2012

ESF Video Posts Mortem

My thoughts on Eric deCarbonnel's preceding five-part video series on the U.S. Exchange Stabilization Fund?  Interesing, disturbing, a little over-the-top, a little short on detail ... and scary.  The series is certainly thought-provoking.  As I said in introducing it, "...  a five-part video series by Eric deCarbonnel of Market Skeptics. As regular readers of this space know, I don't countenance conspiracy theories, and this is clearly one. However, as a result of these videos, I myself have read some of the background material referred to in the videos, and have found enough factual material there to present the series. There are a few assertions (eg. Kennedy assassinations) and word choices that I find unfortunate, but the videos are admittedly designed to wake people up. In fact sometimes I have to remind myself that he is talking about an economic entity at all. Some of the cause and effect is a little hard to follow (HIV segment) and swallow, but I urge readers to persevere to the end. Make sure you watch these videos in sequence. If half of what is presented is true, we should all be the better for having watched the series. I thank Mr. deCarbonnel for his effort."  That's pretty much the way I still feel.

Friday, January 13, 2012

Thursday, January 12, 2012

Wednesday, January 11, 2012

Tuesday, January 10, 2012

Monday, January 9, 2012

Sunday, January 8, 2012

The Twister - On Saturday Night TV?

Warning: Adult Content.  So my wife and I were watching an old Clint Eastwood movie (Joe Kidd) on AMC last night and - out of the blue - comes an advertisement for "Trojan Vibrations Twister", a vibrator!  That's right, a vibrator ad at 7 pm on a Saturday night on the American Movie Channel!  Complete with wholesome-looking thirty-something testimonials ("things got kinda hot" chirps one preppie-looking young man, "I just love the Twister" giggles one young lady), and a promise of "discreet shipping", the ad went something like this: "Our Most Powerful Vibrator: the NEW TROJAN TWISTER + FREE Shipping + FREE Gift.  Pleasure...with a twist: 5 speeds + 3 pulse patterns + 4 unique twistable positions = Customizable Pleasure!  A Great Value – Only $59.99 (regular $76.97)"  Well, I may be showing my age, but I think it's a bit disgusting on Saturday night primetime (I never really did get over those tampon ads).  If I want porno I'll switch ... well, let's not go there.  OH2 ever to the rescue of the righteous, the email to AMC has already been sent.  What next?

Saturday, January 7, 2012

The Running Iron

Cattle rustling was a pervasive crime in the early west, particularly when cattle were allowed to wander on huge unfenced leases, and frequently the first person to brand a new calf claimed it as his own - whether or not that was actually the case.  "The chief way of stealing calves was to pick them up one at a time and subject them to the so-called "running" or "round" iron.  A rustler would travel the range with a branding iron short enough that he could slip it into his bootleg when he needed to conceal it.  The iron had a round edge on one end that the rustler could use to fashion any brand he desired.  In 1906 the NWMP officer in charge at Lethbridge told his superiors that he was not sure whether rustling had increased in the past year but that he was 'inclined to think it has, judging by the rapid increase of some of the herds in this district ... The cattle rustler rides the ranges with a running iron strapped to his saddle generally in stormy weather and picks up calves which have arrived at the age to be easily weaned from their mothers.  It is only a work of a few minutes for these experts to rope a calf and drive it to some place where it is held till it would not be claimed by the mother, or recognized by the owner.'  As time went on, virtually any unmarked cattle - not just those from the great herds but from all the ranches, large and small - became fair game.  The Mountie quoted above added that "fortunately" for the running iron rustlers, 'a number [of ranchers] have settled in the district with small bunches of unbranded cattle.'  These cattle, he was insinuating, were being pilfered.  This measure was not just used on mavericks.  Even the rancher who had previously branded his cattle was not safe from the running iron as it was useful for changing brands.  Sometimes the rustler would simply obliterate the original mark on an animal by burning over it and then would replace it with his own brand.  Or he might alter or "vent" the existing mark.  The letter E could, for instance, be turned into a B by closing up the open side; or a D could be made into a B by adding a dividing line in the middle; Vs became Ws, Cs became Es, Ps became Bs, and so on.  In the 1870s and '80s the NWMP acted as recorders and distributors of brands, but many were not recorded.  Therefore, one caught in possession of cattle with a particular brand could claim that he had used it strictly for the purpose of telling his own animals from neighbouring herds." - from Cowboys, Gentlemen & Cattle Thieves by Warren M. Elofson.

Friday, January 6, 2012

Ready For Another Flash Crash?

As if there aren't enough financial and geopolitical troubles on the horizon early in 2012, a new paper by David Cliff and Linda Northrop published by the Bank for International Settlements has raised the spectre of another "flash crash".  For those who don't remember, on May 6/2010 the stock market inexplicably plunged over a cliff - only to recover most of its losses about 45 minutes later.  In the meantime, almost a trillion dollars were lost by investors.  (To be precise, the Dow Jones Industrial Average lost 650 points in 30 minutes, destroying $850 billion off share values before rebounding.)  In the intervening year and a half one would expect the proper authorities to have thoroughly investigated what went wrong that day - and fixed it.  You'd be wrong.  The two teams of scientists led by the co-authors above, one on each side of the Atlantic, believe that another flash crash is not only possible - but probable.  Both teams are specialists in the socio-technical risks of financial IT systems, ie. what happens when systems interact with other systems thus proliferating into systems of systems that are inherently unpredictable.  They even co-authored a report warning of major systems failures before the May 6th flash crash.  And, they say, the next crash could be worse.  "The true nightmare scenario would have been if the crash's 650-point down spike, the trillion-dollar write-off, had occurred immediately before the market closed ... the world's financial system dodged a bullet."  If the market had not had time to recover the contagion would have spread to Asian and then European markets.  Now they believe that the number and severity of financial IT system near-misses is dangerously rising again.

Thursday, January 5, 2012

Food Allergy Theory

My PB&J yesterday
Why weren't kids allergic to peanut butter back in the 1950s and 60s?  My theory has always been that assaults on our immune systems by toxic chemicals in our environment are to blame.  It was revealed last year, for instance, that pregnant mothers living close to major traffic routes give birth to children with more medical problems, ostensibly due to air pollutants from vehicles.  Last week a new scientific study was published that hints at a behavioural answer, at least for allergies.  By Tom Blackwell of The National Post:  "People from well-educated families are almost twice as likely to suffer from some dangerous food allergies as others - possibly because their bodies’ natural defences have been lowered by rigorous hygiene and infection control, suggests a new Canadian study. The research from McGill University also found that immigrants were about half as likely to be afflicted by the allergies, perhaps reflecting differences in diet and environment between their countries of origin and Canada. The study was published in the Journal of Allergy. The link to higher education may be explained by what is called the hygiene hypothesis, the unproven idea that smaller families, cleaner homes, more use of antibiotics to treat infections and vaccines to prevent them have curbed development of the immune system, said Dr. Moshe Ben-Shoshan, who led the research. That in turn could make some people more susceptible to allergy. If the hypothesis does actually explain some food reactions, though, parents may not be able to do much about it, admitted the allergist at Montreal Children’s Hospital. The benefits of such health products as antibiotics and vaccines easily outweigh the risk of children developing serious allergies, said Dr. Ben-Shoshan. “On the flip side, worrying about every time the kid is exposed to another kid, washing them down in Purelle, that may not be the best thing.” The new study’s authors offer up other theories, too, for why the highly educated are more likely to develop food allergies. Better-schooled families, for instance, may be more apt to have heeded expert advice in the past that they delay giving children foods - like peanuts - that commonly cause acute allergies. That recommendation from allergy specialists has since been abandoned, amid newer evidence that suggests delaying introduction of those substances may actually make children more susceptible to food allergy, said Dr. Ben-Shoshan. It is also possible that some of those higher-educated families were simply more apt to seek medical help and get their children diagnosed for food allergies, the paper noted. The new study found that people in homes where the respondent had graduated from a post-secondary institution were almost twice as likely to have tree nut allergies, 63% more at risk of a peanut allergy and 2.4 times more apt to suffer from a sesame allergy. Immigrants were about half as likely as the average to suffer from any of the food allergies, the study suggested. That finding gibes with some other studies, including one that indicated the prevalence of asthma among Chinese teenagers was lowest in those from mainland China, greater in residents of Hong Kong and highest in ethnic Chinese born in Canada. It all suggests that food allergies might be partly related to environmental and diet factors, like the fact North Americans tend to eat more processed food and less fruit and vegetables."

Tuesday, January 3, 2012

Teach Your Toddler to Ski, Part 2

The Big Three (and only) things your child needs to remember to learn how to ski are: 1) They must keep their hands on their knees.  This gives their hands something to do, gets them leaning forward, helps lateral stability, and prevents flailing.  2) They must sit down if they get going too fast.  And 3) if they want to turn they just rotate their shoulders in the direction they want to go.  That's it.  Don't talk about "snowplows", "falling", or anything else that might distract them from "The Big Three".  These three things need to be repeated over and over (even in the car on the way to the hill) until your child can repeat them with ease.  To practise, find a gentle slope free of obstructions and traffic.  Remember, you want to minimize distractions.  Leave your own ski poles at the lodge, carry your child up the slope 10 or 20 vertical feet or so, and set him or her up at a slight downhill angle across the hill with their hands on their knees.  Remind them how to stop and turn, tell them to wait until you say "go", and then back away from them about ten feet initially.  Then say "go" and get them to shuffle their skis a bit until they ski straight into your arms.  (Note: you may have to move one way or the other a bit to make it happen.)  When they get to you, catch your child and swoosh them into the air while hugging and congratulating them.  This becomes the routine "catch" in a sort of a "catch Mom or Dad" game for them.  Kids love to ski into their parents arms and get praised for doing so.  Okay, now you put your child down going the other way across the slope, again at a slight downhill angle, and repeat the process over and over, always reinforcing The Big Three.  Your spouse can now enter the scene with a camera so your toddler can proudly show off their new skills, but remember to keep repeating those three rules.  After doing this half a dozen times successfully, they're ready for the "bunny lift", the smallest lift on the gentlest slope on the mountain.  Remember, this is all about taking small steps, and building on skills already learned.  (You may have to carry your child up the lift the first time or two until they get really stable on their boards and want to go up beside you "like the big kids".  Riding a ski lift is harder than skiing for little kids, so ask your liftee for suggestions, and be ready to have the T-bar down around your knees!)  When you get off the lift, get away from everyone else as much as possible, and repeat the "catch me" game - always reinforcing The Big Three.  Now that you have lots of slope, you can increase the distance gradually between the two of you so your child gets up a little more speed and excitement before they get to you.  You can even do a backward "snowplow" yourself so that they're really excited to catch you.  But, you ask, when do they start turning on their own?  You can gradually introduce the "rotate your shoulders" turn whenever you think they're ready, but sometimes a big lump of snow or twig or something else will appear and - like magic - they'll remember rule #3 and turn on their own!  Stopping also seems to come naturally to them once they've mastered a few turns because they've learned how to use the edges of their skis without even knowing it.  And that's it.  Wow, their first run.  It was fun, warm, and rewarding for everybody involved.  One final last hint: don't push your luck.  If your child needs a rest (or perhaps an incentive), a hot chocolate in the lodge is a great motivator.  (For our kids, it was always fries and gravy - not politically correct but effective!)  Soon your toddler will be leaving you in the dust.  Have fun out there!

Monday, January 2, 2012

Teach Your Toddler to Ski, Part 1

Little kids have so much fun alpine skiing, and are so cute - and let's face it - you want to get back on the slopes yourself, Mom and Dad.  So here's a method that has worked for me every time.  I've not only taught my own kids to ski but rescued several other parents from disaster trying to teach theirs.  All you need to do is prepare properly, follow the guidelines, be willing to dedicate half a beautiful spring day to your child, and he or she will be off to the slopes in no time!  As a lifelong alpine skier, racing official, and certified disabled ski instructor with three accomplished skiers/boarders for children (and grandchildren almost ready to ski), I humbly offer the following advice.  As in most pursuits, preparation is everything.  You want this to go well.  A little introduction to the concept of skis in the backyard isn't a bad thing but when you're paying for lift tickets, and out there on the bunny slope, it's good to have as many things going for you as possible.  First, let's talk age.  Little girls generally learn to ski earlier than little boys; the former can usually handle learning to ski at about age three, the latter about age four.  (Yes, my sister learned to ski before I did.  Thanks for asking.)  This age factor is not just anecdotal, it is actually borne out by science.  It is well established that girls are developmentally ahead of boys at every stage - physically, dentally, emotionally, you name it - so don't fight it.  There are exceptions to every rule, but remember that little tidbit.  The key here is that your child must be developmentally able to remember three things at once (more about those later), otherwise forget it.  (As an aside, I'll never forget the dipstick carrying his two year-old daughter around the deck of a ski lodge on his shoulders, proudly announcing that her leg cast was because she'd been "skiing too fast".  I have no time for show-offs, especially at the expense of little kids - and the risk of damaging a growth plate on a two year-old just isn't worth it.)  If your child isn't at least three - and able to remember three things at once - wait until next year.  You'll save yourself and your child a lot of grief.  A bad experience could set you back a year anyway, so take my advice and go tobogganing.  Okay, so your toddler is within the ballpark age, and bright as a whip.  Let's talk equipment.  First of all, a well-fitting ski helmet is mandatory.  Nothing else matters until that helmet is in place, for obvious reasons.  Now, the nitty-gritty; remember I said that your child has to concentrate on what you tell them - so forget the distractions: poles, tethers, and probably goggles.  As for skis, get a pair with "fish scales" on the bottom to help them walk in their skis - if you have to carry them everyplace they won't be as independent as soon as they could be.  Children's ski bindings should be mounted and adjusted by a certified technician.  Even then, it's better that the bindings release too soon than too late, so I'd back off the DIN setting one full notch.  (You can re-tighten them a quarter of a notch at a time if they're too loose.)  Goggles are optional, as long as they fit well and aren't a distraction.  The final requirement on your list is a warm, spring day.  Don't try to teach your toddler to ski in the cold.  Okay, now you're both prepared for a great day on the slopes!  Part 2 tomorrow.

Big Mountain's New Mogul

Mogul originally referred to a member of the Mughal Empire, or any member of its ruling dynasty, but in business has come to mean magnate, a prominent person in a particular industry. The Great Northern Railroad was built through Whitefish, MT, in 1904, initiating development of the town known at that time as "Stumptown" for obvious reasons - early employers were the railway and logging industries. By the late 1940s, with the successful construction of Big Mountain ski resort, the tourism sector became increasingly important. And now here's something I didn't know: "Some long-time residents of the town have expressed dissatisfaction with the changing of the name of the local ski resort from "Big Mountain Ski and Summer Resort" to "Whitefish Mountain Resort". The name was changed in June 2007, after Bill Foley, chairman of Fidelity National Financial, Inc., joined the board of directors for the resort. Foley began to buy commercial property in Whitefish around 2006, including several of the town's most popular restaurants, the private jet facility at the local airport, and a voting majority of shares in Winter Sports, Inc., the private company which runs Whitefish Mountain Resort on Big Mountain. Wealthy investors like Foley and others who have taken an interest in Whitefish have encountered a negative reaction from some local residents who fear that the town will be irreversibly changed by outsiders. In May 2004, WSI conducted a 150-for-one reverse stock split. Its stated purpose was to lower expenses by reducing the number of shareholders below the threshold that imposed public reporting requirements. At the time the transaction was proposed, 664 shareholders, or 72% of investors in the company, each separately held less than 150 shares. In total, these investors held a 2.5% equity (and voting) stake. The board expressed concern that the transaction might be viewed as coercive, but after review and outside consultation decided the transaction was fair to the affected shareholders. In December 2006, WSI conducted a 15-for-one reverse stock split, further reducing to about 50 the remaining shareholders in order to provide a tax advantage as a Subchapter S corporation. Again, all shareholders without enough shares to exchange for a post split share were required to cash-out their stock. WSI's handling of the reverse split was criticized and resulted in animosity within the local community, where there were objections to the timing of the related announcements and the loss of a community connection to the resort by the local residents." (Wikipedia) And I thought it was only those damn Canadians that upset everybody!

Sunday, January 1, 2012

Happy New Year 2012!

In one year and out the other!  Hope you had a good one.  Time once again to check the value of relative currencies against the U.S. dollar, courtesy of The Economist and their Big Mac Index - a surprisingly accurate index based on the average price of a Big Mac in various countries around the world.  As you can see, the Canadian Loonie is slightly over-valued, as is my favourite target these days - the Euro, soon to be known as the former Euro.  The best strategy for 2012 would seem to be "sell the Euro, buy the Yuan".  The good people at The Economist point out, however, that - if adjusted for each country's GDP - the Yuan is actually slightly over-valued while the Brazilian Real is the most over-valued currency in the world.  What about the Euro when GDP-adjusted?  Still over-valued - and proverbial toast in my books.  Check out the original article here.