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Wednesday Night Salon
#1314 9 May 2007 Page 2
Introduction
In contrast to most Wednesday Nights, there was a very specific focus on "Nobody's Fuel" the labour of love patiently put together by the Lightfoot family, Douglas nobodysfuel.com/autho, along with his sons Brian and Steven. They presented a detailed look at the findings set out in detail in the newly-released video, while Frank Kinnelly's informed interjections set the tone for questioners.
Astri Reusch, one of Wednesday Night's favorite and best-known artists, has returned from her winter season artist-in-residence stay at the Pilchuck Glass School north of Seattle.
Marilynn Vanderstaay has moved her column to the new Westmount Independent which will be published every two weeks and delivered to all Westmounters by mail. The publisher is David Price of Price Patterson Publishing, the editor, Loreen Sweeney. This will be the only newspaper available to Westmounters that is entirely produced in Westmount, by Westmount residents.
Hubbert's Peak
The world (at least 85%) runs on carbon or more specifically, on fossil fuels, coal, natural gas and petroleum; but time is running out. The use of coal has a severe effect on climate change although technology has been developed to deal with carbon dioxide emissions and it is possible to capture the heat produced to heat buildings, streets and sidewalks. Historically, energy consumption has been a function of affluence, rising with disposable income, increasing availability of clean water, longevity, health care, housing, communication and transportation.
Marion King Hubbert accurately predicted that U. S. petroleum production would peak in the '70s and world petroleum production, in the early part of this century.
[Note: The 100-year period when most of the world's oil is being discovered became known as "Hubbert's Peak". The peak stands in contrast to the hundreds of millions of years the oil deposits took to form. Dr. Hubbert's methods predict a peak in world oil production less than five years away.
see princeton.edu/hubbert/the-peak]
Even with the remaining lifespan of current and as-yet-undiscovered petroleum reserves, the prospect of diminishing production in the face of increasing demand resulting from increased world affluence and population growth is frightening. Forty percent of oil is used to create electricity. Petroleum-based products are so much a part of contemporary life that it appears to be more palatable to rely on human ingenuity to find a solution when the crunch occurs, than to work towards one today.
- We are using up oil faster than we can find it and we can't get the non-conventional oil out of the ground fast enough - some of it we can never get out
- You don't know until several years after whether the peak has been reached
- Price doesn't make the reserves any bigger – it only extends the time over which the reserves will be extracted
- There is a U.S. estimate that we will find more oil in the next 30 years than we ever have
Renewables
Other sources of energy include hydro and tidal electricity, wind and geothermal. They supply approximately 9% of our energy needs today, leaving a gap which they possibly will fill in the future. Although the cost has decreased, wind power has been relatively expensive and is intermittent, requiring an auxiliary energy resource on standby.
Nuclear energy the answer
The logical prime energy source for the future, if human life on the planet is to survive, is nuclear. In the minds of knowledgeable experts, this will be our salvation, provided that the reactor technology required to meet the world's energy demands can be successfully developed in time.
The very first electricity produced by nuclear reactor was in the U.S. in 1951 and today the nuclear energy programme is taking on new life (AP Friday, May 11, 2007); the French and the Russians have had fast reactor technology for more than 25 years, but these have not been without problems
(see: wikipedia.org/wiki/Fusion_power)
Currently, all commercial nuclear reactors are based on nuclear fission. Nuclear fusion is an experimental technology that can produce electricity by fusion, harnessing energy within the atom through the use of fast breeder reactors which, advocates state, can be productive for millennia (as opposed to ten to twenty years for reactors producing energy through fission) while leaving no radioactive waste. The Japanese, who do not have uranium, have a very good programme to develop an advanced fast breeder reactor.
Unfortunately it is not certain that we have the time to develop and produce fast breeder reactors. ITER , a joint international research and development project, aims to show fusion could be used to generate electrical power, and to gain the necessary data to design and operate the first electricity-producing plant.
[Editor's note: "Canada become a participant in negotiations in 2001 by proposing a site for ITER, but left the project at the end of 2003 when it was not selected." That would have been under the Liberal government – not something to blame on the "New Canadian Government"]
Meanwhile, 28 new nuclear reactors are being built in 12 countries.
Knowledgeable skeptics insist that in the last half of the twentieth century, nuclear energy was seen as a stop-gap measure for a quarter century or so, while the search for a more permanent energy source was undertaken, and still believe that the solution to the containment problem in fusion is not attainable in time. The solution, they believe, is to reduce the use of energy while continuing to live well.
Recognizing the problem of developing more accessible clean energy sources, they see human ingenuity and more realistic pricing practices as highly motivating factors in adapting to a different yet successful sustainable lifestyle. They see the price increases in petroleum to date as have been totally insufficient in reflecting the reality of the situation. They suggest that a pricing policy more realistically reflecting the gravity of the situation and concurrent investment in human ingenuity and creativity can provide a solution for the future and is the way to go. They see the government as playing a major role to play in this, taxing carbon, investing taxes in mass transportation as well as creative use of the heat produced by conventional energy sources.
- At some point the curves have to stop going up; we have to assume that energy consumption per capita has got to level off and, hopefully, decline. That has got to come about through conservation afforts that do not force the human race to sacrifice most of the standards of living that the richer nations have achieved
- The problem is not with the per capita consumption – it is the increase of the 'capita'
The economy (See also Jacques Clément's Report
The world economy is in better shape than it has been since before World War I. Although core inflation has been a little higher than predicted, the stock market has done remarkably well, and barring an unpredictable uneasiness that things seem too good, will continue to do so for a while. In China, the economy has increased by 10½ percent, India, 8½ percent, Russia at 7%. These countries will continue to place a huge demand on natural resources. Commodity prices have risen incredibly, leading to uneasiness by some Canadians concerning foreign acquisition of commodities here by multinationals.
- It doesn't seem to individuals that things are as good as they are; absent long-term considerations of a host of issues, the world economy is in pretty good shape – but most people are going to feel uncomfortable about it
- Oil is a cost-plus commodity
Foreign Takeovers – Bad, Ugly or Good?
The recent wave of foreign takeovers of Canadian multinationals, including this week's news that Alcoa has made an offer for Alcan, provokes a number of reactions. Some Wednesday Nighters expressed confidence in the creativity of local entrepreneurs to take up the slack, pointing to such success stories as Cirque de Soleil, Softimage and Discreet Logic (now the entertainment division of California-based Autodesk). Others were uneasy about the future of Montreal,- which today has only a handful of giant multinationals -, as a world-class city, with the disappearance of almost all the head offices that were formerly resident here. These people see a considerable loss in terms of high-end jobs and talented young people, who are more interested in the complexity of the big companies than in becoming entrepreneurs.
- You can't defend the Alstom approach – protecting two [multinationals] instead of one; you have to have a strategy to build five more. Montreal doesn't have a strategy
- Perhaps we'll see some positive changes with the advent of the ADQ
- Small is wonderful, so is medium and so is big; we need them all
[Editor's note: In two recent columns Gazette business columnist Jay Bryan points out 1. Canadian companies are also involved in international takeovers and 2. Wednesday Nighter Karl Moore's statement that "global headquarters aren't nearly as centralized as they used to be" continuing, "Moore counts five headquarters operations, including a major one in Paris, retained after Alcan took over Pechiney, a French aluminum company. [Furthermore] Moore notes that Bombardier Inc. has the global headquarters of its rail operations in Germany. Nokia, the Finnish cellphone giant, has some headquarters operations in Britain. Ericsson, a Swedish telecom company, has key research and development responsibilities in Montreal." Montreal to lose less than you might think
In a second column, Foreign takeovers don't gut Canada, they benefit it he quotes Statistics Canada's findings that:
- Foreign-owned firms do more research and development, on average, and tend to be more innovative than Canadian-owned ones.
- Foreign-owned firms actually increase head-office employment at the Canadian firms they control. In fact, they do so at a more rapid rate than head-office employment increases at Canadian-owned firms.
- A recent Statistics Canada research project studied head-office employment in Canada for 1999 to 2005. It found that foreign-controlled firms accounted for about two-thirds of all Canada's increase in head-office employment during this period.]
Public opinion grows chilly on foreign takeovers
Focus group report for Industry Canada discloses resistance to Bernier enthusiasm for relaxing telecom ownership restrictions
RCI UNDATED: MERGERS, TAKEOVERS UP
The Crosbie & Company investment bank reports that there were 500 mergers and acquisitions worth $66 billion in Canada in the first quarter of 2007. The figure compares with the top 500 transactions for the previous quarter which amounted to $28 billion. Crosbie's director general, Colin Walker, says the increase is chiefly due to the "baby-boomer" generation which is selling off businesses as its members approach retirement.
Rci Monday 28 May 2007 OTTAWA: OPPOSITION WANTS MORATORIUM ON TAKEOVERS
The leader of the federal opposition Liberal Party, Stéphane Dion, has demanded that the Conservative Party government put a temporary end to takeovers of major Canadian businesses until a panel of experts reviews the situation. Mr. Dion says the Investment Canada Act hasn't been reviewed in 20 years and that recent acquisitions of Canadian firms by foreigners suggest that the existing situation is tilted not only against the firms but also against the country's own national interest. In recent months, Canadian companies such as the Inco and Falconbridge nickel miners and the Dofasco steel firm have been acquired by foreign interests. Mr. Dion suggests that a panel of experts review all issues concerning such transactions and make recommendations within three months. Finance Minister Jim Flaherty has dismissed the idea, pointing out that Canadian firms also are making foreign acquisitions. He cited the takeover of Reuters Group PLC by Thomson Corp. on May 15.
Please see T-ALcan
Monday, May 28, 2007 Freeze rejected. Dion singles out Alcoa's hostile run at Alcan
The federal government rejected a Liberal proposal yesterday to freeze foreign takeover approvals for...
do see w-n on Takeovers
Sunday 03 June 2007 Economic nationalism as an illusion
Hark. That grumbling you hear is the federal Liberal party making noises about economic nationalism. Stéphane Dion wants the issue studied. He and New Democrat Leader Jack Layton also want the rules for foreign takeovers revisited.
Tuesday 29 May 2007 The 8 blunders of Liberal takeover policy
Rarely has a political news release contained as many bad economic ideas as the Liberals compacted into their call yesterday for a national frenzy over..
Sunday 03 June 2007
Canada's last steel giant put up for grabs
Shares halted Friday; Hamilton's Stelco is on the market, sources say, and will likely join host of firms gobbled up by hungry bidders from abroad
West Wing of Wednesday-Night (WWW)
Alexandra Tcheremenska-Greenhill OWN writes from her new home in Vancouver: "I have started to seriously plan out the WWW - West Wing of Wednesday-nights - gathering and it's amazing how things seem to line up: we are renting a large house where there is enough space to have the meetings and there is a core group of eclectic Wednesday-Night-worthy individuals that I either already knew but just discovered they now live in Vancouver, or who are being introduced to me via trustworthy friends!!! So we may be able to launch it in June (although a weekly gathering is clearly an unattainable goal - we can aim at least monthly to start with!) - how exciting a thought!!!!
Thursday 9 May Apr 2007 To day NYT Podcast | Menu
Radio
Like the report of Mark Twain's death, reports of the death of radio –at least FM – are greatly exaggerated.
Private clinics and Québec healthcare
It is unfortunate that the Québec health care system which is excellent in quality, lacks adequate access. The failure of the government to provide timely access to the system has led to a small but expanding number of private clinics, which, if left unchecked, will ultimately erode the public system. It is to be hoped that the message will become clear to the government and that steps will be taken to provide us with the accessible, quality medical care that we expect, deserve and pay for. It is indispensable that we learn how to harness ideas and practices from the private system to make the public sector work better (something that the McGill Faculty of Management is addressing). Patient-centered collective bargaining would contribute to an efficient system. There is much to be learned from both the British and Australian systems. Medi Care
Real estate
Canadian dollar is not expected to decline against its U.S. counterpart.
The economy
See also JACQUES CLEMENT: Pages ON THE ECONOMY
for Wed1314 May 9, 2007 by Jacques Clément
U.S.
The Federal Reserve remained steady today at 5¼% Federal funds rate for the seventh consecutive meeting, reiterating the inflation risks, with core consumer prices at 2½%, but with first quarter G.D.P. of only 1.3%, the weakest pace in four years, employment of only 88,000 in April, the lowest in 2½ years, unemployment returning to 4½%, weak capital spending by business, weak consumer confidence, personal consumption weakest performance in five months, declining industrial production and capacity utilization, very weak housing data with prices expected to decline 10%, this year, an estimated 2.4 million people that may lose their homes, existing home sales declining 1.7% in the first quarter with a sluggish outlook for the second quarter, the lowest level in four years and the biggest decline in March (-8.4%) since January, 1989, new home sales declining by 18.5% at the lowest level in 13 years and at the slowest pace in nearly seven years and record housing foreclosures (+47% in March). The Dow Jones reached another record today at 13,363 and beat an eighty year old record, being up twenty-five of the last twenty-nine days. Since its major correction of February 27, the Dow Jones has gained over 1,100 points. A few economic numbers did improve, such as the manufacturing sector, with durable goods orders rebounding by 6% (February-March), the I.S.M. Manufacturing fastest rise in one year, factory orders rebounding over 4% (February-March), personal income remaining strong and first quarter earnings outlook being revised up to 8.2% growth. Mergers and acquisitions of $694 billion in the first quarter (+46%/year), record leverage buyouts of $181 billion and record private equity deals bolstered the stock market. The U.S. dollar continued to weaken, reaching $1.3659 U.S. for the Euro at the end of April.
CANADA
Bank of Canada, in its semiannual Monetary Policy Report, has revised to 2.2%, its G.D.P. outlook for Canada, the weakest in four years, core inflation at 2.3% in the first quarter, returning to 2% by the end of the year, with total inflation of 2.6% in the second half of the year, with $68.00 U.S. assumed for crude oil, currently reflected in the futures market. The Bank is looking for an average economic growth of 2.5% in the first half, with strong final domestic demand, strong gains in consumer spending, robust employment growth, gains in real personal disposable income, additional gains in household net worth and credit, strong capital spending by business and exports recovering (particularly machinery and equipment) despite weak U.S. demand for vehicles and building materials, the Bank estimates that the economy has been operating slightly above its production potential (2.8%) in recent months. Household credit has risen strongly (10% year) because of borrowing against home equity (tripled in volume sine 2001). Monetary aggregates have remained high (M1+10%), reflecting the stronger pace of the economy (M2+8%) being consistent with core inflation above 2%. Government spending has slowed as has spending on residential construction. Labour shortages remain acute in Western Canada but wage increases have been at a relatively modest pace. The Canadian dollar is assumed to remain in the range of 86.5¢ U.S. to 89.5¢ U.S. seen since April. The U.S., with a more prolonged slowdown in the housing sector and weak business investments, is assumed to grow by 2.1% from 3.3% last year. They are forecasting slightly stronger overseas economic growth but for the year, at 4.8%. from 5.3% last year. Canada’s commodity prices should remain high as should profits and balance sheets, with accommodative financial conditions. The Bank projects a12% decline in U.S. residential investments in 2007. Since my last report of April 25, building permits in March were up 27% (a record high) reversing the 22% decline in building permits in February (particularly in B.C., Alberta, Ontario) with residential at a five month high. Housing starts (April) weakened by 1% following a 7.6% rise in March. New vehicle sales fell 3.7%. Statistics Canada Business survey (3,000 manufacturing companies) was upbeat with strong hiring intentions. The T.S.X. has reached nearly a 14,000 record, gaining over 850 points since February 27. The Canadian dollar has reached 90¾¢ U.S., a ten month high with a bullish outlook, despite a $4.00 decline in crude oil prices since the end of March, offset by continuing strong commodity prices and record mergers and acquisitions ($458 billion in the first quarter) and gold getting closer to $700.00 U.S.
Near Term Trading Outlook: 1312
W-N Links for #1314
2007 Notes for #1314
14 May 2007 Canadian panel to look into foreign takeovers
TORONTO, (Reuters) - Canada's government will study the trend of foreign takeovers of home-grown businesses, Finance Minister Jim Flaherty said on Monday amid cries from critics that his policies have made firms vulnerable targets.
Industry Minister Maxime Bernier will soon launch a panel of experts to review Canada's competition policies and propose improvements, and Flaherty said in a speech to the Toronto Board of Trade that one of the issues that the panel will look at is foreign acquisitions of Canadian firms.
10 May 2007 'Green' corporate strategies lacking, despite high awareness in 'c-suite'
Friday 11 May 2007 Trade Deficit Hits a Six-Month High
The price of oil and a surge of imports in March widened the imbalance, though exports continued to rise.
Rex Murphy's
Point of View index
Menu to mitworld.mit.edu/ on-demand videos of significant public events at MIT. in RealPlayer
Ex Thomas L. Friedman. While you were Seeping The World IS Flat Video length is 1:15:04.
 Stephen S. Poloz VP EDC Economics Weekly Commentary
Mexican Resilience Increasing - May 9, 2007
Mexico has come a long way since the so-called Tequila crisis of 1994. Nowadays, Mexico gets caught up in global volatility just like everyone else, but is on the resilient end of the spectrum..
Consider how Mexico weathered the last couple of emerging market storms. In May of 2006, emerging markets retreated on evidence of slower global economic growth, declining commodity prices and rising international risk. The average emerging market bond spread widened by over 50 basis points, but Mexico’s rose by only 37. Mexico’s stock market fell by 18%, whereas Brazil fell by 26%. And, the Mexican peso fell by only 4% while Brazil fell by 16%. Past issues | his WN page
Commentary podcast. 
Wednesday-Night.com on Privacy
Canadian dollar vs euro | Dow 30 w-n chart | TSX
Fed Parties Stéphan Dion | Stevie Harper
see also Wednesday-Night.com MedicalNotes
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