We are NAFTA-ed out! The intense discussion last week was excellent, informative and at points highly entertaining, but it’s time to move on.
Today’s news is a commodity. Topics are fads, flogged to us by the
media with little difference from the way we are subjected to non-stop
advertising for the latest toy, gadget, diet, or car (or politician)
until it is superseded by a rival or de-bunked. Bombarded relentlessly
with news coverage that ranges from ponderous to downright silly, we
often find ourselves if not instant authorities, at the least instant
trivia experts, and before we know it there is a new topic and the
process starts all over again. We confess that Wednesday Night is often
guilty of following the trendy topic, which is why your participation,
thoughtful analysis of the more profound questions and divergent
opinions are such a remarkable asset.
For our part, with Herb’s
help we endeavor to maintain the threads of discussions and to add new
dimensions so that when a topic resurfaces, there is some background
available to enable us to confirm, reevaluate, modify or even reject
our previous stance.
With that preface, and facing the end of the summer season with the
long absences of some of our cherished thinkers, we invite you to
consider what will be the enduring topics over the next months and to
suggest what we should be paying attention to, whether or not it is the
news of the moment.
Aging and decaying infrastructure throughout North
America will require massive investment to repair and replace it.
Recent news is of the bridge collapse in Minnesota, the steam pipe
explosion in New York, the deteriorating state of Québec’s highways and
overpasses, and last week’s alarm over the huge cracks that appeared in
the ceiling at the McGill Metro. What are the causes - negligent
construction, environmental depredations, demands that far exceed the
designers’ specifications, the practice of public authorities to select
the low bidder, or all of the above? Who is responsible?
North America was not alone in undertaking extensive infrastructure
development over the last 60 years. How extensive is the problem
globally and above all, how can it be solved and is it possible to
avert disasters? Who will pay and how?
[This is particularly appropriate topic, given that August 29 is the hundredth anniversary of the collapse of the Québec bridge]
Healthcare makes frequent appearances on the
Wednesday Night agenda, most often in relation to concerns about the
paucity of doctors in Québec, the endless wrangling over the MUHC and
the fate of the Shriners Hospital. But beyond our microcosm and issues
of access, blending of public/private practices, nightmare stories
about “credit-card care” in the States, world-wide problems including
the spread of “diseases of the affluent”
to the Third World. Heart disease is by far the biggest cause of global
mortality, followed not by HIV/AIDS or Malaria, but by cancer.
An important aspect of healthcare is the cost of drugs reflecting often
the huge amounts invested in the development and approval process. We
are reminded of this today with the unhappy story of Neurochem Inc.,
which has revealed data from a key clinical trial that confirmed
Alzhemed, its would-be blockbuster drug aimed at slowing the onset of
Alzheimer’s Disease, is a dud - this is indeed a blow to the families
and victims of the dreaded disease of the elderly.
The Economist worries about the new financial order,
including the “securitisation of just about every form of debt into a
tradable asset”, and that “The spreading panic has shown up weaknesses
in some of the foundations of modern finance” (another crumbling
infrastructure). Related to these concerns are the often-discussed underfunded pension plans, the demographics of an aging population, the global shift of populations from rural to urban settings and how could we not mention Income Trusts?
Topical, if not prescient, as usual, the Couchiching Institute devoted this summer’s conference to diversity, social cohesion and citizenship,
asking “With our increasingly diverse society, how do we maintain a
core set of values and cultural harmony? Is there a mainstream culture?
What role do government and business play in drawing on the talents of
such a multiplicity of cultures? What does patriotism mean in this new
world? Does diversity threaten security?” We would add our deep concern
over the spread of fundamentalism in all religions
and the increasing frequency with which religion and politics
intersect. We commend to your attention CNN’s Christiane Amanpour’s
superb and disturbing documentary “God’s Warriors”
In a particularly telling moment, Jimmy Carter reminds her that
fundamentalist Christians cannot admit that they are wrong because that
would imply that their all-knowing God was wrong. This is, of course, a
universal problem for religious leaders.
Last but far from least on our list is The Environment
and all its subsets of climate change, energy, renewable (or not) water
resources, geopolitical implications and, we would add, emerging
economic issues as more companies embrace the thought of “green money”.
The most recent example is the increased cost of food
as a result of rising demand for corn as a source of ethanol-blended
fuel. We fear that in our fervor to be environmentally responsible we
may be rushing headlong into a morass of unintended consequences.
Wednesday 29 August 2007 ANOTHER REASON TO AVOID CARBS The
National goes inside with rising food prices in Canada’s
supermarkets, a side effect of the poor weather in Canada and
Europe’s wheat-producing regions. Canada’s wheat crop is 20
percent smaller this year and producers are quickly learning that wheat
supplies are in much higher demand than ever before. A large factor in
this is the growing use of wheat in the production of biofuels. While the
price of bread and other wheat products is likely to go up over the next
thirty to sixty days, the National reports, the accompanying CBC article
additionally notes that the price of meat will also see a significant
rise. Grain used for feed in the beef, pork, and poultry industries
consumes a sizeable chunk of the world’s available wheat. The
National reports that a Canadian’s average supermarket bill will
likely increase by 5 percent. Richard Crane, a London-based analyst with
the consulting firm Deloitte, told CBC that grain prices reached an
unprecedented peak of $7.44 (US) a bushel on the Chicago Board of Trade
market last week after climbing steadily for months. He compares the
inflating cost of food to the gradual but steady rise in oil prices.
• ABDULLAH GUL should finally win enough parliamentary votes to secure the Turkish presidency in a third round of voting on Tuesday August 28th. Mr Gul, the candidate of the Islamist-leaning AK Party, narrowly failed to attain the required two-thirds of the ballots in previous attempts but only needs a simple majority this time. Secular Turks fear that the appointment of Mr Gul will threaten the separation of state and religion. The ruling AK Party dismiss such worries as nonsense.
• RUSSIA has rediscovered a taste for throwing its weight around, including in the sphere of international finance. Friday August 31st is the presumed closing date for nominating candidates to head the International Monetary Fund. As that date nears Russia has attempted to derail the nomination of Dominique Strauss-Kahn of France, the European Union’s choice. The post is traditionally the preserve of a European as part of an informal agreement that sees an American head the World Bank. Russia, in an apparent expression of dissatisfaction with the arrangement, has nominated Josef Tosovsky, a former Czech prime minister, although his own government continues to support the EU’s choice.
NEW YORK (Reuters) - Consumer sentiment took its sharpest plunge
in nearly two years during August while home prices swooned
in the second quarter, according to reports that show a heavy
toll from the housing crisis. Full
Article
Tuesday 28 August 2007 A little panic goes long way to boost markets
When Citigroup's model shows investors are worried, the S&P 500 tends to advance in the next 12 months
...He noted in a report yesterday that data for about the last 20 years shows that when Citigroup's intermediate-term panic/euphoria model drops into panic territory, as it did last week, there is a 98 per cent probability that the Standard & Poor's 500-stock index will rise over the following 12 months and a slightly lower chance of gains over the six months.
Moreover, the increases over the 12 months following such events have averaged about 20 per cent. He forecasts the S&P will end the year at 1,600. It closed yesterday at 1,466.79.
Tuesday 28 August 2007 Neurochem (NRM) fell the most in more than two years after the
drugmaker said its experimental Alzheimer’s disease treatment didn’t
demonstrate statistically significant benefits in an 18-month trial.
Note
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Stephen S. Poloz VP EDC Economics Weekly Commentary At least the rest of the world is strong… right? - August 22, 2007
A key source of comfort during the financial turmoil of recent weeks has been the consensus that the world economy remains strong. This is important, for it means that even if the financial contagion continues to spread, the world economy will prove resilient to the shock.
There can be no doubt that the world economy is in better health than it was during 1997-99. At that time, emerging markets with stretched fundamentals staggered from one crisis to another, starting with the Asian flu, then the Russian crisis, and then it spread to Latin America. Global growth slowed, but at the time it was all an emerging market story. Despite the associated financial turbulence, the major economies managed to perform reasonably well. Past issues | his WN page
BBC
Fighting Greek fire 
Robert Galbraith
Stephen S. Poloz
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