Saturday, January 31, 2009

How stimulating..............not

The current decline in the world economy became most obvious to the general population in the third quarter of 2008 highlighted by one of what were to be many milestones in the decline, the collapse of Lehman Brothers. 

Subsequent to the Lehman failure each new day has seen a new financial horror of one sort or the other delivered to us by CNN, Bloomberg, the BBC  World News or one of the other media who now, were it not for the world financial crisis, have very little to report, given the end of Bush, the beginning of Obama and the winding down of the Iraq fiasco.

The roots  of the current fiscal malaise are probably much deeper than we either know or care to acknowledge. For me the end of July 2008 was when it hit home when our company failed to secure financing for the acquisition of a gold mine in South Africa. Perhaps the financiers in Vancouver, Toronto and London did not like the deal, perhaps they saw a collapse in mining and mineral exploration coming. Perhaps both. 

It was only when Lehman glowed hot on the monitors in New York and London that we started to hear about national bailouts and multi-billion food packages for the world's largest banks and, famously, our international auto manufacturers.

Curious it is that the two businesses [second only to the business of government] that have the biggest captive audiences need bailouts. There is something very wrong when a bank fails. There is something very wrong when Ford, Chrysler or GM fail. Ford makes and sells the Ford 150 which is touted as the best selling pick-up in history. Banks borrow money from each other at low rates and lend money at higher rates [or at least that is theory]. What excuse can these businesses have for failure?

It is simple, in fact an oversimplification, to say that the reason they have failed is that the costs are too high. But if the costs are not too high then it must be that they are not charging enough to cover the costs as they are. It has to be one or the other. In a recent news piece we learned that auto workers in Detroit earn on average $67 per hour including benefits. Is it any wonder that these companies have collapsed. The sheer weight of cost on the roof of productivity has caused the roof to cave in. Our response is to prop up the roof with more debt. The real answer is to knock the house down and start again. There is no evidence in North America, Europe, the Asias or  South Americas that total restructuring is being considered. The experts simply cannot get their heads around this approach. Doomed to debt is where we stand in early 2009 and it is hard to imagine that we will recover or repay this debt for decades to come.

World leaders, including Barack [I prefer Barack to Mr President or Mr Obama as I feel he is such a nice guy - and enlightened - that he won't mind the informality of just "Barack"] have made a poor choice. They chose the path of borrowing and spending when the more prudent choice would have been to tighten and increase productivity through improved efficiencies. The Federal banks, the IMF and World Bank have taken us down a precarious path. In the worst case scenario is quite probable that if the mass bailouts do not work in the short term that civic action may result on a scale yet unseen. The Internet puts the world's citizens with seconds of one one another. As a consequence it becomes much easier for mass sympathy and mass action if needed. Hopefully we will not go to that place,

Hopefully the pendulum of growth and natural dynamics of supply and demand will swing our way before too long. Given that we live in the age of instant gratification however, the citizens of the world will be quick to ask 'why we could not' having been told that 'yes we can.'

Friday, January 30, 2009

Typical planning in Maple Ridge

Speechless. One has to wonder what was going through the mind of the planning technicians when they approved this project. No need to speculate however on what was going through the minds of of council members who approved this abomination.

The building has an admirable use in the community and one cannot condemn this building, but it is distressing to see how local government - in this case the District of Maple Ridge - hides behind social needs when justifying abysmal planning. Clearly the district's own policies were ignored in allowing this structure.

Laughable is the only way one can describe the faux windows imprinted in this wall of shame. The tiny building in front also belongs to the district so no argument from them. The small building stands in Callaghan Park. Park? Yes park. I suppose one could always demolish the little building and use the wall for tennis practice.

Doubtless we can look forward to more of this sort of thing in our already forlorn neighbourhood, Haney. We may as well make Jack Atwal chairman of our Design Panel. After all look what he has done for Northumberland Court.

Monday, January 26, 2009

All is quiet on the western front and snow is forecast

Maple Ridge is quiet this night before Stephen Harper delivers his budget. No doubt the NDP, Liberals and Partie Quebecois are rubbing their hands in anticipation of.............what? Ignatief is the first to say that he will not comment until after he has fully absorbed the implications of the Harper budget. So long as it does not lead to a February referendum then I think the country will happy.

For his part the leader of the Liberals is a welcome replacement. He may even have the presence to put the scandals of the Liberal party behind us and, who knows, become the next first minister. While not voicing his feelings on the subject I am certain that he'd like to put some distance between himself and the leaders of the NDP and Quebec Party; it will take some finesse, but if nothing else one can say that Ignatief has indeed more finesse than any recent political leaders in Canada.

A man of patent intellectual capacity and a dry wit to match he seems far more in the mould of Barack Obama than Harper and it is easy to visualize the two them taking this somewhat lost continent forward to a more reasoned and reasonable state of being.

Disagreement is likely to be cordial; agreement is likely to be warm and lasting. After all who would you trust; Harper and Bush or Ignatief and Obama? 

We are expecting 5 to 10 cm of snow in Maple Ridge over the next couple of days. There will lots of snow - as in 'job' - on Parliament Hill tomorrow. The next thing you know and it will spring, followed by one hopes a glorious summer of hope and, who knows, perhaps a little glory.

In the meantime, the west waits, in quietude.

Tuesday, January 13, 2009

Is it big or simply nasty??

Dear Mr. Obama, Mr. Kerry and all the speechwriters and communications professionals in or around Capito(a)l Hill and the White House:

At some point or the other you will need to come to terms with the meaning of word 'Enormity'.

You continue to use the word out of context, most popularly when you refer to the 'enormity of the task.' We know of course that you are trying to say it is a big task, as in enormous. But when you refer to the enormity of the task what you are saying, as an example: "The outrageous, improper, and immoral job of rescuing the world economy. Now, while we know that the road to the world's economic ruin was doubtless created by people who may be described as outrageous, improper, vicious and immoral, the term 'enormity' is not the word to sue when describing what it will take to solve the problem. What find instead is the the enormous task we face when it comes to teaching politicians to speak plain English rather than attempting to grandstand at every opportunity and making idiots of themselves by using English which sounds great but which is balderdash.

Mr Obama used the word often in his acceptance speeches and Mr Kerry used it just morning when addressing Congress at Hilary Clinton's Secretary of State hearing. Tut-tut.

Main Entry:
Inflected Form(s):
plural enor·mi·ties
15th century
1: an outrageous, improper, vicious, or immoral act
2: the quality or state of being immoderate, monstrous, or outrageous ; especially : great wickedness
3: the quality or state of being huge : immensity
4: a quality of momentous importance or impact
usage Enormity, some people insist, is improperly used to denote large size. They insist on enormousness for this meaning, and would limit enormity to the meaning “great wickedness.” Those who urge such a limitation may not recognize the subtlety with which enormity is actually used. It regularly denotes a considerable departure from the expected or normal . When used to denote large size, either literal or figurative, it usually suggests something so large as to seem overwhelming and may even be used to suggest both great size and deviation from morality . It can also emphasize the momentousness of what has happened or of its consequences .

Saturday, January 10, 2009

What will be missing from the Harper stimulus package


For simplicity's sake lets say that in order to make a $1000 dollar per month payment on a mortgage in Canada you need to earn around two thousand dollars pre-tax.

Income $2000 
Tax $1000 
Mortgage Payment $1000
Disposable income $0 = no benefit to national economy

Then let's say you were lucky enough to live in almost any other of the G8 countries or for that matter almost any other country other than Canada where your mortgage is tax deductible.

Income $2000
Deductible for mortgage $1000
Taxable Income $1000
Tax $500
Disposable Income $500 = Benefit to national economy

The same rule could be applied to say private school fees

As it happens I do not believe for a second that Canada at this point in time is in the least in need of a government sponsored handout of any sort to either the financial services industry nor the auto industry any other.

If the auto industry is truly in need then let the oil and gas majors bail out the auto industry. After all the auto industry is the oil and gas industry's only major client. Oh, and the airlines of course. When Shell and Esso start buying shares in airlines and Chrysler, Ford and Mercedes Benz then this world will start to stabilize. We need to robb Peter to pay Peter in other words.

Back to Canada. Instead of running huge surpluses in order to run huge deficits in times of trouble, would it not be expedient to run the economy correctly from the start. The pendulum game is a fools game.


Thursday, January 01, 2009

January 1 2009 - what floats down must, er.....float up

Perhaps not surprisingly the boat house that passed by our house yesterday going downstream showed up on this January 1 2009 going back up the Fraser.

We'll look out for it coming back down the river this evening.