Stephen S. Poloz VP EDC Economics Weekly Commentary
Does it matter who owns all the U.S. bonds? - May 5, 2004
India had a great year in 2003. Now that concerns are emerging that China will slow in 2005, India is finally attracting the attention it deserves. The question is, can it last? List all

Robert Gervais as William Roper A Man for All Seasons see his wn page Host to some of W-N pages

MEET THE WESTMOUNT [Conservative] CANDIDATE

As Mayor Tremblay makes what we trust will be a vain and poorly attended [will anybody go?] town hall tour appearance in Westmount, we will gather to meet with Robert Gervais, Conservative candidate in the next election.

Robert is well-known to many as the son of former Westmount Alderman, André, not to mention nephew of Father Marc with whom he shares some theatrical genes.

Speaking of next elections, it seems all too apparent [We might consider the closing down of the enquiry into sponsorship scandals as a leading indicator that all Canadians will head to the polls on June 28. A poor date in our opinion for Quebecois who, in the French tradition, like to "faire le pont" between the June 24th and July 1st holiday - or was that what the FedLibs were counting on?

We are sure you have many questions for Robert, notably on Medicare, and Dr. Mark Roper will be here to take us through some of those hoops. And are we all watching the hand-outs from the Liberals? How many noticed Mme..Lucienne Robillard announced the Spam Task Force Tuesday. It is made up of legal experts, internet service providers and scholars. ... scholars??...Industry Canada will hold a roundtable meeting to review the process in the fall of 2004 and will present its findings to the industry minister in 2005. Woopee! meanwhile we get over 300 spams a day.

The political scene is heating up. What a pity that we cannot store all that hot air and substitute it for the crude oil whose prices hit 13-year highs of more than $40 a barrel and in New York, the benchmark light, sweet crude closed at $40.06 a barrel. The latest reports confirm that the OECD is nervous about the global impact of rising oil prices

Wednesday May 12, 2004 bbc OECD warns of unbalanced growth
Global economic growth will pick up over the next two years as a "strong and sustainable recovery" takes hold, according to the OECD.
It forecasts that total growth amongst its 30 member countries will rise to 3.4% this year and be 3.3% in 2005.

But will the rise continue?

Tidbits from the business world we may consider: Citigroup Agrees to a Settlement Over WorldCom and how can we avoid the racketeering charges brought against our favorite nemesis, Conrad Black?

Finally, we look forward to [revised?] predictions about the ability of the George Bush team to weather the ever-worsening news of prisoner abuse in Iraq.

Please join us and bring your own favorite topics to the table. Watch here for updates. Do see WN on the Conservative party

Diana and David

Wed 1158 12 May, 2004 click for 2400x281 pan 1158 click for 2400x383 pan piano room 1158 Wed 1156 News slide show | Latest Read About W-N NP story on W-N Contact W-N & Map Mbvr>David Mitchell OWN his wn page Robert Gervais his wn page Udo Stundner Jacques Clément O.W.N. more img Jim Kinnear HIS WN PAGE Sally Eliott J.C. Michael Picton Germain Bourgeois Margaret Lefebvre her wn page Dr. Mark Roper Dr. Martin Dawes his wn page Bruce Kippen John Curtin Ingrid Herb May 11, 2004 Credibility at the cost of scandal Stephen S. Poloz wn page. Wednesday Night Salon # 1158 May 12, 2004 INTRODUCTION It was a Wednesday Night filled with a succession of happy surprises and changes of faces and topics. Notably, Stephen Poloz on a cross-Canada speaking tour - and fresh from a triumphal reception in Drummondville - returned after a long absence. Later in the evening, Margaret Lefebvre introduced Jim Kinnear, President, CEO and Director of Pengrowth Corporation and his sister and business colleague, Sally Elliott. Still later, Michael Picton (piano) and J.C. Justinussen (violin) treated the guests to an impromptu concert. THE CONSERVATIVE PARTY IN WESTMOUNT - more alive and well than previously suspected Wednesday Nighters were delighted to meet Robert Gervais, Conservative Party of Canada candidate for Westmount - Ville Marie. Mr. Gervais who has been very successful in both the private and public sector, presented his own views as well of those of his party to the group. His total bilingualism and transparent integrity endeared him to those who did not accept his political views as well as to those who embraced them. Mr. Gervais, while emphasizing the apparent failings of the Liberal government, explained that the belief that a Conservative government would destroy medicare and the social safety net was misguided. Describing the Conservative platform as including continuing debt repayment, tax reduction, increased funding for medicare and for the military, he expressed the view that more money for the military is now available, and that debt repayment could be achieved by cleaning up government and repatriating to the provinces, those responsibilities that they already have under the Constitution. THE SPAM TASK FORCE The incumbent MP for the riding, the Honourable Lucienne Robillard, has announced the formation of a task force to investigate the reduction of SPAM on the Internet. However, as laws already exist to do so and as such laws are already being enforced in other countries, the question arises as to the need for a task force. Mr. Gervais, as the president of an ISP company believes that the solutions are already available through the industry hich simply requires the support of governments and indication that the existing laws will be enforced. If the reason for the task force is the complexity of the problem, i may well be that small consecutive measures would be preferable to one large costly solution which might or might not be effective. In any event, the new task force is regarded as a costly potential boondoggle The gun registry controversy offers ample precedent. Wednesday May 12, 2004 cbc Feds announce task force on spam ...will spend the next year studying the problem ....Lucienne Robillard announced the Spam Task Force Tuesday. It is made up of legal experts, internet service providers and scholars. ...Industry Canada will hold a roundtable meeting to review the process in the fall of 2004 and will present its findings to the industry minister in 2005. Woopee! meanwhile we get over 300 spams a day. Part of the problem is that it is very rare that Ministers of the Crown have sufficient background and knowledge to make informed decisions, but must depend on bureaucrats who may sometimes have their own motivation or agenda, or not be adequately informed and can rarely be held responsible for sub-optimum advice. AN APPRECIATION OF JEAN CHAREST'S QUÉBEC LIBERALS There has been some dissatisfaction expressed in Urban Canada over the performance of the provincial Liberal government. Jean Charest seems to have disappeared from the political scene following his election. He has been criticized for not listening to his two sets of advisors while going to a small côterie of outsiders for advice, as well as for his relative invisibility. In fact, however, he has done what a prudent politician should do, that is to become very visible in traditional Parti Québécois territory, mend fences with his fellow Premiers across Canada, particularly important in the current policy disagreement with the U.S., and to concentrate on the delicate financial situation that he inherited. Traditionally, Québec has arranged to not have simultaneous Liberal governments in Québec and Ottawa. With the upcoming federal election and the anticipation of the overwhelming majority of Québec's federal seats going to the Bloc Québécois, the question inevitably arises as to the future of the sovereignist option in Québec, the future of the Charest government in the next election, the possible reorientation of the Parti Québécois and/or perhaps, a change of government in Ottawa. GAS PRICES One of the great things about Canadians is that when they are dissatisfied with anything, they vocalize rather than act rashly. The current discussion centres around alarmingly increasing gas prices which affect not only the price of plastics and transportation, but the price of everything that moves from farm or factory to the point of sale. Some observers believe that the phenomenal rise in the cost of petroleum products is not so much because of price manipulation by OPEC as it is the failure to make capital investments to offset depletion. The upward trend in petroleum prices is expected to continue for the remainder of the year. INCOME TRUSTS Another strictly Canadian, seemingly unrelated phenomenon is the income trust, providing the investor with an excellent return on investment. He pays full tax once, rather than on a corporate as well as personal level. The one fear is that repeated increasing capital investments must be made to offset depletion in order to maintain the momentum, resulting in investor disillusionment down the line should opportunities for increasing capital investments dry up. THE EXPORT DEVELOPMENT CORPORATION (E.D.C.) Stephen Poloz spoke without any Interruptions ... I don’t know about you, but I find myself gazing out the window a lot these days. It has much to do with the weather, of course, and my desire to play golf. But it is also the time of year when we take a fresh look at our business fundamentals. And when exporters look out the window at the world economy today, what do they see? Nothing but green lights everywhere. The world economy is running pretty fast, above its speed limit, actually, with growth likely to exceed 4% this year. Every region of the world is participating, which makes this the first synchronised global expansion since 1995-96. Asia is leading the way, with China and India competing for first place. Japan is enjoying a renaissance. South America is mostly back on track. Old Europe is regaining momentum, and 10 new, eager economies are joining the euro club and will boost growth. Russia is doing well. Oil producers are making money hand over fist, and spending it. Commodity prices are up, most of them to profitable levels, and that is generating good growth all over the place, including Africa. And, perhaps most important of all, the U.S. economy continues to defy the pessimists among us. Even the major exchange rates have returned to more normal levels, and that has always been an important barometer of world economic health. Interest rates remain at emergency lows, but the emergency is over, so they are heading back up – another sign of improving financial and economic health. What more can an exporter hope for? Can it get any better than this? Well, ok, maybe if you could have all this great news and a 65 cent dollar, too. But apart from that, it really does not get any better than this – the global economy is at high tide. High tide is good. It means strong order books across the board. It means a return to profitability after a period of stress. It means new investments to make, new jobs to create. It means new foreign shores to navigate, too – and it’s always best to sail your boat to unfamiliar shores when the water is nice and deep. But there is another thing about high tide – it can’t last forever. The world economy is running too fast, and it will begin to gear back later this year. All indications are that the global expansion will continue into 2005, but growth will ease to a more sustainable pace, like 3.8%, next year. It will happen, whether by itself or through central bank tightening. China is already tightening monetary policy because the economy is growing at 10%, which is too much – they need something closer to 7 or 8%. It’s a bit like riding a bike, in China – they need 7% growth to absorb new workers and keep the bike upright, but over 8% it’s hard to negotiate the corners. India faces a similar dilemma, with 8% growth likely to ease back to 6-7%. Stephen S. Poloz VP EDC Economics Weekly Commentary High Tide - April 21, 2004 ...Central banks will wait for markets to push bond yields higher, and then ratify those moves with higher short-term rates afterward...in the third quarter of 2004. Past issues Stephen S. Poloz wn page. DTN OWN Jacques Clement O.W.N. slides Evan Savelson Bruce Kippen Herb O.W.N. DTN O.W.N. Infrid Bejerman Diana mouse O.W.N. Alex Weinstein Freer trade has resulted in increasingly healthy economies on all continents, especially in commodity-producing countries. World economy is growing rapidly, with over 3.3% growth this year, to the extent that China and India are currently trying to slow things down. If there appears to be a slowdown this autumn, the United States is expected to increase interest rates, with at least two or perhaps three hikes starting in June. Canada will do nothing until next year and by then, interest rates will be rising globally. Not much radical change in currencies is anticipated. Failing an unanticipated crisis, things should stay very much the way they are now. The world has changed in the realm of international trade. Of the five hundred billion dollar U.S. trade deficit, all but one hundred billion is the result of international trade within U.S. owned companies. The Canadian economy is expected to grow by over 3% this year. JACQUES CLÉMENT’S REPORT ON THE ECONOMY CANADA The first two mounths economic performance has been described as "the worst in forty years," by the Bank of Montreal and "nearly stagnant" by the C.I.B.C. After negative growth in the first two months of the year for reasons outlined last week, March G.D.P. should rebound because of the 6.2 billion dollar trade surplus, the largest in three years. Exports have expanded over 9% in the last two months while imports rose by 7%. It is the first consecutive two-month rise in exports since January, 2003. Employment was very robust in April, creating over fifty thousand new full-time jobs and the unemployment rate falling to 7.3%. It was at 8% in September last year. Year to date, Canada has only created thirty thousand new jobs. The housing market remains buoyant, with residential building permits rising by 4½ % and C.M.H.C. predicting the second best year housing starts in fifteen years. Given the geopolitical situation, the flattening interest rates, yield spread with the U.S., the political uncertainty in Canada of a possible minority government and the sponsorship scandal, the Canadian dollar near-term outlook is 72¢U.S. to 72½¢U.S. It could weaken to 70¢U.S. by the end of June. UNITED STATES Today’s Beige Book The expansion continues very robust with 288,000 new jobs created in April and the unemployment rate at 5.6%. In the first four months this year, the U.S. has created 830,000 jobs and the manufacturing sector experienced a modest rise in the last two months. The rise of 4.6% in imports in March is a sign of strong economic growth, as is the very strong service sector. The record forty-six billion dollar trade deficit, a rise of four billion, should keep economic growth under 5%. Productivity rose solidly by 3.5% (annual rate) in the first quarter and spending on productivity-enhancing new equipment and software remains very buoyant with semi-conductor sales rising by 34% (year/year) in the first quarter. With the G.D.P. deflator having risen by 2½% (annual rate), the personal consumption inflation by over 3% (annual rate), the producer prices by 3.7% (annual rate.), the escalating cost of materials (twenty-five year high), the substantial increase in energy prices with record gasoline prices, the increase in air fares and clothing, the Consumer Price Index for April will be very unfriendly insofar as the Federal Reserve's timing of the first tightening decision expected on June 30. Allan Greenspan's biggest concern also remains the 500 billion dollar budget deficit, representing 4¼% of the G.D.P. The Dow-Jones has lost close to 700 points since February 11 (close to 7%) and with the S-P trading now at 17 P/E (expected earnings), below the January, 2000 level, the stock market recovery might be less than 100 points away, given the very strong fundamentals. Near-Term Outlook: Euro: $1.18 U.S. - $1.19 U.S. Crude oil $41.00 U.S. - $42.00 U.S. Gold: $ 375 U.S. - $395.00 U.S. QUOTES of the EVENING last week "Integrity is doing the right thing when there is no one watching." "Charest was a great communicator in the days of the referendum but he is not communicating today." "(Jean Charest) showed tremendous promise ... got job ... disappeared." Wed 1158 | more DTN Click image for next picture | back up Notes by OWNs Herb Bercovitz • & Edited by Diana Thébaud Nicholson Mouse bio Herb Bercovitz OWN his page 2004 W-N Links for #1158 defusionwestmount.comAn ongoing series of articles written by former Westmount city councillors reflecting their personal views of our community... Voici une série d’articles écrits par d’anciens conseillers municipaux de Westmount, qui exposent leur point de vue sur notre communauté... Technical Investing with Ron Meisels, in DTC' <1-- A HREF="JAVASCRIPT:openPopImg('http://www.Wednesday-Night.com/chart/dtc5yr.png', 'EEE.T ', '770', '488')" style="color:green" class=b1>5yr a NewYorker Cartoon every 30 sec. see w-n Right Menu => Harper's | for 4 may 04 see w-n Right Menu ===> Canadian dollar vs euro | Dow 30 w-n chart | TSX Paul Martin Wed 1156 News slide show | 1136 w-n slide show | Albums Globe chart (FGT Quote & click to see the chart) 2004 Notes for #1158 Saturday 15 May 2004 Vajpayee's BJP has led India for the last five years. Confident of being re-elected, the prime minister had called elections six months early after polling suggested his party would win a minority government. I hope that Paul Martin and his team read this news carefully! Saturday 15 May 2004 Reuters Good earnings, bad market As earnings seasons go, the latest one was pretty decent, so much so it may seem like a perfect time to zero in on the Reuters Select Rising Expectations screen, which is geared toward identifying companies likely to shine under such conditions. Ironically, though, the stock market hasn't been much fun lately, and some may actually miss the bad old days of downward revisions and negative surprises. What's going on? If the decline in P/Es is great enough to overwhelm the increase in EPS, we'll have a bear market. If the increase in EPS is great enough to offset the decline in P/Es, we'll have a bull market. Saturday 15 May 2004 cbc MANUFACTURING SECTOR CHUGS AHEAD IN MARCH: STATSCAN Canadian manufacturing plants hummed in March as shipments rose 3.4 per cent to $47.7 billion, Statistics Canada said Friday. Saturday 15 May 2004 cbc BILLS WILL DIE IF MARTIN CALLS ELECTION More than a dozen parliamentary bills will die if Prime Minister Paul Martin calls an election, which he is expected to do next week. Saturday 15 May 2004 cbc QUEBECOR WORLD CLOSING U.S. PLANT, CUTTING 600 JOBS Commercial printing giant Quebecor World is closing its magazine plant in Effingham, Ill., a move that will put 600 people out of work by the end of the year. Thursday May 13, 2004 cbc Martin`s MD runs for-profit clinics OTTAWA—Federal Liberal plans for an election campaign focused mainly on health care suffered a setback after Prime Minister Paul Martin`s personal physician was dragged into the political fray. Thursday May 13, 2004 cbc PM, Charest sign deal to widen Quebec road SAGUENAY, Que.—Prime Minister Paul Martin and Quebec Premier Jean Charest yesterday engaged in a gesture as old as asphalt and as traditional as maple syrup — reannouncing a new road on the eve of an election. Thursday May 13, 2004 cbc APRIL JOBLESS RATE EASES TO 7.3 PER CENT The Canadian economy added 50,000 jobs in April, pushing the unemployment rate down to 7.3 per cent - its lowest level since September 2001, Statistics Canada said Friday. Dear Diana and David, I miss coming to your lively wednes-night discussions - the last one looked so promising! I have been quite unexpectedly thrown in charge of our new home renovations and it is keeping me busier than I would like - but hopefully all should be over before the end of the month and we can move in, and I can be back! in your circle of brains. Take care, Alexandra Tcheremenska-Greenhill, MD I am in HaNoi and will be back in Mtl in mid-June. I look forward to seeing you shortly afterward. Cheers, Andre Andre Saumier Dear Diana and David, Very sorry not to be able to make it tonight. I am in Herfordshire, on my way to Jersey. I think JC is hoping to come. If he does, ask him about China's influence in the Pacific. He learned some very interesting things on his latest trip (and also had a very peculiar encounter with the Chinese Ambassador to Tonga). [will do next week] Pip pip, Cleo Thursday May 13, 2004 cbc TRADE SURPLUS HITS 3-YEAR HIGH Canada's trade surplus rose to its highest level in three years in March, as exports grew at almost twice the pace of imports, Statistics Canada said on Wednesday. WN Oil notes Thursday May 13, 2004 PARIS: OECD SEES ECONOMIC PICKUP FOR CANADA The Organization for Economic Co-operation and Development has predicted in its semi-annual report on the world economy that the Canadian economy will grow next year by 1.1 per cent to 2.8 per cent and reach growth of 3.3 per cent in the following year. The report says an increase of exports because of a recovery of world trade will be the driving factor, particularly if the economy of the U.S., Canada's biggest trading partner, continues to recover. However, the OECD says the stronger Canadian dollar could brake Canada's economy. Its report also warns that the Bank of Canada may have to raise interest rates to stifle inflation if the economy grows too hot. The OECD predicts that the economy will continue to grow until the middle of next year, at which time it would be unsafe for the central bank not to increase its trend-setting interest rate. Thursday May 13, 2004 gaz Hospital patients bring own nurses A sign staffing levels critical: union. Dismayed by lack of attention in institutions, some families are hiring private caregivers In HK - first time. Selling into China - putting my frequent flyer miules where my mouth was (you'll remember + said China was the big thing). Back in 2 weeks - see you then. Jeremy Jonas Hi David ... I sent that was vapourized from your computer! Won't be able to make Wed. this time around, but am curious, and do intend to come by soon. I heard that Robert Gervais, a friend of a friend of mine, is running against Robillard - wonder if that's your nice PC boy? Cheers Sarah Musgrave Sounds like you have all the good topics nd people on the Mortons' regular Centaur night. Too many good causes all at once. Remember that the Chinese are now increasing energy consumers. What happens if all the world becomes comfortably consumerist, starting with that American wet dream - a billion Chinese! Des Morton send my regrets. Have left Indonesia leaving a trail of paper (marking papers under pressure) and people in hot pursuit as I rushed to airplane with only one hour of packing(after three months) to catch a plane for Brishbane. Will be in Australia for two weeks meeting friends (Ray and Barb Lewis--(Barb my family doctor for many years) in Brisbane from there to the gold coast, Canberra, Sydney and Melbourne back to Jakarta thence to London for four days arriving in Montreal on June 3. Best wishes for a good meeting and thank you for keeping me posted on the state of the Quebec/Canadian nation while I am far away. Carol Speirs Tuesday May 11, 2004 MONTREAL: CANADA GIVES $100 MILLION FOR AIDS Canada's Prime Minister Paul Martin has announced that his country will contribute $100 million to the World Health Organization's program to combat HIV/AIDS. The program aims at treating three million AIDS victims by the end of next year. Canada's contribution is the most generous of any other country so far. Mr. Martin says Canadians should take pride in that contribution because it's literally a question of life and death. Thirty million of the world's 45 million of AIDS victims are Africans. Mr. Martin's announcement comes just days before the Canadian Parliament is expected to approve legislation legalizing the export of cheaper generic pharmaceutical drugs to developing countries, Canada becoming the first country to do so under an international accord within the framework of the World Trade Organization. On a related matter, Mr. Martin says his government is going ahead with the creation of a "Canada Corps" designed to bring expertise in governance and the reinforcement of institutions to developing nations. Its co-chairs will be astronaut Julie Payette and Gordon Smith, a former deputy minister of foreign affairs. Monday May 10, 2004 ts HARPER OPEN TO PRIVATE DELIVERY OF HEALTH CARE Conservative Leader Stephen Harper said on Monday he was committed to universal health care, but did not reject private enterprise from playing a role in the delivery of services. Thank you for all the interesting news. My very best wishes and congratulations to Julius. Sorry I will not be able to be with you (still in Belgium!). JJJ Diana - I loved the line below and got a good chuckle out of it. You do write well! On a personal note you may be interested to hear that in an election of the McGill professors I was elected by 1% point over the incumbent to serve for 3 years on the Pension Administration Committee of the McGill Pension Plan. So I will be joining Tony (and 7 others) in managing a billion dollars worth of funds. Any advice? Gerald. Ratzer the Computer Box Bookmarklet: Display Images       Hide All Images Underlines Off/On | Highlight Links Duplicate Page | Previous Page in New Window opens the referring page rather than the previous page Resize Window to 800 x 600 | Full Screen More Info About... Calculator... | anything Read Cookie for Site Preview this week's slide show w-n 1157 | past from 1107 w-n slides Please click here to see new/updated pages since last visit January We Got Him!Eliot A. Cohen, who kindly contributed this article, is professor of strategic studies at the Paul H Nitze School of Advanced International Studies, Johns Hopkins University. Stephen S. Poloz VP EDC Economics Weekly Commentary Does it matter who owns all the U.S. bonds? - May 5, 2004 India had a great year in 2003. Now that concerns are emerging that China will slow in 2005, India is finally attracting the attention it deserves. The question is, can it last? see his wn page. Past issues David and Diana: One of these days, I'm actually going to make it down to Montreal on a Wednesday night to see everyone again. Thanks for keeping me in the loop, and best wishes to all. Steve Poloz Jacques Clément Wed 1157 May 5th, 2004 Peter Trent O.W.N. ...Stephen Jarislowsky encourage ..shareholders withhold vote for the Board of Magna , re massively, the remuneration of Frank Stronach, Dr. Kimon Valaskakis Founder of the Club of Athens Ken Fernandez intro his brother Kilton, Alan Mass; Jan Davis, Bea Bazar OC, ..Alexandra Tcheremenska-Greenhill MD & then Jacques Clement own; on the numbers | Album Notes by Herb Bercovitz Art | slides Peter Perkins Wed 1156 Apr 28th, 2004 Nicolas Lucas THE WORLD BANK, IMF lend Argentina money one-third of IMF assets; one third to Ingrid Bejerman from Brazil; Peter Perkins, James Greenhill, Jan Davis, Bea Bazar OC, Bruce Kippen, ..Alexandra Tcheremenska-Greenhill MD & Dr. David Mitchell own then Jacques Clement own; on the numbers click for 2400x236 pan 1156 Wed1157 Wed1159