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Wednesday Night Salon
#1303 21 Feb 2007 Page 2
Introduction
Video 1303 Diana intro to OWN
The bumper crop of OWNs of 2007
There was a festive air about Wednesday Night 1303 with the presence of a number of members of the Order of Wednesday Night to witness the induction of six of the eight new members into the Order, namely, Louise Des Trois Maisons, Catherine Gillbert, Nobby Gilmore, Brian Morel, Desmond Morton and Roslyn Takeishi. André Pasternac and Kimon Valaskakis were out of the country and will be inducted at a future date.
On behalf of the recipients, Brian Morel recalled: "My friend, Harry Mayerovitch designed the Wednesday Night symbol. Harry was a wonderful humanist. If you look at the Wednesday Night symbol, it has two little bits to it, the W and the flame. The W is for Harry's words – and all our words that we speak, and the flame is for the passion that we bring to what we speak about".
Video 2 min
The market
Amid some concerns over the current prolonged bull market, the Toronto Stock Exchange target for this year remains at 14,000 partially accounted for by companies' record buy-backs of their stock; a second important factor is that private equity funds have $750 billion to invest between now and September.
[Editor's note: In a statement on February 23, the investment bank, Crosbie & Co., underlined that 2006 was a record year for mergers and acquisitions in Canada with the value of transactions rising to C$257 billion, and it may be expected that private equity firms, pension funds and other private investors may continue to drive mergers and acquisitions in Canada this year ]
The market has been doing very well so far in New York, but unlike the T.S.X., appears to be heading for a possible correction. In Canada, it is anticipated that the market will continue to do well until June, after which we might see a sustained down leg during which the wise investor will take advantage of the resulting bargains.
Despite the interdependence between Canada an the U.S., it is possible for the Canadian market to prosper while the American market declines, thanks to being at the height of the forty-year cycle of demand for resource stocks and Canada’s wealth of energy and minerals, especially gold, but investors remain overloaded with liquidity. However, the world economy has evolved in recent years and the amount of liquidity looking for a place to invest and continuing low interest rates should result in a continuing upward trend in the stock markets.
Gold is once again increasing in price (up $23 today) if not in value, as the world’s liquidity continues to look for a home. [Editor's note: Supporting this view, The Daily Reckoning Newsletter of February 23 carries this item: "All this excess liquidity has to go somewhere. … Anywhere it goes, it is bound to raise the price of gold - because gold has more durable value. Historically, it is the thing to which investors turn when they smell something fishy in all that liquidity. The bull market in gold probably has a lot further to run."]
For one follower of military budgets, it is obvious that the United States cannot afford the arms required to maintain the strength of the military in Iraq and elsewhere.
Emerging markets are the engine of the world., and not only according to our favorite Wednesday Night fan. No less an authority than Forbes suggests "Emerging market economies are outpacing developed countries in the global economic recovery and may continue to do so for some time. Investors need to think globally" forbes.com/emergingmarkets
The Chinese government has been unsuccessful in its attempt to reduce the rate of growth from 10%; India is growing by 8%; the overall average growth in emerging markets is 6.5%. These countries have young populations who have adopted the American Dream and many of these countries are concentrating on improving the education of their populations. Governments around the world, but especially China whose central bank now has foreign currency reserves of more than $1 trillion - most of it in U.S. dollars - and Taiwan billions, invested in U.S. Treasuries.
The Canadian HIV Vaccine Initiative
In a combined effort, Canada will commit $111 million and the Bill and Melinda Gates Foundation $28 million to developing a vaccine against HIV/AIDS. The HIV vaccine funding is expected to go toward research, testing, trials, manufacturing and distribution and a new facility to manufacture and test vaccines will be set up in Canada.
Although the initiative is most welcome and the objective laudable, the plan as presented appears to be, as yet, poorly defined, causing some concern. It was hoped that the successful development of a vaccine might lead to a “safe, effective, affordable and globally accessible” preventative measure. However, in a number of countries where a successful vaccine has the potential for being most valuable, current and past efforts have met with mixed results due to the practices, myths, religious and cultural beliefs of large pockets of the population.
CIDA
The best intentions of the Canadian International Development Agency (CIDA) have proven costly, frequently failing to produce the anticipated results. The report from the Standing Senate Committee on Foreign Affairs and International Trade points out that, although since 1968, the agency has spent $12.4-billion on aid to sub-Saharan Africa, the standard of living in the region has declined over that period. This fact, coupled with other management problems within CIDA (11 ministers since 1989), has led to the recommendation that Canada must " be more choosy" about where [and how] we spend our aid dollars.
Information Technology
The rate of technology continues to accelerate from the use of human fingers to calculate to the abacus to the punch-card loom to punch-card computers, machine language, to the incredible digital technology universally available today. Our youth is excited about the frequent advances in technology that provide them with rapidly increasing access to information on a day-long basis, but the concerns of many of those old enough to have witnessed the rapid explosion of access to information, remain the "artificiality of communication" and the isolation that appears to result. Highly complex and very necessary human contact appears to be rapidly being replaced by human-Blackberry or human-MP3 contact with results that have yet to be determined. Today, many individuals are introverted and isolated, spending their waking hours on the Internet, however, with wireless technology that enables one to move out of the confinement of the "work station" while still having access to the Internet, it is to be expected that people will return to more social contact and interaction.
Others point to the elitism of the new technologies – the creation of even more divide between the Third World and the developed world; however this is being diminished by the availability of broadband technology in remote parts of the world such as Amazonia.
Another aspect of the Internet and concurrent explosion of information technologies that bears more scrutiny on a future Wednesday Night is raised by The Independent in its piece, The Big Question: Does the Internet liberate or undermine democracy?
Neuroethics
With the explosion of information technology, there has appeared the transhumanist movement, which advocates the ethical use of technology to expand human capacities. In turn, this in turn has spurred the rapid development Neuroethics which "covers ethical problems raised by advances in functional neuroimaging, brain implants, brain-machine interfaces and psychopharmacology as well as by our growing understanding of the neural bases of behaviour, personality, consciousness and states of spiritual transcendence", or as Wednesday Night's OWN ethicist states more simply: the extent to which technology should be used to program the human brain..
The potential for ethical debate on the potential programming of the human brain is enormous. If, for instance, as may be possible, it is determined that there is a genetic basis for criminality, should an attempt be made to reprogram the brain of criminals?
We are off to the polls
The Québec election has been called and the media feeding frenzy has started. Even the Economist has weighed in with early analysis
The Liberals are looking forward to leading a second majority government despite the apparent surge in popularity of Mario Dumont, and the nature of Québec demographics and riding distribution. In order to win Québec, the Liberals need 7% more of the vote than other parties – a huge handicap - because of the uneven distribution of seats favouring the largely Francophone rural ridings ("The tyranny of the rurality"), with a relatively high percentage of the population supporting the P.Q. while Liberal support is concentrated in the largely Anglophone, heavily populated but statistically underrepresented, urban ridings. Québec elections have historically been decided in the rural regions and the Premier appears to have understood this and played his hand very well.
Forecasts around the table range from a small Liberal majority to a minority government as a result of vote splitting by Françoise David and Mario Dumont. The final outcome, however, will likely depend on the degree to which the anticipated disappointment in the leader of the Parti Québécois translates into support for the Liberals rather than for the Action Démocratique, the effect of the Harper government’s support for Jean Charest, as well as the percentage of Quebeckers – and whether from urban or regional areas - who actually vote, as opposed to those who express intentions to pollsters.
What will happen to the price of oil?
Real estate
Canadian dollar is expected to decline against its U.S. counterpart.
The economy
See also JACQUES CLEMENT: Pages ON THE ECONOMY
Videos 1301 Jacques Clément & Ron Meisles Reoprt 3 min Feb 7
1303 Jacques Clement 1303
for Wed1303
Jacques Clément's forecast Wed1301
February 21, 2007
CANADA
The economy is picking up and economic growth is likely to be 1½% to 2% in the fourth quarter last year and 2% to 2½% in the first quarter this year, given very strong employment since October (210,000 new jobs) buoyant consumer spending (retail and wholesale sales rising about 2½% in December), strength in the housing market in January (housing starts rising by 17% above 249,000 annual rate, a two and a half year high and existing home sales rising by 11%), a very strong manufacturing sector in the fourth quarter (shipments increasing by close to 4½ %), new orders by almost 6%, unfilled orders by over 3% and inventories declining. New vehicle sales were up over 8.6% in November-December (although January is expected to decline by 4%). Business investments, particularly oil and gas, remain at a high level as do corporate profits. Commodities are rising with crude oil reaching $60.00 U.S. (up almost $10.00 in the last month) and gold closing at $684.00 (up $77.00 since January 5). The Canadian dollar closed at 86.19 cents U.S. and has recovered from its nineteen month low of 84.35 cents U.S. on February 2, behind the rise in commodities, the strengthening economy and strong merger and acquisition activities. Corporate balance sheets are healthy and the record stock market has benefited from record liquidity and equity buybacks. The T.S.X. has gained over 420 points so far this year and the index could reach 14,000 before year end for an additional gain of 670 points. With inflation at 1.2% and core at 2.1%, Bank of Canada will remain on the sidelines in the months ahead. Going into the March 19 budget, the fiscal surplus is probably between eight and ten billion dollars before three billion dollar debt repayment.
U.S.
With inflation at 2.3% and core at 2.6%, it remains the predominant concern of the Fed with the Chairman saying that it “may ease with softer commodity and energy prices but it is still elevated and remains a risk.” He is “expecting modest economic growth that may grow faster than expected. Housing has stabilized but risks remain. They intend to keep interest rates steady.” With the December, the trade deficit rising 5.3% to over $61 billion, the 3.5% fourth quarter G.D.P. growth is likely to be revised down slightly. The Fed is expecting real G.D.P. of 2½ %-3% for 2007 following 2 ¾% in the second half of 2006. Retail sales were flat in January after a rise of 1.2% in December. Auto sales and production continued weak as did some of the manufacturing sector, with decline in January’s industrial production and capacity utilization (following a rise of 3.6% in factory orders for November-December and December durable goods orders rising 4.7% for the two months). On housing, existing home sales weakened by close to 1% but new home sales surged by over 12% in December. There are still 2.1 million vacant homes for sale. Mortgage delinquencies are rising. On the positive side, employment has been buoyant with close to one million new jobs created in the last six months. Productivity in the fourth quarter rose 3% annual rate and unit labour costs rose 1½% annual rate versus 3.2% in the third quarter. Personal income rose by nearly 1% in the last two months of 2006 and consumption by over 1%. January consumer confidence surveys showed a two year high in Michigan and six year high on the Conference board. The service sector was very strong for the forty-sixth consecutive month. Inflation in January was at 2.3%, core at 2.6% and the Fed would not wait until it reached 3% to tighten further but the odds are at 40% probability. The Dow-Jones reached a record of almost 12,800 yesterday and is heading to over 13,000 in the near term with record M&A activity, $750 billion of unspent private equity, record equity buyback and $50 to $60 billion of private funds, real estate investments over the next seven months. The U.S. dollar has weakened from $1.29 (January 11) to $1.3150 against the Euro and heading to $1.32 U.S.
Near Term Trading Outlook Feb 21 2007
Videos 1301 Jacques Clément & Ron Meisles Reoprt 3 min Feb 7
Near Term Trading Outlook:
Jan 22 video Charlie Rose - Robert Rubin some surprising comments
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Monday 19 February 2007 Economic growth in EU may outstrip U.S.
European Union will grow faster than previously expected this year and may outpace U.S. growth, EU officials forecast
Sunshine and light, mostly Saturday 17 February 2007
Notes by Herb Bercovitz OWN
Editor: Diana Thébaud Nicholson OWN
Radio, the long-lasting treasure
intro Wed1303 | Wed1303 slide show
Oil
Note
Wednesday-Night creates charts and follows stocks, including timely related financial news items, in which Wednesday Nighters are interested and in order to demonstrate a service that could eventually be developed and marketed. Wednesday Nighters are invited to participate and help to test the service.
see Wednesday-Night.com Flip charts
QUOTES of the EVENING from recent
Wednesday Nights
2007
Past Quotes Best or All
W-N Links for #1303
2007 Notes for #1303
Videos 1303 Diana introp OWN 1303
1303 Jacques Clement 1303
Friday 23 February 2007 By MarketWatch According to a recent survey published by the National Multi Housing Council, only 58% of apartment homes have a wired landline phone and 60% of renters consider their cell phone their primary phone.
"The widespread use of cell phones poses new challenges for apartment owners whose structures block cell reception or are in a particular service provider's dead spot," said David Cardwell, NMHC's vice president of capital markets and technology, in a news release announcing the report's findings. "For renters whose primary phone is a cell phone, the ability to get a cell signal may be a compelling factor in the decision to renew, or even to recommend friends to live at the same property."
The study also reported 78% of those surveyed have computers in their apartments and 85% subscribe to a high-speed Internet service.
MPS GONE WILD
by Jordan Himelfarb February 22, 2007
Like a helpless schoolteacher in front of an unruly classroom, Speaker of the House Peter Milliken failed yesterday to get control of a parliament gone mad. “We’re wasting a lot of time here,” he said in a futile attempt to calm cacophonous Liberal MPs shouting “Shame, shame!” at the prime minister. The outburst, borne of moral outrage and perhaps pyrotechnic political tactics, appears to have been a prepared reaction to a correctly-anticipated political low blow struck by Prime Minister Stephen Harper against Liberal MP Navdeep Bains. In a highly tangential (bordering on free-associative) response to Liberal questions regarding his planned changes to judicial selection committees, Harper stated that he wasn’t surprised by the Liberal position, given “how the Liberal party makes decisions,” and then began to read: “The Vancouver Sun has learned that the father-in-law of the member of Parliament for Mississauga-Brampton South…” And that is as far as he got before being bombarded with Liberal boos.
QUEBEC ELECTIONS CALLED, MUD-SLINGING UNDERWAY
Yesterday, Quebec Premier Jean Charest called a March 26 election. Charest
kicked off his campaign by criticizing Parti Quebecois leader André
Boisclair’s "lack of maturity and judgment." In the Post, L. Ian
MacDonald notes that on top of failing to answer questions on his
previous cocaine use, Boisclair has laid himself open to such criticisms
through his “role in the Brokeback Mountain video spoof of
Stephen Harper and George W. Bush” and other misguided adventures.
Meanwhile, the
Post points out that Boisclair has been going round calling Charest
“a liar,” citing the Liberals’ promise to invest $10 in
education for every extra dollar charged in tuition fees as the first and
biggest whopper. Be warned, mud-slinging will be de rigueur over
the next thirty-two days. The
Globe predicts a campaign that will be “vicious” and
“marked by personal attacks.” The
Star writes that “name-calling [. . . ] could be common over the
next month,” and the
Post concludes “it is a safe bet the campaign is only going to
get nastier."
Recent polls show the Liberals just in the lead over the PQ, but a
majority, according to the Post, is not in the bag. At dissolution, the
distribution was seventy-two seats held by the Liberals, forty-five by the
PQ and five by Action Démocratique du Quebec. There were also two vacant
seats and one held by an independent MNA. In the Star, Chantal
Hébert suggests that the final outcome will be less of a reflection of
Quebec sentiment toward sovereignty, and more of a reaction to
Harper’s federal budget to be revealed on March 19, a week before
the vote. “Charest's Liberals stand to live or die by the
conservative budget and its promised solution to the so-called fiscal
imbalance,” she writes. The Post describes Charest’s track
record as “mixed,” although he began yesterday’s
announcement by highlighting achievements such as reduced unemployment,
increased health and education spending and the implementation of a
Hydro-Electric mega project in Quebec’s North. However, in the
Citizen, Brigitte
Pellerin writes “Mr. Charest's popularity levels have been stuck
in the sub-basement for a solid three years and he has conspicuously
failed to deliver on his main promises.” ADQ leader, Mario Dumont,
although he only won four seats in the 2003 campaign, is doing relatively
better in polls this time round. His party’s platform is based on
the “the need for immigrants to embrace Quebec values,” writes
the Post. The
National predicts that “they could take seats from both the
Liberals and the PQ in rural areas, and will challenge both parties in the
greater Quebec City and Beauce regions.” L. Ian Macdonald, in his
analysis, suggests that “Dumont could actually end up in second
place.” The National notes that former US vice-president Al Gore,
speaking at a Montreal environmental conference yesterday, urged voters to
make green issues a priority at the polls and to beware of empty promises,
although he did not throw his weight behind any specific party.
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
Just another flash in Japan? - February 21, 2007
Recent economic news from Japan has been good, so much so that it has people talking about a renaissance and a return to strong growth. The Bank of Japan is even raising interest rates.
Japan?s GDP growth for the fourth quarter of 2006 came in at a startling 4.8%. Investment and exports were very strong. Even more surprising was that real (inflation-adjusted) consumer spending, was up by more than 4% at an annualized rate, and some are pointing to this as early evidence of a consumer renaissance. Unfortunately, it came on the heels of a big drop in consumer spending in the third quarter. For the entire year, real consumption spending rose by only 0.7%, a big deceleration from 2.7% in 2005. Retail sales are essentially flat in the past year, and the Bank of Japan is only cautiously optimistic about the consumer outlook. Past issues | his WN page
Commentary podcast. 
Wednesday-Night.com on Privacy
Canadian dollar vs euro | Dow 30 w-n chart | TSX
Paul Martin | Stevie Harper
see also Wednesday-Night.com MedicalNotes
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BBC
Federalism can sometimes work—even in Canada 
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