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#1309 4 Apr 2007 Page 2
Introduction
Lib Convention
On the eve of Friday's publication of the second report of the Intergovernmental Panel on Climate Change, Cleo Paskal's presence served as a beacon for the evening's discussion.
Global Warming by Cleo Paskal soon come first mention here at Wed1294 20 Dec 2006
Climate/Environmental Change
The popularization of the climate change issue thanks to the persistence of Al Gore in publicizing "An Inconvenient Truth" – a reasoned, albeit alarming, science-based assessment of the effects of climate change on the world – has led even the board rooms of this and other nations to bandy about terms such as sustainable development without, in many cases, much understanding of the term, its implications or its relationship to other environment and development issues such as climate change, the loss of biodiversity, the UN Millennium Development Goals, the pressures of population increase, or the implications of bad hydrological planning. Sustainable development is not a new concept. Its roots are in the Club of Rome (1972) Limits to growth and the report of the Brundtland Commission Our Common Future published in 1987. The Brundtland Report defined sustainability as "a development, which fulfills the present needs without risking that future generations cannot fulfill their own needs" – a neat definition, but a difficult one to apply strictly to any and all corporate projects.
With the possible exception of very young children, almost everyone has heard the story of the three blind men and the elephant. The message was clear at the time, largely because we did not introduce such elements as the political correctness of using the term blind as opposed to sightless, or whether there was a possibility of political financial gain in inviting the sightless to touch various parts of the elephant’s anatomy, or even the hidden cost of the inevitable pollution caused by the by-products of the high volume elephant alimentation. A highly unlikely scenario you say? Not at all! Take, for example, the current discourse on climate change.
Almost nobody, it seems, denies its existence, but there appears to be considerable disagreement on the definition of the problem or proposed corrective measures, partly because of the NIMBY syndrome, but mostly through blindness, short-sightedness, or ignorance of the sometimes ultimate undesirable side-effects of desirable solutions. What is being debated is the cause(s) of climate change, which must be determined if proposed solutions are to be effective. Corporations are beginning to show signs of heeding the warnings, but it would appear this is sometimes less out of conviction regarding scientific arguments, and more out of a recognition that regulation is coming and this is a risk that needs managing.
It is now accepted wisdom that climate change has the potential to wipe off the map a number of low-lying and island states, and destabilize others. Vast populations will be forced to move as waters rise, or dry up. Arable land and sources of food supply will disappear. As species become extinct, valuable ecosystems will be fragmented, leading to further deprivations. Recognizing these factors, at the request of the UK, the UN Security Council will debate climate change as a security issue on April 17. U.N. to discuss climate as security issue
Experts caution, however, that climate change is only one aspect of environmental change and by limiting debate to climate change, world bodies limit solutions to control of emissions, etc., rather than looking at the total picture of development policies and practices. They point to other key elements such as the regulatory and engineering problems that caused the devastating effect of hurricane Katrina, along with the destruction of mangroves that strengthen the shoreline in favour of shrimp farming that contributes to the economy.
People are currently living in areas that will almost certainly be destroyed due to developing environmental conditions. For example, people are still building in the flood plains of Bangladesh, the ultimate result of which is inevitable. The global supply of arable land decreases as the population continues to grow. Such popular solutions to petroleum-based emissions as alcohol-based fuel from cereal crops do not take into account the population growth and possible creation of food shortages resulting in using arable land to grow edible crops as fuel. It is also true that a considerable amount of petroleum products are consumed in the production of ethanol from that source.
Water
The supply of potable water is declining. While climate change plays a part in affecting global water supplies, it is the pressure of increasing population growth that is at the root of the problem. Growing urban water supply and sanitation needs, particularly in lower- and middle-income countries, face increasing competition with other sectors. Rising incomes in other portions of the world population fuel demand for manufactured goods and environmental services and amenities, all of which require water.
[see: 2nd UN World Water Development Report]
According to the IPCC report, by 2020, up to 250 million people living in sub-Saharan Africa are likely to face water shortages. Parts of Asia would be endangered by the melting of glaciers in mountainous regions such as the Himalayas. Similar melting of European glaciers would endanger southern Europe.
"In Southern Europe, climate change is very likely to have negative impacts by increasing risk to health due to more frequent heat waves, reducing water availability and hydropower, endangering crop production, and increasing the frequency of wildfires," the report says.
Seawater can be desalinated, but requires energy. Rainwater is used to recharge ground water in India, but reclaiming water from melting snow is not currently being done.
Pollution
There appears to be confusion between pollution and climate change. Although both problems are real and require attention, pollution in the air actually has a cooling effect on the climate.
Particulate matter pollution (worst in 1960’s and 1970’s) actually protects against energy coming in.
Trains versus planes
On Tuesday, the TGV broke the world's rail speed record when it hit 357 (575kph) miles an hour in a test on part of the Eastern Europe TGV line. One guest, recently returned from Shanghai, marvels over the 8-minute MagLev train from the airport to downtown (at a cost of C$7), while deploring the pervasive smog that hangs over the city. North America is well behind Europe and Asia in conservation measures, where, for example, high-speed trains are often an economical, energy-saving alternative to air travel. While, in most parts of North America, the relatively sparse population density would not make this practical, it appears that California is looking at the possibility between Sacramento and San Diego.
If life is to survive on the planet, economics must give way to conservation.
Important links for climate change issues:
On the Corporate World and Environmental Change:
… more talk around boardrooms about sustainability but they’re not doing anything about it and don’t understand it, but they’re worried about it.
Corporations are beginning to take note of the problem but they are not certain about what the problem is
The economy - see also Jacques Clément's Report
The Toronto Stock Exchange is at an all time high with metals at a five-year high, nickel at an all-time record and gold rising to $750. Crude oil has increased by fifteen dollars since January, but commodities are currently at or near their peak, fuelled by the growth rates of India and China; this is a commodity-driven market which has benefited the Canadian stock exchange
With corporations loaded with cash, mergers, acquisitions and leveraged buyouts are at a record level, over a trillion dollars. According to one analyst, with low inflation, the Canadian market will reach over 14,000, fuelled by gold and metals, before dropping to eleven or twelve thousand around mid to late July, which level will constitute a buying opportunity. The thing to watch for is the New York stock market with the dreaded double top.
Despite the great strength of the economy in the west of Canada, at least one expert predicts that growth will be closer to 2% maximum, but the U.S. is cause for great concern. Inflation, now at 2.7%, is the major problem, not economic growth.
Generally speaking as the prices of houses rise, there is an incentive to build new ones; as the prices fall, accompanied by mortgage foreclosing, the incentive diminishes
When the regulators permit no-money-down mortgages—what exactly do they have in mind?
Short Notes:
- Defence lawyer grills Hollinger's ex-comptroller
- A
defence lawyer sought to show there was no effort to hide millions of
dollars in payments to former media mogul Conrad Black and other
executives.more »
Wednesday Night consensus sees Conrad Black receiving no more than a slap on the wrist in court on either the original judgment or on appeal.
Lucienne Robillard has announced that she will not run again in Westmount-Ville Marie, with a federal election expected to be announced in the next three weeks. As a local convention is impossible to muster within this short period of time, Stéphane Dion will very likely be forced to name a candidate, an action that resulted in unwarranted resentment against Madame Robillard when she was so named by the then Liberal Leader.
NYT: Front Page for Wednessday 4 Apr |
3 Apr Tue |
2 Apr Mon |
31 Mar Sat |
30 Mar Fri |
29 Mar Thur
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: History Pages ON THE ECONOMY
Jacques Clément's forecast Wed1309
April 4, 2007 for Wed1309
U.S.
Ben Bernanke, the Fed Chairman expects the economy to continue expanding at a moderate pace over the coming quarter but continues to worry about inflation. They have not shifted away from their tightening bias but remain flexible should the economy weaken further. He does not foresee a recession and feels that the effects of the sub-prime mortgage market crisis are likely to be contained. The near term prospect for the housing market remains uncertain. William Poole, Governor of the St. Louis Fed, talked about a possible recession and said, “Further interest rate hikes aren’t out of the question.” Leading economic indicators indicated two successive monthly declines and it would be the first time in thirty-five years that it was not followed by a recession! The manufacturing sector remains weak, with durable goods orders in a near 7% decline in the first two months of the year (down almost 4%, excluding transport) with business slashing capital spending at a pace of over 18%.
Auto sales and production are slumping, construction spending is flat. Consumer confidence dropped sharply in March for its first decline in five months. Despite existing home sales rebounding nearly 7% in January-February, new home sales are down over 20% for the same period, sending home sales down nearly 3½ % and housing starts are down nearly 5.5%. Prices have declined for the sixth consecutive month. The Builders’ sentiment was tumbling in early March.
The sub-prime mortgage market is in a deepening crisis. Delinquencies are near a four year high. The value of mortgage loans being reset is $2 trillion, with payments to jump to an annual thirty-five to forty billion dollars through late next year. Sub-prime loans account for 22% of new mortgages and interest only mortgages for 20%. Credit to sub-prime lenders has dried up and thirty have closed up. Lenders are increasing their loan loss reserves to cover potential defaults, causing credit standards to tighten up on other mortgage loans. There are $1.3 trillion in sub-prime loans outstanding of which 15% are in default.
The final fourth quarter G.D.P. was revised up to 2½ % and 3.3% for the year but 2% - 2½ % is now expected for 2007. Retail sales were flat (January –February) and productivity rising at only 1.5%. Corporate earnings in the fourth quarter rose almost 9%, ending eighteen consecutive quarters of double digit growth, with a decline of 10% in consumer discretionary business (auto manufacturers and home builders). Employment remained strong with 1.3 million new jobs created since July last year, including nearly 250,000 in the first two months this year. Personal income and consumption continue to rise strongly at a 1.0%, to 1.5% pace. Inflation is rising with core C.P.I. at 2.7% (year), core personal consumption expenditures deflate at 2.4% (year), average hourly earnings at 4.1% (year) and labour costs at 6.6% annual rate in the fourth quarter.
The Fed’s next meeting is May 9 and they are likely to stay neutral unless the economy moves into hard landing or into stagflation. The Dow-Jones has recovered over 300 points since its correction of February 27 and is 250 points away from its record high of February 20. Record mergers and acquisitions have been a predominant factor in the market’s rise.
CANADA
Economic growth rose only marginally January (2% last twelve months), with strong housing construction, employment, trade surplus with rising exports, rising income, high level of liquidity and rising inventories, but declining retail and wholesale sales, manufacturing shipment sluggishness (-2%) and productivity, affected growth. Raw material prices rebounded by 2½% in February and industrial product prices by 1%.
The existing housing market remained very strong in the first quarter, particularly in Alberta (+30%).
Canada has created over 150,000 new jobs in the last three months and the unemployment rate of 6.1% is at a thirty year low. Core inflation at 2.4% (year) is at a four year high because of higher gasoline and housing costs, hourly earnings at 2.8% (year) and unit labour costs, 2.6% (year).
The T.S.X. has recouped over 400 points since its sharp drop of February 27 and closed at a new record high today of 13,448, propelled by the strong rise in commodities. Crude oil prices have risen $15.00 since its low of January, natural gas is near $7.50, nickel has soared to a new record high and copper near a five month high.
The Canadian dollar has also benefited with a gain of over two cents since February 2. save the internet.com/ in the US videos | Net Neutrality Now
Near Term Trading Outlook: 1307
- Canadian Dollar:86¢ U.S. – 87¢ U.S.
- Euro: : $1.32 U.S. - $1.34 U.S.
Crude Oil : $64.00 - $66.00
- Dow-Jones: D.J.: 12,400 – 12,800
- The T.S.X : 13,250 – 13,500
- Gold:: $660.00 U.S. - $685.00 U.S.
- We are forecasting increase in house prices wich have not peaked in Canada
Notes by Herb Bercovitz OWN
Editor: Diana Thébaud Nicholson OWN
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China’s Trillion Dollar Nest Egg - April 4, 2007
China has now accumulated more than $1 trillion in foreign exchange reserves. Crossing this symbolic threshold has led many to underscore the destabilization potential of the situation.
First, how did this come about? China’s trade has expanded enormously. Imports have risen from $160 billion in 1999 to about $800 billion in 2006, exports from $200 billion to $950 billion. China’s current account surplus rose dramatically during 2005, as the government deliberately tried to slow domestic investment spending. China’s surplus for 2006 is estimated at over $200 billion – a big number, but far lower than the corresponding deficit in the U.S., at $857 billion. Past issues | his WN page
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