Wednesday Night #910
August 11, 1999
THE INVITATION
Every now and then, that perfectly oiled machine known as the Wednesday
Night Salon requires maintenance... we apologize for the lack of a write-up
of last week's excellent session, it has been delayed, but is being
tuned-up as we write.
The usual meticulous planning of the evening's agenda didn't happen this
week, however we are pleased that Guy Stanley will be with us and there
will be talk of the many events that transpired over the past week.
It is a Potluck evening - bring your topics, your prejudices, your projects
for all to enjoy.
910
THE SALON
Marie Mandeville & Gerald Ratzer |
The invitation to the August 11, 1999 gathering at the Nicholsons', read, "It is a potluck evening - bring your topics, your prejudices, your projects for all to enjoy." Enjoyable it
was, but in the absence of David's meticulous audio-visual material prepared as background, it was more an evening of impressions than conclusions supported by news reports or statistics
Robert Ackermann introduced his guest, Pauline Pi who has recently arrived in Montreal from Beijing where she worked with one of Nortel's partners. She is now studying French and working as a paralegal.
ALCAN and ALCOA
The just-announced proposed merger of ALCAN with Pechiney and Alusuisse gets favorable reviews. This will be the biggest aluminum producer in the world with a value of close to $19 billion (USD) and the new company would have its headquarters in Montreal.
A former ALCAN executive commented on the excellent fit from the point of corporate culture as well as product lines.The Alusuisse Lonza Group is stronger in chemicals and packaging with a spirit close to that of ALCAN. Although the European Community and the shareholders must approve the merger before the deal goes through, aluminum stocks are in a good buy position. Especially with the counter-punch of the ALCOA announcement that it proposes to acquire Reynolds.
THE ECONOMY
The market "is finally catching up with metals prospects" as the news of the proposed mergers has sparked a new interest in all metal stocks although there is little upward pressure on gold, especially with the announced intention of the IMF to shed 40% of its gold, not to mention the Bank of England's dumping of 30 tonnes.
Chil Heward predicts that corporate profits will be very strong. Interest rates could rise to 6 and 3/4 within the next six months. As interest rates rise, growth stocks could turn down and interest/economy sensitive stocks rise. He looks for many more mergers in different industries as profits get tighter in the near term. He also believes that platinum group, precious metals and gold are going up (Notley System).
He predicts one-for-one in the dollar/yen exchange rate.
Is Russia a buy? Is there a régime?
What about the stability of the PRC, is there a prospect of devaluation with the consequent impact on Japan?
The stumbling block for China is WTO membership. The Americans do not feel that China is able to meet WTO commitments - e.g. recognition of intellectual property rights -, but there is absolutely no incentive to conform if it is not a member.
Will China devalue? Nobody really knows.
THE PREMIERS' CONFERENCE
The Premiers have called for federal tax cuts, but not at the cost of healthcare. Don't expect a corresponding downsizing of government - at any level.
We were reminded of the birth of Medicare, the principles laid down as a result of a previously established set of values. The country's leaders appear to have forgotten the process and following Mike Harris' lead are attempting to move in two directions simultaneously, with predictable non-success.
The current situation is leading to a slow erosion of social values rather than economic values. What is needed is a "Patch Adams" approach to healthcare, one of treating human beings rather than an illness.
Global Governance. There is quasi anarchy in the global market place; frenzied competition leads to merger mania. Unemployment rises and the working young receive slave wages.
How to solve the increasing disparity between rich and poor? How to rejig the Canadian tax system to eliminate disparities and disincentives?
The Atlantic Monthly (June 99 edition) carries an excellent piece by Lester Thurow on Building Wealth, a must-read.
TAXES
Robert Ackerman introduced the question of the punitive 10% excise tax on jewelry which is self-defeating as the wealthy simply buy elsewhere and Canadian diamond cutters (for example) are closing their doors. The wealthy will pay high prices to tradesmen/producers for goods, but balk at paying a percentage to the government. This tax produces a small amount of revenue for the Government, but is killing an industry which is a natural product of the gold, precious metals and diamonds that can be mined in Canada.
This led to a lengthy discussion of the effects of globalization and the disappearing Middle Class as new service industries come to the fore. Manufacturing is moving offshore from Canada and many other developed nations.
The OECD is coming around to recognizing two kinds of taxes: on mobile, and on fixed, sources of revenue.
There is something seriously wrong with how we are governing ourselves. The state is bankrupt, tax structure is dead, there's a limit on what the taxpayer can pay and the underground economy thrives in avoidance of taxes. And politicians - even those we know and love - simply agree while reminding us that "any change in one tax, however small, affects the tax structure and must be compensated for elsewhere in that structure". There appears to be no creative thinking about how to solve the problem - nor even thinking devoted to finding solutions!
MUNICIPAL MERGERS
There was little disagreement on the phantom if not non-existent advantages of municipal mergers in Montréal.
The result and fallout of the recent Mont Tremblant referendum on merging with St. Jovite does not bode well. After the proposal was handily defeated by the citizens, the Minister has let it be known that the process is unlikely to be reversed; therefore the vote is irrelevant. This Fall will be a crucial period for those of us who wish to keep our small communities intact and independent. More to follow.
Alex Weinstein |
COUCHICHING 99
Margaret Lefebvre & Karen Goldberg |
Alex Weinstein, fresh from his first Couchiching conference, gave a glowing account of his "unique experience" at this year's conference on Science, Ethics and the Human Condition. This year there was a wide range of topics, each one very dense. In his opinion, the most exciting exchanges happen in the less structured sessions such as meals, open group discussions; at times the question periods are more stimulating than the speeches. "The subjects are not the issue, the atmosphere is."
Wednesday Night's Dr. Margaret Somerville's presentation on Cloning was particularly brilliant.
Next year's conference will be chaired by our Margaret Lefebvre ensuring its success.
CONCLUSION
For an evening without an agenda and without guidance from the television monitors, the discussion covered a wide range of subjects and led to some solid conclusions, but more important, some excellent questions for future Wednesdays. All in all, a relaxed evening, with many exchanges - just what's needed once in a while.
Notes by Herbert Bercovitz
Edited by Diana Thébaud Nicholson
# 909 India Augest 4, 1999 SIMON POTTER, Robin Wohnsigl VP AC, Steve Poloz & Tulsi Nowlakha Mirchandaney Sr.vp Blue Dart Express, Dr. Mihailo Crnobrnja, Warren Allmand, Ashok Chandwani & George Cavadias, Fr. David Oliver, Une ile Une Ville? Quote: "I will not come here again until David has been to India!" ...Nimi Potter
Wed #908 Jul 28/99
"The world is healing" ... Jacques and Chil Clément & Heward Markets, economy is booming but Fed may return negative Aug. 24 Marie-Hélène Sarrazin new post Lyda Letacq, Me Marie Cormier, Dame Margaret Lefebvre and MATTHEW BARRETT See ours on Banks
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