Wednesday-Night.com
Salon Magazine vol 18

Oct 6, 1999

Wednesday Night #918

Oct 6, 1999

THE INVITATION

Those of you who have examined the web site will know by now that the suggestions contained in last week's Invitation were not followed. Perhaps nobody did their homework....

In any event, this week we plan to look at least at the current crisis in Russia, taking advantage of the expertise of Professor Marika Pruska-Carroll. Other topics on the agenda will no doubt include Reed Re-visited; the exciting new developments surrounding the Onex/Air Canada/Canadian story; the on-going Opéra Bouffe entitled "The Mayor and I(sland)"; the Market - always the market; the East Coast fisheries crisis (would Parizeau have become an aboriginal if he had known he could take lobsters out of season?) and the platinum healthcard issue. David and Diana Nicholson

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918

THE SALON

On Wednesday evening October 6 1999, the questions raised related to the Russia’s military action in Chechnya. The news reports do not appear to make sense. The military strike is reported to be a response to terrorist bombings directed against Russian apartment buildings. However, Chechen terrorists had nothing to gain by taking this action. Since 1996, there has been relative peace. The Chechen population did not want war. The speculation centres around the problems that Boris Yeltsin faces in the near term.

• Deteriorating support from the Russian population.
• December 1999 elections wil;l come during a time of great scandal surrounding alleged money-laundering.
• Russian allegations that the United States Government and/or both the Democratic and Republican parties planted the money-laundering story in order to discredit Yeltsin, smack of a revival of the Cold War and fly in the face of all logic.

Assuming then, that the Chechnya campaign has been a Kremlin fabricated initiative, the question naturally arises as to what Yeltsin has to gain.

A war against terrorism could unite the Russian population against the aggressor, leaving domestic issues as secondary. Apart from a small group of mothers, the Russians appear to support military action against Chechnya, moving domestic issues to the back burner.

A perceived threat to Russia would permit the invocation of martial law, leading to the postponement of national elections. The governing party would be the beneficiary of such a move.

Is this scenario realistic? If it is, it is likely that it will result in the various regions of Russia gaining greater autonomy and going their own way. We will certainly find out within the next two months.

Marika Pruska-Carrol & friends

THE ECONOMY

The ongoing economic discussion was very upbeat. The main concern has suddenly changed from that of deflation to inflation. The labour settlement in the American automobile industry has seen salary increases of three percent (six percent including fringe benefits). As the world heals, money has been moving, as it inevitably does, from the United States to where it is better treated. This leaves the United States with a weakening dollar and difficulty in financing the trade deficit.

This is comparable to the period of the 1970s and '80s. The market is jittery. One of the resident economists wonders sadly "what ever happened to business cycles?" Another raises the question "what if we start settl;ing transactions on the net in real time? Perhaps this threat is why the banks don't look so good".

Prof Tony Deutsch

The picture is much brighter for Canada, where the market corresponds to the mid-cap and small cap markets in the United States, which have consistently outperformed the Dow Jones index. Rising commodity prices favour the Canadian market. Many Canadian stocks at eight to ten times earnings are a bargain. Tonight's expert is recommending energy stocks, base metals and financials.

Over the short term, the stock market is worrisome, but over the next few months and years there are great values to be picked up in Canada. A four percent growth in the Canadian economy is expected next year. The Canadian dollar is getting stronger.

An intriguing thought voiced by next week's moderator: the stock market is moving into areas of popular culture. Just as Paul Anka had no intrinsic musical value, but was highly prized by his public... perhaps we are heading into a new area where the tried and true rules of thumb will no longer be applicable?

Mega City - "no city is an island"

A new hypothesis was offered in the amalgamation debate. It was hypothesized that the P.Q. has no issue around which to rally the population. Forcing the amalgamation would likely re-ignite the long-dormant language debate, an issue that could rally the faithful while constituting an easy victory for the P.Q.

While it is not in Québec's interest to make a radical move, the very real danger is that certain plums such as Westmount and Outremont will prove to be irresistible targets for amalgamation.

Healthcare

User-pay medical services - are they an altogether bad option? In a new parallel system, would the poor patient possibly be treated better than today? Quite likely, as the waiting period would be reduced by those who willingly pay premiums for shortcuts. While the public system is the ideal solution, it is not efficient in Québec and thus, we must seek alternatives, or better still, find ways to MAKE it work. The healthcare system represents 10% of GDP; salaries and benefits constitute 80% of the MUHC budget, compared to 55% in the U.S. This leads some to the conclusion that Medicare should be run by a non-political body which doesn't depend on votes to be elected.

Quotes of the week:

" Paranoia sells well in Russia."

"The herd is running after the internet stocks. A stampeding herd gets slaughtered."

"No city is an island."

"Divercité=more than language"

John Bowring

The sudden unexpected rise in the price of gold was due to investors who had over-shorted gold. The sale of gold by the International Monetary Fund (to write off Third World debt) and central banks will ensure a stabilization of future gold prices. Gold is no longer an economic indicator, it has become a commodity.

There will be a quarter percent increase in U.S. interest rates, because this is Greenspan's last opportunity to do so. Canada cannot follow suit because we are not creating sufficient jobs. - and this is a worry. Our unemployment remains high. The United States dollar has declined because of an increasing trade deficit, but this is chiefly in goods, there is a surplus in services. Canada is in a surplus trade position.

China will avoid devaluation, because Asian countries are recovering. Real growth in China is the greatest in the world.

Diana Thébaud & Thaipan

HOW TO SURVIVE A HEART ATTACK WHEN ALONE in our medical file.


917 next week 919


Notes by Herbert Bercovitz
Edited by Diana Thébaud Nicholson

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Thank you to Andrew de Courcy-Ireland for the comments in theStk Forecasts page
or Stk forecast Banks

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see Margaret Lefebvre-Walker RUN

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our Medical Web ..Super Hospital

click for the pan photo of 918