Wednesday Night Salon #925

When we asked for help on topics for Wednesday Night, we were delighted with the enthusiasm with which so many replied.

From Tony Deutsch:

…surely we cannot be desperate. Let me just raise the following:

Chechnia
Fed. legislation on what is an acceptable referendum result'
On this one, I am not sure that the topic is appropriate to Wed-Night, even though it seems proper for p.A6 of this morning's Globe;
"...she let him rape her while she stood on her tiptoes against the desk."
Surely, any couple who can pull this one off "tiptoes(!)" deserves a medal from Fitness Canada.

From Daniel Valmont:

An interesting Potluck topic for this evening would be seasonality in equity markets. "buy when it snows, sell when it goes" (don't you just love catchy phrases?)The market in general (TSE and S&P) seem to outperform during the period between November and March. The data is good but not perfect (always a disclaimer). I have reliability numbers and data for all the sub-sectors of the TSE, oil and gas...etc. These theories compliment fundamental and technical analysis, and improve your overall chances of outperforming the market. Remember, performance is always relative!

I will not be able to make it there tonight. If there is interest in the topic I would be happy to go over the data with the Wednesday Night Clan at some date in the future.

Guy Stanley

From Guy Stanley:

This week:

There's a great shot of J-C saying "Canada is my business" as he brings forward the threat to set referendum conditions.
There's the Newsworld discussion about poverty levels.
There's the wobbly launch to the WTO and these issues in the FT today

From Ron Meisels:

Now that the market has performed as we forecast early October, maybe it is time to look ahead once again. If you have me, I would be delighted to bring WN up-to-date, and make a new forecast.

Thank you all for the collaboration – there’s food for many future Wednesday Nights! Meanwhile, this is what we went with.

THE SALON

Wednesday Night # 925
November 24, 1999

"The quality of mercy is not strained,
It droppeth as the gentle rain from heaven
Upon the place beneath: it is twice blessed;"

-William Shakespeare

Herb Bercovitz DTN photo Herb Bercovitz

In addition to the ever present update on the economy, two topics preoccupied the more than twenty guests of the Nicholsons on Wednesday evening November 24, 1999.

(Editor’s note: Not to be missed
it was noted that many Wednesday Nighters had attended the opening night of Herb Bercovitz’s sculpture exhibition at the Gallery of Victoria Hall.
The show will be on until January 2^nd and all are urged to see it. It is spectacular! The Gallery is also a beautifully designed exhibition space and provides a great setting for Herb’s work.)

WATER

George Cavadias

There is no legal definition of water and its ownership. George Cavadias suggests that it is “a natural phenomenon, required by the population.”

Is water renewable – yes and no. On average, 1% of the water in the Great Lakes circulates.

The volume of water in the world, whether in the form of rivers, oceans, aquifers, glaciers or permafrost, ultimately makes its way into the atmosphere, to fall as rain, snow, or other form of precipitation. The rain that falls here might have originated in any other part of the world. It recognizes neither nationality nor boundaries. So what’s the big deal about selling our excess fresh water to those countries who have less of it (and are willing to pay for it in U.S. dollars) and allowing it to be returned to us free of charge through the clouds? The point is that it is a big deal, for the following reasons.

- Water is more than a drink or a medium in which we bathe and grow our crops.

- Our rivers provide us with food, energy and transportation. Altering the natural flow of rivers has had unintended results that have not to date been quantified.

Lowering the water level of the Great Lakes by a foot can lead to serious navigation problems as well as damage to the ecosystem. The creation of large reservoirs in the James Bay hydroelectric project has resulted in increased evaporation which in turn, may have been partially responsible for the lowering of water levels in distant areas.

Guy Stanley

The Aswan dam brought foreseen economic advantages to Egypt, but changed the nature of the Nile delta, bringing extensive erosion and the decertification of Egypt, to the detriment of agriculture.

Once committed to selling water, there is no turning back in time of drought or permanent change in atmospheric conditions (and the prospects are that over the next 30 years there will be a world-wide shortage).

Water implies a stream of goods and services. It makes more sense to export “virtual water” by shipping agricultural products cheaply then to ship large quantities of water at high cost.

The problem is Water Management (or lack thereof).

Ownership of water is a moot point, most often established in Canada by court rulings. We already “export” water in the form of hydroelectric power

It would appear essential to conduct cost/benefit analysis, however, we probably don’t have the proper tools to conduct such analyses. Furthermore, any such analysis must be site specific and much of our water is totally inaccessible.

Conclusion

Considering these factors and bearing in mind the constant growth of the world’s population, it would seem prudent for Canada and United States to enter into a North American water strategy. It would also seem prudent for the world to invest in research into less expensive seawater desalination technology.

CHILD POVERTY

Yvette Biondi

Poverty, particularly child poverty, has taken on increased importance in recent years. Over the past few years, those unprepared technologically as well as their families, have drifted down to the poverty level, while our tax system fails them. No matter how we rejig the tax system, these people will not be reached. Those relatively few who share the new affluence are sufficiently mobile to able to migrate to friendlier fiscal climes. 800,000 Quebeckers receive social assistance of one kind or another.

StatsCan says that 17.5% of the population live below the poverty line while the UN says +/- 6%. What does poverty mean?

Poverty is relative. Quebeckers considered poor here, would be considered wealthy by third world standards. The face of poverty is varied, including those with mental illness, those addicted to drugs and alcohol and those who simply lack the basic skills or education required to earn a living here. Do we want all the population to be middle class, or, do we accept that some people will be poor? Although there has been great emphasis on child poverty in Canada, social assistance is delivered to the parents, not to children.

A relatively recent phenomenon has been the dramatic increase in single parent families. The cost of childcare in a working monoparental family can be a great deterrent to the move from social assistance to productive labour.

(Note, however, that Ed Broadbent has stated that the majority of kids living in poverty come from two-income families!)

Conclusion

This is not a simple problem and there can be no simple solution. Some things that might help include:

· A fairer tax system fairer that is more attractive to those who love the country, but are seduced by higher wages and lower taxes elsewhere;

· Reduced government spending and greater investment in our greatest natural resource, our children, in education, health care, nutrition;

Note that program spending in Canada is less than debt servicing costs.

· Reduced bureaucracies, cohesive government social programs, increased emphasis on social integration of the poor; elimination of means tests, adoption of non-fiscal means of redistributing wealth within income levels as well as within provinces;

· New strategies to recreate the family as the fundamental building block of the country, including job training for young parents;

· New strategies to define the responsibilities as well as rights of family members, including those of children.

THE ECONOMY

Holly Jonas

The Canadian economy continues to thrive, outperforming that of the United States. The forecast is for 4% annual growth in the United States and 5% in Canada (Jacques says more likely 3-3.5%).

In Canada we must cut taxes in order to expand our markets, in one opinion. Another asks “If we wiped out our debt tomorrow, would we really expand our markets?”

Thiessen is worried by pressure of inflation. Two successive interest rate increases of a quarter percent may be anticipated in the next half year and, in the opinion of at least one of our economists, could go higher if we see further strain in employment.

Be prepared for the U.S. market to blast off in January (Ron). The general public is currently abandoning the Canadian market – a mistake. There are some great buys here including Cognos (remember them?), Titan (bought at 17, now at 27 and probably will go to 50). Bell andNortel are low, probably because pension fund managers are overloaded.

The American dollar has not yet improved against the Yen, but undoubtedly will with improved U.S. trade figures in 2000 as exports to Asia and South America increase. A two to two and a half percent inflation rate is anticipated in Canada next year.

It is the ninth consecutive year of expansion in the U.S. economy.

Technology stocks continue to be hot – corporate investment in technology enhancement is up to 30% - and it is the exuberance of the technology stocks that worries Greenspan.

All is not rosy, however. The personal savings rate in the U.S. is negative. Personal debt as a percentage of after-tax income is 105%. Silicon Valley is pushing assembly work offshore, a development that affects trade policy.

Speaking of trade policy, little is expected to come out of the WTO Seattle round.

HEALTHCARE

Yvette Biondi

Our medical expert is gloomy. The Medical system in Quebec continues to deteriorate. The increased funding from the feds is being put towards paying off debts, therefore there is no real increase in funding. The 5% increase awarded to employees will have to come out of the present budget of the MUHC. There is no decrease in the cost of labour.

How to deal with patient care under these constraints will be Hugh Scott’s principle problem.

PUBLIC ANNOUNCEMENTS

We rarely lack for things to do, however, several guests mentioned particular events of interest.

Elisabeth Wojtowicz reminded all that “The Nutcracker” will be playing at Place des Arts for the enjoyment of all with children, grandchildren or no need to a pretext.

Ron Meisels and Alan Mass promoted December 9-10^th“Merry Millennium”, the Centaur Theater fund raiser on which stars Peter Trent, Irene Simons and John Ciaccia, among other prominent thespians/performers of our acquaintance, including Richard McConomy, Peter Johnson and Peter Blakie of Westmount

Dr. Mark Roper

Mark Roper on December 18^th encouraged all to support the Montreal General Emergency Department at their fundraiser at the Pub St-Paul. It starts at 8 p.m. and costs only $15.

June Riley

INVITATION
June Riley suggests a more intellectual (and less charitable) event:
The Montreal Economic Institute in collaboration with Montreal Business Magazine and with the financial support of the John Dobson Foundation invites you to join STEPHEN GOLDSMITH, Mayor of Indianapolis and Domestic Policy Advisor to US Presidential candidate George W. Bush Jr. on the subject of :
RESURRECTING URBAN AMERICA: A ROLE MODEL FOR MONTREAL
date : FRIDAY, December 10th, 1999
at The Radisson Hotel ,12 noon for 12:15
cost : $40.00 per person and $10.00 for students
Contact Suzanne Charest (514) 273-0969
or by email : iedm@videotron.net

Quotes of the Evening