Wednesday Night Salon # 928

15^th December 1999

The Prelude

A week away from the winter solstice and the thoughts of the twenty-fifth or so, David and Diana Nicholson’s guests turned, neither to fears of the Y2K bug, nor to wild predictions of a transformed world as all four digits signifying the year simultaneously roll over to a two and three zeros. Rather, as the end of just another year approaches, there was a sober assessment of the current year and predictions for the year 2000. Get Y2000 test/fix for your computer and see the Bug

However, before discussion began, there were several new faces to introduce, notably, Benjamin Teitelbaum from the Ministère des relations internationales, John Piro who David had persuaded to join Wednesday Night after the Heward Christmas gathering, Pierre Casgrain, an old friend of the (extended) family and a highly qualified observer of the marketplace, and Malik Talib of EXI Technologies.

Although the announced topics for the evening had given top billing to the role of NGOs in the 21st century, Jacques Clément captured the floor and we moved to the economy immediately.

The Economy

Canada has done very well so far this year, leading the G-7 nations with 4% growth during the first three-quarters of 1999 and the prospect of a fourth quarter growth of 5%.

As is his custom, Jacques gave hard numbers to support his predictions.

· In the first half of the year, real GDP was 3.8%;

· In the third quarter, real GDP was 4.7% thanks to strong auto sales, healthy retail sales and production;

· For 1999, real GDP is estimated as close to 3.75%

· For 2000, real GDP is estimated at 2 ¾ - 3 ¾% (basic exports will ease, however Jacques is not as pessimistic as Steve Poloz; import substitution will support domestic production, business investment likely to continue to expand)

· there will be sustained growth in household spending helped by demutualization of Canadian life insurance companies (impact in 2^nd half of 99-early 2000)

· margin of unused production capacity in the economy (1% at end of 1998); output gap (excess of supply as % output capacity) about ½ of 1% by mid 1999

· to be operating at or slightly above full capacity in 2000

· to adjust monetary conditions in a timely manner

Inflation

Trend will remain close to 2% over the next 18 months, reflecting pas depreciation of C$, increase in airfares, rising energy prices and rise in commodity prices.

- Wage settlements increased 2-2 ½ % and expected to continue to be moderate

(Editor’s note: has anyone looked carefully at the demands of the airport workers at Dorval/Mirabel? “…equivalent to 56.3% increase over 3 years … free parking for staff, annual clothing subsidy, staff gyms renovated and one hour per day of paid physical training” – the mind boggles!)

- Increase in labour productivity leading to decrease in labour costs

- Inflation risk in the U.S. resulting from excess demand in labour markets, a depreciating

U.S. $, rising commodity prices and supply bottlenecks

- Non-energy commodity prices expected to further recover next year as global demand continues to rise

- Current high price for crude oil should fall as major producers increase output

- Risk possible of a strong momentum in demand from domestic as well as international markets giving potential inflation pressure

- Intense competition in retail sector will continue

- Long distance telephone rates, computer prices decline will slow

- Commodity prices to continue rising; new home prices to rise moderately

Jacques Clément

The Federal Reserve will be forced to act in the light of the continuing United States trade deficit, and the beginning of a slowdown in the United States economy. There will probably be interest rate increases in the United States in March, June and September, with a neutral November at election time in the United States.

There was little disagreement with any of Jacques’ statements, although Chil Heward believes that growth next year will be 4 ½ %, probably 4% in U.S. , at least 5 % in this ¼.

He also commented on the madness in the IPO markets, creating wealth in a totally new demographic group and exercising considerable influence on the rise in the economy.

If the current rising commodity prices continue, Chil sees a strengthened C$; he expects that the Fed will raise interest rates because of the commodity cycle. Pierre Casgrain confirms the views expressed and pointed to rising demand for newsprint. His firm is bearish, but he asks what will happen to the C$?

On the C$, it is agreed that the Liberal government has been a major disappointment in its failure to stimulate the appreciation of the C$ by introducing tax reductions. Jacques feels that as soon as the budget announces tax reductions, the C$ will take off.

When the bubble bursts

Thank heavens for Julius Grey who points out that as has been the case for the past several years, questions arise as to when the bubble will burst, who will be hurt and how hard. The Canadian economy appears to be expanding exponentially. Stock prices keep rising and consumers spending fearlessly, as national debt decreases at the expense of personal debt. During a period of a 2% increase in wages, consumer debt has risen by 6%. Public spending on education is squeezed and we have debated the consequences of the deteriorating public education often enough around the Wednesday Night table.

After the bubble bursts, will the government of Canada return to interventionism, or will there be a shift to the far right? Perhaps the new technology has brought us a permanent and better standard of living. Technological innovations are the key, but cultural acceptance of technological advancement, recognizing that it allows/creates convenience for consumers, I slow in many cultures.

France has outstripped the rest of the world in economic growth this year, along with Germany and Southeast Asia. The cultural climate in France has always been such as to embrace new technology. This appears to be the clue to France’s success despite its government being far more interventionist than are governments in North America. Each technological advance effectively increases productivity, leaving behind in terms of improved living standards, those nations that fear or reject them.

Wireless technology

The latest trend appears to be in the field of wireless technology, in which France leads, with Canada not that far behind. Financial advantages can be gained in this field by automating supermarket checkout counters, debiting cash or credit cards without emptying baskets or pockets, automatic payment of bus fares, low-cost monitoring of patients or prisoners without physical or human restraints, protection of infants from in-hospital abduction.

It was evident that Wednesday Night reflects the concerns that have yet to be resolved in Canada, the moral questions related to privacy and confidentiality arising from wireless communication. The nations that come to grips with these problems may very well hold the key to reduced costs and improved productivity in many fields in 2000 and beyond. Canadians are at the crossroads in this important new technological field.

Recognition

David called attention to the very good write-ups in the Gazette and La Presse on Alex Weinstein’s project in Verdun. Alex spoke briefly about the joys and frustrations of being his own developer, general contractor and even sales agent, but now that the project is firmly launched, he is happy with the experience!

Chile

Eric Hamovitch was congratulated on the publication of the new book he has just completed on “Chile”. see also by Eric and friends "The Internet raises questions of identity and community" NB SEX
And a lot of books by Eric Hamovitch-menu [Eric Ilamovitch]

We look forward to addressing the topic of the role of NGOs in the 21^st century on another occasion.

Notes by Herbert Bercovitz, Sculptor

With additional notes from Jacques Clément

Edited by Diana Thébaud Nicholson

Sam Totah

click for Sam Totah's story on Wednesday-Night

Java view of #850 by Patrick Deschamps

EXI Technologies Inc. reports results for second quarter of 1999

9:02 EST Monday, August 30, 1999

RICHMOND, BC, Aug. 30 /CNW/ - EXI Technologies Inc. (ASE: EXI) today reported net earnings of $50,164 for the three months ended June 30, 1999. In the second quarter of 1998 the Company reported a net loss of $28,973.

EXI Technologies President and Chief Executive Officer, Malik Talib, said EXI Wireless Systems is continuing to exceed sales goals for 1999. "Our performance in the second quarter was all the more significant because we showed a profit in spite of one time extraordinary expenses of $361,000 due to the relocation of EXI Wireless Systems from Winnipeg to Richmond and the enhancement of technology following the results of beta testing of EXI Wireless' new product, Halo."

EXI Wireless Systems President and Chief Operating Officer, Zahir Abji, said research and development of new applications for the Company's proprietary radio frequency identification technology is a high priority.

"In line with our ongoing commitment to build a technology foundation for growth, R&D spending has been ramped up from $81,947 in the second quarter of last year to $372,678 in the second quarter of this year. We now have a clear direction and identity and we are in a much better position to move towards our longer term goals," he said.

Thanks to Sam Totah

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