Greetings!
This Wednesday, the 17th, we have an eclectic agenda, starting with the pros and cons of the new E-Commerce Centre. Andrew Cross of Espace (not E-Space) Montreal will lead that discussion. Forensic accountants are welcome, as we understand from the Gazette that double-dipping is an issue.
While we are on the topic of special conditions (as opposed to winning ones) NASDAQ in Montreal may also be considered.
Our favorite gemologist, Robert Ackerman, has volunteered to discuss the diamond trade as a backdrop to the war in Sierra Leone. This was touched upon last week, but Robert will talk about the role of governments in the regulation of the cartels and the impact of rogue governments on the industry.
Robert Ackerman |
June 14 2000 De Beers in campaign against rogue traders
This week's Conférence de Montréal is focusing on Africa and the Middle East, indeed timely topics. We look forward to learning what wisdom emerges from the discussions and whether there are concrete proposals, or simply pious hopes. One of the seminar topics is described as " strategic alliances for a sustainable partnership" which strikes us as an enormously vague outcome for a part of the world beset by war, famine and the forces of nature.
But the news out of Africa - and particularly Sierra Leone - is not
encouraging for the immediate future of E-Peace. The ineffectiveness and
total collapse of the UN Peacekeeping effort is both horrific and
deplorable. Sri Lanka's experience is similar. How do we fix the world?
On a brighter note, who among you has noticed that Toronto is seriously talking about becoming the 11th province. Is there hope that it might then separate from Canada?
Finally, we have been asked by a charming Radio Canada reporter if she might sit in on Wednesday the 24th to do some sound bites (pretzels or peanuts?) for a piece that she is preparing on "Intellectual discussion groups" - consider yourselves forewarned and please, don't let us down!
Thursday 29 June 2000 E-Commerce backlash
Developers complain subsidies will bring on another recession downtown
MARY LAMEY The Quebec government is
creating two classes of Montreal real estate, ...E-Commerce Place will push
the office-vacancy rate to
18.5 per cent from its current
level of 12.3 per cent. A
balanced market has a
vacancy rate of 10 per cent. ....Canderel Ltd., Axor
Group and the Mouvement Desjardins will finance and build a campus of
nine mid-sized office towers near the corner of Rene-Levesque Blvd.
and Lucien L'Allier St. The 3-million-square-foot project, to be built in
phases over five years, will cost $700 million. The Quebec government is offering $1.5 billion in tax incentives over 10 years ....also backing the construction of the Cite du
Multimedia, which has added 460,000 square feet ...600,000-square-foot head office for the Caisse de Depot et Placement du Quebec, also near Old Montreal. Combined, the three projects will
add 4 million square feet of space to the downtown core, about one
10th of the total pool.
Wednesday 17 May 2000 Investors 'punished'
Place Bonaventure might lose tenants over Quebec's subsidies for
E-commerce: Goldman Sachs
MARY LAMEY .."Any U.S. investor would have serious caution" about buying into the Montreal real-estate market in light of the subsidies announced last
week by Finance Minister Bernard Landry,
THE SALON
Wednesday Night Salon # 950
May 17, 2000
INTRODUCTION
Enticed by the promise of a discussion of the Conférence de Montréal, Pierre Bossé arrived with his guest, Stéphane Rigny, of the Rand Merchant Bank in South Africa. Stéphane, a native Montréaler, is in charge of Project Finance for the bank ($273B in assets and 34,000 employees). Stéphane is now principally interested in seeking out Canadian investors to undertake with South African investors joint financing of projects in other African countries, especially French Africa.
He mentioned that Canadian companies have been investing in South Africa in mining, but are now moving into heavy industry, Information Technologies and service commpanies.
THE DIAMOND WARS OF THE THIRD MILLENNIUM
Although no longer the major component of the South African economy, mining, or more specifically the mining of diamonds is the building block on which South Africa was built. Formed by the huge pressure of the magma underneath the earth’s crust, most diamonds that can be exploited commercially are found along seismic fault lines, in many countries of the world including Tanzania, Zaire, Ghana, Australia, Canada, Borneo, Venezuela, Russia and Guyana. In Angola and Sierra Leone, the stones are not bound to geographical areas, manpower or energy and so are not exciting from a commercial investment point of view. There, the diamonds are exploited as family businesses which do not link up with the normal distribution pipeline. In these countries, the State does not regulate the industry, nor does it receive any royalties, thus there is no participation with which to finance social projects. The small operations are subject to presures from the State (or marauding bands of rebels) and their product may well finance wars, or the pockets of leaders of factions, rather than State-sponsored social projects.
Until recently, De Beers has controlled the orderly marketing of most of the world’s diamonds by agreeing to purchase a given quantity of diamonds at a set price. Other purchasers may pay more at given times, but cannot offer the security to sellers that is guaranteed by De Beers. By controlling the supply and price by establishing a slow steady market growth, De Beers has worked in its own best interest as well as that of the producers, and retail gemstone consumers. The diamond became an important investment tool, virtually guaranteed to maintain and increase in resale value.
Ultimately the strongest cartels and monopolies show signs of crumbling. Although it has not as yet shaken the market, Russia has for many years shaken the throne of the diamond dealers. The Russian producers appear to think in terms of short term gain rather than slow steady growth. The Australians are bigger and more influential players than the Russains and, while stating that they would not rock the boat, they find their own buyers, sending their diamonds to Bombay for cutting, and marketing through Indo-Argyle, as has Canada. The Canadian production is becoming significant and has unique qualties because these are the only glacial stones. Some African countries, notably Botswana, the largest African Diamond producer, have reconciled government, business and social interestsin a manner which benefits their society as a whole.
Continuing Topics
Bosnia: Despite the media coverage, the visitor is shocked to see the devastation, hotels, libraries, thousands of years of records, a first century mosque, yet the people appear smiling and happy to be living in peace, and the food is good. The selective targeting of ethnic groups tests one’s faith in human nature. Sarajevo had been, like Montréal, composed largely of three ethnic groups, cosmopolitan, living in peace and harmony. Serbs, led by Radovan Karadzic, ethnically cleansed all the Moslems, for instance wiping out a single apartment in a multi-ethnic building. The terrorists succeeded in creating dissension in this previously peaceful city. Those who return now do so only to sell their property. In the countryside, children are constantly being blown up by left-over land mines. The most serious problem is the lack of education and the perpetuation of myths among the peasants who have been inculcated with stories about the barbarism of other ethnic groups. In retrospect, the Dayton agreement appears to have given the terrorists what they wanted.
Sierra Leone is a replay of Bosnia ... ill-prepared and equipped U.N. troops not allowed to defend themselves in any meaningful way when attacked, taken hostage ... stalemate. It isn't over and one wonders if it ever will be.
China and the WTO: As the U.S. Congress debates the Administration's proposal to accord Permanent Normal Trade Relations with China in the face of allegation of human rights abuse, the political alliances are mystifying to outsiders. . There seems little doubt as to the outcome, but the vote could be very close. Year after year, the United States, facing full employment, low inflation and a high standard of living, has accorded China Most Favored Nation status. As the U.S. import much more from China than they export, any increase in the cost of imported Chinese goods might adversely affect that balance. China remains a very important actor on the world economic stage and by virtue of the size of its economy should rightly be part of the G-7. However, every member of the World Trade Organization has the right of veto over the entry of new members (and New Zealand is notorious as one who most frequently exercises the veto).Canada favours China’s entry into the WTO as an opportunity to broaden the scope of trade beyond the United States. It is to be hoped that with entry into the WTO, China will be pressured to amend its ways with respect to human and civil rights, although the world may have to wait for another generation of leaders to appear. The world also has to understand that the geography of China and the size of its population pose problems to a central government which are virtually unimaginable elsewhere. Already ther is a huge dichotemy between the economies of the coastal regions and those of the interior.
While there may be little doubt as to the sincerity of those that wish to link trade to Human Rights, it would be the height of hypocrisy to single out China and ignore human rights abuse in other trading partners. Meanwhile, it has to be recognized that the policy of excluding nations because of human rights abuse has not proven to be a successful weapon against those abuses. Human Rights can be improved only by increased democratization and the evolution of a middle class, more logically brought about through increased trade and commercial contacts than by shunning the guilty nations.
The Economy:
The United States Federal Reserve last week raised interest rates by half a percent, speaking of demand exceeding productivity, threatening inflationary increases in cost of living exceeding three percent. There is a shortage of labour, employment costs having risen to the highest point in twenty years, the economy is at 82% of capacity, imports are at a record level, auto sales are up and new home sales are the highest since 1980. Canada has followed with a matching half percent increase having enjoyed a first quarter growth of four to five percent, four to four and a half percent for this year, making Canada Number 1 of the G-7 countries. Unemployment is the lowest in twenty years and heading down. However poroductivity is low for our economic strength. Two additional rate increases of 1/4 point in June and August are anticipated.
A tip of the hat to Chil Heward who, it was recognized, called the Canadian market exactly several weeks ago.
In several opinions, oil stocks should be held and bank stocks look good. National Bank stock is very cheap. Bérard
doesn't want to sell, but ownership legislation is changing.
The Conférence de Montréal - OIL, FOOD and WATER
The media have not done a particularly good job of covering this year's Conférence and yet it gathered an impressive number of world leaders, headed by the Presidents of Algeria and Nigeria as well as large delegations of business people from Africa, and in particular Nigeria.
While a number of issues were discussed the most impressive subject matter was covered by the linkage of oil, food and water.
The price of oil will increase until August and then start to decline steadily. Some Middle East countries will hurt because they have not diversified their economies beyond oil production while large amounts of oil are bing discovered and exploited in the Caspian Sea, off the coasts of Guineé and Brazil. OPEC is becoming weaker in the mid term. In the long term, competition from fuel cells will force oil prices down to around $10 Bbl which will devastate economies where the Lift Price is $15. The consequent destabilization of the economies of certain Middle East Nations (in a region where there is chronic unrest) could bring tragic consequences, particularly in view of the other two issues.
The world, including Canada, will have to increase our food production by seventy percent in the next ten years to feed a world population which is increasing in the face of agravated shortages of harvests.
Water supply in becoming critical in an increasing number of countries, (the example cited was that of 17 countries of the Middle East and Maghreb where the number of nations facing critical droughts is rising exponentially and where it is predicted that within 15 years ALL will face serious droughts). Canada is sitting on a gold mine and with its water resources could be a major force for peace, however, there is much to be explored and debated here with a view to
eventually making the exportation of fresh water economically feasible. Canada will have to weigh the choice of parting with some of its fresh water or facing the threat of war with the have-not nations. Alternatively, what are the prospects for selling water which now gushes into the St. Lawrence, quickly blending with salt water and, currently, serving no useful purpose?
Subsidy for the Proposed E-Commerce Building
It is probably not a great idea to support construction grants for job creation. In this instance, very little new employment will be created at great cost. Most of the "new employment" will be old jobs crossing the street to a new employer. This is blatant government intervention in an industry that was evolving quite well. One unintended consequence is that the government's move has devalued the Caisse's properties including the Trizec buildings so recently purchased by the Caisse - Peter Monk must be rubbing his hands in glee!
There is some suspicion in some parts that the target winner may be the yes side of the upcoming referendum battle. Little sympathy was offered to the Goldman Sachs investors who are whining about the subsidies, however,as they came here and bought buildings because they were good value and dirt cheap, not because "they loved us".
NASDAQ will be located in the E-Commerce building, but the whole NASDAQ issue is up in the air - all exchanges are in
talks with one another as the move towards globalization continues. Don't hold your breath, there are still lots of regulatory issues to be worked out around the world.
QUOTES OF THE EVENING
On Bosnia
"This is a continuation of the Ottoman Empire - the Balkan wars. What the Ottomans did in the sixteenth and seventeenth century was unforgivable to this day. Everyone wants the same piece of land.
"Sometimes with our analaysis, we do the logical thing instead of the right thing ... We follow our logic, but not our heart."
On China’s Proposed Entry into the W.T.O.:
"I don’t like the Communist regime, but I do think that trade is the motor of society and bringing in Western methods will help democratize China."
(The debate) has created a whole dormitory of unlikely roommates."
"Only by following a learning curve can Democracy be achieved."
"Democracy is not for everyone."
"Russia tends to go to Democracy quite quickly. China is controlling its movement to Democracy. You need a literate middle class before you have Democracy."
"You have to create wealth in order to have a middle class. ie and Brazil"
On the New E-Commerce Building:
"The government doesn’t have a good idea about what the real world of e-commerce is."
"It will suck from current buildings!"
REX MURPHY: D-minus for the Conservatives Joe Clark described last night's Tory win in St. John's West as a
great victory. It wasn't a great victory. It was
a narrow escape. A loss would have been
the equivalent of 'no phone call from the
governor.' The Tories won barely, and Mr.
Clark is viable for a while longer. 
Rex Murphy May 16, 2000
Notes by Herb Bercovitz Sculptor
Edited by Edited by Diana Thébaud Nicholson
Click for Noor's big image then for the lonely life
Tues, May 16th Dallaire says UN's Sierra Leone mission doomed to fail Thanks yo Guy Stanley
Wed949misha.htm
next Wed951radio
Jules Deschenes |
Friday 12 May 2000 Chief Justice Jules Deschenes died Wednesday. He was 76 ..he made tough decisions - and stuck to his guns "I believe the law can be a powerful instrument for change.
That doesn't mean fostering revolution, but rather an evolution of the
mind and evolution of a way of life." he said HUBERT BAUCH In memory of a great Wednesday Night
Conrad F. Harrington |
Monday 15 May 2000 Conrad F. Harrington(87), former McGill chancellor
JANE DAVENPORT ..."Above all, his was a life that revolved around the certainty and joy of
returning to the shores of the St. Lawrence River each summer, to his
beloved Metis," daughter Jill Porter said
© 1997,98,99 by David T. Nicholson
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