Pensions

Peter Ratzer , brother of Gerald, will return. A year ago [Wed1068] , [Wed1013] ; [Wed1043] & [Wed1119] Peter was a star guest. He returns to us this Wednesday. Peter, as many of you will remember, was deeply involved in the financing of the Chunnel.A resident of London, he will bring a first-hand report of the UK view on numerous issues, both financial and geopolitical. Also pensions funds! Aug 2003 paper Update on UK Pensions Special to Wednesday-Night.com by Peter Ratzer Who will explain the underfunding. also see pensions

Calling all the Irish of Montreal and, as it is well known that on St. Patrick's Day everyone in Montreal is Irish, Wednesday Night is calling YOU.

One does wonder why St. Patrick's Day follows so close on the Ides of March. Perhaps the snakes of Ireland didn't pay attention on March 15.

We are pleased to report that Peter Ratzer returns to us from the UK and will continue the saga of defined contributions versus defined benefits, a highly topical subject if one follows the fortunes of Air Canada

"The unions are all refusing even to discuss a demand by Trinity that they agree to change the Air Canada pension to a defined contribution plan from the current defined benefit plan, under which the company is on the hook for any shortfall in guaranteed pension payouts." (Globe&Mail, March 11)

The tragedy in Spain, followed by the elections, and defeat of the governing party will no doubt be a topic. Aside from the promise to withdraw Spanish troops from Iraq, the newly-elected socialists may once again tip the balance in Europe, Mr. Zapatero has promised to revive Spain's traditional "pro-European" foreign policy. This means one less country in the camp that is allied with U.S. interests and new dividing lines in the European Community.

The Russian Federation has voted overwhelmingly for Putin,- more than 70% of the vote is indeed a comfortable margin.. We are amused by Mr. Putin's reaction to criticism from the U.S. that there may have been voting irregularities: "In many so-called developed democracies there are also many problems with their own democratic and voting procedures," he said, referring to the controversial George W Bush's victory over Al Gore in the 2000 poll. But, whimsy aside, what will this mean for Russia and the world in the next years?

Following on our frequent discussions of Free Trade which tend to concentrate on the impact on the U.S. and Canada, Jacques Clément will do a "country report" on Mexico. To start you off, we offer the following clues "Trade with the US and Canada has tripled since the implementation of NAFTA in 1994. Following 6.9% growth in 2000, real GDP fell 0.3% in 2001, recovering to only a plus 1% in 2002, with the US slowdown the principal cause." Mexico, like Canada, refused to sign up as part of the Coalition of the Willing, has the country suffered from this decision?

Finally, as a postscript to the extensive discussion of Haiti last week, new developments in the guise of Aristide's return to the Caribbean (a href="http://www.wednesday-night.com/Jamaica<.asp" target="new" class=b2>Jamaica), portend further aggravations between the U.S. and its colleagues of the O.A.S.

Indeed, lots to talk about and a bit of blarney will not be amiss. Please join us and keep checking back here for new news.

Diana and David Nicholson

Monday 15 Mar 2004 MEI
Soaking 'les riches'
Quebec should cut – not hike – the tax rate for wealthy residents. That would encourage wealth creation and lead to more high-income earners to tax. Article by Norma Kozhaya, economist at the MEI and author of the Research Paper Les bienfaits economiques d'une reduction de l'impot sur le revenu, published in the Financial Post on March 11.

March 2004 MEI
Les bienfaits économiques d’une réduction de l’impôt sur le revenu
Quebecers are the most heavily taxed citizens in North America. The top marginal personal tax rate is higher than in any other province, and hits the Quebec taxpayer beginning at the relatively low income of $53 405. The promised reduction could correct this situation by reducing marginal rates by one third. Research Paper in French (with a bilingual executive summary) on the expected economic impact of a reduction in personal income tax.

March 2004 MEI
The MEI ranked amongst the 15 top new think tank in the world
The MEI has just won one of the prestigious Templeton Freedom Award Grants for Institute Excellence, which are awarded to fifteen young think tanks around the world in recognition of the outstanding way in which, thanks to the excellence of their operating practices and public relations, they have accomplished their missions. Press release for March 7.

Wednesday-Night1150

Wednesday Night aspires to be your personalized magazine "experience", offering news, commentary, editorials, opposing perspectives, elements of humour, reviews of the arts .... The Renaissance man's Economist, perhaps?

This Wednesday is no different. We offer profound commentary on Global Governance, Capitalism, Canadian politics and international business, with regular contributors Dr. Kimon Valaskakis, Me John Ciaccia and Peter Perkins. Guest editors may wish to comment on the international role and responsibility for Haiti, the profoundly differentiated worldwide celebrations of International

In the arts world, the upcoming BlueMet Festival programme includes the launch of Comrade Harry's (Mayerovitch) latest book and a celebration of his 94th birthday, along with its usual creative blend of multinational, multilingual literary talent.

If you have always wanted to be a contributor, publisher or editor of a sophisticated magazine, then you belong at Wednesday Night. Even if you have none of those ambitions, we hope...... See Paul Martin & Haiti

Diana and David Nicholson

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Friday 12 Mar 2004 ts
Trade barriers not cure on jobs, Greenspan says WASHINGTON—Federal Reserve chairman Alan Greenspan said yesterday that "employment will begin to increase more quickly before long," and that erecting protective trade barriers was not the answer to the nation`s current worries about the loss of jobs to foreign competition.

Wed 1150 Mar 17th, 2004 click for 2400x257 pan 1150 Webshots

Wed 1151 News slide show | Latest

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Wednesday Night Salon
# 1150 Mar 17th., 2004

Introduction:

Rating 5 stars The Classic Account of US Foreign Policy by Steven Hook
This is perhaps the best introductory book to American Foreign Policy. As such, it is constantly referred to, and should be read for that reason alone. But there is more to this book than that. It is a readable, well-analyzed account, that draws upon both political realism and internal American attributes to explain US policy abroad. Spanier's account had changed dramatically over the years from edition to edition reflecting the debate of the times. But there has always been a certain pro-American core to it, and that core remains in this book as well. This will certainly cause controversy, as will many of his propositions, but this book remains the best place to start.

The Euro Tunnel

He also briefly explained the management structure of the bi-national organization: two companies, one French and one British, and similarly two holding companies with a unified management that includes two co-chairmen and one CEO. Inevitably the relationship between the two co-chairs is crucial.

Pension Plans:

Traditionally, pension plans have defined benefits, but today, many pension plans are in difficulty. A poor investment climate, increasing longevity, insufficient contributions, mainly on the part of the employer, and/or employer insolvency have thrown a shadow over the prospect of enjoying a comfortable retirement for many pensioners as well as many employees contemplating eventual retirement. Change to a defined contribution plan provides a solution that minimizes the prospect of retirement without the pension on which the retiree had been depending. This would minimize the prospect of the fund being reduced to zero, completely depriving some retirees of their pension, but would make it virtually impossible for employees to do meaningful financial planning because of the uncertainty, not only of the long-term effect of inflation, but also that of the uncertainty of the amount of the pension.

The United Kingdom is currently going through an exercise whose aim is:

• to improve protection for pensioners,
• to make protection easier for employers and
• to give individuals greater control over the age at which they wish to retire.

A consultation [green] paper and government action plan have been published, and legislation will be placed before Parliament this summer with an implementation target date of April, 2005. Included in the proposed legislation is a plan to set up a protection fund, which will provide defined benefit pensioners with some security when an employer becomes insolvent, with a cap of £25,000. There is some concern among Wednesday Nighters that such a fund would give an employer a relatively easy way out of bankruptcy by unloading pension liabilities. Peter points out that the legislation would be implemented through an array of regulations which will need to be carefully examined and may be the source of further problems. However, whatever the outcome, the issue must be addressed and at least there is an attempt to do so in the U.K.

Although the U.K. is making an attempt to solve the problem, it is by no means confined to Great Britain. North American pension funds face the same problem, with Air Canada being a prime Canadian example.

A proposal suggested by some by Wednesday Nighters, would offset the effect of increased longevity over the working life of the pensioner, would be to purchase a twenty year annuity for the retiree, with the federal government insuring the pension from the expiration of the annuity until the death of the beneficiary, a suggestion probably not looked on with favour by the Government of Canada.

The Productivity factor in employment

One of the curious paradoxes in the comparison of Canada with the United States, is that the U.S., with greatly increased productivity, has suffered a job loss, while Canada, though less productive, has experienced a burst of job creation. The reason for this is that until about three years ago, productivity had been pretty equal between the two countries, but the U.S. has surged ahead in this area, causing, by definition, fewer jobs. It is anticipated, however that this is a temporary reaction and that increased American productivity will, in the near term, cause a rebound of employment.

U.S. Foreign Policy

President Bush did not come into office with a strong understanding of international affairs. He was more in tune with domestic issues. The events of September 11 changed the focus of the American public and the Administration. Although subsequent events may well have proven the U.S. administration’s decision to invade first Afghanistan, then Iraq, correct, the Bush disdain for international institutions, notably the United Nations, left the United States pretty much alone in the struggle against terrorism, with the notable exception of the U.K. and a few smaller contributors. It is not absolutely certain that the Madrid bombings have unduly influenced the outcome of the Spanish elections, as 90% of Spanish citizens had reportedly been opposed to participation in the invasion of Iraq from the beginning, but the question arises as to whether governments of other countries participating in the alliance in Iraq will pull out for fear of suffering the same fate as Spain. The effect of the bombings in Spain and elsewhere has cast a gloom over confidence in the future of the tradition of the openness of western civilization. It is time for the United States to make its peace with the U.N. and work with that body to eliminate terrorism wherever it exists.

JACQUES CLÉMENT’S REPORT on the ECONOMY

Nevertheless, there are a few positive developments. Leading economic indicators have been very strong in the last five months; corporate profits are at a record pace. The fiscal surplus for this fiscal year could be revised up to four to five billion dollars given the latter profits. Inflation is below 1%, a two-year low, manufacturing, new and unfilled orders have rebounded strongly in January, inventory rebuilding was the major source of strength in the fourth quarter. G.D.P. rose by 3.8% in the fourth quarter. Capital spending on plant and equipment is rising moderately.

The Canadian dollar near-term trading rage is 74½ to 76 cents U.S. [see WN chatr] Real economic growth this year could be revised down to 2 ½ % to 2¾%

United States Perspective:

Although consumer spending has held up well, consumer confidence has fallen significantly since January. The first quarter G.D.P. forecast by the private sector will probably be revised down from an expected 5% to 4%. Housing starts have weakened by over 10% (January to February). Employment has been very weak. The trade deficit at forty-three billion dollars was at a record for January as exports fell. Factory and durable goods orders declined in January, as did construction spending and services. Nonetheless, retail sales rose moderately from January to February as auto sales recovered.

The manufacturing sector strengthened with industrial production rising by 1.5% in two months (January and February). Business spending on plant, equipment and software is rising. Inventories are lean and rebuilding has accelerated. Business confidence is very strong. Leading economic indicators have risen for the tenth consecutive month. Inflation is below 2% with core at 1.2%. The Dow-Jones index has begun to recover,- 200 points after a loss of over 600 points since February 11, caused by the record trade deficit, the anaemic job creation, the declining confidence in the administration’s economic policies and the geopolitical concern about Al Qa’Ida terrorism. The Euro’s trading range remains $1.22 U.S. to $1.24 U.S., gold at $400 U.S. to $410 U.S. and crude oil at $37 U.S. to $ 39 U.S.

WEDNESDAY NIGHT PREDICTIONS

• Despite reports of the end of the real estate boom, the real estate market in Canada will remain strong.
• With China acquiring more automobiles at an increasing rate, a 28-year low inventory of oil, the expected OPEC cut in oil production on April 21 with subsequent short-term price increase to forty dollars a barrel, the price will inevitably drop in the long term. see wn on oil
• A minority Conservative government in Canada this year.
• The Bloc Québécois will win fifty-two of the seventy-five Québec seats in Parliament.

QUOTES of the EVENING

• “Life expectancy is not an insurable risk.”
• “A decrease in labour productivity is generally someone else’s opportunity.”
• “Spain was wrong both times - wrong when they went to war - wrong for pulling out.”

2004 W-N Links for #1150

• a NewYorker Cartoon every 30 seconds.from w-n Right Menu ===>
  
• create a brandname [http://grhd.solutious.com/]
• Canadian dollar vs euro | Dow 30 w-n chart | TSX
• Paul Martin
• Wed 1149 News slide show | 1136
• w-n slide show | Albums

• Wed 1149 This week in pictures 00000000000

2004 Notes for #1150

Wednesday Apr 28, 2004 Dear Steven,
What a wonderful surprise to find your package when I came home from the office tonight. David and I are delighted with such a personal memento of your visit to Wednesday Night and hope very much that you will now find many reasons to return to Montreal, always ensuring that you are here over a Wednesday. In the meantime, you can follow the antics on www.Wednesday-Night.com Your book is right on top of "Plan of Attack" which another guest (but not the author!), has just sent us. I cannot wait to liberate myself from learned tomes on biological diversity and ecosystems for deep immersion in my favorite topics - foreign policy and politics.
Speaking of which, you may find some interest in the articles of our friend David Jones in the Hill Times David is the former political counselor at the U.S. embassy. I find him far too far to the right to agree with ninety percent of what he says, but every now and then he surprises me, and he is a good observer of Canada-U.S. issues. Once again, thank you for your book. We will treasure it. Hoping to see you soon again, David joins me in sending our very best,
Diana

Saturday 20 Mar 2004 ts
Inflation rate falls to 0.7% in February
Lower gasoline prices and a higher dollar helped drag Canada`s annual inflation rate down to 0.7 per cent in February, its lowest level since late 2001.

January 28, 2004 IRC
NAFTA, Foreign Direct Investment, and Sustainable Industrial Development in Mexico
The 1994 North American Free Trade Agreement (NAFTA) capped Mexico’s ten-year transformation from one of the most closed to one of the most open economies in the world. The hope was that economic integration would stimulate large inflows of foreign direct investment (FDI) in manufacturing, especially by North American corporations looking for a low-wage export platform. By expanding exports, FDI would alleviate Mexico’s debt overhang, create high-productivity manufacturing jobs, and fuel economic growth. see WN on Mexico Painful for some, but hardly a crisis Light crude is hovering around a 13-year high. But are companies protesting too much about high oil prices? see WN on Mexico

Thursday 18 Mar 2004 ec
INFLATION DROPS TO 2-YEAR LOW Canada's annual inflation rate plunged to 0.7 per cent in February, matching the rate set back in December 2001.

Wednesday 17 Mar 2004 cbc
TRINITY TIME THREATENS TO BAIL OUT OF AIR CANADA INVESTMENT

Trinity Time Investments said Wednesday it was thinking of walking away from its $650-million equity investment in Air Canada, blaming "union intransigence" over the contentious issue of pensions.
Trinity Time wants Air Canada's main unions to agree to a change in the pension plans for some of the airline's workers.
Trinity Time wants some workers switched from the current defined benefit pension plan (one that guarantees a certain pension payout at some future date) to a defined contribution plan (which provides no guaranteed pension payout).
A defined contribution plan shifts the investment risk in the employees' pension plan from the company to the worker.
"Our investment – from the beginning – has been contingent on a satisfactory solution to this issue, which impacts directly Air Canada's competitiveness," said Trinity Time director Harold Gordon [Sonny].

Wednesday 17 Mar 2004 cbc
Kofi challenges Canada
By PARKER MITCHELL
...we members of Engineers Without Borders tried to raise awareness of the challenges facing poor people around the world -- and to offer Canadians a chance to strike a blow against world hunger.

Wednesday 17 Mar 2004 BUENOS AIRES: CENTRAL BANKER MAKES COMPARISONS
The governor of Canada's central bank has drawn comparisons between the economies of Canada and Argentina in a speech given in Buenos Aires. David Dodge, the governor of the Bank of Canada, offered the comparisons in an address before Argentina's financial, political and diplomatic communities. Mr. Dodge recalled that Canada was in a difficult financial position a decade ago. He says the Canadian government was spending one of every three dollars of tax revenue on service of the national debt. Mr. Dodge says Argentina was in a similar situation in 2001 in the period preceding its default on $100 billion of debt. The default led to a major devaluation of Argentina's currency. After two years of political and financial instability, the Argentine government has regained control of its finances and Argentina's economy has resumed growth. Mr. Dodge told his audience that the key in the situations of both countries is the realization of the need to adjust financially to changing circumstances. He says one of the main factors in Canada's emergence from its troubles of 10 years ago is the Bank of Canada's use of interest rates to control inflation.

Wednesday 17 Mar 2004 cbc
U.S. FEDERAL RESERVE LEAVES INTEREST RATE UNCHANGED The U.S. central bank left a key interest rate at a four-decade low on Tuesday, citing slow job creation and low inflation.

Wednesday 17 Mar 2004 cbc
CANADA'S JOBS OUTLOOK IMPROVES IN 2ND QUARTER: SURVEY Canadian job hunters can expect an improved market in the second quarter, as more employers indicate they plan to hire between April and June.

Wednesday 17 Mar 2004 cbc
INSURANCE COMPANIES REAP RECORD PROFITS IN 2003 Canada's insurance industry made $2.63 billion in profits last year - more than in any other year. The results are about 775 per cent higher than for 2002.

Wednesday 17 Mar 2004 cbc
FINANCIAL AUDIT RAISES QUESTIONS ABOUT OPG FINANCES A new financial report released by Ontario Power Generation paint a gloomy picture of the Crown corporation's financial situation.

Tuesday 16 Mar 2004 Dear David and Diana,
Oh how we miss you. Sorry for all the silence, we are happily marooned in the Pacific. New Zealand for now, soon on to Tonga and possibly Samoa. The plans were to go to Kiribati, but Air Kiribati just went belly up, so flexibility is the watchword of the day.
We expect you to have all the world's woes solved by the time we return. All the best,
Cleo and Jens Christian

Monday, March 15, 2004 IRAQ FOR SALE BBC TV; exclusive report by Greg Palast Thanks to David Mitchell

Saturday 13 Mar 2004 CONSUMER CONFIDENCE SLIPS Canadian consumer confidence fell back in February from record highs seen last November, Decima Research Inc. reported Friday.

Thursday 11 Mar 2004 MARKETS DROP ON AL-QAEDA FEARS
Equities markets fell apart late Thursday after news reports linked the bombing of a Spanish train with the al-Qaeda terror network.

Thursday 11 Mar 2004 OTTAWA: TRADE SURPLUS DOWN
Statistics Canada reports that the country's trade surplus dropped by $200 million in January compared with the figure for the previous month. December's figure was $5,200,000. The federal collector of data attributes the drop to lower automobile exports.

Sunday 7 Mar 2004 cbc
LOONIE CATCHES FLIGHT ON WEAK U.S. JOBS REPORT The Canadian dollar jumped against the U.S. greenback Friday following a weaker-than expected jobs report from Washington.

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January We Got Him!Eliot A. Cohen, who kindly contributed this article, is professor of strategic studies at the Paul H Nitze School of Advanced International Studies, Johns Hopkins University.

Stephen S. Poloz VP EDC Economics Weekly Commentary
Solid Outlook for Exports of Services - March 17, 2004
Past issues

David N. Thank You All
please also sign the book 27 March is the BD of DTN

Wed 1149 Mar 10th., 2004 HAITI AND DEMOCRACY Jean-Bertrand Aristide; Me John Ciaccia O.W.N. then Iraq Me Allan Mass Peter Perkins; Dr. Tony Deutsch; Dr. David Mitchell & Jacques Clement & Dr. Kimon Valaskakis Founder of the Club of Athens | GlobaCapitalism | Globalisation also Spain. Paul Martin Bea Bazar OC, & Ron her son ; Bruce Kippen, Lyda Letacq, Ginette Sauve-Frankel intro Husband Hugh John Curtin & the Economic
Album Notes by Herb Bercovitz Art Wed 1149 Mar 10th., 2004 | 2400x224 pre 1149 | webshots.com for more pans

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