Have you noticed that Wednesday-Night does not have to worry about Y2K compliance? We will have to begin worrying about Y1K, but not for a year and a half...

CONGRATULATIONS to us all; we have survived Y2K and what a marvelous round-the-world celebration it was! The National Post cover photo was quite wonderful - let us hope it is a Dawn of a New Age, even though we are too wise (or too cynical) to think for a moment that a change in calendar will bring an immediate change in human nature. Pity....

Nonetheless, there is hope. What an end to 1999 with the freeing of the hostages and the resignation of Boris Yeltsin. Portents? Perhaps

It has been suggested that over the course of the next few weeks, all those interested - and with something to add, or dispute - bring their predictions regarding their special fields of interest or expertise to the Wednesday-Night table, or write them to the web site. The Nicholsons and their faithful amanuenses will edit to avoid replication, attribute and generally keep track of what was said by whom.

Jacques Clément will be with us this week and many others returning from far-flung holidays or over-indulgence in fatted calves. (See Wednesday-Night #930 for the first ones).

David and Diana Nicholson

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Wednesday Night in Westmount #931

5th January 2000

The night started with a review of the recent developments in Russia and in particular the resignation on the last day of 1999 by Yelstin and the transfer of power to Vladimir Putin. Putin, who was head of the KGB, has been named Acting President, with democratic elections scheduled for 26th March (the day before David's Birthday).

While Russia is not a great economic factor, either in terms of world trade or trade with Canada, it is still very important as it has a large (and decaying) nuclear arsenal. Few people have any idea of what are Putin's policies. His popularity is high, but a long, protracted war in Chechnya, with many casualties could erode his position. Election turnout will be high.

Warren Allmand pointed out that Russia [cults] has many good people in the Arts, Science and in Sport, where a real meritocracy exists, but they are poor in the areas of economics and management.. Teachers are underpaid now, and actually did better under communism. Martin Barnes said that any expansion and development in Russia will help all its trading partners. Alex Weinstein said that there is no work ethic in Russia. Peter F. Trent 1st commented that the infrastructure for banking, management has fallen apart and will take more than ten years to re-instate. Once this is done there will be a real synergy that will spur development in other fields.

Diana Thébeaud - felt the "Mother Russia" protective ethos still exists, and people in the country thought the State should look after them. The capitalistic work ethic may be a while to take hold across the country.

Tony Deutsch- People in Russia have seen and heard of western style consumerism, and want it themselves.

Jacques Clément- The Bank of Canada has no special forecast on Russian development and trade as it has so little impact on Canada. Canada and Russia do compete in the commodity area.. The banking sector is atrocious. Russia will eventually join the WTO, and this will help it to be more democratic.

Brian Morel - Russian cultural industry may be one area were there is not only excellence, but a sense of respect for what is produced, and also a work ethic among those involved.

John Ciaccia pointed out that Russia promoted culture for ideological reasons.

Warren - while there are lots of Mercedes in Moscow and St. Petersburg, out in the country there is real poverty, poor health, alcoholism, and hardship.

Tony - young people (like any others in the world) look for where the best jobs are. In Russia these are in sports (ice hockey), culture, science and politics.

Margaret Lefebvre-Walker - We should not use the same yardstick to judge Russia as we use. Mercedes are much cheaper in Russia. People move to where the goods are.

Tony addressed the flow of people and the visa restrictions. His example was the Czech gypsies who have now relocated to Finland.

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Jacques gave his usual in depth review of the economic situation. The US unemployment rate is still at 4.1% - a 30 year low. The GDP is in the 3.5% to 4% range and the Consumer Price Index is up only about 1%. A video clip was shown of Edward Yardeni discussing the business cycle and that there will eventually be a downturn in the growth which may well have been over 4% for 1999. In Canada it has been 4.2% and climbing. "If you are scared - you will do something!"

Ron Meisels on the Y2K expenditure - it would have costs us more if we did not spend the funds in preparation of the rollover from 1999 to 2000. Gerald Ratzer pointed out there was really no comparable control group.

Tony - In the Ukraine and Belarus very little was spent on Y2K and there were few problems.

In a change of topic David wished Peter Ferst all the best in his online trading endeavour. Peter said that many traders were switching to his service, which offered after hours service. While some of his clients might be classified as day traders, the majority would be holding on to their stock for longer than a day. He pointed out that Canadians cannot legally open a US trading account. "No US address - no trade in the US" What about a Vermont PO box for $15 a year - which Gerald, like many others, have?

Helene - among the day traders there are very few successes. Minimum accounts are $50,000US - while for E-trade it is $10,000. There are moves to expand the trading hours and also expand the markets from the NASDAQ to AMEX and a broader array of stocks. Eventually there will be 24/7 trading available.

Martin - with 18 years of a bull market - very few traders sell short. Traders are not experienced in a bear market. There will be many losers when the next market correction takes places.

David Nicholson (chair) - traders short faster than when it comes to buying. ie they dump in panic! But Day traders are not gamblers!

Margaret spoke to the case for ethical mutual funds. Her step son-in-law is a committed gambler - and like many gamblers think too much. She also commented that there is overspecialization in funds - to wit the Templeton Prize for Business and Religion.

Jacques said that Alan Greenspan (now aged 73) is the best central banker ever, and expects his nomination for a fourth term as the main Fed financial watchdog, will be approved. A suggestion was put forward that he might not see out his fourth and resign if there is a change in government, to let the new President make his own choice. This year the NASDAQ is up 80% and the DOW and S&P500 by 25%. All indications that Greenspan will increase the Fed lending rate by at least quarter and maybe a half percentage point, at the next meeting on 2nd February. With the core US CPI at 2.1%, tightness in the labour market, the GDP in real terms is closer to 6% and so inflation concerns are ever present. There is a strong housing market - although housing starts are weak, with mortgage rates at 6 5/8%. Consumer confidence is high - best since 1968. Most other indicators are up. In the US there is a record trade deficit and also a record current account.

Ron commented that wages are not a problem and the real strength is from the high productivity in the US. He said a good investment is still the computer and technology stocks. He sees the Canadian dollar strengthening to about 71 cents, with resistance at 75 cents. At the same time the US dollar will decrease against other world currencies. In Canada the core CPI is at 1.6%. Exports remain strong. Some $8 billion has been recently repaid on the national debt, which now stands at $569 billion. In Canada most wage settlements are around 3%, prime is at 6.5%, while US prime is at 8.5%, based on Fed funds at 5.5%.

In Quebec the GDP is at 3.6%, with unemployment at 8.4% - a 23 year low. 77,800 new jobs have been recently created. Exports are up 8% since last year.

John Manley needs a (new) speech writer. His plans on giving all Canadians a free E-Mail account - have already pre-empted by Hotmail, Yahoo and others. See our computer page on his FREE E-Post. We would link to his speach but it did not work when we last tried. The message..Sorry, the web page you are trying to access is secured with a 128-bit version of Secure Sockets Layer (SSL). In order to view this resource, you need a browser with this level of SSL. John Ciaccia was asked about his book. The economy is more important than politics and people are smarter than Landry and others realize. The people know that Quebec is lagging behind Ontario and that there is a 10% tax bonus for people that move from Quebec to Ontario. Helene - recommended investing only in stocks and not in the indicies. Jacques - Investments are stronger in Ontario. At present there is a 3% gap between the unemployment rates in Ontario and Quebec. Ron - There has been a bull market since 1981. In the last 14 months there has been a 59% gain with the TSE at 7,700. Despite a 1/3 correction in the offing, he is predicting the TSE will break the 10,000 by 2001. Also the bull market will continue through 2001. To finish the formal part of the evening Peter 1st interviewed George Cavadias and asked him why he was not in Greece at this time of the year. George's answer "Mon pays c'est l'hiver". Clearly George likes Quebec! Notes by Gerald Ratzer Edited by Diana

Friday 31 December 1999 Let millennium bug bite by Josh Freed

Notes by Herbert Bercovitz (In view of the subject, no editing was done other than suggesting links)

Sam Totah

click for Sam Totah's story

Marcus Hope C.G. of Great Britain

Harry Mayerovitch

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