Wednesday Night #1402

T H E  R E P O R T

Several very promising Wednesday Nighter ventures were given airtime.
Bert Revenaz gave a brief update on the new company, Ecometrica, that he and some colleagues have started up. The  head office is in Edinburgh and as soon as the necessary investment was acquired, the North American office, of which Bert is Managing Director, was established in Montreal. Their first major marketing initiative, the Obama Inauguration Carbon Calculator was launched on January 9 and has attracted considerable attention including an article in the Gazette. Currently the office is focused on IT calculation functions, however plans include a highly participatory ecological mapping service that will be somewhat modelled on the approaches and experiences of birdwatchers and divers.
Jovian Capital Corporation has launched Horizons AlphaPro ETFs which will be managed using proprietary cycle, sentiment (!), and technical research analysis provided by our OWN Ron Meisels. The managed ETF resembles a mutual fund, but has much lower management costs.
The Nicholsons’ old friend, Evan Schulman, has founded a new comany (Evan is a serial founder of companies), Tykhe, LLC, a firm involved in marketing and implementing Revenue Recognition Certificates. The certificates are described as “an innovative financial instrument that allow investors new opportunities and issuers added flexibility. The logic is straightforward: an issuer promises to pay an investor a specified percentage of revenues for a certain period of time. At the end of the time period, the Certificates expire.” Wednesday Nighters’ initial reaction was a cross between scepticism and puzzlement as to the advantages of this particular instrument. More information is needed.

Medical research
Ofer Avital outlined how he came to create his company, Evidence Matters  (now largely licensed to ProQuest) and what it does. Briefly, after realizing that different protocols exist in different countries (he gave the example of differences in treatment of a child’s earache in France and in Quebec), he set out to create a data base that incorporates the whole hierarchy of research evidence, incorporating information from a wide base of sources (New England Journal of Medicine, etc.) and designed a system that creates industry-specific, evidence-based knowledge solutions. Solutions are currently in use principally by medical schools and teaching hospitals, but also physicians, researchers, decision-makers and interested patients, at leading academic and clinical centres in 3 languages and in more than 10 countries worldwide. A new project is underway to establish a data base on mental health.

Computerized medical records
Meanwhile the realization of fully computerized medical records accessible to patients is coming closer. There are a number of inter-related developments including one which will ‘translate’ medical files into language that the average patient can understand. The provincial DSQ (Dossier Santé Québec) is advancing, as are OSCAR and MyOSCAR, the patient-controlled version.
Last week, President-elect Barack Obama has promised to computerize all of America’s medical records within five years, saying that will cut waste, eliminate red tape and reduce the need to repeat expensive medical tests. But it just won’t save billions of dollars and thousands of jobs, it will save lives by reducing the deadly but preventable medical errors that pervade our health care system.” There are issues of concern regarding access by insurance companies, potential employers, drug companies wishing to target certain markets, but generally Wednesday Night’s medical practitioners endorse the idea for Canada and underline that it should extend to all citizens rather than restricting it to patients. This would greatly improve national healthcare (citing the example of letters sent to all women over 50 telling them to have a mammogram) and research data.

Several Wednesday Nighters are actively involved in an anti-smoking campaign, believing that with the change in the administration in Washington and the possible appointment of Dr. Sanjay Gupta  as Surgeon General, it is the time for major changes in how Canada deals with tobacco products, especially cigarettes. They claim that the nicotine content in cigarettes is controlled by the cigarette manufacturers, presumably in the attempt at producing a uniform product.  In the hope of reducing and eventually eliminating tobacco use, it has been proposed that cigarette manufacturers gradually reduce and eventually eliminate their nicotine content thus reducing the incidence of lung cancer.  The proponents of this scheme see that cigarettes with the current nicotine content continue to be produced but available only on prescription for those unable to tolerate the proposed program. The Wednesday Nighters have consulted with Dr. Richard Hurt of the Mayo Clinic, who was a recent guest of Dr. Gupta’s House Call program on CNN and have also written to Canada’s Minister of Health, Leona Aglukkaq in the hope that now would be the time for joint U.S.-Canada action.

Did Speculation Fuel Oil Price Swings?
A clip from the recent 60 Minutes show sparked a discussion of investors versus speculators (and a number of unkind references to Mr. Madoff, to banks and to individuals and institutions who shelter under Chapter 11 after hiding assets). In the summer of 2008, hedge fund manager Michael Masters whose expertise is in tracking the flow of investments into and out of financial markets noticed huge amounts of money leaving stocks for commodities and oil futures, most of it going into index funds, betting the price of oil was going to go up.This would be speculation, no?
Every time there is a bubble and a burst bubble, blame is cast on ‘speculators’, but defining what is a speculator – as opposed to an investor – can be tricky and best done by examples. Warren Buffet, would be considered an investor as he will buy something that is close to book value and hold it for a long period in the anticipation of recovering the investment through dividends. The wisdom of buy-and-hold strategy is debatable; the yields over the long term. Rebalancing of the portfolio is essential if there is to be any profit made.
A speculator would be broadly defined as anyone with the expectation of obtaining profit from capital gain rather than dividends. However, speculation in itself is not bad. If everyone held their investments for the long term, there would be little or no market. It is when speculators act in concert to manipulate the markets that things go sour. What has been the role of the “Enron Loophole, cleverly inserted by Senator Phil Gramm of Texas in a government reauthorization bill?
Oil is a commodity that investors now recognize has limitations which did not perhaps exist – or which may not have been considered – a few years ago. Thus, oil has become a target of speculators rather than investors.
A final comment from one Wednesday Nighter: “if you want to speculate right now, buy gold. If you want to invest, buy shares in the companies that will be replacing all of the water pipelines and infrastructure in the U.S.”

Israel & Palestine
The current Hamas-Israeli conflict remains an enigma for Wednesday-Nighters.  Some Wednesday Nighters see it as an internecine conflict such as has occurred between Hutus and Tutsi, or between Irish Catholics and Protestants, the Sudan and the DRC, which is only solvable by creating a 10-metre fence separating the two peoples until they understand that isolation is no way to exist. It is clear that individuals can get along, but there are those who manipulate sentiment for political ends and rarely suffer the consequences. A sticking point for most was Israel’s resettlement of the lands (not incidentally with the best access to water) conquered in the 1967 War, leaving Gaza with little except the only natural gas supply in the area. Others see the unprecedented level of civilian casualties as the result of a perceived urgency on the part of the Israelis to put an end to the conflict before the U.S. presidential inauguration.  A more disturbing view, one that has been suggested at previous Wednesday Nights, and held by Niall Ferguson is that historically, wars have marked the end of depressions.  Those who hold this view see the current conflict as a possible precursor of an intensely destructive world war, leaving no one untouched.

English-language education Update
Brent Tyler is currently testing the validity, before the Supreme Court of Canada, of Québec’s decision to close the loophole permitting the children of non-francophone immigrants to receive their primary school education in private schools in English, thus qualifying them for secondary education at English public schools.  The prediction is that the Supreme Court will strike down the legislation and that Québec will have already prepared alternative legislation nullifying the intent of that decision. [More on the topic from Julius Grey in the MetropolitaIn : “Voices have been heard again in Montreal’s English Community calling for action if the Quebec government tries to overturn a successful Bill 104 challenge through use of the “notwithstanding clause”. At the same time, criticism has been leveled against Quebec Ministers Kathleen Weil and Yolande James for not insisting more on the protection of English identity. A new round of English complaints is unjustified, whatever happens to Bill 104, and the two ministers are clearly right in rejecting an exclusive English identity… Beryl Wajsman had a different view in a December piece in the Metropolitain]

 T H E  I N V I TA T I O N

Late-breaking news
Nortel files for court protection from its creditors.

Very Random Thoughts for The last Wednesday Night before the dawning of the new era in Washington.

Let us hope that it truly is a new era, as we are VERY tired of the old one. The news just doesn’t seem to get any better – and some of the really annoying people are not going away, e.g. Sarah Palin [yes, we confess that like Tina Fey, we miss Sarah for our rants], and Dubya is making far too many noises about how he has no regrets. Be sure to cancel all social and business engagements on Thursday night, stop at the SAQ for something strong before you settle in to watch his prime-time farewell
One Wednesday Nighter has introduced a useful and fun service for those who are bound and determined to go to the Inauguration. Check out Bert Revenaz’s www.obamacarboncalc.com
For a moment we thought that the U.K. was really taking cost-cutting of government expenditures to heart when we read in the FT that  Tories plan to cut Commons by 60 MPs – then we read further and found this was only a ploy to ensure re-election – don’t tell Stephen Harper! Ah, but he is using the reverse ploy with his 18 new senators.
There’s hope for Ottawa yet, however, now that Chris Ragan has set off in his shining armour to take up his appointment as the Clifford Clark Visiting Economist in the Department of Finance Ragan lands federal government appointment
As we continue to shake our heads over the Madoff saga, how many noticed the Frank Rich column about the U.S. government’s own Ponzi scheme: “THREE days after the world learned that $50 billion may have disappeared in Bernie Madoff’s Ponzi scheme, The Times led its front page of Dec. 14 with the revelation of another $50 billion rip-off. This time the vanished loot belonged to American taxpayers. That was our collective contribution to the $117 billion spent (as of mid-2008) on Iraq reconstruction – a sinkhole of corruption, cronyism, incompetence and outright theft that epitomized Bush management at home and abroad.”  OUCH!
More from the financial world. The ABCP/Purdy Crawford/Montreal Accord saga is coming to an end. While most small investors holding less than $1-million of the paper will be fully paid out in cash by the brokerage firms that sold them the paper, the Caisse, National Bank of Canada and the rest of the larger ABCP investors won’t have it so easy. They will be given bonds that will initially trade at a deep discount to face value. The hope is that they will mature at full value in about nine years. One Wednesday Nighter comments reasonably: “It seems that the retail investor will soon be made whole from the ABCP disaster; I expect that he will never again participate(buy) any more securitized debt obligations nor any other fancy-paper-promises (FPP).  We are all, already witnessing this backlash, for similar reasons, from all investors across the globe. The financial fabric of our Country, torn by such abuses, will now bear a cleverly woven patch. Behind and within every pension fund (institution) there is a beneficial, retail (‘small’) investor.  Why are they not also getting paid now?
If that is not a sufficiently depressing item, then we urge you to take a look (warning this is a 30-minute item) at I.O.U.S.A. , described by Reuters as “To the U.S. economy what ‘An Inconvenient Truth’ was to the environment.” The New York Times says “Brimful of disquieting facts on inflation, trade deficits and Wall Street’s influence on national monetary policy, Patrick Creadon’s resolutely nonpartisan movie tracks America’s “fiscal cancer” through centuries of budgetary highs and lows. Packaging his inconvenient truths with as much humor as he can muster under the circumstances, Mr. Creadon balances his talking heads and pie charts with the folksy progress of the Fiscal Wake-Up Tour, a grass-roots effort spearheaded by David M. Walker, the former comptroller general of the United States, and Robert L. Bixby of the Concord Coalition.
We have often spoken of the End of suburbia. For another take on this question, we recommend  the fascinating What Will Save the Suburbs?  “For a long time now I’ve been obsessed with suburban and exurban master-planned communities and how to make them better. But as the economy and the mortgage crisis just seem to get worse, and gas prices continue to plunge, the issues around housing have changed dramatically. The problem now isn’t really how to better design homes and communities, but rather what are we going to do with all the homes and communities we’re left with.”
On a more cheerful note we have a couple of items of pure delight. The first is the dream job for anyone suffering from our extreme winter (don’t confuse weather and climate change] posted in this Independent article Wanted: Caretaker for island paradise – NOTE: successful applicants will know how to swim. One look at the accompanying picture and you will learn immediately.
And this beautifully written account of a stint as part of an ‘enrichment program’ aboard the maiden voyage of the QM2 – why cannot Wednesday Night be an enrichment program in this style? The part we like best is “We have our own butler who attends to our needs before we know we have them.” Of course it does help that the author is married to Ian Fleming’s niece.
Last but not least, this Wednesday coincides with the 10^th iteration of our West Wing sibling. We congratulate Alexandra on her thoughtful and thought-provoking invitation, wishing that we were so inspired, but we remain confident that you will inspire us – we can always revert to the long list of topics suggested last week!