Wednesday Night #1295

27 December 2006

We have written, sent and posted our seasonal end-of-year Message and invite anyone we have inadvertently left off the Send List to savor the page, the photos and the sentiments therein.
It is difficult for the author to decide on the theme for this evening’s missive. Saccharine sentiment has overwhelmed us these past days and, at the other end of the spectrum, so many pundits are analyzing the past year from every possible gloom and doom perspective that there is nothing left for us to say.
Obviously Bill Watson feels the same way, as his column today consists in a light-hearted analysis of the signatures of Stephen and Stéphane, while the normally deadly-serious Tom Friedman dismounted from his globalization hobbyhorse last week to offer President Bush sardonic, albeit undoubtedly accurate, advice on “Mideast Rules to Live By
The Economist is almost giddy in its treatment of “Happiness and economics“, maintaining in the pre-Christmas edition that the science is not quite as dismal as it was, and introducing us to the new profession of “hedonimetrist”. We are happy to report that the article is a good read, thus proving its point.
Not all is levity and mirth. We would be derelict in our self-assigned task of keeping you informed (possibly more informed than you wanted to be) were we not to point you in the direction of some thought-provoking pieces on the state of the world, as we prepare to take up the challenges of yet another year. Jeremy Kinsman, in a fine analysis of the state of the world, writes that “If 2006 were a wine, it wouldn’t be a vintage worth keeping”. We also commend Foreign Policy’s briefs on the 10 Top Stories You Missed in 2006 , ranging from the hackable biometric e-Passports issued by the U.S. State Department; to Health Canada warnings against Tamiflu, the antidote for avian flu, after 10 Canadians who had taken the drug died suspiciously; and on to Indian firms assisting Iran to develop its nuclear capability.
Pretty much everyone seems to agree and deplore that Christmas is a particularly egregious example of western consumerism, as Bloomberg announces that U.S. holiday retail sales “rose a disappointing 3 percent from 2005 as a slowing housing market and higher energy costs cut into spending”, while the BBC keeps a stiff upper lip, holding out the hope shared by Wednesday Night’s Princess, that “Retailers [will] make up for a disappointing Christmas with the launch of the New Year sales.”
While merchants grumble that the green fall has created a lack of enthusiasm for pre-Christmas buying, we believe that there is a positive side to the debate. Once safe and innocuous, the topic of last resort, the weather is news just about everywhere – as the eastern seaboard enjoyed a balmy December, London was hit by a positively Victorian fog, Vancouver’s Stanley Park, buffeted by vicious winds, has lost 3,000 trees. As with all news, it has become controversial, at least when in the company of the vociferous if dying breed of climate-change naysayers. Nobody is unaffected by weather, so as extreme weather spreads across the globe, shifts in weather patterns are accompanied – or at least followed – by less extreme, but noticeable shifts in media attitudes and consequently, living patterns, leading us to share the optimistic view that “the Color of the Year Is … ” Green and green is the color of hope.
Please take special note that Wednesday 7 March 2007 has been proclaimed (by a computer-assisted select committee) the official anniversary on which 25 years of Wednesdays will be celebrated.

Report
The sparse, but sprightly group gathered, indicated how many Wednesday Nighters are taking advantage of the short week for a long holiday.

John Moore introduced his partner Mike who is a business analyst to stock brokers and investment managers, helping them to select computer systems, concentrating on trading and clearing systems, and risk management systems. He knows Metastock well, thus endearing himself to our Chairman, and launching a lengthy discussion of market-related technology, trading and regulation.

This led almost inevitably to a discussion of the Conservatives’ reversal of their position on income trusts. It will be remembered that when the Liberals first proposed taxing the trusts, the Conservatives (who knew the Liberals were right and, along with many others, were sure that the trusts could not last, especially in view of the ever-expanding list of unrelated businesses that were taking advantage of the structure) loudly condemned the Liberal position. The Liberals retreated from their position in the face of a well-organized campaign by the trusts and the investors in trusts and the Conservatives subsequently campaigned on their promise to defend the trusts. Then came the Hallowe’en massacre
One Wednesday Nighter, who is a keen observer of Ottawa antics, has mentioned that despite all the documented proof (the Conservative platform, videotapes of pronouncements, etc.) to the contrary, the refrain most often heard in Ottawa is “Oh, but that was Monte Solberg (who made the promise)”.
Will this come back to haunt the Conservatives in a future election? A lot of people were hurt and it was a flagrant broken promise.

Markets 
In the absence of the regular Wednesday Night market seers with crystal balls, there were few forecasts for the market in 2007, other than the statement that at least one major firm is ‘pretty relaxed’ about the outlook, confident that rates will come down and that energy costs will stabilize as consumption is generally lower in North America thanks to a so-far milder winter.
It was pointed out that sometimes members of a specific community will become enamoured of one stock and everyone with an investment portfolio will buy that stock because “all my friends are buying it” with the result that it will go up and up, until, like a Ponzi scheme, suddenly it crashes.

Our political leaders
It’s early days with the new Liberal leader, but there was general agreement that Stéphane Dion is not only extremely impressive, but very likeable in person, whereas, although admittedly highly educated and sophisticated, Michael Ignatieff turned people off by his arrogance and his seeming disconnectedness from Canada and the country’s issues.
The more people meet Stéphane Dion, the more they like him whereas The more people meet Michael Ignatieff, the less they like him
Stephen Harper seemed at the outset to be the Liberals worst nightmare, very smart and speaking to what matters to Canadians, but then he went after gay marriage – again -, espoused the GST cut, pursues an ill-advised black & white policy vis à vis Israel, reversing the income trust policy, and, perhaps worst, the on-going neglect of the environment and his adamant opposition to Kyoto. While these positions may be indicative of his commitment to certain principles, his lack of flexibility may be his worst enemy. Furthermore, his refusal to attend the AIDS Conference in Toronto – an opportunity to hobnob with Bill Clinton and Bill Gates – also appears to have been a very poor move. He appears to have written off Québec.
One guest believes that the Conservatives’ position on the Environment will be the key issue until Stéphane Dion is elected. Deniers appear to be gradually moving towards acceptance of man-made global warming. It may not be the most important issue, but it may dominate our economic thinking.

The global decline of fisheries
This growing crisis has been followed and mapped by the UBC Fisheries Centre, under the direction of the brilliant Dr. Daniel Pauly. Dr. Pauly’s research and particularly the mapping conducted for the Sea Around Us project indicate the overwhelming collapse of world fish stocks. This is one issue within the context of loss of biodiversity, a little-understood term whose implications are even less understood by the masses. One of the most comprehensive studies on biodiversity loss is the Millennium Ecosystem Assessment, which is not totally pessimistic, but it is hardly a popular – or vulgarized – document. But it does point to the choices which society must make such as that between shrimp farming and mangroves that hold the shoreline in place.
Can one equate the disaster scenario of the environment to the one many lived through in the 50s of the threat of nuclear holocaust? Does the media exaggerate each crisis? Even Al Gore’s Inconvenient Truth seems to glaze over certain events that do not contribute to the doomsday scenario he propounds.

How to update Wednesday Night
As we move towards celebration of 25 years of Wednesday Night, the question must be asked. Does the format (NOT the Chairman) need updating as suggested recently by one Wednesday Nighter? The general consensus is that the format works, but the relative success of each evening is highly dependent not only on who is present, but the chemistry between all in the room.
On that note, the chemistry having been deemed more than acceptable this evening, the session came to a close with good wishes for a very happy 2007.

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