by Diane Wilson
I have watched CNN and CNBC and MSNBC and NBC, and I have come away thinking that Canadians really are different. CBC's Peter Mansbridge and company lack the frenetic sense of being. He is grounded. The interviews are longer, more news is covered, and people have the good sense not to all talk at once, yelling each other down. Come to think of it, Mansbridge and crew actually listen. Thank goodness.
CBC is much like our Canadian banks. Which many of us had knocked over the years, knowing they were just conservative cash machines for Bay Street. They never seemed to be the real deal, like say a Citigroup. They didn't have the right stuff to get into over their heads with exotic derivatives. They just stuck to their knitting. Who knew that the entire world would look to Canadian banks? Thank goodness.
Or, how about the decision to go to war? Prime Minister Chretien seemed to take forever to make up his mind over joining the US on Iraq. He wanted to study the issue. Meanwhile President Bush had laid out a solid case for invasion and the other allies were falling in line with the US. In the end, the PM said No, and Canada was not the most popular country in the Bush White House. Thank goodness.
I say this not out of malice for the U.S. but affection. America has always been Canada's neighbour and good friend. But the tone south of the border is worrying. Americans are more bellicose than ever. Look at CNBC's Jim Cramer and Rick Santelli, and their rants. It is also pretty weird that the finest American broadcast journalism is coming from a comedian, John Stewart.
It's enough of broadcasters stating that Obama has declared war on investors. It's enough of the hyperbole. Hope lurks in one little corner of MSNBC, with a show run by the very erudite Rachel Maddow. She refuses to have guests bicker and she spends longer on interviews. Come to think of it, I would like to see her do an interview asking why American TVsters are so busy yelling and what can be done about the matter. Are the anchors and the guests just reflecting the mood of the country or is it something more?
Because, deal with the issue, they must. Years from now, patients with hearing deficits are going to be asked a simple question: Were you around heavy machinery and American news?
March 19, 2009
AIG Anger Explodes, French Protest and the South Pacific Erupts
by Diane Wilson
Well, perhaps cable TV can move on to another subject. The House, reacting to anger on the streets caused by bonuses paid to AIG executives, voted 328 to 93 to retrieve the bonuses by slapping a 90% tax on the money. The measure had widespread Republican support. According to The New York Times, the lawmakers were responding to their constituents' anger.
Meanwhile, trouble is afoot in France, reports The Globe and Mail, as more than one million angry workers take to the streets demanding President Nicolas Sarkozy open new talks to tackle the deepening economic crisis. As the French economy contracted at the fastest pace in 30 years, workers from the biggest companies in the country were marching in Paris, Marseilles and Lyon.
And on and on, with mounting unemployment and anger the world over. So it is with a great deal of interest that we read in The Huffington Post that there is an underwater volcano that has been erupting for days, heaving smoke and steam high into the sky. Apparently, this volcano is not having a negative impact on the islanders of Tongatapu or fish and wildlife. However, the beaches of nearby Fiji, will be covered with pumice from the erupting volcano.
Long story short: It is better to give than receive. Paris is not always better in the springtime. And last, that Beatles song no longer makes sense when it enthuses, "I'd like to be under the sea...."
Well, perhaps cable TV can move on to another subject. The House, reacting to anger on the streets caused by bonuses paid to AIG executives, voted 328 to 93 to retrieve the bonuses by slapping a 90% tax on the money. The measure had widespread Republican support. According to The New York Times, the lawmakers were responding to their constituents' anger.
Meanwhile, trouble is afoot in France, reports The Globe and Mail, as more than one million angry workers take to the streets demanding President Nicolas Sarkozy open new talks to tackle the deepening economic crisis. As the French economy contracted at the fastest pace in 30 years, workers from the biggest companies in the country were marching in Paris, Marseilles and Lyon.
And on and on, with mounting unemployment and anger the world over. So it is with a great deal of interest that we read in The Huffington Post that there is an underwater volcano that has been erupting for days, heaving smoke and steam high into the sky. Apparently, this volcano is not having a negative impact on the islanders of Tongatapu or fish and wildlife. However, the beaches of nearby Fiji, will be covered with pumice from the erupting volcano.
Long story short: It is better to give than receive. Paris is not always better in the springtime. And last, that Beatles song no longer makes sense when it enthuses, "I'd like to be under the sea...."
March 4, 2009
Build Canadian! No Beggar Thy Neighbour We
by Diane Wilson
Howard Dean did it for me. Last night in an interview with Rachel Maddow on MSNBC Former DNC Leader Dean praised President Obama's proposed health care reform, saying it will be "a saviour for America. Maybe our automobile companies will finally be competitive with Canada's again."
Mr. Dean, Canada does not have any car companies. We have foreign car companies -- yours among them -- and they are not shy about going cap in hand to our federal and provincial governments. Recently, Chrysler and GM asked for C$10 billion in government aid, in a restructuring plan that will cut GM's workforce to from 20,000 in 2005 to a measly 7,000 in 2010, as noted on the CBC.
Dean spoke only hours after Pittsburgh-based US steel announced its plans to lay off 1,500 workers in Canada. According to The Globe and Mail, this will be the first time that the storied Stelco plant has been shut down. And these cuts follow a host of cuts by other foreign owners like Rio Tinto Alcan (1000)and Vale Inco (423). News late today confirms that Chrysler is eliminating the third shift at its Windsor, Ont. assembly plant, slashing 1,200 minivan workers.
In view of the cuts to Canadian workers, it is time to build Canadian. I would like Research in Motion creator Jim Balsillie to have lunch with Magna's Frank Stronach. I think these guys could dream up a fantastic new Canadian car before their entrees arrive on the table. They could buy Chrysler or GM -- both are cheap and come with loads of government help -- or pick up one of the shuttered plants in Windsor. We already have the aforementioned health care in place. We have great brainpower from places like Waterloo. Why can't Canada build a car that has the same Wow factor as the Blackbery? Maybe the Trackberry Hybrid. It can't come soon enough.
Howard Dean did it for me. Last night in an interview with Rachel Maddow on MSNBC Former DNC Leader Dean praised President Obama's proposed health care reform, saying it will be "a saviour for America. Maybe our automobile companies will finally be competitive with Canada's again."
Mr. Dean, Canada does not have any car companies. We have foreign car companies -- yours among them -- and they are not shy about going cap in hand to our federal and provincial governments. Recently, Chrysler and GM asked for C$10 billion in government aid, in a restructuring plan that will cut GM's workforce to from 20,000 in 2005 to a measly 7,000 in 2010, as noted on the CBC.
Dean spoke only hours after Pittsburgh-based US steel announced its plans to lay off 1,500 workers in Canada. According to The Globe and Mail, this will be the first time that the storied Stelco plant has been shut down. And these cuts follow a host of cuts by other foreign owners like Rio Tinto Alcan (1000)and Vale Inco (423). News late today confirms that Chrysler is eliminating the third shift at its Windsor, Ont. assembly plant, slashing 1,200 minivan workers.
In view of the cuts to Canadian workers, it is time to build Canadian. I would like Research in Motion creator Jim Balsillie to have lunch with Magna's Frank Stronach. I think these guys could dream up a fantastic new Canadian car before their entrees arrive on the table. They could buy Chrysler or GM -- both are cheap and come with loads of government help -- or pick up one of the shuttered plants in Windsor. We already have the aforementioned health care in place. We have great brainpower from places like Waterloo. Why can't Canada build a car that has the same Wow factor as the Blackbery? Maybe the Trackberry Hybrid. It can't come soon enough.
March 2, 2009
The Little Depression: An Ailing Economy Defies Description
by Diane Wilson
We don't know if we're in a depression, because nobody actually agrees on what a depression is, says The Globe and Mail. Ambiguity has come to characterize the 21st century.
Recent wars are fought not against countries with clearly delineated borders, but against amorphous groups lurking in mountains and caves. Similarly, the economic enemy is hard to pin down.
Clearly, the US and Canada are in recession, but what about depression? According to Professor Peter Morici of the University of Maryland, the US is likely in a depression right now. A depression is defined in many ways -- it can be a downturn of three years with a 10% drop in economic output and unemployment above 10%, or a sustained recession during which people actually hock their assets to make ends meet.
Since the States is only 15 months into this mess and unemployment is not yet 8% and output is only down 6.2%, the Depression parameters don't work. During the Great Depression, a quarter of the economy evaporated by 1933 and a quarter of the workforce lost employment. But, last year's stock market was the worst since 1931. And, this just does not feel like other recessions. Bring in Prof. Morici's other definition of a depression -- a recession that "does not self-correct" because of structural problems like bank credit and trade deficits. Which makes me think of how Uncle Sam has come to the rescue of banks, autos and insurers.
We are getting weary, and we need certainty. What if we assume the worst and call it The Little Depression, a limited recession characterized by structural problems? This way, we know where we are at. During this downturn, people will learn to save and eat at home. Stocks will get cheaper, but not that much cheaper. Companies will shore up their balance sheets, and exploit good opportunities. Baby boomers will learn how and why to buy bonds. But it will end, and as we exit this period, de-levered personal and corporate finances should stand us in good stead.
Perhaps the best news about The Little Depression could be that we do everything much faster now. I know I could be wrong about all of this, but I am beginning to think it will not take as many years to fix the mess. We just need to get out of the way, give President Obama and his team a chance to work their magic, and be patient. And then, boy oh boy, watch the sidelined money return from money market funds and treasuries.
We don't know if we're in a depression, because nobody actually agrees on what a depression is, says The Globe and Mail. Ambiguity has come to characterize the 21st century.
Recent wars are fought not against countries with clearly delineated borders, but against amorphous groups lurking in mountains and caves. Similarly, the economic enemy is hard to pin down.
Clearly, the US and Canada are in recession, but what about depression? According to Professor Peter Morici of the University of Maryland, the US is likely in a depression right now. A depression is defined in many ways -- it can be a downturn of three years with a 10% drop in economic output and unemployment above 10%, or a sustained recession during which people actually hock their assets to make ends meet.
Since the States is only 15 months into this mess and unemployment is not yet 8% and output is only down 6.2%, the Depression parameters don't work. During the Great Depression, a quarter of the economy evaporated by 1933 and a quarter of the workforce lost employment. But, last year's stock market was the worst since 1931. And, this just does not feel like other recessions. Bring in Prof. Morici's other definition of a depression -- a recession that "does not self-correct" because of structural problems like bank credit and trade deficits. Which makes me think of how Uncle Sam has come to the rescue of banks, autos and insurers.
We are getting weary, and we need certainty. What if we assume the worst and call it The Little Depression, a limited recession characterized by structural problems? This way, we know where we are at. During this downturn, people will learn to save and eat at home. Stocks will get cheaper, but not that much cheaper. Companies will shore up their balance sheets, and exploit good opportunities. Baby boomers will learn how and why to buy bonds. But it will end, and as we exit this period, de-levered personal and corporate finances should stand us in good stead.
Perhaps the best news about The Little Depression could be that we do everything much faster now. I know I could be wrong about all of this, but I am beginning to think it will not take as many years to fix the mess. We just need to get out of the way, give President Obama and his team a chance to work their magic, and be patient. And then, boy oh boy, watch the sidelined money return from money market funds and treasuries.
March 1, 2009
Why Some Letters of the Alphabet are Better than Others
Economics, Anger and Politics
by Diane Wilson
Nouriel Roubini, aka Dr. Doom, writes in the New York Times about how the US might proceed through this dreadful recession. He notes that it skipped the usual V and is in the 15th month of a U-shaped recession that will unquestionably be the longest since the Great Depression.
US GDP will not grow more than a muted 1% in 2010, while unemployment will rise to around 10%. What's more, even if the Government throws all necessary stimulative actions at the problem, Roubini does not see growth rising to 2% until 2011, meaning the recession could stick around for three years. That's the good news.
If the collective we do not put policies in place, the U-shaped recession could morph into an L-shaped near-depression or stag-deflation, much like the Japanese experienced in the 1990s.
That will give a lot of angry people more time time to get even angrier. Recently, CNBC's Rick Santelli, an otherwise affable man who reports on bonds, created an on-air diatribe against Obama's mortgage relief program. This vitriol cannot be ignored. The GOP has spent the entire week declaring the Democrats Socialists, while some of their more rational members, like Governor Schwarzenegger, wait eagerly for the postman to deliver the Stimulus money.
Frank Rich notes in his column in The New York Times "the genuine populist rage in the country — aimed at greedy C.E.O.’s, not at the busted homeowners mocked as “losers” by Santelli — cannot be ignored or finessed."
We are probably reaching the end of people's ability to absorb weird letters -- V-shaped, U-shaped and L-shaped recessions -- and frightfully large numbers. Most of us just cannot wrap our minds around $350 billion TARP here, $787 billion stimulus there and a $1.3 trillion deficit.
What to do. Fortunately, economists of all stripes are on board with the President. It is now up to the Democrats to put out a very large welcome mat for the Republicans and allow them to talk -- not yell -- about their differing ideas. There has got to be some consensus on some issues. Start with small initiatives, and gently get everybody going in the same direction, maybe by giving credit and even ownership to Republicans for some of their ideas. Also, it would be helpful to have leadership from the Republicans who are currently working with the President. The current anger is counter-productive. And at times, downright scary.
by Diane Wilson
Nouriel Roubini, aka Dr. Doom, writes in the New York Times about how the US might proceed through this dreadful recession. He notes that it skipped the usual V and is in the 15th month of a U-shaped recession that will unquestionably be the longest since the Great Depression.
US GDP will not grow more than a muted 1% in 2010, while unemployment will rise to around 10%. What's more, even if the Government throws all necessary stimulative actions at the problem, Roubini does not see growth rising to 2% until 2011, meaning the recession could stick around for three years. That's the good news.
If the collective we do not put policies in place, the U-shaped recession could morph into an L-shaped near-depression or stag-deflation, much like the Japanese experienced in the 1990s.
That will give a lot of angry people more time time to get even angrier. Recently, CNBC's Rick Santelli, an otherwise affable man who reports on bonds, created an on-air diatribe against Obama's mortgage relief program. This vitriol cannot be ignored. The GOP has spent the entire week declaring the Democrats Socialists, while some of their more rational members, like Governor Schwarzenegger, wait eagerly for the postman to deliver the Stimulus money.
Frank Rich notes in his column in The New York Times "the genuine populist rage in the country — aimed at greedy C.E.O.’s, not at the busted homeowners mocked as “losers” by Santelli — cannot be ignored or finessed."
We are probably reaching the end of people's ability to absorb weird letters -- V-shaped, U-shaped and L-shaped recessions -- and frightfully large numbers. Most of us just cannot wrap our minds around $350 billion TARP here, $787 billion stimulus there and a $1.3 trillion deficit.
What to do. Fortunately, economists of all stripes are on board with the President. It is now up to the Democrats to put out a very large welcome mat for the Republicans and allow them to talk -- not yell -- about their differing ideas. There has got to be some consensus on some issues. Start with small initiatives, and gently get everybody going in the same direction, maybe by giving credit and even ownership to Republicans for some of their ideas. Also, it would be helpful to have leadership from the Republicans who are currently working with the President. The current anger is counter-productive. And at times, downright scary.
February 28, 2009
An Open Letter to President Obama: You Really Do Need Health Care Reform
Dear Mr. President,
By your own admission, you have arrived at this day of reckoning. In saying this, and budgeting for a newly expanded set of goals and priorities as reported in The Huffington Post, you are confronting some of the most difficult issues, ever. According to Politico, you are now ready to begin work with Kansas Governor Katherine Sebelius heading up Health and Human Services. As one of your northern neighbours, I want you to know that you are doing the right thing by advancing health care reform in the United States.
In 2004, the Canadian Broadcasting Corporation ran a series about the greatest Canadian. The list included hockey great Wayne Gretzky, telephone inventor Alexander Graham Bell, and insulin discover Frederick Banting and two great Canadian prime ministers. Who did the public pick? Tommy Douglas (www.cbc.ca/greatest/) the man who introduced universal public health care to Canada, while Premier of Saskatchewan.
I suspect the debates that lie ahead regarding universal health care will make the Stimulus bill appear like child's play. But debate you must. It is wrong to leave 47 million Americans without health care, without the ability to be healthy, without the ability to be well, without the ability to fully contribute to your society.
My American friends want you to get going on universal health care. I believe you have already heard from my St. Louis friend, who believes the economic recovery will be faster if there is a health care plan. The current system equates good jobs with good health care, and that has proved a burden for too many companies. My friend from Virginia, who has lived in Canada for awhile, had a very serious stroke last fall and was hospitalized for 14 weeks. During that period, I asked her if she was angry. She told me that on the contrary, she is so appreciative of the Canadian health care system. She says she could not have afforded the stroke in the U.S.
Mr. President, I do not wish to mislead you and your country. Our system is far from perfect -- we have a shortage of doctors, long wait times, our nurses are overworked. However, we never think for a minute about cost or insurance coverage when anybody falls ill, or goes to the doctor. Medical costs are covered by taxes.
I believe that you and the House will examine many options, and there will be great argument. I hope that the Canadian government studies your various proposals and learns how to adapt and perfect our system in ways large and small. And I advise everybody to keep track of the people leading the charge for American health care reform. Because, like Tommy Douglas, one day they too could be known as your country's greatest Americans!
Good luck,
Diane Wilson
By your own admission, you have arrived at this day of reckoning. In saying this, and budgeting for a newly expanded set of goals and priorities as reported in The Huffington Post, you are confronting some of the most difficult issues, ever. According to Politico, you are now ready to begin work with Kansas Governor Katherine Sebelius heading up Health and Human Services. As one of your northern neighbours, I want you to know that you are doing the right thing by advancing health care reform in the United States.
In 2004, the Canadian Broadcasting Corporation ran a series about the greatest Canadian. The list included hockey great Wayne Gretzky, telephone inventor Alexander Graham Bell, and insulin discover Frederick Banting and two great Canadian prime ministers. Who did the public pick? Tommy Douglas (www.cbc.ca/greatest/) the man who introduced universal public health care to Canada, while Premier of Saskatchewan.
I suspect the debates that lie ahead regarding universal health care will make the Stimulus bill appear like child's play. But debate you must. It is wrong to leave 47 million Americans without health care, without the ability to be healthy, without the ability to be well, without the ability to fully contribute to your society.
My American friends want you to get going on universal health care. I believe you have already heard from my St. Louis friend, who believes the economic recovery will be faster if there is a health care plan. The current system equates good jobs with good health care, and that has proved a burden for too many companies. My friend from Virginia, who has lived in Canada for awhile, had a very serious stroke last fall and was hospitalized for 14 weeks. During that period, I asked her if she was angry. She told me that on the contrary, she is so appreciative of the Canadian health care system. She says she could not have afforded the stroke in the U.S.
Mr. President, I do not wish to mislead you and your country. Our system is far from perfect -- we have a shortage of doctors, long wait times, our nurses are overworked. However, we never think for a minute about cost or insurance coverage when anybody falls ill, or goes to the doctor. Medical costs are covered by taxes.
I believe that you and the House will examine many options, and there will be great argument. I hope that the Canadian government studies your various proposals and learns how to adapt and perfect our system in ways large and small. And I advise everybody to keep track of the people leading the charge for American health care reform. Because, like Tommy Douglas, one day they too could be known as your country's greatest Americans!
Good luck,
Diane Wilson
The Dow is Cooked for Now
Considering GE slashed its dividend 68% Friday, and Citigroup shares now trade for less than a 12 ounce can of Spam, you would have expected the Dow to fall more than 119 points yesterday. However, The Dow Jones Industrial Average -- the 30 companies that reflect the US economy -- has too many companies on deathwatch. Citigroup, the bank that the US government basically nationalized yesterday, currently has a market cap of US$8 billion. GM sports a cap of US$1.37 billion -- roughly three times Oprah's salary -- and trades at $2.25. By comparison, the Royal Bank of Canada has a market cap of US $32.5 billion, while the BCE takeover that never happened was priced at $51 billion.
Look for a redo of the Dow components later this year. In the meantime, the S & P will provide a better gauge of the market. And investors who used Dogs of the Dow Strategy -- the clever theory that suggests buying the ten Dow stocks whose dividends provide the highest yield -- might want to wait and see. Last year's Dog picks included Citigroup, Pfizer, GM, JP Morgan Chase and General Electric, among others --companies that are either staving off bankruptcy or shoring up balance sheets, while slashing dividends.
Look for a redo of the Dow components later this year. In the meantime, the S & P will provide a better gauge of the market. And investors who used Dogs of the Dow Strategy -- the clever theory that suggests buying the ten Dow stocks whose dividends provide the highest yield -- might want to wait and see. Last year's Dog picks included Citigroup, Pfizer, GM, JP Morgan Chase and General Electric, among others --companies that are either staving off bankruptcy or shoring up balance sheets, while slashing dividends.
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