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TAX CUTS
Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by $20. 'Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'
They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
'I only got a dollar out of the $20,'declared the sixth man. He pointed to the tenth man,' but he got $10!'
'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than I!'
'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'
'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
I think that someone got their hands on Johns Bible.
How to (still) get rich in mining
ANDY HOFFMAN AND SINCLAIR STEWART
Saturday, May 19, 2007
So you want to get ahead in mining? True, it might seem like you're late to the party. No doubt you watched, dismayed, as all those long-suffering investors of Falconbridge Ltd. and Inco Ltd. (yes, the same ones you thought were chumps) doubled their fortunes in the span of mere months, thanks to last year's instalment of the Great Canadian Mining Sale. You can't believe you sold your Alcan Inc. shares after the CEO said the company wasn't up for sale, only to see the stock catch fire following a hostile bid from Alcoa Inc. You've lost track of how many times you've heard that rich foreigners are gutting Corporate Canada, and that our precious natural resources are little more than chum for the sharks from Brazil, or the United States, or even Switzerland.
But what do these whimpering economic nationalists know about mining, anyway? Who cares if a few lumbering old companies disappear from the corporate landscape? The fact is, the nationalists didn't understand that the rules of the game have changed. In the brave new world of Canadian mining, it's not about the size of your rocks – it's how you use them.
This is, without a doubt, the greatest mining boom in a generation, with billions of dollars up for grabs. But the voracious interest in all things metal has spawned a subindustry of new tactics designed to attract investors and their money. The game these days is often less about pulling ore out of the ground than about creating wealth – for shareholders, certainly, but also for insiders who create the action. The latest edition of the aspiring mining mogul handbook could be called “Put Down that Shovel: An Insider's Guide to Mining.” Here's an excerpt.
1. Don't fall in love with the rocks
Ask a mining executive, and he'll tell you straight up: geology degrees are so 1970s. Remember, these days the business runs on financial engineering – not mining engineering. Sure, it helps to have a passing understanding of base metals and gems, but the crucial thing is a financial background.
Just take a look around. Frank Giustra, the mining promoter from Vancouver, is a former investment banker. Ian Telfer, the chairman of Goldcorp., is trained as an accountant. So is Greg Wilkins, Barrick Gold's chief executive officer, and Mick Davis, the man who built Xstrata PLC into a major force. Don Lindsay, the head of Teck Cominco Ltd., is a career investment banker. Ditto for CVRD boss Roger Agnelli, who out-duelled Mr. Lindsay to grab Inco, and Tye Burt, the head of Kinross Gold. Peter Marrone, the head of high-flier Yamana Gold? A former corporate lawyer turned investment banker.
Metallurgists and geologists, who are being shoved from the CEO chair by their smart-suited counterparts, have a fatal flaw, explained one industry type: “They fall in love with the rocks.” Translation? They get into cat fights over who has the better assets, instead of recognizing that in many cases, it isn't about the assets at all. It's about telling a good story and closing the deal.
2. Channel your Christopher Columbus
Exploring is a cinch. All you have to do is set up a company, wait for the markets to fall in love with a particular metal, and then tell the entire world you're hunting for it.
One word of caution, though — make sure not to look too carefully.
There's an old saw in the biz that “drill-holes ruin the story.” The moral? Try to avoid the so-called “truth machines” if you don't want to disappoint your investors. Don't scour your property unless you're really, really, sure you'll find something.
Just take a look around. More than 400 junior explorers have cropped up recently to take advantage of a frenzied worldwide demand for uranium. Never mind that only a fraction of these will survive, much less extract a motherlode of the radioactive yellow stuff – what matters is they can still raise money.
Same deal with molybdenum, that metal-of-the-moment whose name most explorers couldn't even pronounce a year ago. Today, it's at the centre of an exploration craze. Just remember what we said before: People like good stories, especially suspenseful ones. Keep them guessing.
3. A metal by any other name...
Not surprisingly, the biggest mining IPO in Canada last year was for a uranium company, First Uranium Inc. C But is it really a uranium player? According to company filings, First Uranium expects to receive more than 75 per cent of its revenues from gold once it starts production in a couple of years. Not that there's anything wrong with being a gold company – it just doesn't have the same pizzazz as uranium (at least not this year).
Just ask Trigon Exploration Canada Ltd., a diamond explorer that showed some savvy by rechristening itself Trigon Uranium. Presto! Its shares jumped almost sixfold last year, soaring from about 20 cents to $1.20. Coincidence? Perhaps.
There are still some throwbacks, though, like DRC Resources Corp. The company's flagship project has one billion pounds of copper, and far less gold – about a million ounces.
But that didn't stop DRC from changing its name to New Gold Inc. C in 2005. Gold companies tend to get better multiples than copper producers, and the rebranding effort certainly didn't hurt. New Gold's shares went on a tear following the name change, climbing from around $5 apiece to a high of $13.40 last year. Coincidence? You decide.
4. You are the market
You don't have to be an economist to figure out why metal prices have soared to record highs. This is supply and demand, right? China and India are placing orders for base metals faster than miners can dig them out of the ground, and prices are skyrocketing as a result.
For most people, the story ends here. Not for the smart money, though. Take uranium. Hedge funds and other financial players are further choking the supply chain by buying the metal and sitting on it for a while. (And you thought uranium was trading at $120 (U.S.) a pound just because of China?)
This isn't a bad strategy for an aspiring mining mogul, either. A new fund called Uranium Participation Corp. is snapping up concentrate, and in the process is helping the stock prices of industry players like Denison Mines Inc. (which happens to manage the fund, as well).
Still doubtful? Check out Sprott Molybdenum Participation Corp., a new fund that buys up the tongue-twisting metal as well as moly-related stocks.
Who are the hottest performers in the mining sector so far this year? Moly Mines (up more than 250 per cent), moly miner Thompson Creek Metals (up 70 per cent, and 515 per cent over the past 12 months), and moly/copper producer Mercator Minerals (up about 100 per cent).
5. Ask for advice:
There's nothing embarrassing about seeking out counsel – in fact, you should brag about it to everybody.
We know what you're thinking. In other industries, when a company hires a strategic adviser to explore its options, it takes great pains to keep things secret, since investors will assume that merger talks are afoot, and send the stock surging.
Thankfully, there aren't so many Nervous Nellies in the mining sector. Take Northern Peru Copper. It put out a press release this winter trumpeting that it had hired an adviser to “explore its options.” The stock went up. A week later, Northern Peru revealed its option: It wasn't merging – it was selling shares in the company (Alas, the financing was derailed, but you get the idea).
UraMin Inc. had better luck. In February it said it was hiring a financial adviser because of the frothy uranium market. Presto-chango, the stock went up 12 per cent that day. Within a week, the company announced it was selling $226-million worth of shares – a deal that was led by the same brokerage that acted as the strategic adviser. The only thing better than good advice is advice that comes this fast.
6. Do the asset shuffle:
Forget about all those team-first analogies, about how “1 plus 1 equals 3.” In mining, the whole is often worth less than the sum of its parts.
The problem is, when you're actually producing something, the market doesn't give you much credit for your exploration business. But it will give credit to a standalone junior explorer (remember those 400 uranium chasers?). If you're a mining executive, the solution is to spin off your exploration assets into a separate business – preferably at a decent price, since you're often acting as one of the buyers.
Have a look at B2Gold, which has interests in development projects in Colombia and Russia. The assets were owned by Bema Gold, which agreed to a takeover bid from Kinross Gold last year. Ex-Bema CEO Clive Johnson got to keep these development projects by paying Kinross $15-million (Canadian). Look for a B2Gold initial public offering in the fall, and let's just say it's a pretty good bet that the offering will raise a lot more than $15-million. That's fast money.
Yamana Gold, headed by Peter Marrone, has followed a similar path. It sold some property to a startup venture called Aura Resources, which counts Mr. Marrone as a director. Aura has also bought property from another company “related” to Mr. Marrone. And both Aura and Yamana share the same chairman, Vic Bradley.
Frank Giustra and Ian Telfer have perfected this move. They teamed up on Silver Wheaton, which was spun out of Wheaton River, and on Terrane Metals Corp. Their most recent project is Peak Gold Ltd., a company they created by buying a pair of mines from Goldcorp (where Mr. Telfer is chairman). These sorts of thumb's-length deals have long been a concern for investors in other sectors, but not so much in the mining world. It's just the way the business works.
7. The Shell Game
This is how you strike gold, without ever striking gold. The game itself is pretty simple: A mining promoter will buy a cheap “shell” company already listed on the stock exchange, gather some friends to help fund the acquisition, and then, some time down the road, load it up with mining assets (remember the shuffle?) and do another share offering. These deals can be very lucrative, especially if you're in a promoter's “circle of trust.” Being a banker is especially helpful.
Consider those who paid 5 cents a unit last year to buy into a shell company called Imperial PlasTech Inc. They included Mr. Giustra, along with several investment bankers and traders from three high-profile brokerages. For the latter group, it was a nice double-payday. When the mining promoters wanted to buy gold assets, stuff them into a shell and rename the company Peak Gold, who did they award the $326-million financing to? You guessed it – the same firms whose bankers and traders were invited to participate on the cheap.
This is all perfectly legal and publicly disclosed – but that doesn't mean everybody likes it.
“To be buying the cheap shares and then have the firm pushing the stock at a higher price to clients – that's not kosher,” says a banker at a firm that forbids the practice. One industry source referred to the move as “getting people pregnant,” and with Peak shares trading at around 80 cents apiece these days, that's quite a baby.
8. Get your director's diploma
One of the great perquisites of the mining business is being appointed to a company board – and the more friends you have (particularly in Vancouver), the better your chances. Consider UrAsia Energy. When the company recently agreed to a $3.8-billion takeover bid, its six directors were sitting on $4-million worth of stock options. Each. And they'd been on the board for less than two years. But the lucrative payday didn't stop there. Mr. Giustra, one of the directors, had also been given 6.2 million shares a year and a half ago – free. Director Ian Telfer, his good friend and business partner, got 2.2 million of his own, gratis. Gordon Keep, a colleague of Mr. Giustra's at Endeavour Financial (the company that collected $12-million advising UrAsia on the takeover), was awarded 525,000 free shares, while Robert Cross, a former brokerage colleague of Mr. Giustra's, was handed 500,000.
At some companies, the payday can be even quicker. The directors at Yamana Gold, for instance, didn't have to wait for a merger before they could cash out. In fact, they didn't have to wait for anything. Most stock options “vest” for a few years before directors or executives can cash out. Yet, in 2005, Yamana's directors were awarded stock options worth more than $1-million each, and they vested immediately. CEO Peter Marrone said at the time it was simply “a practice in the resource sector.” Not any more. Faced with criticism, the company stopped awarding options to directors.
9. Inspire a Letter Writer:
There's nothing better than having someone influential recommending your stock to retail investors. Take James Dines, the man behind The Dines Letter – a stock-picking report with a sizable following. Mr. Dines used to call himself “the original gold bug.” These days, he is the “original uranium bug,” and is touting a company called Mega Uranium Ltd. (as well as Pinetree Capital Ltd., which holds a big stake in Mega and shares the same chairman and CEO – Sheldon Inwentash). When the company revealed last year that regulators were investigating Mr. Inwentash for possible insider trading and stock manipulation, Pinetree shares plunged as much as 30 per cent. Enter Mr. Dines. He published a special edition of his newsletter, counselling readers to “back up the truck” and buy Pinetree shares. The stock rebounded, and finished the day up 4.2 per cent. Why does Mr. Dines like Mega Uranium and Pinetree so much? He didn't respond to requests for an interview, but he received 150,000 shares of a company called Maple Minerals Corp., in July 2005, for selling the rights to the name “Mega Uranium Ltd.” Maple Minerals of course, soon morphed into Mega Uranium and the share price has climbed from around $1 since Mr. Dines received his stock to over $6.
10. Move to Canada.
Please – enough whining about the supposed “hollowing out” of the Canadian mining sector. Sure, the old stalwarts like Inco and Falconbridge have disappeared and Alcan may be next. But what about the legion of foreign miners who are taking their place? Canada understands miners. Its markets offer them cheap access to capital, with none of that annoying “country risk” that comes with doing business in Africa or South America. The great thing is, foreign miners can take advantage of all this without ever having to endure our brutal winters.
Australia's Equinox Minerals, which is developing a big copper mine in Zambia, has already figured this out. Since arriving on the TSX, its shares have surged from around 50 cents to about $2.75.
Bankers know this too. The folks at BMO Nesbitt Burns Inc. pitched sxr Uranium One management on the move to North American markets a few years ago, correctly predicting the listing would give the South African company more visibility and a higher valuation. A couple of deals later, Uranium One is the second-largest uranium play on the TSX, with a market value over $5.5-billion.
Never mind that the CEO still lives in South Africa, or that the head of Equinox remains in Australia. This is common practice.
After Toronto-based LionOre Mining became the subject of a bidding war between a pair of foreign giants, the nickel miner took pains to explain it wasn't really Canadian after all. Its CEO, Colin Steyn, resides in London, and the Canadian work force consists of “five accountants,” according to one company insider.
So be careful about the hand-wringing when a “Canadian” company vanishes again; there's always another miner, foreign or otherwise, ready to take its place. And they've got a good chance of succeeding, as long as they know the tricks of the trade and investors continue to fall in love with the rocks.
Raining here too.
It is greener than green out here.
Already got the first cut of hay off!
Shipwreck yields $500 million in gold and silver
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TAMPA, Fla. (AP) - Deep-sea explorers said Friday they have mined what could be the richest shipwreck treasure in history, bringing home 17 tons of colonial-era silver and gold coins from an undisclosed site in the Atlantic Ocean. Estimated value: $500 million.
Odyssey co-founder Greg Stemm, left, examines coins recovered from the "Black Swan" shipwreck with an unidentified member of the conservation team.
A jet chartered by Tampa-based Odyssey Marine Exploration landed in the United States recently with hundreds of plastic containers brimming with coins raised from the ocean floor, Odyssey co-chairman Greg Stemm said. The more than 500,000 pieces are expected to fetch an average of $1,000 each from collectors and investors.
"For this colonial era, I think (the find) is unprecedented," said rare coin expert Nick Bruyer, who examined a batch of coins from the wreck. "I don't know of anything equal or comparable to it."
Citing security concerns, the company declined to release any details about the ship or the wreck site Friday. Stemm said a formal announcement will come later, but court records indicate the coins might come from a 400-year-old ship found off England.
Because the shipwreck was found in a lane where many colonial-era vessels went down, there is still some uncertainty about its nationality, size and age, Stemm said, although evidence points to a specific known shipwreck. The site is beyond the territorial waters or legal jurisdiction of any country, he said.
"Rather than a shout of glee, it's more being able to exhale for the first time in a long time," Stemm said of the haul, by far the biggest in Odyssey's 13-year history.
He wouldn't say if the loot was taken from the same wreck site near the English Channel that Odyssey recently petitioned a federal court for permission to salvage.
In seeking exclusive rights to that site, an Odyssey attorney told a federal judge last fall that the company likely had found the remains of a 17th-century merchant vessel that sank with valuable cargo aboard, about 40 miles off the southwestern tip of England. A judge signed an order granting those rights last month.
In keeping with the secretive nature of the project dubbed "Black Swan," Odyssey also isn't talking yet about the types, denominations and country of origin of the coins.
Bruyer said he observed a wide range of varieties and dates of likely uncirculated currency in much better condition than artifacts yielded by most shipwrecks of a similar age.
The Black Swan coins - mostly silver pieces - likely will fetch several hundred dollars to several thousand dollars each, with some possibly commanding much more, he said. Value is determined by rarity, condition and the story behind them.
Controlled release of the coins into the market along with their expected high value to collectors likely will keep prices at a premium, he said.
The richest ever shipwreck haul was yielded by the Spanish galleon Nuestra Senora de Atocha, which sank in a hurricane off the Florida Keys in 1622. Treasure-hunting pioneer Mel Fisher found it in 1985, retrieving a reported $400 million in coins and other loot.
Odyssey likely will return to the same spot for more coins and artifacts.
"We have treated this site with kid gloves and the archaeological work done by our team out there is unsurpassed," Odyssey CEO John Morris said. "We are thoroughly documenting and recording the site, which we believe will have immense historical significance."
The news is timely for Odyssey, the only publicly traded company of its kind.
The company salvaged more than 50,000 coins and other artifacts from the wreck of the SS Republic off Savannah, Ga., in 2003, making millions. But Odyssey posted losses in 2005 and 2006 while using its expensive, state-of-the-art ships and deep-water robotic equipment to hunt for the next mother lode.
"The outside world now understands that what we do is a real business and is repeatable and not just a lucky one shot deal," Stemm said. "I don't know of anybody else who has hit more than one economically significant shipwreck."
In January, Odyssey won permission from the Spanish government to resume a suspended search for the wreck of the HMS Sussex, which was leading a British fleet into the Mediterranean Sea for a war against France in 1694 when it sank in a storm off Gibraltar.
Historians believe the 157-foot warship was carrying nine tons of gold coins to buy the loyalty of the Duke of Savoy, a potential ally in southeastern France. Odyssey believes those coins could also fetch more than $500 million.
But under the terms of a historic agreement Odyssey will have to share any finds with the British government. The company will get 80 percent of the first $45 million and about 50 percent of the proceeds thereafter
Is that just a bunch of hot air?? LOL
Grande Cache Coal* (GCE : TSX : $1.25), Net Change: 0.33, % Change: 35.87%, Volume: 3,537,794
Hillsborough Resources (HLB : TSX : $0.55), Net Change: 0.06, % Change: 12.24%, Volume: 659,008
Walking across hot burning coals is no big deal for some people. The Times of India reports that Coal India is exploring
opportunities to acquire steel-grade coking coal mines in Canada through a joint venture route. The company will go ahead with
its Canada plan once it gets assurance from Steel Authority of India Ltd. (SAIL) and Rashtriya Ispat Nigam Ltd. (RINL). SAIL
is now testing a small consignment of Canadian coking coal and the results are expected within the next month. If the grade is
found satisfactory for Indian steel firms, then Coal India will bid for mines in Canada, which could well be the first overseas
project of Coal India. A high-level delegation of Coal India recently visited few coking coal mines and met Canadian
developers. The paper also reports that, Coal India, SAIL, RINL, National Thermal Power Corp. (NTPC) and National Mineral
Development Corp. (NMDC) are forming a public sector giant for acquiring overseas mines. India currently produces 16
million tonnes of steel-grade coking coal but the demand is close to 40 million tonne.
Was too good to last.
From Saturday overnight to Sunday overnight we expect : 15-20 mm of rain
What are they goingto do with 50,000 bucks?
The projects must be really small.
Iraqi cabinet endorses 50m dinar loans for small projects
Iraq Development Program - [07/04/2007]
The cabinet has agreed to offer loans up to 50m dinars for small projects through the state-owned banks," Ali Al-Dabbagh told reporters after a cabinet meeting. The interest rate is 6%, two to be paid by the loan holder while 4% will be paid by the finance ministry, he said.
The cabinet also approved the establishment of the Najaf power plant, operating with natural gas at a cost of US$55m and a design capacity of 22 MW, Al-Dabbagh added.
"A contract to that effect will soon be signed with a specialised company to start carrying out the Najaf power plant project," said the spokesman, without providing the name of the company.
Al-Dabbagh added the cabinet decided to sign WLL (wireless local loop) contracts with companies offering cellular service in the country if they already had contracts with previous governments before April 2003.
The cabinet agreed to implement the contracts concluded by the mobile phones companies and allocate them the required frequencies for operation, he said.
Canadians punch the clock in record numbers
TAVIA GRANT
Thursday, April 05, 2007
A record number of Canadians went to work last month as job creation hit a five-year high in the first quarter.
Employers created 54,900 jobs last month, Statistics Canada said Thursday, five times as many as forecast. The jobless rate, meantime, was unchanged at 6.1 per cent as more people looked for work.
Jobs numbers tend to be volatile, but the three-month trend shows growth at above 50,000 for the last three straight months. Droves of Canadians are now at work, particularly women, suggesting domestic demand will continue to drive economic growth.
Months of solid job gains “reinforces the view that the domestic economy will weather a further U.S. slowdown relatively well,” said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc. He expects the next move by the Bank of Canada will be to raise rates, not cut them.
Employers are adding to payrolls, but they're not raising wages by much. Average hourly earnings eased to a 2.1-per-cent rate from last March, as growth in the services sector — such as food and hotels — accounted for all of the gains.
Muted wage growth comes even as the employment rate reached 63.5 per cent in March — its highest level in at least 31 years. In Quebec, British Columbia and Manitoba, employment rates hit record levels.
Adult women are working more than ever. The employment rate for adult women reached a record 59 per cent in March, “as women continue to be the main beneficiaries of employment growth,” the report said.
Over the past year, employment growth for women has grown at more than twice the rate for men. Women over the age of 55 are also employed at record levels.
More than half of the new jobs last month were full time.
In March, the services side of the economy powered all the job growth, while the goods-producing side shed staff. Most of the new positions came in trade, accommodation and food services, along with information, culture and recreation. Most of those services jobs were in Ontario, Quebec and Alberta.
The goods-producing side of the economy cut 11,100 jobs. The natural resources, agricultural and construction sectors led the drop, while manufacturers added 1,400 positions.
Employers added about 158,000 people to payrolls in the first quarter of the year, led by gains in British Columbia, Alberta and New Brunswick.
Economists had expected 10,000 new jobs for March.
What ails Canada: My parting shot
ERIC REGULY
Thursday, April 05, 2007
It is Easter. Let us pray for peace and goodwill, but also for a country and an economy in purgatory. The corporate profits, the shareholder returns and the employment figures all suggest we're riding the up escalator to a state of eternal bliss. And if you believe that, you must believe that miracles really do happen. So let us pray that . . .
Executives grow cojones: There is a rite of passage in Canada. When some management suit uses intelligence, passion, conniving, Grecian Formula and ambition to rise through the ranks to become CEO, he (sometimes she) immediately checks into the clinic to get himself chemically sterilized.
Henceforth, the executive trembles at the sight of hedge funds, bows to so-called investors who demand immediate satisfaction, sell when they should buy, dole out great heaps of capital to the rabble when they should invest said capital, blame others and ignore domestic and international growth opportunities. In short, he generally plays it safe. There are a couple of notable exceptions; the bosses at Manulife and Barrick Gold, two home-grown international champions, come to mind.
The result is a G8 country that acts like a colony, circa 1900, waiting to be plundered by the Americans, the Europeans, even the Latin Americans -- Inco went to Brazil's CVRD. The imperial troops meet little resistance from local CEOs, shareholders, regulators and politicians. Among the 100 top brands on the planet, there is no Canadian name (though you've got to think BlackBerry will soon be a contender). The Netherlands, a country you could sink in a northern lake, has no fewer than four: Philips, Shell, ING, Heineken.
Entire industries considered "Canadian" to the core, part of the national fabric and identity, have disappeared. With Molson and Labatt, even little Sleeman, gone, there is no Canadian brewer of any size. With Inco and Falconbridge gone, there is but one Canadian base metals miner left: Teck Cominco. The forest products industry in a land of forests is a mishmash of half-bankrupt zombies. Canada does not even make chainsaws. The steel industry is disappearing. The luxury hotel industry, Four Seasons and Fairmont, are in foreign hands. Hudson's Bay Co. is owned by a reclusive South Carolinian.
Canadian companies will allege any reason for their lack of global success: excessive taxes and regulation, domestic merger barriers in some industries and the like. Forget it. Feckless CEOs are the main obstacle.
Inside traders get punished: Canada is leaksville. Many, if not most, takeovers and mergers are preceded by unusual trading activity -- higher than normal volumes, spiking prices -- followed by the non-surprise in the form of a deal announcement. Take Algoma Steel. In February, takeover speculation sent the shares up. Market regulators forced the company to confirm it was in merger talks with an unidentified buyer. Leaks allowed The Globe and Mail to report the suitor was Germany's Salzgitter. The shares soared to the point that Salzgitter walked away from the deal.
The Germans have no doubt told everyone who will listen that the Canadians aren't to be trusted. Bloomberg News carried a story about Canada's sieve-like markets. Bloomberg stories go around the world. Bad rep for Canada? You bet. Does anyone get punished? Almost never, which makes our rep even worse. The lack of a national securities regulator is another embarrassment.
Infrastructure gets built: Canada's infrastructure deficit is in the hundreds of billions of dollars. Everywhere, roads, bridges, schools, hospitals, sewers, power generation plants, daycares, public transportation and public housing are lacking or falling apart. Toronto's infrastructure works for a city half its size. The first Royal commission on developing Toronto's waterfront was in 1911. A century later, it's still a disgrace.
There is no political will to fix it. Voters say they want it fixed. At the same time, they want lower taxes. You can't have both. As the infrastructure rots, job creation and competitiveness suffer. International companies will invest elsewhere. London and New York are incredibly expensive. But you can get to the office in those cities without driving because public transportation didn't drop off the priority list.
Carbon emissions fall: American educator Derek Bok said, "If you think education is expensive, try ignorance." The same applies to carbon emissions. You can pay a little now or a lot later. This is not a zero sum game -- one dollar spent to reduce emissions is not one dollar vaporized. That's because energy efficiency creates value as costs are saved, as the mining companies found when they finally cleaned up their smelters. Canada can be a leader in creating carbon-reduction technologies and carbon trading systems. Or it can keep listening to the neo-cons and the climate-change deniers and do nothing.
Note to readers: This is my last regular column from Toronto. A new column will launch later this month, when I become The Globe and Mail's European business correspondent, based in Rome (for my sins). Advice on which team to support, AS Roma or Lazio, would be greatly appreciated.
ereguly@globeandmail.com
General Motors of Canada told the Canadian Auto Workers Friday that it intends to issue permanent layoff notices to 375 employees at its Windsor transmission plant. The notices will start going out Monday and include employees with seniority dating back to May 18, 1981, which means many of those being laid off have high seniority, some of them up to 26 years. Those being laid off include 288 production workers and 87 skilled tradespeople.
Approximate Affected Workforce: 101-500
Source: The Star Phoenix - March 31, 2007
Quebec's battered forestry industry suffered another heavy blow Friday when Kruger Inc. announced plans to indefinitely idle four sawmills and one planer as it sheds 1,027 jobs in three regions of the province. The hardest-hit area is the North Shore, where 624 workers will lose their jobs with the closure June 29 of sawmills in Ragueneau and Forestville, along with a drying and planing plant in Longue-Rive.
Approximate Affected Workforce: over 1000
Source: Windsor Star - March 31, 2007
The restructuring of the U.S. auto parts industry slopped over the border into Canada again Monday as Dura Automotive Systems Inc. told workers it will shut its remaining plant in Canada, a move that will eliminate more than 300 jobs in Bracebridge, Ont. Dura, which is operating under Chapter 11 bankruptcy protection in the United States, had already announced that it will close plants in the Ontario cities of Brantford and Stratford. The maker of metal seating components, as well as driver control and exterior trim parts, is one of a long list of U.S. auto parts companies operating in bankruptcy protection because of major cuts in production and assembly plant closings at Ford Motor Co., General Motors Corp. and the Chrysler division of DaimlerChrysler AG.
Approximate Affected Workforce: 101-500
Source: globeandmail.com - April 2, 2007
Stelco Inc. will shut its 56-inch hot strip mill in Hamilton in another job-reduction move that will eliminate 300 jobs at the Hamilton works. Hot strip processing will be transferred to the Lake Erie works, Stelco said Thursday. Stelco has already reduced employment in Hamilton by about 900 people since emerging from protection under the Companies' Creditors Arrangement Act about a year ago. The Hamilton hot strip mill, which has operated since the 1940s, has served the market well through the years, but has become a high cost operation with limited support from the marketplace, Stelco said in a statement. The shift in production follows an expansion of the Lake Erie works after a $270-million modernization program.
Approximate Affected Workforce: 101-500
Source: globeandmail.com - April 5, 2007
Employees at New Haven Copper picked up their final checks Friday as the plant's doors closed behind them after more than 160 years in business. The company, which started in 1845, shut down operations and laid off its remaining 51 employees. Parent company Olin Corp., which announced the closure in November, cited reduced demand for copper products and high raw material costs. New Haven Copper operated a re-roll mill for decades, buying sheets of copper and cutting it into strips for electrical connectors and transformers used in computers and telephones. The closing of one of Seymour's last factories follows the shrinking trend of the manufacturing sector of the state's economy.
Approximate Affected Workforce: 51-100
Source: The Associated Press State & Local Wire - March 31, 2007
Trading is all about perceptions. That's why sensible valuations are not useful short-term trading tools. Eventually, common sense will win out and send overvaluation (or undervaluation) lower (or higher)."
The Kool Kat.
Al Gore graduates from Concordia
Sebastien Cadieux & Brian Hastien
Issue date: 4/3/07 Section: News
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Media Credit: UNDP/UNEP
The Link (Concordia University)
MONTREAL (CUP) - Concordia president Claude Lajeunesse was booed as he took the stage to give Al Gore an honorary doctorate from the university on March 22.
The brainchild of Concordia Student Union president Khaleed Juma, the doctorate was presented while the crowd, present to listen to speeches from Gore and David Suzuki, filed out the exits after the question and answer period with Gore was cancelled.
The talk took place in the cadre of Less Talk, More Action: A Youth Action Summit on Climate Change, organized by Youth Action Montreal members and Concordia University students Peter Schiefke and Mohamed Shuriye.
Gore and Suzuki's message was clear: The world is in imminent danger if we continue our current habits and don't change towards a more eco-friendly society.
The former U.S. vice-president's speech was effectively his Academy Award-winning documentary An Inconvenient Truth with updated statistics, and presented by an angrier, fist-shaking Gore.
His presentation was halted at least twice as opponents to his agenda began to shout out.
They called him a liar and a villain, and screamed, "What about your swimming pools?" in regards to recent allegations that the monthly electricity bill of Gore's estate rivalled a year's bill for the average American home.
This led Gore to joke, "I don't even know if you guys are left- or right-wing".
Suzuki also made a 45-minute speech on the topic du jour. The speech was punctuated by numerous bouts of applause from a rather enthusiastic audience.
He espoused that the media should play a more central role in the way it informs the public, saying, "Over half of all Nobel Prize winners are telling us we could have as little as 10 years to avoid a catastrophe and this is pronounced by our media as 'not newsworthy'.
03 07 08 09 38 39 40
02 04 12 14 24 29 32
01 13 15 28 30 38 46
04 06 07 10 29 37 46
06 21 22 25 26 42 46
03 05 06 09 16 36 47
22 51 60 71
Supposed to hit 22 today in the Sun.
They are getting a hundered grand an acre out here for producing blueberry land.
You like that word eh?
wordsmithing
Follow the money, and you'll love what you do. For sure.
Now that makes sense.
Johnny Cash - Delia's Gone
Johnny Cash - Sixteen Tons
Johnny cash - Ghost riders in the sky
Johnny Cash - Sunday morning coming down
How happy are you?
TAVIA GRANT
Monday, April 02, 2007
Is happiness measurable? If so, how should it help shape public policy?
A group of economists, sociologists and policy wonks are gathering in Rome Monday to discuss these questions. It comes as happiness has blossomed into a growing field of study, with hundreds of journal articles published in the past seven years alone.
The conference will focus on whether life satisfaction can be quantified and integrated into policy.
“We are, it seems, much closer to measuring how happy people are, as well as understanding more clearly other aspects of their subjective well-being,” noted the Organization for Economic Co-operation and Development, one of the conference's organizers, on its website.
“These advances, so some would argue, open the door to different paradigms for policy-making...which see people's happiness, rather than national income, as the goal that policy-makers seek to maximize.”
The ideas may be interesting, but many skeptics remain, it added.
Topics at the conference include whether one can construct meaningful statistical indicators of happiness, what factors determine satisfaction, how education and other areas of government policy contribute to happiness and whether subjective well-being indicators help shape policy.
One contentious issue is whether the traditional measure of wealth — the gross domestic product — presents the best picture of how a nation is faring.
Ruut Veenhoven, a conference presenter and sociologist at Rotterdam University, argues that happiness is defined as a “subjective enjoyment of one's life as-a-whole” and this can be measured using self-reports.
In a 2006 study, he found that the Swiss score the highest in terms of “average happiness,” followed by Swedes and Americans. The lowest score was in Zimbabwe, while former Soviet states also tended to fare poorly.
In terms of public planning, the most gains in happiness come from policies that focus on freedom and justice, he concluded. In rich countries, economic growth doesn't add much to happiness and neither does reduction of income differences or greater social security, he said.
Economists are increasingly scrutinizing measures of well-being because they can help with forecasting, one presenter said.
“Although it is probably fair to say that there is no unanimity on the usefulness of subjective well-being information in economics, there is probably greater willingness to pay attention to such measures now than there has been in the past,” said Andrew Clark, research professor at Paris-Jourdan Sciences Economiques, in prepared notes.
“There is now quite a mini-industry of validation studies of ‘what people say,' including work showing that what people say today is a strong predictor of what they will do in the future: life expectancy, morbidity, productivity, quits, absenteeism, unemployment duration, and marriage duration.”
The two-day global conference is organized by the OECD, the Bank of Italy, the Centre for Economic and International Studies of the University of Rome and the Joint Research Centre of the European Commission.
Didn't notice the hair.
Babylon: Making profits under fire
By Matthew Richards
Published: March 9 2007 07:29 | Last updated: March 9 2007 07:29
Believe it or not, there is a fund dedicated to investing in Iraq. In spite of fears that the country is either in the middle of a civil war or about to fall prey to one, the Babylon Fund was launched in September 2006 and is now handling assets worth about $8m.
The fund was set up by Luxembourg-based Godvig Capital Management, and is managed by Björn Englund, who served in Iraq with the Swedish army during the Gulf war of 1991 and went on to become a trader before setting up a “dog fund” for out-of-favour companies in the S&P500 index.
Godvig has a director based in Baghdad, and another based in Stockholm who travels to “the safer bits of Iraq”, according to Bob Torkelund, a Godvig director.
He says the fund could get bigger, although it will still be small compared with most others. “We think we can handle about $20m,” he says. At that point the open-ended fund would stop raising money for a while, although the long-term aim is to open it again provided its investments are successful and it offers a reasonable level of liquidity.
He says there are two big investment themes for the fund: the reconstruction of Iraq and exposure to oil prices.
Mr Torkelund says the fund is aiming to achieve a return of 20 to 25 per cent a year within 10 years. In its first few months it got off to a more modest start, with a 2.4 per cent return in the final quarter of 2006.
The fees are closer to hedge fund charges than typical management fees for an open-ended fund. The annual management charge is 2 per cent and there is also a performance fee of 20 per cent for returns in excess of 8 per cent.
There are four types of investment the fund can make and it aims for each type to account for a quarter of the portfolio. The first is shares on the Baghdad stock exchange, which is small, volatile and trades for four hours twice a week. Its volumes are low – if shares worth $4m change hands, Mr Torkelund says, that would be “a big day”. The fund also faces regulatory barriers to investing on the Baghdad stock exchange.
The second type of investment is Iraqi government bonds, which currently compensate investors for the risk they are taking by paying out at an annual rate of about 8 per cent.
The third type is companies in nearby countries such as Egypt, Jordan and Kuwait. To be eligible for the fund, these companies must do most of their business in Iraq.
The fourth area is international companies such as Halliburton, which do a significant amount of business in Iraq.
In total, Mr Torkelund says there are about 200 companies that fall into one of the three equity categories outlined above, including “90 to 100 interesting ones”.
As befits a manager of a fund with three-quarters of its assets in equities and one quarter in bonds, Mr Englund’s main background is in equities but he also has experience of trading bonds.
The minimum investment is $100,000, with subsequent investments from $10,000 upwards. The $8m in funds raised so far come from just eight investors.