Monday, April 30, 2012

At what point does resistance become terrorism?

There was a lot of topics I wanted to write about today but in the end, I feel I really need to come back around to NATO military occupations around the world. They've found another supposed Al-Qaeda "treasure trove" of information, failed attacks, evil plans, etc. It reads like a hollywood script and the timing with this Bin Laden anniversary is probably coincidential.

Of course it's drumming up the imminent terrorist attack fear. Crap like this gets published.
In public, U.S. officials say there is no credible information of an impending attack. Department of Homeland Security spokesman Peter Boogaard released a statement Monday evening saying, "We have no indication of any specific, credible threats or plots against the U.S. tied to the one-year anniversary of bin Laden's death."
But earlier Monday, White House counter-terrorism advisor John Brennan called the al Qaeda group in Yemen the greatest threat to the U.S.
"AQAP continues to be al Qaeda's most active affiliate, and it continues to seek the opportunity to strike our homeland," said Brennan during a speech at the Woodrow Wilson International Center in Washington, D.C.
There's never any credible information. However, at the same time 'Drone attack kills suspected militants in Pakistan school' and on the same day as this:
Merely being a member of Al Qaeda or one of its allies is not enough to be targeted, Mr. Brennan said, because that describes many thousands of people. Rather, policymakers approve the killing of only those who pose a particular threat, he said, like operational leaders who are planning attacks against United States interests, lower-level militants training for such an attack, and those who possess “unique operational skills that are being leveraged in a planned attack.”
Mr. Brennan also said the administration preferred capturing such suspects alive — usually by telling a foreign government where to arrest them — and would authorize a strike only if that was not feasible.
Are you not sick of the lies yet? Pakistan is fucking pissed! The world is getting sick of NATO's imperialist shit whether our media is telling you about it or not. NATO government's lie about the "war", they lie about the debt squandered on it, they lie lie lie. It's all they fucking do! hoping your head is in the ocean with Bin Laden.

So when does resistance become terrorism anyway? We aided the Libyan "rebels" which as quickly as possible set up their own western backed central bank and oil company. One of which the west is happy to announce production has returned. Good thing, otherwise Europe might have been in a pickle. That should give you a hint.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

The great Canadian bank bailout (now in technicolor)

In case you didn't notice the plenty of black and white evidence showing you our banks are no more sound and stable than our U.S. counterparts then you are in luck. Everyone knows that black and white is ancient and many people can not maintain their attention, so a new report has been released in nice, clean, simple to understand technicolor. If you didn't find Canada's economic situation interesting before, then perhaps you will now.

Fractional Reserve Lending is fractional reserve no matter how "tight" the lending rules are. Do you notice how when people point to Canada's "sound banking policies" they can not name a single one? Ask someone what "tighter" lending rules mean. Our government has been throwing all of these generic terms about our banks at us for 4 years but not once has media stopped to ask 'what exactly does that mean and how does it make us more sound and secure?". The reality is they mean nothing, or at least nothing more than rearranging the deck chairs on the Titanic would ensure it didn't hit the ice berg.

One has to wonder if Stephen Harper with the robocall scam, plus the bank bailout lies ("Canada didn't have to bail out it's banks", remember that one?) would have been elected at all, even in a minority position. I also have to wonder how everyone who was duped feels about their "economic grand master" now? Were you duped? It's ok if you were, he did put up a coordinated (conspiratorial) campaign to fool the entire nation, and fooled we were! At least some of us were, hopefully not my readers and followers. :)

Canada's economic hits actually just keep coming. A few days ago Mark Carney released his "Economic Outlook". The Bank of Canada's outlook looks nothing like the Budget 2012 economic outlook. It's a lot more gloomy, but in my opinion still too rosy as it doesn't take the energy factor in commodity prices seriously. Alas though, our "budget" is based on the fantasy outlook depicted in Budget 2012.

I've been maintaining that interest rate hikes will hurt our economy, it appears that traders on Wall Street agree.
While international investors typically favor currencies with high rates for the potential for greater returns, traders are signaling that in Canada it would do little more than damage an economy underpinned by debt. Household borrowing was 152.9 percent of disposable income at the end of last year, climbing from about 135 percent in 2007 and exceeding the U.S.’s 145 percent, according to data compiled by Bloomberg.
“So much of Canadian growth is led by domestic demand and that domestic demand is led by consumer spending and consumer spending is linked to expanded leverage,” Shahab Jalinoos, a senior currency strategist in Stamford Connecticut at UBS AG, said in an interview April 24.
What have I been telling you? As I said in a recent post:
High energy prices are driving up the cost of living which is being supported by consumer spending that's fueled by cheap lending which is leveraged on an overvalued housing market. This problem then compounds when you consider that a large portion of Canada's anticipated GDP is based on this consumer spending.
I am now calling on Canada's media to call out our "leaders" for their economic lies. For too long now you have accepted the government's stable economic story without question. The next recession is almost here, will you again declare it "unexpected" when it happens?

UPDATE 1:47 PM

The Canadian banker's association is now claiming that bailouts are not true. This is the same group which I just recently quoted.
The source of concern is a new U.S. regulation meant to deter deposit-taking institutions that receive backstopping from Washington from engaging in speculative trading for their own—not their clients’—profit, a practice known as proprietary trading. Risky trades by global banking giants were central to the banking crisis that compelled former U.S. president George W. Bush to launch a $700-billion bailout of Wall Street in 2008.
“I think the impact could be very, very negative,” said Canadian Bankers Association President Terry Campbell. “If you interfere with the ability of governments and corporations to fund themselves, if you interfere with liquidity in the marketplace, which is necessary for funding, then you could have a very severe impact on our economy.”
Lies, lies lies.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Saturday, April 28, 2012

The normalcy of abnormal

After the anger I felt yesterday, I have been thinking. Is it not strange that we equate today's "wars" with real wars of the past? How has this happened? I champion democracy but not at the hand of an iron fist.

What I find even stranger is that at the same time as soon as banks are in danger, "technocrats" are installed. It's NATO members telling them to do this. So is NATO's opinion that democracy can work for everyone but those with financial troubles?

The same holds true for the economy, the world has been "easing" for so long now that it's just normal. The easing hasn't slowed at all despite "recovery", it's normal now for us to ease and keep the economy running. It used to be an "emergency" circumstance. The same goes for G.S.T. if I remember correctly, but let's not go that far back.

Are we still in an emergency state? Would we be if these measures were removed? It's hard to say isn't it? It's normal now though, and everything is fine.

I was extremely angry yesterday. As a Canadian who cherishes the freedom World War II delivered for many nations it really saddens me that our freedom has turned in to a superiority complex. We are not at "war" for our freedom, we are supposedly at "War" for theirs? We'll deliver the utopia? Nations who go around enforcing their utopia's on other nations usually end up as the bad guy. I don't really want to be a part of that, do you?

Things are not normal for us here, but it's been a slow adjustment. New measures here or there, then everywhere. China's in the news again, but Ethical Oil is focusing on David Suzuki. I guess priorities are priorities aren't they? I mean sure we love freedom, but we love business first; business is business. Even if it's with Communist China I guess.

Now I'm non-partisan, this means I'll criticize any party, I don't care. I don't like Obama, and I don't like Harper, and I don't pick sides. However, I have to say with all of the "socialist/liberal/lefty" infiltrator talk, their dirty schemes, etc. Why are you all not worried about a major business foothold by China? Is that not infiltration? Or is that just 'good business'? It's not just good business, it's normal business now isn't it? There's articles every other week about China buyouts.

I don't mean to pick on China, I'm sure they are a lovely country with Canada's best interest at heart, but I do have to point at the clear contrast in opinion and our business trumps freedom approach to the world. I don't like it, at all.

A bankrupt business or bank can be liquidated, economies can be adjusted, new industries can be made. But freedom? Well, once you lose that it's questionable if you will get it back, and if you do the struggle and loss overshadows any "business loses" that some democratic decisions might bring.

But hey, normal is normal, right?

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Friday, April 27, 2012

War and Hypocrisy

I have to say I am a little surprised that Harper would throw Hitler and World War II around so carelessly in a political setting to gain political points. I have to wonder what veterans are thinking about such statements. There are plenty of veterans against these "wars".

Afghanistan is not a war, it is an occupation. Where's the Afghanistan army? Where are their tanks and fleets of planes like the Nazi's had? This is double-think at it's finest, if you want to make World War II comparisons, let's start shall we?
  1. We are the invading force.
  2. We cheer "Bin Laden's assasination".
  3. We have the concentration camps, CSIS/CIA black sites, etc.
  4. We are the ones designing civil rights breaching anti-terrorism acts, patriot acts, NDAA's, etc, etc.
  5. We have no problem violating civil rights at will.
Should I continue? If we want to make World War II comparisons, which side do we sound like to you guys? Maybe it's time to get out.

Canada is not immune to "war propaganda". Next time you read an article telling you we're the good guys, ask a German what they were reading during World War II. They were the "good guys", too.



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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

The Great Canadian Divide: our road to failure

Canada is divided, perhaps more than the hayday of the Quebec separatist movement. There's a divide between generations thanks to the budget and there's a divide between eastern and western Canada and the economic differences and difficulties each is facing.

In many ways Canada is itself a mini-Europe; we are very large with diverse regions with their own needs and economic problems. Creating policy which benefits every single region must be tricky, of this I have no doubt. This is part of the reason that I believe inter-provincial trade should be at the top of our trade and economic growth strategy.

Canada itself needs to be economically sustainable, we don't trade within our own country nearly as much as we should be. In this manner we differ from the European union, the European's greatest benefit from the Euro is the universal trade between closely knit neighbors. We have the potential to have this same advantage - diverse smaller economies supporting each other - if only we'd step back and look at what we have right here within our own borders.

We don't need to surrender our economic and political control to a centralized authority as Europe has had to do to achieve the same thing. We have it right here, in our own backyard!

What's frustrating for me is that as the economies we're focusing on refocus on domestic demand and needs, we're not taking the hint that this might be for specific reasons. The roles are reversing, we're looking to service them and they're looking to buy us. This is what a global power shift looks like, not spectacular from the inside but I think in the future the events happening today will be quite important in describing the rise of the next empires. These periods of major power shift don't come around very often and you should all feel honored to be a part of it. It should unify us, not divide us. All of us, east and west, any race and of any age have a common problem to deal with: the decline and fall of the American Empire.

The "free trade" dealings with other nations should be cautiously observed. This is not a 'happy time' and these nations for the most part are not 'nice nations'. Harper is most certainly responding to this shift in power, but I don't believe the end results will be in our benefit. This is all just-in-time economic decision making, but plans take time and money to implement and the rate of decline in the U.S. is startling.

What decline? you might be asking. The markets are up! and yada yada. It's all about easing, easing and easing. It just goes on and on, the easing, at the cost of the future, along with wonderful "free market" inventions like the Plunge Protection Team are not allowing the markets to crash. They will though, already the IMF is having trouble securing funds as nations rethink the intelligence of pouring resources into a leaky feudalist bucket. Not that it matters, they're mostly fake anyway.

Conclusion

Competition is usually good, but so is cooperation. Our provinces need to stop being so petty about their economic differences and instead work together to create the economic independence Canada seeks. More "free trade" will not protect us from the global economic storm that's brewing once again, it will increase our exposure to it. This isn't about being protectionist, this is about our Country looking out for our citizens. Alberta, Ontario and Quebec should have no problems helping each other out, providing what they can to get Canada's overall economic health on track as we'll only ever be as strong as our weakest link.

Some of our provinces are seriously hurting, Ontario got another credit downgrade today, Quebec is already dealing with mass protest and riots. Will we stand as a country? or fall as a business?

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Thursday, April 26, 2012

'Ethical Oil's predecessor died today

Before 'Ethical Oil' there was 'Carbon Capture'. For years CCS technology was the standard response to environmental criticism of oilsands development. Of course it was a flawed public relations strategy as the $2billion price tag tended to steal the spotlight. In a less publicized annoucement today, Alberta's Pioneer Carbon Capture project has been cancelled. The reason?
A major carbon capture and storage project in Alberta has been cancelled after the three partners decided it was not economical.
The project was shelved after Pioneer’s feasibility study. “Following the conclusion of the [feasibility] study, the industry partners determined that, although the technology works and capital costs were in line with expectations, the market for carbon sales and the price of emissions reductions were insufficient to allow the project to proceed,” Pioneer said in a statement Thursday.
Perhaps it's fitting with a subtle irony that the 'Pioneer' project has been cancelled, of course with Ethical Oil around now to take the public relations hits the cancelling of the CCS probably won't be addressed by the government. You probably won't be hearing them mention about how CCS was a sure-thing even though back in 2009 there was plenty of evidence that the costs were not adding up to the hype.

Aside from the monumental waste of money and environmental failure this represents, it also represents a complete incompetence in management and planning both of financial and of oilsands production. It should call in to question the Alberta and Federal government's capacity to model oilsands development in a responsible way. What we have gotten instead are reactionary protectionist measures meant to deal with the public relations problems oilsands development creates. Anyone with half-a-brain could see that CCS was a "solution" the government could point to when questioned, one that would never be realized on a practical level.

Still have confidence in the rest of their "action plans"?

* ADDENDUM *

BTW, I know the CCS are used for power plants, not oilsands. However this did not stop the government from using it as public relations excuse for oilsands. That's the point: it doesn't even solve the problem they were touting a solution for!

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Wednesday, April 25, 2012

Canada's fantasy economic outlook is at odds with reality

I still haven't had an opportunity to return to my budget analysis, it's been a busy few weeks with the Alberta election and the ever-changing economic news and I just really haven't had time to get to it. However, the most important part was Part 3 which covered what I determined to be Canada's overly rosy outlook on the global economy.

It's just one month later and already global economic data is blowing holes in Canada's so-called risk analysis. It was a risk whitewash, meant to confirm the government's rosy budget outlook and support forecasts of a balanced budget. Canada through convenient economic omissions has maintained the 'stable economy' lie.

The outlook that the "global economy is improving" is being maintained by Canada even now as predictably Europe re-enters a recession along with the UK. The measures in Canada's budget can not mitigate a second global recession and indeed it appears this is where we are heading. I have maintained on my blogs that this is where we are headed, I have stood by these forecasts even as supposed "experts" convince you all to spend-spend-spend because the economy is "beginning to improve". I wasn't guessing and no I'm not a doom and gloomer. I base my forecasts on a very simple principle of cause & effect. I have seen no "cause" events which would result in the "effect" of an actually improving economy. Economic data and growth forecasts are meaningless while central bank easing reigns and the only thing that really matters in the end is nothing fundamental has changed in our economy since the 2008 collapse. Instead all we have done is attempted to "Stimulate" growth on the fraudulent and flawed fundamentals we were so sure before 2008 wouldn't collapse.

Months before the 2008 collapse "experts" were telling you everything is fine, and we will see a repeat of this event - perhaps sooner than you might think. Einstein said that insanity is the act of repeating the same thing over and over expecting different results; by this definition our economic "experts" and leaders are literally insane. Our economic fundamentals have not changed (in fact Canada has been actively fighting economic "change"), and therefore the end result will be the same, only this time Canada doesn't have a "get out of recession free" card to play.

The interest rate fear monger

Mark Carney has been in the news a lot lately preaching about the "inevitable" interest rate hike. I've already written a post on why I think he's bluffing and as long as those fundamentals remain true we will not see an interest rate hike. The fundamentals may even be worse than I originally thought as it appears that mere talk of a rate hike results in stronger Canadian dollar. That's the "free market" for you: central banks making announcements and the people thinking they mean something important.
Talk can net big results, and the amount of talk Carney has been doing I believe is to drive fear. He can not in reality raise interest rates as I've pointed out, however the 'fear' of rising interest rates is what I'm betting he is banking on. I now strongly believe that the interest rate hype is meant to illicit a response from consumers in hopes that they get their debt under control themselves as the central bank can not make any meaningful changes to it physically. Canada is stuck between a rock and a hard-place. High energy prices are driving up the cost of living which is being supported by consumer spending that's fueled by cheap lending which is leveraged on an overvalued housing market. This problem then compounds when you consider that a large portion of Canada's anticipated GDP is based on this consumer spending. To add insult to injury the effects of peak oil on oilsands production that I've been telling you would happen are now happening.
Yes, the oilsands are still booming. Multi-billion-dollar projects are still being built, production is growing and skilled workers are in high demand.
But increasingly what’s happening in the oilsands amounts to an activity boom, not a profit boom, as Andrew Leach, a University of Alberta energy economist, describes it.
This is the end result of Alberta's exponentially rising oil targets since the price of oil after a certain point can no longer rise exponentially. This 'peak' price appears to be $100 dollars now that all of the spare credit people had saved was blown on the high prices of 2008. Growth may push the price past $100 but it can't stay there for long as the price of energy simply causes a decrease in demand and in growth, returning us to the $100 mark. Peak oil theorists refer to this volatile period as "the bumpy plateau". Canada can expect to see diminshing returns on oilsands energy as the large bull run in prices is over. The cost of production for oilsands is based on $100 / barrel now, the costs have finally caught up with the output as oil has leveled off. The demand of course will always exist, the production will continue (albeit sporatically) but Alberta's (and Canada's) net-benefit is now declining.

Conclusion

The coming economic trends have already been set. Bull expectations for Europe are not justified while their people go hungry and jobless. True production, real risk and cost, and the people that make an economy work have been completely neglected in favour of accounting tricks. The only reason the global economy is still alive is because it's still on life support.

Canada is now left with little options as any attempt to address the problems this late in the game will simply result in large and significant negative effects. Depending on what they choose to do (or not do) we will either see trade with the U.S. choked off due to the "strong" Canadian dollar, or we will see the cost of living in Canada rise exponentially as revenue declines in comparison to escalating cost compounded with dollar devaluation due to easing.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Monday, April 23, 2012

This response is important enough to be it's own post

I've recently become a member of Progressive Bloggers. I've been reading many new fascinating blogs, but this one post in particular deserves a direct response.

What are people supposed to do? It's an important question. I would phrase it this way though: what are people free to do?

The problems voiced in the post are all serious, relevent problems. I'd like to start with the simplest and what I believe is the root to the problem. The author states:
Why should food be sold for profit? In Canada and other advanced nations, it is recognized that health care should not be a profit-making enterprise. If we have a universal right to health care, why don't we have a universal right to not be hungry? Why don't all people have all the food they require for themselves and their families?
I always preach personal responsibility.


Number of farms and average farm area in Canada, census years 1931 to 2006.
As you can see by the above chart the number of farms is declining but the farm sizes are increasing. Larger farm sizes due to the industrialization of agriculture allows for the management of such large farms, which leads us to oil and pesticides which are petroleum products. This is where the cost begins.

This is not to say that family farming didn't require energy, but it was much smaller scaled and back then there were significantly more farmers. All of this comes down to energy. Money represents energy, pure and simple. Either you exchange an equivilent amount of energy for the food, or you put in the energy yourself by growing the food. What people should do therefore on this point is grow food.

On jobs, growth, and wages the author writes:
Wages have been slashed or have been stagnant for years. Corporations continue to eliminate jobs, forcing the survivors to work much harder for the same (or lower) salaries, while the unlucky into a job market that is more like an empty larder.
...

While wages plummet or stagnate, everything costs more, seemingly every day - not only extras and luxuries, but the price of basic survival. Food, shelter, and fuel account for an increasing share of whatever income we have. Many people can't afford gas or public transit to even look for a job. Governments cut public services that are needed for meaningful participation in society, forcing more people into social exclusion, be it from lack of health care, child care, elder care, therapies, basic nutrition, or a decent public library.

Not seemingly, actually. I've written about this in another post 'the penny' which deals with "inflation". Most importantly however is the effect of peak oil which I've written a bit about here in this context. All of these problems are important and real. There is another portion to this problem though that's not often talked about in our media and that is the method in which Canada borrows it's money. I've  talked a bit about this here.

The system is surely corrupt, but it is not a capitalist system. The privilaged elite are bailed out at the cost of the taxpayer. It's a system based on infinite growth and the method in which we borrow our money is by definition a ponzi scheme. Socialism is based on infinite growth too. In a world of expensive energy, what people are supposed to do and what people should do are completely different. People should be preparing for the possibility we experience the same disruptions as Greece. Grow your own food, live your own life, stop waiting for the government to invent a solution as there is likely not one coming; just more attempts to stimulate growth.

We need to address the current crisis and after we have stablized perhaps economic theory such as resource-based economies can be implemented, although I think sound money is probably the best as it remains resource based and not debt based.

Hope this helps you figure out what you're supposed to do, all the best.

Richard

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

In the global race to the bottom it's impossible to tax the top

You would think Ontario would have learned it's lesson by now. The rules of economic activity in the era of globalization changed everything and created the race to the bottom, and now peak oil combined with globalization has created the race to the most cost efficient bottom and Ontario doesn't get it.

Ontario has created a new tax bracket for anyone with an income over $500,000 - that is if anyone making $500,000 or more stays in Ontario. I'm going to state a position now that should piss off my left-wing followers: taxing "the rich" will not work in this economic system. No seriously, it won't and it will probably hurt our economy more than if we didn't.

Boo! I know what your thinking.. the rich should pay more and maybe they should but as I often point out ideology and reality are usually quite far from each other in terms of results. In his movie 'Capitalism: A Love Story' Michael Moore mentions early on that through taxing the rich the U.S. accomplished miraculous feats such as the inter-state highway system and he is correct. At a time when no other country had anything of the sort high taxes resulted in an inter-state highway system and many other advancements. Today is a much different environment however.

With the advent of globalization and "free trade" rich corporations have now become global in nature. Not only are they global but they can have significantly more resources than most governments. A corporation that operates at this scale has no home. Ontario's manufacturing has suffered greatly from this fact, and raising taxes on the rich only puts the final nail in the coffin. Quite simply there is no reason the rich should stay there when its really just a matter of money to move. For a corporation with the money it is simply a matter of money to move their entire manufacturing process to take advantage of the booming slave labour market. This is a race to the bottom. In the days that high taxes on the rich resulted in a net benefit, workers were competing for higher wages, not lower ones. Taxing the rich doesn't address any of the core problems we are facing either as individual provinces or as a country. It is sad, but it's true.

The problem we're facing on this front is that of free trade. Free trade benefits those companies which can afford to take advantage of free trade, all others are destroyed by it as its practically impossible to match the amount of externalization (or socialization) of costs a company which takes advantage of free trade can. If we want to put money in our pockets (and thus in the system) we must stop the ludacris idea that selling resources cheap and buying goods made with them can end in nothing other than a net-gain, for it ends in a net-loss over time. Of course challenging this system also means we would further challenge IMF monetary fundamentals which equates to even more money in your pocket if successful.

Finally: inflation (devaluation). In my piece on 'the penny' you'll recall I mentioned that inflation is taxed, so that as cost of living goes up, and your income goes up, the system sees this as "richer" even though your net-wealth has not increased (maybe even decreased). This means that the $500,000+ bracket after pushing all currently rich out of the area, any up and coming business stars get dinged once they become "rich", and with inflation (devaluation) $500,000 is worth less and less every day. You get taxed more for less.

Conclusion

This is probably the stupidest thing Ontario could do right now.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

ARM and the return of the hardware hacker

Technology innovation has in a sense returned to the good old days where hardware and software had far less of a division between them. When Apple and Microsoft initially launched it was a huge gamble on Bill Gates' part to believe software had value in itself, and even then initially had to secure a deal with IBM as a partner for the hardware portion of his business plan. It wasn't until later that software was licensed on it's own as a separate and valuable product.

The big question in technology circles has been "is the desktop dead?", and in sense it surely is. The transition will take some time but it hasn't simply just been replaced by the tablet or the phone, it has been replaced by a completely new era in small, energy efficient and powerful hardware. It has reinvigorated device innovation and made it affordable for the casual hobbiest. Occupy Wall Street's 'Occucopter' is a great example of the innovation which can be applied by pretty well anyone now at a fraction of the cost of traditional innovation.

Therefore to me it is not a question of "is the desktop dead?" but rather "when will we start seeing ARM desktops?". Although "desktop" probably won't be fitting as I anticipate modular devices such as the Asus Eee Pad Transformer. I also anticipate that sooner or later you will see clustered devices. Imagine the phone you have now, but with an additional docking station which has it's own processor setup: plug in your phone and quadrouple the power or expand the display. These are the sorts of devices I anticipate are coming down the tubes.

Conclusion

We're well into a new era of technological innovation, and as a result our technology level has become a whole lot more "futuristic". Some notable inventions I've seen lately:
To just name a few... It should be no surprise that these devices are coming shortly after a major advancement in processing technology. It's not that the desktop is dead, it's that technological innovation has moved beyond doubling speed or doubling cores. We've re-entered an age of rapid technological advancement which should leave plenty of opportunity for all should you know where to look and what to expect.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Some final pre-result thoughts on the Alberta Election

It looks like the Wildrose Alliance is poised for a majority win, although I must plead with you Alberta that a minority is probably the best form of government to face the uncertainty of the future to prevent ideological rule and allow serious discussion on policy. The last thing Alberta needs right now is policy for policy's sake.

At this point I don't think the Wildrose party as a whole understands or is ready to deal with the problems peak oil will create; both for the industry and for the consumer even though the concept of peak oil almost receives daily mentions now in mainstream news.
Crude oil prices reflect the cost of production, which has become more challenging as easy-to-access reserves dwindle.
"Oil companies are turning to increasingly costly-to-produce oil," says Michael T. Klare, author of The Race For What's Left: The Global Scramble for the World's Last Resources. He points to tar sands in Canada, deepwater reserves off Brazil or so-called tight oil that's extracted from shale formations by hydraulic fracturing in the U.S.
These countries worry the oil industry, even though they're not major oil producers, because there's limited global cushion to cover a loss in production should their conflicts spread or deepen.
 This problem receives no mention from the political parties running in today's election but will likely taint every decision making process as budget's are re-worked and projections re-made while confusion reigns as the standard cost of production goes up and up. It's key to understand that oilsand production is subsidized indirectly by cheaper energy forms such as natural gas and conventional oil.

The cost of energy is high, and therefore the cost of everything will be high. From education to health, transportation and beyond a partial reason government spending has ballooned in the last decade is due to the cost of energy. The financial requirements to provide the same level (or slightly worse level) of service are going up. Of course there is corruption, the private interest for the IMF's banks, and simple waste but those expenses are compounded by the exponential cost of energy too. Waste becomes bigger waste, etc.

The road Alberta is on right now is a slow and steady decline and unless the nature of Alberta's economic growth is addressed this decline will continue. The quality of service we receive today will never return as costs escalate and even more cutbacks are made.

Balancing the budget is important, on this I agree with the Wildrose 100%. But balancing the budget using the growth record from the 70s until now as a basis of what to expect growth to look like in the future is foolish. We can only produce a balanced, foreword looking budget if the cause & effect of the price of oil and Alberta's over-reliance on it are weighed fully and truthfully and for this I believe only serious political debate between the 4 political parties can yield any hope of a government lead solution to the problem.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Friday, April 20, 2012

Quebec student protests and the big picture

Ten weeks in and the protests in Quebec are showing no sign they will diminish anytime soon. The common take that I have been reading is that the students are being completely unreasonable. Quebec afterall does have the lowest tuition in the country and even then compared to other countries (like the U.S.) our tuition requirements don't come anywhere close. That's a fine and valid point to make, they probably are over-reacting to the tuition hikes much like when someone who has bottling up their feelings bursts out over what may seem to be the most mundane event, but let's step back for a moment and look at the big picture.

Even before the Occupy movement began, I have been forecasting massive social unrest on a global scale. The Quebec protests are not an isolated event, rather they are the latest in a chain of flashpoints. Sure the $325 increase seems inconsequential, but combine that with the fact all of these youth have been just recently told they will not be retiring at 65. Add to this the ultra-low interest rates making saving for students impossible as money in the bank simply erodes against inflation, the fact most students don't have the reserve funds to invest in the market to make the difference further compounds the problem.

You're looking at a generation that is already priced out of the housing market, has fierce job competition with little job security, and is now being told that they're going to have to pay more for schooling which more and more is looking like a waste of money with youth graduating finding they're just ending up in jobs they would have had regardless. Think they're angry? You bet.

Further add the pent up anger from the bailouts of which the youths have simply been commited to paying off. The debt they're being told they will be on the hook for doesn't even consider any of the future spending and supports their generation might need. It's all about keeping our head above water now at the expense of the future.

These protests will end, but the anger will remain and another seemingly artbitrary flashpoint in the near future will cause ever increasing violence. It will get worse continually if the anger that is deep seeded within the generation is not addressed and in a fashion which shows the generation they are not simply a blank cheque.

Today's youth are not as clueless or "privilaged" as you might think, and if you think these ones are angry just wait for the next crop:


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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

You're welcome to your conscience, but keep it out of my rights

I'm about to do something I hoped I wouldn't have to: weigh in on Alberta's election morality battleground. I have been reluctant to do so and have been quietly biting my toungue as the arguments go back and forth. The past few weeks of revelations on Wildrose personal opinion have been concerning especially since I was seriously considering the Wildrose candidate in my riding.

As I've stated before party politics means nothing to me. I had an excellent discussion with Meagan LaFave's campaign about peak oil and it's the first time a politician has seriously entertained my concerns. The NDP have consistently written off my concerns about peak oil, and for me this is a big deal. Rachael Notley has been a good MLA but she's never entertained my thoughts on peak oil.

Peak oil is not thoroughly understood within the Wildrose party. Last year in an interview with Jason Lamarche Danielle Smith states that she's not really familiar with peak oil and then without even bothering to understand it continues to explain why its not true. This contradiction in views seems to plague the Wildrose and the last few weeks have been no exception. I fully understand that I'm Canadian, not American and that we vote for a local representative and not a leader but it's still conflicting voting for an MLA based on their take on a problem the leader doesn't understand at all. This confliction for me has only grown in the last few weeks with the moral controversies.

Let me be clear here, I do not support the concept of conscience rights. You are however perfectly welcome to your own conscience freedoms. If your conscience is telling you that you can't provide a service to a citizen then you probably shouldn't be providing that service and you're free to find yourself a different career. This is what freedom is all about, it's a double-edged sword and you're perfectly free to make your own decisions even if the options associated with that freedom are not nessecarily your personal preferences.

The Wildrose response has been "we will not legislate on contentious social issues". Who cares about whats legislated? What we are electing here are representatives who should be listening to their constituents about what to suggest legislation on in the first place. What concerns me is whether conscience rights will be applied selectively, where there is no legislation.

Lets say Allan Hunsperger wins and some months later a homosexual brings a concern about gay rights to his representative. Will Hunsperger give equal weight and concern to the matter or will his own bias against homosexuals interfere with his ability to represent? If he truly believes in his convictions which he is defending then is it not reasonable to assume his response could be "well you're just going to the lake of fire anyway"? Everyone deserves equal representation and whether or not the Wildrose can provide that isn't being made clear what-so-ever.

I find it very difficult to understand how clear support for personal discriminatory views can translate into unbiased and fair representation. Maybe conscience rights and intolerance won't be legislated on (although you can never be sure, its not like governments have never legislated on something they said they wouldn't), but that speaks nothing towards whether they will respect and uphold existing rights and represent their constituents proportionally.

UPDATE 6:56 PM

It's come to my attention that Danielle Smith has addressed the topic of representation today. Her release can be found here. I'm not sure when this was posted (no timestamp) so I can't say whether it's in response to my post or simply coincidence (probably the latter as I have few readers). I wish I had read this at the beginning of the week, I held out on writing this post as long as I could waiting for a concrete answer.

Danielle Smith has pledged that her candidates will represent everyone. This statement satisfies my concerns, and I expect that if the Wildrose is elected any MLA who breaches this pledge will be promptly removed. Tolerance for intolerance is something I will not tolerate.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Tuesday, April 17, 2012

Supply when demanded: Why the free market can't address peak oil

A friend of mine has to close their business. It's a fresh business that was founded during the stimulus boom. It's a green business, which took advantage of the government's stimulus measures aimed at green conversions for homes. It's a business which is now no longer profitable since these measures were retracted, one of many I'd assume. This is the simple face of a problem we will all face in our own way sooner or later; that the needed changes to address peak oil comes at a 'net loss' in today's economic terms.

If you're not familiar with peak oil, there is a good primer on the subject here. It's a long read though, so I will briefly explain the gist. Peak oil is not oil depletion, rather it decribes the peak and decline in the rate of oil production from a single well, a group of wells, or the entire world. It also describes the cost of this energy, with the first 50% on the rise towards peak starting cheap and getting increasingly expensive and even more expensive as production declines.

Peak oil is a complex, frightening, and quite frankly boring concept to understand but a simple analogy I use is "the slushie". When you first buy a slushie, it is relatively easy (cheap) in terms of sucking power (energy) to get the slushie. This ease persists until you deplete your slushie about 50%. After the 50% mark, drinking your slushie becomes more difficult (expensive). You have to stop slurping, stir the straw, etc. If you look at your "rate of consumption" of the slushie it has peaked at the 50% mark and goes into decline. The more you deplete your slushie well the slower your rate of consumption becomes. At about 20% it almost becomes so annoying (uneconomical) to drink your slushie you consider either turning it upside down and forgeting the straw or just throwing it away. We can't turn an oil well upside down, so the only option is to call it "depleted" and move on. No well has ever completely depleted, they've just become uneconomical (or too damn annoying) to get the remaining oil out. This is peak oil in a nutshell and global peak oil is a problem as the price of oil directly translates to the cost of production and the cost of living.

There are several common lines you might hear to describe (or more accurately "write off") this problem from all sides:

From the conservative/economic the most common belief I hear is that the free market as a natural response to high oil and gas prices will find "alternatives" more economically viable and realistic as oil & gas become more and more unaffordable. This is the pure and simple supply/demand view; that oil (being a source of energy and a commodity) is subject to the same rules as any commodity in our modern market and if the price should climb too high a similar replacement at a lower cost will be turned to. As an example for this "alternative" we will use natural gas.

From the liberal/environmentalist the most common belief I hear is a variation on the conservative theme. Usually it involves a subsidy of some sort from the government to create the incentive to innovate the so-called green "alternative" energy economy.

You might be wondering why I am saying "alternative" instead of simply alternative. The reason why is: none of the "alternatives" are truly alternatives. None of them. They are all derivatives, meaning that even if oil is not directly used by it, it still depends on technology either during the chain of production or during it's lifetime that does depend on oil.

A simple example of this dependency is "green" transportation, or the idea that the hybrid will somehow help ween us away from oil. For the sake of simplicity we will not even look at the sorts of transportation integral to our supply chain (nobody ships product in a Prius). The real question is, how much oil will it take to build the "alternative" in the first place? It doesn't matter if your car runs on garbage, the car still took oil to build in the first place and all of the technology needed to replace existing technology will take oil to build as well. It doesn't stop there though, the car is built using machines that were themselves built using the supply chain, other oil powered machines, and so on. These machines all need maintanence themselves which takes tools built with oil powered machines. Nevermind the roads, electrical infrastructure (think of all that copper!) , etc. Our advanced technological state fittingly has an advanced supply chain, and that entire supply chain runs on oil.

Now I know: the common rebuttal to this point is that technically in terms of what is getting done we have non-oil powered alternatives to most basic processes of our society. You might look at mining and say we did that before oil or you might look at farming and say we did that before machines. Of course we did, but we had energy subsidy back then too: like slaves (well we still do have them today, don't we Foxconn?). However often over-looked is the fact that back then we didn't have 7billion people, industrial scales of production, or GDP growth fueled by consumerism. To truly understand the gravity of the problem you must put everything into context.

Getting back to the original point, both the left and the right's argument for the switch to greener and more efficient energy is essentially supply and demand which relies on a flawed notion, that there is an alternative of which to balance against. Whether the demand is the natural result of the so-called "invisible hand" of the free market or manufactured in other areas with incentives, they both make the flawed assumption the change comes at a profit and not a loss. Both sides agree that the change will only come at a profit and will be reactive and not proactive in nature.

We have made an assumption in all of these scenarios in which a change to green energy can occur, that assumption is that 'people will react accordingly and in their best interest', this assumption is a two edged sword. The left-wing argument is a variation of the right-wing theme, so we will use the pure supply & demand - high prices equals alternative energy theory as a basis. Let us assume the supply & demand model works as expected and people switch to natural gas (of which the drilling process is itself an oil derivative). The expected ease of demand on oil should lower the price of oil, correct? If the price lowers however, the amount of so-called "incentive" to move away from oil also diminishes relative to the price. At a low enough price it will actually no longer make "economic sense" to move away from oil and so people will either not switch or possibly even switch back (hey, where did all of those numerous scooters I saw on the streets in 2008 go?). Being that our entire technological base is oil, the incentive to switch is further diminished by the perceived "economic boom" cheap energy with the room to grow provides - how ever temporary. When energy is cheap consumerism will likewise be equally cheap which translates to what we consider to be "economic health". As the past 4 years have shown, even after a complete collapse in demand it only takes 4 years of a "slow economic recovery" to push it back above $100 / barrel. How people reacted to the collapsed oil price is just as important as the reaction to high oil prices. People resumed consuming and old energy consuming habits. The natural gas boom in the U.S. further adds to the sense of "energy security".

Addressing peak oil and the implementation of derivative renewable energy sources will come at a net-loss, and this has to be accepted if we're to ever accomplish it. Neither side of the supply & demand theory can properly address the issue. If the price of oil is high: the price of derivative sources will likewise be high. Derivative sources are technically advanced, they require metalurgy and very modern materials only made possible by the basis of simpler oil powered large-scale production and distribution. The little incentive to switch is emotional in nature, either via fear of even higher oil prices at which a certain point becomes unaffordable, or a deeper moral obligation to "go green". It's inevitable that enough investment results in a collapse in oil price which could potentially result in a much more expensive cost-of-living or net-loss. If oil price doesn't collapse, the goal hasn't been accomplished making that situation moot. If the price of oil is low it becomes the defacto source of energy while free market incentive evaporates. While the "alternatives" during a cheap energy period would likewise be cheap, in comparison to the cost of oil they are still very expensive as their energy returned on investment is significantly lower. The cheap energy leaves a perception of room for economic growth in which our GDP model happily accomodates. Only a proactive approach, with the common understanding that the change comes at a net-loss but in the long-term provides a net-gain for everyone will accomplish our goals as a society to move away from oil. Not changing will result in the biggest net-loss, a perpetual recession and multiple lost generations.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Thursday, April 12, 2012

#abdb8 barely touched what may be Alberta's most important issue

I'm pretty disappointed. For a province that relies on energy for revenue: I heard a lot about surpluses and very little about revenue. I heard even less about the elevated cost of living that revenue depends on.

There is clearly a lack of understanding on what the problem Alberta is facing really is. Raj Sherman asks during the debate:
"With oil at $100 / barrel how do we have a deficit?"
A high price of oil isn't good, for anybody. Two very interesting reports came out recently. One from Mark Carney of the Bank of Canada and another from an independant economist: Robyn Allan. What's important isn't the price of oil, what's important is the cost of producing that oil. The cost of production rises with the cost of oil.

These reports both reflect what was inevitable if the price of oil should level off or become volatile. The profit from the past 20 years did not come from the price of oil, it came from a steady exponential increase in the price of oil. This resulted in the production price lagging the selling price. Until it all fell apart in 2008 and the projects halted that is, but with government stimulus and even cheaper debt than before so-called economic growth has begun again and already in just 4 years we are back above $100 / barrel.

Peter Kent made what is almost a comedic statement the other day:
Mr. Kent said this means that Canada is beginning to de-link its growing economy from corresponding increases in greenhouse-gas emissions, which have been blamed for global warming.
Yes, we are "beginning to delink our economy from GHG" - that must be it! It couldn't be the much more logical explanation that all of this cheap debt has simply stimulated "growth" through consumer purchases but not through true productive capacity? How is Canada's economy delinking from GHG when Budget 2012 (which I am still working on the analysis of) focuses on fossil fuel energy production and trade? It's not, what is actually happening is what little real production there is going on in Canada which is not being exported at rock bottom prices shadows in comparison to the growth simulated by debt driven consumer purchases. The products people are buying are over-valued houses, over-valued cars, and imported items. As well as using it to pay gas, mortgages, etc.

All of this talk about rising interest rates isn't likely to happen anytime soon I believe, there are 2 reasons for this:
  1. We can not raise interest rates to reasonable levels until the U.S. raises their rates to reasonable levels. If you don't understand much about modern currency, what is important to know about this is that banks create 95% of the money in circulation, through loans, which has compound interest attached. The more money in circulation, the more "inflation" (in reality devaluation as real inflation should come from a true increase in wealth). I've written more about inflation and fiat currency here. If we raise our interest rates too much above the U.S. to discourage cheap loans, there will be a decrease in the amount of currency being injected in to the system. If the U.S. dollar depreciates too much beyond our currency they will not afford to trade with us. I first wrote about this interest rate debate last April.
  2. As I recently explained: With both housing and oil at peak, there is no growth left to grow. They are depending on consumer spending for more than 1% of 2012-2013 GDP. That spending can only be fueled by cheap loans/government stimulus.
The economic problems we face today are a direct result of the economic climate we are in today. I do not see a true understanding of this climate from any political party at this time. The last 20 years are over, that growth is gone. No policy will bring it back, we need to look forward and accept what is rather than what we wish it to be.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Thursday, April 5, 2012

My #abvote questions

I am having a really tough time this election deciding which of my MLAs to vote for. So to help me make my decision I am putting these questions out there:

  1. When it comes to party politics & ideology I tend not to care; what's most important for me is whether my MLA will represent me. My first question is would you vote against your party if your constituents requested it? What if what your constituent's want goes against your ideology?
  2. Energy is Alberta's largest resource right now. We seem anxious to sell as much as we have as fast as possible, yet the return on investment is almost non-existent. Sure we had a surplus in the past, but we were also creating an infrastructure deficit of which we are now in the red for as we attempt to catch up at inflated prices while oil sits at $100 / barrel. In place of investment in the long term health of the province money was wasted on "investments" such as the Alberta train and our $25M provincial motto no one can remember. My question is how can Alberta's youth retain any value from what's being done now? Given the "hope we don't piss away the next oil boom" attitude of the province and the amount of time and faith that has to be invested to discover the real results, how can Alberta's youth trust investment in their future will be followed through with?
  3. When it comes to student debt: Do you support relief for students? If yes, through forgiveness? cheaper tutitions/fees? or Cheaper/easier loans?
  4. Do you believe in "new age" solutions to food and hunger? Such as urban chickens or public gardens?
  5. Would you put priority for transportation on public transit or drivers?
  6. As more and more countries come to Alberta for oil, foreign influence in our politics will grow. What measures will you take to increase transparency and assure Albertan's their government is working for them 100%?
  7. The U.S. and European debt situations continue to get worse and the Canadian housing market - fueled by cheap mortgages which are also fueling consumer spending which is expected to be 1% of anticipated GDP - is overheated. Gas prices only compound the problem. It's clear over-reliance on the global market and supply chain is an economic weakness. What would you do to strengthen Alberta's local economy, and trade with other provinces?
  8. Finally, on oilsands. Budget expectations on the price of oil expect sustained higher prices, but gas prices are already on the frontpage around the world. In 2008 oil was at $147 / barrel when the mortgage & auto meltdowns occured. Often overlooked are facts such as people ditching their cars in favour of bikes or scooters. Mortgage payments couldn't be paid with such a high price of oil according to Jeff Rubin. Many economists expect a collapse in the price of oil similar to the collapse in price seen in 2008 due to a sudden lapse in demand due to price. What is your plan to balance Alberta's budget if oil isn't more than $80 / barrel?
- Richard Fantin, Edmonton Strathcona constituent.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Wednesday, April 4, 2012

Flaherty, you're not making any sense

So this article here just came to my attention. I have written a few different articles about debt and our housing market lately. On March 21st I published "Canada and the fine line between reality and lies". On the 29th I published "All that matters is the math - but don't forget about the mathematicians". Finally yesterday I did a quick one "The Canadian Housing Conundrum".

It seems that Flaherty doesn't want to tighten the lending markets again. I love that word, tighten. It's excellent newsspeak, as it sounds like something changed and a problem was addressed. Flaherty may soon be caught in his own lie that "growth has been stimulated", as there hasn't actually been growth at all. Debt has been stimulated, which temporarily and at a higher expense makes growth appear to be happening. The basis for this growth as yesterday's post points out is household financing. The same household financing that has been very volatile as I pointed out in the fine line between reality and lies. If that is "tight", then what exactly is loose?

Would it be the reliance on the ponzi American economy our banks admitted to that I showed in all that matters is the math? Is that "tight"? It's not the rules around lending that are the problem, Flaherty. It's the whole damn financial system. It's corrupt, based on fractional reserve lending and exponential never ending growth. Did I mention that pesky problem of peak oil?

We've got a problem here Canadians, journalists and citizens - you need to question the "stability" of our financial system. We didn't avoid the crisis, we delayed it, compounded it, and that won't last.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Tuesday, April 3, 2012

The Canadian Housing Conundrum

Canadians are now out of wiggle room. The Canadian economy is now literally at war with itself.
Canadian authorities are stepping up oversight of the nation’s housing market even as lenders such as Bank of Nova Scotia warn that tougher rules could threaten the economic recovery.
So we're afraid the housing market will stop growth? Well that would would be bad but...
Policy makers, including Finance Minister Jim Flaherty, have said that parts of Canada’s housing market have become overvalued as consumers add to record debt levels, encouraged by some of the lowest mortgage rates in decades.
So we're also afraid of more growth? ok...
Scotiabank (BNS) chief executive officer Richard Waugh warned about making reforms to CMHC that could have “unintended consequences” and cause the market to slow too much.
Oh I see, we want the overvalued housing market to grow, but not too much.
Bank of Canada Governor Mark Carney said in an April 2 speech that households relying on debt financing represents “the biggest domestic risk” to the economy. Some Canadians would be vulnerable to a sharp decline in housing prices, the central bank said in its latest Financial System Review.

The country’s resale housing market is overvalued by 10 percent to 15 percent and there is an oversupply of new homes, Toronto-Dominion Bank economist Sonya Gulati said in a March 22 report. “These excesses should be gradually unwound over 2013 and 2014, with higher interest rates the impetus for the adjustment,” she said.
Oh, no biggie then. The households relying on debt financing will just have to deal with rising interest rates and a lower property value and decreasing growth, err but wait..
“Elevated household debt levels not only make households vulnerable to adverse shocks but continued low interest rates could encourage even higher household indebtedness,” OSFI said in a planning document released on its website yesterday.
Consumer spending has led economic growth since taking the country out of recession in 2009. The Bank of Canada projects households will be responsible for more than half of the country’s 2 percent economic growth this year.
Things couldn't be clearer, don't worry. Everything is fine.

Click here to recommend this post on progressivebloggers.ca and help other people find this information.

Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Monday, April 2, 2012

#Budget2012 Analysis - Part 4 - Supporting Jobs and Growth - Supporting Entrepreneurs, Innovators and World-Class Research

We'll now cover section 3.1 of the budget. The highlights are as follows:

Creating Value-Added Jobs Through Innovation 

  • $400 million to help increase private sector investments in early-stage risk capital, and to support the creation of large-scale venture capital funds led by the private sector.
  • $100 million to the Business Development Bank of Canada to support its venture capital activities.
  • $110 million per year to the National Research Council to double support to companies through the Industrial Research Assistance Program.
  • $14 million over two years to double the Industrial Research and Development Internship program.
  • $12 million per year to make the Business-Led Networks of Centres of Excellence program permanent.
  • $105 million over two years to support forestry innovation and market development.
  • $95 million over three years, starting in 2013–14, and $40 million per year thereafter to make the Canadian Innovation Commercialization Program permanent and to add a military procurement component.
  • $67 million in 2012–13 as the National Research Council refocuses on business-led, industry-relevant research.
  • Streamlining and improving the Scientific Research and Experimental Development tax incentive program.

Support for Research, Education and Training

  • $37 million annually starting in 2012–13 to the granting councils to enhance their support for industry-academic research partnerships.
  • $60 million for Genome Canada to launch a new applied research competition in the area of human health, and to sustain the Science and Technology Centres until 2014–15.
  • $6.5 million over three years for a research project at McMaster University to evaluate team-based approaches to health care delivery.
  • $17 million over two years to further advance the development of alternatives to existing isotope production technologies.
  • $10 million over two years to the Canadian Institute for Advanced Research to link Canadians to global research networks.
  • $500 million over five years, starting in 2014–15, to the Canada Foundation for Innovation to support advanced research infrastructure.
  • $40 million over two years to support CANARIE’s operation of Canada’s ultra-high speed research network.
  • $23 million over two years to Natural Resources Canada to enhance satellite data reception capacity.
Overall I am fairly happy with what I am seeing here and it is in line with what I believe would be considered "good" financial support of small & medium business to accomplish what is needed. Only two items targeted for cutbacks appear in their list:
Scientific Research and Experimental Development
Tax Incentive Program      
  Increasing Cost-Effectiveness      
    Reduce Overhead Proxy Rate From 65 per cent to 55 per cent: -10 -10
    Remove the Profit Element From Arm’s Length Contract Payments: -25 -25
What actions are actually taken to meet the new overhead reduction will have to remain to be seen but I doubt few will complain about removing the profit element from arms-length contracts.

Aside from this, a few certain paragraphs provide clues as to what the government currently believes and the trends it is following as a result. Perhaps most important in regards to this is the medical isotope situation which I believe governments world-wide are not being honest about how serious the shortages are nor how long they will last (indeed I believe they do not even know how long it will last, indefinitely is what I imagine they wish they could tell you). As I've pointed out on twitter the "nationwide" drug shortage is actually a "worldwide" drug shortage. I am positive all governments are aware that nuclear as a source for isotopes is no longer sustainable in the long term. They seem to be acting on this assertion.
Medical isotopes are used in a variety of treatments and diagnostic procedures that help save lives. In Budget 2010, the Government provided $35 million over two years to Natural Resources Canada to support research and development towards new technologies for the production of medical isotopes to help replace reactor-based isotope supplies. Very promising results have been demonstrated to date, but more work is required to bring these new technologies to commercial scale. To further advance the development of alternatives to existing isotope production technologies and help secure the supply of medical isotopes for Canadians, Economic Action Plan 2012 proposes an additional $17 million over two years to Natural Resources Canada.

Atomic Energy of Canada Limited (AECL) is a federal Crown corporation that specializes in a range of nuclear products and services. The Government has taken an important step in positioning Canada’s nuclear industry for future success with the sale of AECL’s CANDU Reactor Division last October. The second phase of the restructuring of AECL—the restructuring of its nuclear laboratories—is now underway. To ensure a secure supply of medical isotopes and maintain safe and reliable operations at the Chalk River Laboratories, Economic Action Plan 2012 proposes $107 million over two years for AECL’s laboratory operations.
This is a problem to keep your eyes on. I personally would suggest keeping close tabs on medicine you require and if possible stockpile it.

A few other paragraphs confirm for me that the government believes fully in climate change and that it is occuring now and is inevitable as earlier signs have indicated.
Canada’s Economic Action Plan laid the groundwork to establish a world-class research station in the North. As announced by the Prime Minister in August 2010, the station will be located in Cambridge Bay. Once established, the station will provide a year-round presence in the region and anchor the network of research infrastructure across Canada’s North, making a significant contribution towards the Government’s Northern Strategy. The Government will be announcing next steps in the establishment of the Canadian High Arctic Research Station in the coming months.
Combine the link, the "research station", and the explicit mission we have for research directly from section 3.1:
The Government’s science and technology strategy, Mobilizing Science and Technology to Canada’s Advantage, emphasizes the importance of ensuring that federally supported research contributes to the commercialization of new products, processes and services that create high-value jobs and economic growth. Guided by this strategy, the Government provides significant resources to support research, development and technology.
It's not unreasonable to assume the research station will be heavily involved in arctic mining research as thats one of few products, services, or processes that can be commercialized. This compliments another paragraph in regards to climate change (from the section on GMO research):
•Increasing the competitiveness of the forest industry. Spruce trees are the most widely used species in Canada’s forest plantations. Researchers at Universit√© Laval are working to develop tools and protocols that make it possible to select high-performance spruce trees with better quality wood and high potential to adapt to climate change. Government and industry have partnered to transfer molecular breeding technology to commercial application across a broader range of tree species, to increase the competitiveness of the Canadian forest industry.
I'm more convinced than ever now that the government's climate change strategy is adaptation and not prevention (indeed I believe they believe it is now impossible to prevent). Take note of the wording "better quality wood with high potential to adapt to climate change". It's current tense and matter-of-fact. I anticipate most policy will be geared towards adaptation with climate change simply becoming a reality.

I found one other paragraph of particular interest:

To help increase private sector investments in early-stage risk capital, and to support the creation of large-scale venture capital funds led by the private sector, Economic Action Plan 2012 proposes to make available $400 million for venture capital activities. This will increase the amount of funding available for growth-oriented innovative firms while focusing resources on those that are likeliest to become global leaders. In the coming months, the Government will consider how to structure its support in order to incent private sector investments and management of seed and large-scale venture capital funds.
It's unfortunate as the government choosing the "likeliest to become global leaders" - which in nature seems generally very anti-conservative taints what more or less reads as an industry-neutral list of innovation funding.

All in all, the focus on small & medium business is a good thing should Canadians use these opportunities responsibly. The general sense of budget 2012 is a worldy sense with a focus on exporting as the primary key to economic success. I believe the opposite in that I do not think we will have any economic stability depending entirely on the health of the global supply chain. Canadians need to trade more with each other to create the kind of resilience to actually withstand economic hard-times - instead of pretending central bank policy can do the hard work. There is nothing in section 3.1 that really specificies what sort of industry is applicable (outside of the specification normally found). If Canadians come to understand the need for a stronger local economy than I believe the funds provided here can contribute towards our prosperity (note I didn't say economic growth).

Part 5, coming soon.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.