DO YOU KNOW WHO THE REAL BANKERS ARE?

(The Metropolitan, Robert Presser) 

∙ The long-term chart shows the US dollar declined steeply in the mid-80's during the Reagan era, recovered under Clinton when prosperity boosted tax revenues & a Republican Congress acted like fiscal conservatives &  resumed its decline under Bush 43. Bernanke has showered the US economy with all-but-free money in an effort to reflate bank balance sheets, real estate values & consumer spending. But consumers are paying down debt; so their spending is expected to decline by as much as US$1TR from the 70% of GDP level. And while its economy is recovering faster, Canada is in a bind because the Bank of Canada won’t raise interest rates until the US does, to protect Canadian manufacturers. The Europeans are now in the same boat as the US was earlier with consumers  spending more & more on cheap Chinese goods & increasing their bilateral trade imbalance. Meanwhile, China is signaling it is ready to let the Yuan float higher, but only in a controlled manner & not in one jump to six, or even five, to the dollar (from the present 6.83) as the US & the Europeans would like to see; and it will do so for selfish reasons : a stronger Yuan will make commodities cheaper & enable local manufacturers to cut domestic prices. The dream solution would be a slowly appreciating Yuan, a stabilizing US dollar as Washington gets its deficits under control & a Eurozone that avoids the implosion of its former Soviet bloc  members & manages to hang together despite the deep divisions between its older Western members & its newer eastern ones. But that ain’t a likely outcome. 

In international politics & finance major change seldom comes smoothly but usually in unsettling leaps & bounds as governments do their utmost to ‘hold back the waves’ until change is forced on them. And German businessmen believe that a higher Yuan is less of a priority than a pickup in demand in China; for many of their exports (& it was only barely nosed out by China recently as the world’s largest exporter) are relatively price-insensitive high-end, high value-added products. 

DOUGHNUT-HOLE COUNTRY (NW, Christina Gillham) 

∙ The outlook for rural America is bleak. The rise of agribusiness & demise of the family farm, the loss of local manufacturing jobs and the flight of young people to the cities have pushed many rural communities to the breaking point, with some losing one-tenth of their population in the past thirty years. But while they have started to fight back with things like free half-acre building lots, husband-and-wife authors Patrick J. Carr & Maria J. Kefalas in their book Hollowing Out the Middle argue that they must adopt a new way of thinking to stop the brain drain. In their view they must do more to prepare their high school students for New Economy careers that they can pursue locally, rather than having to migrate to the cities for a rewarding career, in such areas as computer technology, health care, sustainable agriculture & green energy. And they should do more to capitalize on the federal funding available for green agriculture & energy, and to attract more immigrants who could help revive dying towns through their sheer numbers.  

The urbanization trend was based, like so many things, on a plentiful supply of cheap energy that made distances immaterial. But higher energy prices will likely result in a reversal of the consumerist Leit Motiv from a mind set that “Bigger is Better & Biggest is Best” to one of “Small is Beautiful… Home is Where the Heart Lies”.  

U.S. REVERSES STANCE ON TREATY TO REGULATE ARMS TRADE (Reuters) 

∙ There has long been talk of a need for a UN Arms Trade Treaty (limited to making nations evaluate arms export transaction against its criteria while keeping control over whether or not they should go ahead). While the Bush Administration opposed it, the Obama Administration will support it, provided the negotiations involve consensual decision-making. 

The difference between refusal & insisting on a veto is one of image not substance. Global arms sales are US$400BN/year & exports US$60BN, with the US accounting for 40+% of the former & 50+% of the latter. 

U.S.NAVY PLOTS ARCTIC PUSH (OC, Ian MacLeod) 

∙ A 33-page “roadmap” details a five-year plan for expanding operations in the Arctic to defend national security, potential undersea riches & other maritime interests. While talking diplomatically about “strong partnerships” with other Arctic nations, it is clearly intent on unilaterally retooling its military presence & naval combat capabilities against the time that the Arctic Ocean will be (largely) ice-free for part-, most-, or all of the year.   

Meanwhile, the best Ottawa can come up with is to talk about planting a symbolic flag of souvereignty in disputed Arctic waters by possibly creating a national marine conservation area in Lancaster Sound at the eastern end of the Northwest Passage (as the Inuit have been demanding for decades) & authorizing Parks Canada to launch a $5MM feasibility study to determine whether such a marine park would be compatible with the fragile environment of the region.  

INSURGENTS HACK U.S. DRONE (The Guardian, Ewen MacAskill) 

∙ US sources have confirmed that intelligence had found evidence on laptops seized from militants that they had used Skygrabber software, available on the Internet for US$26, to intercept live video feeds from US remote-controlled drones as they sent missile target information to their ground controllers, thus enabling them to take timely evasive action.  

This puts the lie to the perception in some quarters that the Taliban/al-Qaeda is just a bunch of ignorant, towel-headed cavemen and, more importantly, suggests significant outside support and hi-tech capabilities. 

CANCER IN THE KITCHEN? (NYT, Nicholas D. Kristof) 

∙ More people are getting more different cancers at younger ages. In 1975 a 50 year-old white woman’s chance of getting breast cancer was 1%; today it is 12% & right now a 10 year-old California girl is fighting it. Ditto for asthma & child leukemia : asthma rates have tripled in 25 years & the incidence of child leukemia is rising by 1% per year. While women in Asia have low rates of breast cancer, the same is not true for ethnic Asian women born & raised in the US. One suspected group of chemicals are the ‘endocrine disruptors’, commonly found in anything from plastics to cosmetics. Of the 80,000+ chemicals developed since WW II < 20% of even the more commonly used ones have been tested for toxicity in children. So experts counsel avoiding microwaving food in plastic containers, or putting plastics in dishwashers since heat causes leaching. Some supposedly ‘safe’ plastic containers are marked, usually on the bottom in a little triangle, with the numbers 1,2, 4 & 5 while those numbered 3, 6 & 7 should be avoided. 

Plastic is only part of the problem. The air we breathe can be full of crap. Teflon in non-stick pans breaks down if they are overheated with the resultant bits of teflon flotsam & jetsam ending up in people’s blood stream where they remain for the rest of their lives. Food produced on modern farms is routinely loaded with herbicide & pesticide residues which, since they came up the root system cannot be removed by washing. Several years ago the California food quality control agency purchased 32 containers of milk off supermarket shelves in two counties & tested them, only to find that all but one of the 64 contained traces of rocket fuel that originated from an abandoned plant site up river on the Rio Grande from where it was leaching into the river, with the cows ingesting it either through their drinking water or by eating alfalfa grown on land irrigated with water from the river. And the producer of the movie Food Inc. in an interview reported that one scene he had been unable to include had shown California farm workers wearing space-type suits in the strawberry fields to protect them from the harmful effects of the chemicals being used in growing them. A couple of years ago four leading Canadian politicians had their blood tested for alien chemicals and of the 101 chemicals tested for, incl. known carcinogens & others suspected of altering genetic information, their blood streams were found to contain between 49 & 59.   

HOSPITALS DON’T SAVE MONEY BY USING ELECTRONIC HEALTH RECORDS (Reuters) 

∙ A study by Harvard researchers made public in The American Journal of Medicine involving 4,000 hospitals found that “hospital computerization hasn’t saved a dime, nor has it improved administrative efficiency ... Claims that health IT will slash costs ... are wishful thinking”; in fact, in 2007 those that had computerized most quickly also had experienced the largest jump in costs. The reason : “the commercial market place does not favour optimal products.” 

Corporations’ product priorities are bottom line-, not consumer optimality-, oriented; in fact, the less suitable the product, the sooner it can be replaced with a “new, improved” product.. 

LEAN AT 18 MEANS LONGER LIVES FOR WOMEN (CanWest, Sharon Kirby) 

∙ The US Nurses’ Health study was launched in 1976. It involved 121,000 nurses aged 30-55 who have been followed every two years since. The latest data suggest that all weight gain between the ages of 18 & 50 lowers a woman’s odds of being a “healthy survivor”(someone who at age 70 is still free from 11 chronic diseases running the gamut from diabetes through cancer, heart problems & kidney failure to Lou Gehrig’s disease and has no physical, cognitive or mental impairment). And it found the worst odds for a long & healthy life are among women who at age 18 were overweight [i.e. had a body mass index (BMI) of over 25] & who had gained 10 more kgs. (22 lbs) by mid-life, but that even much lesser weight gains, as little as 4 kgs. (i.e. 9 pounds), lowered the odds of healthy survival. 

Unlike so much health research, this study measures truly long term effects. 

SEPSIS MORE DEADLY THAN STROKES, HEART ATTACKS

(CanWest, Laura Stone) 

∙ The Canadian Institute for Health Information reported on December 10^th that last year sepsis, the body’s response to severe infection, generated 30,587 hospitalizations & 9,320 deaths vs 30,542 & 6,423 and 49,220 & 5,684 for strokes & heart attacks respectively. 

While immense headway has been made in preventing, recognizing & dealing with strokes & heart attacks, there are more & more infection-causing drug-resistant organisms, fewer & fewer effective antibiotics, and more & more people with sub-standard immune systems due to an overzealous attitude with regards to cleanliness.  

RADIATION FROM CT SCANS CAUSING CANCER (Reuters, Julie Steenhuysen) 

∙ An article in the Archives of Internal Medicine predicts radiation from CT scans done in 2007 will cause 29,000 cancers, incl. 2,000 breast cancers, & kill nearly 15,000 Americans, one-third of them people aged 35-54 when they were CT scanned, two-thirds females & 15% from those done on children & teens. The use of CT scans has exploded in America from 3MM to 70MM in 27 years, & the periodical’s editor points out “What we learnt is there is a significant amount of radiation with these CT scans, more than what we thought...”. 

These machines cost so much & become obsolete so quickly, that there is a tendency to max out their use. So the medical-industrial complex is only too happy to accommodate patients’ demands to use them, the more so since this reduces the risk of malpractice suits. 

CLIMATE CHANGE BLAMED FOR GREAT LAKES DECLINE

(G&M, Martin Mittelstaedt) 

∙ A US & Canadian government-funded report made public on December 15^th blames climate change for water levels in Lake Michigan & Lake Huron in the past fifty years dropping about 25 cms. more than in Lake Erie to the East of them. 

This is disingenious. Yes, there has been less rainfall in the lakes’ catch basin in the past decade. But the real reason has to do with that great big sucking sound heard at the Southern end of Lake Michigan as ever more, & ever less sustainable amounts of, water is syphoned off to meet the ever-increasing & inefficiently-used water demands of 13 US states. All prattle about the five lakes being “the world’s largest body of fresh water” ignores the fact that most of it is “old water” from precipitation decades or even centuries ago & that lakes are like a bank accounts : one can only take out of them what is put into them. But God forbid one should wake up Mr. & Mrs. North American Consumer from their lotus eating-like slumber by calling a spade a spade, i.e. Conserve Water!.  

BOREAL FOREST IS CARBON STORE HOUSE (CanWest, Margaret Munro) 

∙ A report by the Boreal Songbird Initiative, a Canada-US pressure group, The Carbon the World Forgot, claims Canada’s boreal forest is ”the world’s largest and most important forest carbon storehouse, holding almost twice as much carbon per unit area (i.e. hectare) as tropical forests”, says its carbon content in the past was vastly underestimated since most of it isn’t locked in trees but in metres-deep soils & peats, some of it thousands of years old & estimates that Canada’s boreal region from Newfoundland in the East to the Yukon in the West holds 208BN tonnes of carbon, 26x the amount currently being spewed into the atmosphere each year by burning fossil fuels (only 34% of which is locked in trees). 

The authors of the study may suffer from a not uncommon America-centric myopia. For the same concern has been voiced about the burning of forests on the Indonesian island of Balikpapan (aka Borneo) that results in the release of massive amounts CO 2 into the atmosphere as the peat in the soil beneath the trees burns as well, often smoldering for years afterwards, as peat fires will.     

DEBT-TO-INCOME RATIO HITS RECORD HIGH (G&M) 

∙ Canadian households’ debt-to-income ratio hit a record 145% in the Third Quarter (vs less than 110% in 2000). This news came a week after Bank of Canada Governor Mark Carney warned that household debt now constitutes the biggest risk to Canada’s financial system. 

Amazing how, despite of all that has happened South of the border, many economists nevertheless rushed out to pooh-pooh the idea that this constitutes a significant risk. 

BANK OF CANADA’S SLIPPERY SLOPE TO INTERVENTION

(G&M, David Parkinson) 

∙ When the loonie surges, the Bank seeks to discourage speculators by ‘moral suasion’, emphasizing a rising Canadian dollar will slow economic growth & keep interest rates low. But the C.D. Howe Institute’s David Laidler says this may prove a  “slippery slope” if it were interpreted to mean it would intervene big time in the FX market if things got out of hand & if a some point it had to make good the implied threat. And this can do more harm than good; thus in 1997 & 1998 the Canadian dollar’s precipitous decline stopped only when the Bank quit intervening in September 1998. For it is hard, if not impossible, for a modest-sized central bank to flood the market with enough money to have an impact on the huge global FX market. And while gale force winds are now buffeting the US dollar in the FX markets, the loonie has actually changed little against other key currencies. 

The Bank occasionally ought to join the fray on the side of the speculators, only to pull the rug out from under them at a point of its choosing. While initially this would cause great consternation & volatility in the market, longer term it would reduce volatility by making the game less of a “heads I win, tails you lose” proposition for speculators. Alas, bureaucrats prefer process over problem-solving. Canada has been fortunate in the quality of its central bank governors & Harper’s choice, Mark Carney, could turn out to be among the best of them, although one that Harper may come to regret. For young as he is, he had over a decade of hands-on experience in global finance in Goldman Sachs’ take-no-prisoners culture & is far better educated than the parochial (citified) country bumpkin that Harper essentially is. So Harper at some point may get a surprise when his Pavlovian, outdated, backward-looking, 20^th century view of the Canada-US relationship will be challenged by a more world-wise central bank governor he appointed himself when the latter comes to  appreciate the time has come for Canada to ‘leave the nest’ & venture forth into a world where a Canadian dollar that has strengthened against its US counterpart is less at a disadvantage in the countries that account for 95% of the global population & 80% of its GDP whose growth rate is as much as 3x that of the US & whose currencies have also appreciated against the US dollar. 

PEI FARMERS HOPE ANNE OF GREEN GABLES WILL HELP THEM SELL BEEF IN JAPAN (G&M, Oliver Moore) 

∙ PEI beef farmers, like their counterparts across in Canada, have suffered from low prices for their product (in part due to mad cow disease scares). So they want to move out of the generic product market & into a luxury Wagyu beef market in Japan in which they think they can capitalize on the strength of the island’s ‘brand’. Because, for reasons nobody has been quite able to explain, 97% of Japanese girls have grown up with, & as adult women, are still mesmerized by, the story of Anne of Green Gables in its PEI setting.  

Obstacles facing them include the fact that of the 150,000 Wagyu cattle already outside Japan, not a single one is in PEI. But they think their ‘brand linkage’ will help them overcome that disadvantage once they get some. It is this type of opportunistic thinking that seeks to build on existing edges that will do more for the Canadian economy than the mindless braying of “the US market, the US market”  

DEBUNKING OUR ‘FETISH OF THE FRESH’ (G&M, Jessica Leeder) 

∙ Prof. Peter Tyedmers, an ecological economist at Dalhousie University’s School of Resource and Environmental Studies, is co-author of a global three year study on the life cycle of salmon production. It concluded that buying local is not always the most environmentally-friendly, basing this on the example of a British consumer having the choice of buying locally- or Norwegian-farmed salmon : it purports that the greenhouse gas emissions associated with the raising & moving the former to the British market are 1.8 tons of CO2 per ton of salmon, compared to 3.3 tons for the locally-farmed product. 

It is likely true that things like the 100 mile diet are not a Goldilocks, one-size-fits-all solution. But that would not necessarily justify extrapolating from Prof. Tyedmers’ one example that any & all such initiatives are by definition counter-productive.     

CANADA FACES SURGE IN ILLEGAL MIGRANTS (CanWest, Peter O’Neill) 

∙ An internal Canada Border Agency Services’ report warns a growing backlash against illegal immigrants, recession-related social tensions and “nationalist” & “protectionist” measures elsewhere could lead to a surge in undocumented migrants seeking to enter Canada to take advantage of its generous social programs and “sympathetic” refugee system.  

Such immigrants are eligible upon arrival for welfare payments that are 60% in excess of those that needy long-term resident seniors who have lived & paid taxes here all their lives can get under Canada’s public pension system. More generally speaking, the migration the world has seen to date will be nothing compared to what awaits it in the not too distant future, especially out of Africa, as climate change, population pressures, water shortages & local insecurity, and in due course food shortages, prompt a global migration tsunami. 

EARNINGS GAP A ‘TROUBLING TREND’ (G&M, Joe Friesen & Tavia Grant) 

∙ Every immigrant to Canada comes with hopes of a new house in a safe country, a job matching their training & a rate of pay in line with their qualifications. But for many of them that proves to be a pipe dream. For a study by StatsCan revealed that in 2008 immigrants on average earned $2.68, i.e. 9.6%, less than their Canadian-born counterparts despite their often higher levels of education, and that the gap is even greater for those with university education and/or arrived within the last five years. 

And yet other StatsCan studies have consistently shown that immigrants have higher wealth levels than native-born Canadians; i.e. while they may earn less, they save more. And it is wholly irrational for Canada to give aspiring immigrants additional points on the ‘score card’ in their immigration application only then to refuse, once they have landed, to ensure they get employed in their field of training. And the truly sad part of foreign-trained professionals driving taxis in Toronto (or Philippine doctors retraining as nurses because it is easier to gain access to Canada as a nurse than a doctor) is that the global community as a whole is twice the loser, once because the country of origin loses skilled people in whose education it had invested scarce resources, and again when Canada fails to employ them gainfully where they can add most value.  

OILSANDS WANT REGULATORY RELIEF SIMILAR TO U.S. COAL

(G&M, Shawn McCarthy)  

∙ Regulatory plans discussed in the US Congress envisage permits to pollute to be issued to the politically-powerful coal industry but not to the oil & gas sector. And while Prime Minister Harper maintains that, to protect the Canadian economy, Ottawa must align its climate regulations with those of the US, Environment Minister Jim Prentice says that as an energy-intensive, export-oriented industry the oilsands may get special treatment. 

The Prime Minister was shamed by President Obama into going to Copenhagen, but once there did what was for him the next best thing, i.e. keep a zero personal profile & let Mr. Prentice carry the can. 

OIL SANDS EMISSIONS POLLUTING WATERWAYS (G&M, Martin Mittelstaedt) 

∙ A study by University of Alberta scientists, published in the peer-reviewed Proceedings of the National Academy of Sciences found that concentrations of PACs (polycyclic aromatic compounds) are much higher in river water near, or immediately downstream from, oil sands mining operations & upgraders than they are upriver, and that where the land has not been disturbed by extraction activity PAC levels in waterways are similar to those in the remote Canadian Arctic, while in areas where it is, they can be up to 50x higher.  

PACs are a component of oil of concern to public health authorities & environmentalists since they are toxic to fish embryos & have been linked to cancer in humans. 

MUNICIPALITY BANS PLASTIC BAGS (CP) 

∙ The Regional Municipality of Wood Buffalo in Alberta, the heart of the North America’s oilsands industry, is banning single-use paper & plastic bags starting next September 1^st as ‘ a first step in changing the area’s image around the world. 

A thousand mile journey may start with a single step but takes 532,999 more to complete; still, as a first step this is encouraging because it comes from the grass roots. 

STARVING POLAR BEARS TURN TO CANNIBALISM (CanWest, Amy Husser) 

∙ Four cases of polar bear cannibalism have been confirmed in the Churchill region of Northeastern Manitoba, & more are being investigated.  Warming weather is being blamed; for 20 years ago bears could return to the ice in Western Hudson Bay by November 8^th, a decade ago that had become November 20^th & this year they were still on land well after that date. And they cannot start hunting seals & building up body fat but on the ice. 

Nobody has ever told the bears that eating their own kind is unacceptable behaviour. While some of it likely has been going on since time immemorial, a lack of alternate food sources on land may increase the incidence thereof & make it more visible than out on the ice pack. 

‘SOY HOUSE’ STAR OF TORONTO WINTER FAIR (Epoch Times, Joan Delaney) 

∙ A partnership of the Grain Farmers of Ontario (GFO), Quality Engineered Homes Ltd. & Habitat for Humanity (Halton) had a 1,200 sf house on display at the Fair almost entirely made of soy, incl. kitchen cabinets, insulation, mattress foam, carpet backing, shingles and paints & varnishes (soybeans are Ontario’s largest crop, this year worth $800MM at the farm gate but this is nothing compared to the US’ 27BN dollar crop in the US). 

These products are made of their 20% oil content not turned into soybean meal.  

THE BEST OF THE CANADIAN BANK FUNDS (G&M, Rob Carrick) 

∙ A decade ago mutual funds controlled by the Big Six banks accounted for 25% of every dollar invested in mutual funds in Canada, vs. 45% today as “Uncritical, trusting investors are raw meat to banks with their branch networks full of people flogging the house products”. So Fundscope evaluated the track records of 1,158 funds in the big banks’ fund families over one, three & five years, rating 160 (14%) “above average”, 188 (16%) “below average“ & the rest “inconsistent performers”. Individual bank results were as follows (numbers show the percentage of above- & below average performers, & the number of house funds) : BMO - 14.7%, 26.5% & 68, CIBC - 11.1%, 22.6% & 235, NBC - 18.9%, 12.9% & 132, RBC - 9.7%, 14.2% & 268, BNS - 5.9%, 11.0% & 118, and TD - 19.6%, 14.5% % 337. 

Is there really a need for 337 house funds, or 268 or 235 for that matter? Only two banks had more above- than below- average performers. As far back as the late 70's already, of AT&T’s then 88 external managers for its pension fund, only eleven outperformed their benchmarks, i.e. added real value, and over the years that ratio does not seem to have changed much. Canadian retail investors don’t appreciate how much Canadian mutual funds’ MERs are out of line with those in just about every other industrialized country, how few of them really ‘add value’ & how many of them are ‘closet indexers’. And few realize they would be better off either managing their money themselves (and saving themselves the 2.5-3.0% MERs) or putting it into low-cost into index funds, as Warren Buffett once suggested they should. (Fundscope is a Canadian analytical firm whose “guiding principles are that investors should be aware of the risk they take & be comfortable with it, investors should be adequately compensated for risk, and in measuring investment performance the benchmarks must compare apples to apples”). 

WE’RE NO. 63 (OC, David Pugliese) 

∙ A report done for the Canadian Centre for Policy Alternatives says that, contrary to the popular perception, the demand for UN peacekeeping troops is greater than ever, with a total of 83,853 UN peacekeeping troops currently deployed in 15 operations, and that Canada’s contribution, a total of 55 military personnel (down from over 3,000 in the 90's), ranks it in 63^rd among UN member nations, behind Cambodia & barely ahead of Romania. 

The CCPA is a left-leaning think tank. There are several other reasons than the one it is focused on, the demands on the CAF from the Afghanistan commitment that are possibly more cogent and certainly beyond the purview of Canadian decision-making. Many of these 15 operations are in Africa where there is a bias for troops from African countries. Developing countries like to send troops on peacekeeping missions because it is profitable. And Canada can add most value by providing a few experts in highly skilled activities like staff duties & logistic than by providing cannon fodder. 

DROPPED MURDER CHANGES RAISE DOUBTS ABOUT ‘MR BIG’ STINGS

(Epoch Times, Sandy Wu)  

∙ After spending 14 years in jail for murder Kyle Unger on October 23^rd left a Winnipeg courtroom with his freedom & name ‘fully restored’ (???) after DNA evidence had earlier cast doubt on his guilt. His conviction had been largely based on a confession obtained in a ‘Mr. Big’ sting operation, a technique developed by the RCMP in which undercover agents posing as organized crime figures worm their way into a, usually unsophisticated, suspect’s confidence & convince him he can become part of a successful crime syndicate headed by a “Mr. Big” if he can establish his credibility by proving he committed a major crime. While the RCMP maintains this method gets results & helps to crack difficult cases, its critics say it is entrapment & produces unreliable confessions. Now a graduate student in criminology at Simon Fraser University has written a thesis on Mr. Big stings that concludes “Mr. Unger’s acquittal ... raises serious questions about the technique ... At the time of his criminal investigation Mr. Unger was young, naive and desperate for money ... (and) the RCMP played on his socio-economic vulnerabilities” & that all confessions obtained this way should be reviewed, especially if not corroborated by other reliable evidence (which Unger’s wasn’t). 

Unger was prosecuted by a since retired Crown prosecutor for whom this was his third murder conviction to be overturned in recent years after individuals spent many years in jail (& there has since been a fourth). One of the more controversial recent examples of this technique occurred after an individual with a known grudge against police killed four Mounties in Mayerthorpe, Alberta when he came upon them kibitzing in a Quonset hut on his property without anyone on guard, waiting for him to show up, before turning the gun on himself. Seemingly desperate for someone to blame other than the inadequate training, bad judgment & relative inexperience of their officers, the force spent millions of dollars sicking one of its young female officers onto a young local oaf to become his “girl friend’ & entrap him. For it suspected him of having assisted the killer in some way prior to the killing. Then the law administration community compounded the error of its ways by charging him, & his more street-wise brother-in-law, with first degree murder & again by having incompetent legal counsel advise them to plead guilty, rather than let the case go to trial where a first degree murder charge might have been hard, if not impossible, to prove to a jury of their equals. Both are now serving lengthy sentences. 

REPORT CALLS FOR BETTER RCMP TRAINING (CP) 

∙ On December 2^nd last year an RCMP officer entered the home of an intoxicated John Simon on the Mi’kmaq First Nation reserve on Cape Breton Island & ended up shooting him. A subsequent investigation by the Halifax police determined no charges should be laid since the officer had believed the man posed a threat to him; but it nevertheless made five recommendations to have the RCMP better prepare its officers to handle “critical situations”. 

Finally, someone ballsy enough to call a spade a spade on RCMP training (the more significantly so a fellow police officer; for in cases like this they tend to instinctively circle the wagons to protect a “brother”.  

KHAWAJA’S FATHER DEFENDS ‘IMMATURE’ SON IN BOOK

(OC, GARY Dimmock) 

∙ Khomin Khawaja, now age 30, was arrested in March 2004 & is serving 10½ years for facilitating & funding terrorism as Canada’s first convicted Islamic terrorist (though acquitted of a more serious criminal charge related to a 2004 London bomb plot). His father, a 67 year-old Ph.D. in interdisciplinary social science living in an Ottawa bedroom community has now written a book To America and Canada with Reason : Fallacy of Terrorism. Why Muslims? that calls his son “the latest victim of this traditionally fixed police outlook ... trained to see the masses through dark glasses”, claims his son was exploited by the British conspirators who didn’t tell him much about their bomb plot, and came from a good home, held down an honest job, taught children religion & “is friendly, disciplined, honest and the embodiment of superb creative thinking, morally strong ... and dedicated to do good to society” (which doesn’t quite jive with him telling an interviewer earlier that his son, at age 25, “was very immature.”) It calls the war on terror a “racist policy adventure aimed exclusively at terrorizing the Muslim people and nobody else” & complains that “the Canadian government was supposed to oppose the terrorism, not inflict it on us ... Our tragedy is explicitly an outcome of ignorance, misinformation and incompetence on the part of the intelligence police apparatus.”  

He has reasons to complain. His son is incarcerated some distance away in Quebec in a ‘special handling unit’ that also houses mass murderers where inmates have limited human contact, even with their guards. His son’s arrest was executed in a door-busting raid in which the entire family was arrested & property was seized, some of which has yet to be returned, five and a half years after the event.  But his diatribe & accusations, and the attempt at whitewashing his son show why Islamic terrorism will be hard to eradicate when community elders refuse to face reality & hide behind religious persecution allegations. As to the son, he made the prosecutors’ job easy with his emails to the British conspirators that showed him to be bent on violence, with the goal of Islamic global dominance, & revering Osama bin Laden.  

CULTIVATING THE CONVICTS (G&M, Lawrence Scanlan) 

∙ There are six federal prison farms in Canada. The Harper government plans to close them all by 2011 on the grounds they cost the tax payer $4MM/year & few of the prison farm workers go into farming upon their release. But a coalition, Save Our Farms, has been formed to fight the idea, the membership of which includes the National Farmers’ Union, the Canadian Labour Congress, the Public Service Alliance, the Council of Canadians and the Sisters of Providence of St. Vincent de Paul. Argument in favour of keeping them include that they save the government an estimated $3MM/year in food purchases from the outside (so than their net cost to the tax payer is only $1MM), that the Kingston farm in particular is a mainstay of that city’s Food Bank & that there is a total absence on the farms of the violence that hallmarks many incarcerated prison populations  

A better case can likely be made for expanding this program, rather than closing it; for, although the Nazis abused the term, there is a great deal of validity in the slogan “Arbeit macht Frei”). But that would require decision-makers with an open mind, not ones with deeply-engrained bias towards retribution. 

ISRAEL TAKES PLUNGE INTO WATER TECHNOLOGY (AP) 

∙ With decades of experience meeting the demand for water in an arid land, many Israeli firms are thinking of exporting their expertise in areas such as desalination & waste water treatment, incl. the use of sewage-eating bacteria. 

Israel’s annual per capita water use in 2002 was 130 cubic metres, compared to an OECD average of 920 (with highs of 1,730 & 1,420 for the US & Canada and lows of 190 & 230 for Luxemburg & the UK). So, if nothing else they certainly could teach the rest of us something about efficient water use.   

GADHAFI’S SON SLAMS LIBYA’S RIGHTS RECORD (OC) 

∙ The Gadhafi Foundation (aka the Gadhafi International Association for Charitable Associations) is run by his No. 1 son, Seif al-Islam. It published a report on December 10^th  that catalogued a long list incidents of torture, wrongful imprisonment & other abuses by the regime, and criticized state control of the media. He has been a prominent reformist voice in Libya, advocating a freer press, a mixed economy and more rights for the Berber minority.  

An interesting fellow. Age 37, he has an engineering degree from a local university, an MBA from an Austrian one & a Ph.D. in economics from LSE, and a following among younger Libyans. Long deemed his father’s choice to succeed him, that may now be in doubt, in part because of his views, in part because Egypt’s President Mubarrak disapproves of him as “an international celebrity with liberal views” & in part because he announced last year he was “withdrawing from politics”. He has advocated a one (federal) state solution to the Israeli-Palestinian conflict & been linked  romantically to an Israeli actress. Earlier this year he presented a paper at an alternate energy conference in Athens that proposed utilizing desert heat to generate electricity. The foundation has been active internationally mediating in hostage-taking incidents involving Westerners.  

GULF ARAB STATES MOVE CLOSER TO SINGLE CURRENCY (AP) 

∙ On December 15^th the leaders of the six member Gulf Cooperation Council (Saudi Arabia, Kuwait, UAE, Bahrain, Qatar & Oman), enacted a ‘monetary pact’ with the objective of facilitating “a timetable for the establishment of a regional central bank & a unified Gulf currency.”  

Another potential (small) nail in the coffin of the US dollar’s reserve currency role.

TRIUMPH OF THE TURKS (NW, Owen Matthews & Christopher Dickey) 

∙ Turkey’s economy has more than doubled in the past decade as its trade became more regionally-oriented, with that with Russia, Iran & Iraq now exceeding that with the EU. Its long-term NATO partners are disturbed by the souring of its ties with Israel over the Gaza offensive, Prime Minister Tayyip Erdogan’s support for Sudan’s Omar al-Bashir (whom he says cannot be guilty of genocide since he is “a good Muslim”) & its cooling attitude towards Europe, & Washington by his thinly disguised Islamism & the low in relations with the US reached when in 2003 a parliamentary revolt prohibited it from invading Iraq from the North from bases in Turkey. It now appears close to making a deal with its Kurdish minority to end a quarter century-long insurgency, is making peace with neighbouring countries that once supported the insurgents, Syria, Iran & Armenia & has become the region’s mediator of choice, having been involved in disputes between Hamas & Fatah, Iraq & Syria, & Israel & Syria. An Erdogan aide said the principle involved is simple : “We cannot be prosperous if we live in a poor neighbourhood. We can’t be secure if we live in a violent one.” 

Those European governments that obstructed Turkey’ efforts to join the EU, first & foremost France, may well get their wish. But that may be for the better : enlargement has created enough problems for the EU without adding a non-European crypto-Islamist government to the mix. And in global terms Turkey may do more good as an Islamist-leaning moderating power in its own region than as the odd man out in the EU.  

A MILITARY COUP IN PAKISTAN? (G&M, Tarek Fatah) 

∙ The right wing backers of the Taliban want President Zardari gone as the only Pakistani politician willing to tackle jihadism head-on. The army obeyed his order to root out the local Taliban only with great reluctance for it has long been chummy with it &  views all peace efforts with India or in Afghanistan with alarm since they would remove much of its raison d’etre. Its patience with Zardari ran out in October when the US Congress passed the Kerry-Lugar bill that made billions in new aid available but only conditional upon it being accounted for & flowing through civilian channels, and on the military not interfering with the democratic process and/or bullying politicians or the judiciary. While this was too much for generals who have become addicted to US military aid that has made them rich, it created a Catch-22 for them : overthrow the government & lose the US aid, or do nothing & lose their veto over domestic & foreign policy-making.

∙ The generals’ attitude is reflected in an article by a retired officer in the right wing The News that read in part : “Military rule ... should return ... The problem with democratic governments is that they remain under pressure to go with what the majority of citizens want, not what is best for them ... People of several South American countries that have returned to civilian rule after a long time are now beginning to feel they were better off under dictatorships.” 

The writer is a former activist in Pakistan & founder of the Muslim Canadian Congress.   

SUCCESS LIES IN BUILDING TRUST AND SCHOOLS IN RURAL AFGHANISTAN

(CSM, Tod Wilkinson) 

∙ Greg Mortenson has been building schools in Afghanistan since before 9/11, in the process surviving an eight day kidnapping, a cross fire between drug lords, two fatwas for educating girls & many threatening letters from fellow Americans for educating Muslim children. He describes his experience in two books, Three Cups of Tea & Stones into Schools. Over the years only one of his schools has been sacked despite many being in places where US troops daren’t go. His educational charity, Pennies for Peace, pays for half the cost of building a school & expects the locals to come up with the remainder in cash, materials and/or sweat equity. According to a teacher at one of his schools “The insurgents are small in number ... They can be minimized ... If the people have the opportunity for jobs, to own land and go to school, most of the problems with the Taliban will go away.”

                   

Mortenson stands the common wisdom that security is a prerequisite to school building on its head (if you build schools in which the community has a stake, security will take care of itself). Rather interestingly in this context, when Gen. McCrystal asked for 40,000 more troops he stipulated more with infrastructure building skills. The way to ‘the hearts & minds’ is less through the barrel of a gun than through giving the locals a stake in society so as to deny insurgents what Mao Tse Tung called ‘the ability to move through the local population like fish through the sea’ (a good illustration of what can happen when people get a stake in society occurred in post WW II Scotland. Before the war the Glasgow docks had been the home of ‘Red Labour”, extreme left wing Labour Party activists. During the war it was flattened by German bombers. And, when after the war its residents were relocated from rented ‘council houses’ into homes which they could own, lo & behold over the next several elections a rightward shift occurred in their political leanings. 

THE PEOPLE’S REPUBLIC OF GREEN (G&M, Mark MacKinnon) 

∙ Baoding is a city of 600,000 one hour South of Beijing by high speed rail. In 2003, city officials decided there was money in green energy. So hundreds of polluting factories were shuttered & a green energy research & manufacturing centre established. Now the industrial park outside the city manufactures solar panels for export & wind turbines for the vast wind farms being built in China’s interior, many of its street- & traffic lights are solar powered, as are some neighbourhoods, & it has the fastest growth rate in the heavily industrialized Hebei province. But while hailed as the first “carbon-positive” city (with emissions less than the reductions achieved elsewhere by products made there), it remains a badly polluted place.

∙ China makes one of every three solar panels produced in the world & plans to install 100 gigawatts (i.e. 100,000MW) of wind power over the next decade, doubling total global wind power capacity. And while the West used much of its stimulus funding to bail out banks, the Chinese earmarked much of theirs more gainfully for investment in renewable energy.  

If nothing else, Baoding appears to prove that, while greater “greenness” doesn’t provide a solution overnight, it is not ipso facto inimical to economic growth. 

INTO CHINA’S SMOG, A GREEN GIANT RISES (G&M, Carolynne Wheeler) 

∙ In the southern China city of Guangzhou a Chicago engineering firm (that also built the Burj Dubai skyscraper), is overseeing construction of a 71-story, 2.2MM sf office tower, the top ten floors of which will house the government-affiliated Guangdong Tobacco Company. When finished, a year hence, it will be one of the greenest, most energy-efficient office towers in the world; for the company’s state affiliation enabled designers to push the edge of the envelope in environmentally-friendly building design (thus two floors of the building will house wind turbines to help meet the building’s power needs). Initially intended as a zero-energy structure producing as much power as it consumed through the use of wind turbines, this concept foundered on local regulations although it is still expected to use only half the external energy of a regular office building.

 

While some local experts question whether US perceptions of sustainability & environmentally-friendliness are compatible with China’s needs, this is sour grapes.   

MARSEILLE AND THE MOSQUE (WP, Edward Cody) 

∙ A new US$30MM, 92,500 sf Grand Mosque of Marseille will be France’s largest. While for the region’s 200,000 Muslims it will be a place where they can gather & worship, for many non-Muslim French it will be a  reminder how Islam is invading France’s cultural landscape & a symbol of an immigrant population that increasingly seeks to live by its own religious & cultural rules rather than France’s long tradition. One right wing politician calls it “a symbol of non-assimilation” that will send a message from its 75 foot-high minaret that the city’s Muslim residents are “imposing their religious beliefs.”  

One novel idea is that, to avoid aggravating neighbourhood residents who campaigned against it, it will not broadcast Koranic chants at prayer times but instead will emit a powerful light beam from its minaret that can, & will, be seen from far away on land & sea, and in the air (the cure in this case could prove to be worse than the disease).  

FRENCH RULING PARTY TO SEEK BURQA BAN (AF-P) 

∙ President Sarkozy’s ruling party’s parliamentary leader said on December 16^th that it will push for a law banning the full-face Islamic veil to defend the country from “extremists” but that it will be enacted only after consultation with the country’s Islamic communities to ensure that they understand it will be “a law of liberation”. And he wrote in Le Figaro “The issue is not how many women wear the burqa ... extremists are putting the republic to the test by promoting a practice that they know is contrary to the basic principles of this country.” 

Consultation will be just window dressing : religious zealots are not convincible types. 

RUSSIA MESSES WITH MOTHER NATURE (LAT, Megan K. Stack) 

∙ Moscow’s long-time mayor, Yuri Lushkov, thinks street snow-clearing is too costly & wants to save US$13MM a year with a radically different approach, seeding the clouds with liquid nitrogen or dry ice to make the snow fall elsewhere. While scientists love the idea, residents of surrounding areas are less enamoured with it out of concern the snow that won’t fall in Moscow will instead fall on them. Russia has had long experience with this technology; for since the days of the Soviet Union clouds have been seeded twice a year to ensure that Moscow has clear, sunshine-drenched skies for major patriotic holidays. 

This looks like a beggar-thy-neighbour’ policy initiative 

AUSTRALIA’S WINE GLUT ENTERS ‘CHAINSAW’ PHASE (Guardian News Service) 

∙ Five years after a wine glut first emerged, Australian wine growers have a 100MM case surplus. To avoid another 200MM case build-up over the next two years, the  industry’s trade groups want 25% of the nation’s 165,000 hectares of wine grape vines ripped out. But only a fraction thereof is expected to be achieved  as it has turned into a turf war between twelve of Australia’s oldest wine-making families & the few big companies, incl. Foster’s & Pernod, that own 25% of the vinyards 

When good things come along, they tend to be overdone and the effect thereof tends to be delayed & cumulative in slow-to-mature perennial crops like grapes.  

OIL REFINING - NIGERIAN STYLE (G&M, Nathan Vanderklippe) 

∙ The Nigerian military said on December 15^th it had destroyed 600 of an estimated 1,000 illegal, makeshift ‘oil refineries’ in the Niger Delta. The process is remarkably simple : all it requires is a 10 metre length of pipe closed at one end & a small pile of fire wood. Step One is to install three valves in the pipe at three metre intervals from the closed end. Step Two is to stand the pipe upright & fill it with crude oil stolen from a nearby pipeline. Step Three is to light a small fire around the bottom of the now upright pipe & give the oil inside the pipe time to break down into its components. Step Four is to drain off the pipe’s contents : the top valve will produce motorcycle-ready fuel, the middle valve a diesel oil-like product & the bottom one a bunker oil-type product for burning. Step Five is to refill & repeat.  

No doubt there will be more than the odd mishap in this process.

 

SOWING THE SEEDS OF ENTERPRISE (Reuters, Helen Popper) 

∙ Cuba last year imported two-thirds, US$2.2BN worth, of staple foods it needs such as milk, corn & rice, one-third of it from the US. But Raul Castro, in the belief that food self-sufficiency is a matter of national security, launched a farming shake-up after he took over from Fidel almost two years ago, among others by paying farmers more. While the two cents dairy farmers now get for their milk is a pittance by international standards (farm gate prices in major developed countries are anywhere between 10x & 25x that), it is nevertheless 3x what they got a year or so ago. Small farmers already supply 60% of Cuba’s output of rice, two-thirds of its milk and 80% of its beans & corn, and 70,000 of them have taken advantage of a program launched last year to lease 1.69MM hectares of idle state land to private farmers. While a lack of agricultural inputs, in part due to the US embargo, has forced farmers to embrace organic techniques, this may make Cuba a model for ecological agriculture. Meanwhile, with output of Cuba’s main export crop, sugar, flat at 1.3MM tonnes annually, its economy hasn’t benefitted as much as it could have from the current boom in its price. 

Castro is right to prioritize food production; for even with raw sugar at US$589/tonne it would take a more than 25% increase in sugar output to offset the import food bill (and domestic food production will create more year-around employment).

TEST-TUBE PORK PROJECT AIMS TO REDUCE EMISSIONS BY FOREGOING THE FARM (G&M, Jessica Leeder) 

∙ In Holland a government-funded group, the In Vitro Meat Consortium, is trying to do away with land-hogging farm operations & cut emissions (livestock production supposedly accounts for 18% of all greenhouse-gas emissions), by producing an artificial pork product from pig blood, semen, muscle cells & embryos taken from a  live pig & incubated in a laboratory so as to transform cells harvested from a single pig into a quantity of pork that would otherwise have required raising 1MM of them, when using traditional methods. Critics say that things being doable doesn’t necessarily make them desirable & that plenty of “natural alternatives” exist using real animals to lessen the environmental impact of livestock production (such as genetically engineering cattle to belch less & developing more cost-effective technologies for converting animal waste into a source of energy, thus “turning issues perceived as problematic into solutions”). 

Animal waste has long been a problem in Holland because of a high ratio of livestock to land base (& the liberal use of additives in animal feeds that find their way into the soil & ground water). But if these guys can harvest semen & embryos from one pig, they may be onto something. 

FOREIGN INVESTORS RUSH TO LOCK UP FOOD SUPPLY (G&M. Eric Reguly) 

∙ What the literature handed out at the recent UN Food Summit called “direct foreign investment” (even though a year earlier the FAO’s Director-General had said it was a form of “neo-colonialism), Moammar Gaghafi refers to as “the new feudalism” & groups representing peasant farmers the world over decry as “land grabs”. All refer to the race by foreign investors from well-off countries to gain control over farmland outside their own countries in the expectation this will give them a secure, captive food supply outside traditional international trade channels when the global food crisis-in-the-making comes to pass. Farm protection & watchdog groups suspect that the change in the UN’s official stance reflects a view that such deals are unstoppable & that it would be better to work within it than to fight it, particularly since Saudi Arabia, one of the biggest foreign land ‘collectors’, is also one of the FAO’s biggest funders. A report by one farm protection group, Grain, referred to these deals as “the siphoning of fertile and probably contested agricultural lands to rich foreigners” (“contested” because in many of the countries involved land titles don’t exist, or are easy to get around, & much of the land involved is currently cultivated by squatting peasant subsistence farmers). It believes that so far 40MM hectares (100MM acres) worth US$100BN has been bought up, or leased, in Africa, Asia and Latin America (which is in line with a UN estimate that in the past three years governments, souvereign wealth funds & private equity funds have bought or leased 20MM hectares in Africa alone). Saudi Arabia, the Gulf States, China & South Korea are big buyers, as are India, Japan, Israel & Jordan, while the Sudan (where the World Food Program is currently feeding millions of people) is encouraging farm land sales to foreigners, as is Georgia. 

It’s hard to believe that grown men are looney enough to seriously believe that in a food crisis, even if the host governments were prepared to let scarce food supplies leave their countries while their populations were starving, the local hoi polloi would permit it.

SUSHI-LOVERS : YOUR NEXT BITE OF BLUEFIN COULD BE YOUR LAST

(G&M, Eric Reguly) 

∙ In early 2008, a big bluefin sold for a record US$55,000 at Tokyo’s Tsukiji fish market & earlier this year another one went for nearly twice that, US$105,000. As their numbers in the Eastern Atlantic & Mediterranean dwindle, the International Commission for the Preservation of Atlantic Tuna (ICCAT), that was to have protected them from oblivion, is increasingly seen as a bad joke & as having become their executioner rather than their saviour, and its acronym is now said to stand for International Conspiracy to Catch All Tunas, even though it recently dropped the allowable catch for 2010 by 39% to 13,500 tons. For since ICCAT was established 40 years ago, the bluefin tuna has disappeared from the Black Sea, almost vanished from the North Sea, the Norwegian Sea & the Bay of Biscayne, become in short supply in the Western Atlantic, off the coast of Canada & the US, and is just holding its own in the Eastern Atlantic & the Mediterranean until legal & illegal overfishing put them on the endangered species list there too. 

This is the same story all over the oceans worldwide : fishing fleets, often from far away places descend on a pieces of the ocean like a swarm of locusts, hoover up local fish stocks at rates far beyond sustainable levels and, once the catch starts to decline, move elsewhere to repeat the process in another place with another species. And as the Canadian experience with the Eastern cod suggests, once a fish population falls below a certain threshold level it seems to have difficulties rebuilding itself. There are those who believe Somali piracy was prompted by foreign fishing fleets depleting the fish stocks off the Somali coast that since time immemorial had provided the locals with a living. 

NEW AIDS INFECTIONS SLOWING (Reuters) 

∙ The UN-AIDS agency says in its latest report that, after killing 25MM people & infecting 60MM, prevention programs seem to be having an impact; for HIV incidence since 2001 has gone down by 25% in East Africa & by 15% in sub-Sahara Africa as a whole. 

It ought to, with all the money & attention devoted to it, while other more endemic & less self-inflicted diseases, like malaria & dysentery, continue to claim millions of victims each year due to a lack of resources. 

STRAWS IN THE WIND 

∙ Following the Copenhagen debacle it is worth remembering that in 2008 almost 50% of all emissions were generated by just 10% of the world’s population in ‘rich’ developed countries. 

So the hard line by governments representing the other 6BN was not wholly unjustified.  

∙ Hummers get 4 miles to the gallon & Abrams tanks 4 gallons to the mile, and it takes lots of fuel to keep the military in Iraq & Afghanistan warm in winter & cool in summer. Since it takes up to seven gallons to deliver one gallon to the ‘sharp end’, the US military is trying out a range of alternate energy methodologies locally to reduce the need to bring fuel in from the outside. And the Air Force is doing its bit by making its aircraft able to use synthetic fuels made with the Fischer-Tropsch method developed by the Germans during WW II.  

Much alternate energy technology was developed during WW II in Germany & in South Africa during the  sanctions but never pursued seriously since, in part for reasons of cost (not an issue during times of ‘national emergency’) but in  part also due to corporate lethargy & resistance by vested interests.  

∙ Banks ‘nickling & diming’ their retail customers to death is an issue in many countries, incl. Canada. In the UK the big issue is overdraft charges. The country’s Office of Fair Trading (OFT) found in 2008 that they vastly exceed their economic cost to the banks & accounted for one-third of their retail income. And according to the Economist they generated £2.6BN (US$4.3BN) in profits for lenders.  

Overdraft charges, however, are a self-inflicted wound.  

∙ There is going to be serious overcapacity in the global cement industry. Forecast 2012 demand in China is 1.8MM tonnes annually. But recently 600MM tonnes of new capacity was added to its already existing 1.8MM tonne capacity. Global 2012 demand is forecast to be 3.5 MM tonnes & this latest boost in China’s capacity is more than twice the total capacity of the next largest two producers, India & the US, combined.  

While not good news for cement producers, it won’t have much of an impact on construction costs.  

∙ Cocoa beans have traditionally only been grown in West Africa. But changing weather has shrunk the land area where they can be grown, in Ghana, for instance, by 40%, & is further jeopardizing cocoa bean output by an increased incidence of disease, bush fires, lessened soil fertility & a shorter life span for cocoa bean bushes.  

The situation is made worse by the tradition of removing tree cover to give the cocoa bushes more sunlight which now given them more sunlight than is good for them.