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Tuesday, July 31, 2007

Gettin' Any?

One of the myths of America is that the 'Ordinary Joe' can 'own' a piece of the action by investing in the stock market. This is the extension of the old 'streets are paved with gold' tale that lured many an ignoramus or fortune seeker from Europe to populate the New World. Some did indeed 'strike it rich' but, like stock market investors, by and large, the return was illusory.

The stock market used to be a 'closed shop' where only the wealthy had the opportunity to speculate and buy into the industry and resource development of the world. 'Risk' companies were formed as early as the 14th century to invest in trade. As in all risk, there were losses, but a return could make up for all, times over. The 'risk' enterprise gave rise to the insurance industry , a way to minimize exposure by sharing loss among all involved in risk and reward. And so it has continued to this day.

The wealthy continue to risk investment. It's the best way to achieve 'gain'. But the risk is the area that has changed? How? Insurance works, but it itself has become a target of investment and, to enable a gainful return, it engages in risk, too. Wise investors - those with most to lose- have worked hard to ensure there's a 'buffer' between them and loss, to minimize their exposure to risk in the stock market. The buffer is the small investor.

Banks, which are among the largest investors, insurance and security companies, too, sell 'products' designed to get the little guy, and his money into the market. In good times there's wealth to be shared by all. When things turn sour the big players make sure the little guys take the first hit. It gives them a chance to sell out at the best price and get their cash into safer investments. How? Simply by selling to their investors.

In the last big recession, banks mutual funds, indeed all mutual funds, lost value that has never been recouped in the 10 years since. But the banks which managed these funds posted record breaking profits during this period too. Mutual funds' market holdings lost value, the banks' either didn't - or they managed to sell them off in a timely fashion, before they bottomed out. Which they did, in the hands of the bank-run mutual funds which were left 'holding' a deflated bag.

Another form of insurance is to loan money for investments. Margin dealing allows people to extend themselves into investments further than they might otherwise go. It preys on the greed factor where good times can provide a lucrative return on money that only costs the interest paid on it to invest. Interest payments provide a steady and relatively low risk return on the bank's investment, as the bank holds he shares as security, and the borrower has a debt obligation that exists despite the vagaries of the market. Needless to say a downturn in the market engenders a call-in of margin loans when the market value of shares held falls below the cost value. the little guy often has to sell out at a loss - somebody gets to 'buy low' - or sell real property or take a forced debt to repay the bank. This is the situation - to the tune of 14 billion dollars at the current time in Canada.

The Market regularly readjusts and 'fleeces' the small investor. This is a form of 'profit taking' for the big boys, akin to the profit-taking they do from when they 'sell high'.

There are real opportunities to make money in the stock market, but they're a bit like playing a lottery. A friend made a substantial profit off a small initial investment in 'e-bay' and any original buyer of Microsoft is probably chuckling still. The purveyors of mutual funds are fond of hauling out the chart that shows that investment value has grown steadily this century. Despite wars and a great depression, the chart showing share value has risen steadily. But what they don't show is that relatively few companies that started the century in trade on the stock market, are still there. Some have merged and changed form and their stock has been redeemed and reissued. Anyone who still holds the original certificates has some interesting curios for sale on 'e-bay', for they won't negotiate at any investment house. Along the way, far more companies have passed out of existence, often taking investment with them. That steady stock market gain should have another line below it to represent the aggregate losses of investment year-by-year. That line would have a steady growth as well.

Banks which used to exist to safeguard the little guy's money are now as intent as any other 'retailer' to get it off him. The old notion of using peoples' savings to invest in mortgages and consumer loans has long gone by the board. Banks are into the market and they encourage their patrons to join the fun, by making 'investment' look like the best way of getting any sort of return on money 'in the bank'. If it's invested, the bank doesn't have to be responsible for a loss.

The Great Depression occurred, in large part, because a loss of confidence caused a 'run on the banks'. But the banks were already weakened by a collapse of loans made to allow stock market investment. What triggered the bank run was the collapse of share value in an over-inflated stock market. The world is more than ready for something like that again. In the interim, it's time for another 'fleecing'.

Sunday, July 29, 2007

Old Soldiers Never Die

A story in to-day's Toronto Star was devoted to the potential, problems of head injuries facing soldiers in to-day's war zones.

Starting with the use of antibiotics in preventing septic poisoning and combating pneumonia in wounded soldiers back in World War Two the mortality rate among military personnel began to decline. That continued with the application of quick evacuation during the Vietnam and other wars where the helicopter made surgical attention within 2 or 3 hours of being hurt a reality. To-day the big killers are no longer shock and lack of care, but blood loss and head injury. The first is being attenuated with a clotting product that acts something like a cement plug to stop massive bleeding. But the latter remains difficult to treat. Closed head injuries due to blast effect are cited as a major cause of death and maiming. It strikes me, however, that any blast that could injure the brain without piercing the skull would probably wreak havoc on soft tissue like the lungs and gut.

Head injuries are notable - not only for their intractability but because of the physical and emotional devastation they cause. If you're not bleeding, you're not hurt. If you're not hurt then any problems you've got are probably mental or self-inflicted. This seems to have been what has happened in the US where 'injured' soldiers have tried to seek paid treatment and been brushed off by Veteran's Administration and the Army. Many army veterans think little of the unmarked wounded and their claims - remembering that 80 percent of 'veterans' don't serve on the sharp end of the stick, and chance are, will return home intact. The Army family has a pecking order and unwounded but 'hurt' soldiers are fairly well down the list.

Canada has yet to see things like this, but then we haven't the same numbers engaged. The severely-wounded are looked after - I don't know what their pension and insurance benefits are like, but their care and treatment is covered and, I believe, their families are looked after. If we are to have problems it will show up in other areas - family discord, drug and drinking problems and affects such as that. A number of ' family support' groups have been started in the military to address and assist with these needs. The problems have yet to become highly evident.

Soldiers are hurt, as always, in wars, but thankfully not as many die. This means that for the fourth time in the USA and the third in Great Britain and Canada there will be appreciable numbers of war wounded living out their lives in the future. The wounded of the previous wars are long gone now, but it doesn't strike me that their welfare was any more than the target of some annual charitable exercise - their families were, by no means, as well-off, as if they had been working. In America some wounded veterans of Vietnam paid the price for a lost war in reduced public interest in their plight. They even received hostility, and still do, from a number of their own, who hadn't seen the same type of service and couldn't understand how they could have behavioral problems rooted in their experiences. What happens in the future will be a measure of how seriously we take our wars, I don't think they're taken seriously at all.

An Order of Kung Fu to Go

Amazing the stuff that's happening with food these days. Not that it's any worse or better than it ever was, but that, when there's a blip in the killing-factor, the whole world can go on a grub alert.

The recent tainted pet food 'thingy' is a case in point. Producers of some 'fancy-dan' pet nourishment corporation bought what they thought to be a harmless Chinese-produced by-product to 'beef up' the protein content of their product. Little did they realize that the canny Chinese had been putting a few additives of their own into things including 'melamine' - a protein usually found in plastics and counter tops. Melamine, while passing through the gut of some ruminant like ourselves is harmless, apparently it has a toxic effect on the excretory system of pussy cats in particular. When people's tabbies and Sylvesters starting ailing, the kitty litter hit the proverbial fan and the lawsuits started flying, and the blame was placed squarely on the Chinese. Never mind the pet food folk who don't test what they tip into the mix.

Now, it strikes me that not all that long ago China was a wet fart away from mass starvation at times. They used to be a main reason the federal government subsidized the railway companies and western wheat growers in Canada. The annual Chinese wheat sales were budget makers. All that, subsidies and sales are gone now, a miracle has occurred in China. But I missed it.

Over the years since then I've seen and read nothing in the media about China's 'wirtwissenschaftwunder' in the food sector. Oh yeah a few years ago I cottoned onto the fact that Chinese 'gelatin' treats had become a big hit in some parts of Canada, and the world. Right, no big deal. But apparently China has reached a point where she has not only managed to feed her teeming multitudes, who only stopped increasing the teeming part a year or two ago for the first time ever. China has become a net exporter of food. Basic food materials like the above grain derivative for cats, but also chicken and seafood. China has become not only a producer of cheap consumables but a source of cheap food. And there lies a rub.

The chinese notion of how food should be handled has taken some time to catch up with the new mass food production facilities. What is fed to food and the additives food animals are given, are not controlled with the same rigor as they are 'here. Not that we're much better, but the Chinese can be downright lakadaisical. You can say one thing about them, however, the food bosses don't get to screw-up twice. In fact the 'handshake' they get includes a lead pill and a permanent retirement. If this was the case here, those top-dog CEO's who command millions in salaries and bonuses would deserve it - if a screw-up or a rip-off was going to cost them their lives, instead of six months on a crappy par 3.

The Chinese react a lot more quickly to criticism than our folk do. There was a mild flurry last week when some mid-level purveyors of off-brand canned food in Louisiana started a recall because somebody had suffered an attack of botulism and claimed it was from some of their chili. There's nothing like botulism to put the wind up food canners, and WalMart - the main customer. Two years worth of production was being called back.

What do they do with two years worth of canned stew and chili? Wouldn't want it in my landfill. Opening, testing and reselling to a hog operation , or the like, would cost more than getting it all back. Best to buy a warehouse, stockpile and forget it. Let some whiz-kid find it in 50 years after profits have all been taken and turned into stuff that's worth nothing.

I'll bet, if somebody really checked, there are some food sources here that fall below Chinese standards. The raids for illegal immigrants at Swift's factories are an indication that they're running on a maximize-profit basis. But, hey, those immigrants would do what they're told safety-wise, they wouldn't want to lose a steady job.

Where are we on 'mad cows'?

Friday, July 06, 2007

Staying the Course

An op-ed piece in the Toronto Star to-day by the doyenne of Canada's Great Afghan Adventure, Rosie DiManno, mourns the loss of six more Canadian Servicemen, and goes on to extol the cause which put them in combat.

http://www.thestar.com/columnists/article/233027

Basically Rosie is saying, in her piece, that Canada is one of the few western nations who have lived up to their commitment to the 'Bonn agreement' which was the basis for to-day's Afghanistan. She denigrates those countries who 'signed on' to rehabilitate the country, but who have yet to join the fray against the 'problem areas'. This is OK, but the 'agreement' she mentions is a fairly significant one, and should be looked at more carefully.

The agreement came from a meeting of disaffected Afghan parties held after the American forces had toppled the Taliban government in 2001. Those parties meeting in Bonn represented most of the Afghan groups who opposed the Taliban - Royalists, warlord forces, Northern Alliance, socialist and democratic exiles, etc. The meeting, largely called at the behest of the US, laid the 'framework' for setting up an effective and recognized government in Afghanistan. The UN gave the agreement its blessing and NATO was called upon to assist. Needless to say, most of the agreement's parameters were put into effect: the provisional Karzai government was confirmed and internationally recognized, a constitution written and signed into law (not without controversy) and a pacification and development program initiated. The US was looking after the former, and NATO (including Canada) was doing the latter.

It didn't take long for the US forces to generate resistance to to their 'drive, shoot and call in the air strike' pacification tactics, particularly in the south and western provinces of the country. In fact the resistance developed to the point where the US started asking for more NATO assistance. The coalition forces including Britain , Australia and some others were first in, and Canada's contingent was eventually switched from development and reconstruction to combat operations in Khandahar province. The coalition (US, UK, Netherlands, Canada, et al) remains engaged in suppressing Taliban activity, while the US maintains its own, separate anti-insurgency operation and other NATO forces from France and Germany, etc. concentrate on the original reconstruction and development mission.

The original notion of the Bonn agreement, setting up a strong, centralized government, was compromised from the get-go by American support for different Afghan groups which permitted them to get a firm hold on various areas of the country, and the government, which they have since used to enhance their power bases. Afghanistan's continuing organizational problems and burgeoning opium trade can be laid in large part to this.

Outside interference - from tribal areas of Pakistan and more lately from Iran - continue to be blamed for problems that more likely have a cause of domestic nature.

Afghanistan has yet to develop an independently operating military or security force. Development and reconstruction remains 'spotty' with a preponderance around the capital and larger cities and none in areas that are not 'secure'. Transportation remains vulnerable and some aspects like hydroelectric or water management systems remain concerns for security purposes.

One overriding consideration, and particularly applying to the 'problem ' areas of Afghanistan is the proposed oil pipeline route, which has to run through Shiite and Taliban areas of the country. Without peace there can be no pipeline, and without the pipeline, Caspian Sea oil remains exactly that, only potentially useful.

So where does this put Canada? Having bought into the American-created problem of having to make Afghanistan free for democracy, Canada is stuck on the old 'cut and run' or 'stay the course' dilemma. Some pundits would have us believe that we're making a difference in Afghanistan, but what kind of difference. These six young Canadians were killed only miles from where their unit first engaged the Taliban last Fall when it was first deployed. So their six month stint has been spent pacifying an area that remains unpacified. The Vandoos take over next, and so things will continue until, at least, 2009.

Rosie notes the fact that military men are different from the milquetoast pols who put them in harm's way. The military has the gumption to hold on, while the easy bleeders might decide to pull the plug on their valor. She also mentions that the Taliban have more patience than our politicians. In doing that she hits the nub of the problem, but she misses the point. She buys into the common wisdom that, like AlQaeda in Iraq, the Taliban are a group of outsiders bent on upsetting a nice applecart, or a group of unemployed Afghans who'll take $20 for burying a bomb. When actually their patience comes from the fact that they have nowhere else to go. They live there, Panjwai and the other 'hotspots' are their homes, and the Canadians, Americans - whoever, patrolling the roads and villages, doing visits and rounding-up suspects are foreign invaders - no matter what they call themselves, or how they describe their 'mission'.

They want something out of Afghanistan. And it isn't girls' schools or a washer dryer in every mud hut. Rosie ought to take a look at why the Afghans, even the Taliban, aren't buying into our 'mission'.

Valor and military acumen there is in abundance, but there's also an element of 'seeing the elephant' just below the surface, of 'sojers doing what sojers have to do'. There's a lot of Canada invested in Afghanistan, I'm just not sure that we, or Rosie, really understand why.

Thursday, July 05, 2007

Two Favourite Topics, in One

http://www.canada.com/vancouversun/story.html?id=0b8c2699-50b5-44e8-a000-b33f08051d69&k=52385

Our boys in red have run afoul of our aboriginal peoples, and possibly the press in this story of their latest adventure.

As the story is outlined a soccer victory led to the brutal and inconsiderate police pepper-spraying somebody's baby and a trip to the hospital for 30 or so formerly happy 'celebratees'.

Police claim that a patrol unit observed a pick-up truck containing a number of young people unsecured in the truck bed. leading a parade of vehicles through a Sunshine Coast BC neighbourhood. Their signals to the driver to stop were ignored, and according to the police the driver drove off the road to get around them and only came to a stop further down the road.

A video of the confrontation that ensued shows two officers talking to the driver of the truck, one Troy Mayers a member of the Sechelt First Nation. There are a number of people standing around watching or engaging the officers in conversation as they talk to the driver. At some point more police show up and the video shows the police then taking Mr. Mayers to a cruiser while the crowd chants "Bullshit! Bullshit". At one point it looks as if Mr. Mayers turns as police are trying to hand cuff him and then an individual wearing a red shirt runs up to the officers gesticulating and swearing. He gets a faceful of pepper spray and the incident degenerates from there, as the videographer seems to focus on the well-being of the interloper. There is a bit of a panic on the tape the cause of which is not evident.

The ensuing story indicates that a baby boy was also hit by the pepper spray and had to be taken to hospital. He might be the lad carried by a woman in the tape, who was fairly close to the cruiser when the red shirted-fellow appeared. A number of others also claim to have been sprayed.

It was also pointed out that this celebration was some sort of annual event for which police had previously closed roads to facilitate it.

Perhaps the RCMP will be more circumspect the next time they see what might appear to be native people having a good time and breaking the traffic laws.