Wednesday, December 16, 2009

Dealing with the end of US Hegemony

I suspect that the problem is that the world is looking at a new set of conditions, in a way that we have never had to confront them in the past; The USA which until recently was the dominant economic entity is being overshadowed by the emerging economies; yes the US economy is still three times as large as that of China ($15 trillion vs. $5 trillion), but what is important is the rate of change, zero growth Vs. 10%, and the dynamic of resources which for the first time are considered a store of wealth (Chinese pig farmers and their copper plates).

For America the story is asset deflation, you cannot have internally generated inflation when credit is contracting at an annual rate of 5% per annum, by definition asset prices have to fall, as the required leverage has to fall to meet the bankers' maximum asset exposure. Banks have been asked to reduce leverage, and as a whole have done so (it helps that they've not had to realize their portfolio losses, but I digress).

Europe is essentially in the same boat, with a bigger time bomb in the form of Eastern and Central Europe; Austria is the first, but you can bet that German and French banks will face similar problems soon. As European banks reel under the write-offs and balance sheet contraction requirements you will see asset deflation becoming a growing problem in Europe too.

The BRIC countries are the new unknown, and this is where inflation may arise, as their economy grow (assuming that the Chinese debt fuel growth can continue for 18 to 24 months) their demand for hard assets (oil, copper, Aluminum, Gold) will continue to rise, and create resource price inflation on a global scale. Too many "dollars" chasing too few resources. You could then see a situation in the U.S. where the economy is growing very slowly, but where prices begin to rise, driven by the cost of "global" resources (e.g. Oil at $200).

By the way this could easily lead to an American "W" situation. Where does Canada sit in all this (because at the end of the day that's the important part of the picture), it is complex, the resource side of the economy will grow dramatically, but manufacturing will suffer because of the export orientated nature of the Canadian economy. One bright aspect is that the Canadian banks have virtually no exposure to Europe or the U.S. and low leverage.

Call me captain gloomy, but Hypo Group nationalization is a huge deal, people forget the role of Credianstalt played in the 1930's depression. Although the challenges we face are different they are not dissimilar; History doesn't repeat itself, but it often rhymes

Thursday, December 3, 2009

Canadian Politics

I must admit that I am a closet conservative, not that this is going to be a huge surprise to Ms. FitN, she knows what I am made of! I was never terribly impressed with the Conservative party, but hey, couldn't be worse than the Liberal Party headed by Stephane Dion (Now replaced by Micheal Ignatieff). The Conservatives were elected on a platform of small government and non-interference (although they do have a "bible belt preacher" attitude).

Canada is somewhat peculiar, in that historically it has been the Liberals (left leaning party) that have reduced expenses and balance the books. Between 1995 and 2006 that is mostly what they did, they were very clever, the Federal government cut its portion of funding in joint provincial/federal projects -- the province taking on the burden of these obligations with the commensurate increase in provincial indebtedness.

Imaging the Prime Minister Harper's (Conservative Party) dilemma when the Canadian economy, like the rest of the world suddenly fell off a cliff. To say that they were unprepared would be an understatement, eventually the the Conservative Government was able to present (cobble) an expansionary budget that has now reverse the past 15 years of Liberal financial stewardship, whereas in 2006 the Federal Government was well on its way to reduce Federal debt to near zero by 2012, the level of indebtedness is now one of the largest in the OECD.

But it gets worse; Canada's Conservative party is based on the same guiding principles that are at the core of the U.S. Republican party, that what happens outside our borders doesn't really matter. Earlier this year Canada's seal exports were banned in Europe because of the way the east coast seal population was being hunted. The image of a a baby seal being clubbed by an unshaven 5th grade educated Newfoundlander was made for prime time TV in Europe. The reality of hunting is never very pretty, and most of us like our meat sealed in plastic -- that way we don't have to think where it comes from. Anyway, the images being provided to the world media were made for prime time, what did the Canadian government do? Nothing, no efforts whatsoever were put in place to counter this terrible image.

During the Liberal administration Canadians were laughing at the Liberal's "One Tonne Challenge" program that was all hot air and no action. Basically telling Canadian to cut their annual carbon footprint by one tonne, it was never explained how Canadians were to do this, there were no real policy nothing... In come the Conservatives who call it as they see it, they scrap the Kyoto Protocol and tell their Alberta buddies that everything is OK. Go crazy on Tar Sands "we've got your back". Although this sounds callous it is a reflection of the reality of living next to the "Great Satan", until the U.S. do something about climate change controls, any action by Canada would be pointless. Right now there is a bill going through the house of Common (Canada's Congress) for Cap and Trade. Nobody really cares, because as soon as the U.S. enact their own rules and regulation we will adopt a carbon copy of what they are doing.

The problem is that Canada and the U.S. don't actually have very good relations right now. In part it is because Canada's foreign policy is... that's the problem we don't seem to have one! It is also a consequence of Democratic administration in Washington and a Conservative Government in Ottawa, but mostly it is a failure of imagination. Steven Harper is not a very curious man. I would call him a George Bush with a vocabulary -- who runs a relatively small and trouble free country.

Imagine Harper's embarrassment when he announced that he was not going to Copenhagen (for the next round of climate control talks) one day before China and America announce that they would be attending! It gets worse, Canada is seen as the big bad wolf, for proposing emission target reduction levels that are identical to what the Americans and Chinese want.

Finally, it has emerged that the Canadian Government has known since 2006 that Afghan prisoners released by the Canadian Armed forces to the Afghan government were mistreated and probably tortured. The Government tried to destroy the reputation of a Canadian diplomat who "blew the whistle" on a number of occasions (similar incident to what happened to Valerie Plame in the in the US), instead of admitting that it just was not interested (again the foreign thing). The Minister of Foreign Affairs at the time is now deeply embarrassed (he has stated that he had no idea that such events were taking place) after Amnesty International revealed (yesterday) that they had me with the Minister's cabinet on several occasions in 2006 to discuss the faith of Afghan prisoners of war being released to the Afghan government.

Right now Canada has bad press. Maybe there's a certain jealousy from other countries. After all, Canada's banks didn't blow up, they are actually in rather good shape. The economy appears to be growing again, the central banks gave clear guidance, our biggest risk is that our currency will continue to appreciate as our companies have good governance, we have plenty of natural resources (Oil, Gas, Hydro, Gold, Steel, Nickel, etc), a well educated healthy homogeneous population, with relatively little crime and social breakdown.

Our government doesn't seem up to the task of showing off Canada in its best light. It reminds me of a story dating back to November 2008, the American media were curious about which book on John Adams Obama was reading, after much speculation it turns out that he was reading two different books, in order to do a comparative analysis (and remove writer bias). You don't get the feeling that Prime Minister Harper read about Mackenzie King (Canada's most famous Prime ministers and oversaw the Canadian economy during and after the WWII). You just don't get the impression that he cares about any of this. A small man, a small party with little thought about the consequences of governing.

Thursday, November 26, 2009

2,063 years later...

so, what have we learned in 2,063 years ?

"The budget should be balanced, the Treasury should be refilled,
public debt should be reduced, the arrogance of officialdom should be
tempered and controlled, and the assistance to foreign lands should be
curtailed lest
Rome become bankrupt. People must again learn to work,
instead of living on public assistance."
Cicero - 55 BC

evidently nothing...

Thanks little sister for this enlightened thought


Thursday, November 19, 2009

Property Bubble in China

My dad just came back from China, board meetings and a bit of sightseeing in the Yellow mountains. It my dad's 10th trip to China over the past decade, me I've only been twice. Anyway, again he was amazed by the vitality of the city, its energy, its growth, its continual building process. apparently the Bund is currently undergoing massive upgrading in preparation for the 2010 World Expo in Shanghai.

Various commentators have been commenting on the growth of China, which this year exceeded 8%, and my dad concurs from the ground, but many more are worried about the Chinese credit expansion, among them mis Michael Petttis a Shanghai based professor and blogger. Over the past few months he has been discussing the credit expansion in China that has found its way, in greater and greater propertion in the the real estate sector. This morning an FT article discusses the Shanghai property market as having some level of over capacity; in fact it compares New York which is perceived to be in real trouble with regards to property values with a 10-15% vacancy rate to Shanghai where the vacancy rate is around 50%, yes nearly half of Shanghai's available commercial real estate stands empty (I have seen reports of other Chinese city were multiple 70+ story buildings stand empty), but in Shanghai this is somewhat unexpected.

The issue is that the owners view the properties as investments and not as asssets to be deployed. The cost of holding these buildings empty is negligible (most of these empty buildings are owned by State Owned Enterprises "SOE" that borrow at subsidized rate), their books show these properties not at book value but at market value which is rising at 3-4% per month -- easy money, until the pied piper shows up!

Imagine any North American mega city with a 50% vacancy rate -- how valuable would these assets be?

Tuesday, November 17, 2009

Death Pannel Debate

This afternoon while waiting for one of my clients to show up, I was "perusing" the internet, specifically the site for David Frum, a Canadian expatriate, famous for being a speach writer during the W. administration, and a Republican commentator.

David linked to the web site of one Laura Ingram, a Talk Radio personality (according to her Wiki profile) on the role of Sarah Palin in the Republican party. One comment in particular was rather interesting, David alluded that Palin missed the boat in her book, it is a "tell all" revenge tom of the usual DC kind instead of being her opening salvo of a policy discussion. As an example he reproaches her the popularization of the "Death Panels", her well know comment on her Facebook page, when no such panels exists (End of life counselling).

Now most Republicans know full well that the death panels were a falsehood, in fact, end of life counselling is an important part of the health care system, making sure that the patient's wishes are followed. But both Ingaram and John Ziegler (a condescending A-hole by the way from his commentaries) could not bring themselves that say that Palin had at the very least misspoke, or had lied, no they maintained that "rationing" was the same as death panels. Although for the life of me I don't know what "uninsured because of preexisting condition" is, if not rationing!

There is a fascinating disconnect here, something similar to what we saw in 2007 when not one single conservative could bring himself to criticise then President Bush. It seem to be a blindside of this political formation. You do not criticize "your"guy, you would never see something similar to what Saturday Night Live has been doing to President Obama, where week after week SNL skewer the current administration lack of progress on so many fronts.

Palin remains incredibly popular with the base of the Republican party. You have to admit that her ability to make her daughter the poster child for abstinence only contraception, while she just gave birth to a little boy/girl rather spectacular, while living at home and unmarried.

Wednesday, November 11, 2009

Socialized Medecine -- the H1N1 vaccine

Yesterday afternoon I left a meeting in the western part of Montreal, and decided that it was the right time to get the H1N1 vaccine. On monday I had checked what was the most convenient local to get the shot, it was at Place Alexi Nihon, a 1960's shopping center near Montreal's old hockey forum (now a cinema).

I arrived at the vaccination center at 16:00, at 16:33 I was all done!

Let me just say that I am part of a "at risk" group because of asthma, two years ago I got a very bad flu during a trip to the Middle East. eventually on my return to Montreal I had to spend the better part of a day in one of Montreal's premier respiratory clinics, it scared the crap out of me, I still remember the technician's look on his face when he reviewed my blood oxigenation level...

So I arrived at the vaccination clinic at 16:00, there were a number of cordonned off segments, the first triage was to determine if I was eligible for the vaccine, I showed my health insurance card (by the Provincial authority), three prescriptions and one of my asthma pumps. I got a card that said 16:00, I was immediately directed to the next queue where my identify was verified (again with my health card) and confirmation that I was taking asthma mediaction.

I was directed to a third queue where eventually (5 minute wait maximum) I spoke with a nurse for a minute or two, where she told me of the potential side effects, made sure I was not allegic to eggs etc etc. Then into a forth queue (I was the only one there), and directed to a nurse who gave me the injection (total time from first arriving on site 15 minutes.

After the injection I was directed to sit in a recovery area for another 15 minutes, total time in Alexi nihon plaza, 33 minutes -- as per my parking ticket.

Update: Turns out that the authorities annouced this morning that they are running out of vaccine (today only) and that some centres will be closed, I also heared of centers where people queu from midnight onwards to get the vaccine.

I was, I guess, a lucky guy!

Monday, November 9, 2009


Well Ms. FitN proved me wrong, she baked more than 150 pretzels to celebrate the 20th anniversary of the fall of the Berlin wall. Don't get me wrong she's an extraordinary women (after she can stand being with me), she is also tenacious and has once again proven her mettle!

So if you have 10 minutes today, pay her a visit at her gallery!


Friday, November 6, 2009

Beating Earnings


Like every guy in the business I follow the business news, and most of the time they get it wrong, still there is rarely any mea culpa. The latest is the "beat" estimates on earnings: Where 58% of the S&P 500 companies beat their Q3/09 earnings estimates. Don't kid yourself that's a load of manure!

A parable may be a useful tool here: Let say that you have a daughter, and as a new years resolution she tells you that last year she got an average of B-. This year she will aim to get a B average (just work with me here). Come June your daughter tells you that the year is difficult that she's didn't do all her homework and that the teachers are more demanding, so she will not get an B, but she will get C- or even a D. She works real hard, and at the end of the September she tells you that she now things she is going to get a D+. At the end of the year her grades arrive and she's got a C-. Granted C- is better than a D+, but its not a B-, and definitely note the B she said she was going to get. I don't want to carry the analogy too far, cus it just gets stupid

In the case of the S&P 500 companies, at the end of the summer (or about 2/3 of the way through their third quarter) they told the market (e.g. the analysts of the previous commentary) they though they were going to get a D+, and they ended up with a C-. Is that good, is that a beat; yes and no, its better than a D, but its not a B or even a B- which is what they thought they would get at the beginning of the year. Moreover, they told the market almost at the end of the quarter that they would achive a D and then a few weeks later they get a C- and everybody gets excited.

Go figure

The Pox on Analysts

Another rant...

I think that a fable would be the best way of attacking this problem, it concerns three analysts, each looking at very different segment of the financial market, let us say that the first, we will call him the Bear, is an old school macro economist, nice guy, not too much respect at the farm from the other animals. However, those who listen to him have done reasonably well; his view is similar to many market observers, the U.S. economy is still in trouble and that recovery will only occur once deleveraging has occured -- and it has not started yet.

The second is the Bull, nice micro economist, nice guy not much introspection -- let just say that his prognostication was that by the end of September 2008 the worse was over, and today everything is fine, growth is hear for good, and the stock market is not overvalued. In fact, we are about this is just the beginning. You see labor productivity in the U.S. is growing through the roof, yes sir, its simple the single largest increase in productivity. No mention that productivity has been rising because U.S. companies have been slashing staff at an unprecedented rate (the greatest reduction in the labor force since 1948), no his thesis is that companies will sell more stuff... and generate more profit. The fact that unemployment is around 10.2%, and that consumption represents 72% of the U.S. GDP is not mentioned. 1/10 is unemployed and 1/6 is underemployed or unemployed has no bearing on the profits of U.S. company (where export accounts for less than 10% of GDP...). Clueless

The third is the Lemming, his specialty are unreadable and interminable reports on companies that everybody likes, but he never draws conclusions (specific or general for the mater) ; just long winded reports. Now a few weeks ago he wrote in a long winded report that a specific company's share price should rise to $2, it was trading around $1.5, this despite the poor economy -- let just say that this company is in the transport business...

Anyway, the first two are clearly economist of sort, but with a very different attention span, and very different audiences. The fact that these guys work in the same firm and come to diametrically opposed conclusion is surprising, but then when you work in a bank for a few years you get used to this kind of stuff. The fact that the second guy is always a cheerleader for the market is irritating, but what is really irritating is the third guy, the clueless lemming.

Today the stock of that transport company trades around $1.0, so its down by 1/3, not up by 25%, so its really standing around 50% below his target of 60 days ago, and we all agree that not that much has changed over the past 60 days, and this is the kicker: He has now reduced his target from $2 to $1.15 -- no explanation, he does produce 2/3 pages of "metrics" that justify the valuation, but at the end of the day, a few weeks ago he justfieid the $2 valuation on a different set of metrics.

To add insult to injury, the guy never even mentions that he got it wrong, there is no A to B discussion. How did he go from $2.00 to $1.10 nobody knows!

Added: Turns out that the Hussman Fund did an analysis of the impact of an increase in productivity on the profitability of companies; guess the result -- there is no correlation between improvement in productivity and corproate profits. None


Tuesday, November 3, 2009

Swine Flu and Reporters

I love journalists, always looking for the easy answer the glib comment. As everybody knows we are in the mist of a flu epidemic (pandemic maybe?) of global proportion. Canada, with its socialized medicine determined that it would need 8 million vaccine doses for the entire population (basically because 2/3 of Canadian think they don't need vaccination). Needless to say with the recent death of a 13 year old boy in Ontario every parent is freeking out. Yet the authorities are not making the vaccine available to children, the government in order to maximize the effectiveness of the vaccine has targeted specific segments of the population, which do not yet include children.

Journalists at the CBC know that the vaccine can only be administered to a certain number of individuals at anyone time (you cannot vaccinate 8 million Canadian in one day!) so there is a queuing system to optimize the delivery process: First, medical workers as the first line of defense it is only reasonable, second groups at risk etc etc etc...

Now our society has suddenly decided that "our children are the most precious commodity" you only have to drive on The Boulevard at 8:15 in the morning as the precious little charges are dropped off to school (its not right for them to walk 5/6 blocks in the morning). The Quebec Minister of health explained (in broken English unfortunately) that with the support of a number of epidemiologists the government had crafted the optimal distribution system for the H1N1 vaccine, that would provide Quebec resident with the optimal solution.

That was clearly the wrong answers, because our Children are at risk. Part of the problem is that there is no concept, in the general public, that this is not a zero sum game, there are just so many vaccine available at anyone time, and that the distribution of these vaccine must be done in the most efficent manner, to maximize the benefits to the overall population.

As a wider debate about health care it is a discussion about resource allocation, a word that apparently doesn't exist in the U.S. since everybody can pay for health care (assuming that every American is a millionaire of course -- the true Republican point). The distribution of H1N1 vaccine is actually a very good example of resource allocation, that is by definition the base issue with health care, because when you are ill there is nothing that can stand in your way. There are discussions here that certain cancer drugs are not available in Canada because they are very expensive, adding only a few months to the patient life. Whereas in the U.S. the drug is available (nobody seems to say if it is paid by the HMO, but anyway). It puts a defining value to human life which is the first time this kind of analysis has been observed by the general public.

With the arrival of targeted drugs the issue will become more and more common. Should there be a drug, which cost $1 million dollar but prolongs the life of a patent be given? If it's $10 million? Once you agree that there exists a price at which treatment must be refused it becomes a negotiation; what is acceptable what is not!

In sense the journalist of CBC was unwilling to make this decision; it was far easier to say: The Children, The Children how could you! Than to take a responsible role in the information process. I get why politicians are often viewed with disdain, they do make errors, but others carry part of the blame, such as those that cover the news.

Ok end of rant!

Monday, October 26, 2009

Zombie Banks 1998 edition

About 10 years ago I was living in Singapore, and working in the aerospace sector. At that time getting good deals were difficult, these were the days when Thai Airways finance a bunch of Boeing B747 with loans priced at 12.5 bps (e.g. 0.12%) over LIBOR (the best rate banks lend to each other), it marked a low point in loan prices, it made my life a misery trying to find interesting deals.

One evening while in Tokyo with friends I met the head of one of Japan's premier aerospace banks, these guys were one of the biggest players in the business, they were drowning their sorrows because they could no longer bid on new business, they had effectively been shut down to new business until the new financial year (1998). They bemoaned their poor luck (no new business meant very small bonus), as their bosses even asked them (desperately) to reduce balance sheet usage -- get rid of loans at least until the turn of the year!

Intrigued I called them up the next day (Japanese despite mind numbing drunkenness are always in the office early the next morning) and see if there was anything we could do to help (e.g. make money). In a nutshell they were looking to unload between $1 billion and $2 billion in aerospace loans ASAP. I told them that to sell such a big number would be very complex unless we could figure out a way to make it low risk for the buyer (me in this case).

This was a two step process, the first was a review of the documentation which took a few days (lots of fun was had in Hong Kong for 5 days of loan review). These were fiendishly complex structures, triple dip tax leases (Japan, Hong Kong and other jurisdictions) but they were also boiler plate so once we verified the termination values (which was done via bespoke models) we were ready to deal. What we did was amazing in its simplicity and it still amazes me that these banks didn't think of doing the deal themselves.

We bought the entire loan book and securitized the obligations; today this would be considered a very safe deal, because we matched our obligations exactly and provided full backstop to the investors. What we had created was an exploding note, the Japanese bank would be the paying agent and the counterparty in those days were were allowed to have exploding margins, so we sold a note for six months at a margin of 50 bps over the US Treasury rate and received 150 bps from the Japanese bank, we also took the refinancing risk -- which was large, but at the end of six months we had a margin of 300 bps should the paper not be redeemed by the issuer, we in turn had an exploding margin with the Japanese banks of 500 bps, we had sold on this risk to an insurance company (for 20 bps), so in a nutshell we paid 70 bps (plus structuring costs) and received 150 bps on $1.8 billion for six months with no refinancing risk, since we had sold this refinancing risk to a third party AAA rated entity we generated $15 million dollars in profit for 8 weeks of work, and because the transaction was securitized there was virtually no capital cost, we calculated at the time that our return on capital was 30,000%.

This may seem insane today, in fact it could not work anymore, because with this type of structure with exploding rate would be illegal for corporation (amazingly Alt-A mortgages, which are with exploding rates, are still legal today -- although not much demand)

Why the Zombie banks, because we are seeing the same insane solutions today with the big US banks; Last week Citibank sent a letter to 2 million credit card holders and increased their interest rate from 7.6% to 29.9%, this to people who do not carry balance on their credit cards! People who payoff their credit cards will usually all have the same reaction, can their cards, the impact on the money supply is not negligible here, because credit cards are a form of cash, and this reduction in the availability of credit is certain to have an impact.

P.S. Yes simplified the meat of the deal, the credit agencies were involved (private rating) but since this was sold as a private placement it didn't make the headlines, we were also very lucky in that there was so much money around that we could "pay" everybody in the bank to get the deal done.

P.P.S The $15 million represented 1.1 year of profits for the Japanese Bank in the book (average loan costs was 45 bps), total cost of the transaction was nearly 2.5 years of bank profits on this portfolio.

Saturday, October 24, 2009

Of Ferrari and Insanity

Thursday night Mrs Frozen in the North and I were driving back home from the office, the congestion was rather bad and so we deviated from our normal route to take an alternative route which took us up Peel Street in Montreal. For those not familiar with this street there are a few "Chi chi" restaurants and a surprisingly large number of toy cars (Ferrari, Mercedes AMG, etc), in front of us a little Korean import was having a hard time "waking up" to the fact that the light had turned green, so I flashed the guy, he was not offended, clearly his mind was elsewhere. He we driving distracted I presumed that he was talking on the phone or something, anyway because of his distraction we missed the green light at the next intersection. Once that light had turned green he was again driving distracted, and at one point started weaving a bit until he hit a parked car, and you guessed it he hit a beautiful black Ferrari... we didn't stick around to see how that turned out, since he hit the car in front of a rather "notorious" restaurant. Still it must have been an interesting conversation.

Second part is the insanity, Mrs FinN is an artist, not always the most practical person but she got great ideas. Next week there is artistic event globally to mark the 20th anniversary of the fall of the Berlin wall. Initially she was to make a Wall in here studio that people could break down. She's now decided that the wall will be more figurative, and so the wall will be made of pretzels. These will not the "american" pretzels these will be the German version, yep, the German version -- there about 4 inches across (the slightly smaller and thinner than a bagel), and get this, she's not buying the 140 pretzels, she's making them!

By the way do you know how many pretzel Mrs. FinN has baked in the past....ZERO. That should make for a fun weekend, and can just picture us Sunday night driving down back to Montreal will two green garbadge bags full of pretzels, cause you don't know Mrs. FinN like I do, no you don't because if she has to cook the pretzels for the next 48 hours straight she will do it!

Proof of insanity

P.S. Are you not amazed that Peel Street in Montreal has its own Wiki page?

Update: Should anybody be interested, by Sunday night, Mrs. FitN had made/cooked more than 50 prtezels...

Winter Wonderland

Last night Mrs Frozen in the North and I drove up to the cottage. Now that we are here my guess is that Mrs FitN would have rather stayed in Montreal, you see, despite heavy rain last night there's still lots of snow on the ground here. Yep snow, the white stuff, thermostat is suppose to rise to 15c in Montreal, it is still Zero here (you see the white stuff behind the sail boat!!!)

Anyway, a quiet weekend at the cottage since it is still raining. Our cat (Hoover) is also disappointed, not a fan of the snow (he grew up in Singapore) he was push-out the door twice today to "take care of business" I am confident that he's now fast asleep on our bed.

Despite the weather, the motorway was jam packed last night, we left Montreal at 20:30 and despite this late departure there was much traffic.

Still its nice to see winter at our doorstep, it makes a change from the rainy summer we have had. In fact, the weather has been so bad that we've had a bear invasion near the cottage. Every year there are a number of bears (black bears) that decide to pay a visit to the town of St-Donat to increase their food intake prior to hibernation. But the berry season was terrible this year, and so the bears are thin, hence their arrival into town. Nearly 80 were captured and forty were killed, without the cull more die of starvation during the winter.

Just to add a touch, I am writing this blog while sitting in front of the fireplace, could not be better!

Wednesday, October 21, 2009

Jackie O

Ms. Frozen in the North and I enjoy two reality shows: The Amazing Race and Survivor, the first where contestant race around the world the other where they are left stranded on an Island, a-la-Robinson-Crusoe mold.

Last Sunday while watching the Amazing race the ignorance of the average American amazed both my wife and I, the contestants were given a picture of a women waving from an official car, and they had to figure out where this picture was taken. Immediately, my wife and I recognized Jackie Kennedy -- wife of JFK, but none of the contestants recognized her! Not one, not even the "old guy" on the show. The contestants were in Burma (there virtually every cab driver could identify Jackie and could also tell the hapless Americans that the picture was taken in front of a famous hotel in the capital).

Later on the contestants were told the head to the tallest building in the Persian Gulf, one contestant actually asked for a flight to a country called the "Persian Gulf", eventually everybody figured out that they needed to fly to Dubai. America is fighting two wars in the area, and whereas Afghanistan is rather far, Iraq actually has a small beachhead on the Persian Gulf and tried to create a bigger one by annexing Kuwait in the 90s.

Thinking about the entire episode I guess the educational system is to blame, there is no more room for general knowedge in the curriculum. The I realized that if the media are incompetent with regards to geography so should the population.

As an aside years ago we lived in Singapore, the city state is globaly considered #1 or #2 in education, a great point of pride for the the country. The local TV station introduced a local version of Who wants to be a millionaire, but clearly little vetting had been done of the contestants, who not only were cloths challenged (some men were wearing singlet vests..) but when asked the most mindless general knowledge questions were unable to answer. One even called a friend who was categoric that a large ice and snow formation in the water was a glacier and not an Iceberg.

My point, even in advance education systems there is no room left for general knowledge, if I cannot make money from it, there is no need to know it. As an undergrad student I was always surprised when a fellow student would ask from the professor: Will this be in the Test? As if this information could not be of any other use in the future. Thankfully most teachers reply was a stern direct look at the student and a silence -- still there was always one or two who would ask!

P.S. After two embarrassing airings, the Singapore version of Who wants to be a millionaire was put on hiatus and a new version was shot where better contestant vetting was done.


Tuesday, October 20, 2009


It has been a week since my last post

Its not for a lack of desire, its just been a little busy over the past few days. This is a short post, yesterday I had a bit of a China Syndrome episode. It seems that last week I spilled a soft drink onto my keyboard, nothing really, but yesterday four keys were operating with some difficulties. I called the help desk and they told me to fill a requisition and that something would show up in a few days/week -- hardly satisfying!

On a whim, I asked the computer tech on the trading floor (where I exist on the edge) if he had any idea where I could get a keyboard fast! He bent under his desk and pulled out a brand new keyboard. Working in a dealing room where each trader has between 5 and 10 screens (we look like NASA) we order about 10-20 new computer per month. In the past we would only order the computer (no keyboard or monitor), but about two years ago, we noticed that if we ordered the a keyboard it was cheaper... than if we just bought the machine.

The impact, we have lots of spare keyboards. he told me not to tell the tech group, you see if he did we would have to match the keyboard to inventory... and the only reason we buy the things is because the computers are cheaper. For those who are too young the premise of the movie China Syndrome is that a can of coke was spilled on the keyboard which let to a nuclear melt down, and in finishing where it gets weirder, when the Three Mile Island nuclear plant almost went critical it was a can of Seven-Up that caused the problem.

Sometimes reality and fiction are strange bedfellows