Sunday, November 13, 2016

Why write ... seriously to ... you!

When you take a pause from personal writing, even if somewhat public, and go into observation mode, you take it on as a learning experience. That is clearly what I have done here with Northworthy. Even prophetically. With posts 7 years and 27 days apart.

Sure I wrote bits n bites here and there, and for work. All elsewhere.

But I did not devote myself into 'me' and what serious and good thoughts I have today, to reflect on, or on the matters that come into my mind that need serious focus, in that entire span.

The "fly bye" reactive and attention sharing Facebook or Twitter worlds? "Look at this, look at that, share this and share that. For the curious, amitriptyline ...

Would it be fair to call either an environment, one for much original thinking of your own?

For that matter, social gaming, part of the new economy, takes you away just as drugs or alcohol could, from facing life square on. If you get stuck in a competitive environment, with "social" reinforcement, you may end up here.

I did. And I was not a formative youth. It just happened.

It was almost like an early 70's experience for me, where through soft drugs, I went consciousness raising.

But I woke up and said "No." That was me at 19 years of age.

And the "wreckage" of those choices took at least 25 years to repair.

My teenage sons went there and are still there in their early 20's. Social gaming is their crutch but do they think that it is also holding them back from taking their own thoughts seriously?

The most important thing to me is my own thoughts. They shape me. Who else is going to take care of that "me"? FB will not. Twitter will not. Social gaming will not. None of those modern distractions will let "me" think forward from my own thoughts, in any serious manner, other than extremely briefly.

You are up to you! Never forget it.

Yes "love" helps but it also enables you, whether off the tracks, or on the tracks. A good partner can cause reflection, give space, and if you are developed (will you ever grow up?), you can roll with it and do "ok."

A lot people choose to be ok but to me, one part of "ok" is not. Satisfied.

I think there is more to life than just resting on where you have been and where you are.

What about where you are going to be and how you are going to get there, in control and in charge of your own life?

How is your self examination of today going to be in the "noise" ? It will be noisy and delayed by necessaries.

I work in a fast paced, interrupted environment with many competing interests and ideas to balance and execute on, as best I can, give it my excellence, all day, every day. I did get my first million that way and will get my second as well - I am not hurting even though a "million" is not what it once was.

For a non-have guy, but a be-ing guy, life is good. With nothing, it would be good but the choice of being v. having has given a slow-learner, a balanced good life, with love and kindness and much food for thought.

That is what writing does for me: I check and think and dig.

Surely I can check on my being, verbally or mentally, while saying to the standard "Howse it going?" "Good!"

Maybe that time is to start the quickie checkup ... and remember your goals and fundamentals for that day. When its time to write, work on those long terms goals, free of noise, in contemplative thought.

Friday, November 11, 2016

Pain. God is Pain. God is Love.

Pain. God is Pain. God is Love.

My late Uncle Irving would be the most pious Jew known to his friends and family if they did not know him. He sang on Passover and effortlessly recited prayers, He toiled endlessly in preparation and in rituals, on the outside he was no half way measure guy when it came to rituals.

But the real Uncle Irving, to him God was dead. He died during the Holocaust, and He killed his family, and forced him in turn to be a man he did not want to be: a killer.

He never forgot. He lived on till he died in secret angst, "Where were You?" "In the face of such evil and to put such evil into men and women, where were You?"

Was God dead?

To my uncle, there was no God. There was ritual remaining only.

Those that knew him, knew this. Those that saw him, had no clue.


He waited for me to come. A miracle.

He lost his wife. Fragile she went down, on 12 prescriptions, she lived.

On her death, his vibrancy and positive spirit lived. And lived on years alone.

We visited every year, his distant home, now an apartment where he saved everything for his only child. Organized her in wealth. But his destiny was set. In rituals still.

But God was dead to him.

Elderly yet strong as an ox, he was hospitalized, His heart weakened not his mind he lost consciousness, and only breathed.

I came to him on his death day. He "stayed alive for you" "waiting" said my cousin, and without doubt he did to me. It was a miracle, for me and for her.

I gripped his hand and he gripped mine, eyes closed, chest heaving,

We did not need to say a thing.

I knew how he felt, and his spirit having touched mine before so deeply, in touching embrace, I left him that day knowing I would not see him again. Knowing also that yes, he had waited for me. His torch my torch to live with as with the many other torches I have touched.



I lost a love, 4 times now in life, the last no different that the other 3, yet the last, said it plain as the world grabbed her, after months of glorious pause, happy, in love, "I need 7 million dollars in the bank." yet despite that wish, and others recited as pagan as anything I heard, there was love still in me. But there was nothingness left in her. Her insight, her love, lost in her false religion to the worldly.


God is not dead. God is love.

God is alive in me and His love, despite what I see of evil and of "wealth" I know what is ephemeral and what is not.

It is not what we have. It was we are inside that matters. It is how we exhibit our honesty or dishonest modesty, that matters.

Yes that can kill me. No one is safe.

My spirit? As I am, I am.

And that is God.

Life is a struggle and yet in rituals, God is alive, in those that want God to be alive. In those that seek God, God is alive, to live with, but know that God see's evil and destroys it, And God see's goodness and destroy's it with evil for goodness is not what goodness has but what goodness does, silently, effortlessly, God has His judgement days. And God has no promise but eternally to live on Himself.

Will we see a judgment day soon, evil and good to die?

God knows.

Wednesday, September 16, 2009

Is Blogging Dead v. Social Networking?

I have to admit that I used to enjoy blogging here and letting go my creative juices on many issues.

Now, its Facebooking, and the involvement of real friends and some virtual friends who are almost as close to real friends as friends you have met, touched, or more.

I am a writer at heart and blogging is best for the long diatribes of the mind but Notes are available on Facebook too but are more restrictive in audience than blogging, which is post card like for anyone on the Internet to see.

It is almost that "To be or not to be" moment in blogging but I think both can co-exist if the urge exists to write on postcards or have influence within the blogosphere, before anything hits MSM.

That thought however brings up a threat however to my fundamental core: freedom of expression.

In a Facebook world, you world is confined to your friends and acquaintances you build up there.

In a Blogging world, there are no such bounds and if someone wants to lurk or examine your thoughts, its freely given, with no expectations on anyone of private thoughts as these are public thoughts, free to roam wherever.

In Facebook as in Blogging, you are free to comment or create content but the span is very different hence.

So has the world gotten smaller as Facebook hits the 200 Million mark of users? And less free as a result as any person has only so much time to create or to read, and be passive or active?

Are there trends here to study say in the use of RSS readers v. Facebook time, that some have called "Wastebook" as it is true social time out v. blogging which requires thought and energy if you are the creator of a blog of relevance?

My blog has fallen out of relevance, from likely 1,900,000 ranked to perhaps 2, 500,000th. Do I care?

It is still my portal of expression, my post card to the world of the Blogosphere and should I take flight on occasion to Wastebook or delve into deep subjects on the blog here, either way, I shall take it to the highest level of joy, moment to moment, living more in the now, than ever before.

I think that effect, the "Social Effect" drawing against the "Singular Universe" in blogging is the ultimate tension, and the impact on relevance may not in fact be diminished in the Blogosphere where content is still king, was always king and shall remain king.

Long live the digital pen!

Wednesday, April 29, 2009

WHO | Swine influenza

WHO | Swine influenza

This is the link to the WHO site that covers this potential pandemic.

With the alert level raised to 5 just now, this might be something serious, with Canada having 19 cases confirmed (none have died).

The US apparently has 91 cases and Mexico, I think they have stopped counting the original deaths are considering only active cases, with deaths involved.

Tuesday, April 21, 2009

Can the Oil Shock Alone Explain the Financial Crisis? - The Atlantic Business Channel

Can the Oil Shock Alone Explain the Financial Crisis? - The Atlantic Business Channel

I think the way the economist James Hamilton used the "oil shock" effect on GDP, is illustrative of part of the story of what went wrong in the USA.

Is it just far too "reduced row" to accurately explain everything else, including the housing price collapses in many markets, the Bush war economy spending, and the excess credit over savings, in both personal and government accounts, including imbalances in trade, particularly with China.

Well, that is what "reduced row" models in economics do: they make a black box of the constants , the parameter estimator and error estimator.

Frankly, I would buy into the explanatory power of the oil shock (read the article!)

Now with Obama making diplomatic gestures worldwide, particularly to Venezuela, a country that used to supply the US, this type of leadership may cower oil powers elsewhere to go "hold on a second, if we keep the price up, a) we get hurt too, b) our oil will never be optimally recovered i.e. it will get replaced by a substitute and we will have nothing to sell."

Most Americans I feel would love to let the remaining oil stay in the ground, including the oil in the tar sands of Canada.

Add in "peak oil" stories that hit the summer of 2008, to play to the fear that the markets were telling us by price alone, to drive up prices further, and yes, what Hamilton and his interpreters say is more than plausible. The recession was inevitable but those stories were not plying the media as was fear itself.

Interestly, the National Bureau of Economics Research, NBER, said the US recession began in January 2008: did anyone notice? (Hamilton BTW states' Q4, 2007)

In Canada, a net oil supplying country, our effects were mitigated by a transfer of wealth and economic activity to Alberta and Saskatchewan, with the economic powerhouse of Ontario in likely the same state as the US as a whole. Now all of Canada is hurting, just as much as the US is, and our unemployment is likely to be stickier than the US for a variety of reasons. Our dollar will likely head lower too as oil does not recover as it did in the past with economic activity still projected in the US to be weakening. If it does recover, we have "stagflation" and the very risk our Central Banks are going to fight dearly against, a stagnant economy, with high unemployment and rising prices.

So, as the science so dismal might say, its far from over with the beginning of growth distant in North America, with but small seedlings planted to stop further erosion.

When will those seedlings grow? I would estimate 2011 in my own experience as the pain has yet to fully hit Main Street.

The de-industrialization of the US as well was likely not in the thought process or planning horizon of "the Interdependencia" groups that effectively globalized the world economy, under US leadership, through the late 70's to now. There does not seem to be a way of going back, and forward? What will be left of the industrial might of the US? And of course, will this lead to dangerous misperceptions?

More questions than answers.

Aussie inventor wins over Microsoft | Australian IT

Aussie inventor wins over Microsoft | Australian IT

This shows the two headed sword of patents to MS, now that MS itself has gone ga-ga over software patents.

Friday, April 03, 2009

todo mundo: Audiomaxxx boom bye-bye

This is an interesting blog post and comments to the Audiomaxxx story.

todo mundo: Audiomaxxx boom bye-bye

The thing that bothers me in this whole thing, is that DJ's should be paying performing licence fees to a collective society. The publisher and writer-composer artist get paid from that. In Canada, there is also a performing right that neighbouring rights holders, the producer and the performing artist, will receive on a reciprocal country by country basis. Canada is part of the worldwide collective networks so Jamaican artists and producers would get paid.

But its the users that "grabbed" from the site and the DJ's that sold copies of copies of the Audiomaxxx mixes that really is the copyright violation focus here.

Either way, a mess of thing for many, many fans and DJ's worldwide of Dancehall Music ... riddems!

The actual charges this guy faces are few in relation to what was originally proclaimed "52 charges under the Copyright Act in relations to 26 different victims." He should in fact set himself up again, but do it with a licensing model that works for all concerned i.e. copy protect his CD's from thieving DJ's, and pay the fee's to copy on legit basis the music for DJ's to resell and for fans without DJ's licences. If the Jamaican Music Association or whatever they call themselves, does not like that i.e. getting paid, then like others have said, they should do it themselves.

All however should remember the fan here. Fans will pay and some artists don't want to do anything initially but get the widest distribution, biggest notoriety, and then hook the fans that will pay. American Idol makes "stars" that may get big pay out of amateur performances that are widely distributed but for no pay initially. It would seem the only way for the music business to work these Internet days, is an artist centric model that the artist themselves develop, free of that artist' bitch and moan at the recording labels, that some would call "acting in a cartel," have failed to do.

Against this is a immutable law that information wants to be free and as a natural force so does music as a form of organized information.

Arguably, its something tough to fight against when it seems such a fundamental force of nature, human or otherwise (ex. animal DNA/plant RNA is "information"), where lacking predators and disease, the entropy is obvious.

But entering a hall, and hearing a performance, recorded for dancing or played live, is paid for and is licensed, to the max. That collective experience most of us desire greatly and some will pay dearly for.

Even "American Idol," when an amateur performer performs a cover song, the original artists of the song, producers, writers, composers and record companies are collecting (in the US, not the performer of the song!).

To me, its a case of "cry me a river" in spades v. understand your business and start marketing appropriately to today, not yesterday.

As far as Audiomaxxx goes, we still have a "broken mass media" on the story, and arguable some actions here in Canada that hurt more than helped the future Jamaican stars.

P2PNet hopefully will follow the case itself (they will).

Tuesday, November 25, 2008

Aiding Firms and Industries does not Help Aggregate Demand

The economist within me is very perturbed.

With the massive losses on world stock markets, the solution du jur appears to be to do anything.

Anything must be good but sometimes one must suspect that companies have made wrong decisions on their investments just as countries can make unwise decisions on raising tax revenues and allocating expenditures.

Sometimes, one feels, there must be a day of reaping what you sow, the yan of the yin.

To avoid this, postponing your day of reckoning, and to do "anything," is that really right?

Usually the unsuspecting people who pay for this the most, are the "next generation" or even the unborn if its really that bad.

In Canada, PM's Trudeau and Mulroney through the 70's and 80's had no gumption to spend more than they received, building a national debt that at times took about one third of tax revenues to service, let alone pay down as it was a growing debt.

In the US, hard numbers are buried by multiple offices in charge of that nations budget. Who knows what the Pentagon has spent in the past 10 years and has plans to spend in the next 5 years????

The US appears to be the biggest basket case but it is not alone as it has lead some necessary efforts with free loaders abounding to those efforts. Is China also a basket case, for "hoarding" foreign currency, rather than spending its foreign surplus? Its hoard is more than 1 Trillion US dollars, and to me, the principal failure of Robert Mundell in not turning them into consumers too.

But the point here is that you cannot just create bailout packages for industries if the consumer will not buy what is for sale.

In my small world, the consumer has just about everything they need. The wants department may be lacking as there is always a nicer car, nicer TV, nicer home, but in the make do department, the consumer is satiated.

That is one of the troubles here: consumer satiation in the West.

The other is asset deflation, that comes from excess money supply over a long period of "growth" stimulated by monetary policies that pushed on the strings of the real economy.

With the asset deflation and collapse of home building in the US and collapse of energy production in China, yes PM Harper is right to say that we could have a depression on our hands with high unemployment.

But as I have read today, had the "Conservatives" everywhere (Canada, US, and anywhere else) been harder on energy efficiency and climate change, would we be here today as we are?

I recall Dick Cheney's remark on conservation, paraphrasing: "we don't need conservation. we need more energy production" to be heard as more oil and gas.

Its too late for the what if's.  

Prices are falling on cheap consumer goods, and consumers have their wallets closed, and their credit cards piled up.  

The real assets? There still above the ground, with the best, the cumulating human capital and wealth that is still abundantly present.

Happy New Years to everyone who reads my blogging efforts.  Its been a trying time for me in the last 8 months but as always, here's to the New Year!

Tuesday, November 04, 2008

Unlocking Conscious Energy

It is sometimes difficult to write a blog when at times to the blogger, life becomes overwhelming.

"Over" to me, is above.

"Whelming" is a well, a pit, a dark abyss, without a bottom, as in the case of the depressed.

The work of Dr. Helen Mayberg exposed me to that "pit" that perhaps in deep empathy, and thought of what one of her slides described, my own life essence in wanting to feel something new, went for it.

Ok, enough of empathizing with the depths of depression a person can experience.

Is it a choice in my mind to overcome this or is this my "area 25" dysfunctioning, by thinking about that depth of depression.

In a sense this is a follow on to my attendance at the centenary lecture I blogged on earlier, and in a sense a corollory to the testable hypothesis I put to the good Doctor:

Can you put yourself into a state of depression?

We know with good results that the stimulation of this area 25 of the brain, relieves depression in terms of symptoms, but what we don't know is whether the cause of the depression is endogenous (within the person's psyche) or exogenous (from external stressors).

Time will tell, if exogenous or endogenous factors can be discerned after Deep Brain Stimulation (DBS). If the factors are exogenous, and the life event has set up the block at area 25, likely, the DBS with cognitive therapy, will be permanently relieving: i.e. the discovery of why one was so despaired, will be exposed consciously, and so called "up the cortex" therapies, can relieve the bad paradigms or events to understanding, so as to no longer exist.

Worse however is the endogenous variety, as this is what likely DBS will most likely be most effective at relieving.

The trick however, is that after DBS, one then has the opportunity to research the depressed person for endogenous or exogenous causality, and in some cases, permanently cure the person.

The good part in all of this research ongoing, is that perhaps the person with the mental illness will have something visible to show the cruel laity, that through bandaging, or a discernable shoulder bulge, a visible "crutch" may make a hidden illness people fear, become a "normal" illness sufficing to say "Hey, here is this surgery I have had. I feel so much better."

The better part is that the flows of conscious energy within the brain are being mapped, and even external flows between people are being worked on.

Where will this take us in the next 7 years? I have predictions of course but they would be ungodly ones to make at this time SMILE

Friday, October 24, 2008

Solutions to the Global Financial Crisis

No one seems to be talking about solutions to the Global Financial Crisis, other than printing more money, authorizing more spending to the people who caused the problem, and "maybe" slipping into deficits here in Canada.

At present, some people are looking at this, and going "Why are the rich getting bailed out?" as now the financial markets have stabilized but when one see's the allocation of the U.S. bailout, its to major banks, one of whom has recently taken over another with the obvious question: does this money provide money for such takeovers and merger and acquisition deals to go on and on ... ?

Back to Canada, we are likely to slide into deficits and big ones at that, as revenues dry up. This is not the way to get into a deficit when one is facing twin ills of deflation (recession/depression) and inflation in the price levels by money based injections.

In my UofT days, I called this monetary inflation, "non-natural" inflation, as this price level rate of change was merely from the absence of the Bank of Canada controlling the rate of growth of physical money.

Similarly, I called natural inflation, the phenomenon where people have to adjust to changes in relative and absolute prices, domestically.

The sum of the two, was evidenced in the rate of change in prices, with natural inflation very difficult to measure but implicit in the "inflation" rate we see in "numbers" and feel in our diminishing wages.

As such a theorist, internationally, we have had some reduction in natural inflation via "globalization" and strong work on creating an interdependent world amongst those that formerly were perceived as threats strategically to the Western world. The principal effect of this action was to reduce absolutely prices on some consumer goods, via the transfer of high paid labour to low paid labour, and low externality production, to production with high levels of externalities (pollution, plus).

Financial investments by the major banks and major corporations made this possible, encouraged by their respective governments.

Africa? No threat. No action.

Now a huge gob of non-natural inflation, to reflate failed financial markets, threatens to seriously overtake, and destabilize Canadian families into tightening their spending (and others' worldwide), as there is no relief in sight on the real wage front.

The effects of this are obvious.

Stagnant economies.

Extreme pressure on China to stop its mercantilism policy on its exchange rate instead of just considering further actions.

Higher unemployment from excess production capacity in Canada while likely China builds more capacity.

Where does it end?

A Conservative government supporting globalization, if elected in the U.S. will doom us, like Herbert Hoover.

In Canada, we recently elected a minority Conservative government that prefers to govern as if it had a majority. It hopes to avoid to slipping into a deficit by revenue shortfalls, by cutting government spending, with a threat made to the professional unions that wage increases or palatable settlements are off the table.

In a recession/depression, Keynes would encourage government spending and monetary control. Keynes? Lord John Maynard Keynes, was the genius behind reflating the Western world in the dirty 30's (1930 - 1939).

In our world now, we have the exact opposite policies, with a major mercantilist power disrupting free market economies.

I hate saying this, but it will get worse for many people over this financial crisis that underlies a real economic problem that will not got away simply with money flashed everywhere.

Friday, October 17, 2008

China watches over internet cafe customers in web crackdown

China watches over internet cafe customers in web crackdown

from the Times Online

Consider that our own ISP's will be turned into copyright cops with C-61, our new copyright legislation, how different is this from what Communist China does to its citizens?

Not much in my humble opinion.

Thursday, October 09, 2008

Tuesday, October 07, 2008

The Sick Patient: the Global Economy

Today, watching some of the coverage of CNBC of the global financial crisis, we had the address of the Fed Reserve Chairman, who said all the money he injected will somehow be reabsorbed but it is not his primary concern i.e. inflation. The message hit the markets like a ton of bricks because the abandonment of the inflation as the primary concern and instead a focus of "reflation" implies a deflation going, on top of the crisis in confidence in the credit markets.

That crisis has been going on since February when the commercial paper market hit a dead end, with new issues not being accepting by banks on credit concerns of the underlying company's and the lack of the ability to float/resell the paper to institutional investors. In February, the Fed in concert with other central banks injected $600 billion dollars in high powered money into the world economy, a stimilus package that in Canada we see in a 3.5% inflation rate so far, with likely more to come i.e. higher rates.

Today the Fed announced an open ended intent to purchase Commercial paper, but in a scary thought, on what terms? Is this a take over of the purpose of a bank in a transaction with a bank's customer? The banks that are solvent, must be scratching their heads on this one, because this must have been a profit centre for their clients. Now they deal with the Fed? Why bother with a bank?

The US nationalized in effect their mortgage industry, wiping out enormous investor wealth.

This is not all going well with markets reacting by reducing the financial assets of investors by another 5% in the US.

Investors only? How about pension plans? And individual RRSP's?

With reactive actions around the globe to increase amounts guaranteed for cash investments in banks, the rush to cash is on.

I look at the above, and realize that this world, is a monetarists managed world. Its not neo-Keynesian, and for those who are not familiar with those terms, John Maynard Keynes was the preeminent thinker to turn around the Great Depression in the 20th century. His tax and spend theories of course were not popular with the elites as they ended up paying a great share of taxes, that governments then spent to reflate, to cause economic growth and jobs to recover.

A neo-Keynesian approach is well overdue for discussion and the Central bankers of the world have to keep their focus back on the price level or we will have serious price inflation, and economic stagnation if not depression like conditions.

The nationalizations and destructions of the financial institutions in the most dynamic economy as President Bush calls his America, is not the solution to the mess. It is causative of more destruction in confidence and in wealth.

I cannot believe there are no more investment bankers left in the United States. Who would have thought that possible a year ago?

The bottom line here is of course the militarism that the US chose to pursue as the answer to a foreign threat that went overboard. While some estimate this as an annual Trillion dollars expenditure, it would seem by cutting taxes, no one is willing to actually pay for that. With an $11 Trillion dollar economy, the US had better refocus on what it can truly pay for and is willing to pay for. A flight to US Treasury securities, might just end with all governments globally backing their own banks cash, as they have started to do.

This is an epic mess.

With respect to Canada, the US has a very bad virus, and when it has to chose between home and abroad, it has always chosen home. We face a very tough time coming. Our Central Bank Governor has also "pushed on a string" by injecting money at a problem that is not solvable my mere money. The lessons of the 70's have been totally lost, and the fix of 80's is going to be painful to relive.

The Central Bank of Australia has cut interest rates by one full percent. The Yahoo article noting this says what I have noted above: "they" are looking for monetary solutions, to pour more money at the problems, and this is very wrong headed in my beliefs.

And Harper is sliding in the polls for his passive approach to the economy. Some pundits who deal with the polls are seeing a Liberal government as Dion has not been resting on his laurels or lack thereof. Resting on what one has done, i.e. contribute to the problem, is not a solution to political success. Cutting taxes in good times especially for those that do not need more money, is not saving the fiscal measures, for when they are needed.

Thursday, October 02, 2008

Schiller, Canada's Real Estate Market, and the Worldwide Financial Crisis

Its bemusing to me, to think that anyone thinks that Canada's globalized corporations, including banks, insurance companies and brokerages are shielded from the current financial crisis worldwide.

Its also bemusing to me, that my fellow Canadians are not going to be suffering shortly from this financial crisis, that some call "a crisis in confidence," that some call "a crisis in financial derivatives," that some call "the sub-prime" crisis of the US.

Remarkably, we do not have the "sub-prime" crisis because Canadian's don't get lines' of credit on their homes and spend more than they save (we do).

Remarkably, we do not have the "sub-prime" crisis because we cannot buy a house with 100% financing (we can still until October 28, 2008).

Could our financial institutions play in the derivatives markets (yes)?

And what exactly are the plunges in the TSX telling investors about the sanctity of their financial assets?

Our Bank of Canada Governor, formerly an employee of Goldman Sachs, has overseen the Money Supply, giving us now 3.5% inflation and rising.

How did that happen?

He injected funds like all Central bankers earlier this year, to boost the flagling US economy: in total $600 Billion in "High Powered" money was injected. Inflation a surprise? No. A guarantee.

Robert Schiller, the Arthur C. Okun Professor of Economics at Yale, who studies the housing market extensively, realizes full well that "asset" inflation has absorbed most of the rise in Money supply the Central bankers have over supplied for many years prior with low, low interest rates to "push on a string" the economies of the world, causing many unwise financial decisions, including the period in Canada where you could finance a house purchase 100% through the CMHC or GE Capital.

Well GE Capital has signalled its leaving our market. And the Department of Finance July 9th put an end to CMHC loan's at 100%:

On July 9, the Department of Finance announced adjustments to the rules for government guaranteed mortgages aimed at protecting the strengthening the Canadian housing market. CMHC supports the new parameters and the government’s ongoing efforts to maintain a strong Canadian housing market.

Consistent with the government’s direction, CMHC will no longer be accepting mortgage insurance applications for 40-year amortizations or 100 per cent loan-to-value mortgages on or after October 15, 2008. Those mortgages with a 40-year amortization and the 100 per cent loan-to-value mortgages already insured by CMHC are not affected. CMHC mortgage insurance coverage on these mortgages is good for the entire life of the mortgage.

So Schiller made some comments on the Canadian real estate market and he see's not much difference between the US market (down in excess of 15%) and ours.

For our economy, its coming from the adjustment from asset based inflation we enjoyed, feeling more wealthy, to asset based deflation and price inflation.

For the non-economist, think about money as water (money) being poured into a glass pitcher, and there being two glasses for that water to go into. In Canada, the pitcher has been used to pour into the asset glass. Now its being poured into general prices, and moreover, the asset glass is shrinking, overflowing now with more sellers than buyers in the real estate market at current prices. Where is that overflow of water (money) to go? Prices.

Are the spigots being turned down i.e. interest rates being raised? No.

So what is the expected result? A weakening currency, signifying a troubled country again, with economic problems and a country lacking the leadership to correct these maladies.

How low will the dollar go, as we get more inflation also from a falling currency as most of our consumer goods are imported?

Again, looking at the asset based deflation (securities are included in this category in this post) and price inflation, and the low interest rates still operative at the Bank of Canada, we can expect a below 90 cent dollar, price inflation likely in the 5-8% range shortly, and a deterioration of the employment market.


And since we feel poorer as our homes are not salable at what we think they are worth, we tend to look at the debt we have borrowed against it as an albatross over our necks, increasing financial stress, tightening the spending we have discretion over, and well, surprise we get a full blown recession, if not depression (contraction in the economy v. just a decrement in the rate of growth, still above "0%."

That is called "stagflation" and a phenomenon of 1974 through 1980 until the Monetary Control Act was brought in and Paul Volker had to take severe measures (very high interest rates) against high inflation and a sputtering economy.

Is Canada immune? I don't think so. I think our financial institutions while being conservative in their natures as "Canadian" some must have gone for super normal profits, and have gotten caught with their fly's open.

The question for most home owners is: is this 1990 again? I tend to think it is not, that the asset class in real estate will not shrink as much as the financial asset class. Certainly, Robert Schiller see's otherwise and there are certainly differences between the "Homesteader" laws that allow a person to walk away from their home in some US States, and leave the keys and loss in value with the bank, v. Canada where you are stuck with that debt to the bank (but for Alberta and Saskatchewan I believe). That weak law, that lets someone walk away without penalty, leaving the risk of the depreciation of the value of the home with the financial institution is the US "sub-prime" crisis in a nutshell.

That said, with the feeling of being poorer, some may seek to downsize their homes, and normally we see the weakening of the higher end homes in these types of markets. This is being seen in Canada.

Moreover, affordability in a broad way, will contract demand for homes. Less demand mean builder inventories rise, and construction jobs dry up, and the lack of confidence spreads.

Meantime, the resource based economy out west, is still crying for skilled and non-skilled labour as they have an endless demand for the resources they produce (and locally pollute) from the world at large. Will the "mess" in central Canada, and the required fiscal and monetary policies to cure them, impinge on the growth in the West, or will that very growth mask the regional problems that this country is and will face in very serious ways over the foreseeable future?

For more on Schiller and Real Estate , see here. Schiller homepage at Yale.

Ed. Note: Oddly or not, while I was at the University of Toronto, I worked on the fix to stagflation and inflation as my central focus. Reading Schiller is almost like reading me, while he lacks what tools I developed from the work of his chair's name sake, Arthur C. Okun. In situations such as "stagflation," a Value Added Subsidy is required, the opposite of a Value Added Tax in my opinion. Since our Stephen Harper has stoked the economy with the opposite cut in the VAT, he leaves little ammunition left for stimulating the economy out of the "stag" part of stagflation. Harper's claim of 200 new food inspectors not true: inspection agency union Harper's claim of 200 new food inspectors not true: inspection agency union

Friday, September 26, 2008

To be creative is, in fact, Canadian

To be creative is, in fact, Canadian

Margaret Attwood in the Globe and Mail

Judge Orders Mistrial in P2P Piracy Case - News and Analysis by PC Magazine

Judge Orders Mistrial in P2P Piracy Case

Courtesy PC Magazine

The salient point:

Thomas' actions, the court said, were far different than the sort of copyright infringement the law was set up to prosecute, where works are copied and then sold for profit.

Monday, September 15, 2008

Retro look: US Financial Crisis: Reality is in the Market: Question: what if anything has really changed?

Waking up this morning to the bankruptcy of Lehman Brothers, the firm that took over Bear Stearns, its brought to mind the fact that underneath the Conservative policies of President Bush, was a neglect of the "economy."

In my own thinking, when Fannie Mae and Freddie Mac were taken over by the U.S. Federal Government last week, the U.S. citizenry took over $7 trillion in debt, bringing the debt level to $16 trillion for those citizens, or $45,714 each.

Canada went through financial trouble at the Federal level starting with Trudeau and Mulroney deficit spending built up substantial national debt but nothing near the levels the U.S. has quickly run up (about 70% less).

Arguably, the U.S. is fighting a war in Iraq and in Afganistan, and as a result, you do have impacts domestically but most American's have not been prepared for the cost of those wars, other than in the blood of their youth.

But war fighting takes a toll financially, are the Americans expecting this to be costless?

The US defense budget was $626 Billion, 3.7% of GDP in 2007, but that excludes the amounts for Iraq and Afganistan that are earmarked, one can see a country spending a trillion dollars per annum for war related activity.

And even arguably another half trillion on top of that: see "The Trillion Dollar Defense Budget."

But that is not the only woe for the U.S. "economy."

While it is Conservative to say that Federal spending is out of control, with President Bush' most recent budget proposing a $240 Billion deficit, it belies the flip side to a deficit is also on the revenue side: examining figures for Income tax collections v. Social Security collections, we find $1.25 Trillion v. $927 Billion, a difference of only $323 Billion.

In other words, with President Bush reducing the top marginal rate to 35% for 2003 to 2008 (from 39.6% in 2000), he has reduced the rate of income tax collections while the economy grew, that benefited only those earning over $357,000.

So why help the rich when your country has a debt of $9 trillion? Whoops, $16 trillion?

Its Conservative.

In Canada, so far, tax revenues as a percent of GDP are 33.4% v. 28.2% in the U.S. (provisional 2006). We do not yet have a fiscal deficit but are now on the borderline from the years of Liberal management to the Conservative give aways to the rich of this country.

Big Canadian Conservative give away's?

1) Cutting the GST benefits who the most? The rich. The poorer arguably have to spend their entire earnings and do get a break. But the rich can buy Mercedes and boats, and holidays and legal services. You can see who got the bigger break on GST.

2) New Tax Exempt Savings vehicles. How can the average family in Canada ever contribute $5,000 a year to such an account, so that the income from it will be tax free? The fact that it accumulates, it basically makes investment income tax free. Who can afford investments? The rich.

3) On Climate changing greenhouse gases, the regulation of the intensity of emissions while not controlling the absolute amount of emissions, will do nothing. The climate will change long before any intensity driven model has any effect on reducing absolutely any emissions.

Note: The Dion solution is not also an optimal way of doing the job if the job is to reduce air pollution and greenhouse gas emissions. Taxing and giving back to those who cannot afford those taxes, seems laudable, but optimal, no. There will be a dead weight loss to the new taxes and an administrative cost to redistribute the tax collections.

Can we Canadian expect more Conservative promises to cut taxes over the election period? Perhaps.

Certainly on Copyright issues they showed in Bill C-61, that they were beholden to U.S. private actors who hold copyrights and not the Canadian public nor Canadian artists and copyright holders.

It all portends a great deal of difficulty for world financial markets, and a hunkering down time for all.

(Ed. Note: All in all, a first post in a long time to break my writing cobwebs.)

Monday, July 21, 2008

Experiment in Wordie

I tried listing some of my core values that I write about on my blog in "Wordie."

Wordie is a java applet on its home page, that allows you to scramble and colour your words (any) in patterns you choose and randomize.

This is my first crack at it:

My second crack: