Saturday, December 27, 2008

Today's piece of advice

Any author of a New Years wrap-up that suggests 2008 began on a prosperous and optimistic note and ended with crash is showing his/her ignorance of both the economy and current events. The meltdown in the sub-prime market (the cause of the credit collapse) and the likelihood of an ensuing recession was obvious to anyone in the know by the spring of 2007. Followers of the US credit bubble build-up saw it coming in 2003 and, especially, by 2004, when anyone who listened to US radio and watched daytime TV was bombarded with home equity loan refinancing ads aimed at very poor people. I reacted to the weirdness by finding a fairly steady job. In October, 2007, I wrote on this blog about the coming recession. By the spring of 2008, I was on about the stock market meltdown, especially as it impacted media stocks like Canwest. I also predicted an election as Harper tried to dodge the prospect of running in a recession.
Anyone who did more poorly than me -- including the "what's hot, what's not" crowd -- is either living in a Canadian dreamworld or is simply trapped in Ottawa's glorious disconnect from reality.
So, my predictions for 2009:

The Dow and TSX will likely bottom at about 4500, a figure that I came up with by calculating the 1987 Dow crash low, adjusted to inflation, adding in some real growth in the economy, and discounting for the credit bubble.

The recession will last about four years and the recovery will be very subtle, at first. Governments will, if they are smart, use this opportunity to rebuild infrastructure. In fact, the recession offers an opportunity to literally rebuild the nation.

Watch for a lot of criminal charges and litigation in response to the credit meltdown.

Labor discontent -- organized and individual -- could be strong as people and their employers struggle to determine the real value of work. One of the quandaries raised by recessions, especially those with deflation, is the inability of people to determine a value for goods and services.

There probably won't be a Canadian election next year. There probably will be one in 2010.The rape of the EI fund and the Liberals' and Tories' effective gutting of Unemployment Insurance as a useful social safety net may shape up to be one of the best election issues ever for the NDP.

The Canadian government will try to scrap barriers to foreign investment, especially in media and banking, to try to save the country's economic oligarchy, including the Aspers. It has already signalled this move.

Watch the fringes: in the economy, in politics and the arts. In recessions, new people and new ideas -- some of them quite malignant -- get pushed to the forefront, while the old and the seemingly broken get discarded.

Watch for a great cleaving between the poor and the rich, the urban and the rural, the East and the West. You'll see it caused by the collapse of oil prices, the killing off of light industry and resource extraction, and the coming deep crash in commodity prices.

Thursday, December 25, 2008

Christmas Queen

Sixty years ago, the Queen was smokin' hot, though not quite as drop-dead gorgeous as her hard-living sister Margaret. Today, she's just so damn cute I can't stop myself from posting her pic on my blog:

Have a happy Christmas. Be kind to one another and accept that each one of us is human, with our strengths and our flaws, and I hope Christmas 2009 finds you a little happier and a lot less stressed than this Christmas.

Monday, December 22, 2008

Sen. Mike Duffy

Congratulations to my friend Mike Duffy upon his appointment to the Senate. I had a great chat with him the other day, and I'm very proud that he's achieved this honour. Mike will follow in the steps of great journalists like Charles Bishop, Grattan O'Leary, Philip Gigantes, Richard Doyle, Betty Kennedy, Jim Munson, and Joan Fraser.

Friday, December 19, 2008

The best headline of 2008

While the subject of the story is rather sad, I would nominate this headline for best of year.

Thursday, December 18, 2008

Three for a buck?

CanWest stock hit 42 cents today.
Ooops, 34 cents.
Trade volume is suspiciously high, too. Someone is liquidating a big position for what they can get for it. Scary.
Six months ago, I suggested media convergence may be yesterday's news because the big convergence plays were tanking in the markets. Then, CanWest was at about $3.75, having lost more than half its value in the previous six months. Now Canwest is at about 1/20th of its summer 2007 price and about 1/40th of its recent peak. Quebecor does slightly better because of its investment in cable (though the company's newspaper interests are not integrated well into any kind of multi-use platform. CTVGlobemeia is hard to guage, since it has unusual factors such as the failed Teachers takeover of BCE and the deep pockets of the Thomson family (made a bit shallower by the tanking of Thomson Reuters).
The stock market isn't always an accurate guage of performance, but when shares in companies that adopted a model of leveraged buyouts/media convergence get stomped as heavily as CanWest, it's time to look for a new model.

So here it is, again:

Don't put anything on newsprint that readers can get on the Internet.

Don't post anything on the Internet that people can only get in your publication.

Wednesday, December 17, 2008

CanWest: practically giving it away.

You would now need two shares of CanWest stock, plus six pennies and the GST, to buy a copy of the Ottawa Citizen.
New low: 47 cents.

In other media news, Fred Kuntz is leaving the Star, making the newsroom a little merrier this Christmas. Kuntz, much-loathed company/Honderich hatchetman, chose the loser road of ditching analysis for short, soft stories. His departure comes just a few weeks after publisher Jagoda Pike walked the plank and was replaced by newsman John Cruikshank.

Tuesday, December 16, 2008

Not-So-Merry-Christmas for Haters

I suspect a fairly large number of right-wing bloggers are breaking out the Kaopectate and tapered plugs.
BTW, my legal sources, who are really quite good, tell me the simplified procedure system may soon have its limit raised from $50K to $100K.

Today in Bullshit

Sun Media cutting 600 jobs (CBC)
Quebecor-owned Sun Media said Tuesday it is cutting 600 jobs in Ontario, Quebec and Western Canada.

The company said the cuts, which are mainly expected to be made by the end of this year, work out to about 10 per cent of the workforce, excluding mailroom staff.

Sun Media blamed the cuts on the effect the soft economy is having on its print media revenue, coupled with a shift toward more free content on the internet.

"The speed at which the current economic environment is deteriorating forces us to make difficult decisions at this time of the year," said Pierre Karl Peladeau, president and CEO of Quebecor.

"This decision in no way changes our commitment to our publications, our readers and our advertisers," he said in a release.

The company said the cuts are expected to result in restructuring costs of approximately $14 million.

Sun Media has 43 paid-circulation and free dailies in Canada's major urban markets, plus more than 200 community newspapers, shopping guides and other publications.

Yea, PK, that's the way to handle increased competition.

Monday, December 15, 2008

Today's little story is tomorrow's big story

Robert Fowler knows just about every Canadian military and foreign policy secret of the past quarter century. Now he's being held by separatist rebels in Niger, along with an aide and a driver. Fowler was there working for the UN to prevent arms shipments to rebels and bandit groups. Niger, a chunk of Sahara Desert with about 14 million people, is the poorest country in the world.
Fowler is:

ex-DM at National Defence.
ex-member of CSIS's oversight board.
former advisor on military and foreign affairs to Pierre Trudeau and Brian Mulroney.
former Canadian ambassador to the UN and Italy.
well-connected member of the Ottawa mandarinate. His sister is married to former Governor-General Romeo LeBlanc.
Potentially, this is the biggest breach of Canadian security and intelligence since the end of the Second World War.

Sunday, December 14, 2008

Recession watch

Welcome to Terrace Bay, Ontario, on the beautiful shore of Lake Superior. First-class fishing, hunting and boating. A very nice 18-hole golf course. Winter sports galore. Friendly people in a cosy small-town.
After six years of an economic slump, air service to the outside world is gone. VIA took off the last train years ago. Greyhound still runs through, but these are the transcontinental buses, and after a few days some of the passengers can be a bit high-smelling and a little, um, testy.
When I was a kid, any sentient being could get a well-paying job in Terrace Bay. I schlepped beer in a basement bar there in 1977 and made as much as a newly-minted school teacher. The lumber and pulp mill paid even more. And the railway, centred eight miles away in Schreiber, paid more than the mill.
The railway has been cutting for years. The pulp and lumber industry is hurt by the McGuinty government's high Hydro rates (even though Terrace Bay has its own large Hydro generating operation built for the mill that actually covers the mill's consumption and exports power to the grid) and by the feds' inability to get a real softwood deal with the Americans (try this, guys: access to Alberta energy for fair Canadian access to the US market. Wasn't that what the FTA was supposed to be about?).
I can say with no sarcasm that, once you get over the climate, the North Shore of Lake Superior is the most beautiful part of Ontario. It's even more gorgeous than the Eastern Townships of Quebec.
Want to live there?
Sell your car and buy a house in Terrace Bay.
After all, you may well be looking at the future of us all, and people there have already learned how to live with recession.

Saturday, December 13, 2008

Ready to take on the world

A pic of Canadian auto workers from today's Toronto Star:

Now, I wonder if the aged auto plant work force, decimated and demographically warped by seniority-based layoffs, might be part of the problem?

Monday, December 08, 2008

Over-leveraging takes down the Chicago Tribune

I'll say it and write it until somebody listens: it's not the Internet that's killing newspapers, it's leveraged buy-outs.
Newspapers can adjust to the Internet, just as they did to radio and TV. But they can't adapt if they are so saddled with debt that they have to cut the quality of their journalism.

Sunday, December 07, 2008

Executive Compensation vs. Reality

Lenny Asper pulled down $900,000 in salary and bonuses while his company's stock lost more than 90% of its value.
I kinda shudder at what he would have made if the company had become completely insolvent.

Friday, December 05, 2008

CTVGlobemedia fire sale

They're ditching a chunk of their ownership in Maple Leaf Sports, giving Teachers majority control of the hapless Maple Leafs.
My grandma's sister was one of the people who put together the Teachers pension system after years of the superannuation system being plundered by the provincial government, but is anyone else as creeped out as I am that this fund seems to own just about everything?

Canwest Dust-watch

Gotta quit joking when I make posts. The other day, I snidely noted the stock was sinking towards a half a buck.

Today's reality:

52 cents, a new New all-time low.
Do I hear half a dollar?


Meanwhile, the Asper family has fallen from the list of Canada's 100 Wealthiest Canadians. Inheritance taxes should have caused that long ago. Every Western country has them, but we don't.

Can they take CanWest private?
No. They don't have the money. No one would lend against this stock and the company's already way over-mortgaged at a time when no one is lending for anything that's not a sure thing.
A friend noted something the other day: the Ottawa Citizen alone is probably worth more than the stock value of this company.
Thus is the lesson learned from this most recent leveraging bubble.
BTW, I want Niall Ferguson's new book on money and finance. If I had money to waste, I'd send copies to Lennie, Gail and Dave.

The weak shall inherit the jails

Online writers now make up the majority of imprisoned journalists.
Not because bloggers are so brave, I'd argue. It's because they don't have the clout of a major media outlet to back them. And in places like China, where there's no free media, it's because bloggers -- like the news sheet printers of the 17th century -- can lurk in the shadows and speak truth to power.

Maenwhile, in the real world

Ontario lost more than 60,000 jobs last month.
I suppose the Clampetts over at Small Dead Animals, the hillbillies born on a sea of American-owned oil, will think that's funny.
By the way, if Alberta is America's largest foreign oil supplier, why doesn't Calgary look like Dubai?

How others see us

The New York Times believes Stephen Harper's defanging of Parliament is worth a story.

Thursday, December 04, 2008

Amatuer hour


I despise what he did today, but Harper sure has taken the measure of Stephane Dion.


Technically, it's legal.
A sharp reporter would call up Joe Clark (1979) and Paul Martin (2006) and ask them if it's morally right. They might have interesting explanations for their decisions to face the House.
But what the hell does morality have to do with power in this country?
Welcome to the age of Karl Rove. It's not a great time for those of us who really, truly believe that Parliamentary democracy is the best form of government. It is a great day for people who believe in electing a dictator every few years. That is, until someone finds a reason to get rid of elections. They are awfully expensive, I suppose.

Canwest Wake-Watch

New all-time low today.
Do I hear half a dollar?

Meanwhile, the Asper family has fallen from the list of Canada's 100 Wealthiest Canadians. Inheritance taxes should have caused that long ago. Every Western country has them, but we don't.

Wednesday, December 03, 2008

The Coalition

Do I like the idea of Stephane Dion as PM?
But I believe in Parliamentary democracy.
We go to the polls and we elect members of the House of Commons.
The party or collection of parties that can hold the confidence of the House of Commons gets to form the government.
Stephen Harper formed a government and met the House. Very quickly, he lost the confidence of the House of Commons. In effect, he tried to form a government but is unable to do so. It can be argued this has happened through his own miscalculation, but it doesn't matter. Our system doesn't differentiate. It's about the ability to pass legislation in Parliament and the Harper government cannot do this.
Canadians do not vote for a Prime Minister, nor do they vote for a political party. They vote for members of the House of Commons.
More people voted for the Liberals, the NDP and the Bloc than voted Conservative, but the Conservatives got first chance to try to form a government.
Two parties have formed a coalition and apparently have the confidence of the House.
It is the duty of the Governor General (like the Speaker in a tie) to do what she can to preserve the life of the Parliament if it is possible, and at the present time it is certainly possible.
Therefore, she is obliged to ask Stephane Dion form a government. She should not allow Harper to dodge the obvious will of the House.
These are not technicalities, nor is it arcane. It's the Constitution, the law of the land.
We have had numerous chances to bring in proportional representation. We have had chances to change the role of the Governor General.
Maybe people are not happy with the idea of this coalition, but it's an absolutely legal and legitimate act in Parliamentary democracy.

Now, from a strictly personal point of view, how many neo-cons screamed "democracy" when George Bush took office with fewer votes than Al Gore? Bush won in 2000 in the Electoral College, but Gore won the popular vote. I suppose at Small Dead Animals everyone was thrilled with the result.
Democracy and the Constitution are not something you can embrace or put away, as needed. You have to put up with situations that, while unpalatable, are legal and proper under the law of the land.

Sunday, November 30, 2008

Today's lesson

One of my students sent me a column to look over. The writer is a very bright young guy who spent some time on Hillary Clinton's campaign last year. He put most of the blame on the opposition for the political and constitutional crisis brewing in Ottawa. I wrote him a long note in reply, and, since I like to recycle everything I write, I've decided to blog it:

This thing isn't over yet. Looks like the opposition parties are close to a coalition and they're not going to stop.

Here are a few things to consider:

Why did Harper cut party financing without restoring the ability of parties to take large donations from corporations (affecting the Libs) and unions (Bloc and NDP)? Harper knew the Libs borrowed the money from the banks to pay for the last election campaign on the basis that the subsidy money was coming. The change would not only ruin their fundraising, it would destroy their credit.

Why did he take away the public sector right to strike for the next three years just a week after the largest union had made a 4-year deal?

I see this as deliberate provocation of a snap election that the Tories would likely win. Harper believed the Liberals couldn't go into a coalition with Dion as leader, so the only option would be an election. Turns out Chretien and Broadbent have worked something out. As for the Bloc, it's done the biggest climb-down. Supposedly, all it wants is money for the Quebec forestry and manufacturing sector, and no cabinet positions.

There is a story in the Toronto Star today saying Harper, Layton and Duceppe wrote to the GG in the fall of 2004 asking her to consider the same type of coalition when the Martin government was teetering. As well, consider the situation in Ontario in 1985, when the Tories won more seats, met the House and were quickly defeated, with the Liberals and NDP pledging to co-operate. Now, there are important differences between Ontario 1985 and Ottawa 2008. Frank Miller, the Tory leader, did not ask for an election. His party had been freefalling at the end of the campaign and he would have lost if they had gone back to the people. Miller went to the Lieut. Gov. and suggested he invite David Peterson to form a government.

In King-Byng (1925), the GG would not give King a dissolution because the government had not yet been defeated (on a censure motion regarding a corruption scandal, not a confidence motion) just a few months after an election. King spun it into a case of interference by the British-appointed GG, even though it was a completely rational decision by Byng that any GG would likely make now. Don't fall into the same trap on King-Byng that 99% of commentators do.

I expect Harper to do the same thing: run against a power-hungry opposition and the the GG (along with Harper's Culture War opponents -- Eastern Liberals, the press, academia and the rest). Having a black woman leftist CBC Governor-General to bash will come in very handy for Harper.



Friday, November 28, 2008

CanWest: Stick a Fork in It (Part 803)

The Dominion Bond Rating Service (DBRS) has downgraded CanWest's credit from "speculative" to "highly speculative" and believes the company will be "in a negative cash flow" situation next year.
The DBRS says the problem is aggravated by a slowdown in advertising.

I'll add another factor: it's managed and staffed by some of the worst news managers in the business. Most of the managerial talent is long gone. There are a few very bright people left, but they're nowhere near the steering wheel.

Keep this in mind: CanWest still employs David Warren. 'Nough said.

Thursday, November 27, 2008

Roll me another one

Archaeologists have found the world's oldest pot stash, more than a pound and a half of weed left in an ancient Chinese tomb.

Today's moment of honesty

When I go to the National Hurricane Center web page, I'm disappointed when there aren't any.

I truly believe most dogs are better than most cats.

I would only watch a car race if I had a reasonably good chance of seeing a wreck.

I would buy a cell phone jammer if I had the chance and I would use it everywhere.

I used to feel superior when I went to the States, but i don't anymore.

I still fall for politicians'lies.

I have ruined some very good books by reading them in the bathtub.

I know in my heart that if I was about to be crushed by a meteorite, I'd repent my sins to God.

Wednesday, November 26, 2008

Bill Harper

A decent guy to work for with a hell of a great sense of humour. A lot of people will miss this guy.

Tuesday, November 25, 2008

Friday, November 21, 2008

Tuesday, November 18, 2008

CanWest Decomposition Watch

67 cents

How low can it go?
I can say with some expertise that it can't fall another 68 cents.

There was a huge number of Canwest shares traded today, about 1.1 million. That's more the ten times the average number.

Monday, November 17, 2008


The makers of newsprint attempt to break the law of supply and demand. There was a time when smart publishers had their own mills. Brian Mulroney's father worked in one owned by the Chicago Tribune. But then came leveraged buy-outs, and the new owners sold the plants. Many of them bought TV network affiliates or businesses that had no relation to newspapers. Smart move.
Meanwhile, there are four dormant pulp mills on the North Shore of Lake Superior: at Marathon, Terrace Bay, Red Rock and Thunder Bay. And one in Dryden.
Noe there's an industry that needs a bit of government-inspired head shaking.

Friday, November 14, 2008

Today in roadkill

Today's close: A record intra-day low of 66 cents, a record low close of 73 cents.
How low will it go? I have no idea. Like Nortel, it may go to zero. All this stopped making sense months ago. My gut tells me it's a good time to buy this stock and hope that shareholder equity isn't wiped out, but do it only if you have money to lose. If shareholders maintain some grip on this company's assets, they should be worth something in a few years and under new management. But if the compoany does go bankrupt, the shareholders will be screwed. It might be worthwhile to see if insiders are selling off, something they're within their legal right to do. The only thing that's stopped me from buying some of this stock is my concern about a conflict of interest, since there are quite a few people who follow this story by coming here.

Globe and Mail media reporter Grant Robertson wrote a large feature on CanWest for today's Report on Business that talked about everything but the quality issue, which is actually the company's biggest problem. Here's the piece, which addresses CanWest's big debt problems and mentions the buy-up of stock by Fairfax.
CanWest's inability to create good content does almost surface in the discussion of the Australian TV network owned by CanWest, which is third in the ratings in a rather small market.
Mediocrity is killing CanWest. You simply cannot gut newspapers and expect people to buy them. You can't show NCIS, a tedious fiction drama, on the History Channel three times every day and expect people to watch. CanWest under-rates the public, failing to realize that the Ottawa Citizen is not a good enough paper to sell in a national capital and the National Post is not good enough to compete with The Globe and Mail. There are no newspaper monopolies anymore, even in single newspaper towns. CanWest needs to learn that lesson.
And Global TV can barely compete with CTV. They're both so bad, but they each buy enough American hits to survive. That will change as more specialty cable stations pick up material from HBO and Comedy Central, which are leaving the US networks in the dust.
I doubt the future holds any happy surprises for CanWest.

CanWest lost $1.02 billion in the last quarter, more than $5 per share. Much of this was a paper loss, a one-time charge to reflect the deterioration of the value of its assets. The actual, cash loss was about $10 million.
CBC's take on it is here.
Interesting that they would take such a huge charge at one time. The charge -- about 15% of the value of the company -- combined with the effects of a very unimaginative and rather lame cost-cutting drive that is certain to reduce revenue and value in the company, might push the stock down ever further.
CanWest is a heavily-leveraged company that could suffer severely in a recession. The next two quarterly reports, covering the fall of '08, (when the markets and public clued in to the '07 subprime collapse), and the recession Christmas that's coming, will be very important.


Arthur Kent is adding to his Alberta lawsuit against CanWest and columnist Don Martin by filing a new action in New York.

Meanwhile, TorStar hit a 52-week and a new modern low, dropping 9% today to close just over $9. The stock traded over $30 two years ago.

Wednesday, November 12, 2008

CanWest decomposition watch

CanWest will cut 5% of its work force, mostly out of its print division.

CP re-writes the press release, neglecting to mention the cuts to newspapers:

UPDATE (Thursday morning): Bay Street's reaction to the cuts? The stock hit another all-time low this morning, 82 cents at 11 a.m. Then 75 cents at 3 p.m. before taking a dead-cat bounce to 80 cents.
I guess the Street is no more impressed by gutted papers and crappy TV than I am.

What does it mean? CanWest is reducing the physical size of some papers and is going to concentrate even more on centralizing its news and bumpf writing and will send out even more canned material to fill its papers. It makes the situation at the Montreal Gazette very interesting. There, a strike looms over CanWest’s plan to move pagination (page layout) of the paper from Montreal to a non-unionized facility in the lovely city of Hamilton.

There are also unspecified cuts coming at the National Post. The Aspers, as we already knew, are pulling the paper out of Manitoba and Saskatchewan. They also plan to end cheap subscription deals like mine. I get the Post for $6 a month.

Meanwhile, the stock hit another historic low today: 84 cents -- about 10% of what is was in the summer of 2007. This comes in the wake of Fairfax Holding’s recent announcement that it was increasing its stake in CanWest. Fairfax has been buying all the way down and will hold about a quarter of the company’s stock, making Fairfax guru Prem Watsa a sort of fourth Asper child. The company is now running more than two weeks late with its reporting of the last quarter’s financials, and it’s pretty clear Bay Street – those few brokers and analysts, other than Fairfax, that actually care anymore – don’t think they’ll be pretty.

Sorry that my own work has lately kept me too busy to stay on top of recent developments. I'll look over this week's financials as carefully as I can.

Saturday, November 08, 2008

California Dreamin'

Anyone actually notice California voters stripped rights from gays (Prop. 8) and lesbians and gave them to farm animals (Prop. 2)?

Thursday, November 06, 2008

Stoopid Gurrrrl

This has happened to me, too, and I don't even smoke.

Livin' the stereotype

The meltdown of Bear Stearns Cos. in March marked the collapse of the modern securities industry, and the careers of some on Wall Street.

The financial crisis also claimed the life of a veteran Bear Stearns manager.

Barry Fox, a research supervisor who worked for nine years at the brokerage firm, took a drug overdose and then jumped from his 29th-floor apartment the evening in May after he learned he wouldn't be hired by J.P. Morgan Chase & Co., which was about to buy his firm. A coroner recently confirmed in an autopsy report that the death was a suicide.

Wednesday, November 05, 2008

I'm alright now, Jack

Black and Hispanic voters in California provided the extra ooomph for Proposition 8, a ban on gay marriage, to pass by a fairly slim margin. Without the big pro-Obama turnout among Black and Hispanic voters, who voted heavily against gay marriage rights, the proposition would have lost.
Like Jon Stewart, I was amazed the proposition was put forward by Mormons, a group of people who have had a rather interesting take on one man-one woman marriage.

How Others See Canada's Newspaper Biz

ANALYSIS-Canada's newspaper industry shows signs of strain
Wed, Nov 5 2008, 18:46 GMT

By Wojtek Dabrowski

TORONTO, Nov 5 (Reuters) - Even though U.S.-style waves of layoffs and major restructurings have not washed over Canada's newspaper industry, signs of a significant downturn are starting to show.

Analysts say that as corporations pull back spending on television and newspaper advertising, already flat revenues are likely to begin declining, especially at newspapers in the competitive market of Toronto, Canada' biggest city.

Companies such as Torstar Corp and Canwest Global Communications are among those that stand to be hurt the most because of their broad exposure to the flagging newspaper market.

In the United States, publishers from Gannett Co Inc and McClatchy Co to the New York Times Co. and Washington Post Co have cut thousands of jobs as they struggle with a sharp drop in advertising revenue as readers drop print editions and get their news online.

Bob Bek, an analyst at CIBC World Markets, said that although the economic pressures facing Canadian newspaper companies aren't as intense as those in the United States, there are still significant problems -- ranging from falling ad revenues to rising newsprint costs and pension expenses.

"By no means is it a positive outlook," Bek said.

Canadian newspapers have also lagged their counterparts elsewhere in the world in finding new ways to charging for content -- such as fees for premium online content -- said Alan Middleton, a professor of marketing at the Schulich School of Business at Toronto's York University.

"If they haven't commercialized the content elsewhere to make it a necessity, their bottom lines are going to be hit very hard," Middleton said, citing falling retail, automotive and government ad spending.

Torstar, which publishes the Toronto Star, the biggest newspaper in Canada, said last week its results should see benefits from unspecified "restructuring efforts already undertaken." It said in the first nine months of the year, its stable of urban and regional newspapers around Toronto cut 270 jobs.

Despite the cost-cutting efforts, Torstar Chief Executive Robert Prichard said the economic outlook remains gloomy as the Star's ad revenue fell 8.5 percent in the quarter and newsprint prices jumped 18 percent.

Meanwhile, Canwest -- Canada's biggest publisher of daily newspapers -- has significantly cut the print presence of its flagship National Post daily in the Western Canadian provinces of Manitoba and Saskatchewan. A company spokesman cited printing and distribution costs as reasons behind the move.

"It's been kept alive artificially," Bek said of the Post, adding that Canwest obviously still sees a franchise value in the daily. The company reports results on Nov. 14.

Asked whether he thinks some newspapers could be forced to close up shop as a result of the downturn, Bek said: "Other than the Post ... I don't think anything else is at risk."

Quebecor Inc is another major newspaper owner, and publisher of the Sun Media chain of tabloid dailies. The company could provide details on its newspaper operations when it reports results on Nov. 7.

The least visibility is provided by the privately held Globe and Mail, which is owned by CTVglobemedia Inc and does not publish financial results.

A turnaround in the advertising market and a cooling of the increases in newsprint prices would likely be necessary before the newspaper industry sees any sort of stability. But signs of a bounce-back are still a long way away, Bek said.

"It's too early to look for a recovery here."

($1=$1.16 Canadian)

(Reporting by Wojtek Dabrowski; editing by Richard Valdmanis) Keywords: CANADA NEWSPAPERS/


Always remember the Fifth of November

What's to say? Americans will have a smarter, wiser president in about seventy days. It will also have a government teetering on bankruptcy and caught in not one but two land wars in Asia.
It seems American democracy, for all its flaws, pushes forward great leaders in tough times: Lincoln in 1860, Roosevelt in 1932, and, I suspect, Barack Obama in 2008. I have rarely seen such a skilled politician and a man who is so comfortable in his skin.
But these may be quite ugly times, too. Nothing changed economically last night. Expectations are high: for medicare, poverty relief, education and so many other services that Americans may not be willing to pay for.
America needs to rebuild its job base. It needs to live up to its trade agreements and its treaties, and stop acting with arrogance. It could start by dealing fairly with Canada's softwood lumber issue.
Obama has every right to go after American companies that have exported jobs while expecting to freely sell their offshore-made goods to Americans. Tariffs are a bad idea, but taxes and fair-trade laws could be used to hobble this practice.
This is a good time to try to re-think everything from the way we make cars to the tax-free status of churches. The very first thing America needs to do is become self-sufficient -- or North America sufficient -- in energy to strip the gears of the OPEC countries, so many of whom have done so much harm to American interests.
I expect Obmama will gently ease the US out of Iraq but will stay in Afghanistan until bin Laden is dead. That is the real exit time. Once he's dead, a decent power-sharing situation can be developed in Afghanistan under the threat of complete destruction if the Afghans allow terrorist camps.
The Iranians will likely try to push Obama, but China and Russia, if they have any sense, will not want the Iranians to have the bomb. The last thing Russia needs is a nuclear-armed Iran shepherding the Muslim former Soviet republics.
In the end, Obama will succeed if he can remake America from a speculation economy to a productive one in which every American feels a sense of ownership and belonging. But it won't be pretty. The Fox News types are going to pull out everything they can. But I suspect Obama won't be nailing any interns in the Oval Office, so things may work out OK.

Saturday, November 01, 2008

Friday, October 31, 2008

More bad news for Canwest

Moody's is taking a cold, hard look at the company's debt. The bond rater believes Canwest needs to sell assets to maintain the cash flow needed to cover debt.
The stock dropped 10% to 90 cents after a very slight dead cat bounce this week.

The Toronto Star gets around to following this story.

This kind of news doesn't help. The '81 recession was brutal but somewhat artificial, caused by central banks cranking up interest rates to fight inflation. This time around, no one's in control. The pattern of volatility and financial sector collapse is more like 1929-1931, but with some measure of more competent government reaction.

Another sad moment for journalism

Studs Turkel just joined God's City Desk.

When you don't know what you're talking about

... don't say anything.
A guy with a Gr. 10 education and a faux Oxbridge accent spouts off about the value of a university education, something with which is he completely unfamiliar.

Warren has never taught university students. He has no idea of the research that's going on. Yes, we get uneducated, unready students from high schools, but the smart ones with real desire are clued in by the end of first year. The quality of humanities scholarship is much better than it was fifty years ago. The research work is of far higher quality and theses are superior to those of two generations ago. Most Canadian history books written before about 1965 are simply jingoistic story books. The best, including all of Parkman's works on Canadian history and most of the works by the handful of Tory English writers that are Warren's intellectual well, are elegantly-written but poorly-researched political tracts.

Yes, the quality of writing has suffered over the years. It's something the academy shares with journalism.

As for the value of being self-taught, Warren really lets his ignorance show. Graduate students are nothing if not self-taught. In fact, when you're doing PhD research, you're supposed to be educating yourself in fields in which no one has worked before and you present the information you find to the world. That's the very idea of the thesis.

The Ottawa Citizen could be such a great newspaper. It has the best investigative reporter on Parliament Hill. It has a stable of talented, dispirited writers. And it has David Warren.

Thursday, October 30, 2008


People in Calgary now pay more for gas than people in Ottawa... a lot more.

NatPost pull-back, price increase announced

Friends tell me notices have appeared on National Post boxes in downtown Toronto saying they will no longer be serviced after Saturday. Similar (or the same) notices popped up on boxes at service centres on Highway 401 east of Toronto earlier this week. I've been in Montreal, where National Post boxes don't seem to exist, so I haven't been able to look for these notices. Now that I'm back in Ottawa, I'll check to see if the same signs are on the boxes here.
Meanwhile, any of you who see something when you are out and about can e-mail me at or post a comment.
Canwest is posting results by the end of the week. Maybe things will be clarified then.
All I've heard is that the Saturday magazine section of the Post has been killed.

Meanwhile, we lost Masthead magazine and its web site this week. That's very sad. Not only was it a great source of news about magazines, but it also had an online job board and hosted a professional development conference in Toronto every spring.


The Post has pulled out of the Prairies and raised the price of its papers to a level that will cause sales to plummet: $1.50 for the weekday paper, $2.50 for Saturday.

Wednesday, October 29, 2008

On Her Majesty's Service

The Queen, a big Bond fan, didn't show up for the opening of Quantum of Solace. Maybe she was one of the handful of people who didn't like Casino Royale, which, in my opinion, is the best Bond ever.

Here's my list, in order, of the best to worst Bonds:

Casino Royale
On Her Majesty's Secret Service
Dr. No
Live and Let Die
Diamonds Are Forever
Tomorrow Never Dies
From Russia with Love
The World Is Not Enough
Die Another Day
(Never Say Never Again)*
The Living Daylights
License to Kill
You Only Live Twice
For Your Eyes Only
The Spy Who Loved Me
The Man With the Golden Gun
View to a Kill

*Not officially part of the Bond canon. Illegitimate spawn of a lawsuit over rights to "Thunderball".


Friends tell me notices have appeared on National Post boxes in downtown Toronto saying they will no longer be serviced after Saturday. Similar (or the same) notices popped up on boxes at service centres on Highway 401 east of Toronto earlier this week. I've been in Montreal, where National Post boxes don't seem to exist, so I haven't been able to look for these notices. Now that I'm back in Ottawa, I'll check to see if the same signs are on the boxes here.
Meanwhile, any of you who see something when you are out and about can e-mail me at or post a comment.
Canwest is posting results by the end of the week. Maybe things will be clarified then.
All I've heard is that the Saturday magazine section of the Post has been killed.

Meanwhile, we lost Masthead magazine and its web site this week. That's very sad. Not only was it a great source of news about magazines, but it also had an online job board and hosted a professional development conference in Toronto every spring.


The Post has pulled out of the Prairies and raised the price of its papers to a level that will cause sales to plummet: $1.50 for the weekday paper, $2.50 for Saturday.

(ht Marsden in the comments)

Tuesday, October 28, 2008

Revised: The Angel of Death Moves Through The Newsrooms

The Christian Science Monitor, one of the best newspapers in the world, died today. (HT to anonymous commenter)

But first it was Frank Magazine:

Attention subscriber!

To our regret, we have decided to stop publishing Frank Magazine. Effective immediately, both the online and the bimonthly paper edition have been terminated.

Despite the efforts of our wonderful staff and contributors, our loyal investors and our dedicated subscribers, we could not achieve profitability.

My thanks to everyone involved with Frank over the past 19 years.
It has been a memorable experience, but it is now time to move on.

To subscribers, your Visa accounts have been closed.
Please direct all inquiries to 613-567-2552.

Er, that's it,

Michael Bate

I don't know where journalism is headed these days. Nowhere good, by the looks of things.

Monday, October 27, 2008

Slow death?

A friend tells me he gassed up Sunday at the Highway 401 service centre near Trenton, and notice a cardboard sign stuck in the National Post box. "As of November 1st, this box will no longer be serviced. If you want the paper, call 1-800-etc."
Places like that normally move a lot of papers.

Sunday, October 26, 2008

From the "Geez, I coulda swore" file...

Ben Muldoon, son of unindicted bribe taker Brian, is getting married next week. I'm sure the happy couple is looking forward to the wedding present from Uncle Karl-Heinz.
As for the rest of us: don't give any complex reading material.

Tag day for David, Gail and Lenny?

This Georgia Straight article describes how the three Asper kids went from having more than $200 million worth of Canwest stock to less than $25 million in a year. The shares of each Asper were worth over $400 million in 2000.

Saturday, October 25, 2008

The Paper Boom

I just found a link to a piece I wrote nine years ago about CAW economist Jim Stanford's book "Paper Boom". I wonder if he's updating it?

I'm getting awfully sick of the media's blackout of media financial news

Like this story.
What's it not telling you?
Teachers' owns 25% of CTVglobemedia, in partnership with Thomson and Torstar. Control of BCE will give Teachers 15% more of CTVglobemedia, making the Teachers' pension the biggest shareholder of one of Canada's largest and most powerful media companies. With Torstar's 20% stake of CTVglobemedia, Teachers and Torstar, if they get along, control the two most important newspapers in Canada, The Globe and Mail and the Toronto Star. Teachers alone will control the main telecom network, the most important satellite broadcast distribution system, a huge cell network, Sympatico's crappy but popular Internet provider service, the physical landline phone system, and will have enough share of the largest private TV network and the most powerful newspaper in the country to effectively call the shots.
I've got to give credit to those guys at Bell. They unloaded their stake in Nortel just before the company went south and used the money to buy a big chunk of the broadcast and print communications business when it was still fairly flush. Now they're unloading the mess onto Teachers, which has already burned through the Sun chain and Osprey, leaving a trail of shell newspapers and ill-served communities.
Meanwhile, the actual teachers are being boned. They just had their pensions de-indexed and their contribution rate is now 11%. Compare that to mine. University profs at Concordia pay 6%, the university pays 4%. But our pension fund isn't out there getting fleeced by every publishing company that comes by.
You won't read that in today's Star. And you'll be hard-pressed to find that Torstar stock has lost half its value this year.
So what's Teachers' private stake in CTVglobemedia worth? You can't find out. It's private. My guess is the equity value is down by at least as much as Torstar's 50%, but not as bad as Canwest's 85%. I'd wager it's closer to Canwest's number.
As for regular phone land-lines? Anyone know Morse Code?
Ah, well. There's always supply teaching, covering for the full-time staff off getting hip replacements.

Meanwhile, here's today's prize for stupidity
Kelly Toughill argues that newspapers should be off the stock exchanges, then uses layoffs at the CBC to try to make some kind of point about job cuts in journalism. Obviously, she believes the CBC's buncomb that the croaking of two of their foreign correspondents was a money, not a power, issue. I hadn't noticed when the CBC became influenced by market forces. And I haven't seen its stock listed, either.
If Prof. Toughill wants to make the point that Canadian newsrooms have suffered from the collapse of share prices, she'll have to do better. The only newspaper in Canada where there have been big cuts this year is the Toronto Star, but Toughill might be too much of the diplomat to mention that. Not that I think newsrooms aren't going to feel this, but why go off on a tangent involving a CBC pissing match?

Thursday, October 23, 2008

Since the whole world seems to be going down the crapper...

here's today's laff, from Richard Cleroux:

While walking down the street one day a "Member of Parliament" is tragically hit by a truck and dies. His soul arrives in heaven and is met by St. Peter at the entrance.

'Welcome to heaven,' says St. Peter. 'Before you settle in, it seems there is a problem. We seldom see such a high government official around these parts,so we're not quite sure what to do with you.'

'No problem, just let me in,' says the MP.

'Well, I'd like to, but I have orders from higherup. What we'll do is have you spend one day inhell and one in heaven. Then you can choose where to spend eternity.'

'Really, I've made up my mind. I want to be in heaven,' says the MP.

'I'm sorry, but we have our rules.'

And with that, St. Peter escorts him to the elevator and he goes down, down, down to hell. The doors open and he finds himself in the middle of a green golf course. In the distance is a clubhouse and standing in front of it are all his old friends and other politicians who had worked with him.

Everyone is very happy and in evening dress.They run to greet him, shake his hand, and reminisce about the good times they had while getting rich at the expense of the public.

They play a friendly game of golf and then dineon lobster, caviar and champagne.

Also present is the devil, who really is a very friendly & nice guy who has a good time dancing and telling jokes. They are having such a goodtime that before he realizes it, it is time to go.

Everyone gives him a hearty farewell and waves goodbye while the elevator rises...

The elevator goes up, up, up and the door reopens in heaven where St. Peter is waiting for him.

'Now it's time to visit heaven.'

So, 24 hours pass with the MP joining a group of contented souls moving from cloud to cloud, playing the harp and singing. They have a good time and, before he realizes it, the 24 hours have gone by and St. Peter returns.

'Well, then, you've spent a day in hell and another in heaven. Now its time to choose your eternity.'

The MP reflects for a minute and then answers: 'Well, I would never have thought that I would say this but, I mean heaven has been delightful, however I think I would be better off in hell.'

So St. Peter escorts him to the elevator and hegoes down, down, down to hell.

Now when the doors of the elevator open he finds himself in the middle of a barren, waste land covered with garbage.

He notices all his friends, now dressed in rags, picking up garbage and putting it in black bags as more trash falls from above.

The devil comes over to him and puts an arm around his shoulder. 'I don't understand,' stammers the MP. 'I was here yesterday and there was a golf course and clubhouse, and we ate lobster and caviar, drank champagne, and danced and had a great time. Now there's just a wasteland full of garbage and my friends look miserable. Whatever happened?' he asked.

The devil smiles at him and says, 'Yesterday we were campaigning.. ..
Today you voted.'

Wednesday, October 22, 2008

Canwest: $1.10 ... oops, 99 cents, um, 95 cents

Update: It fell through a buck today. The Aspers must do something if it stays below a buck, either pull a Nortel and make a 10 to 1 swap or do a company share buyback. The latter is very unlikely, since they have no money. But if something doesn't happen, the stock could eventually be forced off the main exchange and on to the over-the-counter market.
The company is supposed to post results at the end of this month, so that may be the time of some sort of action.
Reuters moved a story on Canwest's share decline today.

This is sad, and I hope there's no impact on the people who work for Canwest. And there shouldn't be. We're talking about, over-all, the best newspaper properties in Canada and a pretty good regional TV network. This is a question of leveraging, the belief the company carries far too much debt. There also seems to be little market enthusiasm for David and Leonard Asper.
Yesterday, a Canwest manager who I respect quite a lot reminded me about the many good people who work for Canwest, decent journalists who just want to raise families, pay mortgages and be proud of their work. I hope every one of them comes through this OK.
We are on the edge of history, probably just a few weeks or months away from more economic events that none of us thought we would ever see. We're already in the middle of the worst banking crisis since 1933 and layoffs have started in the economy. John Budden, a pretty shrewd investment specialist in Ottawa, noted on CFRA yesterday that ship owners have cut their rates by 80% on the big ships that use the Cape Horn route from Asia to Europe and America. That means nothing is moving.
The Financial Post carried a story today about the collapse of palladium, down to one-sixth of what it was worth a year ago. It happened because the speculators have been toasted and the car industry, which uses the stuff, has simply seized up.
Getting back to Canwest. I think it's a steal at $1.10. I think anyone with a few thousand dollars they can afford to play with should buy some of it. The market says the company has almost no equity value. But the market has been wrong before.

Tuesday, October 21, 2008

Canwest: Maybe it's crazy, but...

UPDATE: Now probing a buck. At this rate, Canwest risks being taken off the TSE entirely and kicked to the curb, um, "Venture Exchange". Canwest is now down to $1.18, way below what it would take to get back on the TSE/S&P Index. Couple of reasons: the index funds have to sell it now, and the analyst downgrade that I blogged about yesterday:

A friend had a very strange scenario for this company today. Call it crazy. Call it as dumb as my election prediction (which I did warn everyone was based on a dream, and was nothing I would bet upon). Conrad Black gets pardoned by Bush in January, when Bush is on the way out. OK. So far, not way off the map of probability. And Black makes one of the great historic comebacks of all time by... Christ, I can't even type the rest. But think about it. It's truly Napoleonic. It's as though D'Erlon had got his men into formation and made it over the rise.

FROM MONDAYA major investment analyst has set her target price for Canwest shares at a buck. She also advises people slowly unload the stock, changing her call on Canwest from a "speculative buy".
Most interesting line in the story: Canwest's big bonds come due in 2012 -- three years. I was having a hell of a time finding that bit of information.
So three years until the Great Reckoning for the Aspers, but until then they have no credit to buy or expand anything. And I doubt the fundamentals of Canwest will be fundamentally different in three years, at least in a good way.
Now, my next big question, for anyone in the know: what are the chances of interest default on this junk-bond yield debt? Because that would change everything.

The turkey is now back to its all-time low, $1.28.

To add insult, etc... The Scud Stud is now suing them for a very nasty column in the Calgary Herald by Don Martin.

Monday, October 20, 2008

Today's weird fact

If the US government started running surpluses again and paying of its $10 trillion debt at a rate of $20,000 a year, the debt would be paid off at about the time the sun is expected to burn out, in about five billion years.

For the Tin Foil Hat crowd

I've seen these fuckers around my place, too.

Those big birds circling around? They're not Happy Fun Birds

A major investment analyst has set her target price for Canwest shares at a buck. She also advises people slowly unload the stock, changing her call on Canwest from a "speculative buy".
Most interesting line in the story: Canwest's big bonds come due in 2012 -- three years. I was having a hell of a time finding that bit of information.
So three years until the Great Reckoning for the Aspers, but until then they have no credit to buy or expand anything. And I doubt the fundamentals of Canwest will be fundamentally different in three years, at least in a good way.
Now, my next big question, for anyone in the know: what are the chances of interest default on this junk-bond yield debt? Because that would change everything.

The turkey is now back to its all-time low, $1.28.

To add insult, etc... The Scud Stud is now suing them for a very nasty column in the Calgary Herald by Don Martin.

Sunday, October 19, 2008


I didn't get back home last night from a fabulous party in Old Montreal in time to see this live. Thank God for the new Internet technology.

It finally dawned on my where Palin will end up if politics doesn't work out.

Sins of the media

The pursuit and investigation of a guy who simply asked questions to a political candidate who was knocking on doors in his neighbourhood is precisely the kind of reporting that undermines the credibility of the media. It also sends a dreadful message to people in a democracy: stick your head up and your life is no longer your own. Your professional qualifications, your job, even privacy about your debts become media fodder, to be publicly, used, manipulated and criticized by strangers.

Thursday, October 16, 2008

Today in Ottawa

Beseiged Liberal leader Stephane Dion gets clear of his car as the OPP bomb squad clears yet another "suspicious package" from the trunk.

When nothing makes sense

I've patted my self on the back many times for pegging Canwest as a dog company with nowhere to go but down. I first started following it about six months ago, when I did a little research on how Canadian media convergence plays were doing. At that time, it had lost about half its value on the year and was down to about 1/4 its 3-year high. So my answer was: "not very well."
Why did I care? I teach journalism and media analysis to kids who want to work in media. Academics and media executives have been pushing convergence as the future of media. If it was the future, I thought, companies like Canwest that are well along in the process should be doing well. They should be making money, and that should be reflected in the value of their equities.
In Canada, where four media companies -- Canwest, BellGlobemedia, Quebecor and TorStar, control almost all of the media -- the results should be easy to see. Convergence of the country's blue-chip print media properties in English Canada outside Toronto, along with a major television network, and with Internet properties like should make money, if convergence is a model that works.
But convergence doesn't seem to work. The papers are no better than they were. The TV network picks up some material from the papers, but they always could, through Canadian Press. is not a busy web portal. Instead, "convergence" simply turned out to be a model for cost-cutting, with none of the savings plowed back into journalism. The money has been used for more leveraged buy-outs. It's the same in every Canadian convergence play.
And this is the result: Canwest has already fallen through $1.30.
On my most sceptical day, I would never have believed it. Six months ago, if someone offered me this stock at $1.30, I would have sold everything I had to buy as much as I could. This stock may be undervalued, but now I wouldn't touch it. The market these days is about de-leveraging. It sees Canwest as over-leveraged. And it's predicting the holders of Canwest stock will get little or nothing when the wheels come off the company.
So much for convergence. In my wildest dreams, I hope the newspapers get sold to a deep-pocketed company that understands print media.

Wednesday, October 15, 2008

The 2008 "Word".

Other years have had words. Words like "synergy". And "convergence".
This year's?

Election Post-Mortem

* Ignore all pundits who say any major part is dead. The Liberals were written off as dead in 1984. The Conservatives – and conservatives – were supposedly dead in 1993. Remember all those pundits who talked in the 1990s about a coming Liberal century and shed crocodile tears at the supposed loss of democracy?

* You can win a majority in Canada even with the Bloc squatting on 50 seats. Ask Jean Chretien. Look at the 1993 Parliament.

* As I’ve said, God help anyone elected this year. They will wear this recession. If it lasts three years, expect the Liberals to roar back with a big majority.

* The only hope for the NDP is to ditch the unions and go New Labour/Populist. There is a big opening on the Prairies and in rural Canada as the Conservatives “go native” in Ottawa, something that’s already begun to happen.

* It’s time for the Greens to pack it in. This is a party that the voters have rejected in the four federal elections in which the Greens have been taken seriously by the media. Look, folks, you’re never going to elect anyone. Please detach from the public teat.


Steven Harper - he’s got three worry-free years, at least.

Bill Casey – proof a decent guy can stick to principles and come out a winner,

Danny Williams. – King of the Newfies, whatever that’s worth. Now, about $75 oil, Danny?

Michael Ignatief - everyone says he could have won this campaign.

Dalton McGuinty – the most powerful elected Liberal in the country.

Ralph Gooddale – the only important Liberal on the Prairies.

Canwest – did a pretty good job of covering the election.

Justin Trudeau – until the hype becomes unbearable and the scrutiny begins.


Stephane Dion – it was a good run, but his lack of English skills killed him a year ago. His leadership of the Liberals cost seats everywhere, including Quebec.

Jean Charest - could have been a great voice for Canada in this election campaigning against the Bloc and established himself as the Tory heir-apparent. Instead, was too cowardly and ends up being just another backwater pol.

Liberals everywhere – especially if Justin Trudeau is hyped as the next leader. Justin Trudeau is the darling of some of the media, but the Trudeau brand won’t sell anywhere except, maybe, in Toronto.

Rural Canada – the storm is breaking. The St. Thomas truck plant closure announcement on election day was fair warning. Watch crop prices tumble this fall as the demand for ethanol drops and the bumper corn harvest comes in. I doubt I’m the only one who noticed every field in eastern Canada and the US Midwest was planted in corn and soya beans this summer.

CTV – their lack of ethics is now public knowledge.

The Globe and Mail – when people are laughing at your senior Parliamentary correspondent, there’s a problem. As well, when you’re letting pollsters and shills dictate your coverage and even write it, you’ve gone too far.

Maclean’s – “Smarmy” might be great when folks are flying high, but I suspect the Age of Smug is fast drawing to a close.

The 905 – when those mortgages on the McMansions between Highway 7 and Major Mackenzie come up for renewal and your house is worth 30% less than you paid for it and is mortgaged for 90% of the purchase price, who are you going to ask for help? Your MP? Good luck!

Elizabeth May – hard not to come to the conclusion she’s not an egomaniac and a bit of a flake.

Bob Rae – a lot of people spent the last half of the campaign wondering what kind of evil attack ads the Tories would have developed against Liberal Leader Bob Rae as the markets tumbled. My favorite was the fake “Thank You” billboard from the Buffalo Chamber of Commerce that was erected in downtown Toronto when Rae was Premier. Plus all those nasty things Rae said about Liberal economics.

Bloggers. We’re really yesterday’s news. Even the biggest blogs in the country have nowhere near the readership of a major media web page, and it’s doubtful we’ve swayed a single vote.

The social fibre of Canada – when Parliament, the bar and the press have been de-legitimized by the people in power, there’s a problem. Now academia seems to have been tossed on the pile.

The Death of Canwest

This dog, worth $18 three years ago, has now fallen through $1.50.
I don't follow this collapse because I have anything against Canwest. I do it because I believe this has huge ramifications for Canadian journalism and the concept of "convergence", which was a $50 word for the old bogeyman of cross-ownership and monopoly.
This company is over-leveraged with high-interest debt. The only way it can stave off bankruptcy is by closing money-losers (the National Post) and dismantling the rest of the company. In normal times, this company would have been raided by a buy-out specialist like Conrad Black, who must be laughing right now.
So, again, this is how I see this going: the TV network is uncoupled from the newspapers. The Asper family may or may not end up with some ownership of the network. The newspapers get sold to... well, who?
Listen very, very carefully for talk of changes to Canada's foreign ownership laws.
Or we can ask these guys, who have been quietly adding to their stake in the company.

Tuesday, October 14, 2008

Now, Allanis,

this is ironic.

Out in the real world

there's no mention of the Canadian election on CNN's front page. Surely they realize the news value of it?

Why there are no runs on the banks...

"85% of Americans are broke".

A curmudgeonly investment guru tells CNBC he expects the recession to last 10 to 15 years.


Fill in the blanks

As my old grandpa always said, Tory times are ____________.

The City That Works

My nine-year-old, talking to his 29-year-old aunt over Thanksgiving dinner about where he'd like to live when he grew up, said Toronto's off the list because of all the murders.
I agree.
And jailing 14-year-olds for life would have no impact on that type of crime.

Tough Crowd

I thought Canadian book critics were harsh.

Monday, October 13, 2008

And I hate to rain on anyone's parade

... but it looks like we're not finished with hurricane season, either.

The reckoning

Kate MacMillan at Small Dead Animals has posted a link to a financial graph that she thinks is re-assuring. Stocks, she and her neo-con friends believe, are simply finding their value.

First, notice the dishonesty of the graph. It ends in 2007, just when the market started going south. That was a million years ago in market time. 2007 sure ain't 2008.

Yup. Tory times are good times. Neo-cons really know how to help.

See all those places where the market went from a really high peak to a really deep low? The biggest peaks to the deepest lows? They were in 1939 and 1981. Starting in 2006, we're on a slide down from the biggest peak ever. And every peak has, so far, been followed by a deep low which -- strange coincidence -- was an economic downturn or post-war economic restructuring. (Even after WWII, millions lost their job. These people were called "women"). Click the graphic for the big picture. Take a good, long look.
If you are re-assured, you don't know how to read a graph.

Happy days are here again, right Kate?

And if Harper's re-elected, you're on your own in this thing. Do you feel lucky? Do you make your income off one commodity? Live in a one-industry town? Have a mortgage? Worried about retiring? Planning on getting EI if you lose your job?

I lived in a small town during the early 1980s. For the life of me, I can't understand why anyone in small-town Ontario would vote Tory.

(BTW, if you think recessions are cripplers for the middle class, wait to you live through this.

It will certainly clear up your debt problems, but make sure you have lots of canned goods and no need for any purchases for about a year. I think we may be OK in Canada but the US dollar is way, way, way over-priced. The reason it's up is because people are converting equities into US cash and selling foreign currency to "go liquid" in US dollars and, to a lesser extent, yen, which is probably a big mistake. That won't last long.)

Sunday, October 12, 2008

Election prediction

Everyone and their dog is predicting a Tory minority. These predictions are a good thing for NDP and Green voters, who don't have to worry that their "wasted" votes will, in fact, become votes for Harper. On top of Layton's well-run and lovingly-reported campaign, I'd expect a few NDP pick-ups.
But from where? Their old T.C. Douglas fiefs on the Prairies are gone. The seats will have to come from Ontario and BC, but I do believe the upsurge in Dipper support may simply vault many candidates from third to second place.
The Election Prediction Project, which looks at the race seat-by-seat, still hasn't called it. (Hey, guys, I can call it on Wednesday, too.) They do have some interesting predictions: Justin Trudeau and Marc Garneau being elected in Montreal, Garth Turner being alive in Halton. My own guy tells me at least one of the Montreal Liberals won't make it, and I'd bet a few bucks with the right odds that neither Garneau nor Trudeau are coming to Ottawa. And I'd throw in Garth, too.
I also thing the Green vote is very, very soft, a sort of "none of the above" that's been given to pollsters. I also suspect many people who answered "Green" to pollsters are people who aren't going to vote at all.
Now, two weeks ago, I would have said the people who are going to vote -- older people -- would vote en masse against Stephane Dion. Now, I've changed my mind. The Liberals have launched an ad campaign telling people that, under Stephen Harper, they're on their own in the coming recession. This ad is a killer, mostly because it's true. It nails the fear of the financial crisis. Unlike the Tory ad with the worried yuppie mom, it talks about reality. We know we are in a recession, and we know Harper will not help anyone who's in financial trouble. People who are worried are looking for some sign of compassion and generosity, two things completely lacking in the Tories. That's why I think a few seats in rural Ontario and suburban Toronto (big shout-out to the over-mortgaged!) are going to unexpectedly flip to the Liberals, along with some BC seats and a full sweep of Atlantic Canada.
So I'm going to stick my neck out. Thursday night, I had a dream that the Liberals won this election by one seat. So I'll go all Mackenzie King on ya. That's my prediction: Libs by a seat.

UPDATE (Monday): Election Prediction Project has called it a Harper minority and basically saying this election will return most incumbents except Garth Turner, Keith Martin, Loyola Hearn and some nobodies who deserve to get turfed. They are basically seeing this election as a very light housekeeping.

Free Speech and Chuckles

While most sensible people are happy that the BC Human Rights Commission tossed the complaint by the Canadian Islamic Congress against Mark Steyn and Maclean's, how many people will agree with Canwest's legal position that free speech does not include satire?

Saturday, October 11, 2008

Another sad day

I'll send flowers to the folks at Small Dead Animals, who are really going to miss this guy.

A Shameful Moment in Journalism - UPDATE

The Dion interview fiasco is very interesting to me. I showed the full 7 1/2 minute clip to my first-year reporting class today. My point was that journalists who make promises must keep them. It's important to see the entire clip, with the intro from the ATV news anchor, to see how they try to justify breaking their promise not to use the Dion out-takes.ATV promised Dion they would not show them. They broke their word. I can't believe a Canadian network has acted so unethically and in a way that so deeply undermines their credibility. Perhaps if Dion had said something as outrageous as May's quote about Canadians being stupid or Ronald Reagan's joke about launching a nuclear attack against the Soviets, ATV might have the slightest case. With the Dion interview, it has no case at all.
The question was confusing, as Toronto Star editor J. Fred Kuntz points out today. I'm still not quite sure what it was about. Nothing Dion did was so preposterous or outrageous that ATV had no choice but to screw Dion for the sake of the country.
I don't know how ATV will be able to maintain any journalistic credibility. I personally would never take their word for anything.
And I would say the same if ATV had done this to any party leader.

UPDATE: Turns out the decision to break the agreement and screw Dion was made at the very top of CTV's news organization. People who deal with CTV News should govern themselves accordingly.

Friday, October 10, 2008

My endorsement.

No one.
I'm voting for Paul Dewar because I've known him for years. He was a great teacher at Lady Evelyn school and he's a friend of mine.
Made the election easy for me, in a way. I didn't have the usual angst.
I know Penny Collenette and Brian McGarry and they'd both make good MPs. Paul Dewar is already a good MP, and I see no reason to vote against him.

Good News

The BC Human Rights Commission has tossed the complaint against Maclean's and Mark Steyn.
Hopefully, Human Rights Commissions will no longer be used as cudgels against journalists.

More Scary Stuff

One of Asia-Pacific's smartest investors says the plan to turn to inflation to solve the banking crisis has failed, and all we've done is add inflation to our woes.
It worked in 1932-33, but that was a crisis of depositors' confidence. This is a full vapour-lock of world credit, especially between banks.

A Shameful Moment in Journalism

The Dion interview fiasco is very interesting to me. I'll be showing the clip to my first-year reporting class today. My point will be that journalists who make promises must keep them. ATV promised Dion they would not show the out-takes. They broke their word. I can't believe a Canadian network has acted so unethically. Perhaps if Dion had said something as outrageous as May's quote about Canadians being stupid, ATV might have the slightest case. With the Dion interview, it has no case at all.
The question was confusing. I'm still not quite sure what it was about. Nothing Dion did was so preposterous or outrageous that ATV had no choice but to screw Dion for the sake of the country.
I don't know how ATV will be able to maintain any journalistic credibility. I personally would never take their word for anything.
And I would say the same if ATV had done this to any party leader.

UPDATE: Turns out the decision to break the agreement and screw Dion was made at the very top of CTV's news organization. People who deal with CTV News should govern themselves accordingly.

It's here

Ottawa has just bailed out Canadian banks to the tune of $25 billion, which gives some idea of how much sub-prime and below-equity home debt there is in this country. My bet: we're six months behind the US. It's going to be a brutal winter.

Today's thought

Now that Jean Chretien and Paul Martin have come out of retirement to campaign for Stephane Dion, maybe Joe Clark and Brian Mulroney will hit the trail for Steven Harper.

Thursday, October 09, 2008

The Death of Canwest

Canwest, worth nearly $14 three years ago, is now probing toward $1.50, hitting another all-time low today.
This is an over-leveraged company that faces a strike at one of its largest papers, the Montreal Gazette. I still expect it to be de-leveraged and broken up, putting an end to the concept of media convergence in Canada.
When the company is broken up and sold, I don't know how the shareholders will fare. The market seems to think equity holders won't get much. I'm willing to bet a few thousand that this stock is worth more than a buck and a half, but I'm not touching it until the market settles a bit.
As I said fourteen months ago and re-posted below, the credit crisis will have a profound effect on Canadian media and journalism. I believe in the end it will be a good thing, as these huge, broadcast-dominated chains are taken apart and reconstructed with newspaper assets in stand-alone companies. Newspapers will make money. They'll change, but they'll still turn a profit.
But there's going to be a lot of blood and pain along the way.

David Asper has the gall to tell Canadians things are just fine, thanks.

Today in "yuck"

My father passed to me his phobia of rats.
So an entire Toronto neighbourhood just lost my business.

The landing place for equities

If someone was doing a pool, I'd say about 7000 - 7500 for the Dow and the TSX. That may be generous.
That's taking the pre-1987 crash Dow of 1300, multiplying it by an inflation rate of about 4% compounded, with a little tossed in for national polulation growth and technology.

It might have been smarter to start with the 750 post-crash Dow and using the same process, but if the Dow went down to 3500 we'd all be eating dirt and living in cardboard boxes.

I see Harper is using the "Dion is too scary" ads to attack him for the economy. Tories, though, are the wrong people to elect at the beginning of a recession. Tory ideology prevents them from doing what needs to be done to get cash moving through the economy. A Harper government would make things worse, not better.

Tuesday, October 07, 2008

They still don't get it

So I'll try to explain what you, the Government of Canada, can do to stop a recession from becoming a depression. So far, I've heard nothing useful from any party leader.
(Feel free to use this on the campaign trail)

* Work in co-ordination with other governments to solve the asset backed paper crisis.

*Do what it takes to keep banks from raising interest rates, as TD did last night. The banks will have to find their own way out of the crisis, rather than download it to Canadian consumers. If the banks can't get money to lend on the open market, the Bank of Canada should lend it to the chartered banks.

* Ensure this Friday's meeting of G8 Finance ministers guarantee that they will respect GATT and not seek to protect their economies by erecting tariff walls (this is what really caused the Great Depression).

* Be prepared to make EI a meaningful protection to unemployed workers. The EI premium rip-off has gone on long enough.

* Fix the Business Development Bank of Canada so it stops being a bureaucratic morass and starts funding small and medium-sized enterprises in an expedient and meaningful way, without regard to regional interests.

* Negotiate a meaningful softwood lumber deal, now that the market for lumber has tanked. It will come in handy later.

* This is the time for all of those big infrastructure projects everyone has talked about for so long: the reconstruction of the Gardiner Expressway in Toronto, the demolition and rebuilding of the Ville Marie in Montreal, making the Trans-Canada a four-lane highway across the country. Any other government capital works projects should be done now.

* There needs to be some real, co-ordinated economic planning to revive manufacturing. This includes money for innovation, easy access to capital and land, expanding high-speed Internet across the country.

* Pushing a "buy Canadian" message to consumers and to governments.

* Give kids free trades training as tool and die makers, millwrights, Class A mechanics (not technicians), plumbers, electricians, cabinet makers, and carpenters (among others). Yes, free. We have a whole generation of European-trained tradesmen retiring and a generation of burger-flippers who can't fill their shoes. Look at apprenticeship rules and get rid of some of the more ludicrous ones.

* Make the Auditor-General's Office a true management efficiency watchdog with far more power and resources to examine the bureaucracy and expose wasted resources.

* Reform bureaucracy and put it to useful work before making any drastic cuts.

Monday, October 06, 2008

Here's the deal

The Taliban share power with the Afghan regime, at least for a respectable amount of time.
The new Afghan administration outlaws al Qaeda and closes down any al Qaeda installations within Afghanistan's borders.
Foreign troops leave Afghanistan.
UN observes are allowed to move freely throughout Afghanistan to ensure the deal goes through.
Should al Qaeda return or if the Taliban acts with wanton cruelty against Karsai and his regime, the US will devastate the Taliban again, this time without much thought to "rebuilding" Afghanistan.
The hunt for al Qaeda becomes the problem of the US and the Pakistanis.
It's a simple deal, and it seems to be the one that's taking shape. Strangely, the Saudis are the only power that can broker this deal. After all, they created the intellectual and religious underpinnings of the Taliban in the Wahabbi "schools" the Saudis built in Afghanistan to undermine the Russian occupation and to occupy the attention of zealots like bin Laden.

Black Monday II

European stock markets are down 6% as a big German bank teeters. The Dow Futures show New York opening at about 10,100, meaning the Dow could easily fall through the 10,000 barrier by ten o'clock this morning. That's going to generate big headlines and a lot more fear.
The Canadian dollar is already down, as commodity prices like oil fell in Europe overnight. With the lower commodity prices, the TSX will get hammered again.
The economy, a disaster simmering for fifteen months, is very, very big news.
There's interesting political fall-out. The financial crisis, which Bush tried to delay past the election, appears to have killed McCain's campaign. He's pulled out of Michigan and even lost New Hampshire.
In Canada, Harper is running on his leadership skills, yet he's shown none on this file. Nor has he shown anything resembling concern. And that appears to be taking him down.
Harper has no plans to save central Canadian manufacturing jobs. Even worse for the Tories, most of us in central Canada believe he doesn't care if our factories close and our towns die. There's a feeling he, like so many Westerners, wants to see Ontario and Quebec suffer. As for Maritimers, they're just whiners and welfare bums in the Tory universe.
The Liberals and NDP are picking up and splitting a big anti-Harper vote. Right now, 65% of Canadians would vote against Harper. That's hardly a mandate.
The Globe and Mail web page has a Liberal ad warning voters against "Bush-Harper economics." Have they found the Tory juggular a week before the election? Is "Harper as R.B. Bennett" more potent than "Dion the wimp?"
All of a sudden, this has become interesting.
I said months ago Canadians never re-elect governments in recessions. I didn't expect the process to play out during one election campaign. But the math still favors a Tory minority in a very fractured House of Commons. With six business days to go (next Monday's not a holiday on Wall Street), outside forces may dictate the outcome much more than anyone believed.

Saturday, October 04, 2008

Give me your children

Obama's campaign comes out with an insipid anthem sung by children, possibly the epitome of nice New Age leftist fascism.

And the inevitable (and brilliant) reply.

Friday, October 03, 2008

Sweater Boy Redux

I haven't worked on a politcal campaign in 20 years, but I do offer one piece of advice to anyone who seeks public office: No funny hats, no Native headdresses, no hair nets, no playing a quick game of catch-the-football with reporters, no standing in front of anything that makes it appear you either have a halo or a knife and fork coming out of your head.

What's more interesting is the fact I came across the Dion campaign by accident as I hurried from the Montreal train station to Concordia University's downtown campus. Dion was campaigning in Westmount-Ville Marie, the predominantly anglophone riding where Marc Garneau's running.
By my calculations, when a Liberal leader feels obliged to campaign in Westmount-Ville Marie -- what was once one of the safest Liberal ridings in the country -- less than two weeks before voting day, it's a sign the Liberals are completely, utterly broken. If the Liberals aren't in freefall, why are they worried about Westmount-Ville Marie? And what does that really say about "swing" ridings in the suburbs of Toronto and Vancouver? Looks like they're all written off, and it really is now a race for second place, which Dion can only win by holding downtown Montreal and Toronto ridings, seats that were considered safe a month ago.

A few minutes ago, I ran into an NDP MP who represents a very downtown Ottawa riding. He pretty much confirmed Liberal support in urban Ottawa has collapsed and his main competitor may well be a Tory. Anyone who knows Ottawa voting patterns will realize that's a profound vote shift. The election of 1979 was last time a Tory was a contender in Ottawa Centre. Robert de Cotret had taken the seat in a by-election in 1978, when people were pissed off with Pierre Trudeau. De Cotret lost the seat in 1979. Brian McGarry won't win the seat this year, but it's truly amazing that he might place second against well-connected former Chretien patronage queen Penny Collenette.

Golly, this is getting chronic

Now Harper is accused of lifting lines from speeches by Mike Harris. Next thing you know, he'll be caught stealing from rehabilitated academic quasi-plagiarist Ralph Klein.

I think it's time we looked at some essays and theses.
This time, the goo might stick. Once was stupid but explainable. Twice is a pattern.

Tuesday, September 30, 2008



*link plagiarised from Kinsella and folks on Facebook.


Owen Lippert, the guy who "wrote" Harper's speech is a PhD who is ex-Fraser Institute, ex-editorial board of the Globe and Mail.

He also offered himself up as a Progressive Conservative candidate in 1988.

He's also author of this paper, "Competitive Strategies for Intellectual Properties".

I don't know why people plagiarise. I've caught students doing it and I've seen people I thought were great reporters lose their careers for doing it. I feel sorry for Lippert, who resigned today for giving Harper the plagiarised speech. Here's a guy with a lot of brains and quite a good career, and now he's screwed.
As for the political impact on Harper: nil. Someone gave him a plagiarised speech. He can act the wounded consumer, the betrayed leader. He'd only be in trouble if he claimed to have written it himself.
Some people might be reminded Harper was willing to follow Bush into war in Iraq. But that's a "might have been".
And it's not a career killer. Ask Joe Biden.
Still, it probably puts some spring in the step of the Libs and Dippers.

Monday, September 29, 2008

Let's see the cash first

I've been following the credit meltdown for well over a year, and it's played out the way I expected. Today is sickening. Thank God so few people know any history or have any idea where this thing is going.
It's particularly strange to teach university students who don't have any recollection of recessions. Most of the weren't even born during the recession of the early 1980s.
This one is going to be far worse. The 1980s recession was a contraction of manufacturing. This is a total vapor-lock of credit. This hasn't happened since 1929 and we haven't seen bank failures like this since the winter of 1932-1933, when, at least, a bank relief bill made it through Congress with bi-partisan support. I can't imagine what would have happened in 1933 without the Reconstruction Finance Corp. and the federal re-organization of banking. Unless Congress acts, I fear we will find out.
As for Canada, we're doing exactly what we did in 1929: pretend the downturn will be kept to the States. In early 1930, the Toronto Star sent Parliamentary reporter Wilfrid Eggleston across the States to write about the lousy conditions down there and, by comparison, praise William Lyon Mackenzie King's policies. That didn't save King in the 1930 election campaign. And by the end of 1930, we were worse off than the Americans (but our banks did survive the storm of 1932-1933, when banks collapsed across the States, money disappeared from circulation in America, and people resorted to barter and municipal scrip until a deal was reached between the outgoing Hoover administration, the incoming Roosevelt team, Congress and the banks.
As I said above, today's politicians don't have it in them to work for the betterment of the economy. And, if anything, this collapse is worse. The 1932 collapse began when individual savers pulled their funds from regional banks. It was solved by getting cash to those banks so people would have faith in them and return their savings). Our exports were killed by American tariffs, cheap Soviet wheat came on the market, and pay cuts ruined the purchasing power of those who had jobs.
There's a myth that the war ended the Depression, when, in fact, the economy grew fairly steadily from 1934 until 1939. Without the war, the economy probably would have recovered by the early to mid 1940s, and much faster if there had been a concerted effort to end trade barriers.
Now, banks are not only afraid to lend to businesses and individuals, they're afraid to lend to each other for fear they will lose their money. Quite simply, trade and investment cannot function without this credit.
If you want to know what I think of this mess, read through the blog. It's all here, beginning last August. What's the way out? Well, a lot of people are going to offer a lot of ideas over the next few years. Some of them will be pretty scary as people look for easy answers.
First, we'll have to absorb and work off the losses. A lot of people are going to end up as debt slaves, since American bankruptcy laws were changed by the Bush administration to prevent the types of walk-aways that we have in Canada. House prices are going to have to drop to a level in which it makes sense for the average family to buy.
They way out involves a shift in how we do business and politics. It involves investment in real productivity, not in paper assets. It also involves seeing business differently, especially in the way quarterly results are so over-emphasized. That, much more than anything, has resulted in the drying up of real physical investment.
Many companies will need to be de-leveraged. Eventually, this will be good for the media as it emerges from the debt heaped upon it by the various buy-outs and asset sales of the last twenty years.
But the only real way out is to invest in communities, especially in manufacturing. Quite simply, we don't make anything. We don't process our natural resources. We've become a nation of hole diggers and paper-pushers. We don't even hew wood anymore.
It's the same in the States.

But I am too whacked from watching the day unfold (and lecturing for two hours) to deal with this.

So, instead, I'll mock this guy. I don't think he has more than 4 trillion pounds at his disposal. As for proving evolution, it's fairly easy, to anyone with an open mind.
In fact, it's easy as hell to disprove Noah's Flood as the cause of the deposition of continental sedimentary rocks, but that isn't the bet.

HT to Norman Spector for the link.