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Copacabana Beach, Rio de Janerio.
BLOODBATH IN AFGHANISTAN
BOMBS, IED, KILL 13 AMERICANS AND CANADIANS
U.S. AIRLINES FEAR POST-ATTEMPTED ATTACK DOWNTURN IN TRAFFIC | Still more security hassles. Airline industry already heading into another money-losing year, after losses almost every year this decade. Now comes still more elaborate passenger screening, three-hour delays to board planes. It's not fear of attacks, but annoyance with security hassles, that will drive traffic away. “I don’t think people book away because of fear,” an unnamed airline exec tells NYT yesterday. “I think they book away because of inconvenience. If it means three hours in line at an airport, they aren’t going to take their trips.” U.S.airline CEOs fear encore of post-9/11 drop in traffic. * Canadian travelers, by contrast, are sanguine. Travelers are intrepid, says Canadian travel agent, and will take that sunspot vacation hell or high water * Obama pressed to have U.S. emulate Holland - point of departure for would-be Christmas Day bomber - and Nigeria, bomber's native country, in imposing full-body scanner use at America's 500-plus airports.
U.S. SECURITY SCREW-UP | As with 9/11, lots of advance warning, failure to connect dots. NYT reports in detail on numerous security and intel agencies with heads-up about would-be Detroit aircraft bomber, scraps of information here and there adding up to trouble - but no one, including the security clearinghouse set up for this very purpose in 2004 - tut all the info together. Read this and weep. There'd be no need for elaborate screening of the 99.99% of passengers posing zero threat if the army of intel agencies could get their act together.
INFLATION SCARE | U.S. businesses and consumers equally fear curse of inflation. Raft of recent surveys show that expectations of high inflation once recession ebbs is widespread. Based on fears of consequences of U.S. spending on stimulus and cost of restoring bank stability. Goldbugs, for whom gold is the classic inflation hedge, are feasting on prospect of runaway inflation. Google reports record number of users doing searches on "hyper-inflation." My conviction is that this is an over-reaction. Boom in infrastructure spending - on new N.A. power grid and high-speed passenger train network, among other necessary work - will create next economic boom, generating income-tax revenues to eradicate the admittedly scary, record $1.2 trillion U.S, current-year deficit. Also, the trillions provided by Fed and other central bankers to rescue financial institutions are loans, many already paid back (with a profit!), and guarantees have not been called. The stimulus, spent on alternative-energy R&D, retrofitting homes of offices for better fuel efficiency, replacing Civil War-era schoolhouses, and modernizing highways and bridges - will create tax-paying jobs in short- to medium-term and in long run make 21st century America more productive and globally competitive.
SCOTIABANK'S GLOBAL AMBITIONS | Investing heavily in Pacific Rim. Already the most international of Canada's Big Five banks, Scotiabank has just taken a 20% stake in a leading Chinese retail bank. (Most foreign bankers in China are focused on corporate services). In February, BNS raised to 49% its stake in major Thai lender; and recently its ScotiaMocatta unit, leading world precious-metals trader, set up shop in Dubai. CEO Rick Waugh is scouting still more prospects, in Malaysia, Philippines and Vietnam, * Bank of Nova Scotia's 2008 profits triple.
WELCOME MAT FOR CHINESE | Ottawa sending signal with OK to huge PetroChina stake in oil sands. Never mind that Harper two years ago vowed to amend foreign-ownership rules to block takeovers of Canadian corporate assets by government-owned or controlled agencies, while allowing Canadian industrial icons like Alcan, Dofasco, Inco and Falconbridge to slip away to acceptable private sector buyers in capitalist nations. In volte face neither he nor anyone in Ottawa has explained, Beijing-controlled PetroChina, largest of China's Big Three oil giants, is greeted with open arms in act of unstated reciprocity designed to open Chinese market to Canadian business - like the $4-billion contract Bombardier signed in September to build 80 high-speed trains for China. Fed policymakers also fret that U.S. economy on which Canada is so reliant will be very slow to recover, and want to diversify. So it appears we've seen the end to the Communist China-bashing on human rights by Harper and his caucus - not on principle, but for the money.
Apple's latest generation desktop. Cool enough to justify the sticker shock.
APPLE TO THE CORE | Firm's PCs, once given up for dead, top October sales. Jobs himself has focused on wildly successful iPod, iTunes, iPhone. But those same brilliant Apple design sensibilities are propelling sales of latest generation iMac, the desktop and notebook leader in October. Market-sharp leap is a blip, as PC users are waiting for Windows 7, and Apple's market share won't surpass 5%. But it's a hugely profitable 5%, because of the lavish profit margins Apple reaps by justifying its high sticker price with app-rich, more bug-free and better-looking devices. A basketcase after it fired Jobs in the 1990s, Apple now commands a stock-market value in excess of larger rivals H-P and Dell combined.
ARCTIC GAS PIPELINE GETS GREEN LIGHT | Government panel OKs $16.2-billion scheme. Project, dating from the 1970s, would tap Arctic natural gas reserves for transport to U.S. markets. But the megaproject, promoted by consortium led by Exxon Mobil-owned Imperial Oil, may be too late as new sources of natural gas in the Lower 48 now appear to be in abundance. * Globe timeline on lengthy Mackenzie Valley pipedreamline saga.
QUOTE OF THE DAY | "There is hardly anything in the world that some man can't make a little worse and sell a little cheaper." -John Ruskin.
Courtesy The New Yorker, Dec. 14 edition.
PEARSON TOPS WORLD HUBS AS MOST CONGESTED AIRPORT
U.S.-bound travelers at Pearson last weekend. -CP
DELAYS A MISERY FOR TORONTO TRAVELERS | Multitude of U.S. flights is culprit. Canada is the No. 1 source of U.S.-bound flights, and Pearson handles about half of all Canadian air traffic. Which means U.S.' new screening procedures since Detroit bomb-attempt scare have put Pearson atop the list of world's most congested air hubs, at least for now. “There are some Canadian airports operating very well," a spokesman for the International Air Transport Association (IATA) tells the Globe. "Vancouver is doing well. Calgary seems to have turned around … most of the pressure right now is definitely focused on Toronto.” * NYT expert panel debates shortcomings of air-traffic security.
BUDDING AMTRAK RENAISSANCE? | U.S. passenger rail service still losing money, but traffic up. Problem continues to be reliance on shared freight lines, heavy maintenance costs on outdated trackage, an aging track that can't handle Amtrak's high-speed Acela trains at the speeds of which they're capable. Just the same, traffic has spiked on every route served by the Bombardier-designed Acela, introduced earlier this decade. With mounting congestion and security hassles at airports, Acela already has grabbed majority of travelers on some Northeast corridors.
AL-QAEDA'S YEMENI HAVEN | Goverment says Yemen has about 300 al-Qaeda operatives. That's three times the number the U.S. military estimates are in Afghanistan. It was Yemen's al-Qaeda cell that recruited the Nigerian would-be bomber of a Northwest airliner at Detroit on Christmas Day. Obama has stepped up anti-terrorist activities in Yemen, which seems to have triggered the Christmas Day response. Again, I wonder at the disproportionate U.S. commitment to Afghanistan when the al-Qaeda cells the estimated 60 other nations - including the U.S. and Canada - likely pose more of a threat given they're not under seige.
HOPEFUL LEADING INDICATORS | Canadian and U.S. holiday shopping tops last year's. Retailers pleased that some shelves remain empty even four days after Boxing Day. U.S. home prices rose in October, for fifth consecutive month. And higher-than-expected rise in U.S. consumer confidence reported. (Photo: Boxing day shoppers on a time-out at the West Edmonton Mall.)
U.S. JOBS UPTURN SEEN NEXT YEAR | Pursuit of sales gains gradually overtaking fear of recession. "The employers we're talking to are really shifting from cost containment," says spokesman for CareerBuilder.com recruiting firm. "Now it's really about growth so I think you're going to see customer service jobs added, sales jobs added. Those are really what can grow the business and make the money come back and get the customers back.
VACCINE INC. | Once unprofitable industry now booming. Dates from avian flu crisis earlier in the decade, then SARS, now swine flu. "Between 2004 and 2007," Globe reports, "vaccine sales across the industry soared an average of 32% each year, with flu vaccine leading the way. That is roughly four times faster than any other pharmaceutical product."
PUTIN IN CHARGE? | Premier is fly in ointment in U.S.-Russia nuke-warhead-reduction talks. Obama scrapped Bush's planned missile-shield scheme for Eastern Europe, earning Putin's praise as "brave." But months later Putin now whinging about continued offshore U.S. missile capability. Real issue is national pride. U.S. seeking to contain Russia's nuclear ambit to Russia itself, stripping it of status of nuclear superpower. Another imbalance is U.S. insistence on inspections of Russian weaponry with no reciprocal inspections. This could be a bargaing ploy as START 2.0 treaty talks continue, but fact Medevdev isn't front and centre is a reminder Russia has two co-CEOs.
DEFERRED GRATIFICATION | Studies show procrastinators put off pleasure, not just work. Which accounts for all those unused gift cards, we can always shop later. And the phenomenon of North Americans who visit fewer local attractions in a year than visitors do in a two-week vacation.
PREVIEW | Saskatchewan's transformation into a "have" province chronicled in Globe mag Friday. Or you can read it now, how spiralling commodity prices - especially for the potash Saskatchewan has in abundance, and for which it's the world's leading supplier - has put even Ontario in the shade in its fiscal health.
AFGHANISTAN'S FIRST SKATEBOARD SCHOOL | Kabul academy brings together rich and poor. But even these kids must undergo through screening before arriving each day for lessons and loop-the-loop in adjoining park.
SAD CHAPTER | Bookseller McNally Robinson closes new Don Mills outlet. Part of larger bankruptcy restructuring for customer-friendly retailer, which will be sorely missed in GTA. I wondered, though, why the Canadian chain selected Don Mills for its Toronto debut, rather than a location with more pedestrian traffic and not so remote from downtown. Here's hoping MR's finances recover, and that it takes a second chance on Hogtown.
Courtesy, The New Yorker, Dec. 21 edition.
Why can't America make anything? Two words: business school. (New Republic)
AFTERSHOCKS OF TERRORIST AIRPLANE BOMB SCARE
Sniffer dogs patrol Detroit Metropolitan Airport on Sunday. A suspected terrorist on board a Detroit-bound Northwest flight attempted to blow up the aircraft Christmas Day. -Photo: Reuters.
OBAMA VOWS AIRLINE-SAFETY VILIGANCE | Announces stepped-up security measures. NYT headline "Key Dates Surrounding the Christmas Day Attack" is typical of alarmist coverage. (9/11 was an attack; what happened last Friday was a bungled attack.) Also noteworthy: Yemeni-backed terror group recruited 23-year-old Nigerian as the intended suicide bomber. Why not a Yemeni? And why not a bomber subjected to a "run-through" on how to detonate the device? Critics angry that suspect was placed on suspect list after his well-connected Nigerian father, a banker, warned U.S. embassy in Lagos that his son was seduced by Islamic extremism. In which case, why issue the suspect a U.S. visa in 2008? Answer is that there are about 500,000 people on that list, people who once talked with a person suspected of a terrorist connection - in other words, what police describe as "persons of interest." Suspect's name did not appear on the much smaller "no-fly" list. Real problem originates at Amsterdam's Schipol, one of Europe's four principal gateways, where screeners failed to detect explosives. And this particular explosive is easy to source and difficult to identify, which means the real focus of enhanced security should be on machines better able to detect it, and not more hassles for everyday passengers, which would not have prevented this incident. Such machines are available but costly. * Airline shares fall yesterday on first day of trading after Friday incident.
IS CLEAN TECH THE NEXT BUBBLE? | Billions are flooding into alternative-energy R&D. Critics note that solar and wind power are four times more costly to produce than conventional methods. What they're missing is that the alternative methods are in their infancy, the technology will become affordable as we settle on common standards, and the existing power grid makes alternatives costlier because it hasn't yet been retrofitted to transmit power from unconventional sources. I do believe billions will be "wasted" as some experimental technologies don't pan out. But a few will prove successful and become "the new normal," and firms developing those alternatives will be the Microsofts and Intels of the next decade. * Critics say Canada falling behind in alternative-energy race.
U.S. TO POISED TO PROMOTE NUKE POWER | Some $18.5 billion in loan guarantees. Obama is determined to unlock those funds, authorized by Congress back in 2005, to spur the first construction of U.S. civilian nuclear power plants since the Three Mile Island accident of 1979 brought new construction to a halt. Candidate Obama described himself as "agnostic" on alternatives to fossil-fuel power production, and here's more proof of it. For the U.S. is also now backing solar, wind, biofuels and other alternatives - everything and anything that might work. Notice these are mere guarantees, with the expectation Uncle Sam won't actually dip into the treasury. In some cases, D.C. is using $1 to leverage $10 out of the private sector. In this case, it's leveraging only a guarantee in the event of cost-overruns, and even those will be backed by hard assets with commercial value. Energy Department is hardly scattering the backing, having narrowed likely recipients of loan guarantees to just four firms: Southern Co, Constellation Energy, NRG Energy and SCANA Corp. Expectation is that private sector will foot the bill. "When DOE issues their first loan guarantee, that's going to send an important signal to private-sector financing, and Wall Street in particular," said John Keeley, a spokesman for the Nuclear Energy Institute.
IRAN SAID TO ARREST PRO-REFORM FIGURES | Detains aides to opposition leaders, reports say. The reports are uncomfirmed, as Tehran has exiled or sequestered foreign journalists during the current, widespread protests. Pro-reform websites are reporting on the crackdown.
UPBEAT LEADING INDICATOR | U.S. retail holiday sales were better than last year's. But we'll have to wait for corporate earnings reports to determine impact of heavy discounting on P&L. Still, shoppers are in the stores again, a good sign.
NFB CAPTURES RECESSION IN DOCS | Film board commissions real-life tales of getting by. Money well spent as scores of young Canadian filmmakers get valuable early experience. And their subject is everyday Canadians, not the bafflegab of economists. Reminiscent of FDR's Depression-era funding of artists and of writers - many destined for bestsellerdom - to document local and state history.
GOOGLE GOBBLE | Search giant needs to be reined in, argues NYT op-ed contributor. Cites various and proliferating methods by which Google favors its own ad-linked searches, and buries competition low on scroll or banishes altogether. * Here's an NYT-sponsored debate among experts on "the Google problem."
E-READERS AS NEWSPAPER SALVATION? | Well, they can't hurt. Kindle owners are actually buying access to newspapers they could read free on the Internet. Kindle is still priced too high to be within reach of vox populi and is tougher to navigate than iPhone, which helped rescue music business by converting pirating music lovers to downloaders of tunes at 99 cents apiece. Good news is that Kindle price will come down, usability improve with next generation. Meanwhile, Apple ever closer to launching its much anticipated reader, code-name Tablet, which promises the greater ease of use that made Apple's iPod a must-have.
YVES ROCHER DIES AT 79 | Pioneered plants and other natural ingredients in cosmetics. The French firm remains in operation and in family hands.
ROM MOCKED AS UGLIEST NEW BUILDING | Toronto museum smacked again. This time it's the Washington Post finding the so-called Royal Ontario Museum "Crystal" (actually a metal shed with a few strips of glass) to be atop the list of eyesores of the decade. "Sure, there were a lot of Wal-Marts thrown up in the Aughts, but Daniel Libeskind's addition to the Royal Ontario Museum in Toronto surpasses the ugliness of bland buildings by being both ugly and useless," writes the Post's Philip Kennicott. Earlier this month, VirtualTourist.com put the Libeskind/Thorsell monstrosity #8 on its list of the world's 10 ugliest buildings. (It was forceful ROM director William Thorsell's enchantment with Libeskind that forced the ROM board's approval of the monstrosity.)
OPP CELLPHONE CRACKDOWN | Force already has fined 50 phone-drivers. Edict doesn't become law until Feb. 1, but Ontario Provincial Police are already nabbing motorists whose driving behaviour it deems erratic.
QUOTE OF THE DAY | "There is a certain relief in change, even though it be from bad to worse; as I have found in traveling in a stagecoach, that it is often a comfort to shift one's position and be bruised in a new place." -Washington Irving.
Courtesy, The New Yorker, Dec. 14 edition.
IRAN PROTESTS CLAIM 10 LIVES | Tens of thousands march against regime. Anti-government demonstrations, in cities across Iran, are largest since disputed presidential election in June. Among the dead is the nephew of opposition leader Mir Hossein Mousavi, said by demonstrators to have been shot in the back as security forces fired on demonstrators, and now hailed as a martyr. Police emphatically deny responsibility for any of the deaths. But France and U.S. have already condemned violent put-down of protests. .
FAILED TERRORIST AIRCRAFT ATTACK DELAYS SCORES OF PEARSON FLIGHTS | Travelers subjected to increased scrutiny of apparel and luggage. Air Canada among carriers imposing rule that passengers must have nothing on their laps for the last hour of flight. Suspected terrorist attempted to denonate explosives strapped to his body. U.S. airlines tightening security even on domestic U.S. flights. Questions arise on why suspect apparently determined to blow up Detroit-bound plane was not adequately screened at European point of departure.
U.S. QUIETLY OPENS FRONT AGAINST AL-QAEDA IN YEMEN | Smart move. U.S. military estimates there are fewer than 100 al-Qaeda operatives remaining in Afghanistan. Yemen and Sudan each are former al-Qaeda bases, and U.S. is alert to possibility of terrorist group re-establishing training camps in Yemen.
FAILED DIRECTORS DON'T FADE AWAY. They join boards of other Fortune 500 companies. Leaving wreckage behind, complacent corporate directors aren't shunned by other boards, but welcomed.
BOMBARDIER DEFENDS PRIVATE JETS | Executive-jet maker says planes are a tool not luxury. But in this layoff environment, that ages-old argument doesn't play. Not to worry too much: Bombardier expects robust sales in booming Asia, even if N.A. market likely won't recover to record 2007 levels until 2014.
SQUIGGLY UPDATE | Ignatieff says Canadians don't want election, just new government. Okay, I'm game. How do you get a new government without an election? Oh, by forming a coalition among opposition parties. Um, except that Grits rejected that idea. To paraphrase Ike, there seems to be no answer to the question of how knuckle-headed Iggy's comments can get.
BANKRUPTCY MAY BE JAL'S BEST OPTION, INVESTOR SAYS | Flagship carrier near insolvency. Will need government assistance with unions balking at urgently needed reductions in over-capacity. American Airlines and Delta still waiting in the wings - pardon the pun - to link with JAL as Asian partner.
MADONNA TOPS 2009 TOURS | Pulls in more revenue than younger, hipper acts. Then again, oft-mocked Bay City, Mich. native has built gargantuan fan base over the decades. If the faux Beach Boys can still pull them in with a handful of hits, the former Boy Toy - the real thing - can attract a monster crowd with dozens of hit tunes dating from the mid-1980s.
QUOTE OF THE DAY | "The way to fight a woman is with your hat. Grab it and run." -John Barrymore, U.S. actor.
Courtesy The New Yorker, Dec. 14 edition.
David Olive is a business and current affairs columnist at the Star, which he joined in 2001 after stints at the Globe and Mail, National Post and Financial Post.
"If all economists were laid end to end, they would not reach a conclusion."
- George Bernard Shaw