Wednesday, September 10, 2014

Change at last? Not likely. Pretentious Prentice is just another industry owned insider masquerading as a public servant

Well it seems Pretentious Prentice is the winner of the Albertan leadership race for the top position of Premier CEO though this should be no surprise as it was clear he was the status-quo's choice from day one. With his "expertise" Albertans can be certain that our benefactors, the oil and banking industries, will remain the top concern and beneficiary of all policy decisions - just as Albertans like it.

The expenses of cabinet and MLAs will surely be under a tight leash by a man that rationalized why MP expenses shouldn't be audited (which isn't exactly what the Auditor general thinks) alongside everyone's favorite failed politician Michael Ignatieff.
Federal Environment Minister Jim Prentice, a senior member of Prime Minister Stephen Harper’s cabinet, had this to say about why Fraser shouldn’t get access to MPs’ books:

“There are a set of rules and the expenses are scrutinized through the Board of Internal Economy,” Prentice said. “We have a system that has been working.”

Asked whether there’s a double standard for members of Parliament, Prentice explained politicians’ spending is thoroughly inspected by staff who review the expenses, as well as the MPs on the committee.
Yep, this is the guy that is going to put to rest Albertan's anger over improper expenses by their government overseers, I can't wait to not see the results.

But, it's not all bad Albertans! Prentice, who was previously the federal government's "environment" (read: oilsands) minister will likely feel much more relaxed at the head of Canada's major oil producing province that is home to the major industries that lobbied him, as well as doing away with that pesky word "environment" in his public title which more often than not confuses environmentalists into believing that's the public official they should be talking to. Now as the head of a government that declared not too long ago that "opening new markets" is job #1 for them on behalf of the only industry they care about he can continue the status-quo and ensure that the government's foot remains "off the break" when it comes to unfettered growth and subsidization of the industry and it's dependencies. Jim Prentice will push for and enact existing policy - of the sort the "debt free" Albertans love - in the form of new additional debt to build the required infrastructure to support the new additional population being imported from all over the world needed to support the oilsands which the revenue from oilsands in over 30 years just isn't enough cover.

But Albertans shouldn't worry about an ever-growing mountain of debt to support an industry with tighter and tighter margins whose current level of bankrolling is really only possible due to record low interest rates and even then is just barely profitable as Prentice isn't just a public (/private partnership) "servant" but also a banker. Fresh out of his top-level job at CIBC presiding over an easy currency bonanza to prop up the housing and other asset bubbles caused collectively by the central bank "emergency measures" politicians and market movers have come to rely on Albertans can be confident that Prentice is a true believer in the practice of printing wealth out of thin air which can be seen in his confidence that 10, 15, 20 years down the road the debt Alberta takes on today at historically low interest rates will still be affordable and that the government and central banks under-reported version of inflation won't interfere with his pie in the sky forecasts of productivity and oil price.

Meanwhile as Albertans watch their cost of living rising dramatically, and producers watch their costs of production rising rapidly, CEO Prentice and pals were busy defending the calculated and deliberate wage stagnation caused by the temporary foreign worker program that is being used to work around the high rates of inflation the government and industry aren't reporting. Instead of costs going up, quality, quantity, and wages are going down or stagnating.

It's no wonder that Prentice is such a strong defender of the TFW program, being both a banker who has a vested interest in keeping people believing that "they're richer than they think" and an oil friendly politician rolled by his banker buds demanding returns from an industry where a stable oil price is causing their investments to evaporate. TFWs are nothing more than an elaborate, cheap, and classically feudalist subsidy gifted to industry to work around inflation that's putting ever greater demand on higher wages. Of course costs will always show up somewhere, such as in the safety of Canada's "ethical" industries.

It's actually to the point now where McDonalds is calling on Albertans to protest in favor of continued and ever greater wage stagnation so that they can continue buying cheap hamburgers, because you know, inflation is so low right?

So congratulations, Albertans, on more of the same.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Friday, August 22, 2014

When it comes to #oilsands a stable price is a low price no matter how high it is

Alberta's oil industry is having a serious cash crunch and the problem doesn't look to be reversing any time soon with the price of oil continually hitting a ceiling of affordability over the last few years. This ceiling has robbed Albertan oil companies and the government they own of all of the additional profit brought in by the "buy low, sell high" market mentality that they have been relying on for years. That market of rapid price gains in oil is now years into the rearview mirror and the reality of unsustainable and ever-mounting costs for low energy return on energy investment projects such as the oilsands, deepwater, and fracking are becoming very visible.

This situation is the exact situation I have been warning about for years being one of the few that have maintained that oilsands operations are not profitable at all once the subsidies, market volatility, and infrastructure to support the laborers were either stripped away or accounted for. Oil is at historical all time highs (when you discount volatile spikes like we saw in 2007/2008) yet still the Albertan government must borrow to pay for basic infrastructure upgrades and "cost cutting fever" is gripping oilsands players.

Cost-cutting fever grips oil sands players as economics called into question
Canadian oil companies are ruthlessly enforcing capital discipline as project costs creep up and shareholders pressure management to focus only on the most profitable ventures.

Suncor Energy Inc. announced a billion-dollar cut for the rest of the year even though the company raised its oil price forecast.

Others such as Athabasca Oil Corp., PennWest Exploration Ltd., Talisman Energy Inc. and Sunshine Oil Sands Ltd. are also cutting back due to a mix of internal corporate issues and project uncertainty. Cenovus Energy Inc. is also facing cost pressures at its Foster Creek oil sands facility.

Given that the low-bearing fruit have already been developed, the next wave of oil sands project are coming from areas where geology might not be as uniform,” said Dinara Millington, senior vice president at the Canadian Energy Research Institute.

The global oil industry is gripped with the cost-cutting fever amid shareholder pressure, but the oil sands are particularly vulnerable given their baked-in higher development costs, high wages, remote location and infrastructure challenges. In May, France’s Total SA shelved an $11-billion oil sands mine project planned with joint venture partners Suncor, Occidental Petroleum and Inpex Canada.

Oil sands are economically challenging in terms of returns,” said Jeff Lyons, a partner at Deloitte Canada. “Cost escalation is causing oil sands participants to rethink the economics of projects. That’s why you’re not seeing a lot of new capital flowing into oil sands.”

Existing in-situ oil sands projects in Alberta are produced at a break-even cost of US$63.50 per barrel on average, while integrated oil sands mining projects have a breakeven cost of US$60 to US$65, including a 9% after-tax return, compared to the Saskatchewan Bakken’s US$44.30 a barrel cost.

SAGD operations saw a 5.1% jump from 2011 to 2013 on average, while mining and extraction was up 6.1% and integrated mining and upgrading 7.9% during the period, CERI data shows. Last December, Canadian Natural Resources Ltd. and the Alberta government revised cost estimates of their 50,000-barrels per day upgrading project by 49%.

Costs in the oil sands are rising faster than general inflation, and it’s a culmination of many factors,” Ms. Millington said, adding that currently many producers are reporting a bit of a pause in new contract awards and backlog.

Indeed, large-scale developments present “material inflation risks,” RBC Capital Markets said in a June report.

Even “smaller SAGD projects like Sunshine’s West Ells or Pengrowth’s Lindbergh have announced cost increases while Athabasca’s Hangingstone has experienced modest scheduling pressure and delays,” Canada’s biggest bank by assets said.

The trend of cost rationalization is not unique to the oil sands and rippling across the global industry thanks to the “abundance” of assets, according to Barry Munro, oil and gas leader at Ernst & Young.

It’s not about scarcity of resources anymore. Companies are realizing they have far more assets than they are ever going to have capital to be able to exploit — they feel they have to structurally change their business model.”

Indeed, business plans are in a state of flux. Oil and gas deals in Canada rose 23% in the first half of the year, according to management consultancy Deloitte LLP, but much of the activity took place outside the oil sands sector.

“Deal activity has cooled in Canada’s vast oil sands reserves as producers have struggled with rising costs, in part because of stricter environmental regulations,” Deloitte said in a recent report. “Even with oil at more than $100 per barrel, some large producers have been cancelling projects because higher costs have crimped returns.”

Richard Grafton, chief executive officer of Grafton Asset Management, says oil prices may have to go higher for new investors to favour oil sands.

“Right now, the [price] band that we are in for a number of years is around $100, and frankly, may be we need at a higher price with access to global market, before we get excited about that [the oil sands],” Mr. Grafton told the Financial Post in an interview last week.

A recent report by London-based Carbon Tracker Initiative estimated that a number of oil sands projects would be economically impractical at oil prices below $130 per barrel.

RBC Capital, which is confident that the existing oil sands players will meet their production targets profitably, estimates the industry will require between $26-billion to $33-billion each year to maintain existing production and raise output by an additional 250,000-bpd annually till the end of the decade.

“Challenges and constraints exist such as pipeline capacity and technology development, however, financing is perhaps the biggest challenge facing development stage oil sands companies at this time,” RBC noted.
Perhaps the most interesting paragraph from this latest article is this one:
“It’s not about scarcity of resources anymore. Companies are realizing they have far more assets than they are ever going to have capital to be able to exploit — they feel they have to structurally change their business model.”
As anyone versed properly in 'peak oil' theory knows "running out" of oil is a physical impossibility because the extraction of energy requires energy itself to be accomplished (Energy Return on Energy Invested - EROEI). As we've covered on this blog several times currency (what we call 'money' today) translates to money as money translates to energy. Any trade of goods or services is a trade of energy required to produce the product or provide the service. Money is a physical representation or store of value of this energy, currency is a claim check on money (or at least it is supposed to be). So when one refers to the energy input of energy extraction this translates directly to the cost, or financing of a project. When the amount of energy required to input into the extraction process approaches the amount of energy you get from the output a project becomes economically unviable. We will never run out of oil because the economics of extracting much of the oil in the ground simply provide no return.

It is still very much about scarcity of resources but what few seem to realize is that until we reach the very end of the peak oil story the scarcity in resources is not going to show up in shortages of the resources themselves but rather in the available capital to finance projects and in the affordability of the resources themselves.

In example, here is an article I wrote awhile ago on Obama's claim that "energy efficiency" has resulted in a drop in fossil fuel consumption in the U.S. where as the reality is that it was the global recession depression that truly claims responsibility for the reduction in consumption.
Ok. Now, there is one part in particular that is true, but within the context he's using it is a complete lie: "Taken together, our energy policy is creating jobs and leading to a cleaner, safer planet. Over the past eight years, the United States has reduced our total carbon pollution more than any other nation on Earth."

It's true, they have, want to see that in a chart form?

U.S. consumers did not willingly reduce their consumption rather the needed capital to increase their consumption didn't exist due to the resulting credit crisis. Being that currency is not itself a tangible resource but rather represents these resources it can be said that this is a form of resource scarcity. When we hit the limits of resource affordability credit collapses and capital vanishes which results in a significant drop in demand long before physical resource scarcity can take effect. It is important to understand that an economy that requires ever growing supplies of energy will fail before the supplies of energy themselves fail in fact it's unlikely we will ever see physical resource scarcity as the underlining extraction process requires a stable economy and supply chain which the coming economic shockwaves from resource scarcity will likely disrupt.

So the so-called "abundance of assets" really doesn't mean much at all, just as Alberta constantly touting that it's "total reserves rival Saudi Arabia" doesn't mean much at all. Until those reserves, those assets, are out of the ground they are worthless. If investors are noticing that the returns on these projects are barely worth the time invested, let alone the risk, then we are nearing that moment in time when the light finally goes on in their brains that there is no economic benefit to spending a barrel of oil to get a barrel of oil. None what-so-ever.

This story becomes even more economically depressing when you remember that we are in a historically low-interest rate environment. These projects are not just having trouble getting financing, they are having trouble getting financing at central-bank orchestrated artificially low interest rates which if they were to rise would make financing that much more difficult. The U.S. shale "boom" is experiencing the same problems and has likewise been just barely affordable due to the low interest rate environment.

As I've pointed out before it's not like the federal and provincial governments don't know this, they're very aware, and if you go back and look at their policies, their forecasts, and the economic results of the last few years with this knowledge that they know in mind you'll see there has been a clear strategy to keep Albertans and Canadians in the dark of the true risk and low rates of return. There is a very commonly held belief that the oilsands are providing incredible returns for Canadians - reinforced daily with government and industry funded propaganda -  when the truth couldn't be further from.

The reality is for years the government has been abusing Canadian tax dollars in everything from marketing campaigns to Olympic trains while gambling on market moves and taking credit as prudent fiscal managers the whole while. Albertans lately seem very fed up with the entitled attitude of it's provincial government but what they don't seem to understand is that the Alberta government's #1 job isn't governing the province but rather ensuring access for the oil industry and also ensuring Albertans don't realize they and their children who will be left with the resulting mess and no resources to address it, are being royally ripped off.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Friday, July 25, 2014

The stench of western hypocrisy is becoming hard to ignore

Another day, more western endorsed Gazan deaths. "Self defense", "Rockets", and "Human shields" are really getting old fast in terms of the excuses Israel is using to justify it's slaughter, and it is a slaughter, of what you must remember is a very very tiny occupied land. There is no where for these people to go. From Wikipedia...
Gaza has an annual population growth rate of 2.91% (2014 est.), the 13th highest in the world, and is overcrowded.[4][5] There is a limited capability to construct new homes and facilities for this growth. The territory is 41 kilometers (25 mi) long, and from 6 to 12 kilometers (3.7 to 7.5 mi) wide, with a total area of 365 square kilometers (141 sq mi).[6] As of 2014, the population of the Gaza Strip was about 1.82 million people.[5] The large Palestinian refugee population makes it among the most densely populated parts of the world.[7]
"Rockets" and acts of aggression

ROCKETS!!! ROCKETS!!! THEY'RE FIRING FUCKING ROCKETS, proclaim the fancy propaganda memes spewed out of the IDFSpokesperson. Of course, since the battle started all talk of illegal Israeli settlements has all but vanished from the news even though just prior the European Union was "losing patience" with Israel over it's settlement policy.
The EU Ambassador to Israel has warned that a growing number of EU states are dissuading their citizens from doing business with companies registered in Israeli settlements; France, Italy and Spain have already joined the trend.
Ambassador Lars Faaborg-Andersen told a business seminar organized by the Geneva Initiative on Friday that six European nations have already issued warnings to the Israeli government over expanding construction of settlements beyond the Green Line.

EU member states “are losing their patience with concerns not being treated [seriously]," by Israel, Lars Faaborg-Andersen said.

"The EU is more consistently implementing existing policy, and taking further steps to disengage from the settlements," said the ambassador, and warned that in case settlement construction does not stop, even more EU member states will issue an advisory not to do business with business in the settlements.

The governments of five of the largest EU economies: Germany,
France, Italy and Spain, UK, as well as the Netherlands have urged businessmen nationwide to stop investing into Israeli settlements in eastern Jerusalem, the Golan Heights and the West Bank.
The international community regards all Israeli settlements built on occupied Palestinian land as illegal.
It's really, really, simple folks. You can not be engaged in what is clearly an act of aggression, in violation of international law, of a people you oppress and then cry every time they attack you. That's what oppressed people do, survival is a powerful motivator.

Speaking of illegal settlements and occupations, read this.
In April, Mr. Harper spoke out again: “When a major power acts in a way that is so clearly aggressive, militaristic and imperialistic, this represents a significant threat to the peace and stability of the world, and it’s time we all recognized the depth and the seriousness of that threat.” All nations had to be rallied “to understand that peace and stability is being threatened here in a way that has not been threatened since the end of the Cold War.”

From the outset Mr. Harper declared the presence of Russian troops in Crimea to be an “illegal military occupation” and said Canada would refuse to recognize the forthcoming referendum that Mr. Putin used to “legitimize” its seizure. Foreign Affairs Minister John Baird chimed in to call the upcoming referendum “a Soviet-style tactic that’s unacceptable for a G8 country…” So it was.
Of course he wasn't talking about Israel, he was talking about the Ukraine. We're going to look more at the Ukraine in a bit.

Sure, Hamas is firing rockets aimlessly at civilian populations and "from" civilian areas (because all of Gaza is one overpopulated civilian area, duh). Those rockets are really all they have and they're rockets, not missiles, they don't have guidance systems. It's a point, shoot, and pray it hits something system. They're under a blockade and systematic isolation. You can not deny a people the right to have an army and then complain when they are forced to use Guerilla tactics, survival is a powerful motivator.

"Self defense" and the justification of dead children

Let's say for the sake of argument that Israel's "self defense" excuse were accurate (as in they were not actually occupying the land they're defending), it's being used as the reasonable justification for bombing civilians. Fine. But wait, just 1 year ago I remember another country that was under attack by foreign terrorists that was claiming self-defense in it's military campaign of "bombing their own civilians". That country was Syria. Let's check in with them...
But as the rockets and bombs fall, a deadlier war next door rolls on. The Syrian civil war has claimed 170,000 lives in three years; this past weekend's death toll in Syria was greater than what took place in Gaza. By some accounts, the past week may have been the deadliest in the conflict's grim history. Meanwhile, the extremist insurgents of the Islamic State (also known as ISIS), have continued their ravages over a swath of territory stretching from eastern Syria to the environs of Baghdad, Iraq's capital; the spike in violence in Iraq has led to more than 5,500 civilian deaths in the first six months of this year.

Over the weekend, Islamic State militants battled forces loyal to Syrian President Bashar al-Assad over a gas field in central Syria. According to the Syrian Observatory for Human Rights, some 700 people have died in just two days of fighting,
including employees working at the facility.
So basically, what western nations are saying, is that Israel is completely justified to kill as many civilians as they need to "defend themselves" from rocket attacks but Assad has no right to defend himself in the same capacity from what is turning out to be a very brutal, violent, western backed, terrorist force.

Dead civilians isn't our concern at all, only the western agenda of global resource domination is.

"Human shields" and the Israeli propaganda machine
According to Israel, everything about Gaza is "terror". They don't just build tunnels, they build "terror tunnels". Targets are "terrorist sites". The defending army are not soldiers, they're terrorists, thus not being awarded the international luxury of an "enemy combatant". Less than human. Their obvious usage of traditional military-grade propaganda to dehumanize the enemy has been working in overdrive. Meme after meme, cartoon after cartoon, contextless stat after contextless stat pours out of the IDF in a desperate attempt to win public opinion in favour of their slaughter. But bad vector art of hospitals they'd like to bomb don't prove anything in the face of the pictures of dead children and the interesting little details that leak out.
According to Alex Fishman, a military analyst writing in Yedioth Ahronoth: "The tanks, which serve as the heart of the assault force, received an order to open fire at anything that moved. The area and the targets are due to be seized by the morning hours. From here on, [the army] will start to clear the ground, in what could last for several days, depending on political developments."
Or the quickly deleted reports...
And then there’s the now deleted tweet from CNN’s Diana Magnay observing Israelis cheering as bombs rained down on Gaza: “Israelis on hill above Sderot cheer as bombs land on #gaza; threaten to ‘destroy our car if I say a word wrong.’ Scum.” (CNN pulled her off the Gaza beat as a result).
For Israelis on Edge of Battle, Rockets Put On a Show
SDEROT, Israel — The women and children trudge up the dusty hill between dusk and sunset, some with dogs. The men stay long after dark, some with binoculars. It is the closest thing to a front-row seat for the war between Israel and the Gaza Strip, short of combat. Better than being stuck in a safe room somewhere watching those talking heads on television.

Overhead, they can see Israeli drones and planes beaming light onto the darkened battlefield. Below, across the road, Israeli tanks and troops are staging for entry. Beyond, an orange glow — could that be Shejaiya, the Gaza City neighborhood where
fighting has raged for three days? No, too far north: Probably Beit Hanoun, the border town that has faced intense artillery shelling since the invasion began.

Suddenly, shouts of “Ooh, ooh!” and everyone pointed up at two rockets soaring from Gaza into Israel about 9 p.m. on Tuesday. “Jerusalem,” a veteran hill-watcher said knowingly. They checked the Red Alert apps on their cellphones: Turns out it was Gedera, a town closer to the coast. When the Iron Dome system intercepted it, applause came from the crowd of perhaps 50.

“It’s like we’ve been having a very bad toothache with a pain that’s been accumulating for years,” said Shmuel Dahan, 51, a gardener who lives near the hill. “And we want to come and see the tooth being taken out.”
It should be a pretty key indicator when you see how hard Israel is working to keep popular opinion on it's side that there is likely a reason for that. Israel is never going to be peaceful. Peace doesn't buy you $3 Billion annually in military aid.

Alliances are forming

Facing a constant assault of western based propaganda Russia told Israel something very interesting..
Despite President Vladimir Putin's personal sympathy for Israel, which has remained neutral in the ongoing struggle between Russia and the West over Ukraine, Russia cannot openly support it in the Arab-Israeli conflict because of its other commitments in the region, analysts said.
And a few weeks prior to that China's president visited South Korea in what western media dubbed 'a snub to the North', at least until we heard what he had to say.
SEOUL — China’s visiting president, Xi Jinping, reminded South Koreans on Friday that their two countries had fought “shoulder to shoulder” against Japan more than four centuries ago, underscoring what analysts have called the main goal of his first official visit to the country: drawing South Korea away from Japan and the United States.
It should be no surprise these alliances are forming at the same time the BRICs announce their development bank intended to take on the U.S. dollar's primary reserve currency status.

The stench of western hypocrisy is becoming hard to ignore and sooner, rather than later, the world's going to be saying "that's enough of this shit".

Click here to recommend this post on and help other people find this information.

Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Wednesday, July 16, 2014

Running Orders, by Lena Khalaf Tuffaha

They call us now.
Before they drop the bombs.
The phone rings
and someone who knows my first name
calls and says in perfect Arabic
“This is David.”
And in my stupor of sonic booms and glass shattering symphonies
still smashing around in my head
I think “Do I know any Davids in Gaza?”
They call us now to say
You have 58 seconds from the end of this message.
Your house is next.
They think of it as some kind of
war time courtesy.
It doesn’t matter that
there is nowhere to run to.
It means nothing that the borders are closed
and your papers are worthless
and mark you only for a life sentence
in this prison by the sea
and the alleyways are narrow
and there are more human lives
packed one against the other
more than any other place on earth
Just run.
We aren’t trying to kill you.
It doesn’t matter that
you can’t call us back to tell us
the people we claim to want aren’t in your house
that there’s no one here
except you and your children
who were cheering for Argentina
sharing the last loaf of bread for this week
counting candles left in case the power goes out.
It doesn’t matter that you have children.
You live in the wrong place
and now is your chance to run
to nowhere.
It doesn’t matter
that 58 seconds isn’t long enough
to find your wedding album
or your son’s favorite blanket
or your daughter’s almost completed college application
or your shoes
or to gather everyone in the house.
It doesn’t matter what you had planned.
It doesn’t matter who you are
Prove you’re human.
Prove you stand on two legs.

Click here to recommend this post on and help other people find this information.

Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Friday, July 11, 2014

A carbon tax is never going to work for the same reason no carbon tax is never going to work

Perhaps one of the greatest (and most annoying) red-herring debates of our time is the "carbon tax vs. no carbon tax" debate which always revolves around "economic growth" and is therefore always flawed on both sides of the debate. It's not that the answers given are wrong per say but more so that the question being asked isn't really relevant and so any subsequent answers will likewise be just as irrelevant. I've decided to give my take on the "carbon tax" debate now as I've touched on it previously but haven't ever really gone in depth and with Justin Trudeau's carbon tax announcement I feel now is probably a good time.

Market fundamentals are broken

My biggest issue with concepts such as a carbon tax is that for them to work market fundamentals must be allowed to play out in good or bad ways and as we've shown plenty of times over recent and long term history that is not what happens.

So if we look at the sub-prime crisis of 2008 as an example did society allow the banks to collapse or did we bail them out and start printing currency hand over fist ever since to keep interest rates low and "support the economy"? So let me ask you, what do you think will happen if say an oil company is deemed "too big to fail" (as they would very likely be considered, especially here in Canada) and a carbon levy is interfering with their growth?

Alberta extends deadline to renew carbon levy
The Alberta government came under fire from critics Wednesday after it quietly extended the deadline to renew its carbon levy on the province’s heaviest greenhouse gas emitters.
The move comes one day after auditor general Merwan Saher released a report slamming the government’s handling of its climate change strategy, a central component of which is the $15-per-tonne carbon levy.

The specified gas emitters regulation had been up for renewal Sept 1, but an order by Environment Minister Robin Campbell during a cabinet meeting this week extended the deadline to Dec. 31, 2014.

Premier Dave Hancock said the extension buys the province time to continue discussions on a North American climate change strategy.

“It’s very difficult for Alberta to do anything more than we’re doing now, with respect to raising the costs for industry, without it being a continental approach,” Hancock said in an interview from Iqaluit, Nunavut, where he is attending the Western Premiers Conference.

Hancock said the province has heard concerns from industry about the impact the levy has on investment and cost margins, adding he is waiting to see whether the results of the November U.S. mid-term elections lead to a shift in policy from Washington.

The regulation places a levy on 12 per cent of a company’s emissions. The price on carbon is a central component of the province’s climate change strategy, which aimed to reduce greenhouse gas emissions by 50 megatonnes per year by 2020. The government admitted in 2012 it is on track to miss those targets by a considerable margin, and Saher’s report castigated the government for failing to monitor and report on the strategy’s results.
I'll tell you what we will do, we will manipulate the system and the rules to get what we want, namely economic growth and as we've been discussing over the last few years on this blog Alberta's expensive oilsands industry really has no additional margins to give and despite historically stable and high oil prices continues to hit problems.

Sunshine Oilsands Ltd facing cash crunch as Asian investors appear spooked by poor returns

Cracks in rock could be connected to Cold Lake bitumen leaks, CNRL acknowledges

Sunshine Oilsands said to withdraw US$325M high-yield bond

Sunshine Oilsands founder resigns from board

Oil sands as national economic engine? Survey shows Canadians vastly overestimate sector’s impact

Nexen letting staff go, slashing costs despite CNOOC’s pledges to Ottawa to win takeover approval: sources

Canada energy deals rebound as shale plays trump oil sands in investors’ eyes

Poor returns, slashing costs, job losses. Yea, sure, there is plenty of momentum behind them and Alberta is "leading the way" in job creation (which is obviously a clear indicator of a healthy national economy, right?) but that is going to teeter off too as the operating costs continue to increase. People I know within the industry tell me all of the companies are already starting to get pretty stingy. It's only going to get worse and more apparent as the temporary rise in oil prices thanks to global tensions adds additional strain to the input costs over time. Of course, that event is too far in to the future for greedy Canadians resulting in the production of articles like this.
EDMONTON - It’s a painful truth: bad news is often good news for the oilpatch.

Witness the run-up in oil prices and oil stocks since the jihadists of the newly formed Islamic State invaded Iraq, raising fears that the country might plunge back into civil war.

Since the violent al-Qaida breakaway group — previously known as the Islamic State in Iraq and the Levant (ISIS) — took control of Mosul, Iraq’s second-largest city, oil stocks have resumed their upward trend.

Toronto’s main energy index, which looked ready to roll over in late May after a big run earlier this year, has jumped about five per cent since early June, when Mosul’s outgunned government forces were crushed.

The latest surge in energy stocks also helped propel Toronto’s benchmark equity index to an all-time record high.

Shares of some big Alberta producers — such as Suncor, Canadian Natural Resources and Cenovus — have done even better than the oil and gas index, gaining about 10 per cent apiece in recent weeks.

Surging oil prices have driven the gains, touching a recent peak of nearly $107 US a barrel, up from $99 in early May. Although crude has since backed off to about $104 a barrel, analysts see limited downside ahead.

In fact, with the jihadists in control of a vast border area between Syria and Iraq, the government of Iraqi Prime Minister Nouri al-Maliki teetering, and hopes for future output growth from OPEC’s second-biggest oil producer fading fast, analysts are boosting their oil price forecasts for the rest of this year and next.

The so-called “fear premium” is back. So while oil prices are unlikely to spike further unless the insurgents threaten Iraq’s rich oilfields in the south, the floor price is likely to stay elevated for the foreseeable future.
What does it say about your economic state when global instability is practically a required part of the formula? Meanwhile for those not playing a direct part in the oil industry increased energy costs simply translate to a deteriorating standard of living.
If you are a temporary foreign worker in Fort McMurray, the gap between your wage and the wage that workers earn in the oilsands sector is immense.

On average a worker in a fast food outlet in Fort McMurray — and there are lots of them in a place where at almost any time of day there is a long line of pick-up trucks waiting at the drive-thru — earns $14 to $17 an hour. If it’s part-time work, which it usually is, that works out to $400 to $500 week at the most.

In the oil and gas sector in Alberta where wages are mostly driven by the fierce competition for all kinds of labour in the oilsands industry, the average weekly wage as of December 2013 was $2,067, up 73 per cent from 2001.

Construction workers in Alberta earn an average weekly wage of $1,586 — an increase of 83 per cent since 2001.

This is just the average on a province-wide basis. In the oilsands region where competition for labour in both oilsands operations and construction is fierce, the weekly wages are much higher.

So where does that leave the temporary foreign worker or anyone who wants to work in a fast food outlet or a hotel?

Mostly it leaves them at the bottom of the heap when it comes to wages with not much hope of ever moving beyond that. The guest workers keep wages down for themselves and anyone else who takes those jobs.

Where does it leave the small business owner who can’t really compete with the astronomical wages offered by the oilsands industry?

The Chamber of Commerce in Fort McMurray says even with
the recent change to the TFW program small businesses are left in a tough spot and the federal government should make special allowances for them.

“Here in Alberta and Fort McMurray, we still have enormous difficulty attracting quality people under the current laws,” Nick Sanders, president of the Fort McMurray CoC
told Fort McMurray Today. “For our region, the cap is not appropriate. In fact, we believe it will just hurt our local businesses.”

“And if you look at the predicted job growth numbers, not only in small businesses, but for the oilsands, it’s going to get worse,” Sanders added.
This should of course be no surprise to readers of this blog, but its nice that the mainstream media is finally pointing out that there is a direct connection especially when you have memos warning of "increasing labour costs".

Food bank expanding in Parkland County <- Albertan Growth?

so what does all of this have to do with a carbon tax? I think it should be obvious, as it stands now with the miniscul levy already in place and existing operational costs which are destined to simply increase and an oil price that has reached the upper limits of high cost stability that there just isn't room for a carbon tax and even if we did implement one should it inhibit "economic growth" it would simply be adjusted, delayed, or cancelled.

Or maybe we'll just print the currency to cover it

The entire world right now is supporting their "economies" by printing currency and manipulating economic data to fit the desired interest rate policies. For anyone living in the real world the idea that "inflation is low" is laughable, but the low inflation (free from "distortions" like the cost of food or energy) is required to continue providing the "low interest rate" excuse central banks need to continue carrying out their policies to foster more and more loans to prevent "deflation" (See: The magic of minimum wage and inflation hocus pocus). So if a carbon tax were passed what do you think the odds are that data will simply be manipulated more to the point that central bank monetary policy can simply create the needed currency to cover the additional cost? If governments intentionally inflate away their debt why wouldn't they inflate away the cost of carbon too?

The idea that printed currency with no relation to the real world can be used as a hard limit on real world pollution is probably the stupidest thing I've ever heard of. The day the U.S. stops raising the debt ceiling is the day that I'll believe printed currency can limit anything.

But it's not like no carbon tax is going to save the "economy" either

As it stands right now even with no international or even nation carbon levy Canada's economy is struggling. "Growth" just isn't happening despite all of the continued emergency measures and low interest rates. Sure, we're propping up asset bubbles for the obnoxiously rich but otherwise things are pretty well at a standstill. The lower Canadian dollar (relative to the USD) hasn't resulted in the boom of exports economists have been "predicting" largely because they're basing it on historical models which are no longer accurate.

Awhile ago the World Bank put out a report that said that "addressing climate change would increase economic growth" and I noticed a lot of people rejoicing and linking it without reading it too closely apparently.
In the World Bank report, economists looked at the effects of specific policies in six regions – Brazil, China, the European Union, India, Mexico, and the United States – that are both leaders in the world economy and global emissions.

None of the policies involved putting an economy-wide price on carbon emissions. Instead, the bank used computer modelling to gauge the effects of specific measures – such as installing dedicated bus lanes in India or clean cook stoves in China, or introducing more efficient air conditioning and other building systems in Mexico.
The annual benefits of those policies included GDP growth of between $1.8tn and $2.6tn – which was an estimated 1.5% higher than under a business as usual scenario, the bank said.

It said the pro-climate pro-climate policies would have other knock-on benefits including avoiding 94,000 deaths a year due to air pollution.
Dedicated bus lanes, clean cook stoves, and "more efficient air conditioners". Yup, seriously. Nevermind the resource extraction that will have to occur to build new "more efficient air conditioners" for Mexico, or the tar and roadwork that will go into "dedicated bus lanes". and clean cook stoves in China? Wow, that should surely offset their industrial pollution. These measures will definitely "grow the world economy" because we will be producing more stuff to replace the current stuff so it will "grow the economy" for the same reason that "planned obsolescence" grows the economy but in the process we will have to extract and deploy numerous resources and consume plenty of carbon for the output. It should be no surprise that the World Bank put out this report as surprising as it might be to most people because what are they advocating, really? Buying more stuff which will likely require government or personal loans for the initiatives. Hmm.

The peoples economy is suffering from our pursuit of oil

The idea a carbon tax (or no carbon tax) will enhance the people's economy and not the oligarch's economy is already a big fat lie. Our politicians are paying lip service to economic growth and climate policy but the tragedy of Lac-Megantic and the resulting losses show that universal "economic growth" and the people's economy isn't really the focus.
Most of those who died in the blast were at the Musi-Cafe, a popular waterfront bar. Its owner, Yannick Gagne, who was at home that night, is among the business owners trying to rebuild.

Gagne says he can imagine bands playing to crowds on the waterfront deck of his rebuilt bar, but he is not sure when it will happen. Like many businesspeople, he has a spot to rebuild but is waiting for the provincial government to calculate the amount of assistance he will receive.

"In the best case it will be September, but it could be later," he said, standing amid wood and metal frames in a zone set up by the government for dislodged businesses. "The problem is we don't know how much assistance we are getting from the government, and that is slowing us down. We've been waiting for an answer for months."

Quebec's Ministry of Municipal Affairs said some $4.3 million has been disbursed among 147 businesses that sought aid in the wake of the derailment. An additional 97 requests are still unresolved. A spokeswoman declined to comment on their progress.

That aid is part of more than $200 million that has been doled out by the governments of Quebec and Canada. Most of that has gone toward the cleanup, rebuilding infrastructure and support to municipal and non-governmental bodies.


The one tangible sign of recovery - the return of freight trains last December - is also one of the town's biggest worries. The train is a constant reminder of the tragedy.

"I hear it 15 minutes before it arrives. I see it, I watch it go by my window," said Helene Metivier, 50, who owns an inn just outside the blast zone. "It is hard. I live with this memory and fear."
The one tangible sign of recovery? More trains. Meanwhile new crude oil related derailments seem to happen every month. Nationally Canada is all about economic growth for a small portion of the population while everyone else suffers and pays for the consequences.

We need to unite the people

I was reading a blog post the other day on Politics Respun (though it was a repost from another source) about how the 1% has more solidarity than the rest of us. It's easy to see why they do using the carbon tax as an example. Populations are deeply divided on a carbon tax, will there be jobs or won't there be? But for the 1% carbon tax or no carbon tax: they win and you lose. When you realize most issues put in front of the public are intentionally decisive everything else starts making more sense. You'll start to see that partisan lines don't really exist at all. The end result no matter what choice the people believe they've made will be the same. It's like your parents telling you can do your homework before or after supper. Sure you have a choice but ultimately the parents still set the agenda.

The uniting issue for everyone across all political spectrums should be that our monetary system itself is broken, and needs to be fixed. That it doesn't accurately reflect the reality we find ourselves in. Some people will actually suggest alternatives such as steady state economics but I personally believe that it needs to be a collective decision and discussion. We can't really begin discussing the solution until we start discussing the problems. The real problems, and the current system with it's short term popularity contest we call voting where democracy has been reduced to a representatives' "yay" or "nay" along party lines on lobbied corporate bills they've never even read, can not address our long term structural issues. Nobody wants to spill the beans.

The banking Ponzi-scheme is the issue I believe that can unite left and right. It's why I believe that I have followers and readers from across the political spectrum. Left and right represent different management styles of the existing system but what we really need is to revamp and restructure the entire thing. We need to re-orient the economy so that it meets the needs of the people and isn't predicated on infinite growth. We need to restructure the political system away from parties, not more towards them, proportional representation is the last thing we need. We need individuals, real people, analyzing and discussing these problems not what has essentially become a new form of royal inheritance with multiple people from the same families taking important political roles in countries with millions of people.

We need nothing short of a revolution, not of violence, but of the mind where we finally realize that no matter what order the deck chairs are in we're still on the Titanic.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Tuesday, June 24, 2014

"Smaller words", Big Dreams, Hidden Realities

The Progressive Conservatives of Alberta are getting pretty desperate. Not that I believe in the leadership race but rather that the unified "we need more debt" stance for "capital projects" and "Building Alberta" is really quite interesting when you consider Alberta is a province that once prided itself on it's "debt free" status. You'd think one of these politicians running for leadership might try to advocate it after all Alberta's enjoyed pointing it out whenever another province made an economic blunder, or borrowed. But no, instead Conservative Albertans are having to vote for (what is admittedly very entertaining) blabber like this:
Tory leadership candidate Ric McIver said Tuesday the provincial government must do a better job explaining to Albertans why it needs to take on debt for infrastructure.

In a breakfast speech to the Calgary Chamber of Commerce, McIver said he accepts using debt to pay for capital projects but borrowing should be linked to specific projects, with a fixed repayment schedule.

The government must also demonstrate that its debt-to-GDP ratio will decline within a three-to-five year planning horizon, he said.

The Calgary-Hays MLA told reporters that a revamped budget presentation and “plain talk” would build support among Albertans for the government’s fiscal plan.

“We need to talk to them in a language they want to hear and I don’t believe we’ve been doing that well enough as a government,” said McIver, who stepped down as infrastructure minister to run for the Progressive Conservative leadership.

“When I talk about these things I use smaller words. Because you know what, I’m not smarter than other Albertans and I don’t want to present myself as being (so). And I want Albertans to be comfortable with what we’re saying and I want Albertans to say ‘yeah, what my government is saying I understand.’”

In the spring budget, the PC government projected it would post a $1.1-billion surplus this year while taking on $5.1 billion in debt to pay for public infrastructure, part of a plan that will see the province’s total liability rise to $18.4 billion by 2015-16.

Isn't that cute? "smaller words" lol. So, he's not really smarter than Albertans because he's purposely dumbing himself down to their level. It's a well known fact Albertans just can't handle "bigger words". Albertans need "plain talk" and then they'll see why everything the government has been telling them for years about debt is completely false and yet all of the "prestige" the Conservative brand name earned in the process as "prudent fiscal managers" should stay.

You see the truth is that Albertans have been fooled into believing they were debt free (largely to support the myth of oilsands prosperity as being incredibly profitable which at the time they were, sort of) and now they need to understand in "plain talk" with "smaller words" why they actually aren't. "Capital projects", but if those words are too big we'll just go with "build stuff". We need to build stuff, why? Because we're growing. Why are we growing? To support the supposedly profitable industry known as the oilsands industry. How do we become profitable? Well.. something something oil price and markets and magic. The Alberta government has no plan, they're more like the Underwear Gnomes in South Park:
  • Step 1) Collecting bitumen.
  • Step 2) ???
  • Step 3) Profit!
The Alberta government is perpetually on Step 2; from Ralph Klein who figured he'd just defer "building stuff" into the future to "pay off the debt" that we're now re-acquiring to start "building stuff" to the Ed Stelmach era where the government's target price for oil was constantly raised upward to the current era where unattainable and unsustainable price targets are the only option left only to be replaced by [in smaller words] "we'll get more money if we just get access to new markets". If we get access to new markets there will be something else, some new excuse, if we get pipelines there will need to be something else. It doesn't matter what price they're selling at or how much we produce their associated revenue will always (and I can't stress this enough: ALWAYS) be insufficient to cover the related costs to support oilsands growth. Always.

That's not going to stop them from trying to convince you that everything is just going swell though, building off the other global lies currently at play and using some fairly "bigger words".

Record income for Alberta’s Heritage Fund
Strong equity markets helped push the Heritage Fund to an all-time earnings record of $2.1 billion in 2013-14.

The fund posted a 16 per cent return, the third highest since it was created in 1976. At March 31, the fund was worth $17.5 billion on a fair value basis.

“The Heritage Fund’s strong growth confirms what we have been telling Albertans for some time now—that we can grow our short-term and long-term savings and keep our balance sheet strong at the same time.”Doug Horner, President of Treasury Board and Minister of Finance

According to the Heritage Fund’s 2013-14 Annual Report, the fund’s average annual investment return over the past five years was 12.7 per cent. The 10-year average annual return is 7.5 per cent

The Alberta Heritage Savings Trust Fund is a key part of the government’s legislated savings plan that will see Alberta’s total savings; which include the Heritage Fund, endowments and the Contingency Account; grow to $26 billion over the next three years. A portion of non-renewable resource revenue will be regularly set aside for savings, and by 2017-18, all net income earned by the Heritage Fund will remain in the fund.
So apparently because the government bet right on the equity markets they've now shown that "we can grow our short-term and long-term savings and keep our balance sheet strong at the same time.". Hmm, how about that?


Oh, right, I mentioned how this lie is just building off other lies? Right, well an interesting paragraph in a piece on Joe Oliver (unrelated though)
“The market, bolstered by the Federal Reserve, seems content to ignore weaker U.S. data and Iraq, putting off the day of reckoning yet again. New-home sales are surging once again, as the market continues the trick of focusing on one piece of good news to the exclusion of others.”
Why is it a lie? Because they know it's temporary. They didn't do anything special, the market won that year for them just as it lost for them in 2008 and 2009. This doesn't confirm anything for Albertans besides the fact the Alberta government hasn't learned a god damned thing and are now depending on an artificially manipulated market to deliver their hopes and dreams (and cover up their mistakes).

They're still gambling and calling that a plan. 2.1 billion fuckin dollars? Really? Because of a market that's bolstered by.. oh let's see... what is now only uh yes, $35 billion in bond buying per month. I don't know if you've noticed this folks but with the amount of currency that's been injected into the global economy 2.1billion isn't exactly what it used to be. They're printing U.S. dollars like it's confetti. Japan is printing to "keep the market bolstered" too. They're all printing. So does this market win actually mean anything? I'd bet that by 2017-2018 when the Albertans finally get some of that "income" being generated from their children's savings back (supposedly) that the central bank and "recovery" cash cows will have run out.

In smaller words that means: "the cake is a lie".

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

Friday, June 20, 2014

The current turmoil in Iraq is a direct result of our actions and inaction

It wasn't very long ago that John Kerry stood in front of the world to convince us that bombing Syria in support of the 'rebels' (which at the time it was just being discovered that a large majority of them were actually al-Qaeda affiliates even though this was well known in intelligence circles long before) in an effort to help overthrow Assad was in everyone's best interest. Thankfully due to an unexpected question and the strategic insight of Russia this reality never came to be or the strength of the ISIS offensive in Iraq would be much stronger and Syria would be over run with ISIS fighters and if you can believe it even less stable then it is now.

Assad has been fighting a foreign invasion this entire time while our news told us it was a democratic revolution which we of course supported because we really really really don't like Assad and feel it's our place to decide the Syrian's political future. Can you imagine how western governments would respond to an al-Qaeda Jihad in their countries? You can just hear Mr. Burns shouting "release the drones". Did you once hear the west talk about getting involved against ISIS up until this point? No. We've been perfectly happy to allow them to build up their army as that was supposedly in the west's interest in taking out Assad.

But before Syria, there was Libya, in which the west actually supported these ISIS fighters in the overthrow of Gaddafi. Unlike Syria the news that we were actually aiding al-Qaeda in Libya never became mainstream. Western citizens in effect were cheering for the events that have now led up to this Iraq situation. The west isn't just responsible for the destabilization of Iraq with what is still an illegal invasion on false pretense to overthrow a dictator which the west installed, supported, and even aided in the execution of heinous war crimes but we're responsible for the strength of the invading ISIS fighters too.

We're responsible for the creation of al-Qaeda in the first place, we were responsible for the installation and support of Saddam.  No matter how you slice it the west is responsible for this situation, both directly in our actions and directly through our inaction in support of the west's real agenda to destabilize the Middle east and control the remaining non-renewable resources there. This is not a debate between whether it's "Bush's fault" or "Obama's fault"; it's both of their faults and it's your fault too. Yes, you, dear reader, for not holding our leaders to account as they set out on a quest for world domination using pathetic evidence and excuses to pave the way.

Supporting refugees created by our actions doesn't stop the number of refugees that need help from increasing. If you really want to help these countries, if you really want to help these people, then you must start calling out western governments on their bullshit. It's not a left or right agenda, it's a global agenda implemented and executed by multiple countries all being overseen by the same banking cartel. It is time for the citizens of western nations to start demanding trials for war crimes, those in the present and those done in the past. From Bush Sr. to Obama, from Cheney to Clinton, it is time we recognize that not one single fucking "intervention" has had the advertised results. It's time to recognize that the only thing the "war on terror" has accomplished is the radicalization of more people as the west indiscriminately kills and occupies.

The rest of the world isn't stupid, it may take awhile but the era of American and western "exceptionalism" is quickly coming to a close. I know it feels good to continue acting as though we're the beacon of freedom and prosperity and as though our opinion on the behavior of foreign governments actually mean something, but it doesn't. We have no legs to stand on, we are as corrupt as corrupt can be and the stench of our hypocrisy won't go un-addressed forever.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.