It’s been a decade since Robert Fulford popularized the term: “The Longest Undefended Neurosis in the World.” It’s about as accurate a description of Canada-US relations as has ever been offered. The eagerness which, even at this late date, we lap up any mention of Canada on US media is oddly pathetic. This is the sort of behaviour typically seen in small bankrupt countries. Any mention of Portugal outside of Portugal is almost immediately reported on the state broadcaster. There is a strange cloying quality about such reports. A desperate yelling: “Hey we used to be important!”
It’s a small country thing. When a big country thinks this way you get French-style arrogance: “Hey we still are important, it’s that you lot aren’t clever enough to realize that blindingly obvious fact.”
Today Rob Ford is probably the most famous Canadian in history, save William Shatner. Neither men’s careers has done much to change international perceptions of Canada. We’re boring and probably polite. From time to time we kill seals and moose, though not necessarily in that order. As a general rule we avoid doing evil things. Short of carpet bombing a small country, which is well beyond our military capabilities, nothing we do will change these perceptions. We could annex Buffalo, something within our military capabilities, but I suspect most Americans would probably be grateful. They might throw in Rochester as a parting gift.
Richard Anderson, “Talking With Americans About Canadians”, The Gods of the Copybook Headings, 2014-04-10
April 12, 2014
QotD: Canada’s “small country” syndrome
July 19, 2013
Bitter reality scheduled to return on September 22nd
Here’s an unpleasant idea to disturb your narrative of economic recovery:
You may have noticed the small blurb recently that the ECB had eased the rules for asset backed securitizations. You may have read this snippet and thinking nothing of it you moved on. This would have been a mistake because just here you would have noticed the cracks of a crumbling empire.
The French banks, the Spanish banks, the Portuguese banks are all engaged in an ongoing charade so they do not need to ask the EU for help. They all are taking their Real Estate loans, the properties that they have confiscated, the commercial loans that are no longer paying and they have put them into massive securitizations that are pledged at the ECB as they are given cash for the collateral. The collateral, as you may suppose, has all of the value of cents on the Dollar but they are given money at par while the ECB carries them on their books at par. It is a fraudulent scheme jam packed with money created out of nothing but it is judged to be a better plan that to have to admit to accurate financials and have the banks of Europe default all across the Continent.
[. . .]
There will be nothing but lying until September 22, 2013 which is the date of the German elections. This is the drop dead date that I have been asked about for so long. Then, as soon as the celebration is over that Ms. Merkel is to remain in power, the world will turn on its axis. The status quo will disappear and there will be a “shock and horror” campaign as the Southern nations of Europe demand more help and Germany squirms and then refuses to provide it because it does not have the assets to do so.
Spain, France, Portugal, Greece, Cyprus, and even Italy are all going to line up at the trough only to discover that the promise of water was just that, a promise, and does not exist. A Biblical drought will be upon the Continent and from the political battles will emerge new alliances and new screams calling the traitors by name. The twin towers upon which the markets rest, money from nothing and fairy tale financials, will decompose in the light of this new sun and our old friend, Fear, will return to haunt us.
Sleep well.
June 25, 2013
Portugal’s experience with drug decriminalization
The Cato Institute sent out a Twitter update, reminding everyone about the 2009 White Paper by Glenn Greenwald on how the Portuguese drug experiment played out after 2001:
On July 1, 2001, a nationwide law in Portugal took effect that decriminalized all drugs, including cocaine and heroin. Under the new legal framework, all drugs were “decriminalized,” not “legalized.” Thus, drug possession for personal use and drug usage itself are still legally prohibited, but violations of those prohibitions are deemed to be exclusively administrative violations and are removed completely from the criminal realm. Drug trafficking continues to be prosecuted as a criminal offense.
While other states in the European Union have developed various forms of de facto decriminalization — whereby substances perceived to be less serious (such as cannabis) rarely lead to criminal prosecution — Portugal remains the only EU member state with a law explicitly declaring drugs to be “decriminalized.” Because more than seven years have now elapsed since enactment of Portugal’s decriminalization system, there are ample data enabling its effects to be assessed.
Notably, decriminalization has become increasingly popular in Portugal since 2001. Except for some far-right politicians, very few domestic political factions are agitating for a repeal of the 2001 law. And while there is a widespread perception that bureaucratic changes need to be made to Portugal’s decriminalization framework to make it more efficient and effective, there is no real debate about whether drugs should once again be criminalized. More significantly, none of the nightmare scenarios touted by preenactment decriminalization opponents — from rampant increases in drug usage among the young to the transformation of Lisbon into a haven for “drug tourists” — has occurred.
The political consensus in favor of decriminalization is unsurprising in light of the relevant empirical data. Those data indicate that decriminalization has had no adverse effect on drug usage rates in Portugal, which, in numerous categories, are now among the lowest in the EU, particularly when compared with states with stringent criminalization regimes. Although postdecriminalization usage rates have remained roughly the same or even decreased slightly when compared with other EU states, drug-related pathologies — such as sexually transmitted diseases and deaths due to drug usage — have decreased dramatically. Drug policy experts attribute those positive trends to the enhanced ability of the Portuguese government to offer treatment programs to its citizens — enhancements made possible, for numerous reasons, by decriminalization.
August 5, 2012
Tolerance Is Different From Approval
In his Forbes column, Tim Worstall explains his puzzlement over the ongoing Chick-Fil-A uproar in the US and why tolerance is not the same as approval:
As to the basic point about gay marriage I can only offer my personal opinion: all for it. On the grounds that everyone’s going to understand the miserableness of us middle aged heteros a great deal better after 20 odd years of societally enforced monogamy. Slightly more seriously gay marriage or not gay marriage has little to do with a business column.
What does have to do with a business column is that this whole idea of a market means that we don’t have to care about the personal beliefs of either those who supply us or whom we supply. It’s the very impersonality of market exchange that means that it just doesn’t matter a darn what anyone’s sexual (or indeed any other) preference is. We get to care only about whether it’s a good chicken sandwich or whether the customer has enough money for one.
[. . .]
The other point that occurs to me is that we seem to be separating tolerance from approval in a way that some in the US are not.
Just as background, in the country I live in, Portugal, there is as far as a legal marriage ceremony goes, only civil marriage. Any two consenting adults, in whatever mixture of genders and sexes makes sense to those two individuals, can be married by the State. Religion doesn’t even get a look in.
If you do want a religious marriage, according to the rites of a church, then off you go after your civil marriage and have one. That marriage will be limited by whatever that church decides the limitations upon marriage are. It has no legal effect at all.
At which point everyone tolerates gay marriage but no one demands approval of it. For the two are different. Tolerance being the necessary requirement for a free and liberal society: that you get to do what you want to do as long as everyone else is also given the same freedom to follow their path from cradle to grave. Approval is something else again. I, to take a very trivial example, certainly tolerate the existence of Simon Cowell and his shows but that doesn’t mean that anyone can demand that I approve of them.
July 14, 2011
The Eurozone crises
That’s right, crises, not crisis. There are three interlinked crises, not just one:
The crisis in the Eurozone has been lurching from one country to another over the past year or so. After bailouts for Greece, Ireland and Portugal, and with a second bailout for Greece in the offing, the financial markets this week turned their attention to Italy, a far larger economy than those previously affected. Spain, another country struggling to pay its way, has also been hit by austerity measures and political turmoil. But while it is easy to get caught up in the specifics of each new stage of the crisis, it is worth taking a step back to understand what is going on and the possibilities for the future.
The Euro crisis, like just about every other economic story these days, has a three-fold character. It is not, in fact, a single crisis; it has three inter-related elements: financial, economic and political.
Of the three, the financial crisis is, paradoxically, the least significant, even though it is the most prominent of the three and the one which threatens to spin out of control with serious broader consequences. Alongside the financial, the economic aspect is the most entrenched and material of the three, while the political crisis — that is, the failure of the political elites to get on top of the other two challenges — is the most critical, as it is, or should have been, the key to the resolution of the other two. The shift in focus to Italy, the Eurozone’s third largest economy, indicates that time may have run out for effective containment. The Euro genie is probably out of the bottle.
April 18, 2011
True Finn party surges to 39 seats in Finnish election
From nowhere to third-largest party:
The True Finns finished just behind the conservative NCP and the Social Democrats on around 19%.
While the Social Democrats have called for changes on EU bail-outs, including the planned Portuguese rescue, True Finns opposes the plans altogether.
A hostile Finnish government could theoretically veto the package.
Unlike other eurozone countries, Finland’s parliament can vote on whether to approve the measures.
Correspondents say the increased sway of Euro-sceptics in Finland’s parliament could hold up any further bail-out deals.
As the biggest party, the NCP is tipped to lead the next government with former Finance Minister Jyrki Katainen likely to become prime minister of whatever coalition emerges, replacing Mari Kiviniemi of the Centre Party.
Gavin Hewitt called it a “tremor” with an “epicentre” in Finland:
A few years ago the True Finns were a fringe party, that received almost no attention. So what happened? The vote was not just about the bailout. There was anxiety about unemployment and fears of a jobless economic recovery. Reductions in pensions had angered many workers. The party also tapped into fears about immigration.
What makes this election so significant is that it follows a pattern across Europe. Establishment and incumbent parties are being rejected. Nationalist parties are gaining influence.
In the Netherlands, the anti-Islam MP Geert Wilders leads the country’s third largest party. In Italy the Northern League — hostile to immigration and wary of the EU — is increasingly powerful. In France, Marine Le Pen — who wants to abandon the euro — is showing strong support in the polls.
Recently, writing in the Financial Times, Peter Spiegel questioned whether we were seeing the emergence of a European Tea Party. Certainly there is a strong sense of alienation and dissatisfaction. Immigration is a key factor. It is shaking governments. There are more than 24 million people without work in the EU and there is no appetite to welcome new arrivals. That is why the migrants from Tunisia are sparking such tension between Italy and France.
As important as immigration is unemployment. In countries like Italy and Spain there is talk of a “lost generation” that cannot find work. There is a growing awareness that Europe may be a low-growth area.
H/T to Elizabeth, who reminded me that I had an obligation to report the final results after having posted links to the election race twice before.
April 17, 2011
This is why the Finnish election matters to Portugal
Unlike most other EU states, Finland has an option of putting the bailout to a vote:
Opinion polls suggest the True Finns have nearly quadrupled in popularity since the last election though they are unlikely to enter government.
Analysts see mainstream parties taking a harder line on the EU as a result.
Unlike other eurozone states, Finland can put requests for bail-out funds to a majority vote in parliament.
Since any bail-out must be approved unanimously by all 17 eurozone members, a hostile Finnish government could theoretically veto it.
The outcome of Sunday’s election may affect EU plans to shore up Portugal as well as impacting on stability in debt markets.
April 8, 2011
Monty’s daily dose of DOOM!
People suffering from over-cheerful attitudes about the future of the European Union could just read Monty’s chock-full-of-DOOM postings at Ace of Spades HQ for a quick depressant:
Let’s begin abroad by explaining why Spain is boned. Spain suffers from the same disease as the rest of the continent generally — socialism, postmodernism, an ossified job market, an unsustainable welfare state — but in more concentrated form. Spain is so boned that their main export these days is young ‘uns (h/t Andy).
If you look at the countries currently in the midst of insolvency in Europe — Ireland, Greece, Portugal, and (shortly) Spain — it’s obvious that they are different entities altogether from their more prosperous European peers. For one, most of them are recent entrants onto the first-world stage. Spain languished under Franco until the mid 1970’s; Ireland only emerged from decades of civil strife (both amongst themselves and against England) in the early 1990’s; and Portugal was (and still is) a third-world nation glued to the continenet almost as an afterthought. Portugal is more properly thought of as a North African developing country than a first-world European country, whatever the maps say (h/t rdbrewer).
The Euro project hid those problems…for a while. Cheap credit allowed the dysfunctional European countries to borrow enough money to pretend to a first-world standard of living for more than a decade. There was real growth in the various economies — particularly in Ireland — but much of the “growth” was mainly borrowed money with little attendant economic or social reform.
The Great Downturn of 2008 did not cause the problem; it simply exposed what a sham the whole thing had been all along.
England is watching the drama play out on the Continent, and thanking $DEITY that they never signed on to the Euro. England still has serious problems, but they also have options that the other European nations do not have because they control their own currency.
As usual, the original post has lots of links to follow to increase the dosage of DOOM. Adjust intake to adequately suppress your optimism.
November 30, 2010
Ireland’s debt problem
James Howard Kunstler looks at Ireland’s plight:
When you’re out of the country, as I was last week, it’s good to know that the home folks are keeping up with the Kardashians and bravely venturing into the blood-splattered chambers of cable TV’s latest hit, Bridal Plasty — where candidates for marriage are transformed from Holstein cows into inflatable sex toys by magic surgical technology — not to mention all those humble guardians of freedom who kept the parking lots of WalMart safe for consumerism in the wee small hours of Black Friday. These are, after all, perilous times.
Elsewhere, Ireland and the rest of Europe wore themselves out with soul-searching all week over how to handle national bankruptcy within a currency system that bears only a schematic relation to reality. Does the bankruptee go broke all at once, or is she recruited into permanent debt slavery so that the bond-holders of various banks can keep their loved ones in marzipan and Fauchon’s wonderful marrons glacés for one more holiday season? As of Monday morning, Ireland has been commanded to, er, bend over and pick up the soap, shall we say, for about a hundred billion euros in loans that will not be paid back until a mile-high ice-sheet covers Dublin (something that might happen sooner rather than later if the climate mavens are right).
We’ll see how this bail-out goes down with the French and German voters, too, who have to pay for it, after all, especially as Portugal, Spain, and Italy line up at the cash cage for their cheques (and bars of soap). Of course, a few more basis points in the interest rate spreads could prang the whole Euro soap opera — does anybody really believe this game of kick-the-can will go on after New Years? I’m not even sure it goes on past this Friday, but I am a notoriously nervous fellow.
This is almost as good as the (temporarily discontinued) daily Financial Briefings from Monty.
H/T to Terry Kinder for the link.
June 16, 2010
Monty explains it all for you
Financial worries? Fiscal imbalance? Debt woes? No problem! Monty has the answers (well, answers to some questions, even if they’re not the ones you’re interested in):
And the good news just keeps coming! Slumping cattle and lean-hogs futures may have bottomed out. Screw gold, man; I’m buying swine! (Monty, The Wasteland Bacon Baron. It has a nice ring to it. The potentate of pork! The sultan of swine! The High Lord of ham! The chitlin Chieftain!)
I’m not sure whether this is good news or not: Cramer calls yesterday’s big gain a sucker’s rally and advises people to get out. My rule of thumb is to treat anything Cramer says as the ravings of a lunatic. I consider him a shill and a buffoon. And yet . . . is this a Strange New Respect I’m feeling? Or just the dying embers of that burrito I ate for lunch yesterday?
French financial group AXA experiences a blinding glimpse of the obvious and exclaims, “Ze Euro eez doomed!”. Zut alors! (And no, I don’t know why French guys would be speaking English with a French accent instead of French.)
Spain and Portugal submit their austerity plans to the ECB and IMF. Plans include selling shoelaces at the airport, dancing for nickels, graft, corruption, and murder-for-hire. The ECB and IMF remain skeptical, and suggest that Portugal and Spain might want to look into selling the family silver or something.
And if all of that isn’t enough to get you assembling your Financial Apocalypse Survival kit, how about this?
More bond issues are being denominated in Canadian Loonies and Swiss Francs as investor skittishness regarding the Euro spreads. When investors choose something called the “Loonie” over your currency because it just sounds more stable somehow, dude, you got problems.
May 3, 2010
The end of a monopoly
Wine bottles have been sealed with natural cork for hundreds of years. It is an extremely good, natural product that has been used by almost all wine producers because it was better than every other economic sealant available. But cork has a problem that, as a natural product, it is subject to certain risks, the worst of which from a wine viewpoint was contamination with the chemical compound called 2-4-6 Trichloroanisole (usually abbreviated as TCA).
It only takes a tiny amount of TCA to ruin a bottle of wine: and it occurs naturally in the trees from which the cork is harvested. Wine producers and consumers were demanding a solution (wine writers have estimated that between 10% and 15% of all wines suffer from TCA tainting). As monopoly suppliers, however, the cork producers did very little — where else were wineries going to get their bottle closures?
Enter the competition:
By the 1990s, retailers and wineries were clamoring for a solution to wine taint but the cork industry didn’t respond. “No industry with 95% to 97% market share is going to see its propensity to listen increase —and that’s what happened to us,” says Mr. de Jesus from Amorim.
The outcry was just the opening needed by Mr. Noel, a Belgian immigrant who in 1998 began making what he calls “corcs,” he says in part to avoid lawsuits from cork producers, in his North Carolina plastics factory.
Mr. Noel, whose company had specialized in extruded plastics such as pool noodles, named the new business Nomacorc LLC. He eventually built a new, highly automated factory that does nothing but churn out the plastic stoppers, 157 million a month.
The business took off as wineries, desperate for closures that wouldn’t cause cork taint, lined up to buy his product. Nomacorc now has plants on three continents, which produce 2 billion corks a year.
I’m not a big fan of plastic corks — I’m starting to prefer modern Stelvin twist-off closures — but at least with a plastic cork, there’s almost no chance of TCA contamination. I don’t buy very expensive wines, so the most expensive wine I’ve lost to cork taint was only about $60, but that’s still more money wasted than I’m willing to put up with.
If you’ve ever had a glass of wine that smelled of mouldy cardboard, you’ve had TCA-contaminated wine.
