Wednesday Night #1705

A few Big Ticket items on the agenda this week and the first is of course, Peter Berezin, who will discuss the October and November BCA Reports.
Regarding the October Report, The Universal Constant Of Finance, Peter says:
“The cyclical rebound in U.S. equities is ending. The real level of the S&P 500 is likely to move sideways over the next five to ten years. Foreign stocks should outperform their U.S. counterparts. .. guest-author Dhaval Joshi argues that to make sense of financial markets, it is crucial to recognize that they are complex adaptive systems. Such an understanding can help identify key turning points in market prices.“
The November Report is titled The Return Of The Euro Crisis : Why “Whatever It Takes” May Not Be Enough. Peter’s accompanying comment is:
Global equities have entered a new, more volatile phase. Stretched valuations in the U.S. imply limited upside for stocks, while intensifying deflationary headwinds abroad will exacerbate downside risks.
This month’s Special Report, which was published yesterday, argues that the euro area may be caught in a fiscal trap in which government debt levels are destined to rise further. This could set the stage for another major crisis.

Second on our list is/are the outcomes of the U.S. mid-term elections. Of course, the key question is who will obtain a majority of seats in the Senate. Most are predicting that the Republicans will carry the day, but some are hedging their bets, pointing to some tight and/or unpredictable races. Then, there is the question of what happens next as many point to the fact that while the Democrats have in Hillary Clinton a strong presidential candidate for 2016, the Republicans have no-one and they need to shore up their badly tattered reputation as responsible legislators. [Update DEMOCRATS CRUSHED IN 2014 MIDTERMS —  “Call it a thumping. Call it a shellacking. However you want to describe the 2014 midterm elections, the point remains the same. Democrats took it on the chin Tuesday night, losing the Senate, getting crushed in winnable governors’ races, solidifying their minority status in the House for years to come, and stemming the party’s ability to continue putting its stamp on the judiciary.”  full list of last night’s results.]

Third, we would like intelligent appraisal of the income-splitting proposal announced by Mr. Harper. Andrew Coyne seems to be happy – or relatively comfortable – with it Federal program for income-splitting a step in right direction, but cheerfully ignores the unfairness to single-parent families. [See Income splitting won’t help parents who really need a tax break — Single parents cannot get any help from income splitting at all – it takes two adult taxpayers to take advantage of income splitting.] In fact, there appears to be a fairly wide-spread assumption that single-parent families are usually headed by low-wage-earning females, so it doesn’t matter. We would like to know if anyone is challenging that assumption? Jennifer Robson, meanwhile writes in Maclean’s that Harper’s family tax cut isn’t great policy, or good politics — The way rules are written, the real winners will be lawyers and tax-professionals.
To further the discussion, the Globe & Mail has a good chart on the Distribution of Income-splitting.

Fourth: ever since last Wednesday when we innocently introduced the term climate refugee into the topic of the problems of world-wide migration. we have been deluged by a lively – and sometimes heated – email exchange among a group of Wednesday Nighters, including a 10-slide PowerPoint presentation prepared by Gerald Ratzer defining what are the Green House Gases and why they are important. While all involved in this exchange are passionate on the subject of climate change, we confess that most of the discussion is far too technical for us to follow. Which is not to say that we do not believe in its importance, especially in light of the release on Sunday of the The Intergovernmental Panel on Climate Change’s Synthesis Report [UN climate report urges drastic drop in greenhouse gas emissions — Climate change is happening, it’s almost entirely man’s fault and limiting its impacts may require reducing greenhouse gas emissions to zero this century, the U.N.’s panel on climate science said Sunday. The fourth and final volume of the Intergovernmental Panel on Climate Change’s giant climate assessment didn’t offer any surprises, nor was it expected to since it combined the findings of three earlier reports released in the past 13 months. But it underlined the scope of the climate challenge in stark terms.]  No doubt, we will continue to enjoy the flurry of emails from our passionate debaters who have been joined by Bert Revenaz who will be with us this Wednesday.

We hope all of you in Montreal were able to do – and did – your civic duty despite the problems with Sunday’s School Board vote.
(Complaints over school board elections as people turned away — Long lines and voters’ lists causing problems during first school board election in seven years). We are disappointed in the outcome, but congratulate Anne Lagacé Dowson on a fine campaign. Céline Cooper said it best in her Facebook post:
“The issues you raised and insisted be moved to the forefront of the education agenda — transparency, school closures, better and more accessible French instruction, the importance of quality public education — resonated with a lot of people. It forced the incumbent team to discuss and confront them. Your presence engaged parents and citizens who had never taken an interest in the school board elections before. You ran a passionate campaign, and your entire team should be commended for their dedication and hard work. Well done.”

How does everyone feel about this news announced in La Presse on Saturday? Nouveau pont sur le fleuve: Maurice Richard déloge Champlain
Le gouvernement fédéral a tranché: l’ouvrage immortalisera Maurice Richard, la légende du Canadien de Montréal.
Depuis près de deux ans, le ministre fédéral Denis Lebel poussait dans cette direction, même si certains à Ottawa avaient d’autres vues, a appris La Presse. L’ouvrage aurait pu souligner la contribution de Jeanne Mance à la naissance de la métropole. Mais, probablement à partir de groupes cibles, on a opté pour Maurice Richard, «qui ressortait nettement», confie-t-on. Clin d’oeil aux fans, on souhaite annoncer ce choix le 9 décembre – un rappel du numéro que portait le Rocket. Check out Gilles Duceppe’s reaction: Que le pont Victoria devienne le pont Maurice-Richard!.

Finally, whenever you are feeling particularly upset by a failure in customer service, we recommend this entertaining – in a black sort of way – account by Stephanie Nolen, Globe & Mail bureau chief in Brazil My customer-service nightmare shows cost of living, working in Brazil.