Autonomous Source


November 07, 2007

Down goes the US dollar

Everyone in Canada is talking about the rapid rise of the Loonie (past US$1.10 today!), but the real story is the crashing of the US dollar. Over the past year the Buck has lost over 12% of its value compared to a trade-weighted basket of currencies:

When this change in the dollar value is taken in to account, the S&P 500 has actually lost 3.4% over the past year, and gold has only increased by 16%. Beyond that, the value of all the assets listed on all US balance sheets, both corporate and individual, have been reduced significantly over the last year. If you add in the hit to the foreign holders of US debt, this has probably been the largest destruction of wealth in history. And it's not over yet...

November 02, 2007

Prepare for more child care hysteria

I don't want to alarm anyone or start a panic, but letters from -- gulp! -- A CORPORATION have been sent to the owners of some private day-care centres:

Form letters, written by Texas businessmen fronting the Canadian expansion, have been arriving in the mailboxes of dozens of private daycare operators asking if they want to be evaluated with a view to selling.

It's all part of a rapid global expansion by Groves' ABC Learning Centres, which last year added about 1,000 U.S. centres to its empire.

"We represent a large financial/child care group purchasing child care centres across Ontario," the letter reads. "Are you ready to see what your business is worth in today's market? The process is simple and all information is confidential ... If the centre meets our criteria we will make you an offer."

Dozens of letters! Imagine!

Oh, what the heck, let's panic:

These developments threaten a sea change from the child care environment we now know in Canada. Multi-national child care uses economies of scale and corporate integration of services to open the floodgates to commercial care across Canada. (link)


"Basing the care and education of our children on the corporate model where the greatest return for shareholders, increasing profit margins and global expansion is the rule of the corporation will hurt children and families," said Bird. "We have a clear message today. Canada's children are not for sale."

"It's a Wal-Martization of daycare in Canada," said Liberal critic Ruby Dhalla. (link)


Salma Malik, from Dalhousie Parents Day Care, was alarmed to hear about the poor quality and the high costs of child care for parents in Australia. "Parent fees have risen by 123 per cent in Australia over the past fifteen years. I can't imagine how full-fee families could afford these kinds of increases and think the province should ensure that parents are not left to the mercy of corporate giants jacking up parent fees to increase their profit margins," asserted Malik. (link)


“Foreign ownership of Canadian child care will kill the dream of a pan-Canadian child care system,” says Jody Dallaire, chairperson of the Child Care Advocacy Association of Canada. “Our children and families deserve quality, accessible, community-based child care not some gigantic off-shore warehouse operation.” (link)

A quick pass through most of the Union sites that are responsible for these dire quotes would leave you with the impression that once ABC has a tiny foothold here, their tentacles will quickly stretch across the country, strangling all competition and leaving no other possible options for parents looking for childcare. Big box daycares will stand next to freeway interchanges, where parents will use an efficient drive-through system to deposit their bar-coded, jump-suit wearing children onto conveyor belts leading to their pens. The media will no doubt report these fearful predictions with little skepticism and will completely overlook the self-interest the unions have in making them. They are greatly invested in creating a vast government run bureaucracy with no place for private operators. Why else -- after years of complaining about the lack of childcare spaces -- did they petition Dalton McGuinty today to (among other things):
- Immediately introduce a moratorium on any further licensing of child care programs;
I complained about Eddy Groves and ABC a couple of years ago:
Eddy Groves is not an 'entrepreneur' in the sense that he developed a useful product or service, he just saw that the government was prepared to firehose money in a certain direction and he positioned himself to get a good soaking. He's a corporate welfare beneficiary.
Still true, but I'd rather his company here, continually having to meet government standards and the expectations and needs of the parents, rather than a monolithic, inefficient, union-run 'early-learning' system.

UPDATE: Now that I think about it, perhaps ABC has some inside information that McGuinty is planning to turn on a childcare firehose in Ontario. Watching the corporations and the unions fighting over the money should be a good show.

Cross-posted (a first!) at the Broom. Darcey is planning a big box domination of the Canadian blogosphere. Resistance is useless!

October 26, 2007

On the other hand...

I've praised Flaherty's laissez-faire attitude towards the dollar discrepancy issue because it's the right approach. Change happens when people demand better; it's not up to the government.

And things are starting to change. The Collected Works bookstore in Ottawa is allowing their customers to pay the US price on items with both prices marked (hat tip: Kateland). I've never been there, but I'll have to take a look the next time I'm in the area. is now showing prices in line with their American parent. Companies that have been slow to adapt (like Chapters) have been deluged with complaints. Meetings are being held, buyers are being harangued, and slowly, slowly, more progress will happen.

But the government shouldn't be smug about this. Government is the main reason people in Canada pay more than Americans, and why we will continue to pay more, even after the currency fluctuations have been accounted for.

The Conservatives still stand by the policy of 'supply management' for many agricultural products -- controlling supply by allowing only so many 'rights' to produce, while preventing any imports -- which has the effect of driving prices up considerably. The ironic thing is that the supposed 'reason' for this scheme is to maintain a vibrant agricultural sector. But what it does is decrease new investment and innovation, block new entrants to the business, and lower yields and consumer consumption.

Government standards on many products effectively prevent imports or allow them only through licensed middlemen. A couple of days ago I read the story of a man who found all the appliances for his new house in the US at half the price of what they were selling for here. He thought he had a great deal: his warranties would still be honoured and after paying the duty he would still be far ahead. But then he was informed that because these new appliances were not CSA approved, he would not qualify for house insurance -- even though they were exactly the same make as what he could buy in Canada! I was never a fan on the EU merging their currencies, but I did think it was smart that they merged their various standards on all products, painful as it no doubt was. These standards often operate as de facto trade barriers, while offering governments indignant deniability. "Lower our standards? Would you risk the lives of your children to save a few dollars?"

The government also prevents competition in alcoholic products. Living near the border with Ontario, I have the luxury of choosing from two expensive and unresponsive monopolies (neither of which will carry Laphroaig) but other Canadians aren't that lucky. And in many other markets, such as mobile phones and banking, the government restricts the foreign competitors that would force the incumbants to lower prices.

But probably the biggest reason Canadians pay more is just the border. It takes a long time to cross, a long time to cross back, and long waiting periods before you can bring back anything that would make the trip worthwhile. If Flaherty really wants to see Canadian retailers get competitive, work to make the border crossings more streamlined, and eliminate all those restrictions on foreign purchases. Canadian businesses could adapt or die.

There's about as much chance of that happening as Elizabeth May becoming Prime Minister. In fact, I'll bet that the next 'mini-budget' to come out will offer compensation to those poor Canadian businesses that are losing money to customers going to the States. And you can expect border hassles to actually increase. That's how this country works; the consumer is the least important part of the economy.

October 22, 2007

Canada's retailers are helpless

I'm sure everybody has noticed that the prices Canadians pay for most goods are still significantly higher than what Americans pay. People are getting annoyed, and are starting to complain to the retailers. The federal Finance Minister is encouraging them, apparently because he holds some laughable belief in the power of markets and something called the supply/demand curve. But the retailers aren't buying this nonsense. They've come out to set the record straight.

They can't do anything. It's not their fault:

Diane Brisebois, president of the Retail Council of Canada, which represents 40,000 stores, said Monday her group called for the meeting to explain how prices are set.

"Although we appreciate that the minister wants to get involved, his so-called crusade is misdirected," Brisebois said, noting Flaherty should put pressure on the manufacturers to lower prices in Canada.

Brisebois said manufacturers are continuing to mark up prices in Canada by 20 to 50 per cent, and therefore retailers have little savings to pass on to the customer.

"The minister needs to put pressure on that community as he has done to retail," she said.

"He's not talked about the publishing industry; he's talked about booksellers. Well booksellers don't set the price. The publishing industry, the magazine industry, the car manufacturing industry — those are not retailers. Retailers are given a certain price, they have a markup and they sell the merchandise.

Isn't it crazy that a government minister could think that a group of only 40,000 retailers would have the leverage with their suppliers to get the same prices as the suppliers' other customers? Obviously, only the government could do that. This is Canada, after all.

October 08, 2007

When you work in a corporation too long...

You know how it is. Most of your time is spent on things that are not important. Well, they are important, of course. Your company would fall apart if it wasn't for the many minor tasks you and your fellow workers accomplish each day. But you don't expect any appreciation for them, and they're not anything to write home about.

Once in a while though, you do work on something that stands out. Something you will remember all your days, and that you will probably tell your grandchildren about. It makes you glow with pride and feel energized and excited about your job. No, this is not just a job! It's your Calling in Life! This is not a time for false modesty. Accomplishments like this are good for the moral of your fellow employees, will force customers to reappraise their previous experiences with your company, and -- let's face it -- will allow the top management to see your unique blend of skill and drive, as well as the long-term, out-of-the-box, paradigm-breaking thinking you're capable of. It will finally earn you the promotion you deserve.

You must tell everyone. Send a company-wide email. Make a presentation to your department. And invite the top management! This is big! Send a press release to the media! Take matters into your own hands and send the news to your entire customer database! Everyone must know that you have taken your company to a whole new level of service!

We're writing to let you know that Park Plaza has updated its Privacy Policy effective October 28th, 2007. We value your business and are excited to make these changes, enhancing our services to serve you better.

Please take a few moments to review the updated Privacy Policy.

Thank you for staying at Park Plaza!

And then everything is quiet. Why have there been no responses to your email? Why did no one show up for your presentation? There hasn't been one follow-up phone call, or anyone dropping by your desk. Is your work not respected? What's the matter with the people around here? Are they stupid? Or do they just not care?

Face it, you hate your stupid job...

July 13, 2007

Black snagged on a few charges

He didn't quite wriggle free:

Conrad Black has been found guilty on 4 charges, including obstruction and three counts of mail fraud, and not guilty on the other 9 charges.
The complete list of charges and the verdicts can be found here. It seems he was nailed for the non-compete contracts and the famous removal of the boxes from his office.

I have to say I'm a little disappointed -- in Black that is, not the verdicts. I like Black and I like the way he infuriates the clever people. I hoped the charges were false -- but I'm not very surprised they aren't. Too often powerful CEOs are unable to see where their interests and the company's diverge. They use the company's power to make decisions that benefit themselves first.

Now, how many years do you think he will get? I'm guessing ten and out in three, with a big fine. But what do I know?

January 12, 2007

Taking the 'retro' trend too far...

Or maybe not. The Holden Efijy displayed at the recent North American International Auto Show is really something else.

A resized photo really doesn't do this car any justice. You really have to see them full size: above photo, side, rear, interior.

July 24, 2006

What is he sorry for?

Steve Case is 'sorry' his worthless company managed to buy an established media company rich in assets:

Steve Case, co-founder of the one-time biggest online service AOL, apologized for the company's merger with media conglomerate Time Warner Inc. in an interview with U.S. journalist Charlie Rose.

In an interview broadcast on Friday, Case, who was shoved aside as chairman in 2003 and who left the board entirely in 2005, said, "Yes, I'm sorry I did it," referring to the 2001 merger of Time Warner and AOL.

The deal, known as one of the worst corporate mergers in history, destroyed some $200 billion in shareholder value.

At the time of the merger, AOL was riding the tide of the dot-com stock mania and had a market cap of US$150 billion. And that with little in the way of assets or revenue, just lots of subscribers. Without the merger, AOL would only be known today as a dot-com era joke, judging by its post-merger success. But latched to a big media company, they've managed to stick around until today. Case made a great deal, trading worthless paper for a real, profitable company. I consider it to be the greatest swindle of all time -- and it was legal! The US$200 billion loss in shareholder value was due to the dot-com bust, and would have happened to both companies anyway -- though in a far greater proportion to AOL.

The people who should be sorry for the AOL Time-Warner bungle are Ted Turner and the rest from the Time-Warner side. And I'm sure they are -- they were taken to the cleaners.