Draft! My Google Map entitled Oil Sands, delicious, papergirls, EndNote, YouTube, Draft!

See also

Places of interest:
MacKay River: In the story on The difference is spelling of McKay in Fort McKay and MacKay River is confusing. Is McKay River (known locally as Red River) the same river as MacKay River? Where is Devon?

National Geographic suggests the potential worth of the Alberta oil sands is $80 trillion.

See also

Notes

Bitumen is basically oil-soaked sand.

Timeline

1965 Karl Clark, a patient chemist, took 45 years to perfect a hot-water process in which bitumen frothed to the top and sand settled to the bottom. He used his wife’s washing machine. In 1965 the Great Canadian Oil Sands Company (now Suncor) ran the first commercial application of Clark’s hot-water process producing 45,000 barrels a day. In order to create the mine to feed the hot-water process, thousands of trees were bulldozed (Nikiforuk 2008).

1976 The Canadian Council of Chief Executives (CCCE) founded in 1976, has been Canada’s private sector leader in the promotion of international trade and investment liberalization. The members of the CCCE include the chief executive officers of 150 leading Canadian corporations. These companies collectively administer close to $3.0 trillion in assets, have annual revenues of more than $650 billion and account for a significant majority of Canada’s private sector investment, exports, training and research and development.

1997 Among other initiatives, the CCCE organized and hosted the first-ever APEC (Asia- Pacific Economic Cooperation) CEO Summit in 1997, during which it received His Excellency Jiang Zemin, then-President of China.

2002 Suncor began producing oil at MacKay River in 2002, while Firebag stages 1 and 2 began producing oil in 2004 and 2006 respectively. The sequence and timing of additional stages of Firebag and a potential expansion of the MacKay River facility will be considered as part of a review of oil sands growth projects.

2006 “In 2006, more than 100 of Canada’s public companies were acquired by foreign interests. The list includes some of the oldest and most well-established companies across a broad spectrum of industries – everything from hotels to retailing, to metals and mining. And the trend continues. I sometimes worry that we may all wake up one day and find that as a nation, we have lost control of our affairs. I think we ought to have a vigorous debate about the extent to which it matters whether or not ownership of our economy resides in Canada. I believe that ownership matters a lot. It matters not only for economic reasons but, more importantly in my opinion, for our own sense of self-esteem and pride in our country. My concern is not rooted in any chauvinism or in any antipathy towards foreign investment. Far from it. I happen to believe that globalization is a very positive development and that trade and investment across borders is to be encouraged. Canada benefits mightily from being “open for business” and we mustn’t do anything to change that. My concern stems from the fact that the world is awash with capital and that the consolidation trend in many industries will inevitably continue. We are a small country with a relatively small population. Canadian companies typically are not of a size to be global players. All too often, decisions affecting the future of important firms and the communities that they sustain are made solely with a view to the short-term financial consequences. I find it particularly bothersome that so many of our natural resource companies – which I would argue represent unique and irreplaceable assets – are now owned elsewhere. So what are some actions that we might consider taking? Well, what if we were to consider the feasibility of adopting ownership restrictions for certain sensitive sectors of our economy that would be similar to those that now apply to our financial institutions? After all, I would argue that it is a demonstrable fact that public policy regarding the ownership of our banks and insurance companies has served the country well; there is no shortage of competition in the financial services sector and the services available to Canadians are as comprehensive and as affordable as exist anywhere in the world. Securities regulation is another area where some useful debate could be undertaken. Many feel that Canada now has the most bidder-friendly environment in the world and that this may not always be in our country’s best interests. Under our rules, shareholder rights plans – also known as takeover defenses or “poison pills” – fall away after a very short 60 or 90 days, leaving the target company’s board with far too little time in which to explore alternatives. I believe that it is important for us as Canadians to have companies based here that are global leaders (D’Alessandro 2007-05-03).”

2005-11-18 “CEO Mission to China Builds on Canada’s Strategic Partnership with the World’s Largest Emerging Market.” Seventeen senior business leaders representing a wide swath of the Canadian economy will arrive in Beijing on Sunday for a five-day mission to further the development of stronger trade and investment ties between Canada and the People’s Republic of China. Organized by the Canadian Council of Chief Executives (CCCE), the mission marks the first purely private sector visit to China by a broadly based group of chief executives from among Canada’s largest enterprises. “Since the Council several years ago designated China as a country of the highest strategic importance, we have continued to seek opportunities to build an ever-broader foundation of mutual trust and fruitful bilateral cooperation.” The mission is led by Mr. d’Aquino and Richard L. George, Chairman of the CCCE and President and Chief Executive Officer of Suncor Energy Inc. Other participants include the CEOs of AGF Management Limited, Bentall Capital LLP, Brookfield Asset Management Inc., Canadian Oil Sands Limited, CanWest Global Communications Corp., Enbridge Inc., Harvard Developments Inc., Palliser Furniture Ltd., Pengrowth Management Limited, Petro-Canada, Polygon Homes Ltd., Power Corporation of Canada and Yanke Group of Companies. The CEO mission to China follows the recent establishment of the Canada-China Strategic Partnership by the Right Honourable Paul Martin, Prime Minister of Canada, and His Excellency Hu Jintao, President of the People’s Republic of China. The Partnership, which was announced during President Hu’s visit to Ottawa in September, represents a watershed in relations between Canada and China, encompassing a wide range of bilateral and international areas. China is Canada’s second-largest trading partner, after the United States. The Canadian and Chinese governments have pledged to double bilateral trade within five years, to about $60 billion a year by 2010. The Canadian CEOs will spend three days in Beijing followed by two days in Shanghai. The agenda includes meetings with senior officials of the Ministry of Foreign Affairs, the Ministry of Commerce, the National Development and Reform Commission, China International Capital Corporation, the China Securities Regulatory Commission and CITIC Group. “The emergence of China as a world economic power is opening up huge trade and investment opportunities for Canada,” Mr. d’Aquino said. “The Canadian Council of Chief Executives is committed to working closely at home and abroad to transform opportunity into success.” The CCCE, founded in 1976, has been Canada’s private sector leader in the promotion of international trade and investment liberalization. Among other initiatives, the CCCE organized and hosted the first-ever APEC (Asia- Pacific Economic Cooperation) CEO Summit in 1997, during which it received His Excellency Jiang Zemin, then-President of China. The members of the CCCE include the chief executive officers of 150 leading Canadian corporations. These companies collectively administer close to $3.0 trillion in assets, have annual revenues of more than $650 billion and account for a significant majority of Canada’s private sector investment, exports, training and research and development. In addition to Mr. d’Aquino and Mr. George, the members of the CCCE’s Executive Committee are: Honorary Chairman A. Charles Baillie; and Vice-Chairmen Dominic D’Alessandro, Paul Desmarais, Jr., Jacques Lamarre, Gwyn Morgan and Gordon Nixon, the chief executives respectively of Manulife Financial, Power Corporation of Canada, SNC-Lavalin Group Inc., EnCana Corporation and Royal Bank of Canada.

2009-09-01 “In a blockbuster [tentative] deal, privately owned Athabasca Oil Sands Corp. said PetroChina International Investment Co. Ltd. will buy a majority stake in its operations for $1.9 billion, marking the largest venture by China in the Canadian oilsands to date. [This is still to be reviewed by federal Industry Minister Tony Clement under the Investment Canada Act to evaluate the transaction’s net benefit to Canada.] Athabasca Oil Sands said the state-owned firm, one of the world’s most valuable oil and gas companies, will acquire a 60 per cent working interest in the MacKay River and Dover oilsands projects. “This deal shows that the biggest energy company in the world has chosen Athabasca as their partner,” chief executive and president Sveinung Svarte said in a conference call Monday. ” They clearly told us that’s because they like our assets the best and, obviously, they (the oilsands) are the crude oil story.” The two in-situ projects sit on approximately five billion barrels of bitumen that have yet to be developed, and are part of Athabasca’s almost 10 billion barrels of bitumen reserves. The play is one of the largest in the Athabasca region:about 121,400 hectares. “The reason we chose PetroChina over other some of the other bids was, obviously, their financial strength,” chairman Bill Gallacher said. “But also their technological capabilities related to heavy oil and(steam assisted gravity drainage), which we believe will benefit our project both efficiency-wise and production-wise (O’Meara 2009-09-01.”

Who’s Who

Bill Gallacher is Chair of the privately-owned Calgary-based Athabasca Oil Sands Corp which made a blockbuster deal with state-owned PetroChina International Investment Co. Ltd. -one of the world’s most valuable oil and gas companies- who will acquire a 60 per cent working interest for $1.9 billion in the MacKay River and Dover oilsands projects which Athabasca Oil Sands Corp will continue to operate, marking the largest venture by China in the Canadian oilsands to date. company said the projects, which it will continue to operate, will cost between $15 billion and $20 billion to develop. It has filed for provincial approval for both projects and intends to file an application for the first 35,000-barrel-per-day phase of MacKay River at the end of the year [. . .] Athabasca Oil Sands said it had notified federal and provincial officials on the proposed Chinese investment, which would make the foreign entity a majority stakeholder in the oilsands projects. Gallacher did not anticipate any issues to arise from the Competition Bureau on the deal. (O’Meara 2009-09-01.”

Canadian Council of Chief Executives (CCCE), the mission marks the first purely private sector visit to China by a broadly based group of chief executives from among Canada’s largest enterprises. The (CCCE) founded in 1976, has been Canada’s private sector leader in the promotion of international trade and investment liberalization. The members of the CCCE include the chief executive officers of 150 leading Canadian corporations. These companies collectively administer close to $3.0 trillion in assets, have annual revenues of more than $650 billion and account for a significant majority of Canada’s private sector investment, exports, training and research and development. Among other initiatives, the CCCE organized and hosted the first-ever APEC (Asia- Pacific Economic Cooperation) CEO Summit in 1997, during which it received His Excellency Jiang Zemin, then-President of China. “Many of our members have friendships and commercial relationships in China stretching back years and in some cases decades,” said CCCE Chief Executive and President Thomas d’Aquino.

Thomas d’Aquino is “President and Chief Executive of the Canadian Council of Chief Executives. He has been described by Peter C. Newman as “the most powerful influence on public policy formation in Canadian history”, and listed by historian Jack Granatstein as one of the 100 most influential Canadians of the twentieth century. A prolific writer and speaker, he has worked as special assistant to the Prime Minister, special counsel on international trade law and international advisor on strategic business problems (Northern Edge).”

David Stewart-Patterson is the “CCCE’s Executive Vice President. He is also the author of Post Mortem: Why Canada’s Mail Won’t Move, described by the Financial Post as “rather like reading a less gentle version of one of Studs Terkel’s oral histories”. A former journalist, he has worked as parliamentary correspondent for The Globe and Mail‘s Report on Business and as business editor for CTV’s Canada AM (Northern Edge).”

Northern Gateway project The multi-billion dollar proposed Enbridge Northern Gateway Project to transport 400,000 barrels of oil sand production involving a new twin pipeline system running from the oilsands in Alberta, to a new marine terminal in Kitimat, British Columbia to export petroleum and import condensate. In 2005-04-14 Enbridge CEO Patrick D. Daniel announced that Enbridge had entered into a memorandum of understanding with PetroChina International Company Limited to cooperate on the development of the Gateway Pipeline and supply of crude oil from Canada to China. Daniel noted that the agreement with PetroChina was built on the favourable environment for trade between Canada and China which was cultivated by [former] Prime Minister Paul Martin, and the efforts of [former] Alberta Premier Ralph Klein to stimulate Chinese interest in the oil sands.” The project was shelved in 2006 when the market cooled. By 2009 as China’s thirst for energy and need to secure supply has increased perhaps the Northern Gateway Project might be reconsidered ( (O’Meara 2009-09-01).”

Enbridge Enbridge Inc. is involved in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world’s longest crude oil and liquids transportation system. The Company also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada’s largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 4,000 people, primarily in Canada, the U.S. and South America. Enbridge’s common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the U.S. under the symbol ENB. Information about Enbridge is available on the Company’s web site at http://www.enbridge.com. Enbridge proposed the Northern Gateway Project and is involved in internal pipeline inspection and invests heavily in innovative leak detection technology. Enbridge has a computer system that can electronically monitor pipelines 24/7 from the Enbridge operations control centre. They also promise to put in safety control valves and leak detection systems to provide a strong safeguard for the environment.”

Andrew Nikiforuk published Tar Sands: Dirty Oil and the Future of a Continent with Vancouver-based David Suzuki Foundation-Greystone Books in 2008 in which he argues that, “Canadian taxpayers, who made $150 million [Canadian] in royalties from mining activities between 1966 and 2002, have spent more than $4 billion tidying up scores of contaminated sites…” (2008:100)..

Webliography and Bibliography

D’Alessandro, Dominic. 2007. “How can we preserve Canadian ownership?Perspectives: 8.

d’Aquino, Thomas and David Stewart-Patterson. Northern Edge: How Canadians Can Triumph in the Global Economy.

Gelsi, Steve. 2009-09-01. “Energy stocks fall hard as broad market weighs.” MarketWatch. Issue:

O’Meara, Dina. 2009. “China’s $1.9B Alberta oilsands deal: PetroChina partners with Athabasca Oil Sands.” Calgary Herald.

RTTNews. 2009. “PetroChina To Acquire 60% Stake In Two Athabasca Oil-Sands Projects For US$1.7 Bln – Update.”

Nikiforuk, Andrew. 2008. Tar Sands: Dirty Oil and the Future of a Continent. Vancouver: David Suzuki Foundation-Greystone Books.

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“Canada’s social safety net results in lower rates of poverty and income inequality along with higher rates of self-sufficiency of vulnerable populations than in the United States. But many Canadians would be surprised to find out that the U.S. has a lower burglary rate, a lower suicide rate, and greater gender equity than Canada […] Canada’s relatively poor record on child poverty, income inequality, and assault [remain] shocking […] Particularly troubling is its ranking on child poverty. In Canada, according to OECD statistics, one child in seven lives in poverty. Canada also still has an unacceptably high rate of poverty among its working-age population. According to statistics published by the OECD, just over 10 per cent of its working-age population is below the poverty line. This is double the rate of Denmark, the best-performing country on this indicator. Canada’s crime record is also disturbing—with 17 times the rate of assaults as the best-ranked country, 7 times the rate of burglaries, and 3 times the rate of homicides. Crime takes its toll on trust—both within the community and within public institutions. This picture of crime is not what Canadians think of when they think of their society. […] Canada ranks high on the indicator measuring acceptance of diversity […] Canada’s past achievements, such as reducing poverty among its elderly, show that, given the political will, Canada could successfully address other social challenges to sustain future quality of life (Conference Board of Canada Society Overview 2008 ).”

The Conference Board of Canada (2008 ) compared economic, innovation, environment, education, health and society performances of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, Norway, Sweden, Switzerland, United Kingdom and United States which are considered to be Canada’s international peers. Canada’s standard of living ranking dropped from 4th spot in 1990 to 9th in 2008. In terms of Education and Skills, over 40% of adult Canadians lack literacy skills required for everyday life and work in modern society. In terms of innovation Canada scored D since the 1980s and has failed to produce any top global brands.

The full report for 2008 will not be available until September. I am curious to see how data specifically related to Canada’s growing aboriginal community with its unique social histories and current dilemmas will be analysed in this report. When we examine the weakest points in the report, it is obvious that the vulnerabilities faced by Canada’s most at-risk group (aboriginal women and children) affect our international ranking. It is also useful to consider the location of remote aboriginal communities in terms of the most volatile environmental debates in Canada.

Data for this annual report comes from the Organisation for Economic Co-operation and Development (OECD) (c.80%), the United Nations, the World Bank, and the Yale Center for Environmental Law and Policy. The report measures quality of life based on this definition:

“The Conference Board defines a high and sustainable quality of life for all Canadians as being achieved if Canada records high and sustainable performances in six categories: Economy, Innovation, Environment, Education and Skills, Health and Society (B 10/17). The word “sustainable” [1] is a critical qualifier. It is not enough for Canada to boost economic growth if it is done at the expense of the environment or social cohesion. For example, to take advantage of high commodity prices by mining and exporting all our natural resources may make the country rich in the short term, but this wealth will not be sustainable in the long or even medium term. The Conference Board has consistently argued that economic growth and sustainability of the physical environment need to be integrated into a single concept of sustainable national prosperity—what we call here a “high and sustainable quality of life for all Canadians.”

..

“Having a high quality of life means living in communities that are free from fear of social unrest and violence, communities that accept racial and cultural diversity, and those that foster social networks. A country that provides a high quality of life also minimizes the extremes of inequality between its poorest and richest citizens, while reducing the social tensions and conflicts that result from these gaps. Performance in the Society category is assessed using 17 indicators across three dimensions: self-sufficiency, equity, and social cohesion. Self-sufficiency indicators measure the autonomy and active participation of individuals within society, including its most vulnerable citizens, such as persons with disabilities and youth. Equity indicators measure equity of access, opportunities, and outcomes. Social cohesion indicators measure the extent to which citizens participate in societal activities, the level of crime in society, and the acceptance of diversity [. . .] Canada’s social safety net results in lower rates of poverty and income inequality along with higher rates of self-sufficiency of vulnerable populations than in the United States. But many Canadians would be surprised to find out that the U.S. has a lower burglary rate, a lower suicide rate, and greater gender equity than Canada […] Canada’s relatively poor record on child poverty, income inequality, and assault [remain] shocking […] Particularly troubling is its ranking on child poverty. In Canada, according to OECD statistics, one child in seven lives in poverty. Canada also still has an unacceptably high rate of poverty among its working-age population. According to statistics published by the OECD, just over 10 per cent of its working-age population is below the poverty line. This is double the rate of Denmark, the best-performing country on this indicator. Canada’s crime record is also disturbing—with 17 times the rate of assaults as the best-ranked country, 7 times the rate of burglaries, and 3 times the rate of homicides. Crime takes its toll on trust—both within the community and within public institutions. This picture of crime is not what Canadians think of when they think of their society. […] Canada ranks high on the indicator measuring acceptance of diversity […] Canada’s past achievements, such as reducing poverty among its elderly, show that, given the political will, Canada could successfully address other social challenges to sustain future quality of life (Conference Board of Canada Society Overview 2008).”

Footnotes

1. “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland 1987:43).”

Webliography and Bibliography

Brundtland, Gro Harlem. 1987. Our Common Future: World Commission on Environment and Development. Oxford: Oxford University Press.

Conference Board of Canada. 2008.

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1965-2005 Between 1965 to 2005 there was no national US real-estate bust as home prices surpassed inflation by a percentage point or two on average. However local reversals have taken place and some cities have never recovered (Christie 2005).

1973-5 US investors in the S&P 500 lost 14% in 1973 and 26% in 1974 but gained 37% in 1975 (Mann 2000).

1970s “The additional grades or risk have arisen from the willingness to underwrite mortgages for more risky borrowers, encouraged by the democratization of credit since the 1970s. Lending to more risky borrowers is, by definition, more risky. More loans to risky borrowers increases the total amount of risk to be sold in the marketplace” (Mason and Rosner 2007).

1980-1990 In Los Angeles real estate was turbocharged for nearly 10 years (Christie 2005).

1985 In Peoria, Ill. a more traditional area the average home price fell from $60,800 in 1981 to $51,400 in 1985 partially because of strikes and lay-offs at Caterpillar, the city’s biggest employer (Christie 2005).

1987 Canadian families saved 20 percent of their take-home pay (Ed 2007).
1987 Stock market crash
1988 In “oil patch” cities like Oklahoma City prices plummeted 26 percent from 1983 to 1988. They only returned to 1983 levels in 2003 fifteen years later. In Oklahoma City, the inflation-adjusted price in 1983 was $196,600. Today, it’s just $135,100 (Christie 2005).

1988 Houston home prices fell 22 percent from $111,000 in 1983 to $86,800 in 1988 rebounded only in 2003. Counting inflation, the average Houston home, which cost just $159,700 in 2004, is actually worth less [in 2005] than it was [in 1983]. When, adjusted for inflation, a home cost about $219,000 in 1983 (Christie 2005).

1988 – 1990s Real estate prices fell in Northern California first followed by the rest of the state “as employers fled, incomes dwindled, quakes rumbled, sales fell and prices slipped. [. . .] Silicon Valley’s housing market crashed into recession along with the state’s economy (Perkins 2001).

1989-90 The notorious price bubble of 1989-90 was linked to central banks specifically the Bank of Japan. “The Japanese economy continued to suffer during the early 1990s, and remained in recession until the end of 1993. Nominal GDP growth rates, which had been around 7 percent during the bubble period, fell beginning in 1990 and by 1991-93 were close to zero. Profits in the manufacturing sector fell 24.5 percent in 1991 and 32.1 percent in 1992. Bankruptcies began to rise starting in the latter half of 1990; by 1992, bankruptcies with debt more than Y10 million totaled 14,569 cases. Failures of real estate firms or of firms engaged in “active fund management” constituted more than half the corporate bankruptcies in 1991 and 1992 (Miller 2001).”

1991 Inflation-adjusted take-home pay in Canada froze to this level (Ed. 2007).”

1992 A new car in Canada cost $20, 000.

1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).

1996 There was a housing market reversal in Los Angeles with average house price dropping from $222,200 in 1990 to $176,300 in 1996, a loss of 20.7 percent. “Furthermore, those are nominal prices, not real values. To calculate the loss more realistically you would have to figure in the cost of inflation: $222,200 in 1990 would have been worth $266,700 in 1996 dollars, which means the actual loss for homeowners buying in 1990 and selling in 1996 was closer to 34 percent (Christie 2005).”

1994- 1996 “In 1994, [Japanese] banks wrote off non-performing assets of Y5.7 trillion, exceeding the previous high of Y4.3 trillion in fiscal year 1993. As yet, no major bank has failed, although a number have reportedly encountered serious difficulties. In December, 1994, the Bank of Japan supervised the takeover of two credit cooperatives, the Tokyo Kyowa Credit Cooperative and the Anzen Credit Cooperative, through the creation of a bridge bank with government support. The Bank’s decision not to let these institutions fail and pay off depositors under the deposit guarantee program was based, largely, on concern for the potential systemic effects of a deposit payoff on public confidence in the banking system in general. The “jusen,” or housing finance banks, suffered the most serious problems; these institutions, which were typically organized and sponsored by major commercial banks and staffed, in part, by former officials from the Ministry of Finance, lost tens of billions of dollars as a result of the collapse of the price bubble, and became one of the most contentious political issues of the day during 1995-86 (Miller 2001)”.

1996 “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.” – Alan Greenspan (December 5, 1996)**

1998 There was a market correction in the United States in October of 1998.
1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).
2004 British Columbia graduates from university have an average debt of $20, 000.
2005 Real-estate investing spiked, pressuring prices upward. In Phoenix, according to Bill Jilbert, president and COO of the Coldwell Banker brokerage there, investors from Nevada and California have invaded the Arizona market, and “affordable housing has been pushed to extremes (Christie 2005).”
2000 In Tampa Bay Florida, high risk adjustable-rate mortgages (ARM) made homes “seem affordable when wages stagnated as prices soared. They were just the ticket for cash-out refinancings and home equity credit lines that bought cars and swimming pools and paid off credit card debt. “What happened in a lot of expensive real estate markets is that first-time home buyers who felt they could not afford a home otherwise, took on a loan that had lower monthly payments than a traditional mortgage would have,” said Allen Fishbein, director of housing policy for the Consumer Federation of America. “They weren’t being underwritten on the basis of the borrower’s reasonable capacity to handle these loans.” The payments started out manageable, especially since many loans offered teaser rates. But borrowers are getting a lesson in what the word “adjustable” means. More than $130-billion in mortgages payments were reset in 2006″ In 2006 nearly a third of Tampa Bay mortgages were the high-risk varieties, up from 10 percent in 2003 (Huntley 2006).
1991- 2005 “[I]ncreased complexity from increased grading of risk can also result in increased opacity. Risk that is more difficult to see, by virtue of complexity, is risk just the same. There are plenty of reasons to believe that the amount of risk in the marketplace has increased. Figure 3 shows that defaults on ABS and residential mortgage-backed securities (RMBS) increased substantially between 1991 and 2005” (Mason and Rosner 2007).
2006 Fitch Global Structured Finance 1991-2005 Default Study revealed that, “the overwhelming majority of global structured finance defaults over the 1991-2005 period were from the U.S., accounting for more than 97 percent of the total. While the 1,000 U.S. defaults were mainly concentrated in the Asset-Backed Securities._ (ABS) sector, the 27 international defaults were primarily from the collateralized debt obligations (CDO) sector.” See Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on
2006 In Florida millions of homeowners were warned of the mortgage meltdown in which they will “face a financial nightmare brought on by a combination of higher interest rates, risky mortgages and a housing market gone cold (Huntley 2006).
2007 Since 1991 inflation-adjusted hourly wages rose only 10 cents (Ed. 2007).”
2007 A new car in Canada cost $32,000 a 60 percent increase from 1992 (Ed. 2007).”
2007Canadians collectively owe three quarters of a trillion dollars in personal debt. Canadian families not only have no savings, they draw on pension savings to make ends meet.

“The result of the easy credit is that an average family now owes far more than it takes in. That means we remain solvent only so long as the book value of our assets — things like our home, pension funds or investments — continue to increase (Ed. 2007).”

2007 British Columbia graduates from university have an average debt of $27, 000.

2007 It is now acceptable for Canadian families to pay 60 percent of income to pay monthly payments of their home mortgages (Ed. 2007).

2007 The British Columbia government will allow home owners who are over 55 to defer property tax payments for as long as they live. The government will claim unpaid taxes after you die or sell effectively placing the tax burden on the children (Ed. 2007).

2007 “The number of corporate failures in Japan rose for the third month in a row totaling 896 cases in December up 18.2%. November flops were up 6.5% and the number of companies going belly up in October were up 7.8%. The amount of debts the insolvent companies left behind were up 30.6% to 463.09 billion yen (Belew 2007).

2007 In March Bob Lawless reported in his blog that, “The folks at Automated Access to Court Electronic Records or AACER regularly collect data from all the bankruptcy courts for creditors and attorneys. They have a wealth of information that does not show up in the mainstream media. Most recently, they tell me that there were 58,640 total U.S. bankruptcy filings in February 2007 as compared to 55,088 total U.S. bankruptcy filings in January 2007. OK, that looks like a slight increase, but looks are deceiving. It’s actually a fairly hefty increase. The February filings were spread over only nineteen business days while the January filings were spread over twenty-one days. On a daily basis, the February filings were up 17.7% as compared to January (Lawless 2007).”

2007 Jayson Seth analysed data in National Association of Realtors (NAR) June 24, 2007 report. Seth argues that “America’s easy-credit, quick-flipping, borrow-now-and-forget-the-consequences lifestyle is coming to an increasingly painful, grinding halt” and the “confidence of homebuilders is at a 16-year low (Seth 2007).”

2007 Lawrence Yun, National Association of Realtors announced that the real estate market is softening due to psychological factors, tighter credit for subprime borrowers. NAR’s Lawrence Yun explained that since late 2006 housing sales have slowed as buyers double up with family, friends or just mortgage helper units in their homes to be able to pay for higher-priced homes.

2007 Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on 1. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007]” Furthermore they caution that “structural changes in mortgage origination and servicing have interacted with complex RMBS and highly volatile CDO funding structures to place the U.S. housing market at risk. Equally as important, however, is that housing market weaknesses feed back through financial markets to further weaken financial instruments backing today’s CDOs. Decreased housing starts that will result from lower liquidity in the MBS sector will further weaken credit spreads and depress CDO and MBS issuance. This feedback mechanism can create imbalances in the U.S. economy that, if left unchecked, could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructurings and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

2007 In a Marketplace interview Amy Scott asked interviewees about the disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds. In June two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market are now verging on collapse as the number of borrowers defaulting on these mortgages increases. Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007).

2010-05-06 According to a report entitled “The Microstructure of the ‘Flash Crash’: Flow Toxicity, Liquidity Crashes and the Probability of Informed Trading” in The Journal of Portfolio Management, “The ‘flash crash’ of May 6th 2010 was the second largest point swing (1,010.14 points) and the biggest one-day point decline (998.5 points) in the history of the Dow Jones Industrial Average. For a few minutes, $1 trillion in market value vanished.” Report authors argued that the ‘flash crash’ was the result of the new dynamics at play in the current market structure.”

Easley, David, Lopez de Prado, Marcos M. and O’Hara, Maureen, “The Microstructure of the ‘Flash Crash’: Flow Toxicity, Liquidity Crashes and the Probability of Informed Trading.” (November 19, 2010). The Journal of Portfolio Management, Vol. 37, No. 2, pp. 118-128, Winter 2011. Available at SSRN: http://ssrn.com/abstract=1695041

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1695041

See also article was written by Heather Stewart and Simon Goodley, for The Observer on Sunday 9th October 2011 00.06 Europe/London

Credit crunch, Financial crisis, Financial sector, Banking, Global recession, Stock markets, Business, Lehman Brothers, Margaret Thatcher,

[blip.tv ?posts_id=720586&dest=-1]

Thanks to Corey Beaman for his stunning photography and video clip shown above which he made available via the Creative Commons license in Flickr. He also recommends the www.audi.com/ironman on his blog http://oneighturbo.com/. Billionaire technophile, Tony Stark is Iron Man, who directs a major industrial complex, wearing either his indestructible, hi-tech suit of armor or driving in his invincible Audi R8 which is oddly similar to his armour right down to details like Stark’s artificial heart which resembles the Audi’s mid-engine (http://oneighturbo.com/).The Audi R-8 was chosen by the Automobile Journalists Association of Canada as the “2008 Canadian Car of the Year, ” a 420 horsepower, 250 km/hr, two-seat sports car.As Quirks & Quarks’ Bob McDonald wrote in his blog, “Now there’s a clean, efficient car for you, perfect for a country with speed limits of 100km/hr and snow deep enough to ground this low rider on the first turn.”  McDonald used the Audi R-8 as an example of what might happen when publicly funded science is limited to one kind of science: applied science driven by building, nurturing and protecting investment climate and the economic environment See Mobilizing Science and Technology to Canada’s Advantage . He argued,“Take clean cars for example. Scientists have been working for decades on emission controls, fuel efficiency, fuel cells and alternative ways of making wheels go around. But until regulations are in place that force automakers to use these technologies, they often don’t make it to the road. [. . .] It seems the automakers and the journalists who write about them still think it’s 1969. So if the government is going to invest in new technologies, then regulations, penalties and tax incentives must also be in place to help those technologies get out of the laboratories and really make a difference. Here’s the other danger of focusing on applied science: it doesn’t really develop anything new; it just improves on what’s already out there.”

“The 2008 Federal budget includes more money for science, which is a good thing, but the cash comes with a catch. The scientists have to do what the government wants, not pursue the basic questions of the universe. The new budget is mostly aimed at supporting the auto industry, manufacturing, fisheries, genomics and nuclear power. In other words, applied science that contributes to the economy. Of course, we need clean cars and new products. Applied science is aimed at developing new technologies, new industries, jobs and perhaps a boost to the economy. If it all happens within the four-year tenure of a politician, everyone looks good. But here’s a word of caution about this approach to funding research; it may not actually produce anything, and basic science can end up on the back burner. When the government invests in new technologies, industry doesn’t have to adopt them, and often resists doing it if extra costs are involved.”

More

Webliography

Bernier, Maxime. 2007. Mobilizing Science and Technology to Canada’s Advantage Corporate Publications. Industry Canada. (May 2007)  http://www.ic.gc.ca/cmb/welcomeic.nsf/vRTF/PublicationST/$file/S&Tstrategy.pdf

McDonald, Bob. 2008-03 http://www.cbc.ca/technology/quirks-blog/2008/03/new_government_adds_insult_to.html

McDonald, Bob. 2008-01-25  http://www.cbc.ca/technology/quirks-blog/2008/01/no_science_in_the_pms_ear.html 

McDonald, Bob. 2008-02 “Budget for science, or at least one kind of science.” http://www.cbc.ca/technology/quirks-blog/2008/02/budget_for_science_or_at_least.html

McDonald, Bob. 2008. Budget for science, or at least one kind of science quirks Friday, February 29, 2008.

Leading US advocate for homeless praised The Calgary Committee to End Homelessness’ 10-year plan business plan’s innovation, measurable benchmarks, field-tested, evidence-based & modeled on best practices in US cities which house homeless families, provide supported housing and treatment for homeless who suffer from mental illness and addictions.

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The Calgary Committee to End Homelessness unveiled its 10-year plan, “outlining the hundreds of millions of government dollars success will cost, as well as the projected $3.6 billion in eventual savings. The plan, developed by a committee 2007-2008, includes targets such as reducing the number of emergency shelter beds by half within five years, eliminating family homelessness within two years and chronic homelessness within seven, and creating more than 11,000 affordable housing units, including secondary suites and student housing [. . .] The Calgary committee has already launched two pilot projects it believes will put roofs over the heads of at least 100 people over the next year . . . A New York program is the model for Pathways to Housing, which finds supported housing for people with mental illness or addictions and then focuses on treatment. Hennepin County’s Rapid Exit program is being copied by CUPS as it matches homeless families and landlords, finding a place to live for at least six families in its first month (Guttormson 2008).”

My questions: How did structural changes over the last twenty years change the face of homelessness? When did the Canadian federal government download responsibilities regarding public health services including mental health to the provinces and the provinces to municipalities? What are the current demographic studies of the homeless, the proportion who are urban Inuit and First Nations? women? immigrants? children? families? mentally ill? relationship between mental illness and substance abuse?

Folksonomies or tag cloud

Calgary Committee to End Homelessness, Steve Snyder, Calgary’s housing prices are seriously unaffordable, Phillip Mangano, U.S. Interagency Council on Homelessness, homeless, 10-year plan, crisis-management, end the disgrace, innovative ideas, business plan, measurable benchmarks, innovative ideas, municipalities, field-tested, evidence-based, Pathways to Housing, Rapid Exit, best practice, Calgary Committee to End Homelessness, 10-year-plan, emergency shelter beds, homeless families, supported housing, mental illness, addictions, chronic homeless population,

Timeline

2006 3,400 people in Calgary, Alberta were considered homeless, that is, living without permanent shelter (Guttormson 2008).

2007 The Calgary Committee to End Homelessness launched two pilot projects Pathways to Housing and Rapid Exit in 2007 which are anticipated to put roofs over the heads of at least 100 people in 2008 (Guttormson 2008).

2008-01-28 Demographia International Housing Affordability Survey: 2008 pegged Calgary’s housing prices as “seriously unaffordable.”

2008-01-29 The Calgary Committee to End Homelessness unveiled its 10-year plan, outlining the hundreds of millions of government dollars success will cost, as well as the projected $3.6 billion in eventual savings (Guttormson 2008).

2010 According to the Calgary Committee to End Homelessness’ 10-year plan (2008-2018) officials hope to stabilize the homeless population at the 2006 numbers 3,400) and to eliminate family homelessness by 2010.

2013 Calgary Committee to End Homelessness 10-Year Plan promises to reduce the number of emergency shelter beds by half within five years (Guttormson 2008).

Who’s Who?

Calgary Urban Project Society (CUPS) is “a not-for-profit community health centre in Calgary’s downtown core. Offering collaborative and holistic services in the areas of health care, education and social services, CUPS Community Health Centre helps people make the transition from poverty to stability. Founded on the principle that all people have an inherent right to lead a life of dignity, equality and respect, CUPS is a safe, warm and welcoming environment free of judgment and rejection (CUPS website ).” CUPS is actively engaged in combatting poverty and homelessness in Calgary. They have inaugurated a pilot project which matches homeless families and landlords, finding a place to live for at least six families in its first month is modelled on the US Hennepin County’s Rapid Exit program.

Cox, Wendell a senior fellow at the Frontier Centre for Public Policy and Hugh Pavletich, a property investment manager in New Zealand produced the survey entitled

Demographia International Housing Affordability Survey: 2008.

Frontier Centre for Public Policy’s senior fellow Wendell Cox and Hugh Pavletich, a property investment manager in New Zealand produced the survey entitled

Demographia International Housing Affordability Survey: 2008.

Kim Guttormson is a journalist with the Calgary Herald which is part of the CanWest group.

Pathways to Housing, which finds supported housing for people with mental illness or addictions and then focuses on treatment is modelled on the successful New York program (Guttormson 2008).

Phillip Mangano is executive director of the U.S. Interagency Council on Homelessness and a leading advocate for the homeless, who praised Calgary’s 10-year plan for ending homelessness. Mangano claimed that, “If this plan is implemented the way it is written, you will see in the next few years the number of people on the street, the number of people long-term in shelters, begin to be reduced. Calgary has decided to stop managing the crisis and begin ending the disgrace.” Mangano is confident that Calgary’s “bold and innovative” strategy will accomplish the plan’s ambitious goals. “Mangano, who has read Calgary’s report, calls it impressive and says it has the key components of successful plans in other cities — it’s based on a business plan, it has measurable benchmarks and it uses innovative ideas from other municipalities. “Calgary has done a very good job of uncovering the innovative ideas that are already field-tested and evidence-based, they’re already working somewhere else,” said Mangano, who has worked with more than 300 plans south of the border. “So you know if you invest in them, they’re going to work there (Guttormson 2008).”

Steve Snyder is chairman of the Calgary Committee to End Homelessness. Snyder explained how this plan differs from past approaches where money was “thrown at the homeless issue” in that there is nothing in this plan that is pie-in-the-sky. In order to break the cycle of homelessness the committee studied best practice models in American cities where ten-year plans developed since 2003 have proven successful. “New York has closed a 1,004-bed shelter, Portland reduced its chronic homeless population by 70 per cent, Denver saw its chronic numbers drop 36 per cent and Hennepin County in Minnesota recorded a 43 per cent decrease in homeless families (Guttormson 2008).”

U.S. Interagency Council on Homelessness

Webliography and Bibliography

Guttormson, Kim. 2008. “U.S. advocate for homeless raves about Calgary plan: City lauded for decision to start ending ‘disgrace’.” City & Region. Calgary Herald. January 29. B3.


CC Flynn-Burhoe, Maureen. 2008. “Homelessness: from crisis management to ending the disgrace” >> Google Docs. Uploaded January 29.

A United Way report Losing Ground: The Persistent Growth of Family Poverty in Canada’s Largest City claims almost 93,000 Toronto, Canada households are raising children in poverty. That’s 30% compared with 16 per cent in 1990.

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The uber wealthy are the most mobile, the least at-risk to the unintended and frightening by-products of their industries. Pricewaterhouse Coopers reports that 18 % of North American CEOs are not concerned about climate change, while most Americans, the UK and EU are. In Canada these CEO’s have increased their lobbying power over public policy.

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King of Canada: Tom d’Acquino CEO of CEO’s

January 9th, 2007

The Canadian business community has taken the most active interest in politics at the CEO level than any other business community in in the world (d’Acquino cited in Brownlee 2005: 9 Newman 1998:159-160). And this interest and influence has been on the rise in the last decades. Canada’s business community has had more influence on Canadian public policy in the years 1995-2005 then in any other period since 1900.

Look at what we stand for and look at what all the governments, all the major parties . . . have done, and what they want to do. They have adopted the agendas we’ve been fighting for the in the past few decades (cited in Brownlee 2005: 12 Newman 1998:151).

Tom D’Acquino should know as he is the CEO of the Canadian Council of Chief Executives.

While the average North American is becoming increasingly concerned by climate change, a recent report by Pricewaterhouse Coopers has found that fewer than a fifth – 18 per cent – of North American chief executives are concerned about climate change putting them increasingly out of step with their colleagues in Europe and Asia Pacific.

This a current list of the Chief Executive Officers of the Officers of the Board of Directors of the Canadian Council of Chief Executives:

  • Dominic D’Alessandro, Vice Chair Canadian Council of Chief Executives (CCCE) and President and CEO Manulife Financial
  • Thomas d’Aquino, Chief Executive Officer and President of Canadian Council of Chief Executives
  • Paul Desmarais. Jr. Vice Chair President of Canadian Council of Chief Executives and Chairman and C0-Chief Executive Officer of Power Corporation of Canada
  • Richard L. George, Honorary Chair Canadian Council of Chief Executives and President and CEO of Suncor Energy Inc.
  • Jacques Lamarre, Vice Chair of Canadian Council of Chief Executives (CCCE) and President and CEO SNC-Lavalin Group, Inc.
  • Gordon M. Nixon, Chair of Canadian Council of Chief Executives (CCCE) and President and CEO of Royal Bank of Canada
  • Hartley T. Richardson Vice Chair of Canadian Council of Chief Executives (CCCE) and President and CEO of James Richardson and Sons, Ltd.
  • Annette Verschuren Vice Chair of Canadian Council of Chief Executives (CCCE) and President of The Home Depot Canada

For more see: King of Canada: Tom d’Acquino CEO of CEO’s