Climate Change settled? I think not!

Climate "deniers" (not a thread count, the ones who do not think Climate Change is threatening our imminent existence) have thankfully been busy.

Lawrence SOLOMON1 of Energy Probe had this article, "Alice in Climateland" recounting his strange debate against Dr. Jay GULLEDGE, an acolyte of Al GORE's think tank ally, the Pew Center.

Dr. GULLEDGE's debating strategy appeared to be based on confusing the audience by "sophistic sleight of lip" but this is exactly what the Climate Changers want. The standard Climate Change (CC) argument goes like this:

• It is indisputable that the amount of CO2 in the atmosphere is rising.
• It is effectively indisputable that the increase in CO2 is due to human activity, particularly the burning of fossil fuels.
• It is indisputable that increasing the CO2 level in the atmosphere reduces its transparency to infra-red, which reduces the rate at which the earth radiates heat.
• By conclusive inference it follows that increasing the amount of CO2 in the atmosphere will have some effect on the climate, and the probability is overwhelmingly high that one major effect will be an increase in average global temperature ("global warming").
  
• As soon as questions arise about more detailed effects, like possible increases in hurricane activity, reputable scientists start to argue.
• Therefore, global warming is indisputably real, but the details are not clear.

A short recap of a rebuttal of this by a Denier under the handle of "mikegeo" is:

• The question of global warming is still subject to debate. Despite the anecdotal points raised by CC'ers there is still a great deal of debate over this - look to severe problems with "Global Average Temperatures" or ice cover for example.
  
• If the earth is warming, how do we know is it different from any other climate cycle experienced in the past? There have been many kinds of climate catastrophes - some prompted by meteors, volcanoes and or evidenced by past ice ages and associated temperature reversals.
  
• If so the earth is warming, why? The "Greenhouse Gas"theory is full of holes. It can not be reliably put forward as the only reason. Man was not a factor in previous climate catastrophes yet they occurred. How do we know this is the mechanism?
  
• Climate Changers have the process of the process of scientific inquiry backwards if you have already "assumed" that carbon dioxide is responsible for the warming and that man is responsible for the carbon dioxide. (The writer goes on to mention a few other useful facts.)
• To base draconian economic and and environmental regulations on sporadically recalled weather events from year to year may be politically expedient but it is hardly responsible public policy.

In another significant development the Australian Prime Minister, Kevin RUDD released his governments program new commitment to the 2020 Kyoto Protocol, however it has been modified from what many of the "green wing" in his party wished for. Australia will commit to reduce Green House Gas emissions (GHG) by 5-15% by 2020. That could increase to a 25% reduction if other key polluting countries meet specific targets designed by Australia. This is a wonderful solution and one that I hope others adopt. This common sense approach will link countries compliance and no single country will have to "hobble" itself economically only to see others benefit at no cost by ignoring Kyoto.

Furthermore, last week the U. S. Senate Minority issued a 2nd update on debunking Al GORE's outrageous claims from his dramentry "Inconvenient Truths" in this report. They report that 650 distinguished scientists disagree with the UN sponsored Intergovernmental Panel on Climate Change (IPCC) report of 2006. Among the points raised:

• Another 400 scientists have added their names to a growing chorus of skeptics about the so-called global warming “consensus” since this report was prepared last year. Now over 650 prominent international scientists, including many current and former UN IPCC scientists, who have now turned against the UN IPCC. (This is more than 12 times the number of UN scientists (52) who authored the media-hyped IPCC 2007 Summary for Policymakers.)
• The chorus of skeptical scientific voices grew louder in 2008 as a steady stream of peer-reviewed studies, analyses, real world data and inconvenient developments challenged the UN and former Vice President Al Gore's claims that the "science is settled" and there is a "consensus."
• Some of the bad news for "Climate Changers" (aka "anthropogenic warming fears") included: Global temperatures failing to warm; Peer-reviewed studies predicting a continued lack of warming; a failed attempt to revive the discredited “Hockey Stick”; inconvenient developments and studies regarding CO2; the Sun; Clouds; Antarctica; the Arctic; Greenland; Mount Kilimanjaro; Hurricanes; Extreme Storms; Floods; Ocean Acidification; Polar Bears extinction; lack of atmospheric dust; the failure of oceans to warm and rise as predicted.
• In 2008 marked the year that the purported "Global Warming consensus” collapsed as: 1) Russian scientists “rejected the very idea that carbon dioxide may be responsible for global warming”. 2) An American Physical Society editor conceded that a “considerable presence” of scientific skeptics exist. 3) An International team of scientists countered the UN IPCC, declaring: “Nature, Not Human Activity, Rules the Climate”. 4) India Issued a report challenging global warming fears. 5) International Scientists demanded the UN IPCC “be called to account and cease its deceptive practices,” and 6) a canvass of more than 51,000 Canadian scientists revealed 68% disagree that global warming science is “settled.”
• Major skeptics and their supporters have popped up among many popular periodicals and newspapers.
• At the launch of the IPCC report in 2004 it was widely repeated that 2500 scientists associated with the IPCC's reports had endorsed the IPCC's conclusions. It is now know that this was a misrepresentation as the 2500 were merely peer reviewers and had not endorsed the final report which was "summarized by the IPCC Secretariat" - basically political appointees and bureaucrats.
  
• The Chair of the IPCC, Dr. R.K Pachauri of India received his doctorate in Industrial Engineering in 1972 from North Carolina State University, Raleigh, NC. He began his career at the Diesel Locomotive Works, Varanasi, India and before he ascended into the UN bureaucracy he was Director of TERI (Tata Energy Research Institute), a jointly funded government/industry applied research institute.
• Dr. William M. Briggs, a climate statistician who serves on the American Meteorological Society's Probability and Statistics Committee, has described as the behavior as “really outrageous and unethical behavior on the parts of some editors." when colleagues "tried [to] getting papers published that explored non-‘consensus’ views.” Some skeptical scientists have faced threats and intimidation. Dr. Briggs objected to being called a "Flat Earthers"

• Al GORE claimed that Earth was facing an environmental catastrophe if CO2 emissions surpassed 350ppm. See chart below with data from Paleozoic Era.

• 

see - Sept 2008 "Canadiana-odd-but-true"


Footnotes:
1 Lawrence SOLOMON "The Deniers: The world-renowned scientists who stood up against global warming hysteria, political persecution and fraud, and those who are too fearful to do so." Richard Vigilante Books (April 1, 2008)

2) More Than 650 International Scientists Dissent Over Man-Made Global Warming Claims Scientists Continue to Debunk “Consensus” in 2008. (http://epw.senate.gov/public/index.cfm) The report features the names, biographies, academic/institutional affiliation, quotes and of literally hundreds of additional international scientists who publicly dissented from man-made climate fears. This report lists the scientists by name, country of residence, and academic/institutional affiliation. It also features their own words, biographies, and weblinks to their peer reviewed studies, scientific analyses and original source materials as gathered from directly from the scientists or from public statements, news outlets, and websites in 2007 and 2008.

Madoff Fraud

It is almost beyond belief - US$50 billion for upto 4 years!

Bernard L. Madoff's fraud is almost big enough to give "a Ponzi scheme" a bad name. The fact he was "turned in" by his 2 sons almost makes it read1 like a segment of TV sitcom "Arrested Development". The question on everyone's mind? How such an incredible manipulation so large, (itself suspicious as Madoff's firm reportedly only had US$17 billion last January) could have happened and been undetected for so long. This truely was a master stroke as it would have required massive complicity or gross incompetence by someone. The NYT has reviewed some client statements and notices without finding anything extraordinary, unless they were all completely false (I note that they were not custodial account statements, but brokerage account statements, itself a potential red flag as it is not common for brokerage account to segregated such accounts.) Another issue was the murky division of "trading from safekeeping" functions so activity can be properly audited. Madoff reportedly operated on the 17th floor, separate and distinct form the market-dealing/making operations below.

Among one of the largest effected is HSBC Bank who gave Madoff a $1 billion mandate. It is noteworthy that many of the investors were very large and sophisticated clients who would have been wise to any obvious fraudulent behaviour. Apparently there were rumours of some problems with Madoff in 2001 and a number of investigations were undertaken but nothing was found. The fallout will be to shake the confidence of many private money-management clients in their managers and raise the volume on demands for greater oversight of Wall St. from the SEC and other regulators.


Footnotes
1) In Season 1, the family patriarch George BLUTH (played by Jeffery TAMBORE) is arrested for SEC fraud.

Liberals Flip-Flop on "Peek-a-boo" Leader

Stephane DION resigned as Liberal Leader yesterday, and today Bob RAE announced he was giving up in favour of Michael IGNATIEFF, so it's unanimous. Iggy is not that committed to the Menage a Trois/Coalition with the NDP/BQ - certainly not as much as Bob RAE, and has been quoted as saying "not necessarily the Coalition". Conservatives under HARPER looks more secure every minute.

If the Menage a Trois/Coalition does not defeat the Conservative Government on January 27, then we will not have to suffer Jacques PARIZEAU, Ed BROADBENT, and Elizabeth MAY in the Senate (and possibly Maude BARLOW and Judy REBICK). That is a relief.

[Update: 2008Dec24 HARPER appoints 18 new Conservative Senators! My only disappointment is Deb GREY is not among them.]

Kudos & Brickats for Liberal "Courage"?

Dutch, move over. The Liberal Party of Canada is here.

Following the denouement of DION, the pundits and political commentators are having a field day - here are some of my favourites:

National Post - Night of the Living Dion by Matt GURNEY, A slander on Canadian men by Barabara KAY, Liberals embrace democracy, then abandon it all in one breath by Lorne GUNTER, Bob Rae and the swirling cesspool of Liberal self-interest by Don MARTIN and this Editorial piece. Here is Full Pundit's survey.

Others have mentioned the "Cave-cam" video that sealed his fate. M. DION will be missed the most by the Conservative Party, who feasted on his "easy pickins".

As to Mr. Micheal IGNATIEFF, I have summarized a profile of him before. Here is a George JONAS's take on IGNATIEFF entitled "Ignatieff 's misguided dream" an issue JONAS knows well - having fled Hungary as a teenager in 1958. His family was to follow after him to Canada but didn't. Kelly MCPARLAND weighs in as well.

As to the impact of the "Stimulus Budget" on Jan 27, who knows. Jacquie THORPE already notes we are awash in stimulus. Yesterday's (Dec 9, 2008) interest rate cut of 3/4% was an aggressive signal of it's new policy stance as it is clear that we are now in a recession - something that the BOC Governor Mark CARNEY was coy to admit only 2 weeks ago. This puts the Bank of Canada's (BOC) Overnight lending rate at 1.5% - the lowest since July 1958 when John DIEFENBAKER was Prime Minister.

Backward Contango?

This is the "Winter of our Discontent" and the wheels are coming off.

First this, The Manipulation of Gold Prices which was quickly followed by - Gold in Backwardation. Two thoughtful pieces which attempt to explain the whiplash inducing behaviour of Gold prices over past few weeks in the context of Central Bank "expectations management" and a CFTC "Collusion Conspiracy".

Then, Treasury Sells $30 Billion of Four-Week Bills at Zero Percent - 13:48ET and, Treasury Bills Trade at Negative Rates as Haven Demand Surges - 14:03ET

The Stock Markets tank. Never did I ever, ever believe I would see U.S Tbills trade at zero yield! This is historic - Gravity has been repealed!

"The Treasury Department will sell $28 billion of three-year notes tomorrow (Current BM YTM 1.12% dn 0.103) and $16 billion of 10-year notes (Current BM YTM 2.65% dn 0.089) on Thursday." (As noted in Accross the Curve I can't understand why the Treasury didn't hit every one of the $126bn in bids - I mean why hold back? Are you serious or just pretending. Also that bidders only got 82% "fill" of their "zero" bid is confounding - who took the other 18%?)

We live in strange times! Everyone wants to sanitize their YE Accounts is reason given, but it may just be the wall of Treasury bills flooding Wall Street with no where else to go. No lending is taking place anyways. It's a Government take-over of lending AND borrowing.

Mario DUMONT - DOA

From what I can tell on Radio-Canada, Mr. Jean CHAREST has won a stronger mandate in the Quebec Election. Liberal 66 seats +18; Parti Quebecois 51 seats +15; Action Democratic 7 seats -34 and Independents 2 seats +2. Mario DUMONT has resigned as leader of the ADQ after making abject apologies to voters for his inexperience during the last session and promised to do better after this election. Quebec voters were clearly unmoved. It was also a vindication for PQ leader Pauline MAROIS who fought hard to gain the leadership and has had trouble connecting with voters.

Not sure what this will mean for Public Policy except the narrow majority shall no longer mean accommodating the ADQ and make governing easier. Voter turnout at 57% was lower than in 2007 at 71%.

It was unfortunate that federal politics probably pushed the Parti Quebecois vote up in the last two weeks. The next election may be the the Federal one. A resurgence of the PQ may hinder the BQ presence in Ottawa as there is a line of thought that suggests voters like to have "dynamic tension" in the political balance between provincial and federal parties. This would be good for the federal Conservatives.

ADBE US$23

Now this is interesting. The other day Adobe Inc. (US$23) announced layoffs and reduced Revenue expectations but due to favourable Income Tax refunds bumped-up EPS forecasts for 4Q08.

The 600 layoffs are in the developer ranks - which given ADBE just released it Creative Studio 4 package is not altogether surprising - as even before the merger with Macromedia, both of these companies were "programmer rich" environments. Now that 2 years have passed since that merger and 2 upgrades have been completed, that "software consolidation" has probably been accomplished.

Yet what really caught my eye was this at ZDnet.com - "With 256-bit encryption, Acrobat 9 passwords still easy to crack". How is that possible? Well as Dancho Danchev explains, you are only as strong as your weakest link and in Acrobat 9, despite doubling the encryption level from 128 to 256 bit, they dumbed down the process so it is easier to do a brute-force crack! Why bother with an upgrade like that?

Anatomy of Insider Disclosure (X, C$22)

Here is a stock I recently bought, TMX Group (X - C$22)1













... and here was Announcement in the Financial Post today.










I bought when the insider (the company) was buying - which considering their business, is always a calculated risk for this stock. As soon as the buy-back was finished (at around $27), the stock dropped to C$23 and currently is at $22. Depending on where the market goes from here, are dividend cuts next?

[Update: 08DEC2008 - In an interesting development after the markets closed today, the NYSE was reported to be in talks to acquire/merge with Deutche Bourse.]

Footnote:
1) TMX Group owns and operates the Toronto, Montreal Stock and B.C and Alberta based Venture Exchanges, including all trading and clearing of all stocks, options and financial futures.

Oil becoming the realm of despots

With global multinational TOTAL SA, scuppering any hopes that it might wade into Calgary and pickup Nexen Energy Inc. the gloom is starting to spread. Most "traditional" (read as our American cousins) multi-nationals have "iced" their Oilsands plans in the last few months. Today StatOilHydro ASA did the same, postponing development of it planned $16bn Heavy Oil Upgrader just outside Edmonton. (see chart WTI US$/bbl - courtesy Oilnergy Inc.)

West Texas oil fell more than 6% on yesterday (Dec 4) to its lowest level in nearly four years in response to further bleak economic data that could spell a deeper decline in global energy demand. U.S. light crude fell US$3.12 to US$43.67, the lowest since Jan.5, 2005. London Brent crude fell US$3.16 to US$42.28.

The price decline has been shocking. Since the meltdown began in ernest in August WTI has dropped from US$110 to below US$50.

Here is a list of the number of Oil Sands projects that have been shelved.

Crisis? What Crisis.

Our nascent political drama hit a speed-bump this morning as Governor-General (GG) Michaelle JEAN agreed to prorogue Parliament until Jan 26 2009 so the Conservatives will not have to face an immediate non-confidence motion in the House from the newly formed opposition Coalition of Liberals, NDP and Bloc Quebecois. By agreeing to this break, the GG is allowing the Conservative Government the time to properly prepare their Budget response to the Global Economic Meltdown.

The opposition rebellion was ignited when the Conservatives embedded what was seen as a gratuitous insult to the Opposition on an uncontroversial Confidence motion following the Dec 2 Fiscal Update. This clause would have revoked the existing $2 per voter Election grant to Political Parties. Without this funding, the Liberals, NDP and BQ would be technically bankrupt as they rely heavily on those funds to run their election campaigns. The Conservatives are philosophically opposed to the idea, but they also have the luxury of strong financial support from party members1. It was a serious strategic error for Mr. HARPER not to have anticipated the oppositions outcry from such a provocative move.

Once opposition gelled HARPER quickly backed off and removed the offending clause. (Personally I think he might have indicated a less radical solution like phasing out funding over 2 years or perhaps adding a formula where the government would equally match personal contributions.) However the Opposition parties were not so easily placated. Their outrage transmuted into dissatisfaction with the Fiscal Update and defeating it became the object of their dissent. The Liberals charged that the Conservatives "lack of crisis measures" was tantamount to macro-economic negligence and mis-management. The fact that the Conservatives were rushing to bring out such a "Stimulus Budget" after the Xmas Break on Jan 27, 2009 was impatiently brushed aside as "too little, too late". Faced with the realization that bringing down the Government on a Non-Confidence motion would plunge the country into another election - which would be electoral suicide for whomever initiated it - the Opposition Parties accepted that they would have to mobilize the Coalition to be allowed to Govern.

Mr. HARPER's fatal error became the pretext for the Opposition Parties to advance to a Governing Coalition, although perhaps a little prematurely. A remaining challenge for the Coalition is to transition from their lame duck leader, M. Stephane DION to a new Leader to be selected in the May 2009 Leadership Race. It is unlikely that the GG would appoint a Governing Coalition led by an outgoing, lame-duck leader and a yet-to-be-determined Leader. But certainly, she would prefer that to another General Election.

We know now that the Coalition (the Liberals 77 seats, NDP 37 seats and BQ 49 seats = 163 vs Conservatives 143) has been in the works for some time. Perhaps with indecent haste the 3 Opposition Parties all signed the formal terms of the Coalition Agreement (which governs allocation of cabinet positions, voting rules, dispute resolution procedures etc.) The Coalition has agreed to maintain unity for at least 2 years before triggering another Election.

For our financial markets, this 7 week break from political theater will be a blessing as the news in that time will be unremittingly depressing. Yet domestically, our banking system is probably the most sound in the world right now. Our real problem will be to survive the drop in demand for many of our commodities at once, and the severe depression griping our main trade partner the USA.

Therefore, if the Coalition can hold together until a new Liberal Leader is selected - they may get the chance to govern.

Here are videos of both HARPER's Address and DION's response.





[Update: 2008DEC08 Stephane DION has stepped down as Liberal Leader and now Liberals must rapidly select a new leader before January 26 when Parliament reconvenes and the Conservative government "Stimulus Budget" is expected. Without a Liberal Leader the "Coalition" will not be given the chance to form a government after a non-confidence motion. I predict some Liberals would rather cross the floor to join the Conservatives or become Independents than join such a "Menage a Trois" with the BQ or NDP. Endgame approaches.]

Footnotes:
1) It was expected that the next allocation of Party Financing would total $30 million to be split between the various parties according the their share of popular vote. Liberals $10 million, Conservatives $7.7, NDP $4.9, BQ $2.6 and Greens $1.8.

2) In the Dec 2006 Liberal Leadership Race, these were the Candidate Expenditures.

Name	$Total	%Donors	Rank
BENNETT, Carol	$ 255,000	69%	2
VOLPE, Joe	$ 768,000	51%	5
RAE, Bob	$3,000,000	72%	1
KENNEDY, Gerrard	$1,425,000	48%	7
IGNATIEFF, Micheal	$2,316,000	65%	4
FRY, Hedy	$ 195,000	14%	11
HALL-FINDLEY, Martha	$ 423,000	38%	8
DRYDEN, Ken	$ 650,000	32%	9
DION, Stephane	$1,882,000	50%	6
BRISON, Scott	$ 593,0000	67%	3
BEVILAQUA, Mario	$ 700,0000	21%	10