Category Archives: Business

Round and Round the Mulberry Bush…

il_340x270.480855993_30qp (1)Pop goes the Weasel.

In olden times those down on their luck would pawn their coats or their tools on Monday and hope to redeem their pawn by Sunday when they needed to turn up in church properly attired.

Richard Fernandez, writing at PJ Media, talks about the musical chairs of the Greek Crisis:

Eventually the physical world starts to change to reflect the payments that have to be made to the players. Trade begins to contract, stores start to close and desperate individuals start to riot. In the naive days of the 20th century, when faith in angels and demons began to wane, it was fashionable to regard matter as primary. Wars were fought by burning actual buildings, killing physical people. But today we know that information has physical force. Computer programs, genetic instructions, memes — and financial data — are to all intents and purposes actual things, rather than airy nonsense.

Unfortunately we still live in a world governed by ancient 19th century Marxian ideas, where politicians regard information as infinitely corruptible, in a world where lies are not only common, but the stuff of power, the very sinews or privilege.  A financial crisis occurs when information goes so far out of whack with the physical world the music has to stop, and those without a chair must be booted off. belmont club

Greece is not a big deal. 2% of the EU economy. The entire place could sink into the Aegean and the world would be little worse off.

China is a bigger place. The factory of the world and its stock markets are in the process of collapse. A lot of companies which we have never heard of have shed 2.5 trillion dollars in market cap in the last three months. Unlike the Greeks, the Chinese have lots of hard currency with which to intervene and there is every reason to believe that the possibility of a Chinese crash will be averted. For now.

Infinitesimal interest rates and overbought markets are, at the moment, haunting the US, the UK, Europe, Japan and China. Fernadez thinks that “the players” have figured it all out and have comfy armchairs waiting when the music stops.

I am not so sure. The players have always counted on governments to step in when there is a cash crunch. When the derivatives have been drawn against busted counter-parties, when the “too big to fail” surprise us by failing. To date, that assumption has been true. It has been true because the governments have had the means – usually the printing press – to literally paper over the flaws in the system. At the moment the Greeks do not but the EU does and I suspect will. At the moment, the Chinese market is in free fall but the Chinese government has the cash to bail them out. But cash, however abstracted, is a finite resource. If you print more than your economy can sustain your cash begins to lose its value against real assets, against food, against bills of lading which must be settled on arrival.

The music is still playing and only the smallest children have been denied seats; but now the scramble is on to secure a seat for the next round.

The one thing which the world seems incapable of doing right at the moment is making more chairs.

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Gone to Pot

A client of mine alerted me to tonight’s 5th Estate program on Pot Fiction. It is the full hour and worth watching for a variety of reasons. Here’s the link.

The point of the program is that, in Vancouver at least, the practical effect of Health Canada’s Medical Marijuana regulations is de facto legalization. And, in fact, the program does not actually deal with the effect of the injunction against those regulations which has meant that the regulations themselves are suspended until a case against them has been heard, likely all the way up to the Supreme Court of Canada.

Despite the fact that I don’t smoke pot – because if I do I will be asleep in approximately three minutes – I have long advocated complete legalization. Largely for libertarian reasons but also because the criminal law is essentially unenforceable. But the medical marijuana regulatory scheme interests me as a grand example of government getting something entirely wrong.

The original medical marijuana regulations allowed people to buy from a single supplier or grow their own or designate a grower. While the system was far from perfect, and found to be unconstitutional, it had the advantage of regulating with a very light hand. But, oh Heavens, there was “leakage”. Medical pot was not always only used by medical users. Yikes.

So Health Canada came up with a regulatory scheme which was going to licence grower/distributors and put the users and their growers out of business. Enter Big Green and a bunch of promoters who sold shares in publicly listed companies based on the new regulations. The promoters made a lot of money using a simple story: there were 45,000 medical pot users in Canada (projected to grow to 450,000 users in a decade) who each used about 3 grams a day and who would have no choice but to pay between $8 and $15 a gram for their “medicine”. You do the math.

To my not very great surprise, people used to paying $0 to $5.00 a gram did not rush to sign up. And, very quickly, at least in Vancouver, pot shops – for registered users only of course – began to spring up. Becoming a registered user was not tough. As the 5th Estate guy discovered, telling a naturopath a charming story about stress and sleep disturbance over Skype gets you your registration. At which point you are free to buy. (I note the 5th Estate did not ask the pot shop owners where they were getting their pot – which is a rather good question because it is certainly not from the licenced growers as they are not allowed to sell except by mail order.)

As anyone who has lived in Vancouver knows, the Vancouver Police Department has better things to do than bust dispensaries. Plus, given the injunction halting enforcement of the Health Canada regs, it is not obvious what they would bust the dispensaries for that would have a chance of getting past the Crown. But even if they did bust the dispensary and even if the Crown brought charges, it is pretty difficult to see how a judge could find a person guilty who was selling to a registered user.

The problem is that the boffins at Health Canada have not quite figured out that their regulations are assuming a world which does not exist. First, they assume that people want to smoke “legal pot”. That might be true if police forces were in the habit of kicking down doors to arrest people smoking pot at home but, I fear, that hasn’t happened in years. (It may occasionally occur as a means of harassment but the probable cause issue is usually sufficient to kick the charges.)

Second, the boffins assumed that “medical marijuana” would somehow be policed by the medical profession. While it is a happy thought, all that is needed are a few doctors, nurse practitioners and naturopaths who think pot is just fine for what ails you, to render the “policing” function meaningless. Given that there is very little evidence either way as to pot’s medical efficacy, putting the burden of policing on the medical profession was a non-starter from the get go.

Third, the idea of centralizing growing and distribution of a relatively easy to grow plant in the hands of a group of entrepreneurs was a forlorn hope. Why would Mrs. Smith give up her little personal grow op only to buy her arthritis pain reliever at five times the price from clever marketers? And why would people who were growing illegally stop when they now had a fool proof means of distribution.

The only way that the regulations – if they ever manage to survive judicial scrutiny – will work is if Health Canada can somehow convince the Vancouver (and many other city police departments) to enforce the Criminal Code in the face of wide spread public opposition. Health Canada’s regulations will only work if the cost of “illegal medical marijuana” is, by draconian enforcement, raised to the point where the legal alternative is cheaper. Which would mean a level of enforcement which far exceeded the scale of enforcement we saw in the 1990’s. Which is not going to happen.

Health Canada is in way over its head. It has 1200 pending licence applications and it has only managed to approve 17 of them. It’s regulations are suspended by a Federal Court injunction. Its rules saying that only dried smokable pot is legal have been struck down by the Supreme Court of Canada. It has never managed to provide guidance as to the conditions marijuana is indicated for and what dosages might be efficacious.

Meanwhile, people who want to smoke pot are running rings around the regulations and using them to have a “Get out of Jail Free” card on the off chance they are found “in possession”. Now the law is in disrepute with the public and, more importantly, the police, Crown and judges.

We have legalization through the backdoor.

Unregulated, un-taxed and entirely beyond the state’s control.

I’d call that a win.

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Rebel, Rebel…

Ezra rides again.

http://therebel.media/

Now here’s the thing. Ez has published a magazine and put on a nightly TV show. He apparently has some backing. He has name recognition.

The question is whether he has taken the proper lessons from the fact that neither of these two operations were successful? A good rant once in a while in the style of Rex Murphy is grand;but there needs to a lot more than that.

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Sun TV is dead

Word arrives of Sun TV’s demise.

I don’t watch TV so this is an abstract blow. I watched enough of Sun to know that I didn’t like it any more than I liked the Sun newspapers. It was certainly a dissident voice in the wasteland of Canadian television. But it missed Marshall Mcluhan’s point about television being a cool media. Worse, it lacked the vision which has driven Fox to the top of the cable heap.

Television is dying. Viewership is dropping, ad revenues are down. It’s dying because no one has time and no one wants to be talked at. Talked with, perhaps. My phone offers me a thousand and eleven news sources, raw video of events:the opinions I can develop myself.

Sun’s critical mistake – other than having the production values of community TV, was to miss how mainstream, lefty, media works. The opinion is embedded not overt.

I love Ezra and Brian Lilley. For five minutes at a time max. Which leaves 23 hours and change to do serious reporting, regional coverage, round tables, celebrity bs, culture, media, books and call ins. Plus serious business reporting when the market is open.

None of that happened. Or,if it did, no one knew about it.

Taking several million dollars and running a conservative flag up a pole is a worthy endeavour. Everyone at Sun deserves a heartfelt pat on the back. But the reality is that marketplaces decide what works and Sun TV never did.

It is encouraging that BCF noted that Ezra was sitting with Moses Znaimer at the Mark Steyn event. Znaimer is the smartest guy in Canadian television bar none.

Sun TV was an attempt to change the channel. It failed. The need remains but it has to be smart, slickly produced and Internet aware. Sun TV, whatever its ideological virtue, was ham handed, as slick as Brian’s do, and Internet poison. These are people from the dying newspaper business trying to revive the dying television business and it showed.

The market is never wrong… On to the next thing.

UPDATE:Lots of smart commentary floating around the Canadian net. Thanks to Blazingcatfur, Five Feet and Mark Steyn for linking.

Creating conservative media one needs to keep a couple of things in mind. Toronto is not Canada. No, really. The Internet is here to stay and it has changed everything. Real news leads, opinion follows. Conservatives are busy people. They will watch smartly packaged news and business reporting. The success of BNN demonstrates this. Television is dying so don’t be television…look to VICE as a model. Fixed costs are your enemy, freelancers your friend. There is a lot of underutilised studio space all over Canada. Slick production is about style, the 70’s are over. Technology let’s you shoot studio quality on a DSLR and edit on your phone. Use it or find someone who can.

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Meetings

26. DON’T BRING YOUR iPADI’m not sure men should even own iPads, but I am positive they should not be at meetings. No computers should be. They’re a distraction and they say to everyone else there, “I’m not really here.” If you have to take notes at a meeting, bring a notepad.
http://takimag.com/article/how_to_get_rich_in_america_in_30_easy_steps_gavin_mcinnes/print#ixzz2hCQBv9ye

 

Flat out one of the best business articles I have ever read.

Go, enjoy, laugh.

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