Why was there so much surprise when the Asian economies collapsed? Did nobody see this coming, or did nobody want to believe the signs? And NOW what will happen in Japan? Recently we heard predictions that Japan would not be fully recovered for 15 years!!! While NOBODY (except Ron Meisels???) will predict events 15 years from now, what is realistic?
Wednesday Night #854
Wednesday evening July 15 being particularly hot and humid, relatively
few guests were present to discuss a variety of timely topics in a relaxed and
informal manner. David Nicholson asked the questions which were answered by
those around the table. On the eight hundred and fifty fourth consecutive
Wednesday Night at the Nicholsons', everyone was either a genuine expert or
played the part of one.
Should a hospitalized patient be taken off life-support systems against the
expressed wishes of the family?
There are too many imponderables to enable anyone to provide an overall answer:
- The present or past wishes expressed by the patient
- The quality of life of the patient on life-support
- The absolute right of refusal of treatment weighed against the right of the physician to determine what treatment to offer.
- The rationing of scarce resources. The need to offer limited resources to the more viable patient.
In Canada, physicians are not required to attempt all available possible treatments,
but to act in a manner appropriate to a prudent physician.
Is the falling Canadian Dollar a national tragedy?
Let it find its own level without intervention. A whole new range of global export markets has opened up for Canada as more producers and manufacturers are learning the intricacies of the export market.
We have paid the price and are poised to reap the benefits. We have stopped
borrowing and have started to pay off our debt at an increasing rate. This
phenomenon explains why the dollar is doing so poorly. If Canada publicizes our situation, we will emerge as a safe haven.
Is the bull market dead?
No! There is a lot of capital out there which has nowhere to go but the market.
Where is the money coming from?
Savings are rising, especially in Asia. These savings are being invested in the United, States, Germany and Holland. The key is the yen. The Japanese are unlikely to do anything to correct the situation, but the market predicts that they will. Prudent investors will invest in domestic issues. As was the case in the sixties, Canada is poised on the brink of a domestic boom. We are taking a breather until we find out what is happening in commodities.
Did the Japanese not know ahead of time what would happen?
Don't expect too much from Japan. The Japanese Prime Minister does not have
the same decision-making powers as does the President of the United States.
From the Japanese perspective, things do not appear too serious. The
export-oriented industries are doing very well. As long as that perception is
exists, they are not going to do very much. It may take as long as five or six
years to correct. The Japanese are consummate savers. Their institutions are
flush with capital. Right now, we are noticing corporations and investors moving into Southeast Asia again, investing at bargain prices.
The Wednesday Night view is that bonds are a better investment than stocks; the stock market is expensive and offers high risks. Baby boomers are driving prices up. Companies cannot deliver equivalency of equity costs. Is the equity market the only place for returns? Earnings are beyond deliverables. The bubble may burst, but when? Templeton has suggested there will be a 40% correction….
(Editor's Note: "Asia can't fall much more, Templeton manager says nevertheless, Mobius is in no rush to buy stocks from region" - Globe and Mail, Tuesday July 21st)
If the yen collapses suddenly however, it will spur another devastating currency crisis. Even this would is not be a major setback unless there is a concurrent
collapse of the ruble. This appears unlikely at this time. Russians have some two hundred billion United States dollars invested in foreign assets all over the world.
What about Canada's future prospects?
There is phenomenal growth in Canada not seen since the 1960's. Jean Chrétien
doesn't have to do anything. Our only potential problem is labour and with an
eight and a half percent unemployment rate, this does not seem to be a problem
at this time. With the exception of commodities which have much less importance than previously, our economy is booming.
Should the Montreal Symphony Orchestra go on strike?
In the society in which we live some resources are funded, others are not. The M.S.O. receives no money from the federal government, although it
excels. It should be favoured with provincial and federal grants, because of
its excellence. It serves to inspire other Canadian symphony orchestras as
well as professional musicians to emulate the M.S.O. by seeking to excel.
Should offensive language and images be permitted on the Internet?
None of the guests really cared one way or another.
On that note and in good spirits, the evening came to its inevitable end.
A Letter from Kuala Lumpur: A former Wednesday Night "Regular", a European diplomat, born in Indonesia and now serving in Malaysia, has recently sent a long analysis of the current events in Indonesia, paying particular attention to the historical context. This letter is now on the westweb site and all are encouraged to read it and comment on it.
Reported by Herbert Bercovitz and Michael Judson
Edited by Diana Thébaud Nicholson
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