North American Scum - Week 68 - Aug 13-20

 This breakdown of North American beliefs goes a long way towards explaining why we just can't all get along and why we have no idea what the hell those other people are thinking.

Justice Minister Rob Nicholson (I actually had no idea who he was!) has spoken out and said that he sees no problem in appointing current politicians to judiciary positions.  Isn't this the definition of a conflict of interest?  Even worse, the name that he is not specifically addressing as being up for this job?  Vic Toews!  Canada's gain, Manitoba's loss, if you ask me.

In an interesting coincidence, a survey suggests that only 2% of Canadians believe that climate change doesn't exist (although many of them believe that it is naturally occurring), and Canadian Real Estate prices have declined by 2%.

Holy Bejeebus!  Rex Murphy comments on Christy Clark and the Pipeline.  There are so many layers of sarcasm here (more than I would ever imagine possible in an editorial in a "serious" newspaper) that it is difficult to figure out what he is actually saying.  I have made two conclusions about this whole thing though:

1) The National Post comments section is the worst place in all of Canada.  Just awful, terrible people arguing crazy crap by breaking all of the "logical fallacies" rules. 

2) Christy Clark is an idiot.  She's turned BC into a laughingstock.  Honestly, I think people can understand "We don't want a pipeline because you're going to pour oil all over our Province."  People have no respect for "We don't want a pipeline because you're going to pour oil all over our Province...unless you give us a bit more money."  It's just really, really terrible how she has handled this.  She's single-handedly compromised the environmental argument by giving opponents the out that its' "really all about money".  Maybe that was her intention?

And then...the Premiere of Alberta claims that she's going to continue pursuing her "National Energy Strategy" with or without BC.  Honestly?  She thinks she is in control of our National Energy Strategy? 

As for the approval of the Enbridge Pipeline, the Federal Government may have cut too many scientists jobs to effectively conduct the environmental impact research.  No word on what this means...delay of the approval or just a rubber stamping because there is no research to indicate that it's a bad thing?  And seeing as Enbridge is publishing videos that show an empty waterway off the coast of Kitimat where all the supertankers will easily make their way to Kitimat with Sunshine and Rainbows....

The Tyee has a series going on the Norwegian oil industry.  I read the "ten commandments" of Norway.  I have a hard time coming up with something bad in any of them...

Is it me, or do housing price projections keep getting just a bit worse and worse...?

I'm thinking this guy must be friends with somebody at the Globe and Mail.  A canoeist is frisked because he tried to go paddling a little too close to Stephen Harper's picnic.  They even let him continue his canoe trip, just a little bit further from the picnic.

And, Stephen Harper's bizarre royal fascinations are starting to be implemented in the Canadian military.

The Canadian Mint pisses everybody off by changing the artwork on the new $100 bill as a focus group thought that the lady on it looked "asian".

This is pretty funny (via boingboing).  A man had his ipod stolen from his car and extrapolated what the reaction would be if he was the RIAA/MPAA and this had happened to him.

I'll admit that I've been thinking that Julian Assange is a bit of a skeezy pervert and I didn't really understand the hoopla about his extradition to Sweden.  But reading this article...well...I had no idea that:

- He has offered to be interviewed by Swedish police in the UK

- He has offered to go back to Sweden if they promise not to ship him off to the US

- He hasn't been formally charged with anything back in Sweden

He seems totally reasonable now, actually.  And what right does the US have to charge somebody who is not a citizen of the US with leaking secrets?  It's their secret, not the rest of the worlds.  To extend this to illogical extremes, what if they decided that Kim Kardashian's sex tape was a secret worthy of state secrecy protection.  And somebody in Sweden had that tape and let it leak on the Internet.  How is that a crime?

This is an Americaland link.  But I think it is interesting.  First, it comes from the Guardian.  Second, it's about Bain Capital taking a "profitable" factory, tearing it to pieces and then shipping it to China so that cheaper labour can run the factory.  Why does it take a British newspaper to talk about this.  And, straight from the comments section of boingboing, I love this explanation of private equity:

Actually, the competitiveness has nothing to do with the profit you can make from the company. It's the genius of private equity, LBOs, and debt financing.

 - Take one company that's making money, fully funded it's pension plan or whatever, and has no debt. That company's stock is flat as a pancake. It's a loser. It's not expected to grow much more, so there's no interest for speculators. As far as the market is concerned, that company is the boring kid in the corner that no wants to talk to.

 - Enter a PE shop. They gather some investors and borrow... oh say, 100+ million dollars to purchase the company and take it private. As collateral for the loan they put up the entire stock of the target company. They also agree to insane rates from the bank.

- Once they've purchased the company, it's time to juice that sucker up. They immediately borrow as much money as possible against the assets of the company. Part of that is paid out in dividends to the PE shop, part of that can be put into the company to MAKE IT GROW. Think of it as shoving steroids and growth hormone into a feedlot steer, that bovine is either going to keel over dead or get way big and tasty.

 - Next, borrow more money. Keep on borrowing. (Debt financing is great because of the tax advantages.) Pay more dividends to the PE shop, pay more management fees, and try to expand the company as much as possible.

 - An expanding company looks great to the market. "These guys are going places," folks think. Stock prices soar. More happy faces for the PE firm and their investors.

 - Now, PE firm dumps the company. Either takes it public, or sells it to another entity. More profit. Or the company collapses (either before or after the sale). All that debt and growth is risky, you know...

 - You don't need many successes for this to be a profitable enterprise. Consider that the PE firm didn't put up that much money originally, they borrowed most of it, and they borrowed it against the target. When it all goes bust they walk away without hardly a scratch.

 - Sure, some factories may have gotten closed, or jobs lost, or moved or whatever. Who cares if a pension plan was looted or underfunded or whatever? That's moocher talk, my man. Sure, PE firms sometimes destroy jobs. They also sometimes create them (although that's less common given the successful company vs. imploded bankruptcy ratio). But at the end of the day, that's not the point. The point is to make money for the PE firm. Anything else is just noise.