Double Blind

This announcement from Finance Canada will mark the end of the publicly traded income trust market, effective 2011. This will also prevent Bell and Telus from converting to a trust.

Essentially what will happen is that trusts will not be allowed to deduct distributions to unitholders for income tax purposes. These distributions, however, will be considered taxable dividends to the unitholder, which receive preferential treatment.

Companies that are currently trading as income trusts will receive the existing tax treatment until 2011, while companies that convert in November and after will receive the new tax treatment. There now will be fundamentally nothing different between a corporate earning income and giving out dividends to shareholders versus a trust distributing to its shareholders.

Election day: November 7
Days left: 8

House: I have the Democrats pegged at 221, Republicans 214. (uncertainty is large enough on these numbers that I likely will not be betting on this).
Senate: I have the Republicans at 50, Democrats at 48, Independents (states of CT, VT both Democratic-leaning) at 2. (certainty is high).

Specific Senate races (these are the swing states):
MO – Democratic
VA – Republican
TN – Republican

Other close, but not so close races:
MD – Democratic
MT – Democratic (pickup)
NJ – Democratic
OH – Democratic (pickup)
PA – Democratic (pickup)
RI – Democratic (pickup)

I currently have a stack of money that the Republicans will be able to retain at least 50 senators in the senate after this election. While the margin of error I have in my analysis (zero room for error) is rather unnerving, I have enough information to suggest that my accuracy is high enough that it’s worth putting a chunk of the account to work. I cannot say the same for the house – I do believe the 31% the market is predicting for the Republicans to keep the legislative body is accurately priced. The 69% odds that the market is giving for the Republicans to keep the Senate is inaccurately priced – it should be around 85%.

Strategic thoughts: The Republicans have been really screwing up with a legislative agenda that has gone nowhere and has failed to reign in the executive branch of the government. The Democrats have really been screwing up, but to a lesser magnitude than the Republicans. Every time Nancy Pelosi opens her mouth, she seems to lose swing votes which has crippled their campaign since the Democrats haven’t done a good job wooing the swing voters. The scandals (especially with Tom Delay and Mark Foley) have hurt the Republicans and I think Americans will want to punish them in the upcoming election by taking away control of the house. There is also the obvious consideration that voters are genuinely tired of George W. Bush and the best way to remove some power is by taking away Republican control of congress.

I do think, however, that the single statement which will cause the Democrats to lose 5 seats in the house which they otherwise should have was when Pelosi said the first thing she’ll do when elected is open up congressional investigations on Bush as a prelude to an impeachment proceeding.

I am less inclined to believe that Americans will give control of the Senate to the Democrats as well. What they’re probably looking for is deadlock in government, just like when Clinton was in power.

I listened to Delerium’s Nuages du Monde and unfortunately I was disappointed since this didn’t compare at all to their previous works, namely Semantic Spaces, which was by far and away their best CD, produced in 1994. Other good works by Delerium included Poem, Karma and Chimera, the latter of which was less preferred by fans but I thought had better tracks than Poem.

The problem with Nuages du Monde is tough to describe – technically it’s well produced, the vocals flow, but the music just didn’t do anything for me. The only thing which struck a chord in my head was track 6, Tectonic Shift, which sounded like you were part of some sort of spy thriller movie – it was very immersive. It’s odd that I found this track to be the most powerful since the other tracks have vocalists and should in theory be able to produce better music.

In terms of the tracks with the vocals, by far and away the best track was #2: Extollere. It’s difficult to describe, but it just flows well.

As much as I like a lot of Delerium’s previous works, Nuages du Monde didn’t stand up at all. I guess they set a high bar for themselves and are finding it difficult to scale the hurdle. This is too bad, since they had an all-star lineup of vocalists and a ton of prior experience with music production. Many vocalists that were on this CD were also part of Balligomingo’s work of absolute genius, Beneath the Surface. Why couldn’t they end up sounding as good as they did on his CD?

I think the easy answer is that the group is trying to go “mainstream” and losing a lot of their fan base that listened and liked their “original” stream of music. They bundle the music up with a few tracks of their “original” style and hope that will keep the fans happy. It isn’t working.

The CD Hotel Coral Essex released by the group called the Futuristic Sex Robotz is a geek rap parody that reminds me of Weird Al Yankovic’s It’s all about the Pentiums, except that the former has much more explicit lyrics.

It’s a free download, so you don’t have much to lose except 65 megs of bandwidth and a few brain cells. Geeks that have been around with computers longer than the internet became socially acceptable to use will understand many of the references used in the lyrics and be highly amused by them.

He wrote a response to the lawsuit that was filed in BC courts. Gutsy, very gutsy, in the face of a lawsuit.

The Energy Blog has a post about researchers working on an engine that can improve gasoline consumption efficiency by 30% by ethanol-injection, while being cheaper than hybrid technology.

Yet another example of incremental technology (hopefully) working its way to the market to make life a little more efficient. I guess we won’t have to ditch our cars anytime soon, much to the disappointment of environmentalists.

Via the Burnaby Politics Blog, Jinny Sims is suing Google over comments made by the BC Poly Blog, most likely in relation to the post in May and June of this year leading up to the threatened BCTF strike. The posts were of a general nature of being a very large satire on the BCTF’s stance during the lead-up to the contract settlement. There were also a few pictures that were photoshopped in an obvious manner, but not indecently.

My quick legal opinion (which is worthless since I’m not a lawyer and I haven’t even read the applicable legislation or precedent-setting court cases) says that the BC Poly guy would easily win in court if he/she were charged for libel or defamation. I’ve read the content and it just isn’t that bad and proving damages would be rather difficult. The real reason for suing is that Jinny Sims is trying to find out who exactly is running the operation since the BC Poly person has always been anonymous. If this person could be connected to some sort of political party (specifically the BC Liberals since the Blog has been quite anti-NDP), then that scandal would probably make the news if that person had connections.

The next legal procedure would be for Sims to get a judge to subpoena Google for the related information on the Blog account. Google would then be able to trace that to an IP address, and then you would be able to trace that to a network. That would be likely be connected either to a Shaw/Telus/ISP account (which in that case figuring out the identity of such a person would be trivial once you’ve subpoenaed the ISP), or connected to some piece of public infrastructure (like a Library or Wifi hotspot or such), which would make digging for identity slightly more complicated.

This process takes a bit of time, roughly to the magnitude of a month or two after getting a judge to authorize the subpoena.

What’s also interesting is that the BC Poly guy quit writing after August 4th, which makes me wonder whether this lawsuit is correlated with lack of updates.

I have some suspicions as to what’s happening here, but I’ll keep it to myself as I’m afraid that saying something that is just conjecture might get me sued. This is the other intent of the lawsuit – anybody else saying something bad about the BCTF or Jinny Sims and you’ll get nailed in court whether you’re guilty of breaking any laws or not! As much as I would like to rant and rave that this is part of some union conspiracy, I will point out that the granddaddy of these tactics comes from none other than Mr. Scientology, L. Ron Hubbard:

The purpose of the suit is to harass and discourage rather than win. The law can be used very easily to harass, and enough harassment on somebody who is simply on the thin edge anyway, well knowing that he is not authorized, will generally be sufficient to cause his professional decease. If possible, of course, ruin him utterly.

Oddly enough, if I was in Jinny Sims’ position, I’d be doing the same thing. In court, the advantage is always to the attacker – you win either with a conviction or a settlement. The defender has only one option – win in court. And when the defender has to show up in order to defend him/her self, this makes attacking a very easy win/win situation for Sims. Whoever was writing the BC Poly Blog better have made sure they covered their tracks.

Saudi Arabia confirms threat to oil facilities – Like this wasn’t happening for the past 30 years or anything…

The crude oil market isn’t believing it, and neither am I. Even with OPEC claiming to reduce their output by 1.5 million barrels and attempting to “hold the line at $60/barrel”, there’s only one direction this chart is going: down.

In Abbotsford, you can get a litre of a gas for 85 cents. This is going to continue to head down as the supply continues to hit the system. The reason why it’s impossible to turn off the supply is because once all the companies have invested tens of billions of dollars into oil infrastructure, the marginal cost of keep the thing on even in the face of lower oil prices is a lot cheaper than turning the thing off and getting rid of the investment.

Whoever is still investing in energy, if they haven’t done so already, should be diversifying.

The Richmond Fire and Rescue team has been through quite a few scandals involving allegations by women of mistreatment on the basis of gender. The city of Richmond has been trying to correct this, but one of their policies of purchasing $16,000 worth of underwear and forcing both genders to wear it was ridiculously stupid to say the least.

This is a letter I wrote to the Richmond Review and Richmond News:

After confirming this was not a Halloween joke, I am amazed to think how city staff could approve spending $16,000 of our tax dollars on underwear.

It would be another matter if the underwear was fire retarding or somehow specialized for the job. Instead, this was standard off-the-shelf underwear!

Enforcing a certain type of underwear will do nothing to mend the cultural woes of the Richmond Fire-Rescue.

Throwing money, whether for underwear or million-dollar sensitivity training, will not solve problems.

What is required is strong management to discipline those engaging in unprofessional behaviour and providing incentives for those conducting professionally.

The last sentence is especially important as it doesn’t matter how many initiatives you take to “correct” the situation – the root cause is that if you foster an environment where those doing stupid things aren’t held to account, then those stupid things will continue to occur.

Tim Hortons released third quarter financial results today and while they show the business is doing well, it failed to meet expectations of analysts and investors. You can see the impulse down on the chart at 2pm eastern time – that’s when they released their results.

Since Tim Hortons has about 194 million shares outstanding, right now to buy the entire business would cost you about 5.5 billion US dollars. The company, year to date, has made about US$171 million, which means they’re on track to do about $228 million if you do a straight-line extrapolation. This gives them a price-to-earnings ratio of about 24 times, which means that investors are pricing in quite a bit of growth in Tim Horton’s business.

My issue is that Tim Hortons is getting too large to grow too much on a percentage basis and that most of the growth has already happened in the business. As a result, I don’t think people should be buying the stock. Tim Hortons is a good business, but save your cash for the coffee and doughnuts and not the shares.