Double Blind

Harper’s idea may have secured Ignatieff’s victory in the Liberal Leadership Race. His stock price has gone up considerably over the past week. Odds on November 7 are in brackets:

Ignatieff: 55.6% [62.8%]
Rae: 25.0% [30.5%]
Dion: 23.3% [8.8%]
Kennedy: 4.8% [7.6%]
All others: 1.3% [1.3%]

These numbers don’t add up to 100% since the excess over 100% is the bookmaker’s spread. Just divide the above percentages by 1.1 to get the “real” market odds.

Iggy has been as low as 40% and high as 63%. His contract has exhibited the most volatility since the opening of trading. Rae has hovered around the 27% mark, while Dion has immensely increased since the beginning, up to nearly 30% but has settled down now of news from Quebec that a few key people on his campaign have quit. Kennedy has gone nowhere over the past month.

Because of the Quebec Nation issue, my expectations for the Dion campaign to win have decreased – he was the most ardent of the four top-runners that Quebec is not considered a nation and as far as I can tell, he’s flip-flopping on the issue. Warren Kinsella’s analysis is absolutely correct in that Dion has to take a stand with respect to this – he has a lot more to gain than to lose. Originally I think fair value for the Dion contract was around 30% (plus or minus a few), but because of this Quebec issue it has slipped down to about 20% (plus or minus a few). In other words, the market for the leadership race at present seems to be efficient, and the opportunity that existed nearly a month ago is no longer present.

The only mode of victory that I think Dion has is if Kennedy strongly goes to the Dion camp after the second ballot. If there is still a strong “anybody but Ignatieff” movement, Rae may end up last on the third ballot and most of his vote will probably go to Dion.

You can also interchange “Dion” with “Kennedy” in the preceding paragraph and it would be an equally valid scenario which makes me suspect that Kennedy’s value at present (4.8%) is a tad on the low side, at the expense of Ignatieff.

What is ironic is that the Conservatives would have a field day if either Ignatieff or Rae became the leader of the Liberal party. There is so much campaign fodder for both individuals that the Conservatives would be able to mop up in the next election. Of course Ignatieff would prove to be a more difficult adversary than Rae, but the Conservatives will be happier with either of them.

The government already affects our lifestyles materially with the income tax act and the excise tax act (GST). They can discourage us to do certain things by taxing them (smoking, alcohol, gambling) and they can encourage us to do certain things by providing tax credits (transit passes, education).

The proposals I’ve read about taxing junk food leads me to believe it is a horrible idea. I would combat the idea that junk foods has no redeeming benefit – I claim such foods do an excellent job of helping one relax (think chocolate). Secondly, it creates a very large slippery slope to define what is a junk food and what is not. First you start with the obvious – fast food. The legislation will start there. Then a few years later, you add in things you can buy from the supermarket – chocolate bars, potato chips and soft drinks. Then a few years later, you start adding in cookies, crackers and perhaps even coffee and tea. Effectively any food can be justified as a health hazard if consumed in wrong proportions. Foods that have a slight correlation with an increase of cancer are quite susceptible to a ‘junk food tax’ – think red meats. The government would effectively have the ability to use an economic lever to more or less dictate what is “right” to eat.

The circle is finally closed when the government starts to depend on tax revenues from junk food to keep its books balanced – just like how the government relies on cigarette and alcohol users to continue smoking and drinking, you can be sure that junk food will be right up there on the revenue collection optimization list.

Finally the best argument why a junk food tax shouldn’t be enacted is that they are already taxed – you have to pay GST on it.

Having a healthy population doesn’t involve enacting “silver bullet” legislation like taxing junk foods, it involves individual people working hard to keep themselves in shape and keeping a balanced diet. There is no other solution to this social issue – people need the discipline to stick to a regular dietary and exercise regimen. You can teach the message in schools, but it really depends on the personalities of the individual whether they want to listen and follow-up on it.

Unfortunately on election day, this message doesn’t sell very well to the people that are also looking for diet pills on EBay while they consume their triple cheeseburgers from McDonalds.

I’ve gone through the Federal government’s half-time report which was expected to have some interesting proposed legislation such as income splitting, but there was none of that. The document was devoid of details other than the generalities of reducing taxes at the rate of interest savings from paid debts.

Here were the specific details, however:

Other than this, I can only read the tea leaves as to what the government will actually do during the 2007 federal budget. There was little of concrete substance in this document, hardly an “election platform” document that people were projecting. Also it should be pointed out that “net total debt” is a very convoluted phrase; it has nothing to do with the interest-bearing debt which is still around 500 billion which will be chipped away at the rate of 3 billion a year.

The abstract phrases in the document dealt with reducing taxes for people (in what form other than a cut in the GST is unknown) and reducing taxes and paperwork burdens for businesses.

I guess we’ll find out this spring what it all really means.

Warm-up: Walk slow & easy 5 minutes
Run 3 minutes. Walk 2 minutes. Do this 7 times.
Cool-down: Walk slow & easy 5 minutes

Notes: The weather was cold outside (I’d estimate about 5 degrees) but there was a break in the rain to do the running. I covered about 5.1 kilometers in 21 minutes of running and 18 minutes of walking. Extrapolating this, it means I could run 10 kilometers in 76 minutes, not very impressive at all. As the time might suggest, I wasn’t feeling very good at all out there and was feeling quite winded at the third minute of running after the 6th minute of running. My legs still feel quite functional, but my lungs just weren’t there today. I don’t know if it was due to the cold weather or just waking up on the wrong side of the bed. My heart rate after the 21st minute of running was 176 beats per minute and I was very glad when this training session was over.

Double Blind has been formally active for three years as of today. I don’t plan on stopping soon either. I remember using Greymatter for the first and a quarter of the site’s existence and now the site is using WordPress.

I registered the doubleblind.ca domain name (after the previous owners let it expire) on September 2005. Before, the site was run from a sub-domain using a web server off my main server system (using 1998 hardware and 2001 software no less). Now I just use a regular webhosting service as my old server is very close to being decommissioned.

Despite the change in content engines, nothing much has changed about the site’s layout and look. I don’t intend to change this either since my ability to make cosmetic changes is very limited. Apparently when I was born, I didn’t have the “art” gene within myself.

The most significant time that Double Blind was receiving activity from the internet was during the run-up to the BC Election on May 17, 2005. I recall that I was the first, second or third search match for “BC election” and “BC election 2005″ which significantly gave my articles a lot of exposure before others took over. The peak day was 1000 viewers. I also remember that “Black Thursday” was on May 19, 2005, when Google removed me from the face of the earth.

More recently, my weblog got a bit of exposure during the lead-up of the last Federal Election – the peak number of visits was 900 on election day, while that tapered off to about 100 a day quickly after.

Now, according to the web stats, I get about 200 site visits per day, but most of them are just web spiders. I’d estimate my regular readership is at about 10 people. :)

Unique Visitors per month:
11/2005 – 566
12/2005 – 609
01/2006 – 2910 (federal election!)
02/2006 – 941
03/2006 – 997
04/2006 – 499
05/2006 – 602
06/2006 – 1104
07/2006 – 957
08/2006 – 1181
09/2006 – 1473
10/2006 – 1546

Not only was there action in Parliament (in Ottawa), there was action in the BC Legislature as well.

The MLAs were called back to Victoria so that the government can appoint a new representative for children and youth (as the ministry has been plagued over the past year with issues). Although the report’s recommendation to appoint a representative from the special committee was passed unaminiously by the committee, the report has to be adopted by the Legislature. Here was the important quote on November 22, 2006:

J. Rustad: I ask leave of the House to suspend the rules to permit the moving of a motion to adopt the report, which includes the committee’s unanimous recommendation to appoint Mary Ellen Turpel-Lafond as B.C.’s first representative for children and youth.

Leave not granted.

99% of the time, leave is granted.

This is a procedural trick. The Legislature normally blows through committee reports by everybody (government and opposition) agreeing to it, but the NDP have smartly decided not to let this one go by. The reason is because if leave is not granted, members have to debate it and thus it will give the NDP two extra days to hammer the government in question period on whatever topics they want while they “debate” the merits of appointing the representative or not. The “debate” will just be for a show – the NDP members will each use their maximum alloted time to stall and they don’t have any “real” opposition with respect to the actual appointment.

Carol James is allowed 2 hours to speak on this issue; each NDP MLA will have 30 minutes to debate the issue. As there are 33 MLA’s (including James), the NDP will have to come up with 18 hours of pure drivel. It will be entertaining to see what they actually say although I don’t want to be in front of the television watching it.

From today’s action, it appears the NDP are concerned with documents retrieved from and the processes concerning the Freedom of Information Act, and the environment (specifically concerning with a couple coal-fired power plants that have been proposed in the southern interior). John Les (Solicitor General) didn’t have much to say to Carol James. Barry Penner (Minister of Environment) absolutely destroyed Harry Lalli during question period about regulations concerning power generation in the province.

The point of privilege Carol James brought up is interesting, but I will refrain from commenting about it here. I also have suspicions what the NDP are up to – they had a few months to think about this and Carol James needs to score points in order to keep her job.

Jenny Kwan brining up Standing Order 35 is another stalling tactic. Her argument is junk and even she knows it.

The NDP will have Thursday and Monday in the legislature to raise hell during question period. After that and after the vote on the new representative is approved, the legislature will adjourn until the next spring session.

The Conservatives seem to be toying with the idea of either cutting the GST from 6% to 5% or to allow income splitting between families. A GST cut will result in a tax decrease of $6 billion ($180/Canadian) in the first year, while allowing income splitting will result in a tax decrease of $5 billion ($150/Canadian).

Given a choice between the two, however, income splitting has much more impact for many more people. For example, it would change the financial dynamics considerably of two-parent families with respect to child care. If you had one income earner make $60,000/year while the other person earned $0 (not including the child care supplement or any other taxable benefits you might earn), the person earning $60,000 can shift $30,000 of pre-tax income to the one earning nothing. This would result in a net tax savings of $5100 assuming 2006 tax rates. This is a huge amount of after-tax money to see in a bank account.

This is much, much, much more significant than the current $1200/year child care supplement.

If you are a single high income earner and the Conservatives pass this legislation, you might wish to get married soon.

“We are what we are, Mr. Speaker” – Gilles Duceppe in Parliament, after concluding his speech about the Conservative motion of Quebec being a nation within a united Canada.

The man is brilliant. I’m not being sarcastic either. Life is so much easier when you only have to concentrate on getting elected in a single province.

I have decided to take out some portfolio insurance and have spent $18 on Gerard Kennedy winning the next leadership race. Thus I will win big-time if Dion wins the convention and I will not lose anything if Kennedy wins the convention. I will stand to lose $373.29 if neither Dion or Kennedy wins the convention.

Essentially the reason why I have covered my ass a little on this one is because the price was right (Kennedy is at 20:1 odds right now) and to cover for the scenario where the Dion camp could go to the Kennedy camp – this is a real possibility on the 3rd ballot.

The image above is my current financial position on the Liberal leadership convention. If you know of anybody else putting money on the leadership race, please comment below since I am curious – I seem to be the only guy on the internet that’s willing to publicly put money where my mouth is.

Parliament will be called on Thursday to debate a motion tabled by the Bloc Québécois to recognize that Quebecers form a nation. Of course, this will get voted down, but it is not the point.

This is utter brilliance for two reasons. One is that this is tabled just before the Liberal convention and will get a lot of press because of that. It will probably get the issue going on in the convention as well. The second reason is that it makes both the Conservatives and Liberals squirm in their seats. Especially for the Conservatives, most of their seats were obtained from Bloc territory and their Quebec MPs are going to have to walk a fine line with this one.

If Duceppe plays his cards well between now and election day, he and neither the Liberals or Conservatives will be the winner of the next election. Essentially Duceppe wins if the NDP seat count plus the government party does not form a majority.