Economics

March 13, 2021

There’s a lot to be said with meeting someone in person, looking them in the eye, giving them a firm handshake and knowing that you’re not leaving the room till you get what you want. Obviously, a lot more can be achieved in person than online.

As introverted as I may be, I miss those in-person meetings… in the same way I miss being able to properly hang up a phone. A real phone. At the end of an unpleasant conversation, there was nothing more satisfying than slamming the receiver down onto the cradle. Those Bell phones were made of nuclear-war-resilient plastic. Unbreakable. My uncle in Chile a few times lost his temper on whatever was on the other side of the call and flung his phone out of a second-story office window. The cord ripped away, but the phones always survived. Clicking the [Leave Meeting] on Zoom angrily is a far cry indeed.

Speaking of Chile and doing business, specifically the sort of business that has them pretty close to the top of the list of vaccinations… perhaps my post a few days ago seemed to allude to the fact that perhaps there was some sort of funny business that may have occurred when those Chileans flew out for those in-person meetings and got those vaccine agreements. A little nudge, a little bribe, a little kick-back. I didn’t mean to imply that; I meant to state it unequivocally. Of course that’s what happened. I don’t have any proof of it, of course, and what does it matter… it’s just my opinion. But I also understand what greases the wheels… what gets slow-moving government bureaucracy going in a hurry. What jumps the queue. What gets it done.

My first experience with government corruption occurred when I was quite young… 12 or 13. I had a friend who lived nearby, and his dad put up a basketball hoop in the back lane, hung up over the garage door. The lane was flat and paved… and it was great. We were out there for hours the first week… playing one-on-one and every variation of P-I-G and H-O-R-S-E you can imagine. One day, the neighbour’s wife came out to see what was causing all this racket. The next day, her husband came out to have a look… watched us play a bit… didn’t say much, just went back inside. Oh, did I mention that guy was an Alderman for the city of Vancouver?

Two days later, when we got there after school, there were two freshly-laid speed bumps in the lane, perfectly placed and wide enough to completely destroy our basketball court. It still smelled of freshly-poured tar. Not a single other speed bump in any back lane for 10 blocks around. And not like there were ever any speeding cars there to begin with. What the hell. Is this how things work?

Needless to say, we weren’t happy. Our version of petty revenge lasted years. That guy ran in two subsequent elections, and every time an election sign (with his name, of course) popped up in front of his house, we’d replace it with three different ones from various opposition parties. We’d have to venture deep into East Van in the middle of the night to collect all of the colourful alternatives. Totally worth it.

Ok, where was I… yeah, governments. I think it’s no big surprise to learn that there’s corruption at every level. Screwing up a couple of kids’ fun just because you don’t like the sound of a basketball is a small example. Bribing officials, peddling influence, making big promises, forgiving crimes, throwing huge money at certain people and, ultimately, lying… were things Abraham Lincoln did to push through his Emancipation Proclamation and ban slavery in the U.S.

Ah, didn’t see that coming, did you… yes, indeed… sometimes, that corruption is for the greater good… and for those crimes that today would’ve gotten Lincoln jailed for life, he’s instead considered the greatest president in history. Quite a fine line, isn’t it. I don’t know what those Chileans did, and I don’t care, and certainly, the well-vaccinated populace of Chile doesn’t care either.

If you want to argue that Canada should be above that sort of thing, name me a Prime Minister and we can discuss his corruption scandal. Chretien’s helicopters, Mulroney’s Airbuses, Trudeau’s SNC-Lavalin. Closer to home, Glen Clark’s deck/casino, Harcourt’s BingoGate and Vander Zalm’s Fantasy Gardens.

Government corruption has been around forever, and it’s never going away. At the very least, they could put it to use for the greater good… not just individual gain.

Lincoln? Awesome. Chile? Same. The rest of my examples? Brutal.

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By |2021-03-13T17:03:30-08:00March 13th, 2021|Categories: COVID-19 Daily Report, Politics, Science of COVID-19|Tags: , , , , , , , , , , , , , , |4 Comments
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March 6, 2021

Unrelated to everything… although relevant in that people have opinions they like to share… comes this, from a story that made waves a few years ago…

When you mention Nestlé around here, it’s like mentioning the Satan of corporate greed. These miserable people come in here, steal our water, and then sell it back to us for criminally high prices. It’s outrageous, it’s unacceptable, our government sold us out for next to nothing, somebody do something.

We, here in B.C., are blessed with some of the most bountiful and freshest water on the planet. We completely take it for granted, and only occasionally feel the pain when our water needs to be shut off for the day for repairs. Oh, the humanity, how will we survive. We are so, so lucky.

For centuries, people have been bottling fresh water and taking it to places where it’s needed. There are places in the world where you simply can’t drink the tap water, and you come to depend on it. Sidenote, when I lived in Northern Chile in 1987/1988, water was the equivalent of $3 a bottle, while beer was about 25 cents. I spent a lot of time pretty buzzed… because that water was totally undrinkable. The water was so loaded with calcite that if you didn’t dry it off after washing your hands, you’d quickly find them coated in chalk. The water was sticky and gross – and that was when you could get some actual water pressure.

Around here, there’s nothing wrong with the tap water. Far from it. It boggles the mind that people literally fill up bottles from our tap water, and then sell it back to us… and we buy it, like it’s magically better for some reason. It’s not. A cheap home filter will give you the same quality. An expensive home filter will give you much better quality, but most people don’t actually need it. Not around here. We have amazing fresh water, and more than we know what to do with. Accordingly, forever, the policy has been “take as much as you want” – so long as you don’t pollute the environment. Businesses have been parked on the banks of the Fraser for decades.

One day, a few decades ago, Nestlé showed up and set up shop, taking some of that Fraser River water and bottling it. No one said much, because nobody knew and or cared.

The government, at some point, did care. These guys are taking our water for free and then making a commercial enterprise out of it. Shouldn’t they be paying at least something for it? Maybe they should.

The government approached Nestlé and said, hey, maybe you should be paying for this water. Nestlé said sure, how much? We’re not sure, said the government… we’re going to study it and get back to you. Sounds good, said Nestlé.

Then the government figured out it’d cost a lot of money to study this issue… who’s using water, how much of it, how much should we charge, how much can we charge, how to we meter it, how do we control it, who’s going to manage it… and so on. It’s complex. The government figured it’d cost close to $10,000,000 to study it properly, and came up with the genius idea to get some of these commercial enterprises to pay for it.

Hey Nestlé… how about you pay for this study? Sure, said Nestlé.

OK, said the government… here’s how we’ll do it. We want ten million dollars… you guys pull out a zillion gallons of water a year, and we will charge you enough cents per zillion that we can get our money… and once we’ve figured it out, we will charge more, but this is a good start. Sure, said Nestlé.

And that is where Nestlé, who had been paying zero for the water, now began paying a nominal amount for their water. And when that tidbit of info hit the newswire, the shit hit the fan. Because the story that got told was very simple; the government just sold us ut. How can the government let them steal our water for fractions of a penny per litre… and then sell it back to us for 10,000x the cost. They should be charged $1 a litre! $2 a litre! $10 a litre! They should all be arrested and thrown in jail!!! Our poor precious water!!!

Do you know how much water Nestlé pulls out of the river? If you could dam the river for a certain period of time, how long would it take to accumulate all the water that Nestlé takes in a year? A month… no… of course not. A week? A day? OK, a day… that’s still a lot, sort of. Except it’s not a day. It’s not even an hour. It’s less time than it’s taken you to read this far. In seventy-two seconds, Nestlé takes their annual haul of Fraser River water… because, unfortunately, as priceless as our crisp, clear, pristine drinking water is, 99.99999% of it flows into the Pacific Ocean. It’d be nice to be able to tap into a lot more than that, but the infrastructure isn’t there.

I’m not sure what the status is of these water studies, nor what the plan is to bill industries that rely on it. It’s come to light that any meaningful increase in industrial water cost would cause big problems for some of those businesses who count on super-cheap (if not free) water. Like I said, it’s complicated.

If there’s any aspect of this that relates to the pandemic, it’s the part where well-spoken agendas, as one-sided as they may be, sometimes fill the echo chamber at the expense of a balanced opinion. There’s often more to the story.

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By |2021-03-06T17:06:15-08:00March 6th, 2021|Categories: COVID-19 Daily Report, Politics|Tags: , , , , , , , |5 Comments
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March 2, 2021

The whole concept of supply/demand is pretty easy to understand. You don’t need a degree in economics to wrap your head around the idea that the more supply there is of something, the less it’s worth… and when something – anything – is in short supply, its value increases… sometimes, irrationally. Toilet paper, hand sanitizers, masks. There was no actual rationale behind the toilet paper part of it, but since everyone decided there would be a shortage, a shortage was indeed created and prices shot up and scalpers moved in… until manufacturing turned it up to 11 and caught up, and then there was a flood of extra supply. When it happens in the consumer world, it’s easy to understand – not necessarily why it happened; just what’s going on. At any given time, you know exactly what something is worth because as soon someone who’s willing to pay that amount meets the person who’s willing to sell at that price, the question is answered.

Valuing something like an option is more complicated. Imagine someone is selling a horse for $20,000… and you’re interested, but not sure you can come up with the money… or not sure the horse is healthy, and want it checked out by a trusted vet. But you also don’t want someone to come along and scoop him up while you’re still pondering… so you call up the owner and offer him some money… he sells you an option to buy the horse for 20k, and it’s good for 5 days. After that, the option expires and he can do whatever he wants… and your money either goes towards the purchase of the horse, or you kiss it goodbye.

What’s that option worth? $100 is probably not enough for the owner to turn away potential buyers for a week. $2,000 feels pretty steep if you end up walking away from it. One can discuss it, and many opinions will be offered, but the only one that ultimately matters is what the two people involved in the transaction agree upon.

In the financial world, it’s no different. Options to buy and sell stocks trade on their own, independent market… and those prices are based on numerous variables, but the important ones are how much time until the option expires, at what price the option can be exercised at, and how volatile it is. All of that comes together to a single number, and every time two people agree on it, a trade happens.

But what happens when the thing being bought/sold/traded/optioned/whatever’d doesn’t have a value assigned to it? Or the actual financial value is an irrelevant aspect?

A parachute while browsing the local aviation shop is worth something different than when you’re in a plummeting airplane and there is one parachute left and three people who want it.

A Kit-Kat bar being auctioned after a week of hiking in the frozen snow of Strathcona Park is worth a lot more than when it’s sitting next to the checkout line at Safeway.

And… vaccines. A year from now, a Covid-19 vaccine… be it Pfizer or Moderna or AstraZeneca or, by then, numerous other ones… will be as common as Tylenol. “Hey doc, while I’m here, can you spare a….” “Say no more.” Jab. Done.

But today? People chartering planes to the middle of nowhere, just to get it. People flying to Dubai, just to get it. Young women dressing up as grandmas and getting into lineups… just to get it. Stories of people throwing all sorts of money at it in all sorts of ways, just to get it… now. What’s it worth? What’s it worth in a month, six months?

I don’t know. I suppose I could attach a number to it, as far as what I’m willing to pay for it. We can all do that, and we would all come up with different numbers. Some people are happy with zero; happy to wait. Some people don’t want it, even if you paid them.

All of this is largely irrelevant, because it’s not for sale. It’s like that old MasterCard commercial:

Parking at the clinic: $3
Alcohol/cotton swab/syringe: $1
Trained nurse: $40
Vaccine: priceless

There’s no real point to this; it’s just me thinking out loud, because my business brain can’t help but think about stuff like this. But this business brain also understands that some questions have no answers.

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By |2021-03-02T17:03:05-08:00March 2nd, 2021|Categories: COVID-19 Daily Report, Science of COVID-19|Tags: , , , , , , , , , , |3 Comments
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February 9, 2021

Let’s talk about something else entirely… at least for today.

Like Covid-19, it’s invisible to the naked eye. Like Trump, it’s wildly volatile. Like both of those things, its future is uncertain, but there’s plenty of speculation. What I’m talking about is Bitcoin.

Bitcoin (BTC) was born almost exactly 11 years ago, created by an entity known as Satoshi Nakamoto. Nobody’s too sure if that’s a real person, or a group of people, and/or whether that individual, if it is one, is still alive.

The first time I heard about Bitcoin was some time in 2010… from a friend I’d formerly worked with… a very smart guy, one of the best Linux/network admins I’ve ever met. Smart guy, but nobody took his touting of Bitcoin seriously. This was late 2010, and Bitcoins were worth less than a $1. The following year, they started going up in value… all the way to $20. He was very happy. Then the price crashed back down to a few dollars again. He was not so happy. It all still felt like something not to be taken seriously… but that started to change as time went on.

In late 2013, the world’s first Bitcoin ATM opened up… right here in Vancouver. It’s still there… in Waves Coffee, on the corner of Smithe and Howe.

Very cool. I went down there with $500, plugged it into that machine, and bought 2.5 Bitcoins. And when you buy BTC, there’s no tangible evidence of it… but then again, there’s no tangible evidence of your bank balance, except for what your phone or computer screen tells you. You just assume the little numbers translate to value. Like cash or stocks or gold or anything else with a number that describes what it’s worth. Then I bought a coffee and some food with it; Waves was one of the first places to accept Bitcoin for payment.

I dabbled with BTC over the years; for a while, I had my own mining rig… but it wasn’t anything too sophisticated. In fact, it was computer motherboard and three video cards all crammed into a milk crate. That thing ran hot… and loud. I was selling most of what I mined as quickly as I could… BTC was $400 at the time… and that was the mindset; create $ out of thin air and lock it in. Obviously, in hindsight, holding onto all of that would’ve made far more sense, but BTC back then, at least in my mind, was simply a new-fangled digital currency to be used like any other. And like any other, it’ll fluctuate… but never appreciate to levels of insanity. You wouldn’t expect a Canadian Dollar to suddenly be worth $2,000 U.S.; this was no different. Eventually, I shut it all down. Mining BTC becomes more difficult and more expensive as time goes on. Doing the math on how much energy I was consuming in this increasingly-difficult exercise implied it was no longer worthwhile. The garage, where it had been running, became much quieter and colder.

Except… it was different.

The first evidence of that was in 2013 when BTC shot-up to over $1,000 a coin… and it was because of currency restrictions imposed in Cyprus, during a financial crisis. People there were frantically trying to get their money out. In the old days, you’d try to do that by smuggling out gold or diamonds… but if you can seamlessly tap-tap-tap here and somewhere else in the world, someone else does the tap-tap-tap and now has all the money (and, of course, that someone else can also be you)… and no financial regulator was in the way… well, great. Even better, even if the financial regulator saw that transaction go by, they have no idea who did it. BTC became the de-facto currency of the Silk Road marketplace, a dark web Black Market site for purchasing all sorts of illegal goods.

When the Cypriot financial crisis sorted itself out, the BTC prices came back down to earth, but everyone took notice. Hmmm… forget buying coffees and croissants… if this thing can hold its value, given everything else it brings to the table… hmm…

What else does it bring to the table? It’s secure. So far, nobody has figured out how to hack it, though many have tried. The general consensus is that it’d take a very long time for all the computer power in the world at present to do so. The infrastructure is secure and transparent. Everyone can know what every wallet balance in the world is at – but not necessarily know to whom it belongs. Transactions are verified in real-time by multiple machines around the world. It all simply works. And who’s to say what a BTC is worth? Well, who decides what gold is worth? Or a diamond? It’s simple… it’s worth exactly what at this moment in time, someone is willing to pay for it while someone else is willing to part with it.

But perhaps the biggest intangible, the one thing this particular commodity brings to the table that no other one does is… that it’s finite. Given how it’s designed, only 21,000,000 BTCs will ever be mined. Around 18,500,000 have already been mined, but, like I said, it’s getting harder and harder. The last one won’t be mined till around 2140, and it’ll take decades for that last one to emerge.

Oil, gold, diamonds, wheat, sugar, cocoa, pork bellies… the earth always provides more. Nothing is infinite, but we’re nowhere close to running out of those things… we can always mine, grow or breed more. But not BTCs. So what happens when you have a trusted commodity where supply is known to be limited? You’d expect it would appreciate in value.

At this moment, a single BTC is worth $60,000. That coffee and chocolate croissant I bought way back when for 0.05 BTC? It cost me $3,000 in today’s dollars. That initial $500 in BTC I bought (and is now long gone) would be worth over $150,000… but if that makes you go ouch, consider the very first BTC transaction ever… two Papa John’s pizzas… worth about $30… for 10,000 BTC. That is, in today’s dollars, a six-hundred million dollar pizza. Sorry, two pizzas.

A lot could go wrong with BTC, which would vapourize all that value instantly. Someone could crack the encryption. Governments could conspire to shut it all down. A better crypto-currency could appear, and all the value would flood in that direction. Or… it could continue to appreciate forever. Some people are saying a single BTC could be worth $500,000 within a decade. Given its recent meteoric rise, who knows.

People also wonder what’ll happen after 2140, when there’s no more reward for being part of the network, since mining will have stopped. But in the same breath, the answer is obvious. Not our problem… just like in 2140, perhaps we’ll all have fusion-powered diamond-makers in our homes, or do-it-yourself alchemy kits for turning old pennies into gold. Not our present-day problem.

For now, the world has a trusted, unique, ubiquitous and accessible form of wealth storage that seems to find a little bit more of legitimacy every day. Recently, Elon Musk announced that Tesla would be accepting BTC for payment. And that Tesla holds $1.5 billion in BTC, just as a part of a diversified investment portfolio. And perhaps that’s what a well-diversified portfolio looks like in the future… cash, equities, bonds, gold, real-estate, commodities… and now, also… BTC.

As far as my friend is concerned, the one who was into BTC so early in the game… at some point, he cashed it all in (whatever “it’ is), bought a boat, and has been sailing around the world ever since.

** Disclaimer: I’m nobody’s idea of a registered investment advisor. None of the above is intended as advice; just interesting info. Should you choose to dabble in BTC, do so at your own risk. Past returns are never indicative of future whatever yadda yadda…

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By |2021-02-09T17:03:00-08:00February 9th, 2021|Categories: COVID-19 Daily Report, Politics|Tags: , , , , , , , , , , , |6 Comments
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January 30, 2021

If, off the top of your head, you had to guess which three countries in the world had the most cases per 1M of population, you would think about it, come up with three countries, and be completely wrong. It wouldn’t make sense not to include places like U.S, India, Russia, Brazil, U.K, Spain, Italy… etc… on that list of guesses… but again, with exception of the U.S. (which lands in 8th place), none of the others even make the top 10. In fact, with only Spain at number 18, none of the others make the top 20.

The list of the top three countries with the highest case counts on a per-capita basis are: Andorra, Gibraltar and Montenegro.

Wait, you say, those places are barely populated and that skews the numbers. That is correct. Andorra, top of the list, scores 128,000 per million of population who’ve tested positive. Close to 13% of the population. That’d be like Canada having close to 5 million cases (we’re at less than a million). But, of course, Andorra only has a population of 77,000. Only 100 people there have died of C19. Gibraltar has a population of 34,000. Same idea… and, for what it’s worth, both of them share a border with Spain, where, no doubt, all of their cases came from.

So what, you may be asking….

If you look at Europe as a sort of big country, and each individual country as a province, then some issues relevant to Canada come to light.

Like, with respect to vaccinations, guess where in this country we have the highest per-capita vaccination rates. Now you know it’s a bit of a trick question, so perhaps it’s harder to fool you… so if your guesses included places like the three northern territories, you’re correct. By far.

Vaccination rates for a few key provinces…

B.C.: 2.5%
Ontario: 2.2%
Quebec: 2.8%

Vaccination rates for the territories:
Northwest: 21.0%
Nunavut: 13.5%
Yukon: 15.4%

Some say that’s fair. Some say they should be distributing it more evenly. Some say more should be directed to the hotspots. And everyone is a little perturbed with last week’s news… at the start of the week, we heard how we were not getting what we were expecting from Pfizer… and at the end of the week, we heard how we were not getting what we were expecting from Moderna. Too bad. C’est dommage.

At what point could we conceivably start counting on ourselves for some vaccine? Some homegrown, domestically produced vaccine where we would be first in line?

The only viable possibility would indeed be home-“grown”, and that is Quebec-based Medicago’s tobacco-plant-based vaccine which recently wrapped up phase-2 clinical trials and is about to enter phase 3, involving 30,000 people in 11 countries. For what it’s worth, it’s off to a great start… 100% of people who received the vaccine developed significant antibody responses with no severe side effects. Like Moderna and Pfizer, this one also targets the spike protein, so there’s no real actual virus involved and therefore zero chance on getting sick with C19 from the vaccine. Side-effects – nothing bad so far, and we shall see what phase 3 reveals.

Unfortunately, the earliest we could hope to see this vaccine available to the public would be the second half of the year… but, certainly the government’s order of 76 million doses (and all the money that came with it) is helping push things along. But also, unfortunately, although they’ve been trying to get funding for years, we still don’t have the manufacturing capabilities in place. Medicago reps met with government officials no less than 24 times from 2017 to 2020 trying to find a way to fund the construction of just such a facility. The funding finally came through… in March of last year, when the “Oh shit” moment arrived. At least we’ll be all set for the next pandemic.

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By |2021-01-30T17:04:17-08:00January 30th, 2021|Categories: COVID-19 Daily Report, Politics, Science of COVID-19|Tags: , , , , , , , , , , , , , , , |3 Comments
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January 29, 2021

There’s an age-old question… would you rather fight a horse-sized duck, or 100 duck-sized horses?

OK, it’s not an age-old question. It actually materialized in 2003, in a UK newspaper, but really rose to prominence in a Reddit “Ask Me Anything” thread in 2012… where it was a question posed to president Barack Obama. Obama never got around to answering it, but the question wound up on “the crawl” on TV, and the rest is history. Here are my thoughts…

While a 1,000 pound duck would be formidable indeed, it’s one single enemy… and a coordinated, well-timed attack is all you’d need to neutralize it. On the flipside, I know horses… and I can tell you, dealing with a single angry horse is a handful; a potentially dangerous one… and 100 angry little horses would step on you, kick and bite you relentlessly, and not give up… so yeah, I’ll try my luck against the big duck.

Speaking of Reddit, and fights between one big thing vs. lots of little things… you’ve probably recently heard the words GameStop and AMC and short squeeze and hedge funds…

In a nutshell, here’s what’s going on:

The opposite of the well-known game-plan of buying a stock when you think it’s going to go up, holding it, and then selling it for a profit… is what’s called “shorting” the stock… and it’s what you do when you think a certain stock is over-priced. What you do is borrow the shares from “someone”, sell them… and then wait till the price goes down… and then buy it back at the lower price. Then you return the shares you borrowed and pocket the difference.

Huge (multi-billion-dollar) hedge funds like to short stocks here and there… for varying reasons. Given that their mandate is to hedge risk (it’s in the name…), part of that might be to take positions that go contrary to upward market movements… to hedge the risk in case the opposite happens. But also, using the same analytics and metrics they’d use to picks stocks they think will go up, they do it in the opposite direction.

Arguments can be made about the ethics behind shorting stocks to begin with; you’re basically betting and hoping that a company will do poorly. It goes against a lot of principles, like… well, you can’t sell a house or a car or anything else without actually owning it… why is this different? Because, at least for the moment, the people who run the exchanges say it’s ok. It doesn’t go against the principle of making money… therefore, as long as capitalism exists, so will short-selling.

One thing about buying shares and being wrong… the worst thing that can happen is you lose what you put into it. I buy 10 shares of ACME at $100 each and ACME goes bust and the shares become worthless… I’m out $1,000. But if I short 10 shares at $100 and it goes up to $200… well, I need to come up with $2,000 worth of ACME shares to give back to whoever lent them to me… and it means buying them back from the open market. I have the original $1,000 I made from the sale, but now I have to come up with $1,000 out of my own pocket to cover it. And if ACME went up to $900 a share, now I’m out $8,000 of my own money… and here’s a big problem. Zero is the limit on the way down, but there’s no limit on the way up… and what do I do when I see the price crawling upwards…?

There are two options. One is… cut my losses… buy it back at the higher price, give back the shares, and pour a glass of my finest single-malt scotch, while pondering recent life decisions. Or… double-down. Sell more. If I thought selling it at $100 was a good idea, then selling it at $200 must be a better idea… and now, when it goes down, I’ll make even more. Great plan if it actually goes down… but what if it keeps going up? And now everyone who’s short is buying back in, further lifting the price and causing more panic… this is what’s called short-squeeze, and it’s what sends stock prices soaring very quickly. But here’s an additional wrinkle…

Technically, when you short a stock, you would be borrowing the shares to do so. The brokerage house facilitates that for you (and takes a fee, of course). However, these brokerage houses play a little loosey-goosey with that… not too different from the banks, I suppose, in that if everyone suddenly ran to BMO and demanded all their money, there simply wouldn’t be enough to cover it. They’re counting on not everyone needing all of it all at once.

At the moment, something like 150% of GameStop shares are short. In other words, more shares of GameStop have been sold than actually exist. So… when the people who actually own shares, or own call options (which give them the right to purchase shares at a specified price) suddenly say “Hey, I’d like my shares now” – those shares are nowhere to be found. Frantic buyers who need to come up with them will just keep driving the price higher and higher.

An army of Redditors (from /r/WallStreetBets) decided months ago that if enough people bought up certain heavily-shorted stocks and/or call options (GameStop, AMC and some others) and then promised to hold them, it would drive up prices significantly. One of their targets, GameStop, was being shorted incessantly by a huge $13-billion hedge fund called Melvin Capital.

Shares in GameStop were below $3 last year… and not long ago (early November) were trading at around $10 a share. Then, the Reddit army started buying it up, feeding into the Melvin shorts. The prices started going up… and up…. and more up. And Melvin, instead of covering their losses and taking a bit of a hit… sold more, where it was quickly gobbled up. Lather, rinse, repeat.

This morning, GameStop shares opened at $380. They went as low as $250 and as high as $414 before closing out the week at $325. And there are still a colossal amount of open shorts that will need to cover eventually.

A lot of these stock-dabbling Redditors, swearing to hold it till the cows come home, have made thousands of dollars. Some have made millions. Melvin Capital has lost $5 billion. And it’s not over yet.

Let’s rephrase the original question… and remove the human… who would win the fight, one big duck or an army of little horses?

Perhaps I’m a little biased because I’ve been betting horses all my life, but this is no different… and it’s not 100 of them; it’s literally millions. The big old-school Wall-Street Scrooge McDuck might not have that huge pit of money to swim around in much longer.

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By |2021-01-29T17:03:03-08:00January 29th, 2021|Categories: COVID-19 Daily Report, Politics|Tags: , , , , , , , , |5 Comments
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January 26, 2021

There’s an episode of Star Trek:TNG where Captain Picard and the gang happen upon an odd planet… completely devoid of life, save for a small but picturesque patch of land where a peaceful, old couple (of humans) are living.

This guy (let’s call him Kevin) and his wife tell Picard that an alien race came by and wiped out everyone… except, for some unknown reason, them.

There’s far more to the story, but as it turns out, the alien who did the real wiping out was Kevin himself… who only looks human, but actually isn’t. Some aliens did come by and attack the colony… and Kevin’s wife was killed in the attack. Kevin, who’s actually a very powerful alien, took it upon himself to exact revenge by wiping out all of the aliens… and not just the ones that had attacked him, but he scoured the universe and found them all. Fifty billion aliens; the entire species wiped out. And now he was just trying to live his eternal life on this patch of land with a reconstructed illusion of his wife.

What do you do with a being that wipes out 50 billion others? Picard concludes that they, humans, are not qualified to be his judge… because there are no laws to fit the magnitude of the crime. Picard and The Enterprise leave, and he puts out the word to Starfleet; stay away from this planet. Leave Kevin alone. You really don’t want to piss him off.

Indeed, the punishment needs to fit the crime… and there are places in this world where that’s the case. Finland, for example… where in 2015, a successful businessman by the name of Reima Kuisla was caught doing 64MPH in a 50MPH zone… which translates to doing 103km/h in an 80 zone. That’s not even excessive speeding, and I’m sure more than one of you reading this today were on a highway today, where the limit is 80, and where you were exceeding 100. You’re lucky you didn’t get caught; that’s a $173 fine and 3 points.

Mr. Kuisla wasn’t so lucky… he got caught, and because of his Ten Million Dollar income, paid a fine of $80,000. To scale it down, that’s like someone making $50,000 a year being fined $400. Sounds about right… proportional fines, depending on the income of the perpetrator.

There are more extreme examples, but they seem to top out at… one million dollars. Yes, in 2010, a 37-year-old Swede had just taken possession of his new Mercedes SLS AMG in Germany and was driving it home. The cameras that clocked him only go up to 200km/h, which is what they captured… but the Swedish cops that caught up with him clocked him at close to 300km/h. He claimed he thought the speedometer of his new car was broken and that he was just putting it through its paces. Sure. That’ll be a million dollars, please.

Which brings us to a couple of local lowlifes, the ex-CEO and his actress-wife, whose actions have made them front-page news all over the world… and somewhat tarnished the view that all Canadians are thoughtful and polite.

It takes a lot of planning and a lot of disregard for others… to charter a plane, head to the middle of nowhere, lie repeatedly, and get into a vaccine line-up that’s supposed to be for, more than anyone else, indigenous elders. They lied about quarantining, they lied about why they were there, they lied about where they worked. And as soon as they got what they wanted, they high-tailed it out of here. Or, tried to… but that’s where piece-of-shit narcissists usually mess up. They’re so completely caught up in the ME ME ME of their existence that they forget everything and everyone else. Ten seconds after they got their vaccines, you can imagine hearing them saying to each other, “Let’s blow this popsicle stand”… and it was that urgent “straight to the airport” request that made people wonder… ok, who exactly are these people?

They were slapped with $500 fines, which is a joke… but, to some extent, like Picard… I’m not sure we have laws in place to punish this sort of thing appropriately. Like the Finnish businessman, the now-former CEO of Great Canadian Gaming Corp. made $10M last year. Is $80,000 an appropriate fine?

It’s a good start, but there needs to be more. A lot more. There are tens of millions of dollars to follow for that guy, thanks to stock options and the sale of the company… but it’s about a lot more than money. I’m not sure the answer is jail time; I think the answer is community service, and lots of it… and all of it in the community they affected.

Remote communities like Beaver Creek can probably use some help. Wash dishes at the restaurant. Mop up the airport. Or, actually, go work at that famous motel they don’t actually work at — and clean some rooms. Contribute back to the community, given that what you stole from them is difficult to pin a value on. Maybe consult with those indigenous elders from whom you stole the vaccine… and ask them what they need. And, might I suggest… you start with a series of apologies… to them, to their entire community, and to the countless others who deserve and need that vaccine ahead of you… but, like everyone else, are patiently waiting their turn.

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By |2021-01-26T20:20:45-08:00January 26th, 2021|Categories: COVID-19 Daily Report, Business & Economics, Science of COVID-19, Movies, Music & Entertainment|Tags: , , , , , , , , , , , , |8 Comments
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January 24, 2021

Weird things happen when you’re dealing with big numbers, but when you get to them slowly. Here’s a very basic example, speaking purely with respect to financial wealth:

A man whose net worth is only $1 is not rich. Far from it. Let’s call him poor.

If you take a man who’s poor and give him $1, he’s still poor.

Given those two starting premises, start a little loop. Give the guy another dollar. Is he rich now? No. $3? No. $4? No. But you loop a billion times, and of course, now he is. Somewhere along the line, he went from being poor to being stable… and, continuing, at some point he went from being stable to being well-off. Then he graduated to financially secure… on his way to rich. A dollar a time, he crossed all those lines.

The thing is… it’s difficult to figure out where to draw those lines, because they’re big, wide and blurry. And I don’t mean because everyone would have different definitions and opinions. I mean just you. Pick a number where you’d consider the guy to be unarguably in one of those categories. Now think of a number that’d plant him squarely in the next category up. Those two numbers are far apart. Even if you try to bring them closer together, you’ll still never get to a point where it flips by $1.

This same concept is what plays with our minds in elections. What difference does my one vote make? We keep getting told that it makes all the difference; every vote counts, etc. But the truth is… all other things being equal, your one little vote doesn’t matter. It’s quite a paradox. Take the last election, wherever you are. Change nothing except your one vote… remove it from the election. Did that change anything? Of course not. But also, of course, everything changes if more people start thinking like that. Many elections went the other way (Hilary 2016 comes to mind) because so many people become convinced that their one little vote wouldn’t matter (like people in Michigan) that they didn’t bother voting. At some point, even though it got there one missed vote at a time, it made a difference.

I’ve been accused of being a bit preachy and/or being a little shame-bashing on those making some individual decisions based on how they’re navigating their lives these days; choices with which I don’t agree with, with respect to travel or socializing or whatever… let alone masks and vaccines… but the intent of this post is not that. I’m just here to share a thought… reflecting on how we suddenly hit tipping points where everything changes… and how we got there.

Most rags-to-riches stories are long and drawn out; tiny, incremental gains over long periods of time. Perhaps not dollar-by-dollar, but it’s not a fine line that was hopped over one particular day.

Similarly, it’s like that with a pandemic. I look at these numbers every day, and there’s micro-movement in some direction. On a day-to-day basis, it doesn’t seem to matter much. But when you take a step back and look at it from a bigger-picture point of view, one day you realize you’re in a totally different place. These days, that looks a lot better than it did just a few short weeks ago. But it’s worth remembering how we got here, and how we’ll get to wherever we’re going next… one dollar or one step or one person… at a time.

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By |2021-01-24T20:11:48-08:00January 24th, 2021|Categories: COVID-19 Daily Report, Politics, Business & Economics|Tags: , , , , , |2 Comments
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December 26, 2020

Happy Boxing Day! Now that you’ve unboxed the gifts and boxed up the Christmas, you can relax… and hopefully Santa was good to you. Hopefully you got something meaningful that’ll last a long time; some gift that keeps on giving.

You know what’s an excellent gift that keeps on giving? It occurred to me while running up and down McDonald Beach with the dog… that great dog-beach near the airport.

The people who run the airport, the Vancouver Airport Authority, have never stopped charging the Airport Improvement Fee.

To backtrack a bit… back in the early 90s, YVR realized that with the projected passenger loads expected in the future, the airport was woefully undersized. Vast improvements were needed to deal with the post Expo’86 crowds… and the ever-increasing traffic to-and-from Asia. And they needed to get the money from that somewhere, because, believe it or not, the airport gets no government money.

So, they implemented a simple AIF… a little user-fee tax sort of thing. If you were flying out of YVR, you paid $5 to destinations within B.C, $10 within Canada and $15 everywhere else. These little kiosks popped-up, and you’d line up and wait and buy a little ticket that’d be collected when you went through security. A bit of grumbling ensued by an annoyed public who felt they were once-again getting shafted and wasting time.

Not soon after, they finally figured out how to integrate the AIF into the cost of an airline ticket. No more separate line-ups… it was all transparent. And, oh, how the money rolled in. Twenty million passengers a year times an average of ten dollars each equals a lot. More than $2 billion dollars and counting.

Where’s the money going? Well, it’s gone towards building the best airport in North America ten years in a row. A few years ago, some governing body voted it the best airport in the world. The fact is, whether it’s the new terminal, the new runway, the new outlet mall or just the quiet little museum piece you get to walk through if you land at one of those distant E-gates – the trees and birds and canoe on the water thing – it seems to be money very-well spent.

The AIF was supposed to be temporary but so was income tax during WW2. So were those ugly power-towers on Boundary, north of 1st Ave.

Income tax will never go away. Neither will those towers. And probably, neither will the AIF, and I’m totally ok with that. And by the way, the AIF has changed. Now it’s $5 for travel within B.C. and $25 for everywhere else. I’m totally ok with that too.

I guess that’s not really a gift that keeps on giving; it’s not a gift if it’s being extracted from you… but let’s call it a worthwhile extraction that keeps on giving… there’s a good random thought re Boxing Day, typically one of the busiest travel days of the year… but not when air traffic is down 90%. Maybe next year there will be more excitement on Boxing Day than just taking things out (and putting things back in) boxes.

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By |2021-02-28T16:27:17-08:00December 26th, 2020|Categories: COVID-19 Daily Report, Politics, Travel Stories, Our Dog|Tags: , , , , , , , , , |3 Comments
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December 17, 2020

A quick thought with respect to the winding-down of what history will undoubtedly call the ugliest presidency ever… I wonder if it’s occurred to those who support Donald Trump – at least 74,000,000 Americans – that after all is said and done, no matter what you believe is broken and needs fixing… that this wasn’t the guy to do it.

Notwithstanding he didn’t keep the very election promises upon which he was originally elected (the border wall that Mexico will pay for, the healthcare plan that’s just a few weeks away, etc), suddenly there appeared this whole notion of a large, left-leaning group of overlords that’s controlling everything… well, if that’s the case (which it isn’t, but let’s say it is) – Trump has failed miserably in dealing with it. If you’re a staunch Republican who thinks these are real issues, I think you have to admit your guy failed you. You, like him, can scream fraudulent election and all that… so, ok, let’s say it was… it was a huge fix, all aimed at getting Biden elected – Trump, with his genius intellect and intuition saw through it all along; he identified countless examples of voter fraud. But then what?

In four years, he’s appointed more federal judges than any president in history… placing these people in roles with lifetime appointments – roles that had been gleefully held open by Mitch McConnell. These guys, with their frenzied zealous desire to stay in power, did everything they could… and it still wasn’t enough. With all his appointed judges, with all the vague but passionate handwaving, with all of the alleged evidence, look what he managed. Nothing. From the sounds of all that, you’d think it’d be a slam dunk. But no. Zero. What. A. Loser.

Forget for a moment what he’s broken (and there’s plenty) – in some crazy world, one could argue it was for the greater good, and you have to break eggs to make omelettes or whatever. OK, let’s entertain that for a moment… so, sure… lots got broken, yet… nothing got fixed. If there exists a Deep State (there doesn’t) that’s controlling the radical left (it isn’t), then… despite knowing all this, he couldn’t do anything about it. That deep state now sits well-entrenched, now in power, ready to take over the world. Your guy failed you miserably; more miserably than somebody caught by surprise, who didn’t see it coming. This guy saw it all coming, for four years, and was unable to do a damn thing about it. All talk. Zero action. Is this the guy you want leading you?

Setting aside the obvious fact; it’s hard to fix something that’s not broken because it doesn’t actually exist – notwithstanding it’s his main money-raising platform… but let’s forget all that crap. Let’s look at real things where Trump could’ve made a difference… things he promised.

There’s no better healthcare plan, there’s a bit of new border wall, but most of it is renovation… and Mexico didn’t pay for any of it. Hilary isn’t locked up. There’s no renegotiated Iran deal. There are lots of illegal immigrants still around. There’s no right to carry a concealed weapon in all 50 states. There’s no freeze on hiring federal employees. There is no end to birthright citizenship. There’s no automatic death penalty for cop killers. Eliminate the federal debt in 8 years? It’s higher than when he came into office. And, oh yeah, his tax returns… we’ll see those any day now, as promised.

Actually, that last one – we might, because of a court order coming next month. Between that and going to prison for contempt, he’ll probably eventually provide them. And then he’ll go to prison for what’s on them.

And yet… some staunch Republicans still stay by his side, sending him their hard-earned money, believing everything he says. Up to you, I guess… he’s going to need friends and he’s going to need money. But, between you and me… I think you could do a lot better than this Loser.

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By |2020-12-17T17:03:00-08:00December 17th, 2020|Categories: COVID-19 Daily Report, Politics|Tags: , , , , , , , , , , |7 Comments
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