Crude futures settle below US$78

Bloomberg.com is reporting that West Texas Intermediate for November delivery finished trading at the New York Mercantile Exchange at US$77.70 a barrel, the lowest price for front-month crude futures since last year.

Brent crude - closest in price to Grand Banks light, sweet - closed the day at US$74.09, a drop of almost eight and a half dollars from the day before. That puts crude oil $13 below the average price assumed by the provincial government at budget time last April.

At close of trading on Friday, crude futures up to April were below US$80 a barrel.

In other energy news, Harvest Energy - owners of the Come by Chance refinery - have delayed a planned $2.0 billion expansion of the 115K barrel per day refinery until 2010. Current economic turmoil is also forcing other energy companies to rethink plans in western Canada.

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Jack channels Al Gore, in a bad way

New Democrat candidate Jack Harris seemed to be channeling Al Gore at the all candidates debate on CBC Radio Thursday.

No, not Enviro-Champ Al Gore, but the "I invented the Internet" version.

Morning Show host Jeff Gilhooley asked Harris what he would be able to accomplish for the riding if he were elected as an opposition bencher.

Harris replied he could do lots.

Like say when he was here in Newfoundland and Labrador, on the opposition benches:

"We've got school bussing in St. John's, which we didn't have, thanks to me."

Huh?

Thanks to Jack?

Jack may have advocated for school bussing but the service was extended to include metropolitan St. John's by Lloyd Matthews, the Liberal cabinet minister filling in for Judy Foote who was on sick leave at the time.

The candidates took turns whacking Jack largely because the polls have him way out in front of the rest.  They brought up all manner of points.  The video  - available at cbc.ca/nl/features/debate - makes for some entertaining viewing, even if the audio sucks.

Conservative Craig Westcott got in some of the sharpest licks, including one over Jack and what he plans to do with his provincial pension if he is elected to Ottawa. He kept it up on Friday with a statement aimed squarely at the issue of potential double-dipping by the former member of the provincial legislature:

"Yesterday during our all-candidate debate I posed a very simple question to NDP candidate Jack Harris: if he is elected to serve in Ottawa, will he follow in Norm Doyle's footsteps and donate his provincial pension to charity?

"Mr. Harris avoided answering this question during our debate. So I pose the question again: what will Jack do?"

"I'm not necessarily saying it's wrong to do it, but voters in St. John's East should know Jack Harris' position before election day."

Westcott also scored the most memorable jab during the all-candidates session:

"The only reason he's running this time is because the party couldn't come up with another candidate, so his arm was twisted by Jack Layton and Danny Williams [Harris' former law partner] so what I'd like to know is, when he goes to Ottawa and both of them tell him to jump, which one is he going to listen to?"

They may well have whacked at jack because he's the front runner.  Then again, when you claim credit for things you demonstrably didn't do, you pretty much invite a pile on.

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The dark side of ABC

In "Enough traitor talk", Geoff Meeker at the Telegram takes issue with the extreme language being used by the ABC campaign in some instances:

Politics in Newfoundland and Labrador are heated and vitriolic, but this is something different. Something despicable. It turns my stomach.

One group, comfortably ensconced within the majority, has taken to condemning those they oppose as ‘traitors’, a crime that was punishable by death up until 1961. It’s pretty much the nastiest thing you can say about someone.

How far are we from smashing the windows of these traitors, burning crosses on their lawns and cutting them down with machetes?

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Only Avalon up in the air

As of October 8, democraticSPACE is showing predicted winners in six of seven seats in Newfoundland and Labrador.

Only Avalon is left uncalled. The top picture shows the party that held the riding prior to the election call.  The bottom picture and the name show the candidate and party predicted to win.

NEWFOUNDLAND & LABRADOR

AVALON

BONAVISTA-GANDER-GRAND FALLS


SCOTT SIMMS

HUMBER-ST. BARBE-BAIE VERTE


GERRY BYRNE

LABRADOR


TODD RUSSELL

RANDOM-BURIN-ST. GEORGE’S


JUDY FOOTE

ST. JOHN’S EAST


JACK HARRIS

ST. JOHN’S SOUTH-MOUNT PEARL


SIOBHAN COADY

The website uses an elaborate mathematical model to project election results based on a combination of available poll results and past voting patterns.  That's a short-hand version.  Check the democraticspace.com site for a more detaile description of their methodology.

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The politics of strange bedfellows, Merv and Craig version

Merv Wiseman, Conservative candidate in St. John's South-Mount Pearl.

Craig Westcott, Conservative candidate in St. John's East.

But not always such bosom buddies.

In April 2007, Merv Wiseman then president of the agriculture federation, found himself feeling nauseous at a Craig Westcott commentary on rural Newfoundland.

Wiseman accused Westcott of displaying the culture of defeat attitude toward rural Newfoundland that Stephen Harper displayed.

Ouchies.

Wiseman puts Westcott's comments down to an "urban" mind-set that doesn't understand the contribution made by the "rural."

Check out "The future of rural Newfoundland".  The ram audio file links still work.

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Geez, that's gotta hurt

The view of Iceland then, for some. [h/t to Daimnation!]

His outline of how Iceland went from poverty to prosperity in less than two generations is an inspiration to the ambitions of small nations. In Newfoundland, the "Iceland Model" is a Holy Grail for politicians but they have a mental block when it comes to the reality that Newfoundland does not have control over certain economic policy that Iceland, as sovereign state, has and can make "top-level" policy to direct their economy. Fisheries management is only one example.  While on the surface, Newfoundland and Iceland may appear to have a lot in common, in reality, they are two different planets. The nationalist minded in Newfoundland eye Iceland doe-eyed as the future Newfoundland never had.

Iceland now.

For the fans of prognostication, the Offal News view in 2007, and for those looking for the Bond-able treatment, you can check out:

• Iceland's miracle:  the other side (December 2006):

Well, one of the costs of Iceland's supposed economic miracle is a currency that is dropping against the Euro. As a result, the Icelandic central bank has raised interests rates to 14.25%. It's been about 15 years since we've seen those kinds of interest rates in Canada.

Investors are keeping a close eye on the Iceland situation since the whole economic tension is coming from a government deficit on current account that is running at 27% of gross domestic product in the third quarter.

To put that in context, that's the equivalent of the provincial government here running a deficit - in a three month period just ended - of around $1.35 billion. That's just in one quarter, and assuming the economic output in the economy right at the moment is about $5.0 billion per quarter.

• Beowulf it ain't (August 2006):

But anyway, if this little story is right Danny Williams is going to look at how Iceland generates energy since "if it can be done there, it can certainly be done in" Newfoundland and Labrador.

Minor problem.

Iceland happens to sit on some pretty special geological real estate such that they country has active hotsprings and a volcano that's been known to erupt every so often. 87% of the country's heating needs are supplied by geothermal energy. That's heat from the Earth to you and me.

So of course, not everything done there can be done here.

• All trout live in trees (June 2005):

As noted in previous posts on this subject, the syllogism Iceland = Independent = Successful Fishery//Newfoundland=Not Independent=Fisheries Disaster doesn't stand up to closer scrutiny.

The idea of an independent Newfoundland managing the fishery as Iceland rests on a series of unfounded assumptions.

The local nationalists pushed the Iceland thing as hard as they could but events of the last few days have demonstrated unmistakably that their arguments were built on nothing but air.

A bit like the cartoons where the guy winds up running off the end of a cliff, only to find himself a few hundred feet up in the air.

Then he looks down.

Yep.

That's gotta hurt.

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The little Cuba of the north

According to bloomberg.com, Moscow is offering the Icelanders A loan of four billion euros to help it get through the current crisis.

If Russia can support its stock market and preserve growth, the current financial crisis represents a chance to demonstrate ``influence in the world economy and the diminishing influence of the U.S,'' said Sergei Markov, an adviser to the Kremlin who is a lawmaker in the ruling United Russia party.

Both Putin, 56, and Medvedev, 43, have criticized the U.S. for spreading financial contagion around the world.

U.S. ``irresponsibility'' led to the global credit squeeze, which may reduce Russian growth to as little as 5.7 percent this year, according to the finance ministry, Putin told a cabinet meeting Oct. 1.

One former bank official is quoted as using the line that Iceland is becoming the little Cuba of the North.

Bit of a stretch, but still a cute line.

If things get tough will the locals here start recalling the pre-Confederation ties between Newfoundland and Tsarist and revolutionary Russia?

Maybe.

But don't mention Trotsky and the Cochrane Hotel.

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And on the up side...

St. John's East Liberal candidate Walter Noel's political experience shone through at the start of an all-candidates forum on the local CBC Morning Show this morning.

When asked to identify the most important issue for his riding, Noel said it was the economy.

Noel hit that one and then nailed the corollary, given that the Conservative candidate isn't a contender:  the NDP ain't the ones to trust with managing the nation's economic problems.

Given the shifting strategic landscape and given that Jack Layton has abandoned his campaign goal to form a government, it reminds people they should be thinking twice about a stampede toward the Orange in the East.

It might be too little way too late, but you gotta give credit where it's due.

New Democrat Jack Harris  - the front runner - said the big issue for him was affordable housing.  Good choice but hardly likely to be the top-of-mind issue for voters in the riding, including Jack's own supporters.

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Iceland banks have $250 million in NL fishery

Icelandic banks have invested at least $250 million in the Newfoundland and Labrador fishery.

Telegram editor Russell Wangersky pointed to that fact in his latest column:

That's the $250 million or so Williams was talking about last year, a number that has almost certainly grown considerably since then. Icelandic banks have traded on the fact that, coming from a fishing nation, they understand the needs of the fishery. And truth be told, they've been one of the few sources of available capital for fishing companies in this province, even before the credit crunch hit.

And now, those same banks are promising to get out of their overseas investments. That's a message that must be more than a little frightening for the industry in this province, with capital scarcer than ever.

If the Icelandic banks call those loans - as a ready source of foreign currency - some entity, public or private, will likely be called on to step in an assist the fishing companies.

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Portent?

British Petroleum is halting work on a Delaware liquid natural gas plant:

“We've been looking at the global market conditions surrounding LNG, and the timing for a terminal just isn't right, so we've put it on hold for at least two years,” BP spokesman Tom Mueller said Wednesday.

“We will hold on to the property and look at conditions down the road,” Mr. Mueller added, noting that the company “believes New Jersey will need LNG infrastructure in the future, and we will position ourselves to do that.”

BP's plans, initially announced in December, 2003, called for a 2,200-foot pier to be built off Logan Township. It was designed to handle enough liquefied natural gas, or LNG, to serve 5 million homes and meet rising demand. [Globe and Mail]

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The imaginary bubble

From RBC Economics' latest provincial forecast for Newfoundland and Labrador:

While domestic conditions are generally strong, growth in the economy is nonetheless expected to slow significantly relative to last year amid a leveling off in oil production. In 2007, the return to full operation of the Terra Nova offshore project and the completion of White Rose’s expansion have boosted crude oil
output by more than 20%. With no such increase this year, the contribution of the energy sector to provincial growth is likely to be flat or slightly negative.

Through the first six months of this year, crude oil production was down almost 9% year-over-year. All things considered, real growth in Newfoundland & Labrador’s real GDP is forecast to be negligible this year at 0.2% before picking up in 2009 to around 1.3% on the continued strength of the domestic economy.

Get that?

-  Oil production down by 9%  for the first half of 2008 compared to the same period in 2007.

-  Growth in real GDP at 0.2% in 2008 and only 1.2% in 2009.

Look at the whole report to get the full picture.

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Pattern Behaviour 2: Spot the Pitcher Plants

Provincial Conservatives love to astroturf. In fact they've had this latest astroturf run planned for some time.

They love to call radio programs and make comments in support of their leader, usually following talking points that are astonishingly similar.  It's supposed to appear like a giant groundswell of support for their leader's cause du jour;  some of it - like the insistence they aren't coached - gets kinda funny.

Within the past 24 to 48 hours, the number of Pitcher Plants has jumped dramatically. The ABC Astroturf is in full bloom.

You can tell them a mile away:

1. They make repeated reference to "Premier Williams", pledge their support for him and praise him in the stereotypical pitcher plant fashion.  Most people don't have a need to do that;  Provincial Conservatives evidently do.
2. They make repeated references to the need to "stand up for your province".  A recurring theme among Provincial Conservatives is that the province consists of one mass whose interests are identical and who must act in a corporate fashion under the leadership of a single individual in order to achieve victory over external forces.  That's the foundation of Provincial Conservative politics since at least 2003.
3. They've been making repeated attacks on Fabian Manning.  Again, that hasn't been a common feature of the call-in shows to date.  Tonight it's all Fabe, all the time.  Despite the efforts to claim otherwise - nothing could be further from the truth - there's been a great deal of Family Feud energy directed to defeating Manning.
• Dead give-away:  they all make reference to the same episode, namely Manning sitting next to Harper in the House.  They describe this episode suing similar terms and typically misrepresent what happened in the same way their Leader did originally. People who aren't Provincial Conservatives don't need elaborate rationales to vote against Conservatives.
• Second dead give-away:  they praise any politician who has sided with their beloved "Premier Williams", usually referring to the individual as having acted in the best interests of his or her constituents.  To provincial Conservatives, their leader's decisions and the interest of the entire province are synonymous. (See Indicator 2 above)
4. They take great care to distinguish between Conservatives and the Provincial Conservatives, which they insist on calling Progressive.  Only Provincial Conservatives need to make that distinction for some reason.  Liberals and New Democrats don't care.
5. They turn up online making comments from behind a pseudonym.  In classic Provincial Conservative fashion, everything is about their leader. Note that the two comments here are from individuals who have a well-established pattern of behaviour presenting exactly the same kinds of comments offered here.  They didn't comment on the original post at all, suggesting that they weren't yet mobilized to start astroturfing.

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Iceland sinks deeper into financial mess

1.  "Iceland teeters on brink of bankruptcy". (Forbes.com)

LONDON - Iceland is getting closer to becoming the first nation to go bankrupt as a result of the subprime mortgage crisis and resulting squeeze on lending. Late Wednesday afternoon in Europe, Fitch Ratings said it had cut Iceland's long-term sovereign currency issuer default ratings to "BBB-," from "A," putting them firmly in "junk" territory. Moody's also cut Iceland's sovereign rating to "A1," from "Aa1," and said its ratings were on review, according to TradeTheNews.com.

2.  "Iceland sinks further into crisis". (ABC7 Chicago)

Today, the government said it was abandoning a plan to nationalize the country's third-largest bank (Glitnir) and is instead putting it into receivership.

Further details at Marketwatch.

3.  The Icelandic meltdown jeopardises British citizens who have cash in a British subsidiary of Landesbanki.

More than 300,000 British customers had around £4 billion deposited in Icesave accounts, which until yesterday offered higher rates of interest than British banks.

The UK government last week issued a general guarantee that British account holders will be able to reclaim their money if their financial institution goes bankrupt - but only up to a maximum of £50,000 each.

4.  The Icelandic bank collapse will affect the fishery in Atlantic Canada. 

"The big impact that people probably are not aware of is that these Icelandic banks, Glitnir and Landesbanki, both those banks (finance) a lot of Atlantic Canadian seafood companies," said the chief executive officer of Black's Harbour-based Cooke Aquaculture Inc. on Tuesday.

"Glitnir has a very small piece of Cooke," he said. "These Icelandic banks they're banking a lot of firms - Clearwater Fine Foods, they're part of the syndication in Connors Brothers, they back the Barrett Group [sic.  Perhaps he meant the Barry Group] out of Newfoundland."

So much for the claims Newfoundland and Labrador is protected by a magic bubble.

5.  CBC Radio Noon (St. John's, ram audio).  Rob Greenwood of the Harris Centre at Memorial University discusses the Icelandic crisis in the context of local proponents of the Iceland model for Newfoundland and Labrador.

Rob gives it a nice try but it must be getting really hard to push the Icelandic model and fanciful notion of "subsidiarity" with any degree of seriousness.

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Pattern behaviour

Faced with the prospect he can't deliver his consistently stated goal of ensuring no Conservatives are elected in Newfoundland and Labrador, Danny Williams shifted the goals of his Family Feud and completely reinvented what it was all about.

He did it a few weeks ago.

He repeated the completely rejigged goal of his ABC campaign and CBC is reporting the shift.

No one should be surprised.

It's part of the pattern.

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The Can-Opener's surplus prediction

Memorial University economist Wade Locke:

"The price of oil has already averaged in excess of $110, $115 per barrel for the year so far, so even if the prices were to fall down to $10 per barrel, they would still meet their budget projections of $87 a barrel," Locke told CBC News on Monday.

"So the forecasts in the budget should still be fine. They should have a budget surplus even bigger than they what they had forecast."

Okay.

Let's see if that works out.

Given:

• The 2008 budget estimates predict oil royalties of $1.789 billion based on an assumed average price for oil of $87 per barrel.
• The 2008 budget estimates forecast a deficit on capital and current account of $414 million.
• The 2008 budget estimates forecast an additional borrowing requirement of $380 million for a combined cash requirement (borrowing) of $794 million.
• For the first six months of the fiscal year, Locke gives the average price for crude oil as $115 per barrel.
• The finance minister forecast a $544 million surplus in public statements and the budget speech, even though that figure does not appear anywhere in the budget estimates voted on by the House of Assembly.
• All other revenues and expenditures remain as projected in the estimates.
• Annual oil production is 111 million barrels.

Therefore:

• In order to attain a surplus of $544 million, provincial oil royalties would have to exceed the forecast by approximately $1.338 billion ($794 million + $544 million);  in total that would be oil royalties at $3.127 billion.
• If oil averages $115 per barrel for the entire fiscal year, the projected royalty would be $2.361525 billion.
• If oil averages $115 for half the fiscal year and $87 for the remaining six months, the total provincial royalty would be $2.05535 billion.
• Budget surplus (deficit) @ $115 for 12 months = ($766 million)
• Budget surplus (deficit) @ $115 or $87 over 12 = ($1.072 billion)

No matter how you slice it, that doesn't look like a surplus.

No matter how you slice it, that doesn't look like a larger surplus than the one supposedly forecast in the budget.

Anyone who wants to explain Locke's figuring or where the Bondable version is off is welcome to do so.  Either add your comment to his post or send it by e-mail and we'll do it for you.

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Taylor's self-made hard spot

Provincial acting fisheries minister Trevor Taylor is in a hard spot.

You can tell he's in a hard spot because in order to criticize a recent fish quota trade deal, Taylor wound up resorting to an argument favoured by people Taylor usually criticizes harshly,  people like Gus Etchegary and Sue The Vanished Hydroqueen:

Taylor said the deal hearkens back to prior trade agreements, in which Canada traded its fisheries stocks for economic advantages.

Yes, it's a sign of complete bankruptcy when your argument is merely to repeat the same discredited fables as Gus, Sue and others.

Taylor called the deal tragic.

It's hard to see how it is tragic.

In exchange for allowing Americans to fish a portion of the Canadian quota for yellowtail flounder outside 200 miles, a portion not usually caught anyway, Canada gains.  It gains because:

-  the deal secures American support particularly for other conservation measures;

-  the deal includes Canadian access to over 600 tons of deep water shrimp which will be fished by a Newfoundland and Labrador company (and processed in already under-utilized plants);  and,

-  the deal includes an increased by-catch for American plaice which will allow the Newfoundland and Labrador harvesters to fish the yellow-tail flounder quota more efficiently and to a greater extent.

Sadly, the fishery is as misunderstood as the offshore oil and gas industry.  The result is that completely bogus arguments like the ones offered by Etchegary and Taylor are accepted as fact.

What is tragic is that Taylor is considering increasing plant capacity in a province in which there is way more capacity than existing quotas. Fish plant workers are making as little as $8,000 in some cases from their labour and must scramble to find other work in order to qualify for a pittance in employment insurance on top of that. The existing plants are in many respects  nothing more than stamp factories and Taylor is seriously considering making a bad situation demonstrably worse.

Taylor and the cabinet to which he belongs know what needs to be done.  They are - in effect - abrogating their responsibility to reorganize the fishery in a way that corrects the human tragedy and the economic tragedy in the province's fishery. Taylor and his colleagues are doing nothing more than following the less than sterling example of some recent fisheries ministers, like John Efford, who during his tenure increased the number of plant licenses and contributed to creating the current mess.

Such is the scope of the tragedy in the fishery.

Such is the scope of the tragedy that Taylor, who started his political career showing some promise, has become just another politician mucking about in the fishing industry for political purposes. 

A shuffling of the province's cabinet will evidently produce no positive change in the province's fishing industry.

That's another sign of the tragedy.

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Marg, Princess Warrior tackles Harper again

From nlpress.ca.

CTV caves in face of ABC campaign

From Danny Williams comments on a voice of the cabinet minister call-in show on Sunday evening:

A couple of weeks ago when they were out in Harbour Grace, or Grace Harbour, as the Prime Minister referred the community to, you know, there was something came out of that whereby spokespeople for the Conservatives and for Mr. Manning came out and said that businesses were being threatened, that contracts were being threatened, that if people didn't vote ABC that our government was going to do something to them. CTV reported that and CTV actually had to retract that publicly on their network when it was found that those claims were unsubstantiated.

The original story is linked from this Bond Papers post: "Family Feud?  Try blood feud."

Let's see if CTV and Bob Fife want to comment on this.

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The return of The Can-Opener

Memorial University economist Wade Locke is back in the news and, not surprisingly he is saying things the provincial government will love.

Like his view of oil prices and the chances for a budget surplus bigger than the one forecast:

"The price of oil has already averaged in excess of $110, $115 per barrel for the year so far, so even if the prices were to fall down to $10 per barrel, they would still meet their budget projections of $87 a barrel," Locke told CBC News on Monday.

"So the forecasts in the budget should still be fine. They should have a budget surplus even bigger than they what they had forecast."

Perhaps Wade would like to actually, you know, read the budget estimates and see what the budget says about oil averaging 87 bucks a barrel and surpluses.

Wade also believes that the world has changed fundamentally - high demand and no new supply - such that oil will sell above US$90 a barrel way out into the future.  In the short-term, - up to two years, according to Locke - they might dip but the long-term price will be high, higher and highest. Asked if he thought oil prices would go to  ten bucks a barrel, Locke gave an emphatic "no". 

Like we haven't heard that one being forecast before, based on the change in market fundamentals yada yada yada. There's likely tape somewhere of an economist telling us that there was absolutely no way oil would fall to $10 a barrel again;  that would be right before it went to 12 and then eight bucks.

Uh huh.

Even the Lower Churchill will go ahead, completely unscathed by the tightening of world capital markets. No problems there at all.  The future is bright, as Locke says.

Maybe someone should fire off a proposal to Trevor for some government cash to build a shades factory.  Not Raybans or anything pedestrian but some unique NewfoundlandLabrador brand of sunglasses to keep the unique sun out of our unique as we go around under this amazing bubble of economic protection that evidently surrounds us. 

Other places are falling victim to the global crisis but not here.

Economics is truly a dismal science. Aside from stating the obvious - that things will be unsettled in the next year or two - the rest of what Locke said was ultimately about as useful as something we'd get from Aline Chretien's confidant and her psychic alliance. No shame in that:  none of us can predict the future with any accuracy.  When we do get close it is often due more to blind luck than any insight or foresight.

Maybe to give a sense of Locke's analysis in the past though, perhaps we'll go back to his view of the Atlantic Accord when Danny was in full fight and Wade's view after the deal was inked.

Wee bit different.

But hey, at least we now know who Danny Williams turns to for economic advice and has been probably turning to for advice for some time.

Turns out it wasn't Sarah Palin after all.

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Slim Whitman's Greatest Hits

Danny Williams, from a call to voice of the cabinet minister's Sunday night call-in show:

And, you know, there are issues that are very, very important to Newfoundlanders and Labradorians and we look at the economy and we look at where the American economy is going and Minister Flaherty was on last week and the Prime Minister is out saying oh no, we don't have to worry in Canada, everything is fabulous, everything is wonderful. But, you know, we have to realize that, you know, we do have a direct link to that American economy and if that tanks at some point in time, then, you know, we are vulnerable.

Followed immediately by:

Now that's not to say that, you know, there's going to be gloom and doom in Canada because Canada's fundamental are sound and I firmly believe that.

Well, there's a relief.

You know.

But it gets better.

You know.

Apparently, the province is somehow shielded from the goings-on in the world economy, even if, you know, we do have that direct link he mentioned and if that link "tanks" we would, you know,  be vulnerable:

And on the other side of it, you know, from our own perspective, you know, our economy is strong, we're in a better position than we've ever been, we're also in a very good position now with the, you know, the international financial crisis that's underway. We now, for the first time in our lives, are in a bit of a financial bubble and that's a wonderful thing. We have that protection and the people of this province got the support of the provincial government.

The bubble seems to be some kind of magical Star Trek kinda thing:

But I do think that Newfoundland and Labrador is in a very, very good position. Hopefully our surpluses will continue, hopefully they'll get even larger, it will enable us to do the things that we've been doing. I mean this, for us this hasn't happened overnight. We've been preparing for this.

Ahhh.

We got surpluses and ones that Williams hopes will get bigger.

You know.

Unless that link thing "tanks".

That would be the completely imaginary surpluses, though.

You know.

Which would make the protective bubble surrounding the provincial economy more like The Bubble in St. John's harbour.

Well, not exactly, because apparently some things have been going on behind the doors of Confederation Building people would not be aware of.

Like, you know, building a war chest whatever that means:

You know, we've built a war chest and, as well, we've tried to move our debt down to get us in a good position so that if ever there was a very, very, very serious situation we'd have to take that debt back up again, but we'd have the ability to do it. But, you know, we've been really, very fiscally prudent and fiscally responsible.

Ahhh, again.

You know.

So there's great comfort for all of us because even though we are vulnerable, there is a bubble of some kind, consisting of imaginary surpluses and then there's the debt which has been moving down due to the really very fiscally prudent responsibleness so that - only if there was a very, very, very serious situation  - we could drive the debt up again.

No word on what would happen if things only got very, very serious.

Or if that link thing tanking would be merely very serious, or if it would get enough veries to qualify for the debt growth bubble protection thing and then something else besides.

But anyway, we are vulnerable and then again, we aren't.

You know.

The debt has been going down.

Just like the chart at right shows.

If you hold it upside down, that is.

And it's not like we'd be planning on borrowing any more money in the meantime.

Like say for a major oil project.

Or a major hydroelectric project which the Premier said at the start of his call he had been busy working on.

A nine billion dollar project, which, if you notice, is actually more than the entire public debt load is currently.

Loyal Bond Papers readers will recall the idea of doubling the public debt being raised in January 2006.  That would be, if you recall, long before there was any talk of a major economic downturn. When the downturn came a little closer to reality, the Premier was  willing to acknowledge it would affect the Lower Churchill.

But then the Premier finished on a high note:

So, you know, Newfoundland and Labrador is very much on the move and so, you know, I'm pleased with the position we're in and I do think we're in a favoured position, to be quite honest with you.

To be quite honest, it is completely confusing to know that the province is vulnerable - as the Premier started out saying - and then to have him conclude by saying that this is a favoured position.

Up is down.  Vulnerable is favourable. Deficits are surpluses.

It would be funny, if it wasn't all so very serious.

You know.

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