Thursday, April 13, 2017

Postmedia hits the wall

Last week's quarterly report from Postmedia was predictably grim.

Canada's largest newspaper company reported revenues had fallen 13.4 per cent from a year earlier. Plunging revenues have been a hallmark of Postmedia's six-year existence.

The corporation has slashed costs, but not enough to keep up with revenue losses. Postmedia took in $181 million in the quarter, $28 million less than the previous year. It cut operating costs by $21 million.

Operating income - the actual performance of the business - fell from $13 million to $6 million.

There are two key lessons from these numbers.

First, expect deeper cuts. What's happened so far hasn't been enough to keep up with falling revenues. And, or course, the cuts will lead to further revenue losses.

And second, note that for the first time - even after last year's debt restructuring - Postmedia's operating income of $6 million was less than its interest payments of $8 million.

In the short term, Postmedia can free up some cash to pay the interest. But the fundamentals, as they say, are dismal.

And the end, according to one-time newspaper baron Conrad Black, is clear.

"The bond holders control the company and are content to bleed it dry with the complicity of management. Bankruptcy is next," he said on Twitter.






Friday, April 07, 2017

Which Christy Clark response on the health firings is to be believed?

“I did ask a lot of questions at the time. The assurances that we all received was that these were absolutely justified and the right thing to do.”
- Premier Christy Clark, responding Friday to reporters' questions on the health firings.

"Premier Clark did not recall ever being briefed about the decision to terminate the employees."
- Ombudsperson Jay Chalke on Clark's evidence, under oath, taken as part of his inquiry.

So when, exactly, did Clark ask all these questions on firings she can't recall ever being briefed on? Who did she ask, and who provided these assurances?

And what should voters make of the conflict between her public claims and testimony under oath?

Wednesday, February 01, 2017

Is Vancouver the Jalisco Cartel's 'drug portal to the Pacific'?

Vancouver is making its mark as a major export centre in at least one area — international drug trafficking.

‘Drug Portal to the Pacific,’ an InSight Crime report on the rise of the Jalisco Cartel called the city. 
Cartel's 2015 ambush that killed 15 police officers

“The key to their rapid expansion has been the strategic presence of operations on the southeast border of the United States, next to Tijuana, and the northeast border, next to Vancouver, Canada,” the report said.

The role of Mexican Cartels in Canada isn’t new. In 2015 the Vancouver Sun’s Kim Bolan wrote  about the cartels’ increasing shift to having their own people on the ground in Canada, rather than dealing with Canadian intermediaries.

But the new report by Luis Alonso PĂ©rez (originally done for Animal Politico a Mexican online publication) sets out how important Vancouver has been allowing the once-small Jalisco Cartel become “one of the most prolific and violent drug trafficking organizations in the world.”

It’s not just that Vancouver is a good place to land drugs destined for the U.S. and Canada. It’s become the transshipment point for drugs bound for the Pacific Rim, the article says.

The Jalisco ‘New Generation’ Cartel is a formidable player — combining business smarts, bribery and intimidation - it shot down a military helicopter -  and over-the-top violence, including mass murders. Last month, police blamed the cartel for 12 murders in Manzanillo, including seven people found decapitated in a taxi.

I started following InSight Crime after we moved to Honduras. It was almost the equivalent of a newspaper’s business pages in shedding light on the economy and politics of that country and its neighbours. I’ve found it consistently credible and useful over the last five years.

It’s also a journalistic success story. In 2010, two journalists launched the project with foundation funding. The focus was on crime in Latin America, from drugs to urban gangs to corruption and impunity. It’s going strong, in English and Spanish, with a broad funding base — including the Canadian government.

Saturday, January 28, 2017

Donald Trump's stupid wall and Central America

There is no wall tall enough.
Even if you can leave aside the racism and the attempt to exploit and worsen fears and prejudices, Donald Trump's plan to build a wall along the Mexican border is remarkably stupid.

Early in our stay in in Honduras, I started hearing about the huge number of people who went to the United States. It was an incredibly difficult, dangerous and expensive effort. People set out with almost no money to make a 3,100-kilometre journey through Guatemala and Mexico and across the already difficult U.S. border. They risked robbery, kidnapping, rape, extortion and a lonely death in the desert. Many travelled on La Bestia, a Mexican freight train that carried hundreds of migrants.

I wrote about the journey here and here. The idea that a wall would deter people willing to risk death and sacrifice everything they had for a chance to spend a few years in the U.S. is idiotic.

As is Trump's failure to recognize the risk to U.S. interests created by his $15-billion wall plan.

Hondurans, for the most part, didn't want to move to the U.S. They wanted to spend three or four years working at the jobs no one wanted and sending money home, to pay for a better education for their children, a plot of land to farm or to start a small business. (In countries where employment is scarce and precarious, even a tiny business offers some security.)

Remittances - money sent back by Hondurans working in other countries - equals about 18 per cent of the GDP of Honduras, according to the World Bank. It's about 17 per cent for El Salvador, 10 per cent for Guatemala and nine per cent for Nicaragua (although much of that country's remittances come from people working in Costa Rica).

For comparison, the natural resource and sectors combined contribute 16 per cent of British Columbia's GDP.

The U.S. has fretted about security risks in Central America since the 1890s. And now Trump proposes a wall that, to the extent that it works, will destabilize economies and governments in the northern triangle — an already troubled region.