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On money and the concentration of power

I ’m sitting at the Oriel Bistro, Sloan Square, London, England with one of my favourite newspapers, The Financial Times.

I ’m sitting at the Oriel Bistro, Sloan Square, London, England with one of my favourite newspapers, The Financial Times.  It seems to me, as I sit here at a bistro that is not Starbucks, that I was meant to live in another time as a member of the café society contemplating politics and the arts, not at the Holiday Inn on Regent Street on Sunday mornings but in Paris, Brussels, London or Amsterdam.


The problem is money. One needs to be either rich or poor to spend one’s time effectively in such pleasurable pursuits and I am neither.


I’m well beyond hostels but not rich enough to clip coupons and write poetry.


The bill for the croissants and coffee in pounds sterling will sober me up quickly enough, but for the moment it is a delightful contemplation. Shortly, I shall head to Charing Cross to smell antique books.


On the subject of money, Martin Wolf writes in the Times about the New Capitalism and how unfettered finance is reshaping the global economy. He talks about the disintegration of the institutional scenery of twenty years ago when national elites proffered stable managerial control over companies with somewhat incestuous long-term relationships with financial institutions in their own countries. He says those days are gone.


Global has won. The world is awash in capital and is playing Monopoly in ways not seen before. Canada with its smallish banks and ridiculous regulatory environment is nowhere. Toronto, heretofore a significant player in mining finance, is fast losing ground to London.


Need we look any further than Inco, Falconbridge, Algoma Steel, Dofasco, Four Season Hotels, Alcan and Bell Canada and where the money came from. We have hedge funds and private equity markets that bestride the world taking public companies private and doing so with an inordinate amount of debt. It is inevitable there will be huge bankruptcies when the economy turns south. These pools of capital have no interest in local politics, history, habits, needs or traditions. Only national governments can make a difference and ours doesn’t know how to play. There is, in all of this, quite apart from the desolation of Canadian enterprise, great risk. There is always an equal and opposite reaction to exuberant markets. This time around we have highly leveraged hedge funds chasing commissions and overpaying for assets in Canada and elsewhere. No doubt the debt will hobble  our economy in due course.


A week ago I was sitting at a different table having a coffee.


It was a Norcat (Northern Centre for Advanced Technology) board meeting in Sudbury and Jim Noble, an ex-banker from Manitoulin Island, was pitching a relationship between Norcat and his organization called the Northern Ontario Enterprise Gateway. Jim is in the process of bringing together potential angel investors in Northern Ontario to support tech start ups and succession planning. So far, he has about 30 potential investors in Thunder Bay and between five and 10 investors in each of the larger cities in Northeastern Ontario. He admits it is tough going and so far no deal has been completed.


The truth is that Northerners like Canadians, are risk averse. It’s hard to get them to take a risk which of course is why our country is at risk.


Damned if you do and damned if you don’t.


World capital markets are stripping city states, countries, and regions, of their ability to manage events.


We need a capital strategy in Northern Ontario.


We need to support start-ups and succession plans for locally owned companies. It is the ticking time bomb in our economy. When a local company is consolidated, with that transaction goes the local profits, decision making, creative thinking and loyalty to the community.


If you want to see more about Jim’s initiative go to www.noeg.ca
If you want to see where the action is come to London.

Michael Atkins
President
Laurentian Media Group
matkins@itworldcanada.ccom




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