February mid-month round-up: Greece burns, Alberta gambles & Canada trades soul for Pandas

Well it would appear that China has finally found a spot to park it's unwanted USD. That would be here in good old Canada and all it cost them was leasing us two Pandas. What a deal! Back in 2011 I wrote a quick post about why Canada's economy is good, bad and bullshit. A key portion of this post was that China was dumping the USD - but one year later with multiple countries such as Russia, India, and Iran writing off the USD as well one has to wonder, who exactly is taking it? Well it would appear the answer is Canada.

Now not only are we trading resources to the U.S. for a devaluing USD, no no.. now we will accept them from China as well. Many people are probably looking at our new trade relations with China and say to themselves: "well thats good isn't it? We're diversifying from dependence on the U.S. economy" - but this isn't really the case. Whether we are receiving USD from China, or USD from the U.S. it is still USD which is directly tied to the health of the U.S. and global economy. So are we breaking our dependence on the U.S.? When it comes to the actual physical trade: yes. When it comes to the value we receive for what we trade: no.

Are you a big coffee drinker? Have you noticed anything happening to the price of coffee? How about other imported foods? If you are conscious about your grocery bill you will probably have noticed it's gone up quite a bit. This is a direct result of piggybacking the CAD off the USD. Many analysts now claim the CAD is directly tied to resources now. They indicate that when resources go up, the CAD goes up, and when resources go down, the CAD goes down. However, the target for comparison always happens to be the USD. You may notice that if the CAD does exceed the USD, it's not by very much and not for very long. This is because while resource prices influence our dollar, a 1:1 ratio with the USD at most (approximately) is essential not just for continuing trade with the U.S. but also to continue trade with any country who trades using USD. The number of countries is large, albeit dwindling. It is really a match made in heaven: MAny countries around the world are looking for a place to dump their USD and Canada's valuable resources are "open for business". As most of our politicians are heavily involved in the U.S. stock market, they also have a vested interest in keeping the USD alive, even if the cost of food and gas for you and your family becomes unaffordable. This is the new measure for economic health, this is why the Euro was rising even as Greece was burning. On paper accepting austerity is great, but in reality it is destroying what's left of their physical economy. You know; the economy that feeds people, not HFT.

On top of Canada's "everything must go" fire sale policy it appears that we also are in a bit of a huff about proposed changes to the U.S. banking system. The take away paragraph from this article is:

The source of concern is a new U.S. regulation meant to deter deposit-taking institutions that receive backstopping from Washington from engaging in speculative trading for their own—not their clients’—profit, a practice known as proprietary trading. Risky trades by global banking giants were central to the banking crisis that compelled former U.S. president George W. Bush to launch a $700-billion bailout of Wall Street in 2008.

Translation: our banks engage in the same practices as in the U.S.

It goes on further:

“I think the impact could be very, very negative,” said Canadian Bankers Association President Terry Campbell. “If you interfere with the ability of governments and corporations to fund themselves, if you interfere with liquidity in the marketplace, which is necessary for funding, then you could have a very severe impact on our economy.”

Translation: Governments and Corporations fund themselves using risky and sometimes fraudulent banking practices and if we try to change that now then our "financial stability" is put at risk. Canada's complaints about these changes should confirm for all Canadians that our banks ARE NOT anymore stable than the U.S. or European banks. When you combine this fact with a world that uses the USD and a U.S. whose financial system is mostly dependant on foreign countries providing goods for that USD it should be no surprise the Fed's crisis fund bailed out non-US banks including Canada's TD.

The crisis in Greece is a preview of what's to come for all countries that engage in these practices as their ponzi economies rely on ever-increasing returns while peak oil ensures returns will be ever diminishing. It is the shortfall between leveraged value and real wealth which has Canada concerned as without riskier and riskier ways to leverage funds: profits dry up. For proof of this look no further than Alberta's latest budget which depends on a predicted 40% increase in oil revenue to meet expenses and bring Alberta out of a deficit (yet again).

Alberta's entire budget is based on a "bet" and betting is a feature of gambling. So Alberta's budget isn't really a "budget" at all now is it? When I budget for the month, I do not assume that sometime during that month I'm going to win the lottery and I certainly do not factor my theoretical lottery winnings into my budget. After you win the lottery and have the money in your hand then it is safe to include that in your budget. Now of course the odds of predicting oil price are a lot better than winning the lottery, but the cost of failure is the same.

Back in 2008, no energy analysts and no economic experts predicted a drop in oil price from $147/barrel to $38/barrel. No experts predicted that there would be a scooter revolution due to the price of gas at the time. Alberta has spent the last decade convincing Albertan's the oilsands were making them rich and yet wheres the money? The sustainability fund has been drained, infrastructure is crumbling or 20 years behind, the heritage fund in leu of their olympic train, $25m rebranding effort, and $2B for carbon capture is hardly sufficient to account for all of the resources given away in Albertan's names. With the latest budget and Alberta's continued campaign to pretend it has more money than it does - I expect a repeat of the 2008 situation in Alberta within the next 2 years.

Remember, at $147/barrel - and with cheap credit everywhere - debt could not be sustained. This time around all of that cheap credit has been used up and I believe the ceiling on oil demand is a lot lower. There is no more debt people (Americans) can get into to subsidize their ever-increasing cost of living. If oil hits Albertas targets and without some external crisis (Iran), it's highly unlikely it will be sustained any longer than the time it takes for those price changes to show up in the cost of consumer goods.

Further Reading: The Federal Reserve's Explicit Goal: Devalue The Dollar 33%: Forbes

Occupy: Out with the old, in with the new

I'm happy to say that since my last post Occupy Edmonton is doing very well. Edmonton (and the whole world) showed tremendous support tonight. I dare say Occupy Edmonton is nearing the amount of critical mass it needs to carry forward as a major movement. But where to?

All around the world it seems this is becoming the next big question: What is next for the Occupy movement? Will they start political parties? Will they make demands? I've been thinking about it for sometime from a theoretical point-of-view.

Some of the people who I talked with might remember me saying that ending compound interest for instance might be a good demand. But as this week has gone on I started asking the question 'why should there be demands?' What the people are upset about is obvious. Forcing them to make demands is almost an act of submission in itself, just wrapped in a confidence bow. Sure specifics need to be provided, by why is all of the onus on the people to come up with a credible "societal equitable business plan" and present it to big business/government when they would have us believe they make the big bucks because only they know how to make the big decisions or plan the big plans.

Obviously this stance by the system is completely contradictory. It serves a purpose though, it allows them to play both sides of the field. Say Occupy does make a plan or demands and we present them; it's highly likely the system comes back and says that it had it's "experts" analyze our plan and it simply won't work for one reason or another. When dealing with a systemic issue as large as we are the number of straw-man arguments is endless, there are countless ways we could restructure and everyone has a different idea what that restructuring looks like. Its simple to come up with an argument against any system, as the perfect system is yet to be invented. If no demands are made at all we make an argument for the system in that "we do not know what we want". This isn't desirable either.

So seemingly both avenues are cut off. But wait! There is another!! What if the demand is Occupy itself? Think about it. What if instead of demanding what the people need, the people are actually just doing what the people need? Could our society (for now mostly the U.S. although Canada's turn is coming soon) actually have already reached a point where confidence in the system is so low the people are simply shedding it?

Look at the U.S. right now, Occupy tent cities everywhere. They are beginning to turn into miniature self-governed communities. If these continue to grow.. what significance is the government anyway? If the government can't take care of the people and is just a revolving door and shell game with the banks, what good is it? What service exactly is it providing?

This week it occurred to me that the world just might have been looking in the wrong spot. While we were sitting and waiting for demands, we witnessed the birth of a globally supported, internet based governing system. A system based on direct democracy and consensus.

Lets be honest here and admit society is collapsing, and everything is not ok. As a society we have neglected and underestimated many fundamentals to life which have been lost in our current standard of living. Perhaps without even realizing it the human race is already adapting for the inevitable low-energy future just around the corner.

Katie from OccupyYEG says "As one voice, and one individual I am proud to state, I am a part of the Occupy Revolution. I will not stand silent, I will not relocate and I will not give up. We do not have hope, we are hope."

Maybe more than she even knows.

#YEGArena Tales: Santa Katz and the gift of debt

The mystery surrounding Stephen Mandel's trip to New York is over and the word is in; Daryl Katz and Stephen Mandel have a new deal for the city. For those who haven't been following Edmonton's newest attempt to catch the dangling carrot of becoming a "big city", prior to this meeting two main sticking points about the arena existed:

1. A non-compete clause with Northlands
2. $100million in funding outstanding

Post New York it seems they managed to "sort out" the non-compete clause. Katz has withdrawn this request and has instead replaced it with a public-private marketing campaign for the city of Edmonton (I *think* it's about the city, although it sounds more like a campaign about visiting Edmonton's new arena). Considering the ridiculousness of such a request of the city in the first place I don't exactly see this as "productive" since the $100million (arguably the most important sticking point) is still outstanding.

What else has changed? Well it appears the city will now be putting up 100% of the cost up front, with a 30-year "rent-to-own" style lease of 5.5million / year for the $100million Katz was supposed to contribute. Of course Mandel says the city would "ensure" that the $100million is paid, but with the city's *amazing* negotiation skills how confident can anyone really be on that point?

The live chat was again filled with the pro-arena Nike addicts, chanting their "Just do it" slogan. Seriously guys, you watch too much TV. Last weekend while visiting with my parents we all watched the game. I found it shocking how many Money Mart and other payday loan commercials I saw. Thinking about it though, is it really so shocking? Here you have a group of people whose argument for hastily spending a large portion of taxpayer dollars while taking on considerable risk is "Just do it", Money Mart must be getting rich.

So it would appear that Santa Katz this year brings us the gift of debt. Of course we can be completely confident this loan (give away?) will be paid. We can be confident of this because their reasoning for needing public money in the first place is that the industry would go bankrupt otherwise. As we all know, taxpayer dollars are magical and never go bankrupt. So yes, the new twist of logic is "We can't go to a bank and get a loan, we'll loose money. We can however go to the city and get a loan and pay that back 100%".



No investor could realistically take Santa Katz seriously, and that is probably why he doesn't have any.

My solution to the Edmonton arena debate | #yegarena

Ugh, this arena debate just isn't going away. Now it appears the city wants to preemptively buy the land for 25million (on top of the arena's tag price, and infrastructure costs). Some of the ignorant comments in the live chat such as "Like Nike, Just Do It!" shows the severely irrational mentality behind justifying this frivolous expense.

So I'm going to propose a plan that should make everyone happy. It will transfer the risk to those invested in the arena. It will provide returns in as secure a sense as the free market can provide. It will leave the city free to spend it's money on the many high-grade infrastructure upgrades that will be needed should funding be raised. Finally it will give Edmontonian's (or other Albertans, probably open to other investors too) who want to build up, have input, and support the arena a direct way to do this.

Now before I explain this plan, I am in no way vouching for the success of the project itself. Even if this approach were taken, I would not be investing my own money expecting a return. Like any investment this one would be folly to the market's mood and if you read my other posts on this blog my long term outlook for the current global economic system is clear. However that aside, let's see how we can solve everyone's issues here.

First, the main arguments for and against (as I understand them):

• Katz should be using the free market if he is certain about the return on investment.
• Maintenance alone is not worth 100% of return on investment.
• The questionable non-compete clause.
• We are in a deficit and the arena is a luxury item.
• The meetings are too secretive.
• Infrastructure upgrading

• It's believed the arena will contribute to revitalizing downtown.
• The costs to renovate/modernize Rexall are also high.
• The Oilers might leave without an upgraded facility.
• The facility would probably get heavy use by non-hockey events.
• There are high hopes that an arena will springboard an expansion in commercial service in the area.
• It's a 1 time opportunity for the city.
• If not an arena, then what?
• And finally, Katz says he loves Edmonton.

 So how do we solve all of these issues and make everyone happy? We need to both please those for and against the arena, this is a large investment and those not confident in it should not be obligated to fund it. So the solution? We need a competitive bond process. Ownership of this arena needs to be on the open market. We've had partial open ownership of the Oilers before. So let me break this down for you.

Right now it's estimated that the cost is $450 million broken down:

• $100 from Katz Group.
• $125 directly from city.
• $125 loan from the city, which will be paid back with a utility fee in the future.
• $100 is remaining without a source.

What I would propose is to drop everything except the utility fee. The utility fee would remain but not to repay a loan from the city, instead it would go towards dividend payouts. Once the shares were put on the open market, Katz could *buy* his $100million worth of ownership (or however much he deemed fit) and the rest would be put up for bids. As time went on, this would give the Katz Group opportunity to buy back all of the shares for complete ownership and would minimize their risk.

Under this model, I also would not be *AS* opposed to city investment in the arena as there would be a direct return and we'd be able to cash out and have another player buy the shares. This would also give the hockey players themselves a chance to invest in the stadium they play in, giving them direct input. Other investors, and hockey fans would get direct input by holding shares.

So lets see, this solves the issue of Katz circumventing the free market system in hopes of placing himself in a monopoly. If he wants a non-compete clause with Northlands that is his business, but it's not the city's business to give him an edge over an already established business and then demand a monopoly. It solves the issue that the city is getting very little in return as like any other investor it could get as much a return as anyone else depending on free market risk. It places all risk and reward directly on the shoulders of those with direct interest in the success of a luxury item. I personally do not believe with the current credit crisis that an arena will increase growth, so why should I personally be on the hook with all risk and no reward? This mitigates that for me, and also leaves those who think that like Nike "Just Do It" to cover the cost. They might then make financial decisions off information instead of propaganda slogans.

Under this proposal all meetings would need to be 100% transparent to convince investors it's a viable opportunity. Good bye shadowy city counsel meetings, it should be 100% public and this system would ensure that.

When it comes to infrastructure upgrading, the city would have a lot more resources in terms of state of the art infrastructure without an already large commitment to the facility itself, and any commitment like I said would provide direct returns thus topping up the infrastructure fund if the city chooses to put it there.

Since everything on the pro-side is theoretical or fan-based, I don't see why it doesn't meet the needs. It certainly would show Edmontonians how much Katz loves us and the city by giving us direct input. It would give the expected commercial services the chance to have a direct investment in the facility as well.

That's my idea, I'll be refining it as I think about it more, but I think this model pretty well solves all of the major issues and controversies regarding the arena and should make everyone happy, or at least get their happiness out of city council’s hands as they are supposed to work for all people and any deal brokered by the city isn't going to work for everyone.

I am still refining this solution, so please comment with your constructive criticism. Additional factors I should consider, whatever...

The next Alberta economic boom will be funded by faith

Good day to you Albertans. I haven't written on this blog for quite awhile, in fact I wasn't even sure if I was ever going to blog again. Things are moving too fast now to really spend any significant time on a particular subject however I feel Alberta's economy needs some special attention right now.

Just recently I saw an article proudly displayed on every frontpage: Alberta tops U.S. job creation. Apparently Alberta's job market grew by 22,000 jobs where as the ENTIRE united states only recorded 18,000. Naturally Albertans rejoiced, claiming that boom times were back and economic growth was on the way. Further it seems to be not a reason to be concerned but instead put even more faith the Alberta government is right "waiting for oil & gas revenue to rebound". Anyone remember Ed-TV almost 3 years ago? Anyone remember Alberta's "5 year economic action plan"? Yea, I didn't think so, apparently 3 years into this plan we are still on step 1 "waiting for oil & gas revenues to rebound". So lets look at when they will be rebounding.

Who buys our oil? Who is our largest trading partner? Well it happens to be the U.S. The same U.S. that had the remarkable drop in job numbers, and now today GDP data just kicked the U.S. while already down. One has to wonder exactly where all of this expected economic growth is going to come from? U.S. oil demand continues to stagnate, and lets be honest about how much time it takes for oil infrastructure to be set up for any profitable sales to China or other cross-continental markets. A long time. China certainly is pursuing this option though, and you can trust that China (the largest slave-wage market) really has Albertan's jobs and wages at heart.

Just wait for the day in the very near future where Alberta says "hmm, we really didn't see this coming". Because they will, of this I have no doubt. The forgotten 5-year plan will be revived and extended into a "10 year plan" and by the time Albertan's and the Alberta government take the global economic situation seriously we will not have the funds to do anything about it.

The new Alberta boom is based entirely on faith that Alberta "always has a boom". We simply expect economic booms to be thrown our way, and when we are not in one we are waiting for the next. There is no world-economic data to show any signs of a coming boom for Alberta. Yes, we had more jobs than the U.S., so what? That means a whole bunch of our clients will soon not afford our product. 18,000 jobs for an entire country is dismal, it does not point to an Alberta job boom, it points to a U.S.A. mega-economic failure and this will surely affect the Albertan economy in the not-to-distant future. Faith alone can't sustain us anymore.

Edmonton Arena pt2: The world class city myth

* UPDATED * My solution to the Arena Debate.

Ok, wtf. I write 5 articles and my 2nd and probably worst one gets the most hits? no comments? what gives?

Seriously I wrote that while having an overdose of anger, and its not very well done. So let me try this again. I *really* want to make the case here. I am not just some arena hating guy but that I strongly believe we are being convinced of something that is not economically feasible and is at the moment a ridiculous use of our resources. The previous article was really just a blend of half-assed points that really need some background to really make any sense.

You'll notice much of what I am writing on this blog is about energy and economics, particularly oil. Indeed my argument against the Katz Arena is centered around oil, or more specifically what has come to be know as the representation of oil world-wide, the U.S. dollar.

To understand why the state of their dollar matters to us Canadians and particularly to Albertans is that that is what they give us, for what we give them. We give them oil, they give us digital paper and say "this is worth something". Think about it, therefore what are Canadian dollars? Denominations of the American dollar. This is why staying near or below parity is very important for our government, preferably for the Americans they would want below parity.

Still with me? I promise this relates to the Arena, we'll be getting to that soon. Alright, so we've covered oil and the fact that oil is represented by the American dollar. Now, why does oil give the American dollar value? Well because up until recently it was the sole currency oil could be traded in, it is energy. How do we use it? In everything! In every stage of production! Oil is the engine for modern day consumption, it's not just any commodity it is the base of everything we have today.The American dollar is based of the future capacity to pay debts. If countries didn't accept American dollars, then they wouldn't have any value. They are not intrinsically valuable. It is a promise to pay. (Previously redeemable in gold). So what does Alberta get for it's oil? USD.

So how do we get materials to build say.. an Arena? Well we *pay* for the energy; both human and mechanical that is used in the process of getting them. This is where a term called "peak oil" becomes relevant, and which I am not going into here. There are many resources on the internet about peak oil, I suggest checking it out for yourself. I will say this though, Peak Oil is not Oil depletion. Anyone who implies this doesn't know what they are talking about.

Ok, almost to the arena now. You should see now why the USD collapsing is going to play a big role in the coming years. Think about all of these USD Quantative Easing, they are simply pressing buttons on a computer, making "cash", and then giving this "cash" to middle eastern countries for oil. So the U.S. presses a button, prints 1 trillion, and in return they get oil and also the work required to get that oil which likewise costs oil to provide the industry enough energy to get more oil. The same thing goes with derivative energy by the way, so don't think that there is an easy fix to this issue. Soon the CDN government will need to choose whether they go down over the cliff edge devaluation of the USD to maintain the huge trade relations or to revalue the CDN currency effectively cutting off the U.S. trade capability as it would be too expensive for them which likewise would affect our economy substantially as we saw with the brief interruption they had to their economy in 2008 which caused many Canadian auto shops to close, hundreds of thousands lost jobs.

So in either case we can expect a huge economic impact, there is no recovery, the recovery is a bubble, the final bubble you could say (pt2). A bubble of the USD itself, the international currency. There has been no recovery because you can't eat digital paper, or drive with it, it doesn't make buildings or develop new technology. With the manufacturing base in the U.S. gone, they are literally giving the world nothing in turn for everything, how long do you think that will last for?

When it comes to the arena, construction prices will skyrocket along with the price of oil, as the more the U.S. devalues their dollar, the more USD OPEC will ask for oil. (noticed anything expensive lately?) They are in a competition with China and India, China which by the way made the first ever deal for oil with Russia that is not in USD recently.

Daryl Katz did not become a businessman overnight. To own 1800 drug stores proves he obviously has a good grasp on the economy. How much do you want to bet that if someone like me sees this coming, not to mention many others then he probably does too. So why is it he would rather put his big money into a public relations campaign (public relations is propaganda) which I'm sure isn't cheap, instead of just putting it into the arena he wants to help "give" Edmonton?

This is not the great depression, economic growth in the future under today's terms of what an economy means isn't going to work no matter how many fiat dollars they print. Namely GDP which is just a fancy way of saying it is based on debt. This is because energy is now expensive, and will remain expensive as long as we require yearly increases in energy consumption to fuel GDP growth. More cars, more factories, Quantity not Quality.


Now. I want to get into this first class city crap. You want to know why Edmonton is not a "first class" city? I'll show you why:

From top left to bottom right:

• Sports Bar, Home away from home.
• The Strat, Classy.
• More classy places
• Used Cars
• Gravel parking lot

This is the intersection at 103st and 82ave. The FIRST main intersection showing what Edmonton has to offer to anyone coming into the city from the airport, the reputable center of our culture. The above lists what they see first. I highly doubt this would fly in a real world class city, you know like the ones Katz Group points to as successful?

We aren't a world class city, and a downtown arena won't change that. Katz Group is playing on your wants for such a dream town, they are playing on your fears of loosing the Oilers. Edmonton has a long way to come in a lot of areas before an arena is going to make or break this city. Its a wasted investment. As I advocated in my previous article, let's spend millions of dollars in thousands of places. We could start by putting something useful in the prime real estate that is the gravel parking lot.

That all I got to say on this subject, thanks for reading. Please read my first article on the arena if you haven't already or continue on about Canada's economy in general.

Edmonton Arena Reasoning Awry

* UPDATED * My solution to the Arena Debate.

Ok Edmonton; I've got a beef with the Katz Group. I think they are trying to put one over on us; to distribute risk (that lets all be honest here is quite high) amongst Edmontonians.

nhl.com

Of course I am talking about the beloved Arena: that will revitalize downtown, kick start the economy, upgrade our standard of living, and be paid off in a relatively short time by a bunch of side businesses who haven't stepped forward yet through the taxes that could be levied on future establishments.

Yup, similar to the Alberta Government's theory that oil booms are some sort of universal constant law; the City of Edmonton and the Katz group also seem to be of a similar mystical belief that "if you build it, they will come" in any and all cases.

Edmonton has had a pretty large list in recent history of big investment ventures with little payoff, all in some quest to become a "first class" city which isn't really new. We've made big investments in events like the Edmonton Indy. We were willing to put large bids towards events such as Expo 2017. Yet even though we have held multiple of these world-class events we are not as of yet a "first class" city it would now seem without a new arena for the Oilers.

At the forefront of the drive for a higher standard of living and improved economy for their fellow Edmontonians through the thoughtful service of a new arena is the Katz Group, which according to their site:

The Katz Group is one of Canada's leading drug store operators with over 1,800 drug stores across the country. 

This drive primarily is being done through a propaganda campaign which for the most part seems to offer little information in the "how" department. I call it propaganda because the argument being presented to Edmontonians is being framed for you with the possible outcomes limited to:

• Build an arena and revitalize downtown.
• Do not build an arena and do not revitalize downtown.

The arena is a dreamland, but also likely an expensive economic nightmare based on this rendering.

edmontonjournal.com

Naturally the domain name they chose is "revitalizedowntown.ca". Working to establish an assumed association that the revitalization is an absolute certainty and will surely happen, only the arena itself is debatable not the assumed effects. Their version of the effects this arena will have is that basically, the Arena itself will be so glorious, amazing, and kick ass that business far and wide will flock to have their business near the arena, that people will have the money to pay what are surely to be ridiculous costs to use the arena and surrounding business, that more tourists will come to use it even though its primary months of use for hockey will be when its cold or even colder (-40C).

With the way things are going predicting long term budgets are likely to be pretty much impossible with the Wall Street Journal predicting an end to the USD which up until now has reigned as the international currency and more importantly has been the only currency you can trade for oil. Contrary to sports arena economic experts I have the belief we are nowhere close to being economically positioned to afford a project on this scale.

I have a question for the Katz Group since they ignore me in their Facebook group. If you can own 1600 different drug store locations, and you actually believe this investment is a 100% guarantee -- why not take out a loan? Isn't that what capitalism is all about? If I wanted to get my business a larger office because I needed it and it would surely pay itself off then that would be a no-brainer. I wouldn't then go to the city for my loan, I would go to the bank like everyone else is supposed to. So what is with the insistence Mr. Katz? Could it be this investment is not nearly as sound as you would prefer us all to believe? Could it be you know the construction costs will over-shoot due to current world economic circumstances? Could it be you want the new arena right now before the cost of living goes so high no one will be able to afford the ridiculous cost of tickets to one of the events hosted there? Might it be that world food prices are soaring which is sure to affect us sooner or later?

Edmonton, I plead with you that the logic behind the arena is flawed. There is no extra consumer money right now to fuel the needed amounts of consumption that will be required to pay this thing off. The Katz Group is trying to sell you on the idea to distribute their investment risk on to the people of Edmonton. If we really want to revitalize downtown, how about a park? More street venders? More culture and arts? Why don't we try spending millions of dollars in thousands of places around Edmonton, instead of in one single place? one single investment? I'm all for becoming this elusive "first class" city but my excitement for that prospect does not cloud my judgment on the fact this arena is probably one of the stupidest ideas Edmonton has had in a long time. We already have an arena, and a stadium -- both of which are the center of their particular bad neighborhood. Sports centers do not revitalize anything in Edmonton, and in the end how much should this revitalization really be costing?

Besides problems like this haven't you ever been downtown at rush hour, Daryl? Our downtown can not handle the sorts of traffic this arena would generate even if your theory is correct. Why don't you prove you have faith in the project by going ahead with it on the Oiler's dime and if you can demonstrate a personal faith with personal risk in such a project then I'm all behind Edmonton getting behind it too.

* Edmonton Arena Part 2 *