Marco’s Blog

Do you hate spammers as much as I do? Especially the criminal types - the ones phishing for confidential financial information. I want to see every one of those bastards caught and thrown in jail to rot for years. So every once in a while when I get a phishing spam, instead of deleting it, I mess with the spammers a bit. Sometimes I’ll just click on the link and enter rude comments. (If blocked by your anti-virus software you have to okay access - not always a good idea as I have heard that sometimes the websites themselves have a way of extracting information. Only do this if you have good up-to-date anti-virus software.)

But sometimes I do a bit more. Sometimes I’ll forward the email to Phonebusters, the Canadian Anti-Fraud Call Centre. Originally set up to fight telephone fraud, it also handles email fraud. Forward fraudulent emails to them at info@phonebusters.com . The website is worth exploring as they list all the different frauds being perpetrated and it is worth knowing about what sort of frauds are being committed. Recent advisories warn about a creepy emails that say the sender will hurt or kill you if you don’t do what they say. If you get one, report it immediately.

But sometimes I’ll go a bit further still. I received a phishing email today advsing me in French that my account with Desjardins credit union needed verification. If you hover your mouse over the link in the email, the url should show up at the bottom of the page. That will give you the parent website. In this case, the parent website was joycesanders.net Next I went to Whois and tracked down the registrant - you can see the result here.
That told me the registrant was a Mr. Steve Sloan of CS Domain Solutions (Steve@tcs7.com). I forwarded the spam email to Mr. Sloan advising him that the website registered in his name was being used to send out spam and that he should determine who had compromised his site and report it to police.

The Whois also shows the hosting company - in this case, tcs7.co. So I visited TCS7.com which is a web hosting company and followed the links to contacts. I sent them a note saying that one of the websites they hosted was sending out phishing spam and since the web site url was registered to their employee, Steve Sloan, they should be able to track down the real owner and report him to police.

Now I don’t know if this will accomplish much, but it will put this web hosting company on alert that their services have been compromised by criminals. And if they do have the information on the perpetrator of the fraud, maybe they will alert the authorities. This particular company is based in Greeley, Connecticut.

I only do this on occasion. If I did it for every spam email I got, I would be working night and day as I get a lot of them. But if you like to see spammers feathers ruffled and want a good laugh too, let me tell you about a group of people known as spam-baiters. These folks have made a hobby of creating false identities and then replying to criminal spammers, usually Nigerian fraud spammers, and leading them on a merry chase. One of the best sites cataloguing these efforts is 419 Eater named after the Nigerian criminal code section outlawing such frauds. The site belongs to a spam baiter calling himself Shiver Metimbers.

What does a spam baiter do? He replies to the spammer using his bogus identity and manipulates the greedy con artist to get involved in some even more lucrative (but phony) scheme. Once the spammer is hooked, the psam baiter has him go through all sorts of hoops to claim his ill-gotten gains. These hoops include joining a bogus church and undergoing church initiation rites, sending photographs of themselves holding strange signs or doing strange things, and even getting themselves tattooed (which seems a bit harsh since tattoos are hard to remove). One of my favorites is getting the spammer to carve an elaborate bust from wood and send it along to the spam baiter, posing as a museum curator looking for authentic artifacts. Another is getting the spammer to write out in longhand the entire text of The Hitchhiker’s Guide to the Galaxy for the spam baiter who is posing as a software company executive developing handwriting recognition software. Click on the archive link to check out the different spam baits. Check out the The Tale of the Painted Breast fror a delightful spam bait about a phony church. The Induction Pledge is hilarious. Also check out Busted for one of the art gallery spam baits.

I have been toying with trying this myself just for fun. I’d really like to see those phony lottery guys get tweaked.

I work in the news business - television news to be specific. It’s a fun and lively business, never a dull moment. But I sometimes wonder about what makes the news and where it’s featured - particularly in newspapers.

There’s an old news saying - if it bleeds, it leads. Which means that if there’s a story about violence and mayhem, it makes the front page. This is as it should be. People hear on the radio about some breaking news story - the big fire, ferry sinking, planes crashing, etc. and they check the newspaper to get more detail and information.

But how many of those stories are truly important? By important, I mean how many of those stories will really impact you in your daily life? How many of these events turn out to influence legislation or mores or pastimes? Some do, of course. Here in B.C. we had the horrendous story a couple of year’s a go about a young man working at a gas station who tried to stop a pump and dash - a customer trying to steal gas by taking off without paying. He ran in front of the car to wave it down. Instead the car, driven by a couple of punks, ran him over. He was dragged under the car to a horrific end. That led to the passage this year of what is known as Grant’s Law, named after the young man. Now all gas must be prepaid before it can be pumped in B.C.. And the terrible events of 9/11, of course, led to an invasion of and continuing warfare in Afghanistan and Iraq.

But most stories don’t have that sort of impact. Big fire - forgotten a week later. Plane crash - forgotten a month later. Thug gunned down in a gangland shooting - forgotten a day later.

Most of the really important news, in my opinion, is not on the front pages - it’s in the back pages. And I’ve sometimes wondered whether a newspaper focusing just on important events - events with consequences for you and me - would sell. Probably not. Which is why most newspapers will continue to follow the crime and mayhem beat.

Most of the stuff I consider to be important, by the way, turns up in the business section of the newspaper, though not always. Stories about new companies, new products, new inventions and innovations. Others show up in the science and technology pages. And some show up in the editorial pages where the ideas that shape society are discussed.

Mmmm…I wonder..The Back Pages - would anyone read it?

Last week the news came out that Ontario may become a have-not province in two years while perennial pauper Newfoundland joins the have club, according to a report prepared by TD Bank Chief Economist Don Drummond.

Now Ottawa has had a formula for years where the federal government makes so-called equalization payments to the have-not provinces so they can maintain a standard of services equal to their richer brothers. Newfoundland has received these payments every year since joining Confederation in 1949. But growing government revenues from Newfoundland’s booming oil industry have put it into a have position and it will stop receiving equalization payments in 2009.

Meanwhile Ontario has been suffering as manufacturing slows down. Even so, Ontario Premier Dalton McGuinty points out that Ontario still sends $20 billion a year more to Ottawa in taxes than it receives so the have-not label is a bit thin, in his opinion. Ontarians would be paying any equalization payments with their own money.

It beggars the question of whether the equalization payments should be continued at all. According to the National Post, “Provinces qualify for equalization based on a relative measure of fiscal capacity. A province’s fiscal capacity is the amount of money it can raise across all its tax bases, including income taxes, property taxes and sales taxes, if those taxes were levied at a national average. After calculating each province’s fiscal capacity, federal finance officials then calculate the average fiscal capacity and, if a province does not meet the national average, it gets a top-up grant in the form of equalization from the federal government.”

But Ontario has not so much declined in wealth as other provinces have made enormous strides in gaining wealth, notably Alberta, Saskatchewan and Newfoundland. The latter two have been have-nots for much of their history.

But if Ontario is not really getting absolutely poorer, just relatively poorer, shouldn’t this be an opportunity for the feds to rethink the whole idea? Making equalization payments to Ontario, according to some analysts, could push the federal government into a deficit position after over a decade of surpluses.

Equalization really means that the government is subsidizing an uneconomic choice by many people of where to live. If people choose to live in a have-not province, they should not be subsidized for doing so. Already many people, including many Ontarians, have emigrated to Alberta and other prospering provinces. And this just makes plain economic sense. By subsidizing some provinces (the have-nots) at the expense of others (the haves) just rewards uneconomic choices and leads to lower productivity and reduced wealth all around.

Like its agricultural industry equivalent - marketing boards - equalization payments should go the way of the dinosaur. They are awkward, clumsy, large and inefficient beasts that should collapse under their own weight.

Reference: Ontario could fill Nfld.’s shoes in have-not club: report

Today we are converting the Break Out Report from an investment advisory to a blog commentary.  And to start things off, I decided to step into some controversy and publish an article I wrote in 2003 but never published. It’s called The Trouble With Doom and Gloomers and vents my concerns over some of the more ideologically driven gold bugs. I have no problem with many, if not most, gold analysts.  I particularly like the ones who are not so blinkered by pre-conceived notions that, yes, they can see what’s really happening and will warn their readers if a drop in the gold price is coming.

One gold analyst I have had lunch with occasionally, Ed Bugos who used to publish The Golden Bar Report, recently has launched a new newsletter for Agora Financial.  When he ran the Golden Bar, he predicted in the spring of 2006 that gold would be in the doldrums for a while after topping out at $720 and advised readers to get out.  He lost so many subscribers - the blinkered types who want reality to go their way or else - that he eventually folded the Golden Bar. Ed’s current comments, by the way, can be seen at http://www.contrarianprofits.com/articles/author/ed-bugos/ 

Now Ed remains bullish on gold right now. And with the increasing inflationary pressures we see all around us, he could well be right. But a recent story in the Financial Post section of the National Post (which I unfortunately misplaced and which I cannot find online) cited the prestigious Gold Field Mineral Services (GFMS) as predicting a drop in the price of gold because jewelry demand is falling because of high prices.  Jewelry and other non-monetary uses of gold make up the major part of gold demand.

This can be seen in a year end report at Gold Research and Statistics at http://www.research.gold.org/supply_demand/ The article says, among other things, that “high and volatile gold prices had a major impact on the fourth quarter with identifiable demand falling by 17% in tonnage terms from year-earlier levels. This trend was most keenly felt in India, the world’s largest and also most price sensitive gold market, where Q4 demand fell 64% on year earlier levels following 40% growth in the first three quarters. The US was also negatively impacted with a combination of a weak economy, poor retail environment and record prices denting jewellery demand which for 2007 as a whole stood 14% down on 2006 figures.”

A 64% drop in demand for gold in India in the fourth quarter is not small potatoes. And this continuing downside pressure on demand will keep a lid on gold prices unless the monetary demand heats up a lot because of inflation.  This remains a real possibility, but I remain sanguine on the idea that profiting from gold and gold stocks is as easy as shooting fish in a barrel. It clearly is not as is evidenced by recent events.

Even as inflation in food prices is causing riots and rising oil prices are causing moans and groans among North American consumers, the price of gold has taken a huge nosedive since gold peaked above $1000 in mid-March. It dropped another $18 today.  This turbulence in the price of gold could well move people away from considering gold as an inflationary hedge despite rising prices.

The future is, in my opinion, largely unknowable. What seems so obvious to ideologically motivated investors can come back to bite them in the butt. I am reminded of a quotation from Howard Ruff in his 2006 Ruff’s Little Book of Big Fortunes in Gold and Silver on page 4. He looks back at the 80s and candidly admits that he found it “difficult back then to let go of gold when the gold market was over in 1980. I was so seduced by gold that I truly felt it would bounce back to $1000 or more.” He confidently predicts that he will know when it’s over this time.  We’ll see.

So check out the article - The Trouble With Doom and Gloomers.