The roll-call of economeritricians, users of flawed data to make their theories more compelling, now added Thomas Piketty to its hall of infamy. The best-seller egalitarian French economist wrote Capital in the 21^st Century, an exercise in neo-semi-hemi-Marxist theory. Mr. Piketty argued that the wealthiest 1% increased its share of wealth around the globe in the past couple of decades to levels not seen since the late 19^th century

This is comparable to what happened to the spreadsheets in This Time It's Different, by Carmen M. Reinhart and Kenneth Rogoff, the Harvard economists who called for cutting public debt and austerity in the global economic crisis regardless of the pain it caused. They argued, with poor statistics, that “countries with debt over 90% of GDP tend to have slower growth than countries with debt below 90% of GDP.”

The whistle-blower against Piketty was Lord King, former governor of the Bank of England, in a book review. You have to be a meticulous reviewer to look at the tables at the back of the book. Lord King's finds were investigated and amplified by The Financial Times. The pink paper (in color, not politics) discovered Piketty's tables were full of unexplained and inconsistent data-source switches to make his case. The French rock-star leftist also weighted different-sized countries equally placing Sweden on a par with France or Britain.

Piketty was particularly prone to under-count and obfuscate US data showing that inequality was not rising, not too surprising given that this country is a center of the very capitalism Mr. Piketty rejects. Any evidence of a decline in the share of national income held by the super-wealthy was cast aside in favor of statistics supporting his case.

It looks like Lithuania and Poland got Russia to agree to let Europe get the supplies Gazprom ships via Ukraine. Lithuania bought a floating liquefied natural gas terminal from South Korea, the “Independence”, which is now sailing to the Baltic to reduce its 100% dependence on Russian gas. Until the US starts LNG exports, the new gas will come from the spot market and Norway.

Poland's Donald Tusk heads a summit planned for June which will create an integrated LNG market for the European Union which would be the opposite-number for Russia in buying for the entire EU and also build LNG storage facilities.

Russia upped its price to Ukraine for gas to $485/thousand cubic meters (cu m) from $286 cu m because Ukraine no longer can offer Russia Crimean port facilities for which its gas price was reduced. That is adding insult to injury. However, after the election and the crackdown on separatists, Ukrainian Naftogaz and Russian Gazprom companies are now expected to sign a deal with the help of EU and US intermediaries who will help Ukraine pay its $2 bn bill.

Meanwhile Gazprom as bought Bulgaria to its side by awarding it a contract to build part of the South Stream pipeline which avoids Ukrainian territory. The contact was awarded by Stroitransgaz, a Russian firm part of whose ownership is unknown, possibly a target of US sanctions.

Elections and inaugurations around the world produced some good surprises: India and Ukraine. And there were bad surprises: the anti-European right took far too many votes for my taste in the Euro-parliament elections including one reader, AH, who boasted of his vote; the pro-FARC-negotiation Colombian candidate was forced into a run-off; and King Bhumibol Adulyadej backed the Thai military coup.

For this child of refugees from Hitler's Germany, there were a few nasty memorials. Radical right candidates in Czech Republic, Greece, and Hungary had anti-Semitic planks in their platforms. Turkish Prime Minister Recep Tayyip Edogan blamed Jews and “the spawn of Israel” for the coal mining disaster because Turks criticized his government's initial reaction (Erdogan said mines are dangerous and then a government minister slapped a protesting miner.)

The Sablons Holocaust Museum in Brussels was the latest site of murders at Jewish institutions, as what occurred in Washington DC, Toulouse (France), and Kansas City. It is possible that disgust with austerity has fostered the new vogue for anti-semitism. I hope not since budget cutting zeal is based on flawed statistics.

More follows including a nice quarterly report and news from Brazil, Canada, Singapore, Guinea, Britain, Israel, Thailand, Mexico, Mongolia, Australia, and (first time) Nicaragua.

*Bank of Nova Scotia reported an all-time record high profit for Q2 despite lagging international banking business, notably in troubled Thailand and Puerto Rico, but also (because of forex impact) in other Latin America. Since the quarter closed, BNS cited better conditions in Colombia and is working through term loans which went bad in Mexico. We own BNS for the global business. RBS blamed its 2010 acquisition of bankrupt R-G Premier Bank Puerto Rico for the problems. I wonder what they expected?

Its net rose 14% to C$1.8 bn or C$1.39/sh, beating analyst forecasts of C$1.31. It also announced a 1% stock buyback (cf below) for which it got regulators' approval, but kept its dividend flat at 64 loony cents/sh/quarter, ~3.9% yield.

Offsetting slightly lower global banking was higher consumer, credit card, and auto and real estate lending in Canada and higher wealth management and insurance profits globally. Scotiabank revenues rose 10% to C$5.75 bn. Both revenues and profits from Canada rose 11%. Global wealth management {GWM) profits rose 11% y/y to C$355 mn helped by both more investing and performance. Scotia funds, part of GWM, have 17% more under management. As reported, BNS plans to sell its 37% stake in CI Financial, CIFAF, to redeploy the capital invested with possible future acquisitions, not define.

Global banking and markets earnings hit C$385 mn, including corporate banking in the USA, up 9.4% y/y. Capital ratios are well above regulations: Tier 1 at 9.8%, up 34 basis points sequentially. Risk-weighted assets fell by C$2 bn or 1% (the good side of forex changes.)

It set aside C$375 mn for dud loans, up nearly 10% y/y. Canada provisions rose both sequentially and y/y because of retail credit risk. Worryingly, BNS is adding residential mortgages to its offerings, but its portfolio is 54% insured and the uninsured part is now at 55% of the value of the property covered, vs prior year 57%. The mortage portfolio has been stress tested if that is any comfort.

CEO Brian Porter in the conference call predicted Canadian banking has a good medium-term outlook and also talked up credit card business via the new “Tangerine” re-branded card and a jv with Canadian Tire Financial Services.Platform consolidation is expected to cut costs not only in consumer credit, he said, but also in international banking, the laggard business, and adding scale to its Canadian mutual funds and Latin American asset management.

We would have liked a dividend increase rather than a buyback. And the focus on Canada and Canadian mortgages is worrying. BNS is buying back 12 mn shares. Sell some.

*Nicaragua's Borsoi Concession is being invested in by IAM Gold which can acquire up to 70% of the mine under a deal with Calibre Mining, CXB, also Canadian. It will have to invest $10.9 mn (US) in the next 3 years in the gold and silver mine from CXB and its partners B2Gold and Alder Resources. IAG also completed a drilling program at Quebec's Monster Lake project under a similar earn-in agreement with TomaGold. IAG can earn up to half interest in the mine projects including Lac l'Eau Jaune, Winchester, and Monster Lake if it spends $17.6 mn over the next 5 years. IAG is cleverly monetizing its tech savvy with cash-short junior gold mining companies and spending US$s it earns with gold sales in Canada. The stock is down sharply today as Canadians don't understand this strategy. And because the price of gold has hit a 15-week low. IAG is one penny (US) above its low for the past 12-months. Bow wow, Borsoi. I think it's buy time. IAG can delay its spending if the gold price doesn't rise.

*Canadian Solar signed a deal with a sub of GCL-Poly Energy (GCPEY, a nearly defunct ADR) to build a 300mW/yr crystalline silicon solar cell plant in Funing China, of which it will own 80%. The plant will go live later this year. CSIQ.

*Vale has been excised from the development of Guinea's Simandou iron mine and related infrastructure investment in railways and a port, as Conakry gave the $20 bn concession to: its Oz rival Rio Tinto Group (46.6%); Aluminum Corp. of China(41.3%); and the World Bank's private capital arm, the International Finance Corp. (4.6%). Guinea will own 7.%% of the mine and collect 3.5% royalties on ore exports. After 30 years it will own the port and railway.

This is bad news from Vale, which bought into a shady Swiss-Israeli concession by Beny Steinmetz who allegedly ousted RIO with bribes to the former Guinean president's young 4^th wife. Steinmetz is suing. VALE had hoped to get a slice of the new deal by not suing. It is out ~$500 mn already spent by paying Steinmetz and by work on Guinean infrastructure.

*Israeli Q1 financials analyzed by Globes Israel show that Tamar field produced revenues for Delek Group of $114 mn via two subs as 550 bn cu m of gas was produced. Delek will report results June 2.

The profits of Tamar field were not calculated. But they are presumably good. This matters because Israel's leading geologist, Joseph Langotsky, whose work led to Israeli offshore gas discoveries, backs moves by Labour and Torah Judaism members of the Israeli Knesset (Parliament) to break up the Leviathan field. This would let different consortia compete in operating it. Currently, DGRLY and Noble Energy of Texas control Leviathan. Mr Langotsky argues in a note to the Israeli anti-trust watchdogs that because Leviathan is so big and “divided into several subfields” makes an argument for separating operating units so they could compete with each other. He wrote (according to the Israeli website) “there is no geological or engineering reason preventing production of gas for each part of separate fields.” DGRLY.  

*Oligarchies are inherently unstable. The latest totter is by America Movil whose head, Carlos Slim Helu, the the richest or 2^nd richest man on earth. Slim bought control of the former state-owned telco with a partner, AT&T, back in 1990 when it was privatized. Now T, which is buying into US and Latin American TV distribution by buying into DirecTV, is bailing out of Slim's firm which competes with it Down Mexico Way. It will take over a minority share of fast-growing Sky Mexico under the DirecTV deal. Most of Sky is owned by Televisa, the TV giant and Slim's biggest rival. DirecTV bought out Rupert Murdoch and John Malone from Sky a decade ago. AT&T wants to offer customers on both sides of the Rio Grande quadruple-play service: land lines, cell phone, TV, and Internet, a business America Movil is also haltingly getting into.

John Malone is the cable investor behind our Euroland play, Liberty Global, whose A ADR shares we own, having sold off two lots of non-voting C (LBTYK) shares profitably. LBTYA bought out Virgin Media, two years ago.

I expect Malone to do something with T now.

*Contrary to my forecast yesterday based on Tel Aviv trading, Teva is marginally down today. Never predict, particularly not about the future. Or to quote my first broker, die Neviim sind all tot; the prophets are all dead.

*Tencent Holdings' WeChat message network is the subject of a new Chinese crackdown on the spread of news Beijing wants to hide, according to Reuters. A govt spokesperson told China News Service that WeChat is being used “to disseminate negative or illegal harmful information to the public, damaging the internet and public interest, [and] causing dissatisfaction among internet users. Hitherto the Tencent chat system for small groups of friends was not targeted by Chinese authorities who cracked down on Sina's Weibo, which has wider distribution, requiring that posters register if more than 5000 people get their messages.

*Pure Technologies won an add-on contract to assess a California steel drinking water pipeline worth US$1.2 mn using its magnetic flux leakage system to check for corrosion. PPEHF is also a possible candidate to inspect the Keystone XL pipeline extension (if it is ever built) under new US-proposed regulations.

*Motley Fool Singapore tipped Global Logistic Properties as a way to play China. Its Stanley Lim, CFA, likes SGX:MC0 because China accounts for 60% of its sales and “China is the next growth story” for logistics. We told you first about GBTZF.

*Among those suing and seeking damages over the Royal Bank of Scotland's misleading 2008 rights issue is Lloyd's Bank which added its name to the action, seeking GBP 420 mn, right before the deadline. Both banks were bailed out by the British government which presumably would have to pay Lloyds for RBS sins. We own the RBS preferreds only.

*Cameco will delay licensing its Millenium mine in Saskatchewan because there price of uranium has continued to fall, to $28/lb. It can reapply when the project become economic. CCJ.

*I could not sign up with E-trade to reinvest her dividends from Veresen payable June 23 to shareholders of record May 30, before the May 23 deadline, because of Memorial Day. I will get in before the next payout, which will hit in the Sept. quarter. The divvie is C$0.0833. Normally I hate DRIPs because of the paperwork required, but FCGYF offers re-investors new shares at a 5% discount.

*Mongolia Growth Group is up >5% today on no news. But I did get a quarterly report in the mail. MNGGF.