Market turmoil? It doesn't rattle Warren

FABRICE TAYLOR 

This week's market turmoil might make you feel nauseous but it makes Warren Buffett giddy - or more so at least. Back in February, while on a visit to Toronto, Mr. Buffett told an audience that he was ''370 points giddier,'' referring to a drop in the Dow Jones industrial average. He added that he wasn't quite elated yet. ''Things are not ridiculously cheap.''

When investing comes down to a toss of the coin

NOREEN RASBACH 

Here's a fun little mind-bender: You toss two coins. What are the chances you end up with one head?Most people instinctively would say one in three - either no heads, one head or two heads. In fact, the answer is two in four - the possibilities are no heads, head-tail, tail-head and two heads.

Stay liquid and be cautious - more market mayhem ahead

AVNER MANDELMAN 

How do you boil a frog? If you drop it into boiling water it will jump right out. But if you put it into tepid water and raise the heat slowly, it'll stay put and get boiled. Just like many investors. But because today's market frogs have advanced degrees, they plot the temperature trend and if it leads to boiling, they can jump out early.

How bean counters have hurt your nest egg

DEREK DeCLOET 

Ah, the first week of July: hot summer days, the sound of loud explosions, the sight of things bursting in mid-air before the debris plunges back to earth. Yes, the stock market is putting on quite a show. (Fireworks? Yes, those are exciting, too.)

ARE THESE STOCKS TOO HOT, OR JUST WARMING UP?

David Berman 

FORDING CANADIAN COAL TRUSTYear-to-date gain 106 per centTrailing price-to-earnings ratio 39Distance from record high 19 per centAnalyst target price (average) $89.29

The danger zones of 2008

ROB CARRICK 

TSX 60 GAINERS Fording Canadian Coal Trust FDG.U +107.0% Potash Corp. of Saskatchewan POT +50.6% Agrium Inc. AGU +38.2% Canadian Oil Sands Trust COS.U +35.6% Agnico-Eagle Mines Ltd. AEM +34.8% Goldcorp Inc. G +33.2% Canadian Natural Resources

Pringles aren't potato chips

Pringles, Procter and Gamble Co.'s salty snack stacked in a tube, are not potato chips, a London judge ruled yesterday in a tax dispute.Pringles don't fulfill the legal definition of ''potato crisp,'' the British word for ''chip,'' allowing them to be sold tax free in the U.K., Justice Nicholas Warren at the High Court in London ruled.

Japan pension fund posts loss on returns

Japan's public pension fund, the world's largest, said yesterday it posted a negative return on investments last business year ended in March, its first in five years, with a yen5.8-trillion ($55.4-billion) loss. The Government Pension Investment Fund said the rate of return on its marketable financial assets fell to negative 6.41 per cent in fiscal 2007-08 from 4.75-per-cent the year before, hit by a tumble in the Japanese stock market in the wake of the subprime crisis and by the dollar's fall against the yen. The return on domestic shares was negative 27.97 per cent, while the yen's rise led to a negative 17.1-per-cent return on foreign investments.

BHP bid for Rio faces extended EU investigation

European Union regulators extended a probe into BHP Billiton Ltd.'s hostile bid for Rio Tinto PLC because of ''serious doubts'' over a combination that would control more than a third of the world's iron ore production. The European Commission will review the $163-billion (U.S.) acquisition for 90 more working days and unveil a decision by Nov. 11, it said yesterday. The initial ''investigation has indicated that the proposed takeover raises serious doubts as to its compatibility with the single market,'' the commission said. The antitrust division of the U.S. Department of Justice gave partial approval this week. BHP (Sydney) rose 88 cents to $40.70 Australian ($39.93 Cdn.). RIO (London) rose & 1.40 to & 56 ($113).

Nine convicted in BAWAG fraud case

Nine people, including a prominent executive who fled to France to try to elude justice, were convicted of criminal charges yesterday in an Austrian bank fraud case linked to the 2005 collapse of New York-based commodities brokerage Refco Inc. Vienna Federal Court Judge Claudia Bandion-Ortner found the defendants responsible for €1.4-billion ($2.2-billion) in losses at BAWAG, Austria's No. 4 bank. The defendants include two former BAWAG executives, Helmut Elsner and Johann Zwettler, and U.S.-based investment banker Wolfgang Floettl. All nine proclaimed innocence on charges of breach of trust, aiding breach of trust, false accounting and fraud.

UBS says tax credit will partly offset losses

UBS AG, Switzerland's largest bank, said yesterday it expects its second-quarter results to be ''at or slightly below break-even'' due to a tax credit that will at least partly offset investment losses. It also said it won't need to ask for more capital when it reports the results next month. Analysts had expected a second-quarter loss of as much as $4.9-billion (U.S.) from the bank that has been hammered by big losses related to the U.S. subprime lending crisis. Shares in the crisis-hit bank jumped 8.2 per cent on the announcement, but soon fell back as analysts noted that without the unexpected tax credit of three billion Swiss francs ($2.99-billion Cdn.) UBS would record a significant loss. UBSN (Zurich) fell 54 centimes to 20.48 Swiss francs.

SocGen fined $6.4-million for Kerviel trading scandal

Societe Generale SA, the French bank stung by a record trading loss, was fined €4-million ($6.4-million) by the country's Banking Commission for failing to comply with rules on internal controls. The Paris-based company's internal checks showed ''serious shortcomings, going far beyond simple repeated individual errors,'' the commission said in an e-mailed statement. The fact that management was unaware of these shortcomings can't be used as an excuse for failing to meet bank regulations, it said. A report commissioned by Societe Generale found that trader Jerome Kerviel was able to build up €50-billion in unauthorized futures positions at France's second-biggest bank because of ''fragmented'' internal controls. Unwinding those positions cost a record €4.9-billion, a loss the bank blamed on the former trader. GLE (Paris) fell €1.41 to €54.81.

'Let Alitalia go bust'

Lorenzo Schapira tries to avoid flying Italy's near-bankrupt flagship carrier, Alitalia SpA. The planes are run-down and the service is ''appalling,'' he says.''The government should let Alitalia go bust,'' a 52 year old who runs a disco and a sports club near Milan, said on board an Air One SpA flight home from Rome.

Chrysler looks to China for international growth

Keeping road warriors on the radar

TERRENCE BELFORD 

On July 17 last year, TAM Airlines flight 3054 crashed into the runway at Sao Paulo, Brazil, killing 199 people. Thanks to new traveller tracking and alert software, Canada's Vision 2000 Travel Group was almost instantly able to determine that none of its customers were aboard.

Rogue trader costs TD

TARA PERKINS AND PAUL WALDIE 

Toronto-Dominion Bank, which painstakingly avoided the subprime mortgage trouble that forced its peers to take massive subprime writedowns, said it was taking a $96-million hit yesterday after discovering that a London trader had deceived the bank about the value of securities he traded.

In the end, 'no room to negotiate'

BOYD ERMAN, SINCLAIR STEWART AND JACQUIE McNISH 

An emissary from one of BCE Inc.'s suitors walked into a Toronto boardroom almost two weeks ago and gave the phone company's directors an ultimatum that would make or break the $35-billion deal to sell to a group led by the Ontario Teachers' Pension Plan.

FIVE THINGS: DIAMOND MINING

Richard Blackwell 

1 FALSE STARTThe search for diamonds in Canada goes back as far as French explorer Jacques Cartier, who thought he found some in the 1540s at the mouth of the Riviere Cap-Rouge near present-day Quebec City. Unfortunately, these turned out to be quartz crystals. The name Cap Diamant remains on the dramatic promontory where the Chateau Frontenac overlooks the St. Lawrence. Cartier's mistake, pointed out to him by geologists when he got home, became a part of French folklore. Something fake is still described in parts of France as ''faux comme un diamant du Canada.''

Cordero agrees to bid from Ember Resources

Viterra faces labour strife at Regina office

Total extends offer for Synenco to July 15

Ivey index points to expansion in June

Wi-LAN adds LG to its patent lawsuit

Canadian bankruptcies dip in May from April

New figures show that bankruptcies in Canada dropped in May. The Office of the Superintendent of Bankruptcies is reporting 7,918 bankruptcies in May, down from 8,627 in April and 8,008 in May, 2007. There were 7,364 personal bankruptcies and 554 business bankruptcies in May, bringing the 12-month total to 87,839. Last year at this time, 85,627 consumer and business bankruptcies had been declared over the previous 12 months. May's 7,364 personal bankruptcies were 8.4-per-cent less than in April and 1.5-per-cent less than in May, 2007. Business bankruptcies were down 6.4 per cent from April and up 4.1 per cent over May, 2007.

Goldcorp says power cut affects Guatemala plant

Goldcorp Inc. said yesterday that power lines to its Marlin mine in Guatemala have been tampered with resulting in periodic idling of the mill facility. The company said mining at the underground and open pit have been largely unaffected and ore continues to be stockpiled on site. The Marlin mine is expected to produce 250,000 ounces of gold per year and about 4 million ounces of silver per year over its mine life. G (TSX) fell $1.16 to $45.44.

A sticky subject that isn't going away

KIRA VERMOND 

Even the most socially awkward of us know there are three topics of conversation to be avoided in polite company: Sex, politics and religion. But when it comes to the workplace, spiritual chatter is on the rise as companies pay out anywhere between $1,500 to $2,500 for religious diversity trainers to educate workers about, say, why devout Muslim co-workers pray or why a co-worker urging another to accept Christ as a personal saviour may be legally protected.

Bigger clouds hit those who radiate sunshine

The new co-worker sitting next to you is a real beam of light. Everyone loves him.But don't be jealous -- he's more likely to have his high hopes dashed after the honeymoon glow of the new job has worn off, and more likely to seek out another job.

Sending personal e-mails: false sense of security

Wallace Immen 

A false sense of security may be why more than half of employees admit to sending personal e-mails from work.And 7 per cent fess up to sending more than 10 a day, according to a poll of 1,000 employees by Yahoo! Canada.

British working moms want more flexibility

A lack of flexible working arrangements is the biggest obstacle for working moms to return to work, according to 73 per cent of 1,100 British mothers surveyed. Eighty-six per cent said flexible hours are their most desired working condition, found the survey by Workingmums.co.uk.

CORRECTIONS

The U.S. unemployment rate in June was 5.5 per cent. Incorrect information was published yesterday. CanWest Global Communications Corp. has $3.9-billion in debt. An incorrect figure was published yesterday.

Market turmoil? It doesn't rattle Warren

FABRICE TAYLOR 

This week's market turmoil might make you feel nauseous but it makes Warren Buffett giddy - or more so at least. Back in February, while on a visit to Toronto, Mr. Buffett told an audience that he was ''370 points giddier,'' referring to a drop in the Dow Jones industrial average. He added that he wasn't quite elated yet. ''Things are not ridiculously cheap.''

Single mom should refinance her mortgage

ANDREW ALLENTUCK 

In Ottawa, a health care administrator we'll call Karen, 52, has been separated for a year. Her job pays her $79,457 before taxes, a good salary, but not a lot with which to help two children ages 16 and 21 with their university educations and to plan her own retirement.

When investing comes down to a toss of the coin

NOREEN RASBACH 

Here's a fun little mind-bender: You toss two coins. What are the chances you end up with one head?Most people instinctively would say one in three - either no heads, one head or two heads. In fact, the answer is two in four - the possibilities are no heads, head-tail, tail-head and two heads.

Stay liquid and be cautious - more market mayhem ahead

AVNER MANDELMAN 

How do you boil a frog? If you drop it into boiling water it will jump right out. But if you put it into tepid water and raise the heat slowly, it'll stay put and get boiled. Just like many investors. But because today's market frogs have advanced degrees, they plot the temperature trend and if it leads to boiling, they can jump out early.

Are precious metals prices boosting funds?

SHIRLEY WON 

WHAT ARE WE LOOKING FOR?Whether bullion or precious metals stock funds are shining the brightest so far this year.With gold futures surging to a 10-week week high of $946.50 (U.S.) an ounce in New York this week before easing off, it's time to check out the precious metals sector.

THREE STATS YOU JUST CAN'T BE WITHOUT ON A SATURDAY: THE WEEK IN ECONOMICS

Heather Scoffield 

OECD MEMBER COUNTRIES HAVE HANDLE ON INFLATIONTotal inflation in developed countries is on the rise, but beyond food and energy, prices are well under control in the Organization for Economic Co-operation and Development, especially in Canada.

Contrarian uses research to find the 'unloved'

ANDREW ALLENTUCK 

ERIC HEFFERNANAGE: 53 OCCUPATION: Owner of a Kelowna, B.C., company that builds specialty vehicles like ambulances and police command posts.PORTFOLIO: Power Corp. of Canada, Brookfield Asset Management, National Bank of Canada, Canadian Tire, Manulife Financial, Royal Bank of Canada, Toronto-Dominion Bank, Timber West, Fortis Inc., Yellow Pages Income Trust, Shaw Communications, Telus, Melcor Developments.

STARS AND DOGS

JOHN HEINZL 

DOGAir Canada Investing tip #367: If you're ever tempted to invest in an airline stock, have a friend handcuff you to a chair and slap you with a wet mackerel until the urge passes. Shareholders of Air Canada probably wished they'd heeded that advice: Reeling from high fuel prices, Canada's biggest airline is slashing routes and laying off up to 2,000 employees. Despite such measures, the stock keeps losing altitude.

SPENDING AND SAVING

MORTGAGESBased on a $100,000 mortgageNat'l Av. RateNat'l Best RateMthly paymentTotal Interest costs (lifetime) Variable, closed4.2752.250$541.03$62,310.97 1 year, open8.2894.250$781.73$134,527.06 1 year, closed6.0514.650$642.84$92,852.92 3 years, closed6.1334.890$647.73$94,321.52 5 years, closed6.2865.240$656.90$97,073.02 7 years, closed6.7355.650$684.13$105,240.32

Canada's declining share of FDI is deceiving

HEATHER SCOFFIELD 

The competition landscapeCanada's share of the world's stock of foreign direct investment (FDI) has steadily eroded over the past two decades, and that finding sent the government-nominated panel on competition policy into a tizzy recently.

STOCKS AROUNG THE WORLD THIS WEEK

ANGELA BARNES 

SPAIN: With all the bad news elsewhere, we thought we would feature a market that actually weathered the wave of selling sweeping around the world reasonably well. Spain's Ibex 35 index dropped just 2 per cent, helped later in the week by easing concerns about interest rate increases at least in the near term

COMMODITIES

Oil prices fell yesterday on profit-taking, a day after surging to record highs on the back of a weak dollar and concerns over tight supplies, traders said. Brent North Sea oil for August delivery slid by $1.22 to $144.86 a barrel in electronic deals.

WEEKLY STOCK TRACKER

Up 7.8%BCE Inc., Canada's biggest phone company, jumped 12.8 per cent yesterday after it signed a final agreement with a group led by the Ontario Teachers' Pension Plan to complete the world's biggest leveraged buyout. Yesterday's closing price of $39.64 was still more than $3 below the agreed-upon - and now confirmed - takeover price of $42.75. That's easy money for investors who are willing to wait until December to cash out.

FRIDAY'S MAREKTS: WHAT HAPPENED

DOWNBCE news fails to lift TSX compositeInvestors may have welcomed the news yesterday that the BCE Inc. takeover deal was a near certainty, but the celebrations did not lift the mood for the rest of the Canadian stock market. The SandP/TSX composite closed at 14,010.39, down 133.18 points or 0.9 per cent.

WHAT THE CHARTS SAY

RON MEISELS AND MONICA RIZK 

BULLISH ON NORFOLK After a two-part rise from $20.38 (U.S.) to $57.71 (A-B), Norfolk Southern (Thursday's close $58.91) settled into a wide horizontal trading range between $40 and $59 (see dashed lines). The U.S. railway stock pierced above the top of this range recently to a new high of $67.74, to signal the start of a major upleg (C). Use the current weakness as a buying opportunity in view of higher targets. Only a decline below $54-$55 would reverse the positive long-term outlook.

BONDS

Canadian bond prices, with no domestic data to influence trade, clawed back from early losses to finish higher across the curve for the second straight session as U.S. jobs data came in below expectations.

FOREIGN EXCHANGE CROSS RATES

Canada's dollar dropped on bets the Bank of Canada won't raise borrowing costs this year as the world's eighth-largest economy slows. The currency posted its first weekly decline since mid-June as Royal Bank of Canada lowered its forecast for economic growth.

WHAT THE FUTURES HOLD: WHERE TRADERS SEE PRICES ARE HEADED

Gold closed at US$933.25 an ounce yesterday. The market is pricing it at US$963.10 in one year. ESIGNALThree-month interest rates are at 3.26%. The market expects the rate will be 3.63% in one year. SOURCE: MONTREAL EXCHANGE