Shoes made of recycled newspaperChiang Ying-ying
Top stories Report on Business is following today :
New twist in fertilizer war
A three-way fertilizer war between Canada's Agrium Inc. CF Industires Holdings Inc. and Terra Industries Inc. took an interesting twist this morning. The story so far in the long-running drama: Agrium is chasing CF, which wants nothing to do with its hostile bid and in turn is chasing Terra. Today, CF chalked up a victory as Terra shareholders elected three of its nominees to the Terra board, moving closer to a takeover. Had CF lost that fight, it might have been under more pressure to opt for a marriage to Agrium. Now, though, it has a leg up. "This makes it harder for Agrium to succeed in its bid for CF because as long as CF believes they can pursue Terra, they don't have to get in bed with Agrium," Broadpoint AmTech analyst Edlain Rodriguez told Reuters. "That said, I don't think Agrium is going to give up that easily. I think Agrium is going to keep pushing and I don't think this is the end of this."
Dell stock sinks on results
Dell Inc. stock is sinking after the PC maker's disappointing results late Thursday. Dell posted a 54-per-cent drop in third-quarter profit to $337-million (U.S.), or 17 cents a share, and sales fell 15 per cent. Dell's PC sales fell in the third quarter, but rose at Hewlett-Packard and Acer, reports say. "Dell remains a transition story, Kaufman Bros. analyst Shaw Wu told Reuters. "The conclusion here is that it looks like they are losing share more than expected, even though there was some expectation of that already."
Consumer bankruptcies rise
Canadians continue to go broke in ever greater numbers. The number of Canadians filing for bankruptcy in September surged 47.4 per cent from a year earlier, to 12,305, the Office of the Superintendent of Bankruptcy Canada reported this morning. Compared to August, total consumer and business bankruptcies rose 29.1 per cent, the agency said. That does follow a trend. "Historically, monthly variations between the months of August and September have been mostly positive," it noted. "In the last 10 years, total insolvencies filed in the month of September have been higher than in August on seven occurrences."
Deflation returns to Japan
Japan is struggling with a new bout of deflation, which the government warns could derail the country's recovery. In a monthly report, officials cited "a mild deflationary phase," which observers say puts the new government on course for a clash with its central bank. The Bank of Japan has already knocked heads with the government over when to pull back on emergency measures. While the government boosted its economic forecast, it marked the first time since 2006 that it has declared a deflationary period. "By declaring that Japan is in deflation, the government is trying to persuade the BOJ that it needs to do something," Norinchukin Research Institute chief economist Takeshi Minami told the Reuters news agency. "At present, the governor doesn't seem to be taking price falls too seriously. At least, the BOJ doesn't seem to want to take further action. I think the government is trying to change that." Read the story
Roubini sees slower rebound
Nouriel Roubini, the New York University professor nicknamed Dr. Doom for predicting the financial meltdown, says he expects a U-shaped recovery in the United States and Europe. Unlike a V-shaped recovery, or a quick rebound, U suggests a longer pickup. "Even when GDP becomes positive, consumption will be weak," Mr. Roubini said in a speech in Lisbon, Bloomberg News reports. "The recovery of investment will be weaker." Mr. Roubini also warned again of the threat of asset bubbles as markets rise and interest rates remain near zero.
Bubble warnings in Asia
Is Asia really looking that frothy? Several observers believe so, and continue to warn of a bubble. Pacific Investment Management Co.'s Bill Gross, chief of the biggest bond fund in the world, told Bloomberg Television Thursday that he suspects China is heading for a bubble. And in a note on Pimco's website, he added that "China may abandon its dollar peg within six months' time and with it its own easy monetary policy that has fostered more significant mini-bubbles of lending and asset appreciation on the Chinese mainland."
Separately, a Chinese government economist also warned at a forum that "consumer prices are not going to skyrocket next year, but asset prices will see a steep upward trend. How to prevent the explosion of asset price bubbles poses an important challenge to macro-economic policy makers." Hong Kong's central bank chief warned of a similar risk, saying on the Hong Kong Monetary Authority's website that "with interest rates exceptionally low and with abundant liquidity around the world, Hong Kong faces the potential risk next year that asset prices may go up sharply and become increasingly disconnected from economic fundamentals."
Did the recession end last quarter?
Bank of Canada Governor Mark Carney says the economy hasn't picked up as quickly as the central bank expected. The central bank forecast in October that the economy would expand at an annual pace of 2 per cent in the third quarter, which would mark the end of a three-quarter recession. Mr. Carney told reporters in New York last night that "recent indicators suggest somewhat softer growth relative to that 2-per-cent projection." Some economists still wonder whether the recession actually ended in the third quarter, the first two months of which still showed a crippled economy. We'll find out Nov. 30 when Statistics Canada reports gross domestic product for September and the quarter.
BMO Nesbitt Burns noted this morning that "we're still waiting for September retail sales data to provide the last clue to the September GDP figure, but even if we pencil in a solid 1-per-cent gain in real retail sales, and a resulting gain of about 0.3 per cent in real GDP, it still isn't clear that we'll see positive quarter-over-quarter growth for all of the [third quarter]" The bottom line, of course, is that that was so last quarter, and economists believe the economy is healing now. Mr. Carney also said last night that the Bank of Canada still expects faster growth in the fourth quarter and next year. Read the story
Recovery slow, IMF official says
John Lipsky, the deputy managing director of the International Monetary Fund, says the world is poised for a sustained recovery, but he warns governments should not yet pull back on their emergency measures. Mr. Lipsky told the Reuters news agency in an interview in Dubai, where he is attending the World Economic Forum, that "we think that we are on a trajectory towards sustained growth but that the recovery is going to be relatively moderate and relatively sluggish. At the same time, you cannot discard the risks that there could be a new stagnation."
Goldman shareholders balk
Some of Goldman Sachs Group Inc.'s biggest shareholders want the Wall Street giant to cut the size of its bonuses and give more to stockholders, the Wall Street Journal reports. Goldman and others have been under fire for hefty bonuses, and it's now headed for the biggest payout in its history. Holders of tens of millions of Goldman Sachs shares have told the company privately that it should cut back, the newspaper says.
Related: Goldman's PR efforts undermined by promotions
For environmentalists, a recycled shoe
Greenshoe may be taking on a new meaning. Greenshoe is an agreement that allows an underwriting syndicate to buy extra shares at the original price. Now, from a Taiwanese fashion designer comes something more literal, and definitely 21st Century. Colin Lin, who runs an environmentally friendly shoe company, is using recycled newspaper to manufacture shoes and totes, The Associated Press reports from Taipei. Ms. Lin told the news agency that about 4,000 pairs of shoes, which take up to four hours to manufacture and sell for up to $150 (U.S.), have sold since she launched them. The products stand out, AP says, because of the Chinese characters, photos and ads.
From today's Report on Business
U.S. housing crisis hits new level
Pipeline to West Coast gains backing