These are stories Report on Business is following Thursday, Oct. 6. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
The good, the bad and the clever A collection of dumb, smart and witty things people said and did today in the business world:
1. There's a clever tweet circulating today that cites "three Apples that changed the world." The first is the one Eve bit into, the second the one that dropped on Newton, and the third the one built from scratch by Steve Jobs.
2. David Schreck, a retired economist and former B.C. MLA, should stick to talking about the economy, an area where it's still okay to dredge up ideas from centuries past. (This is no comment on economists in general.) He thought it was okay yesterday to ask on Twitter: "Is Premier Clark's cleavage-revealing attire appropriate for the legislature?" The province's NDP leader, Adrian Dix, rightly asked Mr. Schreck to apologize.
3. A news report today said that Apple stock rose "after co-founder and former chief executive officer Steve Jobs died." Seriously?
4. Jean-Claude Trichet, the soon-to-be ex-president of the European Central Bank, held his last news conference today, warning that "all governments need to take decisive and front-loaded action to bolster public confidence in the sustainability of government finance." This is wise counsel, particularly to those in his own backyard. But just before that, he rejected calls for an immediate cut in interest rates, which wasn't very smart at all. And I'm not the only one who thinks that. "I would have gone for a cut in the rate if I had something to do with it, simply because I think our greatest concern now is growth," Angel Curria, the head of the OECD, told Reuters.
5. Jean-Claude Juncker, the prime minister of Luxembourg and the chief of the euro zone, said today that the so-called troika reviewing Greece's books will likely have their report prepared by Oct. 24, and they're likely to recommend giving Athens its next €8-billion in bailout money. I can almost guarantee this will come back to haunt him, given the repeated dickering, division and delay for which this group is known.
6. U.S. Republican Paul Ryan said tax hikes, such as the one proposed for millionaires, don't make a dent in the deficit but "they do a lot of damage to the economy." Mr. Ryan might want to go to his window and look down on the street, where there's sure to be a protest like the "Occupy Wall Street demonstration" that had spread to several cities, including Washington.
7. The Consumerist notes today that someone who wanted to bug the "Occupy Chicago" demonstrators taped signs in the Chicago Board of Trade windows saying that "we are the 1%." "If they're among the top 1 per cent of earners, how come they can't afford better signs?" the group said in its post.
8. Republican Rep. Ritch Workman has proposed killing a ban on "dwarf-tossing" in Florida because, while repulsive, it is work, Bloomberg News reports. "All that it does is prevent some dwarfs from getting jobs they would be happy to get,” he said in an interview with the Palm Beach Post." While we're at it, Mr. Workman, maybe we should repeal child labour laws?
9. "Hogs are on a pretty good run." This commodities trader was talking about futures.
10. According to Bloomberg News, the group that oversees food safety in Russia has called off a race featured 12 pigs, an annual event, because of fears over African Swine Fever.
ECB stands pat The European Central Bank held its key rate steady today amid calls for an immediate rate cut of up to half a percentage point. Markets are now awaiting a news conference with ECB chief Jean-Claude Trichet.
"The tone is likely to be dovish, with a promise to provide ongoing liquidity as needed and a reminder that the ECB’s core mandate is inflation; however as he steps away from leading the central bank it is unlikely that he is too bold about the future," said chief currency strategist Camilla Sutton of Scotia Capital.
Mr. Trichet will soon walk away from his job, leaving history to judge whether his earlier rate increases were a costly error. Many believe they were.
"It really shouldn't be a surprise given the ECB's track record, but it is puzzling," CMC Markets analyst Michael Hewson said of today's decision.
"The debate will rage and rage but once again the ECB appears behind the curve given the concerns about growth. I'm guessing Trichet didn't want to be remembered for admitting that this years rate hikes were a mistake and has given the dubious honour of reversing them to his successor Mario Draghi."
Nouriel Roubini, the New York University professor and chief of Roubini Global Economics, was harsh on Twitter today, leaving no doubt as to where he stands: "Trichet leaves giving a finger to the markets, thus leaving to Mario the dirty job of doing the right thing."
The ECB did say it would offer unlimited loans at to banks at lower rates than they might otherwise find. Analysts still expect a push for lower rates in Europe moving forward.
"While a minority of the policy council called for a rate cut this month, expect their ranks to grow over the next month or two as the sovereign debt crisis is far from resolved and the recent softer data trend is likely to continue," said senior economist Benjamin Reitzes of BMO Nesbitt Burns.
"Watch inflation rates closely, as the ECB will be reluctant to ease until it’s very clear that inflation is headed below the 2-per-cent target, which may not be until early 2012. That’s especially true with Mario Draghi taking the helm of the ECB in November. Even so, unless European leaders find a way to solve the debt crisis and boost confidence in the near term, we could see a rate cut before year end."
Bank of England acts The Bank of England also held its key rate steady today, but unveiled a new round of quantitative easing to the tune of £75-billion more. With the added boost, the size of the central bank's asset-buying program climbs to £275-billion.
"The pace of global expansion has slackened, especially in the United Kingdom’s main export markets," the Bank of England said as it held its benchmark rate steady.
"Vulnerabilities associated with the indebtedness of some euro area sovereigns and banks have resulted in severe strains in bank funding markets and financial markets more generally. These tensions in the world economy threaten the U.K. recovery."
The central bank is grappling with an inflation rate of 4.5 per cent, and expects it will climb to over 5 per cent within about a month. But it also believes the pace of consumer price increases will fall sharply next year.
A dual mandate? We're getting evidence today, and again tomorrow, that illustrate the juggling acts of central banks and highlight the issue of whether their focus should be solely on inflation or, as I believe, on jobs, as well.
It's a tough issue, and at times murky, but it's arguably more important than ever in this era of high global unemployment that shows no signs of easing as economies slow and fears of another recession mount. Federal Reserve Chairman Ben Bernanke calls it a "national crisis," and rightly so.
The issue comes down to this: Stable, low inflation supports the economy and employment. But there are times when the priority should be inflation and times when it should be jobs. And, as Mr. Bernanke said earlier this week, “we are much further from full employment than we are price stability."
The Fed's dual mandate is being attacked by some Republicans who think the U.S. central bank should act more like the ECB. But a mandate that includes jobs has its prominent defenders, as well.
- Read the full version in Economy Lab: Central banks should have dual mandate
- We can't do it alone, central bankers tell politicians
- Read the Federal Reserve Act
- The ECB: Objective of monetary policy
- Bank of Canada and monetary policy
- Read the Bank of Canada Act
U.S. jobless claims above 400,000 Initial claims for jobless benefits in the United States are back above the 400,000 mark.
They rose last week by 6,000 to 401,000, according to the U.S. Labor Department, again underscoring the jobs crisis in the United States. Having said that, the numbers were better than expected.
The four-week moving average came in at 414,000, down by about 4,000.
World mourns death of Jobs The world today is mourning the death of a man who, well, changed the world.
Steve Jobs, the co-founder of Apple Inc. AAPL-Q and the man responsible for everything with an "i" in front of it, died yesterday at the age of 56. Today, from Apple stores around the world to Mr. Jobs' neighbourhood, those who knew him, and those who didn't, reacted with sadness, praise and fond memories.
Here are some comments collected from The Globe and Mail, The Associated Press, Bloomberg, Reuters and The Wall Street Journal:
"Steve and I first met nearly 30 years ago, and have been colleagues, competitors and friends over the course of more than half our lives. The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come. For those of us lucky enough to get to work with him, it's been an insanely great honor. I will miss Steve immensely." Bill Gates of Microsoft
“We've lost something we won't get back. The way I see it, though, the way people love products he put so much into creating means he brought a lot of life to the world.” Steve Wozniak, who co-founded Apple with Mr. Jobs
“Steve was among the greatest of American innovators -- brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it.” President Barack Obama
“Steve, thank you for being a mentor and a friend. Thanks for showing that what you build can change the world. I will miss you.” Mark Zuckerberg of Facebook
“He always seemed to be able to say in very few words what you actually should have been thinking before you thought it." Larry Page of Google
“Today the world lost a visionary leader, the technology industry lost an iconic legend and I lost a friend and fellow founder." Michael Dell of Dell
“Steve Jobs was simply the greatest CEO of his generation. While I am deeply saddened by his passing, I’m reminded of the stunning impact he had in revolutionizing the way people consume media and entertainment." Rupert Murdoch of News Corp.
“Steve Jobs was a great visionary and a respected competitor. We extend our deepest condolences to his family and to all of the employees of Apple.” Jim Balsillie and Mike Lazaridis of Research in Motion
"To some people, this is like Elvis Presley or John Lennon. It's a change in our times. It's the end of an era,” Scott Robbins, an Apple fan
“Steve was a teacher to anyone paying attention, and today is a very sad day for everyone who cares about innovation and high standards.” Jeff Bezos of Amazon.com
- Canadian reflections on Steve Jobs: 'There's none like him'
- Steve Jobs: The man who changed your world
- Apple after Jobs: Can the tech giant thrive without him?
- Born salesman, Steve Jobs mixed tenacity with technical brilliance
- Steve Jobs's death heralds a new era for Apple
Ivanhoe surges Shares of Canada's Ivanhoe Mines surged today after the company signalled Mongolia will not act on pressure from within its government to increase its stake in the massive Oyu Tolgoi project, the world's largest undeveloped copper mine, The Globe and Mail's Brenda Bouw reports.
Vancouver-based Ivanhoe, which is developing the $6-billion Oyu Tolgoi project in the South Gobi region of Mongolia with Rio Tinto, said the two companies and the Mongolian government have met and confirmed support for the existing investment agreement signed in 2009.
Building permits plunge Building permits issued by Canadian municipalities - they're a volatile measure but do signal future development - plunged in August by 10.4 per cent. That marked the second monthly drop in a row.
The value of building permits declined in both the residential and non-residential sectors, and largely in Ontario, Statistics Canada said today.
"That marks the second monthly decline in permits, and taken together with August’s easing in housing starts, hints that home building in Canada is starting to shift into lower gear," said Emanuella Enenajor of CIBC World Markets.
In International Business The European Commission will make proposals to member states of the 27-strong union on recapitalizing banks, a Commission spokesman said today. Reuters reports.
In Globe Careers A Vancouver reader asks Corporate Governess if he should quit his workplace if he's not promoted.
From today's Report on Business
- Clouds darken for airlines
- Sears must tackle 'identity crisis,' CEO says in memo
- David Milstead's Vox: Behind MacDonald Dettwiler's surging profits
- Report on Small Business magazine: Ten companies that are changing the way we eat