These are stories Report on Business is following Tuesday, June 21. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Glass houses and stones U.S. Treasury Secretary Timothy Geithner had this to say in Washington today on Europe's debt crisis:
"It would be very helpful to have Europe speak with a clearer, more unified voice on the strategy. I think it's very hard for people to invest in Europe, within Europe and outside Europe, to understand what the strategy is when you have so many people talking."
Olli Rehn, the EU economic and monetary affairs commissioner, had nothing to say on the U.S. debt crisis. But I took some licence and tried to imagine Mr. Rehn saying almost the same thing, with a slight change:
"It would be very helpful to have the United States speak with a clearer, more unified voice on the strategy. I think it's very hard for people to invest in the United States, within the United States and outside the United States, to understand what the strategy is when you have so many people talking."
It works either way. Yes, Europe is squabbling, which is at least partly to blame for the fact that its debt crisis continues to rage. But one wonders how Mr. Geithner would describe what's playing out in his own backyard as the Democrats and Republicans bicker over the deficit against an early August deadline?
The similarities don't end there.
Mr. Geithner also said: "We are going to avoid a default crisis, no doubt about that. It is not going to happen. We are going to have a bipartisan deficit reduction framework. The question is what is going to be the shape of that framework."
One can easily imagine Mr. Rehn saying something similar.
Markets eye Greek vote Greece is in the eye of the storm today as the world watches the crucial confidence vote scheduled for about 5 p.m. ET.
The confidence vote is so key because it will determine whether the government of Prime Minister George Papandreou can push new austerity measures and secure a further €12-billion of its initial bailout package and another rescue plan that will take its place. Both are under discussion among officials of the EU and the International Monetary Fund who are demanding Parliament approve the cutbacks, which include slashing the public sector and hiking taxes. The money is key to meet debt payment deadlines.
"The issue here is not that Greek PM George Papandreaou cannot secure enough support through his own party since it holds a small majority of 155 seats out of 300," said economists Derek Holt and Karen Cordes Woods of Scotia Capital.
"The issue is that Greece is being told by the countries and agencies footing the bill that broadly based support is required, and that includes the opposition parties stepping up to the plate in order to express confidence in the government," they said in a report.
"Should opposition parties stand against the government tonight, an election call is quite likely and that faces the disruptive possibility of delaying bridge financing from the IMF. Since polls are showing that about half of Greeks oppose new austerity measures, an election could well play into the opposition's hands and weaken the resolve toward pursuing what other European leaders have stated is required by way of further austerity measures in order to secure additional bridge financing."
Greece's troubles, and the wider debt troubles of the 17 countries that share the euro, have rattled markets for more than a year now, and surviving a confidence vote is just one tiny step.
"A successful vote for Prime Minister Papandreou might bring further respite to the single currency and the recent volatility, as the likelihood would be that the austerity budget could well get through; however passing an austerity budget is one thing," said CMC Markets analyst Michael Hewson.
"Implementing it in the face of fierce opposition amongst the voters is something else and this might also play on politicians minds when it comes to the crunch, making the passing of the budget anything but a 'slam dunk.'"
- 'Danger of contagion' as Greek vote looms
- EU debt crisis threat to economy: Flaherty
- Brian Milner's Economy Lab: Will the Greeks push back?
- Compromise puts Greece back in holding pattern
Encana joint venture ends A proposed $5.4-billion joint venture between Encana Corp. and China's largest oil and gas company has collapsed after the two sides couldn't agree on final details.
Encana said today the deal tied its B.C. Cutbank Ridge project with PetroChina International Investment Co. Ltd. fell apart, highlighting differences around the joint operating agreement. The deal would have marked China's largest investment into Canada's oil patch, The Globe and Mail's Carrie Tait and Nathan VanderKlippe report from Calgary.
Encana is now stuck sitting on rich gas deposits and in need of a wealthy partner to access the energy. As part of the 50-50 joint venture, PetroChina was suppose to pay for half of all future capital costs at Cutbank Ridge, helping Encana fund its operations elsewhere - a much needed source of cash with natural gas prices painfully low.
The collapse of the deal sparked an immediate reaction. UBS Securities Canada analyst George Toriola cut his 12-month price target on Encana shares to $33 (U.S.) from $35, and held his "neutral" rating unchanged, to "to reflect the collapse of this transaction, which had the potential to revalue the Cutbank Ridge assets."
RIM in the crosshairs? Shares of Research In Motion Ltd. rebounded today, though the stock still came nowhere near regaining the ground lost since its poor first-quarter results sparked a rout last week.
The plunge had sparked talk again of Canada's pride soon becoming a takeover target. We'd heard this before, of course, but the talk appeared to have picked up at a speed equal to the stock's decline before today's bounce.
"Given how significant the deterioration of the stock price has been, that alone will cause interest," said Paul Taylor, the chief investment officer at BMO Harris Private Banking in Toronto, according to Bloomberg News.
"RIM still has meaningful market share in the U.S. and meaningful market share internationally, and RIM has an iconic brand."
Mr. Taylor said "it's not hard to envision" a takeover bid of between $40 and $50 a share for the BlackBerry maker.
It was only a few years ago that RIM shares were trading above $140, and the company's market cap topped $80-billion. The stock is now trading at just shy of $28.
In the past, the buzz has suggested companies such as Microsoft Corp. or Oracle Corp. could take a run at RIM.
The Wall Street Journal noted last week that RIM could instead be broken up, given that even at its current price it's still a hefty target for an acquirer to digest. And its various pieces are valuable.
RIM has promised better times ahead, and exciting products, even as it slashed its financial forecast last week and promised job cuts. It's losing market share in the key U.S. market amid heightened competition from Apple Inc. , maker of the popular iPhone, and Google Inc. , whose Android operating system has been doing exceptionally well.
- RIM cuts 200 jobs in Waterloo, reports say
- Market Blog: The slump that won't stop
- RIM braces for 'the big reset'
- RIM's slump deepens
- Gladwell tells RIM to cool its heels in race to the market
- RIM's falling fortunes put Canadian technology 'ecosystem' at risk
Bombardier scores another C Series sale The order flow for the new C Series jet by Bombardier Inc. ticked up again today with the sale of 10 of the planes to Korean Air, the Canadian company's first Asian customer.
The order, announced the Paris Air Show, is worth about $660-million (U.S.) at list prices, though discounts are routinely available, especially for any new airplane's first customers, The Globe and Mail's Eric Reguly reports from Paris.
Bombardier also said VistaJet of Switzerland had placed an order for 10 Bombardier Global 8000 large business aircraft. Based on list prices, the order is worth about $650-million. VistaJet last month ordered two Bombardier Challenger 605 jets and six Global 6000 jets.
P&W eyes Mirabel Pratt & Whitney has put Canada on its list of potential testing and manufacturing sites for the hot-selling new turbofan engines that will power the next generation of Airbus jets.
At a press conference at the Paris Air Show today, P&W president David Hess said that the company's Mirabel site "is a candidate site" for the engines that will power the Airbus A320neo (short for new engine option), which has been one of the star sellers at the show.
Privacy commissioner warns on online dating Canada's privacy commissioner has a warning about "finding love and romance in the 21st century."
In her annual report to Parliament today, Jennifer Stoddart notes the boom in online dating sites, whose revenues are now estimated at between $3-billion and $4-billion globally.
"Finding love and romance in the 21st century increasingly involves sitting in front of a computer screen," she says in the report.
"The popularity of online dating sites has soared in recent years, joining introductions from friends and chance encounters in bars as one of the most common ways in which couples first meet. According to a statistic in the Harper's magazine Index, the chance that an American couple who met since 2007 first met online is now one in four."
The report discloses a probe into privacy issues surrounding eHarmony, a popular U.S.-based service available in Canada as eHarmony.ca. To join, you've got to hand over a lot of info, answering more than 300 questions about character, intellect, family, income, and on and on to include "physical appearance and sexual vitality."
One woman found she wanted to delete her account, but couldn't completely remove her personal info, so complained to the privacy commissioner's office. The site improved its procedures and satisifed the agency's recommendations, now allowing an option to fully delete.
There's a lot of stuff in there about how information can be "anonymized" and "depersonalized," but the bottom line is that the matter was settled.
Not so with all dating sites.
"A quick scan of other sites reveals that some do not even have privacy policies," the report says.
"Some that have privacy policies do not specify how they handle personal information after a user is no longer active on the site. Unless a site deliberately clears out personal data that is no longer required to support the user's dating efforts, the information will remain on the servers. This introduces the risk of a data breach."
It urges users of social networking sites - particularly dating services given the, ahem, "highly personal information collected there" - to safeguard privacy.
As The Globe and Mail's Emily Jackson reports today, the privacy commissioner's report also found that Staples Business Depot failed to fully destroy customer data from returned devices such as laptops, USB hard drives, and memory sticks, leaving some customers at risk of identity theft or fraud.
Retail sales rise New cars and auto parts aside, Canadian shoppers are flagging.
Retail sales climbed 0.3 per cent, though were flat when you take out cars and parts, Statistics Canada said today.
New car dealers saw their sales rise 1.1 per cent, and parts shops posted a 6-per-cent gain. Lousy spring weather seems to have put a dent in building material and garden equipment sales, which slipped 2.8 per cent. And there's something of a trend going on as sales at sporting goods, hobby, book and music stores fell for the fifth month in a row, declining 1.2 per cent.
Over all, economists had expected a better showing.
"Weakness came in building materials and gardening equipment, potentially affected by poor weather, but other sectors had fewer excuses for soft results," said Avery Shenfeld, chief economist at CIBC World Markets.
"The prior month's sales were also revised down a tick. In real terms, volumes were up 0.2 per cent. Over all, a soft report given the revisions, and consistent with April being a lacklustre month for GDP."
What's that mean going forward?
"With consumer spending expected to run at a modest 2.5-per-cent pace in the current quarter, consumers will not be the engine of growth that they were at the early stage of the economic recovery," said Toronto-Dominion Bank economic analyst Leslie Preston.
"That softening trend is seen no matter which way you slice it. Year-on-year rates of growth in headline retail sales, ex-autos, and in real terms have all decelerated significantly since earlier in the recovery and are off their pre-recessionary pace."
In Economy Lab today Has the American Dream lost its mojo? In the aftermath of the Great Recession, with its factory shutdowns and mass layoffs, the potential for upward mobility through ingenuity and elbow grease certainly seems to have diminished. Naomi Powell reports from Stockholm.
In International Business today The world did not end in February when Danish regulators forced haircuts on senior bondholders of a small bank that had burnt through its capital and could not repay creditors. Nor should it as a result of the Irish government's plans, revealed last week, to mete out similar treatment to bond investors in two defunct banks. The Financial Times examines the issue.
From today's Report on Business
- RBC ends foray into U.S. retail banking with sale to PNC
- Billionaire fund manager sells all of Sino-Forest holding
- Boyd Erman: For bankers, small-cap gravy train about to be derailed
- Internet guardian opens up naming system
|BBD.B-T Bombardier Inc.||3.74||
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|ECA-T EnCana Corp.||23.70||
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