These are stories Report on Business is following Monday, March 11, 2013.
OECD sees sluggish Canada
The OECD sees “weak growth” ahead for Canada, an indication that up and down economic indicators of late are going to continue in that fashion.
Canada’s economy stalled late last year, with an actual contraction in December, though readings on trade, construction and, particularly, jobs were certainly more buoyant last week.
Economists have generally cut their forecasts for Canada, and observers don’t expect much in the way of pickup until the latter half of this year.
Tell that to Canada’s employers, however, who boosted their payrolls by 51,000 in February, according to Statistics Canada on Friday.
The Organization of Economic Co-operation and Development today released its composite leading indicators, or CLIs, for the group, projecting firmer growth in the United States and Japan and a pickup in the euro zone zone, notably Germany.
“In Canada the CLI continues to point to weak growth,” it said.
Blood from a stone
You know you’re in big trouble when:
1. You try to roll a giant boulder up a hill when Zeus is in a bad mood.
2. You try to square a circle when everyone knows that pi is transcendental.
3. You try to invade Russia in the winter.
4. You try to retire on your Nortel investments.
5. You go to Greece. cap in hand, asking for €2-billion in aid.
British economist Megan Greene got me thinking about all the impossible things one could try when she tweeted that “Cyprus asks for EUR 2bn from Greece. You know you’re desperate when …”
Ms. Greene was referring to the fact that the president of Cyprus, Nicos Anastasiades, is meeting in Athens today with Greek Prime Minister Antonis Samaris.
According to The Financial Times, he plans to ask the Greek government to give up some of the €50-billion earmarked for Greece’s bank recapitalization as part of the massive bailouts of Athens by its international lenders.
In a weekend interview, the newly installed president ruled out haircuts, or losses, for depositors.
Cyprus is trying to secure its own bailout, and is asking Athens to help Cyprus-based banks doing business in Greece, according to the report.
“This transfer would be hard to justify, given that there’s barely enough funding available for the Greek banks, while the economy is still deteriorating, with more non-performing loans in the system than predicted by adverse scenarios,” one Greek banker told The Financial Times.
Today’s meeting comes in advance of another gathering of European Union leaders, who will be discussing an EU-IMF bailout later this week. Depositor losses could be among the terms.
“EU leaders are once again set to wrestle with the thorny issue of Cyprus and the bailout options for its banks, with policy makers remaining spilt on how to deal with what on the face of it is a pimple in terms of euro zone GDP, but which has the capacity to bring the whole edifice tumbling down,” said senior analyst Michael Hewson of CMC Markets in London.
- Euro zone to bail out Cyprus - but money laundering must stop
- After election win, Anastasiades faces Cyprus bailout quagmire
- ROB Insight (for subscribers): Cyprus held up its end of the bargain. It's the EU's turn
Next BOJ chief pledges fast action
The next governor of the Bank of Japan pledged today to move quickly to juice the country’s ailing economy and reach a new 2-per-cent inflation target.
“I want to debate policy steps with the monetary policy committee and implement these steps as soon as possible,” Haruhiko Kuroda told his confirmation hearing today, according to Reuters.
Mr. Kuroda, head of the Asian Development Bank, is the choice of newly elected Prime Minister Shinzo Abe, and takes over the post later this month, though the central bank’s next meeting isn’t until early April. He faces a huge task.
"In Japan, this morning’s data threw cold water on last week’s optimism (sparked by the fact that the economy didn’t shrink in Q4 and that Japan was technically no longer in recession (insert weak applause)," said senior economist Jennifer Lee of BMO Nesbitt Burns.
"Machine orders plunged 13.1 per cent in January alone (or 9.7 per cent below from year-ago levels), and machine tool orders fell 21.5 per cent from last year," she said in a research note.
"So Q4 may not have contracted but Q1 is not starting off on a strong footing at all. The confirmation hearings for the BoJ nominee Kuroda started on Monday and the ADB president repeated his belief that the bank should begin open-ended asset purchases earlier than in 2014. He doesn’t have the job yet but the pressure is building."
InTrade shuts site
InTrade has suddenly shut down its popular “prediction market,” citing issues that “may include financial irregularities.”
The Irish company, on which users can bet on things that aren’t sports, and which has already been sued by U.S. futures regulators, gave no further details in a statement late yesterday.
“During the upcoming weeks, we will investigate these circumstances further and determine the necessary course of action,” the board of directors said.
“To mitigate any further risk to members’ accounts, we have closed and settled all open contracts at fair market value as of the close of business on March 10, 2013, in accordance with the terms and conditions of our customers’ use of the website.”
So, you’ll have to go somewhere else if you want to bet on the next pope.
Streetwise (for subscribers)
ROB Insight (for subscribers)
- Dell gives Icahn confidential access to its books
- Aurizon sets new defence against hostile Alamos takeover
- One in four Germans would back anti-euro party