These are some of the major stories Report on Business followed this week. Get the top business stories on weekdays on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Leaving in a blaze I'm betting Greg Smith just might be more famous than Jerry Maguire by this point. Not to mention what he did for the Muppets.
Mr. Smith quit his job this week in very public fashion, slamming his employer of 12 years, Goldman Sachs Group Inc. , on his way out the door for what he described as the firm's "toxic" culture.
He resigned as head of Goldman's U.S. equity derivatives business in Europe, Africa and the Middle East with an Op-Ed piece in The New York Times, outlining an environment of money, money, and more money, from clients sometimes referred to as "muppets," Street lingo for dummies.
His comments flew around the world via social media, renewing harsh feelings about Wall Street and prompting a response and internal memo from Goldman. And sparking Muppet jokes galore.
He's not the first person to ever create a buzz by leaving a job, of course. But this one really resounded.
"This will certainly be damaging for the firm,” John Purcell of executive search firm Purcell & Co., told Bloomberg News. "It’s obviously a very heartfelt piece. Maybe he’s made a sufficient amount of money in his life that he isn’t particularly bothered if he isn’t employed in financial services again and works in a completely different world like teaching."
Here's a look at some other public departures, dug up from our files and other sources:
Steven Slater gained folk hero status a couple of years ago, and probably had more fun than Mr. Smith, when the JetBlue flight attendant announced over the plane's intercom that he was quitting, grabbed a beer and rode down the emergency chute, saying he'd been abused by a traveller. He had to serve probation for year.
Carol Bartz. didn't quit as CEO of Yahoo Inc., she was fired. And she let everyone know how it happened, and exactly what she thought about the "doofuses" on the board of directors, in a rather colourful interview with Fortune magazine.
This one goes way back, to the 1920s, but Ernest Hemingway is reputed to have quit in fine fashion when he left what's now The Toronto Star. Tom Williams, then a cub reporter at Toronto's Evening Telegram, recalled the events in a letter to the Los Angeles Times in 1992 about the day Hemingway quit, after he was assigned to write a "fluff piece" on a peacock the newspaper was giving to the zoo. I have no idea if this is true, but Mr. Williams said he knew many of the reporters at the Star, including his uncle by marriage: "Hemingway went out and got very drunk instead. Returning to the office stiff as a teakwood plank, he sat down at his typewriter and wrote his resignation. To hear from the news people present, it was one of the great moments in Canadian journalism, certainly one of the most unforgettable." (Another account says Hemingway quit in late 1923 but waited until after Christmas so he could collect his bonus.)
Former Sun Microsystems CEO Jonathan Schwartz told his followers he was leaving on Twitter, and poetically at that: "Today's my last day at Sun. I'll miss it. Seems only fitting to end on a #haiku. Financial crisis/Stalled too many customers/CEO no more."
Richard Nixon went out this way, the first time, when he lost to Democrat Pat Brown in California in 1962: "You don't have Nixon to kick around any more, because, gentlemen, this is my last press conference." Of course, some people can't take a hint.
James Coyne's departure as Canada's second central bank governor is too long a story to tell here, though it is fascinating. Here, however, is one tidbit from Mr. Coyne said during his public battle with Prime Minister Diefenbaker, whom he accused of being the "evil genius" in the matter: "It was his unbridled malice and vindictiveness which seized on the Bank of Canada’s pension fund provisions."
- Official slams Goldman Sachs as he quits: 'Toxic' culture, clients as 'muppets'
- Boyd Erman: Resignation letter just the latest blow to Goldman's integrity
- Goldman reviews conflict of interest policies
- How to deal with an 'almost psychopath' in your office
Redrawing the map Canada's telecom and media industries - or is it just one industry yet? - are in for another overhaul.
Developments played out twice this week to help redraw the map. First, the federal government unveiled a plan to allow the upstarts in the wireless sector to tap more foreign money and even be wholly owned by non-Canadians, though the smaller players question if that's enough.
Then, on Friday, BCE Inc. struck a $3-billion deal to acquire Astral Media Inc. . That will add considerably to the Canadian telecommunications giant's acquisition last year of CTV.
As The Globe and Mail's Susan Krashinsky and Iain Marlow reported, Canada's media sector has been rapidly consolidating as companies are swallowed by the cable and satellite players that distribute their TV channels.
- BCE to acquire Astral Media for $3-billion
- Tim Kiladze's Streetwise: Astral had other options, chose BCE
Viterra in talks Canada's Viterra Inc. looks as though it will soon be swallowed up.
As The Globe and Mail's Boyd Erman and Paul Waldie reported, Switzerland's Glencore International PLC is in talks with Canada's Agrium Inc. and Winnipeg's Richardson family, working on a potential bid for Viterra, an agribusiness and grainhandling company that itself has grown through acquisitions.
Viterra said this week it has started an auction process, having already said there were interested parties.
Glencore would get some Canadian assets and, notably, Viterra's Australian operations. Agrium wants its farm supply stores across Canada, while Richardson International wants some of its grain assets.
U.S., Europe diverge The economies of the United States and the euro zone are showing increasing signs of moving to different drummers.
While the U.S. economy picks up, slowly but surely, the embattled nations of the euro zone are trying to tough it out amid mounting troubles.
The 17-member monetary union is believed to be in the midst of a mild recession, whereas policy makers in the United States are seeing signs of growth, even in the labour market.
"We now appear to be at the beginning of a striking divergence between the world’s two largest economies," Andrew Kenningham, senior global economist at Capital Economics in London.
"In the fourth quarter of 2011, GDP was already above its pre-crisis level in the U.S., but it was well below this level in the euro zone," he said in a report this week.
"Moreover, business surveys suggest this trend has continued in early 2012, and diverging unemployment rates will reinforce this trend," he added.
- Fed's less gloomy analysis reduces likelihood of stimulus
- Euro zone not out of the woods, RBC executive warns
- Eric Reguly: The calm before Europe's next debt storm
Twelve things 1. I'm not sure why the Pope needs perfume. But, The Guardian reports, the pontiff has commissioned an eau de cologne, made just for him and with a hint of lime, from well-known perfume maker Silvana Casoli. Possible the Pope simply misunderstood when he heard she also catered to Madonna?
2. Tweet of week, from @Pawelmorski: "I can officially confirm that the EM bond desk at Goldman does not find having the Muppet Show theme tune played to them funny."
3. Spotted in a Los Angeles lineup Friday waiting for the new iPad: Apple co-founder Steve Wozniak. He thought it would be fun.
4. "Lawyers are going through difficult times," Maurizio De Tilla, the president of Italy's United Lawyers Organization, said as he led a strike in Rome this week. LMAO.
5. I don't know a lot about cows, but Jocko Besne obviously had an interesting life. According to Agence France Presse, Jocko fathered at least 161,888 and possibly up to 400,000 Prim'Holstein cows. Jocko died this week after 1.7 million sperm donations. Yeah, that would kill you, though the French farming co-op that raised him said he died of natural causes.
6. Runner up tweet of the week, from @matteastwood: "Wow, one share of Apple stocks costs more than a new iPad."
7. There is - was - a celebrated, genetically weird bunny born with no ears in Germany. So celebrated, in fact, that his picture was splashed across newspapers, and he was to be the star of a news conference. Until a TV cameraman accidentally stepped on him.
8. The Gettysburg Museum and Visitor Centre has decided to stop selling Bobbleheads of John Wilkes Booth, complete with pistol, The Evening Sun of Hanover reports. According to the manufacturer, dolls of the man who assassinated Abraham Lincoln were made as a joke a few months ago for those who can't get enough Civil War stuff.
9. Gold, silver, copper wire and ... Tide. According to The Associated Press, Tide has become a favourite for thieves because it sells well on the black market. In fact, police in the Washington area raided a suspected drug dealer last fall and, along with cocaine, found about 20 big bottles of the liquid detergent.
10. Great line from Natalie Peace at Forbes.com: "It pains me to see people sending e-mails all day long to colleagues that sit 15 feet away from them."
11. When I first read this Bloomberg report on what Germany's Angela Merkel told reporters in Rome this week, I had visions of Julie Andrews in the hillside scene in The Sound of Music: "We’ve come a good way along the mountain path, but we’re not completely over the mountain. I suspect that in the next few years there will continue to be new mountains - there won’t be a celebratory event in which we say we’re over the mountain and now we can sit among the trees and say that we’ve done it."
12. Even if I owned shares in Liquor Stores N.A. Ltd. , I'd be pleased by the tradeoff noted in the management discussion and analysis the company filed this week as it released fourth-quarter results: "Although management expects results throughout 2012 may be negatively affected by the continued pressure on consumer spending habits in Alberta as public awareness of the government of Alberta’s proposed new impaired driving legislation continues to garner media attention, early information in British Columbia indicates that consumer spending habits may be returning to the levels in place prior to the October 2010 implementation of similar new impaired driving laws in that province (which should help lessen the anticipated effect of the new Alberta legislation)."
Another point worth noting from the fourth-quarter statement: "In Alberta same store sales increases in resource communities achieved growth in excess of 10 per cent."
And this, on its performance for the year: "Same store sales increases in Alberta and Alaska were offset by marginal same store sales decreases in British Columbia and Kentucky." They make their own stuff in their backyards in Kentucky, right? I've seen Justified.
In the markets Not a bad week for stocks, depending on where you invest. The S&P 500 gained 2.4 per cent, boosted by U.S. banks in the wake of the Federal Reserve's stress tests. But Toronto's S&P/TSX composite slipped 0.1 per cent.
"The performance in Canada continues to be woefully inferior," said Robert Kavcic of BMO Nesbitt Burns.
Required reading this week Buoyed by a focus on mattresses that offer up comfy margins, as well as a restructuring that better matches inventory with demand, The Brick is well on its way to recovery. Marina Strauss and Tim Kiladze look at the company.
It’s costing the energy patch $50-million for every day that Canadian oil sells on the cheap, Nathan VanderKlippe writes.
Canadian companies that sent call centre jobs overseas by the thousands last decade have started to bring them back home, giving new life to a sector that became the darling of the nation’s economy in the 1990s. Sean Silcoff reports.
Calvin McDonald is borrowing from Loblaw’s fashion playbook to help breathe new life into Sears Canada Inc., Marina Strauss writes.
As the Greek economy dominates headlines around the world, another story has emerged: The rise of Greek yogurt. Susan Krashinsky reports.
What to watch for next week Statistics Canada is expected to report next Friday that inflation picked up somewhat in February, driven by higher gas prices. Economists believe Canada's annual inflation rate rose in February to about 2.6 per cent or 2.7 per cent, with prices rising 0.4 per cent or 0.5 per cent in February alone. The overall pace of inflation was 2.5 per cent in January. The so-called core inflation rate, which strips out volatile items, is projected to be 2.2 per cent, up from 1.1 per cent.
"In January overall consumer prices rose a strong 0.4 per cent reflecting gasoline prices rising 2.8 per cent after seven months of decline as crude oil prices have started to move higher out of concern about supply disruptions in the Middle East," said Paul Ferley and Tom Porcelli of Royal Bank of Canada.
"Weekly gasoline price surveys suggest that this pressure continued in February with the rate of increase for this component strengthening to 3.7 per cent."
We'll get the latest provincial budgets from Quebec on Tuesday and Saskatchewan on Wednesday.
"In its fall update, the province of Quebec penciled in a $1.5-billion deficit for the upcoming fiscal year (a relatively modest 0.4 per cent of GDP), down from $3.8-billion in fiscal year 2011-2012," said BMO's Mr. Kavcic.
"With an election likely looming in the near term, the province might not be as adamant to wield the axe as some other provinces, or the federal government," Mr. Kavcic said in a report this week.
"To be fair, Quebec has already done significant fiscal repair work, lifting the QST by 2 percentage points, hiking user fees and restraining spending growth. Meantime, the province of Saskatchewan boasts one of Canada’s most enviable fiscal positions, with a $353-million (0.5 per cent of GDP) surplus projected for fiscal year 2011-2012. Resource revenues will no doubt be a major factor in this budget (they made up 25 per cent of total at last check), but don’t expect a free-spending document like the one tabled by fellow resource heavyweight Alberta."
In the markets, there will be several quarterly reports worth watching, including those by Oracle Corp., Tiffany and Co., New Flyer Industries Inc., FedEx Corp., Lululemon Athletica Inc. and Nike Inc.
|TSX-I S&P/TSX Composite||13,304.92||
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|SPX-I S&P 500||1,792.81||
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|BCE-T BCE Inc.||46.67||
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|LIQ-T Liquor Stores N.A.||14.62||
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|GS-N Goldman Sachs||168.70||
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