News

Top stories from Report on Business today :

U.S. senator unveils sweeping financial bill The chairman of the U.S. Senate banking committee introduced a regulatory reform bill that goes well beyond earlier ideas, proposing new government agencies on financial stability, bank supervision and consumer protection. The bill by Democratic Senator Christopher Dodd. of Connecticut, raises the ante in the raging debate about tighter bank and capital market regulation. The proposal calls for a new super-bank regulator, the Financial Institutions Regulatory Administration, which would consolidate the bank supervisory powers of four current regulators and abolish the Office of Thrift Supervision and the Office of the Comptroller of the Currency. Under the proposed bill, the Federal Deposit Insurance Corp. and the Federal Reserve would lose their roles as direct bank supervisors. The bill goes further than earlier proposals from the Obama administration and one under development in the House of Representatives, both of which seek more modest centralization of bank supervision. The Dodd bill is expected to win little support from the Republicans, promising still more debate, and observers expect no final action by the Senate until next year. Read the story

Britain's biggest banks signal bad debts near peak

Britain's two biggest banks, HSBC Holdings PLC and Barclays PLC, reported strong investment banking profits today and signalled that bad debts may be nearing their peak, raising hopes the worst of the financial crisis is over for them. The success of HSBC and Barclays in weathering the storm — both rebuffed a government bailout of the banking system — contrasts with their beleaguered taxpayer-supported counterparts including Lloyds Banking Group PLC, which announced plans today to shed 5,000 more jobs. HSBC provided the most upbeat trading update, with chief executive Michael Geoghan declaring that “the biggest jolt has now passed through the global economy.” Notably, both banks cautiously suggested that provisions for bad debts appeared to be nearing a ceiling. Read the story

Energy agency warns of fall in energy supply

The International Energy Agency warned today that a dangerous drop in global energy investment could choke off the recovery. The warning from the Paris-based agency comes just a month ahead of the major United Nations climate conference in Copenhagen, where world leaders hope to agree on so-called climate finance to help developing countries cut emissions by switching from fossil fuels to cleaner energy such as wind and solar. The IEA, a policy adviser to 28 mostly industrialized oil-consuming nations, estimates that the financial and economic crisis is responsible for a $90-billion (U.S.) drop in global oil and gas investment this year, a 19-per-cent cut from 2008. The subsequent drop in oil and electricity supplies could “undermine the sustainability of the economic recovery,” the agency said. Read the story

Why the fight for Cossette may be over

Cossette Inc. KOS-T stock rose sharply on the TSX today after the company announced it had agreed to be acquired by a U.S. investment firm, Mill Road Capital, for $7.87 a share. That's well above a hostile bid of $4.95 a share from a group of former Cossette executives, put forward in the summer, and may signal the end of the advertising company's fight for a better deal. Given the new deal with Mill Road, Cossette has set a high bar for competing offers. The takeover vehicle of the group of former executives, Cosmos Capital, doesn't have deep-pocketbacking from a group such as another advertising company, signalling the fight for the company may be over. Read Streetwise by Andrew Willis

U.S. unemployment to remain high

The U.S. economy may be finally growing again, but jobs will be slow in coming back, Federal Reserve officials say. Presidents of Federal Reserve banks in San Francisco and Atlanta say the rebound simply won't be sharp enough to make a significant dent in unemployment yet. The U.S. jobless rate now stands at 10.2 per cent and millions of Americans are without work. “With such a slow rebound, unemployment could well stay high for several years to come,” Janet Yellen of the San Francisco Fed said in a speech today. “In other words, our recovery is likely to feel like something well short of good times.” Read the story

Japan risks debt downgrade

Japan's new government is scrambling to deal with a stunning increase in the country's debt. Fitch Ratings today warned Japan it's at risk of a ratings downgrade if it cannot stick to its targets. The International Monetary Fund, for example, projects Japan's debt will hit almost 230 per cent of gross domestic product by 2010, for the worst showing among the Group of Seven industrialized nations. Also this morning, fresh data showed Japan's trade surplus narrowed in September as imports rose 5.9 per cent and exports 2.5 per cent, as global trade gathers steam again. Read the story

Rona cites first signs of recovery

Canada's biggest home renovation retailer says it has seen the first signs of recovery in the industry. Rona Inc. RON-T said today its third-quarter profit fell to $49.1-million or 38 cents a share from $52.5-million or 45 cents as revenue dipped about 4 per cent to $1.3-billion. The company cited a drop in home construction, sagging consumer confidence and poor weather. Still, said chief executive Robert Dutton, “as anticipated, we glimpsed the first signs of recovery in our industry during the third quarter … The business environment is increasingly favourable to real estate activity over all. Very low mortgage rates and the popularity of the renovation tax credits should continue to stimulate renovation activity across the country.”

There's no business like show business

Canadians love a night out at the movies, particularly when times are tough. Again this morning, Cineplex Galaxy Income Fund CGX.UN-T posted strong third-quarter results, helped along by the likes of some dinosaurs and some basterds. And popcorn, of course. Cineplex profit jumped to $20.4-million in the third quarter from $18.4-million a year earlier and revenue rose to $257.5-million from $239.1-million. Box-office revenue was its highest ever. Among its top movies in the quarter were Harry Potter and the Half Blood Prince , Ice Age: Dawn of the Dinosaurs , District 9 and Inglourious Basterds . Read the story

Why break-ins are down in some U.S. cities

If there can be any silver lining in the U.S. job crisis, it's this: with more people at home, break-ins are on the decline in some areas. The Associated Press reports that in Minneapolis, for example, burglaries were down more than 15 per cent in the first nine months of the year. In Boston, there have been 335 fewer break-ins. And in Aurora, outside Chicago, home burglaries fell more than 15 per cent. That's not to suggest break-ins are down across the country – they are rising in some cities. But it's worth noting that in Chicago, the rate of increase is slowing. And in some cities that were already reporting a decline, the decline is speeding up. “With a lot more unemployed people, a lot more people are staying home, and they see more in their neighbourhood,” Sgt. Thomas Lasater of the St. Louis County, Mo., police department told the news agency. Some police also cite the drop in prices of metals such as copper, which crooks had been stealing from vacant homes.

Madoff's lifestyle: Watches, furs, personalized jacket

The U.S. government is auctioning many of the personal belongings of Bernard and Ruth Madoff, including jewellery, furs and about 40 watches. The U.S. Marshals Service will auction about 200 items on the weekend, an attempt to raise at least $500,000 (U.S.) for Mr. Madoff's victims, The Wall Street Journal reports. Among the items cited by the newspaper: a blue satin Mets jacket with “Madoff” stitched on the back, three boogie boards, his-and-hers stationery, Rolexes, Audemars and Piguets, five fur coats, Tiffany place-card holders and three monogrammed polo shirts. Also on the block are a tea service, Prada and Hermes handbags, and ashtrays.

From today's Report on Business

U.S. dollar sags on global financial leaders' omission

Canadian Tire lays shopper Bob to rest

Will Bay Street bonuses get the boot?