These are stories Report on Business is following Wednesday, Oct. 17, 2012.
FBI arrests suspect
A joint U.S. terrorism task force has arrested a 21-year-old suspect, alleging the man believed he was about to bomb the Federal Reserve Bank of New York, but was caught in a sting by undercover agents.
The FBI said there were components for a bomb, but there was no actual explosive device.
No charges have been proven in court, and there was never a threat to the public, the FBI said, citing the fact that two of the men he allegedly believed were accomplices were actually an FBI source and an undercover agent.
“As alleged in the complaint, the defendant came to this country intent on conducting a terrorist attack on U.S. soil and worked with single-minded determination to carry out his plan," said Loretta Lynch, the U.S. Attorney for the Eastern District of New York.
"The defendant thought he was striking a blow to the American economy," she said in a statement.
"He thought he was directing confederates and fellow believers. At every turn, he was wrong, and his extensive efforts to strike at the heart of the nation’s financial system were foiled by effective law enforcement. We will use all of the tools at our disposal to stop any such attack before it can occur. We are committed to protecting the safety of all Americans, including the hundreds of thousands who work in New York’s financial district."
The man faces charges of attempting to use a weapon of mass destruction and attempting to provide material support to al Qaeda.
The man is alleged to have come to the United States early this year "for the purpose of conducting a terrorist attack on U.S. soil," the FBI said, alleging the suspect believed he would be setting off a 1,000-pound bomb at the Fed building in lower Manhattan.
He is also accused of buying components for the detonator and trying to build the bomb, with bags of what he thought were explosives that came from an FBI undercover agent.
"Attempting to destroy a landmark building and kill or maim untold numbers of innocent bystanders is about as serious as the imagination can conjure," acting assistant director Mary Galligan said in a statement.
"The defendant faces appropriately severe consequences. It is important to emphasize that the public was never at risk in this case because two of the defendant's 'accomplices' were actually an FBI source and an FBI undercover agent."
Nike chairman Phil Knight on sponsorship of Tiger Woods, in an interview with Sports Business during the golfer’s infidelity scandal in 2009:
“One of the things we always try to do when we have a big endorsement is check out the character and the pattern of the individual. But you’re not going to get it right all the time, and if you’re going to be in the business you have to recognize that … Obviously, he was one we checked out and he came out clean, and I think he’s been really great. When his career is over, you’ll look back on these indiscretions as a minor blip, but the media is making a big deal out of it right now.”
Nike on the sponsorship deal with Lance Armstrong, in a statement today during the racer’s doping scandal:
“Due to the seemingly insurmountable evidence that Lance Armstrong participated in doping and misled Nike for more than a decade, it is with great sadness that we have terminated our contract with him. Nike does not condone the use of illegal performance enhancing drugs in any manner.”
Of course, they’re different. Just pointing it out given that sponsorships are supposed to be all about stand-up guys people can look up to.
(Just pointing out, too, that as Nike cut Mr. Armstrong loose, Adidas signed up Justin Bieber for its NEO label. Mr. Bieber doesn’t need dope because he’s on a natural high: “I found a real connection with NEO because is about fashion, freedom and being true to who you are.”)
HBC files for IPO
Hudson’s Bay Co. , the country’s oldest retailer, plans to go public in an initial offering that sources expect could raise as much as $400-million, The Globe and Mail's Marina Strauss reports.
The offering, which would return the venerable retailer into public hands after it was taken private in 2006, would include the Bay – whose name will change to Hudson’s Bay – home decor chain Home Outfitters and U.S. department-store retailer Lord & Taylor.
The prospectus was filed today.
RIM's Heins responds
Research In Motion Ltd. chief Thorstein Heins has responded to an unflattering New York Times piece by saying BlackBerry users take “pride” in using the mobile device.
Mr. Heins was responding to a lengthy piece in the newspaper that quoted BlackBerry users who said they were ashamed at the lack of things the device can do.
“I’ve just come from visiting carriers and partners in all parts of the world, and they have told me that there are millions of BlackBerry fans out there who not only find great value in their device, but also pride in being a BlackBerry owner,” Mr. Heins said in a letter to the editor.
“While any report of dissatisfaction among our users is a cause for concern that I take very seriously, the comments supporting BlackBerry both online and in calls we’ve received from our customers in response to your article are encouraging to me.”
The response came on the same day that a new study showed the number of smartphone users now tops 1 billion.
“The world’s first modern smartphone, the Nokia Communicator, was introduced in 1996,” said senior analyst Scott Bicheno of Strategy Analytics.
“Nokia remained a dominant force in smartphones for over a decade until the arrival of Apple’s iconic iPhone in 2007,” he said.
“The iPhone revolutionized smartphone design and it catalyzed industry growth.”
Strategy Analytics put the number of smartphones in use around the world at 1.038 billion in the third quarter of the year, compared to an estimated 708 million a year earlier.
And that can only grow.
“We estimate one in seven of the world’s population owned a smartphone in the third quarter of 2012,” said Neil Mawston, the group’s executive director.
“Smartphone penetration is still relatively low. Most of the world does not yet own a smartphone and there remains huge scope for future growth, particularly in emerging markets such as China, India and Africa. The first billion smartphones in use worldwide took 16 years to reach, but we forecast the next billion to be achieved in less than three years, by 2015.”
Potash cuts outlook
Potash Corp. of Saskatchewan is cutting its profit outlook, largely because of delays in signing new deals with Chinese and Indian buyers.
The agricultural giant said today 2012 earnings per share will come in “below the low end” of its earlier projection of $2.80 (U.S.) to $3.20, The Globe and Mail’s Bertrand Marotte reports.
For the third quarter, earnings per share are now projected at the low end of its 70-cent to 90-cent forecast.
“The change primarily reflects lower than forecasted potash sales volumes due to delays in new contracts with buyers in China and India,” the company said.
Just yesterday, CIBC World Markets analyst Jacob Bout cut his price target on Potash shares to $46 from $54, also cutting his view of Agrium Inc. and The Mosaic Co., the other major producers.
His target on Agrium fell to $121 from $125, and on Mosaic to $64 from $72.
“The continued deterioration in potash demand has resulted in pricing pressure in key markets such as China and Brazil,” Mr. Bout said in his report on Potash Corp.
“With no stabilizer in sight, the threat of a potash ‘holiday’ in China and India has become the most likely scenario given current market conditions in these regions.”
Oil patch hops
Canada’s oil patch is hopping today with news of a few deals.
First, ExxonMobil Corp. has struck a $3-billion deal for Celtic Exploration Ltd., offering $24.50 a share and half a share in a new company to be created. That over all price includes debt.
Celtic’s main oil and gas business is in central Alberta, and it holds land in the Montney and Duvernay gas plays.
Separately today, Penn West Petroleum Ltd. Unveiled deals to sell $1.3-billion in non-core assets.
- Penn-West to sell $1.3-billion worth of non-core properties
- Exxon bids $3.1-billion to buy Canada's Celtic Exploration
U.S. housing starts surge
As JPMorgan Chase and Co.’s Jamie Dimon noted last week, the U.S. housing market appears to be turning the corner.
It just so happens that Canada’s residential real estate market is heading down at just about the same time.
The latest numbers released today show construction starts in the United States surging by 15 per cent in September, to an annual pace of 872,000. And that’s up from August. From a year ago, it’s up by almost 35 per cent.
Housing starts are now at their best showing in about four years.
Building permits also climbed, by almost 12 per cent.
"The rising optimism within the new build sector, as indicated by yesterday’s reported sixth consecutive monthly increase in homebuilders’ confidence to its highest level since 2006, as well as the elevated level of building permits suggest that the housing market should maintain this momentum over the coming months and we continue to expect overall housing market conditions to improve gradually over the forecast horizon," said economist David Onyett-Jeffries of Royal Bank of Canada.
Of course, in Canada, construction starts remain strong, but that’s not expected to last.
And the latest measure of the resale housing market showed sales down 15 per cent in September.
- U.S. housing starts surge to fastest pace since 2008
- Toronto condo resales falter as listings climb
- Canada's housing markets: Who's winning, who's losing
- Year-over-year home sales plunge 15.1 per cent in September
- Mike Moffatt's Economy Lab: Why Justin Trudeau runs the risk of policy by association
- Hudson's Bay Co. files for IPO
- Yellow Media strikes deal to end debt-swap dispute
- Bank of America profit drops on settlement, charges
- PepsiCo's profit dips amid turnaround push
- Potash Corporation of Saskatchewan Inc$22.010.00(0.00%)
- Agrium Inc$122.770.00(0.00%)
- Mosaic Co$23.230.00(0.00%)
- Penn West Petroleum Ltd$1.700.00(0.00%)
- Exxon Mobil Corp$81.240.00(0.00%)
- Apple Inc$145.820.00(0.00%)
- Nokia Corp$6.340.00(0.00%)
- Nike Inc$53.280.00(0.00%)
- Updated June 26 4:00 PM EDT. Delayed by at least 15 minutes.