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Is Apple planning an iPad with an even smaller screen?

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Smaller screen iPad in works, analyst says If the iPod nano can keep getting smaller, why not the iPad? Analyst Ashok Kumar of Rodman & Renshaw LLC says Apple Inc. could be preparing to unveil a new version of the tablet computer with a smaller screen. The screen on the iPad is now 9.7 inches, but the technology giant may be getting ready for a 7-inch version, Mr. Kumar said in a research note today, according to Bloomberg News. He based his research on discussions with Apple suppliers. Such a move, the news agency said, would be aimed at smaller devices such as Samsung Electronics Co.'s Galaxy Tab. The iPad - like all other things 'i' - has been hugely popular and sparked talk that others in the industry, such as Research In Motion Ltd. are planning something similar.

China's SAIC eyes GM stake The biggest auto maker in China, whose global ambitions seemingly know no bounds, is studying the possibility of buying into General Motors Co. when the U.S. company goes public again, The Wall Street Journal reports. SAIC Motor Corp. has expressed interest in a stake in a reborn GM when it returns to public markets this year, the newspaper said. The two companies have been partners in China for years. The newspaper notes that issue would be a thorny one for the U.S. government, which owns 61 per cent of GM, given the billions in aid the iconic auto maker received.

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U.S. recession declared over The U.S. recession ended in June of 2009, according to the group that determines such things. But that begs the question: With millions unemployment and millions who have lost their homes, do American's know it? The National Bureau of Economic Research said today that its Business Cycle Dating Commitee met yesterday via conference call and determined that the economy bottomed more than a year ago. "The trough marks the end of the recession that began in December 2007 and the beginning of an expansion," the group said. "The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months."

The NBER, though, gave a nod to the sputtering recovery and the extreme troubles left by the recession and the financial crisis: "In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favourable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales ... The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date."

The NBER announcement came just hours after the Organization for Economic Co-operation and Development downgraded its outlook for the U.S. economy, forecasting that it will expand just 2.6 per cent this year.

The recession killed the jobs of millions of Americans. Here's where things stand:

  • The U.S. jobless rate is at 9.6 per cent. The so-called underemployment rate, which includes those who have given up searching and part-time workers who'd prefer full-time work, is at 16.7 per cent. More than 8 million jobs were lost in 2008 and 2009.
  • The U.S. poverty rate is up for the third year in a row, to 14.3 per cent. More than 43 million people live in poverty and almost 51 million have no health insurance coverage.
  • The number of home foreclosures in the United States in August hit the highest monthly level since the beginning of the crisis.

"From a forecasting or market perspective, today's announcement means little, as investors are focused on the path of upcoming activity rather than what happened last year," Goldman Sachs Group Inc. economists said in a research note. "... However, the decision to mark June/Q2 2009 as the trough will fix an important comparison point for economists and other analysts seeking to understand how the economy, labor market, etc. have done 'since the recovery started.'"

The main event Markets are increasingly focused on tomorrow's meeting of the Federal Reserve, and whether the U.S. central bank will unveil any new measures to spur on the faltering recovery. The focus is on whether the Fed could resume large purchases of U.S. Treasuries in a move to drive down interest rates even further. But, The New York Times notes today, the meeting is the last for chairman Ben Bernanke before midterm elections in the U.S., and it's likely the Fed will hold off doing anything at such a "politically delicate moment." Coupled with that is the fact that economic indicators of late have been mixed.

"After moving to prevent a defacto tightening in policy at the last meeting ... the Fed must now decide whether to go 'all in' with more effective stimulus measures, such as actively buying Treasuries," said BMO Nesbitt Burns senior economist Sal Guatieri. "Lacklustre economic growth has kept unemployment stubbornly high, and core inflation is below the Fed's desired range. Although the recent data are probably not weak enough to spur further easing at this meeting, subpar GDP growth in the second half of the year should raise the deflation stakes, and force Bernanke's hand later in the year."

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Euro debt crisis eases Europe's debt crisis appears to be easing, according to bond dealers polled by Bloomberg News. Not only did Ireland say it won't need EU aid, a survey by the news agency of 15 banks that trade directly with Germany's debt agency indicates that the yields on government bonds of debt-troubled European countries are expected to decline to within 2.2 percentage points of the benchmark German paper. That's well below the highs seen earlier when the debt crisis was at its worst. This follows the austerity measures unveiled by several governments. "All the policy backstops have put a floor under the downside risks for peripheral euro-region bonds," Michael Vaknin, a senior fixed-income strategist in London at Goldman Sachs, told Bloomberg. "Spreads are near their records, but the EU and International Monetary Fund have pledged their support and opportunities are starting to emerge."

BHP has plans for Saskatchewan BHP Billiton Ltd. promises to make Saskatchewan the world headquarters of its potash operations no matter the outcome of it hostile $38.6-billion bid for Potash Corp. of Saskatchewan . "It's a good business for us and a good business for the people of this province," BHP chief executive officer Marius Kloppers said today during an event to officially open the Australian company's new offices in downtown Saskatoon. "Our aim is to build a material potash business and not jus one mine ... The centre of our potash business will be right here in Saskatchewan."

The office, located just up the street from Potash Corp.'s headquarters, was opened earlier this year as BHP works to develop its Jansen potash project a couple of hours from the city. BHP has said it will forge ahead with plans to build Jansen even if its bid for Potash Corp. succeeds.

Meet Nokia's Stephen Elop The Reuters news agency today takes an indepth look at Stephen Elop, the new, Canadian-born chief of Nokia Corp. . The first non-Finn to head the world's biggest mobile phone maker in its 145-year history starts his job this week, as many questions surround this company.

Ottawa reviews financial services sector Jim Flaherty says Canada's banking system may need a tune-up, but the engine, chassis, brakes and just about everything else are fine. The finance minister today launched a scheduled review of the relevant legislation - it happens every five years - saying there have already been extensive changes to regulation in the wake of the financial crisis, so the review probably won't mean major reforms. "Some fine-tuning to the system may be required, but wholesale change is not necessary," he said in a statement.

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Banks expected to boost dividends National Bank Financial analysts believe Canada's major banks will start boosting their dividends beginning next quarter and that, despite a slowing recovery, will see "attractive" growth in profits. National Bank of Canada and Toronto-Dominion Bank are the most likely to raise their dividends first, the analysts said. The banks had earlier been told by their regulator not to boost their dividends, and to hold off on stock buybacks and acquisitions, but that restraint has now been lifted.

"We argue that sustainable and attractive earnings growth will characterize the Canadian banking sector even in a slow growth recovery," the NBF report said. "Our analysis indicates that the bulk of earnings growth in the sector will come from the banks' core domestic franchises on the back of fairly tepid underlying earnings drivers - e.g., slow loan growth, decelerating improvement in provisions for credit losses. This suggests that [fiscal]2011's incremental earnings will be sustainable given that they come from the banks' core Canadian franchises. Thus, barring a relatively severe double-dip recession scenario, we forecast declining dividend payout ratios, which will trigger dividend raises in [fiscal]2011."

From today's Report on Business

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About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More

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