Stocks perk up as investors look past dismal jobs data toward stimulus –TSXs first close above 9000 since Jan 9
· TSX +147.04Dismal employment news couldn't stop North American stock markets from registering solid gains for a 4th day as investors look ahead to the U.S. economic stimulus program and an announcement of aid for the financial sector.
· DOW +217.52 The main driver is the Obama administration fiscal stimulus package and the announcement about the financial system and positive data we're seeing from China," said Jennifer Dowty, portfolio manager at MFC Global Investment Management
· Dollar +.29c to 81.52USD
· Oil -$1.61 to $39.56US per barrel. Oil prices dropped below US$40 as the government reported U.S. employers slashed more than a half million jobs last month, the most in 35 years.
· Gold +$.30 to913.90 USD per ounce
· Canadian 5 yr bond yields - .4bps to 1.93
· http://www.financialpost.com/markets/market_data/money-yields-can_us.html
Monday Chuckle:
In the US, foreclosures are high, unemployment is high, Michael Phelps is high…..
Monday, February 9, 2009
Friday, February 6, 2009
Financial Update for Feb. 6,2009
Canada lost 129,000 jobs in January, the worst month of employment loss on record. The decline was far greater than anticipated and bumped the unemployment rate to 7.2
· TSX +167.89higher for a third straight session in a broad rally led by strength in the key energy and materials groups, which rose on higher commodity prices.
· DOW +106.41
· Dollar +.06c to 81.23USD
· Oil +$.85 to $41.17US per barrel.
· Gold +$12.00 to913.60 USD per ounce
· www.bankofcanada.ca/en/rates/bond-look.html Canadian bond prices
Canada posts record monthly job lossThe Canadian economy lost a startling 129,000 jobs in January -– almost all full-time positions, Statistics Canada reported Friday, bringing the cumulative total for the last three months to 234,000 and pushing the unemployment rate to 7.2% from 6.6%.
The consensus among Bay Street economists was that roughly 40,000 jobs disappeared in the first month of 2009. The economy lost 71,000 jobs and 34,000 jobs, respectively, in November and December.
Statscan said the drop in employment was most pronounced in manufacturing, where the net loss totalled 101,000. There were declines in a number of other industries as well. The only industry with notable gains was health care and social assistance, where employment increased by 31,000.
Canada's three largest provinces accounted for the entire employment decrease in January. While just over half of employment losses were in Ontario, 71,000, there were also large declines in both British Columbia, 35,000, and Quebec, 26,000. Employment was little changed in all other provinces.
A report this week from the economics team at Toronto-Dominion Bank indicated that the country stands to lose 325,000 jobs in 2009 as major industries slash production in response to weaker demand, pushing the unemployment rate to 8.8%. Meanwhile, Bank of Nova Scotia forecasts job losses of 220,00 this year with the unemployment rate settling at 8%. The recent federal budget said the stimulus measures would create or maintain 190,000 jobs.
Info below from:
Fraud hunting gets a boost in recession
John Shmuel, Financial Post "There's a direct correlation in the downturn of the economy and the increase of fraudulent activity," he says. "There's a number of reasons for that, not the least of which are desperate times call for desperate measures."
Mike Savage, head of Ernst & Young's fraud investigation and dispute services group, says it always comes down to opportunity. "Fraud is a human behaviour. At any point in time, an individual can feel the pressure to commit fraud -- they see the opportunity, and they can somehow rationalize it in their head that it's OK."
In 2007, according to Mr. Filliter, Canadian corporations lost an estimated $30-billion to fraud. That staggering sum has most likely increased for 2008, he says, and may explode in 2009 unless corporations take steps to protect themselves.
· TSX +167.89higher for a third straight session in a broad rally led by strength in the key energy and materials groups, which rose on higher commodity prices.
· DOW +106.41
· Dollar +.06c to 81.23USD
· Oil +$.85 to $41.17US per barrel.
· Gold +$12.00 to913.60 USD per ounce
· www.bankofcanada.ca/en/rates/bond-look.html Canadian bond prices
Canada posts record monthly job lossThe Canadian economy lost a startling 129,000 jobs in January -– almost all full-time positions, Statistics Canada reported Friday, bringing the cumulative total for the last three months to 234,000 and pushing the unemployment rate to 7.2% from 6.6%.
The consensus among Bay Street economists was that roughly 40,000 jobs disappeared in the first month of 2009. The economy lost 71,000 jobs and 34,000 jobs, respectively, in November and December.
Statscan said the drop in employment was most pronounced in manufacturing, where the net loss totalled 101,000. There were declines in a number of other industries as well. The only industry with notable gains was health care and social assistance, where employment increased by 31,000.
Canada's three largest provinces accounted for the entire employment decrease in January. While just over half of employment losses were in Ontario, 71,000, there were also large declines in both British Columbia, 35,000, and Quebec, 26,000. Employment was little changed in all other provinces.
A report this week from the economics team at Toronto-Dominion Bank indicated that the country stands to lose 325,000 jobs in 2009 as major industries slash production in response to weaker demand, pushing the unemployment rate to 8.8%. Meanwhile, Bank of Nova Scotia forecasts job losses of 220,00 this year with the unemployment rate settling at 8%. The recent federal budget said the stimulus measures would create or maintain 190,000 jobs.
Info below from:
Fraud hunting gets a boost in recession
John Shmuel, Financial Post "There's a direct correlation in the downturn of the economy and the increase of fraudulent activity," he says. "There's a number of reasons for that, not the least of which are desperate times call for desperate measures."
Mike Savage, head of Ernst & Young's fraud investigation and dispute services group, says it always comes down to opportunity. "Fraud is a human behaviour. At any point in time, an individual can feel the pressure to commit fraud -- they see the opportunity, and they can somehow rationalize it in their head that it's OK."
In 2007, according to Mr. Filliter, Canadian corporations lost an estimated $30-billion to fraud. That staggering sum has most likely increased for 2008, he says, and may explode in 2009 unless corporations take steps to protect themselves.
Thursday, February 5, 2009
Financial Update for Feb. 5,2009
· TSX +64.46Commodity stocks led the gains while falling financial stocks held things back
· DOW-121.70 U.S. trends contrasted with strong gains overseas
· Dollar -.12c to 81.17USD Concerns about the U.S. government's plan to stabilize the bank sector prompted a move back into the greenback, considered a safe-haven play, and undid the Canadian currency's early move to its highest level since Friday.
· Oil -$.46 to $40.32US per barrel.
· Gold +$9.70 to902.70 USD per ounce
· www.bankofcanada.ca/en/rates/bond-look.html Canadian bond prices
Has Obama shut down the party on Wall Street?
Janet Whitman, Financial Post
After years of increasingly bloated pay packages, top executives could soon see their lavish lifestyles crimped as Barack Obama, the U.S. President, unveiled plans Wednesday to crack down on compensation.
Critics were quick to slam his suggestions, arguing enforced pay cuts would lead to an exodus of capable executives and make it tough for companies to recruit and retain top talent.
"No one goes into Wall Street to save the world," Meredith Whitney, a bank industry analyst for Oppenheimer & Co., told Bloomberg Television. "Compensation is the motivating factor."
Top executives at companies receiving "exceptional" bailout funds from the U.S. government will have salaries capped at US$500,000, under the new rules outlined by Mr. Obama and Timothy Geithner, the Treasury Secretary.
Companies would also face more scrutiny of travel on corporate jets, office renovations and holiday parties. Mr. Obama also said he wanted to take the "air out of golden parachutes" for departing executives.
He said the actions were necessary because of "shameful" behaviour by Wall Street executives.
"We all need to take responsibility. And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses."
Mr. Obama said the cap strikes the right "balance" between fair compensation and proper stewardship of taxpayer funds.
"This is America. We don't disparage wealth. We don't begrudge anybody for achieving success.
And we believe that success should be rewarded. But what gets people upset - and rightfully so - are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers.
"For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste, it's a bad strategy - and I will not tolerate it as President."
The crackdown comes as Americans have grown increasingly irate over banks paying huge bonuses, while posting record losses and getting hundreds of billions in aid from taxpayers.
According to the New York state comptroller's office, big banks and securities firms in the Big Apple paid more than US$18-billion in bonuses last year.
At the same time, the city's six largest financial firms lost more than US$42-billion and received US$90-billion in government bailout money.
Many Wall Street analysts and industry observers do not believe a pay cap is the solution, and Wall Street could end up losing many of its best and brightest just when it needs them most.
"If President Obama succeeds in limiting CEO pay to $500,000, it will create two distinct markets for CEO talent," said Peter Cohan, an investment consultant and business professor at Babson College in Wellesley, Mass.
"One relatively small one which, for reasons of altruism, is willing to take a pay cut to run a government-owned entity. And the second, much larger one, which continues to rake in millions without suffering from all the public opprobrium that has befallen various banks and insurance executives over the last few months."
For now, the US$500,000 cap will not be as far-reaching as some corporate chieftains might have feared.
Only companies that have received "exceptional assistance" are subject to the rule, which includes the provision any additional compensation be in restricted stock that will not vest until taxpayers have been repaid.
So far, that restriction would seem only to apply to companies in particularly bad shape, such as insurer American International Group, financial services giants Bank of America and Citigroup, and automakers General Motors and Chrysler, which each have received tens of billions in bailout money.
Companies that already have received taxpayer aid will only have to abide by the new pay restriction if they return for more funds.
But CEOs at other companies are bound to feel the pinch in other ways as the Obama administration's increased scrutiny leads to a reduction in perks, such as trips on the company jet to lavish vacations at luxury resorts.
Goldman Sachs, considered among the healthiest banks on Wall Street, already is looking at how to avoid such restrictions.
The Wall Street bank is eager to repay the US$10-billion in bailout it received in October so it does not have to follow limits it agreed to when it accepted the funds.
"There are pretty minor, at this point, executive compensation restrictions and we'd like to get out from under those," David Viniar, Goldman's chief financial officer, said at a financial services conference in Florida.
One Wall Street analyst accused Mr. Obama of playing to the crowd.
"This is pure political grandstanding. If the limit has bite, it will be counterproductive and the unintended consequences will hurt the U.S. as skilled and bright senior managers make choices," said David Kotok, chief investment officer at Cumberland. "If the limits have loopholes, they are a sham. Industrial policies fail. So will this one."
· DOW-121.70 U.S. trends contrasted with strong gains overseas
· Dollar -.12c to 81.17USD Concerns about the U.S. government's plan to stabilize the bank sector prompted a move back into the greenback, considered a safe-haven play, and undid the Canadian currency's early move to its highest level since Friday.
· Oil -$.46 to $40.32US per barrel.
· Gold +$9.70 to902.70 USD per ounce
· www.bankofcanada.ca/en/rates/bond-look.html Canadian bond prices
Has Obama shut down the party on Wall Street?
Janet Whitman, Financial Post
After years of increasingly bloated pay packages, top executives could soon see their lavish lifestyles crimped as Barack Obama, the U.S. President, unveiled plans Wednesday to crack down on compensation.
Critics were quick to slam his suggestions, arguing enforced pay cuts would lead to an exodus of capable executives and make it tough for companies to recruit and retain top talent.
"No one goes into Wall Street to save the world," Meredith Whitney, a bank industry analyst for Oppenheimer & Co., told Bloomberg Television. "Compensation is the motivating factor."
Top executives at companies receiving "exceptional" bailout funds from the U.S. government will have salaries capped at US$500,000, under the new rules outlined by Mr. Obama and Timothy Geithner, the Treasury Secretary.
Companies would also face more scrutiny of travel on corporate jets, office renovations and holiday parties. Mr. Obama also said he wanted to take the "air out of golden parachutes" for departing executives.
He said the actions were necessary because of "shameful" behaviour by Wall Street executives.
"We all need to take responsibility. And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses."
Mr. Obama said the cap strikes the right "balance" between fair compensation and proper stewardship of taxpayer funds.
"This is America. We don't disparage wealth. We don't begrudge anybody for achieving success.
And we believe that success should be rewarded. But what gets people upset - and rightfully so - are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers.
"For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste, it's a bad strategy - and I will not tolerate it as President."
The crackdown comes as Americans have grown increasingly irate over banks paying huge bonuses, while posting record losses and getting hundreds of billions in aid from taxpayers.
According to the New York state comptroller's office, big banks and securities firms in the Big Apple paid more than US$18-billion in bonuses last year.
At the same time, the city's six largest financial firms lost more than US$42-billion and received US$90-billion in government bailout money.
Many Wall Street analysts and industry observers do not believe a pay cap is the solution, and Wall Street could end up losing many of its best and brightest just when it needs them most.
"If President Obama succeeds in limiting CEO pay to $500,000, it will create two distinct markets for CEO talent," said Peter Cohan, an investment consultant and business professor at Babson College in Wellesley, Mass.
"One relatively small one which, for reasons of altruism, is willing to take a pay cut to run a government-owned entity. And the second, much larger one, which continues to rake in millions without suffering from all the public opprobrium that has befallen various banks and insurance executives over the last few months."
For now, the US$500,000 cap will not be as far-reaching as some corporate chieftains might have feared.
Only companies that have received "exceptional assistance" are subject to the rule, which includes the provision any additional compensation be in restricted stock that will not vest until taxpayers have been repaid.
So far, that restriction would seem only to apply to companies in particularly bad shape, such as insurer American International Group, financial services giants Bank of America and Citigroup, and automakers General Motors and Chrysler, which each have received tens of billions in bailout money.
Companies that already have received taxpayer aid will only have to abide by the new pay restriction if they return for more funds.
But CEOs at other companies are bound to feel the pinch in other ways as the Obama administration's increased scrutiny leads to a reduction in perks, such as trips on the company jet to lavish vacations at luxury resorts.
Goldman Sachs, considered among the healthiest banks on Wall Street, already is looking at how to avoid such restrictions.
The Wall Street bank is eager to repay the US$10-billion in bailout it received in October so it does not have to follow limits it agreed to when it accepted the funds.
"There are pretty minor, at this point, executive compensation restrictions and we'd like to get out from under those," David Viniar, Goldman's chief financial officer, said at a financial services conference in Florida.
One Wall Street analyst accused Mr. Obama of playing to the crowd.
"This is pure political grandstanding. If the limit has bite, it will be counterproductive and the unintended consequences will hurt the U.S. as skilled and bright senior managers make choices," said David Kotok, chief investment officer at Cumberland. "If the limits have loopholes, they are a sham. Industrial policies fail. So will this one."
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