Nouriel RoubiniReuters
Today's top stories from Report on Business :
Obama unveils proposed bank rules
President Barack Obama today unveiled sweeping reforms to the U.S. financial sector, a moved aimed at limiting the size and scope of the major banks. Bank shares fell, dragging down U.S. stocks after the president proposed making financial institutions choose between commercial banking and proprietary trading for their own profit, declaring that "never again will the American taxpayer be held hostage by a bank that is too big to fail" and warning that if the banks want a fight, "it's a fight I'm ready to have." Analysts said the proposals, if approved by Congress, could affect trading at some of the country's biggest banks, including JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc.
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Reaction: 'There is no positive story here'
Timeline: From 'fat cats' to complete overhaul
Goldman Sachs rebounds to profit
Goldman Sachs Group Inc. rebounded to a fourth-quarter profit of $4.95-billion (U.S.), or $8.20 a share, compared to last year's loss of $2.29-billion, or $4.97. Goldman Sachs, a frequent target of criticism over big bonuses, took pains this morning as it reported results to point out that the quarter marked "our lowest ever compensation to net revenues ratio." The Wall Street giant, which has fared far better than its rivals, cut the amount set aside for compensation for the year to $16.19-billion from $16.7-billion at the end of the previous quarter. Read the story
Recovery speeding up, central bank says
The Bank of Canada today projected the economy will expand faster than expected from the second quarter through to early next year, largely because of a better outlook for the United States. But the central bank also warned in its quarterly Monetary Policy Report that a sustained recovery depends upon advanced economies cutting their debts and emerging countries, such as China, continuing to stoke demand. On Tuesday, the Bank of Canada left its benchmark overnight rate at 0.25 per cent and pledged to hold it at that historic low until at least mid-year depending on inflation. Read the story
China's economy surges
China's economy expanded at a stunning 10.7-per-cent pace in the fourth quarter, sparking more speculation, and fears in some quarters, that it will continue to tighten policy and threaten demand in the fast-growing country. "Markets continue to fret that China might hit the brakes too hard, but those fears are likely overdone," BMO Nesbitt Burns said this morning. "Chinese officials did everything possible to jump-start the economy, it's unlikely they're just going to reverse all that effort, as strong growth and job creation remain an important part of Chinese policy. The tightening will continue, but not enough to choke off the solid recovery." Read the story
Canadian Natural Resources plans expansion
Oil sands projects are quickly coming back to life. Earlier this week, ConocoPhillips and partner Total SA said they were pushing ahead with the second phase of their Surmont oil sands project, with plans to boost production to 110,000 barrels a day by 2015 from the current 27,000. A day later, Husky Energy and its partner BP said they were expecting to push ahead with work on their Sunrise project, having shaved $1-billion in costs. Today, Canadian Natural Resources said it expects to move ahead on two major projects this year, an expansion of its Horizon venture and its Kirby project in northeastern Alberta. Read the story
Roubini warns on stock prices
Nouriel Roubini, the New York University professor who predicted the financial crisis, warned today that the global stock rally could evaporate in the second half of this year given a weak recovery and asset bubbles. "The real economy is gradually recovering but since March asset prices have gone through he roof," Mr. Roubini said in Hong Kong, according to Bloomberg News. "If I'm correct, by the second half of the year there's going to be a slowdown of growth in the U.S., Europe and Japan. That could be the beginning of a market correction because the macroeconomic news is going to surprise on the downside."
Viterra posts small loss
Viterra Inc. fell to a small loss of $900,000 or less than a penny a share in the fourth quarter, a sharp turnaround from a profit of $46.8-million or 20 cents a share a year earlier, as revenue fell almost 18 per cent on what the agriculture giant said was a significant fall in commodity prices. There were also costs related to its takeover of Australia's ABB Grain Ltd. Still, chief executive officer Mayo Schmidt said in a statement that 2009 was a "defining" year for what used to be known as the Saskatchewan Wheat Pool as "we completed the year as a more geographically diverse company, yet we maintained the financial stability that has become our hallmark."
Greece says it can work out its debt woes
The Greek finance minister doth protest too much, methinks. Greek officials have been stressing to markets that it can work its way out of its debt crisis. But the markets aren't buying that, and the fiscal mess continues to hurt Greek stocks and bonds, and the euro. Yesterday, Greek finance minister George Papaconstantinou said the government will take whatever steps it needs, including possibly selling bonds directly to the public. Today he told a bank conference in Athens that "we will be able to satisfy our borrowing requirements in international markets in the next weeks and months, according to the schedule we have."
From today's Report on Business
China reels in lenders, trading partners feel the pain
Sun Life hangs shingle on Miami stadium