Today's top stories from Report on Business :
Toyota executive apologizes
The chief U.S. executive of Toyota Motor Corp. apologized today for the safety issues related to its massive recalls, but told a congressional hearing that sudden acceleration in some vehicles was due to floor mats and sticky gas pedals. The panel gave the auto maker a rough ride, but the bigger show comes tomorrow when president Akio Toyoda testifies in Washington to a different panel. In prepared remarks for tomorrow's hearing to the House Government Oversight Committee, Mr. Toyoda promises to do everything he can to ensure nothing like this happens again. "My name is on every car," he says. "You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers."
One woman, Rhonda Smith of Tennessee, told the hearing of her harrowing ride in a Lexus that shot ahead at 160 kilometers an hour and finally slowed down after six miles. "I prayed to God to help me," she said.
Read
Toyoda 'deeply sorry' for accidents
Sharp tone set at Toyota hearing
Driver recalls 6 miles of highway terror
U.S. probes raise stakes for Toyota
Brookfield said eyeing U.S. mall owner
Brookfield Asset Management Inc. is negotiating to buy a hefty stake in General Growth Properties Inc., which owns more than 200 U.S. malls and is the target of an unsolicited bid by rival Simon Property Group Inc., reports say. Toronto-based Brookfield is eyeing a 30-per-cent stake in General Growth, which is operating under court protection. Brookfield's bid would give the mall owner a higher valuation than the $10-billion (U.S.) offered by Simon Property, Bloomberg News said, adding it already holds almost $1-billion in the company's debt. Property growth is already the biggest in the United States. For Brookfield's chief executive officer Bruce Flatt, a deal would offer the chance to acquire choice property at bargain prices. Read the story
Rosenberg questions survival of euro
David Rosenberg, who never met a crisis he didn't love, notes that while the euro is hugely oversold, questions over the sustainability of the currency aren't going to disappear any time soon. Mr. Rosenberg, the respected and oft-bearish chief economist at Gluskin Sheff + Associates, pointed in a research note today to the "contagion risk" of the so-called European PIGS - Portugal, Italy, Greece and Spain - and their "pig-like" fiscal troubles. He noted that any restructuring of the currency zone's debt will fall on the region's banks, in turn meaning probable major writedowns. Citing Morgan Stanley data, Mr. Rosenberg pointed out that more than 50 per cent of Portugal's $165-billion (U.S.) in debts is owned by Spanish banks, while more than 30 per cent of Spain's $748-billion debt is held by German banks.
Mr. Rosenberg also provided a history lesson on the Latin Monetary Union of 1865, involving France, Belgium, Italy, Switzerland, Spain, and Greece, and, later, others.
"We are sure that the architects of the grand plan back then didn't plan for its demise either, though the union did last about five decades," he wrote. "By WWI, it had dissolved and one must wonder whether the same will occur to today's grand experiment as it faces its most significant test in its short 10-year history. It sounds unthinkable but it is definitely plausible - common markets are one thing, a common currency in a period of intense instability is quite another - and the implications should be considered thoroughly."
Greece accused of 'blackmailing' neighbours
The head of Germany's Ifo institute accused Greece today of "blackmailing" other countries in the euro currency zone. Greece's debt troubles have shaken stock and currency markets, and even raised questions about the future of the euro zone, though it has pledged to cut its debt through harsh austerity measures and the EU has promised support if it comes to that. " Greece should never have entered the euro zone because they did not qualify and they are now blackmailing the other European countries via the euro," Hans-Werner Sinn, president of the think tank, told Bloomberg News. "More than the euro would be weakened, they argue, if Greece was not helped, but I personally don't think this is a problem."
Related : Greek debt deal revives Wall St. criticism
Several defaults likely, Rogoff warns
Greece's problems have rippled through markets because of fears over sovereign debt defaults. Greece is not alone. Others, such as Spain, Ireland and Portugal, are all in trouble. Today, Harvard Professor Kenneth Rogoff said several countries will probably default while other, richer nations will simply cut spending and slow down growth. Sovereign defaults traditionally follow bank crises within a few years, Mr. Rogoff told a Tokyo symposium, according to Bloomberg news, and he predicted this will occur again. "It's very, very hard to call the timing, but it will happen," Mr. Rogoff said.
China currency revaluation could be large, economist says
An Asia watcher at Société Générale says China will probably revalue its currency by between 5 per cent and 10 per cent this spring. Many economists expect the yuan to soon be revalued. Glenn Maguire, the bank's chief Asia economist, told the Reuters news agency in an interview that he believes the one-time revaluation of the currency will be done in April or May, allowing China to "make a credible commitment" that its currency policy will remain unchanged for a long period. "Practically every man and his dog will be betting on the fact that the yuan will be appreciating by probably more than the return you are likely to get on developed economy bonds or equity markets over the next one to two years," he said.
Related
Is China's yuan policy headed for change?
Why the U.S. dollar may be heading for a slow fall
U.S. consumer confidence falters
The U.S. Conference Board's consumer confidence index sank in February, a surprise drop to 46.0 from 56.5, the lowest reading since April of 2009. "It is not entirely clear what would have motivated such a drastic drop in confidence," said TD Securities chief economics and rates strategist Eric Lascelles. "To be sure, concerns about the Greek fiscal drama and a major vehicle recall would have peaked during the polling period. Similarly, the U.S. failed once again to generate job growth in January. But all of these are representative of reasons to remain relatively glum, as opposed to seeking out a new depth of dissatisfaction with a current situation that objectively includes economic growth, rising home prices, and flat equities. As a consequence of this, we hesitate to suggest that the U.S. consumer situation is truly getting significantly worse." Read the story
Barrick aims for up to $1-billion African IPO
Barrick Gold Corp. plans to raise between $875-million (U.S.) and $1-billion by listing its Tanzanian properties on the London exchange, the Reuters news agency reports. Barrick announced earlier that it would spin off African Barrick Gold, and, the news agency said, the listing would value those assets at about $4-billion and would be the biggest in London in almost two years. Read the story
TransCanada boosts dividend
TransCanada Corp. today boosted its dividend as it reported a sharp increase in fourth-quarter profit. The energy pipeline giant's profit rose to $381-million or 48 cents a share from $271-million or 46 cents a year earlier. It increased its dividend by 5 per cent. "In keeping with previous $0.02/share hikes in each of the past three year [TransCanada]raised its quarterly dividend from $0.38 to $0.40," UBS Securities Canada said in a research note. "Based on our existing EPS estimates, the new level implies a payout ratio of 72 per cent, comparable with 2009 at 71 per cent but above the 2006-2008 average of 65 per cent." Read the story
Sears Canada profit jumps, sales slip
Sears Canada Inc. posted a 29-per-cent jump in fourth-quarter profit to $128.2-million or $1.19 a share from $99.1-million or 92 cents a year earlier. Sales slipped 5.6 per cent to $1.53-billion while same store sales, a key measure among retailers, fell 1.7 per cent. "With the economic recession and low consumer confidence prevalent throughout the year, 2009 was a challenging period for Canadian retailers," said chief executive officer Dene Rogers. "A cool, rainy summer and mild fall and winter in most parts of the country impacted sales, especially in highly seasonal categories." Read the story
Sears Holdings Corp. , its U.S. parent, more than doubled its quarterly profit. Read the story
Home Depot profit better than expected
Home Depot Inc. shares rose after the home improvement chain posted a better than expected fourth-quarter profit. Notably, the world's biggest such retailer recorded its first gain in same store sales in almost four years, of 1.2 per cent, and it increased its quarterly dividend by 5 per cent. Home Depot posted a quarterly profit of $342-million or 20 cents a share earlier, compared to last year's loss of $54-million or 3 cents. Read the story
Wall Street bonuses rise
This one's sure to raise hackles: The comptroller of New York state, Thomas DiNapoli, said today that bonuses on Wall Street rose 17 per cent last year, and that's the cash portion. It doesn't include stock options or deferred compensation. Mr. DiNapoli said that Wall Street is, of course, vital to the state economy, but added that "for most Americans, these huge bonuses are a bitter pill and hard to comprehend." Read the story
Related : Bay Street over Wall Street - Safer and sometimes richer
From today's Report on Business
Budget won't include new spending or tax measures
A shiny new city fuels talk of a bubble
Want to fix Ottawa's books? Try working a bit harder