Stories Report on Business is following today :
Iceland's crisis deepens
Iceland moved deeper into crisis today as its president, Olafur Grimsson, rejected a bill to pay more than $5-billion (U.S.) lost by consumers in Britain and the Netherlands amid its financial collapse. The so-called Icesave deal, passed by Iceland's parliament last month, was unpopular with the electorate and, given the president's refusal to sign it, will now go to a referendum. The decision, taken by a president whose position is largely symbolic, could have sweeping ramifications. Observers said the country risks losing its bid for quick entry to the EU and could hurt its hopes for aid from Nordic nations. Read the story
Google to shake up mobile market
Google Inc. is expected today to shake up an already competitive mobile market by unveiling its first smart phone, the Nexus One. Google has already made its mark with its Android mobile phone operating system, which it launched late in 2007. At today's event, scheduled for 1 p.m. ET, Google is expected to go further, offering its smart phones directly to buyers, in turn giving consumers the freedom to choose their own wireless carrier. Read the story
U.S. pending home sales fall
Pending home sales in the United States fell sharply in November, another setback for the embattled real estate industry where the financial crisis began. The National Association of Realtors said today its index fell 16 per cent from October, far larger than what observers had expected. A federal incentive of up to $8,000 for first-time buyers had been set to expire at the end of November, but the program was extended and broadened.
Fairfax boosts dividend
Fairfax Financial Holdings Ltd. today boosted its annual dividend by 25 per cent to $10 (U.S.) a share. Payable Jan. 26 to shareholders of record as of Jan. 19, it is the fourth annual increase in a row for the Toronto-based financial services holding company.
Ottawa unveils euro bond issue
The Finance Department may be playing to "the world's love affair with Canada" with a planned offering of 10-year bonds in euros, its first in the European common currency since early 1999. Ottawa announced the move overnight, following up on a $30-billion (U.S.) global bond issue last September. Canada is seen in an enviable position, with stable banks, a strengthening currency and a strong fiscal stance. Scotia Capital this morning noted the clear need for deficit financing and "the word's love affair with Canada versus crowding out the domestic issuance space."
Scotia Capital also cited the move as "another anecdote that confirms the broader issues at play in the country's overall balance of payments. Twin current account and fiscal deficits have abruptly turned away from twin surpluses of yesteryear, such that the downward decline in net foreign debt as a share of GDP since the mid-1990s has bottomed and is turning toward increasing reliance upon foreign capital to fund the Canadian economy at the margin of its activities."
The Canadian dollar continued to rise again.
Auto makers to report December sales
North American auto makers today report December sales that are expected to show the embattled industry continues to climb out of the slump, albeit more slowly in the United States than in Canada. In the United States, BMO Nesbitt Burns said this morning, sales are expected to have inched up to levels still one-third below normal but above those that preceded the U.S. cash-for-clunkers program, indicating "a modest upturn in underlying demand."
In Canada, BMO said, sales are projected to have jumped 10 per cent from December, 2008, which would mark the first year-over-year increase in 13 months. The industry, said BMO economist Sal Guatieri, is "already back on its feet in Canada, at least on the sales side. In the U.S., it's moving in that direction slowly."
German unemployment dips
Europe continues to divide along economic lines. Germany, Europe's biggest economy, reported today that unemployment fell in December for the sixth month in a row, by 3,000, although the jobless rate remained at 8.1 per cent. In Spain, however, unemployment rose 1.4 per cent, it's jobless rate nearing 20 per cent. Germany has bolstered its labour market with subsidies for shifting employees to part-time jobs rather than laying them off.
Kraft moves closer to Cadbury
Kraft Foods Inc. sweetened its hostile bid for Cadbury PLC today by boosting the cash portion of the $16.5-billion (U.S.) offer and moving ever closer to winning. At the same time, hopes among investors of a bidding war for the British candy maker dimmed as Nestlé SA said it had no plans to launch any offer. Rather, Nestlé handed Kraft money needed to entice Cadbury shareholders by buying its North American pizza business. "Nestlé's decision effectively leaves Kraft as the overwhelming front-runner," one analyst told the Reuters news agency. Read the story
From today's Report on Business
World's factories humming again
Built out of opulence, named for a bailout