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Alberta under attack Not only is Alberta under attack from environmentalists trying to kill its tourism industry to protest the oil sands, it's also under fire over the treatment of animals at the Calgary Stampede. Yesterday, Corporate Ethics International launched a "Rethink Alberta" campaign with billboards and advertising urging tourists to boycott the province because of environmental damage caused by the "tar sands" (some in Canada would say oil sands). Premier Ed Stelmach said he was furious, calling it "an attack" on the 100,000 people whose livelihoods are tied to the tourism industry.
Now, a fifth horse has died at the famous Stampede, which is certain to heighten calls for an end to chuckwagon and rodeo events. Stampede spokesman Doug Fraser told CTV News that the owner and driver, Kurt Bensmiller, noticed one of his horses was having trouble after last night's chuckwagon races. A vet examined the horse, but "there was no apparent reason for the distress that this horse was under."Of the others that died, CTV News said, two suffered heart attacks, one was euthanized after a shoulder injury and another broke its back after bucking too forcefully.
The Vancouver Humane Society has already called for changes, including a ban on calf roping. And last week in Britain, where rodeos have been banned for decades (but fox hunting was just fine until 2004), some 50 MPs signed a motion urging Ottawa to stop such events. And on its website, People for the Ethical Treatment of Animals has a campaign urging people to write to the Stampede's sponsors, calling it "Canada's shameful spectacle."
- Oil sands ads urge tourists to avoid Alberta
- Stelmach buys U.S. ad touting oil sands
- A new breed of chuckwagon race
- Calgary Stampede sees more upbeat mood
Housing market pace slows Canada's housing market is cooling off after its record-setting pace in the post-recession period. The Canadian Real Estate Association said today existing home sales fell 8.2 per cent in June from a month earlier, largely because of a slower pace in Toronto and Calgary. The national average resale price dipped 1.2 per cent, to $342,662, from May's record $346,881. That's still almost 5 per cent above last year's prices. Here are the views of four economists:
Adrienne Warren, Bank of Nova Scotia: "We expect to see a further slowing in sales over the second half of the year as interest rates gradually drift up. (It should be noted, however, that sales are still at a historically high level despite this year's pullback, supported by improving employment conditions and still-low borrowing costs.) While this in turn will likely put some further modest downward pressure on prices, listings are also beginning to trend lower, which will help to maintain a fairly healthy balance between buyers and sellers."
David Rosenberg, Gluskin Sheff + Associates: "The Canadian housing market at one point during last year's parabolic surge in sales and pricing got as much as 20 per cent overvalued. In recent months, demand has weakened under the weight of eroding homeowner affordability. At the same time, the rush of new construction has elevated the supply side of the equation. and so what falls out these shifting demand and supply curves is a reduction in prices - the long awaited correction is here. Remember - excesses in one direction are generally followed by excesses in the other direction. And bubbles never correct by going sideways. In a nutshell, there's more air to come out of this Canadian housing balloon."
Douglas Porter, BMO Nesbitt Burns: "By some appearances, Canadian home sales have done their best impression of a capsized canoe in the wake of the new tighter mortgage insurance rules and the modest back-up in borrowing costs in the spring. Sales were also front-end loaded in 2010 ahead of the [harmonized sales tax]and are now in rapid reverse. While the headlines may look soggy for the next few months, there are reasons to believe the market could soon regain its balance - long-term mortgage rates have dropped, employment remains on a roll, and prices have stabilized."
Pascal Gauthier, Toronto-Dominion Bank: "After improving markedly in 2008, home affordability eroded significantly in 2009. With the typical lag, this is naturally slowing the pace of sales. Nonetheless, the housing market slowdown should be cushioned by an improving employment and income picture. The level of interest rates remains quite supportive of sales activity, and rising interest rates would only occur against a stronger overall economic backdrop."
BP stops leak into Gulf, shares jump BP PLC said late today it has stopped the gush of oil into the Gulf of Mexico for the first time since the disaster began in April with the explosion on the Deepwater Horizon drilling rig. The energy giant's shares surged after a company official told reporters a new cap had successfully stopped the leak into the Gulf. It's not a permanent solution. BP is still working on two relief wells it hopes will solve the problem.
Financial regulation bill passes Senate The sweeping overhaul of regulations governing the U.S. financial sector cleared the Senate in a 60-39 vote today, and now goes to President Barack Obama. The plan to cut risks in the sector, the biggest overhaul since Depression-era rules, has been more than a year in the making.
"I regret I can't give you your job back, restore that foreclosed home, put retirement monies back in your account," said Senate Banking Committee chairman Christopher Dodd. "What I can do is to see to it that we never, ever again go through what this nation has been through."
Does U.S. face a debt spiral? While not an immediate threat, the United States could face a debt spiral similar to Canada's from the 1970s through the mid-1990s, Scotia Capital says. Debating an argument by Paul Krugman in The New York Times yesterday, Scotia Capital economists Derek Holt and Gorica Djeric said in a report today that "it's not at all inconceivable that the U.S. faces the road Canada went down" earlier.
"The crux of the issue is whether the U.S. creates such a mountain of public debt that interest payments become such a heavy burden as to crowd out other elements of the federal budget," they said. "... What if growth slows appreciably and then faces renewed retrenchment by 2012 as per our beliefs, and the appetite for Treasuries and the [U.S. dollar]wanes as it did for some European government bonds while the U.S. stumbles upon European-style fiscal exit woes and their harsh effects on growth over 2011-2013? Your spread between rates and growth could well shoot to the moon at the same time that public debt keeps rising. This is not a risk to be dismissed in cursory fashion, particularly as the U.S. faces long-tailed social security obligations that were significantly addressed in Canada with CPP reforms in the late 1990s.
"We hope such a bright light as Paul Krugman is right because we recall our own lessons on the economic pain of being disastrously wrong."
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China's growth cools China's efforts to slow its miracle economy are paying off, though that may be cause for concern among countries looking to the Asian giant to help spur their own recoveries. Economic growth in China slowed in the second quarter to 10.3 per cent from a year earlier, down from a pace of 11.9 per cent in the first three months of the year. While China has recently tightened and moved to cool down an overheating real estate market, some of today's numbers suggest growth may be slowing faster than predicted. Growth in industrial production, for example, a key number, slowed to 13.7 per cent in June from May's 16.5 per cent. Export and import growth also slowed in the month, Globe and Mail correspondent Mark MacKinnon reports from Beijing.
Investors fear slower growth in China, which is leading the global rebound, will slow the world recovery, hurting everything from iron ore to other commodities. "The release of Chinese Q2 GDP growth figures overnight showed the Chinese economy slowing down with growth moderating to 10.3 per cent, slightly lower than expectations, but in line with the authorities' intentions to take some of the heat out of the recent expansionary pressures of the past few months, which should preclude any further fiscal measures in the short term, but could also mean decreased demand for commodities throughout the rest of the year," said CMC Markets analyst Michael Hewson.
Manufacturing sales rise Canada's manufacturing sector posted another gain in sales in May - the eighth increase in nine months - with a climb of 0.4 per cent that was driven by the car and auto parts industries. Sales dipped 0.1 per cent when those sectors are factored out, though, Statistics Canada said today. Inventory levels declined 0.7 per cent, while the inventory-to-sales ratio fell to 1.3, its lowest since July of 2008. Unfilled orders jumped 1.3 per cent, but largely because of the aerospace and related parts industries.
JPMorgan boosts profit JPMorgan Chase & Co. topped analysts' estimates today with a 76-per-cent jump in second-quarter profit of $4.8-billion (U.S.) or $1.09 a share, up from $2.7-billion or 28 cents a year earlier. The bank cut its loan loss reserves in the quarter and, analyst Kim Caughey of Fort Pitt Capital Group in Pittsburgh told Reuters, "sets the bar high and gives people who invest in the sector reason to be optimistic." As Streetwise columnist Boyd Erman notes, it wasn't a great quarter for JPMorgan's investment banking unit, whose profit slipped 6 per cent.
Apple to hold iPhone news conference Apple Inc. plans a news conference for tomorrow to discuss concerns over the signal strength on its iPhone 4. The decision to meet reporters has sparked speculation it could give iPhone users a so-called Bumper case, which costs about $29 (U.S.) but fixes the problem. Consumer Reports has said it won't recommend the smart phone after testing showed holding it in a certain way reduces signal strength. The company has said that the reading on signal strength, as opposed to the actual reception, is a problem and it will offer a fix.
"We believe a recall is unlikely as any recall would presumably be more immediate and sales halted by Apple and its operator partners," said UBS analyst Maynard Um. "However, if the solution were straightforward, investors are likely to wonder why it wouldn't be issued by press release (though Apple already addressed the issue in a statement on July 2). We believe an event is necessary as a press release to address what has become a 'loud' issue would likely have drawn more ire."
Nexen profit jumps Nexen Inc. today posted a jump in second-quarter profit to $255-million or 49 cents a share, beating what analysts had expected and up from $20-million or 4 cents a year earlier. Revenue climbed to $1.56-billion from $1.22-billion. Cash flow from operations fell shy of estimates, coming in at $558-million or $1.06 a share. Nexen also said that the startup phase of its Long Lake oil sands project, which it shares with Opti Canada, is nearing breakeven and "will be an important milestone."
Smart Technologies launches IPO Calgary's Smart Technologies Inc. has launched one of the largest initial public offerings in the U.S. this year, raising some $660-million (U.S.) with a sale of almost 39 million shares at $17 each. The price is around the midpoint of the expected range for the manufacturer of digital whiteboards, but the number of shares is more than expected.
From today's Report on Business
- Want to boost your net worth? Live in a mid-sized city
- Canada Post thinks outside the mailbox
- U.S. financial reform will keep lawyers busy for years
- Foreign investors feel the love for Canada
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