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RIM shares hit again Research In Motion Ltd. shares suffered again today as the company scrambled to resolve troubles with governments over their security concerns. The value of the BlackBerry maker's stock has now dropped by about $2.7-billion, based on the number of shares outstanding at the end of May.
RIM is in talks with Saudi Arabian regulators in a bid to halt a shutdown Friday of its BlackBerry Messenger text messaging service, Reuters reported, while authorities in India warned they will shut down the smart phone service if the Waterloo, Ont.-based company doesn't resolve its concerns. These markets are big for RIM, with some 2 million BlackBerry users.
In India, where security authorities want full access to its messaging service, an official was quoted in The Economic Times as also warning the service would be shut down. "We are very clear that any BlackBerry service that cannot be fully intercepted by our agencies must be discontinued," the official said. "Offering access to data is part of the telecom licensing guidelines and has to be adhered to."
Today, Indonesia said it, too, is considering follow the Saudi lead over government demands for freer access to data.
The U.S. State Department also said it is discussing BlackBerry-related security issues with the various governments.
"We're in touch with them, we're going to understand what their concerns are, what their plans are and then we'll have more to say," department spokesman Philip J. Crowley told reporters as the controversy mounted.
"There are legitimate security concerns attached to certain technologies and the flow of information around the world," Mr. Crowley said. "We understand those concerns; at the same time we do support the flow of information, the availability of technologies that empower people."
Yesterday, as it unveiled its new BlackBerry Torch, RIM said its security architecture is the same the world over and, in an interview with The New York Times, co-CEO Mike Lazaridis said "we're not going to compromise that. That's what's made BlackBerry the Number 1 solution worldwide."
- Indonesia also mulls BlackBerry ban
- RIM lights the way with Torch
- RIM-UAE fight spills to other nations
- UAE's BlackBerry threat clouds RIM's future
Japan's economy sputtering Japan's recovery is sputtering as industrial production and exports both lose their momentum, UBS AG says. Japan is also struggling with a fiscal mess and a bout of deflation, which UBS noted in a report will help support the government bond market and yen but said that "this cannot continue" indefinitely.
"Economic growth has been somewhat stronger than we expected so far this year, and GDP may expand by more than 3 per cent for 2010 as a whole," UBS economists wrote. "The labour market remains weak overall, but wages are at least rising modestly, providing support to household spending. However, recent data indicate that growth has has started to slow."
Japan's economy expanded at an annual pace of 5 per cent in the first quarter, but that rapid pace is expected to slow, and there is some speculation that the Bank of Japan could even ease monetary policy more when it meets in next week.
In one area of Japan, Bloomberg News notes, the provincial government is trying to boost its economy by starting up its own dating web site, an effort to get people to meet, marry and have babies. The coastal area of Fukui, the news agency said, houses the country's largest share of dual-income households, the top ratio of working women and the lowest jobless rate.
Next on the agenda, or so those behind the Fukui Marriage-Hunting Cafe hope, is stopping the declining birth rate. "It's difficult to breathe life back into an economy without children, without young people," one Tokyo economist told Bloomberg. "When an area like this keeps aging, the public finances of that government won't last."
Canadian dollar cracks 98 cents The Canadian dollar closed today at 98.27 cents U.S., taking another run at parity. A better-than-expected reading on the U.S. services sector and a U.S. employment report that raised no great fears helped drive the currency, said Scotia Capital currency strategist Sacha Tihanyi.
Mr. Tihanyi noted that Friday's employment report from Statistics Canada could give the currency even more juice. While the loonie is now within striking distance of the one-for-one mark, any tumult in the market could send the currency down again, as it has done several times recently.
The loonie strengthened along with oil today and "investors are still well into risk-seeking territory, which makes them more apt to focus on bullish risk factors," added senior currency strategist David Watt of Royal Bank of Canada in an interview with Bloomberg News.
Intel settles with FTC Intel Corp. has settled a dispute with the U.S. Federal Trade Commission over allegations of anticompetitive behaviour, but the giant computer chip maker said it neither admitted to violating the law nor agreed to the accusations. Under the deal, Intel will be blocked from paying customers to buy its chips exclusively, and it cannot take action against a computer maker that does business with other suppliers.
"This agreement provides a framework that will allow Intel to continue to compete and to provide customers with the best possible products at the best prices," the company said. "The settlement enables Intel to put an end to the expense and distraction of the FTC litigation. The settlement agreement is not an admission that any law has been violated or that the allegations in the complaint are true."
Optimism fades among small businesses Small business owners in Canada are a gloomier lot, a poor signal for the overall economy. The Canadian Federation of Independent Business, which represents small and mid-size outfits across the country, said today its Business Barometer Index dipped to 65.7 in July from 66.4 a month earlier, marking the third drop in four months. The measure fell among eight of the 13 industry groups and in seven of the 10 provinces, suggesting "the economy is settling into a phase of slower growth."
Health care, information, financial services and wholesaling formed the most optimistic group, while agriculture, hospitality and construction were among the most pessimistic.
Short-term perspectives continued to improve compared to several months ago as those owners who believe conditions are good far outnumber the naysayers, the CFIB said. "More troubling is the drop in customer orders and increase in inventories, which suggests a slowing of demand. In addition, capital spending plans also dropped in July among all categories, which means business owners are likely betting on higher interest rates and slower growth into the future."
U.S. saving more, Canada less The dynamics of savings in the U.S. and Canada are changing. According to data released yesterday, the personal savings rate in the U.S. rose to 6.4 per cent in June, and came in at an average 6.2 per cent for the second quarter. But for one quarter when the recession was at its raging worst, that's the highest since the early 1990s, BMO Nesbitt Burns notes. Compare that to Canada, where the savings rate fell below 3 per cent in the first quarter.
"The gap ... looks poised to reach levels not seen since the 1960s," said BMO deputy chief economist Douglas Porter. "This is a huge change from most of the 40 years when Canadian savings rates were almost always higher than in the U.S."
In the U.S., many are saving more as unemployment remains high and prospects in the jobs market low.
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Agrium profit surges Like Potash Corp. of Saskatchewan last week, Agrium Inc. today posted sharply higher second-quarter profits as demand improves. Agrium earned $506-million (U.S.) or $3.20 a share, compared to $370-million or $2.35 a year earlier, as revenue climbed to almost $4.4-billion from just shy of $4.1-billion.
"Global grain prices have risen considerably over the past month, on concerns over drought conditions in Europe and Russia and significantly lower acreage in Western Canada," noted chief executive officer Mike Wilson. "Furthermore, U.S. corn ending inventories have been revised downward twice so far this year. Strong agricultural fundamentals should support the outlook for all crop inputs in the second half of 2010 ... We anticipate North American crop nutrient demand to be strong in the second half at both the grower and retail level, due to firming crop prices, weather induced constraints on nutrient application this spring, an anticipated increase in U.S. corn acreage next year and the current low inventory level of crop nutrients in the U.S. retail system."
Consortium eyes Liverpool A Syrian businessman and one-time soccer star says he has put together a group of investors from Canada and the Middle East to buy the Liverpool soccer club. Details are sketchy but the group headed by Yahya Kirdi said in a statement it has struck an agreement on all major points of a deal, including the purchase price, according to several reports today. A statement on behalf of Mr. Kirdi was released by GameDay Leadership Management Consultants Inc., a group based in Montreal, according to Bloomberg News. Liverpool has won the English soccer championships 18 times and the European championships five times.
AOL posts huge loss AOL Inc. posted a huge writedown and hefty loss today, though it says it's encouraged by recent strength in the advertising market. AOL lost $1.06-billion (U.S.) or $9.89 a share, compared to a profit of $90.7-million or 86 cents a year earlier. Revenue declined by 26 per cent to $584.1-million. Both subscription revenue and ad revenue fell, though AOL's churn rate fell to 2.6 per cent, the lowest in years.
Time Warner tops estimates Time Warner Inc. , the other half of what used to be the AOL-TIme Warner marriage, beat analysts' estimates today and raised its outlook for the year to project a jump in per-share earnings of at least 20 per cent. Time Warner earned $562-million or 49 cents a share, up more than 7 per cent from $524-million or 43 cents a year earlier. Revenue jumped almost 8 per cent.
"Our investments in high-quality content across the company continue to pay off," said chief executive officer Jeff Bewkes. "Turner's original programming strategy contributed to the quarter's strong advertising growth and helped to generate pricing gains at the high end of the recent 2010-2011 upfront. HBO achieved impressive audience growth for its returning shows, and it has more original series in development than at any time in its history."
Toyota rebounds to profit Toyota Motor Corp. today swung back to a quarterly profit and boosted its projections for the year, bouncing back strongly from both the global recession and its recall nightmare. Toyota posted a profit of ¥190.5-billion in its fiscal first quarter, coming back from a loss of ¥77.8-billion a year earlier. Revenue jumped 27 per cent to ¥4.9-trillion from ¥3.8-trillion. The Japanese auto giant also raised its forecast for annual profit.
BLT but hold the bacon Prices for pork bellies are surging in the United States, sparking an increase in the cost of bacon amid predictions of continued high prices. Pork bellies, which are used to make bacon, have jumped 72 per cent in the past year as stockpiles have fallen 73 per cent, Bloomberg News reports. U.S. hog producers had cut their herds after hefty losses in 2009 and 2008. Altin Kalo, a commodities analyst at Steiner Consulting Group, told the news agency that prices traditionally rise in August, when tomatoes are ready and bacon, lettuce and tomato sandwiches become a favourite.
"What you have with bacon is what economists call inelastic demand, meaning it doesn't vary much," Chris Hurt, an economist at Purdue University in Indiana, told Bloomberg. "If a person wants a BLT sandwich and likes that in summer when their patio tomatoes come on, then it doesn't make a difference if bacon is $2 a pound or $6 a pound. They're going to go out and buy it. When it's in short supply and a lot of people want it, they'll pay a higher price."
From today's Report on Business
- Talisman picks up Colombian assets
- Kinross confident in Red Back strategy
- Brookfield Properties lands 'in the penalty box'
- Enbridge makes offer to Michigan homeowners
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