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The 'unfriendly skies'? The business of flying, it seems, ain't what it once was. In the aftermath of the tale of a fed-up flight attendant accused of losing it after a passenger hit him on the head with a piece of luggage, The Associated Press took a look at the "unfriendly skies" as compared to the days of yore. Some of the people who spoke to the news agency complained about fellow passengers, others about flight attendants.
"Airline travel used to be a big event that prompted you to put on your suit and tie," said Jim Erickson, a 34-year-old analyst from Fort Worth, Tex., recalling how one flight attendant splashed water on him by accident and herself became rude. "Pilots stood at the doorway ... flight attendants were glamorous hosts and hostesses. Now, many American carriers have become cattle cars."
It got this way, the news agency reported, because of security concerns, packed planes, budget tightening and, of course, the fees that have driven many a frequent flier nuts.
It's not all that way, of course, and The Associated Press noted heart-warming stories such as those of Mollie Hemingway, of Washington, who was almost sobbing while travelling with her two tiny daughters but was helped out by a flight attendant travelling on her own, rather than on the job. "I practically threw the baby at her," Ms. Hemingway said. "Later she exchanged seats so she could sit next to me and she helped me entertain the girls. I am so thankful for her help."
The JetBlue flight attendant charged in connection with the incident - he's free on bail and no charges have been proven in court - has meanwhile become a folk hero, winning over thousands of Facebook fans, for example. He is alleged to have used profane language over the intercom, taking some beer from the galley and shooting down the plane's emergency chute at Kennedy Airport before being arrested.
- Read the AP story
- Bail for flight attendant after airplane temper tantrum
- Flight attendant wins approval of disgruntled workers
- Video: Flight attendant folk hero?
Markets, loonie sink on sour outlook Mounting fears over the outlook for the economic recovery battered global stock markets and sidelined the Canadian dollar today. After the grim picture painted yesterday by the Federal Reserve, and fresh concerns in the United States, Canada, China and Britain today, investors decided to dump riskier assets and equities. Here's how it looked at the end:
- The loonie sank by more than a penny to close at 95.67 cents U.S.
- The S&P/TSX composite index slipped 2.2 per cent.
- The Dow Jones industrial average lost about 2.5 per cent, the S&P 500 2.8 per cent.
- Japan's Nikkei 225 fell 2.7 per cent.
- Hong Kong's Hang Seng slipped less than 1 per cent.
- London's FTSE 100 sank 2.4 per cent.
- The German DAX fell 2.1 per cent.
- The CAC-40 in Paris lost 2.7 per cent.
"Angst ridden," said David Watt, senior fixed income and currency strategist at RBC Dominion Securities in Toronto. "Rather than 'risk off' markets felt weighed down by angst and a sense of foreboding. Risk sensitive asset prices were mauled. Global equity markets were chopped by 2 per cent to 3 per cent across the board ... A few days ago, 20 of 27 major stock indices were above their [200-day moving average] suggesting medium term optimism. The count is now a rather slim eight, and it could be four shortly, as sentiment sours. "
- Markets Blog: Dow, TSX fall into red
- Markets Blog: You know the world is bearish when ...
- Fed to buy $18-billion of Treasurys
- U.S. dollar falls to 15-year low against yen
- Fed reacts to new threat to economy
- David Rosenberg: All evidence suggests recovery is far from normal
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Fresh signs of slowing in China Feeding into the markets' foul mood today are new numbers that show China's hot economy continues to cool. Several indicators reported today by the government, including retail sales, industrial output, bank lending and fixed asset investment, all paint a picture of a slowing economy, which to date has helped to fuel the global recovery. This follows yesterday's data showing the pace of growth in imports slowing. Today's numbers for July still show growth, but growth that is ebbing. Industrial production rose more 13 per cent, the slowest in about a year. Retail sales, though up almost 18 per cent, are at a seven-month low. And fixed investment, up a hefty 25 per cent, showed the slowest increase in more than two years.
"China's growth needs to be driven increasingly by domestic demand, and softening consumption data certainly don't point in that direction," said BMO Nesbitt Burns economist Benjamin Reitzes. "Making matters worse, consumer price inflation accelerated to 3.3 per cent in the month (as expected), making real sales even weaker."
Added Mark Williams, senior China economist for Capital Economics in London: "The economy appears to be slowing more rapidly than anticipated a couple of months ago, according to data released today. China's government has plenty of room to loosen policy to avoid a hard landing, but this will probably entail limits on bank lending being shelved."
Britain's central bank cuts forecast Britain's growth outlook is also choppy. The Bank of England today cut its forecast for next year and warned of a "choppy recovery" as the world struggles back from the financial crisis and the recession. The central bank now believes economic growth will peak at an annual pace of 3 per cent, compared to the 3.6 per cent forecast just a few months ago.
"There are clearly risks," Governor Mervyn King told reporters. "Business and consumer sentiment have shown signs of softening, measures of financial fragility remain elevated and there is great uncertainty about the outlook for both the United States and our most important trading partner, the euro area."
Trade deficit widens Canadian exports fell in June, largely on a hefty drop in energy products and industrial goods, outpacing a decline in imports and leaving an unexpectedly far wider trade deficit of $1.1-billion. The level of exports fell to $33.5-billion as both prices and volumes declined, Statistics Canada said today. That followed six straight months of increases in export volumes, the federal statistics gathering agency reported. Imports to Canada, in turn, fell to $34.6-billion, largely on price declines as the actual volumes were flat. A quick breakdown:
- Exports to the U.S. dipped 1 per cent, largely on energy products. Imports from the U.S. climbed 0.8 per cent.
- Exports to other countries slipped 7 per cent, primarily because of a drop in shipments to the EU, eclipsing a 4.6-per-cent decline in imports from countries other than the U.S.
- Exports of industrial goods and materials fell 7.1 per cent.
- Precious metals exports fell 24.1 per cent, a third consecutive drop after hitting a record high in March.
- Exports of energy products fell 5.5 per cent as volumes fell for the fifth month out of six.
- Exports of autos and related products fell 4.6 per cent, with cars down 7.1 per cent.
It's just a one-month measure, so don't read too much into it, but the declines in exports to Europe are worth noting. Sales to Europe are now barely above levels of a year ago, said BMO Nesbitt Burns deputy chief economist Douglas Porter, and "this is at the very least a loud warning shot from these European figures."
U.S. trade deficit balloons The U.S. trade deficit also swelled in June, far more than expected, and is now at its fattest since October of 2008. U.S. exports fell 1.3 per cent, marking the second drop in three months, far outpaced by a 3-per-cent rise in imports. Notable in today's numbers was the widening shortfall with China, where the gap is now $4-billion (U.S.) higher at $26.2-billion. This threatens to again heighten trade tensions between China and the U.S., which has been pushing Beijing to allow its currency to rise. China has allowed some movement in the yuan, also known as the renminbi, but the change has been minimal.
On a seasonally-adjusted basis, the U.S.-China gap has only been wider twice, in September and October of 2008, noted Paul Dales, U.S. economist for Capital Economics in Toronto. "It is even worse than that: After applying our own seasonal adjustment it stands at $26.4-billion, which is a new record high," Mr. Dales said. "In the runup to the midterm elections in November, this could boost concerns over the slow pace of renminbi currency appreciation and increase U.S.-China tensions."
As for the overall showing, he added, the figures suggest "that the U.S. economy cannot rely on a boost from overseas demand to offset the current domestic weakness. In fact, overseas effects are exacerbating the domestic downturn."
See you in September Canada could see a big gain in jobs in official figures for this month or next because of the distortion in the educational sector, easing fears of a faltering labour market, Scotia Capital says. Last week, Statistics Canada reported a loss of 139,000 full-time time jobs in July, partly because some 65,000 positions among teachers and their support staff disappeared. That sparked some controversy because for the past several years, that sector has recorded big job losses in July and big job gains soon after.
"The culprit lies in mythical gyrations in education sector employment that make teacher and related jobs look more volatile than Wall Street jobs in recent years," economists Derek Holt and Gorica Djeric said in a report today. "This effect began in a material manner in 2007. The data is seasonally adjusted, but since that year, education sector jobs have dropped sharply every July, only to be regained within a month or two."
The distortion, they wrote, is because contracts in the sector have changed: Temporary contracts are used more now, as are shorter contracts."These two factors mean that education sector jobs are wildly distorted especially during the summer school break since in response to [Statistics Canada's labour force survey] one has to respond that s/he is not presently employed during the period in which no contract is available regardless of prospects for its renewal at the start of each new school year."
That means, they said, that, all things being equal, Canada may see a "higher than average" monthly employment gain in August or September, which in turn "could reverse sentiments in some corners that the Bank of Canada faces a deteriorating labour market."
Teachers sold stake at discount Ontario Teachers' Pension Plan had to offer an 8.3-per-cent discount to attract a buyer for a 10-per-cent stake in Maple Leaf Foods Inc. , Globe and Mail Streetwise columnist Boyd Erman reports. West Face Capital bought 13.7-million shares food producer Maple Leaf at $8.25 apiece in the deal, which was agreed to Monday. The shares closed that day at $9. The total price West Face paid was $113-million, according to a regulatory filing. That also included 2.2-million warrants that can be converted into Maple Leaf shares, which West Face acquired for a penny apiece.
Quebecor posts lower profit Quebecor Inc. profit slipped in the second quarter, though revenue jumped 5 per cent. Profit fell in the quarter to $65.5-million or $1.02 a share from $76.8-million or $1.19 as revenues jumped to $994-million from $946.4-million, the media company said today.
"Quebecor reported ... results that were in line with revenue expectations and ahead of profitability expectations," said Desjardins analyst Maher Yaghi. "The company continues to aim for the launch of its wireless network by the end of this summer. Overall, we remain positive on the company's long-term prospects, given the potential for a significant new leg of growth from wireless, supplemented by organic growth in cable from pricing increases despite slowing subscriber growth. However, we continue to believe that wireless growth may take a few years to impact profitability materially, and that in the near term, telecom margins will be negatively impacted once the wireless network comes onstream."
Markets hit CPP The Canada Pension Plan posted a 1.3-per-cent investment loss in its fiscal first quarter ended June 30 as global stock markets dipped, sending the fund's public equity holdings lower. The value of the fund's assets rose to $129.7-billion from $127.6-billion, however, due to $3.8-billion in new contributions from plan members, which offset a $1.7-billion loss on investments. The losses came as the S&P/TSX composite index fell 6.2 per cent in the three-month period, while the S&P 500 index fell 11.9 per cent.
Call it the sex trade North Korea is making a decidedly unique attempt to settle its debts. Deep in economic trouble, the North Korean government is offering to pay off the equivalent of about $10-million (U.S.) in debt to the Czech Republic with what a Czech newspaper calculates at some 20 tonnes of ginseng. Ginseng is an exotic root believed to be healthy on several fronts, and is a noted aphrodisiac. As The Financial Times noted, however, the "now-capitalist Czechs are unconvinced they need an injection of vigour." The country's deputy finance minister told the MF Dnes newspaper that "we have been trying to convince them to send, for instance, a shipment of zinc, which is mined there."
From today's Report on Business
- West Face investment threatens to shake up Maple Leaf boardroom
- Dollarama aims to keep it simple
- Alberta royalty rollback boosts well value
- Building a brand, one trade show at a time
And, read our Streetwise blog and Your Business section