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Can euro union survive? UBS AG believes Europe's currency union can't survive in its current form. Politicians in the 16-member euro zone can support the union over the next three to five years, economist Dirk Faltin and strategist Katherine Klingensmith said in a report, but it will not lead toward stable reform.
"The external imbalances across countries are growing, and the countries have not converged, as expected," they said. "In the long term, we do not think the common currency can survive. It either must be supported by a full fiscal union - which is unlikely - or a credible no-bailout framework allowing for the correct pricing of risk ... While the euro may not survive in the long run, many European countries are strong and we do not advise avoiding investment in the region."
Separately today, European Central Bank President Jean-Claude Trichet said in a newspaper interview that some investors don't believe strongly enough in the region's ability "to take bold decisions," and it would be a mistake to underestimate Europe and the euro zone, in particular.
- Moody's cuts Portugal's debt rating
- Greece raises €1.25-billion in T-bill auction
- German investor confidence plunges
How Americans feel about capitalism John Maynard Keynes called capitalism "the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone." Al Capone called it "the legitimate racket of the ruling class." Turns out many Americans may feel that way.
They're keen on free markets and free enterprise but much less certain about the overall idea of capitalism, a new poll shows. The telephone survey of 800 registered American voter was done for the U.S. Chamber of Commerce by Lombardo Consulting Group. The poll released today, with a margin of error of 3.46 per cent, showed 57 per cent were very positive or somewhat positive on capitalism. Some 20 per cent were neutral, 19 per cent negative and 4 per cent either didn't know or didn't want to answer. The positive-on-capitalism group was much smaller than the 78 per cent who felt positive about free enterprise and more than 70 per cent who were positive on free market competition.
Just 14 per cent are in the positive camp on socialism and 58 per cent are on the negative side. The survey was conducted earlier this month, well after the financial crisis, when banker became a dirty word, though the U.S. is still struggling and millions remain unemployed.
The president of the consulting firm, Steve Lombardo, told Bloomberg News that "there's been an erosion of support for capitalism."
Editor Frank Newport of Gallup, which conducted its own poll on the subject in April, told the news agency that "It is a reasonable hypothesis that in the midst of the current downturn and the visibility of the corporate excesses that negative assessments of capitalism have increased."
Regulator transition team unveils blueprint A new national securities regulator would rely on technologies like videoconferencing to operate only with regional offices and no single headquarters location, according to a detailed organizational plan released today. A transition office created by the federal government unveiled its first detailed outline of how a new national securities regulator would operate, and it conspicuously makes no mention of a location for a head office for the new organization. Instead, it recommends creating regional offices in each participating province or territory, and spreading senior staff of the commission among them.
The scattered structure is aimed at defusing a major political battle building among various provinces over the location of a head office. Ontario has insisted the head office should be located in Toronto where most of the country's largest securities firms are based, while other provinces have insisted they will not join if it is dominated by Ontario.
- No single HQ for national regulator
- The transition plan
- The long road to a national securities regulator
Steinbrenner built sports empire He was colourful, freewheeling and, of course, a favourite subject on the sitcom Seinfeld. George Steinbrenner, who died this morning of a heart attack at the age of 80, was also a savvy businessman who revived the New York Yankees, and turned it into a sports empire. Nicknamed "the Boss," Mr. Steinbrenner took a group investment of about $10-million (U.S.), bought the club from CBS in early 1973, and built it into a team now valued at $1.6-billion, according to Forbes. Its major corporate sponsors include PepsiCo, MasterCard, Bank of America and others.
"Owning the Yankees is like owning the Mona Lisa," Mr. Steinbrenner once said, according to MLB.com.
Like any alpha male businessman - he was born on the Fourth of July - Mr. Steinbrenner talked big and spent big, paying high prices for the likes of Reggie Jackson and Alex Rodriguez.
"Winning is the most important thing in my life, after breathing," Steinbrenner oft said, according to The Associated Press. "Breathing first, winning next."
Canada posts third trade deficit Canada recorded its third consecutive trade deficit in May as a 5.7-per-cent climb in imports outpaced the 5.2-per-cent rise in exports. The trade deficit of $503-million compared with a shortfall of $330-million in April, Statistics Canada said today. Notable was that machinery and equipment led the surge in imports as volumes rose 4.2 per cent and prices 1.4 per cent. Export volumes rose 3.9 per cent and prices 1.2 per cent.
Notable, too, was a surge of 25.2 per cent in exports to the European Union. Exports to the United States, Canada's biggest trading partner, increased 5.5 per cent, while imports rose 5.8 per cent.
"Bears waiting for the global recovery to peter out will have to wait longer," said CIBC World Markets economist Krishen Rangasamy. "True, Canada ran a trade deficit of half a billion dollars in May, and the prior two months were revised down slightly. But the apparent deterioration in Canadian trade was a result of imports rising faster than exports, as two-way trade picked up significantly, highlighting that demand both and home and abroad is alive and well."
Separately, the U.S. Commerce Department reported that sharply higher imports from China helped push America's trade deficit to $42.3-billion in May, its highest since late 2008. The U.S. deficit with China, widely watched given U.S. complaints over how Beijing holds down its currency, hit its highest since October, at $22.3-billion (U.S.).
"These data are for May and therefore do not capture the slowdown in activity flagged up by more recent indicators," Paul Dales, U.S. economist for Capital Economics in Toronto, said of the U.S. numbers. "Indeed, the survey data suggest that the rapid rebound in both exports and imports growth seen over the last year will soon slow."
How men and women fare on the jobs front Last week's employment report from Statistics Canada showed a continued rebound in jobs from the depths of the recession. With some 93,000 jobs created in June and an unemployment rate below 8 per cent, employment is now just 0.8 per cent below the peak reached in October, 2008, BMO Nesbitt Burns deputy chief economist Douglas Porter notes. As the chart above shows, the rebound has been led by a surge among men 25 years and up. "In fact," Mr. Porter says, "employment among adult males has now reversed all its (heavy) recession losses, with a big helping hand from a snapback in construction payrolls. For adult females, it was a case of 'recession, what recession?' on the employment front."
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From today's Report on Business
- TransCanada faces industry pushback on pipeline tolls
- Calgary Stampede sees more upbeat mood
- A breath of (disclosure) fresh air for shareholders
- Setback at polls casts doubt on Japan's economic reforms
And, read our Streetwise blog and Your Business section