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OTTAWA–The Canadian economy in April showed signs of emerging from the worst two quarters in decades, but the light at the end of the tunnel remains faint and distant.

Statistics released yesterday found the country’s gross domestic product retreated for the ninth consecutive month in April, slipping 0.1 per cent.

That was better than the 0.3 per cent contraction in March and spot-on the economists’ consensus for the month.

If there was a surprise, said Douglas Porter of BMO Capital Markets, it was that manufacturing was even weaker than thought, despite the relatively good month for the auto sector.

"There’s definitely still serious risks out there for the recovery," he said. "So until we definitively turn the corner, I’m going to stay cautious."

One of the trouble spots surfaced in the United States, with a new survey showing the American consumer remains in the dumps payday loans. The New York-based Conference Board said yesterday its consumer confidence index fell five points in June, when analysts had been expecting a slight increase.

Economists are now projecting the second quarter of this year, which ended last night, will show the economy contracted between 2 and 3 per cent on an annualized basis, better than the 5.4 per cent fallback in the first quarter, but still a long way from growth.

CIBC’s Krishen Rangasamy said the GDP numbers can indeed be a signal that the worst of the recession is behind us, but he too cautioned that Canadians shouldn’t start breathing easier just yet.

"At this point, we’re still aiming for a recovery in the final quarter of the year, helped mostly by a pickup in demand overseas," he said.

The Canadian Press

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LONDON – Leading banking and business executives were upbeat on Monday about a developing recovery in the global economy, but cautioned against any slack-off in attempts to reform regulatory and financial systems to prevent a repeat of the crisis.

Deutsche Bank head of global markets Anshu Jain said he expects the banking system to end the year in a far better position, while General Electric Co. chief executive officer Jeffrey Immelt said that the period of crisis management prompted by the global downturn is "behind us."

John Kingman, the chief executive of UK Financial Investments Ltd., the group created by the British government to run the bank stakes picked up in a massive industry bailout last year, said he was confident of beginning the process of "gradual exit" from those positions.

"I would say we have almost a fully functioning capital market," Kingman said at a conference at the London Business School. "In some way, shape or form, 2010 and beyond will see economic growth. How positive it is remains to be seen."

Jain said that substantial progress was being made on unwinding the heavily leveraged positions of banking institutions that fed the current crisis.

"We will finish the year with a much lower level of risk and leverage," he said, speaking at the same event about the banking industry as a whole.

Asked about the prospects for the next 12 months, Kingman said he was confident that "confidence will build in the U.K," allowing the beginning of the gradual exit by the government from stakes like its 70 per cent holding in the Royal Bank of Scotland PLC.

While the tone of the annual "Global Leadership Summit," was broadly positive, there were warnings against the potential that the beginnings of economic recovery could bring with it a growing complacency about tackling the long-term regulatory changes.

While noting that a recovery was a necessary precursor to some changes, Royal Bank of Scotland chief executive Stephen Hester said that both the public and business worlds needed to acknowledge that the excesses enjoyed by many were no longer viable.

"It's a question of trying to rev the engine of change as hard as it can go without blowing a gasket," he said personal loans.

There was also an acceptance that changes to the financial system would be substantial, given the demands made by taxpayers who now have a larger say thanks to the government bailouts of industries around the world.

"I think that is why the system coming out of this will have to look very different from the one we had going in," Kingman said.

Immelt, who last week called for a doubling of manufacturing jobs in the United States to at least 20 per cent of total employment, said that he expects a permanent change in the way business will be done.

"Financial services probably isn't going to be the same in my lifetime," he said. "You're going to see more regulation. The government has moved in next door and they're not leaving."

The presence of Kingman and Hester at the same event also sparked further criticism of RBS's decision to grant the new CEO a pay deal worth as much as 9.6 million pounds ($15.7 million). Kingman said he was "very comfortable" with the package, stressing it requires Hester to hit performance targets that will give shareholders a very healthy return.

Immelt said that Fairfield, Conn.-based GE, one of the world's largest industrial companies, making products like jet engines, household appliances and light bulbs, plans to introduce more products in the next two years than ever before.

It will also spend more on research and development this year than last year, he added.

Business advisory firm Deloitte said that with the immediate crisis over, the businesses who will succeed over the next decade will be those that have the courage to think beyond the current challenging markets.

"Winners emerging from a recession are typically those who have not only built financial strength, but have also developed resilient, robust and flexible business models, to deliver stickier and more compelling value propositions," said Richard Punt, Deloitte strategy partner.

09:50ET 29-06-09

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From David Nicklaus’ Mound City Money blog. STLtoday.com/moundcitymoney

Unanimity is rare in surveys of businesspeople, but the St. Louis Fed found it among area car dealers. The Fed’s latest Burgundy Book survey says all the dealers it talked to expect lower sales this year. Other retailers aren’t quite as pessimistic, but half expect sales to fall and only one-third expect sales to rise.

If Kansas City’s leaders want to learn about the economics of a 1,000-room convention hotel, they could drive 250 miles east and talk to the folks who recently foreclosed on the Renaissance Hotel in downtown St. Louis. Instead, they’re spending $500,000 for a feasibility study. According to the Kansas City Star’s Kevin Collison, our neighbors to the west are also establishing a 20-member steering committee to think about the idea.

We St. Louisans could save them plenty of time and money. Here are three pieces of free feasibility advice:
— It won’t work without a huge public subsidy.

— It won’t magically generate more convention business

— Even with a huge subsidy, it might not succeed.

The ESOP Association estimates that 10 million U.S. workers, about 10 percent of the private-sector work force, participate in employee stock ownership plans at 11,500 companies. Many people would look at those numbers and see upbeat, motivated employees, their incentives fully aligned with the employers’ goals cheap car insurance.

Sean Anderson, a visiting law professor at the University of Illinois, looks at ESOPs and sees a disaster waiting to happen. In an upcoming article, he says Congress should ban employer stock from all company-sponsored retirement plans. Here’s an Anderson quote, from a U of I News Bureau summary of the article that will appear in the Loyola University Chicago Law Journal. :

"ESOPs have a lot of intuitive appeal — the idea of having workers own a piece of the company they’re working for. But they’re Enron on steroids. At the end of the day, they put workers at terrible risk and more often than not work as a tool that benefits the company, not employees."

ESOPs prevent workers from diversifying their retirement savings, and workers don’t even control the price at which they invest.

My guess is that any proposal to abolish ESOPs would run into a firestorm of criticism from many of those 10 million employee-owners. I’ve talked with people who get a special sense of pride from working at an employee-owned company such as Graybar Electric or McBride & Son Homes. Any reformer would also have to contend with the ghost of Louis O. Kelso, the Cold-War-era thinker who conceived of ESOPs as a way to keep workers engaged with capitalism and opposed to communism.

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<credit-solo/>Guarantee Electrical

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CALGARY–Agrium Inc.’s months-long quest to acquire CF Industries Holdings Inc. failed to reach a decisive end yesterday, with just under two-thirds of the U.S. target’s shareholders supporting the Calgary-based company’s offer.

Agrium said 62 per cent of CF shareholders tendered their stock to the nearly $4 billion (U.S.) deal, which expired Monday at midnight but was extended to July 22.

Despite coming in just shy of the two-thirds needed under Agrium’s offer, the results were "extraordinarily strong," Agrium CEO Mike Wilson said in a statement. "CF stockholders have sent a resounding message to CF’s board that they support Agrium’s offer."

Agrium is offering $40 in cash, plus one Agrium share for each CF share, a bid it has called its "best and final price" unless CF has a change of heart and is willing to sit down and talk terms.

Agrium’s hostile pursuit of CF has been rebuffed by directors of the Deerfield, Ill.-based fertilizer producer and distributor, despite two increases to the bid. Yesterday, the pursued firm stood pat.

"Contrary to Agrium’s assertions, the tender offer results do not change the facts that Agrium’s offer substantially undervalues CF Industries, our shareholders do not support the price in the offer, and the offer has significant regulatory issues," said CF chief executive Stephen Wilson affordable health insurance in new york.

CF contends that Agrium is making the offer to quash CF’s own hostile bid for rival Terra Industries.

Agrium says the deal is a 60 per cent premium to CF’s closing stock price Feb. 24, the day before its first bid.

UBS Investment Research analyst Brian MacArthur in a note to clients said, "Agrium cannot legally compel CF to negotiate. Should CF’s board reject Agrium’s overtures, CF could remain independent," but it risks suffering a stock drop of $6 to $12 per share if Agrium walks away from its bid.

Agrium retails agricultural products and services in North and South America. It is a leading global producer and marketer of fertilizer. Its stock closed on the TSX up $2.09 to $47.01 and up $1.85 (U.S.) to $40.74 on the NYSE. CF stock rose $3.56 to $72.88 in New York.

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WASHINGTON — With unemployment likely to hit double digits this year, the Federal Reserve must strike a reassuring message this week: that it stands ready to take further steps to nurse the economy back to health, but also make clear that too much medicine could spur worries about inflation.

Some economists say that at the end of their two-day meeting Wednesday, Fed Chairman Ben Bernanke and his colleagues may say they will stretch out their purchases of government debt to avoid an abrupt end to that effort, now slated for August. Doing so could help avert possible market disruptions and help ease fears about a stimulative overdose that could trigger inflation.

"I think there’s a good chance the Fed will exert more flexibility in the timing of purchases to slow them down," said Michael Feroli, an economist at JPMorgan Economics.

What’s all but certain is that policymakers will hold a key lending rate to banks at a record low near zero. They also are likely to repeat a pledge to keep rates there for "an extended period."

Most economists say that means the Fed will keep the target range for its bank lending rate between zero and 0.25 percent through the rest of this year and probably into next online cash advance. That means commercial banks’ prime lending rate, used to peg rates on home equity loans, certain credit cards and other consumer loans, will stay around 3.25 percent, the lowest in decades.

Most economists say the Fed won’t be inclined to boost its purchases of government debt or mortgage-backed securities at this week’s meeting, preferring to take time to assess the impact of its actions already taken.

There will be "no fireworks from the Fed," predicted Michael Darda, chief economist at MKM Partners. With unemployment expected to worsen and with factory production sagging, Darda said inflation is unlikely to sprout any time soon.

"Don’t expect the Fed to start laying the groundwork for tighter monetary policy" until there is sustained turnaround in factory and employment activity, he said.

And that will take awhile, because an eventual recovery is likely to be tepid. Still, Fed policymakers will continue to explore how and when to wean the economy off stimulative medicine to avoid fanning inflation.

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NEW YORK–A published report says Apple Inc. CEO Steve Jobs, who has been on medical leave for undisclosed reasons since January, received a liver transplant two months ago.

The Wall Street Journal reported the surgery took place in Tennessee. It didn’t specify a source for the report, which comes as Jobs is said to be preparing to return to work.

Apple spokesman John Dowling declined to comment Saturday on whether Jobs had a liver transplant free business card template. But he said in a statement that Jobs "continues to look forward to returning to Apple at the end of June and there is nothing further to say.”

The 54-year-old Jobs had disclosed in August 2004 that he had been treated for a form of pancreatic cancer.

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some rays of hope for the unemployed. Can the recovery last? Most important: Where are the jobs?

Get the answers when Anderson Cooper and Ali Velshi host our panel of experts and check in on virtual town halls across the country.

Thursday, June 18 at 8p.m. ET

–>

NEW YORK (CNN) — Admitted fraudster Bernard Madoff, the mastermind of history’s biggest Ponzi scheme, had a three-hour meeting with the Securities and Exchange Commission’s top watchdog this week, several sources with knowledge of the situation told CNN.

The session took place Wednesday at New York’s Metropolitan Correctional Center, where Madoff is awaiting sentencing on federal fraud charges, the sources said. He met with SEC Inspector-General David Kotz, who is investigating what federal securities regulators knew about Madoff’s $50 billion enterprise before it collapsed in December pay day loan.

Asked about the reported meeting, Kotz said only, "We’ve been making substantial progress in the investigation and plan to issue a comprehensive report very shortly." He told a congressional committee earlier this week that his main report should be complete by the end of August.

Madoff, 70, pleaded guilty in March to 11 criminal counts, including fraud, money laundering and perjury. The onetime chairman of the NASDAQ stock exchange faces a potential 150-year prison term at his June 29 sentencing.

His attorney, Ira Sorkin, had no comment on the report Thursday.

Madoff’s operation reached far and wide, touching major financial institutions overseas, including Spain’s Banco Santander and Britain’s HSBC (HBC), tony communities such as Palm Beach, Florida, and members of Hollywood’s elite, such as film director Steven Spielberg and actor Kevin Bacon.

Kotz is looking into whether the SEC missed or ignored warning signs before Madoff’s enterprise collapsed. His office so far has interviewed more than 100 witnesses and has reviewed millions of e-mails and other documents, he told Rep. Paul Kanjorski, the chairman of a House subcommittee that oversees the securities industry, in a June 15 letter.

Chris Cox, the SEC chairman at the time the scandal broke, resigned under fire in January after disclosing the agency had ignored warnings about Madoff dating back to 1999. And Harry Markopolos, a Boston accountant, told Kanjorski’s subcommittee in February that he repeatedly tried to raise questions about Madoff with the SEC.

"I gift-wrapped and delivered the largest Ponzi scheme in history to them and somehow they couldn’t be bothered to conduct a thorough and proper investigation," Markopolos said. 

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A key index of prices paid by consumers showed the largest year-over-year decline since April 1950, primarily due to sinking energy prices, the government said Wednesday.

The Consumer Price Index, the Labor Department’s key measure of inflation, has fallen 1.3% over the past year.

That’s the largest decline in nearly 60 years, and is due mainly to a 27.3% decline in the energy index.

On a monthly basis, CPI rose 0.1% in May, after remaining flat the previous month. Economists surveyed by Briefing.com expected a 0.3% increase.

Core CPI: The even more closely watched core CPI, which excludes volatile food and energy prices, increased 1.8% on an annual basis.

Core CPI rose 0.1% in May compared with April, matching forecasts. It was restrained by rent costs, which rose only 0.1% — the smallest increase since November 2004, according to Ian Shepherdson, economist at High Frequency Economics.

"Overall, core is subdued," Shepherdson wrote in a research note. "Expect further slowing ahead."

A related Tuesday report showed wholesale prices jumped slightly in May, but the the 5% annual rate of decline was the sharpest since 1949. Both reports seemed to allay fears of inflation and deflation in the short-term fast payday loan no faxing.

Energy: The energy index slipped 27.3% on an annual basis. It climbed 0.2% in May after declining the previous two months.

The gasoline index rose just 3.1% in May - "much less than we expected," Shepherdson wrote.

The mild rise in the gasoline index "merely delays the inevitable," Shepherdson warned, adding that he expects a double-digit increase in June.

Prices at the pump have increased for 50 straight days, rising 30.8% during that period, according to a separate survey for motorist group AAA.

Index-by-index: The indexes for shelter, new and used motor vehicles, and medical care also posted increases in May.

Many other indices slipped. The food index decreased for the fourth consecutive month with a decline of 0.2%.

The tobacco and smoking products index fell 0.3% in May after rising sharply in the two months prior. The increase in March and April was due to an increase in the federal tax.

The indexes of public transportation and apparel also fell. 

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