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daybook 10.01.2009

Daybook, a daily compendium of news, trends, data and analysis compiled by Report on Business editors and reporters, for Thursday, Oct. 1:







Nobody's Business

Leave it to David Rosenberg, one of Bay Street's most bearish economists, to see an omen "of biblical proportions" so apt for his stubbornly gloomy theme of late.

The chief economist of Gluskin Sheff + Associates gave a speech last week at the five-star Broadmoor resort in Colorado Springs, where he poured cold water on the recent economic and market optimism, leaving his high-powered corporate audience stunned, and even the famed economist wondering whether he wasn't overdoing it with all the Chicken Little stuff.

As he crossed a bridge over a tranquil lake on the plush grounds, he wondered if he could be wrong. Perhaps this recession really isn't the proverbial "black swan" that he and some other bearish gurus fear it might be, an economic event unlike any seen before, that by its very existence brings into question all assumptions about the happy recovery that more orthodox (and cheery) forecasts envision?

As he pondered, what did he see in the lake but a pair of actual, living, breathing black swans, several thousand kilometres from their natural habitat in Australia and coming straight for him.

"I thought they might attack me until I yelled, 'Dudes, we're on the same side,'" Mr. Rosenberg recalled. "It was an omen. A reminder that the black swan still lurks."

Just to prove you can't make this stuff up, above is the photo snapped by Mr. Rosenberg on his phone-camera and e-mailed to some colleagues.

"I felt a rush of biblical proportions," he said, "and thought of what it must have felt for Noah as the dove approached the Ark with an olive branch in his beak."

•••

Barry Zekelman, the CEO of John Maneely Co., may not be endearing himself to Lakeside Steel Inc. of late. But if he ever wants to give up his job as chief of the U.S. steel pipe and tube manufacturer, he could make a living as a standup comic who zings his audience with one-liners.

In an interview with American Metal Market, a trade publication, Mr. Zekelman pondered the possibility of buying Lakeside, a Welland, Ont.-based competitor. He suggested he could buy Lakeside and troubled Barzel Industries, which is in bankruptcy protection, and "take them out of their misery." His other thoughts on Lakeside:

•"I was considering putting Lakeside on my Visa, but my wife went out and bought a Dolce & Gabbana dress."

•"Lakeside should probably go to a wishing well and wish they had money."

•"The former parent of Lakeside tried to give it to me, and I wouldn't take it."

Lakeside, which itself is interested in part or all of Barzel, responded in a news release saying it hasn't been approached by John Maneely, and doesn't know what would happen if it were.

"We certainly understand that any pipe and tube manufacturer including John Maneely may want to acquire one or more of its competitors to obtain more market share and to prevent competitors from growing through acquisitions," CEO Vic Alboini said.

Not exactly Don Rickles in his response, but he made his point.

•••

The Financial Times names Indigo Books & Music Inc. CEO Heather Reisman as one of the top 50 women in business in the world. We asked Ms. Reisman what lessons she learned since founding the company in 1996:

• "Stay at the table ... keep working at what you believe in, be willing to accept that mistakes are an essential part of growth and achievement, and never quit."

• "It is all about attracting people who share your vision, who inspire you and who you love coming to work with."

• "Work at what you love and love your work. This is the only way to really fully leverage your abilities."

And finally:

• "Find great mentors (and if possible, marry the very best one!)"

Ms. Reisman is married to Onex Corp. CEO Gerald Schwartz, who engineered the acquisition of Indigo's main rival, Chapters, in 2001.

The other Canadian on the list is Toronto-born Andrea Jung, Avon Products Inc.'s CEO. Staff





Slack: A Daybook series

When times are good, Canadians love to travel, whether it's a weekend splurge at a luxury hotel, a winter escape to sunny climes or an adventurous summer trip at home or abroad. In tough economic times, however, the travel and tourism sectors are among the first to feel the bite. Daybook takes a look at the industry.

Tourism

From empty seats on airplanes to a drop in hotel visitors, the recession has caused Canadians to stick close to home. Here's a look at what the tourism industry has encountered.

Hotels

Fewer hotel rooms are being booked. Across Canada, hotel occupancy rates are 7.4 per cent lower than they were a year ago, according to STR Global's tracking. Three provinces have seen double-digit declines in occupancy in the past year: Quebec, Alberta and Saskatchewan.

Here's how hotel occupancy rates in major world cities are faring:

Cairo: 56 per cent

Mexico City: 60 per cent

Mumbai: 61 per cent

Beijing: 49 per cent

Paris: 82 per cent

Moscow: 76 per cent

Los Angeles: 70 per cent

Travel

"Staycations" are hammering the entire tourism sector. Spending on tourism in the country tumbled 0.6 per cent in the second quarter of this year - the biggest decline since 2001, Statistics Canada said this week. As the economy tanked at the end of last year, "Canadians began cutting back on both their business and leisure travel," the agency noted.

Higher spending on interurban buses and groceries suggest people are travelling closer to home, Statscan says. Tavia Grant





Feel like betting on a race horse? Now might be the time, assuming you don't mind owning a large animal that eats while you sleep and might never win a dime.

A recent auction of thoroughbreds held by Kentucky-based Keeneland saw prices fall by 41 per cent from last year as recession-strapped bidders stayed away or capped their offers. The average price of a race horse was $60,734 (U.S.) in the two-week auction. Total sales fell to $191,859,200, down from last year's $327,999,100.

"The thoroughbred industry, like all markets, has been deeply impacted by the global financial meltdown which is unlike anything we've seen before," Keeneland director of sales Geoffrey Russell said in a statement. Mr. Russell offered some hope the decline in prices might end, noting that breeders are producing fewer horses in the slump.

Four yearlings went for more than $1-million, led by a horse named Storm 'n Indian, purchased for $2.05-million by Sheik Mohammed bin Rashid al Maktoum, who bought 34 yearlings for $13.9-million. Eric Atkins





Calendar

Canadian and U.S. auto makers report their September sales throughout the day.

EnCana Corp. holds a conference call with analysts to discuss its integrated oil business, 9 a.m. MT.

The Bank of Japan releases its tankan business sentiment survey.

The Institute for Supply Management releases its widely-watched manufacturing index for September, 10 a.m. ET

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