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OPEC can't decide Oil prices climbed today after OPEC members failed to reach any agreement on production amid heated divisions.
"Unfortunately we are unable to reach a consensus to reduce or raise production," OPEC'S Secretary General Abdullah El-Badri told reporters in Vienna, according to Reuters.
The meeting in Vienna is reported to have been acrimonious. Indeed, Saudi Arabia's oil minister Ali al-Naimi described it as "one of the worst meetings we have ever had."
Fully half of the 12 members of the group rejected the idea of boosting output by about 1 million barrels a day.
The Saudis had pushed for an increase, The Financial Times reports, but were opposed primarily by Iran and Venezuela. OPEC is already operating above its official quotas, analysts say.
There are fears that high oil prices will hamper the economic recovery. Already, there is evidence of consumers having to shift money to filling up their gas tanks from discretionary purchases.
"OPEC members today were unable to reach agreement on the need to make more oil available to the market," said Nobuo Tanaka, the executive director of the International Energy Agency.
"Crude oil prices have risen as a result and continue to pose a threat to the global economic recovery," he said. "Of course what matters more than output targets is actual supply, which we hope will move in line with seasonally rising demand, and we urge key producers to respond accordingly."
He noted the "constructive statements" from Saudi Arabia, adding that "we are pleased to hear in the aftermath of the OPEC meeting that a number of key producers plan to make more oil available."
Yesterday, Federal Reserve chairman Ben Bernanke said in a speech in Atlanta that "households are facing some significant headwinds, including increases in food and energy prices, declining home values, continued tightness in some credit markets, and still-high unemployment, all of which have taken a toll on consumer confidence."
Mr. Bernanke believes high commodity prices are transitory, though it's not shaping up that way.
Julian Jessop, however, the chief international economist at Capital Economics in London, believes prices will still dip at some point.
"OPEC's decision to maintain its current output quotas, rather than raise them, will disappoint many after the encouraging signals from Gulf delegates in the last 24 hours," he said.
"However, oil production is already well above the formal ceiling, and some members, notably Saudi Arabia, may supply more regardless ... We suspect that if prices pick up any further, those members that did want to increase quotas today, led by Saudi Arabia, will simply increase supply anyway. Indeed, even those members who voted against may be tempted to take advantage of higher prices and allow their compliance to slip further too."
Globalive wins key ruling Globalive Wireless Management Corp. can continue to operate as one of the upstarts that have changed the landscape of Canada's telecommunications industry, the Federal Court of Appeal ruled today.
The battle over Globalive and its Wind wireless brand has been ongoing since the fall of 2009, when the Canadian Radio-television and Telecommunications Commission ruled that a foreign backer exerted too much control, The Globe and Mail's Iain Marlow reports.
But the federal Cabinet, eager to juice competition in the sector with the entry of several players, overturned the CRTC ruling, allowing Globalive to launch Wind Mobile in December, 2009. Shortly after that, Public Mobile, another new wireless player, appealed to the court for clarity on the Cabinet decision and, effectively, Canada's foreign ownership restrictions.
Roaming fees high Canada's wireless operators are some of the most expensive in the world for wireless data roaming charges tacked onto users who use their smart phones outside of the country, says a new survey from the OECD.
The report, drafted by the Organization for Economic Co-operation and Development's science and technology arm, compared wireless data charges when consumers used devices outside of their home countries, Iain Marlow writes.
"When travel among various European countries was factored out, Canada had the most expensive rates in the world for using a megabyte of wireless data - essentially double the OECD average of $13.52 U.S.
When will Greece boil over? One wonders how long it will be before all hell really breaks loose in Greece.
The poster child of the debt crisis is struggling under difficult fiscal targets and wary markets, government borrowing costs have soared, and strikes and demonstrations are a daily event amid severe austerity measures.
Today, the country's statistics agency reported, unemployment hit a record 16.2 per cent in March, having steadily climbed. The ranks of the jobless are now 40 per cent higher than just a year ago, and it can only get worse as Athens prepares to slash public sector jobs and close agencies in a series of measures aimed at reducing its debt burden.
Unemployment among youths now tops 42 per cent, which promises even more trouble for the country as its young people grow increasingly disaffected.
Today, Prime Minister George Papandreou meets members of his party, who are balking at some of the measures.
"The deputies are demanding that the burden should be shifted to those who can withstand it better," Labour Minister Louka Katseli said in a television interview.
Germany, meanwhile, is floating a plan that would see Athens extend the maturities on its bonds by a full seven years.
"Any additional financial support for Greece has to involve a fair burden sharing between taxpayers and private investors and has to help foster the Greek debt sustainability," Germany's Finance Minister Wolfgang Schäuble said in a letter to EU, International Monetary Fund and European Central Bank officials.
Housing starts rise Construction activity picked up slightly in May, boosted by multiple dwellings such as condos, Canada Mortgage and Housing Corp. said today.
Housing starts rose to a seasonally adjusted annual rate of 183,600 from 178,700 in April, the federal agency reported.
"Housing starts increased modestly in May due to an increase in multiple construction in most provinces and in rural starts," said Bob Dugan, chief economist at CMHC's Market Analysis Centre. "The increase in multiples and rural starts was partly offset by a decrease in single starts."
The numbers were juiced by a 33.3-per-cent increase in British Columbia and, to a lesser extent, a 13.5-per-cent gain in Quebec. Starts increased 11 per cent in the eastern provinces and 10 per cent on the Prairies. Ontario starts fell 22.9 per cent.
"Note that housing starts and building permits reached a cycle peak of around 200,000 back in Q1 of last year and since then the trend has been a slowly declining one, despite a low interest rate environment," said economist Krishen Rangasamy of CIBC World Markets.
"And with a recent softening in the pace of existing home sales, the listing to sales ratio rose to a 7-month high in April. So, we may see some softness ahead for housing. We expect housing starts to continue to soften (i.e. a 10 per cent or so drop in starts compared to last year) as home prices stagnate in light of higher interest rates in the second half of the year."
Analysts weigh in on RIM, Apple Analysts at RBC Dominion Securities believe this week's news from Apple Inc. is a "possible game changer" and a potential concern for shareholders of Research In Motion Ltd. .
At its developers conference in San Francisco Monday, Apple unveiled its new iCloud service and previewed its iOS 5 mobile operating system, which, among other things features iMessage, a rival to RIM's popular BBM instant message system on the BlackBerry.
"While largely expected, announced updates to iOS 5, Lion and iCloud position Apple for a 'Post-PC' world, where media and computing shifts to the cloud, synchronizing across multiple devices," said analysts Mike Abramsky and Mark Sue.
"This vision may help drive Apple's next leg of growth and valuation and defend against Android."
Here's what Mr. Abramsky said about RIM: "While unlikely to disrupt Blackberry's BBM franchise near term, this development may elevate investor uncertainty regarding RIM's long-term competitive position for BBM, and sustain concerns regarding RIM's execution challenges to compete."
Maple Group to be more formidable Rival bidders trying to break up the proposed merger between TMX Group Inc. and London Stock Exchange Group PLC could soon become even more formidable as the battle for control of the Toronto Stock Exchange escalates.
As The Globe and Mail's Tara Perkins reports, the Canadian banks and pension funds that have launched a rival bid for TMX are in talks with several other parties, trying to bring them into their fold. They include Manulife Financial Corp. , Desjardins Financial, GMP and Dundee Capital
If the so-called Maple Group succeeds in bringing them onside, it would be a powerful signal to markets and regulators of its support on Bay Street.
No QE3 in cards Investors believe we won't see any further stimulus from the Federal Reserve - in terms of a QE3 - but that the U.S. central bank's key lending rate is going to remain very low for a very long time.
As Globe and Mail Washington correspondent Kevin Carmichael reports today, Fed chief Ben Bernanke was notably glum in a speech in Atlanta yesterday, though he gave no signal of another round of quantitative easing when the current round, dubbed QE2, ends.
"It is unlikely the Fed is going to move away from loose monetary policy this year, but a decision to enter QE3 in the near-term is remote," said Scotia Capital currency strategist Camilla Sutton.
"During yesterday's economic outlook update, Fed chair Bernanke continued to sound dovish, noting that pressures on inflation from high commodity prices should prove transitory, that a slow improvement in labour markets is a weight and that housing remains an issue. However, it is also clear that the U.S. economy has moved away from deflationary pressures and this, combined with chair Bernanke's comments yesterday, suggest that QE3 is not on the table."
- Bernanke shoots back at critics
- Little risk of another recession: Flaherty
- Lipstick Theory bodes ill for U.S. retail
German numbers disappoint Is Europe's powerhouse beginning to slow?
German exports fell 5.5 per cent April, according to fresh data today, while industrial production also slowed down.
"After solid growth in Q1, suggesting that Germany was weathering current economic growth headwinds - including high food and fuel prices - better than many other European economies, Germany's economy is starting to show signs of slowing," said economists Derek Holt and Karen Cordes Woods of Scotia Capital.
"German industrial production unexpectedly contracted in April versus expectations for a modest gain with weakness virtually across the board although some of the weakness stems from a substantially upward revision to the March report ... Construction activity witnessed the largest decline, falling 5.7 per cent month over month after three solid months while manufacturing and mining production also contracted in April."
Some of the softer numbers, they noted, were related to supply disruptions after the earthquake and tsunami in Japan.
In Economy Lab today
Too many of the world's fast-growing developing countries are deploying crisis-fighting policies even though their economies have recovered from the recession, exacerbating inflation, the World Bank says it its latest economic assessment. Globe and Mail Washington correspondent Kevin Carmichael reports.
In International Business today
Japan's current account surplus fell less than expected in April from a year earlier, fuelling further hopes for an early economic recovery as manufacturers restore lost production and mend supply chains after the March disaster. Reuters examines the data.
In Personal Finance today
Women and Warren Buffett have something in common: they're both better investors than the average man, LouAnn Lofton writes .
She wants to downsize to a condo. He wants to stop playing real estate musical chairs.
When the need for emergency cash arises, it is crucial to watch costs carefully.
From today's Report on Business