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Fitch downgrades Ireland If there was a race to the bottom, Greece would be beating Ireland, but only just.
Fitch Ratings today cut Ireland's credit rate by three notches in the wake of its bailout, to BBB+ from A+.
"The downgrade reflects the additional fiscal costs of restructuring and supporting the banking system, reflecting ongoing contingent liabilities arising from the guarantee of Irish bank debt and deposits (equivalent to 93.5 per cent of GDP at end Q310); weaker prospects and greater uncertainty regarding the economic outlook as a result of the recent intensification of the financial crisis; and the associated loss of access to market funding at an affordable cost, resulting in reduced fiscal financing flexibility," Fitch analysts said in a statement.
"The scale and pace of the deterioration of public finances, continuing contingent fiscal and macro-financial risks emanating from the banking sector, combined with the highly uncertain economic outlook and loss of market access, means that Ireland's sovereign credit profile is no longer consistent with a high investment grade rating."
Fitch noted that the new rating still reflects strong underlying fundamentals, including a diversified 'investment-friendly' economy.
Small mercies: Ireland remains two notches above Greece.
The latest move by Fitch comes amid rising tensions in Europe over the spreading debt crisis. In particular, Germany doesn't want to expand the size of the euro zone's bailout fund as it would foot a lot of the bill, nor does it back a proposal for a so-called E-bond, or joint European debt that would likely boost its borrowing costs.
The chief of the International Monetary Fund, Dominique Strauss-Kahn, has already criticized the euro zone for its "piecemeal" approach to its trouble, and today the divisions grew, according to a published interview.
"There is a bit of acrimony amongst euro zone policy makers today as a 'tiff' between German Chancellor Angela Merkel and Eurogroup President Jean Claude Junker was made public in an interview with Die Zeit," said Scotia Capital currency strategist Sacha Tihanyi.
"Mr. Junker had unkind words for those (including Ms. Merkel) who he believes have dismissed out of hand the notion of a common Eurobond issuance. This simply serves to underscore the divergence between those who count the entire euro zone amongst their constituents (like Mr. Junker) and those who are accountable to a smaller country specific sub-group (such as the chancellor). Ultimately, this does not help frayed market sentiment toward the euro."
Added CMC Markets analyst Michael Hewson: "For now with the continued lack of harmony and consensus amongst European leaders with respect to dealing with the debt crisis in Europe, the euro looks set to continue to suffer on the back of an uncertain outlook and political paralysis, if the comments by IMF chief Strauss-Kahn are any indication."
- Fitch strips Ireland of 'A' rating
- Once a joke, Iceland may get the last laugh
- Battered euro may be down, but it's far from out
Billionaires pledge to charity Seventeen more of the mega-wealthy have pledged the majority of their wealth to charity, including Facebook founder Mark Zuckerberg and financier Carl Icahn.
Mr. Zuckerberg, Mr. Icahn, AOL's co-founder Steve Case and and Michael Milken of bond fame have joined the list of those who are part of the Giving Pledge, which was put together by Bill Gates and Warren Buffett, the group said in a statement late yesterday.
Others already on the list include George Lucas, New York Mayor Michael Bloomberg and Larry Ellison of Oracle Corp.
"People wait until late in their career to give back," said Mr. Zuckerberg, who is just 26.
"But why wait when there is so much to be done? With a generation of younger folks who have thrived on the success of their companies, there is a big opportunity for many of us to give back earlier in our lifetime and see the impact of our philanthropic efforts."
Central bank to unveil review The Bank of Canada this morning releases its review of the financial system, a semi-annual report.
"Expect updated comments and analysis regarding the state of household finances particularly given the marked slowdown in household credit growth since earlier this year," said Scotia Capital.
"But the main topics have already been flagged ... and include a focus on capital, derivatives markets, systemic risk and contingent capital."
Globe and Mail economics writer Jeremy Torobin will report on the release after it is unveiled at 10:30 a.m. ET.
Separately, the Bank of England today surprised no one by doing absolutely nothing at its policy meeting.
Lululemon profit, revenue climb Lululemon Athletica Inc. today reported a jump in third-quarter profit to almost $25.7-million (U.S.) or 36 cents a share from $14.1-million or 20 cents a year earlier, sending its stock surging.
Revenue increased some 56 per cent to $175.8-million.
The Vancouver-based retailer also projected fourth-quarter revenue of $210-million to $215-million, and diluted earnings per share of 46 cents to 48 cents.
Vacancy rates decline Winnipeg was the country's tightest residential rental market in October, but the national vacancy rate fell across the country as more people sought housing of all kinds, Globe and Mail real estate writer Steve Ladurantaye reports.
Canada Mortgage and Housing Corp. said today in its Rental Market Survey that the national vacancy rate decreased to 2.6 per cent, from 2.8 per cent a year ago.
In Personal Finance today
In 2010, the bestselling finance books represented a sampling of old standards mixed with modern classics. Here are some well-written and valuable books to improve your financial life.
No-nonsense advice on how to stick to your financial resolutions from Smart Cookies columnist Angela Self.
In Your Business today
Who can you trust more than a firefighter? If your answer is nobody, then Your Business columnist Mia Pearson has got a moving company for you: Firemen Movers.
It's thanks to double-decker buses, not fire trucks, but the predominant colour on London's roadways is red. Over the past four months, a shade of blue has been steadily encroaching. Score one for Chicoutimi, Que.-based Cycles Devinci, which built the bikes for the city's new bike-share program.
Instead of cycling around looking for sales deals, the CEO of TeamSave would like you try to save money from the comfort of your computer screen. But he's got a little competitor called GroupOn to worry about.
From today's Report on Business
- Oil patch pricing carbon tariffs into new projects
- Maple Leaf defends director Purdy Crawford's independence
- Insurers ask Ottawa to ease ownership rules
- New OSC chief pledges more jail terms
And, read our Streetwise blog and Your Business section.