Microsoft, Yahoo partner; Flaherty warns recovery to be gradual.
Microsoft has (finally) struck partnership with Yahoo, in assault on Google.
Microsoft this morning says it has reached agreement with search-engine rival Yahoo on a Internet search partnership, in a combination of the third- and second-largest search engines. Google would still have more market share than Microsoft-Yahoo. But with Microsoft's backing, long-troubled Yahoo would have R&D prowess to more ably take on Google. Microsoft's own new Bing search engine has gotten off to a fast start after a spring launch. Former Yahoo CEO Jerry Yang was ousted after repulsing a $47.5-billion (U.S.) Microsoft offer for Yahoo. While not putting Yahoo up for sale, successor Carol Bartz, tech veteran who long headed Autodesk, lost no time signalling Yahoo wanted to resume talks with Microsoft. NYT has more here.
Flaherty, Yellen, only cautiously upbeat on economic recovery.
The Bank of Canada and the Fed last week gave pols the green light to lead a celebration of imminent economic turnaround. But Jim Flaherty, Canadian finance minister, and Janet Yellen, head of the San Francisco Fed, aren't breaking out the party hats.
"There are good signs that the economy has stabilized and that there are the beginnings of a recovery," Flaherty, pictured right, said Tuesday. But "we have to be careful," he said, vowing to continue Ottawa's economic stimulus program.
Yellen said yesterday she's seeing the "first solid signs" of an upturn. But the president of the Federal Reserve Bank of San Francisco, speaking in Coeur d'Alene, Idaho, added that "recovery is likely to be painfully slow. A gradual recovery means that things won't feel very good for some time to come."
For May, Statscan reports that 1.6 million people were unemployed, with about 778,000 receiving EI benefits - the highest number receiving jobless benefits in 12 years. By a wide margin, Alberta, B.C. and Ontario are suffering the biggest jumps in EI claims.
The BofC says GDP will turn positive this quarter, some three months earlier than expected. But central bankers Carney and Bernanke, each also cautious, say it's too soon to risk raising interest rates.
Spike in Calgary, Edmonton jobless claims lead nation...
...but Alberta's unemployment rate remains far below the national average. Calgary leads Canada in year-over-year increase in number of workers on EI (+340 per cent), followed by Edmonton (+236 per cent). But the current 57,000 Albertans on unemployment rolls as the oil sector slumps is far less punishing than the 95,000 jobless claimants of 1983 when Alberta had a much smaller population.
"It's jumped up tremendously since last year," Todd Hirsch, senior economist at Calgary's ATB Financial, told the Edmonton Sun yesterday. "But it's because we were starting at such a ridiculously low level." Indeed, Alberta is still projecting a labour shortfall of 92,000 over the next decade as expansion of the Athabasca tar-sands megaprojects resumes.
In volte-face, GM rejects Magna's Opel bid. But we're still betting on a Magna win.
General Motors Co. yesterday rejected Magna's bid for GM's German-British automaker Opel-Vauxhall, now favouring rival bid by Belgium investment firm RHJ International. Stated reasons: Magna-led offer is more complicated (Magna, GM, Russian bank Sberbank and Opel workers would each have stakes in the restructured Adam Opel GmbH). And GM wants to retain existing partnerships with Russian automakers Avtovaz and Avtotor, which make Caddies and Chevs. But GM knew all that months ago...
Magna wants to use troubled Russian automaker OAO Gaz, controlled by Russian oligarch Oleg Derapaska, to make Opel line at Gaz's under-utilized plants and to exploit large Russian market, expected to see rapid growth post-recession.
Real reason for GM's cold feet re frontrunner Magna, experts speculate, is that having emerged so quickly from bankruptcy, an emboldened GM is seeking better terms for Opel. Indeed, GM may want to quickly regain full ownership of Opel from RHJ, a short-term speculative investor.
Trouble is, Germany, which already is financing Opel in restructuring and is called on to kick in still more billions of dollars in assistance, heavily favours the Magna deal, as do Britain (Vauxhall) and Opel's unions. So much so that Berlin says there will be no state assistance for RHJ as Opel owner.
As for GM's hopes of continuing to build and sell Caddies and Chevs in Russia (Stronach, pictured, has asked GM for the Russian Chev rights), Derapaska is almost a son to Putin. Putin already has publicly lauded the prospective Opel-Gaz link. At this writing, we'd still count on Berlin and the Kremlin to deliver Opel to Magna.
Washington, too. GM, now majority owned by Uncle Sam, doesn't want to risk further fraying of U.S-Russia relations. And the U.S-Canada bailout of GM is intended to revive its North American operations and protect the jobs of American and Canadian workers, not to enable GM to cling to its non-N.A. businesses.
N.A.'s most competitive newspaper market to get seventh daily.
English-language afternoon daily, that is, tentatively called t.o.night and distributed free at Toronto transit stops among other venues. Set for September 8 launch, and backed by St. Joseph (Toronto Life, et al) and Blackburn family (former owner London Free Press). Betting on status as only afternoon paper, t.o.night will compete with daily freebies Metro and 24 Hours and weekly freebies Now and Eye, along with Star, Globe and Mail, Sun, National Post, Italian and Chinese dailies and other ethnic press. Founder and B-school grad John Cameron, 24, sees t.o.night as commuters' planner for evening entertainment, "the last touch-point before they make these decisions." We see it lasting three months.
Corporate earnings pulse
Losers: Quarterly earnings sharply down at oil gaints BP and Talisman, while Valero posts a loss. (Exxon and Shell report tomorrow.) Losses posted at Torstar, Time Warner, Daimler, Atco, Industrial Alliance. Rogers profit warning. Winner: QLT profits up on sales of new cancer drug.
Commodities also hit: oil, gold, copper all down.
Quote of the day
"Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning." -Winston Churchill, Nov. 10, 1942, address at the annual banquet of the Lord Mayor of London.
For the purposes of this blog, the inception of the Great Recession in the U.S., the epicentre of the crisis, is taken as the start date for the global slump. The U.S. has been in recession since December 2007.