Dubai's Emirates Towers carry a debt load of $59 billion (U.S.). How many more debt bombs are out there among emerging economies? Photo: Chris Jackson, Getty Images.
THE NEXT DEBT CRISIS | Jitters over corporate debt coming due in emerging economies. There is an estimated $200 billion (U.S.) in corporate debt coming due this year and next in emerging economies, about half in Russia and the Emirates. But the contagion is much wider, covering most of the former Soviet republics, as well as formerly spendthrift companies in Turkey and the Baltics. Russia and Ukraine recently have allowed local big corporate borrowers to default. And "Dubai’s refusal to guarantee the debts of its investment arm, Dubai World, may set a precedent for other indebted governments to abandon companies that investors had in the past assumed enjoyed full state backing," the NYT reports. The burgeoning corporate debt of firms like Russia's troubled Rusal, world #1 aluminum maker, varies from 20% to 80% of national GDP. It's no wonder governments won't or can't stand behind it. This could be a replay of the so-called Third World debt crisis of the 1980s. Except that was government, or sovereign, debt and the IMF was able to step in. This is private-sector corporate debt held by bondholders and banks worldwide.
Using our troops as props. Harper's photo-op aboard HMCS Ville de Quebec last weekend offshore Trinidad in which he accused critics of his government's cloak-and-dagger handling of the Afghan detainees scandal of being unfaithful to Canadian soldiers. Our men and women in uniform are under suspicion only to the extent Harper has kept the orders they were given by Ottawa and field commanders under wraps.
HARPER STOOPS LOW ON DETAINEE CRISIS | Torys are pitbulls in detainees Commons debate. Government frontbenchers repeat earlier Harper lie that opposition is betraying rank-and-file soldiers in simply trying to determine why it took 18 months for Canadian Forces to change their detainee hand-over practices after learning of widespread detainee torture by Afghan National Army. Harper has stymied parliamentary inquiry. And more recently has so heavily redacted documents sought by inquiry as to make them useless. Milquetoast Iggy no match yesterday for Baird, who answered Grit's questions only with lies and bullying. It's actually the opposition that's on the soldiers' side, but hapless Grit leader can't seem to get that message across. In suspending last month the detainee inquiry he chaired for lack of government complaince in making documents available, erstwhile U.N. special war-crimes prosecutor and 28-year Canadian Forces veteran Peter Tinsley wrote that Canada's soldiers will “continue to live under a government-enforced dark cloud of unproven suspicion” as long as Harper withholds documents about what the likes of Rick Hillier and defence minister Peter MacKay knew and why were they so slow to act.
HOW SAFE ARE THE SKIES? | Airline safety inspectors cast doubt on Canadian airline safety. Citing horror stories of accidents and near-accidents, they testify that ever since Ottawa's decision to allow airlines to essentially self-regulate themselves, there's no way to know if they're in compliance with safety standards. Surprise government inspections are largely a thing of the past, while cost-cutting in a global industry that has been losing billions of dollars annually for several years is an everyday reality.
TEPID RECOVERY | Meagre 0.1% Canadian GDP growth in 3Q ends official recession but by a whisker. Indeed, the inevitable readjustment of that initial figure in a few weeks' time - common practice in Canada and the U.S. - may have us still in negative territory. Economists were predicting a figure 10 times' higher, more like 1% GDP growth, and even that would fall far short of robust U.S. 2.8% 3Q GDP growth as it emerged from recession. Canada is trailing most industrial nations in strength of recovery, largely due to impact of soaring loonie, which continues to cripple our exporters. Some good news: both personal and corporate spending rose at decent rates in the July-September period. Globe's Tavia Grant has reasons to be upbeat about 4Q prospects.
AUTOMAKERS TO REPORT GOOD NEWS TODAY | Sales flat with last year, which is progress. Analysts seem agreed that worst of the four-year slump in U.S. vehicle sales is over. But also that no time soon will we see a return to the average annual volume of 16.5 million vehicles.
IS U.S. HEALTHCARE REFORM DEBATE WORTH THE CANDLE? | Benefits fall short of promises. In Senate version of the bill hotly debated in this and future weeks, some all-important provisions are so diluted there's scant genuine reform. Two key provisions stand out: Until 2014, private insurers could continue to deny coverage or charge steeper premiums to those with pre-existing health conditions. And the promised ban on annual or lifetime caps on coverage, which is to take effect next year, is riddled with exemptions. That makes a "public option" new government insurer all the more imperative. But its fate is especially contentious. And as to the provisions most senators do agree on, "there's no power to really hold the [private] insurance companies accountable," consumer advocate Betty Ahrens, executive director of the Iowa Citizen Action Network, tells the NYT. "It's toothless." If it works out this way, the private insurers and Big Pharma, with upward of 50 million uninsured Americans forced to buy insurance and become part of the system, will reap one of the greatest windfalls in the history of commerce. It would have been that in any case, but now without patient protections.
PREVIEW | The Afghan-surge case Obama will make to Americans in tonight's TV address is here. This is what the U.S. president has told his defense staff and NATO allies. Which is, 34,000 more U.S. troops, bringing the total to more than 100,000. No timeline for withdrawal, but an assurance that U.S. troop commitment is not "open ended. And that commitment will be tied to Karzai's progress in cleaning up Kabul corruption and extending the central government's ambit beyond the capital. In other words, Karzai making nice with warlords and tribal elders. I promise not to say it again: Good luck with all that. What's not for public consumption is the cost, about $75 billion (U.S.) a year. Obama will be vague on that because Americans are not only war-weary but feel their nation is fiscally tapped out. I expect the gambit here is to put enough pressure on the Taliban, and crimp somewhat its mobility in the country, to the point where the enemy is willing to discuss a negotiated settlement. That has to be the endgame against this undefeatable foe; otherwise it's a decades' long stalemate. Harper got a heads-up last night from Biden, not Obama. Yes, yes, we've been fighting in Afghanistan's most dangerous region and we've been in the country for eight years fighting on America's behalf while the Dutch are on patrol duty up north. But, as the WH explained, Obama has only so much time for calling around. Why waste it on Harper when the PM has been immovable about not increasing our Afghan troop levels or staying later than early 2011? You'd only do it as a courtesy to a loyal ally that's given up 133 of its precious young men and women to a cause we share...Well, I'll leave it at that before blood starts spurting from my eyes.
PBS NEWSHOUR OVERHAUL | Flagship program will become more Web-oriented.
HABS, NOT LEAFS, ARE OUR NATIONAL TEAM | So we tell pollsters. No surprise, given Canadiens' illustrious history and the abundance of non-Montrealer devotees of the franchise. What I did find a tad encouraging as a lifelong Torontoian is that some three-quarters of those polled would bet on the Habs to win another Cup before the Leafs do. I was expecting maybe 90%. (Photo: Tara Walton, Toronto Star.)
AND THE WINNER IS... | Bad sex-scene writing award goes to Goncourt winner Littell. Jonathan Littell's The Kindly Ones captured France's prestigious Prix Goncourt in 2006 and now is honoured with this year's Literary Review Bad Sex in Fiction Award, founded in 1993 by Auberon Waugh, beating out Philip Roth, John Banville and Paul Theroux. The judges found "genius" in The Kindly Ones, but didn't take so kindly to lines such as "I came suddenly, a jolt that emptied my head like a spoon scraping the inside of a soft-boiled egg." I have no idea what that line means, but I'm just an innocent boy from Scarborough (who long hated soft-boiled eggs).
QUOTE OF THE DAY | "The fact that Canadians search twice as much as Americans, according to comScore data, is unbelievable. Canadians are [each] searching [an average] of 143 times a month - those aren't small differences or small changes, that's a pretty significant and quite powerful difference." -Jonathan Lister, country manager and managing director for Google Canada, on why Google Inc. is hiring across Canada. Canadians spend about one-third more time online than Americans, and Google's YouTube operation is more popular in Canada than any other nation. It's not that we don't have lives, you understand. It's that we're obliged to spend a third of them indoors. That's my theory.
Please consider joining me as an elf this holiday season by participating in the Toronto Star's Santa Claus Fund, a century-old Toronto tradition. The Star uses donations to assemble and distribute gift boxes to thousands of less-financially advantaged children throughout the GTA. Each box contains a book, clothing and a toy. You can read all about it, including first-hand accounts of Toronto families in need, at http://www.thestar.com/santaclausfund. I'm counting on your kindness to help put smiles on thousands of young faces this December 25th! Many thanks, David