Winnipeg Free Press

Winnipeg Free Press (Newspaper) - October 07, 2008, Winnipeg, Manitoba C m y k Page b5 business editor Steve Pona 697 7264 business free press. My. Ca i Market details b7 i Winnipeg repress. Com tuesday october 7, 2008 b 5 a p tax 10,230.43 572.92 Dow 9,955.50 369.88 Nash a 1,862.96 84.43 Gold 862.70 33.80 Oil 88.12 5.76 Dollar 90.98 1.49. T Oronto falling Oil prices and investor fears of a global recession pummelled the Canadian Stock Market again monday dragging the Benchmark Index to its biggest int Raday loss Ever As concerns heightened that the Wall Street financial crunch has dragged the Canadian Economy into a deep freeze and seized up Bank lending around the world. The Toronto Stock Market plunged nearly 1,200 Points in Early trading before clawing Back More than half of the loss to close Down about 573 Points five per cent or about $ 75 billion of paper losses. At one Point the Index fell below 10,000 Points for the first time in More than three years wiping out All the gains of the Market since mid 2005. The Bay Street Selloff continued a wave of volatile trading that has seen huge swings up and Down As investors worry about the global credit crunch and its Impact on the Canadian and global economies. Canadas main Stock Index lost 11 per cent last week evaporating $ 150 billion in value As recession worries spooked traders around the world. While the broader Economy seems headed into recession technically two quarters of shrinking output the jobless rate in Canada is still less than half the unemployment of the Early 1980s, during the worst recession in the Post second world War Era. However further cuts in manufacturing retail housing and other sectors because of tight Money the slump in the United states and Market turmoil around the world could push Canadas jobless rate sharply higher Over the next several months. In cutting output monday at Mills in Quebec and British Columbia forestry giant Tembeck cited lower demand from Asia for the pulp it exports to make paper. About half the Canadian Market is made up of Energy metals and other commodities stocks so any weakness in global demand will punish the resources sector As Well As the Canadian Dollar. On currency markets monday the loonie dropped 1.5 cents to close just under 91 cents us. Canadas Economy has grown Only marginally since the beginning of the year with exports and manufacturing squeezed by the slumping United states. On monday economists from Canadas big five Banks said they expect Little or no economic growth in the near future and warned that the Domestic gloom will deepen into something worse than a recession. In their most recent economics forecast Scotia Bank economists predict recessions for both the u. S. And Canada economic slides that they say will require Central Bankers in both countries to Cut interest rates by at least a full percentage Point to rekindle growth. The word recession describe the deep structural problems affecting everything from the u. S. Housing sector to the Canadian Oil Industry said Bank of Nova Scotia chief economist Warren Jestin. You have to invent a new word to describe what were in now he said. Its being driven through the financial markets into the real Economy. On Wall Street the Dow Jones industrials Sank 360 Points joining a global stocks meltdown triggered by investor fears the financial systems in the United states and other countries need More than government bailouts to fix. The Canadian press tax pummelled again group panic feared Toronto some Bay Street analysts suggested monday that a madness of crowds could continue to Batter the Market regardless of the strength of the local Economy. I dont think were in huge trouble Here in Canada but things can take on a life of their own if people Start feeling that Way said Daryl Yahoda who works in the Energy Industry. Canadas Economy is probably still in of shape its More the Confidence of people. That can be a self fulfilling prophecy. Big Lender boosts rate Toronto one of Canadas biggest mortgage lenders to Canada Trust is increasing the interest rate charged for its Home equity line of credit and variable interest mortgages. The Bank has been charging its prime rate for its Home equity lines of credit which uses the value of the customers Home As collateral but will Start charging one percentage Point above prime. The prime rate at to and most major Canadian Banks has been 4.75 per cent since april the last time the Bank of Canada changed its target for its overnight lending rate. No Unity in Europe London individual european governments issued a Cascade of Deposit guarantees to Shore up their Banks but fell Short of any coordinated action monday to Deal with the crisis sweeping financial markets even As Stock markets crashed and the euro Sank to its lowest level in Over a year. Though eur ropes officials appeared to be paying lip service to the need for working together they continued to make key announcements on deposits on a go it alone basis. Fed boosting Loans Washington the Federal Reserve is increasing the amount of Cash Loans it will make to squeezed Banks in an urgent Effort to break through a dangerous credit clog that threatens the Economy. The feds action monday the latest in a series is aimed at spurring spooked financial institutions which Are hoarding Cash to lend not Only to each other but also to individuals and businesses. Litigation on hold new York Wachovia Citigroup and Wells Fargo on monday agreed to a standstill of All formal litigation activity a sign that the Banks and the u. S. Federal Reserve Are working feverishly to reach an agreement Over the Fate of Wachovia. The standstill agreement will end at noon on wednesday unless extended. From the news services Oil and global fears trigger largest Ever int Raday loss by John Valori the managers of More than $ 12 billion Worth of Manitoba Public pension and insurance funds say they will stick to their investment strategies despite relentless Stock Market declines. The tax was Down another 572 Points on monday ending up at its lowest level in three years As the credit crisis cascades through International financial markets. Lindsey Fuller chief investment officer for the civil service superannuation Board fund which manages about $ 6 billion Worth of provincial government employees pension funds said pension funds have the time horizon to ride out Market gyrations. Remember you really dont take losses unless you actually sell something when prices Are Down he said. We have a Long time horizon. Pension funds Are probably in a better situation than most institutions to ride these things out and try to take advantage of them. Fuller would not comment on How the superannuation Board might be taking advantage of the weak markets. It is very difficult to try to change things in markets that Are this volatile said Fuller. Things Are very very oversold at this time and it is probably not a Good time to be Selling things. Don Palmer chief financial officer for Manitoba Public insurance said a pics $ 2.2 billion fund is Only 20 per cent invested in equities with the remainder in fixed income. Mph is before the Public utilities Board for its annual rate application hearings and Palmer said whatever Impact the Market conditions will have on the funds Overall valuation it will not require rate alterations. It will certainly Hurt us in the Short term and will be reflected in our income statements this year but it certainly wont Compromise our ability to pay any benefits said Palmer. Martin. Cash free press. My. Ca people Are scared and the Only thing they re doing is Selling Ryan Detrick senior technical strategist at schaeffers investment research Public pensions insurers confident by Martin Cash Washington the now bankrupt investment Bank Lehman Brothers arranged millions in bonuses for fired executives As it pleaded for a u. S. Government lifeline lawmakers Learned monday As Congress began investigating what went so wrong on Wall Street to prompt a us 700 billion bailout. The first in a series of congressional hearings on the roots of the financial meltdown yielded few major revelations about lehmans collapse and none about Why u. S. Government officials As they scrambled to Avert economic catastrophe declined to Rescue the flagging company while injecting tens of billions of dollars into others. But it allowed lawmakers still smarting from a politically painful vote Friday for the largest Federal Market Rescue in history to put a face on their outrage at corporate chieftains who took Home hundreds of millions of dollars while betting on risky mortgage backed investments that ultimately brought the financial system to its Knees. That face was Richard s. Fuld jr., the Lehman chief executive who sat for a two hour plus grilling before the House oversight and government Reform committee As the panel combed through his pay history management practices and financial strategies. You made All this Money by taking risks with other Peoples Money representative Henry Waxman d Cali the panels chairman said. The system worked for you but it did not seem to work for the rest of the country and the taxpayers who now have to pay $ 700 billion to bail out our Economy. A subdued Fuld opened his testimony declaring i take full responsibility for the decisions that i made and for the actions that i took but he conceded no errors or misjudgments in the chaotic period that led to the firms bankruptcy. And he defended a compensation system that he estimated paid him about $ 350 million Between 2000 and 2007 even As the firm headed for disaster. We had a compensation committee that spent a tremendous amount of time making sure that the interests of the executives and the employees were aligned with shareholders Fuld said. That a snot Good enough for some lawmakers who decried what they called a culture of entitlement at Lehman even As the company nosedive. The panel unearthed internal documents showing that on sept. 11, this year Lehman planned to approve special payments Worth $ 18.2 million for two executives who were terminated involuntarily and another $ 5 million for one who was leaving on his own. The associated press by Julie Hirschfeld Davis Susan Walsh / the associated press Lehman Brothers chief executive Richard s. Fuld or. Centre is jeered by protesters As he leaves Capitol Hill monday. Millions for Lehman chiefs ceo got $ 350m Between 2000- 07 a 05_ oct 07 08. Ind b5 1 0/ 6/ 08 8 47 29 pm ;