Finance & Business World

By May, gas prices in the GTA could ratchet up by anywhere from 5 cents to 20 cents per litre.

Prices at the pump have already climbed by about 7 cents to 128.7 cents per litre in the last month. And while it is normal for gas prices to climb in the spring as motorists drive more and refineries close for maintenance, there are more factors at play this year.

How high can the prices get?

Jason Toews, co-founder of Gasbuddy.com sees prices reaching 150 cents to 155 cents per litre by May. Last year gas prices reached a high of 140.6 cents.

Petroleum analyst Robert McKnight says prices will reach between 143 cents to 147 cents a litre by April. That is a 12 to 15 per cent increase from the pump price you see today, he said.

Michael Ervin, vice-president of Calgary-based Kent Group, has a more conservative prediction of 4 cent to 7 cent per litre increase

The stock market finally got a deal from Greece, but it didn’t produce much of a rally.

The Dow Jones industrial average is finishing six points higher at 12,890. The Standard & Poor’s 500 is closing up two at 1,352. The Nasdaq composite ends the day up 11 at 2,927.

Greece says it has agreed to cut spending to satisfy some of its lenders. That’s a key condition for Greece to avoid a default next month that could spook world financial markets.

Earlier Thursday, the Dow rose to within 75 points of 13,000, a milestone it hasn’t reached since 2008. The S&P’s gain took it within about a point of doubling its level on March 9, 2009, the low for stocks during the Great Recession.

Source

Stocks are edging lower Monday morning as talks drag on between Greek political leaders over a fresh austerity package required for the country to get more bailout loans.

The Dow Jones industrial average fell 36 points to 12,825 a half-hour before noon. That’s a drop of 0.3 percent. American Express Co. led the Dow lower, losing 1.4 percent.

Sam Stovall, chief equity strategist at S&P Capital IQ, said he thinks investors are starting to realize the stock market is vulnerable to a big drop. Trading has been subdued compared with the wild swings of 2011. The S&P has closed up or down by more than 1 percent only three times since the year began. In December, that happened nine times.

“I look at it like a very low tide warning of an impending tsunami,” Stovall said of the recent calm stretch. “We’re setting ourselves up for a decline, the sort of decline that would make you sit up and take notice,” he said.

In other trading, the Standard & Poor’s 500 index fell 3 points to 1,341, for a drop of 0.2 percent. The Nasdaq composite fell 7 points to 2,898.

The declines follow a big gain Friday after a surprisingly good U.S. employment report. Large gains in the stock market are often followed by modest moves, as traders pull some of their winnings off the table. On average since 1950, whenever the S&P rose by 1 percent or more in a trading day, the index has inched up just 0.1 percent the next day, according to S&P Capital IQ.

Greece’s Prime Minister Lucas Papademos will meet with negotiators from the European Union and the International Monetary Fund in the afternoon and then with the leaders of the three parties backing his coalition government. The Greek parliament must sign off on any budget deal.

Among companies making big moves:

_ Boeing Co. fell 1.3 percent following reports that the company found a problem in its 787 Dreamliner.

_ Netflix Inc. fell 3 percent after Verizon Communications and Coinstar Inc. said they will launch a video-streaming service later this year, a challenge to Netflix. Coinstar is the parent of Redbox, a DVD rental company. Coinstar rose 1.4 percent and Verizon less than 1 percent.

_ Micron Technology Inc. fell 2.5 percent following news that the chip maker’s CEO died in a plane crash. Steve Appleton, 51, was at the helm for 18 years, leading the only company he’d ever worked for.

_ Humana dropped 5.6 percent, the biggest loss in the S&P 500 index. The health insurance company reported revenue that fell short of analysts’ expectations. Humana also raised its earnings outlook for 2012 but that, too, was below analysts’ forecast.

Source

President Barack Obama announced a package of proposals designed to jolt the housing market, his latest effort to reignite the economy after four years of foreclosures and falling home prices.

Viacom Inc.’s Philippe Dauman led the list of America’s top-paid CEOs in 2010 but his pay package for 2011 was nearly halved, mainly because he didn’t get stock bonuses for renewing his contract as he did a year ago.

Still, an Associated Press tally values Dauman’s pay package at $43 million, down from $84.5 million a year ago.

The figures were contained in a securities filing the media company filed Friday.

Another reason he won’t be the highest paid CEO last year: Apple Inc.’s Tim Cook was awarded a package valued at a whopping $378 million for replacing the late Steve Jobs at the helm.

Dauman’s base salary rose 33 percent to $3.5 million, but the bulk of his pay came in the form of a $20 million bonus for good performance, a 78 percent increase from a year ago. The company said operating profits came in above the mid-point of its target range and free cash flow generation was near the top of its range.

Dauman’s annual grant of stock awards was 68 percent smaller than a year ago at $13.3 million, and new stock options he was granted were valued at $6 million, down 79 percent from fiscal 2010.

He also received other compensation of $262,636, mainly for personal use of the company aircraft.

New York-based Viacom’s executive chairman and 88-year-old founder, Sumner Redstone, saw a 39 percent boost to his pay package to $21 million.

Redstone, who controls the company through a special class of voting shares, pulled down a base salary of $1.75 million, up a third from a year earlier, and a performance bonus up 78 percent at $10 million. New grants of stock and stock options came to about $8 million, the same as the previous year.

Redstone also benefited from a preferential executive pension plan that grew by about $1 million, with other compensation totaling $30,955 quick payday loan.

Over the fiscal year that ended Sept. 30, Viacom’s widely traded Class B shares rose 7 percent to $38.74 from $36.19. The company said its total shareholder return in fiscal 2011, comprised of $417 million in dividends and $2.5 billion in share buybacks, was 8.7 percent, compared to 0.8 percent for the companies of the S&P 500 Index.

Viacom owns pay TV networks such as MTV, Nickelodeon and VH1 and the Paramount Pictures movie studio.

The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.

The value that a company assigned to an executive’s stock and option awards for 2011 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options

Source

The war of words between Europe and private investors heated up Tuesday as talks to reduce Greece’s massive debt burden hit an impasse.

While the finance ministers of the countries that use the euro as their currency adopted a tough stance on how much rescue money they would pump into the Greek economy, the head of the group that represents the country’s private creditors _ banks and other investment firms _ warned that the future of Europe was being threatened if a voluntary debt reduction deal over Greece was not agreed.

Charles Dallara, the managing director of the Institute of International Finance, warned that Europe was putting “decade of progress at risk” over the management of Greek debt-reduction talks, which stalled over the weekend.

“European stability is at stake as well,” Dallara said in Zurich in a press conference.

On the front line of Europe’s sovereign debt crisis, Athens is trying to get its private creditors to swap their Greek government bonds for new ones with half their face value, thereby slicing some euro100 billion ($130 billion) off its debt. The new bonds would also push the repayment deadlines 20 to 30 years into the future.

However, the main stumbling block over the past few weeks to securing this deal has been the interest rate these new bonds would carry. A high interest rate could buffer losses for investors, but would also require the eurozone and the International Monetary Fund to put up more than the euro130 billion ($169 billion) in rescue loans they promised in October.

Dallara said the private creditors, which include banks, insurance companies and hedge funds, were acting in good faith and that the proposal made last week was in the spirit of last October’s agreement. At that time, Europe’s leaders said Greece should look to reduce the value of its private sector debts by 50 percent, or euro100 billion ($130 billion).

In the early hours of Tuesday, eurozone politicians drew a firm line on the Greek debt restructuring.

Jean-Claude Juncker, the Luxembourg prime minister who chaired a meeting of finance ministers on efforts to fight the crisis, said the average interest rate over the lifetime of the new Greek bonds must be “clearly below 4 percent,” with an average rate of less than 3.5 percent for the period until 2020. That is far below the 4 percent demanded by the Institute of International Finance, which has been leading negotiations for the private bondholders.

The European ministers’ tough stance on the interest rates underlines how the eurozone and the IMF are unwilling to increase new rescue loans above the promised euro130 billion, even though Greece’s economic situation has deteriorated. After already granting Greece a euro110 billion bailout in May 2010, the eurozone and the IMF are threatening to withhold further funding for the country, which has repeatedly failed to hit budget and reform targets required in return for the financial aid.

The interest rate caps will also seriously test the willingness of private bondholders to agree to a debt deal voluntarily.

Dallara said talks would continue over the coming days, adding that he was confident there would be “large-scale” participation by the private sector if a “voluntary” deal is clinched.

However, he refused to put a deadline on the discussions.

Given the complexity of the negotiations and the legal consequences that would ensue, many analysts think a deal has to be agreed soon if Greece is to meet a vital bond repayment deadline in March.

If it can’t pay its bond, Greece would be in default of its debts, a scenario that could lead to renewed panic in financial markets and potentially derailing a feeble global economic recovery.

Dallara said Europe must keep the support of the private sector, given the massive amounts of debt that have to be refinanced from France to Portugal.

He added that there wasn’t a country that didn’t need investment from the private sector.

“Investors need to feel confident in their investments … in sovereign debt,” he said.

Before Dallara’s latest comments, German Finance Minister Wolfgang Schaeuble said the current impasse was a normal part of difficult negotiations.

“We continue the negotiations (with investors) as happily, but also as little susceptible to blackmail as possible,” he told reporters in Brussels. “That exists in every bazaar _ a final offer _ one shouldn’t let oneself be overly impressed by that.”

The alternative to a voluntary deal would be to force losses on to investors _ a move that the eurozone has so far been unwilling to make. Some officials fear that a forced default could trigger panic on financial markets and hurt bigger countries like Italy, Spain or even France.

But several ministers indicated that they might be willing to accept a forced default if it puts Athens in a position where it can eventually repay its remaining debt _ including the rescue loans from the eurozone and the IMF. The eurozone has said that Greece’s debt is sustainable if it falls to some 120 percent of gross domestic product by 2020. Without a restructuring it would reach close to 200 percent by the end of the year.

Even Olli Rehn, the EU’s Monetary Affairs Commissioner, said that forcing some holdouts to accept a restructuring that has the support of the majority of bondholders would be acceptable.

“That is possible within the framework of achieving a voluntary agreement on private sector involvement,” Rehn said, referring to so-called collective action clauses that Greece could write into its old bond contracts to allow majority decision making. The Commission has so far always been opposed to any forced losses for investors.

But ministers also put the pressure on Greece to reach a manageable debt level by bolstering its reform and austerity measures.

“Greece and the banks have to do more in order to reach a sustainable debt level,” Dutch Finance Minister Jan Kees de Jager told reporters as he arrived for a second day of meetings with his European counterparts. “We have to await the discussions about that because a sustainable debt level is absolutely a precondition for the next (rescue) program.”

Schaeuble also insisted that firm support for new austerity measures from all major Greek parties _ including after elections expected in April _ was a precondition for a new bailout.

__

Pan Pylas in Zurich and Nicholas Paphitis in Athens, Greece, contributed to this story.

Source

Asian stocks posted muted gains Monday in trade thinned by Chinese New Year holidays as talks on a debt agreement for Greece dragged on.

Only a handful of markets were open for business. Trading is closed in mainland China, Hong Kong, Taiwan, Indonesia, Singapore, Malaysia, the Philippines and South Korea.

Japan’s Nikkei 225 stock average was up 0.2 percent at 8,779.16 while Australia’s S&P/ASX 200 slipped 0.3 percent to 4,228.10. New Zealand’s benchmark added 0.1 percent to 3,279.19.

On Friday, stocks in Europe mostly held their gains for the week, waiting for the outcome of Greece’s negotiations with its creditors on a deal to cut the face value of up to euro200 billion ($258 billion) in debt by 50 percent.

Over the weekend, the representative of Greece’s private creditors said the talks are continuing even after his unexpected departure from the country.

A deal in Athens would allow the country to receive a second bailout package from other European governments and the International Monetary Fund, and cut Greece’s debt from an estimated 160 percent of its annual economic output to 120 percent by 2020 low interest rate personal loans.

That is still painfully high, but without the help, Greece will not be able to pay euro14.5 billion in debt due March 20. A Greek default would send borrowing costs higher across Europe and could trigger chaos in the global financial system.

On Wall Street on Friday the Dow rose 96.50 points to close at 12,720.48. The S&P 500 index inched up 0.88 to 1,315.38 and the Nasdaq gained 1.63 points to 2,786.70.

In energy trading, benchmark crude was down 41 cents at $97.92 a barrel in electronic trading on the New York Mercantile Exchange.

Source

China is allowing the nation

Three Federal Reserve policy makers called on the U.S. government to try new programs to revive the housing market while differing over whether the central bank should take more steps to cut borrowing costs.

New York Fed President William C. Dudley said in New Jersey today that

The Obama administration will ask Congress to increase federal borrowing authority by $1.2 trillion as the nation approaches the debt limit set by law, according to a Treasury Department official.

The White House will send the request to Congress on Dec. 30, the day the debt is projected to rise to within $100 billion of the $15.194 trillion limit, the Treasury official told reporters today on condition of anonymity.

Congress will be notified under the terms of a deal to raise the limit worked out on Aug. 2 after months of wrangling between the administration and Republican lawmakers. Three days later, Standard & Poor