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07/09/08

U.S. seizes Fannie, Freddie, aims to calm markets

WASHINGTON (Reuters) - The U.S. government on Sunday seized control of mortgage finance companies Fannie Mae and Freddie Mac , launching what could be its biggest bailout ever in a bid to support the U.S. housing market and ward off more global financial market turbulence. The action, prompted by worries over the companies' shrinking capital, was the latest in a series of emergency steps taken by U.S. officials to prop up the wobbly housing sector and quell what is now a year-long crisis in credit markets that has helped push many economies toward recession.

Government strikes deal with GM for Ontario investment

TORONTO (Reuters) - The Canadian government said on Saturday it had struck a deal with General Motors of Canada Ltd that commits the automaker to invest $290 million at several of its Ontario operations. The announcement is the second of its kind in the past three days and may help shore up support for Canada's minority Conservative government in Southern Ontario, where the auto manufacturing sector has been bleeding jobs, on the eve of an election call.

CAW elect Ken Lewenza president

TORONTO (Reuters) - The Canadian Auto Workers elected longtime union activist Ken Lewenza as its president on Saturday, bringing what outgoing President Buzz Hargrove has said is a change "more in style than substance." Lewenza, 54, is expected to hold the union's tough line on issues like refusing concessions in contract talks, rejecting a two-tier system for wages, and lobbying the government on trade issues it sees as unfair.

One step forward, two steps back

TORONTO (Reuters) - Worries over dismal global growth along with sliding oil prices have sent Toronto stocks reeling in the first days of September, and analysts warn the market may have further to fall before it finds its footing. Just three months ago, the Toronto Stock Exchange was the envy of most major markets as it catapulted to record highs on the back of surging commodity prices, which helped it overcome the economic fears and financial-sector disasters that have taken down its peers.

GSE rescue could scare bears

NEW YORK (Reuters) - Bears have reigned supreme on Wall Street so far in September thanks to growing concern about economies worldwide, but their grip on stocks faces a big challenge after the U.S. government's weekend seizure of control of mortgage finance giants Fannie Mae and Freddie Mac. Since late spring stocks have been caught in a vise of investor anxiety about the fate of the two linchpins of the U.S. mortgage market, which between them own or guarantee more than half of the $12 trillion outstanding U.S. home loans.

Job market rebounds ahead of election call

OTTAWA (Reuters) - Canada's job market rebounded slightly in August from heavy job losses in July, easing fears of a sharper than expected economic downturn on the eve of a federal election campaign to be announced this weekend. Employers resumed hiring last month, adding 15,200 to the payrolls on a full-time basis, mainly in the private sector, Statistics Canada said on Friday.

Toronto stocks make tiny gain as resources rise

TORONTO (Reuters) - The Toronto Stock Exchange's main index just managed to end on the plus side on Friday, following a sharp three-day losing streak, as gains by resource and consumer issues offset worries over the outlook for the global economy. Early on, the index had continued its week-long dive, giving up more than 2 percent after a U.S. labor market report fueled worries over the health of the economy of Canada's largest trading partner, with data showing the U.S. unemployment rate soared last month.

Banks see small improvements amid volatile markets

CALGARY, Alberta (Reuters) - Financial markets are still volatile and fragile, with investors fretting over rumors of major bank losses or large portfolios getting dumped onto the market, Josef Ackermann, chief executive of Deutsche Bank , said on Friday. But he and other bankers attending a business forum in Western Canada pointed to glimmers of improvement in some parts of the global business, which has been slammed by about $450 billion in credit-related writedowns.

HSBC's Green says Asian demand to spur inflation

CALGARY, Alberta (Reuters) - Rising demand for commodities and energy from rapidly growing Asian economies could mean inflation will become a long-term problem for central banks, Stephen Green, group chairman of HSBC Holdings Plc said on Friday. Green, who runs the world's second largest bank by market capitalization, said the rising clout of Asian economies will shift financial power from Wall Street and London, and support high prices for the commodities and energy needed for growing Asian economies.

Purchasing activity up, but at slower pace

TORONTO (Reuters) - Canadian purchasing activity rose at a slower pace in August, the Ivey Purchasing Managers Index showed on Friday, suggesting the country is feeling pressure from the U.S. economic slowdown. The index, a joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business, fell to 51.5 in August from 65.5 in July. That missed market expectations for a reading of 63.0.

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