Iowa aftermath

The chase by Marty Cej:

Iowans have spoken and said that Republican voters across the U.S. should now choose between the three candidates who have said the following:
1. "I do take the position that we should just end the Fed."
2. "Isn't that the ultimate homeland security, standing up and defending marriage?"
3. "I've always been a rodent and rabbit hunter. Small varmints, if you will."
Tough call, tough call.

Sometimes, when you air your dirty laundry in public, it can smell like a hockey locker room after a weekend-long Old Timers' tournament. The Chairman of Canadian Pacific yesterday sent a public letter to Bill Ackman of Pershing Square Capital, CP's biggest shareholder, scolding Ackman for leaking misleading information to the media, including the assertion that CP had invited the former head of CP competitor CN Rail to talks. Ackman responded late yesterday with a public missive of his own, stating that CP's Chairman had in fact called him personally to arrange a meeting with CN Rail's former boss.

The thing of it is, both letters can be true since arranging a meeting with someone is not necessarily the same thing as inviting someone to a meeting. Both sides have agreed that talks to improve CP's operating performance have been constructive so it seems the conflict lies in determining exactly how to do it. Ackman wants the CEO of CP out while the board of CP, at least for now, is confident in the current management. So what we are seeing with these letters is not really a tiff over the facts but a fencing match between PR staffs.

I might have given Ackman a point for transparency, but then he used the word "effectuating." In terms of angles, we need to look again at the performance of CP under CEO Fred Green, operationally, financially and as a stock. We need to compare it to competitors not just in Canada but in the U.S. as well. We need to take a look at the issues of corporate leadership, governance and activist investing, and I'm also interesting in hearing more about the strategy of conducting a debate like this through the media. A great story with compelling characters and thousands of jobs and billions of dollars at stake.

As we approach the North American open, European stocks are declining and U.S. stock index futures are pointing to an early decline. Oil is down just a touch and copper has slipped a bit, too. Traders are pointing to Italian bank UniCredit SpA's decision to sell 7.5 billion euros worth of new shares at 43 percent less than yesterday's closing price in a bid to shore up its capital. The size of the discount has rattled markets by raising concern that demand for new bank equity has plunged at a time when many European financial services companies are preparing to go to the same well. We should also add that overnight deposits at the ECB have surged to a record high, again.

We'll zero-in on the Iowa caucuses on Headline this afternoon and ask whether Canadians – or Americans, for than matter – should care. Among our guests is Bill Galston, former policy advisor to Bill Clinton and now Senior Fellow, Governance Studies, at the Brookings Institution. We'll also talk about the economic impact of the U.S. election cycle with John Lonski of Moody's.

Ahead of that, though, Business Day AM will sit down with David Darst, Chief Investment Strategist at Morgan Stanley Smith Barney where he oversees more than a trillion dollars in assets. I'll ask him whether he is fretting over the race for the White House and how he is putting those dollars to work in 2012. He sits down with us at 11:00 am Eastern.

Commodities continue to be a compelling story with expectations continuing to rise for a rebound in many prices this year. Oil, for example, has already vaulted back over $100 a barrel. The question is whether recent and expected gains are justified by the outlook for economic growth. Does oil belong at $100 a barrel with Europe poised on the edge of what could be a severe recession?

Natural gas remains a conundrum for investors and the companies involved in the sector.