Greece avoids bankruptcy amid protests
The chase by Noah Zivitz:
Politicians voted, civilians rioted, now we wait for eurozone finance ministers to vote on whether to unlock the next round of bailout funds for Greece. Major European indices are modestly higher in the wake of Lucas Papademos successfully winning enough support for his basket of cuts. The pictures from the streets of Athens are stunning, and prompt countless questions. We need to hear whether the eurozone will emerge stronger with an austerity-plagued Greece than it would be without it. Linda will assess the economic cost of the cuts for Greece.
The Obama administration tables its fiscal blueprint later this morning, but plenty of details are already known. A $1.3-trillion shortfall is expected this year, with the deficit seen moderating to a mere $901B next fiscal year. According to the early reports, it's a budget filled with short-term items to give the economy a boost, and tax increases to staunch the flow of red ink over the long term. Oh yes, and a $61B tab for banks to recoup costs from the financial crisis. To the surprise of no one, Republicans are already making their displeasure known. Linda will evaluate details that have already spilled out, and we'll need to hear whether Barack Obama's government is delivering a credible plan to get the U.S. on a sustainable fiscal track.
Fiscal management will be on the agenda in a trio of live events we're tracking today: Barack Obama comments on the budget at 11, former U.S. Treasury Secretary Lawrence Summersspeaks in Calgary around 2pm ET, and Ontario finance minister Dwight Duncan discusses his plan to eliminate the deficit at 12.
Amid all the bubble and balloon talk, today we get the country's largest mortgage insurer's perspective on the health of the housing market, when the CMHC delivers its outlook at 8:15am ET. Linda will break the headlines, and we'll hear from the CMHC's deputy chief economist on BDAM.
Barrick Gold has served notice its 20% stake in Russia's Highland Gold is non-core. Paul is looking into what the holding could fetch, and John Ing from Maison Placements will provide insight and preview gold sector earnings on Business Day at 10am.
The future of this country's telecom sector could become an even hotter topic, with speculation the government will soon announce rules for the next spectrum auction. This announcement could be paired with Ottawa's long-awaited review of foreign ownership restrictions. We need to be ready to explain what's at stake for the incumbents and newer wireless companies.
And there's some possible industry consolidation overseas that has grabbed investors' attention. Vodafone disclosed this morning it is in the early stages of evaluating a bid for Cable & Wireless Worldwide.
Let's not lose sight of opportunities to follow-up on SNC Lavalin's employee shuffle. After the closing bell Friday, the former exec VP of construction, Riadh Ben Aissa, fired back. In a statement, he said he wasn't fired – he resigned. He also asserts he spared no effort to protect the company's interests. He now plans appropriate legal recourse. Separately, the CBC says SNC is "in turmoil" over its relationship with Cynthia Vanier, who was contracted to do fact-finding in Libya, and was subsequently arrested in Mexico amid allegations she was involved in a plot to usher Saadi Gadhafi out of Libya. We need to keep peeling away the layers of this story, and hearing what it means for SNC's global operations.
Air Canada has reached yet another tentative agreement with one of its unions. This time, it's dispatchers who appear to be on board – pending ratification. But what about the pilots? Kristine is digging into it.
There's plenty more, including Japan's economy shrinking more than anticipated under the weight of the yen, and borrowing costs slipping in Italy. But that'll do for now.
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