Keystone XL aftermath

The chase by Marty Cej:

"Hi, Kettle? Yeah, it's me, Pot. How are you? Me? Oh, I'm good, good. Just great, yeah, thanks. Anyhow…" The White House has been clear in its criticism of Europe's handling of the sovereign debt crisis, condemning the lack of leadership and will necessary to overcome the morass of local politics to find a lasting solution to a long-term systematic problem. Yesterday, with nary a wink or a nod, the White House said it would delay the permitting of the proposed Keystone XL pipeline until, ummmm, lemme check the ol' calendar here, ummm, yep, we'll put 'er on hold till after the 2012 election. Officially, the U.S. State Department's decision is meant to give the Obama administration more time to assess and analyze the impact of the pipeline on the "health and safety of the American people as well as the environment." Fine. Obama arrived at the White House with a promise to "free America from the tyranny of oil" so the decision is not necessarily out of left field. The guy is in a bind 'cause he's way behind and he's willing to make a deal. Unfortunately, while the battle for the White House rages over the next 12 months or so, American energy consumption habits are unlikely to change. So where to next? Let's talk angles…

TransCanada: How can the company overcome domestic politics to get this project done? How important is the project to the company's future? What does the company's growth strategy look like over the next 12 months in the absence of Keystone progress? What does the growth strategy look like without any Keystone at all? This is a terrific opportunity to get inside a company and see how it ticks.

TransCanada, the stock: Scotiabank says the stock still doesn't reflect the value of the Keystone XL project and reiterated its "outperform" rating. CIBC sees $2-$3 per share downside if the project is denied outright but thinks the pipeline will be approved eventually. CIBC rates the stock a "market perform." RBC is cutting its 2013 EPS estimate but still rates the stock "outperform." Let's make sure viewers get the full range of investment opinions from the Street.
Politics: a friend reminded me yesterday that policy doesn't matter to business until it does. Suddenly, policy matters. What are the next steps for Alberta's new premier? She's off to Washington with a burr under her saddle, but will it matter? What can Ottawa do? What should it do?
Alberta: What does the oil patch think of the decision? What does it do to the mood in Calgary? Edmonton? Fort Mac? Calgary Bureau Chief Brett Harris has the lead on this compelling story. Please keep him informed of any outstanding chases and new opinions.
Speaking of getting inside a company, Howard Green sits down at 1:00 with Michael McCain, CEO of Maple Leaf Foods, to talk about leadership during times of crisis and uncertainty. This is one that every manager and aspiring manager should tune in for.
We'll also sit down with the CFO of Canadian Tire, Marco Marrone, at 9:10 am Eastern. There are few companies with a better read on the Canadian consumer than this one. The company topped expectations with its earnings yesterday and raised its dividend. We'll find out whether that is a vote of confidence in the consumer.
Turning to Europe, well, you know the story. We continue to monitor developments and will report and progress and all the setbacks as they arise.
Today is also National Metal Day, by the way, and also marks Black Sabbath's first ever U.S. gig in 1970 at the Whisky A Go-Go in LA.

Canada gets taste of European debt crisis

The chase by Marty Cej:

A direct line between events in Europe and Canada was brought into clear focus yesterday when Finance Minister Jim Flaherty cut his projections for government revenue and moved out his target date for balancing the budget. All told, Flaherty slashed $53 billion from his revenue estimates between 2011 and 2016 due to slowing global growth and rising financial risks. Many investors appear to agree with the minister's gloomier outlook this morning as stock markets across Europe shed billions of dollars in value and bond yields in Italy -- the world's third-biggest bond market -- surged 66 basis points to 7.38 percent. A few moments ago, British Prime Minister David Cameron said Italy's cost for borrowing money had jumped to "a totally unsustainable level." He implored Europe's leaders -- again -- to get their act together and provide details of how they planned on preventing the contagion from spreading even further. At present, Greece has failed to announce a new leader, Italy's Berlusconi has said he will resign once new austerity measures are approved but there is no certainty as to who will step into the PM role; the ECB is adamant that it will not be the lender of last resort (it says so right there in the ECB's mandate), no one wants to buy EFSF bonds and the IMF wants to get back into the business of helping developing nations rather than saving profligate developed ones. Apart from that, we're good.
A large part of our mandate is to ensure Canadians understand precisely where we are in the economic cycle, to analyze countless data sources on global economic activity, recognize changing global dynamics and unpredictable politics (opa!) and to bring it home in a form that is comprehensive, understandable and, hopefully, can yield some benefit to viewers in their financial decisions. Finance Minister Flaherty said yesterday that his new forecasts provide a "cushion" for Canada in a worsening global economic environment. We need to press harder today on whether that cushion will be sufficient, whether events in Europe are accelerating beyond the combined resources of the ECB, EU and IMF to slow down. France's two largest banks, for example, have a combined exposure of $416.4 billion to Italian public debt. How much more of a hit can France's big banks take from plunging bond holdings? How long will they continue to lend when their capital is crumbling? If credit freezes up in Europe, what will that mean for U.S. and Asian exporters and, by a short extension, Canada's exports to the U.S. and Asia? Like Willie Dixon said, bring it on home.
With Italy, let's talk about the most likely scenarios. Centre-Right coalition? The centrists say "bah!" and Berlusconi's party goes looking for new friends that results in some technocrats in charge? General elections are called? In any event, the next stage will take weeks to unfold and investors will be left having to make some tough decisions in a vacuum. Did I mention that Greece cannot agree on who will lead that country?

I admit that it is with relief that I turn to Canadian and U.S. earnings, which continue to top most expectations. GM, for example, reported a profit of $1.7 billion US, or $1.03 a share in the third quarter, topping the 94 cent average expectation. Also on our radar today is WestJet, Shoppers Drug Mart, IAMgold. Silver Wheaton, Saputo, Enbridge, Onex, RONA, LionsGate, Quebecor, PetroBakken and Wi-Lan. Macy's, too.

RONA CFO Dominique Boies joins us at 2:10 p.m. ET while Pat Daniels, the CEO of Enbridge, sits down with BNN at 4:00 p.m.