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Unemployment in Canada will continue to rise over the next year to almost 10 per cent, despite the federal government’s stimulus package and global signs that the great recession seems to be ending, the OECD said Wednesday.

Canada’s unemployment rate, which currently sits at 8.7 per cent, is predicted to rise to almost 10 per cent next year, the report said, bringing OECD unemployment to a record postwar high.

"There are growing signs that the worst may be over and that a recovery may be in sight," the report noted. "But the short-term employment outlook is grim."

For Canada, employment peaked in October 2008, but has since dropped off by more than 486,000 full-time jobs, many of them in Ontario’s hard-hit manufacturing sector.

The Organization for Economic Co-Operation and Development report, Employment Outlook 2009, noted Canada’s "above-average fiscal stimulus" package helped dampen the blow to overall job loss and that Canada has extended the maximum duration of Employment Insurance benefits.

The report warned, however, that if its forecasts about the current recession are accurate, job loss could go on to be worse than Canada’s recession of the early 90s. It also noted that job loss has been particularly acute among young adults (aged 15-24), with an unemployment rate of 16.3 per cent, about double the adult rate.

"Even if the unemployment rate has already peaked, Canada’s labour market typically takes a long time to recover from recessions," the report says. "The unemployment rate in the early 1990s recession peaked in early 1993, but did not drop below its prerecession level again until almost eight years later."

The overall unemployment rate in OECD member countries has already reached a postwar record high of 8.5 per cent, a slide which saw the ranks of the jobless swell by more than 15 million since the end of 2007 free credit report online.

The OECD predicts that should the various fiscal stimulus packages fail to quicken a general recovery, the group’s countries could see overall unemployment reach a new high of 10 per cent – with 57 million out of work.

"Employment is the bottom line of the current crisis," OECD secretary general Angel Gurria said. "It is essential that governments focus on helping jobseekers in the months to come."

However, the OECD warned that if government stimulus packaged were not "temporary and well-targeted," they could actually impede recovery by "propping up declining firms and making it harder for expanding ones to hire new workers" – an apparent nod to North America’s general government consensus to bail out the ailing auto sector.

There were some slight signs Wednesday morning that net employment losses might already have scraped bottom, according to a new Conference Board of Canada report. The new "Help Wanted Index," which measures online job postings, noted that in August there was a rise of 2.6 percentage points compared to July.

"While the Help Wanted Index does not yet point to a rebound in hiring, it suggests that the number of job losses is bottoming out," says Pedro Antunes, director for the non-profit research group’s national and provincial forecast, in a release Wednesday.

However, the Conference Board’s own research notes that the unemployed still greatly outnumber the amount of new job postings, with a ratio of 3.6 unemployed people for every job posted.

The OECD has 30 members states, including Canada, the United States, the United Kingdom, Australia and Japan.

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Walmart Stores Inc posted better-than-expected quarterly earnings on Thursday as a clampdown on inventory offset falling sales, and the company forecast a full-year profit that could beat Wall Street estimates, sending its shares up 1.7 percent.

The world’s biggest retailer, which now describes itself as “Walmart”, said the hold-down on inventory helped it protect margins and avoid costly markdowns as cautious shoppers stuck to buying necessities like food.

The company’s better-than-expected profit more than outweighed its weaker-than-planned sales given the tough economy, said Peter Benedict, analyst at Robert W. Baird & Co.

“All these other stocks have had such big runs, it’s time for Walmart to play some catch up,” he said of the stock’s rise.

Net income fell slightly to $3.44 billion from $3.45 billion but earnings per share rose to 88 cents from 87 cents, as the company had fewer outstanding shares in the latest quarter. Analysts, on average, were expecting earnings of 85 cents per share, according to Reuters Estimates.

Total sales fell 1.4 percent to $100.08 billion, pressured by a stronger U.S. dollar, which cut the dollar-value of sales made outside the United States. Sales rose 2.7 percent to $104.28 billion on a constant currency basis.

The results came out on the same day as a U.S. government report showing that sales at retailers fell unexpectedly in July. Other data showed the number of workers filing new claims for jobless benefits rose in the latest week.

“Short term, we believe the economy will continue to be challenging,” said CEO Mike Duke on a recorded call personal loans. “We are accelerating our focus on reducing expenses and improving productivity in all of our operations.”

SLIPPING SALES

The retailer said sales at U.S. stores open at least a year — a key gauge known as same-store sales — fell 1.2 percent. Wall Street, on average, expected a gain of 0.85 percent.

In May, the company said it would stop posting sales on a monthly basis, leaving analysts to guess how it fared in the quarter compared with last year when it was helped by rising food and fuel prices and consumers spending tax rebate checks.

Vice Chairman Eduardo Castro-Wright said on a recorded call that the company had underestimated how much of a boost it got from shoppers spending tax rebate cash in its stores a year ago. He also said sales were hurt by falling food prices.

Chief Financial Officer Tom Schoewe told reporters that consumers were under significant pressure, preferring to pay for purchases with cash or debit cards instead credit.

Walmart is also seeing a bump in sales at the start of the month when consumers receive government aid such as food stamps, he said.

Sales at Walmart’s U.S. stores rose 0.3 percent in the second quarter to $64.21 billion, while they fell 3.2 percent to $11.91 billion in Sam’s Club warehouse locations. 

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Accused by Monsanto Co. of patent infringement, DuPont fired back on Tuesday, claiming its Creve Coeur-based rival initiated the case to stifle competition by keeping new biotech trait combinations out of the hands of farmers.

The response from DuPont comes just over a month after Monsanto sued the company in federal court in St. Louis.

The Monsanto lawsuit claims DuPont’s agricultural unit, Pioneer Hi-Bred International Inc., violated a license agreement by combining an herbicide resistance trait that it’s developing with Monsanto’s Roundup Ready trait.

In its answer, Wilmington, Del.-based DuPont challenged the validity of Monsanto’s patents and said the 2002 license agreement doesn’t prohibit it from combining the genetic traits.
DuPont says combining, or "stacking," genetic traits for herbicide tolerance would provide farmers with better weed control than Monsanto’s Roundup Ready technology can deliver by itself.

"We will vigorously defend our rights to bring valuable new technologies to the market," James C default payday loan. Borel, a DuPont vice president said in a statement.

Monsanto was the first company to develop a gene for herbicide resistance with its 1996 launch of Roundup Ready soybeans. Today, Pioneer and other seed companies pay Monsanto for the right to use the Roundup Ready trait.

DuPont says the technology is used in about 95 percent of soybean acres in U.S., and that Monsanto has used strict license agreements to exclude competition and raise prices to farmers.

Monsanto claims DuPont chose to combine the biotech traits in soybean seeds to "cover up" problems with a rival technology, Optimum GAT.

"DuPont’s filing today is yet another smoke screen to divert attention from its problem-plagued product," Scott Partridge, deputy general counsel for Monsanto, said in a statement.

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PNC Financial Services Group Inc. this morning announced that it is buying National City Corp. for $2.23 a share, or $5.2 billion in PNC stock. The deal represents a 7.1 percent discount to National City’s Thursday closing price.

In addition, PNC said it would pay $384 million in cash to certain National City warrant holders.

To help support the deal, PNC is selling the federal government $7.7 billion in preferred stock and related warrants, tapping into the government’s $700 billion rescue plan for the nation’s banking system.

The acquisition of National City, which has 60 branches in the St. Louis area, will increase PNC’s deposit base to $180 billion, making it the fifth largest U.S. bank by deposits.

In addition to ranking fifth nationally in deposits, the combination with National City is expected to place PNC fourth among U.S. banks in number of branches. Pittsburgh-based PNC has no branches in the St. Louis area.

PNC said it expects to incur merger and integration costs of approximately $2.3 billion. PNC said it expects the merger will result in savings of $1.2 billion through the elimination of operational and administrative redundancies.

Under terms of the agreement, PNC will acquire all outstanding shares of common stock of National City in a stock-for-stock transaction, which has been approved by the boards of both companies http://full-free-credit-report.com.

Based on PNC’s closing stock price of $56.88 on Thursday, the exchange of 92 million shares values each share of National City’s common stock at $2.23. The transaction is currently anticipated to close by Dec. 31. The merger is subject to approval by shareholders and regulatory approval.

Speculation has been growing that National City would be acquired.

The Cleveland-based bank on Tuesday said it planned to cut 4,000 jobs as the bank continues to struggle amid the ongoing downturn in the mortgage and credit markets. The bank reported a $5.15 billion third-quarter loss.

Problems in the mortgage and real estate markets since the middle of 2007 have hit National City especially hard.

National City set aside $1.18 billion during the third quarter for loan-loss provisions, compared with provisions of $368 million during the same quarter a year earlier. Loan-loss provisions declined from the previous quarter, when National City set aside $1.59 billion to cover potential losses.

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IndyMac’s startling collapse last week sparked fears that other institutions could follow suit. Yet, several veteran banking analysts say that there won’t be nearly as many bank collapses as there were in the late 1980s and early 1990s.

In 1989, a period just before the peak of the savings & loan crisis, 534 institutions failed. During that tumultuous period, more than 1,000 institutions shut their doors.

"We will not approach nearly that level," said Gary Townsend, a former bank analyst at Friedman, Billings, Ramsey, who now serves as the president of the Chevy Chase, Md.-based Hill-Townsend Capital. "The system is much better capitalized and banks are better credit managers than they were back then."

To that end, IndyMac was just the fifth bank failure this year. The other failed firms were mostly smaller community institutions.

In a note published Monday, Ladenburg Thalmann analyst Richard Bove wrote that the banking sector is "not anywhere near the danger" seen nearly two decades ago. He pointed out that the number of non-performing assets compared to the number of outstanding loans remain just a fraction of the levels during the early 1990s.

At that time, roughly 1,500 institutions were on the Federal Deposit Insurance Corporation’s so-called "problem list" of banks considered at risk of failure.

That’s a far cry from today’s environment.

As of late May, just 90 institutions were on FDIC’s troubled bank list. That number could grow when the FDIC releases its latest reading on the state of the banking industry in August. But on a historical basis it still remains relatively low.

While the global financial institutions have had to write down billions of dollars as a result of the mortgage crisis, many industry analysts anticipate the failures going forward to crop up at the community banking level or among the mortgage-centric thrift banks.

A rash of failures at the community level could have far-reaching effects. Smaller banks are big players in the business of construction loans made to homebuilders. More failures could tighten lending standards further, squeezing certain pockets of the housing market even more than they already have been.

But the FDIC continues to stress that accounts up to $100,000 at a failed bank are insured. For this reason, FDIC chairman Sheila Bair said in a statement Sunday that "for insured depositors, IndyMac’s conversion has been largely a non-event."

Still, IndyMac marked the largest collapse of an FDIC-insured institution since 1984, when Continental Illinois, which had $40 billion in assets, failed.

That prompted speculation Monday that other big firms facing massive loan troubles could suffer a similar fate.

Washington Mutual (WM, Fortune 500) shares tumbled more than 30% Monday after a Lehman Brothers analyst suggested the Seattle-based thrift may need to raise its reserves significantly to cover its home loan losses payday loans. Ladenburg Thalmann’s Bove warned that WaMu is on the edge of the "danger zone."

After the market closed Monday, WaMu said in a statement that the bank "significantly exceeds all regulatory ‘well-capitalized’ minimums for depository institutions."

National City (NCC, Fortune 500) shares plunged on market speculation that the company was close to failure. The bank issued a statement Monday saying it was well capitalized and was not suffering a liquidity crisis.

But Bair told members of Congress last month that her office was preparing for the possibility of a large bank failure but added that she did not anticipate such a scenario.

What may also stem the tide of bank failures this year is that some institutions could get bought before reaching the brink of collapse.

At the same time, private-equity firms and sovereign wealth funds have proved willing to provide funding to capital-hungry banks. Earlier this year, both National City and WaMu raised cash by selling outside stakes to top private-equity firms.

During the S&L crisis, that option wasn’t always available, notes T. Timothy Ryan Jr., a former director of the Office of Thrift Supervision. Ryan helped guide the S&L cleanup and currently serves as the president and CEO of the Securities Industry and Financial Markets Association.

"We had no capacity to raise private equity for institutions that were undercapitalized," said Ryan. "That is wholly different today."  

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The United Arab Emirates has requested the purchase of a new U.S. missile defense system developed by Lockheed Martin Corp (LMT.N: Quote, Profile, Research), a deal that could be worth $7 billion, if approved, two sources familiar with the discussions told Reuters on Wednesday.

Col. Bill Lamb, who manages the U.S. Missile Defense Agency’s Terminal High Altitude Area Defense (THAAD) program, confirmed that an unidentified country had requested a sale of the sophisticated system and that the Pentagon was discussing it with lawmakers.

Lamb, who said the deal would be worth “close to” $7 billion, declined to identify the buyer or give other details.

Two sources familiar with the request, who asked not to be named, identified the potential buyer as the UAE. One said the deal could be formally announced in June or July.

Once the Pentagon’s Defense Security Cooperation Agency notifies Congress about the proposed sale, lawmakers have 30 days to object, although such action is rare.

“As far as I know, everyone who’s looked at it thinks it’s a good idea,” said one of the sources.

This same source noted that the defensive nature of the weapon system made it more palatable to U.S payday loans. lawmakers than the sale of satellite-guided munitions to Saudi Arabia, which had provoked some criticism.

The Pentagon has spent $11 billion over the past 17 years to develop the new missile defense weapon, which is designed to defend troops, population centers and critical facilities against short- to medium-range ballistic missiles of a type that could be fired by Iran or North Korea. 

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Patriot Coal Corp., the company spun off from Peabody Energy Corp. five months ago, said it has agreed to purchase rival Magnum Coal Co. for $709 million in a deal that would create the second-largest coal producer in central Appalachia.

Together, Patriot and privately held Magnum sold more than 40 million tons of coal in 2007, generated almost $2 billion in revenue and own 2 billion tons of reserves, the companies said Wednesday in a statement.

Patriot Chief Executive Richard M. Whiting said Magnum’s assets represent a good strategic and geographic fit and will add to earnings in the first year.

"This transaction fits squarely with Patriot’s strategy of growing through synergistic, accretive acquisitions, particularly in the fragmented central Appalachian region," Whiting said in the statement.

Creve Coeur-based Patriot is using its fast-rising stock as currency. Shares of the company have risen 47 percent since they began trading at $32 on Oct. 18 as investors respond to increasing demand for coal to run power plants and make steel.

Magnum stockholders will receive 11.9 million newly issued Patriot shares, which closed Wednesday at $46.95 on the New York Stock Exchange. Patriot also will assume $150 million in debt.

The transaction, which had been rumored in the coal industry, is subject to approval by regulators and Patriot shareholders and is expected to close around mid-year.

Magnum’s majority owner, Boston-based ArcLight Capital Partners LLC, will own 16 percent of Patriot under terms of the sale, and other Magnum shareholders will own 15 percent.

"We believe this presents a unique opportunity to consolidate two significant, complementary coal companies, achieving the benefits of scale and diversity that we believe are critical to … long-term success in the coal sector," Robb E same day payday loans. Turner, Magnum’s chairman and managing partner of ArcLight, said in the statement.

Magnum, which has 1,700 employees, is based in Charleston, W.Va. It owns 17 mines and seven preparation plants.

The company was formed in late 2005 by ArcLight and Arch Coal Inc.

Creve Coeur-based Arch, the nation’s No. 2 coal producer, intended to exchange some mining operations for a minority stake in the new company, but ultimately sold the assets for cash to rid itself of millions of dollars in retiree health care costs and environmental liabilities.

jtomich@post-dispatch.com | 314-340-8320

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