Moody’s warns may downgrade five big Canadian banks

NEW YORK/TORONTO (Reuters) – Moody’s Investors Service warned on Friday it could cut its ratings on five top Canadian banks on concerns about a softening economy and volatile capital markets, a blow to a banking system named the soundest in the world four years in a row.

But the outlook for the sector is no longer as rosy, Moody’s said, because of the risks presented by the macroeconomic environment and a business mix that leans heavily on domestic mortgages and other consumer lending.

Canadian consumer debt has risen to record highs in recent months, a situation reminiscent of the United States before its 2008 housing crisis. The household debt-to-income ratio jumped to 163.4 percent in the second quarter from 161.8 percent in the first quarter, Statistics Canada said a week ago.

Meanwhile, Canada’s housing market appears to be cooling after several years of red-hot gains.

“Domestically, we’re concerned about the high and increasing levels of consumer indebtedness and elevated housing prices, and we feel that they may tend to leave the Canadian banks more vulnerable to downside risks to the economy than they have been in the past,” David Beattie, Moody’s vice president and senior credit officer, told Reuters.

The warning applies to long-term debt ratings for Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada. It also applies to Caisse Centrale Desjardins, Canada‘s largest association of credit unions.

The ratings agency said any cuts would likely be only one notch. The sector’s ratings are still among the highest in the world.

“We continue to believe that the Canadian banks rank among the strongest in the world, and this review is based on concerns about system-wide and bank-specific risks that aren’t fully captured in their current ratings,” said Beattie.

The only bank not put on credit watch on Friday was Royal Bank of Canada, the country’s largest. That’s because Moody’s lowered RBC’s ratings by two notches in June as part of a review of 17 global banks.

Moody’s did place RBC’s supported subordinated debt ratings on review for downgrade, while affirming its other ratings.

CAPITAL MARKETS EXPOSURE

Moody’s also cited the sizable capital markets exposure of Scotiabank, BMO, CIBC and National Bank as reasons for the warning. Exposure to capital markets was the main reason behind RBC’s ratings cut earlier this year.

For TD, the highest-rated Canadian bank, Moody’s cited concern with its “less-strong” U.S. subsidiary. TD has about 1,300 branches in the United States, outnumbering its branch count in Canada.

TD’s long-term credit rating is currently Aaa, which is the highest rating. Scotiabank and Desjardins are rated Aa1, the next level down, while BMO, CIBC, and National Bank are rated Aa2.

Desjardins was cited because of its more “concentrated” franchise than its Canadian peers, which Moody’s said leaves it less flexibility to respond to profit pressures.

Desjardins has a dominant retail bank presence in the province of Quebec, but lacks the geographic diversity and business mix of the big banks.

Canada’s banks, which had held up much better than their peers during the global economic crisis, were named soundest in the world for four straight years by the World Economic Forum.

The second major debt rating agency, Standard & Poor’s, made a similar move in July, putting RBC, TD, Scotiabank and National Bank on “negative outlook” citing rising consumer debt and elevated housing prices.

Shares of the Canadian banks did not appear to be affected by the Moody’s report, which was released about an hour before markets closed on Friday.

Of the banks placed on review, only TD declined, slipping 0.1 percent to C$ 81.17 on the Toronto Stock Exchange.

CIBC would not comment on the review, while a TD spokesman said the bank “continues to be well capitalized and remains one of the safest and strongest banks in the world.”

The other lenders did not immediately respond to a request for comment.

(Additional reporting by Daniel Bases and Caryn Trokie; Editing by Leslie Adler and Tim Dobbyn)

Economy News Headlines – Yahoo! News

Read More..

Amnesty Int: Ivory Coast torturing detainees

ABIDJAN, Ivory Coast (AP) — Ivory Coast security officials are torturing dozens of detainees by administering electric shocks and other forms of abuse, Amnesty International alleged Friday.

The victims include people charged with endangering state security in the wake of a recent spate of attacks targeting military installations. Since early August, unknown gunmen have carried out roughly 10 attacks at checkpoints, military bases and other installations throughout the country, including in the commercial capital of Abidjan.

United Nations officials have said that more than 200 people have been detained on suspicion of involvement in the attacks, and that torture has been documented at multiple detention facilities.

Gaetan Mootoo, West Africa researcher for Amnesty, said an investigation team received reports of a range of abuses during a recent month-long visit.

“We were able to meet dozens of detainees who told us how they have been tortured by electricity or had molten plastic poured on their bodies,” Mootoo said. “Two of them have been sexually abused. Some have been held for many months denied contact with their families and access to lawyers.”

Army spokesman Cherif Moussa denied the torture allegations Friday. “Our camps are not concentration camps,” he said.

However, he acknowledged the possibility that individual soldiers may occasionally “go beyond what they are allowed to do” when dealing with inmates.

He added that the government tried to ensure that inmates’ rights were respected. “We want to prove that we are not abusing people’s rights,” he said. “We’re working for the state’s security. We’re working for the people’s security.”

Earlier this month, the Associated Press interviewed former detainees at a military camp in the southwestern port town of San Pedro who described widespread beatings as well as the use of electric shocks. A guard at the camp corroborated most of the claims, though camp commanders denied them.

In its statement Friday, Amnesty described how one detainee, a police officer, had died as a result of the torture he endured at the San Pedro camp.

“Serge Herve Kribie was arrested in San Pedro on August 21 by the national army and interrogated about recent attacks,” Amnesty said. “He was stripped naked, tied to a pole, had water poured on his body, and was then subjected to electric shocks. He died a few hours later.”

Amnesty said that some detainees were only released after ransoms were paid. One detainee told the rights group: “My parents first paid 50,000 CFA (a little under US $ 100) and then after my release, my jailers went at my house and demanded a higher sum. I told them that I couldn’t pay such an amount and they agreed to receive 20,000 CFA more (about US$ 40).”

The government has blamed the attacks on allies of former President Laurent Gbagbo, who was arrested in April 2011. Gbagbo’s refusal to cede office after losing the November 2010 election to now-President Alassane Ouattara sparked six months of violence in which at least 3,000 were killed.

Amnesty researchers also met with some of the more than 100 Gbagbo allies – including his wife, Simone – who are being detained on charges stemming from the post-election violence.

“Some of them told us that despite the fact that they have been held since April 2011, they only saw an investigating judge twice for less than a few hours,” Mootoo said.

Despite widespread evidence that forces loyal to Ouattara also committed atrocities during the violence, none have been arrested or credibly investigated, sparking allegations of victor’s justice.

Also Friday, in Amsterdam, judges at the International Criminal Court rejected a request for release by former president Gbagbo, who is being detained on suspicion of crimes against humanity.

Africa News Headlines – Yahoo! News

Read More..

Amazon’s spending spree to hurt margins now, boost profit later: analysts

(Reuters) – Amazon.com Inc‘s spending spree will hurt margins in the near term but boost profit in the long run, analysts said, after the world’s No.1 internet retailer posted a loss on heavy spending on technology, infrastructure and digital content.

Amazon shares were set to open about 2 percent higher on Friday even though the company forecast weak sales ahead of the crucial holiday shopping quarter.

Analysts remained largely optimistic about Amazon‘s ability to post strong growth in its e-commerce and international business despite the economic slowdown in Europe that also contributed to the company’s third-quarter loss.

“The low 4Q12 revenue growth guidance presents an upside opportunity particularly given the continued solid customer and unit increases and the strong third-party business,” said Needham & Co analyst Kerry Rice, who has a “hold” rating on the stock.

Amazon’s current quarter could also benefit from strong e-commerce trends as more consumers shift online to make their holiday purchases, he added.

Barclays Capital Inc analyst Anthony DiClemente cut his target on the stock to $ 220 from $ 230, but said Amazon has regularly shown a tendency to set low expectations.

Susquehanna International, while cutting its price target on the stock to $ 255 from $ 275, said it was positive on Amazon’s growing presence in third-party retail, its digital business leading the transformation of books, music and videos, and its unrivaled network of distribution centers and web service.

RBC Capital Markets raised its price target to $ 250 from $ 245, and said it remained bullish on Amazon’s opportunities in worldwide retail as it expands in geographies and categories.

International sales rose 20 percent to $ 5.92 billion in the quarter from a year earlier.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Don Sebastian)

Internet News Headlines – Yahoo! News

Read More..

Jill Scott to star in Fox Searchlight’s ‘Baggage Claim’

NEW YORK (TheWrap.com) – Jill Scott, the Grammy-winning neo soul singer-songwriter, will star in “Baggage Claim” for Fox Searchlight, the studio announced on Thursday.

She will appear alongside Paula Patton and Derek Luke in this romantic comedy from writer/director David E. Talbert.

Patton will play Montana Moore, a flight attendant who tries to find a man before her sister’s upcoming wedding. Scott will play Gail Best, Moore’s blunt best friend and coworker.

The film is set to begin production this fall and is tentatively scheduled to open in theaters next year.

Scott, who has won three Grammys and garnered 13 nominations, just took to the small screen in Lifetime’s “Steel Magnolias.” She has also had roles in a variety of movies, including Tyler Perry’s “Why Did I Get Married.”

Movies News Headlines – Yahoo! News

Read More..

NYC Nanny Stabbing: When Is a Child Too Young to Remember Trauma?

Nessie Krim, a 3-year-old returning from a swim lesson, witnessed a family tragedy that could leave lifelong scars. She and her mother walked into their New York City apartment on Thursday to find her two siblings in the bathtub with their throats slashed, allegedly by their nanny.

To add to the horror, the little girl and her mother, 34-year-old Marina Krim, watched on as their nanny, Yoselyn Ortega, knifed herself in the throat and slit her wrists, according to police.

When is a child too young to remember a trauma, and is that even the right question to ask?

“It’s more about the family than the child,” said Dr. Alan E. Kazdin, professor of psychology and child psychiatry director of the Yale University Parenting Center and Child Conduct Clinic.

“The child doesn’t know the meaning of the stabbing and may not see blood or know what it was,” said Kazdin. “The easier part to address is that the mother will have a huge traumatic reaction to this and it will likely change the interaction with the 3-year-old.

“You can’t fault the mom for anything, but depressed moms are less engaged with their children.”

The victims’ parents – Marina and Kevin Krim, an executive with CNBC – will surely have a psychologically challenging recovery ahead, say medical experts. And their surviving child Nessie’s emotional health will be intertwined with theirs.

Children always follow their parents’ lead, according to Kazdin. “When a child falls on the pavement, they cry for just a second, then they look to the parent. When they see the parent isn’t crying, they stop.”

“This is an event the child can’t really experience – like 9/11,” he said. “The family will talk and cry about it and not the first, but the enduring events the family will go through in their normal reaction will be devastating to the child.… The trauma experience is not going to be a one-shot thing.”

Marina Krim demonstrated her devotion to her three children in photos and daily anecdotes that she posted over the last two years on a blog, “Life with the Little Krim Kids” on LiveJournal. It was taken down after the murders.

Police said that Ortega, who is 50 and worked in the family home for more than year, remains on a breathing tube after being rushed to the hospital. She was a naturalized American born in the Dominican Republic where the Krims had visited Ortega’s family in February. Neighbors who had known the woman for years said she had no history of mental illness, and police had no motive.

Christine A. Courtois, a counseling psychologist and the author of “Treatment for Complex Trauma,” said that Nessie’s mother will need “extensive support” going forward. “They have to face loss, betrayal, and in addition a trial.”

For the parents, it’s not just about the death but the massive betrayal of responsibility,” she said.

The motivations of Ortega may never be known. “It depends on the character of this woman and what set it off,” said Courtois. “Something may have happened with the children. She may have been resentful about the wealth of the family or have her own history of abuse or something that unhinged her that day.”

Other parents need to be vigilant and take it in the sense that this could happen to anyone,” Courtois said. “Unfortunately, no one is immune.”

She notes that a mother tends to feel more misplaced guilt than a father, even if she had done all she could to vet the nanny.

Both she and Kazdin agree that 3-year-old Nessie will not likely escape unscathed from this family tragedy.

“Even though she might not have known what happened, the fact that her mother walked in and was screaming and screaming, the child will know that [something bad has happened],” said Courtois. “She will register her mother’s distress.”

But will the bloody events of this week be imprinted forever in Nessie’s brain?

“No one knows the answer,” said Kazdin. “Will the child have a mental photograph? No one knows.”

“We do know about the stress that is experienced by parents gets passed on to their children right there on the spot,” he said. “The best thing for the child is for all the support systems to make sure the family gets back on track.”

Health News Headlines – Yahoo! News

Read More..

‘Made in France’ Is a Tough Sell—in France

On the cover of the latest Le Parisien magazine, Industry Minister Arnaud Montebourg poses before the French flag in a sailor’s bateau, wearing a Michel Herbelin watch and holding a Moulinex blender—all made in France. Seeking to preserve and create work in France in the face of a 10 percent jobless rate, Montebourg suggests French consumers forgo cheaper imports and greater product choice if it means more of their countrymen keep their jobs. “My priority is ‘Made in France,’ ” he said in October. “There’s a choice that’s more important than any other, and that is to preserve France’s industrial base.”

The drive is part of President François Hollande’s struggle to prevent continued job losses as Europe’s second-largest economy slumps, shrinking demand and forcing consumers to tighten their purse strings. Montebourg’s pronouncements mark a long tradition of treating the French as citizens first and consumers later.

The reaction among the French to the Made in France drive has been mixed. Executives at Armor-Lux, the Brittany-based maker of the jersey Montebourg wore, are delighted. Export manager Marco Petrucci says Armor-Lux sold 400 more of the €49 ($ 67) jersey the weekend after the magazine ran than it normally does this time of year. The campaign “is a very, very good thing, as textiles have suffered a lot,” he says.

Pascal Denis, a Metro train driver in Paris who was buying baguettes and rillettes (a kind of meat spread) in a Monoprix supermarket on the Boulevard des Italiens, says he tries to buy French products as much as possible: “It’s a question of patriotism.” Yet his colleague Sébastien Lorin, also a Metro driver, says, “It’s hard to justify paying €6 for a pair of socks made in France when you can get a pair made in Indonesia for €1.50.” In the same Monoprix, bank worker Samia Khaldi was buying Coke and Nestea. She says of her purchases, “I don’t pay any attention to where they come from, I just look for the brands I like.”

Some consumer activists bristle at mention of the campaign. “We have a government today that wants immediate results on employment and so is quick to sacrifice the rights of consumers,” says Edouard Barreiro, a representative for consumer group UFC-Que Choisir in Paris. The government’s thinking is flawed, says Hervé Boulhol, head of the France desk in the Economics Department of the Organisation for Economic Co-operation and Development: “If all countries did the same, then we end up with everyone paying higher prices, having less choice, but without creating more jobs” over the long term. “If a French consumer wants to buy French products, that’s fine. But you cannot turn this into a trade-distorting policy.”

Goods manufactured in France are on average 15 percent to 25 percent more expensive than goods made in countries such as China, according to Vincent Gruau, head of Cedre, an association to promote local entrepreneurs. Sometimes the difference is even greater. Le Parisien pointed out that domestic pasta costs €1.55 a kilogram, more than double the average 71¢ for imports.

Still, the industry minister told Le Parisien he’ll contact supermarkets to create an aisle dedicated to goods made in France. He dismisses the argument that low costs are good. “The obsession with low cost means outsourcing and job cuts,” he said, citing the example of the discount airlines that have proliferated in Europe: “Discount airfares ultimately end in 5,000 people at Air France (AF) losing their jobs.”

The bottom line: It will be hard for the French to embrace a Made in France campaign when domestic products can cost double what imports cost.

With Carol Matlack

Businessweek.com — Top News

Read More..

Novartis does not expect further sales bans of flu vaccines

ZURICH (Reuters) – The Chief Executive of Swiss drugmaker Novartis is confident its flu vaccines manufactured in Italy are safe and does not expect further countries to ban sales or halt deliveries.

In a conference call to journalists, Chief Executive Joseph Jimenez said Novartis shipped the two vaccines produced in Italy to European markets and parts of Asia.

He said he did not expect other countries to take action to suspend deliveries but he could not rule this out.

Novartis reported worse-than-expected third quarter sales on Thursday, dragged down by the loss of a U.S. patent on its top-selling blood pressure drug Diovan and tough comparisons at its Sandoz unit.

(Reporting by Caroline Copley)

Diseases/Conditions News Headlines – Yahoo! News

Read More..