Canadian Business

Less then 24 hours ago, iphone has been jail broken one more time, with little help from Natetrue and company. Now a few of the cool features of this release is that you can do what is called pagination . However, this release came after much deliberation , the hacking community wanted to release the version 1.1.3 after the SDK (software development kit) that Apple is due to introduce in middle of Feb ‘08. The reason being that Apple might cook a patch to block the hack, but for some reason, I believe impatience got the better of the hackers community, the Windows version was released this morning. This however works with iBrickr needs to be downloaded , which will guide you through an easy installation process.

New Features:
Language Compatibility: Iphone has gone multi-lingual on this version.
Voice Dialing: The much awaited Voice dialing is now available, also if you want an icon for Speed dial, its available also, without having to jailbreak.
You can sing along now, yes lyrics is possible with your music.
Chapter Option, another update in this 1.1.3 version is, if you press and hold the icon’s a couple of seconds until the icons start wiggling, you then move around and customize your icon settings. Multiple SMS messaging option now available, However cut and paste feature is not confirmed which many feel a necessary function, maybe on the iphone 1.1.4 firmware update or something. Google Maps has some added features in this release to help you locate yourself using GPS triangulation technology.
Your iphone 1.1.3 update also has an Hybrid version of Google maps.This first got reported in Andrews blog on December 30th 07 and it was not confirmed until recently.

The Bank of Canada is expected to adjust its current monetary policy “to reflect the growing risk of a global economic slowdown” (Governor, David Dodge). Looks like we might not see an interest rate cut after all.

“It’s quite clear that global financial turbulence that we were experiencing then is now going to be more prolonged and the volatility is likely to be higher for longer than we anticipated.” –David Dodge

Mr. Dodge further added that the central bank would need to consider the growing economic risks when setting its policies (including interest rates) for the coming months.

Both Dodge and Finance Minister Jim Flaherty are urging China to increase its currency’s value, and to help expand its domestic demand and consumption. This is, by the way, supposed to help the global market in adjusting to the declining U.S. Dollar, and weaker economic growth in the U.S.A.

The current, and growing, global currency imbalances are a result of America’s huge trade deficits with its trading partners, and higher commodity prices. However, although China holds a massive trade surplus with the United States, the value of its currency (the Yuan), is set by the government; it does not change in value along with the economy’s strength. Today, the Yuan is considered to be substantially undervalued.

Exporters in several countries, including Canada, have been hurt by their appreciating currency. The Canadian government estimated that it shouldered about a third of the burden created by the depreciating U.S. dollar. According to these countries, the global currencies are not at an equilibrium where they facilitate trade.

Although I believe a revaluation of China’s currency is important to unwind global imbalances, I don’t think it is in our best interest to continue complaining about a lack of fairness or competitive disadvantage. Yes, our currency being higher than the USD does put some more pressure on us; but how we deal with this pressure is key.

The United States export sector has historically been at a huge pricing disadvantage; yet, these companies have outperformed many in the international arena. The reason being, their business operations had become more efficient and innovative - something our Canadian businesses need to focus on.

The key to economic success is not advocating for an undervalued currency; The key is to develop efficient and innovative business practices.

“Canada’s trade surplus shrinks”, “Bankruptcies increase as loonie gains”, and “Soaring loonie; plunging outlook”. It’s amazing how the headlines change in two days. And oh yeah, I almost forgot Friday’s report on “looming factory job losses”. The culprit? Of course… the rising Canadian dollar. Well, I’ll get to my opinion after I tell you the news.

Exports were at a one-year low in September, said Statistics Canada on Friday. Rising imports also shrank the surplus to $2.6-billion. Exports are slowing, but the imports of cheaper foreign goods are also soaring. Domestic exports of goods such as lumber, telecom equipment and trucks are sliding and the overall decline will likely continue, according to many economists.

The economists are also cutting their annualized growth forecasts. Well probably not a bad prediction, considering that exports make up more than a third of Canadian GDP. Bankruptcies are also sneaking their way up. According to the CIBC, business bankruptcies are growing for the first time since early 2002 and personal bankruptcies, as of September, rose at the fastest pace in more than three years. The question is, what is responsible? And if it is the high Canadian dollar, are we really headed towards a recession?

The answer is unclear, but one thing I can say for sure is that the media sure likes to exaggerate the issue. I don’t quite understand why the “soaring loonie”, and a “rising surplus” has to be instantly correlated with a “plunging outlook”. A surplus isn’t always the most wonderful thing, and imports are not necessarily ‘bad’ and ‘evil’. The fact that we can afford and purchase more products (whether they be domestic or foreign), increases our utility (our standard of living). If I remember correctly, that’s why we trade… right?

Maximizing our exports and minimizing our imports does not put our economy at its best; as a matter of fact, it makes no sense at all. A balanced, healthy two-way trade is supposed to be the objective. Having a more balanced trade for a period, or perhaps even a small trade deficit, will not kill us! America’s huge trade deficits won’t last forever; so what makes us think that our massive trade surpluses will? So there is nothing wrong with loosing a bit of ground on our surplus, and it doesn’t mean we have to expect a recession; Remember: expectation in the markets, only make the outcome more likely.

Conclusion: Don’t let these misleading headlines lead you running for the exits. The loonie has only been at par or higher for about a month and half. Its effect on our numbers haven’t even started to filter through the system yet. Until then, you could expect some more headlines like the following: “GST/PST revenues plunge as cross-border shopping takes its toll”, “Alberta beef farmers slammed by high CAD”, “Where did the yankee visitors to Canada go?”, “Americans buy less Canadian exports”, “Canadian multinationals take hit on bottom line from currency conversion”, … I think you get the point.

While we usually write about big business and the economy here, I want to diverge a bit and talk about a little different topic today - the booming growth of online music downloading.
It is actually getting to be big business lately. The giants of online retailing like Amazon, Yahoo, Apple are already involved. And now bricks and mortar giant Walmart are also jumping into the fray. It’s becoming a bit of a stampede actually, as the big 4 recording companies are teaming up with different partners nearly every day to conjure up new offerings for music downloading.
The surprising thing is that through all the noise it seems that the quiet little mouse in the corner that’s eating all the cheese is the open-source p2p file sharing software Ares. Ares became popular in 2004, and has been quietly growing all along. They have no big corporation to push the news out, so are content to grow by word of mouth. On the other hand, not having a corporate head the for the RIAA to chase has allowed them to fly under the radar a bit. So if you are looking at different models for music file sharing, you might want to look beyond the noise is being made my the giants shouting about their new music download services, and take a look at Ares for free music downloading

Is the high (and rising) Canadian dollar taking devaluing your U.S. stocks? Yes it is… So how do you invest with the high Canadian dollar? Well first - don’t yank all your investments back home. Your portfolio could use the bulk purchases of cheap American equities and greenbacks right now.

Think about it - the Canadian dollar is not likely to stay at its $1.07 level in the long run. Drew Abbott, vice-president and investment adviser at TD Waterhouse Private Investment Advice expects the loonie to settle in the 95-cent to $1 range within the next 18-months.

I understand its hard to watch the value of your investments offshore drop with the U.S. dollar - especially when your Investment Advisor told you to “diversify with foreign investments”. I also understand it makes it even harder when you see local stocks and the TSX performing much better than your own foreign holdings. Finally, I’ll probably get on your last nerves when I tell you to ignore it.

Well, don’t chase the loonie like a bunch of running bulls. Remember what happened when you chased those tech stocks? That’s exactly what the Canadian dollar is turning into - a growth stock, rather than a currency. One the most important keys to investing is PATIENCE. Right now, we have to resist the urge to pull back all our investments back to Canada, and take advantage of the long-term opportunities we are presented with.

“Over the longer haul this is a golden opportunity to at the very least consider slightly increasing holdings in foreign securities. We’ve had an unbelievable run between the Canadian dollar and the TSX over the last five years, and I just cannot believe we’re going to have another prolonged period like that of extreme outperformance” –Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc.

“In the short run, you may be hurt by staying offshore or in the United States, but in the long run you’ll do well with U.S. stocks. You can take your $1.06 or $1.07 and buy some pretty cheap stocks in the United States but you need staying power and patience, and a lot of people don’t have that.” –Irwin Michael, portfolio manager at ABC Funds.

“Even if you put that into a U.S. money market fund earning 5 per cent, if the dollar comes back down from $1.07 to $1, that’s a 12-per-cent return over a year. The major move’s obviously been done. Whether we’re timing it properly is impossible to tell, but that’s one strategy.” –Drew Abbott, vice-president and investment adviser at TD Waterhouse Private Investment Advice.

For those of you non-Canadians who do not yet know what the “loonie” is… its the world’s best-performing major currency this year - the Canadian dollar. It rose as high as $1.0717 (U.S.) Friday from Thursday’s close of $1.0512. It settled Friday’s session at $1.0704, up 1.92 cents.

The currency has soared 25-percent this year against the greenback — and almost 7 per cent in the past month alone. The gains are most striking against the U.S. dollar, but the loonie is also stronger against every single major world currency this year, including the euro, the yen and the Brazilian real.

The CAD is behaving like a growth stock not a currency. Overall it is good that the CAD is stronger but the speed of the rise is somewhat concerning as there is no precedent. No period of similar growth with which we can compare what the next experience will be. Some are forecasting a disaster…

I wouldn’t predict a complete disaster; but any company trying to sell goods to the world will experience a serious profit squeeze. It is tough to set prices when the currency changes so quickly. Hedging is great, but you don’t usually hedge all your projected sales in one contract. There will be fallout from this, but it will be concentrated.

The good news for the average person is that our prices for imported goods should decline. The bad news is that the cost of heating our homes is getting more expensive as commodity prices for oil and natural gas continue to climb. It’ll be interesting to see what the inflation figures come in at in the next few months. If a higher dollar keeps inflation in check by making imports cheaper, then its a good news story.

But I think there will be a lot of people in manufacturing who will be negatively affected.

RBC, the largest international trader of Canadian dollars, raised its forecast for the currency on Friday, saying it will appreciate further to around $1.08 before declining below parity in the second half of next year.

The Canadian dollar has traded above $1.07 before, though that was before official record-keeping began.

The dollar was technically worth as much as $2.78 in the late 1800s, but that’s largely because during Canada’s early history the value of the currency was either pegged to the price of gold or regulated by the government.

Toronto has recently passed two new controversial taxes in city hall - a tax on land transfers, and another one on vehicle registrations. It has been months since this long debated issue came arise. (Originally posted on July 18/07, here)

Mayor Miller’s take: “it is a very difficult decision.” he said the vote poses a “fundamental question” for the city: “Is this city government going to have the resources and the ability to invest, not just to maintain services, but to invest [in new services],” he said. Mr. Miller responded to oppositions by saying “these taxes are fair and reasonable,” convinced that a “yes” vote will help the city push even harder for the province to upload social services now partly paid by local property taxpayers.

The tax on land transfers (up to 2-percent) and a $60 fee for vehicle registrations is expected to raise the city about $180-million to $200-million for 2008.

My take: “You spend like New York, but you aren’t New York!” (agreeing with a lobbyist who was escorted out by security guards for loudly interrupting Miller with the above statement)

Best Buy Canada… maybe not the “best buy” after all - well, at least not in Canada. I was looking for the “best buy” on certain electronics this weekend, and found some interesting information for all Canadian shoppers. Let’s take a look at my shopping list:

iPod Touch 16GB - $435.99 ; ($399.99 USD @ bestbuy.com)

DVD Player - $69.99 ; ($54.99 USD…)

GPS Device - $449.99 ; ($349.99 USD)

37′ LCD - $1299.00 ; ($999.99 USD)

————————————————-

Total at BestBuy.ca - $2,256 CAD vs. Total at BestBuy.com - $1,805 USD

Thats about a whopping $415 difference!.. and oh yeah, last time I checked…

1 Canadian dollar = 1.029654 U.S. dollars

Canadians are facing hugely discriminatory prices. I do understand that maybe the cost of shipping and other expenses may be a little higher, but that still doesn’t reason the $415 difference I just noted above. Don’t get me wrong, it is not only Best Buy Canada that is doing this - it’s all the retailers. As Canadian consumers, we need to negotiate on the prices we are facing, and apply pressure to the retailers to help resolve this issue.

Some retailers are moving towards rebates, discounts, and price cuts to prevent Canadian shoppers from buying the same items south of the border. Hudson’s Bay Co. announced that it was going to renegotiate import contracts to cut retail prices by between 5- and 25-percent. The lower prices should start coming into effect by Friday at the company’s Zeller’s stores. Mr. Flaherty (Finance Minister) lauded the Bay’s move, saying it’s exactly what he’s asking of retailers.

I applaud Mr. Flaherty for applying some pressure to retail during the past few weeks. Although it seems to me as if he is afraid of stepping, or at least receiving criticism for stepping in to the free markets; And honestly, he shouldn’t be. It’s a matter of saving Canadian consumers, retailers, and the economy of Canada. What were to happen if all Canadians were to travel to the United States for their Christmas shopping? It sure wouldn’t be a pretty thing for Canadian retailers nor the economy - but as for consumers.. well, let’s put it this way… they sure would be getting the “best buy”.