LOWER MAINLAND (NEWS 1130) — There will be job losses, but industry insiders are largely optimistic many shopping centres will be able to manage as Forever 21 files for bankruptcy in the U.S., and closes its Canadian stores.
The once-hot destination for young shoppers will close 44 stores across Canada, and up to 178 locations in the United States.
Depending on the mall, the store’s departure could be an inconvenience, or a real problem, according to retail expert David Ian Gray with DIG 360.
“Where we see challenges are when you get secondary malls that maybe need a refresh, there’s a little bit less demand for them now than there was about 10 years ago.”
With Forever 21 stores across Canada preparing to shut up shop, what does that mean for your local mall? And are there other retailers willing to fill that space? Listen to @NEWS1130 as we explore those questions with industry insiders.
He says malls with a lot of foot traffic should be able to manage the closures.
“Metrotown is one of the top producers in Canada. Guilford is really strong as well. Richmond Centre may have a little trouble, but I don’t really believe so. I think those malls are going to be okay,” he says.
“And when you read a lot of the news about struggling suburban malls, I have to say it’s much more a U.S. story than Canadian story.”
Craig Patterson with Retail Insider has a similar view of the situation, and points to the health of the Lower Mainland retail market.
“Say, you know, Tsawwassen Mills — a terrific shopping centre, but hasn’t had the same kind of foot traffic. That might be a challenge to fill.”
But as for the timing, Patterson says other stores are fearing cut-price clearance sales at Forever 21, right as the all-important holiday shopping season begins.
“The lessons to take away is: have something that people want to buy, and create an experience and a reason for them to come into the store. And unfortunately, I don’t think Forever 21 did that.”
Around 2,000 people work at Forever 21 stores in Alberta, B.C., Manitoba, Ontario, Quebec and Nova Scotia. These locations will stay during the liquidation process.
– With files from the Canadian Press
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October 01, 2019 at 03:51AM
Oil prices fell again on Monday on waning hopes of a breakthrough in the U.S.-China trade war.
Late last week, Bloomberg reported that the Trump administration was considering more extreme measures aimed at China, including putting limits on American investments in China, de-listing some Chinese companies from American stock exchanges, as well as putting caps on the value of Chinese companies that managed index funds can hold in the U.S.
No decision has been made, but Bloomberg reported that President Trump gave the go-ahead to his advisers to explore some potential moves. Some China “hawks” have described the plans as a possible “financial decoupling” of the U.S. and Chinese economies.
In response to that press report, the Trump administration issued only a partial and qualified denial, according to Bloomberg. “The administration is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time,” Treasury spokeswoman Monica Crowley said to Bloomberg, without addressing some of the other ideas allegedly put forward.
But Trump’s top trade adviser Peter Navarro seemed to hint at the fact that the administration was considering precisely those moves, while simultaneously calling the reports “fake news.”
“There’s some significant issues related to Chinese stocks listed on public exchanges,” he said on CNBC. “There’s some interesting and significant transparency issues with Chinese stocks, but that’s all I’m going to say, I’m not going to talk about what’s going on behind closed doors.” Related: China’s Renewable Boom Hits The Wall
The precise policy under consideration is not the main point. Rather, turning to restrictions on investment flows and other punitive measures would amount to yet another escalation in the trade war. It would severely undercut whatever slim goodwill has been built in recent weeks between the two countries, and it would make a breakthrough in trade talks infinitely harder.
Of course, it’s possible that the Trump administration is considering these maneuvers as a fallback plan in the event that the trade talks – scheduled to restart on October 10 and 11 – run aground once again. It’s also possible that the administration is signaling its intent to escalate as a way of exerting leverage, pressuring Beijing to cut a deal by hinting that painful reprisals are on the drawing board if China does not give in.
Either way, the markets interpreted the report as very negative for crude oil as it suggested diminished odds of a trade breakthrough.
Meanwhile, Saudi crown prince Mohammed bin Salman gave an interview to CBS’ 60 Minutes over the weekend in which he said that a hot war would result in a spike in oil prices, which would drag down the entire global economy. He was adamant that the world needs to deter Iran, but he said that he prefers a political solution to the dispute rather than a military one.
“The remarks by MBS help to alleviate immediate concerns around escalations in the Middle East, leaving the market to revert its focus to the economy,” BNP Paribas global oil strategist Harry Tchilinguirian told the Reuters Global Oil Forum.
Saudi oil production rebounded to 9.9 million barrels per day (mb/d) last week, according to Aramco. “On the 25th, yes, we reached that target of production,” Ibrahim Al-Buainain, CEO of the state-owned Saudi company said. “We produce depending on the market and depending on capacity, so actually we are a little bit higher than this.”
The Abqaiq attack has been all but forgotten by oil traders. Instead, focus has shifted back to the U.S.-China trade war. “Speculative financial investors (further) reduced their net long positions in Brent and WTI in the last reporting week, thereby contributing to the slide in oil prices,” Commerzbank wrote in a note on Monday.
By Nick Cunningham of Oilprice.com
More Top Reads From Oilprice.com:
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October 01, 2019 at 06:00AM
Investing.com - Two weeks on and oil bulls are swimming against the bearish tide since the Saudi attack. The kingdom’s assurance that its crude output was undamaged and that it will not strike at Iran drove prices down by another 1% or more on Monday.
settled down $1.84, or 3.3%, at $54.07 per barrel.
settled down $1.79, or 2.9%, at $59.25.
“ has closed the gap after the attack on Saudi Arabia,” said Olivier Jakob of oil risk consultancy PetroMatrix.
After surging as much as $8 per barrel initially, both WTI and fell in a slow but persistent slide over the past two weeks as Saudi Arabia said its production had recovered fully from the Sept. 14 attack. It also said it had a higher output capacity now than before.
On Monday, WTI settled 75 cents below its pre-attack price of $54.85. was nearly $1 below its earlier level of $60.22.
While buying on dips prevented an acceleration of last week’s selling, it’s “not enough to reverse the trend,” Jakob said.
The lack of any military response by Saudi Arabia toward Iran, which it has accused of the attack, has also erased any war premium from oil prices.
Saudi Arabia's Crown Prince Mohammed bin Salman warned in an interview broadcast with CBS on Sunday that oil prices could spike to "unimaginably high numbers" if the world does not come together to deter Iran. But he added that he would prefer a political solution to a military one.
Moving on from the Saudi saga, a week-long holiday in China to celebrate the Golden Week is expected to keep the lid on market positives this week.
Adding to that is a subdued Chinese economic outlook, despite a rebound in manufacturing.
Chinese Vice Premier Liu He is expected to travel to the U.S. next week to resume trade talks, but markets aren’t holding out too much hope, given President Donald Trump’s vacillations so far over the negotiations.
Tame inflation data from Germany, as well as the second-lowest reading in four years is also keeping the macro tone in oil subdued.
Hedge funds and other money managers sold 16 million barrels of futures and options in the six major petroleum contracts in the week to Sept. 24, after buying a total of 144 million in the previous two weeks, according to Reuters columnist John Kemp.
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October 01, 2019 at 02:22AM
A rise in U.S. technology stocks and better-than-expected economic data in China pushed global equity markets higher Monday, despite reports that Washington was considering escalating its trade war with China by delisting Chinese companies from U.S. exchanges.
U.S. President Donald Trump is looking at the move as part of a broader effort to limit U.S. investment in Chinese companies, sources told Reuters on Friday, though it was not clear how any such delisting would work.
MSCI’s gauge of stocks across the globe gained 0.28 per cent., following a 0.1-per-cent-gain for Europe’s Euro STOXX 600.
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On Wall Street, the Dow Jones Industrial Average rose 95.9 points, or 0.36 per cent, to 26,916.15, the S&P 500 gained 14.89 points, or 0.50 per cent, to 2,976.68 and the Nasdaq Composite added 59.71 points, or 0.75 per cent, to 7,999.34
Conversely, Canada’s main stock index fell slightly on Monday, weighed down by resource and marijuana stocks.
The Toronto Stock Exchange’s S&P/TSX composite index was down 35.64 points, or 0.31 per cent, at 16,658.63.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 1.6 per cent as gold futures fell.
The energy sector dropped 0.9 per cent as crude prices dropped.
The healthcare sector lost 2.1 per cent as cannabis companies fell, after a U.S. recommendation that consumers avoid vaping products containing the active ingredient in marijuana ahead of their legalization in Canada next month.
CannTrust Holdings Inc. fell 6.9 per cent, while Hexo Corp. and Aurora Cannabis Inc. lost 5.7 per cent and 4.9 per cent, respectively.
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Leading the index were Interfor Corp., up 2.9 per cent, Bombardier In., up 2.9 per cent, and First Quantum Minerals Ltd., higher by 2.8 per cent.
Lagging shares were Silvercorp Metals Inc., down 9.2 per cent, Wesdome Gold Mines Ltd., down 7.0 per cent, and Iamgold Corp., lower by 6.6 per cent.
China has warned of instability in global markets from any “decoupling” with the United States, noting a U.S. Treasury response that said there were no immediate plans to block Chinese listings.
There were few signs that investors were fleeing to safe-haven assets, with benchmark 10-year notes last down 4/32 in price to yield 1.6853 per cent, from 1.673 per cent late on Friday.
Market players said the threat of delisting was being seen as just a tactic before U.S.-China trade talks resume next week. Investors are accustomed to belligerence from Trump before he dials down his rhetoric, said Luca Paolini, chief strategist at Pictet Asset Management.
“It’s a strategy that we have seen in the past - keeping the pressure very high and then settling for whatever deal is possible,” he said.
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Any progress in talks next month would probably fall short of a comprehensive deal, he added. “It’s more likely than not that there will some kind of agreement that would be more cosmetic in nature.”
Also supporting the mood in Asia was economic data from China on Monday that showed sustained weakness in exports but a surprising improvement in domestic consumption indicators.
“This is better than what the market was expecting,” said Alessia Berardi, senior economist at Amundi Pioneer, adding that markets were downplaying the likelihood of a major escalation in the trade war by Washington.
“The probability of implementing the (delisting) decision for the market is still quite low,” she said.
Chinese markets will trade only on Monday before a week-long holiday that marks the 70th anniversary of the founding of the People’s Republic of China.
The dollar was little changed against a basket of six major currencies, adding 0.1 per cent to 99.117. Earlier this month it reached 99.37, its highest in more than two years.
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China’s offshore yuan also held steady before China’s holiday, trading at 7.139 per dollar.
Oil prices fell on Monday on fading concerns of supply shortfalls and conflicts in the Middle East after the Sept. 14 attack on Saudi Arabia, but global benchmark Brent posted its biggest quarterly loss this year on demand fears due to the escalating U.S.-China trade war.
Brent crude futures settled at $60.78, down $1.13, or 1.8 per cent. U.S. West Texas Intermediate (WTI) crude futures, the U.S. benchmark, fell $1.84, or 3.3 per cent, to $54.07.
Brent gained 0.6 per cent while WTI fell 1.9 per cent in September after volatile month where prices spike nearly 20 per cent after the attacks halved Saudi Arabia’s output, but have pared nearly all those gains as output has been quickly restored.
For the quarter, however, global benchmark Brent fell 8.7 per cent, the worst quarterly drop since the fourth quarter of 2018, when prices dropped 35 per cent.
WTI also dropped 7.5 per cent in the third quarter, as concerns that the trade war between the United States and China has plunged global economic growth to its lowest levels in a decade weighed on oil demand growth.
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China’s official Purchasing Managers’ Index (PMI) was slightly improved this month, increasing from 49.5 in August to 49.8 in September, but remained below the 50-point mark that separates expansion from contraction on a monthly basis, data from the National Bureau of Statistics showed.
Reuters
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September 30, 2019 at 04:17PM
Shares in Enbridge Inc. fell by about two per cent Monday morning after the Canada Energy Regulator ordered it to suspend an open season it was holding for service on its Canadian Mainline oil pipeline system.
Enbridge says the CER decision announced Friday after markets closed changes the timing but it still intends to proceed with signing firm contracts with shippers on the system that moves about 70 per cent of Canada's crude exports into the United States.
The pipeline system's current operating model, which makes space open to all bidders on a monthly basis, expires in June 2021.
The regulator says it shut down the open season after reviewing submissions from more than 30 parties, including complaints from producers Canadian Natural Resources Ltd., Suncor Energy Inc. and Shell Canada Ltd. that the process was unfair.
Analysts rate the CER decision as slightly negative for Enbridge because it means the Calgary-based company must now apply to the CER to approve the tolls, terms and conditions of the proposed service change before another open season can proceed.
In a report, analysts at Tudor Pickering Holt & Co. say that could mean it will have to settle for lower tolls than it expected.
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September 30, 2019 at 11:55PM
Forever 21, the low-price fast-fashion chain, is ceasing all operations in Canada.The Los Angeles-based company announced Sunday that it has filed for bankruptcy in both the U.S. and Canada.The “wind-down” of the Canadian arm is part of plans to restructure and refocus the business. The retailer currently employs approximately 2,000 people at its 44 locations across Canada.READ MORE: Popular fashion retailer Forever 21 files for Chapter 11 bankruptcy Story continues below“Forever 21 has made the difficult decision to discontinue further financial and operational support for Forever 21 Canada as we reposition the brand and global business to adapt to the current retail environment,” the company said in a statement to Global News.Here’s what Canadian shoppers need to know about the closures.When will stores close?Forever 21 Canada has locations in Alberta, British Columbia, Manitoba, Ontario, Quebec and Nova Scotia.A spokesperson told Global News that all 44 stores will close before the end of the year.READ MORE: Calgary’s only Forever 21 location closes its doorsThe Canadian subsidiary, under creditor protection, plans to “conduct a responsible, controlled and orderly wind-down of the Canadian business.”A specific timeline of closures was not provided. It’s not clear whether some stores will close sooner than others.What about online shopping and gift cards?Canadian customers will still be able to shop online once stores close, though it will be from a U.S. website.“Canadian customers can continue to shop our curated assortment of merchandise on our U.S. website,” said the spokesperson.READ MORE: Forever 21 accused of ‘triggering’ plus-sized customers after including diet bars in online ordersAs for gift cards, customers will have until the end of Oct. 15, 2019 to use existing cards at Canadian locations.No further gift cards will be sold from Canada as of Sept. 30.There is “potential” that Canadian customers could use existing, unused gift cards at remaining stores in the States, the spokesperson said, but that has not yet been determined.“More information will be provided shortly,” she said.When will liquidation sales start?So far, a firm date hasn’t been set on when liquidation sales will start.“It will begin imminently,” a spokesperson said Monday morning.When it does begin, all sales will be final.“However, Forever 21 Canada will honour its existing return and exchange policy up to, and including, Oct. 15, 2019 for all goods purchased on or before Oct. 7, 2019.”WATCH:Ariana Grande sues Forever 21 for $10 million
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September 30, 2019 at 11:43PM
TORONTO - Canada Post is racking up close to $1 million annually in parking tickets as drivers struggle to navigate increasingly congested city streets, data show.
The information, obtained by The Canadian Press through freedom of information requests, indicates the bulk of the citations are in and around Toronto.
“To meet the needs of Canadians, our employees have to routinely park their vehicles,” said Canada Post spokesman Jon Hamilton. “With the concentration of addresses in urban downtown cores and a rising demand for pickups and deliveries, this can cause challenges, not just for Canada Post but for all delivery companies.”
Data show the Crown corporation has paid out almost $7.5 million in parking fines over the past decade. The worst year was in 2016 with $943,293 paid, slightly more than last year's $914,831, and almost quadruple the $289,908 recorded in 2009.
Under the federal Canada Post Act, the corporation has, with some exceptions, the “sole and exclusive privilege of collecting, transmitting and delivering letters to the addressee thereof within Canada.” The corporation has a fleet of almost 13,000 vehicles that delivered close to eight billion pieces of mail last year.
Eric Holmes, a spokesman for the City of Toronto, said mailbox placements are approved with the “general preference” they not be placed along high-volume streets.
“Illegally parking, stopping, or standing a vehicle is dangerous for pedestrians, cyclists and other motorists and creates congestion,” Holmes said. “Enforcement of parking violations is one way the City of Toronto helps deter this behaviour.”
Hamilton said the corporation was an “active participant” in partnerships with Toronto, Montreal and Vancouver that aim to ease congestion, especially in downtown cores and along major access routes.
Canada Post spars with media group over the flyer business
A group representing some of the nation's largest print and digital news media organizations alleges Canada Post is abusing its position and cornering the flyer delivery business. BNN Bloomberg spoke with Ian Lee, associate professor at Carleton University's Sprott School of Business.
“We also review our operations to make changes, such as adjusting pickup and delivery times, where possible,” Hamilton said. “It's a bigger discussion than simply designating more delivery zones.”
Overall, the fines are barely a rounding error for Canada Post, which lost $270 million last year on revenue of $6.6 billion dollars - three-quarters of the corporation's total revenues. The company initially refused a June 2016 request for the ticket data, citing “commercial sensitivity.”
It relented in June after belated intervention from the information commissioner and released the total value of tickets by region paid from 2009 until mid-2016. Asked for updated figures, the country's largest retail network insisted on receiving a new formal access-to-information request before providing them.
All regions of Canada show ticketing of branded Canada Post vehicles, but most citations are in major urban centres, where thousands of mail addresses can be concentrated in a few blocks. Despite the daunting logistics of pickup and delivery, a Toronto traffic police spokesman was blunt:
“This is an easy one,” Sgt. Brett Moore said. “There is no preferential treatment for Canada Post.”
In general, Canada Post's drivers are on the hook for traffic violations. However, company policy makes allowance for parking tickets - with an excuse - except in designated accessibility spots.
Emilie Tobin, with the Canadian Union of Postal Workers, said the idea of parking exemptions for Canada Post vehicles is a complex topic given that the company is federally regulated but drivers have to follow varying provincial and municipal bylaws.
“In some areas, it is difficult to find a legal parking space, so our members do have to park illegally and some do incur parking tickets,” Tobin said. “It's not an ideal system and postal workers would prefer that routes could be structured in a way that allowed for legal parking 100 per cent of the time.”
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September 30, 2019 at 05:44PM
The oil tanker 'Devon' prepares to transfer crude oil from Kharg Island oil terminal to India in the Persian Gulf, Iran, on March 23, 2018.
Ali Mohammadi | Bloomberg | Getty Images
Oil slipped on Monday as China's economic outlook remained weak even as manufacturing data improved, with the continuing trade war with the United States weighing on demand growth for the world's largest crude importer.
Brent crude futures were down $1.08, or 1.7%, at $60.83 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell by $1.13, or 2%, to $54.78.
China's official Purchasing Managers' Index (PMI) rose to 49.8 in September, slightly better than expected and advancing from 49.5 in August.
However, it remained below the 50-point mark that separates expansion from contraction on a monthly basis, data from the National Bureau of Statistics showed.
China warned on Monday of instability in international markets from any "decoupling" of China and the United States, after sources said that U.S. President Donald Trump's administration was considering delisting Chinese companies from U.S. stock exchanges.
Meanwhile, top oil exporter Saudi Arabia has restored capacity to 11.3 million barrels per day after an attack on its processing facilities this month, sources told Reuters last week, though Saudi Aramco has yet to confirm it's operations have been restored fully.
While Saudi Arabia is maintaining exports by using crude from inventories and spare production capacity, it remains unclear how much of its output has actually been restored.
Saudi Arabia's Crown Prince Mohammed bin Salman, often referred to as MBS, warned in an interview broadcast on Sunday that oil prices could spike to "unimaginably high numbers" if the world does not come together to deter Iran, but said he would prefer a political solution to a military one.
"The remarks by MBS help to alleviate immediate concerns around escalations in the Middle East, leaving the market to revert its focus to the economy," BNP Paribas global oil strategist Harry Tchilinguirian told the Reuters Global Oil Forum, noting the risk posed by the U.S.-China trade dispute.
Money managers cut their net long U.S. crude futures and options positions in the week to Sept. 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
"Clearly, speculators have taken comfort from Saudi comments and the speed at which they plan to bring supply back to the market," ING bank said in a note.
"However, we still believe that the market is underpricing the geopolitical risk in the region."
Oil prices are likely to remain steady this year, a Reuters survey showed on Monday, with supply shocks such as the attack on Saudi Arabia countering flagging demand.
Analysts forecast that Brent crude would average $65.19 a barrel in 2019 and WTI $57.96.
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September 30, 2019 at 04:52PM
The Trump administration has issued a partial -- and qualified -- denial to the revelation that it is discussing imposing limits on U.S. investments in Chinese companies and financial markets as China vowed to continue opening its markets to foreign investment.
Bloomberg News on Friday reported that Larry Kudlow, the head of President Donald Trump’s National Economic Council, was leading deliberations inside the White House over what some hawks have labeled a potential “financial decoupling” of the world’s two largest economies.
The options discussed have included forcing a delisting of Chinese companies from U.S. exchanges, imposing limits on investments in Chinese markets by U.S. government pension funds and putting caps on the value of Chinese companies included in indexes managed by U.S. firms, according to people familiar with and involved in the discussions.
In a statement emailed to Bloomberg over the weekend, a spokeswoman for U.S. Treasury Secretary Steven Mnuchin said there were no current plans to stop Chinese companies from listing on U.S. exchanges.
“The administration is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time,” Treasury spokeswoman Monica Crowley said. Crowley did not address any of the other options reported and declined to offer any further details of the discussions.
The response came after Friday’s initial Bloomberg report, which was later matched by other news organizations including the Financial Times and New York Times, unnerved markets in the U.S. and led to a slump in U.S.-listed Chinese firms. The S&P 500 Index closed down about 0.5 per cent on Friday with the U.S. shares of companies like Alibaba Group Holding and Baidu Inc. tumbling. China’s stock market declined ahead of a week-long National Day holiday.
New Talks
The Trump administration is also getting ready to host Chinese Vice Premier Liu He and other senior officials for trade talks expected Oct. 10-11, just days before another threatened increase in U.S. tariffs on Chinese imports is due to take effect.
While both sides are eager to secure at least a short-term truce in what is now an 18-month-old trade war that has started to drag on the global economy, national security hawks inside the Trump administration continue to push for the conflict to be broadened.
The desire by some inside the White house for new controls on the flow of capital to China reflects the multi-dimensional economic war some Trump advisers are eager to wage against a rising economic rival. Beyond the tariffs on some US$360 billion in imports from China imposed since last year, the Trump administration is pursuing strict new controls on exports of technology and has taken a skeptical approach to Chinese-backed investments in the U.S.
People close to the White House deliberations say they remain preliminary and that no final course of action has been decided on. They also insist the focus is on protecting U.S. investors from ending up unwittingly with stakes in Chinese companies that do not have the same auditing standards as U.S. listed firms.
One factor in that happening, they say, is the increasing presence of Chinese institutions on indexes such as MSCI’s benchmark emerging markets index and a Bloomberg Barclays bond index. Both are used by many institutional investors to decide the composition of their funds.
The growing Chinese presence on international indexes reflects China’s economic rise and Beijing’s decision to continue opening up its financial markets to outside investors. Earlier this month, China lifted long-standing quantitative limits on foreign investment in mainland markets.
China on Sunday declared that the government would continue to open up its financial markets and encourage foreign investment.
“We will take further steps to promote high quality two-way financial opening, encourage foreign financial institutions and funds to invest in the domestic financial market to boost the competitiveness and dynamism of the domestic financial system,” read a summary from the eighth meeting of the Financial Stability and Development Committee posted on its website.
Speaking Monday at a briefing in Beijing, China foreign ministry spokesman Geng Shuang said “maximum pressure and forced decoupling will surely harm the interests of our enterprises and people, cause instability in financial markets, as well as threaten international trade and global economic growth.”
--With assistance from Jun Luo, Lucille Liu and Kiuyan Wong.
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September 30, 2019 at 09:57AM
Co-Founder and former CEO of WeWork Adam Neumann, seen here on May 15, 2017 in New York City, was hailed as a real estate visionary.
Noam Galai/Getty Images
It didn’t take long for Adam Neumann to lose his aura of invincibility. It disappeared in a matter of a few weeks.
As a co-founder of We Co., the parent company of WeWork, Mr. Neumann had been hailed as a real estate visionary. The company secures office space under long-term leases, renovates it and then divides it up to sublease it with shorter terms and premium prices.
Backed by private capital, the company earlier this year had a private-market valuation of US$47-billion. Then came its filing for a public listing, which exposed the size of its losses (US$1.9-billion in 2018 and another US$905-million in the first six months of this year) and the discovery of some questionable transactions. For example, investors learned that We paid millions of dollars to a company controlled by Mr. Neumann for the “We” trademark, a deal the company later said it would unwind.
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As the company’s public face, Mr. Neumann bore the brunt of the backlash. After its initial public offering was ultimately postponed a few weeks later, he was booted as chief executive.
In the aftermath, it has been easy to paint Mr. Neumann as a problematic founder who spooked investors. But there’s been a sudden shift in market sentiment that’s bigger than him, or even WeWork. Quite simply, many investors have new expectations.
For years, ambitious companies coming to market were rewarded for growth at all costs. But now, institutional money managers have started to demand positive cash flow and a visible path to profits – and these businesses struggle to show it.
“We have been through one of the glory periods for companies to remain private and get funding and do things without making money for a long period of time," Tim Armour, CEO of American asset-management giant Capital Group, said at an investor conference two weeks ago. “I question whether that will continue.”
The issue is that many companies are talked about as startups, even though they have been in business for many years.
“If you’ve got a company with no revenue, investors can dream whatever revenue number they want,” John Ewing, chief investment officer at Ewing Morris & Co., said in an interview. That let venture-capital backers speculate about valuations. Eventually, though, "the dreamers move on.”
As the original backers exit in search of funding the next big thing, public-market investors start to value the companies using different metrics. “You hit an air pocket when you transition," Mr. Ewing said.
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Public investors weren’t so skeptical only a few months ago. Ride-hailing giant Uber Technologies Inc. piled up operating losses totalling US$10.1-billion from 2016 to 2018, but was still able to go public in May at an US$82-billion valuation. Rival ride-hailing company Lyft Inc. also went public despite losses, as did workplace messaging company Slack Technologies Inc.
At the time, the expectation was that once these companies and others like them had sizable market shares, they would start to raise prices. No one seems to know whether that will work any more.
“Uber may never prove their business model,” said Kim Shannon, president of Sionna Investment Managers and a value investor who has long been skeptical of the growth-at-all-costs model.
Since going public in May, Uber’s shares have dropped 33 per cent. Lyft’s have tumbled 43 per cent since its March IPO.
It isn’t solely a Silicon Valley phenomenon. In Canada, cannabis producers are enduring similar struggles.
At its peak, Canopy Growth Corp., the largest of the Canadian players, was worth $23-billion. It even attracted a $5-billion investment from alcohol giant Constellation Brands Inc. last summer.
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But just like the Silicon Valley startups, Canopy has hit the air pocket.
In July, Canopy founder Bruce Linton was ousted as CEO. A month later, the company disclosed that it will not be profitable for three to five years. On a conference call, executives said Canopy had been so focused on being the early market leader that it cut corners, and now has to go back and retrofit greenhouses and fix problems across its supply chain. The company’s shares have plummeted 53 per cent from their 2019 high.
This type of shift in investor sentiment has happened many times before. The dot-com bubble is often cited as the prime example, but since the start of the century investors have also gotten into frenzies over sectors such as telecommunications and clean technology, only to abandon them.
This time around, the frenzy is defined by the extent to which investors idolized company founders − something Ms. Shannon called the market’s “collective mania." For cannabis, it was Mr. Linton. For ride-hailing, it was Uber’s Travis Kalanick. For WeWork, it was Mr. Neumann. All three are now gone.
To their credit, these men leave behind legitimate businesses with respectable revenues – unlike many companies from the dot-com boom. The question, however, is whether investors will stick around for the transition to profitability.
Because unlike private capital, Mr. Ewing said, "public investors have a lot of alternatives for where to invest.”
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September 30, 2019 at 05:22AM
Germany's first mass lawsuit begins as 450,000 owners of diesel Volkswagen cars take on the company.
They argue they are owed compensation for being sold cars based on misleading emissions data.
The scandal has already cost VW €30bn (£26.6bn).
It has faced class action claims in the US and Australia, but this is the first time Germans could pursue group claims since the law was changed last year.
This trial will settle points of law and the claimants will later be able to file follow-up claims for compensation if they are successful.
The trial, at Braunschweig Higher Regional Court, about 20 miles from VW's Wolfsburg head office, is likely to last years, however.
Part of VW's settlements so far include a deal to buy back 500,000 cars in the US, where it has agreed to pay more than $25bn (£20bn).
In Australia the company will pay 127 million Australian dollars (£70m) to compensate owners, paying them A$1,400 apiece.
Last week it emerged that three current and former Volkswagen executives were charged with market manipulation in connection with the diesel emissions scandal.
Chief executive Herbert Diess, chairman Hans Dieter Pötsch and ex-boss Martin Winterkorn, did not inform investors early enough about the financial fallout, German prosecutors allege.
In 2015, the firm admitted using illegal software to cheat on emissions tests. VW said it was confident those allegations would prove groundless.
This may be a landmark lawsuit - and in terms of the sheer number of claimants, it's certainly attention grabbing. But it may not be the biggest concern for Volkswagen right now.
Unless there is a settlement, the legal process is likely to take take years - VW expects it to take at least four. Even if they win, car owners will have to go back to court to get compensation.
Meanwhile, VW's chairman and chief executive are both fighting criminal charges for alleged market manipulation linked to the diesel scandal.
Volkswagen itself is facing the possibility of hefty fines from the EU, after being accused of colluding with other manufacturers to delay the introduction of emissions control technology.
It's safe to say its lawyers are already keeping pretty busy at the moment. And in the meantime, the company is trying to turn itself into a leader in the market for electric cars.
Against that background, the group lawsuit may seem for the moment like just another irritation.
TORONTO — Canada Post is racking up close to $1 million annually in parking tickets as drivers struggle to navigate increasingly congested city streets, data show.
The information, obtained by The Canadian Press through freedom of information requests, indicates the bulk of the citations are in and around Toronto.
“To meet the needs of Canadians, our employees have to routinely park their vehicles,” said Canada Post spokesman Jon Hamilton. “With the concentration of addresses in urban downtown cores and a rising demand for pickups and deliveries, this can cause challenges, not just for Canada Post but for all delivery companies.”
Data show the Crown corporation has paid out almost $7.5 million in parking fines over the past decade. The worst year was in 2016 with $943,293 paid, slightly more than last year’s $914,831, and almost quadruple the $289,908 recorded in 2009.
Under the federal Canada Post Act, the corporation has, with some exceptions, the “sole and exclusive privilege of collecting, transmitting and delivering letters to the addressee thereof within Canada.” The corporation has a fleet of almost 13,000 vehicles that delivered close to eight billion pieces of mail last year.
Eric Holmes, a spokesman for the City of Toronto, said mailbox placements are approved with the “general preference” they not be placed along high-volume streets.
“Illegally parking, stopping, or standing a vehicle is dangerous for pedestrians, cyclists and other motorists and creates congestion,” Holmes said. “Enforcement of parking violations is one way the City of Toronto helps deter this behaviour.”
Hamilton said the corporation was an “active participant” in partnerships with Toronto, Montreal and Vancouver that aim to ease congestion, especially in downtown cores and along major access routes.
“We also review our operations to make changes, such as adjusting pickup and delivery times, where possible,” Hamilton said. “It’s a bigger discussion than simply designating more delivery zones.”
Overall, the fines are barely a rounding error for Canada Post, which lost $270 million last year on revenue of $6.6 billion dollars — three-quarters of the corporation’s total revenues. The company initially refused a June 2016 request for the ticket data, citing “commercial sensitivity.”
It relented in June after belated intervention from the information commissioner and released the total value of tickets by region paid from 2009 until mid-2016. Asked for updated figures, the country’s largest retail network insisted on receiving a new formal access-to-information request before providing them.
All regions of Canada show ticketing of branded Canada Post vehicles, but most citations are in major urban centres, where thousands of mail addresses can be concentrated in a few blocks. Despite the daunting logistics of pickup and delivery, a Toronto traffic police spokesman was blunt:
“This is an easy one,” Sgt. Brett Moore said. “There is no preferential treatment for Canada Post.”
In general, Canada Post’s drivers are on the hook for traffic violations. However, company policy makes allowance for parking tickets — with an excuse — except in designated accessibility spots.
Emilie Tobin, with the Canadian Union of Postal Workers, said the idea of parking exemptions for Canada Post vehicles is a complex topic given that the company is federally regulated but drivers have to follow varying provincial and municipal bylaws.
“In some areas, it is difficult to find a legal parking space, so our members do have to park illegally and some do incur parking tickets,” Tobin said. “It’s not an ideal system and postal workers would prefer that routes could be structured in a way that allowed for legal parking 100 per cent of the time.”
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September 30, 2019 at 03:56AM
Concerns about faltering global oil demand and expectations of rising U.S. crude oil exports trump fears of supply shortage after the attacks on Saudi oil and have investment banks predict that oil prices would not move much higher in the fourth quarter, a poll of 13 major investment banks by The Wall Street Journal showed on Friday.
Although the attacks on Saudi oil infrastructure on September 14 knocked 5.7 million bpd—or 5 percent of global oil supply—offline, Saudi Aramco is busy reassuring the market that full capacity is back online and not a single shipment of crude oil will be missed.
According to the WSJ poll, banks expect Brent Crude prices to average US$64.31 a barrel in Q4, basically unchanged from last month’s poll estimate. WTI Crude prices are forecast to average US$58.24 per barrel in Q4, slightly up from last month’s estimate of US$57.82 per barrel, the WSJ poll showed.
As of 08:30 a.m. EDT on Friday, Brent Crude was down 1.1 percent at US$61.06 and WTI Crude was down 0.9 percent at US$55.90, with both benchmarks headed for a weekly loss, due to a faster than expected Saudi oil comeback, rising U.S. commercial inventories, and slowing Chinese economic growth that rekindled fears of slowdown in oil demand growth.
The WSJ poll also showed that the major investment banks expect oil prices to be lower in 2020 than in the fourth quarter of 2019. Brent Crude is seen averaging US$61.95 per barrel next year, and WTI Crude is forecast to average US$56.55 a barrel.
Further slowing global economic growth and rising takeaway capacity out of the Permian to the U.S. Gulf Coast for exports will be two key drivers of the oil market later this year and at the beginning of next year, Harry Tchilinguirian, Head of Commodity Research at BNP Paribas, told The Journal.
Some analysts, however, caution that the market is underestimating the supply security risk in the aftermath of the attacks in Saudi Arabia.
“Participants are clearly not concerned about Saudi supply, with Aramco reportedly returning production quicker than anticipated. Nor do they seem overly concerned with the risk of further such attacks in the future,” Warren Patterson, ING’s Head of Commodities Strategy and Senior Commodities Strategist Wenyu Yao, said on Friday.
“We continue to believe the market is underpricing the current geopolitical risk,” ING’s strategists said.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
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September 30, 2019 at 02:00AM
Low-price fashion chain Forever 21, a one-time hot destination for teen shoppers that fell victim of its own rapid expansion and changing consumer tastes, has filed for Chapter 11 bankruptcy protection.READ MORE: Calgary’s only Forever 21 location closes its doors Story continues belowThe privately held company based in Los Angeles says it will close up to 178 stores. The company once had more than 800 stores in 57 countries.Forever 21 joins Barneys New York and Diesel USA in a growing list of retailers seeking bankruptcy protection as they battle online competitors. Others like Payless ShoeSource and Charlotte Russe have shut down completely.The numbers bear out the crisis facing traditional retailers. So far this year, publicly traded U.S. retailers have announced they will close 8,558 stores and open 3,446, according to the global research firm Coresight Research. That compares with 5,844 closures and 3,258 openings in all of 2018.WATCH: Ariana Grande sues Forever 21 for $10 million
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September 30, 2019 at 09:20AM
BEIJING--An official gauge of China's factory activity rebounded in September but continued to indicate a contraction, reflecting the headwinds faced by Chinese economy amid its protracted trade dispute with the U.S.
The manufacturing purchasing managers index rose to 49.8 in September from 49.5 in August, the National Bureau of Statistics said Monday. September's reading was above the median forecast of 49.6 from a Wall Street Journal poll of 11 economists.
But the index has stayed below the 50 mark for five straight months, which indicates the activity was still cooling despite its improvement. A reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 indicates a contraction.
A subindex measuring total new orders received by manufacturers in China rebounded to 50.5 in September from 49.7 in August. It was the first time the new order subindex showed an expansion since May.
New export orders, an indicator of external demand for Chinese goods, rose to 48.2 from 47.2 in August, while import orders recovered to 47.1 from 46.7 a month earlier.
Production also rebounded to 52.3 in September, compared with 51.9 in August.
Zhao Qinghe, an economist with the statistics bureau, said production in food processing, textiles and equipment rebounded sharply in September. China's large manufacturing companies, which typically benefit the most from the government efforts to support the economy, were the major force behind the rise in the index this month, he said.
Beijing has released billions of dollars in liquidity into the banking system to encourage more lending to business as economic growth slips to a nearly three-decade low.
The official PMI data are based on the replies to monthly questionnaires sent to purchasing executives at 3,000 companies in 31 manufacturing sectors.
China 's official nonmanufacturing PMI, also released Monday, edged down to 53.7 from 53.8 in August.
-- Grace Zhu
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September 30, 2019 at 09:40AM
TOKYO/SINGAPORE (Reuters) - Asian stock markets, including China's, were little changed on Monday, shrugging off news that the U.S. administration is considering delisting Chinese companies from U.S. stock exchanges.
MSCI's broadest index of Asia-Pacific shares outside Japan () was flat, while China's Shanghai stock index () slipped 0.1%, barely responding to any of the concerns around the latest Sino-U.S. tensions that caused the Nasdaq index () to fall more than 1% on Friday.
European shares were seen struggling when they open for trading. Pan-European Euro Stoxx 50 futures () were down 0.11%, German DAX futures () down 0.08% and futures () 0.16% lower.
Risk assets took a hit in U.S. trade on Friday following news the Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from U.S. stock exchanges.
The report knocked Chinese shares listed on U.S. exchanges, with Alibaba Group Holding (N:) falling 5.15% and JD.com (O:) 5.95% on Friday.
Worries such an escalation would hurt Japan the most weighed on the Nikkei (), which shed 0.9%. U.S. stock futures () gained 0.35%, paring most of Friday's 0.53% fall in the index.
Trading in Chinese markets was quiet ahead of a long break. Chinese share markets will trade only on Monday this week ahead of the country's National Day holiday, which runs until Oct. 7.
There were mixed signals from China's manufacturing surveys on Monday, which showed sustained weakness in exports and surprising improvement in domestic consumption indicators, and a Chinese central bank statement briefly hinting at plans for more stimulative policies.
China's yuan was little moved at 7.1260 yuan per dollar, while the rallied a bit from Friday's three-week low of 7.1520.
The delisting of Chinese companies from U.S. stock exchanges was part of a broader effort to limit U.S. investment in Chinese companies, two sources briefed on the matter told Reuters.
A U.S. Treasury official said the United States does not currently plan to stop Chinese companies from listing on U.S. exchanges, Bloomberg reported on Saturday.
"While China runs a current account surplus and is a net creditor nation, Chinese companies are net debtors and rely on foreign capital," Koji Fukaya, president of Office Fukaya Consulting.
"Washington seems to be trying to limit Chinese companies' activities by putting pressure on their funding," he said.
Still, with trade talks between the United States and China expected to be held Oct. 10-11, many market players are hoping such drastic measures on capital markets will be avoided.
"At this point, markets will have to wait and see. Of course we need to be guarded against more crazy headlines, but this week could be a bit calmer given holidays in China. Economic data will likely be the main driver for markets," said Kyosuke Suzuki, director of forex at Societe Generale (PA:).
U.S. data on Friday showed consumer spending barely rose in August and business investment remained weak, suggesting the American economy was losing momentum as the trade dispute drags on.
Industrial output in Japan and South Korea, released Monday morning, dropped more than expected, underscoring the headwinds from the trade war.
Investors are also keeping a wary eye on U.S. politics.
U.S. House Speaker Nancy Pelosi said public opinion is now on the side of an impeachment inquiry against Trump following the release of new information about his conversations with Ukrainian President Volodymyr Zelenskiy.
Major currencies were little changed, with the yen trading slightly firmer at 107.75 yen .
The euro hovered around $1.0932 (), having sunk to a 28-month low of $1.0904 on Friday as concerns about tepid growth in Europe weighed on the common currency.
Sterling traded at $1.23 , not far from Friday's low of $1.2270, its lowest since Sept. 9.
Boris Johnson said on Sunday he would not quit as Britain's prime minister even if he fails to secure a deal to leave the European Union, insisting only his Conservative government can deliver Brexit on Oct. 31.
Oil prices dipped but stayed off last week's lows.
Saudi Arabia's crown prince warned in an interview with CBS program "60 Minutes" aired on Sunday that crude prices could spike to "unimaginably high numbers" if the world does not come together to deter Iran.
But Crown Prince Mohammed bin Salman said he would prefer a political solution to a military one, adding the Sept. 14 attacks on the kingdom's oil facilities were an act of war by Iran.
Brent crude () futures fell 0.36% to $61.64 a barrel while U.S. West Texas Intermediate (WTI) crude () fell 0.14% to $55.83 per barrel.
(This story corrects headline and first paragraph to Asia shares 'mostly flat' (not 'edge lower') and in 2nd paragraph the MSCI Asia-ex-Japan index to flat (not down 0.55%)
PRODUCT RECALL
CANADIAN FOOD INSPECTION AGENCY
**********************
Food Recall Warning - Metro brand deli trays recalled due to Listeria monocytogenes
Recall date: Sept. 27, 2019
Reason for recall: Microbiological - Listeria
Hazard classification: Class 1
Company / Firm: Metro Ontario Inc.
Distribution: Ontario
Extent of the distribution: Retail
Recall details
Metro Ontario Inc. is recalling Metro brand deli trays from the marketplace due to possible Listeria monocytogenes contamination. Consumers should not consume the recalled products described below.
Recalled products
Brand Name
Common Name
Size
UPC
Code(s) on Product
Metro
Snack Delights Small (serves 8-10) 1un
1 count
0260911 729999
All Best Before dates up to and including 2019.SE28
Metro
Snack Delights Large (serves 11-16) 1un
1 count
0260910 949992
All Best Before dates up to and including 2019.SE28
Metro
Fresh 2 Go Snack and Grab Party Tray 450 g
1 count
0222136 414999
All Best Before dates up to and including 2019.OC02
Metro
Frsh 2 Go Premium Kolbassa Sausage-Cheese Tray 760 g
1 count
0221922 119995
All Best Before dates up to and including 2019.OC02
What you should do
If you think you became sick from consuming a recalled product, call your doctor.
Check to see if you have the recalled products in your home. Recalled products should be thrown out or returned to the store where they were purchased.
Food contaminated with Listeria monocytogenes may not look or smell spoiled but can still make you sick. Symptoms can include vomiting, nausea, persistent fever, muscle aches, severe headache and neck stiffness. Pregnant women, the elderly and people with weakened immune systems are particularly at risk. Although infected pregnant women may experience only mild, flu-like symptoms, the infection can lead to premature delivery, infection of the newborn or even stillbirth. In severe cases of illness, people may die.
Background
This recall was triggered by Canadian Food Inspection Agency (CFIA) test results. The CFIA is conducting a food safety investigation, which may lead to the recall of other products. If other high-risk products are recalled, the CFIA will notify the public through updated Food Recall Warnings.
The CFIA is verifying that industry is removing the recalled products from the marketplace.
Illnesses
There have been no reported illnesses associated with the consumption of these products.
**********************
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September 29, 2019 at 09:51PM
Canada Post is racking up close to $1 million annually in parking tickets as drivers struggle to navigate increasingly congested city streets, data show.The information, obtained by The Canadian Press through freedom of information requests, indicates the bulk of the citations are in and around Toronto.Story continues below“To meet the needs of Canadians, our employees have to routinely park their vehicles,” said Canada Post spokesman Jon Hamilton. “With the concentration of addresses in urban downtown cores and a rising demand for pickups and deliveries, this can cause challenges, not just for Canada Post but for all delivery companies.”READ MORE: 32-year-old charged for allegedly stealing Canada Post van in ReginaData show the Crown corporation has paid out almost $7.5 million in parking fines over the past decade. The worst year was in 2016 with $943,293 paid, slightly more than last year’s $914,831, and almost quadruple the $289,908 recorded in 2009.Under the federal Canada Post Act, the corporation has, with some exceptions, the “sole and exclusive privilege of collecting, transmitting and delivering letters to the addressee thereof within Canada.” The corporation has a fleet of almost 13,000 vehicles that delivered close to eight billion pieces of mail last year.Eric Holmes, a spokesman for the City of Toronto, said mailbox placements are approved with the “general preference” they not be placed along high-volume streets.WATCH: May says Green Party will focus on ‘local services’
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September 30, 2019 at 02:48AM
The Canada Energy Regulator has ordered Enbridge Inc. to suspend its open season for service on its Canadian Mainline oil pipeline system.
The regulator said Friday it came to the decision after reviewing letters from more than 30 parties.
It says Calgary-based Enbridge may not continue its open season process until an application for firm service, including all associated tolls and terms and conditions of service, have been approved.
There was growing opposition from major Canadian oil producers to Enbridge's plan to convert most of its Mainline system to long-term contracts.
Letters of complaint were sent to the regulator by Canadian Natural Resources Ltd., Suncor Energy Inc., Shell Canada and MEG Energy Corp., along with the Explorers and Producers Association of Canada.
In its submission, Suncor said the open season compels shippers that wish to maintain access to transportation on the Mainline to enter into irrevocable, binding, long-term firm contractual commitments on the basis of terms and conditions of access, and tolls, that have neither been settled through meaningful negotiation nor approved by the regulator.
Enbridge announced the open season on Aug. 2 and said it would accept bids until Oct. 2 from shippers who wished to enter into contracts of from eight to 20 years for priority transport on the Mainline, with discounts available based on contract length and volumes.
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September 28, 2019 at 10:44PM
A Toronto-area contractor says it was "pretty creepy" to discover someone had hacked into his email and impersonated him — convincing customers of his family-owned granite countertop business to send thousands of dollars via e-transfer.
The fraudsters then stole the payments.
"You can't think of something like this happening," said Sarmen Sinani, of Markham, Ont.
"They [fraudsters] were saying, 'Send me the money. And don't send a cheque. Just e-transfer it.'"
Sinani is one of more than 200 people Go Public has learned were recently targeted by fraudsters who stole tens of thousands of dollars, sent via Interac e-transfers, by breaking into email accounts and redirecting the money.
It has some experts questioning why the popular electronic money transfer system involves email at all, when other jurisdictions have stronger security.
"Canadian customers deserve the best safety and security for their banking and e-transactions," said cybersecurity expert Claudiu Popa, who advises governments and companies. "Unfortunately, we are far from getting there."
Sinani was working on a customer's order when he emailed her in March, asking for a 50 per cent deposit. By May, he still hadn't received it, so he asked again.
To his surprise, his client said she had e-transferred it on March 15. Sinani searched through deleted emails and discovered a fraudster had impersonated him and told his client to e-transfer $2,775.
"The hacker would alter my conversation to them [his customer] and alter their conversation to me," said Sinani. "Basically they were taking full control of two people, just going back and forth. It's unbelievable."
Posing as Sinani, the fraudster told his client he had an out-of-town family emergency and instructed her not to stop by the store to drop off a cheque.
Instead, the fraudster told her to send an e-transfer to a new email that appeared similar to the actual email for Sinani's family business, Sinco Marble and Granite.
Then, the fraudster posed as Sinani's client and altered her emails, telling Sinani that she was dealing with a family emergency and couldn't come to the shop to pay the deposit.
"It was insane," said Sinani. "They played us good."
Sinani says it was 'insane' to discover someone had hacked into his email and was impersonating him with customers. (Mehrdad Nazarahari/CBC)
No help from Interac, CIBC
Sinani says when his customer contacted Interac, the company said its e-transfer system had worked — moving money from point A to point B — and that it was not going to investigate.
"They're just not being co-operative," he said. "I'm sure there's an easy way to see where the money went. But no one wants to work on it, I guess."
Interac declined an interview request with Go Public, but in a statement said each fraud case is "unique and customers should speak to their bank directly."
Interac would not address Sinani's — or other customers' — concerns. Interac is a private company and Canada's big banks and credit unions are among its shareholders.
Sinani's customer lost the money through her account at CIBC. The bank would not tell Go Public what — if anything — it was doing to help trace the money, but in a statement said funds sent "to an email impersonator are very difficult to recover."
York Regional Police are investigating.
'Turning into an arms race'
A cybercrime expert who specializes in password cracking says many people aren't aware of the underground community of fraudsters who buy and share email and password information, aimed at draining bank accounts.
"There's people doing offensive research to determine new ways of attacking," security systems, said Dustin Heywood, with IBM's X-Force Red.
"It's turning into an arms race."
Heywood estimates that the average person uses their email and password on about 300 sites — from the local library to pizza delivery — and any one of those databases can get hacked.
Dustin Heywood is part of IBM's X-Force Red, a global team of hackers hired to break into their systems and fix their security vulnerabilities. He specializes in cracking passwords. (Dave Rae/CBC)
"The problem is, not every site has the same level of security around their passwords," he said. "So if a weaker site gets hacked, then all of a sudden your password is being leaked out."
Heywood says hackers then use bots — custom software — that can lurk undetected on hundreds of thousands of computers.
"They could have something sitting there for months and when the right keywords come through" — such as "payment" or "deposit" and — "Bang! We've got ourselves a transfer."
So Interac's e-transfer system, he says, is only as secure as users' email and passwords.
Interac system 'unique'
On the heels of a Go Public story published last week about e-transfers, we heard from a number of people who have lived in other countries that use systems that allow people to electronically transfer funds directly from bank to bank.
"One does not have to worry about payments being intercepted," Andrew Dunning wrote, about e-transfers in the U.K.
"Everything is practically instantaneous, and it's all traced between the banks. It's shocking to me that the [Canadian] government has not mandated the implementation of this system."
Rajesh Vijayaraghavan of the University of British Columbia's Sauder School of Business, says Interac's e-transfer system is 'unique' because it relies on email, unlike in other developed countries. (Submitted by Rajesh Vijayaraghavan)
Rajesh Vijayaraghavan, who studies risk management in financial institutions, says Interac's system is "unique" because it relies on email, unlike most in other developed countries.
Vijayaraghavan, an assistant professor at the University of British Columbia's Sauder School of Business, says the U.S., Australia, New Zealand, India and other countries have had systems in place for years that allow e-transfers directly from bank to bank — using only a bank code and a person's account number.
"The rest of the world can't be wrong," he said. "It's the better system."
Two weeks ago, the European Union went a step further, requiring all financial institutions to offer two-factor authentication — a system which only allows a user to log on to an account once they've received a code on a separate device or an email at a different email address.
Vijayaraghavan says shifting away from an email-reliant system would require work.
"It's a legacy system," he said. "So this has to be a co-ordinated effort from all banks."
Claudiu Popa, a Toronto-based security expert who advises governments and companies, says online banking customers must demand reform in how e-transfers are authenticated. (John Badcock/CBC)
Popa, the cybersecurity expert, says the only way banks will improve security for e-transfers — and the auto-deposit option — is if the government forces them.
He says requirements for strong authentication are needed immediately, instead of the convenient, but less secure, system currently in place.
"No more secrecy and downplaying these issues," Popa said. "Canadians need to demand reform from their politicians."
Sinani the contractor, says he's no longer a fan of e-transfers, since he and his customer are now in a "stressful" dispute over who should cover the stolen $2,775.
But he says about 80 per cent of his customers want to pay using e-transfer because it's so convenient.
"Convenient is great, until something like this happens to you," he said. "Improving the system would be better."
Submit your story ideas
Go Public is an investigative news segment on CBC-TV, radio and the web.
We tell your stories, shed light on wrong-doing, and hold the powers that be accountable.
If you have a story in the public interest, or if you're an insider with information, contact GoPublic@cbc.ca with your name, contact information and a brief summary. All emails are confidential until you decide to Go Public.
(Reuters) - The United States does not currently plan to stop Chinese companies from listing on U.S. exchanges, Bloomberg reported on Saturday, citing a U.S. Treasury official.
"The administration is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time," Bloomberg quoted bloom.bg/2obHkDb Treasury spokeswoman Monica Crowley as saying.
Reuters reported on Friday that President Donald Trump’s administration is considering delisting Chinese companies from U.S. stock exchanges in a move that would be part of a broader effort to limit U.S. investment in Chinese companies.
The Treasury did not immediately respond to a Reuters request for comment.
(This story has been refiled to add dropped ‘not’ in first paragraph)
Reporting by Sathvik N in Bengaluru; Editing by Dan Grebler
Oil prices are now responding to daily doses of rhetoric related to Iran, with WTI and Brent inching higher Thursday following the Pentagon’s vow to deploy equipment and personnel to Saudi Arabia to boost defenses. WTI pared some earlier losses from the day before on surprise news of a US crude buildup, and Brent finished higher Thursday, but the Pentagon’s announcement doesn’t really have market legs, particularly once it becomes clearer, beyond the headlines, that the deal calls for only 200 support personnel, one patriot battery and four sentinel RADARs. Today, oil prices have headed lower already, gearing up for a weekly loss, due to the fast pace of Saudi production recovery and slowing Chinese economic growth eating away at demand outlook.
US Sanctioning Chinese Shippers Benefits Saudi Arabia
The US has slapped sanctions on Chinese firms for “knowingly engaging” in transporting Iranian oil. The sanctioned firms include two tanker subsidiaries of Chinese state-owned shipping giant Cosco Shipping Corporation. Inevitably, this has caused a lot of scrambling among traders to get in front of sanctions.
Oil traders in Asia found themselves in a rush to cancel bookings with these companies and will also have to let provisional charters expire. What’s more, oil cargoes that have already been loaded onto vessels of these sanctioned entities are questionable. It is unclear whether already loaded oil will need to be offloaded and reloaded onto a nonsanctioned vessel, or whether oil that has already been loaded made it under the wire and will be allowed to deliver without penalty. The sanctions arena was complicated enough before this.
In the meantime, it’s worth noting that while China insists it is entitled to import Iranian oil, it’s purchases have tapered off drastically. In August, they fell to 787,657 tonnes, which is down from 926,119 tonnes the month before. But the recent monthly data is nothing compared to the bigger picture: A year ago, China was purchasing 3.28 million tonnes of Iranian oil. Saudi Arabia has been a big beneficiary, of course. China has increased its Saudi crude intake exponentially, purchasing 7.79 million tonnes in August--double what it took the same month last year.
And while traders are now scrambling to get in front of the new sanctions, the war of rhetoric continues with no real move towards a war other than vague statements coming out of Riyadh that a military response to Iran - which continues to deny involvement in the Sept 14 attacks - is “possible”. The markets aren’t buying it, for the time being.
Iran continues to push for a response of some kind in its favor, and it’s going for the ultimate leverage in response to Trump’s transactional nature. In its latest salvo, Tehran has confirmed that it’s using advanced models of centrifuges to enrich uranium in breach of the 2015 nuclear agreement that the US pulled out of. Iran is not, however, increasing enrichment levels. This is just part of the bargaining process.
And Iran is already lining up the victories in Yemen, the site of the major event that preceded the attacks on Saudi oil facilities. Now, not only has the UAE given up on this war, but days after the attack, the Houthis declared a unilateral ceasefire. That has now prompted the Saudis to agree to a partial ceasefire. Mission accomplished on that playing field.
Ethanol Becomes A Key 2020 Election Topic: Here’s Why
The corn lobby and the oil industry in the US have been at odds forever, but now, Trump is looking to keep both sides happy in the runup to the 2020 elections.
The renewable fuel standard played a major role in past elections, and this election will likely be no different. Trump has already issued significant waivers to oil refineries, which will excuse them from the tough blending requirements. That Trump first appeased the oil industry is telling, and the administration had been counting on corn country support, which helped to solidify Trump’s win in the last election. On Trump’s first run, he garnered support from the corn belt, which had previously been carried by Obama.
But the corn belt has grown anxious about Trump’s courting of oil refineries on ethanol requirements, and the administration is growing anxious itself. It needs the corn vote. With that in mind, Washington is now assuring the corn belt that it will come up with a workable solution for both sides. Re-election could very well be at stake over this.
The corn lobby, though, must proceed cautiously. It doesn’t have many friends left. The Democrats used to be their biggest champions, but ethanol isn’t all that attractive anymore. Environmentalism is a key focus of the Democrats’ platform, and environmentalists don’t think ethanol is nearly clean enough. The corn lobby, then, could end up getting shunned by both sides.
Where does this leave ethanol, which was once the promised hope of America’s energy independence? On shaky ground, we suspect, and not just because it has become clear that ethanol isn’t furthering America’s energy independence. Trump may not need to win over enthusiastic support from the corn lobby - he may only need to garner more support than the lobby is willing to give the Democrats. This may leave the corn lobby without a champion.
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September 28, 2019 at 02:00AM
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