Flaherty wants Europe to solve its own debt crisis

Finance Minister Jim Flaherty says Europe should use its own resources to resolve its debt crisis before other countries contribute.

His comment during a visit to Beijing adds to the pressure on European leaders to produce a financial rescue plan and resources to support it.

China, South Africa and others have said they might consider contributing but need to first see a detailed plan.

Flaherty said they want to see Europe build a "very strong firewall" to protect their banks and prevent debt contagion from spreading.

Chinese officials have said Beijing might consider putting money into a fund to help stabilize Europe by buying government bonds with money from outside investors but wants to see details before it can decide.

Flaherty said he discussed the issue with Chinese officials in Beijing and at a meeting of Asia-Pacific finance ministers this month, but declined to say what the officials said about China's current position.

"Generally, I think the view is that we first need to see that very substantial commitment and action by the Europeans -- and I'm talking about the members of the euro zone -- before any more would be asked of non-European G-20 countries," said Flaherty.

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EMI sold to Vivendi and Sony in $4.1B deals

EMI Group Ltd., home of The Beatles and Coldplay, has been sold in two parts for $4.1 billion

Vivendi SA's Universal Music Group said Friday that it has agreed to buy the recording division of EMI for $1.9 billion.

The second part, the publishing division in charge of songwriting copyrights, was sold to Sony/ATV, for $2.2 billion. That's according to a person familiar with the matter.

A second person says the deal leaves Citigroup, EMI's owner, with liability for a pension plan worth about $600 million.

Both people were not authorized to speak publicly and spoke on condition of anonymity.

Citigroup had put the iconic British music company up for sale after foreclosing on private equity firm Terra Firma in February.

Terra Firma bought EMI in 2007 in a $6.8 billion acquisition financed with debt from U.S. bank Citigroup, but it couldn't make enough money to keep up with the terms of its debt.

EMI Group has Canadian operations with a roster of musicians that include Nickelback and Tom Cochrane.

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France irked by S&P rating downgrade error

France reacted with outrage after the Standard & Poor's ratings agency accidentally sent out a message saying it was downgrading the country's prized "AAA" credit rating during a tumultuous week in Europe's protracted debt crisis.

The error stood for an hour and a half Thursday before it was retracted by the agency — spooking markets by foreshadowing the event that could sound the death knell for the 17-nation eurozone.

The accident came just as Greece and Italy both were in the process of getting new interim governments led by financial experts to guide them out of the continent's debt crisis. Most European markets were still open at the time, and U.S. financial markets were in full swing.

Despite Standard & Poor's statement saying the original message had gone out to some subscribers because of a technical error and its reaffirmation that France's credit rating remained "AAA" — the highest level — and stable, some damage could not be undone.

The yield, or interest rate that France pays to borrow money for 10 years, has risen 0.32 percentage points since Thursday morning, hitting 3.48 per cent Friday afternoon, the highest rate since May.

In the midst of a crisis where fear drives the markets as much as fact, the error has at the very least reminded investors of France's difficulties. And often the suggestion of something amiss is nearly as bad as having something amiss.

French Finance Minister Francois Baroin did his best to quell fears, calling the error a "rather shocking rumor of information that has no foundation."

"We won't let any negative message go," he said in Lyon in comments published Friday on the La Tribune newspaper website.

The French market regulator immediately opened an investigation into the mistake at Baroin's behest, and the minister also called for a European probe.

While the error may have increased the pressure on French bond yields, they were already rising — because, like many countries, France is struggling with slow growth and high debt piled up during the boom years.

The rise of such yields is at the heart of Europe's debt crisis: The increase of those interest rates in Ireland, Portugal and Greece — because investors considered them increasingly bad risks — eventually forced each of those countries to seek massive international bailouts.

Now Italy is coming under the same pressure. That poses a bigger problem because its economy and debts dwarf the others — Italy's economic output is 17 per cent of the eurozone's compared to a combined 6 per cent for the other three nations. Europe doesn't have enough money to fully bail Italy out.

'I can't remember a situation where an agency released a rating movement in error '—Analyst Gary Jenkins

But a French debt downgrade would be a problem on another order of magnitude. France and Germany's "AAA" credit ratings are the bedrock of Europe's bailout fund. Because the debt of those two countries is considered so safe, the fund pays very favorable interest rates on the bonds it issues.

Some analysts said the accident may have tipped the actual thinking at the ratings agency.

"I can't remember a situation where an agency released a rating movement in error and no doubt there will be many people who believe that there is no smoke without fire and that this cannot have happened unless S&P were preparing the ground for a downgrade," Gary Jenkins, an analyst with Evolution Securities, said Friday.

He hastened to add: "I have no idea if this is the case or if it was just a genuine error."

S&P, however, does not even have France on surveillance — the step that typically comes before a rating is downgraded. Moody's, on the other hand, says it is studying whether to put France's rating on notice.

A downgrade of French debt would also pose a domestic problem: President Nicolas Sarkozy, who is expected to face a re-election battle next spring, has staked his credibility on balancing France's budget by 2016.

Along the way, Sarkozy has laid out yearly targets for reducing France's deficit — each one tied to a growth projection. But those forecasts have repeatedly proved too rosy and his conservative government has already twice this year been forced to introduce extra cuts to stay on target.

It's clear the last thing Sarkozy wants to see is for French borrowing costs to rise as his government fights to clean up its deficits and keep the eurozone united.

On Thursday, the European Commission said it considered France's growth forecast for 2013 too high — and Baroin shot back that Paris has already set aside a reserve fund for that eventuality.

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MF Global fires 1,066 employees

Defunct New York-based global investment bank MF Global Inc. says it is terminating its entire workforce of 1,066 employees.

The company said Friday it is dismissing workers in accordance with a bankruptcy court-mandated liquidation. Between 150 and 200 former employees are being hired to assist with the liquidation and court proceedings.

MF Global declared bankruptcy Oct. 31, after losing money on a number of bad bets on derivatives contracts, precipitated by the European financial crisis.

The company did not immediately return a call seeking comment. It said in a statement that all the employees were notified of their termination Friday.

The company said it is working to vacate its headquarters in New York as soon as possible and will close the facility.

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Alberta premier pitches Keystone in Washington

Alberta Premier Alison Redford is in Washington, trying to convince members of Congress and government officials of the merits of the proposed Keystone XL pipeline.

On Nov. 10, the State Department said it would delay the approval process for the 2,736-kilometre pipeline, proposed by Calgary-based TransCanada Corp to carry 700,000 barrels a day of mostly oilsands crude from Alberta to U.S. refineries on the coast of the Gulf of Mexico.

It's now expected to take until 2013 for a decision on whether it should get the go ahead.

The Department said it wanted to study alternative routes for the $7-billion project that would bypass the environmentally sensitive Sandhills area in Nebraska and avoid crossing over the Ogalla aquifer, which supplies drinking water for 1.5 million people in eight states.

Redford’s meetings in Washington will extend into Tuesday.

Officials in Redford’s office said she will tell lawmakers that the project would help the struggling U.S. recovery.

Ranchers, environmentalists, Hollywood celebrities and politicians have made the project a focus of protest over several months, expressing concern not only about oil spills but also about the slow pace of developing alternatives to fossil fuel-based energy.

Keystone supporters say it will provide a boost to the economy at a critical time and also significantly reduce U.S. dependence on Middle Eastern oil.

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GG urges Canada to ramp up productivity

Canada can't afford to hunker down in the midst of global economic turmoil, Gov. Gen. David Johnston said in an interview just before the start of a 15-day trip to southeast Asia.

He said the future is at stake.

"If we want our children to have lives that are at least equal or better than ours — which has been a great Canadian dream — then we certainly have to do better on innovation and productivity," he said.

Governor General David Johnston takes part in an interview at Rideau Hall in Ottawa on Thursday, November 10, 2011. THE CANADIAN PRESS/Sean Kilpatrick Sean Kilpatrick/Canadian Press

Johnston leaves for Malaysia, Singapore and Vietnam on Saturday. He's looking to learn about Asian competitiveness, tout Canada as a prime destination for foreign investment and immigration and find opportunities for Canadian interests.

"We should broaden our horizons," he said in the library at Rideau Hall, where the walls are lined with award-winning Canadian works.

"We should look at the globe entirely as we think about markets and think about opportunities that Canadian expertise can exploit. And that would be a main purpose of this trip....seeing the world as not just North America, not just our backyard."

Long gone are the days when Canadians could depend simply on natural resources or a low Canadian dollar to make money, Johnston said.

And now, with the International Monetary Fund warning of a "lost decade" due to weakness in the United States and Europe, Canadian business can't look to its traditional markets to pick up the slack, he warned.

"It seems to me it's very important for Canada to be a trading nation with the entire globe. And the Asian area is the fastest-growing part of the globe. So we should be there."

Indeed, his trip to southeast Asia was requested by the Prime Minister's Office and comes just as Stephen Harper and Finance Minister Jim Flaherty are in Hawaii meeting with other Asia-Pacific leaders to discuss trade and economics.

Flaherty will go on to China and Japan, following in the tracks of Natural Resources Minister Joe Oliver, who was there this week.

Their message echoes that of Mark Carney, governor of the Bank of Canada: if Canada is to thrive, businesses need to get off their wallets and move aggressively into markets that are actually growing, especially in Asia.

But that's far easier said than done.

Canada's productivity — a key to being globally competitive —is mediocre at best and needs to pick up speed, Johnston said.

Johnston, who has a long history of promoting innovation in Canada, recently had dinner with Jeff Immelt, the chief executive officer of General Electric Co., a company Johnston says serves as a prime example of how Canadian firms should behave in the face of adversity.

"They've never hunkered down. When it's in recession times, they are looking even more aggressively at world markets, at the clusters of activity where they are operating in and determining how they can be one of the best in the world."

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Harper 'disappointed' by Keystone pipeline delay

Delays on the U.S. side to assess the controversial Keystone XL pipeline proposal are a disappointment, Prime Minister Stephen Harper said, before heading to a meeting with U.S. President Barack Obama at the end of the Asia-Pacific Economic Co-operation summit.

"We have already indicated of course that we are disappointed," Harper told reporters in Hawaii, where the summit was held. "Nonetheless, I remain optimistic that the project will eventually go ahead because it makes eminent sense."

Obama reportedly told Harper that delaying the project until 2013 will ensure all questions are properly addressed, during their meeting Sunday. The prime minister also noted that Obama said a final decision had not been made.

Earlier in the day, Harper said the recent decision to delay construction of the $7-billion pipeline has been met with "extremely negative reaction" in the U.S. because the project is "obviously what's in the best interests of not just of the Canadian economy but also the American economy."

Harper also noted that the delay draws attention to Canada's need to access Asian markets for energy products.

Natural Resources Minister Joe Oliver told CBC News on Sunday the U.S. decision to put the project on hold pending an environmental-impact assessment will cost the Canadian company pushing the project.

Oliver said he expects the study ordered by the U.S. State Department "will be costly for" Calgary-based TransCanada Corp.

TransCanada is seeking to build the Keystone XL pipeline expansion from Hardisty, Alta., across the border to Nebraska, where it would meet up with an existing pipeline. Another new segment would run south to Port Arthur and Houston in Texas from Cushing, Okla.

The project has approval in Canada but is awaiting the go-ahead from U.S. officials. But that won't happen until late next year, at the earliest, following a State Department announcement Thursday that it wants to look into alternative routes for the pipeline's Nebraska portion due to environmental concerns.

"I think that this was disappointing, obviously, and it will be costly for the company. It will mean lost revenue for the province and delayed economic activity for the country," Oliver said.

He said it's unlikely TransCanada will abandon the Keystone XL project, however.

"I think if it’s delayed too long then the project could, you know, fall off. And the economic viability of any project could be undermined by excessive delay. I don’t think that we’re there yet, but this wasn’t helpful."

Environmentalists opposed Keystone XL because under its currently proposed path, it would run through sensitive ecological lands in the American Midwest, where any spill would be devastating.

Other opponents of the project say Canada should refine its oilsands crude domestically — and not effectively ship refining jobs and value-added processing to U.S. facilities in the Gulf of Mexico.

Oliver dismissed the environmental concerns, saying the Keystone XL plan had received an environment impact study in the U.S. and was more of a "local issue in Nebraska as much as anything."

The Keystone XL brouhaha highlights the need for Canada to find more buyers for its petroleum, the natural resources minister said.

"Basically all of our energy exports are currently going to the United States. We have one customer. So it is a major fundamental strategic objective of Canada to diversify our customer base," Oliver said.

"I was in China and Japan and I just got back yesterday. And let me tell you there’s a keen interest in our resources in both those countries. The Japanese are interested in our natural gas, the Chinese in our oil and gas."

Calgary-based pipeline operator Enbridge has plans afoot to build $5.5 billion in pipelines from Alberta to a port in Kitimat, B.C., to ship oil to East Asia.

But that project, called the Northern Gateway, is also hotly contested. It would run through aboriginal land and expose First Nations to possible devastation from any spill, which Enbridge has had several of lately in Michigan, Illinois and the Northwest Territories.

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Italy's PM-designate lays groundwork for overhaul

Italy's premier-designate, economist Mario Monti, talks to reporters at the Quirinale Presidential Palace after meeting with Italian President Giorgio Napolitano in Rome. Pier Paolo Cito/AP

Italy's premier-designate Mario Monti began talks on Monday to create a new government of non-political experts tasked with overhauling an ailing economy to keep market fears over the country from threatening the existence of the euro.

Investors initially cheered Monti's appointment, though concern lingered about the sheer amount of work his new government will have to do to restore faith in the country's battered economy and finances.

After losing all confidence in financial markets, Silvio Berlusconi resigned as premier this weekend, as promised, after both houses of Parliament passed emergency austerity and reform measures with unusual speed.

President Giorgio Napolitano tapped Monti on Sunday to create a government capable of implementing economic reforms aimed at reviving stagnant growth to bring down public debt, stuck near 120 percent of GDP.

Improving market confidence in Italy is crucial to the future of the eurozone as the country would be too expensive to rescue. A default on its $2.6 trillion US in debt would cause massive chaos in financial markets and shake the global economy.

As in Greece, where a new government of technocrats also took over last week, the hope is that administrations of experts not affiliated to parties will be more willing to make the tough but necessary decisions that politicians have so far balked at.

Monti appeared to have the respect of many Italians, eager to see an end to the financial crisis that threatens their own well-being.

"In my opinion he will be better than what we had before, obviously," said Bernardo Albrigo, in the Campo Dei Fiori open-air market in central Rome. "He seems to me to be a person who is serious, normal and with experience."

The next six months will be a tough test of the Italian government's ability to restore credibility in its finances -- some $273 billion US in public debt comes due through the end of April.

On Monday, Italy easily raised $4.1 billion in the sale of five-year bonds, though at a higher cost. Investors demanded an interest rate of 6.29 percent for the bonds, the highest level since 1997, compared with 5.32 percent at a similar auction a month ago.

The auction result highlighted how it will take time to bring Italy's borrowing rates significantly lower after spiking last week well above the 7-percent level that eventually forced three other eurozone countries to need bailouts.

On Monday, the yield on Italy's benchmark 10-year bonds fell as low as 6.28 percent before stabilizing around 6.40 percent -- still uncomfortably high for the country. The yield is indicative of the rate the government would pay if it were to tap financial markets to raise cash.

Monti said Sunday that he would act "with a sense of urgency" to identify ministers in the new government but said he would also take the time necessary to secure a strong team. He will be meeting with various political parties throughout the day to garner support for his mission.

"In a moment of particular difficulty for Italy, in a troubled global and European context, the country must win the challenge to redeem itself," Monti said. "Italy needs to return to being an element of strength and not weakness in the European Union, of which we were founders and in which we need to be protagonists."

Monti must now draw up a cabinet, lay out his priorities, and see if he has enough support in Parliament to govern. Rival political parties offered various degrees of support, including one demand from Berlusconi's party — the largest in Parliament — that his government last only as long enough as it takes to heal Italy's finances and revive the economy.

The 68-year-old economics professor proved his mettle as European competition commissioner in the 1990s. But he'll have to win a confidence vote in Parliament before he can lead the nation.

Despite his resignation, Berlusconi pledged to continue playing a role in Italian politics.

"Berlusconi made his position very clear when he left on Sunday," said James Walston, a political analyst at the American University of Rome. " He sent a video message to Italy saying that he is not finished. So at the moment, he is certainly not retired, he is not the retiring type."

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TMX sets up shop in China

The company that owns the Toronto Stock Exchange has opened an office in Beijing to help it convince more Chinese companies to list on Canada's largest stock exchange.

"We're pleased to continue [our] global expansion by opening an office in this important region," TMX Corp. president Tom Kloet said as the Beijing office was formally opened on Monday. "Opening an office in Beijing underscores our commitment to ensuring that the benefits of the Canadian capital markets are well understood around the world."

More than half of the world's publicly traded mining companies are listed in Toronto, as are more than a third of the world's public oil and gas names. China's booming economy has an insatiable appetite for resources at the moment, so just as Chinese firms are investing heavily in Canadian companies, the stock exchange is hoping more and more Chinese resource companies will want access to Canada's resource-savvy capital markets by listing on the TSX.

Earlier this year, TMX Corp. opened an office in London, England. That move was part of the company's overall objective of furthering its international profile and presence. Access to new European markets and investors was a centrepiece of the proposed merger of TMX Corp and the London Stock Exchange before that deal fell apart.

But setting up shop in China is the TMX's attempt to link up with an economy that's growing a lot faster than the traditional markets in Europe. TMX said in a release that the company's efforts in China will focus primarily on advancing Canada's capital markets and TMX's stock exchanges. The office will also provide the ability to offer enhanced services to new and existing clients in China.

In recent months, Chinese companies have come under increased scrutiny for their accounting practices after several accounting irregularities came to light.

Sino-Forest was once the most valuable forestry firm on the TSX until a report from short seller Muddy Waters alleged the company had misstated its assets. The company is currently under investigation by the OSC and trading in the shares is frozen.

There are already several dozen China-based companies that list on the TSX, but TMX Corp. is eager to see that figure climb even higher.

"The opening of the TSX office in Beijing demonstrates the opportunities that Canadian businesses see to further their relationship with the People's Republic of China," said Finance Minister Jim Flaherty, who was on hand for the opening. "It creates an important bridge between our respective capital markets and brings our market participants closer together."

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Upscale Tim Hortons 'ambience' revamp planned

Canadians may not associate espresso, arm chairs and soft lighting with Tim Hortons, but the upscale fixtures are part of the brand's latest makeover.

Along with the December launch of drinks like lattes and mochas, the chain is also giving some of its stores a facelift that invites customers to linger a little longer.

The redesign includes wireless Internet connections, bench seating, softer lighting, a new floor layout and a more open kitchen that gives customers the "ambience" of watching their food being prepared for them.

"While specialty coffee represents a relatively small part of the overall coffee market, it is a growing segment," executive chairman, president and CEO Paul House said on a conference call with analysts Thursday.

"We believe our entry with such a meaningful and relevant offering will reinforce our continued coffee leadership in Canada." The move is expected to encourage customers to come inside, sit and perhaps spend a little more money, rather than zooming through the drive-thru.

"A baked product is really, in some cases, an impulse buy so if you're looking and you like what you see you're more likely to buy it," House said.

The new interior is also designed to provide a more comfortable restaurant environment as Tims ramps up its food offerings.

Earlier this month, it launched a hot lasagna casserole in several restaurants and House said it plans to offer more "comfort foods." In the U.S. it is testing panini-style grilled sandwiches.

The makeover comes as the chain reports soaring profits and revenues based on the traditional offerings Canadians know and love Tims for — doughnuts, coffee, soups and bagels.

The company earned $103.6 million or 65 cents per diluted share in the third quarter, up from $73.8 million or 42 cents in the same 2010 period.

Revenue totalled $726.9 million, up from $670.5 million.

The average analyst estimate had been for a profit of 64 cents per share, according to data compiled by Thomson Reuters. Same-store sales, a key metric measuring results from stores open at least a year, were up 4.7 per cent in Canada and 6.3 per cent in the United States.

Still, the company remains focused on how to succeed in an intensely competitive Canadian coffee market as it watches competitor McDonalds also remake its image.

Just days after Tims announced it would introduce espresso-based drinks, McDonalds said it would do the same.

Specialty drinks had been a territory traditionally left to the baristas at Starbucks or Second Cup, but Tims new machines allows it to brew up similar beverages, while maintaining the low cost and fast service it's known for.

Its espresso based beverages start at $2, about 40 per cent cheaper than Starbucks.

But House said he isn't afraid of alienating the chain's core customers, those who come for a "double-double" and a doughnut.

The chain is simply reacting to the evolving tastes of Canadian coffee drinkers, he said, adding that Tims has made some decisions considered risky in the past — such as becoming the first Canadian chain to ban smoking in the 1990s.

"Every time we've done it, there's always that concern you're going to turn off your core customers, but so far we've been successful and not done that."

Tims also caters to local market tastes when it considers how to design or renovate stores, he said.

"Some of these new style restaurants will not be the right features for rural markets and so forth, I don't know if they're going to want leather chairs," he said.

"But in the city markets, especially in the downtown areas of Toronto and so forth, that's really what that market expects." During the quarter, the company opened 41 locations in Canada and 23 in the U.S.

The company has also signed a licence agreement with Dubai-based Apparel Group to open up to 120 restaurants in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman over the next five years.

Shares in the company were up one per cent or 55 cents to $50.09 Thursday on the Toronto Stock Exchange.

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Harper looks to Asian energy markets after Keystone delay

Prime Minister Stephen Harper told U.S. President Barack Obama at the APEC summit on Sunday that Canada will look for new markets in Asia for its oil and gas, now that the Keystone pipeline has been delayed for more than a year.

Harper made Canada's disappointment in the delay clear when the two leaders sat down for almost 30 minutes at the summit in Hawaii.

All of Canada's oil and gas exports currently go south of the border, and Keystone would transport crude from the oilsands to Texas. Now, however, Harper says the U.S. decision has left him no choice.

"I did indicate to him, as I did to the president of China yesterday [Saturday], as our government has indicated, this highlights why Canada must increase its efforts to make sure it can supply its energy outside of the United States and into Asia in particular," Harper said.

To that end, the prime minister will visit China sometime next year. As well, Canada has decided to signal formally that it is interested in joining the Trans-Pacific Partnership, a group of Asian countries that aims to boost trade and lower tariffs in the Asia-Pacific region.

The United States has also discussed joining the TPP.

Previously, there has been resistance to Canada's participation, because of its staunch protection of the dairy, poultry and egg sectors. Harper now says he feels Canada can do both.

"We're constantly in trade talks, but I continue to believe we can advance our interests and at the same time protect our interests in those agricultural sectors," he said.

According to the White House account of the meeting, Obama said he supported the decision to delay TransCanada's Keystone XL project "to ensure that all questions are properly addressed and all the potential impacts are properly understood."

During a bilateral meeting on Saturday, Chinese President Hu Jintao noted with approval Harper's attempts to reach out, and invited him to visit next year.

"You have repeatedly stated that you attach importance to our relationship and that you hope to forge an even closer relationship with China," the Chinese president said. "I appreciate that position."

Harper also signalled that a border security deal with the U.S. is nearing conclusion. He announced that he'll visit Obama in December and the deal will be part of their discussions

The "Beyond the Border" deal was announced with much fanfare nine months ago as a way to continue to secure the borders but not choke off vital trade.

"It will be a very comprehensive package when it is announced," Harper said.

With files from Susan Lunn in Honolulu and The Canadian Press

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Debt's dirty dozen danger signs

If there's one plaintive cry you tend to hear again and again from credit counsellors, it's this: "If only our clients had come to see us sooner."

By the time many people actually ask for help, their debt problems are so huge that their credit ratings are in tatters and some solutions may no longer be an option.

With that in mind, here are a few of the early warning signs that are pretty good indicators that people may be on their way to financial disaster and should seek help. See if any apply to you.

1. You are only able to make the minimum monthly payment on your credit card debt. A corollary of this warning sign: using a cash advance from one card to pay off another. Imagine that you've racked up a $5,000 debt on a card that charges 19.9 per cent annually. No problem, you say … you just need to make a minimum monthly payment of 3.0 per cent of the balance owning — or $150, in this case. But add in another couple of credit cards with high interest rates, and you can see how making even the minimum payment can quickly become a problem. And don't think of it as a debt of $150. You still owe $5,000. And in the early years, those minimum payments are mostly interest. By the way, in this example, paying the minimum will see that debt hang around for more than 20 years!

2. You're delaying utility bill payments. Most people know that if they pay their electricity or water bill a few weeks late, the service won't get cut off immediately. But stalling one creditor to pay another is a classic "I'm in trouble" indicator. And if you can't make your utility payment one month, how likely is that you'll be able to make a double payment next month?

3. You cash in some of your RRSPs before retirement. More and more Canadians are doing this. A Statistics Canada study found that almost a quarter of taxpayers over one nine-year period cashed in some of their RRSPs following events like the loss of a job or the death of a spouse. Raiding RRSPs early is generally not a good idea as it usually results in a big tax hit and robs you of future retirement income.

4. You argue with your spouse about money. Divorce experts say financial difficulties are a leading cause of splitting up. If you're hiding purchases or the extent of your debt from loved ones, or losing sleep at night, these are all warning signs that should not go unheeded.

5. You are constantly using your overdraft protection. Some people have several accounts, all deep into overdraft territory. Besides the high interest rates these accounts charge, if you're managing to not bounce cheques only because of overdraft protection, things will only get worse.

6. You're broke the day after payday. Living paycheque to paycheque is a fact of life for many people. But when the money that's meant to last for the next two weeks has disappeared in 24 hours, that's a crisis that often sends people to payday loan and cash advance companies. They're only too happy to provide you with an advance on your next paycheque in return for huge fees and interest charges. Putting aside part of your paycheque in an emergency account can help you deal with unexpected expenses.

7. You consolidate your debts every other year. Many people pay off their high-interest rate credit card debt by refinancing their home and rolling that debt into their lower-interest rate mortgage. But some can't resist running up their credit card debt again and end up having to arrange another consolidation several years later. That's a strategy that's eventually likely to backfire. "People can't borrow their way out of debt," points out Rob Boulanger, the director of counselling at Credit Counselling Services of Atlantic Canada in Saint John. "They're just repackaging their debt in different form and extending their debt over God knows how many years."

8. Cutting back on essentials. By this, we don't mean cutting out those $4 lattes to save some money. We're talking about cutting back on food or clothing or cutting out one meal entirely in order to make payments to creditors. Boulanger says he sees seniors doing without needed medications or cutting dosages in half so they can pay their other bills. "It's a generational thing," he says. "The older crowd often has a 'pay your bills at all costs' mindset, even if it endangers their own health."

9. You keep applying for more credit. If you're applying for new credit cards, regularly asking for increases in credit limits or are constantly borrowing from friends and family members to make ends meet, then you're regularly spending more than you take home. If something doesn't change, bankruptcy will likely loom.

10. You're charging everyday expenses like groceries and gasoline because you don't have the cash on hand. It's one thing to charge everyday purchases so you can collect more reward points. But if you have to charge it because there's nothing in your wallet or chequing account, the reward points are nothing but a dangerous distraction. If you aren't able to pay off your credit card bill in full each month, this strategy of putting everything on that card will blow up in your face. It's astonishing how fast the "little things" add up.

11. You regularly get past-due notices or get calls from creditors asking for payment. Paying the occasional bill late happens to many of us. But if it happens all the time, or if you regularly bounce cheques, these are serious warning signs. One side note: If you have the money and pay bills late just because you're a procrastinator, arrange for automatic bill payments. Paying bills after their due date — even just a month late — lowers your credit score and can make it more difficult to borrow at preferential rates. It also voids the interest-free grace period.

12. You don't actually know how much money you owe. Most of us, at least at some time, have wondered where all the money goes. Some people, though, have taken that to the extreme. "Some people are subsidizing themselves through credit, and they don't really know it," Boulanger says. "Some don't know they're in trouble. Once their credit maxes out and they can't get any more, only then do they realize they're in trouble."

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U.K. cabinet minister eyes limits on CEO pay

Britain's business minister says he's sympathetic to the Occupy movement and will consider bringing in legislation to curb CEO salaries.

In an interview that aired Sunday, Business Secretary Vince Cable told the BBC that skyrocketing pay for executives against a backdrop of job and benefit cuts for the average worker "causes a lot of public anger and indignation, and we're seeing some of that spill over into protests in recent weeks."

"I have some sympathy with it," Cable continued.

Cable, a Liberal Democratic MP from west London, was his party's point person on economic issues before becoming a minister last year in Britain's coalition government.

He's been campaigning for months to reform executive pay, which has bounded up by 75 per cent over the last two years for senior executives at Britain's top 100 publicly traded companies, according to research by the firm Income Data Services.

Meanwhile, unemployment hit a 17-year high in the United Kingdom last month, while average wages, after accounting for inflation, are falling.

"A small number of people have done extraordinarily well in the crisis, often undeservedly, and large numbers of other people who played no part in causing the crisis have been hurt by it," Cable told the BBC.

He said shareholders at publicly traded companies need to take the reins in curbing excessive pay packages for executives, but the government would step in if necessary.

“If it does require legislation, of course we’ll introduce it,” he said.

A discussion paper Cable published two months ago floated several ideas for keeping top corporate salaries in check, including having employees sit on companies' remuneration committees.

The global Occupy rallies, which began with protests on Wall Street and have inspired international demonstrations, have touched Britain as well. Hundreds of demonstrators have been camping for weeks outside St. Paul's Cathedral in London to denounce corporate excess and seek economic justice.

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Japan returns to 6% growth after earthquake

Japan's economy grew for the first time in four quarters in a comeback from the earthquake and tsunami disaster that already faces multiple global headwinds.

The world's No. 3 economy expanded at an annualized rate of 6 per cent in the July-September period, driven by exports, the Cabinet Office said in a preliminary report Monday.

It was the first growth in four quarters. The result was in line with market forecasts, including Kyodo News agency's projection of 6.2 per cent annualized growth.

"Having something as strong as hoped for is really good news," said Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo. "Basically all parts of the economy were expanding. And this is extremely important because we see a slowdown internationally, which is already hitting exports."

While such a robust rebound is encouraging, it is unlikely to last.

"The situation surrounding our country's economy is becoming tougher as we see the recovery in overseas economies weakening and face the impact of the Thai flood, in addition to the yen's rapid rise," said economic and fiscal policy minister Motohisa Furukawa, according to Kyodo.

Economists expect GDP — a measure of the value of all goods and services produced domestically — to contract in the last three months of the year before turning moderately positive again next year.

Last week, Japan's lower house of parliament passed a $157 billion US extra budget to help fund recovery efforts in Japan's tsunami-battered northeast. The budget also includes measures aimed at easing pressure from the yen's recent surge.

Considered a safe haven, the Japanese currency has hit record highs against the dollar this year amid intensifying worries about Europe and the U.S. The climb is particularly painful for exporters, whose overseas earnings shrink in value when repatriated.

The new government spending should help offset weaker overseas demand, said Kyohei Morita, chief economist at Barclays Capital in Tokyo.

"We maintain our view that Japan is likely to outpace other advanced economies in 2012," Morita said in a research note Monday.

The International Monetary Fund agrees. It estimates Japan's economy will expand 2.3 per cent next year — the strongest growth forecast among the Group of Seven countries including the U.S., U.K. and Germany.

Japan's latest annualized GDP figure translates to growth of 1.5 per cent from the previous quarter, according to the Cabinet Office.

Consumer spending, which accounts for some 60 per cent of the economy, climbed 1 per cent from the previous quarter.

'Japan is likely to outpace other advanced economies in 2012'—Barclays analyst Kyohei Morita

Capital investment by companies rose 1.1 per cent. Exports jumped 6.2 per cent.

The March 11 earthquake and tsunami killed thousands of people and wiped out large swathes of Japan's northeastern coast. The disasters damaged many factories in the region, causing severe shortages of parts and components for manufacturers across the country, including automakers.

The tsunami also crippled a nuclear power plant that triggered the worst nuclear crisis since Chornobyl.

Since then, the country has steadily fixed its factories and benefited from pent-up demand for Japanese goods such as cars.

Toyota Motor Corp.'s production had recovered to pre-tsunami levels by September, earlier than initial estimates. Output took another big hit due to the recent flooding in Thailand, but the automaker said last week production in Japan would return to near normal levels Nov. 21-25.

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New plastic $100 bills go into circulation

Canadians can get their hands on the country's newest banknotes Monday — $100 bills made from a plastic polymer designed to last longer and thwart counterfeiters.

Bank of Canada governor Mark Carney will be on hand at an afternoon ceremony in Toronto to formally launch the bills.

First announced in June, the bills are a departure from the current cotton-and-paper bills in circulation because they feature the latest in anti-counterfeiting technology.

Counterfeiting became a major problem between 2001 and 2004, when it peaked at 470 fake bills for every one million in circulation. Since then, officials have been able to use new technology to get that figure down to only about 35 fake bills for every one million in circulation today.

To fight that, the new bills have two transparent windows built into them that make them difficult to forge but easy to verify. One extends from the top to the bottom of the bill and has holographic images. Another window is in the shape of a maple leaf.

There is also transparent text, a metallic portrait, raised ink and partially hidden numbers throughout.

The bill commemorates Canadian innovations in the field of medicine and features an updated portrait of onetime Canadian Prime Minister Robert Borden.

The $100 is just the first denomination to be released. A new $50 bill is expected in March, follow by new $20, $10 and $5 versions. All are expected by the end of 2013.

Because they are made of durable polymer, the new bills are expected to last 2.5 times as long as the current ones. That alone could save the government $200 million or more over the life of the series, officials say.

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