Finance topics

AMSTERDAM–Dutch sports car maker Spyker denied Sunday it had plans to jointly bid for General Motors’ Saab with Luxembourg investment firm Genii Capital.

German WirtschaftsWoche business weekly, in abstracts of a story to be published on Jan. 18, said the two companies, which have been trying individually to clinch a deal to buy the money-losing Swedish automaker, had now teamed up.

Spyker chief executive Victor Muller, in a reply to Reuters via text message, responded "No," when asked if Spyker was in contact with Genii about a joint bid for Saab or had changed its strategy.

Genii is backed by Formula 1 mogul Bernie Ecclestone.

Lars Carlstrom, who is coordinating the bid for Saab by Genii Capital and Ecclestone, told Reuters there had been some talks with Spyker’s Muller last week but that he could not confirm nor deny anything related to a joint bid.

GM Europe spokesman Stephan Weinmann said GM was in talks about Saab but he declined to comment whether discussions were ongoing with one or several bidders.

GM said on Monday it would move ahead with closing Saab down. On Tuesday, it appointed two supervisors to oversee a wind-down, though it said it would continue to consider "several purchase proposals it has received for Saab."

The magazine’s abstract said: "According to WirtschaftsWoche information, Spyker Cars and Genii Capital have been in contact in order to make a last-second joint offer." It did not give other details.

On Tuesday, Muller said GM’s decision on Saab was a matter of "days not weeks."

Meanwhile, more than 2,000 Saab drivers gathered in their cars in the Swedish brand’s hometown Sunday to show support for the iconic mark.

"It’s hard to know exactly how many cars there were, but an estimate we’ve done puts the number at 2,500," Claes Robertsson, the head of Saab Turbo Club of Sweden, a group of Saab admirers, told AFP.

Robertsson said both Saab employees and brand enthusiasts had attended the rally, in which drivers from Germany, Denmark, Norway, the Netherlands and Britain also took part.

Swedish news agency TT said the demonstration started at the Saab museum in its southwestern Swedish hometown of Trollhaettan and ended at the Saab factory.

According to police, the four-kilometre stretch was entirely filled by Saab cars, TT reported.

In the Netherlands, more than 500 Dutch Saab lovers rallied.

Saab, which employs 3,400 people in Sweden, is one of four major brands being sold by GM as part of a massive restructuring that began in 2005 and accelerated last year when the largest U.S. automaker went bankrupt.

Analysts have warned some 8,000 jobs could be lost with Saab’s closure.

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Last-minute holiday shoppers brought relief to retailers, handing them modest sales gains for the season and prompting several to raise their fourth-quarter profit outlooks.

The improved picture comes because retailers never had to resort to drastic price-cutting after keeping inventories lean. Still, retailers may be facing chilly months as consumer spending is expected to remain muted amid high unemployment and tight credit.

"The holiday season was decent but nothing you can get excited about. And it was saved by a last-minute surge," said Ken Perkins, president of research firm RetailMetrics. "Santa didn’t deliver coal, but he certainly didn’t deliver caviar."

According to Thomson Reuters’ preliminary findings, eight retailers beat expectations, one met, and four missed. Sales figures are based on sales at stores open at least a year and are considered a key indicator of a retailer’s health.

Retailers’ decent performance in December, helped by a last-minute spending spree in the days before Christmas, comes after a disappointing November fast payday loans.

Retailers managed to avoid another Christmas catastrophe because they had a year to plan for a new consumer mindset. They headed into the season with sharply lower inventories and more practical merchandise that resonated with shoppers who stuck to shopping lists and researched deals online before they bought. Shoppers were in malls buying, but they were choosy. They picked up discounted flat-panel TVs, computers and smart phones, but often stayed away from clothing unless it was practical.

Stores were on edge until near Christmas because consumers delayed buying more than last year, either because they were shut in by winter snowstorms or were holding out for better deals. But many stores kept to planned discounts. That’s different from last year, when stores started liquidating merchandise in November because of the escalating financial crisis.

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RALEIGH, N.C. — U.S. consumers and businesses are filing for bankruptcy at a pace that made 2009 the seventh-worst year on record, with more than 1.4 million petitions submitted, an Associated Press tally showed Monday.
 
The AP gathered data from the nation’s 90 bankruptcy districts and found 1.43 million filings, an increase of 32 percent from 2008. There were 116,000 recorded bankruptcies in December, up 22 percent from the same month a year before.
 
While experts believe some of the increase is due to a natural recovery as consumers and attorneys become accustomed to a recent overhaul of bankruptcy laws, the numbers indicate clear correlations to recession-weary regions. Arizona saw the fastest increase, a jump of 77 percent from the year before, followed by Wyoming (60 percent), Nevada (59 percent) and California (58 percent).
 
Emile Harmon, who owns a law firm in Tempe, Ariz., said the firm has doubled its staff to handle the surge in bankruptcy filings. The lawyers have been steadily shifting away from their other areas of business, civil lawsuits and divorce cases.
 
"Bankruptcy is kind of swallowing the whole practice." Harmon said. "There’s little time to do other stuff."
 
There’s also no sign that things are slowing down. Harmon said bankruptcies have been coming in waves, first with those 18 months ago who had adjustable-rate mortages, then with those who lost their jobs due to the housing downturn. Now he’s finding wealthy individuals and business owners who have finally succumbed to lower incomes and shrinking home values.
 
"A lot of the people we see were in a really good financial position two years ago," Harmon said. "People really look at you and say, ‘I can’t believe I’m here business cards."’
 
For three years, filings have been steadily rising back toward levels reached early in the decade before Congress overhauled the nation’s bankruptcy laws. The 2005 alterations made bankruptcy filings more cumbersome, a move that followed fears from lenders that some consumers were abusing the system to wipe away debts.
 
Bankruptcies surged to slightly more than 2 million in 2005 as consumers rushed to file before the new law took effect but then plummeted to 600,000 in 2006. They’ve been climbing ever since and in 2009 became the seventh-highest year on record, behind only the years 1998 and 2001-2005.
 
The 2005 spike had been preceded by a steady climb from 1.5 million in 2001 to 1.6 million in 2005.
 
John Pottow, a bankruptcy professor at the University of Michigan, said the return to the highs of earlier this decade illustrates the failures of the 2005 overhaul bill. He said the measure largely made filings more costly and time-consuming by forcing consumers to undergo a paperwork-heavy test to determine eligibility for Chapter 7 bankruptcy and adding liability for attorneys who provide help.
 
"It never made sense in the first place that you could change the laws and make all these bankruptcies go away," said Pottow, who would like to see the 2005 law changes repealed. "If people are encountering financial distress, you can only scare them away for so long before they come back again."
 
While every state saw a rise in bankruptcies, Alaska (up 12 percent), Nebraska (12 percent) and North Dakota (14 percent) performed best.

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Russia’s central bank cut its benchmark interest rate for the 10th time since April to discourage speculative ruble trades and ease credit flows.

Bank Rossii cut the refinancing rate by a quarter-point to a record low 8.75 percent and lowered the repurchase rate charged on one- and seven-day central bank loans to 7.75 percent from 8 percent effective Dec. 28, it said in a statement today. The bank last lowered the rates by half a percentage point on Nov. 24.

The decision to cut rates may “soften the impact of factors constraining the economic rebound and will make the tendency toward GDP growth more sustainable,” Bank Rossii said. With bank liquidity rising, the cuts may limit the inflow of short-term foreign capital that could lead to volatility on the ruble market, according to the statement.

The central bank has cut the refinancing rate from 13 percent in April after the world’s biggest energy exporter lurched into its deepest economic decline since the government began regularly updating economic data in 1995, contracting 10.9 percent in the second quarter and 8.9 percent in the third. The bank has eased policy to aid the recovery and stem speculative inflows that have fueled ruble volatility.

Equity Funds

There’s some evidence the Moscow-based bank’s currency policy is working. The ruble has lost 2.7 percent against the dollar since Nov. 11, when it reached the strongest level of the year, after gaining 13 percent in the previous three months. Bank Rossii’s efforts to deter speculation are “appropriate,” International Monetary Fund senior Russia representative Odd Per Brekk said last month.

Russian authorities are trying to discourage the use of the ruble in so-called carry trades, in which investors borrow in low-yielding currencies to buy high-yielding currencies that can generate a quick profit.

Russian equity funds drew $59.5 million in the seven days ended Dec. 16 after posting an inflow of $181.7 million a week earlier, according to EPFR Global. The country may post a net capital outflow in the fourth quarter after oil prices retreated in December and investors fled emerging-market assets on concerns about Dubai’s debt restructuring, central bank Chairman Sergey Ignatiev said on Dec. 22.

Russia may see a net outflow of $40 billion for the year, according to the central bank.

‘Zero Growth’

Policy makers are also trying to revive lending after previous rate cuts failed to ease credit flows.

The financial industry will show “zero growth” next year as provisions for mounting bad loans tie up cash that might have gone to companies and households, Alexander Turbanov, head of the Deposit Insurance Agency, said last week.

“We could not drastically change the situation with lending in industry,” Deputy Economy Minister Andrei Klepach said last month. “There is stagnation in lending and borrowing.”

Policy makers will be looking for signs that today’s cut feeds through to bank loans. Lending to companies by Russian banks rose 0.8 percent last month, Bank Rossii First Deputy Chairman Gennady Melikyan said last week sam day payday loan. Lending to households fell 0.2 percent in the month, while bank assets grew 2.8 percent, Melikyan said, adding that the data don’t include OAO Sberbank, the country’s biggest lender, or take exchange-rate shifts into account.

‘Frozen’ Loan Books

“Banks are not lending at present, and have effectively frozen their corporate loan books,” said Clemens Grafe, chief economist at UBS AG in Moscow. “Instead, they are concentrating on building up buffers to absorb expected loan losses, and this is clearly restricting the economy.”

Russian banks’ corporate loan books fell 0.5 percent in October, following a 0.7 percent decline the previous month, the central bank said on Dec. 3.

Corporate borrowing costs from domestic banks fell in November to the lowest level this year, sliding to an average of 13.6 percent compared with 13.9 percent a month earlier and 17.4 percent in January, the central bank said on Dec. 23.

The country will post “steady economic growth” next year because the negative factors that led to the worst slump since the 1998 default, including lower prices for commodities and a lack of external financing, are “no longer in effect,” Ignatiev said this week.

Further Cuts

The economy may grow 5 percent or more in 2010, faster than the government is estimating, and output will return to its pre- crisis level in less than three years, Ignatiev said Dec. 22.

The refinancing rate may be lowered as much as 1 percentage point in 2010, Arkady Dvorkovich, President Dmitry Medvedev’s chief economic adviser, said Dec. 8, adding that the inflation rate next year may slow to 8 percent or more.

“Average lending rates may drop more,” Dvorkovich said. “Lending rates for large and medium companies are at 14 percent to 16 percent. I think they may drop by 3 percentage points.”

Russia has continued easing its policy rates even as the IMF has urged Bank Rossii to halt the reductions, warning they may be inflationary.

“Further cuts in policy interest rates should be put on hold until the monetary implications of the very large end-year liquidity injection associated with the fiscal deficit become clear,” the IMF said in a report this month.

The IMF warned Bank Rossii to step up efforts to contain inflation and embrace a more “ambitious” policy to reduce consumer-price growth to below 5 percent in 2010.

Consumer prices rose 9.1 percent on an annual basis in November, the slowest pace in more than two years, according to the Federal Statistics Service.

The ruble gained for a third day against the dollar, adding 0.4 percent to 29.4683 at 11:57 a.m. in Moscow, heading for its strongest close since Dec. 4. Against the euro the Russian currency was little changed at 42.5934.

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Target Corp. and U.S. retailers may lose almost $9 billion in holiday sales as banks rein in lending to cash-strapped consumers before a new credit-card law takes effect.

Sales in November and December may fall 1.2 percent to $436.7 billion from the same period in 2008, said Britt Beemer, chairman of consumer polling firm America’s Research Group. If lenders weren’t cutting customer spending limits and rejecting more credit-card applicants, sales would gain about 0.8 percent to $445.5 billion, he said in a Dec. 21 interview.

Target Chief Financial Officer Douglas Scovanner says the credit-card legislation is exacerbating a spending slump just as consumers begin to consider more discretionary purchases they would usually buy with credit. Items such as clothing, jewelry and home goods suffered steeper declines during the recession and are among the most profitable sales for retailers.

“It will mute the impact of the rebound that would have otherwise occurred,” Scovanner said. “Diminished availability of credit equals diminished spending.”

Reduced lending may shave at least half a percentage point off sales at stores open at least a year once more of the Credit Card Accountability, Responsibility and Disclosure Act goes into effect in February, Scovanner said in a Nov. 17 interview in Minneapolis, where the chain is based. In November, Target’s comparable-store sales declined 1.5 percent.

‘Tighten Up’

The act bans so-called universal default, the practice of raising interest rates based on a missed payment with another lender. The rules are already causing lenders to “tighten up,” said Brad Jolson, senior director for risk management solutions at Fair Isaac Corp. FICO, as the company is known, is the Minneapolis-based provider of the credit-scoring formula most widely used by lenders.

Available credit to U.S. consumers through cards fell to $3.6 trillion this year from a peak of $4.7 trillion last year, according to a study released in July by TowerGroup, a Needham, Massachusetts-based financial research and advising firm.

“We’re scared to death of what this law is going to do,” said Edward Record, CFO at Stage Stores Inc., the Houston-based operator of 759 stores including the Bealls and Peebles chains. “It’s definitely going to hurt consumer spending.”

Store-Brand Cards

About a third of Stage Stores’ sales comes from store-brand credit cards, and as much as a quarter from other issuers, Record said in a Dec. 17 telephone interview. He said he expects the general-purpose cards will be more affected because Stage Stores was “pretty conservative” with its own cards.

Stage Stores added 8 cents to $12.42 in New York Stock Exchange composite trading yesterday and has advanced 51 percent this year. Target fell 54 cents to $48.79 in trading yesterday. The shares have gained 41 percent this year.

Target also offers its own branded credit cards through a portfolio it funds mainly with JPMorgan Chase & Co. Writeoffs for loans deemed uncollectible rose to 14.99 percent in November on an annualized basis, up from 13.49 percent in October and 11 percent a year earlier, Target said in filings.

Proponents of the credit-card law say the rules protect consumers and put more cash at their disposal, benefiting shoppers and retailers. Some issuers may have hurt sales between the law’s passage and enactment by raising rates in anticipation of the coming restrictions, said U.S. Representative Carolyn Maloney, a New York Democrat and a sponsor of the law.

“Much of the damage was and is self-inflicted,” she said in a Dec. 16 telephone interview. “Virtually all of the consumers I’ve talked to like my card reforms.”

Managing Risk

The law will reduce lenders’ flexibility to manage risk, said Peter Garuccio, a spokesman for the American Bankers Association, a Washington trade group representing about 95 percent of U.S. banking assets. That leaves them the options of “not making cards available or doing so at higher prices,” he said in a telephone interview on Dec. 21.

JPMorgan Chase and Bank of America Corp., the two largest issuers, referred questions on the law to the American Bankers Association. Bank of America decided not to raise card interest rates before the law goes into effect except in instances where customers miss at least two payments within 12 months, Betty Riess, a spokeswoman, said yesterday by telephone.

Less credit hurts larger sales disproportionately, according to Beemer, the consumer researcher.

“Credit drives purchases over $50,” he said. He estimates that half those transactions were made with credit cards before access diminished this year.

Applications Rejected

This year, 22 percent of the consumers that Beemer’s Charleston, South Carolina-based firm surveyed said they had credit-card applications rejected, compared with 12 percent last year. More than 37 percent said their credit limits had been reduced in the past year. That means fewer sales of items such as appliances, Beemer said.

The National Retail Federation, which hasn’t taken a stance on the credit-card law as a whole, has said proposed rules under the law threaten stores’ ability to grant so-called instant credit at checkout.

The Federal Reserve’s proposed guidelines would require retailers to ask customers for information on income and other assets, according to the industry group. That may all but eliminate merchants’ ability to issue store cards or raise borrowing limits at the register, Mallory Duncan, general counsel of the Washington-based federation, said in a telephone interview. The current practice is to use credit scores, purchasing history and other credit-bureau information, he said.

“It’s going to have quite a chilling effect on our ability to initiate new accounts,” Duncan said.

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Gold prices plunged Thursday as the dollar surged against the euro amid concerns about the economic health of certain European nations.

February gold fell $28, or 2.5%, to settle at $1,107.40 an ounce after falling to a low of $1,098 an ounce earlier in the session. The retreat came two weeks after gold settled at an all-time high of $1,218.30 an ounce.

Carlos Sanchez, a precious metals analyst at CPM Group in New York, said the selloff was "definitely attributable to the stronger dollar, and some stop-loss selling."

The dollar jumped 1.3% against the euro to $1.4346, its highest level since early September. The euro came under pressure after Standard & Poors downgraded Greece’s credit rating, raising concerns about the health of other strained euro zone economies like Ireland.

A stronger dollar tends to weigh on the price of gold, since the precious metal is traded in U.S. dollars around the world.

The buck was also supported by a Wednesday statement from the Federal Reserve that said U personal loan for poor credit.S. economic conditions continue to improve, even as the central bank held interest rates near historic lows.

Sanchez said a firm move below $1,100 an ounce could pave the way for a brief retreat toward a range near $1,050 an ounce. However, he expects the weakness to be short lived.

Gold, which has gained about 24% this year, has been on a tear over the last few months as the dollar has weakened substantially.

While the dollar has regained ground in recent days, many traders expect gold prices to push higher into next year amid strong investor interest and the outlook for low U.S. interest rates.

In a research report out Thursday, analysts at Morgan Stanley raised their forecast for gold prices next year by 20% to $1,200 an ounce. The investment bank also raised the outlook for 2011, but reduced forecasts from 2013 onwards.  

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European Union finance ministers will give Chancellor Angela Merkel’s government until 2013 to bring Germany’s budget deficit back in line with EU fiscal rules, a draft document shows.

The German government should start reducing the budget deficit in 2011, cutting the shortfall by 0.5 percent of gross domestic product per year, according to the draft recommendation scheduled for adoption by ministers at a meeting in Brussels next week. The deficit, projected to reach 5 percent of GDP next year, should be back below 3 percent by 2013, according to the draft, which was obtained by Bloomberg News.

“In addition, the German authorities should seize any opportunity beyond the fiscal effort, including from better economic conditions, to accelerate the reduction of the gross debt ratio back toward the reference value” of 60 percent of GDP, according to the recommendation.

The document, prepared by a group composed of officials from the 27 EU nations, the European Central Bank and the European Commission, will be discussed by finance ministers at a meeting in Brussels on Dec. 1 and 2.

German Finance Minister Wolfgang Schaeuble has said he will bow to EU pressure to help strengthen the Stability and Growth Pact that was put in place to protect the euro. France has asked for an extra year to cut its deficit to 3 percent of GDP.

Merkel’s government has until June 2, 2010, to outline in detail how it intends to comply with the EU’s consolidation demands, according to the document. Merkel should enact policy measures that would help Germany’s economy grow at a faster pace in times of normal economic growth, the recommendation shows.

Economic Stimulus

EU finance ministers have committed to withdrawing economic stimulus after 2010 and to start reining in deficits that have swelled because of the recession. Germany’s budget shortfall will peak at 5 percent of GDP in 2010, and France’s deficit at 8.3 percent this year, the commission forecast on Nov. 3.

“For this government, the Stability and Growth Pact is not up for discussion and we will do everything to make sure it stays strong,” Schaeuble told reporters in Brussels on Nov. 10. To afford tax cuts promised to voters, Germany needs “a strict budget policy,” he said.

Merkel’s Cabinet on Nov. 9 approved tax cuts for 2010 totaling 6 billion euros ($8.9 billion). The measures, including expanded children’s benefits, are supplementary to about 10 billion euros in tax reductions taking effect on Jan. 1 that were approved in June by Merkel’s previous coalition.

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A return to lavish bonuses for Wall Street’s top earners could be just the tonic that the Swiss watch industry needs this Christmas after months of austerity depressed sales.

The country’s watch sector, which makes up around 7 percent of exports, has been grappling with a sharp drop in demand over the past year after the worst economic crisis in decades killed consumers’ desire and ability to splurge on pricey treats.

But watchmakers are eyeing a modest rise in sales over the key festive period — the fourth quarter accounts for some 30 percent of sales — as a recovery in Wall Street earnings could lift bankers’ bonuses by up to 50 percent.

“The consumer mood between the continents varies, but on average it is better than last year,” said Philippe Merk, chief executive of privately owned Audemars Piguet, whose watches cost around $20,000 to $30,000.

“Luxury consumers, who are bankers, are better off now as this is the sector that has recovered the fastest. These are the indicators that tell us that this year’s Christmas sales will be better,” he said.

Bonuses are expected to be substantially higher this year despite pressure from politicians and regulators to restrain payouts.

Goldman Sachs, for example, has set aside nearly $17 billion for bonuses so far this year and looks well on track to break the $20 billion mark, which could mean higher payouts per employee than in the previous record year, 2007.

This comes after a revival in profits for most investment banks, and contrasts with a bleak year for the financial sector that has seen governments bailing out major banks and nearly 400,000 job cuts.

Richemont’s most important Cartier brand, Swatch Group’s Tissot marque, luxury watchmaker Parmigiani Fleurier and the head of LVMH’s watch and jewelry unit have all said they expect stronger demand this Christmas.

And Tiffany & Co posted better-than-expected quarterly results on Wednesday that showed its upscale shoppers around the world were spending again.

One Swiss banker said he was treating himself to one of Maurice Lacroix’s latest watches this year, adding that some people bought watches and jewelry as a solid investment, especially after this year’s volatile equity markets.

But he cautioned that there would still be many in the financial sector who would have to forego such purchases.

“It will not be as easy as it was in the past. There is a real difference between the winners and the losers. Employees at those banks that are now state-controlled can forget about bonuses this year,” the banker said.

ASIA A BIG FACTOR

Swiss watch exports have tumbled 26 percent so far this year, ending several years of strong growth, but some analysts predict the watch industry will grow 3-4 percent thanks to an easier comparison base next year and thriving demand from Asia. 

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It’s a tough time to be starting a career.

This year has been extremely rough: New college graduates had 40% fewer job prospects, a new report shows. And the outlook for 2010, while better, is still not very promising.

Jobs for graduates with bachelor’s degrees, which account for most new graduate hires, will drop nearly 1% next year, according to Michigan State University’s survey on recruiting trends.

Overall, hiring of grads with any degree will decline by 2% compared to 2009.

"Things fell apart really fast last year, but it looks like the job market for graduates has hit a bottom," said Phil Gardner, director of MSU’s Collegiate Employment Research Institute, which conducts the annual survey.

For sure, the job market in 2009 suffered an extraordinary decline. A year ago, Gardner anticipated that employment for new graduates would fall by as much as 10% in 2009. The national unemployment rate, now 10.2%, was 6.8% last November.

Hiring of master’s degree graduates will plummet by 11% based on a weaker labor market for accounting students, the study said.

Jobs for Ph.D.s will spike by 20% and those for MBA graduates will rise 11%.

Who’s hiring? Large companies, those with more than 4,000 employees, plan to decrease hiring of all graduates by 3%, and medium-sized companies, those with between 500 and 4,000 employees, expect to lower hiring by 11%.

Smaller companies, however, may provide a bright spot in the job market for new graduates.

Employers with fewer than 500 staff members said they expect hiring at their companies to jump by 15%. These companies will hire 11 new graduates on average in 2010, and 8 of them will be at the bachelor’s level.

A third of employers said they would consider graduates regardless of their major.

"Employers want to be much more flexible," said Gardner. "They want skill sets that they can plug in anywhere as the they evolve instead of getting stuck with someone focused in one area."

But even as companies look for versatile candidates, the most sought-after graduates are those who majored in environmental science and statistics, for whom job opportunities will climb by 6% and 11%, respectively cash advance in one hour.

"There is a reawakening in American society that environment sustainability is important, and there’s also a lot of stimulus money in that area," Gardner said. He added that statisticians are in demand because they are "quantitatively literate and companies are looking to tap into people that can manipulate and understand numbers."

Hiring will increase in sectors such as agricultural production, food processing, nonprofit and manufacturing. Hiring in consulting services, including engineering, computing, research and marketing, will hold steady at last year’s pace.

Where are the jobs? U.S. companies that recruit nationally are expected to rebound with a 3% uptick in hiring, and employers based in the South Central, Southwest and Northwest regions of the country are also indicating an improvement in hiring, the study said.

Job opportunities in the South Central will rise by 6%, in the Northwest by 4% and in the Southwest 2%.

Employment prospects for graduates in other regions of the country will still sag.

Hiring in the Mid-Atlantic will drop by 8%, in Southeast by 7%, in the Northeast and the Great Lake Region by 4% and in the Upper Plains by 3%.

What’s the pay? A majority of employers, 80%, will not be raising starting salary offers above those made last year. But 8% will lower base pay by 5%, according to the survey, and 12% will of employers will increase salaries by a modest 3%.

The average salary for bachelor’s degree graduates will be $39,900.

Only 7% of employers said they will offer signing bonuses, and 20% will provide performance-based bonuses at the year’s end, down from 33% in 2009.  

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GATINEAU, QUE.–Canadian television could get skinnier.

Some of the nation’s broadcasters are suggesting Canadians be offered a "skinny basic" package of TV channels, a smaller but cheaper version of the basic channels available today.

They made their arguments Tuesday during hearings before the Canadian Radio-television and Telecommunications Commission, though cable and satellite providers are vehemently against the idea.

For consumers, the proposition might mean giving up channels on the current basic package and paying a low fee set by the CRTC for a smaller set of channels consisting of local, regional and some national programming.

It is one of several ideas Canada’s conventional broadcasters are offering to help their ailing industry, at a time when falling advertising revenue and the splintering of ad dollars among scores of channels have made local programming unprofitable.

"We know it can work. We know, on a cost basis, it can be done by cable companies," said Steven Guiton, chief regulatory officer at CBC/Radio Canada. "And that’s why we think it’s realistic."

When pressed for details of such a proposal, Hubert Lacroix, president and CEO of CBC/Radio Canada, said the state-owned broadcaster is holding its comments for a separate set of CRTC hearings scheduled for early December.

The CRTC’s commissioners quizzed CBC officials on the subject repeatedly, and threw questions about a basic package at officials of Bell Canada, who also appeared before the commission.

Both Monday and Tuesday, CRTC chair Konrad von Finckenstein seemed almost to beg the broadcasters and their rivals, the cable and satellite carriers, to negotiate a deal among themselves and come to him for approval. The carriers have refused to negotiate, saying they have nothing to gain.

The cable and satellite carriers are dead set against the idea of a smaller basic cable package. Bell Canada said its own basic service – which is larger than the one broadcasters are suggesting – is a loss-making venture that attracts few customers cash till payday.

"There’s little take-up, so what’s the point?" asked Mirko Bibic, Bell’s vice-president for regulatory and government affairs.

Rogers Communications Inc. argued a slightly different position on Monday: that a basic TV package, such as the one suggested by the CBC, would remove channels from Canadians and force them to replace them at a cost, leading to a widespread consumer backlash.

Pam Dinsmore, vice-president, regulatory, for Rogers Cable, said a "skinnier" package is a customer-friendly way of loading additional fees onto consumers.

Earlier, in a formal presentation to the CRTC, CBC/Radio Canada used the example of Quebec’s Vidéotron as a possible model. Under that system, consumers pay a cheaper rate for a more basic package and extra for non-basic, specialty channels.

CBC also argued Tuesday for the right to negotiate a fee for its local signals.

The CRTC has twice rejected proposals by broadcasters for so-called "fee-for-carriage," but is hearing from both sides in the debate for a third time.

Broadcasters including the CBC, Global and CTV are asking the federal government to step in and find a way to force cable and satellite providers such as Rogers Communications, Bell Canada and Shaw to sit down and negotiate a fee to carry local TV.

The carriers want to keep the status quo, which is profitable for them. However, broadcasters say their current business model is "broken" and losing them money as advertising declines.

If broadcasters win before the CRTC, the cable and satellite providers have said they would have no choice but to pass the cost on to consumers in the form of what they call a TV "tax."

The hearings continue until Nov. 27.

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