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The OPEC cartel agreed on Wednesday to reduce production by 2.2 million barrels a day, the group’s largest cut ever, in an effort to put a floor on falling oil prices.

It is the third time producers have agreed to reduce their output in three months. Since September, members of the Organization of the Petroleum Exporting Countries have pledged cuts totaling 4.2 million barrels a day, or nearly 12 percent of their capacity, a record in such a short time.

But oil futures fell more than 8 percent, or $3.54, to settle at $40.06 a barrel, on Wednesday, as the market focused on the dire state of the global economy, and many experts doubted that OPEC would manage to carry out its promises, leaving markets oversupplied in the face of falling demand.

After riding a wave of rising oil prices for nearly a decade, the world’s top exporters are struggling in a weakening global economy, a dizzying slump in oil consumption and a sharp downfall in prices. In a move reminiscent of 1998, when oil fell below $10 a barrel, OPEC has asked outside producers to trim their production but seems to have found few takers.

"We want non-OPEC countries to contribute, and not just benefit from the impact of our cuts," Chakib Khelil, OPEC’s current president, said after the meeting, which was held under tight security in the coastal Algerian town of Oran.

"It’s in their own interest as well as in ours." Khelil said at a chaotic and confused news conference after the meeting.

Russia, which is not part of OPEC, sent a large delegation to Algeria, but analysts saw this as a gesture of political support that carried little more than symbolic value. Russian oil production is going to decline this year anyway because of government policies that have discouraged investments and harmed domestic producers.

The oil collapse has brought down gasoline prices for consumers, but it is devastating to producers, who have based their budgets for next year assuming prices well above $50 a barrel on line pay day loans.

The Saudi oil minister, Ali al-Naimi, set the tone on Tuesday as he arrived in Algeria, when he proposed a large cut to balance the market and trim commercial oil inventories that have been swelling well above their historic levels. Other representatives quickly backed the proposal.

The Saudis had until now been wary of acting too aggressively lest they derail any economic recovery. In June, as prices were still rising, they pledged to flood the market to prevent prices from spiking. But that did not prevent oil from rising above $145 a barrel the following month.

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Now, with the economy seizing up, the Saudis seem to have become much more concerned with the drop in prices, and their ability to prevent a complete collapse. Oil has fallen by $100 a barrel, or 70 percent, since peaking five months ago. King Abdullah recently said he would like to see prices at $75 a barrel, more than 50 percent above their current levels.

The cartel has not faced such a challenging environment since the early 1980s. Oil consumption is set to decline for the first time in 25 years because of the economic crisis.

The new target sets OPEC’s production at 24.85 million barrels a day, starting Jan. 1.

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Federal Finance Minister Jim Flaherty said Monday that no specific action by any one government can make the global economic crisis disappear but that Canada will continue to do its part.

Flaherty, who spoke to reporters after an event in Toronto, said Canada's government will continue to fulfill its obligations to stimulate its economy under an agreement by the Group of Seven most industrialized nations to try to reinvigorate the world economy.

He also said he has received input from the opposition Bloc Québécois about the budget he is preparing, but has not received proposals from the Liberals or the New Democratic Party, the two other opposition parties fast pay day loans. During a political crisis last week that threatened to bring down the Conservative government, the government asked the opposition for ideas on stimulating the economy.

The three opposition parties recently signed a coalition agreement that has the potential to topple the Conservatives from power.

But the government managed to win a rare suspension of Parliament last week and avoided being ousted by the coalition, which said the government's economic plan is inadequate.

Flaherty is scheduled to deliver a budget on Jan. 27.

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Call them resigned or defeatist, but two leading risk managers are already sure of one lesson from the crisis ravaging the global financial system: in one way or another, it’s happened before and it’ll happen again.

“For at least 10 to 15 years, people will remember this very painful experience, take it to heart and balance risk versus return more realistically,” said John Rowe, London-based executive vice president for SunGard, a financial software maker.

“But I say to my younger colleagues: don’t assume this is the last one. If you’re young enough you’ll see the next one,” said Rowe, who used to oversee market risk at Bank of America.

Leaders of the Group of 20 developed and emerging economies have ordered financial supervisors to conduct a root-and-branch review of the shortcomings in regulation and oversight that spawned the credit crisis and still-deepening global slump.

Speaking on a recent visit to Beijing, Rowe saw no need for supervisors to become heavy-handed. But, he said, they should require banks to demonstrate they have the capacity to process their trades from start to finish and value them daily.

“And they should say ‘if you can’t show us, we’ll get real tough’,” he said. “It would slow the pace of innovation to some significant extent, but it wouldn’t completely handcuff the process.”

Even then, Rowe said the best pricing and risk management tools struggle to capture “tail risk” — statistically improbable confluences of events that have materialized with alarming frequency during the crisis, bringing many banks to their knees free credit report.

“People have been too inclined to put complete faith in the scientific certainty of the numbers that come out of all these complicated systems and abandon a certain amount of common sense.

“Part of the problem is not derivatives or risk systems. It’s human psychology at fault here. We’ve met the enemy and it’s us.”

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Nikolaus von Bomhard, the chief executive of Munich Re (MUVGn.DE: Quote, Profile, Research, Stock Buzz), the world’s largest reinsurer, thinks he may have already spotted the next market land mine: before long, the availability of too much cheap cash will once more cause risk to be underpriced.

The appetite for risk may have faded for now, but von Bomhard said he suspected this was just a fad.

“Excess liquidity will sooner or later become an issue again,” he said in an interview at the weekend.

“One or two years out, it will take a lot of discipline to take the liquidity out and not fall into the trap again of chasing yield and disregarding risk.”

As for the claims side of Munich Re’s business, von Bomhard agreed with Rowe that managing risk is as much about trying to understand human nature and technological change as it is about analyzing actuarial tables. 

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For the world’s largest brewery, the sale of Labatt USA represents a small ripple in an ocean of beer.

But for brewery workers in Canada, it could mean the loss of up to 15 per cent of production in Canada within three years.

And for border-town beer drinkers, it means the future of two favourite brands, Labatt Blue and Blue Light, is in doubt.

Belgium-based InBev announced yesterday it had agreed to divest Labatt USA as part of a $52 billion (U.S.) deal to buy America’s largest brewer, Anheuser-Busch Cos.

The U.S. Department of Justice required the divestiture as a condition for approval of the larger deal.

"At this time, it’s too early to tell what the impact will be to our Canadian operations," Charlie Angelakos, a spokesperson for Labatt Brewing Company Ltd., said yesterday.

However, he confirmed the sale of Labatt USA to an unidentified third party would mean the end of production of U.S.-bound beer at Labatt’s Canadian breweries within three years.

The London, Ont.-based company said it brews all the Labatt beer sold in the U.S., which accounts for "just under" 15 per cent of Labatt’s total production in Canada.

The company declined to reveal which of Labatt’s seven breweries ships to the U.S. market, citing competitive reasons.

The breweries are in London, Ont., Edmonton, St freecreditscore. John’s, Nfld., Montreal, Halifax, Creston, B.C. and the recently acquired Lakeport Brewery in Hamilton.

Considered the best-selling Canadian brand south of the border, Labatt USA accounted for 1.7 million hectolitres of production last year.

InBev said yesterday the sale of Labatt USA would have no material impact on its earnings.

The brewer also said it has identified "a number of interested potential purchasers" but has not yet determined a fair market value for the asset.

InBev has owned Labatt since 1995.

Labatt Blue and Blue Light have less than 1 per cent of the broader U.S. market, but upstate New York accounts for 60 per cent of those sales, said Eric Shepard, executive editor of trade publication Beer Marketer’s Insights, based in Nanuet, N.Y.

In Syracuse, Buffalo and Rochester, Labatt competes head-to-head with Anheuser-Busch brands such as Bud and Bud Light. Regulators feared the merger could lead to price increases.

"This divestiture will ensure that consumers will continue to benefit from the significant competition between the merging companies in upstate New York," deputy assistant Attorney-General Deborah Garza said in a statement.

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Only five U.S. companies filed initial public offerings in the third quarter, an 87 percent drop from the third quarter of 2007, according to Hoovers Inc.

The five companies that went public on U.S. exchanges last quarter raised $917 million. That is down considerably from the 38 companies that went public a year ago, raising $11.2 billion.

“The IPO market is as bad as we’ve seen since 2003, and the ongoing troubles of the U.S. financial sector aren’t making conditions any friendlier for IPO aspirants and their underwriters,” said Tim Walker, Hoover’s industry expert.

The sobering third-quarter figures come on the heels of a 77 percent year-over-year drop in second-quarter filings and a 73 percent drop in first-quarter filings.

Among the companies that filed in the third quarter, Energy Recovery Inc. (NASDAQ: ERII) of San Leandro, Calif. had the best first day of trading, with shares gaining 16 percent. Rackspace Hosting Inc. (NYSE: RAX) of San Antonio had the worst first day—its shares dropped 20 percent the day it went public.

“Any company coming to the IPO market wants to feel sure that it can get a favorable hearing from potential investors,” said Walker. “If you’re Google or Visa, your brand ensures you’ll get that hearing. But if you’re anybody else – even a billion-dollar arm of an existing business that wants to spin off – you’re gambling right now that the week of your debut won’t be a market roller-coaster.”

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What’s better than a credit card that gives points for free flights?

How about a credit card that gives cash rebates?

You can book your own flights during seat sales, often a better deal than using the card.

There’s nothing worse than waiting years to collect points for a airline ticket, only to find you still have to pay hefty taxes and surcharges. If you have points piling up, you may be happier with cash rebates paid once a year that you can use to buy anything you like.

There are more cashback credit cards on the Canadian market than ever before. Let’s start with no-fee or low-fee cards.

The CIBC Dividend Card has three tiers of rebates. You get 0.25 per cent on net annual purchases up to $1,500, 0.5 per cent up to $3,000 and 1 per cent over $3,000.

Scotiabank’s Moneyback Visa card has the same three tiers of rebates. It has an $8 annual fee, but gives you an 18.59 per cent interest rate (lower than CIBC’s 19.5 per cent).

The TD Rebate Visa suits low spenders. It has just two tiers: 0.5 per cent on purchases under $3,000 a year and 1 per cent above that (up to $25,000 a year).

RBC’s no-fee Rewards Visa Gold and Rewards Visa Classic cards give you financial rewards. You can pay down an RBC mortgage, loan or line of credit, or contribute to a registered retirement savings plan or education savings plan.

Financial rewards are popular, accounting for 18 per cent of total gift certificate redemptions, says RBC spokeswoman Jackie Braden. People like to pay themselves first and get related tax benefits or grants.

BMO has a no-fee cashback reward option on its Mosaik MasterCard, giving 0.5 per cent on purchases and 1.5 per cent at Shell gas stations. (With the premium cashback option at $49 a year, you get 1 per cent on purchases and 2 per cent at Shell.)

Monty Loree, a blogger who writes about credit at www.canadian-money-advisor.ca, helped me find other cashback cards that looked enticing.

Citizen’s Bank lets you earn points for its financial products faxless payday loans. It donates 10 cents to non-profit initiatives worldwide each time you use the card.

At a cost of $45 a year, Citizen’s My Visa Rewards Plus card has a low interest rate of 11.25 per cent.

Capital One’s Cash Back Platinum Plus MasterCard, aimed at big spenders, gives you 1 per cent on purchases up to $10,000, 1.5 per cent up to $20,000 and 2 per cent on $20,000 or more.

It has a $59 annual fee and a variable interest rate of prime plus 15.05 per cent (equal to 19.8 per cent right now).

MBNA’s Premier Rewards Platinum Plus MasterCard gives you a 1 per cent rebate on all purchases with no limits. The annual fee is $29.

Finally, American Express has a Costco cash rebate card with three tiers: 0.25 per cent on the first $2,000, 0.5 per cent on the next $3,000 and 1.5 per cent on any amount over $5,000.

The maximum rebate is $500 a year, which requires $37,000 in spending.

While the Amex card is free, you have to pay for a Costco membership every year ($50). It’s the only credit card accepted by Costco stores. You can juice up your rebate by an extra 0.5 per cent when you carry a balance on the card.

Next week, we’ll look at the best deals in travel and merchandise rewards.

Ellen Roseman’s column appears Wednesday, Saturday and Sunday. You can reach her by writing Business c/o Toronto Star, 1 Yonge St., Toronto M5E 1E6; by phone at 416-945-8687; by fax at 416-865-3630; or at eroseman@thestar.ca by email.

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FRANKFURT–Europe's central banks offered up more cash to jittery banks on Friday, putting a combined $90 billion into money markets in a lockstep move aimed at stemming a loss in confidence in the face of a withering global financial crisis.

The move is aimed at boosting shaky confidence and persuading fearful banks to lend to each other. Banks have been increasingly reluctant to lend to each other as distrust spread throughout the financial system.

The European Central Bank, which oversees the 15-nation euro zone, said it offered $40 billion in the three-day tender with 64 banks bidding $96.7 billion. That compared to the $100 billion that banks bid for on Thursday.

In London, the Bank of England said it provided $40 billion, as well.

The Swiss National Bank said it received bids worth $21.1 billion from banks seeking access to the US$10 billion it provided.

Earlier, the Bank of Japan pumped another 2 trillion yen ($18.7 billion) into money markets, its seventh injection this week.

The move came a day after the U.S payday loan. Federal Reserve plowed as much as $180 billion into money markets abroad and the New York Federal Reserve's action to ease a spike in overnight lending rates by injecting $55 billion into the banking system.

On Thursday, the Fed authorized new swap facilities with the Bank of Japan for as much as $60 billion; $40 billion for the Bank of England and $10 billion for the Bank of Canada. All told, Fed action increased lines of cash to central banks by $180 billion to $247 billion.

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Maple Leaf Foods Inc. said freshly sliced meats from its now thoroughly sanitized processing plant in Toronto would begin reappearing on store shelves by the middle of next week.

The plant on Bartor Rd. had been found to contain the same type of listeria implicated in the deaths of at least 17 Canadians and has been closed since Aug. 20.

The company said it had started the process of reopening the plant yesterday, four weeks after efforts to locate the source of listeria led it to areas deep within two meat-slicing machines.

As part of Maple Leaf’s efforts to regain consumers’ confidence, the country’s largest food processor said it has implemented rigorous new sanitation and food safety procedures on all 84 meat-slicing machines in its plants around the country.

As well, the entire Bartor Rd. plant has been thoroughly sanitized six times, tested and given a clean bill of health by government inspectors, third party experts and its own staff, the company also said.

Maple Leaf Foods said it would conduct several test runs before releasing any new products into stores.

"We recognize that we have to rebuild consumers’ confidence," said Michael McCain, president and chief executive officer of the $5.2 billion food-processing giant. "I am confident in the machines, with adjusted protocols."

He said it could take anywhere from several months to a year to restore product sales, based on other product recalls of this nature.

McCain declined to be more specific, or speculate on how much the recall had cost the processor of fresh pork and chicken, bacon, and ready-to-eat meals cheap payday loans. The company’s initial estimate was $20 million.

"While we operated to the highest standards … our best efforts were not enough. We have learned from this tragic experience and we can and will do more," said McCain.

While closed, the plant underwent six sanitization procedures under independent supervision, McCain said.

The company will disassemble and deep-clean all its slicing machines on a regular basis, McCain said. It will also double its testing of possible sources of listeria in the surrounding environment, such as fridges, walls and floor drains.

While defending Canada’s food safety standards, McCain also announced plans to name a chief food safety officer at Maple Leaf, who will report directly to McCain on the latest innovations and processes.

And the company plans to assemble a food safety advisory panel, within three months, to look at industry-wide best practises, he said.

McCain said he’d welcome more government food safety inspectors in his plants.

The union representing federal inspectors has complained they are understaffed.

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Ontario’s energy regulator has given Hydro One the conditional go-ahead to build a new high-voltage transmission line that will carry wind and nuclear power from Bruce County to Milton.

The 180-kilometre line is expected to cost about $635 million and will run alongside a high-voltage line already linking the Bruce Power nuclear plant in Kincardine to a switching station in Milton.

The controversial project, expected to affect about 350 property owners along the route, has been touted as the largest expansion of Ontario’s transmission system in the past 20 years.

"I’ve always thought of this as a three-legged stool, and we got one of the legs," said Gary Schneider, project director at Hydro One.

Environmental and citizen groups doggedly protested the proposal, arguing the costs were too high and permanently boosting the existing line with new technologies would be sufficient. Some contended Hydro One wanted the new line to justify expansion of nuclear power.

The Ontario Energy Board disagreed, ruling the project was in the public interest "in regard to its impact on price, reliability and quality of electricity service to consumers." It found economic benefits of the line would exceed its expected cost.

Schneider said the next leg of approvals is an environmental assessment, a draft of which will be released Monday for 30 days of public comment, then revised and formally submitted to the environment ministry in early November.

"We hope that, in early 2009, we get a decision," said Schneider, adding the third leg of approvals involves acquiring the necessary land rights, as the new line will require a 60-metre widening of the existing transmission corridor no fax payday loan. "We’re hoping to start tabling those offers to landowners in October."

Owners who don’t accept the offers, set by a third-party appraiser, will be forced into a land expropriation process. Schneider said he hopes it doesn’t come to that, but added it likely will for some.

The new line likely won’t come into service until 2011.

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One of the most dangerous jobs on a construction site is inspecting the foundation or pier holes — also known as shafts. In 2004, safety concerns prompted the Missouri Department of Transportation to implement a rule requiring inspections on state highway projects be done without sending a person into the shaft.

To the engineers at one local company, that rule meant an opportunity to introduce technology that they hope will eventually eliminate in-person shaft inspections in all construction projects.

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Maryland Heights-based Geotechnology Inc. uses a camera meant for underwater exploration and observation to inspect shafts. The camera can take full-color video which can be streamed live to a computer on-site or recorded for later viewing. It also have a 360-degree pan, tilt and a zoom lens capable of focusing in on specific areas of the shaft.

All that means a safer work environment, said Phil Jozwiak, vice president for transportation and infrastructure at Geotechnology.

"Sending people down the shaft in such confined space … it’s risky," Jozwiak said. "You have to be in a harness, sometimes you have wear a respiratory device, there may be methane coming out of the hole."

Using a camera and pre-drilling probe holes also save time, Jozwiak said.

There are two ways a shaft is drilled and inspected. The first is when a contractor drills a shaft, it is cleaned out and another pilot hole, several feet deep, is dug at the bottom of the shaft to inspect the rock surface beneath it. If the rock is not strong enough, the shaft is dug deeper till a solid rock surface is found. And finally, someone is harnessed, equipped with safety gear and sent into the shaft to inspect it.

What they are looking for is clay seams or any anomalies in the rock surface that may indicate a weak spot, Jozwiak said.

The other method involves drilling a probe hole about two-inches wide and removing the rock core first cash advance. The core is then examined to determine if the location is strong enough and how deep the shaft needs to be dug, he said.

Then the shaft is drilled, and instead of a person, the camera is lowered into the hole. It is safer, more efficient and time-saving, Jozwiak said.

It’s also handy in situations where a bridge needs to be built over a stream or river. Shafts dug underwater cannot be examined without stopping the water flow and emptying the hole if they have to be inspected in person.

The camera is submersible and can be used as long as the water is not too murky, he said.

It is portable and lightweight and only needs one person to operate. Some of the other cameras in use have to be lowered from a drill rig or a crane or mounted at the rear of a vehicle, said Craig Kaibel, staff engineer for Geotechnology.

But Kaibel also found a few flaws in the system, one of them was stability.

Initially, engineers lowered the camera into the shaft on two cables, he said. But if it was zoomed or tilted rapidly, the camera started rocking back and forth on the cable.

"Looking at a rocking image would make you seasick," Kaibel said. "I took it out once and decided it wasn’t good enough."

It also was difficult to have the camera centered in the shaft to get a clear view of all sides.

Kaibel decided to make a few changes.

He created a light-weight steel frame that can be mounted at the top of a drill shaft and used to lower the camera into the shaft. He also attached a centralizer to the camera which keeps it in the center of the shaft and can be adjusted for a diameter of 12 inches to five feet.

Now when the camera moves, the movement is restricted by the centralizer and the image stays stable, Kaibel said.

The toughest challenge now is to convince more contractors and developers in the private sector to start using the camera as an alternative to sending someone to inspect the shaft, Jozwiak said.

"Everything is going in the direction of greater safety," Jozwiak said. "Some larger projects are already starting to use it. Pit is a matter of getting engineers and owners comfortable with it."

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