Tuesday, June 30th27.3°C

Consumer confidence rises

Consumer confidence showed a solid gain in June following a modest increase in May, supporting the view that strong job gains are giving a boost to the overall economy.

The Conference Board said Tuesday that its consumer confidence index rose to 101.4 in June, up from a May reading of 94.6. The June level matches the level in March. The index took a tumble in April.

The index is now 17.4 per cent higher than it was a year ago, evidence that the economy is poised to enjoy stronger growth in coming months.

The June gain, which was stronger than economists had expected, was supported by increases in consumer views about current conditions and the labour market. Those expressing the view that jobs were plentiful rose to 21.4 per cent, up from 20.6 per cent in the previous month.

"After a brief setback, consumer confidence appears to be surging anew," said Jim Baird, chief investment officer at Plante Moran Financial Advisors. "Continued improvement in job market conditions and income growth should help sustain an optimistic mood and provide fuel for spending growth."

After a dismal start to the year, the economy has been showing signs of a rebound. In June, the labour market created 280,000 new jobs and economists believe job creation will top 200,000 when the July jobs report is released Thursday.

The expectation is that stronger job growth will boost consumer confidence and lift consumer spending, which accounts for 70 per cent of economic activity.

"Overall, consumers are in considerably better spirts," said Lynn Franco, director of economic indicators at the Conference Board.

The economy went into reverse in the first three months of the year with the gross domestic product, the broadest measure of economic health, contracting at an annual rate of 0.2 per cent.

Analysts are predicting a better performance in the April-June quarter with forecasts of growth rebounding to 2 per cent or better and accelerating even further to growth of around 3 per cent in the second half of the year.

A separate survey of consumer sentiment compiled by the University of Michigan that was released last week showed a gain to the highest reading since January.

The Canadian Press


Nicotine poisoning on rise

Federal health officials are considering whether to require new warnings and child-resistant packaging on liquid nicotine formulas used with e-cigarettes and other emerging tobacco products.

The Food and Drug Administration said Tuesday it is responding to an uptick in nicotine poisonings reported by emergency rooms and poison centres nationwide, many involving infants and children. The agency said in an online posting it is considering whether "it would be appropriate for the protection of the public health to warn the public about the dangers or nicotine exposure" and "require that some tobacco products be sold in child-resistant packaging."

Liquid nicotine is primarily used to refill e-cigarettes, a fast-growing market encompassing hundreds of products and an estimated $2.1 billion in sales. But the agency also has concerns about other novel tobacco products hitting the market, including dissolvable nicotine strips, lotions, gels and beverages.

The agency will seek public comment on a number of questions surrounding the proposed warnings and safe guards, according to a government memo due to be published Wednesday.

Under a 2009 law, the FDA gained authority to regulate some aspects of cigarettes and other traditional tobacco products. Among other things, the agency can restrict advertising to youth, require warning labels and evaluate new tobacco products for their health risks.

But since e-cigarettes and other liquid-nicotine products do not actually contain tobacco, they are not covered by the original law.

A year ago, the FDA released a proposal bringing e-cigarettes and other newer products under its authority. The agency was slated to finalize that regulation this month, but an FDA spokesman said Tuesday that the agency "hopes to finalize the rule this summer."

Anti-tobacco activists applauded the FDA proposal, but also said the FDA must complete its regulations for new products.

"We're pleased that the FDA is taking this step, but this is not a replacement for quickly issuing a final, strong deeming rule that regulates all tobacco products and addresses flavours and marketing," said Susan Liss, executive director for the Campaign for Tobacco-Free Kids, in a printed statement.

The FDA will take comments from the public for 60 days on more than two dozen questions, including:

  • what language to use on any nicotine exposure warnings
  • whether to use graphic warnings about nicotine exposure
  • whether child-resistant packaging should be required for products besides liquid nicotine

E-cigarettes are battery-powered devices that heat liquid nicotine to produce an odourlessvapour that users inhale. Many brands also feature flavours, such as mint, cherry or coffee. Manufacturers have sometimes touted the products as a less dangerous alternative to smoking because they don't contain the cancer-causing ingredients found in many traditional cigarettes.

But public health officials have been highly skeptical of such claims, pointing out there are no definitive studies on their health effects.

Scientists from the Centers for Disease Control and Prevention say that nicotine is harmful to the developing brain. And e-cigarettes could be a new way of introducing kids to nicotine, they warn.

The number of high school students who have tried e-cigarettes tripled last year — to more than 13 per cent — while traditional teen smoking hit a new low, according to recent figures from the CDC.

The Canadian Press

Questions hover over Rouge

In its short life, Rouge has been credited with giving Air Canada a financial boost and shaking up the country's airline industry, but at least one analyst says the parent company may be digging itself into a hole with its expansion strategy.

By stuffing its planes with more seats and paying lower wages, the airline subsidiary has dramatically cut costs and provided a travel alternative for consumers who don't mind sacrificing space for cheaper prices.

Analyst David Tyerman of Canaccord Genuity says Rouge appears to be a financial success even though the company doesn't segment the subsidiary's results.

"I think the proof of that would be that they've rolled it out so aggressively," he said.

From an initial start with four planes, Rouge celebrates its second anniversary on Canada Day with 33 narrow-body and larger aircraft that mainly serve southern sun destinations and Europe.

Flights have also been added to Osaka, Japan, Lima, Peru, and six U.S. vacation spots. Domestically, Rouge recently began connecting Toronto to Abbotsford, B.C., and Sydney, N.S. Next year it will add London Gatwick.

Some of the destinations are new, others are destinations previously covered by the mainline carrier. Since 2009, Air Canada (TSX:AC) has increased its international capacity by 50 per cent, partly due to Rouge.

That has put extra pressure on rivals such as Transat AT (TSX:TRZ.B), Sunwing, WestJet (TSX:WJA) and Signature Vacations to keep prices low.

"Everybody complained about pricing to the sun destinations last winter. Rouge was part of the problem," Tyerman said.

The extra competition is good for consumers, especially those willing to put up with less legroom, he said. Rouge has tinkered with the airplanes by adding some business class seating to appeal to passengers willing to pay a little more for extra space.

By the end of 2017, the Rouge fleet is expected to reach the 50-plane maximum currently permitted under union contracts.

But Ben Cherniavsky of Raymond James has warned that Air Canada hasn't fully heeded the lessons of Tango, its first low-cost airline effort that collapsed in 2004.

He said Air Canada runs the risk of "diluting" key hubs and creating brand confusion among customers by operating flights to Abbotsford and Gatwick on Rouge, while the mainline carrier flies at higher prices to nearby Vancouver and Heathrow airports.

Cherniavsky said passengers will travel one hour by land to Abbotsford for discounted flights. The analyst also said Air Canada will have to match domestic rival WestJet's lower fares to Gatwick, potentially prompting some Heathrow passengers to switch London airports.

That could have potential implications across the airline's network, he wrote in a report, adding it may be cheaper to buy a Rouge ticket to Gatwick from Winnipeg and get off in Toronto, than to fly on the mainline carrier between Winnipeg and Toronto.

"What remains to be seen is whether or not they are simply digging themselves deeper into a hole."

Air Canada said its senior executives were not available for an interview. In its last quarterly conference call on May 12, Ben Smith, president of passenger airlines, said the market is starting to notice positive change.

"With our revised and enhanced model with Rouge, with our different cost structure now at regional and at mainline, we can access pockets of demand all over the place, in particular the leisure markets that were not attractive to us in the past."

The Canadian Press


GDP edged down

The Canadian economy slipped in April, hurt by weakness in the mining and energy sectors, to post the fourth consecutive monthly decline.

Statistics Canada said Tuesday that the country's real gross domestic product edged down 0.1 per cent for the month.

Economists had expected the country's real gross domestic product to gain 0.1 per cent, according to Thomson Reuters.

The pullback for April follows a first quarter that saw the economy contract at an annual pace of 0.6 per cent.

"The oil shock continues to reverberate through the Canadian economy, in all its various forms. GDP came stumbling out of the gate in 2015 with four consecutive monthly declines, suggesting it will need some solid gains in the next few months just to keep it out of the red for the entire first half of the year," Bank of Montreal chief economist Doug Porter wrote in a report.

"This latest growth disappointment — along with the rumbling uncertainty surrounding Greece — has simply cranked up the odds of another Bank of Canada rate cut at some point this year, and heaped renewed downward pressure on the Canadian dollar."

Statistics Canada said a decrease in the output of goods-producing industries outweighed an increase by the service sector.

Weakness in the mining, quarrying, and oil and gas extraction sectors led to the goods production group to drop 0.8 per cent in April.

Mining, quarrying, and oil and gas extraction contracted 2.6 per cent in April, down for a sixth consecutive month.

Service-providing industries grew 0.3 per cent in April, helped by wholesale trade.

The Canadian Press

TSX gains after Greek crisis

The Toronto stock market pushed ahead with gains in late morning trading as Greece inched towards the default deadline on its loan to the International Monetary Fund.

The S&P/TSX composite index moved higher towards midday, rising 66.17 points to 14,556.32, while the loonie traded at 80.13 cents US, down 0.57 of a U.S. cent.

Traders appeared mostly unfazed by the looming midnight cutoff in Greece, which suggests that at this point few expect an outcome any more negative than is already being anticipated.

The Dow Jones Industrial average rose 58.56 points to 17,654.91, while the Nasdaq moved up 24.39 points to 4,982.85 and the S&P 500 picked up 7.72 points to 2,065.36.

Oil prices made some advancement, with the August contract lifting 47 cents to US$58.80 a barrel while the August gold contract fell $10.70 to US$1,168.30 an ounce.

Statistics Canada reported the latest real GDP figures, showing that Canada's economy was pulled down 0.1 per cent in April, affected by weakness in the mining and energy sectors.

Riding the final hours of Greece's midnight deadline, 19 finance ministers of the eurozone plan to meet Tuesday evening to assess the latest proposals from Athens that would keep the bailout talks moving forward.

Eurozone top official Jeroen Dijsselbloem said the ministers will meet five hours before the European part of Greece's bailout program expires.

Wall Street suffered its worst session of the year on Monday while the Toronto stock market faced a similarly deep plunge — the worst since dropping almost 361 points on Jan. 5.

The Canadian Press

Lufthansa offer 'inadequate'

A lawyer for relatives of people killed in the Germanwings crash in March says parent company Lufthansa has made a compensation offer.

Elmar Giemulla said in an emailed statement Tuesday that the company is offering 25,000 euros ($27,740) in compensation per passenger, plus payments of 10,000 euros each to immediate relatives. He described that as "completely inadequate."

Prosecutors believe the Airbus A320 was intentionally crashed into a French mountain by co-pilot Andreas Lubitz on March 24, killing all 150 people on board Flight 9525 from Barcelona to Duesseldorf.

Immediately after the crash, Lufthansa offered aid of up to 50,000 euros ($56,000) per passenger to their relatives, independent of any eventual compensation payments.

The Canadian Press

Greece won't pay IMF loan

Greece is set to become the first developed nation to not pay its debts to the International Monetary Fund on time, as the country sinks deeper into a financial emergency that has forced it put a nationwide lockdown on money withdrawals.

Greece owes the IMF about 1.6 billion euros ($1.9 billion) by the end of Tuesday but has run out of money and after five months of talks with creditors, has no prospect of getting new rescue loans.

Finance Minister Yanis Varoufakis, asked whether Greece would meet Tuesday's repayment, replied: "no."

The European part of Greece's international bailout expires at the end of Tuesday, and with it any possible access to the remaining rescue loans the country needs to pay its debts.

"The program runs out tonight, at exactly midnight central European time," German Chancellor Angela Merkel said in Berlin. "I know of no solid indications to the contrary."

The heightened crisis, which peaked over the weekend after Prime Minister Alexis Tsipras called a referendum on creditor proposals for reforms in return for bailout loans, has increased fears the country could very soon fall out of the euro currency bloc.

If Greece doesn't repay the IMF by the deadline, it will be officially in arrears and will no longer have access to funding from the body until it clears its arrears. This, IMF chief Christine Lagarde told the BBC last week, has "never happened in the case of an advanced economy."

Straight after the referendum call, in which the government is advocating a "no" vote, Greeks began rushing to ATM machines. The referendum is set for Sunday and the government declared all banks will remain shut for at least a week. Greeks have been limited to cash withdrawals of 60 euros ($67) per day.

Capital controls began Monday and will last at least a week, an attempt to keep the banks from collapsing in the face of a nationwide bank run.

There was speculation Tuesday that an 11th-hour deal might be possible, with reports that Tsipras was to undertake an initiative based on an offer by European Commission President Jean-Claude Juncker. Markets in Europe rose on the hopes for a resolution of some kind.

"Of course, we are not going to cut off our channels of communication after midnight tonight," Merkel said. "That means that the door is open for talks, but that is all I can say at this hour."

Asked whether there was a chance of a deal, Varoufakis told reporters outside the finance ministry: "We hope."

Tsipras spoke by phone Tuesday with Juncker, European Central Bank chief Mario Draghi and European Parliament president Martin Schulz, a Greek official said, but without revealing the content of the discussions. The official spoke on condition of anonymity in line with government regulations.

In Brussels, European officials said the Commission chief was willing to help give Tsipras a belated way out of his financial crisis if he accepts creditors' conditions and campaigns for staying in the euro.

An EU official, who asked not to be identified because of the sensitivity of the talks, called it "a sort of last-minute offer" before Tuesday's dual deadlines.

Tsipras would need to write to Juncker and other leaders saying he accepts the latest offer, which was on the table last weekend. He would also have to change his position on Sunday's referendum.

Beyond accepting the creditors' proposal, Commission spokesman Margaritis Schinas said the offer would also involve unspecified discussions on Athens's massive debt load of over 300 billion euros and around 180 per cent of GDP. The Greek side has long called for debt relief, saying its mountainous debt is unsustainable.

Juncker had expected an answer before midnight Monday, but was still waiting by early afternoon Tuesday.

In Athens, Euclid Tsakalotos, alternate foreign minister and the co-ordinator of the Greece's bailout negotiating team, suggested there was no particular offer to discuss.

Asked by reporters outside the prime minister's office what the answer to the proposal would be, Tsakalotos replied "What proposal? Did they send us something?"

Tsipras argues the demands from creditors for further, tougher austerity measures cannot be accepted after six years of recession.

European officials and Greek opposition parties have warned a "no" vote in the referendum will lead Greece out of the eurozone and potentially out of the broader 28-country European Union. The government has responded by saying this is scaremongering, and that a rejection of creditor demands will mean the country is in a better negotiating position.

The crisis has roiled global markets as investors fret over the repercussions of a Greek debt default and its exit from the euro — developments that could derail a fragile global economic recovery, as well as raise questions over the long-term viability of the euro currency.

The last-minute attempts to negotiate a deal for Greece helped stocks Tuesday. The Stoxx 50 index of top European shares was up 0.2 per cent, having been down 0.8 per cent earlier.

Tsipras was defiant in a television interview late Monday, urging voters to reject creditors' demands. More than 13,000 people gathered in Athens to support him and denounce Greece's creditors, as they chanted: "Take the bailout and go!"

A protest by supporters of a "yes" vote is planned for Tuesday night.

The government insists a "no" vote will not mean an exit from the euro, with Tsipras saying in his Monday night interview that Europe would not dare kick Greece out of the joint currency.

Varoufakis went further, threatening court action if attempts were made to remove the country from the joint currency.

"The Greek government will make use of all our legal rights," Varoufakis told Britain's Telegraph newspaper.

"We are taking advice and will certainly consider an injunction at the European Court of Justice. The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable," he told the paper, in comments released by the ministry.

On the streets of Athens, Greeks began adjusting to the new reality of restricted cash. Pensioners have been hit particularly hard, as many do not have bank cards and are completely cut off from cash.

The finance ministry said it would open about 1,000 bank branches across the country for three days from Wednesday to allow pensioners without bank cards to make withdrawals. But the limit for them would be set at 120 euros for the whole week, rather than the 60 euros per day allowed for those with bank cards.

The Canadian Press

Banks leery of ex-grow ops

At first glance, the mid-century, three-level Winnipeg home was everything that Sarah Fehr and her fiancee had been looking for.

It was located in the right neighbourhood, had a double garage and the backyard was spacious enough for the couple's two pugs to frolic in.

Perhaps most importantly, it was reasonably priced.

However, a quick Google search revealed the home's shadowy past: it had been busted several years earlier for housing a marijuana grow operation.

While former grow ops may seem like a good deal to some buyers, experts caution that banks and insurers are increasingly shying away from these properties — even after all of the necessary remediation has been done.

"It's always been strict, but it was a lot looser four or five years ago," says Jeff Mark, co-founder of broker Spin Mortgage, adding that only credit unions and subprime lenders are willing to finance these homes, often at higher rates than those offered by the banks.

Running a grow-op in a residential home can cause extensive damage that may be pricey to remedy.

High levels of moisture can cause mould to grow in the walls. Pesticides and other chemicals can seep into carpets and walls and contaminate the air. Even the home's structural integrity and electrical wiring may be compromised.

Before a lender will agree to mortgage a former grow op, a battery of costly tests must be performed to ensure it is inhabitable.

Fortunately in Fehr's case, the seller had already performed most of those tests, and the local credit union was willing to provide a mortgage. But finding insurance proved to be a headache, says Fehr.

"There were insurers who flat out said, 'No, we will not touch a grow-op,'" says Fehr.

Eventually, after jumping through all of the regulatory hoops, the couple managed to close the deal and take possession of the home late last year.

But brokers say the process can be so arduous that many buyers throw in the towel, adding that in an increasing number of cases, even a single marijuana plant is enough to stigmatize a home.

"The problem is that everything gets painted with the same brush," says Scott Dawson, a British Columbia-based mortgage broker with Verico Paragon Elite Lending. "Whether there's one plant or a number of plants, it's all kind of lumped in together as a grow-op."

Mark of Spin Mortgage recalls one loan application that went up in smoke because the disclosure statement said a single marijuana plant had been found in the closet. The house had not undergone any grow-op related modifications, he says.

"At the end of the day it comes down to the bank's discretion," says Mark. "It can be unfair in certain circumstances."

Brokers say the banks are concerned that stigma surrounding the home's criminal past will reduce its resale value, making it difficult for the bank to recoup its investment if the borrower defaults on the loan.

"If it's more difficult for them to liquidate, they just don't want that on their books," says Dawson.

Such strict policies can have some inadvertent side effects, says Mark. For example, even though most provinces require sellers to disclose if a property was formerly a grow-op, some may not disclose that, he says.

"I'm sure there are many deals that go undetected because of people withholding that information," says Mark. "There are probably people out there living in a former grow-op that don't even know it."

The Canadian Press

Silvertip Mine gets go-ahead

The British Columbia government has issued a permit allowing construction to start on the proposed $50-million Silvertip Mine just south of the Yukon border.

The Mines Ministry says the underground silver, lead and zinc mine could operate for up to 21 years and create up to 200 jobs when it is in full production.

Mines Minister Bill Bennett says JDS Silver Inc., has signed a benefits agreement with the Kaska First Nation.

Bennett says the mine will store its tailings in above-ground and underground facilities, using above-ground dry-stack tailings rather than a tailings pond.

JDS Silver's chief operating officer Kevin Weston says the mine will be one of the most environmentally responsible operations in the province.

A massive tailings pond failure at the Imperial Metals mine in central B.C. last summer has focused intense scrutiny on mining operations across the province.

The Canadian Press

NBC severs ties with Trump

NBC said Monday that it is ending its business relationship with mogul and GOP presidential candidate Donald Trump because of comments he made about Mexican immigrants during the announcement of his campaign.

NBC said it would no longer air the annual Miss USA and Miss Universe pageants, which had been a joint venture between the company and Trump. Miss USA has aired on NBC since 2003 and this year's edition was set for July 12; NBC said it hasn't been determined what will air in its place.

The network said that it has already begun exploring ways to air future seasons of the reality series "Celebrity Apprentice" without Trump as host. Reality show producer Mark Burnett continues to work on that show. "The Apprentice," which Trump also hosted and does not feature celebrities, is on hiatus.

"At NBC, respect and dignity for all people are cornerstones of our values," NBC said in a statement.

Trump attributed NBC's decision to a clash in view points on immigration, saying his views were strong and NBC's "very weak." He said he anticipated losing the business relationship and that he's not apologizing for his statements because they "were correct."

"Whatever they want to do is OK with me," Trump told reporters in Chicago after a campaign speech to civic leaders.

He said he'd consider suing, as he plans to do with Univision which announced last week it would not air either of the two pageants.

"When I come out with a strong immigration stance, and I'm very strong on borders and I'm very strong on crime, that maybe I'll lose NBC along the way," he said.

During his presidential kickoff speech, Trump said Mexican immigrants are "bringing drugs, they're bringing crime, they're rapists and some, I assume, are good people." He called for building a wall along the southern border of the United States. Trump later said that his remarks were directed at U.S. policymakers, not the Mexican government or its people.

The National Hispanic Leadership Agenda, a group of 39 Latino advocacy organizations, had called on NBC to get out of business with Trump. Similarly, a petition urging the same thing on the Change.org website had gathered more than 218,000 signatures.

The Canadian Press

Greece: What's next Q&A

Greece has entered the twilight zone.

Out of money, cut off by its creditors, its banks shut, the struggling country will vote Sunday on whether to accept painful cutbacks in return for desperately needed financing.

Between now and then Greece remains suspended between collapse and an uncertain rescue, between membership in the 19-member euro club and the possibility of a humiliating exit.

A look at what's ahead:


Q: What is next deadline for Greece?

A: On Tuesday, the main part of Greece's bailout deal expires. With no agreement to release the last 7.2 billion euros ($8.1 billion) from that deal, Greece is on its own.

An EU official said that after the deal expires, it would take weeks for creditors — other eurozone states and the International Monetary Fund — to put a new agreement on track.

Tuesday is also the day Greece has to pay a debt of about 1.5 billion euros ($1.7 billion) to the IMF. If Greece doesn't pay, it will take a while for the IMF to actually declare Greece in default. Credit ratings agencies say arrears to the IMF will not immediately trigger a default crediting rating for Greece.

But the IMF won't give Greece more money unless the arrears are taken care of. That puts Greece in the same bin with fragile, war-torn developing countries in Africa and Latin America.


Q: And after Tuesday?

A: Prime Minister Alexis Tsipras has called a referendum for Sunday. Greeks will be asked to vote if they support a bailout deal that creditors have proposed that involves budget cutbacks and tax increases in exchange for the remaining loans in the country's rescue program.

Tsipras is urging people to vote "no."

The catch, however, is that by the time of the vote, Greece's bailout program would have expired. So it's unclear exactly what the Greeks would vote on and how the question would be framed.

Jean-Claude Juncker, president of the EU Commission, has urged Greeks to vote "yes" to a deal, no matter how it is worded.

A "no" vote could mean euro exit is closer for Greece, as the country would have no outside financial aid.

Some think a "yes" could restart talks. Joerg Kraemer, chief economist at Commerzbank, says that "should the electorate vote in favour of a compromise, the eurozone members will not be able to ignore that and will resume negotiations."

A "yes" vote, however, could lead to the collapse of the Greek government, as it is unclear it would be able or willing to implement a deal with creditors that it had so vehemently resisted.


Q: Is a deal to save Greece still possible?

A: Technically, yes. Pierre Moscovici, the EU's top economic official, said Monday that a deal was "a few centimetres" away.

EU officials and creditors indicate they are still willing to strike a deal. Tsipras, however, has dismissed all their proposals so far as insufficient.


Q: Will Greece leave the eurozone?

A: Many see Greece's decision to close the banks as a step closer to leaving the euro.

The banks' trouble is a bad sign, because the Greek government would need billions of euros if it has to rescue them without outside support. Until Sunday, the ECB had been keeping the banks afloat by increasing emergency credit as deposits fled.

A modern economy needs functioning banks. For Greece that would mean printing a new currency and using it to refloat the banking system.

Greece is also having serious trouble paying its day-to-day bills for salaries and pension.

If it starts issuing scrip — official IOUs for payment later — that could be the first step in introducing a new currency.


Q: If Greece leaves the euro, will the shared currency fall apart?

A: Many economists say no.

Since its troubles over high government debt started in 2009 — in Greece — the eurozone has built anti-crisis measures. Those include a pot of money to rescue troubled governments and an offer by the ECB to buy the bonds of governments facing market pressure. The ECB's current 1.1 trillion euro bond-buying monetary stimulus program has further insulated markets from panic. The ECB says it will take additional steps if necessary to keep Greece's troubles from spreading.

In the longer term, however, some experts think a Greek departure sets a bad precedent. Investors might think other countries could leave, and would require higher interest to lend those countries money. That would hurt the countries financially, in the longer term, and market pressure could conceivable force them out too if they run into trouble.


Q: Will a Greek exit from the euro hurt my investments, as the Lehman Brothers collapse did in 2008?

A: Stock were down globally on Monday, though there was no outright panic.

U.S. Treasury Secretary Jacob Lew says no one really knows what the fallout would be from Greek exit. Which is why he thinks it should be avoided.

Demetrios Efstathiou, economist with ICBC Standard Bank, says it would not be comparable to 2008.

"The collapse of Lehman Brothers came as a shock to the markets," Efstathiou said. "In contrast, Greece's dire financial position has been discussed to exhaustion, for many years now, and its bonds have been trading at distressed levels for many months."

Take your pick.

The Canadian Press

Musicians look to hook up

In your quest to find a date, a spouse or a hook-up, you might discover something else when using dating apps: new music.

From Madonna to Mariah Carey, an increasing number of acts are looking to platforms like Tinder and Match to promote their music and reach their fans on-the-go. Madonna's latest album was advertised on Grindr, an app for gay men, while Jason Derulo looked to Tinder to debut a music video.

Carey launched a profile on Match.com to premiere her music video for the single, "Infinity," and last week DJ-producer Afrojack took over Match's Twitter account for eight hours to answer questions about love and relationships while promoting his new single, "SummerThing!"

"You want to go where your fans are, where your potential fans are. And you can't just promote on iTunes — you've got to think of other ways to reach an audience," said Joel Simkhai, the founder and CEO of Grindr.

Simkhai said Madonna's team contacted Grindr about collaborating. They launched a contest around Valentine's Day where users would change their profile photos to mimic the album cover of "Rebel Heart" — where Madonna's face is wrapped with wires. Five winners earned a chance to live chat with the pop icon, who released the album in March.

"She was very keen with having chats with actual Grindr users," Simkhai said. "That was her idea."

Gay fans have long supported Madonna, who has advocated gay rights for decades. Grindr also worked with Lady Gaga in 2011 when she released "Born This Way," even providing a link to iTunes to download the No. 1 hit.

Zedd, the Grammy-winning DJ-producer, worked with Tinder to promote his album, "True Colors," released last month. While searching for suitors, Tinder users would come across Zedd's promotional profile and if they swiped right — which means "like" — they could purchase the 25-year-old's album at a discounted price of $3.99 (it currently costs $7.99 on iTunes).

"Music is something that is so woven into the life of millennials, as is meeting new people, that there's just an incredible amount of overlap between the two," said Phil Schwartz, Tinder's head of marketing. "Tinder's always been talked about as a social discovery app, and I think this is more evidence that this is true."

"Tinder is where millennials are, and if you combine that with the fact that the platform is highly, highly engaging, you have something really, really powerful," he added.

Tinder or Interscope Records, Zedd's label, wouldn't say how many albums sold on Tinder, but the sales from the app counted toward the 39,000 copies "True Colors" pushed in its first week, helping it debut at No. 4 on the Billboard 200 albums chart.

Schwartz said 85 per cent of Tinder users are between the ages 18-34, and the average user spends about 11 minutes on the app each day — one of the main reasons Derulo launched the video for "Want to Want Me," a Top 5 hit, on Tinder.

"I see this app as the wave of the future. I know my fans will swipe right," Derulo said in a statement.

PlentyofFish also worked with Derulo when the website appeared in the music video for his song "Ridin Solo" in 2010. The dating service also appeared in Britney Spears, Flo Rida and Kesha's videos. In addition to finding a place in Gaga's "Telephone" video, PlentyofFish worked with the star during a U.S. tour, giving fans a chance to win tickets and backstage passes.

Other artists also have found ways to work with dating apps: Hilary Duff, a regular Tinder user for real dates, used the app's interface in her latest music video, and Limp Bizkit frontman Fred Durst is the director behind recent commercials for eHarmony, the dating service that has worked with Natalie Cole and used her hit, "This Will Be," in TV and radio ads.

Grindr — which has 2 million active daily users — said the company's success with music partnerships is leading to more work this summer. After collaborating with Madonna, who has a deal with Live Nation, Grindr is continuing to work with the concert promoter and is expected to launch campaigns with Nicki Minaj and Idina Menzel.

Grindr is also expected to work with Ciara, Jessie J, Disclosure and others through Goldenvoice, the company that created the Coachella Valley Music and Arts Festival, operates music venues and promotes hundreds of concerts each year.

"This is a win-win for us. Our users are very interested in music, very interested in entertainment," Simkhai said. "We like to show them things that (are) relevant to them."

The Canadian Press

Greek crisis drags markets

Losses intensified on the Toronto stock market near midday as worries grew over whether Greece could be headed for a debt default.

The S&P/TSX composite index fell 254.17 points to 14,553.92, near its lows of the session.

Greek Prime Minister Alexis Tsipras made a surprise call for a referendum next Sunday focused on reform proposals the country's creditors demand should be taken to get access to blocked bailout funds.

In the meantime, strict controls have been placed on capital, with Tsipras closing banks and the country's stock market for the week.

Some of the biggest decliners on the TSX were financial stocks after bank stocks in Europe took a hit earlier in the day.

On Wall Street, traders reacted to the growing uncertainty and its impact across the globe.

The Dow Jones industrial average was down 191.68 points at 17,755.34, the Nasdaq index fell 59.01 points to 5,021.49, and the S&P 500 slid 21.12 points to 2,080.37.

In commodities, the crude contract dropped $1.16 at US$58.47 a barrel and the August gold contract rose $4.60 to US$1,177.80 an ounce.

The Canadian dollar was down 0.39 of a U.S. cent to 80.81 cents.

Greek uncertainty weighed heavy across the globe, with Asian and European markets also lower.

The Canadian Press

30 years of cellphones

Victor Surerus says the $2,700 he paid for his first cellphone 30 years ago was worth every penny.

It was July 1985 and Surerus says he needed the phone to help run his business as a travelling funeral director out of Peterborough, Ont. The phone attached to an aerial in his car and came with its own carrying bag.

He says his contract with Bell made him the first cellphone customer in Canada, and that honour didn't come cheap. In those early years, his annual bills amounted to roughly $10,000.

"This way you had the freedom of doing things and you weren't tied down," he says now from his home in Roseneath, Ont.

"The price was high to pay for it, but it was worth it."

Cellphones debuted in Canada with a call between Art Eggleton and Jean Drapeau, then the mayors of Toronto and Montreal respectively, on July 1, 1985.

The regional monopolies that dominated the telephone industry in the early 1980s were concerned that mobile phones would disrupt their grip on nearly every aspect of the market.

Francis Fox, then the minister of communication in Brian Mulroney's cabinet, says the phone companies would defend their turf by saying their industry was heavily regulated and the CRTC was there to protect the consumer.

"Their great line was always, 'If it ain't broke, don't fix it,'" he says.

Shrugging off pressure from the Reagan administration to choose a bid from an American company, Fox and his team awarded the rights to the first private cellphone network to an upstart company that later became one of the three dominant players in Canada's wireless sector: Rogers.

"Obviously we thought that it would lead to the usual benefits of greater competition, which meant innovation, which meant new products, and which meant lower prices for the consumer," Fox said.

Fox says the recent quarrels between the federal government and Rogers, Telus, and Bell over competition are echoes of the arguments he heard 30 years ago involving the landline monopolies.

"What goes around comes around," he said.

Rogers Wireless executive vice-president Raj Doshi joined the company in 1989, when it was still CanTel AT&T and mobile telephones were still a luxury item.

Doshi has the original Cantel ad from January 1985 announcing "the end of the line for the telephone" framed in his office as a reminder that back then, competition was less important than explaining why people needed to spend thousands of dollars on a cellphone.

"When you talk about competitive intensity, it was very much around getting people aware of the proposition versus the pure competitive intensity between the two of us," he said. "The market growth potential was basically the whole of the Canadian population."

Wade Oosterman, now president of Bell Mobility, remembers it differently. In the mid-1980s he worked with George Cope, now Bell's CEO, getting Clearnet Communications Inc. off the ground, which was later bought by Telus.

"It was competitive right from the get-go," he said. "The cost of building out Canada is extraordinarily high: big land mass, relatively few people. When you're spending that kind of money on deploying your network, every single subscriber really, really counts."

The high price of cellphones eventually fell as technology advanced, networks matured, and new competitors such as Wind Mobile and Videotron entered the market, while others such as Public Mobile and Mobilicity were snapped up by the big three incumbents. Regional players Sasktel and MTS carved out a niche in the Prairies, becoming dominant in their regions.

"Canada and everybody who played a role in it should be quite proud of the state of the wireless industry in Canada today and the benefit it confers on consumers and businesses alike," Oosterman said.

The Canadian Press

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