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Thursday, March 5, 2009

US stock markets dropped to twelve-year lows on Thursday, amidst falling confidence in the financial sector and worries over whether the US automobile manufacturer General Motors will be able to keep operating.

The Dow Jones Industrial Average dropped by 4.08%, or 280.52 points, at the closing bell, reaching a level of 6595.32, a new 12-year low. The Nasdaq Composite lost 54.15 points, or 4%, to 1299.59, while the Standard & Poor’s 500 plunged by 30.27 points, or 4.25%, closing at 682.60.

Every stock in the Dow Jones, other than Wal-Mart, either lost ground or remained even, and all stocks in the S&P 500 index lost ground.

General Motors’ shares lost 15.5% after the auto firm announced that its auditors had “substantial doubt” over whether it would be able to keep operating.

Shares of financial companies were lower by nine percent, with Bank of America losing 11.7% and Citigroup falling by 9.7%.

“What’s most worrisome is that we haven’t hit the crescendo yet,” said Bill Groeneveld, the head trader for vFinance Investments. “Asset-management divisions are getting calls to just liquidate everything, and we haven’t seen the big players come back in at all.”

“This is one of the worst bear markets in the last 100 years; it started out with the credit crisis and the subprime [loans], but it is like a forest fire that has raced across the clearing and ignited other parts: Autos, auto parts, the insurance companies have been hit very hard. The credit crisis is causing an unraveling of industry after industry because the banks don’t lend,” said David Dreman, the chief investment officer of Dreman Value Management.

European markets were also lower today, with the London’s FTSE index losing 3.2% and the DAX index of Germany falling by five percent.

Thursday, January 15, 2009

On Wednesday, Canadian energy company EnCana announced that it would pay a C$500,000 cash reward for information leading to an arrest and prosecution in four bombings of its natural gas pipelines. The explosions have occurred over the past three months in northeastern British Columbia.

While the Royal Canadian Mounted Police (RCMP) has been investigating the situation since the first explosion in October, there are still no suspects. Some residents in the area are vocally opposed to EnCana’s gas exploration, and have not been cooperative, according to the RCMP.

“There is a small group of individuals within the community who we have spoken to many times,” RCMP Sergeant Tim Shields noted. “They know full well who they are, and they have not been co-operative. And we are appealing to those people to do the right thing and come forward to our investigators and tell us what they know.”

The four bombings, which targeted pipelines, wellheads and a metering shed in the Tomslake community, have not injured anyone. Encana fears that residents or its employees may not be so lucky if there are further bombings. EnCana executive vice-president Mike Graham commented that, “Whoever is responsible for these bombings has to be stopped before someone gets hurt. We hope this reward will encourage anyone who has knowledge of those responsible for the bombings to come forward and help put an end to these dangerous attacks.”

The reward has elicited over a dozen tips since its announcement. While some of the tips have been “very low quality,” the RCMP remains hopeful and will continue to process all leads.

Rewards of smaller amounts may be paid out for information that aids the investigation but does not directly lead to an arrest. “After consulting with the RCMP and the Crown assigned to the prosecution, EnCana will determine the monetary value, if any, of the information provided to the investigation,” noted Graham.