North America

Italian Premier Silvio Berlusconi and German Chancellor Angela are taking a wait-and-see posture on aid to the auto industries that power both economies, while closely watching moves in the United States, the leaders said following a summit in the northern port of Trieste on Tuesday, the Associated Press reported. Automakers have been calling for aid to help them weather the slide in demand with the global financial crisis--while the United States considers a bailout for Detroit's General Motors Corp., Ford Motor Co. and Chrysler LLC.
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Pepsi Bottling Group Inc., the world's second-largest soft-drink distributor, lowered its 2008 earnings forecast and said it will eliminate 4.6 percent of its workforce in North America, Europe and Mexico, Bloomberg reported. Pepsi Bottling, which is 33 percent-owned by PepsiCo Inc., will cut 3,150 jobs, mostly in Mexico. Earnings per share will be $2.20 to $2.26 this year, down from the $2.32 to $2.38 Pepsi Bottling forecast in June, the Somers, New York-based company said today in a statement. The shares fell in New York trading.
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Eighty-five companies worldwide defaulted on their debt in the year through November 11, impacting a total of $284 billion, up sharply from the two previous years, Standard & Poor's said Monday. By comparison, there were only 22 defaults for all of 2007 and 30 in 2006, Reuters reported. Seventy of the 85 companies are based in the United States, five in Europe, four in Asia, three in Canada, two in Mexico and one in Russia, according to Diane Vazza, head of S&P's fixed income group.
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Brazil's important ethanol sector took a hit Friday after a major producer revealed that it filed court papers seeking protection from creditors while it restructures $100 million in debt, the Associated Press reported. Companhia Albertina sought the protection similar to Chapter 11 bankruptcy reorganization used in the United States but will continue operating, said Gabriel Andrade, an investment banker with Sao Paulo's Arsenal Investments who is advising the company. It appeared to be the first sign of trouble for an ethanol producer since the credit crisis hit the planet hard.
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Japan, the world's second-largest economy, has fallen into recession, the government said Monday. The country's gross domestic product contracted at an annual rate of 0.4 percent from July to September, marking the second consecutive quarter of negative growth, the Washington Post reported today. Japan's economy minister warned that the situation could worsen: Collapsing sales of Japanese goods in the United States and Europe amid the global downturn threaten to make the country's export-dependent economy even weaker in coming months.
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Storm Cat Energy Corporation announced that all of its wholly-owned U.S. subsidiaries filed for a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code, the International Business Times reported today. Storm Cat Energy Corporation was not included in the U.S. bankruptcy filing, nor did it file an application for creditor protection under the Companies' Creditors Arrangement Act in Canada. Storm Cat is in negotiations with its existing lenders to secure sufficient debtor-in-possession (DIP) financing.
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Seoul shares slipped 2 percent on Tuesday as demand worries following a bankruptcy filing by a major U.S. electronics retailer sent tech exporters such as LG Electronics lower, Reuters reported yesterday. Banks also fell on jitters about funding difficulties and rising bad debt. The United States is South Korea's second-biggest export market. Appliance and mobile phone maker LG Electronics dropped 6.99 percent and LG Display, a maker of flat screens for TVs and computers, declined 6.46 percent. Hynix, which produces chips used in computers and consumer electronics, fell 8.52 percent.
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There will be a steady upward march in personal and business bankruptcy filings in Canada as overspending and falling home prices catch up with individuals and as a slowing economy hurts businesses, Reuters reported yesterday. Canada's Office of the Superintendent of Bankruptcy said last week that total bankruptcies in September jumped 28.4 percent from the same month a year earlier. Individual bankruptcies were up nearly 30 percent nationwide, but businesses also posted a 9 percent increase.
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The number of bankruptcies in Canada rose 18.7 per cent to 8,836 in September--the majority filed by consumers--from 7,446 the previous month, the Ottawa Citizen reported today. On an annual basis, the Office of the Superintendent of Bankruptcy said that failures were up 28.4 per cent from 6,879 recorded in September 2007. Consumer bankruptcies jumped 19.6 per cent to 8,347 in September from 6,977 the previous month, and rose 29.8 per cent from 6,430 a year earlier. Business bankruptcies increased 4.3 per cent to 489 in September from 469 in August.
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