Time to stop saying sorry, Barclays says

The chief executive of Barclays PLC may be being brutally honest when he says it's time for bankers to stop apologizing for the financial meltdown. Bob Diamond may even be right. It's done, time to get on with it.

But millions of people have lost their jobs, millions of people have lost their homes, millions upon millions of wealth disappeared, and millions upon millions upon millions went to propping up the world's banks as the financial system neared collapse.

There's a reason they call it the biggest crisis since the Great Depression, and the best thing for a banker to do, given the groundswell of anger, might be just to lay low. Whether he's right or not.

“There was a period of remorse and apology for banks and I think that period needs to be over. We need our banks willing to take risks ... so we can create jobs,” Mr. Diamond told a parliamentary committee in London today, according to reports of the exchange.

Mr. Diamond was grilled by MPs, saying he was not unaware of the "emotion" surrounding bankers' bonuses. But he added that he's running a business, and that he has to balance the size of those payouts among everyone's expectations.

“Bonuses are not taken lightly," he said. "We are sensitive. We’re listening."

The issue of bonuses was a hot topic, but Mr. Diamond wouldn't say whether he'll waive his again.

• Time to stop saying sorry: Barclays boss

U.S. home market sees milestone

The meltdown of the U.S. housing market now has the ugly distinction as having eclipsed that of the collapse of the Great Depression.

A new report from Zillow.com, a real estate site based in the United States, shows the peak-to-trough plunge in U.S. home values reached 26 per cent in November, down from the June 2006 high. That's a shade more than the 25.9-per-cent drop between 1928 and 1933, Zillow chief economist Stan Humphries said yesterday.

November, Mr. Humphries wrote, marked the 53rd consecutive monthly decline in national home values, bringing them to the levels of October 2003.

"More worrisome, the pace of home value declines also notched up again with the monthly depreciation rate increasing to 0.78 per cent in November," he said. "This is the highest rate of monthly depreciation since February 2009."

Foreclosure liquidations fell to 0.94 of every 1,000 homes, down from 1.15 in October, though this was no doubt an "artificial dip" as evictions slowed markedly due to the U.S. foreclosure scandal.

"Look for the liquidation rate to increase again in December and likely reach new peak levels in 2011," Mr. Humphries said.

He noted, though, that despite last week's disappointing reading of the U.S. jobs market, economic indicators have been picking up, which ultimately will help boost the real estate sector.

"Unfortunately, this aid to the housing market will be longer term and more gradual," he said. "For at least the next six to nine months, the larger factors affecting the housing market that will produce more home value declines will be the excess inventory of homes, high negative equity and foreclosure rates, and weakened demand due to elevated unemployment."

Separately, Capital Economics said today, the jump in 30-year mortgage rates in the U.S. to just shy of 5 per cent, from a record low 4.2 per cent, has put "a small dent" in what already is a fragile outlook for housing.

"Higher mortgage rates threaten to extinguish the recent tentative upward trend in both mortgage applications and home sales," said senior U.S. economist Paul Dales.

• Judges target bank lawyers in U.S. foreclosure mess

Misery loves company

There’s something heartwarming in Japan’s pledge today to support Europe’s bailout efforts.

Anxiety over Europe’s debt crisis eased somewhat today as Japan’s finance minister, Yoshihiko Noda, said his country would buy up more than 20 per cent of the bonds that will be issued for the European Financial Stability Facility, the official name for the bailout fund.

“It would be appropriate for Japan as a leading country to buy a certain amount as a contribution and also to increase the trust in the deal,” Mr. Noda said.

Yes, Japan is a leading economy. It’s also the world’s most indebted nation, with a debt-to-GDP ratio of 200 per cent, and its own economic problems abound.

Markets are somewhat calmer today, and the pressure on the euro eased, boosted by Japan’s promise and by the fact that Greece sold €1.95-billion in debt today in a heavily oversubscribed auction, with a yield of 4.9 per cent. Bond yields in other of the so-called periphery countries, though still high, also dipped.

“While this may help liquidity in the short term for European debt and drive bond yields down a little it is unlikely to make any difference with respect to the problems within in Europe and probably only serve to delay the inevitable," said CMC Markets analyst Michael Hewson. "Until such times as European leaders grasp the fact that some form of restructuring is necessary the euro will continue to remain under pressure.”

At the same time, Portugal’s Prime Minister Jose Socrates said in a speech today that his country doesn’t need a bailout, despite the intense speculation in markets that Portugal is next.

Some observers believe the international support for Europe isn’t necessarily aimed at averting a bailout of Portugal, but of heading off what would be a far more significant rescue for Spain.

"Where Japan stopped short in its commitment to backstopping Europe's funding crisis was to avoid mentioning Portugal, Spain or Belgium," said Scotia Capital economists Derek Holt and Gorica Djeric.

"Their bonds nonetheless also rallied overnight. The move is significant, since it says that Europe will find buyers when it converts single name risk to a pan-European issue," they said in a research note.

"Maybe the EFSF in a convoluted European sort of way is playing a similar role to U.S. Treasuries in tying fragmented European capital markets together, albeit at a very embryonic stage of development. It is also significant because Japan and China together control almost $4-trillion in global foreign exchange reserves, although redeploying significant sums would come at the expense of other global debt markets."

• Japan to help finance European bailouts
• The euro crisis roars back
• Europe must do more for euro: Portugal
• Economy Lab: In euro bond market, 007 is licence to kill

BMO buys investment manager

Bank of Montreal is boosting its wealth management operations in Asia, announcing a deal today to acquire Hong Kong-based Lloyd George Management.

The investment manager BMO is buying has some $6-billion (U.S.) under management, and specializes in Asia and emerging markets.

“Over the last two decades, we have built Asia's leading independent boutique, originally focussed on China and India but now encompassing global emerging and frontier markets,” said Robert Lloyd George, the chairman of Lloyd George.

Gille Ouellette, the chief of BMO's private client group, noted that wealth management is a "key component" of the bank's China strategy.

• BMO to buy LGM of Hong Kong

Talisman holds line on spending

Talisman Energy Inc. expects to boost production by 5 per cent to 10 per cent this year, though it is holding exploration and development spending at last year's level of about $4-billion (U.S.).

That, the Calgary-based energy company said today, is aimed at "maintaining capital discipline in an uncertain commodity price environment."

Talisman added in a statement that it changed its portfolio mix last year to maintain a "balance between natural gas and liquids opportunities, and high grading to a more profitable asset base."

Corus revenue climbs

Corus Entertainment Inc. said today its revenue climbed 8 per cent in its first quarter, though profit slipped from a year earlier, when the media company posted hefty one-time gains.

Revenue rose to $240.7-million from $222.3-million. Profit fell to $46.2-million or 57 cents a share from $73.9-million or 91 cents.

• Corus revenue rises on revenue, TV gains

In Personal Finance today

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• Rising gas prices pack a financial wallop

Money management tool is great for the financially challenged, but some are raising concerns about privacy, security and potential identity theft .

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If you can't afford to pay for your renovation, don't call it an investment in your home.

• Condo reno? Talk about diminishing returns

From today's Report on Business

• Toyota's plan for 2011: Be less boring
• Earnings season starts with a bang
• Boyd Erman: Tight times for traders lead to merger talks
• Fed books windfall from crisis