The Canada Audit Regulator has review the work by Canadian accounting firms who audit the statements of Chinese companies listing on the TSX, and have labeled the reviews as disappointing.

After three months of reviews done on Chinese clients, the Audit regulator has released statements saying that they found major gaps in the audit work preformed. For example, one audit firm has been restricted from taking on any more Chinese clients. Several other firms have been required to do additional work on 12 of the files they reviewed.

“The disappointment we had was a lot of things that we felt were fundamental auditing processes and procedures were just not applied,” CPAB chief executive officer Brian Hunt said in an interview, “It’s just a disappointment on our part that things we would consider fundamental here in Canada just were not done, and I’m at somewhat of a loss to explain it.” Hunt would not comment if Sino Forest was among the files reviewed.

Bookmark It

Hide Sites

The efforts come at a time when Harper is working on returning to a balanced budget which also includes making efforts to sustain social programs and fiscal positions over the next generation. He added that the center piece of the Canadian retirement system is the Canada Pension Plan which is currently fully funded.

Before jumping on the band wagon of people yelling and screaming at the proposed changes, lets talk about how the OAS works.

OAS is sent out to all seniors, but it is a income test benefit and depending on your income, your OAS payment may be clawed. Currently any senior who earns less than $69,000 a month gets full monthly OAS payment to a max of $540. Once your income is above $112, 000 your OAS is completely eliminated.

The Guaranteed Income supplement is paid to seniors who make less than $16, 368 and pays a maximum of $732 per month. Since Harper just raised this amount it is unlikely that he will change this.

Although the Harper government hasn’t announced the changes they will be making they did say that the focus of the program would be on medium and long term OAS collectors and ensuring the stability of the program. Current OAS collectors will continue to collect with out any changes.

This morning on the CBC eye opener, discussed the changes and their discussion with Jim Yih, a personal finance blogger went to the major changes 2012 (previously announced and passed).

Changes that will be happening in 2012:

Everyone will be receiving a CPP raise, since they have been building a surplus, making it easier to qualify for the maximum.

Currently you can take CPP at 60, without stopping work. To prevent it from draining, CPP will be increasing the penalty for collect it early (before your 65 birthday). Previously it was a 30% reduction, and it will be phased in over five years to a 36% discount.

They are also encouraging people to leave their CPP longer, so if you take it after 65, you could get a 42% bonus if you waited until 70.

Bookmark It

Hide Sites

Union is based out of Ottawa, and provides individual annuities, life and accident insurance in five provinces, but mainly services a Quebec customer base. The company has been struggling over the last couple of years and cited poor investment returns over the last two years that brought them to the edge.

Regulators put pressure on Union to fix it problems, but they were unable to successfully raise capital or to sell themselves. At one point, potential buyers said they would have to be paid to take on their policies liabilities.

Union was able to increase their business volume which increased their revenue but it wasn’t enough to keep regulators happy. They were forced to wind up after their capital levels fell from 178% to 120%. Depending on the company capital levels need to be between 150-200%.

Grant Thorton, the law office in charge of Union is currently focused on transferring the policies to another insurance company to ensure policy holders continue to be serviced.

Bookmark It

Hide Sites

The resulting sales drove up net income per share from 45 cents a share to 50 cents, beating the average estimate of 49 cents. Helping to drive the stores sales were their instant coffee, keurig brand single serve coffees and the low-calorie peppermint mocha. They ended their first quarter on a high note, stating that it was their most successful holiday season to date.

Ending this quarter on a high note, the store is planning on rolling out their product line which will bring happy hour to Starbucks. The store plans on introduction beer and wine to their stores after a successful experiment in six locations tried to increase traffic during the afternoon and evenings. The stores also paired the new drinks with a new menu that included fruit and cheese plates as well as focaccia with olive oil.

Starbucks was also making news today for being more expensive in Canada then the United States due to the higher-raw ingredient costs especially milk.

Starbucks ended the day up 1.19% at $47.48.

Bookmark It

Hide Sites

Milk futures jumped 41% in 2011 due to  an increase in rising populations, increased exports and rising world incomes. Milk futures reached their highs in August 2011, but still ended the year as the number one commodity performer.

Following along with milk is dry whey, a milk by product used in sports drinks, snacks and baby formula. Whey priced increased 75.13%.

Lots of analyst believes that milk exports will rise in Canada, Mexico, Japan, China, Philippines and Indonesia, the six biggest buyers in the world.

Even though milk future rose during the year, it didn’t necessarily mean bigger pay days for the farmers, as feed prices also increased throughout the year.

Bookmark It

Hide Sites

The company knew that they departure from Japan would be short lived and believe that  a new franchise or joint venture partner would provide significant opportunity for the company, they grossed $70 million in sales in 2009.

The companies invested $200 million on the plan to return to Japan, and are betting it all on their signature burger. The Foie Gras burger has the traditional square patty topped with truffle butter.  Such a dish would not be popular in North America, but following McDonalds lead on localized menu items, the Japanese diner appreciates the localized menu.

Wendy is the world’s 3^rd largest quick service hamburger company and owns a variety of corporations such as Arbys, T.J Cinnamons and Pasta Connection in their business portfolio. Their company trades on the NYSE under the symbol WEN. Their first location in Japan will be located in Tokyo’s Omotesando area and they plan to open 100 restaurants over the next five years and believe the country can support up to 700 restaurants. They will be rolling out their restaurants through a joint venture with Higa Industries who operated 180 Domino Restaurants.

Wendy’s was down 1.30% today to $5.34 US.

Bookmark It

Hide Sites

After China announced that they were going to reduce export of rare metals in 2010, foreign firms began worrying about access to supplies and began looking for alternative deposits, which has led to mining expeditions around the world, with the majority searching in Canada.

Earlier this week Toyota announce that they would be entering a joint venture project with  Matamec to develop a rare earth mine in Quebec.  If the joint venture with Matamec turns out to be economically viable, Toyota will finance the entire dig and use the entire output to produce their hybrid vehicles.

Bookmark It

Hide Sites

This was the biggest ECB infusion of credit in the 13 years of the  Euro. There was great excitement over the  additional 189 billion euros lent over the estimated 300 billion euros the market was expecting, mainly because it highlighted the needs of the European banks.

The Bank of England policy makers have left the option open for more cash to be available to the economy in February due to the risk of another recession from slower consumer spending and the euro crisis.

The news leave the possibility for a third round of quantitative easing which could happen in February. The European crisis, is also expected to create a third round in the United States as well as in Japan and the other banks in the European Union

It is wildly regarded that the second round of quantitative easing failed to solve the economic problems.

In other news, Rim turned down offers from Amazon and Microsoft to buy their struggling company.  Rim staff have reported that they prefer to fix their problems on their own.  Rim is up 10.54% on the news.

Bookmark It

Hide Sites

Newmans methodology was to examine stock prices, expected 2012 earnings and financial information on a series of companies, his list of companies include the following:

Eastman Kodak- No surprise here, the company’s stock price declined 85% in one year. Their man business, photo film, is a dying business and the company has been slow to react to the digital market. In order to fend off bankruptcy, the company began to brainstorm ideas for a new market. Instead of going to the obvious and venturing into the digital photo world, they tried unsuccessfully to enter the pharmaceutical and document management world.  Today, they are in the process of selling off assets to raise cash with the hopes of being able to return to a profitable company. The company has been trading below a dollar and is setting off alarms from analysts that they might be delisted.

Research in Motion: Well no big surprise here. Canadians around the world have been hearing about the demise of the Canadian Golden Child. The once all mighty blackberry which held 55% of the smart phone market two years ago has seen their stock price drop 76% in 2011.  With an exploding smartphone market, RIM has been slow to respond to the changing demands and demographics of the smartphone user. Many are predicting RIM might be a target for a takeover in 2012.

Officemax: This might simply be a story that three is a crowd. Officemax, the competitor to Staples and Office Depot has found out that she really is the third wheel when her stock price decline 75% year to date. With a tough economy, the office supply world is facing pressure from stores like Walmart and Costco, but Officemax is facing the hardest year of the entire group.

Monster Worldwide: It  looks like when you can’t find a job, you also shouldn’t be investing with Monster, a job advertising website that connect potential employers with employees. Their stock has fallen 67% and they are facing competition from competitors entering the online world, squeezing their profits. With a slow economy, Monster is struggling to keep drumming up business.

Netflix: Well the digital movie world might have taken down Blockbuster, Netflicks success came to halt with a bad decision. The hottest movie rental website came crashing down when they tried to separate their DVD by mail and video stream services in two, allowing them to increase prices.  Customers freaked, and with new competition entering the market, subscribers moved to the new providers. Netflix stock subsequently dropped 60% and a sharp earnings drop expected in 2012 makes Netflix a prime target for a takeout.

Hewlett-Packer: A third CEO in two years can only mean two things: a company turn around or imminent disaster.  With so many hands stirring the pot the company strategy has been confusing and earnings have been reflecting a lack of leadership. HP participates in numerous industries and competitors have been taking away market share in all categories.  The company has been trying to grow through acquisitions in recent year but have left major holes in their new product development. With a 38% year to date stock decline, the newest CEO Meg Whitman has some work on her hands to make it through 2012.

Best Buy: Just when they hands up in victory after Circuit City declared bankruptcy in 2009, Best Buy got suckered punched. Circuit City opponent- cash poor consumers, ruthless price pressure, online stores- is now after Best Buy. The company is reporting lower than expected earnings and is concerned about consumer spending. Their future success depends on whether consumers will spend in 2012 or if they will save and pay down debt.

Bookmark It

Hide Sites

The addition of Canada and Australia brought the Yuan tightly controlled foreign exchange market to nine including- the Euro, Hong Kong dollar, Japanese Yen, Malaysian ringit and Russian ruble.

The Chinese central bank allows the Yuan to move up or down .5 percent from it’s fixed rate to the US dollar each day, but does allow the Yuan to move 3% against other currencies.

Bookmark It

Hide Sites