North Dakota train derailment, explosion prompts evacuation

Many residents evacuated a southeastern North Dakota town overnight after a train carrying crude oil derailed and exploded, and officials warned that acrid smoke could blow into the area.

No one was hurt in Monday's derailment of the 1.6-km-long train that sent a great fireball and plumes of black smoke skyward about 1.6 kilometres from the small town of Casselton. The fire had been so intense as darkness fell that investigators couldn't even get close enough to count the number of burning cars. Some burned through the night. The National Transportation Safety Board was preparing to investigate.

The Cass County Sheriff's Office called on the 2,400 people living in Casselton, about 40 kilometres west of Fargo, to leave their homes, citing a shift in winds blowing smoke toward the town. Health experts were testing the quality of the air but did not yet have results early Tuesday.

"Is it highly hazardous or did most of it burn off in the fire?" Sheriff Paul Laney said of elements in burning crude that could be risky for health. "We just don't know."

Laney said much of Casselton's water tower was covered in soot and that he expects to see a lot of the black powder around town as the day progresses.

"Wait until you see the footprints in the snow later on," he said. "That's the stuff coming out of the sky."

Sheriff's Deputy Joe Crawford said about two-thirds of the town's residents had heeded the recommendation to evacuate their homes. Officials were waiting for daybreak before making new attempts to investigate the scene. The fire died down overnight, "but we've still got plenty of smoke and plenty of fire and plenty of heat," Crawford said.

Terry Johnson, the manager of a grain dealer about a kilometre from the derailment, said he heard at least six explosions in the two hours following the derailment.

"It shook our building and there was a huge fireball," he said.

Official estimates of the extent of the blaze varied. BNSF Railway Co. said it believed about 20 cars caught fire after its oil train left the tracks about 2:10 p.m. local time Monday. The sheriff's office said Monday it thought 10 cars were on fire. Officials said the cars would be allowed to burn out.

Authorities haven't yet been able to untangle exactly how the derailment happened. BNSF spokeswoman Amy McBeth said another train carrying grain derailed first, and that this knocked several cars of the oil train off adjoining tracks.

BNSF said both trains had more than 100 cars each.

The incident will likely prompt discussion about the safety of transporting oil by cross-country rail. Fears of catastrophic derailments were particularly stoked after last summer's crash in Québec of a train carrying crude from North Dakota's Bakken oil patch. Forty-seven people died in the ensuing fire.

The U.S. National Transportation Safety Board said Monday night it has launched a "go-team" to investigate this latest derailment. Jeff Zent, a spokesman for Gov. Jack Dalrymple, said the National Guard was on alert if needed.

Ryan Toop, who lives less than a kilometre away, said he heard the explosions and drove in frigid temperatures until he was the equivalent of about two city blocks from the fire.

"I rolled down the window, and you could literally keep your hands warm," Toop said.

The rail tracks run straight through Casselton, and Cass County Sheriff's Sgt. Tara Morris said it was "a blessing [the derailment] didn't happen within the city."

A shelter was set up in Fargo and Casselton Mayor Ed McConnell said he didn't want anyone sleeping in their vehicles as temperatures dipped to –28 below overnight.

"All the experts say it can be a hazardous situation to their health," McConnell said. "We're going to try to get everybody out of the town."

The North Dakota Department of Health warned that exposure to burning crude could cause shortness of breath, coughing and itching and watery eyes. It had said those in the vicinity with respiratory conditions such as asthma, bronchitis or emphysema should minimize outdoor activity.

North Dakota is the No. 2 oil-producing state in the U.S., trailing only Texas, and a growing amount of that is being shipped by rail. The state's top oil regulator said earlier this month that he expected as much as 90 per cent of North Dakota's oil would be carried by train in 2014, up from the current 60 per cent.

The number of crude oil carloads hauled by U.S. railroads surged from 10,840 in 2009 to a projected 400,000 this year. Despite the increase, the rate of accidents has stayed relatively steady. Railroads say 99.997 per cent of hazardous materials shipments reach destinations safely.

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U.S. home electricity use declines for 3rd straight year

The average amount of electricity consumed in U.S. homes has fallen to levels last seen more than a decade ago, back when the smartest device in people's pockets was a Palm pilot and anyone talking about a tablet was probably an archaeologist or a preacher.

Because of more energy-efficient housing, appliances and gadgets, power usage is on track to decline in 2013 for the third year in a row, to its lowest point since 2001, even though our lives are more electrified.

Here's a look at what has changed since the last time consumption was so low:

Better homes

In the early 2000s, as energy prices rose, more states adopted or toughened building codes to force builders to better seal homes so heat or air-conditioned air doesn't seep out so fast. That means newer homes waste less energy.

Also, insulated windows and other building technologies have dropped in price, making retrofits of existing homes more affordable. In the wake of the financial crisis, billions of dollars in Recovery Act funding was directed toward home-efficiency programs.

Better gadgets

Big appliances such as refrigerators and air conditioners have gotten more efficient thanks to federal energy standards that get stricter every few years as technology evolves.

A typical room air conditioner — one of the biggest power hogs in the home — uses 20 per cent less electricity per hour of full operation than it did in 2001, according to the Association of Home Appliance Manufacturers.

Central air conditioners, refrigerators, dishwashers, water heaters, washing machines and dryers also have gotten more efficient.

Other devices are using less juice, too. Some 40-inch LED televisions bought today use 80 per cent less power than the cathode ray tube televisions of the past. Some use just $8 worth of electricity over a year when used five hours a day — less than a 60-watt incandescent bulb would use.

Those incandescent light bulbs are being replaced with compact fluorescent bulbs and LEDs that use 70 to 80 per cent less power. According to the Energy Department, widespread use of LED bulbs could save output equivalent to that of 44 large power plants by 2027.

The move to mobile also is helping. Desktop computers with big CRT monitors are being replaced with laptops, tablet computers and smart phones, and these mobile devices are specifically designed to sip power to prolong battery life.

It costs $1.36 to power an iPad for a year, compared with $28.21 for a desktop computer, according to the Electric Power Research Institute.

On the other hand

We are using more devices, and that is offsetting what would otherwise be a more dramatic reduction in power consumption.

DVRs spin at all hours of the day, often under more than one television in a home. Game consoles are getting more sophisticated to process better graphics and connect with other players, and therefore use more power.

More homes have central air conditioners instead of window units. They are more efficient, but people use them more often.

Still, Jennifer Amman, the buildings program director at the American Council for an Energy-Efficient Economy, says she is encouraged.

"It's great to see this movement, to see the shift in the national numbers," she says. "I expect we'll see greater improvement over time. There is so much more that can be done."

The Energy Department predicts average residential electricity use per customer will fall again in 2014, by 1 per cent.

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Pension crisis a global problem

A global retirement crisis is bearing down on workers of all ages.

Spawned years before the Great Recession and the 2008 financial meltdown, the crisis was significantly worsened by those twin traumas. It will play out for decades, and its consequences will be far-reaching.

Many people will be forced to work well past the traditional retirement age of 65. Living standards will fall and poverty rates will rise for the elderly in wealthy countries that built safety nets for seniors after the Second World War. In developing countries, people's rising expectations will be frustrated if governments can't afford retirement systems to replace the tradition of children caring for aging parents.

The problems are emerging as the generation born after the Second World War moves into retirement.

"The first wave of under-prepared workers is going to try to go into retirement and will find they can't afford to do so," says Norman Dreger, a retirement specialist with the consulting firm Mercer in Frankfurt, Germany.

The crisis is a convergence of three factors:

•  Countries are slashing retirement benefits and raising the age to start collecting them. These countries are awash in debt since the recession hit. And they face a demographics disaster as retirees live longer and falling birth rates mean there will be fewer workers to support them.
• Companies have eliminated traditional pension plans that guaranteed employees a monthly check in retirement.
• Individuals spent freely and failed to save before the recession and saw much of their wealth disappear once it hit.

Those factors have been documented individually. What is less appreciated is their combined ferocity and global scope.

"Most countries are not ready to meet what is sure to be one of the defining challenges of the 21st century," the Center for Strategic and International Studies in Washington concludes.

Mikio Fukushima, who is 52 and lives in Tokyo, worries that he might need to move somewhere cheaper, maybe Malaysia, after age 70 to get by comfortably on income from his investments and a public pension of just $10,000 a year.

People like Fukushima who are fretting over their retirement prospects stand in contrast to many who are already retired. Many workers were recipients of generous corporate pensions and government benefits that had yet to be cut.

Jean-Pierre Bigand, 66, retired Sept. 1, in time to enjoy all the perks of a retirement system in France that's now in peril. Bigand lives in the countryside outside the city of Rouen in Normandy. He has a second home in Provence. He's just taken a vacation on Oleron Island off the Atlantic coast and is planning a five-week trip to Guadeloupe.

"Travel is our biggest expense," he says.

Under siege

The notion of extended, leisurely retirements is relatively new. Germany established the world's first widely available state pension system in 1889. The United States introduced Social Security in 1935. In the prosperous years after the Second World War, governments expanded pensions. In addition, companies began to offer pensions that paid employees a guaranteed amount each month in retirement — so-called defined-benefit pensions.

The average age at which men could retire with full government pension benefits fell from 64.3 years in 1949 to 62.4 years in 1999 in the relatively wealthy countries that belong to the Organization for Economic Cooperation and Development.

"That was the Golden Age," Mercer consultant Dreger says.

It would not last. As the 2000s dawned, governments — and companies — looked at actuarial tables and birth rates and realized they couldn't afford the pensions they'd promised.

The average man in 30 countries the OECD surveyed will live 19 years after retirement. That's up from 13 years in 1958, when many countries were devising their generous pension plans.

Dong Linhua, 59, speaks at his home in Shanghai, China. Dong, a former Shanghai factory worker and now a real estate investor, plans to retire soon. But government attempts to rein in pension problems may change his entitlements. (The Associated Press)

The OECD says the average retirement age would have to reach 66 or 67, from 63 now, to "maintain control of the cost of pensions" from longer lifespans.

Compounding the problem is that birth rates are falling just as the bulge of people born in developed countries after the Second World War retires.

Populations are aging rapidly as a result. The higher the percentage of older people, the harder it is for a country to finance its pension system because relatively fewer younger workers are paying taxes.

In response, governments are raising retirement ages and slashing benefits. In 30 high- and middle-income OECD countries, the average age at which men can collect full retirement benefits will rise to 64.6 in 2050, from 62.9 in 2010; for women, it will rise from 61.8 to 64.4

'We have to prepare for our own futures rather than depending on our children'- Korean retiree Yoo Tae-we

In the wealthy countries it studied, the OECD found that the pension reforms of the 2000s will cut retirement benefits by an average 20 per cent.

Even France, where government pensions have long been generous, has begun modest reforms to reduce costs.

"France is a retirees' paradise now," says Richard Jackson, senior fellow at the CSIS. "You're not going to want to retire there in 20 to 25 years."

The fate of government pensions is important because they are the cornerstone of retirement income. Across the 34-country OECD, governments provide 59 per cent of retiree income, on average.

Impact of 2009 recession

The outlook worsened once the global banking system went into a panic in 2008 and tipped the world into the worst recession since the 1930s.

Government budget deficits swelled in Europe and the United States. Tax revenue shrank, and governments pumped money into rescuing their banks and financing unemployment benefits. All that escalated pressure on governments to reduce spending on pensions.

The Great Recession threw tens of millions out of work worldwide. For others, pay stagnated, making it harder to save. Because government retirement benefits are based on lifetime earnings, they'll now be lower. The Urban Institute, a Washington think-tank , estimates that lost wages and pay raises will shrink the typical American worker's income at age 70 by 4 per cent — an average of $2,300 a year.

Leslie Lynch, 52, of Glastonbury, Conn., had $30,000 in her 401(k) retirement account when she lost her $65,000-a-year job last year at an insurance company. She'd worked there 28 years. She's depleted her retirement savings trying to stay afloat.

A protester wears a placard which reads, "retirement at age 55" during a rally in Paris, Tuesday, Sept. 10, 2013. France has among the most generous pension systems on earth but that will change, experts say. (The Associated Press)

"I don't believe that I will ever retire now," she says.

Many of those facing a financial squeeze in retirement can look to themselves for part of the blame. They spent many years before the Great Recession borrowing and spending instead of saving.

The National Institute on Retirement Security estimates that Americans are at least $6.8 trillion short of what they need to have saved for a comfortable retirement. For those 55 to 64, the shortfall comes to $113,000 per household.

Asian challenges

In Asia, workers are facing a different retirement worry, a byproduct of their astonishing economic growth.

Traditionally, Chinese and Koreans could expect their grown children to care for them as they aged. But newly prosperous young people increasingly want to live on their own. They also are more likely to move to distant cities to take jobs, leaving parents behind. Countries like China and South Korea are at an "awkward" stage, Jackson says: The old ways are vanishing, but new systems of caring for the aged aren't yet in place.

Yoo Tae-we, 47, a South Korean manager at a trading company that imports semiconductor components, doesn't expect his son to support him as he and his siblings did their parents.

"We have to prepare for our own futures rather than depending on our children," he says.

China pays generous pensions to civil servants and urban workers. They can retire early with full benefits — at 60 for men and 50 or 55 for women. Their pensions will prove to be a burden as China ages and each retiree is supported by contributions from fewer workers.

The elderly are rapidly becoming a bigger share of China's population because of a policy begun in 1979 and only recently relaxed that limited couples to one child.

China is considering raising its retirement ages. But the government would likely meet resistance.

The end of pensions?

Corporations, too, are cutting pension costs by eliminating traditional defined-benefit plans. They don't want to bear the cost of guaranteeing employees' pensions. They've moved instead to so-called defined-contribution plans, such as 401(k)s, in the United States. These plans shift responsibility for saving to employees.

But people have proved terrible at taking advantage of these plans. They don't always enrol. They don't contribute enough. They dip into the accounts when they need money.

They also make bad investment choices — buying stocks when times are good and share prices are high and bailing when prices are low.

Several countries are trying to coax workers to save more.

Australia passed a law in 1993 that makes retirement savings mandatory. Employers must contribute the equivalent of 9.25 per cent of workers' wages to 401(k)-style retirement accounts.

In 2006, the United States encouraged companies to require employees to opt out of a 401(k) instead of choosing to opt in. That means workers start saving for retirement automatically if they make no decision.

Easing the pain

Rebounding stock prices and a slow rise in housing prices are helping households recover their net worth. In the United States, retirement accounts hit a record $12.5 trillion the first three months of 2013.

But Boston College's Center for Retirement Research says the recovery in housing and stock prices still leaves about 50 per cent of American households at risk of being unable to maintain their standard of living in retirement.

When they look into the future, retirement experts see more changes in government pensions and longer careers than many workers had expected.

Cuts in government pension programs like Social Security will likely hit most retirees but will probably fall hardest on the wealthy

Those planning to work past 65 can take some comfort knowing they'll be healthier, overall, than older workers in years past. They'll also be doing jobs that aren't as physically demanding. In addition, life expectancy at 65 now stretches well into the 80s for people in the 34 OECD countries — an increase of about five years since the late 1950s.

"My parents retired during the Golden Age of retirement," says Mercer consultant Dreger, 37. "My dad, who is 72, retired at 57. That's not going to happen to somebody in my generation."

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Apple rejects Carl Icahn's dividend and share buyback plan

The board of directors of Apple Inc. is recommending that shareholders reject a proposal led by activist investor Carl Icahn that would see the technology company spend most of its huge cash hoard buying back its own shares and paying extra dividends to investors.

In a proxy statement released late last week, Apple's board responded to a proposal led by Icahn that called on the company to spend "not less than $50 billion US" to buy back Apple shares, which would pump up the value of those that remain for shareholders.

Thanks to the popularity of its landmark iPhones and iPads, Apple has more than $147 billion in cash sitting in various bank accounts around the world, and the company has yet to lay out how it plans to spend that money to increase shareholder value.

Icahn's original plan was for Apple to spend up to $150 billion on a combination of dividends and share buybacks, but he watered down that proposal to the new $50 billion minimum.

Icahn's plan centres on the notion that there is nothing the company could invest in that would provide a greater return to shareholders over the long run than simply giving them a one-time dividend and reducing the number of the company's shares.

In the proxy, the board lays out the reasons why they don't support that plan.

"The company's success stems from the company's unique ability to combine world-class skills in hardware, software and services to deliver innovative products that create new markets and delight hundreds of millions of customers," Apple said. "This success has created tremendous value for the company's shareholders."

That's the company's way of telling investors they'll get a better deal on their dollar if they let the company invest that money in creating new devices that will give them a greater return on their investment down the line.

Apple already gave shareholders a bonus in April, when it announced it plans to spend up to $100 billion on dividends and up to $60 billion on share buybacks in the next few years. The company has already spent $43 billion on those plans, but Icahn's proposal calls for Apple to pick up the pace even more.

"While the board and management oppose this shareholder proposal, they are fully committed to returning cash to shareholders," Apple said. "The board and management team believe that capital should be returned to shareholders on an efficient and sustained basis and that the evaluation of capital return should be performed regularly and carefully with the best long-term interest of the business and shareholders in mind."

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U.S. home prices post biggest gain since 2006

U.S. home prices rose in October from the previous year at the fastest pace in almost eight years. But price gains slowed in most U.S. cities from September to October, suggesting the increases are levelling off.

The Standard & Poor's/Case-Shiller 20-city home price index rose 0.2 per cent from September to October, down from a 0.7 per cent increase from August to September.

Monthly price gains slowed in 18 of the 20 cities tracked by the index. And prices declined in nine cities, including Chicago, Denver, and Washington.

For the year, prices are still strong, reflecting big gains in earlier months. They have risen 13.6 per cent over the past 12 months, the fastest since February 2006.

"Annual returns have been in double-digit territory since March 2013 and increasing," said David Blitzer, chairman of the S&P Dow Jones index committee. "However, monthly numbers show we are living on borrowed time and the boom is fading."

The Case-Shiller index covers roughly half of U.S. homes. It isn't adjusted for seasonal variations, so the change partly reflects slower buying in the fall. The index measures prices compared with those in January 2000 and creates a three-month moving average. The October figures are the latest available.

The housing market has been recovering since 2012 and has helped drive economic growth over the past year.

But the gains have slowed in recent months, as increases in mortgage rates and home prices have crimped affordability. The partial government shutdown in October also delayed some sales.

Sales of existing homes have fallen from September to November, the National Association of Realtors said earlier this month.

Despite the declines, home re-sales should reach 5.1 million in 2013, the best total in seven years, the Realtors forecast. That's 10 per cent higher than 2012. But it is still below the 5.5 million that is consistent with healthier housing markets.

Strong price gains in 2013, fueled in part by a limited supply of homes for sale, may be pricing some buyers out of the market. Prices are up more than 19 per cent year over year in Atlanta, Las Vegas, Los Angeles, San Diego and San Francisco, according to the Case-Shiller index.

Mortgage rates have also risen by roughly a full percentage point since the spring, though they remain low by historical standards. Mortgage buyer Freddie Mac said last week that the average rate on the 30-year loan is 4.48 per cent.

Many economists say the Case-Shiller figures overstate recent price gains because they include foreclosures. Foreclosed homes usually sell at steep discounts. As the proportion of those sales declines, the index rises more sharply.

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Consumer confidence at 3-year high, survey finds

Shoppers more upbeat about the direction of the economy

The Canadian Press Posted: Dec 30, 2013 8:30 AM ET Last Updated: Dec 30, 2013 8:30 AM ET

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Samsung selling 110-inch TV for $150K US

Samsung said a 110-inch TV that has four times the resolution of standard high-definition TVs is going on sale for about $150,000 in South Korea.

The launch Monday of the giant television set reflects global TV makers' move toward ultra-HD TVs as manufacturing bigger TVs using OLED proves too costly.

Last year, Samsung and rival LG Electronics, the world's top two TV makers, touted OLED as the future of TV. OLED screens are ultrathin and can display images with enhanced clarity and deeper colour saturation.

But Samsung and LG failed to make OLED TVs a mainstream option that would replace LCD television sets and are still struggling to mass produce larger and affordable TVs with OLED. Meanwhile, Japanese media reported last week that Sony Corp. and Panasonic Corp. decided to end their OLED partnership.

Demand for U-HD TVs is expected to rise despite dearth of content while its price will likely come down faster than that of the OLED TVs. Much of the growth is forecast to come from China, a major market for the South Korean TV makers. Chinese TV makers have been making a push into the U-HD TV market as well.

According to NPD DisplaySearch, global sales of ultra-HD TV sets will surge from 1.3 million this year to 23 million in 2017. More than half of the shipments will be taken by Chinese companies between 2013 and 2017, according to NPD.

While Chinese TV makers have been seeking to boost sales of U-HD TVs with a lower price and a smaller size, Samsung's strategy is to go bigger with a higher price tag. Samsung's 110-inch U-HD TV measures 2.6 metres by 1.8 metres. It will be available in China, the Middle East and Europe. In South Korea, the TV is priced at 160 million won ($152,000 US) while prices in other countries vary.

Samsung said it received 10 orders for the latest premium TVs from the Middle East. Previously, the largest U-HD TV made by Samsung was 85 inches measured diagonally.

The ultra-HD TVs are also known as "4K" because they contain four times more pixels than an HD TV.

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BlackBerry faces another year of uncertainty

BlackBerry hopes to clean the slate again as it heads into the new year with another lease on life and a leader who believes he can do what his predecessors couldn't — save the company from a slow death.

After months of painful uncertainty and dismal financial results, BlackBerry is in the hands of chairman and chief executive John Chen who hopes to navigate the company into 2014 with reinvigorated vision.

"I need to go out and convince the world that the fight has now started," said Chen during a recent media event at the company's headquarters.

"It's a long haul journey — no question," he added.

The odds are stacked against him, but Chen insists he will rebuild the BlackBerry name by chasing the business customers who helped make the company a powerhouse in the smartphone industry.

"It's really kind of going back to the roots," he said.

If the situation sounds familiar, that's because BlackBerry has been here before.

The Waterloo, Ont.-based company has spent the last few years losing the fight for a stronger position in the market as Apple's iPhone and other smartphones on the Android operating system pulverized its reputation with consumers as a cutting-edge technology developer.

Last January, after two major delays, BlackBerry lifted the curtain on its latest smartphones and operating system in New York, ushering in what it hoped was a new era that would prove naysayers wrong.

But once the dust settled, it was clear the new BlackBerry 10 phones didn't connect with consumers.

'Too many different paths to see'

Most of the advertisements sold vague ideas about the phone's features, and often the products were leaning on the clout left in BlackBerry's name, rather than promoting features of the phones.

BlackBerry has struggled in recent years to keep up with Apple's iPhone and other smartphones on the Android operating system. (Adrian Wyld/Canadian Press)

Chen believes BlackBerry executives were lost as they struggled to deliver the new devices.

"In the past when we were a little troubled ... there were too many different paths to see," he said, reflecting on the days before he started at the company.

"We lost some good, valuable market time that people have taken advantage of [and] from this point on the fun for them will be greatly curtailed."

A few months ago, even BlackBerry executives weren't this certain about the company's future.

The smartphone maker looked like it was about to be broken up and sold, or shrunk into a private company, until a group of investors agreed in November to inject US$1 billion — enough money for another swing at a recovery.

It was a surprise decision by Fairfax Financial, one of BlackBerry's largest shareholders, who led the charge to raise the financing, but also a sign that few others were interested.

BlackBerry had spent months shopping around its assets, but was never able to find a suitor. The company's co-founders Mike Lazaridis and Doug Fregin sidelined their attempted bid, while big players like Facebook were reported to have entertained the possibility before deciding to bow out.

Customers defecting

The new financing agreement brought many quick changes to BlackBerry, including the exit of CEO Thorsten Heins and the departure of various other high ranking executives and board members, some who helped build the company to its former heights.

Chen is confident about the direction he's headed, even though the reality facing the smartphone maker isn't so optimistic.

The government agencies and companies he's determined to chase are notoriously loyal, but once they've strayed to alternative platforms it's hard to lure them back, mainly because business contracts are typically long term.

Many customers prefer BlackBerry's security technology, but even some big Canadian banks and U.S. corporations, have started to defect to alternative offerings from competitors.

According to the latest financial statements, BlackBerry has lost about 68 per cent of its enterprise business customers over the past few years, dropping to 80,000 from about 250,000 at its heights.

To help retain customers, BlackBerry has given away free upgrades and trials to its latest enterprise operating system that last until the end of 2013. After that, it will make a case for customers to start paying for the service.

"We are going to take the technology message out," Chen said.

"With the last company I ran, I kept the message on for like 10 years. It probably took five years before anybody even listened to me, and it took another five years for people to believe it. You just need to focus."

Smartphone sales fall

Whether or not BlackBerry has time is debatable.

In its most recent quarter, BlackBerry posted a US$4.4-billion loss as sales of its smartphones continued to fall. The company also burned through about $1.1 billion in cash, though the total amount in its coffers — which sits at $3.2 billion — was propped up by the Fairfax-led investment and a significant tax return.

On Tuesday, Lazaridis grabbed attention for selling $26 million of BlackBerry shares, a move that came before the tax-loss deadline in Canada, but also lowered his stake below five per cent.

Investors appear optimistic, at least for now, helped by Chen's determined persona. The company's badly beaten stock has climbed 24 per cent since its latest financial results were released a week ago. On Tuesday, BlackBerry shares closed at $8.25, up 27 cents, on the Toronto Stock Exchange.

"People are excited today, but we'll see how patient they are in two more quarters when there probably won't be any evidence of a turnaround," said Mike Genovese, an analyst at MKM Partners.

He said BlackBerry will need at least another year before any semblance of a turnaround can materialize, while Chen has said he doesn't expect the company to become profitable until at least the middle of 2016.

Whether the rest of the world has that sort of patience remains to be seen, and investors are taking a risk holding the stock in their hands, Genevese said.

"Six months from now I'm not so sure investors are going to be as excited as the stock price seems to be telling us right now," he said.

"The stock is a lottery ticket on the miracle they get something right."

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Pension crisis a global problem

A global retirement crisis is bearing down on workers of all ages.

Spawned years before the Great Recession and the 2008 financial meltdown, the crisis was significantly worsened by those twin traumas. It will play out for decades, and its consequences will be far-reaching.

Many people will be forced to work well past the traditional retirement age of 65. Living standards will fall and poverty rates will rise for the elderly in wealthy countries that built safety nets for seniors after the Second World War. In developing countries, people's rising expectations will be frustrated if governments can't afford retirement systems to replace the tradition of children caring for aging parents.

The problems are emerging as the generation born after the Second World War moves into retirement.

"The first wave of under-prepared workers is going to try to go into retirement and will find they can't afford to do so," says Norman Dreger, a retirement specialist with the consulting firm Mercer in Frankfurt, Germany.

The crisis is a convergence of three factors:

•  Countries are slashing retirement benefits and raising the age to start collecting them. These countries are awash in debt since the recession hit. And they face a demographics disaster as retirees live longer and falling birth rates mean there will be fewer workers to support them.
• Companies have eliminated traditional pension plans that guaranteed employees a monthly check in retirement.
• Individuals spent freely and failed to save before the recession and saw much of their wealth disappear once it hit.

Those factors have been documented individually. What is less appreciated is their combined ferocity and global scope.

"Most countries are not ready to meet what is sure to be one of the defining challenges of the 21st century," the Center for Strategic and International Studies in Washington concludes.

Mikio Fukushima, who is 52 and lives in Tokyo, worries that he might need to move somewhere cheaper, maybe Malaysia, after age 70 to get by comfortably on income from his investments and a public pension of just $10,000 a year.

People like Fukushima who are fretting over their retirement prospects stand in contrast to many who are already retired. Many workers were recipients of generous corporate pensions and government benefits that had yet to be cut.

Jean-Pierre Bigand, 66, retired Sept. 1, in time to enjoy all the perks of a retirement system in France that's now in peril. Bigand lives in the countryside outside the city of Rouen in Normandy. He has a second home in Provence. He's just taken a vacation on Oleron Island off the Atlantic coast and is planning a five-week trip to Guadeloupe.

"Travel is our biggest expense," he says.

Under siege

The notion of extended, leisurely retirements is relatively new. Germany established the world's first widely available state pension system in 1889. The United States introduced Social Security in 1935. In the prosperous years after the Second World War, governments expanded pensions. In addition, companies began to offer pensions that paid employees a guaranteed amount each month in retirement — so-called defined-benefit pensions.

The average age at which men could retire with full government pension benefits fell from 64.3 years in 1949 to 62.4 years in 1999 in the relatively wealthy countries that belong to the Organization for Economic Cooperation and Development.

"That was the Golden Age," Mercer consultant Dreger says.

It would not last. As the 2000s dawned, governments — and companies — looked at actuarial tables and birth rates and realized they couldn't afford the pensions they'd promised.

The average man in 30 countries the OECD surveyed will live 19 years after retirement. That's up from 13 years in 1958, when many countries were devising their generous pension plans.

Dong Linhua, 59, speaks at his home in Shanghai, China. Dong, a former Shanghai factory worker and now a real estate investor, plans to retire soon. But government attempts to rein in pension problems may change his entitlements. (The Associated Press)

The OECD says the average retirement age would have to reach 66 or 67, from 63 now, to "maintain control of the cost of pensions" from longer lifespans.

Compounding the problem is that birth rates are falling just as the bulge of people born in developed countries after the Second World War retires.

Populations are aging rapidly as a result. The higher the percentage of older people, the harder it is for a country to finance its pension system because relatively fewer younger workers are paying taxes.

In response, governments are raising retirement ages and slashing benefits. In 30 high- and middle-income OECD countries, the average age at which men can collect full retirement benefits will rise to 64.6 in 2050, from 62.9 in 2010; for women, it will rise from 61.8 to 64.4

'We have to prepare for our own futures rather than depending on our children'- Korean retiree Yoo Tae-we

In the wealthy countries it studied, the OECD found that the pension reforms of the 2000s will cut retirement benefits by an average 20 per cent.

Even France, where government pensions have long been generous, has begun modest reforms to reduce costs.

"France is a retirees' paradise now," says Richard Jackson, senior fellow at the CSIS. "You're not going to want to retire there in 20 to 25 years."

The fate of government pensions is important because they are the cornerstone of retirement income. Across the 34-country OECD, governments provide 59 per cent of retiree income, on average.

Impact of 2009 recession

The outlook worsened once the global banking system went into a panic in 2008 and tipped the world into the worst recession since the 1930s.

Government budget deficits swelled in Europe and the United States. Tax revenue shrank, and governments pumped money into rescuing their banks and financing unemployment benefits. All that escalated pressure on governments to reduce spending on pensions.

The Great Recession threw tens of millions out of work worldwide. For others, pay stagnated, making it harder to save. Because government retirement benefits are based on lifetime earnings, they'll now be lower. The Urban Institute, a Washington think-tank , estimates that lost wages and pay raises will shrink the typical American worker's income at age 70 by 4 per cent — an average of $2,300 a year.

Leslie Lynch, 52, of Glastonbury, Conn., had $30,000 in her 401(k) retirement account when she lost her $65,000-a-year job last year at an insurance company. She'd worked there 28 years. She's depleted her retirement savings trying to stay afloat.

A protester wears a placard which reads, "retirement at age 55" during a rally in Paris, Tuesday, Sept. 10, 2013. France has among the most generous pension systems on earth but that will change, experts say. (The Associated Press)

"I don't believe that I will ever retire now," she says.

Many of those facing a financial squeeze in retirement can look to themselves for part of the blame. They spent many years before the Great Recession borrowing and spending instead of saving.

The National Institute on Retirement Security estimates that Americans are at least $6.8 trillion short of what they need to have saved for a comfortable retirement. For those 55 to 64, the shortfall comes to $113,000 per household.

Asian challenges

In Asia, workers are facing a different retirement worry, a byproduct of their astonishing economic growth.

Traditionally, Chinese and Koreans could expect their grown children to care for them as they aged. But newly prosperous young people increasingly want to live on their own. They also are more likely to move to distant cities to take jobs, leaving parents behind. Countries like China and South Korea are at an "awkward" stage, Jackson says: The old ways are vanishing, but new systems of caring for the aged aren't yet in place.

Yoo Tae-we, 47, a South Korean manager at a trading company that imports semiconductor components, doesn't expect his son to support him as he and his siblings did their parents.

"We have to prepare for our own futures rather than depending on our children," he says.

China pays generous pensions to civil servants and urban workers. They can retire early with full benefits — at 60 for men and 50 or 55 for women. Their pensions will prove to be a burden as China ages and each retiree is supported by contributions from fewer workers.

The elderly are rapidly becoming a bigger share of China's population because of a policy begun in 1979 and only recently relaxed that limited couples to one child.

China is considering raising its retirement ages. But the government would likely meet resistance.

The end of pensions?

Corporations, too, are cutting pension costs by eliminating traditional defined-benefit plans. They don't want to bear the cost of guaranteeing employees' pensions. They've moved instead to so-called defined-contribution plans, such as 401(k)s, in the United States. These plans shift responsibility for saving to employees.

But people have proved terrible at taking advantage of these plans. They don't always enrol. They don't contribute enough. They dip into the accounts when they need money.

They also make bad investment choices — buying stocks when times are good and share prices are high and bailing when prices are low.

Several countries are trying to coax workers to save more.

Australia passed a law in 1993 that makes retirement savings mandatory. Employers must contribute the equivalent of 9.25 per cent of workers' wages to 401(k)-style retirement accounts.

In 2006, the United States encouraged companies to require employees to opt out of a 401(k) instead of choosing to opt in. That means workers start saving for retirement automatically if they make no decision.

Easing the pain

Rebounding stock prices and a slow rise in housing prices are helping households recover their net worth. In the United States, retirement accounts hit a record $12.5 trillion the first three months of 2013.

But Boston College's Center for Retirement Research says the recovery in housing and stock prices still leaves about 50 per cent of American households at risk of being unable to maintain their standard of living in retirement.

When they look into the future, retirement experts see more changes in government pensions and longer careers than many workers had expected.

Cuts in government pension programs like Social Security will likely hit most retirees but will probably fall hardest on the wealthy

Those planning to work past 65 can take some comfort knowing they'll be healthier, overall, than older workers in years past. They'll also be doing jobs that aren't as physically demanding. In addition, life expectancy at 65 now stretches well into the 80s for people in the 34 OECD countries — an increase of about five years since the late 1950s.

"My parents retired during the Golden Age of retirement," says Mercer consultant Dreger, 37. "My dad, who is 72, retired at 57. That's not going to happen to somebody in my generation."

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Apple rejects Icahn's dividend and buyback plan

The board of directors of Apple Inc. is recommending that shareholders reject a proposal led by activist investor Carl Icahn that would see the technology company spend most of its huge cash hoard buying back its own shares and paying extra dividends to investors.

In a proxy statement released late last week, Apple's board responded to a proposal led by Icahn that called on the company to spend "not less than $50 billion US" to buy back Apple shares, which would pump up the value of those that remain for shareholders.

Thanks to the popularity of its landmark iPhones and iPads, Apple has more than $147 billion in cash sitting in various bank accounts around the world, and the company has yet to lay out how it plans to spend that money to increase shareholder value.

Icahn's original plan was for Apple to spend up to $150 billion on a combination of dividends and share buybacks, but he watered down that proposal to the new $50 billion minimum.

Icahn's plan centres on the notion that there is nothing the company could invest it that would provide a greater return to shareholders over the long run than simply giving them a one-time dividend and reducing the number of the company's shares.

In the proxy, the board lays out the reasons why they don't support that plan.

"The company's success stems from the company's unique ability to combine world-class skills in hardware, software and services to deliver innovative products that create new markets and delight hundreds of millions of customers," Apple said. "This success has created tremendous value for the company's shareholders."

That's the company's way of telling investors they'll get a better deal on their dollar if they let the company invest that money in creating new devices that will give them a greater return on their investment down the line.

Apple already gave shareholders a bonus in April, when it announced it plans to spend up to $100 billion on dividends and up to $60 billion on share buybacks in the next few years. The company has already spent $43 billion on those plans, but Icahn's proposal calls for Apple to pick up the pace even more.

"While the board and management oppose this shareholder proposal, they are fully committed to returning cash to shareholders," Apple said. "The board and management team believe that capital should be returned to shareholders on an efficient and sustained basis and that the evaluation of capital return should be performed regularly and carefully with the best long-term interest of the business and shareholders in mind."

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Delta to honour dirt-cheap flights after pricing glitch

Some lucky fliers capitalized on a computer glitch Thursday and scored some really cheap flights on Delta Air Lines.

From about 10 a.m. to noon, certain Delta fares on the airline's own website and other airfare booking sites were showing up incorrectly, offering some savvy bargain hunters incredible deals. A roundtrip flight between Cincinnati and Minneapolis for February was being sold for just $25.05 and a roundtrip between Cincinnati and Salt Lake City for $48.41. The correct price for both of those fares is more than $400.

One customer posted to Facebook that she bought a flight from Toronto to Austin, Texas, for $134. A roundtrip flight for the same dates in mid-February now cost between $650-$855 and up at Delta's website

Trebor Banstetter, a spokesman for the Atlanta-based airline, told CBC News that correct prices are now being displayed, however, "Delta will honour any fares purchased at the incorrect price."

Jackie Fanelli, 27, learned about the super cheap fares from a friend's Facebook page. She attempted to purchase a $98 roundtrip first-class ticket from her home city of Baltimore to Honolulu on Priceline.com but the transaction didn't process before the deal was shut down.

"It was too good to be true," Fanelli said. "I try to go away every other year and this was not the year."

Delta's website was having lingering problems from the increased traffic Thursday afternoon.

"It looks like Delta's programmers had a little too much eggnog yesterday," joked George Hobica, founder of AirfareWatchDog.com, which promotes airfare sales.

It's likely that the airline tried to tweak its fares with a $10 or $20 system-wide change and a junior programmer made a mistake or two, he said.

"People just go wild. People have been bragging about booking six first-class tickets to Hawaii," Hobica said. "People hate the airlines so much that when this happens, they say: I'm going to get back at you for the time you broke my suitcase and didn't pay for it."

Other airlines have faced the same issue. In September United Airlines experienced an error in filing fares to its computer system. Many customers got tickets for $5 or $10, paying only the cost of the Sept. 11 security fee.

New U.S. transportation regulations, aimed at truth in advertising, require airlines to honour any mistake fares offered.

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Canadian retailers adapt to competitive new reality

Many U.S. retailers are planning to launch in Canada in 2014. (AP)

There is little doubt the retail landscape in Canada is changing as increasing numbers of big name U.S. chains shop for customers north of the border.

And, according to retail experts, just who wins the competition for the pocketbooks of Canadians in 2014 is likely to be decided by who is perceived to be offering the best deals.

"The environment overall remains very competitive. The one who can offer the best value is probably the one who's going to gain the most market share," said Brian Yarbrough, a retail analyst with Edward Jones.

"It's just the nature of where we've been lately. It seems that people are very focused on value and they're focused on deals and I think that will continue," Yarbrough said.

Target launch

The competition in Canada has been intense this year as Target became the latest big American chain to invade the Canadian retail space, having now rolled out 124 stores across the country.

Domestic retailers countered by consolidating at a frenzied pace in an effort to lower overall costs and increase their buying power with manufacturers as they attempt to keep up not only with Target but also the likes of Walmart and Costco.

The grocery segment was particularly active, as Loblaws struck a deal to buy Shoppers Drug Mart for $12.4 billion in cash and stock and Sobeys bought the Canadian assets of U.S. grocer Safeway for $5.8 billion.

Online retailer Amazon even got into the mix, announcing it would begin delivering food directly to Canadians' doorsteps.

In other development in the retail sector, department store chain Sears Canada announced a turnaround plan that included laying off staff and the sale of valuable assets, while Hudson's Bay Co. continued to go upscale, striking a $2.9-billion deal to buy Saks Inc. and bring it to Canada.

Luxury retailer Nordstrom is also set to enter Canada next year and moving into some of the locations vacated by Sears.

Move upmarket

Canada isn't home to as many upscale retailers as the U.S. and that could present an opportunity for growth in the sector, especially as stock markets have improved, boosting confidence among wealthier consumers.

But even that environment remains competitive, Yarbrough added, noting that "even in the luxury space you're seeing discounting going on."

Meanwhile, Graeme McVie, vice-president and manager of business development at marketing and research firm LoyaltyOne, said consumers may be looking for value, but that doesn't mean they're going to see it only in the price of the goods they buy.

Stores can also encourage traffic by being well organized and stocked and by providing good service. For example, they can help clients set up the electronic devices they buy, something they wouldn't get shopping online at a discount.

Even promotions themselves aren't always what they seem, McVie added.

"The savvier retailers are using that (promotions) to grab headlines and drive overall price perceptions, but those discounts don't always apply as much as you'd like to believe."

"Not all the products are discounted to same degree and some of the prices are only available at specific times," he noted.

Winners and losers

Ken Wong, a marketing professor at Queen's University in Kingston, Ont., said whether or not consumers come out as the winners in the current price-driven environment depends on what they're looking for.

"If what you look for is low price then it is unquestionably a good thing, because bigger stores, on the range of merchandise that they carry, always have lower prices," said Wong.

"But you're not going to find more esoteric, more specialty type products in a big box store relative to a local store, nor are you usually going to find in a big box store products that are unique to local tastes."

What smaller businesses can offer are those local products, more personal service and, in some cases, more convenient locations.

"Where small stores get into trouble is when they try to go head-to-head with a big box store, especially on price, because they just can't sustain their operation at that margin, their costs are too high," Wong said.

Value matters

Fiona Story of the Yellow Pages Group, which has been working to promote local business through an event called Shop The Neighbourhood, agreed that competitive pressures mean small businesses have to get more creative to lure customers.

"There's actually a need for small businesses to up their visibility and take advantage of other channels, particularly digital marketing channels that they may not have necessarily been considering before," Story said.

And deals offered by local retailers don't always have to be huge, she said. For example, during one recent marketing event the store's deal was a free balloon for anyone who visited, and people went.

"There is a desire to support the local businesses in your neighbourhood, but people are busy so sometimes we just need that recall or reason to get out there and to do it," she said.

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BlackBerry shares down 8% on TSX

Days after an unexpected jump higher, shares in BlackBerry wiped out most of their recent gains and traded down by almost 10 per cent on Canada's benchmark stock exchange Friday.

BlackBerry shares were off by almost 80 cents to $7.56 shortly after trading opened in Toronto. The shares were playing catch-up to what happened in New York yesterday, when the TSX was closed for Boxing Day but the Nasdaq was still open.

The company, whose stock trades on both exchanges, was hit by news that co-founder Mike Lazaridis is selling $26 million worth of his remaining stake, in effect exiting the company completely.

Lazaridis has sold 3.5 million of his BlackBerry shares since Monday, bringing his total ownership below the five per cent threshold that requires him to report his holdings to regulators.

Last week, the company posted disastrous quarterly earnings that showed a $4-billion writedown related to unsold inventory. But despite the bleak number, the company's shares gained 16 per cent last Friday.

Speculation at the time was that part of the reason for the sudden bounce was short-sellers giving up their positions, a counter-intuitive phenomenon whereby the stock sees a sudden but temporary surge in buyers because everyone who had been betting against the company gives up.

Trading activity today appears to back that up, as BlackBerry shares have headed lower again.

BlackBerry practically invented the smartphone industry and remained among the prominent players in the handset arena until fairly recently. But it has lost a major chunk of its market share to rival companies such as Apple, Samsung, LG, HTC and others.

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Head of railway in Lac-Mégantic disaster says he's 'also a victim'

The railway executive behind the company whose train smashed into Lac-Mégantic wants people to know he's been suffering, too.

Looking back at the year as it comes to a close, Ed Burkhardt said he's still troubled by the Quebec derailment and has thought about it every day since the July 6 catastrophe killed 47 people and destroyed part of the town.

The chairman of Montreal, Maine & Atlantic Railway Ltd. also told The Canadian Press in a recent interview that he's sustained significant personal financial losses since the disaster.

"They had every reason to be very upset with what had occurred," Burkhardt said about the anger directed toward him by the people of Lac-Mégantic.

"But what they didn't know was that I was equally upset and I was also a victim of this whole thing."

Investment wiped out

The chairman of Montreal, Maine & Atlantic Railway Ltd. also told The Canadian Press in a recent interview that he's sustained significant personal financial losses since the disaster.

Burkhardt, who said he is the largest shareholder in the now-insolvent MMA, explained that he lost his entire investment after the crash forced the company to file for bankruptcy protection.

"That's a big pile of money, I might say," Burkhardt, the president of MMA parent company Rail World Inc., said in a phone interview from his Illinois office.

"It's reduced me from being a fairly well-off guy to one that's just getting by. But OK, that's what happens."

He added, however, that he wasn't complaining about the hit he took to his bottom line, insisting he didn't want to criticize the people of Lac-Mégantic because "they went through hell."

"[Financial losses are] not in the same category as the personal losses, the deaths and all of that, that people suffered in Lac-Mégantic," he said.

Burkhardt's frequently blunt remarks, often lacking public-relations massaging and sentimentalism, made him public enemy No. 1 last summer in Lac-Mégantic.

His brief stop in the town in the aftermath is perhaps best-remembered for his tumultuous news conference, during which he was heckled by irate locals.

Heavily criticized

Burkhardt, who also faced criticism for waiting more than four days before visiting the town after the crash, had anticipated the rough reception. He defended his delayed appearance, saying he was dealing with the crisis from his office.

Before travelling to Lac-Mégantic, Burkhardt even quipped that he'd probably have to wear a bulletproof vest during his visit.

Burkhardt displayed his straight-shooting style in the middle of the news conference when a reporter asked him how much he was worth, financially. He replied: "A whole lot less than I was Saturday [the day of the derailment]."

Reflecting on his reputation in Lac-Mégantic, Burkhardt believes local anger was directed at him because, as chairman, he was the voice of the company.

"I think I assumed too much of a personal role up there, so I guess I was the magnet for all of the people's unhappiness, which is not terribly surprising," the railway boss said.

He then repeated an allegation he first made publicly at that July news conference: the train driver didn't do his job properly the night of the disaster.

"They view me terribly, but I wasn't the guy who didn't set the brakes on the train," he said.

Burkhardt has alleged that the driver did not apply enough handbrakes before the train broke loose and barrelled about 10 kilometres down a hill into Lac-Mégantic.

Train driver did not respond

Tom Harding, the train's driver, was suspended by MMA following the accident. Harding's lawyer did not respond to a request to comment on Burkhardt's allegation.

Firefighters from the neighbouring town of Nantes have said they responded to a blaze on board the train hours before it came off the tracks in Lac-Mégantic. MMA has suggested the fire department's decision to shut off the locomotive to extinguish the fire might have disabled its air brakes.

Police and federal transport safety officials are conducting investigations into the crash.

In the months since the disaster, Burkhardt says he's questioned whether his trains should have ever been transporting crude oil.

"I've asked myself a number of times as to whether we should have been handling this oil at all," Burkhardt said.

"Hindsight is 20-20 vision, so at this point I wish we hadn't been handling oil. We would have obviously not been exposed to such a situation."

MMA stopped hauling oil after the crash, but Burkhardt noted that other Rail World operations in Europe have continued to transport other highly explosive cargoes, like propane.

Canadian authorities have indicated that the deadly oil in Lac-Mégantic proved to be as flammable as gasoline, though it had been improperly labelled as something less volatile.

"There's always going to be risks in handling dangerous commodities," he said.

"You try to minimize those risks, you try to manage your company well, so that those risks are low. But the risks are never zero."

Burkhardt said he welcomes the fresh debates over regulations for the rail industry, as long as any eventual changes are harmonized in Canada and the United States.

For example, he thinks tank-car construction needs to be improved, though due to the high costs he expects any transition to a more-durable tanker to take a long time.

He also encouraged more testing of operating employees, with particular attention placed on brake management and in preventing runaway trains.

Still, he thinks it should be up to railway managers to enforce any changes, rather than a heavier-handed approach by regulators.

"I put the pressure on the management, not on the regulator," Burkhardt said.

"I don't want the regulator telling me what to do. I want to figure this out within management."

MMA and Rail World executives, including Burkhardt himself, are among those named in pending lawsuits in Canada and the United States over the Lac-Mégantic​ crash.

The insolvent MMA has filed for bankruptcy protection and is now under trusteeship, though it continues to manage its day-to-day operations. MMA is expected to be sold off in the coming weeks.

There are concerns in Lac-Mégantic that a new owner could eventually resume oil shipments in the area. MMA's train service recently returned to the community, though it will no longer carry dangerous freight through town.

Burkhardt said the railway's next owner will need additional traffic along the line for it to be profitable. It will be up to them, he added, to decide whether to start hauling crude oil again.

On that question, he doesn't think the door should be forever closed to moving oil on the MMA line.

Burkhardt said MMA's decision to stop handling oil after the derailment was made easy by the fact it was unlikely to be commercially viable under the circumstances.

"Obviously, the shippers were just as horrified as we were by what occurred and probably wouldn't have used our services anyway," he said.

"Although the risks of moving over some other railroad to destination are probably just as great."

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Target hackers got card PINs too

Target said Friday that debit-card PINs were among the financial information stolen from millions of customers who shopped at the retailer earlier this month.

The company said the stolen personal identification numbers, which customers type in to keypads to make secure transactions, were encrypted and that this strongly reduces risk to customers. In addition to the encrypted PINs, customer names, credit and debit card numbers, card expiration dates and the embedded code on the magnetic strip on back of the cards were stolen from about 40 million credit and debit cards used at Target stores between Nov. 27 and Dec. 15.

Security experts say it's the second-largest theft of card accounts in U.S. history, surpassed only by a scam that began in 2005 involving retailer TJX Cos.

Target said it doesn't have access to nor does it store the encryption key within its system, and the PIN information can only be decrypted when it is received by the retailer's external, independent payment processor.

"We remain confident that PIN numbers are safe and secure," spokeswoman Molly Snyder said in an emailed statement Friday. "The PIN information was fully encrypted at the keypad, remained encrypted within our system, and remained encrypted when it was removed from our systems." The company maintains that the "key" necessary to decrypt that data never existed within Target's system and could not have been taken during the hack.

However, Gartner security analyst Avivah Litan said Friday that the PINs for the affected cards are not safe and people "should change them at this point."

Litan said that while she has no information about the encrypted PIN information in Target's case, such data has been decrypted before, in particular the 2005 TJX Cos. hacking case that's believed the largest case of identity theft in U.S. history.

In 2009 computer hacker Albert Gonzalez plead guilty to conspiracy, wire fraud and other charges after masterminding debit and credit card breaches in 2005 that targeted companies such as T.J. Maxx, Barnes & Noble and OfficeMaxe. Gonzalez's group was able to decrypt encrypted data. Litan said changes have been made since then to make decrypting more difficult but "nothing is infallible."

"It's not impossible, not unprecedented (and) has been done before," she said.

Besides changing your PIN, Litan says shoppers should opt to use their signature to approve transactions instead because it is safer.

Still, she said Target did "as much as could be reasonably expected" in this case. "It's a leaky system to begin with," she said.

Credit card companies in the U.S. plan to replace magnetic strips with digital chips by the fall of 2015, a system already common in Europe and other countries that makes data theft more difficult.

Minneapolis-based Target Corp. said it is still in the early stages of investigating the breach. It has been working with the Secret Service and the Department of Justice.

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BlackBerry co-founder Mike Lazaridis sells $26M US in shares

Mike Lazaridis has cashed in shares of BlackBerry, making $26 million US in the process, as he lessens his
stake in the smartphone company he helped create.

Documents filed with U.S. regulators on Tuesday show that a numbered company registered in Ontario and controlled by Lazaridis has sold 3.5 million shares in BlackBerry since Monday.

The two transactions take Lazaridis' stake below five per cent of BlackBerry, which is the threshold where he would be required by regulators to report any future sales of shares in the company.

The first sale was made on Monday when 3.17 million shares were sold at an average price of $7.55 on the open market.

The second transaction came on Christmas Eve Day when the same numbered company sold 333,107 shares at an average price of $7.63.

Mike Lazaridis and fellow co-founder Douglas Fregin established Research in Motion, which would later become BlackBerry, in 1984. (Eric Risberg/The Associated Press)

In total, the transactions reaped $26.5 million.

Both sales were made through 1258701 Ontario Ltd., an investment holding company, according to the documents from the U.S. Securities and Exchange Commission.

In October, the numbered company was part of an effort by BlackBerry co-founders Lazaridis and Doug Fregin to submit a bid for BlackBerry when the Waterloo, Ont.based firm was hunting for potential buyers.

Plans to sell the company were eventually scrapped when Fairfax Financial (TSX:FFX), one of BlackBerry's largest shareholders, came up with a plan to raise a billion dollars in hopes to resuscitate the struggling company instead.

Major changes were made almost immediately, with the hiring of John Chen as chairman and chief executive officer. Chen previously helped turn around Sybase, a data management company.

Last week, BlackBerry (TSX:BB) reported a quarterly loss of $4.4 billion as sales of its smartphones continued to decline.

Chen delivered the clearest plan for the company's future yet, which stoked investor optimism.

Shares of BlackBerry have been on the upswing, rising 24 per cent since the financial results were released.

On Tuesday, the company's badly beaten stock hit its highest levels since late October, before the plan to sell BlackBerry was sidelined.

BlackBerry shares closed up 27 cents to $8.25 on the Toronto Stock Exchange.

A company spokeswoman said BlackBerry had no comment.

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Insurance and the ice storm: Are you covered?

Hundreds of thousands of Canadians have been inconvenienced by the big ice storm that's swept through southern Ontario, Quebec and the Maritimes. And for many of them, it's also caused costly damage: falling tree limbs have crashed down on their cars or damaged their homes, power failures have led to huge quantities of spoiled food or frozen pipes, while others have been forced into hotels to keep warm.    

A vehicle struck by a fallen tree limb in Toronto in the wake of the weekend ice storm: Car damage will only be covered by insurance under certain circumstances. (Matthew Sherwood/Canadian Press)

​

That's when people start asking: Will insurance pay for any or all of this? Am I covered?

The answer to that depends on individual policies, but here are some general guidelines:

Damage to homes

Damage to homes from falling trees or ice is generally covered by a homeowner's policy, says the Insurance Bureau of Canada. "This includes damage caused by flying debris or falling branches or trees, or damage to your home and its contents when water or snow enters through openings caused by high winds," the IBC says.

Many homeowners' policies have standard deductibles of $500, so you'll have to figure out if it's really worthwhile to make a claim if the damage is minor. 

What's covered by insurance:

Usually covered:

• Physical damage to home from falling ice, trees, tree limbs, flying debris.
• Damage to home caused by snow, rain or wind.
• Damage to home and contents from water or snow entering through opening caused by high winds.   

May be covered:

• Damage to cars and trucks caused by falling ice, falling trees and tree limbs, wind, water, but only if comprehensive or all-perils insurance has been purchased.
• Homeowners who can't live in their homes because of insurable damage may be entitled to additional living expenses (such as hotel bills) in some circumstances.

Source: IBC 

If the damage is caused by your neighbour's tree, you should still contact your insurance company to report the damage, IBC spokesman Steve Kee told CBCNews.ca. "Your insurer may then go after your neighbour's insurance company for payment," he said. If the tree is owned by the city, you should still report the damage to your own insurer. But the damage may be something the city would ultimately be responsible for, Kee said. He also advised potential claimants to take pictures of any damage "once it's fresh."  

A claim for food spoilage or burst water pipes caused by a power failure could also form part of an insurance claim, but there may be limitations.  

What if a big tree goes down in your yard but doesn't actually cause any damage? Would you be covered for the cleanup and removal of the tree? Probably not. Insurance covers damage to your fences, your roof, eavestroughs, windows, porches and outbuildings. But debris removal from your yard, in the absence of physical property damage, will generally be at your own expense.  

For those who've chosen to check into a hotel or motel to escape a cold house, the Insurance Bureau of Canada warns that the hotel bills may not be covered. "If they're going to a hotel because of insurable damage to their home or if they're forced to leave their homes by a police order," they may be entitled to additional living expenses, Kee said. But if they're checking into a hotel just to be more comfortable and are not reporting physical property damage, the hotel bills would generally not be covered, he said.

Following the 1998 ice storm that ravaged parts of Ontario and Quebec, some insurers said they would consider a call by Quebec's premier for Quebecers to leave their unheated homes to be "the equivalent of an evacuation order," and therefore would be covered even if there was no physical damage to the insured property, according to the Toronto-based Institute for Catastrophic Loss Reduction.  

Damage to cars

Damage to cars from flying debris, falling ice, trees, or tree limbs is covered only if you have comprehensive or all-perils insurance. This is optional coverage, so check your policy. For those who have purchased this coverage, the deductibles vary widely. The standard deductible is $300, so if the only damage is a broken windshield, it may not be worthwhile to make a claim. On the other hand, if your vehicle has been seriously dented, it's easy to rack up damage of more than $1,000.

And as with home damage, if you can show that the damage to your vehicle was caused by a neighbour's tree, your neighbour's insurance company may ultimately be responsible for the claim.

Will your premiums go up?

People are often reluctant to make small insurance claims because of fears that premiums will go up, even from ice storms which are not considered "at fault" incidents.

The industry acknowledges that this could happen following this ice storm. "Premiums are based on claims records," the insurance bureau's Kee said. Each insurer will have different responses to ice storm claims, depending on the firm's own claims experience and on the particular claims record of their client. Someone who has made three claims on their homeowner's policy in the last five years could well see their premiums rise on renewal. What is the likelihood that premiums will rise? "There is a potential for things to go up," is about as specific as Kee would go.

But premiums may not rise across the board. The Institute for Catastrophic Loss Reduction, which acts as the research arm for Canadian property and casualty insurers, studied the aftermath of the 1998 ice storm and found "no evidence that rates were bumped higher after the '98 event," according to ICLR managing director Glenn McGillivray. "It's not a given [that rates will rise]," he says. 

Losses by businesses

Thousands of businesses have also incurred major losses from the ice storm. Because it occurred just before Christmas, retail stores that have been forced to close have lost thousands of dollars in sales. Many grocery stores without generators have had to dispose of huge quantities of spoiled food.

Commercial insurance policies reflect the individual circumstances of each business, so it's difficult to come up with general coverage guidelines. CanadianUnderwriter.ca estimates that 30 per cent of the claims following the 1998 Quebec-Ontario ice storm were commercial claims, with the average claim being a little more than $8,000.

Property and casualty insurers paid out $1.6 billion for about 840,000 claims following the 1998 ice storm. So far, the industry says it's still too early to estimate the number and extent of damage claims that will arise from the current ice storm.

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Holiday sales slump into Christmas

Stores are hoping Americans who've been tight-fisted with their money will get the last-minute itch to buy in the final week of the holiday shopping season.

After a strong start to the season, sales at stores have fallen for three consecutive weeks. That puts a lot of pressure on retailers to get shoppers into stores in the final days of what's typically the busiest shopping period of the year.

Sales at U.S. stores dropped 3.1 per cent to $42.7 billion for the week that ended on Sunday compared with the same week last year, according to ShopperTrak, which tracks data at 40,000 locations. That follows a decline of 2.9 per cent and 0.8 per cent during the first and second weeks of the month, respectively.

Online sales not included

The numbers, which don't include online sales, are another challenge in what has largely turned out to be a disappointing holiday shopping season for stores. The two-month period that begins on Nov. 1 is important for retailers because they can make up to 40 per cent of their annual sales during that time.

Retailers started the season cautiously optimistic after a strong start in November — ShopperTrak said sales were up 3.4 per cent for the month. But in the final days, retailers have found it increasingly hard to attract shoppers into stores even though some like Toys R Us have rolled out big discounts, while others like Kohl's have stayed open for dozens of hours straight since the weekend.

None of that seemed to lure shoppers. At the Garden State Plaza Mall in Paramus, N.J. on Saturday, Abercrombie & Fitch, AnnTaylor and Express had 50 per cent sales, while Aeropostale was discounting its entire assortment up to 70 per cent.

Still, Barbara Jackson, 45, was spending cautiously. She said she's capping her holiday budget at $1,500 — half of what she spent last year. That's because Jackson, an aide to the elderly, is earning less than last year.

"I am more budget conscious," Jackson said.

Karen McDonald, a spokeswoman at Taubman Centers, which owns or operates 28 malls, estimated that business for the week that ended Sunday was unchanged to mid-single digit percentage growth compared with a year ago.

"I felt for sure it was going to be gangbusters. But it was just OK," McDonald said.

Slight gains

Shoppertrak estimates that holiday sales at stores so far are up 2 per cent to $218.4 billion compared with the same period last year. That's below the 2.4 per cent forecast for the two-month period, but the company is standing by that estimate with a few days left before Christmas and a little over a week before the season ends.

The National Retail Federation, the nation's largest retail group, also said it's sticking with its forecast that sales in stores and online will be up 3.9 per cent to $602.1 billion.

But even online sales, which had been a bright spot for much of the season, aren't growing at the expected pace. Online spending from home and work desktop computers in the U.S. from Nov. 1 through Dec. 15 was up 9 per cent from the same period last year to $37.8 billion, according to the most available data from comScore.

That's below the 14 per cent growth that the Internet research firm is forecasting for the season. The company still expects online sales to grow at that pace for the season, but the category only accounts for about 11 per cent of spending in the three months that include the holiday shopping season.

Final sales figures for the holiday shopping season are expected in January.

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Amex agrees to pay $75M for misleading service & fees

The Associated Press Posted: Dec 24, 2013 1:53 PM ET Last Updated: Dec 24, 2013 3:29 PM ET

American Express has agreed to pay at least $75.7 million to end an investigation into what regulators said was misleading marketing of some discontinued card products.

The Federal Deposit Insurance Corp. said Tuesday that American Express led consumers to believe that an account protection product would work for up to two years when the benefits usually lasted no more than three months, and it didn't properly explain the enrolment process for a product intended to protect against identity theft. It said 85 per cent of consumers who signed up didn't complete the enrolment process, but they were billed anyway.

The agency also said that the company misrepresented the terms of a "lost wallet" product that was offered to Spanish-speaking customers in Puerto Rico, and it did not provide written materials in Spanish.

The FDIC says the programs were marketed to customers between 2004 and 2012. It said American Express will pay restitution to 335,000 customers.

The New York-based company said it agreed to pay $16.2 million in fines and repay at least $59.5 million to customers.

American Express Co. said it has set aside enough to cover most of the costs of the settlement with the FDIC, the Consumer Financial Protection Bureau, and the Office of Comptroller of the Currency. It has already made most of the payments to customers.

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Dec 27, 2013 10:19 AM ET Dec 27, 2013 10:19 AM ET Dec 27, 2013 10:19 AM ET Dec 27, 2013 10:20 AM ET Dec 27, 2013 10:19 AM ET

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Canadian retailers adapt to competitive new reality

Manu U.S. retailers are planning to launch in Canada in 2014. (AP)

There is little doubt the retail landscape in Canada is changing as increasing numbers of big name U.S. chains shop for customers north of the border.

And, according to retail experts, just who wins the competition for the pocketbooks of Canadians in 2014 is likely to be decided by who is perceived to be offering the best deals.

"The environment overall remains very competitive. The one who can offer the best value is probably the one who's going to gain the most market share," said Brian Yarbrough, a retail analyst with Edward Jones.

"It's just the nature of where we've been lately. It seems that people are very focused on value and they're focused on deals and I think that will continue," Yarbrough said.

Target launch

The competition in Canada has been intense this year as Target became the latest big American chain to invade the Canadian retail space, having now rolled out 124 stores across the country.

Domestic retailers countered by consolidating at a frenzied pace in an effort to lower overall costs and increase their buying power with manufacturers as they attempt to keep up not only with Target but also the likes of Walmart and Costco.

The grocery segment was particularly active, as Loblaws struck a deal to buy Shoppers Drug Mart for $12.4 billion in cash and stock and Sobeys bought the Canadian assets of U.S. grocer Safeway for $5.8 billion.

Online retailer Amazon even got into the mix, announcing it would begin delivering food directly to Canadians' doorsteps.

In other development in the retail sector, department store chain Sears Canada announced a turnaround plan that included laying off staff and the sale of valuable assets, while Hudson's Bay Co. continued to go upscale, striking a $2.9-billion deal to buy Saks Inc. and bring it to Canada.

Luxury retailer Nordstrom is also set to enter Canada next year and moving into some of the locations vacated by Sears.

Move upmarket

Canada isn't home to as many upscale retailers as the U.S. and that could present an opportunity for growth in the sector, especially as stock markets have improved, boosting confidence among wealthier consumers.

But even that environment remains competitive, Yarbrough added, noting that "even in the luxury space you're seeing discounting going on."

Meanwhile, Graeme McVie, vice-president and manager of business development at marketing and research firm LoyaltyOne, said consumers may be looking for value, but that doesn't mean they're going to see it only in the price of the goods they buy.

Stores can also encourage traffic by being well organized and stocked and by providing good service. For example, they can help clients set up the electronic devices they buy, something they wouldn't get shopping online at a discount.

Even promotions themselves aren't always what they seem, McVie added.

"The savvier retailers are using that (promotions) to grab headlines and drive overall price perceptions, but those discounts don't always apply as much as you'd like to believe."

"Not all the products are discounted to same degree and some of the prices are only available at specific times," he noted.

Winners and losers

Ken Wong, a marketing professor at Queen's University in Kingston, Ont., said whether or not consumers come out as the winners in the current price-driven environment depends on what they're looking for.

"If what you look for is low price then it is unquestionably a good thing, because bigger stores, on the range of merchandise that they carry, always have lower prices," said Wong.

"But you're not going to find more esoteric, more specialty type products in a big box store relative to a local store, nor are you usually going to find in a big box store products that are unique to local tastes."

What smaller businesses can offer are those local products, more personal service and, in some cases, more convenient locations.

"Where small stores get into trouble is when they try to go head-to-head with a big box store, especially on price, because they just can't sustain their operation at that margin, their costs are too high," Wong said.

Value matters

Fiona Story of the Yellow Pages Group, which has been working to promote local business through an event called Shop The Neighbourhood, agreed that competitive pressures mean small businesses have to get more creative to lure customers.

"There's actually a need for small businesses to up their visibility and take advantage of other channels, particularly digital marketing channels that they may not have necessarily been considering before," Story said.

And deals offered by local retailers don't always have to be huge, she said. For example, during one recent marketing event the store's deal was a free balloon for anyone who visited, and people went.

"There is a desire to support the local businesses in your neighbourhood, but people are busy so sometimes we just need that recall or reason to get out there and to do it," she said.

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Insurance and the ice storm: Are you covered?

Hundreds of thousands of Canadians have been inconvenienced by the big ice storm that's swept through southern Ontario, Quebec and the Maritimes. And for many of them, it's also caused costly damage: falling tree limbs have crashed down on their cars or damaged their homes, power failures have led to huge quantities of spoiled food or frozen pipes, while others have been forced into hotels to keep warm.    

A vehicle struck by a fallen tree limb in Toronto in the wake of the weekend ice storm: Car damage will only be covered by insurance under certain circumstances. (Matthew Sherwood/Canadian Press)

​

That's when people start asking: Will insurance pay for any or all of this? Am I covered?

The answer to that depends on individual policies, but here are some general guidelines:

Damage to homes

Damage to homes from falling trees or ice is generally covered by a homeowner's policy, says the Insurance Bureau of Canada. "This includes damage caused by flying debris or falling branches or trees, or damage to your home and its contents when water or snow enters through openings caused by high winds," the IBC says.

Many homeowners' policies have standard deductibles of $500, so you'll have to figure out if it's really worthwhile to make a claim if the damage is minor. 

What's covered by insurance:

Usually covered:

• Physical damage to home from falling ice, trees, tree limbs, flying debris.
• Damage to home caused by snow, rain or wind.
• Damage to home and contents from water or snow entering through opening caused by high winds.   

May be covered:

• Damage to cars and trucks caused by falling ice, falling trees and tree limbs, wind, water, but only if comprehensive or all-perils insurance has been purchased.
• Homeowners who can't live in their homes because of insurable damage may be entitled to additional living expenses (such as hotel bills) in some circumstances.

Source: IBC 

If the damage is caused by your neighbour's tree, you should still contact your insurance company to report the damage, IBC spokesman Steve Kee told CBCNews.ca. "Your insurer may then go after your neighbour's insurance company for payment," he said. If the tree is owned by the city, you should still report the damage to your own insurer. But the damage may be something the city would ultimately be responsible for, Kee said. He also advised potential claimants to take pictures of any damage "once it's fresh."  

A claim for food spoilage or burst water pipes caused by a power failure could also form part of an insurance claim, but there may be limitations.  

What if a big tree goes down in your yard but doesn't actually cause any damage? Would you be covered for the cleanup and removal of the tree? Probably not. Insurance covers damage to your fences, your roof, eavestroughs, windows, porches and outbuildings. But debris removal from your yard, in the absence of physical property damage, will generally be at your own expense.  

For those who've chosen to check into a hotel or motel to escape a cold house, the Insurance Bureau of Canada warns that the hotel bills may not be covered. "If they're going to a hotel because of insurable damage to their home or if they're forced to leave their homes by a police order," they may be entitled to additional living expenses, Kee said. But if they're checking into a hotel just to be more comfortable and are not reporting physical property damage, the hotel bills would generally not be covered, he said.

Following the 1998 ice storm that ravaged parts of Ontario and Quebec, some insurers said they would consider a call by Quebec's premier for Quebecers to leave their unheated homes to be "the equivalent of an evacuation order," and therefore would be covered even if there was no physical damage to the insured property, according to the Toronto-based Institute for Catastrophic Loss Reduction.  

Damage to cars

Damage to cars from flying debris, falling ice, trees, or tree limbs is covered only if you have comprehensive or all-perils insurance. This is optional coverage, so check your policy. For those who have purchased this coverage, the deductibles vary widely. The standard deductible is $300, so if the only damage is a broken windshield, it may not be worthwhile to make a claim. On the other hand, if your vehicle has been seriously dented, it's easy to rack up damage of more than $1,000.

And as with home damage, if you can show that the damage to your vehicle was caused by a neighbour's tree, your neighbour's insurance company may ultimately be responsible for the claim.

Will your premiums go up?

People are often reluctant to make small insurance claims because of fears that premiums will go up, even from ice storms which are not considered "at fault" incidents.

The industry acknowledges that this could happen following this ice storm. "Premiums are based on claims records," the insurance bureau's Kee said. Each insurer will have different responses to ice storm claims, depending on the firm's own claims experience and on the particular claims record of their client. Someone who has made three claims on their homeowner's policy in the last five years could well see their premiums rise on renewal. What is the likelihood that premiums will rise? "There is a potential for things to go up," is about as specific as Kee would go.

But premiums may not rise across the board. The Institute for Catastrophic Loss Reduction, which acts as the research arm for Canadian property and casualty insurers, studied the aftermath of the 1998 ice storm and found "no evidence that rates were bumped higher after the '98 event," according to ICLR managing director Glenn McGillivray. "It's not a given [that rates will rise]," he says. 

Losses by businesses

Thousands of businesses have also incurred major losses from the ice storm. Because it occurred just before Christmas, retail stores that have been forced to close have lost thousands of dollars in sales. Many grocery stores without generators have had to dispose of huge quantities of spoiled food.

Commercial insurance policies reflect the individual circumstances of each business, so it's difficult to come up with general coverage guidelines. CanadianUnderwriter.ca estimates that 30 per cent of the claims following the 1998 Quebec-Ontario ice storm were commercial claims, with the average claim being a little more than $8,000.

Property and casualty insurers paid out $1.6 billion for about 840,000 claims following the 1998 ice storm. So far, the industry says it's still too early to estimate the number and extent of damage claims that will arise from the current ice storm.

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