In a 219-212 vote late yesterday, the House of Representatives approved the largest healthcare overhaul in four decades. The bill, which failed to garner a single Republican vote, will be signed into law by Obama, who called it "a victory for the American people."
The healthcare measures will cost $940B over ten years and cover 32M uninsured Americans. The bill is a mixed bag for insurers, who stand to gain over 20M new customers but are unhappy the bill doesn't substantially address the problem of rising healthcare costs and further reduces government subsidies to the industry. Pharmaceutical companies, on the other hand, emerge as clear winners from the bill, while large businesses are worried about higher costs and stricter coverage rules.
Meanwhile, the Canadian dollar is charging towards par with its U.S. counterpart. Canada's currency has risen about 7 percent since early February, peaking on Friday at 99.38 U.S. cents, its highest since July, 2008. Many analysts expect it to return to parity with the U.S. dollar, and stay strong through 2010 or longer.
What this means is that cross-border acquisitions have become more attractive. There are also greater availability of debt and equity financing. What does this means for local businesses if consumers are heading south for cheaper products or looking to acquire U.S. assets by Canadian companies looking to grow?
Canada's economic recovery has outpaced the U.S. and corporate balance sheets are stronger. Debt and equity markets have been willing to finance deals, and may be even more enthusiastic about a U.S. purchase that could be financed in both U.S. and Canadian dollars. In short, Canadian companies are better positioned than many of their international peers to purchase foreign assets, having better weathered the financial crisis than most, and emerged from the recession with stronger balance sheets -- relatively high levels of cash and low levels of debt.
But staying true to “No Risk, No Gain” belief, while there is no doubt with the U.S. being a significant market, if you buy a strategic asset which has a great fit with your business, you can achieve synergies, but at the same time, you have to be ready to take some volatility along the way.
The U.S. economy is still unhealthy with high levels of national debt that has to raise concerns and lead to the question, “How far can the U.S. currency fall?”. Of course, there would be less incentive to purchase an asset when it will be worth less in the future. Agreeing on a price is fraught in an economy where no one is sure if the biggest risks are still ahead.
The soaring Canadian dollar does help Canadian companies in another way, allowing them to import at lower costs, especially inventory and equipment upgrades.
Overall, Canada’s economy is heavily reliant on immigrants with new money and the commodities market. Then there are other causes for concern with local businesses struggling to keep up with increasing competition and most fresh graduates are victims of structural unemployment (stuck in a job well under their qualifications).
The healthcare measures will cost $940B over ten years and cover 32M uninsured Americans. The bill is a mixed bag for insurers, who stand to gain over 20M new customers but are unhappy the bill doesn't substantially address the problem of rising healthcare costs and further reduces government subsidies to the industry. Pharmaceutical companies, on the other hand, emerge as clear winners from the bill, while large businesses are worried about higher costs and stricter coverage rules.
Meanwhile, the Canadian dollar is charging towards par with its U.S. counterpart. Canada's currency has risen about 7 percent since early February, peaking on Friday at 99.38 U.S. cents, its highest since July, 2008. Many analysts expect it to return to parity with the U.S. dollar, and stay strong through 2010 or longer.
What this means is that cross-border acquisitions have become more attractive. There are also greater availability of debt and equity financing. What does this means for local businesses if consumers are heading south for cheaper products or looking to acquire U.S. assets by Canadian companies looking to grow?
Canada's economic recovery has outpaced the U.S. and corporate balance sheets are stronger. Debt and equity markets have been willing to finance deals, and may be even more enthusiastic about a U.S. purchase that could be financed in both U.S. and Canadian dollars. In short, Canadian companies are better positioned than many of their international peers to purchase foreign assets, having better weathered the financial crisis than most, and emerged from the recession with stronger balance sheets -- relatively high levels of cash and low levels of debt.
But staying true to “No Risk, No Gain” belief, while there is no doubt with the U.S. being a significant market, if you buy a strategic asset which has a great fit with your business, you can achieve synergies, but at the same time, you have to be ready to take some volatility along the way.
The U.S. economy is still unhealthy with high levels of national debt that has to raise concerns and lead to the question, “How far can the U.S. currency fall?”. Of course, there would be less incentive to purchase an asset when it will be worth less in the future. Agreeing on a price is fraught in an economy where no one is sure if the biggest risks are still ahead.
The soaring Canadian dollar does help Canadian companies in another way, allowing them to import at lower costs, especially inventory and equipment upgrades.
Overall, Canada’s economy is heavily reliant on immigrants with new money and the commodities market. Then there are other causes for concern with local businesses struggling to keep up with increasing competition and most fresh graduates are victims of structural unemployment (stuck in a job well under their qualifications).
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