Friday, Aug. 01, 2014 5:35PM EDT

Depressed by a down week for stocks? Don’t sweat it

IAN McGUGAN

Hey, you there on the ledge. I know you’re a bit down about a bad week for stocks. But before you do anything silly, let’s chat a bit.

Sure, the past couple of days have been rough, but as my colleagues and I at the Institute for Treatment of Stock and Markets Affective Disorders (ITSMAD) like to say, a little fall for the right reasons never hurt anyone.

Friday, Aug. 01, 2014 5:07PM EDT

Global trade no longer seen as growth-booster

Andy Mukherjee

India looks like the party-pooper of world trade. Really, its refusal to back a global accord on standardized customs just throws sand at an already creaking wheel.

Trade is no longer seen as the growth-booster it was before the financial crisis, particularly in emerging economies. Even politicians normally friendly to business – like Indian Prime Minister Narendra Modi – aren’t terribly keen to invest their political capital in dismantling barriers to exchange. For Modi, agreeing to the World Trade Organization deal that lapsed on July 31 would have exposed the country’s domestic farm-support policies to challenges by trading partners.

Friday, Aug. 01, 2014 4:30PM EDT

P&G; boss fixing everything but growth

Kevin Allison

A.G. Lafley is fixing everything at Procter & Gamble Co., except for the lack of growth. A new plan to ditch up to 100 underperforming brands is the P&G chief’s latest idea to boost performance, after cutting costs, exiting pet food and raising the dividend. Lafley is turning P&G into a leaner and more focused company. But his moves since coming out of retirement have yet to do much to address P&G’s tepid sales.

Thursday, Jul. 31, 2014 5:31PM EDT

U.S. telecom regime provides strong model for Ottawa

KEVIN CARMICHAEL

Think a heavy-handed government agency is bad for competition? Take a look at the U.S. wireless industry, which has become one of the most consumer-friendly markets on earth because Washington short-circuited the impulses of the U.S.’s profit-seeking telecommunications executives. Ottawa, which has struggled mightily to germinate a competitor for Canada’s Big Three telecoms companies, should study the U.S. situation closely for inspiration.

Friday, Aug. 01, 2014 5:00AM EDT

Lack of scientific R&D; funding will leave Canada in the dust

TODD HIRSCH

Scientific research and development is not a luxury for modern, industrialized countries such as Canada. It’s a necessity that we ignore at our peril. Without it, innovation and new discoveries suffer – and we risk being left behind in an increasingly competitive global economy.

Canada is criticized routinely on this measure, and for good reason. According to the most recent data from the OECD (from 2011), Canada falls well behind most other wealthy nations on total spending on research and development. At 1.74 per cent of GDP, we lag behind countries including the U.S. (2.77 per cent), Sweden (3.37 per cent) and Finland (3.78 per cent). Israel, a powerhouse in innovation and creative design, tops the list at 4.38 per cent.

Thursday, Jul. 31, 2014 3:04PM EDT

Canadian economy beginning to ride the U.S. wave

BARRIE McKENNA

The Canadian economy is finally showing signs of hitching a ride on the U.S. recovery.

Slightly more than a year ago Bank of Canada Governor Stephen Poloz laid out a road map for where he thought the economy was headed going into last fall.

The potent U.S. economy would come back strong, Canadian exports would pick up and more confident businesses would start to put their cash to work. All this activity would pick up the slack from other cooling sources of momentum, including consumer spending and the housing sector.

Thursday, Jul. 31, 2014 3:19PM EDT

Exxon’s production slump not as bad as it seems

Christopher Swann

Exxon Mobil’s second-quarter production slump is not as bad as it seems. A 6 per cent slide in oil and gas output, the worst in five years, overshadowed forecast-beating earnings and wiped $9-billion (U.S.) off the giant’s market value in early trading on Thursday – rising to $11-billion by noon. Exxon, though, has several projects coming online that should reverse the decline. With capital spending on these all but over, cash flow’s healthy again, too.

Wednesday, Jul. 30, 2014 6:11PM EDT

How to deal with slow economic growth: Get used to the pain

IAN McGUGAN

When the discussion turns to ways of dealing with Canada’s agonizingly slow economic recovery, Christopher Ragan has a different take than most.

Get used to the pain, he says.

There is no immediate, practical way to propel the economy ahead at much more than its current tortoise-like pace, according to the McGill University economist. There are, however, smart strategies to help the most vulnerable segments of society.

Thursday, Jul. 31, 2014 4:59PM EDT

The dilemma facing central bankers: wage shares

Andy Mukherjee

It’s not a central banker’s job to make sure economic gains are spread fairly between workers and capitalists. But that doesn’t mean monetary authorities should look the other way when things get lopsided. Wage shares keep falling in rich nations’ national incomes, which could trap policy makers into inadvertently blowing bubbles or throttling growth. There can be no fine balance.

Wednesday, Jul. 30, 2014 2:46PM EDT

BoE gives bosses new reasons to avoid U.K. banks

GEORGE HAY

Bank regulators have just given the top people in U.K. corporate life another reason to avoid job offers from domestic banks.

The Bank of England outlined a range of generally sensible proposals to make the bosses of these institutions more accountable. But the reforms could further drain an increasingly barren talent pool of potential chairmen and chief executives.

Wednesday, Jul. 30, 2014 4:30PM EDT

Spain’s import surge underlines need for reform

FIONA MAHARG-BRAVO

There has been no shortage of good economic news from Spain in recent days.

The economy created 402,000 new jobs in the second quarter, the largest quarterly increase since 2005. While the recovery is weakening in the rest of the euro zone, Spain’s gross domestic product picked up pace to grow 0.6 per cent from April to June. But as exports are stalling, the economy’s surge is now driven by a pickup in internal demand. That’s not a pattern that looks sustainable over the long term.

Wednesday, Jul. 30, 2014 3:30PM EDT

Inversions start to spin out of control

ROBERT CYRAN

Inversions are starting to spin out of control. A quest for tax savings has made digestible overseas targets attractive to U.S. buyers.

Hospira’s potential $5-billion (U.S.) deal for a Danone unit highlights a fresh supply, for so-called “spinversions.” The odd combination also reflects the perverse incentives distorting corporate decisions.

Wednesday, Jul. 30, 2014 11:00AM EDT

Little attention is being given to G20 economic pledge

KEVIN CARMICHAEL

Tired of lacklustre economic growth, the finance ministers of the Group of 20 nations earlier this year tried to recapture some of the old magic of their epic struggle against the Great Recession.

In an echo of the co-ordinated fiscal stimulus the G20 deployed to avoid a global depression, the members of the 2014 roster said they would implement new policies that would raise the current trajectory of the group’s combined gross domestic product by 2 per cent over five years. They said they would review progress in September, when ministers and central bankers are scheduled to meet in Cairns, Australia. The International Monetary Fund and the Organization for Economic Cooperation and Development were charged with delivering the report card.

Wednesday, Jul. 30, 2014 8:04AM EDT

What to expect from the Fed: ‘Halloween will mark the end of QE3’

MICHAEL BABAD

Bupkes is Yiddish for “nothing.” Bupkes is also Yiddish for what to expect from the Federal Reserve Wednesday afternoon.

By most accounts, the U.S. central bank is expected to just tweak its language when it releases its policy statement, while continuing its steady pullback in bond-buying stimulus known as quantitative easing, or QE3 to signal the third round.

Tuesday, Jul. 29, 2014 3:45PM EDT

Why economists shrug off the housing bubble

IAN McGUGAN

Can economists warn us of housing bubbles – and crashes – ahead of time?

It’s a question that becomes ever more fascinating as Canada’s real estate market scales new heights. The reaction from most Canadian bank economists has been largely a shrug. Yes, activity may be overheated in certain cities, they acknowledge, and prices may have to back off a little, but there’s little reason to worry about anything serious.

Tuesday, Jul. 29, 2014 2:00PM EDT

U.S., New Zealand stumbling blocks for Trans-Pacific Partnership

BRIAN MILNER

A more assertive Obama administration and a less dogmatic New Zealand government are keys to the successful completion of negotiations aimed at creating a major free-trading bloc involving Canada and 11 other countries on both sides of the Pacific, Japan’s economics minister says.

“I will not comment on domestic issues of the United States. However, the point of concern I have at present is that the White House seems to be losing its grip over the U.S. Congress,” says Akira Amari, who is spearheading Japan’s efforts to conclude the Trans-Pacific Partnership talks with a far-reaching trade deal by the end of this year or early in 2015, if possible.

Tuesday, Jul. 29, 2014 12:02PM EDT

Is Abenomics ‘coming unstuck’?

MICHAEL BABAD

This past spring may well be remembered as the “high water mark” of Abenomics.

There’s no question the aggressive economic program – huge stimulus and monetary policy measures, with an inflation target – launched by Japanese Prime Minister Shinzo Abe made its mark.

Japan’s economy surged by 6.7 per cent in the first quarter of the year, and the latest reading on inflation showed there is indeed inflation, of 3.4 per cent, notable in that it’s not deflation.

Tuesday, Jul. 29, 2014 3:16PM EDT

MetLife CEO should revel in his anonymity

ROB COX

Quick, who’s the chief executive of MetLife?

That the name Steve Kandarian doesn’t roll off the tongue for almost anyone who isn’t deeply steeped in the insurance business is probably a good thing for his shareholders. How he handles his company’s inevitable designation later this week as a systemic threat to the financial industry could change that. A Jamie Dimon-style public spat with regulators would be foolish.

Tuesday, Jul. 29, 2014 11:50AM EDT

Buffett adds extra difficulty to investor’s challenge of boosting Coke

KEVIN ALLISON

Warren Buffett adds a degree of difficulty to an activist shareholder’s Coke challenge.

Value investor David Winters is now on his second campaign to inject some fizz into Coca-Cola. The Oracle of Omaha’s vocal backing of Coke boss Muhtar Kent, though, makes it harder to shake things up.

Coke deserves criticism. Its shares have underperformed the S&P 500 Index by 20 per cent since 2010 as Americans have ditched fizzy drinks in favour of healthier alternatives. Coke has not been aggressive enough about cutting costs to adapt.

Monday, Jul. 28, 2014 5:49PM EDT

Canada’s top financial regulators still operate behind closed doors

Kevin Carmichael

On Jan. 29, 2008, some of the most powerful public servants in Ottawa gathered around 6 p.m. for a meeting that was scheduled to last at least three hours.

Dinner was to be served, according to the agenda circulated in advance of the meeting of the Senior Advisory Committee, which is chaired by deputy minister of Finance and includes the heads of the Bank of Canada, the Office of the Superintendent of Financial Institutions, the Canada Deposit Insurance Corp., and the Financial Consumer Agency of Canada.

Friday, Jul. 25, 2014 5:44PM EDT

Putin’s next major battle: ‘Stagflation’

IAN McGUGAN

Vladimir Putin has successfully butted heads with the West before, but now faces a more unpredictable foe: stagflation.

On Friday, Russia surprised global markets by raising its key interest rate for the third time in five months to put a lid on rampaging inflation, while announcing that its economy barely grew in the second quarter.

Monday, Jul. 28, 2014 2:47PM EDT

Zillow and Trulia fire up online real estate boom

ROBERT CYRAN

Zillow and Trulia may be firing up an online real estate boom.

The two listing services’ proposed $3.5-billion (U.S.) merger won’t produce many cost savings. But the all-stock deal promises to reduce competition and push prices higher, creating the potential for even faster growth. With only a tiny slice of the ad market, online real estate has room to raise the roof.

Monday, Jul. 28, 2014 1:01PM EDT

Mexico oil’s big opportunity: Cleaning up a big mess

CHRISTOPHER SWANN

Pemex is giving Big Oil an even bigger mess to fix. Mexico’s energy giant lost more money in the second quarter. Chronic inefficiency is pushing crude output to its lowest since 1990. And the government upped its tax take to 132 per cent of Pemex’s income.

The country’s output of black gold has fallen by a quarter over the past decade – an urgent problem for a nation that relies on oil for a third of its tax revenue. State-owned Pemex, whose 75-year drilling monopoly will soon end, revealed on Friday that it expects production to be 3 per cent lower than previously forecast in 2014, at around 2.4 million barrels a day.

Friday, Jul. 25, 2014 3:36PM EDT

Memo to Wall Street: More Ace Greenberg please

Antony Currie

Wall Street needs more leaders like Alan “Ace” Greenberg. The onetime Bear Stearns boss, famed for his pithy missives to staff, died on Friday. He was 86. Though he was no longer in charge, the firm’s 2008 collapse is a notable blemish on an otherwise illustrious career. The industry could use more of Greenberg’s scrappy PSD: poor, smart and driven.

Friday, Jul. 25, 2014 11:53AM EDT

An open letter to Trade Minister Ed Fast

KEVIN CARMICHAEL

Dear Mr. Minister,

It’s been a while since you’ve been through town. I trust you’ve been well and that you are having a good summer. I see Washington again is toying with “Buy American” legislation. Sigh. This must be frustrating, especially as it comes on top of the whole Keystone XL fiasco. If only TransCanada Corp. had avoided that North Dakota aquifer in the first place, eh?

Friday, Jul. 25, 2014 1:40PM EDT

Shareholders don’t hold back in punishing Amazon

Robert Cyran

Shareholders have punished Amazon with a whole new multiple.

The $165-billion (U.S.) internet retailer chalked up another stunning quarter of growth – revenue rose 23 per cent. Investors’ devotion to this figure over the years, rather than the at best anemic bottom line, explains why the stock now trades at 112 times next year’s expected earnings, according to Reuters data.

Thursday, Jul. 24, 2014 12:48PM EDT

Speed bumps still litter U.S. economy’s road to recovery

KEVIN CARMICHAEL

I’m not sure to what extent the readerships of Time and the Economist overlap. Those who picked up the print edition of only one of the two magazines this week would have been left with very different impressions of the state of the U.S. economy. Those who read both could be suffering from cognitive dissonance.

Thursday, Jul. 24, 2014 2:52PM EDT

Murdoch calls on European outposts for Time Warner

QUENTIN WEBB

Rupert Murdoch is calling on European outposts to help in his pursuit of Time Warner. The media mogul’s Twenty-First Century Fox is poised to sell its Sky pay-TV arms in Italy and Germany to Fox’s UK affiliate British Sky Broadcasting.

There’s strategic logic to the asset shuffle and the proceeds could help sweeten his $80-billion (U.S.) bid for the owner of CNN and Warner Bros. How Murdoch treats non-Murdoch owners is the linchpin.

Thursday, Jul. 24, 2014 2:15PM EDT

Allergan bosses put money where their mouths are

ROBERT CYRAN

Allergan bosses have put money where their mouths are. The drug maker says it is worth more on its own than the $52-billion (U.S.) hostile suitor Valeant Pharmaceuticals International is offering.

That’s straight from the empty-promise, takeover-defense playbook. Allergan, however, is linking stock and option grants to lofty profit goals. It’s a bolder gambit that should become an M&A norm.

Wednesday, Jul. 23, 2014 2:00PM EDT

Doors opened wide for U.S. retail M&A;

KEVIN ALLISON

The doors have been opened wide for U.S. retail mergers.

Amazon’s seemingly unstoppable march makes it harder for trust busters to prevent big merchants that cater to the same customers from uniting. Pressure on discounter Family Dollar and animal accoutrement purveyor PetSmart, two $7-billion (U.S.) chains, to merge with rivals shows that uppity investors have taken note. Expect more deals of a similar ilk.

Wednesday, Jul. 23, 2014 1:45PM EDT

Apple’s growth in China less impressive close up

ETHAN BILBY

China was the star of Apple’s quarterly earnings on July 22. But the relationship isn’t reciprocal.

Seen from the People’s Republic, the U.S. tech group is far from the leader, and faces a bitter battle with large rivals U.S. consumers have barely heard of, like Xiaomi and Coolpad. As they gain share too, Apple will struggle to be more than an also-ran.