Here are our editors’ picks of some of the best reads of the week. (The articles are available to Globe Unlimited subscribers only.)
Argentina: where comedy meets tragedy
Investing in the Latin American nation takes a big leap of faith and a considerably developed sense of humour, ROB Insight’s Sean Silcoff says. An overvalued currency, the ever-present threat of nationalization, and a government that keeps moving the goalposts makes it a tough place to do business. Brazil’s Vale has nixed a huge potash project, but Barrick and other Canadian miners still have big investments there. Oh, and did we mention the rocketing costs, widely discredited government statistics, and bleak economic landscape?
Budget rains on bank finance parade
Shed a tear for the poor banks … okay, fine – don’t, but Ottawa is coming after “character conversion transactions.” The derivative instrument that offers a little more tax-advantaged income to holders at a lower funding cost for banks has been a win-win for everyone but the tax man, Boyd Erman writes in Streetwise.
Big money in euro misery
Hedge funds have been cashing in on EU financial woes, explains ROB Insight’s Scott Barlow, by snapping up higher-yielding bonds of debt-strapped sovereigns in the knowledge they won’t have to take a haircut if things go south. It’s perfectly legal – the hedgies are simply responding to the precedent set with the Irish bailout in 2008.
Top TD executive heads for the exit
The head of the bank’s foreign exchange and interest rates business, Mark Faircloth, will leave the bank at the end of April, Boyd Erman writes in Streetwise. He had rejoined the bank after it hit trading troubles in the wake of the financial crisis. Moti Jungreis will assume the title of vice-chairman and head of global rates and foreign exchange.
Keystone just became a harder sell
By October of this year, the U.S. Energy Information Administration reports, the U.S. will be producing more oil than it is importing. The shale-oil boom and a decline in domestic consumption of liquid fuels are contributing factors. That shift in the energy landscape in the U.S., David Parkinson says in ROB Insight, is one more argument the Keystone naysayers have: more energy produced at home is one less reason a pipeline is needed to import crude from the oil sands.