Here are our editors’ picks of some of the best reads available to Globe Unlimited subscribers this week.
Nanny knows what’s best for you
Quebec convenience store chain Alimentation Couche-Tard is again pushing the Ontario government to allow the sale of alcohol in its Mac’s stores. Sean Silcoff points out in ROB Insight that 20 years after Alberta privatized liquor sales, the range of products on offer has increased eightfold, government revenues have risen and consumer prices have fallen. So it’s a no-brainer, right? Wrong. Entrenched interests are so, well, entrenched, that the status quo is likely to remain for the foreseeable future.
Corporate Canada and the big owe
Corporate debt issues are on a tear and show no sign of letting up, Jacqueline Nelson writes in Streetwise . Proceeds of investment-grade issues are up 29 per cent year to date from the same period a year ago – more than double the 13-per-cent rate in the U.S. – as companies take advantage of low interest rates for early refinancings and mergers.
Making sense out of the census
Statistics Canada’s National Household Survey released this week should be a treasure trove of data to guide policy makers – but it isn’t, David Parkinson explains in ROB Insight . The 2010 scrapping of the long-form census means the latest set of numbers have none of the comparables needed to accurately identify economic shifts and trends, and so the true impact of the greatest recession in 70 years will never be known.
High-yield bonds: Quantity over quality
Yields may be on the rise, but the Moody’s Covenant Quality Index report is nearing its weakest level this year, with the portion of low-rated bonds carrying weak covenants close to all-time highs. It seems investors are more concerned about rate risk than they are credit quality or broader economic trends, writes Boyd Erman in Streetwise .
China’s credit steamroller
Material producers make up about 40 per cent of the value of the Toronto Stock Exchange, and the fortunes of those companies are strongly linked to Chinese commodity demand, Scott Barlow writes in ROB Insight . That demand in turn is being fed by a titanic expansion in credit which, were it to collapse, would take Canadian investors down with it.