Friday, Mar. 14, 2014 2:46PM EDT
Something must be done about rising income inequality, says the International Monetary Fund, and the solution is redistributive taxation. You read that right – the IMF in Washington, the same people who dole out free-market medicine and put fiscal hairshirts on insolvent governments. Their latest idea, announced yesterday by the Fund’s deputy managing director, David Lipton, sits oddly with the Fund’s reputation as global capitalism’s establishment club. But if the IMF is beginning to focus on statistics about wealth disparity rather than good old GDP, it is because the figures look alarming and, more importantly, because governments – the Fund’s members – now fear political conflict and social unrest.More »
Friday, Mar. 14, 2014 3:42PM EDT
Lego has trumped Goldman Sachs in the $1.5-billion (U.S.) flotation of cleaning giant ISS. The Danish toymaker’s owners, the Kirk Kristiansen family, made a minority investment in the group in 2012 to help cut its debt. ISS’s successful stock-market debut has brought a sparkling return for the Lego latecomers, leaving owners EQT and Goldman in the dust.More »
Friday, Mar. 14, 2014 5:00AM EDT
China’s leaders cling to the belief that they can engineer a soft economic landing. They’ll just gently let the air out of urban property bubbles and fix what ails the overheated credit market with financial reforms, limited bond defaults and a fresh clampdown on shady lending practices.
Their aim is to keep everything as controlled and orderly as possible while ensuring the economy can still create enough new jobs to keep social unrest from worsening. But the messy antics of free-market capitalism keep getting in the way.More »
Thursday, Mar. 13, 2014 3:00PM EDT
I really, really hope my fellow Canadians in Quebec fully understand their province’s mid-term economic outlook before heading to the polls. Debt, demographics, and the end of equalization payments strongly suggest that, should the Parti Quebecois succeed in its goal of eventually winning a referendum on sovereignty, going it alone would prompt a painful, extended economic transition period.More »
Thursday, Mar. 13, 2014 4:10PM EDT
Alibaba Group’s latest deal shows the extent of investors’ frenzy for China’s internet. The e-commerce giant announced on March 11 it had agreed to buy 60 per cent of Hong-Kong listed ChinaVision for $804-million (U.S.). The film group’s market value promptly soared to almost $5-billion. Star-struck investors are too easily excited.More »
Wednesday, Mar. 12, 2014 1:25PM EDT
It’s not just South Korea that worries Ford, it’s Brazil, China and India, too. When Stephen Harper rebuked Ford for its criticism of the Canada-South Korea trade pact, he probably reckoned it was just a little local grumbling from a factory in Ontario. But at last week’s Geneva motor show, Ford’s bosses were scanning the globe and what they saw was not pretty. The emerging markets are long on car assembly and a bit short on customers, which means a new threat for North American and Canadian auto companies seeking a respite from ruinous competition at home.More »
Wednesday, Mar. 12, 2014 1:12PM EDT
The Republican hardliners who rushed the U.S. Congress in 2010, taking the legislative process hostage, are inspired by former president Ronald Reagan. For them, he symbolizes a time when tax cuts equated to jobs and America’s economic might ruled the world.
It’s a flawed world view, which is apparent to the majority of Americans who live outside these lawmakers’ gerrymandered districts. As the Tea Party Republicans pump themselves up for diplomatic battle with Mr. Reagan’s old foe, Russia, they are about to learn that American influence isn’t what it was in 1984.More »
Tuesday, Mar. 11, 2014 5:54PM EDT
Canadians are right to be concerned when three or four companies effectively control a single national business like wireless telecom. But what if an important and expanding global market were dominated by only a trio of powerful players?
That will be the case in the already concentrated banana universe, once Chiquita Brands International Inc. completes an all-stock merger with smaller but financially sounder Irish company Fyffes PLC. Their combined market share will come in at just under 30 per cent, supplanting current top banana Dole Food Co. Inc. and its 26-per-cent chunk. Fresh Del Monte Produce Inc. holds down the third spot among the banana-peddling elite with about 15 per cent (based on 2011 figures) of a $9-billion (U.S.) export market.More »
Tuesday, Mar. 11, 2014 5:00AM EDT
Republicans are urging U.S. President Barack Obama to use oil as a weapon in the West’s diplomatic struggle with Russia over the future of Ukraine. By issuing permits to export American oil and gas, they argue, he could reduce Europe’s dependence and hit Russia in the pocket. It is by no means certain, however, that America has the infrastructure to make a difference – and it is not only Russia that would suffer from a falling oil price. The Arab oil exporters of the Gulf are similarly burdened and the major U.S. and European oil companies are geared to expensive production.More »
Wednesday, Mar. 12, 2014 12:07PM EDT
Daniel Indiviglio and Richard Beales
Fannie Mae investors may be using magic calculators. With the latest reform blueprint taking shape in the U.S. Senate, hedge funds like Fairholme Capital Management have urged Washington to revitalize Fannie, the mortgage finance giant, which along with Freddie Mac was kept alive with nearly $190-billion (U.S.) of taxpayer cash in the aftermath of the financial crisis.More »
Wednesday, Mar. 12, 2014 11:42AM EDT
Japan’s long battle with deflation has a message for the euro zone: Avoid even mild declines in prices. They creep up, cause immense damage and can be hard to reverse.
The euro zone’s 0.8-per-cent inflation rate is alarming because of weak demand. The International Monetary Fund expects 2014 GDP to be 2.5 percentage points below potential. That’s worse than the 1.5-percentage-point output gap in Japan in 1998, when prices began to fall. Besides, just as the Asian financial crisis tipped Japan into deflation, turmoil in emerging markets could threaten price stability in the single-currency area.More »
Tuesday, Mar. 11, 2014 4:57PM EDT
Chevron looks to be the best of Big Oil’s bad bunch. Like its rivals, the energy giant is facing a stagnant crude price, soaring drilling costs and slower output. Yet even after trimming forecasts, Chevron’s production will rise five times faster than at larger peer Exxon Mobil. That makes Chevron’s cheaper valuation look most attractive.More »
Tuesday, Mar. 11, 2014 1:20PM EDT
Bondholders in Detroit’s $18-billion (U.S.) bankruptcy must feel like they’re in a mirror universe. A restructuring plan filed by the city’s emergency manager would effectively turn bankruptcy precedents upside down by paying equity holders – in this case, ordinary Detroiters – at the expense of secured creditors. Such a shareholder-friendly approach might save the city and anoint Judge Steven Rhodes a hometown hero. But it may yet come at a market price.More »
Tuesday, Mar. 11, 2014 12:34PM EDT
Around the world, investigators are trying to find out if the largely unregulated foreign-exchange market was manipulated. Even before the probes are completed, the pace of change will pick up in the $5-trillion-a-day market, in both what moves currencies and the way business is done.
Regulators are investigating whether some traders profited from knowledge of how clients wanted to trade around the time that widely-used benchmark prices were set. Chatter about rumoured flows has long been a way of life in FX, and not just at benchmark-setting minutes.More »
Tuesday, Mar. 11, 2014 11:46AM EDT
Hollywood’s romance with Chinese film companies is about more than easy money. Media group Huayi Brothers is committing up to $150-million (U.S.) to an industry veteran’s production group, while private equity firm Hony Capital is helping to fund a new studio. Countless financiers have lost their shirts in Tinseltown. But the new arrivals are no ingénues. Chinese cinemas and local know-how will help to draw studios hoping for big hits.More »
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David Parkinson has been covering business and financial markets since 1990, and has been with The Globe and Mail since 2000.
Sean Silcoff joined The Globe and Mail in January, 2012, following an 18-year-career in journalism and communications. He previously worked as a columnist and Montreal correspondent for the National Post and as a staff writer at Canadian Business Magazine.
Ian McGugan is the Investment Editor of The Globe and Mail and has been writing about investing, economics and business for more than 20 years. He joined the Globe and Mail in 2010.
Dave Morris joined the Globe and Mail in 2010 as Associate Editor of Report on Business Magazine.
Carl Mortished is a Canadian financial journalist and freelance consultant based in the U.K.