Every day ROB Insight delivers exclusive analysis on breaking business news and market-moving events. Streetwise offers news and analysis on Bay Street and the world of finance. Insight the Market delivers up-to-the-minute insights on developing market news.
Here are our editors’ picks of some of the best reads available to Globe Unlimited subscribers this week.
An abundance of misery
Another 2,000 Canadian jobs bit the dust this week, with Bank of Montreal and Potash Corp. issuing the pink slips. The combined forces of technology and globalization are living up to their promise of giving us more leisure time, but unfortunately they’re also leaving a lot of people without any income. In ROB Insight, Scott Barlow explains how both blue– and white-collar jobs are getting swept away by improved productivity as the global economy shifts away from scarcity to the economics of abundance.
Big Six’s trillion-dollar mortgage risk
Canadian banks’ combined exposure to mortgages and HELOCs is in the neighbourhood of $1-trillion, a dizzying sum of money to have on balance sheets, particularly when the housing market is seen by some to be in or near bubble territory. But on a closer look, the threat isn’t nearly so great, writes Tim Kiladze in Streetwise, with more than half of the exposure backed by the CMHC, giving it a risk-weighting close to zero per cent.
Who says gold can’t be tarnished?
Down 27 per cent as the year draws to a close, gold looks set to end its 12-year winning streak. After taking such a drubbing, it doesn’t seem unreasonable to expect a rebound could be in the offing. But don’t bank on it, says David Berman in Inside the Market. As the prospect of a global economic catastrophe appears to fade and inflation shows no sign of rearing its head, two of the metal’s most compelling drivers have run out of steam.
Taxes a hot potato for Ring of Fire
The massive mineral deposit in Northern Ontario known as the Ring of Fire could yield big profits for miners and a lucrative stream of royalties for the provincial government. Nothing can happen until the crucial infrastructure to access the remote region is built, but working out the details of a tax regime is equally important if the project is to come to fruition. In ROB Insight, David Parkinson says Ontario should look to its provincial neighbour to the east to understand what not to do.
Trying to cut a deal? Get a woman on board
Having a female presence on your board isn’t just good for your corporate image, it’s also good for business. A recent study found that the average cost of deals is reduced by around 15 per cent when there is at least one woman director on the board, Jacqueline Nelson writes in Streetwise, and that the tally on attempted takeover bids was reduced by more than 7 per cent.
The equity bubble that isn’t
Google Trends shows that Web searches for “stock bubble” have hit levels not seen in six years. But telltale signs of a bubble in the market – excessive optimism and wildly stretched valuations – just aren’t there, writes Scott Barlow in Inside the Market. Neither operating margins nor returns on equity are seriously out of whack, and any potential fallout in the frothy housing market would be contained, thanks to the CMHC and the lack of U.S.-style derivatives-based leverage.