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.
Chocolate, fondue, and angry citizens
You wouldn’t expect one of the wealthiest countries in the world to be on the vanguard of the attack on income disparity. This past spring the Swiss voted in favour of tough curbs on executive pay, banning golden hellos and golden parachutes. A referendum later this month proposes to ban Swiss-based businesses from paying anyone a salary more than 12 times that of the lowest paid staff. And a vote scheduled for 2014 proposes a basic minimum income. In ROB Insight, Carl Mortished explains the shift in national sentiment.
Can their fingers do the walking fast enough?
Like many companies in the sector, Yellow Media is struggling to make the transition from print to digital, writes Tim Kiladze in Streetwise. This week the company announced it is cutting 10 per cent of its work force, as it races to increase its digital revenues amid tumbling income on the print side. Having sold its best assets to pay debt accrued over years, the company is running out of cards to play.
TSX no longer reflects emerging markets
It may be a good thing, or a sign of trouble ahead for domestic stocks, but the relationship between the TSX benchmark index and markets in the developing world is disintegrating, says Scott Barlow in Inside the Market. The correlation between them has stumbled precipitously since September, and although that may be just a temporary trend, signs suggest the decade-long lockstep movement of the two is coming to an end.
Waiting for the housing hammer to fall
It’s not a question of if there will be a correction in real estate, but when, and how bad it will be, writes Scott Barlow in ROB Insight. The relationship between consumer spending and housing price increases diverged in May, and both mortgage and non-mortgage borrowing are also on the rise. This continuing stress on household balance sheets means that, sooner or later, something has to give, and when Canadians are finally forced to reduce debt loads, housing demand, and therefore prices, will start to fall.
Banks duke it out in credit card ring
With Canadians up to their necks in debt, loan growth for credit card issuers has slowed, so banks are looking for different ways to maximize those profits, writes Tim Kiladze in Streetwise. One of those ways to up their game is to poach high-end users who make lots of purchases, and therefore generate more merchant fees at the till. Although the incentives to win over such customers can be costly, the fees of 2 to 3 per cent per purchase might make it worthwhile in the long run.
Can airlines sustain the altitude?
North American airline stocks have been on a tear this year. The big question is whether this is a temporary lift for airlines or part of a longer-term trend, David Berman writes in Inside the Market. With double- and even triple-digit gains, the track record of the sector leads one to wonder whether they’re going to come back down to earth any time soon. But greater efficiency among carriers and decreased fragmentation suggest the industry is far healthier than it has been for a long time.