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The spies who came in from the cold ... to oil and banking Add to ...

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Spies find new work in business One wonders what spies can bring to the business world.

The alleged Russian sleeper agents kicked out of the United States earlier this year with great fanfare are beginning to find work in private business.

Anna Chapman, or Anna Vasil'yevna Kushchyenko, who gained some celeb status as she became known as a "femme fatale" and a modern day "Bond girl," went into financial services when she returned to Moscow.

And today, the Russian business daily Kommersant reported that Andrei Berzukov, who lived in Boston under the name of Donald Howard Heathfield, has been hired as an adviser to the president of Rosneft, the oil giant owned by the government.

He'll be advising on international projects, of course.

Carney warns again on debts The Bank of Canada is looking at new ways for monetary policy to guard against financial imbalances such as the build-up of household debt that has occurred amid historically low interest rates, Governor Mark Carney says, warning borrowers, banks, company and governments to not be complacent about such risks.

In the text of a speech in Toronto, Mr. Carney today repeated his concerns about the debt loads of Canadians rising faster than their incomes, and, while saying further interest rate hikes would need to be carefully considered, stressed that borrowing costs would eventually begin rising again, Globe and Mail economics writer Jeremy Torobin reports.

Mr. Carney's comments came as Statistics Canada reported that the ratio of household credit market debt-to-personal disposable income hit a record 148.1 per cent in the third quarter from 143.4 per cent in the prior quarter.

Much of the reason stemmed from a 1.5-per-cent drop in disposable income, The Globe and Mail's Tavia Grant reports.

Other measures of debt are rising too. Household debt, household debt per capita and debt-to-personal disposable income are all increasing, a development that has sparked concern among Bank of Canada officials and federal policy makers alike.

Household net worth grew 2.7 per cent in the third quarter, the strongest quarterly growth in a year, as stock markets rose.

"Given these types of asset gains, we believe that an appropriate level of household-debt-to-income is in the range of 138 per cent to 142 per cent," said Toronto-Dominion Bank economist Diana Petramala.

"For now, however, debt for the majority of households remains quite affordable, with the interest only debt-service ratio in the third quarter remaining relatively stable at a four-year low of 7.2 per cent despite the acceleration in the level of indebtedness. This is because interest rates have remained exceptionally low over the last two years.

Franco-Nevada, Gold Wheaton strike deal Franco-Nevada Corp. and Gold Wheaton Gold Corp. are are merging in a friendly deal valued at $830-million, The Globe and Mail's Tim Kiladze reports today.

The transaction provides Franco-Nevada with exposure to precious metals streams such as 50 per cent of Quadra FNX's Sudbury footwall deposits, which hold gold, platinum and palladium in ore, as well as 25 per cent of the gold stream from First Uranium's mine waste solutions uranium and gold tailings recovery operation.

BMO warns on investing returns Investment returns over the next decade will probably be lower than many people expect, BMO Nesbitt Burns warns, likely in the range of 5 per cent to 6 per cent on an average annual basis in a balanced portfolio.

"Even with a relatively upbeat medium-term outlook for corporate profits, investors should be prepared for only moderate financial market returns in the years ahead," BMO economists Douglas Porter and Robert Kavcic said in a research report, basing their findings on a balanced portfolio that is weighted 60 per cent in stocks, 35 per cent in bonds and 5 per cent in cash.

"Our view is that a typical balanced portfolio will do well to generate average returns of more than 6 per cent in the medium term, a significant downgrade from widespread upbeat expectations as recently as five to 10 years ago," they said.

One way to estimate the longer-term equity returns, they added, is to assume that stock prices will, at most, rise in concert with corporate profits, which are already high as a share of gross domestic product, particularly in the United States. Thus, a growth rate faster than that of nominal GDP will be challenging over the next decade.

"Arguably, the biggest issue for prospective investor returns has been the relentless decline in long-term interest rates," they said. "Even with a late-year back-up, 10-year Canadian government bond yields are only slightly above 3 per cent, down almost 40 basis points since the start of the year and roughly 2 percentage points below the average of the past 15 years ... The broad bond market should return little more than the current yield on the Canadian bond universe of just over 2 per cent, and investors need to adjust their expectations accordingly."

How bad is China inflation? China reported higher-than-expected inflation data Saturday - 5.1 per cent for November compared to 4.4 per cent a month earlier - but held fast on interest rates despite investor fears.

Beijing has already taken steps to tighten conditions - on Friday it again raised the reserve requirements for the country's banks - and economists had increasingly speculated that officials could hike the benchmark lending rate after seeing the inflation data.

That could have spooked markets by heightening concerns that it would have helped curb China's huge appetite for imported commodities.

"Recent policy moves and official statements, including that from this weekend's high-level policy meeting, give the strong impression that the government believes inflation is under control," said Mark Williams, senior China economist at Capital Economics in London.

"We agree, but market jitters will remain high until it is clear that the headline inflation rate has peaked."

Mr. Williams said there's still "a good chance" that China will raise rates before the end of the year, though he expects inflation to fall back in December and stabilize over the next few months.

Berlusconi warns of crisis Italy's prime minister is playing to investor fears, warning politicians that the country could become the next victim of Europe's debt crisis if he loses a non-confidence tomorrow.

Italy is already caught up in the crisis, just not to the extent of others such as Portugal, Ireland, Greece and Spain, the so-called PIGS. One might want to remind Silvio Berlusconi that the other acronymn making the rounds is PIIGS, which, alas, includes Italy.

"It is madness to initiate a crisis without any foreseeable solutions," Mr. Berlusconi told politicians today, speaking in the Senate.

A&P files for Chapter 11 The Great Atlantic & Pacific Tea Co. may not be so great any more. A&P, one of the best known names in U.S. groceries, though struggling mightily, filed yesterday for Chapter 11 bankruptcy protection, with debts topping $3.2-billion (U.S.).

The grocery chain filed for bankruptcy protection with $800-million in debtor-in-possession finance from JPMorgan Chase & Co., money meant to keep it running through the process.

Air Canada rejoins index Sign of the times? Air Canada is returning to the S&P/TSX composite after seven years. The move will be effective next Monday.

In Your Business today

Mylifelist.org - a next-generation social networking site - encourages people to consider their deepest dreams and desires, be it a fitness, travel or career goal, then write them down and draft a plan to make them become reality. Find out what inspired entrepreneur Bill Starr.

Canadian entrepreneur and philanthropist John McCall MacBain was the founder and former president and CEO of Trader Classified Media, which he sold in 2006 for more than $2-billion. He recently received an honourary degree from Dalhousie University and delivered a convocation speech containing advice and challenges for other entrepreneurs, which he has agreed to share with Globe readers.

Columnist Mark Evans writes that "no matter how you feel about negative feedback, customers are footing the bill so you need to deliver the services and products to meet their needs. It is a simple economic proposition."

In Personal Finance today

The holidays are the perfect time to hit grandparents up for an RESP contribution, make sure you're maximizing government grants, review your savings goals and rebalance your portfolio.

You'll save on flights and hotels, but there are some hidden costs and other pitfalls to consider before you buy an all-inclusive deal.

Consumers are putting away the plastic this Christmas, much to the chagrin of retailers and credit card companies.

In Technology today

The medium hackers work in has become the ultimate driver of global culture, commerce and statecraft. If the WikiLeaks drama is any indication, they've only just begun rocking the world.

Gawker Media is "deeply embarrassed" today after revealing hackers accessed the customer database over the weekend. The company, which runs a series of irreverent blogs on media, technology and other issues, is urging subscribers to change their passwords.

From today's Report on Business

And, read our Streetwise blog and Your Business section.

Follow on Twitter: @michaelbabad

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