Skip to main content

The Globe and Mail

In Spain, even the dead face eviction from their tombs

These are stories Report on Business is following Monday, Nov. 7. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

Follow Michael Babad and Globe top business news on Twitter

Spanish moss? No room at the inn? In hard-hit Spain, there's apparently no room at the crypt either.

Story continues below advertisement

Ciaran Giles of The Associated Press today tells the story of a Spanish cemetery that's threatening to evict the dead because the rent hasn't been paid on their gravesites.

The Torrero cemetery has been putting stickers on the sites warning people, who hopefully visit the remains of their ancestors, that they have to pay up. It's not a money issue, but one of space.

According to a city official in Zaragoza, in the northeast of the country, remains have already been turfed from more than 400 crypts. In Spain, according to the report, many cemeteries rent out sites for five or 49 years, rather than selling them. Some 7,000 of Torrero's almost 115,000 sites have had their leases expire, and the remains that have been dug up have been moved to a common burial site.

(I don't quite understand the system, and I'm not sure exactly what happens when the rain in Spain falls mainly on the plain. But I live in Toronto, where we rent apartments, not crypts.)

Markets eye Italy, France The bond market is telling Italy to get its act in gear. Will that require getting Silvio Berlusconi out?

The attention of investors has clearly shifted from the so-called periphery of the euro zone to larger economies like Italy and, to a lesser extent, France. That's a frightening development because it carries a far greater threat, one that strikes at the core of monetary union and suggests Europe's troubles will continue to plague the global economy.

Even as Greece was still in the crosshairs last week, the focus was shifting to Italy and its embattled leader, Mr. Berlusconi, who has been shamed by other European leaders who believe he hasn't done enough on fiscal and economic reform.

Story continues below advertisement

Rumours that he could resign - he denied them - were enough to push up Italian stocks today while other markets sank. That should tell Mr. Berlusconi something, but apparently hasn't.

Italy's bond yields also spiked again - at one point they reached almost 6.6 per cent, the highest for the country in the history of the euro zone - and stocks sank. However, the market perked up on rumours that Mr. Berlusconi was poised to quit.

Like Greece's George Papandreou before him, Mr. Berlusconi faces a revolt and rumour and speculation that he'll resign, though he denied that today.

But here's where they differ: Unlike Mr. Papandreou, Italy's media magnate has been dogged by scandals that seem always to be with him. The latest include allegations involving an underage Moroccan belly dancer, the stuff of titilation but not really what you want to be selling investors.

No charges have been proven, and Mr. Berlusconi denies any wrongdoing. In a just society, he would not be forced from office on allegations.

But the market is not a just arena, and the issue of the scandals frequently pops up alongside talk of Mr. Berlusconi's economic record because they erode his credibility. Regardless, it is Mr. Berlusconi's failure to deal with the country's €1.9-trillion in debt, the fattest in the euro zone, that should chase him out.

Story continues below advertisement

Already, Mr. Berlusconi has been forced to promise his colleagues in the euro zone he will follow through in areas such as pensions and the labour market. And agreeing to be policed by the International Monetary Fund, as he did last week, is a humiliation for the region's third-largest economy.

For the markets, the easing of the crisis in Greece, where Mr. Papandreou is quitting and a new coalition forming, is of little solace today.

"Although developments in Greece should be seen as positive, they were largely as expected and attention is rapidly turning to Italy as next potential pressure point," said Adam Cole, global chief of foreign exchange strategy at RBC in London.

"Italy's parliament votes tomorrow on the 2010 public sector accounts and local media suggest as many as 40 of Berlusconi's MPs may rebel - easily enough for the bill to fail," he said in a research note today.

Review threatens Keystone delay A new hurdle was thrown in the path of the Keystone XL pipeline today when the office of the U.S. Inspector General said it was launching a review of the permitting process.

The examination follows allegations of conflict relating to the project by TransCanada Corp. , The Globe and Mail's Nathan VanderKlippe reports.

The review will examine "the Department of State's handling of the Environmental Impact Statement and National Interest Determination for TransCanada Corporation's proposed Keystone XL permit process," and comes as another potential setback for a controversial pipeline that is under attack on many fronts.

BP deal collapses BP PLC put a good face today on the collapse of a $7-billion (U.S.) deal to sell off its stake in a major oil producer in Argentina.

BP said today that Bridas Corp., which was poised to acquire the majority position in Pan American Energy LLC, the second-largest producer in Argentina, failed to secure the necessary regulatory Argentine and Chinese regulatory approvals.

Bridas, in turn, blamed BP, citing legal issues but without going into specifics.

"PAE is a strong business," BP said today in a statement.

"As a result of Bridas Corporation's decision to terminate, BP is no longer in discussions with them regarding this transaction. BP is happy to return to long term ownership of these valuable assets, given the considerable improvement in its own financial strength and circumstances, as well as the improved external trading environment."

Cameco profit sinks Canada's Cameco Corp. today posted a 60-per-cent slump in third-quarter profit, but a gain in revenues. The uranium giant also said it took several steps in its strategy to double annual production by 2018.

Cameco earned $39-million or 10 cents a share in the quarter, down from $98-million or 25 cents a year earlier. Revenue climbed 26 per cent to $527-million.

"Cameco performed well during the quarter despite the prevailing economic uncertainty," said chief executive officer Tim Gitzel.

"We realized higher prices on our uranium sales and achieved higher sales volumes resulting in higher adjusted earnings. With sales commitments of over 300 million pounds, we are positioned to continue delivering solid financial performance while preparing our assets for the growth we expect in the nuclear industry."

The company said in a statement it expects to "invest significantly" in boosting production at existing mines over the next several years.

Analysts keen on SNC, on Air Canada not so much Raymond James Ltd. is boosting its price target on shares of SNC-Lavalin Group Inc. after the engineering multination's stronger-than-expected earnings last week.

"We continue recommending an overweight position in the stock - the top engineering and construction pick in our coverage universe," said analyst Frederic Bastien, who raised his target on the shares to $65 from $60.

"What attracts us to SNC are the breadth and depth of its operations, a track record of dividend increases and healthy [returns on equity] and an all-time high backlog of services revenues."

CIBC World Markets also boosted its price target on SNC, to $64 from $62.

For Raymond James, Air Canada isn't quite as lofty, however. Analysts Ben Cherniavsky and Steve Hansen slashed their price target on the airlines shares to $1.75 from $3 after its quarterly results last week.

"We believe that current management deserves credit for a number notable achievements," the analysts said. "... Having acknowledged this, we believe there are still too many risks and challenges on the horizon to warrant anything but a neutral rating on the stock right now."

What to watch for this week Watch the shares of Groupon Inc. to see whether they carry through on the momentum from their dot-com-era-like debut Friday. After pricing the $700-million (U.S.) IPO at $20, the shares surged in their initial trading Friday by almost 56 per cent, though then settled back, closing just above $26, still a huge deal for those who got in. Next up, Facebook?

Canada's trade deficit is expected to have narrowed slightly when Statistics Canada reports Thursday on its reading of exports and imports. "With exports hampered by a downshifting U.S. economic recovery and a legacy of an appreciating C$, Canada's trade balance should fi nd itself in the red for the eighth straight month in September," said Emanuella Enenajor of CIBC World Markets. "But the deficit could actually be a bit better than the balance of prior months, helped by a weakening C$ that helped to boost industrial product prices. And while energy exports have been lagging recently, August's stunning boom in energy sector production suggests higher resource exports could be in the pipeline for September."

Trade numbers for the United States will be reported at the same time Thursday, but America's trade deficit is believed to have widened slightly. Senior economist Sal Guatieri of BMO Nesbitt Burns: "Firmer oil prices and a pickup in consumer spending likely lifted imports for the first time in four months. Exports should continue to trend upwards, albeit at a more modest pace than earlier this year given weaker global demand and a firmer greenback. Despite the expected deterioration in September, net exports improved moderately in Q3, supporting GDP growth."

You talkin' to Bernie? Robert De Niro is about to get a in-depth lesson on Ponzi schemes.

The Hollywood star is poised to portray Bernie Madoff in an HBO production, with the source material being Laurie Sandell's book Truth and Consequences: Life Inside the Madoff Family, according to reports.

HBO has optioned the book, according to The Hollywood Reporter. The project is the child of Tribeca Productions, which is run by Mr. De Niro and Jane Rosenthal.

Mr. Madoff won't be on the red carpet for the premiere. He's serving 150 years for the $50-billion (U.S.) fraud.

Business ticker

In Economy Lab It is hard to deny that the events since 2008 have uncovered serious shortcomings in the functioning of global financial markets, Kevin Milligan writes. But a financial transactions tax is a distraction from the real regulatory improvements that need to be enacted.

In International Business

Kraft is entering the energy drinks arena with the roll-out next month of a caffeinated version of its MiO 'water enhancer,' Alan Rappeport of The Financial Times reports.

In Globe Careers

How we deal with failure is important. It can be the start of a downward slide, or a learning experience and chance for a fresh start. Harvey Schachter examines the issue.

In Personal Finance

Taxpayers are on the hook for the pensions and salaries of government workers, a new book warns.

From today's Report on Business

Report an error
About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More

Comments are closed

We have closed comments on this story for legal reasons. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.