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Five business stories to watch this fall Add to ...

Report on Business writers point to the big players, big deals and big issues in the season ahead

BlackBerry may no longer exist as a public company. Economists will be watching for any signs that the housing market is either heating up again too quickly or poised for another downturn. U.S. Federal Reserve chairman Ben Bernanke leaves the world’s most powerful central bank. The fifth anniversary of the 2008 economic collapse. And, the auction of the most valuable wireless spectrum that has ever come up for bidding.

1. Buyer for Blackberry 0 likes

By the end of the year, Canada’s best-known technology brand may no longer exist as a public company.

BlackBerry, the Waterloo-based maker of the world’s first smartphones, is on a quest to sell itself to the highest bidder. The company is looking for an investor to help it avoid a spiral of declining sales in the face of rivals such as Apple and Samsung.

One of the company’s options is to go private. Such a move would mean buying back all BlackBerry’s shares on the public market, which would require billions of dollars. A number of private equity firms, including Canada’s FairFax Financial, which is already BlackBerry’s biggest shareholder, might be able to raise enough money to buy the company outright.

BlackBerry may also find a suitor among its many competitors, such as Microsoft, Amazon or Facebook. All those companies have enough cash on hand to buy the company outright, but once they do so, might decide to split BlackBerry into parts, get rid of a significant portion of its workforce or even stop production altogether.

Another possibility: BlackBerry is stuck with no buyer at all, forcing it to remain a public entity. But given its plummeting sales and stock price, doing nothing might be the worst outcome of all for Canada’s once-mighty technology giant.

— Omar El Akkad

2. The home game 0 likes

The housing market’s year-long slump appears to be coming to a close, and economists will be watching for any signs that it is either heating up again too quickly or poised for another downturn. Ottawa, meanwhile, is trying to keep the market hovering between those two extremes, and has shown its willingness to intervene when necessary.

Sales of existing homes are now approaching the levels they were at before Finance Minister Jim Flaherty tightened the mortgage rules in July 2012, a move that sent sales plunging. Vancouver, the hardest-hit market, is in the midst of a rebound, helping nationwide home sales to come in higher than a year ago for the first time since the rule changes. Sales in many other cities have also picked up to an extent that has surprised economists in recent months.

But there are plenty of threats to this upturn. Unemployment is a big one. The jobs numbers have been weaker than expected, and strong employment levels are critical for the housing market. Higher mortgage rates are another concern, with the banks likely to bolster their rates in step with changes in five-year government bond yields. For now, the central bank continues to characterize the housing market as one of the largest domestic threats facing the Canadian economy.

— Tara Perkins

3. Replacing Bernanke 0 likes

All eyes will be on the U.S. Federal Reserve this fall, as its chairman, Ben Bernanke, concludes one of the most dramatic tenures in the history of the world’s most powerful central bank. It was on his watch that the U.S. and much of the rest of the world were plunged in 2008 into the worst financial crisis and deepest economic slump since the Great Depression. In response, he boldly steered the Fed into previously uncharted territory, slashing interest rates to zero and launching unprecedented monetary easing to keep banks afloat and credit flowing. He ignored critics who feared the policies would trigger inflation and create new asset bubbles.

The economy is now on the mend, however, so the tricky task ahead is to reduce this high-octane stimulus without sending the patient back into shock. Much of this work will fall to Mr. Bernanke’s successor after he departs in January. The leading candidates for a post that ranks just below the U.S. president in terms of domestic power and global influence are Fed vice-chair Janet Yellen and former treasury secretary Larry Summers. Ms. Yellen, who has prodded Fed policy makers to do even more to help the economy, would be the first woman in the job. The markets fear Mr. Summers would move faster to reduce monetary stimulus. All of which will make for considerable nervousness in coming weeks.

— Brian Milner

4. Those hard times... 0 likes

They were dark days that few will ever forget – whether senior Bay Street bankers or small business owners. Five years ago this fall, the global financial system nearly collapsed when a U.S. housing crash snowballed into a global economic crisis. In just a matter of months, Canadians saw the Toronto Stock Exchange soar higher than 15,000, and then lose half its value.

It is a period that few people want to revisit. Lehman Brothers, one of the world's biggest investment banks, went bankrupt, and countless other financial institutions had to be bailed out – including AIG, the world's biggest insurer. The chief culprit: complex securities such as “collateralized debt obligations,” which packaged mortgages into new investments, and credit default swaps, which served as a form of insurance. When the U.S. housing market went bust, both conspired to generate tens of billions of dollars of losses.

To navigate Canada's financial institutions through the tidal waters, it took tight-knit collaboration between Ottawa, the Bank of Canada and the biggest names on Bay Street. They pulled it off, and ultimately Canadian banks were praised for their resiliency. But no one will ever forget how close the global financial system came to the brink. And many wonder if we've done enough to safeguard the system to prevent it from happening again.

— Tim Kiladze

5. Selling the spectrum 0 likes

The word “spectrum” is obscure enough to make most Canadians’ eyes glaze over. But that invisible public resource, the radio waves that bring our smartphones to life, is now at the heart of a heated battle– the outcome of which could shape competition and consumer prices for decades to come.

The federal government is preparing to auction off wireless licences for the 700 megahertz frequency – the most valuable spectrum that has ever come up for bidding. Interest by at least one big multinational telecom company has had Canada’s Big Three wireless carriers mounting an all-out effort to convince Ottawa to change the rules to close so-called loopholes that they say give big foreign-owned companies an unfair advantage.

Although the 700 MHz auction is not scheduled to begin until January, carriers face a Sept. 17 deadline to apply as bidders and to put down initial deposits – which means Rogers Communications Inc., BCE Inc. and Telus Corp. are running out of time to persuade Ottawa to change course. They oppose rules that would allow foreign-owned telecom companies, such as Verizon Communications Inc., which was mulling whether to enter the Canadian market all summer, to acquire double the amount of prime spectrum in the auction. Incumbents also don’t want new players to be allowed to “piggyback” on their networks and purchase small carriers that are off-limits to them.

This spectrum is highly sought after because of its ability to penetrate buildings and travel long distances with fewer cellular towers.

— Rita Trichur

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