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from Breakingviews:

Cross-border arbitrage is expansive Bimbo’s yeast

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Cross-border arbitrage is the yeast for Grupo Bimbo’s aggressive expansion. In its latest deal north of the border, the acquisitive Mexican breadmaker is shelling out $1.8 billion to buy Canada Bread. Paying 20 times earnings to move into a mature market may seem questionable. But Bimbo’s earnings fetch an even higher multiple at home – and the deal should lower its weighted average cost of capital.

Excitement over Mexico and its expanding manufacturing base has fed the country’s stock market. The Bolsa has more than doubled over the past five years and even withstood the more recent emerging markets ructions. Grupo Bimbo has done even better, with its stock more than tripling. A rising middle class in Mexico means more demand for premium baked goods.

Meantime, a series of foreign acquisitions has added to the company’s growth – unbeknownst to most Americans, such breadbox staples as Thomas’ English Muffins, Arnold rye and Entenmann’s chocolate chip cookies are all made by the Mexican company.

from MacroScope:

The Bank of Canada is probably not ready to seriously consider cutting rates — yet

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With all signs showing the Canadian economic miracle is fading, the Bank of Canada is understandably starting to sound more dovish. The Canadian dollar has got a whiff of that, down about 10 percent from where it was this time last year.

But that doesn't mean Governor Stephen Poloz is ready to signal on Wednesday that his rate shears are about to get hauled out of the shed.

from Photographers' Blog:

The last theater in town

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Powell River, Canada

By Andy Clark

As far back as I can remember, history has always fascinated me. Though my specialty as an amateur historian has been military history, just about anything that occurred prior to my birth has had my undivided attention. Recently while having a coffee with a friend, he mentioned he had been to a town north of Vancouver called Powell River and had happened to visit a local movie theater. He went on to say matter of factly, that the theater had been continuously running since it was built many years ago.

“Stop right there,” I said. “Did you take any pictures of the place?” Yes, he had and he pulled out his laptop to show me.

from Breakingviews:

Lenovo-BlackBerry bid could squish under pressure

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By John Foley and Ethan Bilby

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Lenovo is wading into the BlackBerry jam. The Chinese technology group has gained access to the books of the Canadian smartphone seller, which is already considering a $4.7 billion approach from shareholder Fairfax Financial Holdings. If it chose to bid, Lenovo would have to do better than the current offer of $9 per share, and overcome more obstacles.

from MacroScope:

How many politicians does it take to change a government?

Talks between Angela Merkel’s CDU and the centre-left SPD will resume on forming a German grand coalition but any agreement is probably weeks away yet.

With the Greens having bowed out at least we now know it will be a joint administration of the big two parties or fresh elections. The former remains odds on.

from Photographers' Blog:

The gunfighters

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Aldergrove, Canada

By Andy Clark

The hot mid-day sun beat down as the fellow nervously checked his Ruger Blackhawk single action revolver. Spinning the chamber and checking the hammer mechanism several times he then slipped the gun smoothly in and out of his holster sitting low on his hips. Adjusting his Stetson he looked up and said “I may be nervous, but I am ready”. Stepping into position he slightly bent his knees and placed his partially open right hand over the holster, while his flattened left hand crossed over his stomach and balanced just above the hammer of the gun. Only yards away his opponent stepped into his position and took a similar stance. A split second later there was a deafening and almost simultaneous boom as both guns spit fire, creating a large cloud of blue smoke that hung in the air. It was over. There lying on the ground was not some poor soul but rather the tattered remains of two yellow balloons, both gunfighters checked their guns, holstered them and prepared for the next round.

As you have gathered this was not some scene from the late 19th century in a dusty town of the American wild west but rather, a modern day competition, taking place at the annual Canadian Open Fast Draw Championships in Aldergrove, about an hour east of Vancouver, British Columbia.

from MacroScope:

Curse of the front-runner a bad omen for Fed contender Yellen?

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The buzz on who will replace Ben Bernanke as Federal Reserve chairman has grown this year and amplified recently with talk of Lawrence Summers as a real possibility. There is also lingering speculation over Timothy Geithner, another previous U.S. Treasury Secretary, and former Fed Vice Chair Roger Ferguson among others as possible successors. Bernanke has provided no hint he wants to stay for a third term.

But above the din the central bank's current vice chair, Janet Yellen, has remained the front-runner. Her deep experience and implicit policy continuity has crowned her the heir apparent until proven otherwise. A Reuters poll of economists showed Yellen was seen as far and away the most likely candidate.

from Reihan Salam:

Pushing the immigration debate to the next level

It is often said that America is “a nation of immigrants.” But that’s not true in the strictest sense. As of the 2010 Census, the foreign-born share of the U.S. population was 12.9 percent, and so 87.1 percent of Americans that year were native-born non-immigrants. Granted, the nation of immigrants line tends to be used figuratively, to indicate that virtually all Americans come from somewhere else if you go back far enough. That includes the members of the indigenous communities that had settled in what is now the United States many centuries ago, and the descendants of the enslaved Africans who were brought to the Americas against their will. Yet when we use nation of immigrants so loosely, it loses all meaning.

And when you compare the foreign-born share of the U.S. population to other countries, you soon realize that while the absolute number of immigrants living in the U.S. is very large, we’re nowhere near countries like tiny Qatar, where over three-quarters of the population consists of foreign-born individuals, most of whom are guest workers, or Canada, where the foreign-born share is a robust 20.6 percent. The U.S. is roughly in the same ballpark as countries like Germany and Sweden, which have become major destinations for immigrants only in recent decades.

from MacroScope:

Small rays of hope brightened Canada’s economic outlook last week

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 All data released last week point to a far better first quarter growth in Canada than previously expected, prompting economists to revise up their predictions.

In a Reuters poll conducted early last month, forecasters predicted that Canada's economy expanded by just 1.6 percent on an annualised basis in the first three months of this year.

from Chrystia Freeland:

Banker steps into the role of superhero

In other ages, we have called on shamans or saints in times of crisis when the usual remedies have not worked.

In the stagnant world economy today, we have designated central bankers as our superheroes, and we are relying on their magical monetary powers to restart global growth.

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