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Top Links: ‘The truth is that most asset managers create nothing’

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web

Crude prices shot higher Wednesday on news OPEC would implement a cap on production. Analysts, according to a Bloomberg survey, are sceptical the deal will have any beneficial effects on investors in the energy sector.

"[Morgan Stanley wrote] 'This is not the only OPEC agreement to limit production in this downturn, and thus skepticism on finalization is warranted. For example, a production freeze agreement early in 2016 failed to materialize at the April Doha meeting when more specific commitments were required' … [Citigroup wrote], 'Look deeper and the 'deal' becomes less and less meaningful, and more and more rhetorical.' … Those who think that this is a return to the old OPEC should take more seriously the new circumstances of a world with shale and of lower demand growth."

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"Here's What Analysts Are Saying About the OPEC Deal" – Bloomberg
"Oil shares lift global stocks but crude dips after OPEC boost" – Reuters
"Oil traders, ask your doctor about treatments for whiplash" – Quartz
"Shale Drilling Revival Seen Taking Hold as Oil Price Recovers" – Bloomberg

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Institutional Investor describes the "ill wind" blowing through the asset management industry, describing business prospects as "grim,"

"The truth is that most asset managers create nothing. They shove digits around. The entire business has become a tap dance meant to convince asset owners to part with their money.'

"Things we do and do not say" – Institutional Investor

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Comments gathered from experts suggest that concerns about global financial contagion from beleaguered Deutsche Bank are likely overblown, primarily because the German government will have no choice but to bail them out to some extent. However, reports indicating Commerzbank is laying off 10,000 employees, suspending dividend payments and guiding profit expectations to low levels suggest that European banking issues might extend well beyond Deutsche Bank.

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I don't think it's time for Canadian investors to panic, but it's important to remember that domestic bank stocks traded sharply lower during the European banking crisis in 2012.

"Deutsche Bank Should Make You Worry About Europe's Other Giants" – El-Erian, BloombergView
"Commerzbank to cut nearly 10,000 jobs, halt dividend" – Report on Business
"Why People Have Been Worrying About Deutsche Bank, in 12 Charts" – Bloomberg
"Commerzbank Unveils Job Cuts in Biggest Overhaul Since Bailout" – Bloomberg

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The Wall Street Journal has made an interesting historical perspective on Blackberry free to read for non-subscribers,

"Success came so quickly that it overwhelmed the one-plant company, which raced to keep up with global demand and open new facilities... Those pressures distracted the company's leaders from a brutal technology marathon that allowed little margin for error … When Mr. Lazaridis conducted an autopsy on Apple Inc.'s first iPhone in the summer of 2007 he was stunned to find so much computing power inside the sleek phone. The phone was nonsensical, he told his team … Mr. Lazaridis and other executives didn't grasp that their ambitious new competitor had changed the rules: By signing an exclusive agreement with AT&T, Apple gave the carrier an enormous incentive to upgrade its networks. "

"The Fast and Fleeting Times of the BlackBerry" – McNish, Wall Street Journal

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Tweet of the Day: "@ZSchneeweiss Low bond yields threaten to keep us all at our desks way past 65: @ScouseView bv.ms/2dtjFZK via @BV pic.twitter.com/ocDqtlBZ8P " – Twitter

Diversion: "H ow Crazy Is Elon Musk's Mission to Mars?" – Gizmodo

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About the Author
Market Strategist

Scott Barlow is The Globe's in-house market strategist. He is a 20-year veteran of Canadian investment banks, including Merrill Lynch Canada, CIBC Wood Gundy and Macquarie Private Wealth (MPW). He was a highly ranked mutual fund analyst for 10 years and then, most recently, the head of a financial adviser support team at MPW. More

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