Dragged from the temple of justice yet again

THE outcome was not quite so definitive as Roy Moore’s critics had demanded or as, in his secret heart, the man himself may have expected. In a ruling issued today by Alabama’s Court of the Judiciary (COJ), following a hearing last week, the state’s chief justice was suspended without pay for the remainder of his term of office. That does not have quite the dramatic, biblical overtones of removing him altogether, a verdict that would have conjured images of a righteous, berobed figure being dragged by heathens from the bench. But it is the end of Mr Moore’s long, grandstanding judicial career all the same.

Removal, remember, was the punishment that curtailed his first stint as Alabama’s chief justice in 2003 (he was re-elected in 2012). On that occasion he installed a granite monument to the ten commandments in the rotunda of the state judicial building, then defied a federal court’s instruction to remove it. This time the complaint, initially brought by the Southern Poverty Law Centre (SPLC), a watchdog, stemmed from his rear-guard recalcitrance over same-sex marriage. The legal manoeuvring was complex; but, in essence, he counselled Alabama’s probate judges,...Continue reading

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The One-Engine Economy

Consumers have been the only thing pushing the U.S. economy along. They could use some help.

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Why Fear of a Deutsche Bank Bailout Is Wide of the Mark

The amount of money Deutsche Bank would have to lose even to hit its first line of defense is huge.

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Gilead's Growth Tonic Is Elusive, May Have Side Effects

The biotech company’s deliberate approach to deal making has frustrated investors, but it could still pay off.

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Europe's Rising Inflation Little More Than Energy Jolt

Inflation is finally rising in the eurozone. But the European Central Bank can’t take much of the credit. All the movement is in energy prices.

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Europe's Rising Inflation Little More Than Energy Jolt

Inflation is finally rising in the eurozone. But the European Central Bank can’t take much of the credit. All the movement is in energy prices.

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H&M Turnaround Will Take More Than Cooperative Weather

Third-quarter numbers offered scant evidence of recovery at the Swedish fashion retailer.

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Japan's Long and Winding Detour to Inflation

The Bank of Japan may have shaken up its strategy to jump start inflation, but on the ground, there’s little sign change is coming.

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Japan Buyback Boom Fails to Leave Mark

Japanese companies need to do a lot more share buybacks to shed their cash hoarder nature.

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NXP Can Help Qualcomm Shift Its Gears

Qualcomm remains too reliant on smartphone chips; a deal with NXP would add diversity.

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How to Play the Viacom-CBS Sibling Rivalry

For Viacom and CBS, a no-premium deal may be the most likely outcome.

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Americans Are More Optimistic About the Economy Than You Might Think

Consumer surveys have yielded starkly conflicting results of late ahead of the presidential election. Here is one way for investors to sift through the noise.

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Wells Fargo Illustrates Case for Splitting Board From Management

The fracas over Wells Fargo is resurrecting an old debate over whether bank chiefs should also serve as board chairmen.

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A close, crucial race in North Carolina

ON SEPTEMBER 28th, the day after her first presidential debate with Donald Trump, Hillary Clinton held a rally in Raleigh, the capital of North Carolina, where she ripped into Mr Trump’s “dangerously incoherent,” performance. Days earlier, the Democratic nominee had chosen Greensboro, one of the state’s largest cities, for another important appearance: Her first rally after a few days off the trail with pneumonia. As she faces a tightening race, Mrs Clinton is stepping up her efforts in North Carolina—where polls put her neck-and-neck with Mr Trump—in the hope that it will smooth her path to the White House in November.

For Mr Trump, the stakes in the Tar Heel state, are even higher. He has spent a lot of time in North Carolina and in recent weeks his daughter-in-law, Lara Trump, a native, has been helping open Trump offices here. Mrs Clinton’s campaign was up and running in the state early on in the campaign, opening dozens of field offices and airing adverts. Mr Trump’s campaign has downplayed his campaign’s relative bricks-and-mortar absence, claiming that the election will be won or lost in the final weeks.

Many pundits believe that Mr Trump...Continue reading

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How India Listing Should Lift Prudential and its Peers

The valuation put on an Indian life insurer shows that western investors may be missing something.

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Boundary issues

HUNGARY will hold a referendum on October 2nd. (Such things have become a fad in Europe.) The question is: “Do you want the European Union to be entitled to prescribe the mandatory resettlement of non-Hungarian citizens in Hungary without the consent of parliament?” (Note the neutral wording.) At issue is the EU’s Emergency Response Mechanism, adopted in September 2015, under which 160,000 of the migrants who began surging into Europe last year are to be shared out between member states according to quotas. The decision passed the European Council by majority vote, but four countries voted against it: the Czech Republic, Slovakia, Romania and Hungary. Hungary and Slovakia have challenged the system in the European Court of Justice. It is “unlawful, unworkable and dangerous”, says Zoltan Kovacs, a government spokesman. 

The referendum is largely a popularity ploy by Viktor Orban (pictured, right), Hungary’s populist prime minister, and will have no legal effect. It is also a challenge to the authority of Brussels and the leadership of Germany’s Angela Merkel, who champions the relocation scheme. Mrs Merkel sees accepting refugees as a...Continue reading

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Cocoa by candlelight

Topping the cosiness index

HOW big is the world’s appetite for things Danish? Foreign audiences have already binge-watched the country’s noir TV series (such as “The Killing” and “The Bridge”) and raved over the new Nordic cuisine of Noma, Copenhagen’s trend-setting restaurant. This autumn, publishers are testing the limits of the world’s Danomania. Before the Christmas season, at least nine English-language books will come out devoted to explaining the elusive quality of hygge.

Hygge is difficult to pronounce. (Try “hew-geh”.) It is also tricky to describe. Writers have tried “the art of creating intimacy”, “cosiness of the soul” and “cocoa by candlelight”. It is an attitude rather than a recipe, evoking relaxation with close friends or family. Many see it as a quintessential element of Denmark’s national character. There is some evidence for this: the Danes are Europe’s biggest consumers of candles, burning through about 6 kilogrammes (13 pounds) per person every year. Runner-up Austria manages just half that. Denmark often leads (highly...Continue reading

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Immune to reason

The HIV rate is shooting up

THE front line in the fight against Europe’s fastest-growing HIV epidemic runs through a dark blue bus parked on the outskirts of St Petersburg. Two friends enter late one September evening to collect clean needles and condoms, and duck into a side cabin for an HIV test with a nurse from Humanitarian Actions, a local NGO. “You barely feel it, don’t be afraid,” one says. Several minutes pass with bated breath. Then the results appear: all clear.

In most of the world the threat of HIV/AIDS has receded. The exceptions are eastern Europe and Central Asia. In Russia, which accounts for more than 80% of new infections in the region, 51,000 people were diagnosed in the first five months of this year. In January registered HIV cases there topped one million. Vadim Pokrovsky of Russia’s Federal AIDS Centre reckons the true figure may be 1.4m-1.5m, about 1% of the population; he warns there could be 3m by 2020. In some African countries prevalence can reach 19%, but the epidemic is slowing. In Russia, the infection rate is “getting worse, and at a very fast pace”, says Vinay Saldanha, UNAIDS’...Continue reading

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Brought to BUK

THERE was never much doubt about what brought down Malaysia Airlines Flight 17 over eastern Ukraine on July 17th 2014, killing all 298 people on board: a Russian missile, fired from territory controlled by Russian-backed separatists. Still, it was important to see the facts confirmed. On September 28th the Dutch-led Joint Investigation Team (JIT) laid out its case, backed by an array of photo, video and forensic evidence, satellite and radar data, interviews with eyewitnesses and intercepted phone calls. The investigators called the findings “irrefutable”.

The JIT’s preliminary report is the beginning of what is sure to be a long and trying path to justice for the victims. Many had boarded the flight from Amsterdam to Kuala Lumpur with suitcases stuffed with bathing suits, bound for beach holidays in South-East Asia. They were cut short, the JIT found, by a Russian-made BUK 9M38 surface-to-air missile, which had left Russia that morning. The launcher, and three unused missiles, returned there the day after. The launch site was a field near the town of Pervomaiskiy, under the control of pro-Russian fighters. Investigators say they have some 100 potential suspects, but...Continue reading

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A tale of two ethics

THE phrases “ethic of conviction” and “ethic of responsibility” mean little to most English-speakers. In Germany the equivalent terms—Gesinnungsethik and Verantwortungsethik—are household words. Pundits drop them casually during television talk shows. Hosts use them as conversation-starters at dinner parties. The concepts draw on the opposition between idealism and pragmatism that runs through politics everywhere. But they also capture a specific moral tension that is “very German”, says Manfred Güllner, a sociologist and pollster. Anyone interested in understanding German politics, on anything from the euro to refugees, would do well to get a handle on them.

The terms come from the sociologist Max Weber, who used them in a speech he gave in January 1919 to a group of leftist students at a Munich bookstore. Germany had just lost the first world war. The Kaiser had abdicated, the country was in the throes of revolution and Munich was about to become the capital of a short-lived “Bavarian Soviet Republic”. Armed with only eight index cards, Weber gave a talk that would become a classic of...Continue reading

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Chains of command

Treading lightly

LIEUTENANT Mehmet Ali Celebi has not sat in a gunship cockpit for years, but will jump back in at a moment’s notice if the Turkish army comes calling. A promising helicopter pilot, Mr Celebi was sentenced to 16 years in jail in 2013, framed by policemen who uploaded numbers belonging to Islamist radicals onto his phone. He was released a year later, along with hundreds of other secularist officers who had been locked away on trumped-up charges by prosecutors close to the Gulen community, a secretive Islamic movement.

Since July’s thwarted coup, staged by an army faction believed to be led by Gulenists, the tables have turned. Today, it is Gulen followers in the bureaucracy who are being indiscriminately purged by their one-time patrons, the ruling Justice and Development (AK) party. Some 70,000 civil servants, including judges, prosecutors and teachers, have been sacked or suspended, sometimes on the thinnest of evidence. At least 32,000 people, including more than 100 journalists, are in prison.

The crackdown has left the second-biggest army in NATO in turmoil—this at a time when it is supposed to be fighting in...Continue reading

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Tests of character

Lie-detection the old-fashioned way

HOW would you feel if you were invited to the moon? If you found a gold coin, would you save it, give it to charity or splurge on a holiday? Personality quizzes of this kind—“psychometrics”, in the jargon—are already the bane of many a jobseeker. Now, it is being applied to the oldest problem in finance: will a borrower repay?

In rich countries, lenders use credit scores to weigh risk. But just 7% of Africans and 13% of South Asians are covered by private credit bureaus. Bailey Klinger of the Entrepreneurial Finance Lab (EFL), which explores new kinds of credit data, argues that psychometrics could scoop many more people into the financial system. Everyone has a personality, after all.

Judging character is not new. Psychometrics attempts to make it a science. EFL began life as a research initiative at Harvard. The model used by Creditinfo, a rival firm, was developed with help from Cambridge. Their online quizzes are road-tested and tweaked for different cultures. Sifting the data reveals telling patterns: for instance, EFL found that young optimists are risky, but old ones are a safe...Continue reading

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Cornering the market

IN ARCHITECTURE, a cornerstone is laid where two walls meet, serving as a single point from which the building takes its shape. No one constructs an entire building out of these weighty slabs. So it is meant to be in finance. To perk up interest in initial public offerings (IPOs), companies sometimes invite in “cornerstone investors”: a small number of big investors who promise to buy a stake and hold it for a while, a vote of confidence from which the IPO takes shape. Odd, then, to see a trend in Hong Kong of IPOs constructed almost entirely out of these weighty pledges.

The latest is the Postal Savings Bank of China, a lender with 500m retail customers. Its shares started trading on September 28th, capping a $7.4 billion IPO, the world’s biggest in two years. A share sale of that size would normally dominate headlines in the financial press. But this one passed quietly, and for good reason. Just a small portion of its shares were actually sold to the public. Nearly 80% went to cornerstone investors, just shy of a record. 

Cornerstones, still rare in other markets, have long been a staple in Hong...Continue reading

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Slip slidin’ away

INVESTORS in Mexico were among those cheered by Hillary Clinton’s strong performance in the American presidential debate on September 26th. The country’s ailing peso has lost 12% of its value against the dollar this year. But either side of Mrs Clinton’s first joust with Donald Trump it climbed by 2%.

The link between the peso and Mr Trump’s chances of becoming president seems clear enough. The Republican has talked loudly about withdrawing from the North American Free Trade Agreement, raising tariffs on Mexican imports and taxing remittances. How realistic any of this is, and what effect it would have on the Mexican economy, is unclear. But his hawkish trade policy gives investors plenty to worry about.

The peso is a highly liquid currency frequently used to hedge against exposure to global risk. It fell sharply after Britons voted in June to leave the EU, even though Mexico and Britain do little trade. It is now being used as a hedge against the possible turmoil of a Trump presidency. “The peso is seen as the purest proxy for the American election,” says Andrés Jaime of Barclays Capital.

The peso’s...Continue reading

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Warping the loom

Closed outcry

THE controversies that beset America’s financial markets extend to even the most basic activities, such as trading a security. What was once the preserve of a stockmarket duopoly of the New York Stock Exchange and NASDAQ, and a handful of narrow commodity markets, is now a bewilderingly complex tapestry. It is also subject to incessant reweaving: take this week’s announcement that BATS Global Markets, an operator of four stock exchanges, will be sold to the CBOE, an options exchange, for $3.2 billion.

BATS was founded in 2005 in Kansas by a man whose background was in trading shares from his bedroom. In 2012 it famously botched its first attempt to list its own shares, completing the job only this year. The price it now commands reflects its success in expanding to become America’s second-largest equity market, with a growing presence in options. It brings to the relatively long-established CBOE, founded in 1973, what is seen to be better, low-cost technology. The CBOE said that BATS will also play a role in developing new “tradable products and services”.

This is a crowded field. More than a dozen exchanges deal...Continue reading

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Taking it to 11

IN THE spoof “rockumentary”, “This is Spinal Tap”, Nigel Tufnel, the band’s guitarist, displays his amplifiers with pride. The dials range not from one to ten, but up to 11. On a normal amp, he explains, when you reach ten, there is nowhere to go, but “these go to 11.”

Three of the world’s most important central banks—the Bank of England, Bank of Japan (BoJ) and the European Central Bank (ECB)—have dialled monetary policy up to 11, expanding their asset purchases from government bonds to embrace corporate debt and even equities. With government bonds and short-term interest rates already at historically low (and in some instances, negative) levels, such asset purchases were seen as the next logical step.

The expanded policy has several justifications. It is not clear that driving government-bond yields or short-term interest rates any lower will do a lot to help the economy; negative rates may dent bank profits, for example, making them more reluctant to lend. And if the aim is to get companies to borrow more, then buying their bonds will reduce the cost of that borrowing via lower yields.

But there...Continue reading

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Down to earth

AS BRITAIN contemplates its post-Brexit identity, government ministers are racking up the air miles. Theresa May, the prime minister, thinks Britain “should become the global leader in free trade.” Officials are discussing trade deals with a range of Asian and Middle Eastern countries. Daniel Hannan, a prominent Leave campaigner, even suggested in the Sun newspaper that he wanted Britain to join NAFTA, an intra-American trade agreement. The Brexiteers have spent less time wooing the EU, to which Britain sends roughly half its exports. Indeed, given promises made during the campaign to restrict the free movement of EU labour, reaching a post-Brexit trade deal may prove difficult.

The focus on achieving trade agreements outside Europe may seem a smart move. The EU’s economy is weak: its demand for British exports has been depressed for years. Britain’s membership of the customs union prevents it from making trade deals with fast-growing economies such as India and China, where Savile Row suits and Scotch whisky find ready markets. Brexiteers say that if Britain quit the EU it could forge new deals wherever it liked, boosting...Continue reading

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The agony of Aleppo

IN THE past week eastern Aleppo, a rebelheld area that is home to more than 250,000 people, has endured a typhoon of shrapnel. Rebel groups say the regime of Bashar al-Assad is pursuing “a scorched earth policy to destroy the city and uproot its people”. Mr Assad is trying to regain full control over the western slice of the country, where some 70% of Syrians live. His Russian allies are helping, using the same tactics and some of the weapons that turned the Chechen capital, Grozny, into a smouldering ruin in 1999.

Since the collapse of the short-lived ceasefire brokered by America and Russia, hundreds of air strikes and shells have slammed into the eastern part of the city. Activists counted 250 separate strikes on a single day last week as the regime seeks to seize the opposition’s last big urban stronghold. On September 27th the regime, backed by Shia militias from Iraq, Iran and Lebanon, launched a ground assault targeting rebel positions across the divided city.

“The situation is intense,” says one of the few remaining paediatricians in eastern Aleppo, who calls himself only Dr Hatem. “Many children have died. There is a...Continue reading

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The home guard

MOHAMMED JAAFAR, a commander of Nigeria’s Civilian Joint Task Force (CJTF), recalls his first arrest with relish. It was in 2013, shortly after the vigilante group had been formed to fight the Islamist rebels of Boko Haram. A distressed neighbour appeared at his door in Maiduguri, the birthplace of Boko Haram, reporting that a radicalised relative was hiding in his house. “I knew I was now a target,” Mr Jaafar says. So he summoned his men, scaled his neighbour’s wall and seized the suspect, who was an emir: one of Boko Haram’s spiritual leaders.

Many Nigerians are proud of such derring-do on the part of the CJTF, which has swollen into an army of over 26,000 in Borno, the state worst affected by the insurgency. As north-easterners, its members claim to know the suspects in their communities, saving innocent bystanders from being rounded up by ill-informed regular soldiers. They tried to protect their towns when Nigerian troops fled the front line (a common occurrence until early last year). Some fought bravely alongside the army, too. As Boko Haram advanced on Maiduguri in 2014, for example, the vigilantes helped avert the fall...Continue reading

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To sell or not to sell?

AT THE biggest-ever global wildlife conference, khaki-clad hunters rub shoulders with animal-rights activists, nerdy scientists and blustering politicians. All have one thing in common: a desire to save endangered species from extinction. The similarity ends there. Pelham Jones, a South African, leads a group of private rhino owners arguing that legal trade in horn would stop the slaughter of their animals by criminal gangs. Across from his booth sits a Vietnamese delegation that claims to have reduced demand among consumers back home, where rhino horn is proudly used as “medicine”. Around the corner are conservation groups that think legalising the trade will doom the rhino to extinction. “It’s very clear in this room there is total polarisation,” Mr Jones says.

This is the first time for 16 years that Africa has hosted the Convention on International Trade in Endangered Species (CITES), which regulates trade in plants and animals. This one has record attendance: some 3,500 participants are meeting from September 24th to October 5th in Sandton, a swanky suburb of Johannesburg. The stakes are high for the continent’s most iconic fauna. Rhino...Continue reading

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A burnt-out case

Kabila’s not going anywhere

FROM the outside, the offices of FONUS, a political party in Congo’s capital, Kinshasa, look relatively unchanged. The gate is still in the blue and yellow colours of the national flag; the party president’s picture still hangs in the doorway. Inside, however, is chaos. Two large printing machines have been turned into a pile of blackened and twisted metal. The corrugated iron roofing is on the floor. A party member explains how at 3am on September 20th two jeeps full of soldiers arrived, broke in and poured petrol everywhere. Then one of them fired a rocket into the printing room.

The FONUS office was not alone. The road it sits on, opposite the national football stadium, is lined with buildings festooned with political flags and posters. Several of them, all from opposition parties, now have smashed windows and blackened walls. They were attacked after a protest on September 19th against President Joseph Kabila’s failure to organise elections. That turned into a looting spree, which was in turn put down with bullets by Mr Kabila’s personal guards. Around 50 people were killed; two police...Continue reading

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Crushed flowers

ALEPPO’S location was always a blessing and a curse. It lay at the fork on the Silk Road where goods went south to Africa and the Middle East or north into Eurasia. Merchants milked the proceeds, helped by carrier pigeons from Baghdad bringing daily updates on shifting commodity prices. But it was also a prize. Empires battled for its wealth.

In the tenth century it shifted from Christian Byzantine to Shia Fatimid to Sunni Abbasid hands, sometimes every few days. Merchants nodded, checked the wind and kept out of the fray. Its location was too important not to overcome earthquakes or sacking by the Mongols or Tamerlane. “It was just about trading,” says Philip Mansel, who this year published a timely book on Aleppo’s rise and fall.

Prosperous local merchants invested in music, poetry and food, rather than shrines, of which there are remarkably few. “Excess is obnoxious, even in religious worship,” is an oft-quoted Aleppo proverb. Unlike Damascus, which traditionally was more devout, Aleppo embraced Turkish-speaking Ottoman rulers as readily as French imperialists. Access to their new markets was too attractive to do otherwise. The Ottomans made it their second city after they seized it in 1516. It was the only Arab city where their sultans spent much time.  

Aleppo’s architecture and culture reflected its grandeur. The Prophet...Continue reading

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A “weird and strange” campaign

The forces of Justice and Development

SINCE making gains in municipal elections last year, things have gone downhill for Morocco’s ruling Justice and Development Party (PJD). First, a former candidate was accused of sexual harassment. Then in July a party member was arrested with three tonnes of cannabis. One of its governors is accused of trying to influence a big property deal. And in August two sexagenarian leaders of the party’s religious wing, one married, were caught by police in a “sexual position” on a beach.

This would be bad for any party, but the PJD is Islamist and its members are prone to moralising. So some Moroccans have revelled in its misfortune, especially as it comes in the run-up to parliamentary elections on October 7th. Over 30 parties will compete for 395 seats, but the real battle is between the PJD and the Party for Authenticity and Modernity (PAM), which vows to “liberate” Morocco from the Islamists. The PAM won about the same number of votes as the PJD in the municipal polls.

These are the second parliamentary elections since thousands of Moroccans took to the streets in 2011...Continue reading

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The angry 80%

“WE ARE the 80%!” declared Henrique Capriles, governor of the Venezuelan state of Miranda and a leader of the opposition to the country’s autocratic left-wing government. He was one of a parade of speakers who took to a makeshift stage at the Miranda sports complex in Caracas on September 26th to rail against the regime. The week before it had taken steps that will make it far more difficult to remove the president, Nicolás Maduro, by constitutional means. 

Protests will start immediately, said the opposition Democratic Unity alliance (MUD). October 12th will be “a special day of national mobilisation”. It will be followed by the “real conquest of Venezuela”, on October 26th-28th. Those are the days fixed by the national electoral council (CNE) to record public support for launching a referendum to recall Mr Maduro.

Mr Capriles is right. Venezuelans have been driven to near-desperation by shortages of food, medicines and other basic goods and by inflation of around 700%. Millions are having to skip at least one meal a day. According to one recent poll, 84% would vote to remove Mr Maduro from office. But the regime is...Continue reading

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A discredited profession

ON THE eve of independence day in Mexico last month, thousands of protesters marched through the capital to demand the resignation of the president, Enrique Peña Nieto. The demonstration was not huge, and in other countries would have been unremarkable. But not in Mexico, where the presidency has long been viewed with deference.

Mexicans blame Mr Peña for a sluggish economy, a renewed rise in violent crime, perceived (though denied) conflicts of interest and, most recently, for inviting and then being humiliated by Donald Trump. His approval rating of 23% is the lowest for a Mexican president since records began. Yet Mr Peña is not the most unpopular leader in Latin America. That dubious honour does not even belong to Venezuela’s Nicolás Maduro (21%) but rather to Luis Guillermo Solís of Costa Rica (10%), according to Consulta Mitofsky, a Mexican pollster. Chile’s Michelle Bachelet languishes in the low 20s. Colombia’s Juan Manuel Santos has only recently risen above that, in part because of his peace deal. Only half a dozen of the region’s presidents, headed by Danilo Medina of the Dominican Republic, get a thumbs-up from their...Continue reading

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The dangers of farsightedness

IN PLANNING for the future, democratic politicians dare not look far beyond the next election, lest they lose power before the future arrives. Thailand’s military rulers have no such qualms. They have rewritten the constitution to guarantee themselves a guiding hand over future governments even after elections resume. That has given them the confidence to draw up a 20-year plan for the economy. In a speech in Bangkok on September 28th, Prayuth Chan-ocha, coup leader and prime minister, promised to turn Thailand into a developed country by 2036.

The junta sees Thailand climbing to a fourth stage of economic development (“Thailand 4.0”) beyond agriculture, light manufacturing and heavy industry. This next stage will feature new “growth engines”, such as biotechnology, the internet of things and “mechatronics” (a fusion of mechanics and electronics). 

In pursuit of this vision, some welcome structural reforms are under way. The junta has passed an inheritance tax; one on land and property will follow. It has also begun to reform the corporate governance of the country’s 56 state-owned enterprises, hoping to free them from...Continue reading

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Going into battle

IN HER first two months on the job Yuriko Koike, Tokyo’s governor, has ruffled many feathers. She began before she was even elected, by running without the endorsement of the Liberal Democratic Party (LDP), of which she is a member but which supported another candidate. Since taking office she has revealed that the site to which the city’s main fishmarket is supposed to move has not been properly decontaminated; she is banning her staff from working past 8pm in the name of “life-work balance” and she has declared war on financial waste and corruption—taking the lead by pledging to halve her own salary. The hallmark of her tenure, she says, will be “major change” to the way the city is run.

In fact, it is a major change simply having someone like her as governor—mayor, in effect, of Tokyo prefecture, with a population of 13.6m and an economy roughly the size of Canada’s. Not only is she a woman (unlike 87% of Japanese parliamentarians). She is also neither a political dynast (unlike five of the past seven prime ministers), nor a party stalwart. That played to her advantage in the election, but, alas, will limit her clout when taking on the old-boys’ network of...Continue reading

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Death by water cannon

“ANOTHER has been killed like this, again,” lamented the mother of Lee Han-yeol, who was fatally injured by a tear-gas canister in 1987 during a demonstration against the military regime of Chun Doo-hwan. She was among many attending the funeral of Baek Nam-gi, a 69-year-old South Korean activist and farmer. Mr Baek was knocked over by a blast from a police water cannon during a demonstration last year; after ten months in a coma, he died on September 25th.

Clashes between demonstrators and police have a special resonance in South Korean politics. The death of Mr Lee became one of the defining moments of the country’s transition to democracy. As he lay in a coma, fellow students circulated a photograph of him, bloodied and slumped in the arms of a friend. Almost 30 years on, protests, frequent and raucous, are still a big part of public life. But just how far it is legitimate for protests to go, and how police should respond, are still matters of fierce debate.

Mr Baek’s death struck a chord in part because he epitomised the dogged activism that helped to put an end to the authoritarian order that endured from the second world war until the late 1980s. He...Continue reading

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The velvet glove frays

An opposition politician’s lot

LIKE many old people new to social media, Hun Sen, Cambodia’s longtime strongman, has swiftly gone from sceptic to oversharer. Visitors to his Facebook page see him not only praying at temples and gravely shaking hands with world leaders; he also mugs for selfies with adoring crowds, plays with his grandchildren and hacks his way around a golf course. Scarcely a moment of his recent tour of the provinces went undocumented.

Politicians everywhere use social media to humanise themselves and connect directly with voters. Mr Hun Sen faces local elections next year and a national contest in 2018. On his recent provincial swing he pressed flesh, announced local infrastructure projects as though they were acts of personal largesse and even freed birds from captivity—a ritual good deed in local Buddhist practice. But in case his efforts to win hearts and minds fall short, he appears to have a contingency plan: intimidate the opposition and civil society.

At a meeting of the UN Human Rights Council this week, Samol Ney, Cambodia’s ambassador, insisted: “The judiciary is…an...Continue reading

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Bill and Hillary Inc.

Where past and future collide

DAMARIS OLLER came to America from the Dominican Republic in 1974, worked hard, lived legally and raised two children. But she did not become a citizen—because she saw no need to—until last April. “It was because of that man,” she explains at the El Jibarito café in Kissimmee, in central Florida, where she serves tasty slow-roast pork, plantains and beans. “I was afraid that if Donald Trump becomes president I’d be kicked out the country.”

Ms Oller is the Hispanic voter of Hillary Clinton’s dreams. Frightened and disgusted by Mr Trump’s promise to deport 11m undocumented people, and by his slandering of Mexicans as rapists and the Spanish language as unAmerican, she says she will vote for the Democratic nominee as if her life depended on it: “Estoy con ella” (“I’m with her”). She is also a Floridian Hispanic, which makes her one of the most important voters in America.

Florida is the biggest swing state, with 29 electoral-college votes up for grabs, so more likely to determine who wins on November 8th than any other. Shifting from red to blue to red, then blue again, Floridians have picked the winner in the past...Continue reading

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Touching the void

“IT’S about time that this country had somebody running it that has an idea about money,” Donald Trump said during the presidential debate on September 26th. Yet Mr Trump’s finances are the murkiest of any candidate in memory. He makes the Clintons look like paragons, and also makes a mockery of disclosure rules for candidates.

There are four problems. First, Mr Trump’s business is baffling. There is no holding company with accounts, and no major part of it has been publicly listed for long. Mr Trump has made a 104-page declaration of wealth to the electoral authorities. But the rules governing these forms are hopeless—they do not distinguish between revenue and profit, and any asset worth over $50m need not have its precise value specified. Mr Trump says he is worth $10 billion. An analysis by The Economist in February suggested $4 billion, but without audited accounts, who knows? The same forms show that Hillary Clinton is worth $11m-53m. This appears to exclude property and, perhaps, some of Bill’s assets.

Second, Mr Trump has not made public his tax returns. During the debate he again claimed that he is unable to because the...Continue reading

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Notes from the undergrowth

In Flint, don’t drink the water

DESPITE deluges in the South, droughts in the West and fires throughout national forests this year, the words “climate” and “change” have seldom been uttered together on the campaign trail. Fifteen of the 16 hottest years on record have occurred since 2000. Yet Donald Trump has claimed that global warming is a Chinese hoax designed to thwart American businesses (he also denied saying so at the first debate between the candidates, on September 26th). Hillary Clinton believes that “climate change is real” and that dealing with it will create jobs in the renewable-energy sector. In sum, the two candidates offer completely different environmental platforms.

Uncoupling emissions growth and economic expansion is important to slowing climate change. Total energy consumption in America has dropped 1.5% since Barack Obama became president, according to the White House; in that time the economy has swelled by 10%. America now generates more than three times as much electricity from wind, and 30 times as much electricity from solar, as it did eight years ago.

Most voters accept that climate change is...Continue reading

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Heard on the trail

Ladies’ night
“She gained a massive amount of weight and it was a real problem.”
Donald Trump fat-shames Miss Universe 1996. Fox and Friends, post-debate

A bad workman ...
“My microphone was terrible. I wonder, was it set up that way on purpose?”
Mr Trump explains his poor debate performance. Fox News

... blames his tools
“Anybody who complains about the microphone is not having a good night.”
Hillary Clinton responds

American History X
“I think even most eight-year-olds will tell you that whole slavery thing wasn’t very good for black people.”
Barack Obama takes issue with Mr Trump’s assertion that blacks have never been worse off. ABC News

Grumpy old men
“He’s up in years.”
Donald Rumsfeld, 84, judges former president George H.W. Bush, 92, on his rumoured support for Mrs Clinton. MSNBC

The enemy of my...Continue reading

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Enter the lawyers

Demanding justice, at a price

UNDER pressure from families bereaved by the terror attacks of September 11th 2001, and with the threat from Islamic extremism a potent talking-point in the general-election campaign, Congress has voted overwhelmingly to allow Americans to sue foreign governments for aiding and abetting terrorist acts in America. The decision on September 28th overturned a veto by President Barack Obama and brushed aside furious lobbying by Saudi Arabia, the primary target of the new law. A vote in the Senate passed 97-1, followed by a 348-77 vote in the House of Representatives, easily clearing the two-thirds hurdle for a veto override: the first of Mr Obama’s time in office.

The vote prompted something close to presidential scorn, with Mr Obama, in an interview with CNN television, calling the congressional decision a “mistake”, driven by the desire not to be seen “voting against 9/11 families right before an election”. His press spokesman went further, calling the Senate vote “the single most embarrassing thing” the chamber had done in decades.

The law, the Justice Against Sponsors of...Continue reading

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Fat help

BACK in Syria food was cheap, remembers Maya, as she sits cross-legged in the small flat she shares with her husband, their five children and another couple in Amman, Jordan’s capital. When she first arrived here, she had to cut back. But now, with her husband working and 20 dinars ($28) a month from the World Food Programme (WFP), a UN agency, she can buy the children a treat like fish or chicken.

Scattered across Turkey, Lebanon and Jordan are 4.4m registered Syrian refugees, 90% of whom, like Maya, live outside formal refugee camps. This makes it a logistical nightmare to get the traditional food aid to them—sacks of rice and pulses. The WFP, the world’s largest food-aid provider, has adapted: a decade ago, it doled out aid only in kind. Now just over a quarter of its aid globally is cash-based. Every month Maya gets a text message alerting her that her special debit card, which she can use only to buy food, has been topped up. The WFP reaches around 1.1m refugees like this in Jordan, Lebanon and Turkey.

This week saw the launch in neighbouring Turkey of the largest-ever humanitarian-aid project financed by the EU: a whopping €348m...Continue reading

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China's Streaming Craze Launches a Billion Shooting Stars

The owner of streaming app Inke is China’s newest unicorn thanks to a 19-fold increase in value in eight months.

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The little cartel that could

DOES OPEC matter? Those who dismiss the significance of the Organisation of Petroleum Exporting Countries, a producers’ cartel, cite at least three reasons to think not. Its 14 members cannot agree among themselves, not least because they include bitter regional rivals like Iran and Saudi Arabia. Even if the cartel could agree, its pacts would not work, because so much crude oil is now produced outside the club, in the hinterlands of Siberia or the fracking fields of America. And if OPEC’s agreements will not work, its members will have no reason to stick to them.

Those who think OPEC still matters can now make one powerful counterargument: Algiers 2016. On September 28th OPEC members gathered there for an informal meeting and agreed to cut output for the first time since 2008. The agreed cut was modest, limiting production to 32.5m-33m barrels per day, which is between 0.7% and 2.2% below current output. Saudi Arabia’s production was likely to fall anyway as the winter approaches. The agreement was also vague. Members will wait until their formal meeting in November to settle how the overall cut will be distributed among them....Continue reading

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Hard bargain

ROBERTO AZEVEDO, the head of the World Trade Organisation (WTO), is not the architect of grand global trade deals that his title suggests. Sitting in his Geneva headquarters, he remembers only too well how the WTO’s Doha round collapsed under the weight of its own ambition. “Let’s do the trade deals that are in reach,” he says. Overambition is not the only problem. “Anti-trade rhetoric is catchy,” sighs Mr Azevedo. So catchy that it has infected deals beyond the WTO. The world’s most trumpeted regional trade deals are drifting out of grasp just when pep is most needed: on September 27th the WTO forecast that for the first time in 15 years, global trade growth this year, at just 1.7%, would not keep pace with global GDP.

The Trans-Pacific Partnership (TPP), a deal between America, Japan and ten other countries around the Pacific, was signed in February but is now faltering. On September 26th Hillary Clinton and Donald Trump, the Democratic and Republican nominees for the American presidency, fought to distance themselves from it in their first televised presidential debate. Mr Trump labelled the deal “almost as bad as NAFTA” (the North...Continue reading

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Why Markets Are Riding Such a Long and Narrow Path

There been much talk about policies that might wake up markets, such as helicopter money, fiscal stimulus, or structural reforms. But little or no action.

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OPEC 'Understanding' Is Easily Misunderstood

Wednesday’s jolt in oil prices seems like an overreaction to news out of OPEC.

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BlackBerry Can't Let Software Get Hung Up

BlackBerry’s exit from handsets puts all hope on software, where competition is fierce.

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The 2016 election: No happy ending

“WE LIVE in a world that has walls. And those walls have to be guarded by men with guns,” snarls the demonic Colonel Jessep at the end of “A Few Good Men”. Moments later he admits that, to maintain standards in his front-line unit, he ordered the fatal bullying of a young Marine: “You’re goddamn right I did.” It is one of cinema’s great confession scenes, and unexpectedly came to mind during the first presidential debate at Hofstra University on Long Island, on September 26th.

Time and again Donald Trump was baited by Hillary Clinton into outbursts of Jessep-like candour. Reminded that in 2006 he had wished aloud for the property crash that would cost millions their homes, deeming such a slump a chance to “make some money”, Mr Trump leaned to the mic and growled: “That’s called business, by the way.” Another rash boast concerned Mr Trump’s refusal to release his tax returns. Perhaps, Mrs Clinton mused, her rival does not want Americans to know that he is not as rich as he claims, or that in the only annual returns that he has ever made public (while seeking a casino licence), he paid no federal income taxes. “That makes me smart,” snapped...Continue reading

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Companies Pick Wages Against the Machine

This year’s weak capital spending figures are at odds with the strength in U.S. hiring.

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Costco Must Do More to Battle Amazon

Costco shares should continue to suffer under the weight of competition from Amazon.com and others.

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Less Cash in the Mattress at Tempur Sealy

Tempur Sealy’s sales may continue to be pressured as online competition mounts.

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Interpreting the electorate's wishes

Navel-gazing nations

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Church and state get cosy in North Carolina

A RULING last week at the Fourth Circuit Court of Appeals is a reminder that church and state are far from separate in America. The First Amendment’s proscription on government acts “representing an establishment of religion” has been interpreted to bar prayer in schools, government aid to churches and certain types of sectarian displays on public grounds. But outside the classroom and the public square, official allusions to religion fly freely. In Marsh v Chambers, a case from 1983, six members of the Supreme Court found no trouble with the fact that Nebraska had hired a chaplain to deliver invocations in the state legislature. Legislative prayer is “deeply embedded in the history and tradition of this country”, Chief Justice Warren Burger wrote. “We are a religious people”, he continued (quoting an earlier case), “whose institutions presuppose a Supreme Being”.

Two years ago in Town of Greece v Galloway, the justices ruled 5-4 that it was fine for a town board to invite mostly Christian ministers to launch their monthly meetings with a prayer. Now...Continue reading

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European Banks and the Great Mortgage Settlement Game

Royal Bank of Scotland has taken another step toward clearing its crisis-era lawsuits and penalties, but its latest U.S. mortgage settlement and Deutsche Bank’s current talks highlight just how much litigation European banks still need to close.

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China worries subside

OPINION polls have taken a bit of a reputational battering in recent years. In Britain, they underestimated the strength of the No campaign in the Scottish referendum and failed to predict a Conservative majority in the 2015 election; while in America, polls underestimated Obama's margin of victory in 2012 and the Republicans' mid-term success in 2014. In economics, there is still a debate about the usefulness of surveys of consumer and business sentiment (relative to the hard data).

Polls of investor sentiment are generally seen as useful, if only as a contrarian indicator. If fund managers are bullish about emerging markets, that means a lot of good news is priced in. The risks are thus skewed; further good news is thus unlikely to have a positive effect on asset prices while bad news will have an adverse impact.

What determines investor sentiment is also interesting. Presumably this comes from a mix of their own analysis of economic data, conversations with the business in which they invest and the general tone of media coverage. (Some people use the number of times key words like "recession" and...Continue reading

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Jakarta’s mayor inspires citizens to look past race and religion

MANY pundits have predicted that the race to become the next governor of Jakarta will be an especially nasty one, fraught with racial and religious discord. It began harmoniously enough on September 24th, the day after the deadline to register as a candidate, with all three contenders and their running mates smiling and laughing as they posed together for a photo. But the front-runner, Basuki Tjahaja Purnama, known to all as Ahok, is both Christian and of Chinese descent—both rarities in an overwhelmingly Muslim, Malay country. How voters will respond is anyone’s guess.

 

Ahok is already governor (in effect, mayor) of Indonesia’s teeming capital, a city of about 10m people. He had been deputy governor, but won an automatic promotion when his predecessor, Joko Widodo, stood down to run for president in 2014. That means he has only faced the voters as the running mate of Jokowi, as the president is known, during the previous election for governor, in 2012—never at the head of a ticket.

 

As recently as 1998 hundreds of ethnic Chinese were raped and killed in riots in Jakarta. Christians have been the victims of...Continue reading

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Chip Boom Helps Erase Toshiba's Bad Memories

Toshiba has more than doubled its operating profit forecast on strong memory prices, but it has to stay focused to compete.

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Chinese Insurers' Short-Term Strategy Is Getting Old

China’s life-insurance industry has been turbocharged by billions of dollars worth of short-term products. It’s a peculiar trend.

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Nuclear power play

 

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Drones: DJI's Liftoff Needn't Ground GoPro

Action-camera maker’s Karma drone can still find a niche in the fast-expanding market.

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Media Likes Twitter But Tech May Pay More

Twitter has generated interest from tech and media companies, but the former are likely to pay a higher price.

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Presidential Debate: Financial Markets Declare Winners and Losers

Investors offered their own grades for Hillary Clinton and Donald Trump following Monday’s debate.

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Colombia’s 50-year war comes to an end, at last

On September 26th the Colombian president, Juan Manuel Santos, and the leader of the Revolutionary Armed Forces of Colombia (FARC), Rodrigo Londoño, known as "Timochenko", signed a peace accord to end more than 50 years of war between the Marxist rebels and the Colombian state. Beginning in 1964 as a peasant revolt, the conflict is believed to have cost more than 220,000 lives and displaced almost 7m people. Under the agreement, signed with a pen made from a bullet, the FARC’s estimated 7,500 fighters will move into disarmament zones monitored by the UN and surrender their weapons within 180 days. FARC leaders and fighters who committed crimes against humanity will face a special tribunal but will not serve time in jail if they confess.

The FARC is to become a political party. Initially, it will have ten seats in Colombia’s 268-member congress. 

Leftist rebels patrolling near San Vicente de Caguan, 1999. At the movement’s peak it fielded...Continue reading

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The timely autobiography of an American mythologist

LIKE much great art, Bruce Springsteen’s finest songs transmute the particular into the eternal. The more tightly local their focus—those boys from the casino dancing with their shirts open in “Sandy”; that Tilt-a-Whirl down on the south beach drag—the more universal they magically become. As he puts it in “Born to Run”, his new autobiography, he sings about “the joy and heartbreak of everyday life”, of humdrum defeat and defiance, the pull of home and the road’s allure, familiar dichotomies somehow elevated, in his ballads, into a new American mythology.

As “Born to Run” recounts, those songs feel authentic because they are. At the heart of his oeuvre, and of his book, is his painful relationship with his father, a sometime pool shark whom, as a child, Mr Springsteen fetched from bars in Freehold, New Jersey for his long-suffering mother, and whom he once hit with a baseball bat to protect her. He records their wars over his lengthening hair, which culminate in Springsteen senior calling in a barber when his son is incapacitated by a motorbike accident; the silences and boozing; but also his unexpected, curt relief when Bruce fails his army medical...Continue reading

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A referendum by Serbs threatens yet more trouble for Bosnia

 

 

 

 

THE threat of a new war in Bosnia is so strong that “you can feel it in the air,” warns Aleksandar Vucic, the prime minister of neighbouring Serbia. It would take only a spark, he thinks, to ignite it. Some worry that the Republika Srpska, the Serb half of Bosnia, has just struck that spark.

On September 25th, the semi-autonomous region held a referendum on whether to celebrate its own national day on January 9th, the date of its founding in 1992. Bosnia’s constitutional court had declared the vote illegal, ruling that it discriminated against Bosniak Muslims and Croatians. By holding it anyway, Bosnian Serbs have struck a blow against the authority of a weak Bosnian state that has faced the threat of disintegration ever since it was created under the American-brokered Dayton accords more than two decades ago.

Milorad Dodik, the Bosnian Serb leader, has said that the Republika Srpska will vote on secession by 2018, and Sunday’s vote was seen as a trial run. The international body set up to oversee Bosnia’s 1995 peace agreement, which had the power to block the...Continue reading

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Portugal Faces Ratings Risk Re-Run

Southern European bonds are coming under pressure again; Portugal faces the most immediate test.

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Deutsche Bank's Issues Are in its Future as Much as its Past

The bank needs capital but it is a long way from finding a convincing sales pitch for investors.

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Too Many Chips on Macau's Recovery

More visitors are staying in Macau’s shiny hotels, yet they would need to make more bets in the casinos to justify the rally in the city’s gambling stocks.

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The first presidential debate

WHEN George Wallace ran a populist campaign for president in 1968, Lurleen Wallace, his wife, was asked what people liked so much about him. “When he’s on ‘Meet the Press’ they can listen to him and think, ‘That’s what I would say if I were up there.’” Bear this in mind as you read confident predictions that Hillary Clinton triumphed in the first presidential debate at Hofstra University. This campaign is the political equivalent of asymmetric warfare. The candidates do not meet on the same plane. Plenty of people who watched the debate will conclude that Donald Trump won.

Mr Trump started the stronger. His opponent was handed a question on the economy to begin with. She waffled and missed an opportunity to point to the recent news that all incomes are now growing strongly. Mr Trump appeared, if not presidential, then not out of place on a stage next to a former senator and secretary of state. He had an effective attack against Mrs Clinton which turned her experience back on her: you have been in public life for 30 years, so why haven’t you fixed all these problems you keep talking about?

From about the 15-minute mark (of a total of 90) the debate...Continue reading

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Follow our journalists as they watch Hillary Clinton and Donald Trump debate

A Twitter List by TheEconomist

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Nike Can Regain Stride After Results

Nike’s North American results should begin to accelerate again as the sportswear maker pushes back against competitors.

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A Symbolic Freeze Agreement Won't Revive Oil Prices

An oil producers’ meeting in Algeria may be surprisingly productive but there will be little fundamental impact of a freeze on a still-glutted market.

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More Than Money at Stake in Tesla's SolarCity Deal

Weighing Tesla’s merger offer for SolarCity means separating what can and can’t be measured.

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What difference do presidential debates make?

HILLARY CLINTON and Donald Trump are the most unpopular presidential candidates ever, but everyone is interested in what they have to say. On September 26th, amid a tightening presidential race, they will meet for the first of three debates. It is expected to be the most watched ever, with perhaps 100 million American viewers—it may even match the Super Bowl. The commentary, across the media, will be fast and furious. 

Since the first televised presidential debate in 1960, journalists have tended to ascribe great importance to debate performances. Candidates are said to gain “momentum”; truly exceptional debate performances may even be judged to be “game changers”. Certainly debate gaffes can come to dominate the political conversation: in a 1976 debate, then-president Gerald Ford once famously (and ludicrously) proclaimed that Poland, Romania and Yugoslavia were free of Soviet influence. Mr Ford duly went on to lose the election.

But political scientists are actually quite sceptical about the idea that presidential debates have a big effect on elections. Perhaps the most cited academic study on the topic comes from Robert Erikson and Christopher...Continue reading

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Don't Be Fooled by Lull in U.K.'s Supermarket Storm

Signs of growth this month probably don’t signal an end to the price wars between Britain’s grocers—not least because of Wal-Mart.

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Japanese Banks: New Policy, Same Old Pain

With profitability withering away, Japanese banks may need a lot more help than the central bank is willing to give.

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Another $10 Billion Hong Kong Stock Market Mystery

Property developer Fullshare is the latest hard-to-explain Hong Kong highflier.

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All the Texas Tea in China Is Less Than It Was

China’s oil consumption is closely watched, but its faltering domestic production may be having a bigger impact on the global balance.

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At Carnival, It's No Time to Jump Ship

Carnival shares have significantly underperformed the broad market heading into Monday’s earnings report.

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AMD No Longer Coming Up Short

The chip maker’s improving prospects have made the stock a less appealing short target.

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Twitter Deal Would Be One Too Many for Salesforce

The cloud software company’s expansion appetite is giving Salesforce’s investors indigestion.

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Lessons from the debates of the past

EXPLAINING Ronald Reagan’s landslide victory over Jimmy Carter The Economist’s issue dated November 8th , 1980 singled out a few big factors. These included a mood of economic “misery”, public angst about American hostages held in Iran and the splintering of the Democratic voting coalition between white southerners and northern workers underway since the passage of the Civil Rights Act and the riot-torn, race-haunted election of 1968. “This was the election that Watergate postponed”, was the pithy verdict of this newspaper’s Washington bureau, contemplating Mr Carter’s drubbing in 44 states.

But in their first take on the Reagan Revolution, this reporter’s predecessors highlighted one other big thing, too: a television debate in which the Democrat tried and failed to portray his opponent as a “simpleton” and hard-right war-monger, offering what Mr Carter deemed “extremely dangerous” policies. Instead, we noted, Mr Reagan came across as “calm and reasonable, a decisive achievement for him with many undecided voters.” As a “controlled, humourless” Mr Carter offered a welter of statistics, he was undercut by his opponent’s amiable manner...Continue reading

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The FARC agree to hand in their weapons and become a normal political party

BY NIGHT it was a music festival. Bands took to a massive stage, dappled with coloured light and shrouded in artificial fog, to belt out reggae and traditional Colombian cumbia for a crowd consisting mainly of fighters from the leftist FARC guerrilla army and its supporters. The concert’s location—a fairground in the grasslands of Colombia’s central Meta province—put foreign visitors in mind of Glastonbury or Woodstock, though the location was rather more remote. The nearest town was five hours away by car on unpaved roads. One rapt guerrilla said he had never been to a concert before.

By day, delegates to the FARC’s tenth conference deliberated on the fine points of an accord to end their 52-year-long war with Colombia’s government, the culmination of four years of negotiations that took place in Havana. They debated its provisions for setting up a special justice system to try leaders who have committed war crimes, and laid out plans for becoming an unarmed political party. At the end of seven days of debate and music, the FARC is expected on September 23rd to approve the deal and agree to hand in their weapons. Their leaders will travel to Cartagena, on...Continue reading

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Early voting may decrease turnout

THERE are just 46 days to go before the most divisive presidential election in living memory draws to a close. With polls showing a tightening race between Hillary Clinton and Donald Trump ahead of their first presidential debate on September 26th, questions about voter turnout loom large. How successful, pundits ask, will the candidates be in persuading their supporters to get out and vote for them on November 8th?

But in many states voting is already underway. Some 5,000 postal votes have already been cast in North Carolina. On September 23rd early voting begins in Minnesota, with New Jersey and South Dakota following on September 24th. In total, 37 states now allow early voting in some form or another. In 2012, 42m people—nearly one-third of all ballots cast—were submitted before election day itself, up from less than 7% of voters in 1992. 

At just 54% of the voting-age population, America has one of the worst turnout rates for general elections in the developed world. Proponents of early voting—which is not cost-free as polling stations...Continue reading

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Seconds Matter a Lot for Facebook Valuation

Facebook’s overstatement of one video viewing metric could undermine the highly optimistic assumptions underlying its valuation.

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Wanda-Sony Pictures: China Is Coming to Theater Near You

Dalian Wanda’s tie-up with Sony Pictures is about something bigger than bringing Hollywood to China.

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The Looming Storm in Insurance

The question for property and casualty insurers isn’t only whether reinsurance pricing will find a floor, but also how much the industry is now starting to amplify financial and actuarial risks.

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Why Sheds Are the New Shops---For Now

E-commerce has made distribution warehouses hot property, but investors shouldn’t forget the usual real-estate risks.

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Don't Fade the Fed

Investors are skeptical about whether the Federal Reserve will raise rates at all this year. There is reason enough for that, but it is also dangerous.

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How violence in North Carolina could help Donald Trump

WHEN Hillary Clinton was eight percentage points up on Donald Trump last month, it seemed nothing, except perhaps a major national security or law-and-order emergency, which generally helps Republicans, or a health scare for Mrs Clinton, could make the race competitive.

Then on September 11th Mrs Clinton collapsed on a New York street; it was later revealed that she had contracted pneumonia. On September 18th a bomb blast in Manhattan injured 31 people, for which an Afghan-American was later shot and arrested. And on September 22nd the governor of North Carolina declared a state of emergency in the city of Charlotte, after (yet another) killing of an, allegedly unarmed, black man by police sparked violent protests, including the shooting of a black protester.

Mrs Clinton is now ahead by two points, in an average of recent polls—well within the margin of error. Analysis of the polls by FiveThirtyEight, a data journalism website, gives her only a 58% chance of beating Mr Trump on November 8th.  

The unforeseen disasters are not the only reason for the tightening polls. Mrs Clinton, it appears, had been benefitting...Continue reading

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Cut the Cord on Overvalued Utilities

Utility stocks could wipe out many years of excess yield by simply moving back to their average valuation relative to the broad market.

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A Market-Timing Strategy That Just Might Work

Two professors developed a hypothetical trading strategy around earnings announcements that, with hindsight, has a formidable track record.

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Chinese sneezes

INVESTORS have long been wary of America’s sneezes, knowing they can give the world a cold. In Asia they now also fret about Chinese rhinitis, which is proving just as contagious. For financial epidemiologists, this is something of a puzzle. It is to be expected that germs can spread from China, Asia’s biggest economy, to others in the region. But it is surprising quite how infectious they are proving. Unlike America, enmeshed in global markets, China’s economy is in self-imposed quarantine, protected by capital controls that limit its interactions with others.

Yet China’s impact on Asian stockmarkets is now nearly as potent as America’s. Two recent papers, one from the IMF and one from the Bank for International Settlements (BIS), a forum for central banks, reveal the extent of the change over the past decade. The IMF estimates that the correlation between the Chinese stockmarket and those in other Asian countries has risen to more than 0.3 since June last year (1 is a “perfect” correlation), double the level before the global financial crisis. That is still below the 0.4 correlation between America and Asia, but the gap is closing fast (see chart). According to...Continue reading

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Won’t pay! Can’t pay?

BILLS for pre-crisis buccaneering are still coming in. Deutsche Bank, Germany’s biggest lender, confirmed on September 15th that America’s Department of Justice (DoJ) had asked for $14 billion to settle possible claims connected with the underwriting and sale of residential mortgage-backed securities (RMBSs) between 2005 and 2007. The next day Deutsche’s share price, already reeling after a wretched year, plunged by 8%. It was groggier still after the weekend, closing on September 20th at a 30-year low (see chart).

American banks have settled with the DoJ for amounts between $3.2 billion (Morgan Stanley) and $16.7 billion (Bank of America), as well as agreeing on smaller sums with the Federal Housing Finance Agency (FHFA), another regulator. Deutsche, which settled with the FHFA for $1.9 billion in 2013, insists that it will not pay anything near to what the DoJ has asked for, and it surely won’t. Citigroup, which reached an RMBS deal with...Continue reading

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