The Only Thing on Sale at Coach Is Its Stock

Coach’s shares have lost about 17% over the past three months and look undervalued relative to peers.

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Cloud Bill: Why Amazon, Microsoft and Google Are Likely to Keep Spending

Trailing 12-month capital investments are now at $30 billion for three largest cloud vendors.

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Oil Is Slicker Than Water at GE

General Electric is dumping its water business while combining the oil and gas unit with Baker Hughes, but probably not because it needs the cash.

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Big Mergers May Face a Higher Bar in Washington

The White House is looking at the impact on jobs and pay when approving corporate deals, including planned mergers like General Electric-Baker Hughes and AT&T-Time Warner.

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WPP Gets a Boost, for Now, From Digital Competition

Intense competition is probably responsible for bumpy sales by WPP and other ad industry giants.

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Is Mark Carney indispensable?

OVER the weekend, rumours flew that Mark Carney, the dashing Canadian at the helm of the Bank of England, might leave his job in 2018. (He initially promised to serve for five years, but a full term is eight, and many Britons hoped he would stay on.) An early exit for Mr Carney, who has been on the job since 2013, would be understandable. While Canada is the world’s great liberal icon, Britain is a mess. Not only must Mr Carney steer the British economy through the rough, post-referendum economic seas, but he has also faced criticism from Tory leaders, who are angry with Mr Carney for trying to warn Britons that Brexit would in fact be economically damaging.

This morning, the Financial Times reports that the rumours are wrong, and Mr Carney stands ready to serve a full term. One could practically hear the sighs of relief around the City. Yet is it right that so much should seem to ride on the presence or absence of one man?

Back in 2012,...Continue reading

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Is Kenya’s film censor out of control?

 

WHAT does a film certification board do? In Kenya, at least according to Ezekiel Mutua, the head of the Kenya Film Classification Board (KFCB), the job seems to have expanded a lot. As well as certifying films, Mr Mutua and his officials have also promised to raid strip clubs to prevent a wave of “bestiality”, raged against homosexuality and threatened to regulate Netflix to prevent it from becoming a threat to national security. The wave of censoriousness has amused the Kenyan press—and made Mr Mutua into a national figure. But some Kenyans worry that it hints at a growing willingness on the part of the government to use censorship ahead of a tense general election next year.

The KFCB has existed since 1963. It has long been moralistic: in 2014 it made headlines when it banned “The Wolf of Wall Street” from distribution. But under Mr Mutua, who became the CEO last year, it has become far more active. In March, he claimed that foreigners were organising a mass sex and drugs party called “Project X” in Nairobi, which they would film and sell as pornography. In July, he threatened a nightclub over a speed-dating night he...Continue reading

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Wall Street v Main Street

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Chinese Capital Controls Aren't So Scary For AIA

The Asian insurer is beginning to look more fairly priced now that capital controls are getting tighter.

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The Pirate Party wins fewer votes than expected in Iceland’s general election

 

AFTER the party, reality. As the final results came in on the morning of October 30th, it appeared as though the Pirate Party would win about 15% of the vote in Iceland’s parliamentary election, making it the third-biggest party in the legislature. This was a big improvement on the Pirates’ result in the previous election, in 2013, where the party, which mainly campaigns on things like transparency and internet governance, had won about 5% of the vote.

Still, it was not as good as the Pirates had hoped. In April they were polling at about 40%. The then prime minister, Sigmundur David Gunnlaugsson, had been caught up in the leak of the Panama Papers, which showed that he had quietly sold a stake in an offshore firm to his wife—a revelation that forced him to resign. Even on the day of the vote, some analysts were predicting that the Pirates would be the biggest party in parliament. The mood at the Pirates’ election-night afterparty was restrained: nerdy types in purple T-shirts and eye-patches furrowed their brows as the results came in. The Pirates could still form a government, though they would probably be second partners to...Continue reading

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Apple and Microsoft Are Right to Boot Up PC Efforts

Rumors of the death of personal computers have been greatly exaggerated. They still matter, to both Apple and Microsoft.

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Don't Expect Fed to Clarify Its Plan

The Federal Reserve will almost certainly keep interest rates unchanged this week. Anyone hoping for a clear signal about December’s meeting probably will be disappointed.

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Anatomy of a stupid rumour

The FBI reconsiders Hillary Clinton’s e-mails

HILLARY CLINTON’S lead over Donald Trump had started to look so assured that perhaps only some unforeseen calamity could prevent her becoming president. Then on October 28th, 11 days before the election, the FBI director James Comey announced that he was, in effect, considering reopening an investigation into Mrs Clinton’s use of a private e-mail server as secretary of state. Perhaps no other issue is so obviously loaded with calamitous potential for her campaign.

The FBI concluded its investigation into Mrs Clinton’s email arrangements in September, having ruled that she and her aides had been “extremely careless” in exposing classified information to her inexpertly-secured server, but that they had done nothing criminal. In a letter to Congress, however, Mr Comey said that “in connection with an unrelated case” new emails had emerged which “appear to be pertinent to the investigation”.

To that bombshell he attached what he presumably intended as a caveat. Mr Comey said the FBI was still trying to “determine whether they included classified information” and otherwise “assess their importance to our investigation”. But in the feverish last...Continue reading

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As Oil Slump Continues, Baker-Hughes Needs a Deal

Baker-Hughes has seen its shares outperform larger peers but has good reason to talk to General Electric.

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Good Quarter Signals Better Growth Next Year

Corporate, government and consumer spending are likely to pick up, boosting growth.

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McKesson Sounds the Drug-Price Alarm

In a worrisome sign for stocks, drug prices might not be rising as much as investors thought.

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BNP's Capital Relief Should Be Contagious

Rule change gives more breathing room before coupons and dividends are threatened.

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Paul LePage: Trumpism in office

“I GET a kick out of him,” said Bob Choiniere, about Paul LePage, Maine’s outspoken Republican governor. “He’s just saying what we all think, right?” Mr Choiniere sat at the counter of Simones’ hot dog stand in Lewiston, a perennial stop for anyone running for office in Maine, no matter what their party. Mr LePage had just stopped by with Donald Trump junior, son of the Republican nominee, in town campaigning in the state’s second congressional district, where the presidential race is tightly contested. The governor has been a vocal supporter of the elder Mr Trump, who has promised the term-limited Mr LePage a place in his administration, if elected. The two men are both hot-headed, blunt and happily rub people the wrong way. Mr LePage sees the similarity, too: he has described himself as “Donald Trump before Donald Trump became popular”.

What happens when a Trumpian politician has to govern? Mr LePage triumphed, just, in a three-way race in 2010. Mere weeks after he took office, bumper stickers were spotted on the state’s roads noting that 61% of Mainers did not vote for their governor. Lance Dutson, a Republican political...Continue reading

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What Does Apple Get for $10 Billion of R&D?

Despite a growing R&D bill, Apple’s investments still trail those of its peers.

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The Worrying Weak Point for Super-Strong Bonds

Inflation and central banks have investors jittery, but the bond market has a built-in weakness to worry about.

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ZTO: Keep Clear of Chinese E-commerce Belly Flop

Chinese express delivery company ZTO’s 15% first-day drop augers a difficult road ahead.

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The only thing we have to fear is fear of inflation

DON'T look now, but after years of lingering on the brink of (or in) deflation, rich economies are heading in a different direction. Inflation is rising, and a handful of economy watchers are worrying that accelerating price increases could "rattle global markets", as Mike Bird of the Wall Street Journal writes:

Rich-country government-bond prices tumbled Thursday, sending yields up on both sides of the Atlantic to levels not seen since the U.K.’s vote to exit from the European Union in June. In the U.S., the yield on the 10-year U.S. Treasury note surged as high as 1.847%, according to Tradeweb, its highest level in four months. Yields rise as bond prices fall. The German bund’s yield rose about 0.07 percentage point to 0.161% and the 10-year U.K. gilt yield was up about 0.10 percentage point to 1.259%, according to Tradeweb.

The rising yields are the latest sign that investors are bracing for what could be an epic shift across markets. In recent years, falling commodities, meager wage rises and insipid economic growth kept prices low and pushed investors into...Continue reading

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Amazon Is Back to Its Old Big-Spending Ways

Amazon’s quarterly report shows the performance of its retail segment still matters a lot.

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Investors Look to GDP Report for Reassurance

As job growth steadies and inflation firms, growth is the final piece of the puzzle. Friday’s GDP report should calm jitters.

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Xi Jinping gets a new label, but no more power

CHINESE politicians often take obscure-seeming terms very seriously. Earlier this year officials floated the idea of anointing President Xi Jinping as the “core” of the Chinese Communist Party. Though the description has been applied to every paramount leader apart from Hu Jintao, Mr Xi’s immediate predecessor, it was controversial enough to be quietly dropped. But on October 27th, after a meeting of the party’s 350 or so highest officials, Mr Xi finally won the title.

A turgid communiqué summarising the outcome of the four-day conclave contained few other revelations. It repeated the familiar rhetoric of Mr Xi’s presidency, underlining the party’s commitment to fighting corruption and the need for party members to be more disciplined. It offered some platitudes: paying for promotion is forbidden and promotions should be awarded on the basis of good work, not “bargaining”; officials should follow the party’s rules; and—rather tough to enforce—“boasting should be banned” and flattery “weeded out”. It is hard to believe the party really intends that publicity about leaders be “based purely on facts”, as the document...Continue reading

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Qualcomm's NXP Ride Worth a Big Toll

The deal would give Qualcomm exposure to the automotive and other growth sectors, making it worth the cost of the chip maker’s overseas cash.

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Malta's Central Bank Governor Denies ECB Policy Fuels Populism

Malta’s new central bank governor rejected claims that European Central Bank policy has fueled populism, saying Europe’s economies are healthier and less susceptible to extreme politics thanks to ECB intervention.

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Deutsche Bank Investors Stuck Waiting for an Unwanted Call

The lack of a resolution on fines leaves the German lender vulnerable.

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Ivanka and Tiffany Trump appeal for women’s votes in Georgia

MARSHALLED on stage at the climax of a debate or rally, the Trump family can seem otherworldly, even faintly sinister. In contrast to the everyman image many politicians try to project—the guy like you, with whom you might enjoy a beer—the Republican nominee’s clan is impossibly well-clad and -coiffed. That collective image is of a piece with the paterfamilias’s implicit promise: not so much to represent the nation as to redeem it, like some baggy-suited Superman. An event on October 26th in Marietta, Georgia, which featured Ivanka Trump and her less-deployed sister Tiffany, exemplified his offsprings’ role in his appeal and his campaign.

Mr Trump will probably win in Georgia, but victory isn’t nearly as assured as it ought to be, or might have been for a different Republican candidate. A recent poll for the Atlanta Journal-Constitution makes the reason for the uncertainty clear: leading narrowly in the state overall, he trails 48% to 37% among women, many of whom, like others across the country, were distressed by the videotape from 2005 in which Mr Trump brags about committing sexual assault, and by the subsequent slew of accusers who say he molested...Continue reading

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Invesco Brings in the Cash

Invesco’s diversification makes it the rare asset manager to get cash from investors when most funds are flowing to giant index-fund firms.

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At a Trump rally in North Carolina, signs of a shrinking campaign

IF HILLARY CLINTON has made any new friends in this surly election year, that group should start with the souvenir-sellers at Trump rallies. Like itinerant camp-followers trailing a medieval army, they line the approach roads to the Republican’s campaign events for hundreds of yards. Mere Clinton rallies make do with a few salesman offering campaign buttons and shirts. In contrast Trump events are surrounded by a proper street bazaar, featuring lines of trestle tables groaning beneath heaped t-shirts, baseball caps, bumper stickers, Trump-themed shot glasses, bobble-head dolls and (a new sighting this week) a Trump-Pence 2016 doormat. And the salesmen certainly owe Mrs Clinton. For even as the Republican’s grim poll numbers threaten to leave his campaign deflating like a punctured beachball, it is loathing of the Democratic first lady that—more than any other force—puffs it back up again. The vendors are cashing in on that hatred during these final days, and Trump supporters cannot get enough of their wares.

On the night of October 26th Lexington headed to a Trump rally in Kinston, North Carolina, at a quiet rural airfield where the ex-military runway is long...Continue reading

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Reimagining Russia’s past

PERCHED high above the Black Sea coast of Sochi and nestled in a coniferous forest stands a large and gloomy green house. It was once occupied by Joseph Stalin who had it built in 1937, at the height of the great terror which he had unleashed onto his country, and who would spend at least four months a year there, apart from the years of the second world war. After Stalin’s death the house served as a retreat for the leaders of the Soviet bloc countries. But now, in a fitting twist of fate, it is being transformed into an exclusive hotel owned by a secretive Moscow business group.

Sochi is also a favourite place for Vladimir Putin, Russia’s president, who staged the 1914 winter Olympics there shortly before the annexation of Crimea and the war in Ukraine. A few months later Sochi hosted the Valdai club, a Russian answer to Davos, which was established in 2004 as a platform for informal meetings between foreign experts and Russian leaders. This year the meeting of the Valdai club began with a visit to Stalin’s dacha. Many participants saw it as a deeply symbolic gesture.

Compared with the lavish palaces of Mr Putin, the dacha is...Continue reading

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Social justice is becoming a bigger issue in Germany

THE refugee crisis is not the only issue that could decide next autumn’s election of the Bundestag. If Germany’s three left-wing parties get their wish, social justice may become just as contentious. The Social Democrats (who currently govern as junior partners under the chancellor, Angela Merkel), along with the Greens and The Left, which descends from the Communist Party in the former East Germany, are hoping to form a leftist coalition on this issue to unseat Mrs Merkel in 2017. Their dream is to spark a Bernie Sanders-like movement that—this being Germany, not America—could sweep them into power. So they have begun reciting a menacing-sounding metaphor: the “scissors” (ie, the gap) between rich and poor will keep widening unless they get to run the country.

Whether or not the divide between haves and have-nots is increasing is debatable. Compared with the 1990s, income inequality is higher as measured by the Gini coefficient. But it peaked in 2005 and has since remained broadly stable. Within the EU, Germany is a middling country in terms of income inequality, behind a few more egalitarian countries, such as Sweden, and well ahead of...Continue reading

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Ireland may suffer the most from Brexit

ON OCTOBER 25th John Bruton and Bertie Ahern, two former Irish prime ministers, appeared before a committee in Britain’s House of Lords to discuss the impact of Britain’s decision to leave the European Union on its western neighbour. Both men were sombre. Brexit, said Mr Bruton, might deal Ireland’s economy an even heavier blow than Britain’s—even though, as he added wryly, “we had no say in that decision.” Since 1973, when both countries joined the EU’s precursor, the European Economic Community, Irish businesses have become intertwined with British ones, said Mr Ahern. Unpicking those ties would be “devastating”.

The first blow has already fallen, says Fergal O’Brien of IBEC, a business lobby group. As sterling has weakened, exports to Britain have become less competitive, and imports from Britain cheaper. Britain takes two-fifths of Irish-owned firms’ exports, and a similar share of all agricultural exports. Beef and dairy farmers are struggling, and several of Ireland’s mushroom farms, which export four-fifths of their produce to Britain, have already closed. The pain will worsen as sterling’s fall and Brexit-induced...Continue reading

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Populism tastes best hot

EARLIER this year David Coburn, who sits in the European Parliament for the UK Independence Party, a Eurosceptic group, came up with an eccentric argument for leaving the European Union: the quality of his morning toast. He claimed that EU regulation meant toasters had only “the power of one candle or something”, leaving his bread “all peely-wally” rather than nicely roasted. Brexiteers cheered: yet another example of croissant-scoffing continentals meddling with British traditions, such as burning bread to a crisp.

In fact, the EU does not regulate the energy consumption of toasters—and on October 25th it appeared to abandon any plans of doing so. According to internal documents from the European Commission, toasters, kettles and hairdryers are unlikely to be included on a list of new products covered by the Ecodesign Directive, which sets rules on improving the energy efficiency of appliances.

Such rules are wildly unpopular, and not just with grumpy Brits. On its website, the right-wing Alternative for Germany party sells incandescent lightbulbs (which the EU has phased out) as a rather dimly lit protest gesture. Even in...Continue reading

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The gap between poor and rich regions in Europe is widening

THE beautiful but rubbish-strewn streets of Catania, Sicily’s second-biggest city, are a world away from swanky Trento, in the country’s richer north. About a quarter of Sicilians are “severely materially deprived”—meaning that they cannot afford things like a car, or to heat their home sufficiently—compared with just 5% in Trento. Italy is not unique. In many places, the divide within countries appears to be getting worse.

According to an analysis by The Economist, the gap between richer and poorer regions of euro-zone countries has increased since the financial crisis. Our measure of regional inequality looks at the average income per head of a country’s poorest region, expressed as a percentage of the income of that country’s richest part. The weighted average for 12 countries shows that regional inequality was declining in the years leading up to the financial crisis of 2007-08, but has increased since then (see chart).

The poorest area in Slovakia, the euro zone’s most geographically unequal economy, now has an income per person of just 28% of the richest, a slight fall from...Continue reading

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Rebooting

JUST outside Stanford University’s campus sits the headquarters of Symphony, one of the myriad tech companies that sprout like weeds in Silicon Valley. After a lunch break exercising in a nearby park, a dozen fit-looking employees, still in workout clothes, help themselves from buckets of fruit, energy bars and the food of the day (Indian), before plopping themselves in front of monitors in an airy room bathed in natural light. For the sought-after engineers making up most of the company’s 200-strong workforce, this sort of environment is the norm. Work is supposed to be healthy and relaxed—a far cry from the terrors of a New York bank with its incessant pressure to sell and complex internal politics, not to mention often unappetising, pricey food.

Across the continent, in a newly opened tower within the World Trade Centre, Kensho, a three-year-old company, has a similar feel. Like Symphony but a bit smaller, it is stuffed with talented engineers. In a New York approximation of the West Coast, it boasts “vertical gardens”—rectangular patches of vegetation like framed paintings—and a pool table.

Symphony is a messaging platform,...Continue reading

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Wind and solar advance in the power war against coal

THE battle between clean energy and dirty coal has entered a new phase. The International Energy Agency (IEA), an industry forecaster, this week reported that in 2015 for the first time renewable energy passed coal as the world’s biggest source of power-generating capacity.

The IEA, whose projections for wind and solar energy have in the past been criticised as too low, accepted that renewables are transforming electricity markets. Last year 500,000 solar panels were installed every day around the world. In China alone, home to a whopping 40% of the 153 gigawatts (GW) of global growth in renewable-energy installations, two wind turbines were erected every hour. Based on existing policies, it forecasts that from 2015-21, 825GW of new renewable capacity will be added globally, 13% more than it projected just last year.

All those new wind and solar plants will not generate electricity all the time. Unlike coal, which burns around the clock, renewables are intermittent. But the IEA expects the share of renewables in total power generation to rise to almost 28% from 21%. Government policies to curb global warming and reduce air...Continue reading

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Steel trap

BESIDES being dirty and dangerous, making steel in China has been a good way to burn through money over the past few years. But in recent months, the fires from the country’s blast-furnaces have started to emit the warm glow of profits. Steel prices have risen by nearly 50% this year. Production, which fell in 2015 for the first time in decades, is also up. Smelters are set for a strong recovery after losing $10bn last year. And it is not just the steelmakers who will be pleased. Asia’s central bankers can also take some comfort in the rising prices: they suggest that the threat of deflation might be receding.

Once seen in Asia as a peculiarly Japanese phenomenon, deflation spread throughout the region’s factories in the past half-decade. The prices that consumers see in shops have on the whole continued to increase, albeit more gently than before. But the prices that companies charge for goods as they leave their factories’ gates have dipped lower and lower. Virtually all big Asian economies, including South Korea, India, the Philippines, Taiwan and Thailand, have experienced prolonged bouts of falling producer...Continue reading

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Known unknown

COMPETITION between currencies is the stuff libertarian dreams are made on—and central bankers’ nightmares too. Already digital monies, in particular Bitcoin and Ethereum, are rivals. On October 28th a new crypto-currency will join the fray: Zcash. Many such “altcoins” are dubious affairs and don’t add much. But this one brings important innovations.

Zcash is based on Bitcoin’s code, but its creators, a bunch of cryptography researchers, have tweaked it. The new digital cash is minted more quickly and the system can handle more transactions. This makes for more liquidity and shorter transaction times, says Zooko Wilcox, who leads the project.

The newcomer also differs in the way it is governed. The incumbent started—and is still run—as an open-source project: a small group of volunteer developers decides which changes are made. Zcash’s code is also open-source, but its inventors have formed a company and accepted money from investors. In addition, 10% of the 21m coins to be issued are earmarked for founders, investors, employees and a putative Zcash foundation. All this, says Mr Wilcox, is to align incentives for all...Continue reading

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The greatest moderation

ON OCTOBER 19th China reported that its economy grew by 6.7% in the third quarter. It would have been an unsurprising, reassuring headline, except that China had reported exactly the same figure for the previous quarter—and for the quarter before that. This freakish consistency invited the scorn of China’s many “data doubters”, who have long argued that it fudges its figures. China has expanded at the same pace from one quarter to the next on numerous occasions. But it has never before claimed to grow at exactly the same rate for three quarters in a row.

Has anywhere? This growth “three-peat” is not entirely without precedent. Seven other countries have reported the same growth rate for three quarters in a row, according to a database spanning 83 countries since 1993, compiled by the Economist Intelligence Unit, our sister company. The list includes emerging economies like Brazil, Croatia, Indonesia, Malaysia and Vietnam, but also two mature economies: Austria and Spain. Indeed, Spain has performed this miracle of consistency twice. It grew by 3.1% (year-on-year) in the first three quarters of 2003 and by 4.2% in the first...Continue reading

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No Trumps!

TRADITION suggests that Wall Street should favour the Republican Party. America’s conservatives usually back low taxes, free trade and a reduction in regulation. But the 2016 election seems to be an exception. A Bank of America Merrill Lynch poll of fund managers in October found that a Republican victory was seen as one of the biggest risks facing financial markets, along with the disintegration of the EU.

A study* by Justin Wolfers of the University of Michigan and Eric Zitzewitz of Dartmouth College found that in the wake of the first debate, there was a six-percentage-point rise in the probability of a Hillary Clinton victory on betting markets. In reaction, stockmarkets rose, and gold and Treasury bonds (two assets that benefit when investors become risk-averse) fell. “Financial markets expect a generally healthier domestic and international economy under a President Clinton than under a President Trump,” the authors concluded.

What makes this election different for investors is the nature of the Republican candidate—Donald Trump is a long way from the party’s mainstream. A Trump victory would throw up all kinds of uncertainty...Continue reading

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Passing the buck

IN 2007 financial dangers, piled up like so much tinder, ignited at last and caused a swathe of destruction across the global economy. The blaze also engulfed governments, which faced intense public pressure to prevent such calamities from recurring. Much has happened on the regulatory front since then. Few believe, however, that the problem of financial instability has been solved. To regulators’ frustration, in a world of global financial flows, efforts to safeguard one country often endanger others.

This bothersome tendency has become harder to ignore as cross-border capital flows have swollen. Annual gross financial flows in rich countries soared from roughly 5% of GDP in 1980 to around 25% of GDP on the eve of the financial crisis. This worldwide torrent of money has its benefits. Investors can more easily diversify their portfolios. Investors in slow-growing rich countries gain access to higher-yielding investments in poorer, capital-starved economies, and those poorer economies gain access to desperately needed capital relatively cheaply.

Yet there are costs as well. Emerging economies with less sophisticated financial markets and...Continue reading

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An uncertain community

FOR a community of 172m, almost 15% of the population, Muslims at first glance appear oddly absent from the pages of India’s newspapers. In fact, they crop up a lot, but not by name. Instead, reporters coyly refer to “a certain community”. The clumsy circumlocution is a way of avoiding any hint of stoking sectarian unrest. The aim is understandable in a country that was born amid ferocious communal clashes and which has suffered all too many reprises. But the dainty phrase also hints at something else. Since India’s independence in 1947, the estrangement of Muslims has slowly grown. 

India’s Muslims have not, it is true, been officially persecuted, hounded into exile or systematically targeted by terrorists, as have minorities in other parts of the subcontinent, such as the Ahmadi sect in Pakistan. But although violence against them has been only sporadic, they have struggled in other ways. In 2006 a hefty report detailed Muslims’ growing disadvantages. It found that very few army officers were Muslim; their share in the higher ranks of the police was “minuscule”. Muslims were in general poorer, more prone to sex discrimination and...Continue reading

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If you want it done right

Keeping her eye on the ball

PHOTOGRAPHY is fiercely restricted inside Khawaja Masood Akhtar’s factory in Sialkot, a small city in northern Pakistan. His products—top-of-the-range footballs—must be zealously guarded until the time comes for his customers, big international sports brands, to unveil their offerings for the new season. Until then the latest ball designs are subjected to a battery of tests in windowless laboratories. They must endure everything from hard poundings from mechanised boot studs to repeated dusting with fungus spores. The quality of the factory’s output is so high that Adidas chose it as one of only two in the world to manufacture the balls used in the World Cup in 2014.

Pakistan has precious few globally competitive exporters, but a good number of them are clustered in Sialkot, an out-of-the-way city of fewer than 1m people in north-eastern Punjab. It supplies the world with all sorts of sporting gear, from hockey sticks to judo suits, as well as leather goods and surgical instruments. Sialkoti Lederhosen are all the rage in Bavaria. The city’s 8,000-member chamber of...Continue reading

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Gift horse

Ewha takes all sorts

PARK GEUN-HYE’s presidency, soon entering its fifth and final year, may well be remembered for its apologies. The first was a tearful televised address in 2014 to atone for her government’s botched response to a ferry accident in which over 300 were killed. On October 25th Ms Park apologised again, this time for sharing advance drafts of dozens of speeches with a confidante, Choi Soon-sil, who has no government position.

A day earlier JTBC, a local cable-television network, said it had retrieved presidential files and e-mails from a computer discarded by Ms Choi. Ms Park said that she had sought her friend’s opinion only early on in her presidency, before her staff had hit their stride, but the media have been portraying Ms Choi as the eminence grise of her administration, pulling strings behind the scenes.

The revelation is the latest twist in a political drama that has embroiled Ms Park’s conservative government and gripped the nation. Daily press reports and social-media chatter present new claims about Ms Choi’s influence over Ms Park, and how Ms Choi is alleged to have exploited...Continue reading

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Sibling rivalry

THE president of the Maldives, Abdulla Yameen Abdul Gayoom, has fallen out with all manner of people in his three years in office: two successive vice-presidents, both turfed out of office; his first defence minister (ditto); the failed assassins who bombed his yacht last year (he blamed one of the deposed veeps); Mohamed Nasheed, his predecessor but one, who says the president is turning the Maldives into a dictatorship; and the Commonwealth, a club of former British colonies, which has questioned his democratic credentials. But his newest adversary is by far the most surprising: Maumoon Abdul Gayoom, his half-brother and another former president, who was the country’s strongman from 1978 to 2008.

The dispute between Mr Yameen, as the current president is called, and Mr Gayoom, the former one, centres on the Progressive Party of the Maldives (PPM), which Mr Gayoom founded in 2011 (for most of his presidency, political parties were banned). The party nominated Mr Yameen as its presidential candidate in 2013, but Mr Gayoom remained head of the party. The two seemed to get on well enough until June, when Mr Gayoom opposed a bill to allow the...Continue reading

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A wrong direction in the steppe

“THINGS really get messy when politicians see money,” mused Tsakhiagiin Elbegdorj, Mongolia’s president, earlier this month. He was discussing his country’s request for an emergency loan from the IMF to help ward off a balance-of-payments crisis. The messiness might be avoided, Mr Elbegdorj added, if the IMF forced Mongolia to observe a little more budgetary discipline than it is used to.

Although sparsely populated and vastly endowed with mineral wealth, Mongolia has yet to set its economy on a stable footing. Squabbling and delays over big foreign investments in mining projects, along with low global commodity prices, have stemmed inflows of foreign currency, prompting the local currency, the togrog, to wilt. It has declined 17% against the dollar since late June. The government’s lavish spending in expectation of big mining revenues, meanwhile, has boosted its debt to almost 80% of GDP, much of it denominated in dollars. The togrog’s slide has prompted fears that the government will struggle to service its foreign debt.

When the IMF last came to Mongolia’s rescue, in 2009, it seemed to be providing just the...Continue reading

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Africa unplugged

A FEW miles down a rutted dirt road, and many more from the nearest town, a small farmhouse stands surrounded by dense green bush. On the inside of one wall gangly wires reach down to a switch and light that are connected to a solar panel. Readers in rich countries may well consider electric lighting mundane. But in northern Rwanda, where fewer than one in ten homes has access to electricity, simple solar systems that do not rely on the grid—and use a battery to store electricity for use at night—are a leap into modernity. A service once available only to rich Africans in big towns or cities is now available for just a few dollars a week. People are able to light their rooms, charge a smartphone and listen to the radio. In a few years they will probably also be watching television, powering their irrigation pumps and cooling their homes with fans. 

In short, poor people in a continent in which two of every three people have no access to power may soon be able to do many of the things that their counterparts in rich countries can do, other, perhaps, than running energy-hogging appliances such as tumble dryers and dishwashers. And they will be able...Continue reading

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Light-up nation

ISRAEL’S right-wing government is adamantly opposed to the legalisation of cannabis for recreational use. But it is also rather lax when it comes to medical marijuana. The health ministry is currently licensing a new list of 100 or so doctors who will be allowed to prescribe the drug for a growing list of medical conditions, and is allowing regular pharmacists to stock it. In August the agriculture minister announced that local cannabis growers will soon be allowed to export medical marijuana.

Israel has a number of advantages. It has booming agricultural and medical technology sectors, a strong record in creating start-ups and a large venture-capital industry to fund them. In addition, marijuana research in Israel, which has been going on since the 1960s, has a head-start over America, where both the medical community and pharmaceutical companies are heavily restricted by laws which are only now being slowly reviewed. Although a growing list of American states are allowing legal marijuana use, both for medical and recreational purposes, there are very few clinical trials of the suitability of various strains and active ingredients for treating...Continue reading

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Tightening the noose

HARASSED by sniper fire and slowed down by the suicide bombers of Islamic State (IS), Kurdish and Iraqi forces have taken heavy casualties as they fight their way towards Mosul, Iraq’s second-largest city and the place where the jihadists first announced the creation of their “caliphate” two years ago.

Villages freshly captured by the Iraqi army and Shia militias on the roads leading to Mosul show signs of the jihadists’ hasty retreat. Weapon caches are abandoned, pots of uneaten food still sit on stoves and medical clinics have been pilfered for supplies. But there are signs, too, of the defences dug by IS to evade air strikes: deep, wide subterranean tunnels with room enough to sleep and eat, their entrances concealed inside one-storey buildings.

The operation to retake Mosul began on October 17th. Since then an awkward coalition of Iraqi and Kurdish forces has swept across the vast, sun-baked plains of Nineveh to seize a string of villages to the east, north and south. As The Economist went to press, some units were within 6km (4 miles) of the city.

Kurdish and Iraqi troops, supported...Continue reading

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Erdogan’s war game

TWO months after Turkish tanks flanked by Syrian insurgents wrested it from Islamic State (IS), the border town of Jarablus, in Syria’s north, is slowly getting back on its feet. Schools have reopened. Aid has begun to trickle into the area, as have thousands of people from neighbouring villages and some 7,700 Syrian refugees returning from Turkey. “Finally we have enough food,” says Aminah Hardan, a young mother of nine who arrived in Jarablus from Aleppo in early 2013, only to watch IS take over the city months later. The militants, she says, once asked her husband to whip her for not wearing a niqab. Since the Turks rolled into town, she has swapped it for a yellow headscarf.

For years, Turkey’s president, Recep Tayyip Erdogan, has urged his Western allies to help him carve out a buffer zone in Syria’s north to provide refugees with a haven and anti-regime insurgents with a bridgehead. He now has what he wished for. With Turkish troops and their Syrian proxies in control of an area stretching from Jarablus to Azaz, some 90km (55 miles) west, Mr Erdogan has killed two birds with one stone. He has pushed IS...Continue reading

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Exit South Africa

UNDER Nelson Mandela’s government, South Africa championed the creation of a court to try the world’s worst criminals. Out of apartheid and the Rwandan genocide came a boon for international justice. “Our own continent has suffered enough horrors emanating from the inhumanity of human beings towards human beings,” Mr Mandela said ahead of the Rome statute adopted in 1998, which established the International Criminal Court (ICC). So strongly felt was this mission that South Africa incorporated the ICC’s founding treaty into its own domestic laws.

But under President Jacob Zuma the country has taken a radically different turn. On October 21st South Africa’s government filed notice of its intention to quit the ICC (the process will take a year). This puts South Africa in the company of Burundi, which said it was leaving after the ICC began investigating the wave of killings that followed President Pierre Nkurunziza’s decision to cling to a third term. Other African countries may follow suit. The Gambia, another human-rights abuser, says it will do so. Kenya, Uganda and Namibia have made similar threats.

South Africa’s explanation...Continue reading

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Fighting their chains

THIS time, the protests were nationwide. From Maracaibo in the west to Ciudad Guayana in the east, hundreds of thousands of Venezuelans filled the streets to call for an end to the authoritarian left-wing regime led by Nicolás Maduro. More than 100 people were arrested and one policeman in the state of Miranda died. “This government is never going to leave through an election,” said María Gil, a masseuse who joined the throng in Caracas, Venezuela’s capital. “All that is left is protest.” David Mujica, a street trader, agreed that voting “changes nothing”. 

Both protesters branded Mr Maduro a “dictator”, a term Venezuelans have been using more freely after the events of the past fortnight. On October 21st, days before voters were to go to polling stations to register their signatures in favour of holding a referendum to recall the president from office, the process came to an abrupt halt. Five criminal courts in five separate states declared that the conduct of an earlier stage in the process—the submission of signatures from at least 1% of the electorate—had been fraudulent. That is nonsense. The opposition submitted 2m...Continue reading

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Fourth time unlucky

MANAGUA, Nicaragua’s capital, is not throbbing with campaign fever. With days to go before presidential and parliamentary elections on November 6th, political posters are nowhere to be seen. Campaigning, when it happens, is low-key. Yadira Ríos, the vice-presidential candidate of the Independent Liberal Party (PLI), has taken to obstructing rush-hour traffic at a roundabout just to get noticed. “We have a small budget,” she says from a garageforecourt as drivers honk at her 20-odd supporters on the road, “so we do this”.

Their antics will be in vain. Daniel Ortega, a former guerrilla commander who first won the presidency in 1985, is almost certain to win a third consecutive term, and his fourth overall. According to one recent poll, he will win 65% of the vote. That endorsement owes something to the president’s success in managing the economy and reducing poverty. But it also comes from an undemocratic suppression of the opposition to him and his Sandinista National Liberation Front (FSLN).

The election is, in effect, a one-party event. Mr Ortega’s main political foe, Eduardo Montealegre, was removed as the PLI’s leader...Continue reading

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Ciudad Juárez trembles again

IN PUERTO DE LA PAZ, a settlement of hardscrabble houses and shacks in the western suburbs of Ciudad Juárez, a new three-storey community centre offers taekwondo, five-a-side football and classes in baking and giving beauty treatments. It is one of 49 such centres in poorer parts of this sprawling industrial city jammed against Mexico’s border with Texas. Intended to offer young people alternatives to organised crime, they are a sign of change in a place that became known as “the world’s most dangerous city”.

There are other changes. Restaurants and bars are full. “There are parts of the city that are heaving with nightlife where a few years ago you wouldn’t have seen a soul,” says Nohemi Almada, a lawyer and activist. The local economy is booming. Factories lining Juárez’s urban highways, making everything from car parts to wind turbines, sport job-vacancy signs.

Between 2008 and 2011 Juárez descended into hell. It felt the knock-on effects of the offensive against drug mobs launched by Mexico’s then-president, Felipe Calderón. “Here the war on drugs was a massacre,” says Ms Almada. “We all grew used to seeing...Continue reading

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Something new to cheer

WHEN Charles Miller, son of an English railway engineer posted to Brazil, returned to São Paulo from a British boarding school in 1894, he brought back a football—and popularised a game that would help define Brazilian identity. Miller’s other sporting import, rugby, had less appeal. It was played at a few posh boarding schools and almost nowhere else. But now rugby is beginning to find a mass audience.

Asked which sport would grow most, more Brazilians picked rugby than any other in a survey conducted in 2011 by Deloitte, a consultancy. Since then its popularity has shot up as if propelled by a well-taken conversion kick. Some 60,000 Brazilians are thought to play rugby, far fewer than the 30m who play football or the 5m-10m who take part in volleyball—but up from 10,000 five years ago. The national team, the Tupis, named after a family of indigenous peoples, draw audiences of 10,000 to stadiums and 7m to television screens. (The league is still amateur.) Highlights from European games pop up on the São Paulo metro’s in-train television.

Rugger’s return to the Olympics at the Rio de Janeiro games last August, after a 92-year...Continue reading

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My brilliant friend

IN JANUARY 1933, after months of rebuffs, the American poet Ezra Pound finally secured a meeting with Benito Mussolini, his idol, in Rome. Flicking through his admirer’s poems—and possibly distracted by the presence of a pretty young English teacher—Mussolini politely described them as divertente, or amusing. Pound chose to interpret this nicety as evidence of il Duce’s genius and appreciation of his own; his ruinous devotion to him intensified. In perhaps the weirdest subplot of America’s wild presidential election, an offhand comment by Vladimir Putin seems to have had a similar effect on Donald Trump. 

This is a season of conspiracy theories. In certain corners of the internet it is an item of faith that Hillary Clinton enabled the attack on Benghazi, to cover up illicit arms sales to terrorists. Analysis of Mr Trump’s attitude to Mr Putin can veer into the thrilleresque too. Yet there is a pattern in his remarks that, as polling day nears, deserves scrutiny. Tracing it lays bare his slipshod policymaking, even if his motives remain opaque.

The “bromance”, to use Barack Obama’s term, was...Continue reading

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Meet Kamala Harris

IF THE Democratic Party were a business, investors would mutter that it has a succession crisis. Its presidential nominee is 69 years old, and its leaders in Congress—Representative Nancy Pelosi and Senator Harry Reid—are both 76. That pin-up of the campus left, Senator Bernie Sanders, is 75. The young thruster set to lead Senate Democrats after January, Charles Schumer of New York, is 65. Nor is the galaxy of Democrats outside Washington thick with dazzling stars: after several bruising elections, the party currently holds just 18 out of 50 governors’ mansions.

Talk to thoughtful Democrats about the future and one name inspires more hope than most: Kamala Harris, the attorney-general of California and, barring a meteor-strike between now and November 8th, that state’s next member of the Senate. Insiders noticed when Ms Harris, 52, was endorsed by President Barack Obama, even though, under a run-off election system used in California, her opponent is a long-serving Democratic congresswoman, Loretta Sanchez.

Ms Sanchez has ascribed this snub to race solidarity between her opponent and the president, sniffing: “She is African-American,...Continue reading

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Naming without shaming

DONALD TRUMP may pretend to think that the hacking of the Democratic National Committee’s (DNC) e-mail system in July could have been carried out by a 400-pound nerd sitting on his bed; but on October 7th the director of national intelligence, James Clapper, and the Department of Homeland Security made official what had long been suspected. Their statement expressed confidence that the Russian government had “directed the recent compromises of e-mails from US persons and institutions, including from US political organisations”, and that the “thefts and disclosures” were “intended to interfere with the US election process”.

A well as the DNC attack, there have been a spate of others, all aimed at showing Hillary Clinton in a poor light, all distributed by either WikiLeaks or the lesser-known DC Leaks. The hacker groups behind the scams are fronts for Russia’s FSB and GRU spying agencies and, according to Mr Clapper, could have been authorised only by officials at the most senior level. But what to do about it?

Despite the seriousness of the charge (the hack by China’s PLA on US Steel, Iran’s Islamic Revolutionary...Continue reading

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On the trail

Gettysburg redress
“All of these liars will be sued after the election is over.”
Donald Trump, at Gettysburg, on the women who have accused him of sexual assault.

Weapons of mass destruction
“Peanut-buttering is better than firebombing.”
A woman in Wisconsin was arrested for smearing peanut butter on the cars of people she believed were Trump supporters. Stevens Point City Times

From Russia with love
“We are unable to accommodate your request to visit a polling station.”
Texas and two other states have refused Russian requests to observe voting. Texas Tribune

Don’t bake
“She’s not coming over to your house! You don’t have to like her.”
Oprah Winfrey found a novel way to sell Hillary Clinton to voters. Politico

Let Donald be Donald
“He delivers his own speeches…He’s the guy who’s running for the White House, and he has the privilege to say what he wants.”
Kellyanne Conway, Mr...Continue reading

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A shrimp among whales

FOR hundreds of years Korea was China’s vassal state. Then it came under the heel of imperial Japan at the start of the 20th century. After Japan’s defeat in 1945 the Soviet Union occupied northern Korea. That led to the creation of the implacably hostile North Korea, an existential threat to the South ever since. America has acted as the South’s guarantor, keeping tens of thousands of troops there since the Korean war ground to a bloody halt in 1953. The South swings between resenting the American presence and worrying that it might come to an end.

South Korean officials, in short, have long had plenty to worry about. But their angst these days is unusual in its intensity. Life in Seoul may be carrying on as normal, with pop-up food stalls doing brisk business and rock bands performing lustily in open spaces, but the nuclear-armed North, 60km (35 miles) up the road, is looming especially large in policymakers’ minds.

The threat from the North has always been tangible. For years, its commandos would slither across the demilitarised zone to launch unnerving attacks, such as the one in 1968 that targeted Park Chung-hee, South Korea’s strongman, in the...Continue reading

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How to Get Out of Chinese Property When the Price Is High

Billionaire Li Ka-shing is selling out of a huge property project in Shanghai. Investors should take note.

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Tata: The Mess Spreads At India's Biggest Company

Accusations by Tata Son’s ousted chairman, Cyrus Mistry, raise serious issues about India’s sprawling conglomerate.

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U.S. Banks Still Eating Deutsche's Trading Lunch

Deutsche Bank and Barclays results show stronger and less distracted U.S. banks continue to take market share from European rivals.

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U.K. Economy Can't Shrug Off Brexit Forever

The U.K’s decent third-quarter GDP growth is good news. But uncertainty about Brexit will weigh on markets.

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Calais migrant camp is cleared, but problems remain

“SIX places left for Rouen!” calls the official in a red jacket, approaching the queue of refugees hoping to board coaches. “Where’s that?” asks Dilo, a 24-year-old Afghan, his belongings stuffed into a small zip-up bag. The official pulls out a plastified map of French regions, and points to Normandy. “Near Paris? OK,” Dilo agrees. His name is recorded, a green wristband fitted, and he is shepherded with other volunteers through the hangar which serves as a processing centre, and on to the waiting coach outside. As it pulls away, the advertising slogan on this tourist bus comes into view: “Follow your dreams”.

For the 8,000 or so refugees, most of them from Sudan, Afghanistan and Eritrea, who had made the camp in the Calais dunes their home, there are few dreams left. Many had hoped to reach Britain, across the English Channel. But the construction of ever-higher walls topped with razor wire around the undersea tunnel and now the port (financed by the British government), along with heavy French policing, has sealed the route. “I’ve tried so many times, but it’s impossible,” says Jan, a 29-year-old Afghan, clutching a cricket...Continue reading

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If the EU cannot do trade, what can it do?

IN HAPPIER days for the European Union the arcana of international trade policy were a matter for harmless eccentrics, while the intricacies of Belgium’s constitutional arrangements were reserved strictly for masochists. Not in today’s Europe, where crises strike in the most unexpected places. Behold the fiasco of the Comprehensive Economic and Trade Agreement (CETA) with Canada. Justin Trudeau, Canada’s prime minister, had to cancel his visit Brussels on October 27th to sign the trade and investment deal which has been seven years in the making. That is because the Socialist-led parliament of Wallonia, the French-speaking bit of Belgium, blocked it. As The Economist went to press the federal government, which needs the regions’ support to approve the deal, had failed to win the Walloons around. Thus did a regional parliament representing 3.6m people thwart the will of governments representing 545m.

The debacle has many fathers. Wallonia’s Socialists, out of national office for the first time in decades, are troubled by fringe leftists and keen for attention. The Flemish, their richer (and more trade-friendly) partners in...Continue reading

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Tesla: The Bill Is Still Coming Due

Tesla Motors’ third-quarter results aren’t as strong as they seem.

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Amazon.com Can't Neglect Its Retail Roots

Amazon.com’s success in the cloud is well documented, but it must show its core retail business can eventually be highly profitable, too.

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Global imbalances, a pre-crisis scourge, are back

BRAD SETSER, an economist at the Council on Foreign Relations, is the author of a new discussion paper looking at "the return of the East Asian savings glut". A summary of his paper begins in arresting fashion:

The combined savings of China, Japan, Korea, Taiwan, and the two city-states of Hong Kong and Singapore is about 40 percent of their collective GDP, a thirty-five-year high.

Prior to the financial crisis, many economists fretted about the problem of global imbalances. Measurement error aside, global trade balances; surpluses in some countries offset deficits in others. Yet the magnitudes of those surpluses and deficits can be small or large. In the early 1990s, surpluses and deficits were each around 0.5% of global GDP. They expanded rapidly therefore, to about 2% of global GDP on the eve of the crisis. After shrinking dramatically during the crisis and global recession, imbalances have begun to rebound and are now back to about 1.5% of GDP.

Why do such imbalances matter? They can create problems in a few ways. Large surpluses can be a side...Continue reading

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Spain at last has a government again

EVEN Pablo Iglesias, the leader of the leftist Podemos party, this week recognised that one of the political qualities of Mariano Rajoy, Spain’s conservative prime minister, is patience. Having endured seven years as opposition leader, Mr Rajoy won power in a landslide in 2011 only to have to pick up the pieces of his country’s housing bust. His fiscal curbs and financial and labour-market reforms speeded a vigorous economic recovery, but were unpopular. Together with corruption scandals in local government, that cost Mr Rajoy his majority in an election last December. His People’s Party (PP) remained the largest party, but in a newly fragmented parliament.

Since then, Spain and Mr Rajoy, reduced to an impotent caretaker, have waited for more than 300 days. No party has been able to assemble a parliamentary majority. A second election in June boosted the PP (from 123 seats in December to 137 seats out of 350) but failed to break the deadlock. Then after a wrenching internal struggle and faced with a third election at which they would probably lose more seats to the PP, the opposition Socialists at last agreed to abstain. That should allow Mr...Continue reading

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Deal or No Deal, Time Warner Is a Good Bet

Investor skepticism over the regulatory outlook for AT&T’s deal for Time Warner has created an opportunity in the media company’s shares.

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A matter of life and death in California

 “I AM living a parent’s worst nightmare,” says a tearful Sandra Friends in a campaign video for Proposition 66, one of two initiatives related to the death penalty that will appear on California’s ballot on November 8th. Ms Friends’ son Michael Lyons was kidnapped, sexually assaulted and murdered two decades ago in Yuba City, California when he was just eight years old. She has since become a vocal critic of Proposition 62, which would repeal the death penalty, and a champion of Proposition 66, which seeks to “mend, not end” capital punishment. 

Though they diverge on how to fix it, the backers of both propositions agree that the current system no longer works. According to Mike Ramos, the district attorney of San Bernardino County, who wants to reform but not abolish the death penalty, it often takes years for lawyers to be assigned to accused murderers. Such delays, combined with legal challenges, mean California has executed only 13 people since 1978, the last in 2006. A decade later, 741 death row inmates await execution in the Golden State—by far the highest number in the country. Last year California ran out of cells for its death-row...Continue reading

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Recession Fears Are Misplaced Until Growth Takes Off

Just because the economic expansion has been long doesn’t mean it is getting long in the tooth.

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Crunch time for Obamacare

FANS of the Affordable Care Act, Barack Obama’s health-care reform, should spend November biting their nails. The first reason is the presidential election: Republicans want to repeal the law. The second is that the three-month window when Americans can buy insurance, if they are not already covered through their employer, opens on November 1st. Many will shop on Obamacare’s government-run marketplaces, or “exchanges”. On October 24th the health department confirmed that buyers will pay a lot more this year. How they react will determine the future of the law—and not just because it may swing their votes.

The average benchmark “silver”—ie, middling—plan sold on the exchange will cost 22% more for 2017. This steep increase partly reflects the fact that insurers have been charging far too little. Many were caught out by the sickliness of exchange customers, and have made big losses as a result. Some, like Aetna, have left most exchanges (in five states, only one insurer now remains). But despite this turmoil, insurance for 2017 will cost roughly what the Congressional Budget Office predicted it would when the law...Continue reading

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Are magazine covers a contrarian indicator?

FINDING a reliable way of timing the market is something that has eluded the greatest investment minds in history. That is why many people are tempted by the magazine cover indicator as a contrarian signal. One of the most famous was Business Week's "Death if Equities" cover in 1979 (which actually came three years before the great bull market got going).

Analysts Greg Marks and Brent Donnelly of Citigroup write that

The premise behind the indicator is that when a journalist or editor finally devotes a cover to a market trend, company, country or person, the story or theme has been in vogue for some time and is likely past its peak. Positioning and sentiment should already fully reflect the story on the cover of the publication and the story should be fully priced in. In other words, by the time a journalist writes about the trend, a majority of the move has already happened.

The two analysts - cheeky devils - decided to apply the test to Economist covers. They elected 44 cover images between 1998 and 2016 which seemed to make an optimistic or pessimistic point. Perhaps the best-known was...Continue reading

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Wall Street v Main Street

In the first of our Economist Radio specials from Washington, Money Talks examines the Wall Street versus Main Street argument playing out in the election. Our Buttonwood columnist dissects how markets might respond to a Trump win. And award-winning  MIT economist, David Autor, dissects the negative consequences of free trade 

Santander: A Rare Bank That Lives Up to Hard Promises

The Spanish lender is exposed to a tough market in Brazil,

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School reform will not be a priority for the new president

FOR a president, making education policy can be like running a school with thousands of unruly pupils. He can goad states and coax school districts, offering gold stars to those who shape up. But if a class is defiant he can do little. Just 12.7% of the $600bn spent on public education annually is spent by the federal government. The rest is split almost equally between states and the 13,500 districts. Many presidents end up like forlorn head teachers: America spends more per child than any big rich country but its pupils perform below their peers on international tests.

Despite the constraints, George W. Bush and Barack Obama both used the regulatory power of the federal government to spur reform. Through the No Child Left Behind (NCLB) Act of 2001, the Republican president launched a flurry of standardised tests, sanctioning schools whose pupils failed to progress. Through his “Race to the Top” initiative, announced in 2009, the Democratic one offered cash to states in exchange for reforms such as higher standards and evaluating teachers based on pupils’ results. Similar policies were implemented by 43 states in exchange for federal waivers...Continue reading

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China's Latest Debt Crackdown Just Delays More Serious Action

China faces a broad dilemma: how to manage a huge debt mound while maintaining loose monetary policy.

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Pokémon Shows Nintendo Still Has Path to Glory

Solid profits from Nintendo’s stake in Pokémon Go is further proof that mobile gaming—not consoles—is the company’s future.

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Apple Dials Down Modest iPhone Hopes

The rally in Apple’s shares since the new iPhone was unveiled could stall, but the stock is still cheap.

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New Sales Model Obscures Weakness at Software Maker

Software-maker PTC’s transition to a subscription model is clouding its results, leading to a big stock rally.

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Tesla Earnings: The Moment of Truth

Tesla Motors has a low bar to hurdle in Wednesday’s earnings report as analysts have slashed estimates.

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Do Trump’s calls for poll watchers constitute incitement?

An unlikely surge in Utah

WITH the Gothic spires of the Salt Lake Temple looming behind her, Diane, who works for the Mormon Church, grimaces as she considers her political choices. “Well, Trump wants to be king, not president. And Hillary lacks integrity. I would vote for Mickey Mouse before I voted for either of them.” The only candidate Diane can stomach is Evan McMullin, a 40-year-old Mormon from Utah who served in the CIA and announced his candidacy as an independent only two months ago. According to some pollsters, the previously unknown Mr McMullin is either tied with, or outperforming, Hillary Clinton and Donald Trump in Utah—one of only 11 states where he appears on the ballot. If he wins, which is still a long shot, this would be the first time a third-party candidate has won a state since 1968. It would also represent a remarkable departure from the state’s past political record. The Beehive State has been ruby red since the 1960s; Republicans have bested Democrats in general elections there by at least 18 percentage points since 1964. This largely has to do with Utah’s population of Mormons, who make up over 70% of the electorate and lean more Republican than...Continue reading

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How much do China, Japan and America trade with the EU?

A POPULAR idea is floating around certain circles: that you do not need a deep trade deal with the EU in order to trade with them in a significant way. For instance, Guido Fawkes, a blog, points out that each year China trades with the EU to the value of half a trillion dollars. But China is not in the single market and so does not have to accept annoying rules and regulations. Japan trades a lot with the EU, but is not in the single market and does not have to accept free movement of labour (it has net migration close to zero, in fact).

This has implications for post-Brexit Britain, of course. The implication seems to be that Britain need not be in the single market in order to trade lots with the EU. 

But take a closer look at the figures, and that rosy conclusion is thrown into doubt. It is true that America, China and Japan trade lots with the EU (our chart looks just at goods trade, which is easier to measure). But these countries are much, much bigger than Britain is. So, proportional to the size of their economies, they...Continue reading

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