A new voting law for Italy

ITALY’S late dictator, Benito Mussolini, once denied it was difficult to govern the Italians, adding “It is simply pointless.” But what if it were impossible?

The question is posed by a new electoral law, approved by the Senate on October 26th after a stormy passage through parliament. About a third of the members of both houses of parliament will be elected on a first-past-the-post basis; the remainder by proportional representation. Only parties that win more than 3%, and electoral alliances that get more than 10%, of the national vote will be admitted to parliament.

The law harmonises the rules for the Senate and the lower house, the Chamber of Deputies. But it fails to resolve a problem at the heart of Italian politics since the last general election in 2013: a party with a quarter of the vote, Beppe Grillo’s anti-establishment Five Star Movement (M5S), has so far refused to ally with any of the others. That means that every government since has been an...Continue reading

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A federal judge blocks Donald Trump’s ban on transgender soldiers

AMERICAN politics has a new rhythm: the president does something outrageous; lawsuits fly; a judge stops the new policy in its tracks. The ban on travel from Muslim countries came first, halted within hours of its appearance at the end of January. The second and third versions of the travel ban have been frozen too, though version 2.0 escaped full Supreme Court review when it expired earlier this month. The White House’s attempts to punish sanctuary cities for refusing to cooperate on immigration enforcement have also been halted by federal judges—three times. Now Donald Trump’s ban on transgender troops—a policy he announced in a series of tweets over the summer—has been dealt a significant legal blow.

On July 26th, Mr Trump tweeted that the government will no longer “accept or allow transgender individuals to serve in any capacity in the US military”. Why this reversal of an Obama-era policy opening the armed services to transgender people? “Our military must be focused on decisive and overwhelming victory”, Mr...Continue reading

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The Wild Card in This $66 Billion Health-Care Deal

Long-term investors tend not to put much weight on daily share price gyrations. CVS Health shareholders don’t have that luxury.

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Samsung Needs to Keep Pushing the Reform Button

The Korean tech giant is raising its dividends and improving its corporate governance. It needs to do more to unlock the discount at which it trades to global peers.

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Why Asia's Largest Oil Company Won't Reward Investors

PetroChina, which reported sharply higher third-quarter earnings Monday, has a lot of attractive features—state financial backing, enormous reserves, and a near-monopoly in the world’s most-important natural gas growth market. But policy and market forces are shifting against it.

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SoftBank Ought to Back a Sprint and T-Mobile Marriage

Sprint is once again running away before exchanging vows with T-Mobile.Instead of going back and forth on the terms, SoftBank should just take the plunge.

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Beating Rival Banks in Tough Times Bodes Well for BNP

BNP Paribas’s third-quarter numbers gave investors the heebie-jeebies, but compare the French bank to its peers and there is little reason for fright.

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Eurozone Still Not Ticking the Inflation Box

Eurozone data show the European Central Bank was a little fortunate in the timing of its decision to slow bond purchases next year.

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Startups That Never Grow Up

The flood of cash into startups has allowed companies to stay private for far longer than in the past, raising the question of whether many companies are worth the $1 billion-plus values private investors have attached to them.

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How to understand the first indictments against Donald Trump’s former aides

CALL it the “Al Capone trap”. Ever since the authorities used tax evasion charges to jail the notorious Chicago crime boss in 1931, the idea has taken hold that federal prosecutors work a bit like legal vigilantes: using any weapon that comes to hand to achieve their sworn mission, which is always to take down the biggest bad guys they can, by any means necessary.

That is not how Robert Mueller, the lantern-jawed special counsel and former FBI chief, sees his mission, say well-informed former federal prosecutors. Mr Mueller’s mission is not to topple President Donald Trump and claim a political scalp. Mr Mueller’s—deadly serious—mission is to investigate Russian government efforts to interfere in the 2016 presidential election, and whether there was any coordination between Russia and the Trump campaign in those efforts. There is an important difference between those two possible missions, even if they may end in a similar place, namely grave political jeopardy for the 45th president.

That distinction should...Continue reading

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The Savings Rate is Too Low

Heard on the Street: Americans’ low rate of personal saving is remarkable and a return to a higher level could be unpleasant for investors.

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A Surprising Shakeout Among Banks as Rates Rise

When the Federal Reserve began raising interest rates, every bank was a winner. As the Fed prepares for its fifth rate boost, some banks are benefiting more than others.

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A Stock Market Where the Rally is Actually Deserved

European stocks have rallied sharply this year, but based on companies actually making more money, not investor appetite for ever increasing earnings multiples.

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Iceland’s voters stick with the establishment

IF A populist electoral eruption were understandable anywhere, it would surely be in Iceland. The old-guard parties’ mismanagement of the economy a decade ago led to a collapse that was epic even in the context of the global financial crisis. Since then the country’s politics have been roiled by periodic scandals. Last year the then prime minister, Sigmundur David Gunnlaugsson (pictured right), resigned after his name was linked to the “Panama papers” scandal. Then, in September, news broke that the newish prime minister, Bjarni Benediktsson (pictured centre), had concealed the fact that his father had helped a paedophile to restore his reputation. That prompted elections for the third time in four years, which took place on October 28th.

Early on in the campaign the Pirates, a protest party, and the Left-Green Movement, one of Iceland’s most left-wing outfits, were polling well. Yet, as in last year’s election, parties tied to the establishment ended up doing much...Continue reading

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HSBC Finally Finds a Taste of Growth in China

HSBC has been promising growth in China and now it seems to have found some with a chunky slug of extra lending in the southern Chinese province near its Hong Kong stronghold.

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Millennials Have Fallen in Love With Gucci, for Now

Classic brands often blame millennials for sales downturns, but the younger generation is giving Gucci a sensational boost. This could assure the luxury goods maker years of growth, or leave it grumbling like everyone else about that fickle group.

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Sickly Earnings Season for Drug Stocks

This earnings season has an unhappy one for pharma investors. The NYSE Arca Pharmaceutical Index is down more than 5% over the past three weeks.

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An Australian court’s verdict leaves Turnbull in a pickle

WHEN his deputy was recently outed in a row about legislators who are dual nationals, Malcolm Turnbull, Australia’s prime minister, downplayed the potential consequences for his conservative coalition government. He may now be feeling less confident. On October 27th the country’s highest court ruled that Barnaby Joyce was ineligible to hold his seat because he was also a citizen of New Zealand when he was elected. As a result, Mr Turnbull has lost his lower-house majority of just one. At least until a by-election is held in December, he will have to rule with a hung parliament.

They have been dubbed the “citizenship seven”: legislators from both houses of parliament whose eligibility to hold foreign passports came to light two months ago. The seven, variously, were citizens by descent of Canada, New Zealand, Italy and Britain. The constitution bars those with foreign citizenship, or people who are entitled to it, from competing for parliamentary seats. The seven say...Continue reading

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The Alexander-Murray bill does not solve all Obamacare’s problems

ON OCTOBER 25th the Congressional Budget Office (CBO) released its score of the Bipartisan Health Care Stabilisation Act, the cross-party effort by two senators, Lamar Alexander of Tennessee and Patty Murray of Washington, to shore up troubled health-insurance markets. The main goal of this bill is to restore, for two years, the payments to insurance companies that President Donald Trump cut off a couple of weeks earlier (see article). The budget experts predict that doing so would in fact end up saving the government money. But would the bill achieve its aim of stabilising insurance markets?

Restoring the payments should help reduce premiums, and hence encourage marketplace enrolment by healthy people. But the damage to the market in 2018 has already been done. Enrolment in the individual market opens on November 1st, and there is no time for premiums, which are agreed with state regulators...Continue reading

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At Clariant, Breaking Up Was the Easy Part

Activists prevailed in keeping Clariant independent, but now they need to come up with ideas for creating value.

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Tech Rally Is Juiced by Highflying Cloud Business

Fast growth in cloud revenue at Amazon, Microsoft and Google gave investors reasons to bet the three tech giants could maintain their growth trajectories.

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Catalonia’s parliament declares independence; Spain imposes direct rule

IT WAS political theatre—epic for some, farce for others and tragic for many more. By 70 votes out of 135, and with the opposition having walked out, the Catalan parliament in Barcelona voted today, October 27th, to declare independence and constitute Catalonia as a republic. Minutes later in Madrid, the Senate overwhelmingly approved the government’s request to exercise its constitutional power to dismiss the Catalan regional government, impose direct rule and call a fresh regional election within six months.

Until almost the last minute it appeared that this head-on clash could be avoided. On October 26th officials in Madrid and Barcelona had discussed a deal whereby, if Carles Puigdemont, the Catalan president, himself called a fresh election, the government would suspend its plans for direct rule. Amid much confusion, the deal was aborted because of the mistrust between the two administrations and because Mr Puigdemont apparently feared being denounced as a traitor by the independence movement that he leads.

“Today the parliament took a long-awaited and struggled-for step,” Mr Puigdemont said after the independence vote. But it is...Continue reading

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The Bond Selloff's Missing Ingredient: Inflation

Better growth and tighter central bank policy are lifting bond yields, but the market lacks a critical factor for lift-off.

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Irrationality at the voting booth

THE publication of Hillary Clinton’s campaign memoir “What Happened” in September set off a new round of finger-pointing over what caused the 2016 presidential election result. Many argued that the Democratic candidate did not accept enough blame for her own defeat. Social psychologists might have something to say about that: most argue that it is a widespread tendency to attribute other people’s misfortune to personality traits rather than to the circumstances they find themselves in; we do the reverse when it comes to our own failures. This “fundamental attribution error” is discussed by Edward Glaeser, an economist at Harvard, and his colleagues in a recent paper that could help explain many political outcomes.

There is no simple objective measure of a politician’s competence. But voters’ perception of competency appears to often be determined by ideology. For example 70% of Democratic voters thought Barack Obama would go down in...Continue reading

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James Mattis visits the DMZ

JAMES MATTIS, America’s defence secretary, is a man who weighs his words. He is a reader, earning fame in the Marine Corps for carrying works of Roman military history into warzones in his rucksack, even as he earned a simultaneous reputation for ferocity in combat. He speaks sparingly in public, rarely appears on television and turns positively mulish when asked by reporters to comment on breaking news on which he has not been briefed.

It matters, then, that when Mr Mattis—a former four-star general turned civilian head of the most powerful armed forces on earth—visited the border between South and North Korea on October 27th, his brief statement revolved around a quote from America’s top diplomat, Rex Tillerson: “Our goal is not war.”

Mr Mattis spoke of peace, stability and of the value of the 60-year old alliance between South Korea and America—an “ironclad commitment”, he called it. Standing yards from North Korea in the eerie Cold War stage-set of the truce village at Panmunjom, he did not bang the...Continue reading

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The Reformation’s 500th anniversary has Germans arguing over holiday time

IT IS impossible to miss what Wittenberg, a sleepy town in Saxony-Anhalt south of Berlin, is known for. The sign at the train station reads “Lutherstadt Wittenberg”. Visitors may wander around the house where Martin Luther lived with his wife, children and disciples, and purchase Luther-themed tea and socks embroidered with his most famous pronouncement: “Here I stand, I can do no other.” A statue of the man himself towers over the market square, not far from the “Luther-Apotheke”. Posters all over town advertise the planned festivities commemorating the 500th anniversary of the Reformation, which Luther is said to have launched on October 31st, 1517 by nailing his 95 theses to the door of Wittenberg’s church.

For most Germans, the chief consequence of the anniversary is that this year “Reformation Day” is a national holiday. Usually only a few of Germany’s eastern states get October 31st off. Such disparities have led to a longstanding German debate...Continue reading

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Kenya’s fresh election is preposterously flawed

CLUTCHING a large rock on his shoulder, Sam Ogada is ready for battle. “This”, he says, gesturing with it, “is the only language our government understands”. A little way down the street, in Kisumu, a large city in western Kenya, piles of burning tyres spew black smoke into the air. Policemen, dressed in full camouflage and clutching assault rifles, mill about. The sting of tear gas hangs in the air. On the streets men have fashioned bricks, stones and tree branches into crude roadblocks, where, when not fighting with the police, they ask somewhat menacingly for donations from passing motorists.

The people of Kisumu are used to this. The city is the stronghold of Raila Odinga, Kenya’s veteran opposition leader. It has been a centre for discontent with Kenya’s government for as long as most Kenyans can remember. In 1969 the first president, Jomo Kenyatta, visited but had to be rescued from an angry crowd by policemen firing a hail of bullets. Yet people here, who are...Continue reading

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The Balfour Declaration still offers lessons to Israel and the Palestinians

IN OCTOBER 1917, in the depths of the first world war, an expectant Chaim Weizmann was waiting in a London anteroom. Britain’s war cabinet was voting on a document, now known as the Balfour Declaration, that would pledge Britain’s support for Zionists’ hopes of statehood in Ottoman-ruled Palestine. Mark Sykes, a British diplomat, rushed out to share the good news: “Weizmann, it’s a boy!” But the 67-word declaration was vague. It offered a Jewish “homeland”, not a state. Nor did Britain explain how it would be created, promising only “best endeavours” to do so. The Zionist leader’s first reaction was disappointment. The boy “was not the one I had expected,” he later wrote.

A century on, his successors have no such doubts. On November 2nd Binyamin Netanyahu, Israel’s prime minister, will attend a dinner in London to celebrate the document’s centenary. Theresa May, the British prime minister, will join him. So will Lord Balfour, a descendant of the man who lent...Continue reading

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Saudi Arabia launches a futuristic economic zone

Israel’s “New Labour” party

A third way in the Jewish state

AVI GABBAY has already overturned convention once—when on July 10th he won the primaries to become the leader of Israel’s Labour party just six months after joining it. Now he is causing more ructions in the main opposition, with a series of statements that are heretical to those on the far left of Israeli politics. Although other Labour leaders have, at times, espoused similar views, Mr Gabbay has done so earlier and more emphatically. He says that, should he win the next election he would not invite the country’s Arab parties to join his coalition. And he has said that he does not think that Jewish settlements built on land in the West Bank, which Israel captured in 1967, should necessarily be dismantled as part of a peace agreement. Further disconcerting some Labour supporters is his view that “a Jew cannot really not believe in God.” 

Mr Gabbay’s intentions are clear. He is determined to break the image of...Continue reading

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Biafran separatists are gaining support, 50 years after the civil war

DOORS hang off their hinges. Cupboards have been emptied onto floors, walls and windows are pitted with what appear to be bullet holes. A statue of Nnamdi Kanu, the leader of the Indigenous People of Biafra (IPOB), a Nigerian separatist group, is missing a hand and an arm. Mr Kanu’s family compound in Umuahia, the sleepy capital of Abia state in south-eastern Nigeria, was raided by soldiers on September 14th. His brother, Emmanuel, claims 28 people were killed and says he has not heard from Mr Kanu since. The army denies the raid even happened. Meanwhile Mr Kanu, who was charged with conspiracy to commit treason two years ago, failed to attend a bail hearing on October 17th.

His disappearance illustrates how the unhealed wounds of Nigeria’s brutal civil war have been reopened in recent years. That conflict, which was fought between the breakaway Republic of Biafra and the Nigerian state, resulted in the loss of almost a million lives between 1966 and 1970. Separatist...Continue reading

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A pageant with a feminist cause in Liberia

“THEY want to strike fear into the hearts of their opponents!” remarked an onlooker, tapping his chest. Fighting words, perhaps, for a staff fundraiser—but hyperbole is the name of the game at the Liberia National Police (LNP) Queen Contest. Trading their uniforms for ballgowns and flanked by raucous entourages raining confetti and cash, a half-dozen policewomen peacocked to their seats under a balloon-lined marquee. They vogued, cat-walked and delivered impassioned speeches.

This was no normal beauty pageant. The contestants were chosen for their professional ambitions, their appearances almost incidental. For all its pomp, the contest is a practical affair to raise money to send policewomen to Australia for training. Guests and officers of all ranks put banknotes into the basket of the nominee they support. The winner is not the queen judged most beautiful, but the one who raises the most cash.

The money is then pooled and is meant to help send ten policewomen abroad....Continue reading

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Asia's Rich Are Helping Swiss Bankers Recover Their Poise

Asian investors, particularly from China, are helping UBS revive from a summer stumble and its shares have further to run.

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The world’s youngest female leader takes over in New Zealand

JACINDA ARDERN looked a touch less assured than usual when she took to the stage on October 19th after becoming New Zealand’s prime-minister designate. The 37-year-old had raised Labour from the dead after assuming leadership of it in August, but the centre-left party had still finished second in last month’s general election with just under 37% of the vote. She had managed to secure leadership of the country by turning her charm on the populists of New Zealand First, convincing them to side with her instead of the winning centre-right National Party. With support from the Greens (who are not part of the coalition), Ms Ardern has created the first government of losing parties in New Zealand’s proportionally representative parliament. On October 26th she was sworn in as the world’s youngest female leader.

Ms Ardern’s promises of change resonated with many young New Zealanders. They were tired of the National Party, which had led the country for nearly a decade. But some...Continue reading

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In South Korea, two reactors are saved from the axe

ON A vast building site on the southern coast of South Korea near its industrial heartland, the foundations of the country’s newest nuclear-power project are swaddled in protective tarpaulins. Ten cranes tower overhead but nobody sits in their cabins. The only movement is the whirl of a few fans. Work on the two reactors stopped suddenly in July, after Moon Jae-in, the country’s left-leaning anti-nuclear president, ordered a pause to the project to give a citizen-jury time to consider its merits. “I was a little worried,” admits Ahn Seong-Shik, the civil engineer in charge of building the reactor shells. “But I trusted the Korean people.”

Mr Ahn’s faith paid off on October 20th, after the jury endorsed the construction of the two reactors, Shin Kori 5 and 6. “It was a very smart decision,” he says. Mr Moon, who has promised to phase out nuclear power, accepted the verdict. It is an unexpected reprieve for a project that Mr Moon had pledged to scrap before he...Continue reading

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Thailand prepares to cremate a much-loved king

Is the world getting Myanmar wrong?

IN THE bonfire of liberal certainties, Myanmar makes for an especially painful case. Only two years ago the world celebrated as a land long covered by darkness emerged from brutal army rule. In a jubilant election the National League for Democracy (NLD) swept nearly all before it. The party’s revered leader, Aung San Suu Kyi, took over from the same generals who had imprisoned her or kept her under house arrest for nearly two decades.

Hers had been painted as a contest between good and evil, in which not just the people of Myanmar but much of the democratic world felt they had a stake. Ms Suu Kyi’s moral authority on the global stage was matched only by the Dalai Lama’s. Yet unlike Tibet, Myanmar enjoyed a fairy-tale ending with its first proper election—one in which, moreover, it was possible for outsiders to feel they had played a part. They included Western governments that had kept up the pressure on the generals, campaigning dons from the Oxford high tables at which Ms Suu Kyi...Continue reading

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Chinese Banks' Capital Cushion Isn't So Comfy

Banks have been issuing a huge pile of new debt to shore up their balance sheets, suggesting all is not well beneath the surface.

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Independents stampede into Mexico’s presidential election

THE split was years in the making. On October 6th Margarita Zavala (pictured), the former first lady of Mexico, resigned from her conservative National Action Party (PAN). She had long hoped to be its nominee for president in elections to be held next July. But the head of the party, Ricardo Anaya, has formed a “Citizens’ Front” alliance with two smaller parties, and looks set to win the group's nomination himself. So Ms Zavala has done something that was never possible before in a Mexican presidential race. She registered as an independent candidate. She was not alone: 85 other independent aspirants had signed up by the deadline on October 14th.

The contest to succeed President Enrique Peña Nieto is the fourth since Mexico’s democratic era began in 2000. But it will be the first presidential race since the country began allowing candidates to seek office without the backing of a political party. That is the result of a binding ruling by the Inter-American Court of...Continue reading

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Donald Trump could set off a nationalist backlash in Mexico

AMID the shiny skyscrapers and hipster cafés of central Mexico City, the legislative offices of Armando Ríos Piter, a centre-left senator from the poor, rural state of Guerrero, offer a salutary shock. The walls are crammed with jaguar masks, indigenous art and placards from anti-corruption protests: reminders that this is a large, diverse country, in which reformers like the senator must battle income inequality, graft and violent crime.

Despite pressing domestic concerns, Mr Ríos Piter now also has a new worry abroad: President Donald Trump. Some 1m Mexicans from Guerrero live in the United States, he says; they tell him they “feel frightened” by rumours of looming immigration raids and deportations.

In a country whose leaders have intermittently resorted to anti-Americanism to prop up autocratic rule or justify protectionist policies, modernisers have long laboured to overcome distrust of the United States. The resentment was learned early, in childhood lessons about...Continue reading

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Murderous Latin American police need to start policing themselves

“SEVEN rats eliminated,” began one voice message in a WhatsApp chat in El Salvador. “What joy!” In a country ravaged by gangs, such exchanges might be expected among hit men. Instead this discussion was among policemen. According to revelations in August by Revista Factum, a website, they gloated over killing gang members, shared tips on tampering with crime scenes and posted videos of detainees being tortured.

El Salvador has the world’s highest murder rate, and its policemen kill with worrying frequency. The fact that police kill people so often in countries wracked by violence may stand to reason: the more armed criminals that officers confront, the more they will need to open fire. But something particularly alarming is taking place. A study by Ignacio Cano, a Brazilian criminologist, found that the higher a country’s murder rate, the greater the overall share of killings committed by cops (see chart). It seems that police unable to quell violence may lose their inhibitions about...Continue reading

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Why Latin America is seeing a cable-car boom

Flyest ride in town

MEXICABLE, a cable-car line 4.9km (three miles) long, soars above Ecatepec, a poor suburb of Mexico City. Open for just over a year, its 185 gondolas carry 18,000 people a day between San Andrés de La Cañada, at the top of the hill, and Santa Clara Coatitla at the bottom. The trip makes five stops en route and takes 19 minutes, compared with the 80-minute bus trip residents previously endured. The cable car is “super quick and much less stressful,” says Nelly Hernández, a passenger accompanied by her awestruck four-year-old daughter.

In rich Western countries, cable cars are mainly for tourists. Latin America, in contrast, has adopted them as mass transit for the poor. They suit the region’s mountainous cities, many of which have expanded chaotically, says Julio Dávila of University College London. Ecatepec’s population jumped after an earthquake hit Mexico City in 1985.

The pioneer was Medellín, Colombia’s...Continue reading

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ECB Takes a Teeny, Tiny Step Toward Ending Loose Monetary Policy

The European Central Bank opened the door to exiting extraordinary monetary policy but is still a long way from going through it

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Storms Force Insurers to Pay Up for Protection

The reinsurance industry looks like it will get a modest boost following the wave of natural disasters this year, but primary insurers may get squeezed.

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Millennials are doing better than the baby-boomers did at their age

ALL men are created equal, but they do not stay that way for long. That is one message of a report this month by the OECD, a club of 35 mostly rich democracies. Many studies show how income gaps have evolved over time or between countries. The OECD’s report looks instead at how inequality evolves with age.

As people build their careers, or don’t, their incomes tend to diverge. This inequality peaks when a generation reaches its late 50s. But it tends to fall thereafter, as people draw redistributive public pensions and quit the rat race, a contest that tends to give more unto every one that hath. Old age, the OECD notes, is a “leveller”.

Will it remain so? Retirement, after all, flattens incomes not by redistributing from rich seniors to poor, but by transferring money to old people from younger, working taxpayers. There will be fewer of them around in the future for every retired person, reducing the role of redistributive public pensions.

One logical response to the diminishing number of workers per pensioner is to raise the retirement age. But that will exacerbate old-age inequality, if mildly. Longer careers will give richer workers more time to compound their advantages. And when retirement eventually arrives, the poor, who die earlier, will have less time to enjoy their pensions.

Today’s youngsters may resent having to provide...Continue reading

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Will corporate tax cuts boost workers’ wages?

THE president’s tax promise has always been clear: he will reduce the amount middle-earners, but not rich Americans, must pay. Yet every time Donald Trump releases a plan, analysts say it does almost the opposite. The Tax Policy Centre, a think-tank, recently filled in the blanks in the latest Republican tax proposals and concluded that more than half of its giveaways would go to the top 1% of earners. Their incomes would rise by an average of $130,000; middle-earners would get just $660. The White House maintains that tax reform will deliver a much heftier boost to workers’ pay packets. Who is right?

The disagreement boils down to who benefits when taxes on corporations fall. The Tax Policy Centre says it is mainly rich investors. But in a report released on October 16th, Mr Trump’s Council of Economic Advisers (CEA) claimed that cutting the corporate-tax rate from 35% to 20%, as Republicans propose, would eventually boost annual wages by a staggering $4,000-9,000 for the average household.

The claim has sparked a debate among economists that is as ill-tempered as it is geeky. Left-leaning economists are incredulous. Writing in the Wall Street Journal, Jason Furman, who led the CEA under Barack Obama, pointed out that if the report is right, wage increases would total about three to six times the cost of the tax cut. Larry...Continue reading

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Silicon speculators

Nail-biting decisions

EXCHANGE-TRADED funds (ETFs) were supposed to make investing easy. Instead of spending hours researching individual stocks and bonds or paying an expert fund manager, investors could simply buy a few ETFs. But now there are too many to choose from. BlackRock offers 346 in America alone. Some investors need help allocating their money between different funds. Many companies now offer “automated wealth managers” (AWMs) that perform this service.

AWMs have been around for less than ten years, but they have proliferated, offering different services in different countries. Often, they are called “robo-advisers”, but this term can be misleading. Some offer clients detailed advice about how to save. For example, Wealthfront, an American AWM, predicts the cost of sending a student to a given college, taking into account increases in tuition fees and likely financial aid. It then suggests how parents can save in a tax-efficient way. Other...Continue reading

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India recapitalises its state-owned banks

Pillars to be reinforced

ONE of the perks of owning a bank is the ability to tap it when you need money. The Indian government, which has majority stakes in 21 lenders, is no exception. As it happens, it needs to finance a bail-out of the banks it owns, most of which are in trouble. So under a cunning plan unveiled on October 24th, the ailing banks will lend the government 1.35trn rupees ($21bn), about a third of their combined market value. The government will reinvest this money in bank shares, thus ensuring they no longer need a bail-out.

Steadying a tottering financial system is never a graceful exercise, as American and European authorities discovered after the financial crisis. India’s lenders withstood the meltdown of 2007-08 well, but then embarked on an ill-advised lending spree, backing lots of infrastructure projects that got snarled in bureaucracy. Bad loans piled up. State-owned lenders, which account for around two-thirds of the sector, now have...Continue reading

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Italy’s fourth-biggest bank returns to the stockmarket

A TELEVISION advertisement for Monte dei Paschi di Siena begins with a toddler tumbling and a gymnast stumbling. “Falling is the first thing we learn,” declares the voice-over. “The second is getting up again.” Italy’s fourth-biggest bank and the world’s oldest, which was bailed out by the Italian government in July, has had several bruising falls over the years. On October 25th it returned to the stockmarket after a ten-month hiatus—the latest stage of its plan to get back on its feet. The shares closed higher on the day, at €4.55 ($5.37), but still far below the €6.49 the government paid.

Trading was suspended last December, after a failed private-sector attempt to save the bank through a share issue. The government said it would get involved. In July the European Commission approved a €8.1bn “precautionary recapitalisation”. European rules say banks receiving such aid must be solvent, the capital injection must not distort competition and the capital...Continue reading

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Firms should make more information about salaries public

SWEDES discuss their incomes with a frankness that would horrify Britons or Americans. They have little reason to be coy; in Sweden you can learn a stranger’s salary simply by ringing the tax authorities and asking. Pay transparency can be a potent weapon against persistent inequities. When hackers published e-mails from executives at Sony Pictures, a film studio, the world learned that some of Hollywood’s most bankable female stars earned less than their male co-stars. The revelation has since helped women in the industry drive harder bargains. Yet outside Nordic countries transparency faces fierce resistance. Donald Trump recently cancelled a rule set by Barack Obama requiring large firms to provide more pay data to anti-discrimination regulators. Even those less temperamentally averse to sunlight than Mr Trump balk at what can seem an intrusion into a private matter. That is a shame. Despite the discomfort that transparency can cause, it would be better to publish more...Continue reading

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Sauce for a Brussels goose

DIVORCES are rarely easy. In the 16 months since Britain voted to leave the EU in a referendum, the negotiations have made little progress. One of the trickiest aspects is the amount that Britain should pay to meet its existing spending commitments for EU programmes.

This is not analogous to dividing up the bill in a restaurant, and deciding who had the lobster and who stuck to the mixed green salad. Take the cost of EU officials’ pensions. The tricky bit in calculating it is that pensions are long-term commitments; a bureaucrat who starts work in Brussels today might still be collecting a pension 70 years from now. Working out the cost is fiendishly complicated, requiring estimates of how much wages will rise (if the pension is linked to salary) and how long employees will live. Then the sum of future benefits has to be discounted at some rate to work out the current cost; the higher the discount rate, the lower the presumed expense.

The EU doesn’t pre-fund pensions for...Continue reading

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For American Express, competition will only intensify

HE IS leaving with the share price rising and the announcement, on October 18th, of earnings that were largely well received. Better still, Kenneth Chenault, American Express’s chief executive for 16 years, accomplished a feat rare in the upper reaches of American finance: to stand down without an obvious helping shove. No grandstanding senators hounded him out (see Wells Fargo). No boardroom coup hastened the end (Citigroup). The financial crisis left him untouched (take your pick). His successor, Stephen Squeri, promoted from within and apparently groomed for the job, takes over in February.

For all that, Mr Chenault’s long tenure has not been an unequivocal triumph. Though generating strong returns on assets and equity, American Express has continued its slide within the fast-changing and competitive payments industry. According to Nilson, an industry bible, in 1974 the amount of money for purchases channelled through American Express was equivalent to 50% of what went through...Continue reading

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Switzerland is seeing more cases of malaria

“YE SHUL hav a fevere tertaine,” a line from Chaucer’s Canterbury Tales, is probably a reference to malaria, which was rife in swampy areas of medieval England. (“Tertaine” refers to the fever’s tendency to recur every three days, a hallmark of the variety known as Plasmodium vivax.) The parasite was once endemic throughout Europe, not just in southern countries like Greece but as far north as Finland. In Italy in the late 19th century it used to kill 15,000 people each year. But by the end of the last century public-health programmes had rid the continent of the disease. Today, even in Africa and Asia, the war on malaria is going well: between 2000 and 2015, the World Health Organisation reported a 37% drop in the global incidence rate, and a 60% fall in the death toll.

One might thus think that in Switzerland, of all places, doctors would have little need for anti-malarial treatments. Yet data from the Swiss...Continue reading

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In the Czech Republic, almost everyone ran against the system

THE ANO (“Yes”) party, led by Andrej Babis, an agro-industrialist billionaire, won a clear victory in the Czech general election on October 21st. Like other populist politicians, Mr Babis attacked established political parties as a cartel of insiders, despite himself serving as finance minister from 2014-17. “Traditional parties play this game of left and right, but they are not left and right,” Mr Babis says. “They have the same programme: power and money.” The message worked. ANO took 29.6% of the vote and 78 of 200 seats.

But as in many European countries, Czech politics is fragmenting. Nine parties will enter parliament, including everything from communists to far-right xenophobes, and there is no obvious coalition. Czech unemployment is low, the economy is growing and wages are rising. Yet voters seem more focused on fears that the European Union will force their country to accept refugees, and the sense that corrupt insiders have cornered the gains from the...Continue reading

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The new Czech leader is not leading an anti-Europe uprising

WHY does it keep happening? Consider some events of the past week. Andrej Babis, a tycoon with a populist bent, sweeps aside the old guard in a Czech election. Fresh from his own electoral success, Sebastian Kurz, the boy wonder of Austrian conservatism, opens coalition talks with a far-right party that harbours former neo-Nazis in its ranks. Dozens of deputies from the anti-immigrant Alternative for Germany party take their seats in a Bundestag that was supposed never to find space for their kind, while Viktor Orban, the father of Hungary’s illiberal democracy, declares central Europe a “migrant-free zone”.

It is tempting to seek a single explanation for these disparate phenomena. Perhaps Angela Merkel’s open-door refugee policy of 2015 is to blame. Maybe this is the rage of those left behind by the uneven distribution of globalisation’s booty. Or it could be that the central Europeans have had enough of the overbearing bully-boys of Brussels. Worse, if these outcomes stem from...Continue reading

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Ksenia Sobchak fills out the cast of Russia’s electoral circus

A model candidate

KSENIA SOBCHAK first gained fame in Russia as the host of Dom-2, a raunchy reality-television show where contestants compete for love while building a house. Since then, Ms Sobchak, whose father was Vladimir Putin’s political mentor, has cycled through a variety of roles, including talk-show host, opposition leader, journalist, restaurateur, model and actress. Her latest part may be her biggest yet: candidate for president of Russia.

Ms Sobchak acknowledges that the election, due in March 2018, is not a real contest, but a “high-budget show”. She knows that she has no chance, but says she represents voters who are “against everyone”. Ms Sobchak insists her role has not been approved by the powers that be, but few in Moscow politics believe her. Many recall the bid in 2012 of Mikhail Prokhorov, the oligarch who owns the Brooklyn Nets basketball team, which was widely seen as a Kremlin ploy to absorb the protest...Continue reading

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Spain prepares to intervene in Catalonia

Independent thinkers

MANY Spaniards have long hoped that an all-out confrontation between the government and the pro-independence leaders of Catalonia could be avoided. But this week time all but ran out.

On October 21st Mariano Rajoy, Spain’s prime minister, asked the Senate to grant him the constitutional power to dismiss the Catalan regional government, impose direct rule and call a fresh regional election within six months. With Catalan leaders pledging resistance, it is unclear whether this heralds the start of a solution or a worsening of Spain’s constitutional crisis.

As The Economist went to press, Carles Puigdemont, the president of the Generalitat, as Catalonia’s devolved government is known, was due to address his parliament. Many in his coalition, which holds a bare majority of seats, want him to declare independence. Since no European government will recognise this, it would be purely symbolic. Over the...Continue reading

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Forecasting the opioid epidemic

OPIOID abuse is a national emergency, and the president is expected to declare it so officially. That will help free up funds for agencies to treat the problem. As part of this effort, researchers will try to determine when the opioid epidemic will peak, and how many more people are likely to die before it fades. The answer to that second question can vary by half a million deaths over the next decade.

The epidemic appears to be gathering pace. Of the 65,000 drug-overdose victims in the 12 months to March 2017, 80% died from opioids (coroners’ reports may undercount that figure). The death toll now exceeds the height of the AIDS epidemic in 1995. Donald Burke, dean of public health at the University of Pittsburgh, points out that the number of fatal drug overdoses has doubled every eight years for the past 37. Unabated, a continuation of that trend would see annual opioid deaths rising to 90,000 by the middle of the next decade.

That analysis may be too simplistic. Mr Burke’s forecast is “plausible if nothing changes”, but it is “insane if it actually happens”, according to Michael Barnett, a professor of health policy and management at Harvard University. A more nuanced model would try to capture the fact that the opioid epidemic is not a singular event but a set of intertwined ones taking place in different places. Mr Barnett forecasts that...Continue reading

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America’s love affair with uniformed men is problematic

A POIGNANT feature of American bases in Iraq were their walls of Thank You cards sent by American schoolchildren. Often displayed outside the chow-hall, where the troops gathered to eat, they typically thanked them for “being over there to keep us safe”. Hardly any of the soldiers Lexington spoke to, during several trips to Iraq, believed that to be the case. Their Iraqi enemies were fighting a defensive war, not trying to launch one against America. Yet the soldiers accepted the sentiment unblushingly. No soldier expects the beloved chumps back home to understand what he gets up to. He just needs to feel appreciated.

This paradoxical tendency among soldiers, to hunger for the approval of civilians whose views they otherwise set little store by, came to mind during chief of staff John Kelly’s recent presentation in the White House briefing room. The retired marine general’s boss, President Donald Trump, had got himself into hot water after it emerged that he had not written to the...Continue reading

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Preventing ex-convicts from working is silly

BUT for the heroic work of state prisoners, the wildfires that recently swept through northern California would have been even more destructive. Around 4,000 low-level felons made up 30% of the forest firefighters battling the raging flames, carrying chainsaws and other heavy equipment. Some risked their lives. Last year Shawna Lynn Jones, a 22-year-old who had less than two months of her three-year sentence left, died while fighting a fire. By all accounts, Ms Jones took great pride in her work, for which she was paid less than $2 an hour, and would have liked to continue firefighting once released.

Yet California, like many other states, makes it virtually impossible for former prisoners to get a firefighter’s licence. The state requires nearly all firefighters to be certified as an emergency medical technician (EMT), an approval usually denied to convicted felons. That is why only a handful of former prisoners managed to get a job with Cal Fire (the California Department...Continue reading

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How Robert Mueller’s investigation could end

GEORGE W. BUSH, the former president, earned headlines with a recent speech that—while it did not name President Donald Trump—unmistakably rebuked his Republican successor for degrading America’s national discourse with divisiveness and even “casual cruelty”. Yet his weightiest words came moments later, when Mr Bush urged America to secure both its electoral infrastructure and democratic system against subversion by foreign powers. This time he named names. “According to our intelligence services, the Russian government has made a project of turning Americans against each other,” the 43rd president said. He added that foreign aggressions—including cyber-attacks, the spreading of disinformation via social media or financial influence—“should not be downplayed or tolerated”.

Almost a year after his victory, and despite numerous revelations of Russian-funded attempts to stoke racial, religious and ethnic conflicts during the 2016 election, downplaying the attacks remains...Continue reading

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Jeff Flake breaks free

Jeff Flake breaks

JEFF FLAKE, Arizona’s junior senator, is among the upper chamber’s more reliably conservative members, as conservatism was once defined. FreedomWorks, an organisation that scores members on their votes for low taxes and less regulation, gives him a 95% lifetime rating, higher than all but four other senators. The National Rifle Association endorsed him, as did the Club for Growth, a low-tax advocacy group. But he not only declined to endorse President Donald Trump last year, he wrote a book condemning Mr Trump’s influence on conservatism. For someone as indifferent to policy and demanding of personal loyalty as Mr Trump, that proved unacceptable. The president repeatedly lambasted Mr Flake and praised Kelli Ward, his highest-profile primary challenger, whom Stephen Bannon, Mr Trump’s former chief strategist, has endorsed. That augured a bruising campaign that Mr Flake decided was best avoided.

In an emotional speech on October 24th, he...Continue reading

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Republican congressional committees and whataboutism

Meanwhile on Fox

AMERICAN politics has no superior practitioner of the old Soviet art of “whataboutism”, which aims to deflect criticism by pointing out that other people elsewhere have done bad things, than President Donald Trump. At a now-infamous press conference, when asked about the murderous violence of far-right marauders in Charlottesville, Virginia he snapped, “What about the alt-left”? When an interviewer noted that Vladimir Putin, whom Mr Trump said he respected, killed political opponents, Mr Trump responded, “We’ve got a lot of killers. What, you think our country is so innocent?”

Congressional Republicans are following their leader. On October 24th Bob Goodlatte and Trey Gowdy, chairmen respectively of the House Judiciary and House Oversight committees, announced they would open joint investigations into actions taken by the Justice Department during the 2016 campaign, including James Comey’s decision to publicise its investigation...Continue reading

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America’s tech giants have no political party to protect them

THE tech giants have suddenly found themselves without a political party to protect them, just when they most need one. On November 1st executives from Facebook, Google and Twitter will testify before the House Intelligence Committee about how their platforms were used by Russia’s government during last year’s election. Politicians on both sides of the aisle, though they see eye-to-eye on very little, seem to agree that giant internet companies such as Amazon, Facebook and Google may pose a threat to society. “If data is the new oil, is [Amazon’s Jeff] Bezos the new Rockefeller?” asks Bruce Mehlman, a Republican lobbyist, in a report called “Navigating the New Gilded Age”, which is circulating in Washington.

Democrats, long backers of the tech sector’s innovative products, are no longer the allies they used to be. When Barack Obama was president techies got plum jobs in his administration, and the party’s supposedly superior data analytics seemed destined to help lock in...Continue reading

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Celgene's Health Scare Is a Wake Up Call for Biotechs

Celgene shareholders got some chilling news Thursday morning, sending its shares plunging 18% when trading opened—the stock’s worst decline in more than a decade.

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Trading Places: Why Barclays Is Falling Behind Deutsche Bank and Everyone Else

Barclays is achieving something that long seemed impossible in European banking: it is making Deutsche Bank look good.

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Big Beer's U.S. Problem Just Got Bigger

Anheuser-Busch InBev bought SABMiller in a $103 billion deal that reshaped the global brewing industry. History is often cruel to mega-mergers, but with U.S. tastes shifting, SABMiller looks like it was worth every cent.

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The fall of a wacky mayor shows Turkey’s president is worried

EARLIER this year, Melih Gokcek, the veteran mayor of Ankara and a member of the ruling Justice and Development (AK) party, hosted a group of foreign journalists at an estate on the capital’s outskirts. Mr Gokcek began by clicking his way through a gruesome PowerPoint presentation on the previous summer’s failed coup, mixing images of bodies mangled by tanks with the soundtrack from the film “Requiem for a Dream”. He finished by claiming that Western powers had been involved in the bloodbath, that the Obama administration had created Islamic State, and that American and Israeli seismic vessels were deliberately setting off earthquakes near Turkey’s Aegean coast. A bewildered reporter asked where Mr Gokcek was getting his information. “I have the world’s best intelligence service at my disposal,” the mayor responded. “It’s called Google.” He did not seem to be joking.

Mr Gokcek’s career as Turkey’s leading conspiracy theorist, a title fought over by many members of...Continue reading

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Line's Shareholders Aren't Getting the Message

The Japanese app is making more money from its users. Trouble is, its user base isn’t growing.

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Express Scripts Only Looks Cheap

The pharmacy-benefits manager has a low valuation but that masks challenges including growth, regulation and competition.

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How AMD Can Hurt Intel

Intel Corp. is so big that rival Advanced Micro Devices can hardly dent its business. But good news at AMD can make investors question their optimistic outlook for the chip giant.

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The financial markets are not the whole economy

DONALD TRUMP is fond of pointing out that the stockmarket has reached many record highs under his Presidency. It is a capricious measure to boast about, and one that may not fully reflect the concerns of those who voted for him and probably care more about real wage growth. And a look at the ratio of stockmarket capitalisation relative to GDP shows that this measure is close to a record high. And that led me to reflect on a sentence I wrote a few years ago: we are better at creating new claims on wealth than at creating wealth itself.

That sentence was written in the context of the huge rise in debt in the 40 years leading up to the 2008 crisis, and on the multiplication of obscure financial instruments that preceded it. It reflected the huge rise in the economic role of  the finance sector, and the wages of those who work within it. But it also relates to the way that the...Continue reading

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Scott Pruitt seeks to weaken independent scientific review at the EPA

YESTERDAY, October 24th, three scientists from the Environmental Protection Agency (EPA) were to present at a conference on the health of the Narragansett Bay estuary (pictured). They were to unveil a 500-page report, which found that “stressors associated with climate change are increasing rapidly”—but the agency abruptly cancelled the presentation without explanation. Critics pointed to it as the latest example of meddling and muzzling by the agency’s new leadership. Scott Pruitt, the industry-friendly administrator, is sceptical of the scientific consensus on climate change. The agency has also furiously scrubbed references to climate change from its website, and encouraged the creation of a “red team” to play devil’s advocate to established climate science. Mr Pruitt is set to continue his campaign against science he does not much like, by upending several critical advisory boards that the EPA relies on for independent scientific advice.

Mr Pruitt is expected to announce today that scientists who currently receive...Continue reading

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Surprise Capital Demand Signals Uncertainty for Banks

Any investor who thought British banks had escaped demands for higher capital just got a shock, with Lloyds told by U.K. regulators to boost its buffer.

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India's Big Bank Boost Can't Afford to Fail

India has finally sent its flailing state-owned banks the big lifeboat they need. Investors should jump aboard cautiously.

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The Crisis in Spain: Why Are Markets So Calm?

Catalonia’s bid for independence has held Spanish stocks and bonds back rather than being outright damaging so far.

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Get Ready for an Imperial China

Xi Jinping, China’s most powerful leader in decades, has failed to anoint a clear successor in a sharp break from previous convention.

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Jeff Flake says he will not seek re-election to the Senate

JEFF FLAKE, Arizona’s junior senator, is among the upper chamber’s more reliably conservative members. His record in this Congress earned him  a 100% rating from Freedomworks, an organisation that scores members on their votes for low taxes and less regulation. He received a 98% rating from Americans for Prosperity, a similarly conservative advocacy group funded by the Koch brothers, and a staunch endorsement in his last race from the National Rifle Association for votes expanding concealed-carry rights and opposing the creation of a federal firearm-owner database.

But Mr Flake is also thoughtful, decent and the author of a book opposing Donald Trump and his “affection for authoritarians and strongmen”. For a president as unprincipled, ignorant of policy and demanding of personal loyalty as Mr Trump, Mr Flake proved stylistically and substantively unacceptable. The president lambasted Mr Flake, up for re-election next year, as “weak on crime & border” [sic], and praised his highest-profile (so far) primary...Continue reading

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WeWork's Lord & Taylor Deal: Savvy Move or Top of the Market?

Real estate startup WeWork is buying Lord & Taylor’s flagship New York City location for $850 million and intends to convert the landmark building into its office headquarters. Heard on the Street examines the pros and the cons of the deal.

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GM Keeps Investors' Robotaxi Hopes Alive for Now

General Motors will soon outline plans for a hugely ambitious road trip from its Midwestern home to America’s tech-savvy coastal cities. They need to be impressive to live up to investor expectations.

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A 17-year-old immigrant fights to have an abortion

ON SEPTEMBER 11th, a 17-year-old girl was apprehended as she illegally crossed into America from Mexico. Now nearly 16 weeks pregnant, the girl—known as Jane Doe or J.D. to protect her privacy—would like to have an abortion. But her custodian at a detention centre in Brownsville, Texas—the Department of Health and Human Services (HHS)—is refusing her request. The government will "protect the well-being of this minor and all children and their babies in our facilities”, an HHS spokesman explained. “[W]e will defend human dignity for all in our care." On October 18th, a federal judge instructed the federal government to grant J.D.’s wish, but two days later, a three-judge panel on the Court of Appeals for the District of Columbia Circuit froze that order until October 31st by a 2-1 vote. If by that date the authorities have not found a sponsor “capable of providing for the child’s physical and mental well-being” who could help her procure an abortion, the court held, J.D. may return to court to plead her case...Continue reading

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How non-disclosure agreements can protect workplace abusers

IN RECENT days, as numerous actresses have described harrowing encounters with Harvey Weinstein, the disgraced film producer, attention has turned to the vehicle that helped keep these episodes quiet for years: non-disclosure agreements (NDAs). “We did not know we were working for a serial sexual predator”, thirty or so of Harvey Weinstein’s former employees write in an unsigned letter published in the New Yorker on October 19th. “We knew that our boss could be manipulative”, they go on. “We did not know that he used his power to systematically assault and silence women”. 

The authors of the letter say they want to end the enforced silence in which they have been held. “We know that in writing this we are in open breach of the non-disclosure agreements in our contracts”, they write. “But our former boss is in open violation of his contract with us—the employees—to create a safe place for us to work”. They ask the Weinstein Company to “let us out of our NDAs immediately” and to “do the same for all...Continue reading

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Northern Italy votes for more autonomy

MORE than 5m Italians took part on October 22nd in two referendums on granting autonomy to the rich, northern regions of Lombardy and Veneto, which drew inevitable comparisons to the independence ballot three weeks earlier in Catalonia. Few in Italy travelled as far to cast their votes as Maurizio Zordan. The 53-year-old executive recently moved to Grand Rapids, Michigan, to run the American subsidiary of his family firm, which sells shop fittings for luxury-brand stores. But he felt so passionately about the referendum that he flew back to vote in his home town of Valdagno.

The governments of the two regions staged the ballots ostensibly to give themselves a popular mandate to open negotiations with Rome (even though they could have demanded talks without a vote). Both administrations are dominated by the Northern League, which once advocated secession for the richer north.

As in Catalonia, few people opposed to more autonomy bothered to vote against it, so the...Continue reading

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Insurers Unload Problems Into Private Equity's Arms

With plenty of ready buyers looking to pounce, insurers’ struggling with promises from a high-rate past may soon get help.

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Martin Shkreli's Legacy Upends a Creative Financier

Martin Shkreli’s old company has turned into a dud investment for a financier who gained notoriety for​the wild ride taken by shares of DryShips.

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China's Latest Fintech Offering Looks Overpriced

Shares in Alibaba-backed Qudian have been on a wild ride since they floated in the U.S. last week. Investors should shop elsewhere.

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Xi Jinping’s thinking is ranked alongside Mao’s

 

THE constitution of the Chinese Communist Party defines what it means to be a party member and lists the organisation’s core beliefs. On October 24th a new principle was added to it: “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”—quite a mouthful. Xinhua, a government news agency, said the change was approved at the end of a weeklong party congress, an event that takes place every five years. Party leaders had been parroting the cumbersome phrase for several days since Mr Xi, who is the party’s general secretary as well as president, first mentioned it (albeit without his own name attached) on the opening day of the gathering. Bill Bishop, an American China-watcher, says he writes it as XJPTSCCNE “to avoid getting carpal tunnel syndrome”.

Talk of theory and whether someone is named in a document might sound recondite. But this has huge implications because it invests Mr Xi with more power than any Chinese leader since Mao...Continue reading

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A New CEO Isn't the Cure for BHP's Ills

Big BHP shareholder Elliott is agitating for a board review of management—but the miner’s current leadership isn’t really the problem.

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Japan’s ruling coalition retains a supermajority in snap election

LIKE him or, as some Japanese do after five years in office, loathe him, Shinzo Abe has proved a savvy political operator. Having already led his Liberal Democratic Party (LDP) to four successive electoral victories, the Japanese prime minister risked bringing an end to his long winning streak when he decided last month to dissolve the lower house of the Diet (parliament) 14 months early.

Mr Abe’s reputation had recently suffered as a result of his alleged links to two scandals (in which he denies any involvement). Right after he announced the snap poll, the governor of Tokyo, Yuriko Koike, formed a new political party that looked as if it might pose a serious challenge. Instead, Mr Abe won a big victory in the election on October 22nd. He will probably remain four more years at the country’s helm. Serving only half of this new term would make him modern Japan’s longest-serving prime minister.

The LDP took 284 of the 465 seats contested, the same number that it held...Continue reading

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Allergan: That $15 Billion Sure Went Fast

Last year Allergan PLC did one of the best deals in drug industry history. The drug company has been busily squandering the benefits ever since.

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Natural Gas Prices May Surprise This Winter

After nine years of booming production of natural gas, this winter could be one of the rare instances supply and demand conspire to drive up prices.

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Chinese Banks in Need of a Stiff Quality Check

When Chinese banks start reporting their third quarter earnings this week, investors should pay particular attention to their asset quality.

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Feeding Babies in China Is a Booming Business Again

The world’s largest infant-formula market is surprisingly volatile. Investors shouldn’t expect the good news for Western consumer groups to last.

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What Will the Next Fed Chief Do About Stocks?

With the Federal Reserve likely to be under new leadership next year, investors are asking how the central bank will approach the economy. They should also be asking how the Fed will deal with asset prices.

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Spain moves to dismiss Catalonia’s secessionist government

THE hesitation is over. On October 21st Mariano Rajoy (pictured, left), Spain’s prime minister, announced that his government will ask the Senate to give it powers to dismiss the administration in Catalonia and to call a regional election there within six months. Whether this leads to a solution to the six-week stand-off over Catalan independence, or to an intensification of Spain’s constitutional crisis, depends on how much resistance the government will now face in one of the country’s most important regions.

Mr Rajoy acted after Carles Puigdemont (pictured, right), the president of Catalonia’s devolved administration, refused a formal request to clarify or revoke an ambiguous declaration of independence which he made and then “suspended” on October 10th. The government has opted to activate Article 155 of the 1978 constitution, which gives it the power to compel a region to obey the law but has never before been used. The Senate is expected to approve the...Continue reading

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Spain moves to dismiss Catalonia’s secessionist government

 

THE hesitation is over. On October 21st Mariano Rajoy (pictured, left), Spain’s prime minister, announced that his government will ask the Senate to give it powers to dismiss the administration in Catalonia and to call a regional election there within six months. Whether this leads to a solution to the six-week stand-off over Catalan independence, or to an intensification of Spain’s constitutional crisis, depends on how much resistance the government will now face in one of the country’s most important regions.

Mr Rajoy acted after Carles Puigdemont (pictured, right), the president of Catalonia’s devolved administration, refused a formal request to clarify or revoke an ambiguous declaration of independence which he made and then “suspended” on October 10th. The government has opted to activate Article 155 of the 1978 constitution, which gives it the power to compel a region to obey the law but has never before been used. The Senate is expected to approve...Continue reading

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