Autumn blues

QUEASY calm is unpleasant, but it beats sickening panic. Late on September 29th Deutsche Bank’s share price lurched downwards again, to a 34-year low, after Bloomberg reported that “about ten” hedge funds had switched some business away from the troubled German lender. That capped a stomach-churning fortnight, after America’s Department of Justice (DoJ) requested $14 billion to settle claims that Deutsche mis-sold residential mortgage-backed securities (RMBSs) before the financial crisis. Hopes that it might settle with the DOJ for $5 billion-odd, though so far unfulfilled, have since brought uneasy respite. On October 5th Deutsche’s shares were some 20% above their nadir.  

A swift, affordable agreement would end uncertainty about the bill and quieten chatter, pooh-poohed by government and bank, that the German state might have to prop up the country’s biggest lender. It would also buy breathing space....Continue reading

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Active defence

WHEN firms merge, their bosses gush Panglossian jargon. So it was with the tie-up announced this week of Henderson Global Investors, an Anglo-Australian asset manager, and Janus Capital, an American one. Janus Henderson, as the combined business will be known, will become a “truly global” asset manager that will deliver “compelling value creation”, boasted its American half. Yet behind the boosterism lie the real fears of active fund managers: of losing business to passive ones—ie, those offering funds that simply track a market index. It is hard not to see the merger as, more than anything, a defensive move.

To be fair, the companies do have a strong business case for merging. Janus is deeply established in America and Japan. It is famous for having in 2014 hired Bill Gross, the “bond king”, when he abruptly left Pacific Investment Management Co, PIMCO, the firm he co-founded and turned into a giant. Henderson’s sales network is centred on Europe. The firms stand to gain more from selling each other’s products in new markets than they will lose from stepping on each other’s toes.

Moreover, the combined...Continue reading

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Capital punishment

AMONG the proud titans humiliated in the financial crisis of 2007-08 was GE, forced to take a government bail-out in 2008. In response it swiftly slimmed down its lending arm, GE Capital. But the regulators were still not happy. In 2013 they labelled it a “systemically important financial institution” (SIFI), ie, one big enough to pose a global risk. That imposed costly regulatory burdens and encouraged GE’s boss, Jeffrey Immelt, to announce in April 2015 the closure of GE’s finance division within three years.

In a remarkable corporate transformation, he is ahead of schedule. The disposal to Wells Fargo this week of GE’s global inventory-financing business means that GE has sold $193 billion of “ending net investment”, or ENI (an adjusted asset figure), in the past 18 months, covering more than 25 lending units.

It has taken almost a decade. But GE is, almost, an ex-bank. As Mr Immelt promised last year, it is also much simpler. It shed its SIFI status in June. Lending, in ENI terms, is down by 85% from its peak in 2008 (see chart) and now focuses on its core industrial businesses. Its reliance on short-term...Continue reading

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The green light

Vestine sees the light

WHEN Vestine Mukeshimana bought electric lights last month from BBOXX, an off-grid solar company, it helped her spot snakes in her garden and stopped thieves making off with her cow. In her Rwandan village she and her neighbours now cook after dark and their children study in the evenings. They have never heard of the Green Climate Fund (GCF), a UN initiative to bring climate finance to developing countries. But last month such household solar schemes became its first disbursed investment.

Understaffed and buffeted by politics, the GCF is struggling to define itself. It started operations last year after coaxing $10.3 billion from governments. Raising money was hard; spending it is proving even harder. Its board meets on October 12th in Songdo, South Korea, to weigh up proposals. It will also have to mull appointing a new boss. Héla Cheikhrouhou, the old one, has left, warning that the wrong projects are being financed.

The debate goes to the very purpose of the GCF. It was set up in 2010, part of a pledge to transfer $100 billion of climate cash a year by 2020. Developing countries had long...Continue reading

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An emerging threat

WHEN the returns on cash and government bonds in the developed world are zero, or even negative, it is hardly surprising that investors are casting their nets more widely. In the process the “search for yield”, as it has been called, has inevitably turned its attention to emerging markets.

One or two decades ago, emerging-market sovereign debt might have been the only beneficiary of these flows. But government bonds do not offer such a juicy return these days; the yields on ten-year bonds issued by Malaysia and the Philippines, for example, are around 3.6%.

As a result, investors are taking a big extra risk and piling into emerging-market corporate debt. So far this year bond funds in that sector have received inflows of $11.5 billion, according to HSBC. Their enthusiasm has been rewarded. Bloomberg’s emerging-market corporate-bond index has returned 13.4% since January 1st, compared with a return of just 4.4% from American Treasury bonds (see chart). This rally has occurred despite early-year wobbles about the strength of the Chinese economy and the impact of higher American interest rates.

The improved...Continue reading

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From base to gold

WHEN Marco Polo travelled to China in the 13th century, he found that among its wonders was “the secret of the alchemists”. Its imperial court could turn mulberry bark into money. It simply printed paper notes, decreed that people must accept them and killed counterfeiters. For a Venetian used to gold coins, the world’s first fiat currency was a marvel. Its value derived not from precious metal but from the credibility of the regime issuing it. This month China achieved another kind of monetary alchemy: to fashion a global reserve currency out of one that, by a range of criteria, does not yet merit such status.

On October 1st the yuan became the fifth entrant in the basket of currencies that forms the Special Drawing Right, a reserve asset created by the IMF. Immediate implications are limited. SDRs are a unit of account, not a real currency; inclusion in the basket does not force anyone to acquire the yuan. Symbolically, though, it is a big deal: the IMF’s seal of approval for China’s monetary system. It has deemed it safe for central banks around the world to add the yuan to their reserves. Dozens of central banks in fact already do so,...Continue reading

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How the other tenth lives

WHAT is the most important number in global economics? Judging by the volume of commentary it excites, America’s monthly payrolls report (released on October 7th) might qualify. Other contenders include the oil price or the dollar’s exchange rate against the euro, yen or yuan. These numbers all reflect, and affect, the pace of economic activity, with immediate consequences for bond yields, share prices and global prosperity—which is what economics is ultimately all about.

But if global prosperity is the ruling concern of economics, then perhaps a more significant number was released on October 2nd by the World Bank. It reported that 767m people live in extreme poverty, subsisting on less than $1.90 a day, calculated at purchasing-power parity and 2011 prices. The figure is not up-to-the-minute: such is the difficulty in gathering the data that it is already over two years out of date. Nor did the announcement move any markets. But the number nonetheless matters. It represents the best attempt to measure gains in prosperity among the people most in need of them.

The latest figures should arouse mixed feelings. They are simultaneously a cause for...Continue reading

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Career breaks

FRANK LLOYD WRIGHT quipped that “the modern city is a place for banking and prostitution and very little else.” Little did the early 20th-century architect know how banks would flourish, hoovering up much of the world’s talent by the early 2000s. But this golden age is ending: bankers’ jobs are at risk from the digital revolution on the one hand, and falling profits on the other.

Nowhere have bankers fallen from grace with such a bump as in Europe. This week ING, the Netherlands’ largest bank, announced that up to 7,000 jobs would be cut in the next five years. Commerzbank, Germany’s second-largest bank, had already reported it would cut its workforce by 9,600, nearly a fifth.

Across Europe, bankers are packing up. In Britain more than 10% of bank jobs were cut between 2011 and 2015; in Germany the workforce has shrunk by around 20% since 2001. Since the start of the year Credit Suisse has got rid of...Continue reading

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Amnesties international

INDIA and Indonesia share a problem: too little tax revenue. Of the 3.8% of India’s 1.3 billion people whose incomes are logged by the tax authorities, barely one-quarter cross the tax threshold. The share of Indians who declare annual incomes of more than 1m rupees (about $15,000) is just 0.1%. Among Indonesia’s 255m citizens, 27m are registered taxpayers. But in 2014 only 900,000 of them filed a return.

Indonesia’s tax-to-GDP ratio is around 11.4%—better than India’s 10.8%, but well below the OECD average of more than a third. Many people are simply not paying their dues. Both countries are stepping up efforts to bring dodgers in from the cold.

India, where an amnesty on undeclared domestic income expired on September 30th, has been stricter. Penitents, many of whom received warnings that they were being monitored, had to surrender 45% of their newly declared income. The government expects to rake in $4.4 billion from the 64,275 people who turned themselves in. That will dwarf the amount taken from a similar campaign last year, which targeted overseas income. In that one, India earned $373m from 633 individuals who owned up.

Indonesia has been...Continue reading

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Reversing roles

Peering towards Pakistan

IF IT were not that India and Pakistan have been lobbing live mortar rounds at each other for the past few days, forcing the evacuation of thousands of villagers from border zones, or for the fact that both states are nuclear-armed, the latest jump in tension between the eternal rivals might seem silly. On September 29th India launched what an army spokesman called retaliatory “surgical strikes” against “terrorist launch-pads” in Pakistani-held territory. This followed an attack by Pakistan-based fighters two weeks earlier that had left 19 Indian soldiers dead and prompted angry Indian calls for revenge.

But in a reversal of typical roles the apparent victim, Pakistan, denied that any such deadly Indian raids had taken place; it dispatched reporters to the border to check for themselves—under strict supervision, naturally. This embarrassed India’s government, which had won thundering applause from local media when it announced the revenge attacks. One animated cartoon pictured a giant prime minister Narendra Modi flicking his mosquito-borne Pakistani counterpart, Nawaz Sharif, into oblivion....Continue reading

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Help needed

THE timing could not have been worse for Afghanistan’s beleaguered president, Ashraf Ghani. On the eve of a major conference of international donors in Brussels, at which the Afghan government would show off its achievements after two years in office and present its vision for the future, Taliban insurgents stormed into the northern city of Kunduz in the early hours of October 3rd. The militants occupied civilian houses and made it all the way to the city’s central square, where they hoisted their group’s white-coloured flag.

It was almost a year to the day since the Taliban had seized parts of the city for the first time. A shaken Mr Ghani had promised then that it would never happen again. This time, within 24 hours, the Taliban retreated—at least from the centre—after the arrival of Afghan special forces and NATO “advisers” (backed by local militias, members of which are pictured). But the embarrassment had been inflicted. At about the same time, the Taliban also launched an attack from their southern front in Helmand, capturing a district on the edge of the provincial capital, Lashkar Gah. Only two of Helmand’s 13 districts are now...Continue reading

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Evil genius

IN A world starved of old-fashioned, plain-evil Bond villains, at least there is Kim Jong Un. Witness the cackling glee exhibited by the chain-smoking Mr Kim and his generals when they celebrated North Korea’s launch of a ballistic missile from a submarine in August; or the tear-choked euphoria of one newsreader, in traditional Korean dress, as she declared success in the country’s fifth and largest nuclear test last month. In a world where morality comes in many shades of grey, the nuclear ambitions of Mr Kim, running a gulag masquerading as a country, are painted in black and white.

To many American policymakers, the submarine launch and nuclear test mark a turning point. Until now, North Korea’s missiles have threatened South Korea and Japan. Now its nuclear and missile programmes have improved with such speed and determination that they begin to threaten the United States itself. A nuclear attack on Los Angeles? Time to think about it. The summer’s tests, says Andrew Shearer of the Centre for Strategic and International Studies in Washington, point to a possible “game-changer” for America. North Korea is rapidly climbing up to the top of...Continue reading

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Hammering Haiti

Hurricane Matthew, the strongest storm in the Caribbean in nearly ten years, struck Haiti and then moved on to Cuba. It is expected to reach Florida, Georgia and South Carolina. In disaster-prone Haiti, the poorest country in the Americas, winds of up to 230kph (145mph) and heavy rain forced some 10,000 people to take refuge in temporary shelters; more than 20 people have died. The storm destroyed crops and cut off southern regions from the capital, Port-au-Prince. Aid agencies fear that the flooding will worsen a cholera epidemic, which followed a massive earthquake in 2010. After the latest storm passed, the electoral council postponed the first round of a long-delayed presidential election, which had been scheduled for October 9th. The vote is a rerun of an election held in October 2015. Its disputed results provoked widespread protests. A caretaker president has governed the country since the last duly elected president, Michel Martelly, stepped down in February this year.  

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The once and future bully

“YOU are the United States, you are the future invader of the guileless America of Indian blood, which still prays to Jesus Christ and still speaks Spanish.” So goes the ode “To Roosevelt” of 1904 by Rubén Darío, a Nicaraguan writer. His poem was occasioned by the seizure of Cuba and Puerto Rico by the United States in the Spanish-American war of 1898, in which Theodore Roosevelt played a minor role that helped him win the presidency, and by his subsequent grabbing of Panama, a province of Colombia.

Darío was prescient: in the next three decades there would be more than 30 military interventions by the United States in the Caribbean basin, in the name of what Roosevelt called “the exercise of an international police power”. These events, and the asymmetry of power and wealth that underlay them, gave rise to an enduring tradition of anti-Americanism (or “anti-yanquismo”, since “América” to Spanish-speakers means the entire land mass). In recent times this has been identified with the left—with Fidel Castro of Cuba, the late Hugo Chávez of Venezuela and Evo Morales of Bolivia. But...Continue reading

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Mayor none-of-the-above

BRAZILIANS find local elections dull. But the first round of voting in this year’s contests, on October 2nd, was anything but. It showed, first of all, just how fed up voters are with conventional politicians. Even though voting is obligatory, nearly a fifth of the electorate did not show up, a record high for a local poll.

The second lesson is that the Workers’ Party (PT) of Dilma Rousseff, who was ousted from the presidency by congress in August, will struggle to regain anything like its former influence. It lost nearly two-thirds of the mayoral races that it had won in 2012, including in São Paulo, the biggest city (see chart). Though its rivals are hardly beloved by voters, that will make it harder for the PT to put up a fight in the next presidential election, in 2018.

In many places the sum of no-shows plus blank and spoilt ballots outstripped votes for the winner. In Belo Horizonte, Brazil’s fourth-largest city, a former chairman of a local football club will face the team’s former goalkeeper in a run-off on October 30th.

The anti-political mood owes much to recession and to the Petrobras scandal, which almost weekly exposes a...Continue reading

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What now?

ON SEPTEMBER 26th Colombia’s president, Juan Manuel Santos, gleaming in a white shirt, appeared before more than a dozen heads of government and other dignitaries to sign, with a pen fashioned from a bullet casing, an accord to end the country’s 52-year-long war with the FARC rebel army. The FARC’s top commander, Rodrigo “Timochenko” Londoño, equally resplendent, added his name. Less than a week later, on October 2nd, Colombian voters rejected the peace deal in a plebiscite. Mr Santos appeared on television, dark-suited as if in mourning. “I will not give up” on peace, he vowed.

The grim prospect is that, although no one wants it, Colombia could return to war. Mr Santos extended the ceasefire declared by the government in August, but initially only until the end of October. The message is double-sided. The government is still working for peace, but if necessary is prepared to resume hostilities. The short extension is partly designed to put pressure on the FARC. They read the ceasefire decision as an “ultimatum” and ordered their troops, which had begun to move toward demobilisation zones, to “secure positions”. Whether low-level...Continue reading

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Airline Price War in Europe Is Proving Cynics Right

Flights are cheap—as is talk of a more consolidated and disciplined European airline industry.

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Taxing patience

Man contemplating $1 billion loss

MITT ROMNEY, at least, knew it was coming. “I think we have good reason to believe that there’s a bombshell in Donald Trump’s taxes,” the 2012 Republican nominee warned in February. On October 1st the New York Times revealed Mr Trump’s 1995 state tax returns, which had been sent to the newspaper anonymously. They show a $916m loss—entered part-manually, because, his accountant said while confirming the leak’s authenticity, the figure was too big for his software to process. Set against later income, the loss could have allowed Mr Trump not to pay federal income taxes for many years.

Unlike any other major-party nominee since 1976, Mr Trump has kept his returns under wraps. His fondness for so-called “pass-through” businesses explains this. These shunt profits and losses directly onto their owners’ tax returns (in contrast to corporations, which file their own papers). Pass-throughs have become curiously common in America. According to one recent study, such firms now account for over half of all business income.

Pass-through firms, like...Continue reading

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Barack Obama’s open letter to his successor

IN A trenchant, unapologetically centrist essay for The Economist Barack Obama has urged the next president to shun the “crude populism” being peddled by both the right and the left, and to ensure that the American economy remains open to the world. In what is, in effect, an open letter to his successor on how to navigate a time of voter rage, Mr Obama argues that politicians calling for “anti-immigrant, anti-innovation protectionism” are forgetting an all-American principle—that when businesses remember the common good as well as profits, and free markets avoid unhealthy concentrations of power: “capitalism has been the greatest driver of prosperity and opportunity the world has ever known.”

No living politicians are named, but the open letter contains unmistakable rebukes for Hillary Clinton’s recent, campaign-trail flirtations with anti-trade rhetoric, as well as swipes at those—starting with Bernie Sanders on the left, and Donald Trump on the right—who call the American economy rigged, and demand it be...Continue reading

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Elliott Agitates Samsung in the Right Direction

Elliott Management’s call for change at Samsung Electronics pushes the company in a direction it is already heading. That should benefit shareholders.

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Why Hillary Clinton needs Michelle Obama

“NO!” the crowd roars, when, a few seconds into her speech at North Carolina State University, in Raleigh, Michelle Obama points out the tragic fact: she and her family will soon leave White House. At once, the chant begins, among the 6,000-odd fired-up students and others who have flocked to hear the popular first lady: “Four more years! Four more years!” This is presumably not quite what Hillary Clinton, for whom Mrs Obama was out on the trail, wants to hear.

Nowhere does the Democratic nominee encounter a reception quite like this; even at the Democratic convention, in Philadelphia, the crowd had to be skillfully worked up to achieve anything like this pitch of enthusiasm. And the crowd in Raleigh represents the younger voters that Mrs Clinton has struggled with particularly. Millennials, a group roughly defined as voters aged between 18 and 34 year-old, prefer Mrs Clinton to Donald Trump by a big margin. But they don’t like her nearly as much as they liked Barack Obama. In 2012, he won 67% of such voters; Mrs Clinton is currently getting around 40% of them, with the rest mostly split between Gary Johnson, the Libertarian nominee, and Donald...Continue reading

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Salesforce Should Leave This Bird in the Bush

The idea of buying Twitter has erased billions in Salesforce’s market cap. That may be only the start.

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Election Says Only So Much About Stocks

Election forecasts and politically focused investment portfolios are saying different things about who will become the next U.S. president.

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Shiller's Powerful Market Indicator Is Sending a False Signal About Stocks This Time

A close look at a Nobel Prize winner’s valuation metric shows that the market isn’t as highly valued as it appears.

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What Natural-Gas Prices Are Telling Us

With storage still bulging, the surge in natural-gas prices this year anticipates what might happen after this winter as the U.S. market finally returns to balance.

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Australia’s government is still dragging its feet on gay marriage

WARREN ENTSCH is a former crocodile-catcher, whose federal parliamentary seat covers a remote tropical region of Australia bigger than Bangladesh. His home state of Queensland and his party, the ruling Liberals, are both conservative. Mr Entsch calls himself “the stereotype redneck”. He is also one of Australia’s most zealous advocates for making gay marriage legal. Malcolm Turnbull, the prime minister, has called a non-binding referendum on the issue early next year. Politicians, however, are bitterly divided over whether asking voters to decide is the best approach. Their rancour will be evident when parliament reconvenes on October 10th.

Australia is one of the few rich countries that still maintain a ban on same-sex marriage. When it was enacted 55 years ago, the federal Marriage Act never defined marriage. Pitching for votes on “family values” before an election in 2004, John Howard, a former Liberal prime minister, amended the law to say that marriage is “the union of a man and a woman to the exclusion of all others”. Far from settling the matter, Mr Howard bequeathed political discord to his party. A recent opinion poll showed...Continue reading

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It's No Time to Shop for Tesco's Shares

Most executives try to under-promise and over-deliver. Tesco Chief Executive Dave Lewis used to be no exception—hence the share-price surge that followed publication of the U.K. grocery giant’s expectation-busting results.

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Deutsche Bank 'Coco' Pain Isn't What it Seems

As Deutsche Bank’s stock has been battered, anxiety has also gathered around its other forms of capital, notably convertible junior bonds known as cocos.

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Sompo-Endurance: Japan's Insurance Shopping Spree Restarts With a Bang

Sompo’s $6.3 billion deal for New York-listed insurer Endurance Specialty is sign of the negative-rate times.

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Your name will also go on the list

The vice-presidential debate was relatively civil, but still alarming

KEEP Donald Trump off stage and wash this presidential campaign’s mouth out with soap, and American politics is still broken. That is the result that emerged from a controlled experiment in political science conducted on October 4th—more formally known as the first and only vice-presidential debate of 2016.

The debate pitted Hillary Clinton’s running-mate, Senator Tim Kaine of Virginia against Mr Trump’s sidekick, Governor Mike Pence of Indiana. The two men, both sons of the Midwest with a neat line in folksy, aw-shucks modesty, spent quite a lot of their 90-minute clash stressing how much they respected each other’s faith and essential decency, even as they sparred about tax rates, how to fight terrorism and other questions of policy. As the pair bragged, competitively, about their Middle American credentials, Mr Pence took an early start by announcing: “I grew up with a cornfield in my backyard”. Mr Kaine countered that he had worked with Jesuit missionaries in Honduras as a young man. Neither man swanked about the size of his genitals, called anyone fat or declared himself a genius. With Mr Trump and his almost-equally-disliked rival Hillary Clinton absent from...Continue reading

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Constellation Brands' Party Rolls On

Constellation’s market value has more than tripled over the past three years thanks to a key deal expected to continue reaping benefits.

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Google Brings It Home

The internet giant has a good chance of catching up to Amazon.com in connected speakers.

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Deutsche's dilemma

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Polish women skip work to protest against an abortion ban

EDYTA, a project manager at a telecoms company, put on her black work outfit on October 3rd just as she would on any Monday morning, but she did not go to work. Instead she joined a crowd of an estimated 30,000 people, mainly women, on Warsaw’s Castle Square to demonstrate against a proposed tightening of Poland’s restrictions on abortion. The protest was part of a one-day women’s strike that brought black-clad female marchers into the streets in cities across the country. The so-called “black Monday” protest was one of the most striking signs yet of resistance to the cultural conservatism that has taken hold in Poland since the installation last year of a government led by the right-wing Law and Justice (PiS) party.

Poland already has some of Europe’s toughest restrictions on abortion; indeed, Edyta first protested against the adoption of the current law in the early 1990s. (The existing law bans abortion except in cases of rape, severe congenital defects or a threat to the mother’s health. Some women obtain abortions illegally, others travel abroad.) The new draft law, proposed by anti-abortion organisations and backed by the Catholic...Continue reading

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Bonds and Stocks: It's Getting Complicated

September saw unusual movements in stocks and bonds. The happy balance that has rewarded fixed-income and equity investors may be shifting.

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Apple's Price Is Right for iPhone 7

A higher average selling price for new iPhones could pay off well for Apple.

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Good Case for LVMH's Groovy German Acquisition

LVMH Moët Hennessy Louis Vuittonhas bagged a good maiden deal in Germany. Just don’t expect the usual cost-cutting or cross-selling to boost profits.

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“The Birth of a Nation” is controversial in more than the intended way

THE road from Hattie McDaniel’s turn as Mammy in “Gone with The Wind”, which earned her an Oscar in 1940, to “12 Years a Slave”, which won Best Picture in 2014, was long and steep. Mammy is the epitome of Hollywood’s old, morally purblind plantation mythology; Steve McQueen’s film strove to capture slavery’s incessant terrors. “The Birth of a Nation”, which is released this week, asks audiences to make another interpretive leap: to see that, since slavery was evil, it was legitimate, even righteous, for slaves to rise up against their tormentors. It raises questions about the past’s grip on the present, about injustice and redemption, but in more than the intended way.

“The Birth of a Nation” retells the story of Nat Turner, leader of a slave rebellion in Virginia in 1831. That title, appropriated from D.W. Griffith’s racist classic of 1915, signals its historiographical ambition. An in-cinema voter-registration drive underscores the implicit link with today’s combustible racial politics, in which black Americans are renewing the fight against discrimination even as many whites believe it no longer exists—and as Donald...Continue reading

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Evergrande: Already Bloated Chinese Developer Bulks Up Where It Shouldn't

Evergrande, China’s biggest developer by assets, is finding yet a new way to make itself even bigger. But bigger might just be more problematic.

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Room for Seconds at Darden Restaurants

Darden Restaurants looks like an underappreciated value following its transformation.

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Why Hillary Clinton has the edge in Virginia

AS BATTLEGROUND states go, Virginia appears to be relatively unworrying for Hillary Clinton. Even before the Democratic presidential nominee selected the state’s junior United States senator, Tim Kaine, as her vice-presidential running mate—a move that pundits believe slightly strengthens her hand here—Virginia appeared to be locking down for the Democratic ticket. So confident is Mrs Clinton that its 13 electoral votes are hers that she didn't advertise on Virginia television in September and isn’t planning to do so in October.

Donald Trump has consistently trailed Mrs. Clinton in statewide polling—sometimes by double-digits. A new poll published by the Wason Center for Public Policy at Christoper Newport University on October 3rd put her seven points above Donald Trump; a poll by the centre published on September 26th, the day of the first presidential debate, showed her leading by six points. 

On September 24th, Mr Trump visited the state for a rally in Roanoke, a small, heavily Democratic city in the Blue Ridge Mountains. It was a perch from which he could reach out to rural voters, with whom he is popular, not just in Virginia but in four...Continue reading

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A New Worry for Banks and the Economy

In a worrying sign for banks, commercial loan growth slowed sharply in the third quarter. The reasons are unclear.

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Saving Colombia’s peace agreement

JUAN MANUEL SANTOS, Colombia’s president, took a gamble with his country’s future on October 2nd, and lost. After four years of talks in Havana, negotiators from his government and the FARC rebel army had reached an agreement to end a 52-year war, Latin America’s longest-running conflict. Mr Santos asked voters to approve it in a referendum, which was held this weekend. By a very slim margin, they said “No”. That shocking result leaves the peace process in limbo, plunges the country into uncertainty and weakens the president. Both sides have said they will honour, for the time being at least, the ceasefires they declared this summer. But it is far from clear whether and how the truce can be sustained over the long run.

The government did not see defeat coming. In a recent interview with The Economist Mr Santos said he was certain the “Yes” camp would win, and seemed unconcerned about the margin of victory. “You win with half, plus one,” he said. The margin of defeat was almost that narrow: “No” won 50.2% of the vote. Turnout was low; just 13m of Colombia’s 35m voters went to the polls. Hurricane Matthew probably...Continue reading

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Janus-Henderson: Active Managers Get Defensive Together

Janus Capital Group of the U.S. isn’t crisis-stricken like some former prey, but Henderson Group is still getting the better value in their $6 billion so-called merger of equals.

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Viktor Orban fails to win his referendum against migrants

TO JUDGE from the hearty applause that greeted Viktor Orban as he took to the podium in Budapest’s Balna Cultural Centre, you might assume it had been a good night for Hungary’s prime minister. Hardly. Mr Orban’s call for Hungarians to reject European Union refugee quotas in a referendum was heeded by 98% of those that voted. But despite the government’s furious campaigning, turnout was well below the 50% threshold needed to make the vote binding. In his victory speech Mr Orban skated over this setback, instead railing against Brussels and vowing to insert the result into Hungary’s constitution. A government spokesman told The Economist that the failure to attract enough support made no political difference.

Yet make no mistake: the result is a monumental embarrassment. For weeks Mr Orban’s government had briefed reporters that the referendum was no mere legal tweak or response to current events. Indeed, it would not even have applied to the sole relocation decision already taken by the EU, under which Hungary is supposed to take 1,300 asylum-seekers off the hands of Italy and Greece. (The Hungarian and Slovak governments are...Continue reading

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Alibaba Needs To Prove It Can Reach Great Heights

With shares near a post-IPO high, Alibaba has to show its non-core businesses can deliver.

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Pound Will Feel Pain as Brexit Clock Ticks Faster

For many markets buoyed by central banks, buying dips has proved a profitable strategy. For sterling, selling strength looks a better strategy—even if the U.K. economy continues to perform better than many feared in the short term.

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U.S. Manufacturing Faces a Key Test

ISM data Monday should offer clues on whether manufacturing’s recent weak spell is a blip or more problematic.

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Dragged from the temple of justice yet again

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

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

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