Britain seeks friends at Europe’s top table

THERESA MAY, Britain’s prime minister, arrived in Brussels on October 19th for an EU summit with a cacophony of voices in her ears. Hardliners in her Conservative Party were urging her to stick two fingers up to the intransigent Europeans and walk away from the deadlocked Brexit negotiations. Business groups and Philip Hammond, her chancellor, were growing increasingly fretful over the urgent need to agree a “transitional” deal to avoid a regulatory cliff-edge once Britain leaves the EU in March 2019. As if to rub it in, soon after Mrs May arrived Lloyd Blankfein, the CEO of Goldman Sachs, tweeted mischievously that after Brexit he expected to spend a lot more time in Frankfurt, a European rival to the City of London, Britain’s financial heart.

This week’s summit was once supposed to mark the moment when the EU would agree that the Brexit divorce talks—focused on the rights of European citizens in Britain after Brexit, the status of the Irish border and a settling...Continue reading

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The Downside of Big Profits at Google and Facebook

Google, Facebook and Twitter face serious questions about their outsize influence. Strong earnings reports won’t help that.

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P&G Does Itself No Favors Post-Peltz

Life isn’t getting easier for Procter & Gamble after its unconfirmed victory in the proxy fight with activist Nelson Peltz.

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Catastrophes Everywhere, but Big Insurers May Do Alright

Much uncertainty remains around the costs from recent storms and earthquakes that will fall on investors. But for the big traditional groups like Swiss Re and XL, the storm damage may not be that bad.

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General Electric's Kitchen Sink May Still Have Holes

General Electric left its investors unhappy once again. At least management seems to be getting the message this time.

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How the Stalled Aramco IPO Could Hamper Hong Kong's Dreams

An Aramco listing in Hong Kong would stoke the city’s ambitions to become the place where Chinese capital meets international companies.

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Chenault's Unfinished Business at AmEx

American Express CEO Ken Chenault is going out on a high note, but his successor will have to contend with fundamental questions about the company’s business.

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The virtue of Ecuador’s Leninism

IN FEBRUARY Rafael Correa, Ecuador’s then-president, compared the country’s run-off election to the battle of Stalingrad. “We are going to fight the worldwide right wing,” he said. His man, Lenín Moreno, duly scored a narrow victory against Guillermo Lasso, a conservative banker. Yet with Mr Moreno in office for less than five months, Mr Correa has now turned his rhetorical fire against his former ally, calling him “a hypocrite” and a “compulsive liar” who has achieved “what the opposition didn’t manage in ten years, to discredit our revolution”.

Mr Correa is alarmed because, to the surprise of many, Mr Moreno has turned out to be his own man with his own ideas. And that has implications beyond Ecuador, a country of 17m people that was notorious for political instability before Mr Correa took charge in 2007 as part of a wave of populist leftist leaders in South America. Benefiting from an oil windfall, he ruled as a paternalist autocrat. In what he called a...Continue reading

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Venezuela holds another flawed election

“THIS only happens in Venezuela,” boasted Nicolás Maduro as the electoral commission declared the results of a long-delayed regional election on October 15th. For once, the country’s president (pictured, with moustache) may have been right. In the midst of an economic calamity largely of his own making, with opinion polls showing support among Venezuelans for his government at less than 30%, his United Socialist Party (PSUV) won 18 out of 23 governorships and more than half the national vote.

“Neither Venezuelans nor the world will swallow this fiction,” declared Gerardo Blyde, the campaign director of the opposition Democratic Unity coalition (MUD). The electoral commission, which takes its orders from Mr Maduro’s regime, has published fiction before, most recently in July, when it claimed that more than 8m people voted to select members of a “constituent assembly”, a sham parliament designed to bypass the opposition-controlled national assembly. The commission...Continue reading

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At mid-term elections, Argentina chooses between sobriety and Peronism

IF THE polls are right, Mauricio Macri, who narrowly won Argentina’s presidency against the odds two years ago, will strengthen his hand in mid-term elections on October 22nd. A good result in the ballot, in which a third of senate seats and half of those in the lower house of congress are being contested, would help him to complete economic and institutional reforms already begun. If that happens, Argentina may at last begin to recover the prosperity for which it was long ago fabled.

Success for the pragmatic, business-minded Mr Macri may also mark the political demise of Cristina Fernández de Kirchner and the ruinously populist brand of Peronism that she espoused for eight years as president until 2015. Ms Fernández, who succeeded her husband, Néstor Kirchner, as president, is expected to win one of three senate seats in Buenos Aires province, by far the most populous. But if, as pollsters predict, her party fails to win the most votes in what was traditionally a Peronist...Continue reading

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Multilateral lenders vow openness about their carbon footprints

THE World Bank gets a lot of flak. Developing countries clamour for a bigger role in its management. President Donald Trump’s administration lambasts it for lending too much to China. Employees are in open rebellion against their boss, Jim Yong Kim. Now the embattled institution faces criticism from a traditionally friendlier quarter: environmentalists. They accuse it and other multilateral development banks (MDBs) of not being upfront about their true carbon footprint.

That must hurt. After all, MDBs pioneered climate-friendly finance. Ten years ago the European Investment Bank issued the world’s first green bond to bolster renewables and energy-efficiency schemes. The World Bank has not backed a coal-fired plant since 2010. In 2011-16 it and the five big regional lenders in the Americas, Asia, Africa and Europe offered developing countries a total of $158bn to help combat climate change and adapt to its effects. They disclose the amount of carbon dioxide emitted by their...Continue reading

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A rash of bankruptcies hits Chinese lenders backed by state firms

THE Communist Party dominates China’s economy and uses state-run companies, which it controls with an iron fist, to enforce its diktats. Or so the theory goes. Reality is messier: the party often struggles to monitor state-owned enterprises (SOEs), let alone to get them to toe its line. As it convenes its five-yearly congress, one of the financial system’s dodgiest corners has served up a reminder of the limits to its power.

In the past two months at least seven online lenders backed by SOEs have collapsed. It was a business none should have been in, far removed from the industries they were supposed to focus on. The money potentially lost is trivial—roughly 1bn yuan ($150m), compared with government assets worth more than 100trn yuan. Still, these cases highlight how hard it is for the party to stamp its authority on the vast state sector.

The troubled SOEs include distant subsidiaries of the national nuclear company, an aviation company and a big energy...Continue reading

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Workers are not switching jobs more often

How should recessions be fought when interest rates are low?

A Lloyd’s report urges insurers to ask “what if?”

ON JULY 7th disaster was narrowly averted when an Air Canada passenger plane, trying to land on a full taxiway at San Francisco airport, pulled up just in time. Five seconds longer, and it might have crashed into fully loaded planes and killed over 500 people, in potentially the deadliest aviation disaster ever. Instead, the incident became a non-event—not just in collective memory but also in insurance. With no losses, there was nothing to log. Yet ignoring such near-misses, argues a report published this week by Lloyd’s of London, an insurance market, and RMS, a risk-modeller, is a missed opportunity.

Counterfactual “what if” thinking may be an enjoyable pastime for historians—“What if Hitler had been assassinated?” being one favourite—but is not common among underwriters. They prefer to base estimates of future risk—and hence premiums—on hard data of what happened in the past, eg, the number of aeroplanes that crashed and the total losses incurred. Since actual...Continue reading

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Politics ensnares South Africa’s biggest asset manager

Matjila, survivor

THE rot in South African politics, which has eaten away at state companies, is spreading. This week McKinsey, a consultancy, apologised for the “distress” it had caused the South African people. Political mud had already drowned Bell Pottinger, a British public-relations firm, and forced resignations at KPMG, an auditor. So the shenanigans at the government-owned Public Investment Corporation (PIC), have set off alarm bells. One concern is an apparent attempt to oust Dan Matjila, its boss. A linked worry is whether PIC funds will be used to prop up state businesses.

The PIC is a lucrative prize: it is Africa’s largest money manager, controlling 1.9trn rand ($140bn) of assets, mostly the pensions of state employees, and holding 11% of shares in South Africa’s biggest 25 companies. So anonymous allegations against Mr Matjila, including the claim that he had misdirected funds to his girlfriend’s business, naturally provoked a furore. On...Continue reading

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Higher taxes can lower inequality without denting economic growth

INEQUALITY is one of the big political issues of the 21st century, with many commentators citing it as a significant factor behind the rise of populism. After all, nothing could be more indicative of the triumph of the common man than the elevation of a property billionaire to the American presidency.

A new IMF report* looks at how fiscal policy can help tackle inequality. In advanced economies, taxation already has an impact. The Gini coefficient (a standard measure of income inequality) is around a third lower after taxes and transfers than it is before them. But whereas such policies offset around 60% of the change in market inequality between 1985 and 1995, they have had barely any impact since.

That is because of a change in policy direction. Across the West, taxes on higher incomes have generally fallen. This could be for a number of reasons, the IMF says. The tax take from high earners could have become more “elastic” (ie, sensitive to rate changes); in a mobile...Continue reading

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New Zealand’s Labour Party turns defeat into triumph

FOR the first time since the 1920s, a losing party will form a government in New Zealand. Labour came second in last month’s election, claiming 46 seats with a shade under 37% of the vote. But after the horse-trading had finished, it emerged with political power. It has entered a coalition with New Zealand First, a populist party that won nine seats and held the balance of power. By relying as well on the votes of the Green Party’s eight MPs (who remain outside the coalition), Labour secured a narrow majority in the one-house, 120-seat parliament. The party was polling terribly before the campaign, but recovered under a charismatic new leader, Jacinda Ardern, who has been the boss for less than three months. Her coalition ousts the soft-right National government, which has been in power for nearly a decade. At just 37 years old, Ms Ardern joins a growing club of youthful leaders promising to shake up politics.

The result will incense the conservatives, led by the outgoing...Continue reading

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Witches are still hunted in India—and blinded and beaten and killed

Not much to show for her guile

AT LEAST Ramkanya Sen is alive. The grandmother spent three weeks locked in a windowless storeroom in the searing heat, refusing to eat, until a tip-off alerted a journalist to her predicament. The rescue came just in time, say doctors who revived Ms Sen (pictured) at a government hospital in Bhilwara, a small city in southern Rajasthan. Sent home in August, she is still weak, shaken and disoriented, but safe for now.

Indian police records suggest that on average more than 150 less lucky women die every year for the same reason that Ms Sen was locked away: being fingered as a dayan (witch). They are burned, hacked or bludgeoned to death, typically by mobs made up of their neighbours and, sometimes, their own relatives. Ritual humiliation often precedes death. A suspected witch may expect to be stripped naked, smeared with filth, dragged by her hair and forced to eat excrement. Kanya Devi, from a village...Continue reading

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Voters are not impressed with Japan’s new opposition party

THE candidate of the Constitutional Democratic Party (CDP), Akira Nagatsuma, spoke from the top of a gaisensha, a van adorned with banners and loudspeakers of the sort favoured by campaigning Japanese politicians. Later on, down the road, the hopeful from the Liberal Democratic Party (LDP), Fumiaki Matsumoto, also addressed passers-by from atop a campaign vehicle, as an aide held an umbrella over his head. But Akihiro Araki, the candidate of the Party of Hope in Tokyo’s seventh district, is “driving around waving” rather than speaking, “because of the rain”, a press officer says.

That seems an apt metaphor for the rapidly diminishing expectations for the Party of Hope, a new national force founded with fanfare by Yuriko Koike, the governor of Tokyo, hours before the prime minister, Shinzo Abe, called a general election for October 22nd. Aiko Kida, a 39-year-old housewife who voted for Ms Koike as governor, says she would like to vote for the...Continue reading

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The half-million Rohingya refugees in Bangladesh will not leave soon

Emmanuel Macron’s employment reforms may not go far enough

TOY robots line Jérôme Veneau’s barber shop in Paris, and a Superman symbol adorns one wall. The decor is appropriate: Mr Veneau’s efforts to earn a living are robotic and tireless. His first 200 haircuts each month, he says, pay for his social charges and taxes. Only then does he make his first cent of take-home pay.

His customers are so plentiful that he regularly turns people away. Yet after 29 years, he remains a solo practitioner. When he falls ill or takes lunch, the shop closes. Why not hire someone to help? “Never, the whole system is a mess,” he says. He once had an employee, but the man claimed to have been injured by repetitive scissor-snipping. A court ordered Mr Veneau to pay €17,000 ($20,000)—some to the worker, some to the state. His family stumped up the cash. “I’ll never hire again,” he says.

Mr Veneau voted for Emmanuel Macron, France’s reform-minded young president, who vows to unblock the country’s labour markets. In a...Continue reading

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Georgia and Abkhazia are making Nutella’s job harder

A few isolated nuts

ISOLATED by the Black Sea and Russia, Georgia has spent the past few decades binding itself closer to the rest of Europe. In this effort, hazelnuts play a crucial role. In 2007 Ferrero, an Italian company, set up a branch in Georgia to supply the key ingredient of its signature product: Nutella, the chocolate-hazelnut paste that is the most European of all breakfast spreads. The country has since become the world’s third-largest producer, behind Turkey and Italy. Hazelnuts are Georgia’s biggest export after copper ore.

In 2014 Georgia and the European Union concluded a Deep and Comprehensive Free Trade Agreement (DCFTA). Yet rather than making Nutella’s supply chain smoother, the DCFTA could render it a bit sticky. About 10% of the hazelnuts Georgia exports come from the Russian-backed breakaway territory of Abkhazia, which has enjoyed de facto independence since its war of secession in 1992-93. Georgia has no formal trade relations...Continue reading

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Alexei Navalny tells Russians they have a choice

Calling on the kids

“HELLO, Khabarovsk!” Alexei Navalny, Russia’s opposition leader and would-be presidential candidate, booms his greeting from a makeshift podium on the outskirts of this far-eastern city, a statue of a victorious revolutionary-era Soviet partisan looming behind him. The young crowd of several thousand, dotted with red balloons and banners reading “Navalny 20!8”, goes wild. After eight rallies across the country the candidate’s voice is hoarse, but he is fired up.

The rally, Khabarovsk’s largest in years, could be part of an American presidential campaign. Tall and charismatic, Mr Navalny looks the part. Russia’s electoral politics have long been neutered by President Vladimir Putin, who decides who can or cannot run; the population assumes the role of a television audience with little say over the show’s content. Mr Navalny’s campaign threatens to change that.

There are five months to go before Russia’s...Continue reading

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Sebastian Kurz is flirting with the far-right Freedom Party

SEBASTIAN KURZ has a problem. On October 15th Austria’s 31-year-old foreign minister scored an impressive election victory, somehow presenting himself as a credible messenger of change even though his centre-right Austrian People’s Party (ÖVP) has been in office for 30 years. His energy and charisma kept the Freedom Party (FPÖ), a far-right outfit with neo-Nazi roots, from running the country; it had led in the polls for two years before Mr Kurz took over as chairman of the ÖVP in May. But to govern Mr Kurz needs a coalition partner, and the FPÖ, which came third in the election, is his first choice. Now Europe is left wondering whether Austria’s political whizz kid is fending off a populist uprising, or preparing to lead it.

Mr Kurz spoke to your columnist this week. He was fresh from a day spent discussing the vagaries of coalition politics with Austria’s president, and taking a congratulatory call from France’s Emmanuel Macron. Should he become chancellor, Mr Kurz will be...Continue reading

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Jeff Flake’s anti-Trump manifesto could cost him his job

EVEN if Donald Trump had not become president, Senator Jeff Flake of Arizona would probably still be facing a challenge in the Republican Senate primary in 2018. Grassroots conservatives in Arizona have long distrusted him for his perceived apostasy, especially his support for immigration reform. But Mr Trump is the president, and Mr Flake has cast himself as a voice of intraparty opposition to him, transforming his bid for a second term into a battle for the soul of the Republican Party.

Alabama provides a glimpse of what may be in store. On September 26th, Roy Moore, a populist conservative jurist, defeated Senator Luther Strange, the incumbent, in the state’s Republican primary. Though Mr Strange had the support of the president, it was Mr Moore who carried the banner for those who want to “drain the swamp,” as Mr Trump is fond of saying. Mr Strange’s defeat was a loss for the establishment, and political prognosticators now look to other states, Arizona included, to see if the far-right rebellion will...Continue reading

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After all but defeating the jihadists, Iraq’s army turns on the Kurds

WHEN a leader loses half his realm and his government’s main source of revenue and shatters his people’s dreams of independence, all in a couple of days, an apology might seem in order. But Masoud Barzani, the president of Iraq’s Kurdistan region, is not offering one. In the face of a lightning Iraqi advance, Kurdish forces retreated this week from territory they had occupied since the fall of Saddam Hussein in 2003. Mr Barzani blamed “traitors” and said he would fight another day.

The sudden collapse of Kurdish Peshmerga fighters, and with them the Kurds’ cherished dream of statehood, contrasts awkwardly with the inflated promises Mr Barzani made before the rout. Last month he insisted on staging a referendum on Kurdish independence, not just within the Kurdistan region’s original borders, but also in areas his forces had captured in the war against the so-called Islamic State (IS) since 2014. These included the oil-rich city of Kirkuk, which would have been the cash cow of...Continue reading

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The boycott of Qatar is hurting its enforcers

Doh! The embargo isn’t working

THE largest insurer in the Gulf should have taken out a policy on itself. Last year Qatar Insurance collected about 110m rials ($30m) in premiums from its Abu Dhabi office. But in September it announced that, because of a diplomatic dispute, the United Arab Emirates (UAE)would not renew its business licence, forcing it to close its branch in the Emirati capital. Its stock price has fallen by 30% since the beginning of the summer.

It has been more than four months since Saudi Arabia, the UAE, Bahrain and Egypt closed their borders and cut diplomatic ties with Qatar. The so-called quartet wants the little gas-rich emirate to stop supporting Islamist groups, including the Muslim Brotherhood, and to shut down Al Jazeera, the Arab world’s most popular broadcaster, which Qatar sponsors. The dispute has become personal, with diplomats hurling insults in Cairo last month. Officials in Doha, the...Continue reading

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John Magufuli is bulldozing the opposition and wrecking the economy

CRITICALLY ill in a hospital in Nairobi, Tundu Lissu, the chief whip of Tanzania’s main opposition party, Chadema, is a lesson to those who would criticise the Tanzanian president, John Magufuli (pictured). On September 7th Mr Lissu was gunned down in broad daylight near his house in the sleepy administrative capital, Dodoma, after returning from a session in parliament. The attempted assassination came just two weeks after he was arrested—for the sixth time—for such things as insulting the president. It is not clear who was behind the attack. A month later, the government has yet to make any arrests. Mr Lissu had previously complained about being followed, and said he worried he might be killed. “This cowardly attack on one of Tanzania’s most fearless and prominent politicians raises concerns about the safety of all dissident voices in the country, at a time when space for dissent is quickly shrinking,” said Amnesty International, a human-rights group.

Tanzania, a country of...Continue reading

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The loneliest plant on earth

WOOD’S CYCAD is a striking plant, tall with a shaggy green crown and bright orange cones. But despite its good looks, it will never find a mate. “The loneliest plant in the world, right here,” a guide tells a golf cart full of visitors touring the Durban Botanic Gardens. Found in a Zululand forest in 1895, it is the only cycad of its kind, and a male. Without a female it will never reproduce sexually, though offshoots have been used to make clones of it. The sense of its isolation is magnified by the security cameras trained on the plant to thwart thieves.

Cycads, which resemble spiky palm trees and bear pineapple-shaped seed cones, trace their lineage to the time of the dinosaurs. But some species might not be around much longer. They are the world’s most threatened plant group, according to the International Union for the Conservation of Nature.

South Africa’s cycads, most of which are found nowhere else in the world, are especially threatened, despite laws...Continue reading

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Fiscal conservatism, RIP

TO BE shocked by the Republicans’ latest enthusiasm for deficit spending, you would have to have taken seriously their former disdain—nay, horror!—for it. Back when Barack Obama was in charge, Mitch McConnell said the deficit was America’s “most serious long-term problem”. The Republican National Committee (RNC) warned darkly that the Democratic president’s profligacy was putting “America’s future in the balance”. But this was a charade, of course. Republican congressmen have long preached the virtues of prudence in opposition, then let borrowing rip in power. This week Mr McConnell duly corralled support among his fellow Republican senators for a budget bill designed to facilitate a tax cut that, if passed, might add over $2trn to America’s $20trn national debt. The RNC has said it considers this an opportunity for hardworking Americans to “get their time and money back”. The deficit is “a great talking point when you have an administration that’s Democrat-led,”...Continue reading

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Governors’ races have become contests between bajillionaires

Citizens for Rauner

THOUGH the primary is not until next March, the election to be the next governor of Illinois is already on track to become the most expensive in state political history, overtaking the $280m fight for the governorship of California in 2010 between Jerry Brown and Meg Whitman, a billionaire businesswoman. Election spending in Illinois has increased by 741% this year compared with the same period in the previous election, according to the Illinois Campaign for Political Reform, an NGO. The candidates burned through $15.6m in the past three months, led by J.B. Pritzker, a self-funded billionaire businessman running for the Democrats, who splashed out $11.1m, mostly on television advertising, followed by Bruce Rauner, the self-funding Republican incumbent, who spent $2.6m, even though he has not confirmed yet that he is running for re-election. Mr Rauner and Mr Pritzker have so far raised just under $100m between them. In the sort of twist...Continue reading

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America’s first opioid court is working well

“YOU got to be selfish. You got to do what’s best for you,” says Craig Hannah, a judge in Buffalo, New York, to the young man standing before the bench. “Yeah, I know,” replies Patrick Bruno, “It’s so hard.” Mr Hannah runs the country’s first opioid court. Mr Bruno, who has appeared before him regularly since the court opened in May, is struggling to stay away from friends who are still getting high. “They’re not helping,” the judge says. “I want you to show me you’re serious.”

Buffalo’s experiment began after Jeffrey Smith, who heads the district’s treatment courts, noticed that many of those arrested while high on opiates did not live long enough to make their court dates. The city has a history of developing such specialist courts. In the 1990s it was an early adopter of drug courts, which try to mentor defendants through rehabilitation rather than sending them to prison. Later it introduced mental-health courts. It created the first...Continue reading

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Two white-shoe Republican candidates go full Breitbart

EVER since Donald Trump’s victory emboldened the Republican Party’s nativist wing, the dirtiest words with which a Republican can be tarred have not four letters, but 8 and 13: “moderate” and “establishment”. Unfortunately, those accurately describe the two Republican candidates for governors’ mansions this year.

In New Jersey, Kim Guadagno has spent two terms as lieutenant-governor. Mrs Guadagno is pro-choice, believes that greenhouse gases contribute to climate change and has addressed her state’s LGBT Chamber of Commerce. Before Ed Gillespie decided to run for governor of Virginia he was a lobbyist, political strategist, head of the Republican National Committee, adviser to George W. Bush and Mitt Romney and, in college, a Senate car-park attendant—hardly the outsider that the Republican base seems to crave.

But recent commercials suggest both candidates have turned Trumpian, meaning nativist, race-baiting and unconcerned with accuracy. Mrs Guadagno’s...Continue reading

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The story of Puerto Rico’s power grid is the story of Puerto Rico

Elon, where are you?

IN A room beneath the smokestacks of the Aguirre steam plant in south-eastern Puerto Rico, an engineer points to a colourful poster entitled “How Electricity Arrives at Your Home”. In normal circumstances, explains Alexis Torres, burning oil turns water to steam, which spins mechanical turbines and sends energy out through power lines that criss-cross the island territory. Hurricane Maria made landfall 30 miles from the Aguirre steam plant. The south-east, where coal and oil plants generate much of the island’s electricity, suffered the worst damage.

A month later, 82% of Puerto Ricans still lack power. The island operates a centralised electricity grid: the plants in the south-east provide power to beach resorts in the north-west and metropolitan San Juan; 80% of the power lines were destroyed by the storm. Restoring them is a finicky process. By October 10th 16% of the island’s power had been restored. Later that day it...Continue reading

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Counties that voted for the president get more in disaster relief

“NOBODY could have done what I’ve done for Puerto Rico with so little appreciation,” President Donald Trump announced on October 8th. Boricuas, as denizens of the island are known, have yet to display the gratitude their president seeks. The islanders have been particularly galled by the contrast between his perceived slights to Puerto Rico and his all-hands-on-deck rhetoric during Hurricanes Harvey and Irma, which pummelled Texas and Florida. Explaining the difference, Rick Wilson, a Republican consultant critical of the president, has suggested Mr Trump thinks of Puerto Ricans not as American citizens, but rather as “sea Mexicans”.

Even in an era when polls show record levels of partisan division, a few things, such as disaster relief for those lacking food and water, ought to transcend political calculation. In fact, electoral considerations appear to have been a big factor in how the government allocates aid ever since Congress expanded the president’s discretion over...Continue reading

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The president’s indecision on health care is costly for middle-earners

INSURANCE is supposed to be about the careful management of risk. Recently, for America’s health insurers, it has had a lot to do with keeping track of President Donald Trump’s Twitter feed. On October 12th the White House announced that it would cut off payments to insurers that underpin parts of the Affordable Care Act (ACA), better known as “Obamacare”. The move will knock already wobbly markets, a prospect that seems to delight Mr Trump. Yet on October 17th Senators Lamar Alexander, a Republican, and Patty Murray, a Democrat, launched a bipartisan proposal to shore up Obamacare, in part by guaranteeing the payments for two years. At first, Mr Trump seemed to be encouraging the deal. Then, on October 18th, he declared his opposition to reinstating the payments.

The money in question compensates insurers for lowering deductibles and out-of-pocket costs (the slice of medical bills not covered by insurance) for poor buyers on Obamacare’s insurance marketplaces, or...Continue reading

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Unilever Cost-Cutting Turns Out to Be Twisty Path to Profits

The Anglo-Dutch consumer giant has been hit by upstart competitors like ice-cream brand Halo Top, as brand-building is a less predictable business than it used to be.

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The Philippine army recaptures a city seized by Muslim insurgents

Recaptured but ruined

THE city of Marawi, President Rodrigo Duterte declared on October 17th, has been liberated from the jihadists who had seized control of it. Mr Duterte was speaking in Marawi a day after Philippine forces had killed Isnilon Hapilon, a leader of Abu Sayyaf, a local militant group, who had declared allegiance to Islamic State (IS). That, in effect, puts an end to the attempt by IS to establish a South-East Asian outpost of its collapsing caliphate. But it took five months of fighting for the army to regain control of the city. And there is a risk that disaffected Filipino Muslims will redirect their aggression into terrorism and extortion, which have racked the southern island of Mindanao, in particular, for decades.

The day after Mr Hapilon’s death, the government said the battle for Marawi had killed 847 IS fighters, 163 soldiers or policemen and 47 civilians. It has emptied the city and surrounding areas, displacing nearly...Continue reading

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Box Stacks Up its Cloud Gains

Young tech companies like to move fast and break things, but humbled upstart Box has discovered the value of taking things slow and steady.

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For a Profitable Tech Stock That's Still Cheap, Look to Taiwan

TSMC stands to benefit from the hottest tech trends, from new smartphones to cryptocurrencies.

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Dr. Copper Needs Lessons in Chinese Medicine

Copper is testing three-year highs and the Dow has just broken 23000. Is global growth about to go through the roof? Unlikely: take a closer look at China.

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On NAFTA, America, Canada and Mexico are miles apart

THESE are troubling times for Roberto Santana Flores, a Mexican maker of charro shirts, a modern take on the Mexican cowboy aesthetic. He recalls life before the North American Free-Trade Agreement (NAFTA), a trade deal linking Mexico with America and Canada. He remembers his shirts incurred a whopping 37.5% tariff if exported to America. Now they cross the border duty-free. But his dream of expanding his factory and his American customer base is under threat. He scours the newspapers daily for news of the NAFTA negotiations. They tell of conflict. Some even warn the deal may collapse. Since it covers trade worth more than $1trn a year, that is alarming for many more than Mr Flores.

On October 17th trade representatives of the three countries gathered to mark the end of the fourth round of talks. A collapse does not seem imminent. Robert Lighthizer, the United States Trade Representative (pictured, centre), denied that abandoning the deal was even being discussed,...Continue reading

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Spain faces a constitutional crisis over Catalonia

WITH its mastery of social media and identity politics, the Catalan independence movement is very 21st-century. But the latest chapter in its struggle with the Spanish government has featured an old-fashioned tool: an exchange of letters, delivered by fax. In these Carles Puigdemont, the head of the Generalitat, Catalonia’s government, twice this week refused to clarify or revoke the ambiguous proclamation of independence that he had issued and immediately “suspended” in a speech to his parliament on October 10th. In response, the Spanish government said it will go ahead and seek extraordinary powers to impose constitutional rule in Catalonia.

Spain is thus entering its worst constitutional crisis since the 1930s. It is the culmination of years of rising discontent in Catalonia, one of the country’s richest regions, which has 7.5m people and its own language and culture. Although Catalonia enjoys broad self-government, many Catalans want it to have more money, more powers, and to...Continue reading

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China’s leader Xi Jinping declares the start of a “new era”

IN THE days before the opening on October 18th of the Chinese Communist Party’s quinquennial congress, the country’s security officials put their surveillance efforts into overdrive. On Chang’an Avenue, the boulevard that passes by the venue in Tiananmen Square, naked flames were banned. Tough luck for restaurants, family dinners and smokers. Out-of-towners driving to the capital were stopped at checkpoints and made to sign papers promising not to get into trouble during the week of the congress. Foreigners were barred from travelling to Tibet. The region is well over 1,000 miles from the capital, but the party fears that even a lone banner-waving separatist sympathiser that far away could spoil the event in Beijing.

Such paranoia reflects the importance attached by the party to such congresses. They are convened to add a veneer of intraparty democracy to decisions made beforehand in secret, but those decisions are crucial. The congress, the 19th since the party’s...Continue reading

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IBM: Big Blue Coming Out of the Red

The company reported another decline in quarterly revenue on a year-over-year basis Tuesday. But revenue fell only 0.4% and ended up exceeding Wall Street’s consensus forecast. That gave its shares a big boost.

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Syria’s Kurds led the advance on Raqqa, but now may fracture

THE BODIES of the dead would hang for days from the railings in the main square of Raqqa. It was a macabre warning to residents that Islamic State (IS) had declared the capital of its so-called caliphate in the Syrian city. Signs around the victims’ necks revealed their crimes. Dozens were executed for spying; others for smoking or listening to music.

This week that reign of terror ended. On October 17th, after four months of heavy fighting, the Syrian Democratic Forces (SDF), an army of Kurds and Arabs, took the square. Tying yellow and green flags to the railings where the bodies once hung, they stomped and shouted to celebrate.

The capture of Raqqa highlights how over the past few years the SDF has become the most effective American-backed force in the fight against IS in Syria. Its parent group, the left-wing Democratic Union Party (PYD), now controls a swathe of territory running almost the entire width of northern Syria that it calls Rojava. The PYD...Continue reading

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The death of a crusading journalist rocks Malta

TWO or three hundred people gathered outside the courthouse in Valletta on October 17th to protest at the assassination the previous day of Daphne Caruana Galizia, Malta’s most intrepid and controversial journalist. It was a modest turnout for what Adrian Delia, leader of the opposition Nationalist Party (PN), called “the darkest moment in the country’s political history”. After a speech by a friend of the dead woman, the crowd sang the national anthem and dispersed, some weeping.

The last words Ms Caruana Galizia wrote on the blog where she excoriated Malta’s elite for its corruption, negligence and incompetence were: “There are crooks everywhere you look now. The situation is desperate.” After posting them, she drove away from her home in the village of Bidnija and was killed by an explosion so powerful it threw her rented car 80 metres into a field. Her son Matthew ran to the scene, where the car horn was still blaring. “I looked down and there were my...Continue reading

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Kyrgyzstan holds an election that was not a foregone conclusion

AS THE young man hesitated, golden autumn leaves drifted down onto the streets of Bishkek, the relaxed capital of Kyrgyzstan. “It’s a choice between old and new. I can’t decide,” he explained, as he hovered outside the polling station. The choice was as unusual as it was difficult. Kyrgyzstan—a mountainous post-Soviet country of 6m people bordering China—was holding the first genuinely competitive presidential election in Central Asia, a region ruled by strongmen who typically romp home with close to 100% of the vote.

In the end a majority of Kyrgyzstan’s voters plumped for old over new, or at least continuity over change, electing Sooronbay Jeyenbekov (pictured), a former prime minister anointed by outgoing president Almazbek Atambayev. Mr Jeyenbekov, a dour 58-year-old with all the panache of a Soviet apparatchik, beat his more dynamic rival, Omurbek Babanov, a 47-year-old businessman (and also a former prime minister) with 55% of the vote. That may seem like a...Continue reading

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Investors Need to Watch This Nasty Drug-Price Feud

Pharmacy-benefit managers are supposed to reduce drug prices but haven’t, and their customers are pushing back.

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