Two years ago the world pledged to keep global warming “well below” 2°C hotter than pre-industrial times. Climate scientists and campaigners purred. Politicians patted themselves on the back. Despite the Paris agreement’s ambiguities and some setbacks, including President Donald Trump’s decision to yank America out of the deal, the air of self-congratulation was still apparent this month among those who gathered in Bonn for a follow-up summit.
Reviving the original Trans-Pacific Partnership, a trade deal between 12 countries around the Pacific Rim, is technically impossible. To put the accord into force, members making up at least 85 percent of their combined GDP had to ratify it. Three days into his administration, President Donald Trump announced that America was out. With 60 percent of members’ GDP gone, that deal was doomed.
Only one thing spooks the oil market more than hot-headed despots in the Middle East, and that is hot-headed hedge-fund managers. For the second time this year, record speculative bets on rising oil prices in American and European futures have made the market vulnerable to a sell-off.
A year ago, Donald Trump was elected president. Many people predicted that American foreign policy would take a disastrous turn. Trump had suggested that he would scrap trade deals, ditch allies, put a figurative bomb under the rules-based global order and drop literal ones willy-nilly. Nato was “obsolete,” he had said. Nafta was “the worst trade deal maybe ever.” America was far too nice to foreigners.
“I’m gonna make a [whole lot] of money on August 2nd on the Stox.com ICO.”
The week of November 6-10 was uncomfortable for a host of well-heeled figures. In the frame were U2’s Bono, Commerce Secretary Wilbur Ross of the United States and Queen Elizabeth of Britain, as well as some of the world’s most valuable companies, including Apple and Nike.
In 1962 a British political scientist, Bernard Crick, published In Defense of Politics. He argued that the art of political horse-trading, far from being shabby, lets people of different beliefs live together in a peaceful, thriving society.
A few years ago the news about the euro-zone economy was uniformly bad to the point of tedium. These days it is the humdrum diet of benign data that prompts a yawn. This week figures show that GDP rose by 0.6 percent in the three months to the end of September, an annualized rate of 2.4 percent. The European Commission’s economic-sentiment index rose to its highest level in almost 17 years.
He is leaving with the share price rising and the October 18 announcement 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 step down without an obvious helping shove. No grandstanding senators hounded him out, unlike at Wells Fargo. No boardroom coup hastened the end, unlike at Citigroup. The financial crisis left him untouched, unlike at…well, take your pick. His successor, Stephen Squeri, promoted from within and apparently groomed for the job, will take over in February.
Seventeen years after Vladimir Putin first became president of Russia, his grip on the country is stronger than ever. The West, which still sees Russia in post-Soviet terms, sometimes ranks him as his country’s most powerful leader since Stalin. Russians are increasingly looking to an earlier period of history. In Moscow both liberal reformers and conservative traditionalists are talking about Putin as a 21st-century tsar.
The MBA is both revered and reviled. To boosters it has advanced the science of management and helped companies, and countries, to grow. Detractors say that it offers little of practical value and instills in students a sense of infallibility that can sink companies and knock economies sideways.
Shoppers will spend record sums online in the next few weeks—in China for Singles Day on November 11, in America on Black Friday and around the world in the run-up to Christmas. E-commerce has been growing by 20 percent a year for a decade, shaking up industries from logistics to consumer goods. Nowhere does debate about what this means rage more fiercely than in America, where thousands of stores have shut this year and where retailing accounts for one in every nine jobs.
POPULISM’S wave has yet to crest. That is the sobering lesson of recent elections in Germany and Austria, where the success of anti-immigrant, anti-globalization parties showed that a message of hostility to elites and outsiders resonates as strongly as ever among those fed up with the status quo.
TECHNOLOGY giants are a bit like dinosaurs. Most do not adapt successfully to a new age—what is known in the industry as a “platform shift.” A few make it through two and even three such shifts, but only a single company spans them all: IBM, which is more than a century old, having started as a maker of tabulating machines that were fed with punch cards.
“We are always short 10 to 20 people,” said Jack Marshall, manager of PPG’s plant in Oak Creek, Wisconsin.
American presidents have a habit of describing their Chinese counterparts in terms of awe. A fawning Richard Nixon said to Mao Zedong that the chairman’s writings had “changed the world.” To Jimmy Carter, Deng Xiaoping was a string of flattering adjectives: “smart, tough, intelligent, frank, courageous, personable, self-assured, friendly.” Bill Clinton described Jiang Zemin as a “visionary” and “a man of extraordinary intellect.”
The new app for an upmarket British department store certainly looks the part. Released on Google Play, a shop for Android software, on September 5, it has the right logo, the correct vibrant color and the usual offers of fashionable clothes and accessories. The app is not authorized by the brand, however. It’s littered with pop-up ads and is painfully slow—furious users gave it one-star ratings. Its developer, Style Apps, also has launched apps for other clothing brands that are household names in America.
In his classic The Intelligent Investor, first published in 1949, Wall Street sage Benjamin Graham distilled what he called his secret of sound investment into three words: “margin of safety.” The price paid for a stock or a bond should allow for human error, bad luck or, indeed, many things going wrong at once.
Switzerland, which developed cross-border wealth-management in the 1920s, once was in a league of its own as a tax haven. Since the 1980s, however, tax-dodgers have had a rich menu to choose from: They can hide assets anywhere from the Bahamas to Hong Kong. The percentage of global wealth held offshore has increased dramatically—but it has been hard to say how much that is, and who owns it.
Richard Nesbitt, former chief operating officer at the Canadian Imperial Bank of Commerce, has long been an evangelist for women in business. In Results at the Top: Using Gender Intelligence to Create Breakthrough Growth (Wiley, 2017), cowritten with Barbara Annis, he describes his efforts to convince men to promote women.
Arkady Volozh, the bearded cofounder of Yandex, Russia’s largest search engine, bristled at hearing his company branded “the Google of Russia.” Far from emulating the American firm, he pointed out, Yandex launched in 1997, a full year before Google.
In 1845 Frédéric Bastiat, a French economist, wrote an open letter to his national parliament, pleading for help on behalf of makers of candles and other forms of lighting. The French market was being flooded with cheap light, he complained. Action was necessary: a law closing all windows, shutters and curtains. Only that would offer protection against the source of this “ruinous competition,” the sun.
Eight months into Donald Trump’s presidency, the rules-based system of global trade remains intact. Threats to impose broad tariffs have come to nothing. Some ominous investigations into whether imports into America are a national-security threat are on hold. Trump looks less like a hard man than like a boy crying wolf.
If President Donald Trump had slapped punitive tariffs on all Chinese exports to America, as he had promised during his campaign for office, he would have started a trade war. Fortunately the president hesitated, partly because he wants China’s help in thwarting North Korea’s nuclear ambitions.
Economists can be a haughty bunch, but a decade of trauma has had a chastening effect. They are rethinking old ideas, asking new questions and occasionally welcoming heretics back into the fold. Change, however, has been slow to reach the university economics curriculum. Many institutions still pump students through introductory courses untainted by recent economic history or the market shortcomings it illuminates.
The numbers are stark. Cancer claimed the lives of 8.8 million people in 2015, with only heart disease causing more deaths. Around 40% of Americans will be told that they have cancer during their lifetimes. It is now a bigger killer of Africans than malaria.
Browsing websites that list sperm donors is weirdly similar to online dating. “Sanford is the total package,” one online ad begins, and goes on to describe his strong jawline and piercing blue eyes. With a degree in finance and a “charming demeanor,” he is more than a pretty face. You can listen to a voice recording from Sanford himself. If all that wins you over, you can have his baby without ever having to go on a date. For $635 Seattle Sperm Bank will ship you a vial of his frozen swimmers.
Never shy about hype, on September 12 Apple CEO Tim Cook presented the company’s latest iPhones to a packed auditorium in its glitzy new headquarters in Cupertino. He made a grand prediction: Its new, premium phone, the iPhone X (pronounced “ten”), will “set the path of technology for the next decade.”
A new phrase entered the Oxford English Dictionary in 2013: “range anxiety,” or the fear an electric vehicle will run out of power before it reaches a charging station.
The human face is a remarkable piece of work. The astonishing variety of facial features helps people recognize each other and is crucial to the formation of complex societies. So is the face’s ability to send emotional signals, whether through an involuntary blush or the artifice of a false smile.
Sticklers for value have plenty of reasons to frown at financial markets. Much feels out of order, from squashed bond yields to pricy stock markets. But currency markets, at least, seem to have shifted in line with fundamentals this year.
THE extent of the devastation will become clear only when the floodwater recedes, leaving ruined cars, filthy mud-choked houses and the bloated corpses of the drowned. But as we went to press, with the rain pounding South Texas for the sixth day, Hurricane Harvey had already set records as America’s most severe deluge. In Houston it drenched Harris County in nearly 12 trillion gallons of water in just 100 hours—enough rainfall to cover an 8-year-old child.
WHAT is the right way to invest for the long term? Too many people rely on past performance, picking fund managers with a “hot” reputation or backing those asset classes that have recently done well. Just as fund managers cannot be relied on to be consistent, returns from asset classes are highly variable. The higher the initial valuation of the asset, the lower the future returns are likely to be.
MONDAY is “Game of Thrones” night at The Collective’s Old Oak building. Millennials congregate in TV rooms around the 11-story, 550-person building. Some gather at the movie theater, lounging on bean bags decorated with old graphics from Life magazine. Nothing gets residents out of their rooms like the hit TV show. This is not a student dorm, however. It is home.
After the events of March 11, 2011, when an earthquake and tsunami led to a meltdown of three nuclear reactors at the Fukushima Dai-ichi power plant in Japan, you might be forgiven for concluding that atomic power and seawater don’t mix.
For professional soccer teams August often is the costliest month, the month when they make vast bids for each other’s players. This year has been particularly lavish. Early this month, Paris Saint-Germain, a French team, signed Neymar da Silva Santos Jr., a Brazilian forward, from Barcelona for $264 million, more than double the previous record price for a soccer star.
It is odd that North Korea causes so much trouble. It is not exactly a superpower. Its economy is only 1/50 as big as that of its democratic capitalist cousin, South Korea. Americans spend twice its total GDP on their pets.
In 1953 B.F. Skinner visited his daughter’s math class. The Harvard psychologist found every pupil learning the same topic in the same way at the same speed. A few days later he built his first “teaching machine,” which let children tackle questions at their own pace. By the mid-1960s similar gizmos were being flogged by door-to-door salesmen. Within a few years, though, enthusiasm for them had fizzled out.
It is said that Travis Kalanick, who resigned as Uber’s boss last month, has been reading Shakespeare’s Henry V. Prince Hal’s transformation, from wastrel prince to sober monarch, is doubtless one he would like to emulate.
With the defeat of Marine Le Pen in her bid for the French presidency, establishment politicians in rich countries breathed a sigh of relief. The fortunes of extremist candidates have faltered since the populist surge that put President Donald Trump into the White House.
A widely read cover story on the impact of global warming in a recent edition of New York magazine starts ominously: “It is, I promise, worse than you think.”
The hereditary principle is not only un-American but harmful to the children of great men, Benjamin Franklin declared soon after the Revolutionary War, as rumors flew of plots to establish a new aristocracy with George Washington at its head. To honor parents is reasonable, Franklin admitted, but to reward descendants for an accident of birth is “not only groundless and absurd but often hurtful to that posterity.”
Stonecutters Island in Hong Kong used to be a favored habitat for poisonous snakes and eye-catching birds such as the white-bellied sea eagle. Thanks to Hong Kong’s rapid development, it is no longer so hospitable.
In 1965 André-François Raffray, a 47-year-old lawyer in southern France, made the deal of a lifetime. Charmed by an apartment in Arles, he persuaded the widow living there to make a deal: He would pay her 2,500 francs—then about $500—a month until she died, and in return she would leave him the apartment in her will. Since she was already 90, it seemed like a safe bet.
‘There’s nothing wrong with bingo and chicken,” Tom Kamber said, but went on to explain that you won’t find either in the senior center he runs in Manhattan.
THE story of the European Union is in part that of the steady accretion of power by its central bodies.
When Narendra Modi became prime minister of India in 2014, opinion was divided as to whether he was a Hindu zealot disguised as an economic reformer, or the other way around. The past three years appear to have settled the matter.
The headquarters of General Motors towers over the other skyscrapers in Detroit’s city center, a reminder that the carmaker still rules the American market. GM’s domestic might increasingly contrasts with its position elsewhere in the world, however. Although most other carmakers see becoming ever bigger everywhere as the answer to the industry’s multiple challenges, GM is in retreat.
It is as if North Korean dictator Kim Jong Un wants to be seen to be flinging his explosive toys about with ever more abandon. In recent months his men have fired off missiles in one test after another, often with the young, overfed dictator gleefully looking on.
Florence Lehericy is a nurse, but she is now starting a new career as a parliamentary deputy for Calvados, in northern France. Jean-Marie Fiévet, a fire fighter, is joining her from a constituency in Deux Sèvres in the west.
That central banks cannot endlessly reduce unemployment without sparking inflation is economic gospel. It follows from “a substantial body of theory, informed by considerable historical evidence,” according to Janet Yellen, chairman of the Federal Reserve. Her conviction explains why, on June 14, the Fed raised interest rates by a quarter of a percentage point, to a range of 1 percent to 1.25 percent.
THREE jihadist attacks in Britain in as many months have led to a flood of suggestions about how to fight terrorism, from more police and harsher jail sentences to new legal powers.
IN June 1956 a TWA Constellation collided with a United Air Lines DC-7 over the Grand Canyon in Arizona, killing all 128 people on both aircraft. At the time it was the worst-ever airline disaster. Struggling with outdated technology and a postwar boom in air travel, overworked air-traffic controllers had failed to spot that the planes were on a collision course.
EMERGING markets have been through a great deal in the past four years. The “taper tantrum” in 2013, prompted by fears of a change in American monetary policy, was followed by the oil-price drop of 2014, China’s botched devaluation of its currency in 2015 and India’s botched “demonetization” of much of its own currency in late 2016, in which it abruptly removed high-value banknotes from circulation.
Today Britain finds itself in a different era. The vote for Brexit has committed it to leaving its biggest trading partner and snuggling closer to others, including a less-welcoming America. The economy has held up better than many feared, but growth is slowing and investors are jittery. The union is fraying again. Real wages have stagnated. Public services are stretched.
Markets frequently froth and bubble, but the boom in bitcoin, a digital currency, is extraordinary. Although its price is down from an all-time high of $2,420 recently, it has more than doubled in only two months. Anyone clever or lucky enough to have bought $1,000 of bitcoins in July 2010, when the price stood at $0.05, would now have a stash worth $46 million. Other cryptocurrencies have soared, too, giving them a collective market value of about $80 billion.
At its outset 2017 seemed likely to mark a turning point for global monetary policy. The Federal Reserve had raised its main interest rate by a quarter-point and was expected to add three such increases this year—or perhaps even more, if a new Republican Congress and a new Republican president could agree on tax cuts.
The abrupt departure of Ford chief executive Mark Fields, which the car giant announced on May 22, has two explanations. Investors had become restive at its performance, particularly in the past year, but Fields also was perceived to lack the drive of Alan Mulally, whom he had succeeded. In replacing him with Jim Hackett, who ran an office-furniture company before joining Ford’s board in 2013 and more recently led the company’s mobility unit, Ford hopes to conquer current problems and shore up its future strategy.
These days, the hills of Languedoc in southern France turn green with the leaves of grapevines. This is helped along by chemicals—lots of them, confides a winemaker based near the town of Thuir in the Pyrenees. In their absence vineyards would need natural fertilizers and would have to be weeded by hand, both costly. French farmers use more chemicals than anyone else in Europe: 65,000 tons of pesticides alone each year.
The victory of Israel over the Arab armies that encircled it in 1967 was so swift and absolute that many Jews thought that a divine hand must have tipped the scales. Before the Six-Day War, Israel had feared another Holocaust. Afterward it ruled an empire of sorts. Awestruck, the Jews took the holy sites of Jerusalem and the places of their biblical stories.
It is hard to predict when bubbles will pop, especially when they are nested within each other. It helps to keep this image in mind when considering one of the biggest surges in asset values of recent years: The market value of all the world’s crypto-currencies has trebled since the beginning of the year, and is now worth more than $60 billion.
The currents of trade, President Donald Trump accepts, will ebb and flow. “Sometimes they can be up and sometimes we can be up,” he said in an recent interview with The Economist.
When a video of a passenger being dragged off a United Airlines flight went viral last month, the American carrier’s Middle Eastern rivals were quick to mock its customer service. Qatar Airways updated its smartphone app to say that it “doesn’t support drag and drop.”
A new commodity spawns a lucrative, fast-growing industry, prompting antitrust regulators to step in to restrain those who control its flow. A century ago the resource in question was oil. Now similar concerns are being raised by the giants that deal in data, the oil of the digital era.
The election of Donald Trump as America’s 45th president dismayed most of New York: Trump’s home city had voted overwhelmingly for another local candidate, Hillary Clinton. Wall Street cheered, though.
As the second-richest person in the world, and with a half-century record of investing success, Warren Buffett is a household name worldwide. In China, though, he is something more: a celebrity.
North Korea can be as confusing as it is alarming. It is a hereditary Marxist monarchy. It has the world’s youngest supreme leader and also its oldest: The reigning tyrant, Kim Jong Un, is in his 30s, but his grandfather, Kim Il Sung, is the “eternal president” despite having died in 1994.
Trump Tower, in midtown Manhattan, has become a modern-day Mount Vernon. Tourists have long visited President George Washington’s homestead. Now they venture through Trump Tower’s brass doors to ogle the décor—“it’s so gold,” said a German teenager standing near the lobby’s waterfall on a recent afternoon—or to buy souvenirs.
Cars are getting bigger. For years motorists worldwide have been abandoning four-door sedans in favor of bulkier SUVs. Carmakers have become bigger, too. Four car companies now make around 10 million vehicles a year in order to reap economies of scale, particularly in the mass-market sector of the business, in which profit margins can be painfully thin. Many executives also believe that size is the only protection against the technological upheaval sweeping the industry.
Norway offers much to envy. The food is tasty, public services are great and the people are impossibly good-looking.
A glimpse into the future of retailing is available in a smallish office in Hamburg. From there Otto, a German e-commerce merchant, is using artificial intelligence to improve its activities. The company already is deploying the technology to make decisions at a scale, speed and accuracy that surpass the capabilities of its human employees.
Computer security is a contradiction in terms. Consider the past year alone: Cyberthieves stole $81 million from the central bank of Bangladesh. The $4.8-billion takeover of Yahoo by Verizon was nearly derailed by two enormous data breaches. Russian hackers interfered in the American presidential election.
DONALD TRUMP won the White House on the promise that government is easy. Unlike his Democratic opponent, whose career had been devoted to politics, Trump stood as a businessman who could Get Things Done. Enough voters decided that boasting, mocking, lying and grabbing women were secondary. Some Trump fans even saw them as the credentials of an authentic, swamp-draining savior.
TO bring House Republicans good luck in passing their replacement for the Affordable Care Act, a.k.a. Obamacare, Rep. Pete Sessions (R.-Texas) wore a brown suit to the chamber, in honor of President Ronald Reagan.
Amazon is an extraordinary company. The former bookseller accounts for more than half of every new dollar spent online in America. It is the world’s leading provider of cloud computing. This year Amazon probably will spend twice as much on television as HBO. Its own-brand physical products include batteries, almonds, suits and speakers linked to a virtual voice-activated assistant that can control, among other things, your lamps and sprinklers.
According to a document crafted by the Trump administration, a model trade agreement has 24 elements. Second on the list is “trade-deficit reduction,” giving a hint as to why Trump wants to review America’s existing agreements. In January Sean Spicer, his press secretary, said that the administration would “re-examine all of the current trade deals.” A presidential order to do exactly that is reported to be in the offing.
One big question has lurked throughout the euro crisis: Should one or more members quit? Could they?
Economic and political cycles have a habit of being out of sync. Just ask President George H.W. Bush, who lost the presidential election in 1992 because voters blamed him for the recent recession. Or Chancellor Gerhard Schröder of Germany, booted out by voters in 2005 after imposing painful reforms, only to see successor Angela Merkel reap the rewards.
Third time lucky. In each of the past two years, the Federal Reserve has predicted multiple interest-rate rises, only to be thrown off-course by events. On March 15 the central bank raised its benchmark Federal Funds rate for the third time since the financial crisis, to a range of between 0.75 percent and 1 percent. This was, if anything, ahead of its forecast, which it reaffirmed, that rates would rise three times in 2017.
It sounds like a scene from The Big Short (2015), a film about financial speculation. Light aircraft fly photographers close to America’s oil-storage facilities, using infra-red imaging and photographs to gauge the rise and fall of levels of crude in 2,100 storage tanks, in an attempt to work out whether oil futures are overvalued or not.
In the stormy and ever-changing world of global finance, insurance has remained a relatively placid backwater. With the notable exception of AIG, an American insurer bailed out by the taxpayer in 2008, the industry rode out the financial crisis largely unscathed.
A bathing cap that can watch individual neurons, allowing others to monitor the wearer’s mind. A sensor that can spot hidden nuclear submarines. A computer that can discover new drugs, revolutionize securities trading and design new materials. A global network of communication links whose security is underwritten by unbreakable physical laws.
Many Americans were taken aback when, in January, news broke that Peter Thiel, an internet billionaire and adviser to President Donald Trump, had New Zealand citizenship. For five years this backer of an “America first” president had kept his Kiwi passport quiet. Then the government released details of his $10-million lakeside estate.
It has been many years since France last had a revolution, or even a serious attempt at reform. Stagnation, both political and economic, has been the hallmark of a country where little has changed for decades, even as power has rotated between the established parties of left and right.
On the campaign trail, Donald Trump’s trade policy was an alarming mixture of coruscating complaints and fierce threats of protectionist retaliation. But the world has been in the dark about how much of this rhetoric his administration might turn into reality. A flicker of light came on March 1 as the administration’s trade-strategy document was presented to Congress. Washington wonks see the hand of Peter Navarro, Trump’s trade adviser and author of a book (and film) called Death by China. Robert Lighthizer, the nominee for the US trade representative, has not yet been confirmed.
Almost 150 years after photovoltaic cells and wind turbines were invented, they still generate only 7% of the world’s electricity. Yet something remarkable is happening. From being peripheral to the energy system just over a decade ago, they are now growing faster than any other energy source and their falling costs are making them competitive with fossil fuels. BP, an oil firm, expects renewables to account for half of the growth in global energy supply over the next 20 years. It is no longer far-fetched to think that the world is entering an era of clean, unlimited and cheap power. About time, too.
Might Donald Trump’s promise to shake up America’s trade policy extend to its statistics? According to a report in The Wall Street Journal, discussions are afoot on changing the way trade figures are tallied. The Bureau of Economic Analysis, the country’s main statistical body, calls this “completely inaccurate.” But in trade as elsewhere, the new administration seems prone to using statistics as a drunk uses a lamppost—for support rather than illumination.
“We almost went out of business several times.” Usually founders don’t talk about their company’s near-death experiences. But Jen-Hsun Huang, the boss of Nvidia, has no reason to be coy. His firm, which develops microprocessors and related software, is on a winning streak. In the past quarter its revenues increased by 55%, reaching $2.2 billion, and in the past 12 months its share price has almost quadrupled.
