Rus in urbe redux

IN LEIPZIGER TOR, people are giving way to grass, flowers and potatoes. So many prefabricated 1950s apartment buildings have been razed in this working-class district of Dessau-Rosslau, a city in eastern Germany, that the plants receive all the light and rain they need. And the local planners have other buildings in their sights. Some residential blocks are half-empty. An abandoned school is succumbing to weeds. They too will probably be demolished and replaced by meadows.

Many of the world’s cities are having to cope with rapid growth. Dessau-Rosslau’s challenge is to manage decline. Since 2007 its population has dropped by almost 10,000, to 81,500. Everybody, from the city authorities to the man in the street, reckons the trend will continue. What will Dessau-Rosslau be like in ten or 20 years’ time? “Smaller,” says Rolf Müller, a longtime resident, as he carries a box of groceries out of an Aldi supermarket.

The condition from which Dessau-Rosslau suffers is increasingly common. From 1950 to 1955 only ten of the world’s largest conurbations lost people, according to the UN (see chart). The tally rose steadily over the next few...

from The Economist: International http://ift.tt/1FiInO3

Do you see what I see?

HUMAN beings are not born with the knowledge that others possess minds with different contents. Children develop such a “theory of mind” gradually, and even adults have it only imperfectly. But a study by Samantha Fan and Zoe Liberman at the University of Chicago, published in Psychological Science, finds that bilingual children, and also those simply exposed to another language on a regular basis, have an edge at the business of getting inside others’ minds.

In a simple experiment, Dr Fan and Dr Liberman sat monolingual, bilingual and “exposure” children aged between four and six with a grid of objects placed between them and an experimenter. Some objects were blocked from the experimenter’s sight, a fact the children could clearly see. With a large, a medium and a small car visible to the child, but the small car hidden from the adult, the adult would ask “I see a small car” and ask the child to move it. Both bilingual and those in the exposure group moved the medium-sized car (the smallest the experimenter could see) about 75% of the time, against 50% for the monolinguals. The successful children were less likely even to glance at the car the experimenter could not see.

This study joins a heap of others suggesting that there are cognitive advantages to being bilingual. Researchers have found that bilinguals have better...

from The Economist: Science and technology http://ift.tt/1PQ6Hkv

Pack power

Don’t let the grey hair fool you

LIKE people, wolves have found that there are benefits to be had living in a group. Together they can more effectively take down large prey, raise families and defend their territory. The received wisdom is that there are also costs to group living, not least a greater risk of death from catching a contagious disease. Now a team of ecologists working in Yellowstone National Park in Wyoming have found evidence that for wolves, at least, that is not always the case.

Wolves were driven to extinction by hunting in the Yellowstone region in the early 20th century, but were reintroduced in 1995 and have been closely monitored ever since by the National Park Service. This includes tranquillising 25 or so wolves a year and fitting them with radio collars so they can be tracked. Among the wealth of information this effort has produced, in 2007 researchers were alerted to a contagious illness creeping into the population.

Known as mange, the disease is caused by parasitic mites that burrow into the flesh of wolves, causing an extreme allergic reaction and driving them to scratch...

from The Economist: Science and technology http://ift.tt/1clcufn

Waterworlds

FOR decades, researchers looking for life elsewhere in the solar system have stuck to a simple rule: “follow the water”. The stuff is essential to life on Earth, and its peculiar properties mean those hunting aliens think the same will be true elsewhere. This is one reason that Mars has received so much of their attention. Mars has water vapour in its atmosphere, and water ice in the shining cap at its north pole. Liquid water—which is the form life needs—may well exist underground, and may still sometimes be seen at the surface, where dried-up rivers and lakes suggest it was once commonplace. Orbiting spacecraft have seen mysterious dark channels appear on crater walls; recent results from Curiosity, the newer of the two American rovers now exploring Mars, suggest these could be trickles of brine, kept liquid in the bitter cold by their high salt content.

But for all that, Mars is at best a desert with a few wet patches. Farther from the sun there are a number of icy bodies that seem to boast whole oceans of liquid water beneath their solid surfaces. Even by the standards of space exploration, this water—billions of...

from The Economist: Science and technology http://ift.tt/1PQ6Btk

Coping with adversity

Snap a wheel off a robotic vacuum cleaner and it will circle hopelessly. For a rover plonked onto a distant planet or a search-and-rescue robot sent into perilous surroundings, the consequences of damage can be more dire. A fixed number of contingency plans can be programmed into the device, but a research effort reported this week in Nature aims to teach robots how to compensate for any kind of damage.

Antoine Cully at Paris-Sorbonne University in France and his colleagues have developed software that permits a robot to build a three-dimensional map of every motion it can carry out, assigning a value to each—for not every joint and movement is as crucial to the machine’s motion, or can be as easily compensated for, as every other.

Guided by this understanding of their physical selves, robots tested by the team could adapt to all manner of injuries. A six-legged robot reduced to five legs, as in the picture, or a robotic arm broken in any of 14 different ways, discovered how to carry on their missions in less than two minutes of adjusting to their new limitations.

from The Economist: Science and technology http://ift.tt/1clcrjM

Lost and found

STUDENTS called him the “phantom”: an elusive, furtive figure who haunted Princeton’s libraries and lecture halls. The garbled formulae he scrawled on blackboards, uninvited and unread, evinced a scholarly background. Other jottings made even less sense: “Mao Tse-Tung’s Bar Mitzvah was 13 years, 13 months and 13 days after Brezhnev’s circumcision.” Sometimes he banged his head in mental agony. Myths abounded. Had maths broken his mind? Or a love affair his heart?

The numerology, conspiracies and supernatural beings arrived in John Nash’s mind with the same sparkling clarity as his insights into the isometric embeddability of abstract Riemannian manifolds in Euclidean spaces. Those thoughts had made him one of America’s most promising young mathematicians. So he took the other ones seriously, too.

His gift was insight, not theory—he solved problems first, finding out how he had done so later. His work on manifolds (crudely: proving that a line drawn on a multidimensional idealised piece of paper remains the same length no matter how tightly it is crumpled) could have won him the greatest mathematical prize, the Fields Medal, had an...

from The Economist: Obituary http://ift.tt/1LMyrjM

The economics of bluffing

WILL Greece default on its debts and leave the euro? Will Britain decide to leave the European Union? Politicians in the two countries have threatened, implicitly or explicitly, to take these drastic steps if their European colleagues do not offer them inducements to stay.

Many people regard these threats as a bluff. They think that Greece does not really want to leave the euro, and that David Cameron, Britain’s prime minister, does not want his country to exit the EU. When push comes to shove, Greece will do a deal (see article) and Mr Cameron will persuade British voters to stay in the EU in his planned referendum. But there are risks that neither outcome will turn out as planned. In both cases, political leaders are making a risky bet.

The financial analogy is with writing (selling) an option. In the markets, an option is the right to buy (a call) or sell (a put) an asset at a given price; say shares of Apple at $130. In return for granting the buyer of the option this right, the...

from The Economist: Finance and economics http://ift.tt/1Aw1CY2

Compacts of god

Let’s hope they issued cat bonds

INSURANCE only works if reinsurance works, those in the business say. An insurer that would face crippling losses if, say, a hurricane struck an island where it had covered lots of property against extreme weather, would typically insure itself against such an event with a reinsurer. But the $425 billion industry is under threat as insurers increasingly offload risk directly to capital markets instead. This month Warren Buffett, who has investments in reinsurance, dismissed it as a “fashionable asset class” whose prospects have “turned for the worse”.

Two things have made life more difficult for reinsurers. First, as insurance companies merge into fewer, global players, the share of policies they seek to reinsure has declined rapidly over the past decade, says James McPherson of PwC, a consultancy. A Slovenian insurer that used to take out reinsurance against a big snowstorm, for example, no longer needs to do so if it is part of a global insurance firm that can offset the risk with unrelated policies in other parts of its portfolio. Technological advances and regulatory pressures have...

from The Economist: Finance and economics http://ift.tt/1FFdaa3

Undue credit

DAVID EINHORN, a hedge-fund manager, saw the financial crisis coming and made a fortune from it. But not all his predictions have been as prescient. Asked in 2012 about rating agencies, which, unlike him, had failed to discern the impending disaster, Mr Einhorn said, “It’s a matter of time before they all disappear.”

After all, the three big rating agencies, Fitch, Moody’s and Standard and Poor’s (S&P), had all judged Lehman Brothers a safe bet until the morning of the day it defaulted; they also gave high ratings to securities based on subprime mortgages that turned out to be toxic. “Deeply disappointing,” was how Ray McDaniel, the boss of Moody’s, described its performance.

In response, politicians vowed to change the industry beyond recognition. They handed the job of regulating them to new outfits: a special unit of the Securities and Exchange Commission (SEC) in America and the European Securities and Markets Authority in the European Union. A provision of America’s Dodd-Frank financial-reform law, enacted in 2010, states that any requirements in regulation for a security to be rated should be expunged. For...

from The Economist: Finance and economics http://ift.tt/1Aw1Eir

When the talking has to stop

THE latest episode in Greece’s long-running economic drama is coming to a head. Since the victory of the radical-left Syriza party in the election of late January, Greece’s creditors and the new government headed by Alexis Tsipras have been exchanging threats. A resolution of some kind must occur in June, and sooner rather than later in the month.

It could still be a disastrous falling-out that leads to Greece defaulting on official loans, imposing capital controls, freezing deposits and tumbling out of the euro. But as time and money run out, the concentrating of minds on both sides seems likely to bring a deal.

Mr Tsipras is the one under most pressure. A recent payment to the IMF of €750m ($825m) was made only by drawing down a special account Greece held at the fund. Next month the government is due to pay the IMF double that amount, starting with €300m on June 5th. It may not be able to: a government minister said on May 24th that the money wasn’t there. Even if the first instalment can be rustled together, the government will be hard-pressed to find the €300m due on June 12th and the €600m due on the 16th; a...

from The Economist: Finance and economics http://ift.tt/1FFdc1C

Feeling valued

THERE was a time when virtually all the ills of the world economy were blamed on the yuan. Critics charged that China’s intervention to suppress its currency had led to anaemic imports from Europe and America, to a savings glut that flooded America with cheap credit and even to the global financial crisis, since the cheap credit enabled irresponsible lending. The allegations were exaggerations. But it was evident that China had held its exchange rate down, boosting its companies at the expense of others. So it was a notable shift when the International Monetary Fund declared this week that the yuan was “no longer undervalued”.

Not everyone agrees. Jack Lew, America’s treasury secretary, was quick to say that he still sees the yuan as undervalued. With China in their sights, American senators passed a bill earlier in May that could lead to sanctions against foreign countries deemed to manipulate their currencies. The IMF’s previous assessment that the yuan was too cheap had lent a veneer of intellectual credibility to such drives. Its new language strips that away.

The change was a long time in coming. The IMF had...

from The Economist: Finance and economics http://ift.tt/1Aw1CXX

Homeowning Hamlets

The market is distorted

IN A world of fully rational human beings, people would all be constantly checking the financial markets for profitable opportunities. But often they ignore a chance to save money even when it is right under their noses.

That conclusion is clear from a new study of the Danish mortgage market.* Danish homeowners tend to use fixed-rate mortgages, which they can refinance at any time without penalty. This refinancing can occur even when borrowers are in negative equity (meaning that they owe more than their house is worth) or when their creditworthiness has deteriorated; restrictions only apply when the homeowner tries to increase the size of the loan.

As rates on long-term mortgages fell from more than 7% to around 4% in the aftermath of the financial crisis, some Danes were quick to refinance loans taken out at higher interest rates. The academics dub these people “levelheads”—the kind of rational agents beloved by economic models. But a second group, nicknamed “woodheads”, were slow to refinance, either because they were not paying attention or because of inertia (they could not...

from The Economist: Finance and economics http://ift.tt/1FFdbLg

Marjorie Deane internships

Applications are invited for The Economist’s 2015 Marjorie Deane internships. Financed by the Marjorie Deane Financial Journalism Foundation, the awards are designed to provide work experience for a promising journalist or would-be journalist, who will spend three months at The Economist writing about economics and finance. Applicants are asked to write a covering letter and an article of no more than 500 words that they think would be suitable for publication in the Finance and economics section. Applications should be sent to deaneintern@economist.com by July 3rd. For more information, please visit http://ift.tt/1gKuRFS.

from The Economist: Finance and economics http://ift.tt/1Aw1CXV

A weighting game

THE Trans-Pacific Partnership (TPP), a putative trade agreement, would ease commerce between America, Japan and ten other countries that between them account for two-fifths of global GDP. But how beneficial would it be to these economies? Advocates claim it would boost their output by nearly $300 billion in a decade. Critics say it would make little or no difference.

The disagreement reflects the difficulty of gauging the impact of free-trade agreements. Almost all economists accept the benefits of free trade as laid out in the early 1800s by David Ricardo. Countries do well when they focus on what they are relatively good at producing. But Ricardo looked at only two countries making two products, at a time when few non-tariff barriers such as safety standards existed. This renders his elegant model about as useful for analysing contemporary free-trade deals as a horse and carriage are for predicting the trajectory of an aircraft.

Instead, most economists use what is known as computable general equilibrium (CGE) analysis. CGE models are built on top of a database that seeks to describe economies in full, factoring in incomes, profits...

from The Economist: Finance and economics http://ift.tt/1Aw1E29

Bullet proof

IN PRINCIPLE, Colombia’s government and the FARC leftist army both think it would be a good idea to shoot less at one another while they negotiate an end to their 50-year war. In practice, that is difficult. Violence has flared since April, when the FARC attacked an army patrol, killing 11 soldiers. The attack breached a unilateral ceasefire that the FARC declared in December. The government responded by resuming bombing raids on the guerrillas.

The situation has since deteriorated. An attack on a FARC camp in south-west Colombia on May 21st killed 27 guerrillas, including a former member of the negotiating team, and prompted the FARC formally to end its ceasefire. By May 26th another 15 rebels and two civilians had been killed in several skirmishes with the army.

The escalation has angered ordinary Colombians, who are impatient with the slow pace of the peace talks, which started in November 2012. It has hardened their hostility to the guerrillas. That will make it more difficult for Colombia’s president, Juan Manuel Santos, to win political backing for an eventual peace settlement. But it has not disrupted the peace process itself.

The talks resumed in Havana on May 25th. The government strengthened its team by adding the foreign minister, María Ángela Holguín, and Gonzalo Restrepo, a former chief executive of the Éxito Group, a retailer. His role...

from The Economist: The Americas http://ift.tt/1J8XnTt

Bucking the system

SWARTHY, with eyes that brood like Sylvester Stallone’s, Jaime Rodríguez cuts an odd figure in a room of business executives—and he revels in it. He paces around in black cowboy boots. He tells stories of his impoverished childhood, always quick to throw in a ribald quip: “I’m restless. My mother had ten children (well, my father helped a bit).” He’s mischievously, maddeningly evasive. When a questioner asks for his plan of government, he replies, “send me a WhatsApp.”

Mr Rodríguez, who calls himself El Bronco, wants to make history. On June 7th he has a chance of becoming the first regional governor elected without the support of a political party, thanks to a reform in 2014 that opened the door to independent candidates. He is running in the northern state of Nuevo León, one of nine up for grabs. Opinion polls put him neck-and-neck with his main rival, who is from the Institutional Revolutionary Party (PRI) of Mexico’s president, Enrique Peña Nieto. But he could be pipped at the post.

The elections include nationwide ones for the lower house of Congress. They will deliver a verdict on...

from The Economist: The Americas http://ift.tt/1LLCvBj

Ten-pin bowling

Fed up in Guatemala City

CORRUPTION scandals are two-a-penny in Latin America. But few have inflicted as much damage on an incumbent government as in Guatemala. In May the vice-president quit, the heads of the central bank and social-security institute were arrested and three ministers were sacked. Pressure is mounting on the president, Otto Pérez Molina, to resign even though he has not been accused of anything. He insists he will stay until his term ends in January. “We don’t really know what to do or what’s coming next,” says Eduardo Stein, who was vice-president from 2004 to 2008.

There were three catalysts for the crisis, which could yet extend to Congress and the judicial system. The first is a history of corruption, which has already reached the highest levels of government. Alfonso Portillo, a former president, was jailed in the United States for bribery and money laundering. Second, the International Commission Against Impunity in Guatemala (CICIG), a United Nations-backed institution, is investigating crimes in conjunction with a tough federal prosecutor’s office. It is not afraid to go after big fish. Third...

from The Economist: The Americas http://ift.tt/1J8Xpe6

Suffer the children

WHEN Pope Francis visits Paraguay on July 10th, he will find a controversy that he might prefer to ignore. A ten-year-old Paraguayan girl is currently 26 weeks pregnant after having been raped by her stepfather. Some six weeks ago she was taken to a hospital by her mother, who asked that she be allowed an abortion. But the Paraguayan authorities, backed by the Catholic church, not only refused her plea; they also arrested the mother as an alleged accomplice in her daughter’s abuse, although she reported the crime last year.

This appalling case highlights several of Latin America’s abiding ills. The first is child abuse. While the plight of street children and child prostitutes has received a lot of attention, most abuse occurs in the home. Although there is little data, there is no reason to believe it is less prevalent than elsewhere in the world. It may be more so. Bolivia’s ombudsman reported that 34% of girls suffered sexual abuse before age 18. Studies suggest that up to 36% of Latin American adult women suffer domestic or sexual violence.

The second affliction is teen pregnancy, which is extraordinarily common given the...

from The Economist: The Americas http://ift.tt/1LLCvBe

Beachcombing

Singular focus

VISITORS to the Cannes film festival have come to expect taboos to be broken and cinematic forms to be twisted into new shapes. A typical winner might be a three-hour Turkish adaptation of Chekhov, a Thai journey through reincarnation, or (clutch those pearls) an explicit French romance between two women. The 68th edition of the festival ended on May 24th with many calling it an off-year, but it still had films that could impress, and even shock, with their force and originality.

The Palme d’Or went to Jacques Audiard’s “Dheepan”, a relatively conventional drama about a Tamil fighter from Sri Lanka who starts life anew in a French housing project. The win seemed to reflect France’s concerns over its immigrant population as much as any dramatic achievement. For true éclat it was necessary to look to “Son of Saul”, a piece of high art imagining a low point of humanity, which won the Grand Prix—essentially the second prize. This debut feature directed by Laszlo Nemes, a Hungarian, depicts a seemingly unapproachable subject—the Auschwitz-Birkenau concentration camp—with extraordinary...

from The Economist: Books and arts http://ift.tt/1ezS6sE

Stranger and stranger

The Meursault Investigation. By Kamel Daoud. Translated by John Cullen. Other Press. 143 pages; $14.95. To be published in Britain by Oneworld in July.

WHEN Albert Camus first published his best known work, “L’Étranger” in 1942, Algeria was still a colony of France, and “the Arab” killed by the book’s anti-hero, Meursault, had no name. Seventy years on, that omission is rectified in a scorching debut novel that is sure to become an essential companion to Camus’s masterpiece. He was called Musa.

“The Meursault Investigation” by Kamel Daoud, an Algerian journalist, is a biting, profound response to French colonialism. It is also a lamentation for a modern Algeria gripped by pious fundamentalism. And it has earned the author both the 2015 Prix Goncourt for best first novel and a Facebook fatwa from a minor Muslim cleric calling for his death.

The book starts as a caustic, rambling monologue told by an old man in a bar to an appropriately nameless French expat. The narrator is Musa’s younger brother, Harun; he says he and his mother are “the only genuine heroes of that famous...

from The Economist: Books and arts http://ift.tt/1FiIoBB

Size matters

Dietland. By Sarai Walker. Houghton Mifflin Harcourt; 320 pages; $26.

IN A small café, surrounded by the temptations of baked goods, Plum plumps herself and her laptop down each day to answer e-mails from a thousand teenage girls. Girls who cut themselves, girls with broken hearts, girls who make themselves throw up every night. She does so on behalf of a magazine editor who maintains she is too busy to write herself. Plum works in the café because she is too fat for the slender magazine journalists, who feel ill at ease with her in their glamorous office.

Sarai Walker’s first novel, “Dietland”, is a curious concoction—part exploration of the way society treats the female body, part thriller. Using Plum’s desperate efforts to shed her bulk, Ms Walker unpicks the way in which women are encouraged literally to take up less space. Joining a weight-loss programme, Plum longs to erase her own edges, to shrink into acceptability: “I wanted to become smaller so I wouldn’t be seen. If I was smaller they wouldn’t stare. They wouldn’t be mean.”

Alongside Plum’s anguish runs the story of a guerrilla feminist group which takes aim at society’s ingrained patriarchs with brutal effect. A dozen men accused of rape, including footballers and pornographers, are kidnapped and dropped to their deaths from a skydiving plane. In response to...

from The Economist: Books and arts http://ift.tt/1FiInxs

Early days yet

Celebrated centurion

The Life of Saul Bellow: To Fame and Fortune, 1915-1964. By Zachary Leader. Knopf; 812 pages; $40. Jonathan Cape; £35.

CHIMING with the centenary of the birth of Saul Bellow and the tenth anniversary of his death comes a biography drawing on a wealth of previously restricted material and new interviews. “The Life of Saul Bellow”, by Zachary Leader, is the first in a two-part portrait of a writer whom Mr Leader calls “the most decorated...in American history”. This volume charts his initial struggles, burgeoning talent and first big artistic achievements, finishing with the publication in 1964 of “Herzog”, which many believe to have been Bellow’s masterpiece.

Mr Leader, an academic at the University of Roehampton in London, takes the reader through Bellow’s early years in Canada and his relationship with his Russian immigrant parents, particularly a “tyrannical” father who deplored his son’s “dreamy side”. Two formative events stand out. Aged eight, Bellow develops appendicitis and from his hospital bed becomes a reader. A year later the family is “smuggled...

from The Economist: Books and arts http://ift.tt/1ezS2tb

Stones that speak

YOU don’t notice it at first. But all over the archaeological site at Palmyra you see the same symbol—on architraves and lintels, and especially on the magnificent Bel temple. The line of carved stone eggs, each one separated by a dart or arrow pointing downwards, was first used by the Greeks on the Erechtheum behind the Acropolis. It was brought to Syria by the Romans, who built Palmyra and decorated its monuments with the egg, meaning life or rebirth, and the arrow, war or death. For centuries the two were carved together, signifying the duality of human existence.

The jihadists of Islamic State (IS) understand the meaning of symbols better than most. Over the past year they have projected fear across Iraq and Syria, posting footage of people they have beheaded. In February they released videos of ancient statues being smashed in the museum at Mosul in northern Iraq and, later, the bulldozing of the ancient Assyrian capital, Nimrud, 20 miles (32km) away. IS wants to do away with “false idols”, promising instead an Islamic caliphate that threatens to be as extreme as it is thuggish.

So when IS overran Palmyra on May 20th, many...

from The Economist: Books and arts http://ift.tt/1FiIn0k

Youthful conservatism

Who says the campaign is over?

SINCE coming to power in 2007, Poland’s centrist Civic Platform (PO) party has notched up an unbroken string of victories in national elections. Voters unsettled by the conservative Law and Justice (PiS) party’s erratic performance in power from 2005 to 2007 apparently deemed it unelectable. That equation changed on May 24th, with the upset win of Andrzej Duda, the 43-year-old PiS candidate, in Poland’s presidential contest. His defeat of the incumbent Bronislaw Komorowski by 51.5% to 48.5% points to widespread fatigue with PO. With a general election due this autumn, the question is whether Mr Duda won because of his own strengths as a candidate—or whether Polish voters are shifting from the centre to the right.

The heavily favoured Mr Komorowski, who ran a complacent campaign, was shocked after finishing second in the first round on May 10th. He made hasty efforts to recover before the run-off, scheduling a nationwide referendum on a proposal to switch the electoral system from party lists to single-member districts—a demand made by Paweł Kukiz, a former rock star who won 21% of the...

from The Economist: Europe http://ift.tt/1G2WyMR

Scattered support

THE regional and municipal elections in Spain on May 24th were billed as the latest test of the idealistic new parties that have emerged all across southern Europe in the wake of the euro crisis. Like Greece’s Syriza and Italy’s Five Star Movement, the left-wing Podemos and liberal Ciudadanos parties promised to give a voice to voters infuriated by corruption and economic hardship, and to shatter the political status quo. They have done so, transforming the two-party system that has dominated Spain since democracy was reintroduced in 1978 into a four-party one. They have also made the country a lot harder to govern.

The conservative Popular Party (PP) of Mariano Rajoy, the prime minister, was able to claim a sort of victory: when all the regional and municipal elections were tallied, it finished first. But its share fell to just over a quarter of the votes. The opposition Socialists (PSOE) of Pedro Sánchez claimed to have launched a comeback, but they were beaten by the PP almost everywhere. Podemos was relegated to third place. Ciudadanos fell short of predictions that it would become Spain’s new kingmaker.

The two...

from The Economist: Europe http://ift.tt/1EA8hv1

Alternative reality

IN THE original instalment of the “hybrid war” that it launched against Ukraine last year, Russia’s propaganda machine depicted its neighbour as a neo-Nazi state whose soldiers burnt villages and crucified children in the Russian-speaking east. But after the vast military parade Russia staged on May 9th, marking its victory over German (and by implication Ukrainian) fascism, a new story-line started to take shape. Ukraine is now portrayed as a failed state. It has defaulted on its debts and violated every international norm, and its Western sponsors are panicking. A new Maidan revolution could happen at any time—the smell of burnt tyres is in the air.

Western leaders, the story goes, have realised their mistake and are flocking to make amends with Vladimir Putin, the magnanimous Russian leader who tried to warn them against supporting Ukraine. First it was Angela Merkel, the German chancellor, who sought an audience with Mr Putin. Then it was John Kerry, America’s secretary of state, who flew all the way to Sochi to pay his respects. “America has realised that Ukraine is not worth spoiling its relationship with Russia,” proclaimed Channel One,...

from The Economist: Europe http://ift.tt/1G2WyML

Republicans in name aussi

It’s only a name

NEW parties are constantly sprouting up in Europe’s fertile political landscape. It is more unusual to find established parties taking on new names. Yet this is what Nicolas Sarkozy, the former French president, plans to do at a rally in Paris this weekend. As part of his bid to run again for the presidency in 2017, the irrepressible leader of the centre-right UMP is rebranding the party Les Républicains (The Republicans).

Mr Sarkozy’s party makeover is part of an improbable political comeback, an effort to reinvent himself as a fresh force. When the ex-president returned last year from the shortest political retirement in recent history, taking over a party tainted by in-fighting and financing scandals, he wanted a clean break. He overhauled the top jobs and promised a primary to select a presidential candidate. And he picked a new name and logo. These go to a vote of party members on May 28th-29th.

The new name is not to everybody’s taste. Some find it baffling that a party descended from Charles de Gaulle, who marked his distance from the United States and...

from The Economist: Europe http://ift.tt/1EA8huY

Part of the furniture

STROLLING around the European Parliament in Brussels recently Charlemagne asked his companion, an MEP’s assistant, if the success of anti-European parties in last May’s elections had changed the feel of the place. “Well, for one thing you see posters like that,” she said, pointing up at an image of Marine Le Pen gazing grandly from a prominent office window. Ms Le Pen’s far-right National Front (FN) won the European elections in France, as did the United Kingdom Independence Party in Britain. Other Eurosceptic parties did well elsewhere. The results should not have been a shock. Dissatisfaction with the European Union dates back at least to 1992, when French voters registered their petit oui of 51% in a referendum on the Maastricht treaty. Across the EU, public support for the union has fallen from 65% to 50% since.

But the second phase of discontent came in the form of new (or revived) populist parties. Outfits opposed to immigration or euro-zone bail-outs began to flourish in northern Europe around five years ago. (One of them, Timo Soini’s Finns party, entered government in Finland this week.) More recently anti-austerity...

from The Economist: Europe http://ift.tt/1G2WxIP

How to shrink a city

ONE of the biggest challenges for the world this century is how to accommodate the hundreds of millions of people who will flock to cities, especially in emerging economies. Coping with this human torrent will be fearsomely difficult—but at least the problem is widely acknowledged. That is not true of another pressing urban dilemma: what to do with cities that are losing people.

They are hardly unusual. Almost one in ten American cities is shrinking. So are more than a third of German ones—and the number is growing (see article). Although Japan’s biggest cities are thriving, large numbers of its smaller ones are collapsing. Several South Korean cities have begun to decline—a trend that will speed up unless couples can somehow be persuaded to have more babies. Next will come China, where the force of rapid urbanisation will eventually be overwhelmed by the greater power of demographic contraction. China’s total urban population is expected to peak by mid-century; older industrial boom...

from The Economist: Leaders http://ift.tt/1ezRAej

Why Turks should vote Kurd

THE man who dominates Turkish politics, and has done so for 12 years, is not running in the general election on June 7th. As president since August, Recep Tayyip Erdogan is meant to stay above the fray. Yet the vote is still all about him. He is campaigning for the Justice and Development (AK) party that he founded to win a majority large enough to change the constitution into one with a strong executive presidency. It is to be hoped that he fails.

As prime minister for over 11 years Mr Erdogan notched up many achievements. The economy was mostly stabler and growth steadier than in the 1990s. He tamed Turkey’s coup-prone generals and its aggressively secularist establishment. In October 2005 he secured the prize of opening negotiations to join the European Union. He pushed Turkey into a more active foreign-policy role in the Middle East. And he has come closer than any predecessor to making peace with the country’s 15m restless Kurds.

But these achievements are now looking less impressive. Growth has slowed sharply, the lira is under pressure and investors are fretting about a coming bust, not least because Mr Erdogan has attacked the...

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At last, a challenge to the impunity of FIFA

FEW arrests can have provoked such Schadenfreude as those of seven senior officials of FIFA, football’s world governing body, early on May 27th at a swish Swiss hotel. The arrests are part of a wide-ranging investigation by America’s FBI into corruption at FIFA, dating back over two decades. The indictment from the Department of Justice named 14 people on charges including racketeering, wire fraud and paying bribes worth more than $150m. They are likely to face charges in a US federal court. As more people start talking in a bid to sauve qui peut, the investigation will with luck reach into every dark and dank corner of FIFA’s Zurich headquarters (see article).

American extraterritorial jurisdiction is often excessive in its zeal and overbearing in its methods, but in this instance it deserves the gratitude of football fans everywhere. The hope must be that FIFA’s impunity is at last brought to an end and with it the career of the...

from The Economist: Leaders http://ift.tt/1RqGLcP

From followers to leaders

Introducing the latest in feather-duster technology

IT IS a courageous foreigner who drives on China’s roads. A combination of tens of millions of inexperienced drivers and a general disregard for traffic rules makes them among the world’s deadliest. Braver still would be the car manufacturer that dares to put a car loaded with automated-driving features on such roads. Western notions of what is a safe distance between cars mean little in China. How could an autonomous vehicle conceived for orderly Germanic roads cope with such anarchy?

Nevertheless Audi was this week giving journalists demonstrations of hands-off motoring through the frantic Shanghai streets. Its test cars were in town for a giant consumer-electronics fair, where it announced deals with Baidu, China’s biggest search-engine and mapping firm, and Huawei, a telecoms-equipment manufacturer, to kit out its connected cars of the future.

The German firm’s faith in China’s digital boom may be well placed, if this week’s convention is a guide. This is the first year that a version of the Consumer Electronics Show (CES), which is held every year...

from The Economist: Business http://ift.tt/1FQ3kDD

A palette of plans

BUSINESSES are bombarded with advice on strategy. Many gurus urge them to discover a “blue ocean” where they can swim without competition. Others argue that this is a pipe dream—a blue ocean will immediately be turned red by competitors—and advise them to focus on flexibility. Some pundits preach the first-mover advantage; others urge firms to be fast followers. Bosses end up confused and cynical, with some lurching from one strategy to another and others concluding that they never want to hear the word “strategy” again.

The Boston Consulting Group (BCG) made its name with clever ideas about strategy, most notably the growth-share matrix, which helps firms divide their lines of business into stars, cash-cows, dogs and question-marks. Now it has brought some clarity to the current confusion with a new book, “Your Strategy Needs a Strategy”, by Martin Reeves, Knut Haanaes and Janmejaya Sinha. The BCG trio argue that business is so fast-moving and diverse these days that a single, overarching strategy will no longer do. The competitive landscape is constantly changing in many industries; businesses speed through the life-cycle from stars to dogs. So,...

from The Economist: Business http://ift.tt/1FQ3kDA

Exploring the Amazon

NOT long after Jeff Bezos, the founder of Amazon, said he would pay $250m of his own money for the chronically loss-making Washington Post, in August 2013, he sat next to the newspaper’s editorial-page editor, Fred Hiatt, at a dinner. It was a perfect opportunity to influence the Post’s line, but Mr Bezos reportedly preferred to talk about other things on his mind, such as exploring the dark side of the moon.

Technology, not journalism, is Mr Bezos’s passion. So far he has been the sort of proprietor newshounds dream of, with a light touch on editorial matters and a willingness to finance experimentation and bear losses. After years of shrinking ambitions and cost-cutting under its old owners, the Graham family, Posties are experiencing a period of expansion and excitement under Mr Bezos. As other American papers have continued to cut staff, the Post has hired more than 100 newsroom employees since the takeover was announced.

In its revamp, the Post is following some of Amazon’s tactics. Much as Mr Bezos has made his e-commerce firm...

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Bedside manners

No need to call

IN 2008 Jordan Shlain treated an elderly patient with pneumonia. He was worried about her, so he gave her his mobile number—but she didn’t use it, and ended up in intensive care. This set Dr Shlain thinking about how to follow up with patients; his simple solution was a daily phone call and a spreadsheet to record the data. One day another patient in his San Francisco surgery remarked, “Dude, you need to turn this into software.” He did, and earlier this year Cedars-Sinai Health System, a hospital operator in Los Angeles, adopted a patient-feedback system developed by the firm he set up, Healthloop.

Doctors can use Healthloop to send their patients questions about their condition, by e-mail, text or smartphone app. Its software then works out when intervention by a doctor or nurse is needed. It is efficient and patients like it. These days the idea of finding value in health data is very much in vogue but most attention is being showered on the promise of “big data”, in which giant databases on genomics, population health and treatment are crunched in the hope of discovering medical insights. But there is...

from The Economist: Business http://ift.tt/1FQ3kni

Offshore fog

Try to keep it pumping

WHEN the North Sea oil- and gasfields were booming, inefficiencies mushroomed. Now, times are tough—and it may be too late for belt-tightening. The offshore industry, particularly the British bit of it, is squeezed between a lower oil price, stubbornly high costs, an ageing infrastructure and a looming bill of many billions of dollars for decommissioning old platforms.

The result threatens the profitable and unprofitable alike. If even a few companies which use the pipelines and terminals shut down, then the bill lands all the more heavily—and perhaps cripplingly—on the survivors. Similarly, if a piece of the infrastructure breaks (or its operator goes bust) then everyone who uses it is in trouble.

Operating expenditures in North Sea oil have doubled in 15 years. Only a fifth of that increase, at most, is because of increased activity. The biggest reason is inflated costs, reckon consultants at McKinsey, followed by pure inefficiency, such as needlessly high standards and complexity. Poor planning wastes the time of highly paid staff: overlapping safety briefings for example, or...

from The Economist: Business http://ift.tt/1FQ3knb

Malone wolf

Still plenty of dealmaking left in him

JOHN MALONE is revered as a genius by investors and executives in the telecoms and cable businesses. The boss of Liberty, a cable and media conglomerate, he has struck more deals than perhaps any other tycoon in the world—buying and selling hundreds of firms worth over $100 billion since the 1970s, often negotiating on his own, using calculations that fit on a napkin. Unusually for an empire-builder he has made his investors a ton of money, and has little interest in the public eye.

On May 26th Mr Malone, pictured, made his biggest bet yet. A cable TV and broadband firm he backs, Charter Communications, will buy two rivals, Time Warner Cable (TWC), and Bright House, to create a giant worth $130 billion, including debt. The takeover is the sixth-largest in American history. It will make Mr Malone the world’s pre-eminent media baron. Including his radio and foreign operations he will control businesses with triple the operating profits of Rupert Murdoch’s empire. Although Comcast, run by another media titan, Brian Roberts, will still be the biggest cable operator in America—with...

from The Economist: Business http://ift.tt/1FQ3iM3

Big plan, a little fuzzy

FROM the damming and diverting of mighty rivers to the building of huge new cities from the ground up, China’s government does not shy away from grand schemes. The Communist Party’s highest decision-making body has now signed off on another one: the integration of the capital, Beijing, with the nearby port city of Tianjin and much of the surrounding province of Hebei in a “co-ordinated development programme”.

The idea had been under quiet consideration for years, but after the Politburo announced on April 30th that it would move forward, extravagant claims quickly followed. It could turn the region into a “Chinese version of the Rhine-Ruhr”, one of Germany’s most populous and productive areas, said Xinhua, a state-run news agency. Other reports likened the potential effects to the “powerful boost” enjoyed by Los Angeles when, decades ago, it incorporated nearby counties. An economist at Peking University said it would be “earthshaking” for the region’s population of more than 100m and bring “tremendous economic progress in north-eastern China by 2050”. According to the finance ministry, the project will attract 42 trillion yuan ($6.8 trillion) in investment over the next six years alone.

The decision to go ahead was taken at a meeting chaired by Xi Jinping, China’s president and the Communist Party’s leader. Reports in state media often link his name...

from The Economist: China http://ift.tt/1FQ373m

Determined

EVERY year on June 4th, thousands of people gather in Hong Kong’s Victoria Park to commemorate the crushing of the Tiananmen Square protests in 1989. The former British colony is the only place in China where large-scale mourning of the bloodshed is tolerated. This year crowds will gather as usual. But a growing number of people now criticise the event, arguing that Hong Kong should fight for its own causes, rather than marking the mainland’s struggles. The splintering of the pro-democracy movement in Hong Kong is a product of growing antipathy towards China. Other protest movements increasingly stress a separate identity in the territory too. The governments of Hong Kong and China are watching with alarm.

When Hong Kong reverted to Chinese rule in 1997, Chinese officials hoped that a gradual narrowing of the wealth gap between it and the mainland would help to overcome the misgivings of many Hong Kongers. There has been much evidence since then of the mainland’s growing success: millions of rich tourists have been pouring into Hong Kong to shop, China’s brightest students have been flocking to local universities and mainland professionals have been...

from The Economist: China http://ift.tt/1FQ39Z6

A goring concern

THE slowdown in China’s property market has been cruel to makers of wooden flooring. After double-digit growth for much of the past decade, sales have slumped. Kemian Wood Industry, which used to boast of the quality of its composite floorboards, took radical steps to deal with the downturn. It switched its focus to online gaming and changed its name. After its rechristening as Zeus Entertainment in early March, its share price doubled in short order. This past week, though, its transition plan hit a snag. CCTV, the state broadcaster, accused it of being one of a series of companies that are “fabricating themes and telling stories” to inflate their share prices.

Zeus Entertainment denies the allegations. But the wider trend is clear. At least 80 listed Chinese firms changed names in the first five months of this year. A hotel group rebranded itself as a high-speed rail company, a fireworks maker as a peer-to-peer lender and a ceramics specialist as a clean-energy group. Their reinventions as high-tech companies appear to have less to do with the gradual rebalancing of China’s economy than with the mania sweeping its stockmarket.

The...

from The Economist: Finance and economics http://ift.tt/1d1BDwo

Polishing up a tarnished trophy

SPORT is riddled with graft, from the bungs given to officials who help hand tournaments to undeserving countries, to the betting syndicates that rake in ill-gotten gains from match-fixing with help from unscrupulous players. Football’s world governing body, FIFA, more than any other sports organisation, has become a global symbol of this pervasive corruption.

It has been beset by scandal in recent years, connected to, among other things, the distribution of global marketing rights and the awarding to Russia and Qatar of the rights to stage the 2018 and 2022 World Cup finals respectively. Numerous investigations have been held, and several reports penned. But they have failed to stop the rot at the Zurich-based organisation.

That may change after the events of May 27th. Swiss police, at the request of American prosecutors, swooped on a Zurich hotel and arrested seven of the organisation’s officials on suspicion of receiving bribes totalling more than $100m. Among those marched...

from The Economist: Business http://ift.tt/1J8TQoc

Flying too high

 

 

 

 

IF YOU were a Chinese worker you could have spent the past year toiling to earn a living. Or you could have bought some shares and sat on the sofa (see article). Chinese equities have been on a bull run of epic proportions. The CSI300, an index of the biggest mainland stocks, has more than doubled over the past year. That looks positively anaemic compared with ChiNext, a market for Chinese startups which has tripled in 12 months; let alone with shares in Qtone, an online-education company that gained almost 1,300% between its listing early in 2014 and the middle of this month. Its own directors have warned investors to be wary of “ignorant hype”.

The signs of overvaluation are everywhere. Stocks listed on the Shenzhen exchange, home to most tech firms, have an average price-earnings ratio of 64; for those on the exchange for small and medium-sized enterprises it is 80. (For most stocks a P-E ratio above...

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The weaker sex

AT FIRST glance the patriarchy appears to be thriving. More than 90% of presidents and prime ministers are male, as are nearly all big corporate bosses. Men dominate finance, technology, films, sports, music and even stand-up comedy. In much of the world they still enjoy social and legal privileges simply because they have a Y chromosome. So it might seem odd to worry about the plight of men.

Yet there is plenty of cause for concern. Men cluster at the bottom as well as the top. They are far more likely than women to be jailed, estranged from their children, or to kill themselves. They earn fewer university degrees than women. Boys in the developed world are 50% more likely to flunk basic maths, reading and science entirely.

One group in particular is suffering. Poorly educated men in rich countries have had difficulty coping with the enormous changes in the labour market and the home over the past half-century. As technology and trade have devalued brawn, less-educated men have struggled to find a role in the workplace. Women, on the other hand, are surging into expanding sectors such as health care and education, helped by their...

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The crowd will see you now

THAT people scour the pages of the world wide web searching for answers to medical problems is well known. Indeed, doctors label the most diligent seekers of online medical information “cyber-chondriacs”. Some frustrated individuals have even set up their own websites, replete with data about their conditions or those of family members, to encourage strangers to help solve “mum’s medical mystery”, or offer a cure for a particular brain cancer.

But to create a lone website in the hope that a knowledgeable passer-by may shed light on a mysterious illness is the cyber-equivalent of crying in the wilderness. To create one on which anyone and everyone can post a problem, so that anybody who might, for whatever reason, want to help knows where to go, is more like setting up a stall in a market at which buyers and sellers know where to meet. And such a stall, called CrowdMed, now exists.

The need for a “crowdsourced” service like this comes from the number of rare diseases around. The National Institutes of Health, America’s medical agency, recognises 7,000—defined as those that each affect fewer than 200,000 people. A general practitioner cannot possibly recognise all of these. Moreover, it may not be clear to him, even when he knows he cannot help, what sort of specialist the patient should be referred to. Research published in 2013, in the...

from The Economist: Science and technology http://ift.tt/1dmSjiH

Early man

This blade, together with almost 150 other stone artefacts unearthed recently in Kenya, to the west of Lake Turkana, pushes the age at which early humans are known to have made such tools back 700,000 years, for dating of the strata they were found in suggests they are 3.3m years old. Sonia Harmand of the West Turkana Archaeological Project, in Nairobi, and her colleagues, report the finds in this week’s Nature. Who made these tools is not known, but they are contemporary with a species called either Kenyanthropus platyops or Australopithecus platyops, depending the palaeontologist doing the naming, so it is likely that members of this group were the craftsmen. Stone cores found with the blades show they were made, as was common subsequently, by striking flakes off a large rock.

from The Economist: Science and technology http://ift.tt/1dmSiLF

Unsettling settlements

THE scene was familiar: regulators meting out vast penalties to banks, scathing statements about gross misconduct, yet no individuals charged with any crimes and some confusion as to what exactly the banks were admitting to and what effect that would have. On May 20th a consortium of American and British government agencies announced settlements with six international banks regarding claims that they had manipulated currency markets. The six—Bank of America, Barclays, Citigroup, JPMorgan Chase, Royal Bank of Scotland (RBS) and UBS—agreed to pay $5.6 billion in penalties. All but Bank of America also admitted to crimes, although the significance of that is unclear.

The settlement is the culmination of a long investigation into perhaps 20 employees of the banks, who referred to themselves as the “cartel”. Between 2007 and 2013 they used coded communication in an online chat room to help one another make money, especially by rigging the two daily “fixes” of the exchange rate between the dollar and the euro, violating rules on market manipulation and collusion. As one of them wrote in a chat session, “If you aint [sic] cheating, you...

from The Economist: Finance and economics http://ift.tt/1dmSn27

Waste not, harm not

BLUNDERS in economic policymaking abound, but among the worst are energy subsidies. They stoke waste, squeeze other spending, enrich middlemen and help the comfortably-off more than the poor, who use little energy.

Include the cost of pollution and the bill is even higher. A new IMF working paper puts it at a stonking $5.3 trillion, or 6% of global GDP—more than all government spending on health care. The+ biggest subsidies are in the poorest countries (where they can reach 18% of GDP) and the lion’s share goes to coal, the dirtiest fuel, which no country taxes properly. By contrast, renewable energy subsidies (mostly in the rich world and not covered in the IMF paper) amount to a mere $120 billion, and would vanish if fossil fuels were taxed fully. The biggest subsidiser of fossil fuels is China at $2.3 trillion, followed by America ($700 billion), Russia ($335 billion), India ($277 billion) and Japan ($157 billion).

Big numbers bring big headlines. In this case, they also introduce much greater margins for error. The common and strict definition of subsidies is “pre-tax”: directly intervening to keep a price...

from The Economist: Finance and economics http://ift.tt/1AhtE9v

America the not so brave

Weil walked

CRACKING down on tax evasion “has been a core piece of President Obama’s agenda” since before he took office, according to a spokesman. His administration’s campaign to that end has been a “groundbreaking” success, according to the Department of Justice, the agency that has led it. Indeed, the DoJ considers it nothing short of “historic”.

There is some truth in all this. In 2010 Congress knocked a hole in the once-impregnable secrecy of Swiss banks by passing the Foreign Account Tax Compliance Act (FATCA). It forces financial firms around the world to disclose their American clients or face penalties. Swiss banks have paid billions in fines for helping Americans evade tax; Wegelin, the country’s oldest private bank, had to close its doors in 2013 after pleading guilty to conspiracy to evade taxes. A dozen big Swiss banks are still under investigation, and 100-odd smaller ones have joined a programme that will let them avoid indictment by coming clean and paying fines.

But the American government has been nowhere near as energetic and effective as it claims. It has been slow to chase tax...

from The Economist: Finance and economics http://ift.tt/1K5fvw1

A faulty gauge

EXPORTS from north-east Asia have long been a good gauge of the health of the world economy. The region, which knits together Japan’s high-tech wizardry, Korean and Taiwanese expertise in electronics, and China’s prowess in assembly, produces nearly a quarter of all goods shipped around the world. This juggernaut now appears to be slowing. South Korean exports fell by 8.1% in April from the same month a year earlier, the worst figure in two years. China’s were down by 6.4% year on year. Taiwanese and Japanese exports are limping along as well. The weak figures seem to point to a renewed funk for the world economy. In fact, Asian exports are simply not the reliable barometer of global demand they once were.

First, there is the problem of currency swings. The bad showing for Asia is made worse by the convention of reporting data in dollar terms. America buys only about 15% of Asian exports, but when the dollar is as strong as it has been, the value of exports to other countries appears to shrink. In other currencies, or in volume terms, shipments have been more robust. Frederic Neumann of HSBC, a bank, notes that Europe’s imports from...

from The Economist: Finance and economics http://ift.tt/1K5fsAv

Reversal of fortune

FOR a while, it seemed that two market trends were inexorable. The euro was falling towards parity with the dollar and yields on German ten-year government bonds were on their way to zero. Both reversed in April (see chart).

The shift was so dramatic that it seems likely investors were caught napping. Dhaval Joshi of BCA, a research group, says that the European Central Bank’s bond-buying created a degree of “groupthink” among investors, with everyone convinced that yields were headed lower. When the trend changed, there was a stampede for the exits.

In the currency markets, investors were bullish on the dollar at the start of the year in the belief that the American economy was strengthening and that the Federal Reserve would push up interest rates, perhaps as soon as June. But the economic data have been disappointing: revisions may show that GDP declined in the first quarter and the Atlanta Fed’s GDPNow model suggests the second quarter is only on target for annualised growth of 0.7%. Meanwhile, economic data in the euro zone were generally better than expected—hence a pattern of selling the dollar and buying euros...

from The Economist: Finance and economics http://ift.tt/1Anm7FL

War-torn reform

EVEN before the Russian invasion of the east of the country last year, the task of reforming Ukraine’s economy was daunting. Its people are poorer than they were when the Soviet Union ended (see chart 1). Corruption pervades Ukrainian life. The traffic police demand bribes at random and newspapers carry advertisements for companies that will forge exam papers for you. To this set of chronic problems, the war has added acute ones: the destruction of much of the country’s industrial base, spooked investors and a balance-of-payments crisis. If Ukraine is to build a stable economy, it must fix the public finances, shake up the all-important gas sector and stamp down on corruption against the backdrop of an unresolved conflict.

Ukraine’s public debt is around 100% of GDP, much of it denominated in foreign currency. Already unsustainable, its debt burden is on an upward path: in the first quarter of 2015, Ukrainian GDP...

from The Economist: Finance and economics http://ift.tt/1K5fvfF

A cosmetic approach

Something smells fishy

IN THEORY, all 5,400 listed firms on America’s equity markets are always for sale. In reality, bids rarely come out of the blue. That may explain why a notice posted on May 14th on the website of America’s main stockmarket regulator, the Securities and Exchange Commission (SEC), of a ludicrously high bid for Avon Products, a beleaguered door-to-door cosmetics company, prompted investors to buy first and ask questions later.

By the time the soaring share price had forced three trading halts on the New York Stock Exchange, those who had bothered to read the relevant filings closely were ready for Avon’s shares to plunge, as they duly did. The bidder, whose announcement the SEC posted automatically, claimed to be incorporated in the British Indian Ocean Territory, home to more long-range bombers than corporate raiders. Its name, PTG, was a play on TPG, a big private-equity firm.

Eventually, Avon announced that it had not heard from any would-be buyer, and that it was not even sure PTG existed. (Curiously, after the hoax was exposed, Avon’s share price came to rest above its starting-...

from The Economist: Finance and economics http://ift.tt/1Anm7pu

Signifying something

WILLIAM FAULKNER called the book “a real son of a bitch”. Readers can empathise. “The Sound and the Fury”, published in 1929 when the then 32-year-old author was poor and unknown, uses a kaleidoscope of narrators to chronicle the decline of a genteel Mississippi family. The novel starts from the perspective of Benjy Compson, the youngest son, whose view of events is a mess of memories, jumbled without order or insight. A young man with the “idiot” mind of a child, his stream-of-consciousness account bounces between the decades as it drops from one sentence to the next. The effect is disorienting. Performing it on stage seems like an act of hubris.

“The novel is a complete train wreck,” says John Collins, the artistic director of Elevator Repair Service (ERS), a theatre group. But turning unwieldy prose into living, breathing works of theatre is the kind of problem that has animated ERS for nearly 25 years. The company is best known for “Gatz”, an audacious, eight-hour production of the entire text of “The Great Gatsby”, which became a surprise hit in theatres around the world. Now armed with a broader audience, the company is resuscitating its 2008...

from The Economist: Books and arts http://ift.tt/1HwHZkK

A near-run thing

“Is that the way to St Helena?”

Waterloo: The History of Four Days, Three Armies and Three Battles. By Bernard Cornwell. William Collins; 352 pages; £25.

Waterloo: Four Days that Changed Europe’s Destiny. By Tim Clayton. Little, Brown; 588 pages; £25.

Waterloo: The Aftermath. By Paul O’Keefe. Overlook; 392 pages; $37.50. Bodley Head; £25.

WITH the bicentenary of the battle of Waterloo fast approaching, the publishing industry has already fired volley after volley of weighty ordnance at what is indeed one of the defining events of European history. About that, there can be no argument. Waterloo not only brought to an end the extraordinary career of Napoleon Bonaparte, whose ambitions had led directly to the deaths of up to 6m people. It also redrew the map of Europe and was the climax of what has become known as the second Hundred Years War, a bitter commercial and colonial rivalry between Britain and France that had begun during the reign of Louis XIV. Through its dogged resistance to France’s hegemonic...

from The Economist: Books and arts http://ift.tt/1HwHW8w

Transcendental meditation

Seiobo There Below. By Laszlo Krasznahorkai. Translated by Ottilie Mulzet. New Directions; 451 pages; $17.95. Tuskar Rock; £16.99.

BACK in 2007 Colm Toibin, a prizewinning Irish author, told a press conference that the most interesting writer he had come across in two years of reading contemporary fiction as a judge of that year’s Man Booker International prize was Laszlo Krasznahorkai, a reclusive Hungarian with a reputation for sentences so long and convoluted that some of them went on for an entire chapter.

So impressed was Mr Toibin by the Hungarian’s fabulist confections that he founded a small publishing imprint, Tuskar Rock Press, to bring just such fiction to a wider audience. Eight years on, Mr Toibin’s faith in Mr Krasznahorkai’s talent has been vindicated. Just after Tuskar brought out his latest book, “Seiobo There Below”, in Britain, the Hungarian novelist was named the winner of the Man Booker International prize for 2015 on May 19th. Now ten years old, the award differs from the annual Man Booker prize for fiction in that it is presented every two years, and for a body of...

from The Economist: Books and arts http://ift.tt/1K5e6Wa