Economist 4/25/14

  1. Berkshire Hathaway is into all manner of business, from insurance to ice-cream parlours. Normally, such diverse groups suffer a “conglomerate discount”; but Berkshire’s shares trade at a 40% premium to the book value of its holdings. Mr Buffett’s proven formula has been to seek solid firms with good defences against competitors, leave their managers to run them as before, and hang on to them for the long term. His success over the past half-century makes him living disproof of the “efficient-markets hypothesis”.In any case, the best of Berkshire’s gains came in earlier decades, when it was easier to find small, nimble “gazelles” to satisfy its hunger for growth. Now to expand significantly it must hunt lumbering “elephants”.Mr Buffett says he has a succession plan, but Berkshire’s board may turn into a battlefield once he steps down (see article), with his replacement as chief executive torn between his son Howard, who will be the chairman, and strong-willed directors such as Bill Gates.Buffett should remind shareholders at the annual meeting of the examples of James Hanson of Hanson Trust and Henry Singleton of Teledyne. These two conglomerate-builders of the 1960s to 1980s ended their stellar careers by breaking up the empires they had created, having recognised that an orderly sale would realise more value than a long, sad decline. 
  2.  On April 24th a settlement was reached between 64,400 tech workers and Google, Apple, Intel and Adobe Systems, which stand accused of conspiring between 2005 and 2009 to restrict the pay of their staff by, among other things, agreeing not to poach rivals’ workers. Although the proposed settlement, rumoured to be worth $324m, should spare the firms from a court battle due to start next month, the legal jousting leading up to it has revealed evidence of discussions they would no doubt have preferred to keep secret.All of the firms had already settled a similar case brought by America’s Justice Department in 2010. And the risks grew even further last year when Pixar and Lucasfilm, two film studios, and Intuit, a software firm, reached a $20m settlement in a case involving claims that they had struck no-poaching agreements.
  3.  The scale of the massacre of civilians in South Sudan’s oil hub of Bentiu on April 15th-16th plumbed a new depth of hell. The rebel White Army (pictured), so-called after the ash its fighters sometimes smear on themselves, killed anyone they suspected of supporting the government.With each new offensive, large numbers of civilians from the two main ethnic groups, the Dinka, from which Mr Kiir hails, and Mr Machar’s Nuer, have found themselves caught in enemy territory.Uganda has backed Mr Kiir’s government with a large force. The rump state of Sudan to the north has sold weapons to both sides; Ethiopia is courted by the rebels, who accuse Egypt, with whom Ethiopia has sour relations, of backing Mr Kiir.Meanwhile, the UN has increasingly found itself in the line of fire. More than 50,000 civilians are sheltering in five of its bases. Some 10,000 UN peacekeepers are trying to protect them, but on April 20th they failed to do so when 58 people were killed by a mob. The roots of the conflict lie in a failure to build the basis of a functional state. When South Sudan got full independence from the north in 2011, its abundant aid money and oil revenue (virtually its sole domestic source of income) were used for two baleful purposes: to pay for an expanding army and to enrich the country’s new elite.South Sudan’s main international sponsors, such as the United States and the EU, have become less willing to pay off the warlords to keep the peace.
  4. THE Red Sea city of Jeddah is the most relaxed spot in the kingdom of Saudi Arabia. But its residents are worried by a rise in the number of people diagnosed with Middle East Respiratory Syndrome, known as MERS. Few cases had been reported since the virus, a less infectious but deadlier version of Severe Acute Respiratory Syndrome (SARS), was found in Saudi Arabia in September 2012. But Saudi officials announced on April 23rd that 11 new cases had been discovered that day alone, bringing the total to 48 cases in five days, compared with a total of 272 cases diagnosed in the past 18 months. Of those infected, 83 have died, including several foreigners of undisclosed nationalities.Though MERS first appeared in the oil-rich east of the country, possibly having passed to humans from camels.
  5. In 1967 the share of mothers who did not work outside the home stood at 49%; by 2000 it had dropped to just 23%.Taken as a whole, the group includes mothers at both ends of the social scale (see chart 2). Some are highly educated bankers’ wives who choose not to work because they don’t need the money and would rather spend their time hot-housing their toddlers so that they may one day get into Harvard. Others are poorer but calculate that, after paying for child care, the money they make sweeping floors or serving burgers does not justify the time away from their little ones.The first group is fairly small. Pew estimates that there are 370,000 highly educated and affluent stay-at-home mothers .That is 5% of all stay-at-home mothers with working husbands. How can women be taking over the workplace while simultaneously opting out of it? The answer is that men have been quitting the labour force even faster. Overall labour-force participation (for both sexes) has been declining since 2000, but for men it has fallen faster (from 75% to 69%) than for women (60% to 57%).  “The average full-time working woman earns just 77 cents for every dollar a man earns, Actually, it is a bit more complicated than Mr Obama pretends. If employers could really get the same work done for 77 cents on the dollar by hiring women, they would do so. Men in “full-time” work do indeed make more than women, but this is partly because they work longer hours (full-time here means 35 or more hours a week). Men also cluster in some of the better-paid professions: they are 87% of engineers but only 16% of teachers. They do more dangerous jobs: 92% of work-related deaths are of men. . Single, childless women earn 95 cents for every dollar a single, childless man makes, which is hardly the stuff of campaign slogans.

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