Economist 3/16/15

  1. Houston is not pretty, but it thrives. In the decade to 2010, the population of its metro area grew more than that of any other American city. Between 2009 and 2013 its real GDP increased by 22%, more than twice as fast as the American economy as a whole. Over two-thirds of the growth in crude oil production in the United States between 2009 and 2014 took place in Texas. As well as refineries and drillers, oil brings office jobs: ConocoPhillips and Halliburton both have their headquarters in Houston, as does BP’s America division. Exxon Mobil is building a huge new campus near The Woodlands, a wealthy suburb north of the city.More foreign goods now flow through Houston’s port than any other in America; some 51m people a year now fly through its two airports, one of which, Hobby, is being expanded by Southwest Airlines. Paradoxically, perhaps the city’s biggest strength is its sprawl. Unlike most other big cities in America, Houston has no zoning code.Last year authorities in the Houston metropolitan area, with a population of 6.2m, issued permits to build 64,000 homes. The entire state of California, with a population of 39m, issued just 83,000.A property slump could hit Houston’s core city—which relies heavily on property taxes—hard. It is already running a hefty deficit and carrying a heavy pension burden.
  2. Turkey has been suffering recently from a sharp fall in its currency. The Federal Reserve is partly to blame. The assumption that it will soon raise interest rates has bolstered the dollar at the expense of other currencies. The falling lira is raising the cost of imported goods and thus stoking inflation, just as the local economy is slowing. Mr Erdogan’s Justice and Development (AK) party has won three successive elections thanks in part to its strong economic record.Erdogan seems desperate to prop up growth, which increased by a feeble 1.7% year on year in the third quarter of 2014.In fact, the central bank has been lowering rates, even though inflation is well above the target of 5% and the lira’s fall is accelerating. Yet Mr Erdogan denounced its most recent cut, of a quarter of a percentage point in late February, as insufficie
  3. Unplanned teen pregnancies are more common among Hispanics than in any other group in America. They are most prevalent in rural areas, and strongly associated with childhood poverty.Motherhood can easily prove overwhelming for students.Small, drab Bernalillo is mostly Latino, poor and surrounded by mile upon mile of desert scrub. In the past three years a total of 39 teenagers have fallen pregnant while at high school, earning them a place in a programme. Most lack transport, so if they are late for the bus they miss school. Some have boyfriends at the school, who are offered fatherhood classes and prodded to help care for their baby.To date no student has chosen an abortion; very few local families would allow it, suggests Ms Cost. Yet traditional values stretch only so far. None of the mothers has married while at the school.One in five Hispanic girls gives birth while still a teenager, compared with one in six black and one in 11 white girls As a group, Hispanics suffer the most from childhood obesity. Almost one in four of them fails to graduate from high school on time. A legacy of under-education plays a role. A substantial minority of young Latinos, notably Mexican-Americans, have parents who never finished school.
  4. IN GROCERY, at least, globalisation has met its match.Carrefour of France has quit 19 foreign markets in the past 20 years. Tesco of Britain lost billions on a failed attempt to make it big in America, abandoned in 2013. In 2006 Walmart of the United States, the world’s biggest retailer, gave up on its attempts to conquer Germany and South Korea.he big success story in food retailing has been the international expansion of Aldi and Lidl, two German chains founded in 1946 and 1973 respectively. They are now the world’s biggest “deep-discount” grocers, offering mostly their own brands of goods and almost no premium-priced products. The Schwarz Group, which owns Lidl as well as a hypermarket brand, Kaufland, is also Europe’s biggest retailer. In Europe as a whole they are still relatively small: Aldi has a 3.3% share of sales and Lidl 3.8%.Aldi’s performance in Australia has been impressive. The discounter opened its first store there in 2001 but already has about 10% of the grocery market on the eastern seaboard.In America, Aldi has been quietly growing for decades. Aldi Süd has 1,375 stores under its own name, mainly on the east coast, but has expanded into Texas, Florida and California. Aldi Nord operates 435 shops in America under the name of Trader Joe’s. Together they have just 1.7% of the national market.Despite the impression of relentless expansion, Aldi is picky when it looks abroad.
  5. Britain announced on March 12th that it would join China’s new Asian Infrastructure Investment Bank (AIIB) as a founding shareholder. The AIIB is one of a number of new institutions launched by China, apparently in frustration at the failure of the existing international financial order to adapt quickly enough to accommodate its astonishing rise. Efforts to reform the International Monetary Fund are stalled in the United States Congress. America retains its traditional grip on the management of the World Bank. The Asian Development Bank remains based in Manila, but it is mostly run by Japanese bureaucrats. So it is perhaps understandable that China, flush with the world’s biggest foreign-exchange reserves and anxious to convert them into “soft power”.America, however, has reacted negatively to the AIIB.
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