- INVESTORS were expecting bad news when Sainsbury’s, Britain’s second-largest supermarket chain, reported annual results on May 6th. Sainsbury’s obliged, following Tesco, its bigger rival, in recording a “kitchen-sink” loss—writing down lots of overvalued assets. Although Tesco’s kitchen-sinking was in a different league (it lost £6.4 billion), Sainsbury’s still announced charges of £753m ($1.1 billion), producing an overall loss for the year of £72m. But hefty write-downs now, chiefly of underused hypermarkets, may mean bigger profits later when the assets are sold, probably for residential development. The write-downs do nothing to tackle British grocers’ underlying problem: the loss of customers to two German discount chains, Aldi and Lidl.
- Mr Obama itches to sign the Trans-Pacific Partnership (TPP), a trade deal that would link 11 economies of the Pacific rim—including Japan and Singapore, but not China—with America. The deal would reduce tariffs and, more importantly, harmonise regulations between the countries to make trading easier.According to one estimate, by 2025 the TPP would raise American incomes by 0.4% per year. The public largely agrees with the president: 58% of Americans see free trade mostly as an opportunity.Many Democratic politicians are less trade-friendly than those that vote them in (the influence of trade unions may have something to do with it). They fret that imports from low-cost countries such as Vietnam will hurt American workers in industries such as carmaking and textiles. This is not a foolish worry. Trade has probably held down blue-collar workers’ wages.
- LIFE is pretty sweet for America’s airlines at the moment. The price of jet fuel has been hovering at its lowest point for six years and no prospect of pesky foreign competition any time soon. As a result of all this, North American carriers are expected to record a combined net profit of $13.2 billion in 2015 according to IATA, an airline association.Yet there is also another reason for American carriers’ rosy health: the amount they reap from baggage fees. In 2014 they earned $3.5 billion from ferrying our luggage around, according to US Department of Transportation figures released this week. Although that is a record, that amount has actually changed little in recent years. It is a consistently lucrative pursuit.Airlines seem to have settled on a standard price, at least for domestic flights, of somewhere around $25 for the first checked bag. Of the big carriers, only JetBlue and Southwest do not charge for this.
- Some South Africans wondered why King Goodwill continues to be bankrolled by taxpayers given his pronouncements that clash with the country’s progressive constitution.King Goodwill is just one of ten traditional kings, and one queen, each receiving a yearly public stipend of about $110,000. Some 8,000 other traditional leaders, including chiefs and headmen, get smaller amounts. But King Goodwill, unlike the others, will also receive $4.8m this year for the upkeep of his household: seven palaces, six wives and at least 28 children. In rural areas, far from the courts, chiefs and headmen play a practical role in mediating disputes. But customary law often stands at odds with South Africa’s Bill of Rights, which protects women and minorities, among others. Much of South Africa’s communally held rural land is also the richest in minerals. When traditional leaders strike deals with mining companies, the danger is that chiefs and their families will benefit most. Last year the Restitution of Land Rights Amendment Act made it easier to lodge land claims. President Jacob Zuma, a Zulu, has encouraged traditional leaders to file claims before the deadline in 2019; King Goodwill is claiming rights to the entire province of KwaZulu-Natal.
- OVER $13 trillion is sitting in American bank accounts and money-market funds, earning little or no interest. If consumers were even marginally more demanding, they could earn tens of billions of dollars in extra returns. That is the premise behind MaxMyInterest, a year-old electronic service aimed at slothful but yield-hungry savers. It offers to move money from banks that want to shed deposits, and that therefore pay savers low interest, to ones in need of them, and so willing to pay more. At the same time, it makes sure that each account holds no more than $250,000, the maximum amount insured by the government, providing not just higher returns, but risk-free ones.The average interest paid on deposits in America is a microscopic 0.09% a year, according to BankRate, a data firm. MaxMyInterest’s clients receive 0.75% to 1.05%, with a weighted average of almost 1%.That may seem small, but it amounts to $2,000 a year for every $250,000 account.So far JPMorgan Chase, Citibank, First Republic, Wells Fargo and Bank of America—all titans of American banking—are working with MaxMyInterest to shift excess cash out of the accounts of willing customers. Meanwhile, Barclays, GE Capital, American Express, Ally Financial and Capital One 360 (formerly ING Direct) have signed up to receive money. Big banks should beware, too. They may benefit at the moment, but the spread of such services will make it easier for savers to shop around for higher rates.