Economist 10/14/15

  1. Squeezing every ounce of performance out of Ferrari is important. Selling 10% of the firm in an IPO in New York, which is expected early next week, will help to pay for Fiat Chrysler’s ambitious investment plans. (Fiat Chrysler’s investors will eventually get 80% of the stock; a Ferrari family member owns the other 10%.) At the upper end of the price range Ferrari would be worth nearly €10 billion, half the value of Fiat Chrysler itself.The least expensive Ferrari costs some €180,000. The firm has consistently turned a profit and, for the car industry at least, makes a handsome operating margin of 14-16%.Ferrari spent €541m, a fifth of its revenues, on research and development in 2014 (though it is unclear how much of this went on its Formula 1 motor-racing team); capital spending accounted for another 12% of revenues.
  2. MBA remains hugely popular. Nobody knows exactly how many people study for the degree globally, but 192,000 masters degrees in business were awarded in America in 2012, making it easily the most popular discipline among post-graduate students. Worldwide 688,000 people sat the GMAT, the de facto entrance exam for MBA programmes.The reason for this drop is partly cyclical: people tend to apply to business schools during downturns in an attempt to shelter themselves from the economic storm. But the MBA faces many longer-term problems. The most pressing is tighter visa requirements in parts of the rich world.Canada and other countries do not just covet foreigners deciding whether to apply to American schools.89% of students found a job within three months of graduating. Their median basic salary is close to $100,000, an increase of 88% compared with their pre-study salaries.
  3. TIPPING in America is out of control. On that most can agree. The minimum that a waiter in even the greasiest café now expects seems to be 20%.New York Eater writes that Union Square Hospitality, the big restaurant group run by Danny Meyer which owns several well-known New York restaurants, is to ban tipping.Mr Meyer says that the current situation is bad for everyone. Diners turn into employers, responsible for setting the pay of the person who serves them.As we have mentioned before, the idea that tipping ensures good service is questionable. Diners don’t tend to vary their tips, regardless of the service they receive. So to maximise earnings, the best thing for a waiter to do is serve lots of people as quickly as possible. All in all, if the price of the food were also to account for the cost of paying waiters—as it already does with, say, rent, corporation tax and servicing the boss’s company car—then everyone would be happier.
  4. SINCE Canada enacted a rule in 2011 requiring veiled women to reveal their faces during public citizenship ceremonies, the country has sworn in 680,000 citizens. Just two have refused to comply.When and where women wear a niqab, which covers all but the eyes, became an issue last month when the Conservative government said it would appeal to the Supreme Court a lower court’s decision that the rule contravenes the Citizenship Act.The fuss is a godsend for Stephen Harper, who hopes voters will re-elect him for a fourth term as prime minister—despite their fatigue with his ten-year rule and a weak economy. “When you join the Canadian family in a public citizenship ceremony it is essential that that is a time when you reveal yourselves to Canadians,” he declared.Canada’s 1m Muslims are dismayed. Although hate crimes in general are declining, those targeting Muslims are not.Public opinion is with the prime minister. Canadians are famously tolerant, but 80% think women should unveil at citizenship ceremonies.
  5. THE generals who took over Thailand in mid-2014 have settled in for the long haul and watched the economy slump. They have stifled dissent and defended their grip on power by arguing that they are needed to restore “public order and morality”.For those who dare criticise them, the generals have devised what they euphemistically call “attitude adjustment” sessions. These are aimed at instilling a proper sense of “understanding” and respect for Thai institutions, including their favourite one, the monarchy. The sessions sometimes consist merely of being locked up for a few days.Since last year’s coup, the authorities have “summoned” nearly 800 people for attitude adjustment, according to iLaw, a Bangkok-based NGO.

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