Economist 11/30/15

  1. IN JUNE of last year the European Central Bank reduced its benchmark interest rate, at which it lends to commercial banks, to 0.15% and its deposit rate, which it pays to banks on their reserves, to -0.1%.The ECB was in effect charging commercial banks to hold their excess deposits at the central bank.Three months later, the ECB cut the deposit rate again, to -0.2%.Not so long ago, the lowest possible interest rate was thought to be zero. There is a ready alternative to keeping money in banks: holding it as cash.This has not caused commercial banks to swap their reserves at the central bank for cash, as theory would suggest. That is because to do so would itself be costly. To settle payments, banks must move vast sums between themselves each day. The costs of counting, storing, moving and insuring lorry-loads of banknotes apparently trumps the smallish charge Europe’s central banks are levying to hold electronic deposits.
  2. For all these countries, it is the exchange rate against the euro that matters most. To suppress their currencies, their central banks must offer interest rates that are further below zero than the ECB’s. The deposit rate in Denmark and in Switzerland is -0.75%. In Sweden it is -1.1%.Most banks, however, have shielded retail customers from such charges, on the assumption they would move their accounts elsewhere. As a consequence, overall bank deposits have been stable. The banks have simply absorbed the cost of deposits at the central bank, which has dented profits.
  3. THE Sikh religion provides for a gathering of believers, the Sarbat Khalsa, in times of great crisis. It was convened regularly in the 18th century, when the Mughal empire was trying to exterminate the Sikhs. But it was called just twice in the 20th century. The last time was in 1986, as a response to bloodshed that began with the Indian army’s assault on the Sikhs’ Golden Temple in Amritsar.And so a tremor was felt in the state of Punjab when a Sarbat Khalsa was called for November 10th, to be held on an unassuming patch of ground outside Amritsar. Its topic was blasphemy and the desecration of the Sikhs’ holy book: torn pages had been showing up around the state for weeks.The Badals understand that they and not the religious leaders were the real target—for their family is widely thought to control the gurdwaracommittee that appoints the priests.Few seem happy with the Badals. Their many businesses have thrived, though little else does. Their electoral hold on the state is helped by the fact that not only are they Sikhs, like most of Punjab’s population, but they are from the Jat Sikh caste, the majority within the community.
  4. Each government sets different rules for what data may be looked at, by whom and with what authority. This is partly due to politics (Belgium has numerous squabbling police forces); and partly because of legal restrictions—the European Parliament takes privacy extremely seriously, as does the German government.Breaking down barriers to information-sharing is a much better idea. Terrorists and criminals cross national borders easily. Law-enforcement should be able to do the same. The police should have access to databases such as passenger name records on internal European flights, and the fingerprints of people who have arrived claiming refugee status.The internet has (by accident, not design) has fostered a culture in which anybody can pretend to be who they like.We do not allow anonymous births, cars, planes or bank-accounts. Insisting on absolute anonymity online looks a bit anomalous.
  5. FOR more than two decades, 50 was a kind of magic figure for cyclists in the Tour de France. That is maximum threshold for hematocrit, the percentage of oxygen-carrying red-blood cells that can be found coursing through human vessels without external help. Breach the 50-mark and be suspended on the reasonable suspicion that you were using EPOs (erythropoietins), a red-blood-cell booster; but ride with a lower figure and risk being left behind. As of last year, 38% of all top-ten finishes in the Tour de France from 1998-2013 were found to have doped themselves with EPOs.Yet each year only 1-2% of all tests result in penalties.he preferred method therefore is “micro-dosing”. Instead of injecting EPO subcutaneously (under the skin), risking a longer “glow time” during which they might be found out, athletes have learned to administer smaller doses directly into their veins. Marginal gains matter. The difference between the first and second place in the 100m dash in world championships held earlier this year was 0.01 seconds, faster than blink of an eye.The most common anti-doping test is called a T/E ratio, where “T” stands for testosterone and “E” is a steroid called epitestosterone. The human body normally has equal amounts “T” and “E” in the blood. But the World Anti-Doping Agency (WADA) allows T/E ratios as high as 4:1, to allow for the small segment of the population who have the natural genetic variation. Hence, the ordinary-blooded athlete finds wiggle-room to dope.To address some of these issues, the “Athlete Biological Passport” (ABP) was introduced in 2009. The passport records all of an athlete’s vital physiological records to generate a baseline blood profile. Over time, an electronic trail should allow testers to see unnatural variations and sudden spikes to compare against the body’s natural ability.

Economist 11/20/15

  1. According to research published by the Pew Forum, a pollster and think-tank, there was an impressive rise, between 2007 and 2014, in the proportion of religious Americans who agree that “homosexuality should be accepted by society“. Among Catholics the rise was from 58% to 70%, among mainline Protestants there was a jump from 56% to 66% and among Mormons (starting, as you’d expect, from a low base) there was an even faster increase from 24% to 36%.To put it simply, the Mormons are radically committed to religious liberty, including the (often contentious) liberty of sub-cultures to live by their own particular norms.
  2. Since 1980 South Carolina voters have an almost-perfect record of picking the candidate who goes on to win the Republican nomination. Local grandees call their state a microcosm of conservative America.That conservative diversity has long made South Carolina more representative than either Iowa.The one blot on South Carolina’s perfect record of picking a winner: 2012, when state Republicans chose Newt Gingrich, the former Speaker of the House of Representatives, over the eventual nominee, Mitt Romney.The Republican who wins South Carolina will earn timely momentum. Its primary will be followed by a flurry of more than a dozen contests, many in the South.
  3. The World Bank estimates that it takes about 4.3 years, on average, to resolve a bankruptcy case in India, more than twice as long as in China. The recovery of debts is just 25.7 cents on the dollar, one of the worst rates among developing countries. Take Kingfisher, once India’s second-biggest airline, which was grounded in 2012 with debts of more than $1.5 billion. Only this year did its creditor banks manage to seize its former headquarters in Mumbai. Unlike most other countries, India has no unified bankruptcy code, and its courts have to interpret a variety of sometimes conflicting laws that touch on insolvency.At the moment, creditors cannot take any legal action against a defaulter until a restructuring plan is in place, which usually takes between three and ten years.To be declared sick, and qualify for court protection, firms have to apply to the Board for Industrial and Financial Reconstruction, a government agency, which will not act until the firm has frittered away half of its net worth in losses. By then it may be too late to save it.
  4. Why are strongly left- and right-wing parties so popular on social networks? One reason is that they are prolific. In October Marine Le Pen, the leader of the National Front, tweeted 626 times. Italy’s Northern League posted on social media once every six minutes this month, on average. Populists also interact with supporters better than mainstream parties do, says Jamie Bartlett of Demos, a think-tank in London.Social media reward starkness, not subtlety. Ms Le Pen’s tweeting “Bye Bye Schengen” in September was shared 600 times. By contrast, a message from Donald Tusk, the president of the European Council, calling for more co-ordination between Europe’s home and foreign policies went largely unnoticed.
  5. A WEEK after the carnage in Paris, terrorists struck again, this time in an attack on a hotel in Bamako, the capital of Mali.The first characteristic of this form of terrorism is that the main weapon used is guns, rather than bombs. This is partly because assault weapons are relatively easy to obtain. East Africa is awash with guns that have come down from Somalia.Bomb-making, on the other hand, requires either access to explosives (whether commercial or military, both of which are tightly controlled) or the ability to make explosives from commonly available materials—a dangerous and difficult job.A second characteristic of this style of attack is that the perpetrators have no expectation of coming out alive.The advent of suicidal attackers, on the other hand, means there is less scope for negotiation. Often the main reason such attackers have for taking hostages is to complicate efforts by security forces to regain control of the site, since hostages may be killed in the crossfire.The recent attacks suggest two responses. The first is the need to do more to tackle gun-smuggling. In Europe is should be possible, for instance, to prevent the legal sale of decommissioned assault rifles that can be converted back to lethal use.The second is that the rich world needs to do more to build up special forces and hostage-rescue capabilities across Africa and the Middle East.

Economist 11/19/15

  1. In 2014, the number of migrants arriving by boat fell by a third between September and October as the voyage became more dangerous. This October, the opposite happened. A record 218,953 migrants arrived, a 27% increase on September.Last year, most migrants arrived in Europe via a dangerous 300km journey from Libya to Lampedusa, an Italian island in the Mediterranean.Rougher seas and a shortage of boats saw arrivals in Italy fall by half last month to just 8,500 arrivals (4% of the total). But migrants now overwhelmingly take the eastern Mediterranean route from western Turkey to the Greek islands.The Aegean Sea is choppy and windy in October, but with journeys as short as 10km—the destination is visible through binoculars.
  2.  Last year 32,700 people were killed in terror attacks worldwide, nearly twice as many as in 2013.Most of the deaths last year (and every year) are in the Middle East and Africa—not the West. Iraq, Nigeria, Syria, Pakistan and Afghanistan together account for three-quarters of the global total.Western countries suffered under 3% of all deaths in the past 15 years. Boko Haram, an Jihadist group that operates mainly in northern Nigeria and Cameroon,was responsible for over 6,600 deaths.That is more than any other group in the world—even IS.67 countries saw at least one death last year compared with 59 the year before.
  3. since 2007 Exxon Mobil, the world’s biggest publicly listed oil company, is proposing a carbon tax, and has already put a shadow price on each tonne of CO2 it emits. And in the lead-up to the climate-change summit that starts in Paris at the end of this month, six European oil majors have advocated carbon-pricing systems.Cynics start from the premise that this is a public-relations exercise, rather than a commitment to wean the world off fossil fuels—which still account for 87% of the global energy mix.First, it enables them to launch a stealth attack on coal—usually a dirtier but cheaper fossil fuel.Bob Dudley, the boss of BP, a British major, says switching just 1% of power generation away from coal-fired plants to those fired by natural gas would cut global CO2 emissions by as much as increasing renewable energy capacity by 11%.
  4. FOR the first time in 40 years, junior doctorsin the National Health Service have voted to go on strike for several days next month. The government is proposing a new contract to hit its declared target of a fully staffed seven-day service, including in the evenings and at weekends.But the British Medical Association, the doctors’ trade union, has broken off talks, claiming that some juniors will lose pay under the new contract.Yet the impending junior doctors’ strike shows how hard it is to depoliticise health, because underlying it is one big issue: money. Since it is almost entirely taxpayer-financed, the NHS budget must be set by the government. The Tory manifesto promised to maintain health spending in real terms, ring-fencing it from public-spending cuts.That is in part because demand for health care increases inexorably every year. An ageing population, new technology and drugs, and a rise in obesity and alcohol consumption all play a part.
  5. The market for rice is more distorted than that for any other staple. Rice growers pocketed at least $60 billion in subsidies last year, according to the OECD, twice as much as maize (corn) farmers, the second-most-coddled lot.Rice feeds more people than any other crop. Almost half the world’s population eats it every day. It accounts for more than 20% of the calories consumed by the average Asian, and 50% of the intake of the poorest 500m.All subsidies breed inefficiency and raise costs, whether for consumers, producers or taxpayers.This is bad enough in rich places like Japan, which levies an average tariff on imported rice of 322% and spent roughly $12 billion last year on handouts to rice farmers.the same cannot be said of consumers in China, Indonesia and the Philippines. All three countries have high tariffs on rice to protect local farmers. The three also set a minimum price for home-grown rice, and restrict imports in various ways. The result is domestic prices that are 50-100% above international ones.When prices were falling in 2012-13, Thailand, then the world’s biggest exporter, wasted $16 billion on a failed effort to boost them through hoarding.

Economist 11/18/15

  1. Yoweri Museveni, Uganda’s president since he took power after a coup in 1985. A staunch ally of the West, he introduced multiparty elections in a country torn apart by Idi Amin. But he has been in power for almost 30 years and seems determined to stay for longer. In February Uganda will hold elections.There are eight presidential candidates, but only three are credible. Mr Museveni himself; Amama Mbabazi, a former prime minister who has broken with his one-time boss; and Kizza Besigye, a long-standing opposition leader who was Mr Museveni’s doctor in the bush wars of the 1980s.At the last election in 2011 turnout was just 59%, down from 71% in 2001. Mr Museveni’s supporters are largely bought, reckons Mr Sewanyana. Some say they are paid between 5,000 and 10,000 Ugandan shillings ($1.50-$3) to come to rallies, as well as given transport and food.Partly thanks to long suppression, the opposition is weak and divided.MPs are obsequious to the president; officials and judges serve at his whim, and ministerial jobs are given to allies and family members. Janet Museveni, the president’s wife, is a cabinet minister; Muhoozi Museveni, his son, is head of the presidential guard.
  2. THE $12.2 billion deal in which Marriott, an American hotelier, will buy a rival, Starwood, follows months of rumours about the bid target, whose brands include Westin and Sheraton. In April Starwood’s slow growth, at a time when other chains are doing well, prompted it to start exploring “strategic and financial alternatives”. Marriott’s acquisition, announced on November 16th, will make it the world’s biggest hotelier: it will manage more than one million rooms, about 50% more than its closest rival, Hilton.In America revenue per available room (RevPAR, revenue divided by rooms available in a given period), has risen for the past five years, according to STR, a data firm. PwC, a consultant, expects occupancy rates this year to reach their highest level since 1981.Crucially, hotel companies own fewer hotel buildings than they once did. In this “asset-light” model, firms earn fees for managing and franchising hotels. Marriott owns or leases just 2% of the hotel rooms it operates. Hoteliers do not profit from soaring property prices, but they aren’t gutted by a slump either.
  3. ON AVERAGE, a nonstop transatlantic flight and back spews out about a tonne of CO2 emissions per passenger.A new study of the 20 biggest transatlantic carriers by the International Council of Clean Transportation (ICCT) found that there was a 51% difference between the fuel efficiency of the best-performing airline, Norwegian Air Shuttle, and the worst, British Airways (BA).One reason for its impressive performance is that it predominately runs a fleet of modern, efficient Boeing 787-8s. Norwegian only began flying the transatlantic route in 2013. The planes it uses are, on average, also only two years old. Its high pax-km/l is also down to the fact that it squeezes in more passengers. Its planes typically have no business-class seats, and are instead configured with 259 seats in the economy cabin and 32 seats in a premium-economy one.
  4. FOR well over a century, people have predicted that technology will make business travel obsolete.Yet far from stowing their strollers, putting away their passports and signing in to Skype, the corporate world’s “road warriors” are clocking up more miles than ever.According to a report by the Global Business Travel Association (GBTA), firms around the world will spend a record $1.25 trillion this year on sending employees on work trips. This largely reflects growing business confidence.Another survey, by BusinessTravelNews, suggests that management consultants and makers of expensive hardware remain the biggest spenders on travel among American companies.Yet despite this, most executives say they enjoy life on the road. According to the GBTA around half are happy with the amount of travelling they do, while over a third say they would like to do more. This may be because the daily grind back at base has got a lot tougher too.
  5. Worldwide deforestation is bad for the environment. It is responsible for about 10% of climate-change emissions and leads to massive reductions in biodiversity.How can we protect forests? One option is direct regulation: in other words the placement of restrictions on road building or the establishment of protected areas. Another option is to impose a fine or tax on forest clearing. Governments can also pay landowners to conserve their forest under a “payment for ecosystem services” (PES) contract.It is extremely difficult to measure the success of such policies. For example, after Brazil tightened regulation and introduced satellite monitoring in the mid-2000s, deforestation slowed to about half a million hectares annually.The gold-standard method of evaluating conservation policies is the systematic use of randomised-controlled trials (RCTs), similar to those used to test pharmaceuticals. RCTs involve randomly selecting two groups of individuals or regions and implementing a policy only for one group, keeping the second as a control.

Economist 11/17/15

  1. Nearly 10m foreign sightseers will enter the Indonesia this year, many heading straight to the bars and beaches of the island of Bali. That is a record, but still well short of the 12m or so who visit tiny Singapore.Inflexible visa rules, dangerous transport, annual forest fires and lingering worries about terrorists are among many of Indonesia’s handicaps.As well as pepping up domestic travel, the government wants at least 20m foreign tourists to visit annually by 2020.For the first time tourism now has a government ministry of its own. Its promotional budget this year quadrupled to nearly $100m, and could rise to $300m in 2016.Immigration authorities have at last granted visa-free entry to tourists from dozens of countries, batting back nationalists who say states that benefit should open their borders in return.
  2. AMERICA remains the world’s most profligate spender on health care, according to a report published on November 4th by the OECD, a club of 34 mostly rich countries. In 2013 America spent, on average, $8,713 per person—two and a half times as much as the OECD average. Yet the average American dies 1.7 years earlier than the average OECD citizen. This longevity gap has grown by a year since 2003. Americans have the same life expectancy as Chileans, even though Chile spends less than a fifth of what America spends on health care per person.
  3. The prize, said the Nobel committee, was also an encouragement for Tunisia to stay the course. But a month later, the country looks rather wobbly. A rift in the dominant political party threatens to destabilise the government, which was already struggling to jump-start an economy plagued by corruption, red tape and two big attacks on foreign tourists claimed by Islamic State this year.Neighbouring Libya, mired in civil war, may have provided the training ground for those terrorist strikes.The security threat adds to pressure on Nidaa Tounes, the party with the most seats in parliament, to resolve a long-simmering power struggle between rival factions.
  4. One wing, led by Mohsen Marzouk, the party’s secretary-general, believes Hafedh Caid Essebsi, who leads the other wing, is trying to create a family dynasty. His father, Beji, is Tunisia’s president and the founder of the party.The party is a patchwork of leftists, liberals and conservatives, as well as trade unionists and businessmen, many of whom have ties to the regime of Zine el-Abidine Ben Ali, the former dictator. They united under the banner of Nidaa Tounes, and the leadership of Mr Essebsi, to oppose Nahda, a moderate Islamist party that led the government from late 2011 to early 2014.(Any split in Nidaa Tounes would, ironically, make Nahda the largest party in parliament.)If the government survives, as expected, that may be its biggest accomplishment. It has done little to reform the inneficient economy, which still favours old elites. The public sector, already too large, has recently grown. Corruption, say some, is worse than ever.The lack of economic progress in the countryside makes securing Tunisia more difficult. Thousands of Tunisians are thought to have joined Islamic State in Iraq, Libya and Syria.
  5. SLAMMING the door on Syrian refugees would be a betrayal of America’s values, declared Barack Obama on November 16th. Refugees should not, he said, be conflated with terrorists.Yet in spite of his exhortations, 22 Republican governors declared on the same day that they would not accept any Syrian refugees in their state, in defiance of Mr Obama’s plan to resettle 10,000 Syrians in America over the next year.Michigan has one of the largest Arab-American communities in the country with several hundred thousand residents of Syrian, Iraqi and Lebanese origin. The generally pro-immigration Mr Snyder has hitherto encouraged Syrians to come to his state.The governors’ and presidential contenders’ reaction is opportunistic and counterproductive. They see the tragedy as an opportunity to look prudent and protective of their citizens while ignoring the fact that since the 1980s not a single refugee, who has gone through the refugee-resettlement process, has committed a terrorist act in America (the Boston bombers were asylum seekers). So they are in fact “protecting” their citizens from a threat that barely exists. It is much easier for a foreign terrorist to come to America on a student or tourist visa, as the 9/11 hijackers have done, than to go through the year-long vetting process in refugee camps.In spite of their grandstanding the governors don’t have the legal power to stop refugees from settling in their state. Once they have been admitted to America they will be able to move around freely, like all residents.

Economist 11/16/15

  1. FACEBOOK recently issued its latest report on the number of requests it received from governments around the world for data about its users’ accounts in the first half of 2015. This is the social network’s fifth report since 2013 and shows the demand for such information is rising. Requests in the United States have jumped by a third since the first report. Britain, the third highest for total requests, has experienced an increase of 92% over the same period. Although these numbers are small (American requests to Facebook for account information represents just 16 per 100,000 of its users).In July Facebook lost a case in New York where it contested 381 search-warrant requests; mostly on the grounds that legally only a defendant can contest a search warrant.
  2. The lads’ mags are in trouble. In the first six months of this year, sales of 11 of the 15 titles classified as men’s magazines, including Loaded, dropped from the same period last year.Part of this decline could simply be due to the economic slow-down. Women’s titles, such as Marie Claire,Cosmopolitan and Tatler, have taken a battering this year too. But the fall at the lads’ mags has been steeper: Loadedhas lost nearly 13% of its circulation. Even FHM, owned by Emap, a British publisher, which remains the market leader with a circulation of over 700,000, was down by 2%.
  3. SOUTH AFRICANS eat about 1.8m tonnes of chicken a year.Chicken, the cheapest meat here, is the main source of protein for poorer South Africans. But demand is growing, and a weak currency has sent prices soaring by 13% over the past two years.All of this makes the South African government’s slowness in resolving a trade impasse with America over imports of chicken, beef and pork all the more baffling.American producers complain that their access to the South African market is frustrated by high duties (imposed ostensibly because American producers have been “dumping” chicken at below the cost of production.Now Barack Obama, America’s president, has stepped in with tough talk and an ultimatum. Unless South Africa removes barriers to American meat within 60 days it could lose preferential access to America’s markets that was granted under the African Growth and Opportunity Act (AGOA).This would affect South African exports of citrus and wine.In June, Mr Obama renewed AGOA, which lets African countries sell many goods tariff-free to America. South Africa was included despite critics within Congress arguing it was rich and mature enough not to need a leg up.
  4. ON NOVEMBER 6th the British government proposed a series of reforms to higher education. Amid a long list of suggested changes, one measure stood out: those universities that passed muster on a new rating system would be allowed to raise tuition fees in line with inflation.In 2010, when a Conservative-led coalition was preparing to raise the cap on tuition fees (from £3,290 to £9,000 a year), as many as 50,000 protesters hit London’s streets and critics lined up to pronounce the move a blow to social mobility.Five years on, it is clear the critics were wrong. In 2014, just under one-fifth of 18-year-olds from the poorest backgrounds went to university, more than ever before.Without financial support for those from poor backgrounds, such a rise would almost certainly have led to fewer going to university. But tuition fees are rarely paid up front. Instead, the government offers loans to students heading off to university for the first time.
  5. African migrants encounter as much undisguised hostility in Malta as anywhere in Europe.In the early 2000s, when thousands of African asylum seekers began landing here annually, it came as a shock.Malta is both the EU’s smallest state and its most densely populated one. Maltese feel they should have to take fewer migrants than larger states.Malta is barely 200 miles from Libya, still a major transit country for refugees though no longer as important as Turkey. But the flow to Malta has virtually shut down—and no one knows why. Over 140,000 migrants arrived in Italy by sea in the year to November 10th; in Malta, since the end of January, the number is just 20.The Maltese economy grew in the second quarter at an annual rate of more than 5%. Unemployment is the third-lowest in the EU. The budget deficit this year is expected to be 1.6% of GDP.At the EU-Africa migration summit, European leaders pleaded with African countries to help them to bring their migrant problem under control.Locals say some asylum-seekers who have been accepted in other Mediterranean countries, like Spain, are coming to Malta in search of jobs. The country even offers passports to anyone who invests €1m.

Economist 11/9/15

  1. WHEN Spanish explorers first landed in San Francisco they settled on a sunny patch of land known today as the Mission District, displacing the Native Americans who had been living there.Those concerned about gentrification of the Mission supported a ballot measure—decided by voters in San Francisco’s election on November 3rd—which would have stopped all new construction in the area for 18 months.The proposition was defeated at the polls.San Francisco has the most expensive rents in America. A one-bedroom apartment costs, on average, over $2,640 a month, 23% more than in New York city. Second to San Francisco, at $2,590 a month, is nearby San Jose in Silicon Valley, where many tech companies have their headquarters. New York city comes third.San Francisco’s onerous permit process (which means it can take years before new constructions break ground), as well as its strict zoning laws, have limited the supply of new dwellings.Some blame tech firms directly for the city’s problems. One closely-watched ballot initiative would have restricted property-owners from renting out their homes for short-term stays through websites like Airbnb for more than 75 nights a year. This, too, was defeated, in part because Airbnb spent so much to fight it.
  2. FEW industries have been shaped more by mergers and acquisitions than pharmaceuticals.In the first ten months of this year, mergers involving drug companies in the S&P 500 share index were worth a total of $328 billion, according to Dealogic, an information provider. Last year pharmaceuticals was the most deal-hungry industry in America.Some of the merger mania is driven by reasons not specific to the drugs industry, such as historically low interest rates. These make the returns on buying assets relatively more attractive.Another motive is the desire to achieve an “inversion”. This is a ploy in which a business based in a country with high corporate-tax rates merges with one based in a low-tax place, so as to shift the combined group’s domicile to the target firm’s home country.In recent years it has appeared that the return on research-and-development spending is dwindling, and that blockbuster drugs are getting harder to find.This is why many of the largest firms, including Sanofi, Merck and GlaxoSmithKline, are based to some extent on successions of deals.Another trigger for deals is that many big firms are suffering from the expiry of patents on their drugs—which allows makers of cheap copies to grab much of their business. This is another reason to buy a rival firm with promising new medicines in development.
  3. SHARES in Walmart, the American retailing behemoth, have dropped by a third so far this year. But those of Walmex, its separately listed Mexican arm, are up 30%.although Mexicans are gloomy citizens, they are cheerful consumers. Retail sales (excluding new stores) increased 6.2% in the first nine months of this year after growing less than 1% in 2014 and barely at all the year before.The United States’ relatively strong growth is boosting remittances from Mexicans living there. Thanks to a devaluation of the peso against the dollar.It is also a sign that the reforms are having some effect. In an overhaul of the telecoms sector, the government encouraged new entrants to challenge América Móvil, a near-monopoly. It gave independence to the regulator and abolished long-distance charges for fixed-line calls within Mexico and the fees charged by América Móvil for national roaming.The government says it is beginning to overcome one of the biggest causes of low wages: low-productivity jobs in small firms that escape tax and regulation, which account for 60% of employment. The evidence of progress is patchy. This year the number of people in formal employment has risen at an annual rate of 4.4%.
  4. As far as is known, Ferrari has never tried to register the sound of its engines. Perhaps that is because it knows, from long experience, how much effort and expense others would have to expend to get their engines to sing from the same song sheet.Having flatplane crankshafts in its engines helps no end. Such power units spin up faster and rev to much higher speeds than conventional vee-eights with crossplane cranks. In so doing, they bark with a banshee shriek rather than a throaty rumble.There is nothing new about flatplane cranks. They were the preferred type back in the early days of motoring. Their simple layout made them easy to manufacture, and they were more than adequate for the needs at the time. In the pursuit of a smoother ride, however, Cadillac introduced the first crossplane vee-eight in 1923.
  5. So why bother with flatplane cranks anyway? For two reasons. First, they do not need heavy counterweights to balance the static weight of their pistons, connecting rods and crankpins. Being all in one plane, opposing pairs of pistons balance each other instead. With a lower rotational mass, the engine can then spin faster, which translates into greater power and a more immediate response to the throttle—an essential feature of sportscars.The second attraction is the flatplane vee-eight’s firing order, alternating evenly between the two banks of cylinders (L-R-L-R-L-R-L-R ). This provides not only better airflow into the engine, but also evenly spaced pulses of exhaust gas from each bank of cylinders—and hence better “scavenging” of the waste gases from the engine.Overall, a flatplane vee-eight is a smaller, lighter engine with a lower centre of gravity than its crossplane equivalent—all features prized by sportscar-makers.