Economist 1/8/16

  1. ON JANUARY 5th, in a pre-dawn ritual going back decades, a handbell rang to mark the year’s first auction at Tsukiji, Tokyo’s sprawling fish market. The star attraction was a glistening 200kg tuna, sold to a sushi restaurant chain for ¥14m ($118,000).Some 60,000 people work under its leaky roof, and hundreds of forklifts, carrying everything from sea urchins to whale meat, careen across bumpy floors.The site’s owner, the city government, wants it moved.That is unpopular. Traders resent being yanked to a sterile new site to the south. The new market is being built on a wharf whose soil is contaminated by the toxic effluent from a former gasworks. The clean-up and negotiations delayed the move for over a decade.The final blow was Tokyo’s successful bid to host the 2020 Olympics. A new traffic artery will cut through Tsukiji, transporting visitors to the games’ venues.
  2. EARLIER this week Airline Ratings released its annual airline safety ranking. The survey uses a star rating system based on factors such as fatalities over the past 10 years, various safety accreditations or endorsements and, more interestingly, whether the fleet is composed of Russian-built stock (for which airlines are penalised).Unsurprisingly Qantas topped the list for the third year running; the Australian carrier has been fatality-free during the jet-engine era (its last crash took place in 1951).Having said that, in ranking terms it is much of a muchness. Qantas has an exceptional record, but 148 of the 407 airlines that were rated achieved the full seven-stars. This number would be higher if more had received an IATA Operational Safety Audit (IOSA) certificate. This is an award that accrues two stars in the rating system. But many budget carriers can’t apply for it as they tend not to be members of IATA, the airline association that awards the certificate.
  3. But the simple fact is that air travel remains incredibly safe and, despite recent incidents, is getting safer. Last year there were 560 fatalities out of 3.6 billion passengers carried, or 0.000016%. This is below the 10 year rolling average of 714 fatalities and well below the 1,597 deaths out of 141m passenger reported 50 years ago (still an insignificant 0.001%.On a more sobering note, deaths on planes are increasingly being caused by malicious acts rather than technical failures. According to data from FlightGlobal, 2015 saw the fewest accident-related crashes (eight) and deaths (161) since 1946.Terrorism, hijacks or pilot suicide aren’t included in the Airline Rating methodology. This helps to explain why GermanWings received the maximum seven-stars and why Malaysia Airlines achieved five-stars.
  4. MACY’S, an American department store, announced results on January 6th.The company plans to cut thousands of jobs and close 40 of its 770-odd shops.But two American “off-price” retailers, TJX and Ross, are thriving.Traditional American retailers have several problems, many of their own making. Since the financial crisis they have lured shoppers with steady discounts. Margins have suffered accordingly.Furthermore, department stores’ model—buying clothes from vendors months before those clothes arrive in shops—looks increasingly slow.Trends seem to move more quickly and weather patterns are becoming less predictable.As traditional retailers falter, off-price retailers are zipping ahead. Their basic model is as follows: when designers make more clothes than normal shops will sell at full price, TJX and Ross buy them at a deep discount, then resell them.Ross has become the single largest clothing shop in America, according to Euromonitor. TJX has a collection of smaller shops, such as TJ Maxx and Marshalls, which collectively have an even bigger footprint. In 2014 TJX reached a symboblic milestone: its revenue surpassed that of Macy’s.
  5. THE declaration on January 6th that North Korea had detonated its first hydrogen bomb was met with a show of joy on the streets of Pyongyang, its capital, and with despair in most others.Outsiders picked up the magnitude-5 earthquake caused by the blast, and put its epicentre at Punggye-ri, site of an underground complex in the north-east, near China, where three previous tests, in 2006, 2009 and 2013, took place.A fourth nuclear test had been expected. But most experts dismiss the claim that this was a hydrogen bomb of the sort found in advanced nuclear arsenals. The explosion was roughly as big as the atom bomb detonated in 2013; even a failed detonation of an H-bomb would be more powerful. The test is a sobering reminder of the progress that three generations of Kims have made in expanding their nuclear capability—despite outside efforts to curb it.Under Barack Obama, America has let its North Korea policy drift. But the country that can do most is North Korea’s big neighbour and supposed friend, China. Its banks are the main conduit for North Korean money. More worryingly, China does next to nothing to stop the flow of nuclear technology between rogue states and North Korea

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