Tag: Approved

THE theories lurk in odd corners of the web, occasionally bubbling into broader public consciousness. That President Donald Trump is working with Robert Mueller, for example, and preparing a hammer blow against the true threats to American democracy: Barack Obama, Hillary Clinton and their “deep state” allies. Such fabrications are not new. Yet the capacity of fake news to influence the outcome of political votes seems to have grown, and is provoking a backlash. France, for example, may soon allow judges to censor fake-news stories during election seasons. Malaysia’s government says it may jail those who publish or circulate fake news. Such steps risk enabling governments to limit legitimate speech (on April 3rd India’s government abandoned similar plans after widespread criticism). What is more, they are unlikely to do much to stem the flow of disinformation so long as there remains an audience of readers hungry for fakery.

Outrage over fake news is overwhelmingly targeted at the supply side:…Continue reading

ECONOMISTS do not much like their discipline being dubbed the dismal science. Some American universities are paying more attention to the noun than to the adjective. The reason is not philosophical, but pragmatic. Foreign STEM graduates (the acronym stands for science, technology, engineering and mathematics) can get visa extensions for three years of practical training (ie, work). Those from other disciplines are allowed only a year.

Two more years working in America means more earnings. It also means a better chance of finding an employer willing to sponsor an application for an H-1B visa, the main starting-point for skilled foreign workers who hope to settle permanently. In 2012 the Department of Homeland Security expanded the list of STEM courses. Now any reasonably crunchy economics degree can count as STEM with a tweak to its federal classification code, from economics (45.0601) to econometrics and quantitative economics (45.0603).

Economics departments appear to be catching on….Continue reading

Takeda shows some bottle

WHEN it comes to foreign deals, Japanese drug companies are interested in buying the product, not the company, says Fumiyoshi Sakai of Credit Suisse, a bank. So the news that Takeda, Japan’s biggest pharmaceutical company, wants to buy Shire, a similar-sized Irish drugmaker that specialises in treatments for rare diseases, came as something of a surprise. At $85bn, the combined value of the two firms would be in the ranks of industry behemoths such as Bayer and GlaxoSmithKline.

In recent years Takeda and its domestic rivals, Astellas and Shionogi, have bought a handful of small foreign firms. Most were American biotechnology companies with one or two specialist products. But the need to expand abroad is becoming a matter of greater urgency for Japanese drugmakers.

Their main domestic client, the government-run health system, accounts for 40% of drug spending. As Japan’s ageing population puts ever more pressure on its budget, the…Continue reading

TWENTY years ago Thailand was the most torrid of emerging markets. After a spell of overheated growth and wide current-account deficits, it had exhausted its foreign-exchange reserves and lost its currency’s peg to the dollar. In the aftermath, inflation approached 10% and the Bank of Thailand (BoT) struggled to restore confidence in the baht. In a widely cited paper by Romain Rancière of the University of Southern California and two co-authors, Thailand was used as a stark illustration that dynamism and danger, fast growth and occasional crises, went hand in hand.

A few of today’s emerging markets can still set the pulse racing—Turkey, for example, has combined breakneck growth with double-digit inflation and a worrying slide in the lira. But Thailand is not one of them. Private investment expanded by only 1.7% last year. Thailand’s sovereign bonds yield less than America’s. Inflation is once again a worry, not because it is too high, but because it is so stubbornly low. Consumer prices rose by…Continue reading

Mr Redstone has a message for you

NOTHING is ever easy at Sumner Redstone’s media empire. For two months the boards of CBS and Viacom, two entertainment companies controlled by the Redstone family, have explored a possible combination, something long wished for by Shari Redstone, the ailing media mogul’s daughter and anointed deputy. But on March 30th those talks turned to acrimony after CBS made an offer valuing Viacom below its market capitalisation of $12.5bn, and reserved no leadership role at the combined firm for Viacom’s CEO, Bob Bakish. Ms Redstone and Viacom’s bosses regarded the offer as an insult, according to sources.

The tactics amount to a stunning power play by Les Moonves, the CEO of CBS. It leaves Viacom, owner of Paramount film studio and cable networks including MTV and Comedy Central, in a state of limbo. Viacom’s board made clear the offer was a non-starter, and is expected to make a counter-offer that would include a leading role for Mr…Continue reading

“WE ARE sad to report that Tesla has gone completely and totally bankrupt.” So tweeted Elon Musk, boss of the electric-car company, on April 1st. He even posted a picture of himself supposedly drunk and inconsolable as proof. It was meant as an April Fool’s Day joke, but the gag backfired. It is uncomfortably close to the truth. America’s leading manufacturer of electric vehicles is under pressure. Mr Musk is fighting battles on many fronts and they all exacerbate his main threat: a financial squeeze that could eventually push Tesla over the edge.

Even Tesla’s shareholders, who are rarely put off by bad news, are jittery. Its shares have fallen by 16% since the end of February, most steeply after a Tesla using the firm’s Autopilot software crashed into a roadside barrier in California on March 23rd, killing the driver and raising questions about the safety of its system for semi-autonomous driving. The crash is being investigated by the authorities.

The pile-up of woes…Continue reading

ONE of the most fashionable ideas in business is that companies should earn their crust from subscribers, who are “locked in” for a period of time, rather than from customers who can easily switch to another provider at any time. Subscription models are seen by many investors and executives as the holy grail, because they promise a recurring stream of revenue. But the approach suffers from three underappreciated problems. Acquiring subscribers can be eye-wateringly expensive. Their urge to run away is often only temporarily suppressed. And consumers may have more than one relationship at a time.

The best-known subscription model is probably Amazon Prime. It has about 80m members in America alone and for $99 a year offers films and music, speedy delivery of goods and even discounts on goods such as baby food. There are many other examples. Netflix offers a wall of TV for a monthly fee. And more are coming. Venture-capital firms are pouring money into subscription-based home-delivery firms that…Continue reading

BOOK clubs usually meet to discuss literature. But members of DataKind, a group of volunteers that helps charities use data to improve their services, are gathering in London to study a legal text. The General Data Protection Regulation (GDPR), set to come into effect on May 25th, is arguably the most complex piece of regulation the European Union (EU) has ever produced. A thick print-out includes its 99 articles and 173 preliminary comments. Gianfranco Cecconi, a data scientist leading discussions, is poring over a lengthy section he has annotated in red pencil.

After years of deliberation on how best to protect personal data, the EU is imposing a set of tough rules. These are designed to improve how data are stored and used by giving more control to individuals over their information and by obliging companies to handle what data they have more carefully. Recent revelations that Cambridge Analytica acquired data on Facebook users in underhand, and possibly illegal, ways has underscored the need to…Continue reading

WHEN Spotify, a music-streaming service, went public on April 3rd, its founder, Daniel Ek, rang no bells on the trading floor of the New York Stock Exchange. Rather than the “pomp and circumstance” of an initial public offering, the Swedish firm, which is widely credited with turning round the fortunes of the music industry, opted for an unusual direct listing. No new shares were issued. Bankers did not sign up new investors, set a target price or stabilise early trading. Existing investors were simply allowed to trade their shares publicly.

Despite the low-key approach, and even as other tech firms’ shares wobbled, there was plenty of interest. That will cheer other firms considering going public. The share price ended its first trading day at $149, comfortably above prices reached in private markets earlier this year. That values the company at $26.5bn, making it the largest firm to list since Snap last year, and the eighth-largest tech listing ever.

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“THIS will require a quick lesson in global economics…bear with me,” says Erik Killmonger, the muscular villain in “Black Panther”, a long-running Marvel Comics series. In that saga and the recent film it inspired, Killmonger and the Black Panther vie for the throne of Wakanda, a fictional African kingdom little known to the outside world. A land of great wealth and technological sophistication, it lends itself to several quick lessons in economics. Bear with us.

The source of Wakanda’s riches is its “great mound” of vibranium, a versatile ore left behind by a meteor strike, which can absorb sound and motion. Like other deposits of natural treasure, Wakanda’s vibranium attracts some vicious intruders. But unlike some other resource-rich countries, Wakanda has never succumbed to outside foes.

That has helped it escape the “resource curse”, in which natural riches keep a country poor by crowding out manufacturing or ushering in predatory government. The curse is greatly feared. But Wakanda’s success in eluding…Continue reading