January, 2018


The dollar keeps weakening. Is that good news for the world?

AT THE start of 2017, just before Donald Trump was inaugurated as president, a survey of fund managers by Bank of America Merrill Lynch (BAML) found they believed that being positive on the dollar was “the most crowded trade”. It turned out they were right to be cautious. On a trade-weighted basis, the currency has fallen by 9% against other major currencies in the past year. It is not clear what the Trump administration thinks about this. At the recent World Economic Forum in Davos, Steven Mnuchin, the treasury secretary,Read More

A travel agent is trying to charge fees for sunbeds

IN KEEPING with the trend for charging for things travellers used to get free, it should perhaps come as no surprise that sunbeds are the latest feature of a standard holiday on which travel agents are slapping extra fees. Thomas Cook, a British package-holiday firm, has announced that it will allow holidaymakers to pre-book poolside loungers for £22 ($31) per person. Six days before the start of a trip, travellers will get an email offering them the chance to reserve specific sunbeds. The booking tool will include a map thatRead More

Why don’t foreign investors take fright more often?

BACK in the days of the gold standard, central bankers were very concerned about the views of international investors. They believed that maintaining the value of their currencies would reassure creditors. That is why they were so resistant to the idea of floating currencies. Georges Bonnet, a French finance minister, put it best Who would be prepared to lend with the fear of being paid in depreciated currencies always before his eyes? Upgrade your inbox Receive our Daily Dispatch and Editors’ Picks newsletters. This fear still shows up from timeRead More

How to board a plane without a boarding pass

EARLIER this month a woman arrived at O’Hare International Airport in Chicago without a ticket, boarding pass, or passport and flew to London. Prosecutors claim she did this by sneaking past officials from the Transportation Security Administration, a government agency responsible for airport security, while they were inspecting other travellers’ boarding passes. She was briefly thwarted when she tried to do the same thing at the boarding gate for a flight to Connecticut. But the gate agent caught her and asked her to sit down. After spending the night inRead More

Monetary policy suffers a shortage of central bankers

IN THEIR quest to stabilise the job market, central banks are setting a bad example. Jerome Powell, whom senators this week confirmed as the next chairman of America’s Federal Reserve, will lead an institution with three existing vacancies on its seven-member board, and a fourth that will open up imminently. Not since July 2013 has its rate-setting committee boasted the full complement of 12 voting members. Upgrade your inbox Receive our Daily Dispatch and Editors’ Picks newsletters. This monetary undermanning is, however, much worse in Nigeria. Its monetary-policy committee wasRead More

How microcredit can help poor countries after natural disasters

BOTH, in different ways, worry about liquidity. And global warming may, indeed, be bringing meteorologists and financiers together. On January 18th, VisionFund, a microlending charity, and Global Parametrics, a venture that crunches climate and seismic data, launched what they billed as the “world’s largest non-governmental climate-insurance programme”. The scheme will offer microfinance to about 4m people across six countries in Asia and Africa affected by climate-change-related calamities. Natural disasters are becoming more frequent and severe. They disproportionately affect poor countries, where many eke livings from vulnerable agricultural land. Yet itRead More

Qualcomm is fined for anti-competitive practices—again

THE tech industry hardly needs another reminder that trustbusters are on its case. But the European Commission is always happy to oblige. On January 24th Europe’s executive body slapped a penalty of €1bn ($1.2bn) on Qualcomm, one of the world’s largest chip-designers, for abusing its dominance in baseband processors, a critical component in mobile phones. Large fines are becoming something of a habit for Qualcomm, which will have paid out nearly $1bn a year, on average, to trustbusters the world over since 2015. This week’s penalty, which amounts to nearlyRead More

Why drones could pose a greater risk to aircraft than birds

THE “Miracle on the Hudson”—the successful ditching of a US Airways jetliner into New York’s Hudson River in 2009 after it hit a flock of geese—taught frequent flyers two things. First, it really is possible to land an aircraft on water, just as is shown on seat-back safety cards. Second, and more worryingly, the incident showed how dangerous birds can be to aircraft, particularly when they get sucked into engines. The machines are supposed to be designed to withstand an impact by the feathered creatures. Using big guns, chickens haveRead More

Morgan Stanley’s unexciting model takes the prize on Wall Street

MORGAN STANLEY emerged in 1935 out of a global financial disaster, as one of Wall Street’s leading firms. In a rare shred of consistency in America’s turbulent markets, history has repeated itself. But it was a close call. An ill-timed infatuation with debt ahead of the 2007-08 financial crisis threatened to add it to the industry’s towering funeral pyre, which consumed all its big competitors with the exception of Goldman Sachs. Of the two, Morgan Stanley came out of the crisis the more tarnished, less for what it did thanRead More

Direct-lending funds in Europe

WHEN Caronte & Tourist, a Sicilian ferry company, needs a new ship, it is cheap and easy to borrow from a bank. But in 2016, when Caronte’s controlling families wanted to buy back the minority stake held by a private-equity firm, banks balked at the loan’s unusual purpose. Edoardo Bonanno, the chief financial officer, also worried that the €30m ($33m) in extra bank debt might make shipping loans harder to obtain from them in future. So he turned instead to a direct-lending fund run by Muzinich & Co, an assetRead More