February, 2018


Forecasting congressional votes could yield juicy returns

STOCK traders hang on central bankers’ every utterance. They scan news sites for market-moving events, such as terrorist attacks, and monitor President Donald Trump’s tweets for hostility towards publicly traded firms. Curiously, though, few analyse goings-on in Congress, which can shift the course of the world’s largest economy. Jonathan Strong, a former reporter (including at Roll Call, a sister publication of The Economist), hopes to change that. With the help of 0ptimus, a firm of Republican data wonks, he has spent three years building Legis, an algorithm powered by vastRead More

Jerome Powell's game of Kerplunk

THERE is an old children’s game called Kerplunk. It is similar in concept to Jenga. Marbles are poured into a plastic tube through which sticks have been threaded. The players take it in turns to remove the sticks with the aim of avoiding the fall of marbles. The normal pattern is for a few marbles to drop until the unlucky player removes the strut that keeps up the rest. A noisy crash ensues. Jerome Powell (pictured), the new chairman of the Federal Reserve, may be that unlucky player. Janet Yellen,Read More

California Democrats snub Dianne Feinstein

DIANNE FEINSTEIN has served California as a senator for 25 years. She has raised $13m for her 2018 re-election bid; her closest competitor, a state senator named Kevin de León, has rustled up $434,000. So it was humiliating for Ms Feinstein when the California Democratic Party failed to endorse her at its annual convention in San Diego.

Results announced on February 25th revealed that just 37% of delegates voted for Ms Feinstein; 54% chose Mr de León. Candidates need to win 60% of ballots to be awarded the party’s endorsement. Ms Feinstein’s inability to garner that support will make her the first incumbent senator in decades to run in the Golden State’s primary, on June 5th, without official party backing.

The outcome of the convention was not entirely shocking. Viewed as a staunch moderate, Ms Feinstein has never particularly appealed to Democratic activists of the sort who tend to serve as delegates. Much of Ms Feinstein’s ideology is progressive. She has fought zealously for gun control, successfully getting an…Continue reading

The Supreme Court limits whistleblower protections under Dodd-Frank

WHEN Paul Somers realised that Digital Realty Trust, the real-estate investment company where he was vice-president, was playing fast and loose with securities rules, including hiding $7m in cost overruns, he alerted senior management. Shortly afterwards he was sacked from his $200,000-a-year job. In 2014, Mr Somers sued the company, arguing that he should have been immune from retaliation by whistleblower protections in the Dodd-Frank Act, a 2010 package of Wall Street reforms passed in the wake of the 2008 financial crisis. The company countered that Dodd-Frank defines “whistleblower” as someone reporting misdeeds to the Securities and Exchange Commission (SEC), not to internal compliance departments. The Ninth Circuit Court of Appeals saw the law differently, but on February 21st, the Supreme Court unanimously sided with the company in Digital Realty Trust v Somers. If Mr Somers wanted his good deed to go unpunished, the nine justices agreed, he would have had to…Continue reading

A brawl on a cruise ship raises worries about security at sea

THE cruise industry sells itself as a relaxing way to travel, a world away from the hassle, queues and crime of travelling on land. Yet not all holidays look like the brochure, and cruises are no exception. Earlier this month one such voyage, nicknamed the “cruise from hell”, came to a resounding end in Melbourne, Australia. Dozens of brawls had broken out on board the Carnival Legend, a ship owned by the world’s largest cruise firm, many of which had apparently been instigated by a family group of 23. ItRead More

Duelling Democratic and Republican memos are bugle-toots on a battlefield

AMERICA is living through strange times when the headline “duelling committee memos released” can make partisans sit up and roar. These are those time, alas. There has been much roaring since the late-night release over the weekend of a memorandum written by Democratic members of the House of Representatives Permanent Select Committee on Intelligence (HPSCI), rebutting an earlier document written by that body’s Republican leaders. The release of the Democratic rebuttal was a surprise. Publication had already been delayed for two weeks by the White House, ostensibly because President Donald Trump was concerned that his opponents had been careless about revealing intelligence sources. That is a worthy concern, though slightly at odds with Mr Trump’s decision to release the initial Republican memo before reading it despite public pleas from the FBI and Department of Justice that it risked giving away secrets.

In more normal times, the contents of the memos themselves might seem…Continue reading

Can Eric Greitens hold on to his job?

THE mugshot taken of Eric Greitens after he was taken into custody on February 22nd is not flattering. The usually photogenic Republican governor of Missouri looks drawn, his jaw grimly set. A grand jury in St Louis had just indicted him on a charge of invasion of privacy. If convicted of the felony of which he is accused, the governor will almost certainly lose his job.

The indictment relates to an extramarital affair that Mr Greitens had in 2015 with a hairdresser in St Louis. The married father of two boys admits to the affair, but firmly rejects an allegation that he threatened to blackmail his lover by taking a compromising photograph of her while she was blindfolded in his basement. The indictment states otherwise. “The defendant knowingly photographed [the victim] in a state of full or partial nudity without the knowledge and consent of [the victim] and in a place where a person would have a reasonable expectation of privacy,” says the indictment. “The defendant subsequently transmitted the image contained in the photograph in a…Continue reading

The Supreme Court rebuffs Donald Trump’s call for a quick DACA hearing

WITH a brief order on February 26th, the Supreme Court dealt a blow to Donald Trump’s plans to rescind Deferred Action for Childhood Arrivals, or DACA. The justices, without elaboration or dissent, refused to expedite Mr Trump’s appeal of a lower-court decision stopping him from winding down the programme, which protects some 700,000 undocumented immigrants from deportation and gives them permission to work. The government had asked the Supreme Court to hear its appeal before the Ninth Circuit Court of Appeal had weighed in—an extraordinary request typically granted only in the midst of national emergency. It seems that Mr Trump’s lawyers overreached: the justices effectively told the administration to stand down and get back in line. They will consider acting only after the case wends its way to them on the prescribed appellate path.  

When Jeff Sessions, the attorney-general, announced on September 5th that the programme was illegal and would be ended, a phase-out was established. DACA recipients would have until October 5th…Continue reading

Money stolen by Bernie Madoff is still being found

WHEN bankruptcy trustees were appointed over a hectic weekend late in 2008, there seemed no end to the losses caused by the collapse of Bernie Madoff’s Ponzi scheme. Cash in the bank was no more than $150m. But the losses have been less, and the assets available for compensation greater, than had been feared. On February 22nd Irving Picard, the bankruptcy trustee overseeing the liquidation of Mr Madoff’s firm, announced that a fund set up to reimburse customers would make its ninth distribution, of $621m, bringing the total handed outRead More

Changing the guard at HSBC

YOU spend 38 years at a mighty global bank, the last seven as chief executive. As boss you clean up a stinking mess, the legacy of ill-conceived acquisitions and shoddy practice. You shell out billions in fines and legal costs. You shed businesses and cut jobs by a quarter. You build a solid capital base. You maintain dividends. On your last day, you announce decent results, with revenue growing after five years of shrinkage and profits up nicely. The market’s parting gift to you? The share price falls by 3%.Read More