‘Revolution Française’ Review: The March of Macron

Date: 13-08-2018
Source: The Wall Street Journal

In the span of one year, Macron created his own political party, took out his rivals on the left and the right, and became president of France. Philip Delves Broughton reviews “Revolution Française” by Sophie Pedder.

French President Emmanuel Macron at Versailles.

The presidency of France’s Fifth Republic was tailored for Charles de Gaulle. Subsequent presidents have tried to alter it to their own personalities, with varying degrees of success—the jacket billows out, the pants sag around the knees. But when Emmanuel Macron burst from political obscurity and into office in 2017, he seemed to throw out de Gaulle’s old threads and replace them with his own slim-cut navy suit, the uniform of France’s young professional class.

In the span of one astonishing year, from 2016 to 2017, Mr. Macron created his own political party, La République en Marche, and took out his rivals on the left and the right. He out-campaigned and raised more money than the stagnant major parties. He canvassed voters door to door, a technique that may be standard in many countries but is an act of scandalous populism in France. And he used digital databases to identify potential voters, something Paris’s political barons considered too outrageously modern. On the night of his election, Mr. Macron was 39 years old.

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Turkish Lira Plunges Further; Erdogan Fails to Assuage Investors

Date: 13-08-2018
Source: The Wall Street Journal

Lira falls as much as 10%, shaking emerging markets world-wide

Turkey’s currency plunged again Monday, rattling other vulnerable emerging markets, as a defiant speech from President Recep Tayyip Erdogan and policy moves from the nation’s central bank failed to assuage investors about the country’s perilous financial condition.

The lira fell as much as 10% in early Monday trading to as low as 7.131 against the U.S. dollar, according to FactSet. It later pared some of the losses but President Erdogan’s fiery tone hit the currency again, leaving it down 6.95% lower at 6.91 against the dollar.

The lira is down more than 40% this year, battered by concerns about the NATO member’s political and economic stability and a continuing trade spat with the U.S.

“We will not retreat from our position,” Mr. Erdogan told a conference in Ankara, adding Turkey wouldn’t allow the U.S. “to lay its hands on achievements we gained at the cost of blood.”

As part of a plan announced earlier Monday, Turkish authorities made efforts to boost liquidity in the market, lowering the amount of reserves local lenders must park with the central bank. The move should help inject about 10 billion liras, $6 billion and $3 billion equivalent of gold into the financial system, the central bank said.

But analysts said the measures won’t have any direct impact on the lira because it doesn’t ease a core concern—the hefty debt exposure of Turkish banks and corporations—and warned the central bank has limited reserves of its own to weather the storm.

The EU Spent a Bundle to Unify the Continent. It’s Not Working.

Date: 08-08-2018
Source: The Wall Street Journal

Some of the biggest recipients of aid are hotbeds of the very discontent that’s driving the bloc apart

The European Union has spent nearly one trillion dollars to unify the continent by delivering highways and trains into places where there were once gravel paths. In current dollars, that is over eight times the size of the Marshall Plan that rebuilt Europe after World War II. The EU has built airports and bridges, trams and swimming pools. It has repaired castles and medieval churches.

It hasn’t bought love.

To the vexation of European leaders, some of the biggest recipients of funding are now hotbeds of discontent, brimming with voters disquieted by the cultural and political pressures that have accompanied European integration, and threatening the bloc’s cohesion.

A renovated kindergarten in Lapy, Poland, sits near a bright blue billboard reading “Financed by the European Union.” The EU bankrolls one-fifth of Lapy’s budget, improved its sewage system and built an office complex for startups. Locals meanwhile overwhelmingly support Poland’s governing nationalist party, which says the EU overrides Polish sovereignty, condescends to Poles and threatens religious values.

A Team Comfortable With Letting Trump Be Trump

Date: 07-08-2018
Source: The Wall Street Journal

Four top White House advisers come from different backgrounds, but have one thing in common: They are contemporaries of the president

It’s fair to say that the most important people around President Trump these days are his White House chief of staff John Kelly, his national security adviser John Bolton, his economic council chief Larry Kudlow and his outside legal counsel, Rudy Giuliani.

Those four top advisers come from quite different backgrounds, but here’s one thing they have in common: They are contemporaries of the 72-year-old president. The ages of Messrs. Kelly, Bolton, Kudlow and Giuliani are 68, 69, 70 and 74, respectively.

The point here isn’t so much the ages of these men atop the Trump world, but rather how they collectively represent a significant change in how the White House is staffed and run. The model isn’t merely different from the one Mr. Trump started with; it’s radically different from the previous norm.

These aren’t young people on the rise, as is often the case with White House advisers, but rather veterans near the end of their career arcs. More important, they are content not to try to maneuver Mr. Trump so much as to follow his impulses—even if those impulses are at odds with their own positions.
Mr. Bolton is defending policies on Russia and North Korea that seem in conflict with his long-held positions; Mr. Kudlow is doing the same on tariffs and trade.

How Your Brokers Can Make 10 Times More on Your Cash Than You Do

Date: 04-08-2018
Source: The Wall Street Journal By Jason Zweig

It pays to pay attention to what your brokerage is doing with your cash

When some investment firms say they will treat your money as if it were their own, they mean it — all too well.

If the Securities and Exchange Commission wants to make good on its promise to compel brokers to act in their customers’ best interest, it should shine a klieg light on how brokers treat investors’ cash.

Investors invest, but of course they leave billions in cash in brokerage accounts, too.

At Morgan Stanley, $6.3 billion of that cash is in a money-market mutual fund yielding 1.8%. On Aug. 13, the firm will shut that fund and sweep its clients’ idle cash into bank accounts that, after a transition period, could yield much less.

Should Artificial Intelligence Copy the Human Brain?

Date: 04-08-2018
Source: The Wall Street Journal By Christopher Mims

The biggest breakthrough in AI, deep learning, has hit a wall, and a debate is raging about how to get to the next level

Should Artificial Intelligence Copy the Human Brain?

Everything we’re injecting artificial intelligence into—self-driving vehicles, robot doctors, the social-credit scores of more than a billion Chinese citizens and more—hinges on a debate about how to make AI do things it can’t, at present. What was once merely an academic concern now has consequence for billions of dollars’ worth of talent and infrastructure and, you know, the future of the human race.

That debate comes down to whether or not the current approaches to building AI are enough. With a few tweaks and the application of enough brute computational force, will the technology we have now be capable of true “intelligence,” in the sense we imagine it exists in an animal or a human?

On one side of this debate are the proponents of “deep learning”—an approach that, since a landmark paper in 2012 by a trio of researchers at the University of Toronto, has exploded in popularity. While far from the only approach to artificial intelligence, it has demonstrated abilities beyond what previous AI tech could accomplish.

The “deep” in “deep learning” refers to the number of layers of artificial neurons in a network of them. As in their biological equivalents, artificial nervous systems with more layers of neurons are capable of more sophisticated kinds of learning.

This Political Fight Will Go Many More Rounds

Date: 02-08-2018
Source: The Wall Street Journal

Even if Trump retired quietly to Mar-a-Lago, a return to civility would be highly unlikely.

Someday soon, many Democrats think, America will wake up from the Trump nightmare and return to normalcy. Donald Trump, they hope, will prove to be not a new normal but an unfortunate aberration. They’re probably wrong.

Democracy tends to give us the government we deserve. Bill Clinton wasn’t responsible for the rotting of personal morality; he reflected what was already there. Similarly, Mr. Trump did not create the polarization and politicization of everyday life; he’s simply great at riding a wave that was already coming ashore. Mr. Trump’s passing from the national scene will not automatically usher in a new era of comity and harmony.

Long before President Trump, American politics were taking on an increasingly partisan tenor. Gerrymandering succeeded all too well, creating districts so safe that many members of Congress began to fear primary challenges if they deviated from the party hymnal or worked across the aisle. Many legislators started living in their districts and commuting to Washington, diminishing the opportunities for them to meet—and humanize—colleagues from the other party. The growth of campaign expenditures from super PACs and other independent groups increased single-issue funding, while weakening the ability of party leaders to corral their caucuses.

Trump Advisers Urge Raising Additional China Tariffs to 25%

Date: 01-08-2018
Source: The Wall Street Journal

Washington hasn’t made meaningful headway in easing its market-rattling trade dispute with Beijing

The White House and Beijing haven’t  made much progress in trade talks.

As Washington and Beijing struggle to break a trade impasse, some administration advisers are urging President Trump to raise the stakes with a sharp increase in the level of tariffs proposed for $200 billion in Chinese imports targeted for punitive measures.

Trump administration advisers are debating measures that might bring Chinese negotiators to the table. Some are pushing the president to apply tariffs as high as 25% on $200 billion of Chinese imports, up from an original proposal for 10%.

The White House won’t make a final decision until at least late August on those tariffs, which are likely to target consumer goods and food as well as machinery components. Advisers are justifying the steeper tariffs, in part, to make up for the rapid depreciation of the yuan in recent months. Since May 30, the yuan has fallen 6% against the dollar.

GE Puts Digital Assets on the Block

Date: 31-07-2018
Source: The Wall Street Journal

Software development was a key initiative of former CEO Jeff Immelt

General Electric has been selling off assets as part of its long-term turnaround effort.

General Electric Co. is seeking a buyer for key parts of its digital unit as the conglomerate unwinds a signature initiative of former Chief Executive Jeff Immelt that loses money despite billions in investment.

The Boston-based company has hired an investment bank to run an auction for the operations, which produced $500 million or more in revenue last year and lost money, according to people familiar with the matter.

Though proceeds of a sale aren’t expected to mean much for a company with a market value of more than $100 billion, the move to unload the operations is symbolic of a dramatic reversal of fortune at GE, which has stumbled badly after a series of missteps.

Trump Says He ‘Opened Up Europe’ for Farmers. Europeans Disagree.

Date: 28-07-2018
Source: The Wall Street Journal

The gap over what was agreed to at the White House on Wednesday indicates the perils of rifts re-emerging

A day after President Trump hailed “a breakthrough agreement” on trade with Europe, European officials said the president and his aides are exaggerating the scope of their new pact.

While Mr. Trump told an Iowa crowd Thursday that “we just opened up Europe for you farmers,” officials in Brussels later said he did no such thing.

“On agriculture, I think we’ve been very clear on that—that agriculture is out of the scope of these discussions,” Mina Andreeva, the European Commission spokeswoman, told reporters in Brussels on Friday. “We are not negotiating about agricultural products,” added Ms. Andreeva, who was part of the European delegation visiting Washington earlier this week.