Archive for October 26, 2006

Politics this week: 21st – 27th October 2006

October 26, 2006 Leave a comment

Iraq remained the dominant issue in America’s mid-term elections. With less than two weeks to go before polling day, Democrats hammered home the message that October is already the deadliest month of the year in the conflict both for American troops and Iraqi civilians. George Bush acknowledged his own dissatisfaction but said America was constantly adjusting its strategy and still winning. See article

In Iraq itself, the prime minister, Nuri al-Maliki, pledged to crack down on illegal militias, particularly the Shia Mahdi Army, that are responsible for most of the continuing sectarian violence. But he refused to set a timetable for this; Shia parties with links to the militias make up part of his own coalition government.

New Jersey’s highest court issued a mixed ruling on gay marriage. It decided that homosexual couples are entitled to the same rights as heterosexual ones, but it avoided a conservative backlash (for now) by giving the state legislature time to ponder whether this constitutes “marriage”.

The Mark Foley scandal rumbled on as Dennis Hastert, the Speaker of the House of Representatives, presented his version of events to the House ethics committee. The committee’s report on Mr Foley’s relationship with congressional pages is expected soon.

California’s department of corrections provided the first details of its plans to house some prisoners temporarily in other states. Arnold Schwarzenegger, the state’s governor, issued an emergency proclamation earlier this month in response to “severe overcrowding” in prisons.

Iran’s fiery president, Mahmoud Ahmadinejad, who has called for Israel to be “wiped off the map”, threatened that European countries could get “hurt” unless they distanced themselves from the Jewish state. Meanwhile, unfazed by discussion of UN sanctions over its refusal to suspend suspect uranium-enrichment work, Iran said it would inject uranium gas into a second cascade of enrichment machines at its plant at Natanz.

Israel’s coalition government tilted towards the right after the prime minister, Ehud Olmert, was forced to accept the inclusion in its ranks of the right-wing Yisrael Beitenu Party, led by Avigdor Lieberman. The decision is meant to ensure the government’s survival following the war in Lebanon over the summer, widely seen as a disaster. See article

The head of the United Nations mission to Sudan, Jan Pronk, was expelled from the country by the government. His offence was to write in his blog that the Sudanese army has suffered some defeats in Darfur against rebel fighters and that its morale is low.

The capital of Chad, N’Djamena, was fortified following reports that rebels were moving towards it from the east of the country. The government of President Idriss Déby, which survived a rebel assault on the city in April, accuses neighbouring Sudan of arming and backing the rebels.

The prime minister of Ethiopia, Meles Zenawi, said that his country was now “technically at war” with the Islamist militias that have taken over much of neighbouring Somalia. Ethiopia has admitted to having hundreds of troops in the country in support of the weak transitional government based in Baidoa. See article

North Korea’s regional neighbours continued their consultations about how to impose sanctions on the country following its nuclear test earlier this month. Pyongyang rattled its sabres and warned South Korea that if it participated in the UN-backed sanctions this would be a “declaration of confrontation”. See article

India’s prime minister, Manmohan Singh, appointed Pranab Mukherjee as foreign minister. Mr Singh had been doing both jobs since last November, when his then foreign minister resigned over the Iraq oil-for-food scandal.

Russia’s president Vladimir Putin had a stormy few days after an open microphone caught him praising Israel’s president for his virility in multiple alleged rapes. He also had a prickly meeting with European Union leaders in Finland, where they pressed him to liberalise his country’s energy market, and came under pressure over Georgia. In a national phone-in, Mr Putin underlined his anger with Georgia, accusing the authorities there of resolving problems “by force”. See article

Germany’s armed forces are likely to have a more robust role overseas. The government approved a new security doctrine that reaffirmed the Atlantic alliance, but foresaw wider involvement in peacekeeping. Existing rules restrict German troops in Afghanistan from fighting the Taliban. See article


In Hungary, violent clashes between police and demonstrators demanding the government’s resignation marred the commemoration of the 50th anniversary of the anti-Soviet 1956 uprising. Police used tear-gas against the protesters and more than 100 were hurt.

Britain announced restrictions on migrants from Romania and Bulgaria, which join the EU next year. The restrictions were criticised by both free-marketeers and protectionists, but only six EU countries have said, so far, that they will fully open their labour markets to the workers. See article

In a referendum 78% of those voting approved a $5.2 billion plan to widen and deepen the Panama Canal. The expansion, due to be completed by 2014, could turn Panama into the logistics hub of the Americas, according to its backers.


Mexico’s Senate rejected a call to sack the governor of the southern state of Oaxaca, which has had its capital disrupted by striking teachers and left-wing protesters for the past five months. The governor’s supporters have called for federal police to evict the protesters.

After dozens of rounds of voting at the United Nations General Assembly for one of the two Latin American rotating seats on the Security Council, Guatemala out-polled Venezuela, but failed to secure the required two-thirds majority. The search began for a compromise candidate.

Bolivia’s government agreed to give jobs in a revived state-owned mining firm to 4,000 self-employed miners involved in clashes over a tin deposit earlier this month in which 16 people were killed and 60 injured.

Categories: Uncategorized

Business this week: 21st – 27th October 2006

October 26, 2006 Leave a comment

Business this week

Oct 26th 2006
From The Economist print edition

Jeffrey Skilling, Enron’s former chief executive, was sentenced to more than 24 years in prison and ordered to pay $45m in restitution for his part in the fraud that bankrupted the energy trader in 2001. Mr Skilling was found guilty in May along with Kenneth Lay, but Mr Lay’s convictions were recently “vacated” following his death in July. Enron employees who lost their pensions expressed satisfaction at Mr Skilling’s sentence. He said he was innocent and would appeal against the verdict. See article

The former chief financial officer of Comverse Technology pleaded guilty to fraud in relation to a stock-options scandal. He was the first senior executive to plead guilty in a host of similar scandals that have recently come to light, though other big corporate cheeses have resigned from their jobs. Comverse’s former boss, Jacob “Kobi” Alexander, who fled America, is fighting his extradition from Namibia.

The retrial began of Josef Ackermann, the chief executive of Deutsche Bank, and five others who face criminal charges that stem from the awarding of executive bonuses at Mannesmann. Mr Ackermann was on the company’s supervisory board at the time of its takeover by Vodafone in 2000 (Deutsche Bank is not connected to the trial). There is speculation that Mr Ackermann will plead guilty to non-criminal charges in order to concentrate on running Germany’s biggest bank.

United Biscuits, which makes some of Britain’s best-known snacks, including Jaffa Cakes, Penguin biscuits and Hula Hoops, agreed to be bought by two private-equity firms for some £1.6 billion ($3 billion).

Altria announced that it would reveal its decision on whether (and how) to spin off Kraft Foods at a shareholders’ meeting in January. The conglomerate has long wanted to sell Kraft, but its plans were put on hold after its Philip Morris unit became embroiled in tobacco litigation.

Carl Icahn won his battle to shake up the management of ImClone Systems, a biomedical company, when it appointed him chairman and sacked its interim chief executive. Mr Icahn, who owns around 14% of the company, had led a shareholders’ campaign to oust several directors.

Ford reported its biggest quarterly loss in 14 years—$5.8 billion—as it booked writedowns and charges. The performance of Ford’s North American auto unit, where sales dropped by some 15% compared with a year ago, and its premier-car group, which includes Jaguar, continued to pull down its earnings. Alan Mulally, who was appointed Ford’s chief executive in September, said the results were “unacceptable”.

DaimlerChrysler’s quarterly profit, 37% lower than a year ago, was also hampered by plunging sales in America, offsetting an improved performance at the company’s Mercedes unit. But there was some good news for Detroit when General Motors said a net loss of $115m (compared with $1.66 billion last year) was actually an adjusted profit of $529m if special items, which are related to its restructuring, were excluded.

Some much-needed good news for Airbus. It sealed a deal to set up a plant in China and won an order for 150 A320 jets from the country.

A substantial merger was announced in Australia’s insurance industry as Promina agreed to a A$7.9 billion ($6 billion) takeover proposal from Suncorp-Metway, a rival which also operates banks.

In an unusual move for the company, IBM filed two lawsuits against Amazon claiming the online retailer infringed five patents on internet technology, including processing online transactions. IBM holds more patents than any other American company and usually seeks to resolve licensing disputes out of court.

Meanwhile, Amazon said its quarterly profit had fallen (again). But as sales exceeded forecasts, its share price rose. Investors also cheered Amazon’s statement that it would put a brake on buying new technology that has enabled it to launch services such as film downloads, but dragged down earnings.

Sony’s net profit plunged by 94% in its second quarter (and it made an operating loss) compared with a year ago. Along with the continuing troubles at its gaming unit, the conglomerate took a hit from the safety recall of 9.6m laptop batteries, for which its executives apologised. See article

Existing-home sales in America slid in September for a sixth month as the housing market continued to slow. The median home price also fell, to $220,000—2.2% less than a year ago. But the fall was bigger in some regions—5.1% in the north-east for instance.

Categories: Uncategorized