Archive for November 2, 2006

Politics this week: 28th October – 3rd November 2006

November 2, 2006 Leave a comment

Politics this week

Nov 2nd 2006
From The Economist print edition

America’s political parties rallied their core supporters as the electorate prepared to vote in the mid-term elections on November 7th. George Bush hit the trail to rail against gay marriage and terrorists in Iraq. He also chastised Senator John Kerry, who is not up for election, for his gaffe that the uneducated get “stuck in Iraq”. With polls forecasting that the Republicans will lose the House of Representatives, but predicting the outcome in the Senate with less certainty, Democrats continued with their mantra that the Iraq war has made America unsafe. See article

Authorities said arson was the cause of a forest fire near Palm Springs, California, that burned more than 40,000 acres. Five firefighters were killed and dozens of properties destroyed.


Iraq‘s unrelenting violence included two particularly vicious bomb explosions in Sadr City, a Shia district of Baghdad. One killed at least 15 people, including four children, at a wedding; the other at least 30 people, mainly labourers looking for work.

Israel launched a “major operation” in the northern Gaza Strip, reoccupying the town of Beit Hanoun with tanks and helicopter gunships. See article

Meanwhile, talks continued about prisoner exchanges to retrieve the Israeli soldier held captive in Gaza and the two held captive in Lebanon. Egyptian officials negotiated with a Hamas delegation in Cairo; and Hizbullah’s leader, Hassan Nasrallah, said the UN was negotiating between Israeli and Hizbullah officials.

Tony Blair sent a senior foreign-policy adviser, Sir Nigel Sheinwald, to Syria to find out whether President Bashar Assad could be tempted into playing a more pro-Western role. America meanwhile warned Syria to cease attempts to destabilise the government of Lebanon. See article

Around 70 people were killed by floods in Ethiopia‘s eastern Ogaden region after a river burst its banks. In August, flooding killed an estimated 900 people in the country.

A Nigerian passenger aircraft crashed after take-off from the capital Abuja, killing 96 people. It was the country’s third civilian air disaster in a year. See article

Congo‘s presidential run-off election on October 29th passed off relatively peacefully. Early indications show a surprisingly close contest between the incumbent president, Joseph Kabila, and his challenger, Jean-Pierre Bemba. See article

Violent clashes erupted across Bangladesh as an interim government, to oversee elections due in January, took office. The opposition feared that the outgoing government led by Khaleda Zia, the prime minister, might try to rig the elections through a biased interim administration. See articleE+

Just three weeks after testing a nuclear device, North Korea announced that it would rejoin multilateral talks on ending its nuclear-weapons programme. The breakthrough came after secretly arranged talks with America and China in Beijing. See article

Protests took place in Pakistan after the army attacked a madrassa in the tribal area of Bajaur and killed at least 80 people it said were training as terrorists. Locals said many of the dead were children and that pilotless American drones had begun the attack. See article

Two days of talks in Geneva between Sri Lanka‘s government and Tamil Tiger rebels ended with no progress towards fixing their battle-scarred “ceasefire”.

A summit in Berlin between Germany and Poland did little to resolve bilateral tensions over gas pipelines and German property claims dating from the aftermath of the second world war. The personal relationship between Germany‘s Angela Merkel and Poland‘s Jaroslaw Kaczynski was at least cordial, however.

One year after the riots in France’s troubled suburbs, another spate of vehicle burnings, especially of buses, took place. In Marseille, a female bus passenger was left badly burnt and fighting for her life. See article

More than 70 Muslim workers at Paris airport were stripped of their security clearance. Some were reported to have visited terrorist training camps in Afghanistan and Pakistan. See article


Serbian voters approved a new constitution that declares Kosovo to be an integral part of Serbia. A fresh election will probably be held in December, but Kosovo is still likely to win independence next year. See articleE+

Catalonia held its first regional election since being granted more autonomy by the Spanish government under a new statute. The conservative nationalist CiU party won most seats, but it will take weeks before a new coalition government is formed in Barcelona.

Sir Nicholas Stern, the head of Britain’s government economic service and a former chief economist at the World Bank, published a report on the economics of climate change. It concludes that if greenhouse-gas emissions continue on their current path, the cost could range between 5-20% of global output over the next 100-200 years. See articleE+


Brazil‘s left-of-centre president, Luiz Inácio Lula da Silva, won a second term by a landslide. He gained 61% of the vote in a run-off ballot, against 39% for Geraldo Alckmin, his centre-right opponent. Lula said he would seek to raise economic growth and cut the gap between rich and poor. See article

In a victory for Bolivia‘s socialist president, Evo Morales, ten foreign energy companies signed new contracts that grant majority ownership to the state and will quadruple government tax revenues from energy. Mr Morales also postponed previous plans to nationalise Bolivia‘s mines. See article

Thousands of federal police retook the centre of the southern Mexican city of Oaxaca, which had been occupied by protesters for five months. Congress called on the state’s governor to step down. See article

At least 16 policemen were killed in a homemade mortar attack by FARC guerrillas on a rural police station in north-west Colombia.

After 47 rounds of voting in which Guatemala regularly beat Venezuela but failed to secure a two-thirds majority, both countries withdrew and agreed to support Panama to represent Latin America in a rotating seat at the UN Security Council.

Categories: Uncategorized

Business this week: 28th October – 3rd November 2006

November 2, 2006 Leave a comment

Business this week

Nov 2nd 2006
From The Economist print edition

Preliminary findings by the federal agency that investigates industrial chemical accidents in America rebuked BP for “the drastic effects of corporate cost-cutting” that led to last year’s explosion at the oil company’s refinery at Texas City. The investigators described a series of lapses underpinned by “cost pressures” that led to the blast, which killed 15 people and damaged BP‘s reputation. The company has settled with most of those who were injured or lost relatives in the accident, but the findings, which BP questions, may prove pertinent if there is a criminal trial. See article

Investigations widened on both sides of the Atlantic into the latest allegations of price-fixing among chipmakers, which this time focus on fast-memory SRAM chips. Sony said it was co-operating with an inquiry by America’s Justice Department into industry-wide practices. Meanwhile, European regulators raided the offices of several chipmakers as part of their investigations. One of the companies reportedly targeted was Samsung, which was fined $300m last year by America after admitting to price-fixing in slower DRAM chips.

Google’s buying spree continues. The firm announced it had acquired a company that specialises in building wiki webpages. JotSpot’s products enable multiple users to collaborate on the internet on websites such as blogs, and on corporate intranets.

CVS, America’s biggest retail drugs chain, agreed to merge with Caremark, a company that offers pharmaceutical services to health-care and insurance firms. The deal, valued at $21 billion, adjusts the focus of CVS‘s core business from pharmacy retail, in which Wal-Mart has become increasingly competitive on generic-drug prices, to managing drug-benefit plans. See article

Rinker, an Australian building-materials company, rejected a $12.8 billion takeover offer from Mexico’s Cemex, the world’s biggest maker of cement. Rinker’s share price, which had been declining recently in relation to the slowdown in America’s housing market, from which it derives the bulk of its earnings, surged on Sydney’s stockmarket.

There was some fairly positive news from America’s two biggest carmakers. General Motors and Ford said their auto sales in the United States rose in October by 22% and 8% respectively compared with a year earlier. With petrol prices tumbling from summer highs, the increase was particularly marked in sales of trucks and pick-ups. However, analysts cautioned that the comparison was skewed as October 2005 was a particularly dismal month and that sales fell compared with September 2006.

Schneider Electric, a company based in France and the world’s biggest electrical equipment distributor, agreed to pay $6.1 billion for American Power Conversion, which specialises in maintaining “critical power” supplies to homes, businesses and hospitals during blackouts.

After more than a year of rumours about a possible deal, CB Richard Ellis, which manages real estate for companies, agreed to buy Trammell Crow, a smaller rival with more blue-chip clients, for $2.2 billion.

UBS had a bad week. Amid reports that it was co-operating with a Securities and Exchange Commission investigation into the possible manipulation of American Treasury prices, the Swiss-based firm reported a 21% drop in net profit for the third quarter compared with a year ago, a stark contrast to the stellar earnings posted by other big investment banks. UBS blamed the “market correction” that saw stockmarkets tumble in the early summer. See article

MasterCard, which listed on the stockmarket in May, issued its first results for a full quarter since it became a public company. The credit-card company’s net profit rose by 82%, to $193m, compared with a year earlier, as consumers worldwide increased their use of plastic.

There was more evidence of a slowing American economy. GDP grew by 1.6% at an annual rate in the third quarter, the smallest increase since early 2003, with a sharp fall in home-building contributing to the sluggish performance. And with carmakers cutting production, the Institute for Supply Management’s index indicated that manufacturing was growing at its slowest pace in three years.

The European Commission’s indicator of business and consumer economic sentiment in the euro area rose in October to its highest level in more than five-and-a-half years. Among the bigger countries in the currency block the uptick in optimism was particularly strong in Germany and France (where the unemployment rate is at a five-year low), but in Italy confidence fell.

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