Archive for November 24, 2006

Politics this week: 18th – 24th November 2006

November 24, 2006 Leave a comment

Pierre Gemayel, Lebanon’s minister of industry and a member of a famous Christian political dynasty, was shot dead in Beirut, inflaming sectarian tensions. The Lebanese army took to the streets while the country observed three days of mourning. Many fingers pointed at Syria, but Damascus strongly denied any involvement. See article

Syria and Iraq agreed to restore diplomatic relations after a break of 24 years. The charm offensive by Syria, long suspected of stirring turbulence in Iraq, followed a visit by its foreign minister to Baghdad, the first by a senior official since the toppling of Saddam Hussein. Meanwhile, Iraq‘s president planned a visit to Iran. And George Bush said he would travel to Jordan next week to meet Iraq‘s prime minister.

A new UN report noted that this year more than 2m Africans will die of AIDS, nearly three-quarters of all the AIDS-related deaths on the planet. See article

The Supreme Court in Kinshasa, Congo‘s capital, was set on fire by supporters of Jean-Pierre Bemba, the losing candidate in last month’s presidential election. Mr Bemba had asked the court to rule that the victory handed to Joseph Kabila was unfair. See article

A French judge said that Rwanda‘s president, Paul Kagame, should be put on trial for allegedly orchestrating a plane crash in 1994 that killed his predecessor, Juvénal Habyarimana. The incident marked the beginning of the genocide there. Rwanda‘s government said the French claim was baseless.

Responding to an order to clamp down on a spate of kidnappings in Nigeria‘s Delta region, the country’s army carried out an operation to free seven foreign workers who had been captured from a ship. One British hostage and two kidnappers were killed.

Mexico’s president-elect, Felipe Calderón, unveiled his economic team, naming Agustín Carstens, a former IMF official, as finance minister. Earlier, Andrés Manuel López Obrador, the narrow loser of last July’s presidential election, proclaimed himself the “legitimate” president at a rally of tens of thousands of his supporters.

Six of the nine elected regional governors in Bolivia said they were breaking relations with Evo Morales, the socialist president, over a bill that would allow the central government to scrutinise their funds and the Congress to sack them. The opposition walked out of the Senate in protest over that, land reform and other measures. See article

Nicaragua‘s outgoing president signed into law a measure outlawing all abortions, including when a woman’s life is in danger. Chile‘s Congress rejected a bill that would have legalised abortion in some circumstances.


The Dutch election produced an inconclusive result, but it gave the ruling Christian Democrats under the outgoing prime minister, Jan Peter Balkenende, the most seats. Mr Balkenende must now scrabble around for coalition partners; the negotiations could take months. See article

Allegations continued to fly that Russian intelligence agents had poisoned a renegade comrade who defected to Britain. Alexander Litvinenko remained in intensive care in a London hospital after his apparent poisoning. Several prominent critics of the Kremlin have been poisoned or shot in the past few years. See article

Italy‘s government sacked the chiefs of all three of its intelligence agencies. The cause was apparently the involvement of one agency in a CIA kidnapping of a Muslim cleric in Milan some years ago; but others said the spies were not proving loyal to Romano Prodi’s centre-left government. See article

The European Union gave Turkey a deadline of December 6th to open its ports and airports to Greek-Cypriot ships and aircraft, but Turkey has already said it will refuse. The likely outcome is that those chapters in the EU accession negotiations with Turkey relating to trade and free movement will be frozen.

In Poland, 23 miners were killed in a gas explosion at their mine in the Silesia region. It was the country’s worst such disaster since 1979.

In the United States the Democrats continued to put their new leadership team in place but insisted they were still united after rejecting John Murtha for majority leader in the House of Representatives, choosing Steny Hoyer instead. Mr Murtha was championed by Nancy Pelosi, who will become speaker when the new Congress starts in January.

Rupert Murdoch made a rare apology and agreed that the decision of his company to publish a book by O.J. Simpson recounting hypothetical details of the murder of his ex-wife and her friend was “an ill-considered project”. The book has now been scrapped and a television interview cancelled after a backlash. See article

NASA scientists conceded that they had probably lost the Mars Global Surveyor in space. The probe, launched ten years ago, has been one of the most successful missions run by America’s space agency, photographing Mars in unprecedented detail.


The government in Nepal signed a comprehensive peace agreement with the country’s Maoist rebels. On paper, this brings an end to ten years of conflict. Maoist fighters started arriving at the cantonments where they are to be confined. See article

Marking a visit to Delhi by the Chinese president, Hu Jintao, India and China signed a raft of mainly trivial agreements. The two countries said they would try to double their bilateral trade by 2010.

In Washington, DC, the Senate approved controversial legislation that would open the way to nuclear co-operation with India, despite its having tested nuclear weapons and never having signed the non-proliferation treaty.

In Hanoi, leaders of the Asia-Pacific Economic Co-operation (APEC) forum held their summit and made their usual vague commitments to freer trade. George Bush discussed North Korea‘s bomb with his Russian, Chinese and South Korean counterparts.

Correction: Last week we erroneously reported that the summit George Bush was headed to in Hanoi was being held by ASEAN. Sorry for the confusion.

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Business this week: 18th – 24th November 2006

November 24, 2006 Leave a comment

The London Stock Exchange rejected a second takeover bid by the American NASDAQ exchange. The LSE said the new £2.7 billion ($5.1 billion) offer still “substantially” undervalued it, and spurned a proposal for further talks. After NASDAQ revealed it had increased its stake in the LSE to almost 29%, attention turned to the Americans’ chances of getting the LSE‘s biggest investors to support their offer. See article

Tributes were paid to Milton Friedman, who died on November 16th, aged 94. The American economist, a champion of free markets, laid the intellectual foundations for the ending of the post-war Keynesian consensus. Mr Friedman urged governments to cut spending and privatise state services, but gave warning that “Hell hath no fury like a bureaucrat scorned.” See article

America’s treasury secretary, Hank Paulson, gave a speech in which he called for balance in regulatory oversight of capital markets. Mr Paulson said that legislation should not be “excessive” or impose “needless costs”, but he stopped short of calling for an overhaul of Sarbanes-Oxley rules, which critics say are intrusive. See article

A fight broke out for control of ITV, Britain’s biggest commercial broadcaster. BSkyB, a pay-TV channel that is part of Rupert Murdoch’s empire, bought a 17.9% stake in ITV, which was interpreted as an attempt to stymie a £4.7 billion ($8.9 billion) merger bid from NTL, a cable and phone operator in which Sir Richard Branson is the largest shareholder. Sir Richard called on regulators to intervene in what he fumed was BSkyB‘s “blatant attempt to distort competition”, but ITV rejected NTL‘s offer as too low. See article

In a significant step towards an accommodation between newspapers and internet companies in lucrative classified advertising, several firms representing 176 newspapers in America reached a partnership with Yahoo! to share content and advertising online.

Google’s share price continued to rise and pushed past $500 for the first time. The share price has gone up by around 40% since February, when investors took fright at negative reports about future growth. Google now has a market capitalisation of some $155 billion, more than eight times that of General Motors.

General Motors’ share price came under pressure as it emerged that Kirk Kerkorian has cut his stake to 7.4% from 9.9%. Mr Kerkorian recently failed to persuade GM to create an alliance with Renault and Nissan and remains critical of GM‘s own blueprint to restructure its business.

Hot on the heels of last week’s $26.7 billion agreement to buy out Clear Channel Communications, a radio and outdoor-advertising company, the rush for big private-equity deals continued. In the largest-ever leveraged buy-out, Blackstone continued its property-acquisition spree by offering $36 billion for Equity Office Properties, America’s biggest real-estate investment trust. It also emerged that Australia‘s Qantas Airways had been approached about a potential buy-out, said to value the airline at around A$11 billion ($8.5 billion). See article

Mining and metals firms also had an acquisitive week. Freeport-McMoRan secured a $25.9 billion deal for Phelps Dodge, a bigger mining rival which failed to cement an ambitious three-way merger with Inco and Falconbridge earlier this year. And in the largest investment by a Russian firm in America, Evraz, a steel group controlled by a Russian oligarch, Roman Abramovich, said it was buying Oregon Steel Mills for $2.3 billion.

CSN, a Brazilian steelmaker, approached Corus, an Anglo-Dutch rival, about a takeover. The move puts pressure on India’s Tata Steel to raise its recent offer for Corus. See article

The planned merger between Gaz de France and Suez was thrown into doubt again when the French courts said the deal could not be completed until workers facing privatisation at GDF had had more time to consider the agreement. The combination of the two utilities has been mired in controversy since the French government unveiled the plan in February.

Markets responded positively as the Ifo institute’s index of German business confidence, seen as an indication of future growth in the euro area, reached a 15-year high.

Construction started on new homes in America at an annual rate of 1.49m in October, the lowest level for six years. The rate was 27% below October 2005—the biggest year-on-year decline since March 1991 (the housing market’s slump has been blamed for weak growth in the third quarter). Meanwhile, the White House lowered its GDP growth forecast for 2007 to 2.9%.

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