Here’s the usual international affairs and business weekly bulletin (Source: The Economist, per 08/01/2010 print edition)
Politics this week
Yemeni government forces stepped up a campaign against al-Qaeda suspects, as a clamour grew in the West after a failed attempt by a Nigerian jihadist to blow up an airliner approaching Detroit on Christmas Day. The man had recently been in Yemen. Security forces there said they had killed several al-Qaeda people and arrested at least three others. The American, British and French embassies in Yemen’s capital, Sana’a, were temporarily closed after reports of planned attacks against them by al-Qaeda.
With airport security tightened, Barack Obama responded to mounting political pressure about the failed attack by castigating America’s intelligence services for not stopping the plot. The American president said there had been enough evidence from various parts of the intelligence system to prevent the bomber from boarding the plane in Amsterdam, but that intelligence officers had “failed to connect those dots”. See article
America said it was pondering new sanctions to press Iran to curb its nuclear programme, in particular by targeting the powerful Revolutionary Guard. But China said it was still too soon to take such measures. See article
Iranian officials warned protesters that they could face death as enemies of God if they continued publicly to express dissent. An opposition manifesto written by five prominent exiles was widely aired in Iran and abroad. Reports circulated that Mir Hosein Mousavi, the thwarted candidate in last year’s presidential election, would be arrested. See article
Argentina’s president, Cristina Fernández, sacked the central bank governor, Martín Redrado, after he failed to back her plan to use $6.6 billion of the country’s foreign-exchange reserves to pay public debt. Mr Redrado’s office said he would stay in the job until his term ends in September. See article
More than 90 people were killed when a suicide-bomber detonated his vehicle in a crowd watching a volleyball game in north-west Pakistan. The attack took place in a village in Bannu district, which is close to the tribal area of South Waziristan, where Pakistan’s army has been fighting Taliban extremists. See article
Afghanistan’s parliament rejected 17 of 24 nominees for cabinet posts put forward by the president, Hamid Karzai. Mr Karzai then ordered the postponement of parliament’s winter recess, in the hope of filling the posts before an international conference on Afghanistan to be held in London in late January. See article
Just months before an election is due in Britain, yet another plot was hatched by disgruntled Labour Party MPs to try to topple Gordon Brown. The conspiracy fizzled when cabinet ministers (belatedly) said they (grudgingly) supported the prime minister.
Iceland is to hold a referendum after its president vetoed a plan to pay $5.5 billion to compensate Dutch and British savers who lost their money when Iceland’s banking system collapsed in 2008. See article
Business this week
Novartis, a Swiss drugmaker, agreed to pay Nestlé, the world’s biggest food company, $28.1 billion for Nestlé’s 52% holding in Alcon. The American eye-care company is best known for its contact-lens products, but also has significant businesses in eye-treatments and surgery. Novartis bought an initial 25% stake in Alcon from Nestlé in 2008. Including an offer to buy out minority shareholders, the deal is worth $49.7 billion, the biggest takeover in Swiss corporate history. See article
Kraft then announced that it would put the proceeds from selling its pizza division towards increasing the cash proportion of its hostile bid for Cadbury. This is partly in response to angry Kraft investors, such as Warren Buffett, who argue that Kraft’s proposal to issue up to 370m new shares to acquire Cadbury would destroy shareholder value.
Google entered the smart-phone market with Nexus One, which runs on the web giant’s Android operating system and is made by HTC of Taiwan. Advertised as a rival to Apple’s iPhone, the Nexus One will be sold in an “unlocked” state to let users choose their own wireless provider.
In a speech at the annual meeting of the American Economic Association, Ben Bernanke again blamed the worst financial crisis in decades on weak regulatory oversight that failed to put a stop to the lax lending practices that precipitated the housing bubble. The chairman of the Federal Reserve has been deflecting criticism from those in Congress who want to curb the central bank’s powers. Some say it was mostly the Fed’s loose monetary policy that caused the bubble.
Japan’s Sumitomo Mitsui Financial Group became the latest big financial institution to bolster capital by announcing another huge share issue, which it hopes will raise ¥800 billion ($9 billion). It also confirmed that Goldman Sachs will convert ¥100 billion of SMFG preferred shares into common stock. A committee in Basel that sets capital standards for banks worldwide has called for a shake-up in the way capital is measured, with more weight given to equity.
Dubai officially opened the $1.5 billion Burj Khalifa tower, which at 828 metres is the world’s tallest building. It will also contain the planet’s highest mosque and swimming pool. In mid-December Dubai received a $10 billion bail-out from Abu Dhabi, a wealthier neighbouring emirate, to aid Dubai World, a state-backed conglomerate which faces a debt crisis caused by its commercial-property arm.
Spain assumes the rotating presidency of the European Union and Pécs (in Hungary), Essen (Germany) and Istanbul (Turkey) become European capitals of culture.
France celebrates the summer solstice with the Fête de la Musique: free music played outdoors, from Paris to the smallest village.
Beer-lovers end the Munich Oktoberfest, having downed enough gallons to keep it as the world’s biggest beer festival.
There had been a glimmer hope for Saab earlier this month, as supercar maker Spyker stepped in as a possible suitor after similarly small 
With good timing, America’s Environmental Protection Agency declared that six greenhouse gases, including carbon dioxide, “threaten the health and welfare of the American people”. The decision could open the way for the Obama administration to impose its own curbs on emissions, although Congress may want the final say.
Investors knew Abu Dhabi could not let its neighbour fail without damaging its own economic interests. They assumed that Abu Dhabi knew this too. Therefore when it let Dubai walk to the edge, it was deeply unsettling. Either Abu Dhabi’s policymakers did not know the damage this would do, or they did not care. The announcement on Monday suggests that Abu Dhabi did care. It just did not anticipate quite how badly creditors would react.
