The Economist - 10 August 2024

Год выпуска: August 2024

Автор: The Economist Newspaper and The Economist Group

Жанр: Экономика/Политика

Издательство: «The Economist Newspaper Ltd»

Формат: PDF (журнал на английском языке)

Качество: OCR

Количество страниц: 76

WILL THE ECONOMY SWING THE ELECTION

• America is not entering recession, but its economy is slowing. That is bad news for Kamala Harris: leader, page 7, and briefing, page 14.
• Is Tim Walz a good pick? Leader, page 9, and analysis, page 19.

Britain's riots and the response

• Punish the thugs, stand up for immigration and improve local services: leader, page 8.
• What the violence says about Britain's far right, page 43.
• The people who most oppose immigration are not the ones rioting, page 44.
• How hotels became targets for British rioters, page 45.

Bangladesh begins again

• An Asian giant has ousted an autocrat. Now for the hard part: leader, page 11.
• Domestic politics and great-power rivalries will make the shift to democracy hard, page 27.

Thailand: a desperate dissolution

• Move Forward and its leader have been banned, page 28.
• That may not save an unpopular regime: leader, page 9.
• How to prevent dementia Almost half of cases can be delayed or avoided, page 63.

The world this week Politics

• Sheikh Hasina was ousted as prime ministerof Bangladesh and tied the country, following weeks of mass protests led by students. Hundreds of people were killed by the security forces in a crackdown on the demonstrators. Sheikh Hasina had mied Bangladesh for 20 of the past 28 years with an iron fist. The recently appointed head of the army described the uprising as a “revolutionary period”. Khaleda Zia, a former prime minister and leader of the opposition, was freed from house arrest after the dictator fled. Muhammad Yunus, a Nobel peace prizewinner, was named interim leader.
• The Constitutional Court of Thailand ordered Move Forward, the main opposition party, to disband for trying to reform the country’s lese-maj-este\aw, which protects the monarchy from anycriticism. It also banned its senior leaders from politics for ten years. Move Forward came first in an election last year, but it was blocked from taking office by Thailand’s royalist establishment. Its MPs will retain their seats in parliament and probably reorganise as a new party. Amnesty International said the court’s decision was a “serious violation” of the freedom of expression.
• Vietnam’s president, To Lam, was confirmed as general secretary of the Communist Party, the country’s most important political job. His predecessor, Nguyen Phu Trong, who died in July, was elected party chief in 2011 and spent the following years consolidating his power. Mr Lam led a crackdown on corruption when he was security minister. He became president only in May.
• Venezuela’s attorney-general opened a criminal investigation into two leaders of the opposition, Edmundo Gonzalez and Maria Corina Machado, forcalling on the rank and file of the armed forces to reject the government’s claim that it won a presidential election on July 28th. Voting receipts obtained by the opposition show that Mr Gonzalez in fact won. Government forces have killed 24 people during protests and arrested 2,200 more.

A summer of discontent

• Britain experienced its worst rioting in over a decade, after far-right activists exploited the murder of three girls to indiscriminately attack asylum-seekers and ethnic minorities. Social-media disinformation stoked the disorder, for example by falsely claiming the murderer was an immigrant. The rioting spread across the country, the first serious test for the month-old new Labour govern me nt, led by Sir Keir Starmer. Public opinion is strongly against the rioters, but more people think the prime minister handled the situation badly than well.
• Evan Gershkovich, a journalist with the Wall Street journal, returned to America, after being incarcerated fori6 months in Russia. Mr Gershkovich’s release was part of a wider prisoner swap that saw 16 Americans, Germans and Russians freed by Russia in exchange for eight Russians (and two children) in the biggest such exchange since the cold war.
• Ukrainian pilots have started flying F-16S, according to Volodymyr Zelensky. The first ten fighter jets (out of a promised 79) arrived in Ukraine at the end of July. It is unclear how many are currently flying. Meanwhile, Ukrainian defences shot down four missiles and 15 drones in another Russian attack. And the Kremlin was embarrassed by its failure to repel an incursion by as many as 1,000 Ukrainian soldiers into Russia’s Kursk province, which seems to have been penetrated by at least 10km (6 miles).
• Three Taylor Swift concerts were cancelled in Vienna, after the authorities uncovered a plot by Islamist extremists to target the events. One 19-year-old suspect had allegedly collected explosive materials to mount the attack.
• Hamas named Yahya Sinwar, its leader in Gaza and the architect of its terrorist attack on Israel on October 7th, as its new supreme leader. The surprise choice will tie the group more closely to Iran and reduce the chances of a ceasefire that might end a warthat has claimed almost 40,000 lives.
• America deployed additional fighter jets and other forces to the Middle East to help defend Israel and existing American forces in the region from a possible attack by Iran and its proxies. Seven American citizens, including five service members, were injured in a rocket attack on a military base in Iraq. A militia aligned with Iran carried out the attack.
• The UN’s Famine Review Committee confirmed that after nearly 16 months of civil war, famine is under way in Sudan. This is only the third time the UN has used the word “famine” since the Integrated Food Security Phase Classification system was established two decades ago.
• At least 21 people were killed in demonstrations in Nigeria, according to Amnesty International. People have taken to the streets to protest against a deepening cost-of-living crisis, the removal of a fuel subsidy and food inflation.
• Al-Shabab, a jihadist group in Somalia linked to al-Qaeda, claimed responsibility for a suicide-bombing and attack by gunmen on a popular beach that killed at least 37 people and injured more than 200.
• America’s defence secretary, Lloyd Austin, revoked the recent deal through which the plotters of 9/11, Khalid Sheikh Mohammed and two of his abettors, agreed to plead guilty to conspiracy and murder in exchange for a life sentence rather than face the death penalty. Mr Austin said that “responsibility for such a decision should rest with me”. The families of some of the victims of 9/11 had been angered by the plea deal.
• Kamala Harris picked Tim Walz as her running-mate in America’s presidential election. Mr Walz has been governor of Minnesota since 2019. By selecting him Ms Harris hopes to boost the Democratic ticket across swing states in the Midwest. Mr Walz delighted Democrats recently when he described Donald Trump and J.D. Vance as “weird people”.
• The Democratic National Committee officially confirmed Ms Harris as the party’s presidential candidate, after holding a virtual roll call of delegates. The DNC wanted to avoid any potential legal challenges at the party’s convention, which starts in Chicago on August 19th.

The less-awkward squad

• A second member of the progressive “Squad” and critic of Israel in the House of Representatives was booted out by voters in a Democratic primary. Cori Bush lost her bid for re-election in St Louis to Wesley Bell, who was backed by pro-Israel campaign groups.

The world this week Business

• Global stockmarkets had a rollercoaster week, underlined by the VIX index of volatility reaching its highest level since the start of the covid-19 pandemic. The S&P 500 fell sharply and the NASDAQ Composite entered correction territory in a rout triggered by news that job creation in America had slowed substantially in July, raising fears of a recession. Both market indices clawed back some of their losses in subsequent sessions.
• In Japan the Topix plunged by 12% in a day, its worst performance since 1987, as the yen strengthened at a blistering pace. Investors are betting that America’s Federal Reserve will now be forced into making more and deeper cuts to interest rates. That combination has hit investors who borrow cheaply in yen to make higher-yielding investments in dollars. The Bank of Japan recently increased its main rate, which makes that trade less attractive. Japanese stocks rallied in subsequent days, in part because the Bo) suggested it would not raise rates again in the shortterm.
• Investor skittishness over the value of artificial-intelligence stocks was also a factor in the market turbulence. Intel’s share price plunged by 26% after it announced plans to cut 15,000 jobs and reduce capital spending. The sell-off spread throughout the tech sector; Nvidia’s stock fell by 6%.
• Elliott Management, an influential hedge fund, reportedly told its clients that Al technology is “overhyped” and that shares related to Al, especially Nvidia’s, were in “bubble land”.
• Warren Buffett’s Berkshire Hathaway sold half its stock in Apple during the second quarter, as part of a scaling back from equity markets and towards short-term bonds. Meanwhile, Apple reported a solid year-on-year rise in quarterly revenue and profit, though sales from China fell again.
• America’s Justice Department won its antitrust lawsuit against Google over online search. The judge found that Google acted to maintain a monopoly, in part by paying companies such as Apple and Mozilla to make it the default search engine on their devices or browsers. How Google must rectify that will be determined at a later date. It is appealing against the decision. A separate antitrust trial over Google’s ads business starts next month.

The not-so-golden state

• Chevron said it was moving out of California, its home for 145 years, and relocating its headquarters to Texas. The oil giant has faced an increasing number of lawsuits in California from climate-change activists over its business. Last September the state government sued Chevron and four other oil companies, alleging that they had deceived the public about the impact of fossil fuels. Other companies, including Oracle, have moved from California in recent years.
• Elon Musk (who has moved Tesla’s corporate base to Texas and is doing the same for X and SpaceX) launched a new lawsuit against OpenAl and its co-founder, Sam Altman, claiming that investors had been taken in by Open Al’s “fake humanitarian mission”. Mr Musk filed a similar suit earlier this year, only to drop it after three months. Meanwhile, John Schulman, another OpenAl co-founder, left the startup to join Anthropic, a rival outfit created by former OpenAl employees in 2021.
• Glencore decided not to spin off its coalmining assets, after shareholders said they would rather keep the highly profitable business. Sentiment has drifted away from high-minded ESG goals and towards bottomline profits at other energy-related companies, too.
• Meanwhile, Saudi Aramco announced that its shareholder dividend this year would top $124bn. Amin Nasser, the chief executive of the world’s biggest oil company, said markets were “largely ignoring” the continuing huge demand for oil.
• Warner Bros Discovery wrote down the value of its legacy TV channels, which include CNN, by $9.1bn, reflecting changes in the broadcasting industry in just two years since Discovery and WarnenMedia merged.

Trying to stay in shape

• Increased competition in the market for weight-loss drugs meant that Novo Nordisk’s quarterly sales and profit came in slightly under market expectations. The Danish maker of Wegovy and Ozempic has boosted its spending on R&D to stay ahead of its competitors. WeightWatchers’ share price dived after it reported slimmer earnings. The company has started providing anti-obesity drugs to boost its weight-loss programme.
• Australia’s biggest wine producer, Treasury Wine Estates, is selling off its cheaper brands, such as Blossom Hill and Wolf Blass, in order to focus on higher-priced plonk, including Penfolds and Squealing Pig. Consumers are drinking less wine (hie), apparently, but spending more per bottle.

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