The Economist - 5 October 2024

Год выпуска: October 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: 80

The year that shattered the Middle East

• Kill or be killed is the Middle East's new logic. Deterrence and diplomacy would be better: leader, page 11.
• In a nine-page special briefing we look at how the region has changed since Hamas rampaged across southern Israel on October 7th 2023. Our coverage examines Israel’s ever-expanding conflict with Iran and its proxies, the surprising detachment of most of the Arab world, the unresolved divisions within Israeli society and the radicalisation of a generation of Palestinians, page 18.

Crypto bros v cat ladies

• How the campaigns are exploiting the battle of the sexes, page 27.

The housing supercycle

• Why property prices could keep rising for years, page 64.

Will China’s stimulus work?

• It will take more than a spectacular stockmarket rally to revive the economy: leader, page 12.
• Can the buying frenzy last? Page 60.

Mapping a fruit fly’s brain

• The first “connectome" of the brain of a complex adult animal has just been published, page 67.
• It is a step towards understanding human brains: leader, page 15.

The world this week Politics

• Israel launched aground invasion of southern Lebanon, initially sending small numbers of troops over the border but then preparing to deploy additional forces. They were soon engaged in heavy fighting with Hizbullah, Iran’s biggest proxy militia in the region, in which Israeli troops were killed. More than 1,000 Lebanese combatants and civilians have been killed and overim displaced. Iran lashed out with a direct attack on Israel, firing around 200 ballistic missiles. A man was killed in the West Bank when a missile fragment fell on him. No other deaths were reported. Binyamin Netanyahu, Israel’s prime minister, said Iran would pay a “heavy price”.
• Iran’s strike came in the aftermath of Israel’s assassination of Hassan Nasrallah, the leader of Hizbullah in Lebanon since 1992, in airstrikes on southern Beirut that targeted the group’s headquarters. Israel has now killed most of Hizbullah’s military leadership in the past two weeks and destroyed perhaps half of its 120,000 or more rockets and missiles.
• Two Palestinian gunmen killed seven people in a shooting and knife attack in Tel Aviv. The two terrorists were shot and “neutralised” by a security officerand nearby civilians, according to the police.
• Kenya’s Parliament started proceedings to impeach Rigathi Gachagua, the country’s deputy president, over his alleged role in antigovernment protests in June. Dozens of people were killed in the protests, which nearly unseated the government.
• At least 45 people died and more than 100 were missing after smugglers forced migrants off two boats travelling from Yemen to Djibouti. The incident makes 2024 the deadliest year on record for migrant sea crossings between the Horn of Africa and Yemen. Most recently, 196 people had drowned while trying to cross in June.
• The hard-right Freedom Party (FPÖ) won the most votes in Austria’s general election, the first time it has claimed victory. Its chances of forming a government are slim. Karl Nehammer, the country’s incumbent chancellor, whose conservative People’s Party (ÖVP) came second, may try to hammer together a coalition of Social Democrats, liberals and Greens. The ÖVP and the FPÖ have been coalition partners before; the last one ended in 2019. But Mr Nehammer has ruled out the inclusion of Herbert Kickl,the FPÖ’s leader, in any new alliance.
• Mark Rutte took over from Jens Stoltenberg as NATO’s secretary-general. In his first speech Mr Rutte reiterated the alliance’s commitment to Ukraine, warning that the cost to the West would be much higher if Russia won the war. Meanwhile, nine people were killed in Russian drone attacks on a hospital in Sumy, in northeast Ukraine. Six people were killed in Russian shelling on Kherson, which lies close to the front line. And Vuhledar fell to Russian troops. The town had managed to withstand the invaders for two years.

The end of a deep history

• Britain’s last remaining coal-fired power station officially shut down, bringing an end to 142 years of coal-fired electricity generation in the country. The world’s first coal-power station was built in London in 1882 by Thomas Edison. Plans to phase out coal were announced in 2015, when about a quarter of Britain’s electricity was generated by the fossil fuel. Britain’s greenhouse-gas emissions have fallen by more than half since 1990.
• Ishiba Shigeru became Japan’s new prime minister, following a contest in the Liberal Democratic Party to replace Kishida Fumio. Mr Ishiba named his cabinet, but also called a snap general election for October 27th. The new finance minister is Kato Katsunobu, who was a health minister under Abe Shinzo and is a firm believer in Abenomics. He has called for a stimulus package that boosts wages and capital spending.
• Responding to the latest bout of sabre-rattling from North Korea, South Korea displayed its Hyunmoo-5 ballistic missile at a military parade for the first time. The powerful weapon has been developed as a bunkerbuster. Yoon Suk-yeol, South Korea’s president, warned the North that if it attacked, “That day will be the end of the North Korean regime.”
• At least 224 people died in flooding and landslides in Nepal. Kathmandu, the capital, registered the highest daily rainfall fordecades.
• Claudia Sheinbaum was sworn in as Mexico’s president, the first woman to hold the job. Ms Sheinbaum is from the same left-wing party as her predecessor, Andres Manuel Lopez Obrador. In a speech she sought to reassure investors that their investments in Mexico would be safe following judicial reforms that have been criticised for undermining the rule of law. She reiterated that the central bank would remain independent.
• Argentina’s statistics agency recorded a big jump in poverty, with 53% of Argentines living under the poverty line in the first six months of this year, compared with 42% in the previous six months. Javier Milei, the president, has cut subsidies for transport and fuel as part of his drive to normalise the economy. A spokesman blamed the rise in poverty on the “disastrous situation” that the government inherited from left-wing administrations.
• In Canada Justin Trudeau survived a vote of no confidence in Parliament, the second in under a week. After two stinging by-election defeats the prime minister is facing calls to hold an early general election, especially from the opposition Conservatives, who are ahead in the polls. The Bloc Quebecois, which wants independence for Quebec, has promised to support the Liberal government, but only if it boosts the state pension.

A deadly tempest

• Hurricane Helene left a trail of destruction across six American states, killing about 200 people. Hundreds of people are reported to be missing. North Carolina bore the brunt. The category 4 storm made landfall in Florida’s Big Bend region, packing sustained winds of 140mph (225kph).
• J.D. Vance and Tim Walz, the two vice-presidential candidates in America’s election, held a televised debate. The candidates were amiable, focusing on domestic policy. Viewers were equally split on who came off the better.
• Jimmy Carter celebrated his 100th birthday. The former American president, who has been receiving hospice care for 19 months, has said he is determined to vote for Kamala Harris in November’s election.

The world this week Business

• Dock workers on America’s east and Gulf coasts went on strike, theirfirst since 1977. Some of the ports affected are the busiest in the country, and include New York and New Jersey, Savannah and Houston. The workers’ union has rejected a pay rise of 50% over six years. With just a month to the election, the White House pressed employers to raise their offer, as businesses demanded that federal law is invoked to keep the ports open. A long strike will snarl up shipping and push up freight rates. Analysts at JPMorgan Chase estimate that it could cost the economy between $3.8bn and $4-5bn a day.

In reverse gear

• The strike will also hit the car industry, as the ports account for a sizeable chunk of trade in vehicles and spare parts. It couldn’t come at a worse time, with General Motors and Toyota reporting declining sales in America. Stellantis, owner of the Chrysler brand, cut its fullyearguidance, driving its stock down by 13%. In Europe Volkswagen issued its second profit warning in three months because of the “challenging market environment”. Aston Martin’s stock fell by 25% after it, too, said annual profits would be lower than it had hoped.
• Bucking that trend, Tesla reported its first quarterly rise in deliveries this year. The carmaker delivered almost 463,000 vehicles from June to September, an increase of 6.4%, year on year.
• Nike’s woes continued, as it reported a 10% drop in sales for its recent quarter, year on year. The sportswear company withdrew its earnings guidance for the full year, shortly before Elliott Hill takes over as chief executive on October 14th.
• OpenAI raised $6.6bn in its latest funding round, giving it a value of $157bn. SoftBank reportedly invested $5oom. After a period of retrenchment following some disastrous investment decisions, Son Masayoshi, the Japanese tech conglomerate’s boss, has said he is going on a “counter-offensive” to increase the group’s spending on artificial intelligence.
• California’s governor, Gavin Newsom, vetoed a state bill that would have brought in strict safety requirements for the development of large-scale AI models. The bill called for AI to have full shutdown capabilities and security protocols to avoid “critical harms” to infrastructure and people. It was opposed by Google, OpenAI and Meta, but supported by Elon Musk.
• Chinese stockmarkets snapped out of their funk and rallied in response to the government’s recent stimulus package, chalking up their biggest daily gains since 2008. The benchmark CSI 300 rose by 25% over five days, its most ever by that measure. The Shanghai Composite was up by 21% over five days, its largest gain since 1996. Hong Kong’s Hang Seng Index also surged; it has risen by 30% since rhe start of 2024.
• The Federal Trade Commission cleared Chevron’s acquisition of Hess, an energy exploration company, but blocked the chief executive of Hess from joining Chevron’s board. The regulator has lodged a complaint against John Hess, accusing him of communicating with OPEC and encouraging the cartel to “stabilise production and drawdown inventories”, which could cause oil prices to rise. The FTC says that giving Mr Hess a board seat would have let him “amplify” this message. Hess responded that the FTC’s claims were “without merit”, and that Mr Hess had said similar things to the American government.
• Abu Dhabi’s state oil company offered to buy Covestro, a German chemical firm that was separated from Bayer in 2015, for €14.7bn ($16.2bn). If it passes regulatory muster in Europe the deal will be the largest-ever takeover of a foreign entity by the United Arab Emirates.
• Oil prices rose sharply amid the latest turmoil in the Middle East, pushing the price of Brent crude above $75 a barrel. But over the month of September the price of Brent fell by 9% and by 17% over the whole of the third quarter, as traders weighed the likelihood of slowing global demand for oil against possible short-term disruption to supply.
• The euro zone’s annual inflation rate dropped sharply in September to 1.8%,the first time it has fallen below the European Central Bank’s 2% target since mid-2021. That strengthens the case for the ECB to cut interest rates again when it meets on October 17th.

Money, it’s a gas

• Pink Floyd reportedly sold the rights to its catalogue of recorded songs to Sony for $400m (though not the songwriting rights). The deal brings an end to years of squabbling about rights among the band members. The decades-long feud between David Gilmour and Roger Waters is as legendary as Pink Floyd’s music.

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