1. In an effort to address the ongoing financial crisis, the Securities and Exchange Commission took the unusual step of banning short sales of some companies’ stock. Announced on Friday and confirmed by similar bans in the United Kingdom, France, Portugal, Ireland, Australia, and other major markets, the move was intended to prevent future downward pressure on financial stocks. According to an FT analysis, many hedge funds may be hurt by the move. In an even more dramatic move, the Bush administration has proposed a $700 billion relief package for Wall Street. The package, which will require the ceiling on the national debt be increased from $10.6 trillion to $11.3 trillion, would be the largest rescue package in the history of the country.
2. On Saturday, South African President Thabo Mbeki agreed to step down from office after his ruling party, the African National Congress, called for his resignation. It is widely expected that Jacob Zuma will replace Mbeki as the new President of South Africa. There are considerable questions about what will happen to South Africa’s economic policy under a Zuma Presidency. Mbeki moved the ANC’s economic policy towards a more open, free-market system at odds with the party’s strong union and activist base. It remains to be seen in what direction Zuma will steer Africa’s largest economy.
3. Relations between the United States and its South American neighbors took a hit last week, as Bolivia and Venezuela expelled the U.S. ambassadors. The United States responded by expelling the Bolivian and Venezuelan ambassadors.
4. On Thursday, Iranian President Mahmoud Ahmadinejad appeared to making an overture towards Israel, confirming his close ally and vice president Esfandiar Rahim-Mashaei’s assertion that Iran was “a friend of [the] Israeli people.” The FT speculates that the move may be part of a broader strategy of improving relations with the West. However, Ahmadinejad’s history of calling for the destruction of Israel and denial of the holocaust suggests that he may have a great deal more work to do if that is indeed his intention. Further, Ahmadinejad’s move was countered on Friday by a statement from Iran’s supreme spiritual leader, Ayatollah Ali Khamenei, who said it was “wrong” to claim that Iran could be a friend of Israel.
5. On Sunday, militants in Nigeria called an end to a week-long series of attacks against oil facilities in the Niger River Delta region. The Movement for the Emancipation of the Niger Delta (MEND) had claimed responsibility for the attacks, which it claims are part of its effort to establish local control over the region’s oil resources.