Tag Archives: swine flu

Five Stories You Might Have Missed

Debates over Wall Street compensation reemerged on the national stage last week, as the government urged companies that received federal assistance under the Troubled Asset Recovery Program (TARP) limit executive compensation. On Thursday, the Federal Reserve issued draft rules governing compensation for companies that have not repaid TARP assistance. Under the new rules, the companies would be required to demonstrate that their compensation packages do not encourage excessive risk-taking. In an interview with the Financial Times, George Soros weighed in on the debate, calling Wall Street’s profits this quarter “hidden gifts” from the U.S. government. He commented that, “Those earning are not from the achievement of risk-takers. These are gifts, hidden gifts, so I don’t think that those monies should be used to pay bonuses. There’s a resentment which I think is justified.”

Meanwhile, concerns over the spread of the H1N1 (swine flu) virus continue to grow. On Saturday, President Barack Obama declared a declaration of “national emergency” to combat the flu. Under the declaration, hospitals eases some restrictions on hospital operations, giving them additional powers to treat the flu. 

In news from outside the United States last week:

1. German Chancellor Angela Merkel formally announced her new coalition agreement on Saturday. There were few surprises, as Merkel’s center right Christian Democrats allied with the liberal Free Democratic Party. The coalition contract included a promise to pass a €24 billion tax cut for poor and middle-income Germans and will reform inheritance laws. Under the new coalition agreement, Guido Westerwelle, the leader of the Free Democrats, will assume the post of foreign minister. The Christian Democrat’s Wolfgang Schäuble, a strong fiscal conservative, will become finance minister.

2. In two separate attacks, two car bombs exploded outside government buildings in Baghdad, Iraq, on Sunday, killed more than 130 people and injuring more than 500. The attacks were the deadliest in more than two months. Iraq had been enjoying a period of relative stability, as Western-backed tribal leaders had pushed al Qaeda militants into the margins. But U.S. officials contend that Iraq may be entering a period of increased violence, as militants attempt to reignite sectarian violence ahead of parliamentary elections scheduled for next year.

3. Negotiations intended to resolve the standoff over the Iranian nuclear program appear to have stalled. The talks, which were reopened early last week, were intended to develop an agreement which reduced Iran’s stockpile of low enriched uranium (LEU), building upon an agreement reached earlier this month under which Iran agreed, in principle, to send some of its estimated 1,200 kg of LEU to Russia and France, which would convert the fuel into medical isotopes before sending it back to Iran. But after Iran failed to meet a Friday deadline, the United States warned that it would be willing to wait for a few more days, but cautioned that its patience was limited. Iran’s current stockpile, if enriched, could provide enough uranium for a single nuclear weapon.

4. Figthing between Somali insurgents and African Union (AU) peacekeepers broke out in Mogadishu on Thursday, killing at least 30 people. According to witnesses, militants attacked using mortars as Somali President Sheikh Sharif Ahmed was leaving the country for a meeting in Uganda. AU forces responded with artillery fire. More than 19,000 civilians have been killed, and an estimated 1.5 million people have been displaced from their homes since 2007 as a result of ongoing fighting in Somalia, which has made the country a center for international piracy and terrorism.

5. The government of Brazil on Tuesday imposed a two percent tax on some capital inflows into the country. The decision, which as intended to slow the increase in the value of the real, Brazil’s currency, which had already increased more than 36 percent against the U.S. dollar this year. The new tax targets portfolio investment and financial speculation, not productive investment in the country. Nevertheless, the announcement was not well received by the market, and stocks fell sharply after the government made its announcement. But analysts offered a more positive pronouncement. In an editorial comment, the Financial Times described the new tax as “wise,” “sensible,” and “honest.”

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Five Stories You Might Have Missed

The big story of the week has been the swine flu outbreak, which now appears to be in decline. The Mexican government has announced that the outbreak that originated there appears to be easing. While governments around the world are responding with caution, the award for the biggest overreaction goes to the government of Egypt, which announced it would cull all 300,000 pigs in the country, despite the fact that there is no evidence that of the flu in the country. Pig farmers responded angrily to the proposal, sparking confrontations with police in the capital, Cairo. The World Health Organization, meanwhile, is defending its reaction, which many have criticized as an overreaction, saying that a second wave of outbreaks could appear in the future.

In news from outside the area of H1N1 (swine) flu:

1. The conflict between the Pakistani military and Taliban militants continues. The government of Pakistan stepped up its offensive against Taliban forces in regions along the Afghan border last week. The intensification of actions against the Taliban by the Pakistani government follow criticisms raised by U.S. Secretary of State Hillary Clinton that the Pakistani government was “abdicating” power to militant groups inside the country.

2. Regional governments in Southern Africa, led by South Africa and Botswana, are attempting to raise funds to finance trade credits and business loans to support the new coalition government in Zimbabwe. Zimbabwe’s economy continues to struggle, despite the government finally reigning in inflation last month. The power-sharing government has taken radical steps to bring the economy under control, including slashing government spending and permitting the use of foreign currencies for domestic transactions. As a result, the country had been struggling with an estimated 231 million percent inflation  over the past year. But so far Western donors, including the International Monetary Fund, have been hesitant to remove sanctions or increase aid to the impoverished country.

3. The European Union’s application for observer status on the Arctic Council was blocked by Canada last week. Canada is upset about proposed EU legislation intended to ban all imported seal products. Tensions over the status of the Arctic have intensified in recent years, as retreating sea ice resulting from climate change opens new shipping lanes and the possibility of extracting the Arctic’s vast stores of oil and gas. 

4. Despite experiencing a severe recession of its own, the government of Japan announced plans to expand financial assistance to other Asian countries. In a move intended to expand Japan’s influence in the region, the country will offer up to $100 billion in financial aid to Asian countries impacted by the global economic crisis. This announcement comes after other announcements that Japan would offer $100 billion in extra capital to the International Monetary Fund, $61.5 billion bilateral currency swap between Japan and Indonesia, and $38.4 billion in the multilateral Chiang Mai currency swap initiative. According to some observers, Japan is anxious to expand its influence in the region to counter the increasing influence of China.

5. May Day protests took place across Europe on Friday. Confrontations between police and protestors turned violent in Turkey, Greece, and Germany. The first of May is observed as International Workers Day (Labor Day) outside the United States. Increased unemployment resulting from the international financial crisis combined with growing social inequality raised concerns that protests may turn violent in countries like France and Spain as well, but no such outbreaks occurred.