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The Economist Espresso via e-mail for Tuesday November 25th
Race, justice and protest: the Michael Brown verdict
“There is inevitably going to be some negative reaction, and it will make for good TV.” So Barack Obama concluded a press conference late last night, after prosecutors in Ferguson, Missouri, announced that a grand jury had decided not to indict Darren Wilson, the police officer who in August shot an unarmed black man, Michael Brown. The decision, inexplicably, did not come until 8pm, by which time protesters in Ferguson were facing off with police. Even as the president spoke, cable-TV channels screened pictures of men throwing bottles and bricks and the police firing tear gas. There were mainly peaceful demonstrations in several other cities. Mr Obama condemned violence, but he also pointed out that “communities of colour are not just making these problems up.” As the tear gas clears, the investigation goes on: Eric Holder, the attorney-general, said that the federal Justice Department’s investigation into the shooting of Mr Brown continues.
Collateral damage: Obama fires Hagel
When you’re in a hole, fire someone. That being Washington’s way, Barack Obama’s national security team is now wondering who will be next, after the easing out yesterday of Chuck Hagel, the defence secretary. Mr Hagel was picked for his Obama-like caution less than two years ago. His mission: to help wind down the Afghan conflict and shrink America’s war machine to fit a new era in which military force would be a tool of last resort. Then Team Obama learned that, alas, in foreign policy, others get a vote: from Islamic State fanatics to muscle-flexing Chinese generals and revanchist Vladimir Putin. Poor, decent, briefed-against Mr Hagel—a former Republican senator who came by his war-wariness honourably, seeing action in Vietnam—was judged an inept salesman for the old Obama doctrine, and never penetrated the president’s inner circle. More departures surely loom. Some inner-circle sackings would actually help, but don’t count on them.
Indian Kashmir: Modi’s new frontier
Polls open in the perpetually disgruntled Indian state of Jammu & Kashmir today, in the first of five rounds of voting for the state assembly. For the first time the Bharatiya Janata Party of the prime minister, Narendra Modi, known for its Hindu nationalism, stands a chance of leading a coalition government in the Muslim-majority state. It is expected to win by a landslide in the largely Hindu Jammu, but may find allies even in the troubled Kashmir valley. The insurgency there, fired by local resentment at Indian rule and by infiltration from Pakistan, which still claims sovereignty over all of Kashmir, is at a low ebb. So turnout will be high, despite separatists’ call for a boycott. The election will not bring peace, however, without an agreement between India and Pakistan. And, though their leaders may talk at a summit in Nepal this week, that is not on the cards.
Time is money: the IMF and Ukraine
A mission from the IMF leaves Ukraine today, after a two-week visit for talks with the newish coalition. In April, when Ukraine was at real risk of defaulting on its debts, the fund promised it $17 billion: $4.6 billion has arrived. Ukraine wants more; the IMF wants a commitment to reform. Ukraine could yet default: foreign-exchange reserves are probably about $10 billion, and $14 billion-worth of external repayments fall due before the end of 2016. The currency, the hryvnia, has lost half its value this year: some think it may soon fall to 25 to the dollar, from 15 now. The country’s banks are struggling: one, VAB Bank, was declared insolvent on Friday. Meanwhile the conflict with Russian-backed separatists in the east drags on, despite a notional ceasefire. Arguments within the coalition could delay the next slug of IMF money until next year. That may be too late.
Printing banknotes: no more easy money
De La Rue, a British company that prints banknotes for dozens of countries, reported gloomy half-year results today: revenues fell by 8%, year-on-year, and profits by 36%. Its new boss, Martin Sutherland, who joined last month, will have to work hard for his cash. A profit warning in September, the second within a year, caused De La Rue’s shares to plunge by 34%, shortly after the firm won the contract to print plastic banknotes for the Bank of England from 2016. Overcapacity in the industry and growing competition have squeezed margins; De La Rue is thought to have won the Bank of England contract only by offering a huge discount. Fortunately, its other area of expertise—printing passports—offers brighter prospects, as governments everywhere add new security features. For Mr Sutherland, more emphasis on travel documents may be just the ticket, now that producing banknotes is no longer a licence to print money.
The world in brief
The “P5+1” countries (America, Britain, China, France, Germany and Russia) and Iran pushed back their deadline for an agreement on Iran’s nuclear programme from yesterday to the end of June. Iran insists its motives are peaceful and wants sanctions lifted; the other powers want to cut Iran’s enrichment capacity.
Hong Kong’s government began removing tents and barricades from roads in the volatile Mong Kok area, amid signs that public support for the two-month-old pro-democracy protests has started to fizzle, and the movement itself appears increasingly divided between a peaceful majority and a more confrontational splinter group.
Tunisia’s presidential election is heading for a run-off next month between the favourite, Beji Caid Sebsi, and the incumbent, Moncef Marzouki, after Sunday’s first round. Mr Sebsi’s secular Nidaa Tounes (“Tunisian Call”) came top in recent parliamentary elections; Mr Marzouki may attract supporters of Nahda (“Awakening”), an Islamist party with no candidate of its own.
BT, Britain’s biggest fixed-line telecoms provider, said it was in preliminary talks with two mobile operators about a possible merger. One is O2, a mobile network owned by Spain’s Telefónica that BT spun off in 2002. The other is reportedly EE, owned by Orange, of France, and Deutsche Telekom.
The chief executive of United Technologies, which makes Otis lifts, Pratt & Whitney engines and Sikorsky helicopters, resigned unexpectedly. The company did not say why Louis Chenevert had stood aside, to be replaced by Gregory Hayes, the chief financial officer, but insisted it had nothing to do with its unspectacular financial performance.
Executives from Sony told investors today that they expected revenues in the company’s troubled electronics division to rise by 70% in the next three years. They are pinning their hopes mainly on the PlayStation 4, a successful games console, and image sensors; they warned of cuts to Sony’s TV and smartphone units.
A museum in Bern said it would accept a bequest of artworks from the estate of Cornelius Gurlitt, whose hoard of paintings included many collected by Jewish families in Nazi Germany. The museum said it would work to return looted art to its rightful owners.
Markets & Currencies
At last close
DJIA : 17817.90 (+7.84 / +0.04%)
S&P 500 : 2069.41 (+0.00 / +0.00%)
FTSE 100 : 6729.79 (-20.97 / -0.31%)
DAX : 9785.54 (+52.99 / +0.54%)
Nikkei 225 : 17407.62 (+50.11 / +0.29%)
Hang Seng : 23843.91 (-49.23 / -0.21%)
Crude Oil (WTI) : 76.04 (+0.26 / +0.34%)
Gold : 1201.00 (+5.30 / +0.44%)
Major world currencies
Last updated: Tue 25 November, 11:06 GMT
EUR – USD 1.2439
GBP – USD 1.568
USD – JPY 118.115
AUD – USD 0.8551
USD – CAD 1.1293
USD – CHF 0.9666
EUR – GBP 0.7933
“Cultivation of the mind is as necessary as food to the body.” — Marcus Tullius Cicero
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