Message-ID: <4608840.1075855133378.JavaMail.evans@thyme> Date: Thu, 13 Dec 2001 11:08:54 -0800 (PST) From: the_economist-business-admin@lists.economist.com To: dbaughm@ect.enron.com Subject: The world this week: Business 8th - 14th December 2001 Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: 7bit X-From: The_Economist-business-admin@lists.economist.com@ENRON X-To: dbaughm@ect.enron.com X-cc: X-bcc: X-Folder: \Edward_Baughman_Jan2002\Baughman Jr., Don\Deleted Items X-Origin: Baughman-E X-FileName: dbaughm (Non-Privileged).pst Welcome to The world this week: Business A summary of the world's main events from The Economist. Also available at http://www.economist.com - - - - - - - - - - - - - - - - - - - - - IN THE ECONOMIST THIS WEEK - America's energy policy was wrong before September 11th. Now it is even more so * Japan's economy * The future of American farming * Race and poverty in Britain * European merger rules * Kenya's dynastic politics * The origins of racism * Spherical robots * Classical CDs * You can read these articles, and many more, in the free area of Economist.com, at http://www.economist.com. Subscribers can also read 40 more new articles. Click here to subscribe: http://TheEconomist.s.maildart.net/link_15814_6723637_1_79944192_60299072_1_61 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DOWNWARD MARCH America's Federal Reserve responded to continuing signs of economic weakness with its eleventh INTEREST-RATE CUT of the year. A reduction of a quarter-point brings rates down to 1.75%, the lowest for 40 years. - - - - - See article: Don't bet on a swift recovery http://TheEconomist.s.maildart.net/link_36738_6723637_1_79944192_60299072_1_69 The value of GLOBAL MERGER AND ACQUISITION ACTIVITY in 2001 was $1.6 trillion, half what it was worth the previous year, according to data from Dealogic. In 2000, the inflated value of high-tech shares fuelled many a deal that now looks unwise. CSFB is to hand over some of the cash it had made from the dotcom boom. The investment bank has reportedly agreed to pay $100m to settle an investigation by America's regulators into claims that it had rigged initial public offerings of high-tech shares by allocating big tranches to favoured customers in return for a slice of the profits in the form of inflated commissions. ZURICH FINANCIAL SERVICES reshuffled its top management yet again. Dinos Iordanou, who had been promoted to head of group operations last year and was tipped to take over the top job, left to run an insurance start-up. Perhaps as a result, Converium, a reinsurance business Zurich has spun off, made a quiet stockmarket debut. The weak economy claimed more victims at AMERICAN EXPRESS. It announced that up to 6,500 more jobs would go, on top of the 7,700 announced in the past 12 months, a total of 15% of its workforce. COMPAQ'S merger with HEWLETT-PACKARD seemed doomed after the Packard foundation rejected the deal. Hewlett family members had already dismissed the merger; together they own 18% of the company. Compaq shares sank, but both it and HP optimistically insisted that the deal would succeed with the aid of institutional shareholders. - - - - - See article: Carly Fiorina of Hewlett-Packard http://TheEconomist.s.maildart.net/link_36737_6723637_1_79944192_60299072_1_68 TELECOM TROUBLES The global telecoms slump hit Eastern Europe. TELEKOMUNIKACJA POLSKA announced that it would get rid of 12,000 employees next year, some 20% of its workforce. France Telecom, which acquired 35% of the former state monopoly from the Polish government last year, had said that job cuts would come but had agreed with powerful unions that it would wait four years. Struggling BRITISH TELECOM appointed Ben Verwaayen, a Dutchman from struggling Lucent Technologies, as its new chief executive, to replace Sir Peter Bonfield, who recently said he would depart from BT a year ahead of schedule. NOKIA provided some relief from the gloom surrounding high-tech companies. The Finnish mobile-phone behemoth announced that fourth-quarter profits were likely to be better than previously forecast after handsets sold in greater quantities than expected. But fourth-quarter profits will not match last year's; and its infrastructure business still languishes. CONSIGNIA, once known as Britain's Post Office, may have to lay off some 30,000 workers over the next year and a half, twice previous estimates for redundancies needed to save costs as postal growth slips. Unions reacted to the state-owned company's announcement with outrage and threatened to strike. YAHOO!, the world's biggest Internet portal, made an unsolicited offer of $436m for HOTJOBS, a careers website that was planning to merge with its rival, TMP Worldwide. DRUG CULTURE Corporate Japan suffered its biggest foreign intrusion with the purchase by ROCHE of a controlling interest in CHUGAI, a large drug company, for up to YEN198 billion ($1.59 billion). The Swiss drug firm assuaged Japanese sensitivities by dressing the deal up as an alliance with Roche as an invited partner. PFIZER threatened to stop supplying France with new medicines in protest at the country's drug-pricing policies. It hopes competitors will join the struggle to squeeze extra cash from France's government; it would go to research and developing better cures, says Pfizer. MERCK shocked investors and sent its shares reeling with the news that profits would not grow in 2002. The American drug firm blamed the expiry of patents and slowing sales. FIXING THE CAR MAKER FIAT unveiled plans for a restructuring that would see the loss of 6,000 jobs, the sale of non-core assets and the possible demise of up to 18 of its factories. The head of its car-making division, Roberto Testore, resigned. - - - - - See article: Fiat's problems http://TheEconomist.s.maildart.net/link_36736_6723637_1_79944192_60299072_1_67 Five GERMAN BANKS felt the wrath of the European Commission. In its latest round of cartel-busting, the commission levied fines of EURO101m ($90.4m) for fixing commissions on the exchange of the 12 euro-area currencies since 1997. 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