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Letters are welcome via e-mail to letters@economist.comRobert Gelbard SIR ? I was shocked and profoundly embarrassed by the utterly false statement made against me in your article on the International Commission Against Impunity in Guatemala (CICIG) (?Parachuting in the prosecutors?, October 15th). Based on two decades of experience in democratic institution-building, law enforcement and counter-narcotics, I have criticised the overall efforts of Francisco Dall?Anese, who heads CICIG, as being not aggressive enough compared with those of Carlos Castresana, his predecessor, and in light of the dire situation facing Guatemala.That is vastly different from your dismaying allegation of ?spread(ing) poison?. In fact, I have publicly and repeatedly agreed with Mr Dall?Anese?s position on Carlos Vielmann, a former interior minister.CICIG is a unique and valuable entity in the absence of a functioning Guatemalan justice sector. But precisely for that reason, as Mr Castresana realised, CICIG must for now occupy itself with the prosecution of cases and work on its institution-building function.Guatemala is a country rife with disinformation; you have unfortunately bought into such an effort against me. I am both angry at you...

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Letters are welcome via e-mail to letters@economist.comA plan for the euro

GREECE, progenitor of the euro zone?s debt drama, is back at centre-stage. The reason is a battle between the Greek government, its European and IMF rescuers, and the holders of Greek bonds over the terms of a ?voluntary? reduction in its private debts. Greece?s economy is in far worse shape than when the outlines of a deal were put together last October, so there is a bigger financial hole to plug. Germany and other rescuers don?t want to offer more money, not least because Greece?s politicians have broken so many of the promises they made to reform. Bondholders don?t want to take a bigger hit.

THE HEADQUARTERS OF China Central Television, designed by Rem Koolhaas and Ole Scheeren, looks like a monstrous space invader striding across Beijing. The headquarters of the China National Offshore Oil Corporation resembles an oil tanker emerging from a shimmering sea. It was designed by Kohn Pedersen Fox, an international firm of architects, and sits directly opposite China?s ministry of foreign affairs. All over central Beijing you see state companies erecting giant monuments to themselves, reflecting their huge power and their vision of themselves as agents of modernisation.That vision is not confined to Beijing. Petronas, Malaysia?s state-owned oil company, has built 88-storey twin towers in the heart of Kuala Lumpur. In Moscow, VTB, Russia's second-largest state bank, has its headquarters in a sleek glass skyscraper in the spanking new Moskva City Business Complex.The most striking thing about state-owned enterprises (SOEs) is their sheer collective might in the emerging world. They make up most of the market capitalisation of China?s and Russia?s stockmarkets and account for 28 of the emerging world?s 100 biggest companies. True, the state-owned sector as a whole has been in rapid retreat. It now makes up only about a third of China?s and Russia?s GDP, against almost all of it two decades ago. But this decline is the result of selective pruning rather than...

VIDEO GAMES COME in many guises. There are strategy, adventure, puzzle, sports and business games, first-person and third-person shooters, fantasy and science-fiction role-playing games, fighting games (think of a virtual boxing match), flight simulators and many, many more. The same people will probably play lots of different kinds of games. The archetypal players?young males with plenty of free time and disposable income?are known as hardcore gamers. They tend to use dedicated consoles or powerful PCs, and their games are likely to involve violent action, complicated role-playing or strategy.In recent years they have been joined by so-called casual players who spend less time, money and attention on simpler games, often played on mobile phones or online. Action and strategy titles are available for such users too, but they tend to be less complex. The classical casual genre is puzzle games?abstract brain-teasers such as the venerable ?Tetris? or modern titles like ?Dr Kawashima?s Brain Training?.The internet offers more possibilities. ?Massively multiplayer? games are played by hundreds or thousands of people simultaneously, all inhabiting the same virtual world, hosted on a remote server. The iconic example is the fantasy-themed ?World of Warcraft?. Life in such worlds goes on regardless of whether an individual gamer is playing or not. On a...

PEOPLE who work in private equity love a good party. But at a recent gala, many revellers looked beleaguered. ?This industry is going to go through a period where everybody gets sacked,? groused one private-equity executive to another.Life isn?t as flush as it used to be for private-equity, or buy-out, firms, which purchase companies with debt, fix them up and sell them. Debt, which juices the profits of private-equity firms, is harder to come by. And firms are stuck holding investments for longer, since the public markets are not strong enough to list companies and cash out.All buy-out firms share these tough conditions. But British outfits, which managed £146 billion ($234 billion) and 19% of global buy-out assets in June 2011, are having a tougher time than their American peers. Many British firms focus on investing in Europe, where the economic outlook is rotten. European banks are more loth to provide debt given their own funding difficulties. Another source of financing?the high-yield debt market?is weaker in Europe than in America.Many investors are wary of putting money into the euro-denominated funds that many British buy-out firms raise. Executives complain that they show up to meetings to be pummelled with questions about the European sovereign-debt crisis, not about their fund. One buy-out boss said that before the crisis, his executives had to meet with no more...

THREE years ago the Bank of England, which had already cut interest rates to record lows, wheeled out a new, unconventional tool to stimulate the economy. It would buy government debt using newly-created cash?a policy that became known as ?quantitative easing? or QE. The Bank is now a market mammoth, owning over 30% of the £940 billion ($1.5 trillion) pool of outstanding government bonds. It is set to get bigger: on February 9th the Bank's monetary-policy committee authorised £50 billion of new purchases over the next three months. But is this strategy working?A surge of demand from a new buyer will push up prices in any market. Indeed, this is the Bank?s aim. Its current purchases outstrip the supply of new bonds by around £5 billion per month. This causes bond prices to rise, lowering yields and making them less attractive as investments. That, combined with the cash that investors receive from the Bank, ought to nudge them towards assets offering better yields, like corporate debt and equity. That, in turn, should lower businesses? financing costs and boost investment.Market movements suggest quantitative easing has achieved most of these things. Yields on ten-year government debt, a favoured purchase, have fallen from around 4% to 2% since the programme began. Over the same period the FTSE 100 index has risen by nearly 70%, although actions taken in America and Europe...

FOR all its eventfulness, 2011 only produced one incident that really shifted the opinion polls. David Cameron?s refusal to support a new European Union (EU) treaty last December went down well with voters, who rewarded the Conservatives with their first lead over Labour in a year. It also cheered Tory MPs, many of whom had never warmed to their leader.Their initial joy increasingly looks misplaced, and they know it. Mr Cameron had initially said that the countries which signed up to the new ?fiscal compact? to strengthen the euro?potentially all 26 other members of the union?would not be able to use EU institutions such as the Commission and the Court of Justice. These are part-funded by the British taxpayer and meant to serve the whole EU.Soon after, Mr Cameron was deluged by behind-the-scenes legal advice, which suggested that Britain would not get its way on the institutional matter, and by angry Liberal Democrats, the more pro-European of the coalition parties. Sure enough, by the time of an unofficial EU summit in Brussels on January 30th, the government had watered down its position. It now says only that it has ?legal concerns? about the Court of Justice being used to enforce new fiscal rules. Although Mr Cameron says he will take action if the new arrangements compromise British interests, it is hard to see what, if anything, has been prevented by his veto.The...

ARISE, Mr Goodwin. On January 31st the Honours Forfeiture Committee ruled that Sir Fred, as he has been since 2004, should be stripped of his knighthood after his tenure as chief executive of the Royal Bank of Scotland (RBS) ended ignominiously with a huge bail-out. Mr Goodwin joins a list of ex-Sirs that includes Anthony Blunt, a Soviet spy, and Robert Mugabe, the president of Zimbabwe.Mr Goodwin?s replacement, Stephen Hester, has also faced opprobrium after the company?s board agreed to pay him a bonus worth £963,000 ($1.53m). Perhaps confusing the man responsible for the failure of RBS with the one hired to fix it, politicians and one newspaper assailed Mr Hester?s ?reward for failure?. Within days he turned down the bonus.If stripping one failed banker of his knighthood and hounding another who is making a decent fist of a difficult job looks like a witch-hunt, that?s because it is. Galling as it may be to imagine Mr Goodwin insisting on being called Sir Fred at his local corner shop, or offering his hand to be kissed at the bus stop, no power flowed from his title. Shame is an important sanction when well-paid people screw up, but Mr Goodwin?s reputation was already in the gutter following the bank?s failure and a nasty public row over his pension. Knighthood or not, he was not about to walk back into public life.True, Mr Goodwin had a cocksure management style that...

THERE was never any doubt that Britain?s economy was destined for a stormy close to 2011. Its proximity to the tempest engulfing Europe guaranteed that. All told, the economy?s fourth-quarter performance?a contraction of 0.2%?is a bit worse than expected, but hardly surprising. Is worse to come?The answer depends overwhelmingly on whether Europe?s crisis deepens or is resolved. A sharp decline in European industrial production from September hit both demand and confidence among British businesses. In the fourth quarter British industrial output sank by 1.2%. Yet the euro-zone economy seemed to be stabilising by the end of the year. Industry on both sides of the English Channel fared somewhat better in December, and in January the euro zone posted a surprise increase in manufacturing activity.Things are somewhat cheerier at home, too. Consumer-price inflation fell from 4.8% to 4.2% from November to December alone. That should reduce pressure on real household incomes, buoying demand. The hangover from December?s gyrations could leave Britain in recession through the first quarter, but growth is expected to return thereafter. The IMF now forecasts growth of 0.6% in 2012, a bit better than the average economists? projection of 0.2%. Those figures hinge on continued progress towards a resolution of Europe?s crisis.

SOMETIMES it takes the interaction of powerful forces for things just to stand still. So it is with Britain?s housing market, which lenders expect to remain characterised this year by low levels of transactions and stable prices. But, quietly, the property market is being transformed.The forces bearing down on housing are obvious enough. Home sales have fallen sharply since the start of the financial crisis, to around half their 2007 levels. That reflects greater conservatism on the part of lenders??We don?t assume that home prices will go up, a mistake everyone made in the past,? says one?and of borrowers worried by an uncertain economic outlook at home and endless euro-crisis headlines. Household demand for secured credit fell in the last quarter of 2011, according to the Bank of England.A slump in volumes has not led to a slide in prices, however. House prices are down by less than 10% from their peak, still well above The Economist?s definition of ?fair value?, which is the long-run average ratio of house prices to rents. Prices in America, by contrast, have fallen back to fair value. A shortage of housing supply has helped sustain prices, as have low interest rates: two-thirds of British mortgage-holders are on variable-rate loans. A big rise in unemployment would unsettle this equilibrium, but only if joblessness bites among homeowners rather...

SPAIN?S Socialist Party specialises in nail-biting leadership contests. Its new head, Alfredo Pérez Rubalcaba, followed this tradition on February 4th, scraping to victory by just 22 of the 955 votes cast at a convention in Seville. His opponent, Carme Chacón, a 40-year-old female former defence minister, would have made a more striking choice, but it was not to be.Mr Rubalcaba is a party veteran who became deputy to José Luis Rodríguez Zapatero just as the prime minister?s popularity plummeted in 2010. An aura of defeat already surrounds the 60-year-old. He was the party?s candidate for prime minister at November?s general election, when Mr Zapatero decided not to run again. The Socialists lost a third of their deputies, their worst result in 35 years, as the People?s Party (PP) led by Mariano Rajoy swept to an absolute majority. Mr Rajoy may now stay in power for at least eight years.The Socialists? ills extend beyond parliament. They preside over just two of Spain?s 17 regional governments and could lose their stronghold of Andalusia to the PP in March. That would be a big blow to Mr Rubalcaba?s standing. Today the biggest Socialist-run city is Zaragoza, fifth in size behind the PP-run Madrid, Barcelona, Valencia and Seville.How can a man so closely linked to Mr Zapatero?s failures expect to win back voters? Mr Rubalcaba?s answer is to veer left. He supports bank taxes,...

TAKING big decisions on Greece?s future suggests high drama. But the delays, muddle and political posturing dogging efforts to win a ?130 billion ($170 billion) bail-out from its European Union partners could be from an old Athenian comedy. This week the three political leaders supporting a fractious government were arguing over the details of an austerity package with Lucas Papademos, the caretaker prime minister. Their meeting was repeatedly delayed as the ?troika? (the European Commission, the European Central Bank and the IMF) grappled with Evangelos Venizelos, the finance minister, over ?3 billion of spending cuts.Foot-dragging over reform is a big reason for Greece?s sick state. The economy may shrink this year by around 3%, after 6% last year. Unemployment hit 19% in January. Almost one in two young Greeks is without a job. Given the outlook, investors have unsurprisingly shied away from new privatisations. Delays by finance-ministry officials have also infuriated the troika. Only after it had dismissed their latest proposals as ?unrealistic? and ?farcical? did Mr Venizelos cave in. A 20% reduction in the minimum wage, another round of pension cuts and 15,000 public-sector job cuts are among the measures the politicians are being asked to swallow in the next 15 days.Explore our...

SINCE the start of the euro crisis, a hope has been that a way could be found to support governments that were temporarily short of cash (because of skittish bond investors) but that had public finances that were otherwise sound. The ?489 billion ($643 billion) of cheap cash that the European Central Bank lent in December to banks for three years may prove such a scheme. With the promise of more long-term ECB loans to come, borrowing costs for euro-zone governments have fallen sharply, in part because banks have put some of the money to work by buying high-yielding bonds (see article).It is damning, in such propitious circumstances, that Portugal has not shared in the rush. Even as yields in other trouble spots, such as Ireland, Italy and Spain, have plunged since the start of the year, Portugal?s have risen. In part this is because its bonds were downgraded to junk status on January 13th by Standard & Poor?s, a ratings agency, forcing funds that can only hold investment-grade bonds to sell. The surge in yields on two-year Portuguese bonds is a sign that bondholders fear they will have to accept the kind of losses that Greece is still negotiating with its private-sector investors. When bond prices fall in anticipation of uniform losses, the implied yields on short-dated bonds rise by more...

GERMANY?S intelligence services failed to detect a gang of neo-Nazis who murdered ten people over several years. Never mind. They have a vice-president of the Bundestag in their sights.Times are awkward for the 17 Offices for the Protection of the Constitution, as the domestic intelligence agencies are known (one at federal level and one for each of the 16 states). The ?Zwickau cell? killed with impunity until two of its members shot themselves in November after fleeing a bank robbery. Perhaps that is because the spooks were busy watching the Left Party, the fourth-largest in the Bundestag. The federal office is monitoring 27 of its deputies, including Petra Pau (a Bundestag vice-president) and a member of the committee that oversees the intelligence services. The party, or affiliated groups, are also targets in most states. This constitutes ?defamation of the opposition?, complained Jan Korte, a legislator on the watch list.There are reasons to keep an eye on the Left Party. It is the direct descendant of East Germany?s communists and expanded westward by attracting disgruntled Social Democrats. Although the party espouses ?democratic socialism? it harbours some groups that seem unsure about democracy. It has seats in 13 state legislatures and has helped govern, mostly pragmatically, three eastern states. The federal agency has been watching it since 1995.The fuss erupted...

NO FIREWORKS, no flag-waving crowds: just a champagne toast and a sigh of relief. That was the response on January 22nd, when Croats voted to join the European Union. The ?yes? camp won a two-thirds majority, far more convincing than anyone had expected. True, the reported turnout of 43% was low. But Croatia?s voting rolls are out of date. Guessing at the real number of eligible voters and subtracting the diaspora, especially Bosnian Croats, the turnout may have been a respectable 60%, says Vesna Pusic, the foreign minister.Croatia?s EU accession was negotiated by the Croatian Democratic Union (HDZ) government, which was thrashed in December?s election. But it was backed by its left-leaning successor and by all main political figures, academics, institutions and the Catholic church. Parts of the nationalist right were against but the wind was knocked from their sails last week when a hero, Ante Gotovina, who was convicted last year by the UN war-crimes tribunal in The Hague, said the EU was where Croatia belonged.Explore our interactive guide to Europe's troubled economiesOpponents had argued that Croatia, which fought a war of independence against Yugoslavia two decades ago, should not now bind itself in a ?Euroslavia?. They were backed by...

JUST when Sweden?s opposition Social Democrats thought things could not get worse, they have. Indeed, Europe?s most successful political party is in the throes of the worst crisis in its history. Hakan Juholt has quit as leader after only ten months, following a seemingly endless stream of blunders that led many party districts to call for him to go. The opinion polls are sending shivers through the party, with support hovering around 25%, its lowest ever.This is not entirely Mr Juholt?s fault. The Social Democrats, who ruled Sweden for most of the 80 years until 2006, lost the elections in 2006 and 2010 because they failed to appeal to middle-class voters. Deep rifts have emerged between the party?s left and right wings. The Greens and the Left Party, both of which have new and energetic leaders, have surged on the back of the Social Democrats? problems.The party?s executive committee decided it should be speedy in choosing a successor to Mr Juholt. But finding one has not been easy. The Social Democrats have been criticised in recent years for failing to groom new leaders and attract talent. Mr Juholt, who was himself a compromise candidate, was largely unknown to most voters. The choice is always made behind closed doors, guided by a party culture that frowns on naked ambition. The etiquette is that candidates should deny any interest in the top job until they are made...

EVEN the right judged it a success. On January 22nd François Hollande, the Socialists? presidential candidate, addressed his first big rally at Le Bourget, an airport just north of Paris. He answered critics of his lacklustre campaign with a strong performance that electrified his supporters. The polls make him the clear favourite to beat Nicolas Sarkozy, the incumbent, in the second round of the election in May. Mr Sarkozy, who has yet formally to enter the race, has started to talk publicly about life beyond politics.To the surprise even of some who work with him, Mr Hollande declared war on global finance. The financial industry, he said, had grown into a nameless, faceless empire that has seized control of the economy and society. To tackle the enemy and restore the French dream, Mr Hollande wants to separate banks? ?speculative? activities from their lending arms. He would outlaw ?toxic? financial products, keep banks out of tax havens and ban stock options for all companies except start-ups.

Socialist dreamer

?ALL-WHITE neighbourhoods are effectively extinct,? according to ?The End of the Segregated Century?, a recent report by the Manhattan Institute, a New York think-tank. Only 0.5% of America?s 70,000 neighbourhoods are now all-white. In fact, American cities are today more integrated than they have been since 1910. And since 1960 the proportion of black Americans living in ?ghetto neighbourhoods? (more than 80% black) has dropped from nearly half to about 20%.Until the Great Migration north, beginning around 1910, most of the black population lived in the rural South. Then they were pushed into ghettos because of restrictive deed covenants and blatant discrimination by landlords. Although the Supreme Court ruled against race-based zoning in 1917 and New York City outlawed housing discrimination in 1958, real change did not begin until the 1960s during the civil rights era when segregation was still near its peak.Gentrification has also helped: Washington, DC?s Navy Yard for instance, 95% black in 2000, is now less than a third black. America is also no longer a biracial country. Latinos and Asians are moving into so-called white and black neighbourhoods. The typical black American now lives in a neighbourhood that is 14% Hispanic, about the same figure as for whites.Depopulation of ghettos, rather than integration of them, has also contributed to the decline in segregation....

AFTER three years of stagnant loan growth, The Peoples Bank in Coldwater, Ohio, has noticed a change. Clients who two years ago would not have qualified for a loan now find that they can. One customer who was working for only 35 hours a week two years ago is now working 45 to 50 hours. ?That was his reason for coming in: he had steadier income,? says Jack Hartings, president of the seven-branch bank. Since the bank?s main alternative to lending money is buying Treasury bonds that yield only 1%-2%, Mr Hartings is eager to make new loans.

INDIANA, like many manufacturing states in the Midwest, has long felt the pain of seeing jobs go overseas. In his seven years as Republican governor, Mitch Daniels?s response has been to offer a strong diet of pro-business legislation. In the past few years Indiana has cut its corporate tax rate by nearly 25%, established one of the highest R&D tax credits in the country and started work on a $10 billion infrastructure-improvement plan.

ALABAMA?S immigration law, boasted Micky Hammon, an Alabama legislator and one of its co-authors, ?attacks every aspect of an illegal immigrant?s life. They will not stay in Alabama?This bill is designed to make it difficult for them to live here so they will deport themselves.? It is not, however, designed to introduce visiting executives from Mercedes-Benz, which employs thousands at its factory in the state, to the pleasures of Alabama?s jails. But that is what happened to Detlev Hager, who was caught in November driving in Tuscaloosa with only German ID on him.Alabama?s immigration law is the nation?s toughest. It requires police to check the immigration status of anyone they detain, stop or arrest and have a ?reasonable suspicion? of being in the country illegally. It bars illegal immigrants from working, soliciting work, attending public universities or entering into ?a business transaction? with the state. It invalidates any contract to which an illegal immigrant was party. It prohibits people from renting apartments to illegal immigrants, taking them in their cars or giving them shelter, and it requires officials in state schools to determine whether pupils are legal or illegal.As enacted, however, the law has not turned out quite as its backers planned. In September a federal judge struck down four provisions, including the prohibition on illegal immigrants working...

WHEN the winning bid for the privatisation of Guarulhos, São Paulo?s main international airport, was read out on February 6th, the crowd at the city?s stock exchange gasped. At 16.2 billion reais ($9.4 billion), it was nearly 4 billion reais more than the second-highest bid, and 12.8 billion reais above the government-specified minimum. On offer was 51% of a public-private partnership with Infraero, Brazil?s lumbering state-owned operator. The partnership will have to pay the sum in inflation-linked instalments over 20 years, and also give the government 10% of its turnover. From what is left, money will have to be found for investment of more than 4.5 billion reais fixing up decrepit, overcrowded terminals. A third of that sum must be spent before hordes of football fans arrive for the 2014 World Cup.Controlling stakes in two more of Infraero?s 66 airports were also on offer. Viracopos, 100km from São Paulo, needs huge investment to cope with overflow from Guarulhos, which has no room to grow. Brasília?s airport is to be expanded as a hub for domestic flights. All told, the government pocketed a cool 24.5 billion reais.Some 30% of the country?s air passengers and 57% of its air cargo pass through the three airports. They should be gold mines. Passenger numbers in Brazil have doubled in a decade and hectic growth is expected to continue. Since Infraero is heavily...

UNTIL this year, no woman had ever been the presidential candidate for any of Mexico?s main political parties. That changed on February 5th, when Josefina Vázquez Mota, a former secretary of education and of social development, won the primary of the conservative National Action Party (PAN). ?I will be Mexico?s first presidenta? (female president), she said in her victory speech.

LYING between Colombia?s coca bushes and Mexico?s cocaine traffickers, Central America is a choke point on the drugs trail. In 2010 the smugglers ensured that Honduras, El Salvador, Belize and Guatemala were among the world?s seven most violent countries. Costa Rica and Panama are richer and safer. But since 2007 their murder rates have respectively risen by a third and nearly doubled.Amid this inferno Nicaragua, the poorest country in mainland Latin America, is remarkably safe. Whereas Honduras?s murder rate in 2010 was 82 per 100,000 people, the world?s highest in over a decade, Nicaragua?s was just 13, unchanged in five years. That means it is now less violent than booming Panama, and may soon be safer than Costa Rica, a tourist haven. What explains the relative peace?Spending is not the answer. With a GDP per head of $1,100, Nicaragua can afford only 18 policemen for every 10,000 people, the lowest ratio in the region. (Panama has 50.) Earning $120 per month, its officers are also the worst-paid. Nor does Nicaragua spend much on prisons: it jails just 120 people per 100,000, compared with 390 in El Salvador. This may work in its favour: El Salvador?s violent mara gangs look for recruits in the country?s packed prisons.Nicaragua?s distaste for its neighbours? mano dura (?iron fist?) policies grew out of the 1979 revolt...

?THE change has begun. The change has arrived,? declared Otto Pérez Molina as he donned Guatemala?s presidential sash on January 14th. Quoting Mayan astronomers who set the start of a new 5,125-year epoch in 2012, Mr Pérez, a former general, vowed to save the country from its ?crisis? of crime and poverty.Guatemala has grave problems and feeble means to combat them. Its murder rate of 39 per 100,000 people, partly spurred by drug gangs, is among the world?s highest. Slow violence is done on a bigger scale by malnutrition, which stalks half the country?s children, the worst rate in the Americas. Government revenues are just over a tenth of GDP, the region?s lowest share.Mr Pérez won the election by pledging an ?iron fist? against crime and corruption, which he says have ?infected? the state. Supporters hope for army-style efficiency. Critics worry that as head of military intelligence during some of the country?s 36-year civil war, he must have known of the atrocities committed by his side. Mr Pérez?s backers note that he negotiated the 1996 peace accords, which shrunk the army.The president has promised results fast. Mauricio López Bonilla, the interior minister, says he hopes to cut the murder rate to 30-35 per 100,000 by July. He plans to increase the police force?s ranks by 40% and the army?s by 22%. Claudia Paz y Paz, the attorney-general, will stay on, despite pursuing...

SOON after Barack Obama chose to delay a decision last year on a proposed Alberta-to-Texas oil pipeline called Keystone XL, Stephen Harper, Canada?s prime minister, warned that his country would not be left at the altar. ?This does underscore the necessity of Canada making sure that we?re able to access Asian markets for our energy products,? he said. The threat was clear: if the United States did not want oil from Alberta?s dirty tar sands, Canada would build a pipeline to the Pacific and ship the stuff to Asia. There, says Enbridge, the firm behind the project, each barrel might fetch $20 more (counting shipping) than in America. On January 18th Mr Obama rejected Keystone XL. New calls for Canada to look west will surely follow.

AS IF anyone needed reminding that Haiti is often synonymous with poverty and tragedy, on Christmas Eve more than three dozen emigrants from the country drowned after their overcrowded boat sank off the eastern tip of Cuba. Even before a massive earthquake in January 2010 devastated the capital, Port-au-Prince, Haiti was a stain on the conscience of the Americas. Now Michel Martelly, the new president, wants to change his country?s image from basket case to business opportunity. His officials talk up the tourist potential of 1,700km (1,060 miles) of coastline, and the attraction for investors of a productive workforce and tropical crops like mangoes and coffee. ?The Haitian people are not looking for handouts, but for a hand up?for jobs and work that will restore their dignity,? Mr Martelly told a recent investment conference sponsored by the Inter-American Development Bank.Aid officials say that Mr Martelly is the most pro-business president since Haiti moved towards democracy in the 1980s. He has pledged to create 500,000 jobs in three years, which would make a significant dent in an unemployment rate of about 40%. A start has already been made. In November officials cut the ribbon on a $257m industrial park near Cap Haïtien, the second city. Anchored by a South Korean clothing manufacturer, the park will create 80,000 jobs directly and indirectly, they say. Another South...

IN THE streets of El Alto, Bolivia?s poorest and fastest-growing city, scarecrow dummies hang grotesquely from lampposts with ropes around their necks as a macabre warning to potential thieves and criminals. The threat is not idle. Residents have little faith in the police or the courts. Instead, they often take justice into their own hands: the lynching and killing of alleged offenders is not infrequent in El Alto, nor elsewhere in Bolivia.The socialist government of President Evo Morales reckons that the way to restore public faith in the judicial system is to replace the judges with elected ones. On January 3rd, with much fanfare, he swore in 56 judges elected in a national ballot last October. They will now compose the country?s four highest courts.For Mr Morales?s supporters, this represents popular justice. The judiciary was ?packed by middle-class opportunistic lackeys of the government of the day?, complained Idon Chivi, an official responsible for the reform. The new judges, he says, are more representative: 50% are women and some, for the first time, are Amerindian.The opposition complains that the new judges are in practice handpicked government appointees. It sees the judicial election as intensification of the politicised justice already dispensed under Mr Morales. Many Bolivians heeded an opposition call to register a protest vote in October. Only 40.5% of the...

THE Jewish state was founded as paradise for the persecuted. Overshadowed by the terrible legacy of anti-Semitism and bruised by its frequent wars, the country now faces, Israel?s politicians proclaim, the danger of annihilation by Iranian nuclear bombs. Yet for long years Israel has enjoyed one relative comfort. Most of the time its angry neighbours have been conveniently weak and divided.Could that change? Some Israelis fear the Arab spring is set to produce an Islamist winter. Religiously inspired parties, mostly linked to the Muslim Brotherhood, have emerged as the strongest political force in half a dozen Arab states. The Brotherhood itself now dominates Egypt, the largest Arab nation. Its rise there in effect ends the isolation of the Brothers? offshoot in the Gaza Strip, the Palestinian group Hamas, which has warred with Israel for decades. Jordan?s wobbly king, reliably accommodating to Israel, faces a rejuvenated Islamist opposition. When the smoke clears in Syria, Islamist forces could emerge triumphant there too, seemingly completing Israel?s encirclement by like-minded, hostile governments.Israel?s leaders also sensed danger on February 6th at news that Hamas and Fatah, the rival Palestinian party that runs a secular rump state on the West Bank, have agreed to end a bitter feud and form a unity government. Binyamin Netanyahu, Israel?s right-wing prime minister,...

SIX months after the two Sudans formally split into separate countries they are still haggling over the divorce settlement. The tense negotiations, often accompanied by violent clashes along their border, are being described in both capitals as an ?oil war? since the main prize is petroleum revenues. Recent South Sudanese threats to cut the north out of them completely have made a return to sustained conflict a real possibility. Sudan?s president, Omar al-Bashir, said war is nearer than peace.When South Sudan seceded last July following decades of civil war, it took with it three-quarters of the old country?s daily production of around 480,000 barrels. But its only way of getting the oil to market is via the north, which has pipelines, refineries and export terminals.Talks over how much South Sudan should pay in transit fees have yielded no result. In December Sudan decided to confiscate oil as payment in kind. South Sudan calls this theft. In January it announced the shutdown of all production, even though this will deprive it of 98% of its official revenue. It also signed a memorandum of understanding with Kenya to build a new pipeline to Lamu, an Indian Ocean port, though experts warn this would take years and cost billions of dollars.The decision has proven very popular in South Sudan. ?This is the day we truly became an independent nation,? says one Juba resident. But...

ALI ABDULLAH SALEH ended his 33 years as president of Yemen on January 22nd and boarded a plane to Oman and may go on to America. This has brought to a close, at least temporarily, a violent power struggle.Riven by civil strife for many years, opposition groups rose up in open revolt a year ago, following the example of youths in Tunisia and Egypt. Mr Saleh, weakened by an injury from a bomb attack in June, clung to power. For months Yemen appeared in danger of sliding into bloody chaos. Mr Saleh?s loyal troops fought not only student protesters but also tribal bands and defecting soldiers, leaving extremist groups to set up strongholds in the north and south of the country.His departure was brokered by Western diplomats and Gulf leaders. It follows an agreement that gives him and his loyalists immunity from prosecution. The final sign-off on the deal was delayed by several months, until it was enshrined in law by the Yemeni parliament. Mr Saleh?s going should ease political tensions in Yemen. UN envoys have coaxed its competing factions into a detailed power-sharing plan that excludes jihadists. However, Mr Saleh has accepted neither defeat nor permanent exile and says he plans to return to Yemen, a possibility that could yet disrupt the delicate transition of power.Mr Saleh left behind a country that is broke and sclerotic. For decades he secured his power by playing off...

LIBYA?S interim rulers had their first serious wobble on January 21st when a crowd of several thousand massed outside a government building in Benghazi, the country?s second city, where members of the National Transitional Council were meeting. They hurled grenades and Molotov cocktails, yelled angry slogans and demanded more support for rebel fighters now out of a job.Their discontent had been building for some time, particularly in the east of the country, which fell swiftly to rebel forces early last year. As war raged further west until the fall of Tripoli, the capital, in August and the death of Colonel Muammar Qaddafi in October, Benghazians felt increasingly neglected.The most recent uproar came after more than a month of nightly protests. Pictures of the once-popular Mustafa Abdel Jalil, who led the rebels in opposition, have been burned in the streets; other leaders have been vilified for their links with the former regime. Protesters complain that the city, marginalised under Qaddafi, has seen few improvements since his fall from power. The judicial system is still suspended, schools have only recently reopened, official handouts for the poor are not yet restored, and promised medical treatment for fighters wounded in the uprising last year has yet to materialise.The deputy head of the council, Abdel Hafiz Ghoga, whom many dislike for having once led the lawyers?...

THE International Criminal Court (ICC) on January 23rd announced the prosecution of four well-known Kenyans for crimes against humanity. The charges date back to a post-election spree of violence in 2008, which killed 1,500 people and displaced 300,000 more. Among those facing trial are Francis Muthaura, the country?s top civil servant, and Uhuru Kenyatta, the finance minister. Both men resigned three days later. They are from the Kikuyu tribe, while the other accused are from the rival Kalenjin: William Ruto, a former cabinet minister, and Joshua Sang, a radio-show host.Politics is likely to get messy as a result. Messrs Kenyatta and Ruto may still plan to stand in presidential elections this year. Mr Kenyatta, who says he will co-operate with the court, would likely be the main challenger to Prime Minister Raila Odinga. Mr Ruto has little chance of being elected, but could play the role of kingmaker if the result is close.The court?s indictments are unlikely yet to be much of an impediment on the campaign trail. President Mwai Kibaki had originally planned to ask the men to step down for the duration of the case. But a recent speech indicates he lacks the stomach?or the power?to act against Mr Muthaura, his closest aide.After four years, Kenya has done almost nothing to get justice for victims of the killing spree. Only a handful of people have been prosecuted in domestic...

IT IS almost the love that dare not speak its name. Ever since Azerbaijan?s independence in 1991, relations between the Jewish state and a Shia Muslim one have grown and flourished. Both fear Iran; both have things the other wants. In a 2009 American diplomatic cable published by WikiLeaks, Ilham Aliev, the Azeri president, was quoted as saying that the relationship was like an iceberg: nine-tenths of it was ?below the surface?.What is known is that Israel gets a good third of its oil from Azerbaijan, via a pipeline that ends at Ceyhan in Turkey, whence it is shipped to Israel. An Azeri drilling company is hoping to strike big in Israeli waters just off the southern port of Ashkelon. Azerbaijan, now a member of the UN Security Council, generally votes with Arab and Muslim countries when it comes to resolutions on Israel. Israelis say they mind more about what Azerbaijan does than what it says.In the past decade Azeri-Israeli trade has grown fast. But the figures do not spell out the size of one-off sales of Israeli military stuff, which make the statistics bounce around. In 2008 Azerbaijan?s recorded exports to Israel (almost all oil) were officially worth $3.6 billion; in 2009 they were $1.2 billion; in 2010, $1.7 billion. The lower figures are unlikely to record the full extent of the trade.One of Azerbaijan?s largest mobile-telephone providers is a joint venture with an...

THE alliance of right-wing nationalists and religious zealots that underpins Binyamin Netanyahu?s ruling coalition may be starting to fray. A new centrist-cum-secular party proclaimed on January 8th by a popular television anchorman, Yair Lapid, could poach votes from Mr Netanyahu?s Likud, say opinion pollsters, though it would take more from the main opposition party, Kadima. And a widely mooted new centrist religious party under Aryeh Deri, a former leader of Shas, currently Israel?s biggest religious party, would nibble away at the two religious ones (including Shas) now in Mr Netanyahu?s coalition. Together, according to a recent newspaper poll, the two newcomers could give the combined parties of the ?peace camp? a slight edge over Mr Netanyahu?s ?national camp? and perhaps even install a prime minister after the next election who would strive harder to do a deal with the Palestinians.Israel is abuzz with such hypotheses. But the next election is far away. By law, Mr Netanyahu can keep governing until October 2013. The Israeli economy is more robust than many and he is under no serious domestic threat that could cause his coalition to implode. The longer he waits, the likelier the new contenders are to shrivel and fade from public awareness.But Likud insiders say the prime minister fears possible friction between Israel and the United States in a second-term Obama...

WHEN the leader of the Malaysian opposition, Anwar Ibrahim, was acquitted by a high court judge last month on controversial charges of sodomy, supporters in the government of the reforming prime minister, Najib Razak, were able to claim it as something of a victory. It was proof, they said, that ministers no longer meddled in judicial decisions, as in the bad old days. They even claimed it as evidence of Mr Najib?s wider programme to bring the country into a modern, liberal age.And so the attorney-general?s decision barely two weeks later to appeal against Mr Anwar?s acquittal hardly looks good. Mr Anwar has always maintained that the sodomy charge was a smear that had been orchestrated by people from within Mr Najib?s ruling party, the United Malays National Organisation (UMNO). The case had run for two years, which for many Malaysians was quite long enough. Mr Anwar?s lawyer quickly derided the appeal as ?a desperate act?.The attorney-general?s decision renews suspicions that nothing much has changed within UMNO, which refuses to stop hounding Mr Anwar and, despite Mr Najib?s worthy intentions, wants few reforms to speak of. Resistance to Mr Najib?s changes has become something of a leitmotif of his time in office, and it could cost him dear at the next general election, which is expected later this year.Over the past two years this English-...

THIS Christmas Moises Garcia, a Nicaraguan living in America, got the gift he had spent almost four years and $350,000 fighting for: the return of his nine-year-old daughter. In 2008 Karina was whisked away to Japan by her Japanese mother. He set about fighting in the Japanese courts for the right to see her. During that period, he met her only three times. Their longest meeting lasted for only two hours.Then he had a stroke of luck. Last April Karina?s mother travelled to Hawaii to renew her green card. She was arrested at the airport and charged with violating Karina?s custody agreement. As part of a plea bargain, the mother relinquished Karina, who became the first child seized by a Japanese parent to be returned to America via the courts. (Feel sorry for Karina, in the middle of this tug-of-love.)Because of such cases, America is one of many countries that has pressed Japan to honour its promise to join the Hague Convention on the Civil Aspects of International Child Abduction. Japan proposes to do so this year. The convention sets rules for the prompt return to their normal country of residence of children under 16 who have been abducted by one of their parents. The State Department says Japan has about 100 such cases involving children of Americans. There are scores from other countries, too.But for one category of parents?those living in Japan without access to their...

PRISON guards beat Mohammed?s head so badly that his eyelids were puffy and purple, and his feet so hard that he could not walk. They hurled abuse and taunts at the 21-year-old Syrian protester. But his sunny resolve was unbroken. ?As soon as I can walk, I?m back on the street,? he vowed from his bed in a suburb of Damascus.Violent unrest wreaks havoc on mental health, provoking nightmares, altering behaviour and causing lasting illness. But the link between suffering and trauma is less straightforward than many assume. In research published in 2008 Brian Barber, a psychologist at the University of Tennessee, found that violence had left young Palestinians in Gaza less traumatised than their Bosnian peers, even when stripping out factors such as the levels of bloodshed they had witnessed and whether their homes had been destroyed.The key, he found, lay in how injured people understood the violence. The young Palestinians saw the intifada as a way to end the Israeli occupation. This political framework left them less upset by what they saw. In contrast, many Bosnian youths were mystified by the onset of the war that engulfed...

RETIRED policemen, judges and presidents who support radical drug-law reform still greatly outnumber those who pipe up while still in the job. But calls for a rethink are increasingly coming from incumbents too. Last year Bolivia?s left-wing government briefly withdrew from the UN?s Single Convention on Narcotic Drugs, the 1961 treaty underpinning prohibition. It returned after negotiating an opt-out for coca, a traditional mild stimulant (unlike cocaine, no more harmful than caffeine) protected by the country?s constitution.More hawkish leaders are also thinking twice. Felipe Calderón, Mexico?s conservative president, said in August: ?if you [America] are determined and resigned to consume drugs, then seek market alternatives?or establish clear points of access other than the border with Mexico. This position can no longer go on.? Soon after, Juan Manuel Santos, the centre-right president of Colombia, said he would welcome legalisation if it cut criminals? profits.European leaders so far lack these cojones. Though the Netherlands tolerates cannabis sales to locals in designated coffee shops and Portugal has decriminalised the consumption of all drugs, neither has legalised supply, meaning that consumers? cash still goes to the mobs who behead, boil and skin in Latin America. Last year George Papandreou, then prime minister of Greece, became the only...

CARBON emissions vary hugely between countries. That is well known, as is the finding that rich people emit more than poor ones. But a newly revised paper* by Emilio Zagheni of the Max Planck Institute in Rostock, Germany also shows how carbon footprints vary by age?and the worrying implications of this.Average spending patterns vary over a lifetime. Consumption as a fraction of household spending typically peaks when people are in their 20s. Old people drive cars less than do their children and grandchildren. Clothes spending peaks in (most) people?s 40s and declines thereafter. These choices have environmental results, because some kinds of economic activity are more heavily polluting than others.

LUCIFER, V8, Anal, Christ: these are among the baby names rejected by New Zealand?s department of internal affairs, who recently released a comprehensive list of those disallowed by registrars in the past ten years. Though no name is banned outright, says Ross McPherson, the deputy registrar-general, some applications were not even words. Disappointed parents included those wishing to christen their offspring with numbers (89), letters (J, I, T) and punctuation marks (*).Few decisions are more personal than the naming of offspring. Yet laws regulating the choice of both first names and surnames are common around the world. Denmark expects new parents to choose from a register of acceptable names; Portugal lists banned and approved ones. In Iceland a committee of language specialists must rule on any unusual name. German registrars prohibit the use of most nouns and place-names, and also frown upon any that do not clearly imply a gender: bad luck, Kim. Experts at a German-language society run a helpline offering advice to puzzled parents (at a cost).Governments argue that these rules prevent children being saddled with preposterous names (Sinbin) that may cause them problems in later life. They also aim to block names that might cause offence to others (Jesuswept). Even where registrars have no power of prohibition, worrisome choices can be referred to judges or to child-...

DEBRA COOK was once a doughty defender of Scientology, helping it to contest critics? claims that it is a ruthlessly run moneymaking cult based on bogus science. But on New Year?s Eve Ms Cook, who spent more than 17 years in the organisation?s leadership, wrote an explosive e-mail to 12,000 members, complaining that its chairman, David Miscavige, is mismanaging its finances and breaking its internal rules.A Scientology spokesman dismissed Ms Cook as a ?squirrel? (the organisation?s term for a heretic), insisting that she has had no position in the church since 2007, ?having left for medical reasons?. An ex-Scientologist, Mark Rathbun, says Ms Cook once underwent a gruelling interrogation at an internal disciplinary facility, where she was accused of lesbianism (which Scientology sees as a grave disorder). Among other mistreatment, he says, she ?was made to stand in a large garbage can and face one hundred people screaming at her demanding a confession?.Even if true, that appears not to have dented her loyalty. Ms Cook says she is ?completely dedicated? to Scientology, and praises its ?stunning and miraculous? results. That may make her attack, which is studded with quotes from the group?s founder, L. Ron Hubbard, all the more telling.Her first criticism is of an excessive focus on fund-raising, a distraction from the proselytising efforts that he regarded as the priority....

TURN a lens on a familiar text?or better still, on several similar but not identical versions of a story?and all manner of unexpected insights will pop up: not necessarily about the apparent subject matter, but about who wrote the material, for whom and why.That approach was first used by German scholars, and then British ones, just over a century ago, on the texts sacred to Christianity, using techniques honed on the writings of Greece and Rome. From small differences in the four Gospels, they drew big conclusions. Matthew speaks of a lamp giving light to ?all those in the house?; Luke speaks of a lamp to guide ?those coming into the house?. For Martin Dibelius, a German scholar, that was one clue?among many?that the material collected by Matthew was prepared for a Hebrew public, who were in a sense already illuminated; Luke?s words were aimed at ?Gentile? newcomers. Dibelius reckoned the Gospels were collections of mini-sermons, collated rather than written by the Gospel authors; and he tried to work out who the target audiences had been.Christians were initially uneasy with such academic scrutiny. The Vatican only dropped its objections to critical scholarship after the second world war; Pope Benedict XVI, for example, might challenge the scholars? conclusions but he would not object to their method.Many evangelical Christians still stress the ?inerrancy? of the Bible...

DISGUSTED by an increasingly invasive state, America?s most capable entrepreneurs retreat to Galt?s Gulch, a libertarian commune. That was the theme of Ayn Rand?s magnum opus, ?Atlas Shrugged?, a sacred text for libertarians ever since it was published in 1957. Actually creating such an enclave has been the dream of many fans of small government (or of none at all). Several have had a try at it, but their efforts have always ended in disaster (see table).

ANALYSTS have been poring over the mathematics of the proposed all-share merger between Glencore and Xstrata, announced on February 7th, trying to work out which side has the better of the deal. Is one share of Xstrata, a mining company based in Switzerland but listed in London, a fair swap for 2.8 of its Swiss neighbour, Glencore, a miner and by far the world?s biggest commodities trader? Mick Davis, Xstrata?s boss, proposed a different equation for investors to ponder. ?One plus one?equals 11,? was his summary of the merger?s merits.Mr Davis, an accountant by training and a qualified cricket umpire, is generally given to more sober judgments. Perhaps he can be excused his excitement. A deal would forge the world?s fourth-largest mining company with a market capitalisation not far shy of $90 billion, and Mr Davis will be its chief executive.The return of the mining mega-merger was no surprise. Ivan Glasenberg, Glencore?s boss, has long talked as if a merger had already taken place. His company owns 34% of Xstrata, which was formed by a spin-off of Glencore?s coal mines in 2002. Part of the motivation for Glencore?s initial public offering last year was to put a value on the company and give it a currency with which to strike a deal.The alliance would extend Xstrata?s lead as the world?s biggest thermal-coal miner, giving it more than one-tenth of the market, and make it...

IN AN early episode of ?Sergeant Bilko?, a 1950s TV comedy, the eponymous hero rents an empty store. His fellow soldiers, convinced that the army?s ?smartest operator? sees a business opportunity, beg to be made partners. Not all do well out of the deal.Nat Rothschild also has a name that inspires confidence among investors. The scion of a European banking dynasty (some of whose members own stakes in The Economist), Mr Rothschild raised £707m ($1.08 billion) to create his own empty store, a London-listed ?cash shell? named Vallar. He then used the cash to buy stakes in two coal-mining ventures in Indonesia associated with the Bakrie group, a family-owned conglomerate.Bumi PLC, the British-based company that emerged with Mr Rothschild as co-chairman, appealed to cautious punters who might otherwise have shied away from risky commodity bets in faraway places. But the marriage of British finance and Indonesian business is on the rocks, and investors are sore.On February 3rd the Bakrie family and Samin Tan, an Indonesian businessman, called on Bumi?s shareholders to unseat Mr Rothschild from the board. The move came after months of boardroom strife, which began when the Bakries sold half of their stake to Mr Tan, to pay off debts. It worsened last November when Mr Rothschild called for ?a radical ?cleaning up?? of the ?balance-sheet and corporate culture...

?WE?VE been waiting for this day for 30 years,? said Nicolas Sarkozy, France?s president, on the news this week that India had gone into exclusive negotiations with Dassault Aviation, a French firm, to buy 126 of its Rafale warplanes for $15 billion-20 billion. France has not sold a single Rafale overseas, and until this week the plane?s future looked iffy. Shares in Dassault Aviation soared by 18.5%.The loser, ironically, was the Rafale?s cousin, the Eurofighter Typhoon, built by a consortium led by EADS, Europe?s defence and aerospace champion, which is jointly controlled by Germany and France. EADS itself owns a 46% stake in Dassault, a legacy of earlier French government meddling, so its own shares inched up on the news.Dassault won its exclusive-bidder status by offering the lower price. Both European jets had satisfied the technical requirements of the Indian Air Force, which wants zippier planes to guard against China?s Chengdu J-10 combat aircraft and Pakistan?s ageing American F-16s. In tests over the Himalayas and the Rajasthan desert, India had eliminated the F-16 and F/A-18, the Russian MiG-35 and Swedish JAS 39 Gripen from the process during 2009-10.The capabilities of both the Rafale and the Eurofighter were on display during the Libyan war. The Typhoon is the superior air-to-air interceptor. The Rafale switches more easily into a ground-attack mode.After...

SOME parents give their children cakes. A few give them cake shops. The hot topic in South Korea is the trend for daughters and grand-daughters of chaebol families to open bakeries and other small food outlets. The chaebol are the conglomerates that dominate the Korean economy, so these plutocratic pâtissières have deeper pockets than any of the little bakers they compete against.Their baking has provoked outrage. Lee Myung-bak, South Korea?s president, calls it a ?hobby? business for rich girls that threatens the livelihood of poor shopkeepers. Lee Ju-young, a member of the national assembly, likens it to Park Ji-sung (Manchester United?s Korean midfielder) lording it over amateurs in a backstreet game of football. A restaurateur in Seoul puts it more plaintively: ?These families already control everything else in Korea. Why can?t they leave something for the rest of us??The chaebol families have decided that this is not a battle worth picking. Scions of the Samsung, LG and Hyundai dynasties are all hanging up their aprons. Artisée, a chain of swanky pastry shops run by Lee Boo-jin, whose dad is the chairman of Samsung, is to close. So is the Hyundai-affiliated Ozen.Whether this will help small bakers much is open to question. Artisée has only 27 shops; Ozen a mere two. Both are...

FOR months Research In Motion (RIM), the Canadian maker of BlackBerry smartphones, has seemed incapable of getting anything right. Its PlayBook tablet went on sale without e-mail (unless attached to a BlackBerry). Its network was blacked out for days with scarcely a word from the company. It has been slow to upgrade BlackBerry?s operating system. Investors squealed as the share price fell by 70% in ten months. Canadians are now worried they might lose a second technology champion within a few years.Ever louder calls for a change in leadership were answered on January 22nd, when RIM?s joint chief executives and chairmen, Jim Balsillie and Mike Lazaridis, stepped down. Investors doubt the new chief executive, Thorsten Heins, a former chief operating officer, will stop the rot. On January 23rd the share price fell by 9%.Perhaps that is because RIM sees little rot to stop. Mr Heins was anointed by Messrs Balsillie and Laziridis, who are still on the board. ?I don?t think there is some drastic change needed,? he told analysts this week?certainly not a break-up of RIM, an idea some disgruntled shareholders want to consider. His boldest step will be to find a new chief marketing officer.But rot there is. Fewer and fewer companies insist that their staff use BlackBerrys. ComScore, a research firm, says that last autumn only a sixth of American smartphone-users brandished RIM?s...

LAWYERS have long considered themselves a breed apart: highly educated professionals, not dim-witted businessmen who think a ?whereas? is a man who turns into a small member of the horse family when the moon is full. Many countries bar business types from owning even a bit (much less all) of a law firm. But in Britain, that law changed in October.Companies are queuing up to form new ?alternative business structures? (ABS). The Solicitors Regulation Authority, the biggest legal regulator, has received at least 65 applications. The first ABSs should be approved in February.The ?alternative? possibilities are many. Irwin Mitchell, a big personal-injury firm, may float its shares. Slater & Gordon, which in 2007 became the first Australian firm to go public, has since bought some smaller firms and nearly tripled its revenues, to A$182m ($194m).Another new structure will be that of the Co-operative, a membership organisation best known for its supermarkets, but which also runs a bank and buries and cremates more people than any other entity in Britain. The Co-op already has a legal arm for its members. Approval as an ABS will let it sell the same services to the general public. In anticipation, it plans to add 150 people to its current legal staff of 400.Liberalisation will make lawyering cheaper, say its boosters. Tech-savvy entrepreneurs may buy or start law firms and offer...

FIGURES on employment tend to encourage a black-or-white view of an economy. Either conditions are worsening and firms are shedding workers, as they did by the hundreds of thousands in 2008 and 2009, or times are improving and businesses are creating new jobs. Spirits leapt on February 3rd on news that America?s private businesses boosted their payrolls by 257,000 jobs in January, capping the country?s best 12-month employment performance in the private sector for over five years. But the headline figures represent just the tip of a large labour-market iceberg. Data provided by the relatively new Jobs Openings and Labour Turnover Survey (JOLTS) illuminate these depths.Even in the darkest of days, labour markets remain busy. Growing firms hire to expand and even shrinking businesses seek out workers to fill important vacant positions. In December 2008, for instance, overall American employment dropped by nearly 700,000 jobs. Yet in that month more workers?over 4.1m in total?were hired into new positions than in December of last year, when net payrolls grew by 203,000. During a relatively placid economic period like the mid-2000s, about 65% of all hiring is associated with what economists have dubbed ?churn??the job-to-job movement of workers through the labour force, which neither adds to nor subtracts from total employment. Of the 12m or so hires that occurred in a typical...

ALL that glisters is not gadolinium. Even so, that mineral and its 16 ?rare earth? cousins?found in everything from batteries to catalytic converters?do help make the modern world go round. And, as the world?s manufacturers of such products have been reminded recently, China has a chokehold on their production.China?s grip on rare earths first made headlines in 2010, when it suddenly cut exports to Japan. But it had been squeezing the market for years. In 2000 it exported some 47,000 tonnes of the stuff; by 2010 it exported only about 30,000 tonnes. This decline appeared to be the result of unfair export taxes and quotas.

Mine, all mine

THE first round of Japanese investment into America, during the 1980s and 1990s, was notable for being so emotive. Extraordinary prices were paid to buy up supposedly gilt-edged assets including golf courses, investment firms and a large part of New York?s Rockefeller Centre. Sellers were delighted; the public horrified. The real victims were the Japanese buyers themselves, who suffered huge losses.Not every deal flopped. In particular, a minority investment in Goldman Sachs by Sumitomo Bank that was initially seen as an embarrassment in Japan (Sumitomo thought the stake was to be a partnership rather than a spigot for cash) turned out to deliver good returns. The lessons of that approach?a discreet profile, a minority stake, a focus on finance?may characterise the next wave of Japanese investment.Western banks need to raise equity capital to meet new regulatory hurdles. Other financial assets are being sold off as part of post-crisis restructurings. Japanese banks are relatively healthy, have high capital ratios and are deeply sceptical about their own ability to grow in Japan. That has led them once again to look outward, and not just to the Asian backyard.On January 18th Sumitomo Mitsui Financial Group, Japan?s second-largest financial institution and the current incarnation of the old Sumitomo Bank, paid $93m for a 5% stake in Moelis & Company, a niche investment...

?IT SUCKED,? says the head of investment banking at one of Europe?s biggest banks, reviewing the fourth quarter of 2011. That succinct assessment will take few by surprise. The sale and trading of bonds and shares slowed to a trickle last year. Analysts at Credit Suisse reckon that investment-banking revenues among the big American banks slumped by a quarter in 2011. Trading bonds, currencies and commodities (activities known as FICC) is the industry?s bread and butter: FICC revenues fell by about 15% in America. Things are even worse in Europe. Credit Suisse reckons that European investment banks will post a 43% drop in revenue for 2011. On February 2nd Deutsche Bank announced a fourth-quarter loss for its investment bank.The first few weeks of this year also look dire. Markets have recovered relative to December, but there has not been the usual January leap. Analysts at Citigroup gloomily predict a further 10% fall in FICC revenues in Europe this year.The question dogging the industry is whether these falls are temporary or permanent. ?Trading goes up, trading goes down,? Jamie Dimon, the boss of JPMorgan Chase, told journalists in January. ?When things come back these numbers will boom again and we?ll be geniuses, and it won?t be because we did anything, it will be because we stayed in the game.?

In "By hook or by crook" (January 14th 2012) we mistakenly said that write-downs had boosted BBVA's capital by ?400 billion. We were a little out: the bank's capital rose by ?400m. Sorry.

THE European Central Bank (ECB) tends to take the long way around. When in 2009 the Federal Reserve and the Bank of England slashed interest rates towards zero and started quantitative easing (buying government bonds with central-bank money), the ECB was more circumspect. It was reluctant to cut its main rate below 1% and loth to buy government bonds directly.Instead it adopted its own non-standard measures. It offered unlimited loans to commercial banks for up to a year against a broad range of collateral. The ECB?s oblique approach had much the same effect as the route taken by the Fed and others. A flood of liquidity from a ?442 billion ($611 billion) auction of one-year ECB loans in June 2009 pushed short-term interest rates close to levels in America and Britain. Banks used much of the cash to buy government bonds, driving down long-term interest rates.

?PM2.5? seems an odd and wonkish term for the blogosphere to take up, but that is precisely what has happened in China in recent weeks. It refers to the smallest solid particles in the atmosphere?those less than 2½ microns across. Such dust can get deep into people?s lungs; far deeper than that rated as PM10. Yet until recently China?s authorities have revealed measurements only for PM10. When people realised this, an online revolt broke out. Such was the public pressure that the government caved in and PM2.5 data are now being published for Beijing and a handful of other cities.But what of the rest of China? At the moment, only PM10 data are available. However, officialdom?s hand may soon be forced here, too. Though pollution data are best collected near the ground, a plausible estimate may be made from the vantage-point of a satellite by measuring how much light is blocked by particles, and estimating from those particles? chemical composition the likely distribution of their sizes. And a report prepared for The Economist by researchers at Yale and Columbia universities, and Battelle Memorial Institute, under the auspices of Angel Hsu of Yale, does just that. It draws on data from American satellites to map out PM2.5 pollution across the entire country.

GIVEN journalists? penchant for sticking the suffix ?gate? onto anything they think smells of conspiracy, a public-relations consultant might have suggested a different name. But ResearchGate, a small firm based in Berlin, is immune to such trivia. It is ambitious, too?aiming to do for the academic world what Mark Zuckerberg did for the world in general, by creating a social network for scientists. And it is successful. About 1.4m researchers have signed up already, and that number is growing by 50,000 a month.Non-scientists might be surprised that such a network is needed. After all, the internet was originally created mainly by academics for academics and Mr Zuckerberg?s invention, Facebook, got its start on college campuses. But though the internet has speeded things up, it has not fundamentally changed how researchers are connected. Academic communities are still pretty fragmented, frequently making it hard for scientists to find others doing similar research. And results often are not shared across disciplines.To make things more efficient and interdisciplinary, ResearchGate wants to help the academic world to grow more connective tissue, as Ijad Madisch, one of the firm?s founders, puts it. As on Facebook, users create a profile page with biographical information, list their interests and research skills, and join groups. They can see what others with similar...

SOMETIMES it takes but a single pebble to start an avalanche. On January 21st Timothy Gowers, a mathematician at Cambridge University, wrote a blog post outlining the reasons for his longstanding boycott of research journals published by Elsevier. This firm, which is based in the Netherlands, owns more than 2,000 journals, including such top-ranking titles as Cell and the Lancet. However Dr Gowers, who won the Fields medal, mathematics?s equivalent of a Nobel prize, in 1998, is not happy with it, and he hoped his post might embolden others to do something similar.It did. More than 2,700 researchers from around the world have so far signed an online pledge set up by Tyler Neylon, a fellow-mathematician who was inspired by Dr Gowers?s post, promising not to submit their work to Elsevier?s journals, or to referee or edit papers appearing in them. That number seems, to borrow a mathematical term, to be growing exponentially. If it really takes off, established academic publishers might find they have a revolution on their hands.A bundle of troubleDr Gowers?s immediate gripes are threefold. First, that Elsevier charges too much for its products. Second, that its practice of ?bundling? journals forces libraries which wish to subscribe to a particular publication to buy it as part of a set that includes several...

FOURTEEN years ago James Thomson of the University of Wisconsin isolated stem cells from human embryos. It was an exciting moment. The ability of such cells to morph into any other sort of cell suggested that worn-out or damaged tissues might be repaired, and diseases thus treated?a technique that has come to be known as regenerative medicine. Since then progress has been erratic and (because of the cells? origins) controversial. But, as two new papers prove, progress there has indeed been.This week?s Lancet published results from a clinical trial that used embryonic stem cells in people. It follows much disappointment. In November, for example, a company in California cancelled what had been the first trial of human embryonic stem cells, in those with spinal injuries. Steven Schwartz of the University of California, Los Angeles, however, claims some success in treating a different problem: blindness. His research, sponsored by Advanced Cell Technology, a company based in Massachusetts, involved two patients. One has age-related macular degeneration, the main cause of blindness in rich countries. The other suffers from Stargardt?s macular dystrophy, its main cause in children. Dr Schwartz and his team coaxed embryonic stem cells to become retinal pigment epithelium?tissue which supports the rod and cone cells that actually respond to light?then...

AS ALL fans of crime fiction know, DNA is the gold standard of forensic science. Or is it? Itiel Dror, a cognitive psychologist at University College, London, thinks this doctrine of infallibility needs to be questioned. His problem is not with the technology itself, but with the way it is deployed. For he has gathered evidence that DNA examiners? interpretations of their results are, at least in complex cases, open to subjectivity and bias.When America?s National Academy of Sciences produced a report on the state of forensic science in 2009, it criticised many of the methods then in use. Citing earlier research by Dr Dror, the report?s authors stated, for example, that fingerprint examiners? claims of zero error rates were scientifically implausible. DNA, however, was spared their criticism. Now Dr Dror and Greg Hampikian, a forensic biologist at Boise State University in Idaho, have published a study in Science & Justice that suggests all is not shipshape in the domain of the double helix either.Do Not AdulateDr Dror?s and Dr Hampikian?s experiment presented data from a real case to 17 DNA examiners working in an accredited government laboratory in North America. The case involved a gang rape in the state of Georgia, in which one of the rapists testified against three other suspects in exchange for a lighter sentence, as part...

We invite applications for the 2012 Richard Casement internship. We are looking for a would-be journalist to spend three months of the summer working on the newspaper in London, writing about science and technology. Our aim is more to discover writing talent in a science student or scientist than scientific aptitude in a budding journalist. Applicants should write a letter introducing themselves and an original article of about 600 words that they think would be suitable for publication in the Science and Technology section. They should be prepared to come for an interview in London or New York, at their own expense. A small stipend will be paid to the successful candidate. Applications must reach us by February 3rd. These should be sent to: casement2012@economist.com

THE phrase ?clockwork universe? is more than a pithy tribute to the exactitude of physics. For thousands of years, the movement of the heavens (or rather, as was eventually realised, the movement of the Earth within the heavens) served as exactly that?a clock. It still does. Even the hyper-accurate atomic clocks now used to record the passage of Coordinated Universal Time (UTC), the globe?s official standard, regularly defer to the addition of so-called leap seconds. These are introduced every so often by the time lords of the International Earth Rotation and Reference Systems Service. Their purpose is to match the relentless stream of regular 86,400-second days that pour out of atomic clocks with the slight irregularities that the Earth experiences in its rotation around its axis.But possibly no longer. Next week, the International Telecommunication Union (ITU) is meeting in Geneva, and one of the items on its agenda is the abolition of the leap second. If the assembled delegates vote in favour, then the next leap second (which will be added one second before midnight on June 30th, causing clocks set to UTC to display 23:59:59 for two seconds instead of one) will be one of the last?and the answer to the question ?what time is it?? will have ceased to have anything to do with the revolutions of the heavens.Worrying about a few stray seconds may remind some readers of...

The worldwide steel and metals industry was the subject of the biggest number of anti-dumping investigations initiated by members of the World Trade Organisation last year. A report by Rowe & Maw, a corporate-law firm, records 95 cases involving steel and metals?more than a third of the year?s total. Of these cases, 37 were started by America, in an attempt to protect its ailing steel industry from foreign competition. The steel business has entered a period of restructuring amid a wave of consolidation by the world?s biggest producers. Steel accounted for 80% of America?s anti-dumping investigations in 2000, and American companies are clamouring for even more cases this year. In relative terms, the paper and wood industries showed the biggest drop in anti-dumping activity over the past year: 25 cases were begun in 1999, but just eight got going in 2000. Investigations involving textiles and related products also fell sharply, from 37 to 16.

In February, the European Union?s current account jumped into surplus for the first time in five months; the 12-month deficit shrank by nearly 10% compared with January. Hurt by weak data from purchasing managers, the euro shed 0.9% against the American dollar. But the greenback fell by 3.0% against the Australian dollar. In trade-weighted terms, the yen rose by 0.2%.

The Nasdaq Composite index rose by 7.8%, boosted by an unexpected first-quarter rebound in the American economy. Tokyo reached its highest level of the year after opinion polls showed firm support for Japan?s new prime minister, Junichiro Koizumi.

Growth rates of both broad- and narrow-money supply in Australia continued to rise in March, to 14.1% and 7.5%, respectively. Danish money supply contracted again in March.

Quarterly forecasts from J.P. Morgan Chase suggest that the euro will strengthen a little against the American dollar over the next quarter, and then stay at the same level into next spring. The currency has weakened a little over the past three months. The exchange rates for sterling and Swiss francs are also expected to remain broadly stable over the next year. The Swedish krona is expected to appreciate in the next three months and to hit still loftier highs by April 2002. The yen is expected to weaken against the dollar, before regaining a little ground by next April. On an opposite course, the Brazilian real will strengthen a little this summer, before softening over the following nine months. The Mexican peso is predicted to experience a 10% fall against the dollar over the next year.

Interest rates eased in many euro area markets. Britain?s broad-money growth slowed to 8.4% in the 12 months to March, down from a revised 9.4% in February; Canadian broad-money growth slowed for the third month running, to 5.6%.

The visible-trade deficit in the euro area, which now includes Greece, narrowed to $9.7 billion in the year to February. In the same period Britain?s visible-trade deficit shrank to $43.3 billion, and Italy?s trade surplus remained at $1.6 billion. The dollar fell by 1.7% in trade-weighted terms, and the euro gained 1.8%.

Further weakness in high-tech and telecom shares, as well as concerns about corporate profits, pushed the S&P 500 and the FTSE 100 down by 0.8% and 1.1% respectively. Political uncertainty in Japan made investors cautious, but the Nikkei still gained 1.4%.

Tax wedges measure the share of labour costs attributable to income taxes and social-security contributions less cash benefits. In the past three years, they have fallen in most OECD countries. The biggest declines have occurred in Ireland and Australia, where the wedge for a one-earner family with two children fell from 14.5% to 7.7%. The Czech Republic also trimmed its wedge substantially from 31.2% to 24.8%. However, Japan and South Korea have moved in the opposite direction as their governments have tried to spend their way out of economic crises. The tax wedge has risen in both countries by about a third.

In a surprise move between scheduled meetings, America?s Federal Reserve cut the federal-funds rate by 50 basis points to 4.5%. It was the fourth cut this year and brought its target for interest rates to the lowest level for 6 1/2 years.

America?s trade deficit fell to $33.4 billion in February, slightly reducing the deficit for the latest 12 months. In the year to February, Canada?s trade surplus rose to $39.3 billion. Italy?s current-account deficit narrowed to $5.8 billion in the 12 months to January. The trade-weighted value of the dollar increased by 0.6%, and the yen?s rose by 2.3% over the week.

On April 18th, the Dow Jones rose by 3.9% and the Nasdaq Composite surged by 8.1%. Both reached their highest levels for five weeks after the cut in American interest rates. The Nikkei 225 had already closed up 4.4% on the day at a three-week high.

Prices of American Treasury bonds fell on April 10th, as the stockmarket rally lured investors away from fixed-income securities. The 12-month growth in Japan?s broad money supply fell to 2.6% in March.

In most stockmarkets, the ten biggest companies account for a significant slice of total market capitalisation. In both Finland and Switzerland, their share is over 80%. In Finland, a single company, Nokia, which makes mobile phones, weighs in at 66% of the total. Besides Finland, only in Switzerland and the Netherlands does one company account for at least 20% of the stockmarket. Bigger markets tend to be less concentrated: America?s biggest company, General Electric, makes up only 2.7% of its stockmarket. Concentration has declined in several countries as the value of telecoms companies, often the biggest in a market, has fallen. A year ago, five countries in our chart had a top-ten share of over 60%. Now only three do.

The euro fell by 1.4% against the dollar. In trade-weighted terms the euro lost 1.5%, while the yen rose by 1.0%. The Australian dollar strengthened by 2.2% from the record low against the greenback that it had reached on April 3rd. The Austrian trade deficit widened to $4.6 billion in the 12 months to January.

Stockmarkets rebounded, as investors sought bargains in the belief that markets had been oversold. The Dow Jones Industrial Average rose by 6.2%, closing above the 10,000 level and only 13.8% off its record high. The Nasdaq Composite index gained 13.0%.

Roughly 60 countries, including the European Union?s 15 members and the Gulf Co-operation Council?s six members, have mechanisms for restricting trade with the rest of the world. That conclusion comes from the annual report of the United States Trade Representative (USTR) on obstacles to American exports. (The report does not analyse America?s own, elaborate restrictions.) Of most relevance to countries besides America are anti-competitive practices. The bad news on this front is that Hungary, Peru and Romania have attracted the USTR?s attention for their protectionist policies in telephone services, fuel and products previously controlled by state monopolies. On the good side, Norway has reformed its monopsonistic system of buying pharmaceuticals for hospitals. Another negative is in the growing field of electronic commerce; the USTR finds that 52 countries now hamper trade on the Internet, up from 46 last year. Export subsidies could be the next area in which progress is made; most members of the World Trade Organisation want to trim them, especially for farm products.

Broad-money growth was unchanged in the euro area in the year to February, but narrow-money growth picked up slightly. Money-supply growth in Denmark was again negative. Australia cut its interest rates by half a percentage point.

Australia had its biggest trade surplus for nearly four years in February, cutting the 12-month total deficit to $3.6 billion. The trade-weighted Australian dollar appreciated by 0.6% on April 4th after the Reserve Bank?s half-point cut in official interest rates boosted investor confidence. In trade-weighted terms, the yen and sterling fell during the week by 3.2% and 0.9%, respectively.

It was another gloomy week for most stockmarkets. The Nasdaq lost 6.0% on April 3rd, after more high-tech companies issued profit warnings. It finished the week down by 11.6%, to its lowest level since October 1998. The Dow Jones Industrial Average fell by 2.8%.