Current Table of Contents

• Tech.view: Even pigs can fly
  

  Suddenly the skies are open to amateur aviators

  ONE of your correspondent’s all-time favourite movies is “Porco Rosso”, a feature-length anime from Hayao Miyazaki’s legendary Studio Ghibli in Tokyo. The attraction of the movie—Mr Miyazaki’s most self-indulgent by far—is the way it marries the Japanese director’s passion for Italian design and his love of old aircraft, especially seaplanes from between the two world wars.

  Like many of his fables, the story features an irrepressible young girl and something else dear to Mr Miyazaki’s heart: a pig. ...

• Europe.view: Power, money and principle
  

  Defending political freedom in Russia and Britain

  IMAGINE the outrage if the Russian police raided the Duma and arrested a leading opposition politician on the grounds that he had obtained leaked information embarrassing to the Kremlin. It would prompt pompous lectures from Western politicians and lobby groups about the dangers of autocracy, the need to maintain the separation of powers, and so on. When the same thing happens in Britain, it is not just bad for the political system in a country that likes to think it is the mother of parliamentary democracy. It also weakens the argument that tussles between Russia and the West are based fundamentally on values rather than geopolitics.

  “Whataboutism” was a favourite tactic of Soviet propagandists during the old Cold War. Any criticism of the Soviet Union’s internal repression or external aggression was met by asking “what about” some crime of the West, from slavery to the Monroe doctrine. In the era when political prisoners rotted in Siberia and you could be shot for trying to leave the socialist paradise, whataboutism was little more than a debating tactic. Most people inside the Soviet Union, particularly towards the end, knew that their system was based on lies and murder. For all its shortcomings, the West was not that bad. ...

• Asia.view: The Pakistan connection
  

  Where the terror trail so often leads

  IT MAY have been a slip of the tongue. But there was something very revealing about a remark that Pakistan’s president, Asif Ali Zardari, made in an interview with an Indian television channel on November 30th. Asked about allegations that Pakistan was involved in the murderous onslaught on Mumbai, he promised, before the world, strict action “if any evidence points towards any individual or group in my part of the country”.

  The (perhaps unintended) implication that Mr Zardari is in control of only part of Pakistan is all too true. And that helps explain why it is so difficult for India to respond. ...

• Business.view: The urge to merge
  

  Mergers and acquisitions could boom again next year

  LIKE every other business activity nowadays (except bankruptcy-advisory work) merging and acquiring companies (M&A) is in a deep slump. Last week BHP Billiton, a mining giant, withdrew from its planned hostile acquisition of Rio Tinto. This is part of a trend of corporate grooms abandoning their would-be wives at the altar. According to Thomson Reuters, that takes the total value of cancelled mergers so far in this quarter to $322 billion, a two-year high and almost as much as the value of completed mergers in this quarter ($362 billion).

  Another study, by UBS, found that one-third of the deals announced in America this year have been terminated before consummation. And the number of proposals is down overall this year. Worldwide, the value of mergers and acquisitions completed so far in 2008 is $2.8 trillion, down by 27% from the same time last year. ...

• Green.view: Green army
  

  Many eyes make light work

  THE rich world abounds in environmental ideals but lacks biodiversity. The number of animals and plants that thrive in Europe and much of North America is only a fraction of those found in tropical regions. Too often people see environmental problems like climate change, deforestation, wildlife exploitation and loss of biodiversity as things that happen elsewhere—when in fact, developed countries have plenty to worry about: industrial and automotive pollution, the loss of marine life in their over-fished waters, the decline of songbirds in the countryside, and the effects of climate change on everything and everyone.

  Could people get as motivated about the beetles down the road as the rainforest in Brazil? That is the hope of a new project in Britain called Open Air Laboratories (OPAL), which aims to mobilise the British population to become more engaged with nature. If the idea works it will create a small green army of ordinary citizens who will create community environmental reports and contribute to national surveys of soil, air, water, biodiversity and climate. ...

• Market.view: Any port in a storm
  

  Examining the yield gap between equities and bonds

  RECEIVING dividends should be the main motivation for long-term investors. The investment Methuselah who bought GBP100 worth of British equities back at the start of 2000 would have had GBP1.64m by the end of 2007, had he reinvested his dividends. Without reinvestment, his sum would be worth just GBP13,580. The business-school method of valuing shares is based on the discounted value of future dividend payments.

  Dividends are also a great check on the honesty of management. Accounting rules can be bent to produce profits in line with analysts’ targets, but dividends have to be paid with hard cash. A cut in dividends signals that executives feel the business outlook has deteriorated sharply. It is a much more visible sign of risk than the abandonment of a share buy-back. ...

• Art.view: The shock of the new
  

  Nothing excites the art market like finding what was lost

  THE highlight of the Old Master sales in London this summer was a lovely little fete galante depicting a guitarist and an amorous couple painted by Jean-Antoine Watteau, a master of 18th-century French romanticism. Barely a foot square, “La Surprise” was estimated to fetch as much as GBP5m ($7.7m), twice the auction record for a Watteau. Nonetheless, half a dozen bidders turned up to fight for it, and in the end Jean-Luc Baroni, a London dealer, was forced to pay GBP12.4m (including commissions) to claim the prize.

  Watteau painted slowly and died young. His work rarely comes up for auction. But “La Surprise” also drew interest because for 200 years it was believed lost, perhaps even destroyed. The only surviving record of it was an engraving by Benoit Audran dated 1731, together with a later copy which had been in the Queen’s collection at Buckingham Palace since 1814. Then, all of a sudden, the original came to light during a routine valuation of the contents of a British country house in 2007. ...

• Tech.view: Getting a grip
  

  Enough of these low-profile tyres

  ONE of the handy things about having a four-post car lift at home is that you get to see everything at eye-level. Recently, your correspondent noticed some hair-thin cracks in the tyres of one of his ancient Lotus cars.

  While the car, which he assembled himself 36 years ago, may be getting a little long in the tooth, the tyres have clocked up fewer than 5,000 miles. But they were fitted while the car was having a complete nut-and-bolt rebuild ten years ago. ...

• Europe.view: From Havel to Habermas
  

  Central Europe's missing political philosophy

  THEY gripped the world, but left political philosophers yawning. According to Jurgen Habermas, a German philosopher, the revolutions that overturned decades of totalitarian rule in central and eastern Europe in 1989 were marked by a “total lack of ideas that are either innovative or orientated towards the future”.

  In a sense that was right. One of the most memorable images of the extraordinary “Velvet Revolution” in what was then Czechoslovakia in November 1989 was a map showing a ladder, reaching from the depths of central Europe up a cliff, to the heights of the western part of the continent. “Zpět do Evropy” it read: “Back to Europe”. ...

• Asia.view: Too much or too little?
  

  Thailand and the Philippines give Asian democracy a bad name

  THAILAND’S three-year-old political crisis continued to rage this week, as the increasingly desperate anti-government movement, the People’s Alliance for Democracy (PAD), made a last-ditch effort to provoke violence and force the army to stage another coup. It invaded Bangkok’s main airport, prompting the army chief to call on the government to dissolve parliament and for the PAD itself to cease its protests. The PAD’s thuggish tactics have lost it much of the support it once had among Bangkok’s middle classes. Only a fraction of the promised crowd of 100,000-plus materialised this week for its “final” push to overturn the government. Pro-PAD union bosses’ calls for a general strike were generally ignored. But compensating for its dwindling public support is the high-level backing the PAD apparently continues to enjoy from elements in the military and the royal palace, including Queen Sirikit, which has so far rendered it untouchable.

  The PAD began in late 2005 as a series of peaceful weekly rallies in a Bangkok park against the then prime minister, Thaksin Shinawatra. It gained traction because Mr Thaksin seemed to regard an electoral mandate as a licence to do as he pleased. Critics were menaced; conflicts of interest between Mr Thaksin’s powers as prime minister and his business empire went unchecked; and he sought to pack the country’s institutions with cronies. Only when his attempts to do this with the army's senior command finally exhausted rival factions' patience did he come a cropper, being removed in the coup of 2006. ...

• Art.view: Salvation in Cyrillic
  

  Will Russian buyers rescue the art market?

  THE 2008 autumn art-auction season, barely a month old, has been characterised by two extremes: stacks of unsold works, and a few eye-watering purchases.

  Day after day, auctioneers on both sides of the Atlantic have been faced with the dull atmosphere of near-empty salerooms, bought-in masterworks and overpaid guarantees. Only occasionally have bidders snapped to attention, as they did on November 3rd, when an anonymous buyer at Sotheby’s in New York paid a record $53.5m ($60m including commissions) for a superb abstract entitled “Suprematist Composition”, painted in 1919 by Kasimir Malevich. ...

• Business.view: Banking on a banker
  

  Does the Treasury secretary's past career matter?

  SO THE new Treasury Secretary, it seems, will be Timothy Geithner, currently president of the Federal Reserve Bank of New York. As the top economic official in Barack Obama’s administration at a time of economic crisis, he must be up to the task at hand, and his expected appointment has been widely welcomed. But does his previous career, mostly as a government bureaucrat in the central bank, really equip him for the job?

  The first Treasury Secretary, Alexander Hamilton, was a politician, economist, lawyer, businessman and banker. His successors have typically been at least one of those—though they have disproportionately come from Wall Street. ...

• Green.view: Sub-subprime
  

  Greener thinking for the poorest cities

  WORLD HABITAT DAY last month was marked by a prize rewarding smart urban planning - supposedly in the “greening” of cities. This year top honours went to Nanjing in China, with commendations for Kigali in Rwanda, Ciudad Juarez in Mexico, Shaoxing and Zhangjiagang also in China, and Bugulma in Russia. The day struggled for media attention. Some in Habitat, the United Nations agency tasked with improving the planet’s urban fabric, fretted that they had been outshone by the International Year of the Potato. “We’re not bums and needles like UNICEF,” sighed a Habitat official. “We’re policy, and policy, for most people, is like watching paint dry.”

  Yet the facts tell a far more dramatic story—one that could soon shove grey and diminutive Habitat towards the front of the UN system and make it an increasingly important player in green politics. ...

• Market.view: Delphic gloom
  

  A worrying fall in American equities

  LIKE ancient oracles, technical analysts make mysterious pronouncements based on mysterious patterns. And also like those mouthpieces for the divine, their predictions can be infuriatingly imprecise. But sometimes it is easy to understand why points on the chart can have symbolic significance.

  Take the S&P 500’s fall, on November 20th, below the 2002 bottom of 777 (though it rose above 800 on Friday). It means the market fell to an 11-year low, the kind of period that meets the definition of long-term for most investors. “Buy and hold” no longer looks like such a brilliant strategy. It also means that the 2003-2007 rise in share prices looks like a rally in a long bear market, rather than the bull phase it seemed at the time. ...

• Tech.view: The video wars continue
  

  Reports of Blu-ray's death are greatly exaggerated

  AMONG the few things capable of raising a smile in these dismal days are the plummeting prices in big-box stores. Still, with what promises to be the worst recession in living memory barely begun, your correspondent believes prices—especially in consumer electronics—won’t bottom out for at least another quarter or two. Even so, he’s having a tough time convincing the impatient inmates of Mayhem Manor that high-definition television sets (HDTVs), which are cheaper than ever today, will be one-third cheaper still by next March.

  Not that a new HDTV is really needed. The five-year-old, two-ton Toshiba in the living room still coaxes pristine pictures from its satellite signal. But it was made before “progressive scanning” of 1,080 lines replaced low-grade “interlacing”. Worse, its screen measures a modest 32 inches, rather than the 50 inches or more typical today. ...

• Art.view: Skating to nirvana
  

  Peace brought Romanticism to 19th-century Holland

  THE stolid, clog-wearing, cheese-making Dutch are not your obvious Romantics. But when Holland gained independence in 1813, after decades spent fighting the French, a resolute high-mindedness that was thrifty, intimate, idealistic and in its way peculiarly Dutch, finally settled on the Low Countries.

  These good people had no time for the high Romanticism of the Germans, who hankered after the lances and legends of the Middle Ages, or the leafy ideals of the English with their love of daffodils and the bucolic greenery of the Lake District. ...

• Europe.view: Cleaning up the act
  

  The EU's watchdogs stand in need of better watching

  The European Union’s thinking about corruption goes roughly like this. It is a problem for governments, chiefly in the new member states. The best way to fight it is by making entry into the EU conditional on progress. That will create the political will which must, sooner or later, bring results.

  That approach is not working. Anti-corruption efforts have stalled or reversed. Countries such as the Slovenia, Romania, Latvia and the Czech Republic have closed down or weakened their anti-corruption offices. Efforts by the two newest members, Romania and Bulgaria, are ineffective. Croatia, though gripped by a ghastly outbreak of gangland violence, is moving swiftly towards the EU. ...

• Asia.view: Icons under fire
  

  Both the Dalai Lama and Aung San Suu Kyi face criticism from their own sides

  BORN to leading roles among their people; one a devout Buddhist, the other a reincarnate Buddha; Nobel peace prize-winners; championed by the famous; admired around the world: Tibet’s spiritual leader, the Dalai Lama, and Myanmar’s detained opposition leader, Aung San Suu Kyi, have much in common.

  Add two more items to the list. Both, so far, are political failures. And both are now facing quiet criticism for that from their own supporters. ...

• Green.view: Green halo
  

  George Bush's environmental legacy

  WITH the elections over, one might be forgiven for thinking that George Bush has nothing left to do. Any large or controversial measures can be undone when the new administration arrives in January. So what is there left to occupy a president except long walks and a spot of fishing? In fact, there is at least one last big environmental project that Mr Bush wants to complete: creating a vast new marine nature reserve in the Pacific.

  Last year, Mr Bush established the world’s largest marine protected area—Papahānaumokuākea Marine National Monument, in north-western Hawaii. The monument became the largest single conservation area in American history, home to some 7,000 species, including the monk seal, spinner dolphins and the green sea turtle. It was a big step, but now the question is whether he can pull off the same trick on an even grander scale, by fully protecting two vast areas of the Pacific Ocean from fishing and mineral exploitation. ...