Shining a harsh light on Lehman’s bankruptcy

IT SOUNDS distinctly unpromising. A nine-volume, 2,200-page report by a court-appointed examiner into the causes of Lehman Brothers’ bankruptcy, published on Thursday March 11th, has a table of contents that lasts for 38 pages. Its most exciting finding relates to an off-balance-sheet accounting gimmick. But the work of Anton Valukas, the chairman of Jenner & Block, a law firm, is crisp, clear and explosive.

Mr Valukas and his team took more than a year to research their report. They collected more than 5m documents and reviewed an estimated 34m pages of information. Looking at Lehman’s IT systems was a particular challenge. The firm had a rat’s nest of more than 2,600 systems and applications at the time it went bust; Mr Valukas boiled that down to the 96 most relevant ones, some of which are now operated by Barclays (the buyer of Lehman’s American arm after the holding company failed). He also conducted more than 250 informal interviews, many of them with Lehman’s directors and most senior executives. ...

A wireless replacement for all those pesky power cables

BENEATH your correspondent’s desk is a cat’s cradle of tangled cables linking a pair of computers to numerous peripherals and laptops around the office. On the credenza opposite is another jumbled nest of wires for recharging mobile phones, cameras, netbooks, MP3 players and other portable gizmos. When everything is humming, there are no fewer than 15 transformers plugged into various wall sockets and power strips, along with all the other electrical cables for powering computers, monitors, printers and still hungrier office gear.

Lately, your correspondent has taken to unplugging the power adaptors—at least those he can lay his hands on—when they are not being used to recharge their tethered friends. As it is, his office becomes a veritable Christmas tree of fairy lights at night with all the red, green and amber standby diodes twinkling in the dark. ...

The challenges ahead for Chile's new government

SEBATIAN PIŇERA looked shaken, rather than jubilant, as he was sworn in as Chile’s president on Thursday March 11th. Minutes before he was reminded of the scale of the task he faces in rebuilding a large swathe of the country after a massive earthquake on February 27th. The same area was hit by an aftershock that, with a 6.9 magnitude, was only slightly smaller than the quake that devastated Haiti in January.

Three other large tremors followed during the inauguration ceremony in the National Congress in Valparaiso on the coast of central Chile. Outside people started to head for the hills as the national emergency office issued a tsunami warning. The sea, in fact, remained calm but Mr Pinera cancelled a lunch with visiting foreign leaders—some of whom did not look as if they could have eaten much anyway. After sending Rodrigo Hinzpeter, his new interior minister, to the capital, Santiago, to co-ordinate a response to the emergency, the new president boarded a helicopter to the aftershock’s epicentre in the O’Higgins Region, just south of Santiago. ...

Where employers are most optimistic, and pessimistic

IN 27 out of 36 countries surveyed by Manpower, an employment-services firm, more companies said they expected to add jobs in the three months to the end of June than said they reckoned on reducing their workforce. The difference between the proportion of hirers and firers was highest in Brazil and India. Throughout Asia companies have become more optimistic about hiring than they were a year ago, most dramatically in Singapore but only slightly in Japan. Things look less rosy in Europe. In several countries, including Spain and Ireland, more companies expect to see cuts to their workforce than expect it to grow. Of the four countries where the outlook has darkened, three are in Europe.

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For once, the anniversary of a wartime battle in Latvia should pass off peacefully

THAT March follows February is not a state secret, but it sometimes seems to come as a surprise to Latvian officials. Sometime in February, they notice that March 16th is approaching and start worrying, belatedly, about what outsiders will think.

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Eurocrats offer up half-baked ideas to prevent a future sovereign-debt scare

NOW that Greece has given in to pressure from its peers for a more austere budget, the euro zone’s policy brass suddenly seems more sympathetic towards its most troubled member. On reflection, perhaps the fault with Greece’s parlous public finances lay not just with its budgetary profligacy but also elsewhere: in the absence of a central euro-zone authority for helping out cash-strapped countries; or with the credit-rating agencies that had unhelpfully downgraded Greek government bonds; or with the amoral speculators who had bet against those bonds and helped drive up borrowing costs.

It was mildly surprising that some of the messages of support came from Germany, where fiscal indiscipline is least tolerated. On March 7th the finance minister, Wolfgang Schauble, floated the idea of a European Monetary Fund (EMF) to act as a lender of last resort to euro-zone countries that could not raise funds in capital markets on tolerable terms. He offered few details about how an EMF would be financed or how it would operate. It would not be a “competitor” to the IMF, based in Washington, DC, though it would seek to police the fiscal policies of lax member countries. ...

The Israeli-Palestinian peace process resumes, after a fashion

IT WAS a wretched beginning to what had been hailed as the hopeful resumption of peace talks, albeit indirect ones, between the Israelis and Palestinians under the aegis of an American mediator. Barely had America’s vice-president, Joe Biden, begun a visit to Israel to herald a new era of compromise and goodwill than it was announced, as if deliberately to poison the mood, that 1,600 new houses would be built for Jewish settlers in a big Jewish suburb in the Israeli-annexed eastern part of Jerusalem that Palestinians see as their fledgling state’s future capital. Palestinian politicians were united in fury. Arabs and other peacemaking outsiders viewed the action as the illest of omens. Mr Biden sharply “condemned” the action as “precisely the kind of step that undermines the trust we need right now.”

A sheepish-looking Binyamin Netanyahu, Israel’s prime minister, let his aides claim implausibly that he had been unaware of the building decision. The next day his minister of interior dismissed it as a “routine, technical” step, while conceding that the timing was unfortunate, and apologised. Unsurprisingly, the incident increased scepticism towards the promised new round of talks. ...

Branding in the New York art world

VIPs criss-crossed Manhattan last week to attend museum shows, conference panels, champagne brunches, curator tours and the stands of nearly 500 galleries exhibiting in 11 fairs. The week was vibrant but confusing due to poor co-operation between event organisers and some amateur branding.

The first problem was an illogical association of name and place. Every March the Armory Show sets up shop in New York. This year, the Art Dealers' Association of America (ADAA) decided to hold its smaller but more prestigious fair in the same week. While the ADAA's exhibition took place in the historic Armory building on Park Avenue, the Armory Show was held in two piers on the Hudson River (see slideshow below). “It must drive them as crazy as it drives us,” admitted Giovanni Garcia-Fenech, the Armory Show's communications director. ...

Living costs in big cities

PARIS is the most expensive city to live in according to the latest survey from Economist Intelligence Unit, a sister company to The Economist. The survey assesses the cost of living by comparing housing, food, clothing, transport and utility bills and the like in 132 cities around the world. Tokyo comes second, up from sixth place a year ago. The fall in Russia's currency against the dollar has made Moscow cheaper than it once was.

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AIG reluctantly hands its crown as America’s global life insurer to MetLife

ANOTHER week, another opportunity for AIG’s rivals to expand at the American insurer’s expense. Days after sealing a $35.5 billion deal for its Asian life-insurance operations with Britain’s Prudential, the firm, which is being dismembered to recoup bail-out costs, agreed on March 8th to sell another crown jewel, Alico. The acquisition propels New York-based MetLife, which is paying $15.5 billion, into the industry’s global elite. Though it is the biggest life insurer in America, where its Snoopy logo is ubiquitous, it has been tentative abroad. Alico will give it a presence in 64 countries, up from 17 now, taking its non-American revenue from 15% of the total to 40%.

The biggest leap will be in Japan, the world’s second-largest life market, in which Alico is a top-tier competitor. But MetLife’s boss, Robert Henrikson (who took over in 2006 from Robert Benmosche, now AIG’s chief executive), also has his eye on the faster-growing markets in Eastern Europe, the Middle East and Latin America that make up almost a quarter of Alico’s business. Another attraction is its distribution network: 60,000 agents, brokers and other local middlemen. ...

Did protectionism force EADS to scrap a $35 billion bid to supply the American air force?

THE announcement on Monday March 8th that Northrop Grumman and its European partner EADS were pulling out of a bid for a $35 billion contract to build air-refuelling tankers for the United States Air Force was no surprise. Northrop had said that it would not contest the terms of the latest contract proposal, even though it thought they had been drawn up to favour the rival Boeing bid. The British and German governments, along with the European Commission, expressed concern at what they see as the Pentagon rejecting open competition in order to bolster Boeing. Lord Mandelson, the British business secretary, said it was “very disappointing” that the Ameircan-European bidders felt the procurement process was so biased against them that it was not even worth making a bid.

The outcome is a blow to EADS, which on Tuesday announced a loss for 2009 caused by the need to post a €1.8 billion ($2.5 billion) charge because of cost over-runs on another military project, the A400M military troop carrier, and further charges caused by delays to its A380 super-jumbo passenger aircraft. ...

Industry’s move from the rich to the poor world is confusing the carbon accounts

ON MARCH 4th The Economist ran a story about the challenges facing scientists who are trying to find out which greenhouse gases come from where. On March 8th a paper published in the Proceedings of the National Academy of Sciences by Steve Davis and Ken Caldeira of the Carnegie Institution’s campus at Stanford University brought to the fore a further problem in trying to figure out who emits what—one that turns not on how carbon flows through the atmosphere and biosphere, but on how it flows through the world economy. Who should be held responsible for the greenhouse-gas emissions involved in making, say, a flat-screen television? The country where the television is made? Or the country where it ends up being used?

Looking at the carbon emissions associated with a country’s consumption, rather than its production, does not change the general outline of what is going on in the world: rich people still emit more carbon dioxide than poor people do. But it does heighten the contrast. Rich countries which import manufactured goods from poorer ones end up with even higher emissions; poor countries that export a lot of manufactured goods with lower ones. Using figures from 2004, the most up to date that have the sort of industry-specific data they need, Dr Davis and Dr Caldeira reveal the striking scale of this effect. They find that roughly a quarter of the world’s emissions end up being consumed somewhere other than where they are produced. For a few small and reasonably post-industrial countries, such as Switzerland, the emissions associated with total consumption (emissions produced in Switzerland minus those associated with goods produced there and subsequently exported plus those associated with goods imported) are more than twice the emissions actually produced on Swiss territory. ...

Some innovations help women more than others

TWO recent innovations have garnered a lot of attention for the way they empower women. One is microcredit, a system of lending to very poor people, the majority of whom are female microentrepreneurs who are thus helped to climb out of poverty. The other is the mobile phone, which among other things has led to the emergence of an army of “telephone ladies” in countries such as Bangladesh, who earn a decent living by buying a phone and renting it out to other villagers.

That said, some innovations have been harmful to women, especially in the developing world. As the cover story of the latest issue of The Economist points out, at least 100m female lives have been lost in recent decades due to “gendercide” in countries such as China, where the number of live male births recorded enormously exceeds the number of live female births. One factor in this has been new technology that allows parents to determine their embryo’s sex early in a pregnancy—and thus to abort females in countries where male offspring are valued more highly. Other innovations also bring more benefits to men than women. For example, women are estimated to be only 25% of internet users in Africa, 22% in Asia, 38% in Latin America and just 6% in the Middle East. ...

Brazil fires another salvo in its dispute with America over cotton subsidies

HOW serious is the decision by Brazil’s government, announced on Tuesday March 8th, to raise duties on a number of American-made imports? The increases are sizeable for goods such as cosmetics (tariffs will double, to 36%) and many household wares (tariffs will also double, to 40%). And the timing is significant: the news came as America's commerce secretary, Gary Locke, was due to arrive in Brasilia to promote an export-promotion initiative in America's 10th-largest export market.

Yet the decision is not entirely surprising, as it relates to a long-running trade dispute. Asked about the dispute at a press conference last week Hillary Clinton, the secretary of state, said “I feel like I have walked into a movie that has been going on for years”. Brazil complained to the World Trade Organisation (WTO) nearly eight years ago about America's counter-cyclical subsidies to its cotton growers, which are designed to cushion them against fluctuations in the cotton price, and a programme guaranteeing loans for international buyers of American cotton. ...

Where America's gay couples enjoy legal equality

GAY couples in Washington, DC, have been enthusiastically lining up for marriage licences since March 3rd, when the DC Appeals Court threw out an attempt to force a ballot on the issue. The first ceremonies are set to take place on Tuesday March 9th. The District of Columbia joins five states where gay men and women have equal marriage rights. There may be many more nuptials to come: Washington, DC, is home to a higher concentration of same-sex couples than anywhere else in America. Newlyweds will also have their relationship recognised in neighbouring Maryland, after an advisory ruling last month. But prospective couples may want to set a date quickly. California struck down its gay-marriage law in a ballot in 2008, just six months after it was passed.

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Sectarian violence kills hundreds in Nigeria

THE number plates in Nigeria’s Plateau State declare it to be the “Home of Peace and Tourism”. This has seemed ever more optimistic in recent years, as the state capital, Jos, has been battered by brutal violence, with fresh attacks over the weekend reportedly leaving hundreds dead.

In the early hours of the morning of Sunday March 7th gangs attacked villages near Jos, according to the Red Cross. Houses were razed and many women and children killed. Locals say the gang members belonged to the mainly Muslim Fulani tribe while the villages were populated by the mostly Christian Berom group. The death toll is hard to verify, with estimates ranging from 200 to 500. ...

American dominance of the Oscars is declining

AMERICANS did well at the Academy Awards on Sunday March 7th. Kathryn Bigelow became the first woman to win the Oscar for best director and Sandra Bullock got a statuette as best actress (she had received the less-coveted “Razzie” award as worst actress the night before). But American dominance, though still evident, appears to be waning. In the past decade six of the ten best-director Oscars went to Americans and five of the best-actress Oscars, a decline from the 1970s-90s when Americans won almost everything. This recent bout of globalisation resembles the awards' earliest years. Between 1930 and 1969, only half of the 40 winning directors, and only 55% of the actresses, were American-born.

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Counting begins after Iraq's modestly hopeful general election

DESPITE a wave of violent attacks, millions of voters took part on Sunday March 7th in the second full parliamentary election in Iraq since the 2003 invasion. In a country slowly emerging from years of bloody fighting, voters faced a choice between a Shia-dominated government and a non-sectarian one. Neither option offers an obvious path to full peace and prosperity.

Much of the effect of the election depends on the horse-trading and coalition building that is to follow. But the election result will give an indication of who is to lead the oil-rich nation. The prime minister, Nuri al-Maliki, should do well in the main Shia population centres of Baghdad and Basra. His rivals from the Iraqi National Alliance, comprising a number of Shia religious parties, expect to win most of their votes along the lower stretches of the Tigris and Euphrates rivers, the Shia heartland. Non-sectarian alliances are expected to do well in Baghdad and Anbar province, once one of the most restive parts of the country. ...

Renewed diplomatic efforts over Iran's nuclear activities

• AFTER Iran announced that its long-delayed Bushehr civilian nuclear plant will be operational within a few months, American diplomats will renew efforts to obtain further sanctions against the Islamic republic over its suspected efforts to build a nuclear bomb. Hillary Clinton, the American secretary of state, has been trying to persuade members of the UN Security Council, including Russia, which has been helping to build the Bushehr plant since 1995, to accept to a new round of sanctions against Iran. The country's government refused to agree to a compromise plan for its uranium to be enriched in Russia.

• AMERICA’S vice-president, Joe Biden, tries again to untangle the knot that is Middle Eastern politics. He travels to the region on Monday March 8th and will meet the leaders of Israel, the Palestinian territories, Egypt and Jordan in an attempt to encourage the resumption of peace talks. George Mitchell, Barack Obama’s envoy, is adding his weight to efforts reopen negotiations. A recent row over historical holy sites has not helped to warm relations, as Israeli archaeologists in East Jerusalem, which the Palestinians see as their future capital, are intent on uncovering evidence of Jewish ties that could be used to undermine the Arab presence there. ...