★☆★Economist系列精读★☆★

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Glue bonesAug 25th 2009
From Economist.com
An adhesive made by worms inspires a new treatment for broken bones
The worm's turn
TORN flesh is easy to put back together with stitches, but when bone breaks, repairs are nowhere near as simple. Fractures that run in a straight line can often be placed back in their proper alignment and set in a cast for a period of time that allows the break to heal. Complex fractures, though—those that involve bones shattered into fragments—are more challenging. Large fragments can, with the aid of metal screws and pins, be reattached and set in place for healing. Small fragments cannot be treated in the same way, as they are often too tiny to be connected with metal hardware. Medics have long sought a glue to do this work, and now Russell Stewart of the University of Utah may have found one in the secretions of a marine worm.

The sandcastle worm, as the beast is known, lives in a mineral shell. It does not, however, secrete this shell directly in the way that, for example, a mollusc would. Instead, it secretes 这里是分泌的意思a glue and uses this to stick bits of sand together to form its casing, in the way that a freshwater caddis fly larva does. The glue does not dissolve in water. Indeed, it is able to displace water and thus adhere to surfaces in aqueous solutions. And it solidifies soon after being secreted. It, or something like it, therefore sounds ideal for repairing bones.

Dr Stewart and his team began by analysing sandcastle-worm glue to see how it works. What they found was a mixture of proteins, some positively charged and some negatively charged, and also a lot of calcium and magnesium ions. The combination produces a material that can, when circumstances are right, bind the protein molecules so tightly together that any water molecules between them are expelled.

The trigger for this to happen is a change in acidity. The gland in which the glue is generated is mildly acidic. In these circumstances the glue remains liquid. Seawater, however, is alkaline. This alkalinity causes the glue to set. It solidifies into a foam within 30 seconds and becomes a flexible, leathery substance over the course of several hours.

Having understood how the sandcastle worm performs its trick, Dr Stewart was in a position to replicate it. Instead of proteins, he and his team used two synthetic polymers. These, however, had the same crucial chemical groups as their natural counterparts, and also similar electric charges.不明白这个是什么意思？有相似的电子？

The result, as the team reported to a recent meeting of the American Chemical Society, was a substance even better, from a medical point of view, than the natural glue. Not only did it solidify in response to changes in acidity, it also did so in response to changes in temperature, being liquid at room temperature and solid at body temperature.

The resulting glue not only sticks bits of bone together in watery environments, but also does so with twice the strength of the glue used by the worm. And, although it is still early days, preliminary tests suggest it is both non-toxic and biodegradable. If further testing confirms this, it means that, as the broken bone heals, the glue will disappear naturally. Complex fractures will thus heal more easily.

gdreamer9UID：2542678

Computing climate changeAug 24th 2009
From Economist.com
How much carbon dioxide do computers emit?
AVIATION has long been blamed for its share of anthropogenic global warming. Indeed, some travellers now ask themselves whether their flight is strictly necessary and, if they decide it is, salve（QUIET OR ASSUAGE） their consciences by paying for the planting of trees. These, so they hope, will absorb the equivalent of their sinful emissions. But you, dear reader, are indulging right now in activity that is equally as polluting as air travel: using a computer.

According to a [url=http://www.economist.com/world/international/<?xml version=%221.0%22 encoding=%22UThttp://www.theclimategroup.org/a ... Smart2020Report.pdf]report[/url] published by the Climate Group(TCG，气候组织), a think-tank based in London, computers, printers, mobile phones and the widgets that accompany them account for the emission of 830m tonnes of carbon dioxide around the world in 2007. That is about 2% of the estimated total of emissions from human activity. And that is the same as the aviation industry’s contribution. According to the report, about a quarter of the emissions in question are generated by the manufacture of computers and so forth. The rest come from their use.
EPADown on the server farm
The same report estimates that the spread of computers will increase these associated emissions by about 6% a year until 2020, when one person in three will own a personal computer, half will have a mobile phone and one household in 20 will have a broadband internet connection. Yet computing can also be used to tackle climate change. For example, domestic consumption could be cut by the large-scale employment of smart meters in houses and flats. Households are the biggest users of electricity after manufacturing and transport. In Britain, they accounted for 29% of consumption in 2004, according to a government report.
Small and medium-sized businesses, meanwhile, could save electricity by switching to distributed computing, rather than running their own servers. The delivery of computer services over the internet, from vast warehouses of shared machines, enables firms to hand over the running of their e-mail, customer databases and accounting systems to someone else. Companies that do so use computers more efficiently and thus reduce not only their costs but also their carbon footprints. （碳足迹，人类生态足迹的一种，包括水足迹等等其他生态足迹）

Another way to improve the situation is virtualisation—the creation of “virtual” machines (ie, software emulations of separate computers) so that multiple operating systems and applications can run on the same piece of physical kit. Sun Microsystems, a maker of servers, reckons that 70% of the servers in most organisations have only one application running on them. Consolidating these applications onto fewer and fewer machines, courtesy of virtualisation, would be more efficient and thus greener.

Ironically, of course, environmental research itself relies heavily on computers.（！说的好！） So, perhaps the best thing the home user can do is donate his inefficiencies to the cause by signing up to climateprediction.net, which uses the idle capacity of home computers to test the accuracy of various computer models of the climate.

那时UID：2678975

不错啊，谢谢大家，upup~

gdreamer9UID：2542678

The smell of death
The dogs have had their dayAug 20th 2009
From The Economist print edition
Analysing the smell of corpses may help to find the dead—and the living
Alamy
IT IS morbid, but true, that one of the ways survivors of natural disasters are found is by bringing out bloodhounds 侦探犬that have been trained to find the dead. 提出问题1 Often, when these dogs reveal corpses under rubble, rescuers also find previously undetected air pockets with living people in them. Dogs are useful when police officers are looking for the buried corpses of murder victims, too. 提出问题2Such animals, however, require feeding and housing when they are not being used, and expert handling when they are. It might be better, therefore, if they could be replaced by machines—and that is what Sarah Jones and Dan Sykes of Pennsylvania State University propose to do. As they outlined to this week’s meeting of the American Chemical Society, in Washington, DC, they have been analysing the smell of corpses, with a view to automating the process of detecting them.TS 提出观点有待证明

The idea of doing this is not entirely new, but when Ms Jones and Dr Sykes looked at the previous studies they found that the corpses used were usually at least three days old. That is an almost inevitable delay if human cadavers are employed,尸体的利用? since permission must be sought and forms filled in. But the two researchers wanted to know which chemicals emanate from freshly dead bodies, as well as from those that have been around for a few days. SE1 So they decided to compromise and work on pigs instead of people. Pigs are often used as substitutes for humans in early-stage medical experiments, as they are about the same size. 晕!看了觉得以后吃猪肉心理不舒服阿For that reason, too, they decay at the same rate and go through the same phases of decomposition.

To carry out their experiment Ms Jones and Dr Sykes put dead pigs inside small wooden chambers that were covered with clear plastic sheets. The chambers, which were placed in the middle of a field, prevented large scavengers from coming along and dragging the corpses away. Insects and bacteria from the air above and the grass below, however, had easy access to the bodies.
The chemicals of decay were sampled by three collectors inserted through holes in the plastic sheet. The collectors contained fibres of different compositions, each of which absorbed a unique range of volatile molecules such as organic acids, alcohols, amines and ketones. The fibres were replaced at regular intervals over the course of seven days and taken away for analysis by a device called a gas chromatograph-mass spectrometer.
SE2 As Ms Jones and Dr Sykes told the meeting, the composition of the chemicals released by the corpses did, indeed, change over time. Acids made up 32% of the compounds detected in the first two days, but dropped to 25% after the third day. Some of the individual acids that were released, such as pentanoic and benzoic acid, were present throughout all seven days that the experiment was conducted. Some, including tetradecanoic acid, were found early but not late in the decomposition process, while others, such as acetic and propanoic acid, were found late but not early. Similar results were found with other sorts of volatile compounds.
SE3 This information will be useful for establishing “time of death” in murder investigations. It could also be used to fine-tune an electronic nose, if such a device were to be used at the site of a disaster. Electronic noses rely on detecting changes in the electrical conductivity of various substances when they absorb particular target molecules, and could easily be brought in to replace dogs if they were thought reliable enough.
SE3 For that to happen, more research will be needed. The pigs will have to be staked out in a wide variety of environments, and more experiments on human corpses would be desirable, as well. The result, though, could be lives saved and murderers caught—as well as a few redundant bloodhounds.+态度

gdreamer9UID：2542678

这个颜色怎么编辑的~为什么我在文档中设置有颜色的 粘贴出来颜色都一样的
Bela1229 发表于 2009-8-26 23:14

在编辑界面里可以看到一个彩色的小框，点一下就是各种颜色了。

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President Ma’s imperfect stormAug 27th 2009
From Economist.com
A planned visit by the Dalai Lama to Taiwan upsets ChinaIF THERE has been one dominant theme of Ma Ying-jeou’s 15-month tenure as president of Taiwan, it is the effort to improve relations with China. And it has borne fruit. Commercial, financial and travel ties are perhaps better than they have ever been since the end of the Chinese civil war in 1949 left Taiwan as, de facto, an independent country.

After eight years of worsening relations under President Chen Shui-bian of the Democratic Progressive Party (DPP), now the main opposition, even a Taiwan-China summit has become conceivable. Now that Mr Ma is also chairman of the ruling Nationalist party, the Kuomintang, or KMT, such a meeting could be held with Hu Jintao not as China’s president, but as the head of its Communist Party.

So it seems astonishing that Mr Ma has jeopardised all this by doing the one thing most calculated to upset China: accepting a visit to Taiwan from the Dalai Lama, the exiled spiritual leader of Tibet, whom China reviles as a “splittist” when it is polite and “a jackal in monk’s clothing” when it feels cross.

Yet Mr Ma has done just that. Unlike last year, when he stopped the Dalai Lama coming, on the pretext that the time was inopportune, he has agreed to a request for a visit next week, to comfort those who have suffered loss or been bereaved by Typhoon Morakot. The worst storm to hit Taiwan in 50 years, the typhoon devastated parts of the south of the island between August 6th and 9th. The final death toll is unknown, but could be as high as 650.

It was the link with Morakot that made the Dalai Lama’s visit so hard to turn down, for three reasons. First, the scale of the disaster and the Dalai Lama’s popularity in Taiwan are both so great that to reject the visit would seem heartless.

Second, Mr Ma personally—and his government as a whole—have been roundly criticised for their slow and inadequate response to the disaster, and in particular for initially rejecting foreign aid. Mr Ma’s own popularity ratings have plummeted. When the DPP raised the question of the Dalai Lama’s visit they knew this put him in a difficult position.

That was in part for a third reason: that the DPP had accused the government of being afraid to accept foreign help after the typhoon for fear of angering China, which bridles whenever Taiwan improves its official ties with any other government. The accusation was probably baseless. More likely the government had simply fallen prey to bureaucratic inertia, and to a drastic underestimate of how serious the damage had been. But it left it vulnerable to any further hints of pandering to China’s whims at the expense of its own people.

China has of course responded angrily to Mr Ma’s decision to accept the Dalai Lama, as it does when any foreign government gives house room to the Tibetan leader—or these days to Rebiya Kadeer, an exiled activist from China’s ethnic-Uighur minority.

It is noticeable, however, that China has directed its fiercest criticism not at Mr Ma, but at the DPP, which favours Taiwan’s eventual formal independence from China. It accused the party of trying “to sabotage the hard-earned positive situation of cross-straits relations”.

This indicates both the greater sensitivity China has shown in recent years to Taiwan’s internal politics, and the dilemma its policy always faces there. If it punishes Mr Ma by introducing sanctions or slowing down the pace of rapprochement, it would undo his government’ s main achievement. And the biggest beneficiary of this would be the DPP, China’s enemy.

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Company size

Big is back

Aug 27th 2009
From The Economist print edition

Corporate giants were on the defensive for decades. Now they have the advantage again

Illustration by Jon Berkerly

IN 1996, in one of his most celebrated phrases, Bill Clinton declared that “the era of big government is over”. He might have added that the era of big companies was over, too. The organisation that defined capitalism for much of the 20th century was then in retreat, attacked by corporate raiders, harassed by shareholders and outfoxed by entrepreneurs.

Great names such as Pan Am had disappeared. Others had survived only by dint of huge bloodletting: IBM sacked 122,000 people, a quarter of its workforce, between 1990 and 1995. Everyone agreed that the future lay with entrepreneurial start-ups such as Yahoo!—which in late 1998 had the same market capitalisation with 637 employees as Boeing with 230,000. The share of GDP produced by big industrial companies fell by half between 1974 and 1998, from 36% to 17%.

Today the balance of advantage may be shifting again. To a degree, the financial crisis is responsible. It has devastated the venture-capital market, the lifeblood of many young firms. Governments have been rescuing companies they consider too big to fail, such as Citigroup and General Motors. Recession is squeezing out smaller and less well-connected firms. But there are other reasons too, which are giving big companies a self-confidence they have not displayed for decades.

Big can be beautiful…

Of course, big companies never went away. There were still plenty of first-rate ones: Unilever and Toyota continued to innovate through thick and thin. And not all start-ups were models of success: Netscape and Enron promised to revolutionise their industries only to crash and burn. Nevertheless, the balance had shifted in favour of small organisations.

The entrepreneurial boom was supercharged by two developments. Deregulation opened protected markets. Some national champions, such as AT&T, were broken up. Others saw their markets eaten up by swift-footed newcomers. The arrival of the personal computer in the 1970s and the internet in the 1990s created an army of successful start-ups. Steve Jobs and Steve Wozniak founded Apple Computer in 1976 in the Jobs family’s garage. Microsoft and Dell Computer were both founded by teenagers (in 1975 and 1984 respectively). Larry Page and Sergey Brin started Google in Stanford dorm rooms.
But deregulation had already begun to go out of fashion before the financial crisis. The Sarbanes-Oxley act, introduced after Enron collapsed in disgrace, increased the regulatory burden on companies of all sizes, but what could be borne by the big could cripple the small. Many of today’s most dynamic industries are much more friendly to big companies than the IT industry. Research in biotechnology is costly and often does not bear fruit for years. Natural-resource companies, whose importance grows as competition for resources intensifies, need to be big—hence the mining industry’s consolidation.
Two further developments are shifting the balance of advantage in favour of size. One is a heightened awareness of the risks of subcontracting. Toy companies and pet-food firms alike have found that their brands can be tainted if their suppliers (notably, from China) turn out shoddy goods. Big industrial companies have learned that their production cycles can be disrupted if contractors are not up to the mark. Boeing, once a champion of outsourcing, has been forced to take over faltering suppliers.
A second is the emergence of companies that have discovered how to be entrepreneurial as well as big. These giants are getting better at minimising the costs of size (such as longer, more complex chains of managerial command) while exploiting its advantages (such as presence in several markets and access to a large talent pool). Cisco Systems is pioneering the use of its own video technology to improve communications between its employees. IBM has carried out several company-wide brainstorming exercises, recently involving more than 150,000 people, that have encouraged it to put more emphasis, for example, on green computing. Disney has successfully ingested Pixar’s creative magic.
You might suppose that the return of the mighty, now better equipped to crush the competition, is something to worry about. Not necessarily. Big is not always ugly just as small is not always beautiful. Most entrepreneurs dream of turning their start-ups into giants (or at least of selling them to giants for a fortune). There is a symbiosis between large and small. “Cloud computing” would not provide young firms with access to huge amounts of computer power if big companies had not created giant servers. Biotech start-ups would go bust were they not given work by giants with deep pockets.
The most successful economic ecosystems contain a variety of big and small companies: Silicon Valley boasts long-established names as well as an ever-changing array of start-ups. America’s economy has been more dynamic than Europe’s in recent decades not just because it is better at giving birth to companies but also because it is better at letting them grow. Only 5% of European Union companies born since 1980 have made it into the list of the 1,000 biggest in the EU by market capitalisation. In America, the figure is 22%.
…but size isn’t really what mattersThe return of the giants could well be a boon for the world economy—but only if business people and policymakers avoid certain pitfalls. Businesses should not make a fetish of size, particularly if this means diversifying into a lot of unrelated areas. The conglomerate model may be tempting when cash is hard to find. But the moment will not last. By and large, the most successful big firms focus on their core businesses.
Policymakers should both resist an instinctive suspicion of big companies (see article) and avoid the old error of embracing national champions. It is bad enough that governments have diverted resources into propping up failing companies such as General Motors. It would be even more regrettable if they were to return to picking winners. The best use of their energies is to remove the burdens and barriers which prevent entrepreneurs from starting businesses and turning small companies into big ones.

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The Federal Reserve

Right man, rough job

Aug 27th 2009
From The Economist print edition

Ben Bernanke’s renomination as Fed chairman is good news. But his hardest work lies ahead

AP

HAVING endured weeks of criticism over his plans to reform American health care, Barack Obama urgently needs some friendly headlines. That helps to explain why, on August 25th, the president nominated Ben Bernanke to a second term as chairman of the Federal Reserve, even though Mr Bernanke’s first one does not expire until next January. The decision was widely hailed on Wall Street and in Washington, DC. With few exceptions, politicians and economists lined up to praise Mr Bernanke and to laud Mr Obama for keeping him.

The decision was a good one, for two important reasons. The first, on which most commentators have dwelt, is that Mr Bernanke has done a sterling job of dealing with the worst financial crisis since the 1930s. Some of the breathless praise about how this former student of the Depression saved the world from a repeat is overdone. It ignores the fact that Mr Bernanke was complicit in creating the loose monetary conditions which fuelled the financial frenzy in the first place. As a governor of the Fed earlier this decade, he was even more convinced than Alan Greenspan that central banks had no business raising interest rates to head off asset bubbles. Reappointing Mr Bernanke might thus appear akin to paying a plumber all over again for repairing pipes that he fitted after they have flooded your home. Nor, once the crisis struck, was he the only central banker to prove handy with monetary plunger and wrench. The leaders of several other rich-world central banks have also acted boldly.

Mr Bernanke’s academic research gave him an acute appreciation of the risks posed by dysfunctional financial markets. His willingness to experiment with unconventional monetary-policy devices allowed the Fed to counter financial collapse even as America’s politicians were paralysed. And his mild, diplomatic manner brought much-needed calm amid the crisis。
The second reason why the renomination makes sense has less to do with Mr Bernanke’s strengths than with the dangers of ditching him. The likely alternatives were not obviously superior to the incumbent. Given the broad consensus that he has handled the crisis well, replacing him, especially with an obvious Democrat, would have whiffed of politicisation. True or not, that perception would have damaged the Fed and thus the economy. America’s central bank is already in its most parlous political position in generations, under fire from the left for failing to prevent financiers’ excesses and from the right for swelling its balance-sheet and overstepping its remit. It is caught up in a furious debate over financial regulation, and has little popular support. According to one poll, Americans think less of the Fed than of the Internal Revenue Service. In this environment, the merest hint of a partisan decision could have been disastrous.
Mr Bernanke’s reappointment has defused that danger. But far more perilous times lie ahead. For both substantively and politically, the tasks over the next four years may be harder than handling the crisis itself. There will be no quick return to business as usual for the Fed or any other central bank. The Fed’s monetary stance must be loose enough for long enough to prevent the economy sinking into a deflationary quagmire, but must be tightened quickly enough to stop inflation soaring. With short-term rates close to zero, this monetary balancing-act must be performed with untested equipment—particularly the swelling and shrinking of the Fed’s balance-sheet—and against a backdrop of steeply rising government debt.
A question of backbonePolitically, the difficulties will if anything be greater. Mr Bernanke must steer the debate over regulatory reform so that the Fed is not left with implausibly broad responsibilities and insufficient tools with which to carry them out. He must explain the logic behind its monetary decisions but stand firm against pressure to influence them. Given that America’s economy is likely to face weak growth and high unemployment for a long time, that will not be easy. For example, the housing industry will cry out if the Fed starts to sell its mortgage-backed securities. And there will be howls from Congress, and maybe the White House too, if interest rates rise when joblessness is still high and the deficit huge.
Mr Bernanke has earned his reappointment by showing that he is a bold and creative crisis-manager. In his second term he will need just as much technical competence as he has shown in his first, and even more political backbone.

gdreamer9UID：2542678

Not as fragile as they lookAug 31st 2009
From Economist.com
Leave them alone, and damaged ecosystems will bounce back fast

CONVENTIONAL wisdom is often a poor guide. For one thing it suggests that human damage to the world’s species, habitats and ecosystems is terminal: that when things are lost, they are lost for ever. But oil spills of the sort that now threaten the Timor Sea, forest fires like those that recently afflicted Greece, and other man-made and man-assisted threats to wildlife are transient. Except in those cases in which a species is driven to extinction, the Earth’s ability to shrug such things off is often underestimated.

Alan Weisman shows this in his book, “The World Without Us”, which illustrates nature’s great capacity to recover. Have mankind abducted by aliens or wiped out by some Homo sapiens-specific ??这个是什么？virus, and nature, Mr Weisman reckons, would reclaim its territory with surprising speed, as weeds colonised pavements, rivers flooded subway tunnels and buildings burst as they were played like concertinas by a cycle of freezing and thawing. By Mr Weisman’s reckoning, residential neighbourhoods would return to forest in 500 years and only the most stubborn of human inventions, such as certain plastics, would prove permanent. TS

SE 1Mr Weisman’s conclusion was backed up earlier this year by a studypublished in the Public Library of Science by Holly Jones and Oswald Schmitz, of Yale’s School of Forestry and Environmental Studies. They used Web of Science, an online journal archive, to gather a set of 240 peer-reviewed scientific papers that measured recovery rates in large terrestrial and aquatic ecosystems. The data thus available included work on agriculture, deforestation, the introduction of invasive species, logging, mining, oil spills, overfishing and the damage done to seabeds by trawling, as well as, for comparison, naturally occurring disasters such as hurricanes.

The pair measured 94 aspects of how ecosystems are put together, including the ways in which nutrients cycle within them, the rates at which decomposition takes place and the sizes of their plant and animal populations, so that they could classify whether, and how fast, an area had recovered. They found that 83 of the 240 papers demonstrated complete recovery, while 90 showed a mixed response. Only 67 showed no recovery at all and, as the authors explain, more would have recovered if the projects had continued for long enough to track the changes in ecosystems that respond more slowly, such as forests.

Ecosystems exposed to more than one pressure, such as a forest that is first felled and then used for agriculture, took the longest to recover. Even in those cases, though, the average recovery time was, at 56 years, within a human lifetime. Sites that experienced single threats typically recovered in less than 20 years. The researchers found that recovery rates are influenced more by the type of ecosystem than by the magnitude of the damage inflicted upon it. Forests, for example, take longer to renew (42 years) than ocean floors (typically less than ten) regardless of the scale of the stresses inflicted on them.

SE2 Some commentators are sceptical (the same as skeptical)about such positive findings.否定上一观点 They point out that, of necessity, the study’s retrospective methodology includes papers published before researchers were required to declare any competing interests. This may have allowed, for example, an oil company to produce a report that plays down the damage done by a spillage. But such biased individual reports would be unlikely to affect the overall findings of a large study like this one.这句话要是早点看到用到ARGUMENT里面多好，哎！



SE 3 Critics also question whether total ecological recovery really has been achieved as often as Ms Jones and Dr Schmitz suggest, and point to examples where it manifestly has not, such as the cod fishery of the Grand Banks, off the coast of Newfoundland, which collapsed in 1992. Almost two decades on, the cod show no sign of recovery, perhaps because new predators, such as dogfish, now dominate the waters.

It is true, though, that the question of what is pristine or natural can be debatable. A good example of this, which Mr Weisman uses in his book, is Dartmoor, a national park in the south-west of England. Dartmoor is considered by many to be one of Britain’s great nature wildernesses. In fact, it is a human construction, formed by tens of thousands of years’ worth of alterations such as burning and agriculture. But it is in its current state, rather than as the forest it once was, that people wish to preserve it. Ms Jones and Dr Schmitz point out that most conservation work is not actually concerned with returning landscapes to their natural or prehuman states and “instead use contemporaneous reference systems as targets”.

SE3 Despite their study’s limitations, and the difficulty of measuring recovery and choosing targets, Ms Jones’s and Dr Schmitz’s findings are good news for conservationists. But the final word of advice belongs to Mr Weisman as he invites people to ponder an alternative to his post-human future: “Since we’re imagining, why not dream of a way for nature to prosper that doesn’t depend on our demise?”
典型的科学严禁的平衡结构正态度文章。

GenevUID：2543794

Confectionery

Hovering Kraft

Sep 7th 2009
From Economist.com

America's Kraft Foods will have to sweeten its offer to acquire Cadbury, a British confectioner

EATING comfort food at home and, if all else fails, gorging on chocolate seem to be the simplest ways for consumers to lighten the mood in the dark days of recession. Revenues grew in 2008 at both Kraft Foods, an American giant, and the latest morsel that it wants to gobble up, Cadbury, a British confectioner. The slump-defying strength of Kraft convinced it to make a &pound;10.2 billion ($16.7 billion) cash-and-shares bid for Cadbury, which it made public on Monday September 7th in the hope that Cadbury’s shareholders might see sense in the proposal. The board of the British maker of chocolate and gum quickly rebuffed the bid as “fundamentally undervaluing” the company.

Kraft has its sights on the world’s second-largest confectionery-maker to form a “global powerhouse in snacks, confectionery and quick meals” with combined revenues of some $50 billion. Analysts agree that the firms would make an excellent fit. Kraft has little presence in Britain’s confectionery market, where Cadbury is strong, but it has thriving businesses in Scandinavia and Brazil, where Cadbury has made few inroads. Particularly attractive to Kraft is Cadbury’s strong showing in chewing gum, an area where Kraft has little expertise, particularly in Europe and Latin America.

Getting its hands on Cadbury would also allow Kraft to compete more closely with Mars. The American confectionery giant has plenty of clout with retailers since it controls 14% of the global confectionery market after its purchase in 2008 of Wrigley, a gum-maker, for $23 billion. A combination of Kraft and Cadbury would result in a firm with a similar portion of the world market. In the wake of the Mars/Wrigley deal many industry-watchers expected that Cadbury might make acquisitions of its own to take on the new market leader.

Cadbury was even touted as a possible buyer of Kraft’s confectionery arm. The British firm had bulked up by buying Adams, a big gum-maker, in 2003 to recover the number-one spot among confectioners that it held until the Mars/Wrigley tie-up. But attempts to streamline its business by selling the Dr Pepper Snapple Group, its American soft-drinks arm, coincided with the credit crunch. Cadbury was unable to make a lucrative sale to a private-equity firm, instead spinning off the business and raising rather less than it had once hoped for to fill its coffers for acquisitions. Cadbury is rumoured to have eyed Hershey, America’s dominant chocolate-maker. But any potential deal would probably have failed to win the support of the trust which controls Hershey and which is fiercely independent.

Cadbury’s success in realigning its business makes it a tasty target. Kraft estimates that it can wring out annual savings of $625m by the third year and has cannily promised to keep open a factory in Britain that was destined for the chop. But that is probably not enough. Cadbury’s shares leaped by over 40% on Monday morning after investors digested the news of the potential takeover, somewhat in excess of the 31% premium offered by Kraft over Friday’s closing price.

It seems likely that Kraft will return with a better offer. Cadbury’s mainly British investors are likely to want to see more cash in the takeover offer rather than shares in Kraft. But opinion is divided over how much more it can afford given its debt pile of $20 billion, a hangover from its purchase in 2007 of the biscuit business of Danone, a French food firm. Another possibility is that Hershey may team up with Nestlé for a joint bid that would split Cadbury between the two with the American firm swallowing the chocolate business and the Swiss one walking away with the gum side. What seems certain is that, amid the consolidation among confectionery businesses, Cadbury’s days as an independent company are drawing to a close.

GenevUID：2543794

Brazil's oil policy

Preparing to spend a “millionaire ticket” from offshore

Sep 3rd 2009 | S&Atilde;O PAULO
From The Economist print edition

The government has unveiled plans to give the state the lion’s share of the money from vast new oil discoveries. Will this wealth be invested or squandered?

BY TRADITION Brazil invests little and saves less. Brazilians like to borrow and spend, and ao inferno with the future. This may be a legacy of stubbornly high inflation for most of the second half of the 20th century. It may also be an inheritance from further back. Eduardo Giannetti, an economist and philosopher, thinks that the Brazilian ethnic mixture of indigenous nomads, Portuguese settlers seeking a quick fortune and Africans brought to the country in chains bequeathed an entrenched habit of spending now and saving some other time. Whatever the cause, the discovery in 2007 of potentially vast new offshore oil deposits deep beneath the Atlantic seabed will be a crucial test of Brazil’s moral fibre: depending on how it is used, this new wealth could help the country overcome poverty and underdevelopment, or exaggerate its spendthrift ways.

After almost two years in which his government has pondered the question, on August 31st President Luiz Inácio Lula da Silva unveiled four new bills setting out how the windfall should be gathered and spent. His rhetoric on what he called “independence day” was triumphalist. The oil deposits were “a gift from God,”“a millionaire ticket” and “a passport to the future.” But he also pointed to the problems that oil has caused some economies, and explained how Brazil plans to avoid them. The bills, which have to be approved by Congress, will not affect existing exploration and development contracts held by Petrobras, the state-controlled oil company, and five foreign oil companies. These contracts govern parts of the Tupi field, which contains between 5 billion and 8 billion barrels of oil. But plenty of oil and gas would fall under the new laws. Officials believe that in all, there may be up to 50 billion barrels of oil and gas offshore—enough to turn Brazil into an oil giant.

One bill declares the oil in the new fields—dubbed pré-sal because they lie beneath a shifting layer of salt—the property of the state, rather than of the companies that buy concessions. In each block, half of any oil produced would go to the state. The remaining half would be subject to a production-sharing agreement between Petrobras and any companies that partnered it, in proportion to their costs. Another bill creates a new state oil company called Petrosal to represent the state’s interests in each block. In theory this will be a small entity, staffed by technicians. In practice it may swell, particularly if it is controlled by politicians, as they may stuff it with supporters. The state will also inject the monetary equivalent of 5 billion barrels of oil into Petrobras, with the aim of ensuring it has the financial muscle to remain the dominant operator. Since 60% of Petrobras’s shares are traded on the market, this capital boost will dilute existing shareholders. The company’s share price fell sharply on the day of the announcement, wiping $7 billion from its market value. In addition, the government plans to set up a social fund to spend Petrosal’s billions.

Officials have argued that the discovery of so much oil in the Tupi field has eliminated geological risk. That, they say, merits guaranteeing the state a fatter slice of the revenues. But this could have been done by tweaking the existing arrangements, for example to impose a higher royalty. The pré-sal fields are technologically complex and expensive to develop. Two recent wells, one drilled by Britain’s BG Group and the other by America’s Exxon Mobil, proved dry. Some industry experts question the decision to scrap the current rules in which concessions are overseen by the National Petroleum Agency (ANP). “You have a system that has worked well for ten years and is transparent, in a country that often has problems with corruption in public works projects,” says Marilda Rosado, a former director of both the ANP and Petrobras and currently a partner in a Rio law firm, “and you decide to scrap it?”

The reason for doing so, according to Mauricio Tolmasquim, head of the state-run Energy Research Company (EPE), is to give the government more control over the oil business. EPE looked at the regulatory regimes in the 20 countries with the biggest oil reserves. Only three—the United States, Canada and Brazil—operate a pure concession system with minimal state involvement, it found. The new set-up, says Mr Tolmasquim, would allow the government to take things such as the exchange rate into account when it takes decisions on exploration.
Even if Congress heeds Lula’s plea to act speedily, it cannot approve the bills until December. In practice, they may become bogged down by wrangling. One of the new measures reduces the share of oil revenues that go to the states and municipalities closest to the fields, aiming to spread the wealth more widely. That is reasonable but will face political resistance. José Serra, the governor of S&atilde;o Paulo and the man opinion polls tip to succeed Lula in a presidential election next year, has urged Congress not to rush. The government spent 22 months coming up with its proposals, so congress and society should also be given time to debate them, he says. It would certainly suit his campaign if they did. Conversely, the electoral chances of Dilma Rousseff, Lula’s chosen candidate, might be boosted by speedy approval.

There are still many details to be sorted out. The proposed social fund was originally conceived as being earmarked for education and infrastructure spending. It was supposed to be inspired by Norway’s oil fund, most of which is saved. Now its mandate has spread to the environment, culture and even the financing of new industries. The worry is that the money will be spent today rather than saved or invested, further bloating a state whose revenue is already equivalent to 36% of GDP, compared to 20% in Mexico.

Of course, these are nice problems to have. And Brazil is better placed to deal with them than many other countries. Still, as Lula pointed out, what looks like a winning lottery ticket can all too easily become a curse. Anyone who has been following the recent corruption scandals in Brazil’s Congress will know that such a disaster is well within the powers of the country’s lawmakers.

gdreamer9UID：2542678

http://www.economist.com/businessfinance/displayStory.cfm?story_id=14442673&source=features_box1

actually the comments followed this article is more appealing:)

Wearing thinSep 14th 2009
From Economist.com
How strong is Barack Obama's belief in free trade?
Shutterstock
ALTHOUGH Barack Obama alarmed free traders last year with protectionist-sounding pronouncements on the campaign trail, such as one about the need to renegotiate NAFTA, optimists among them dismissed this as mere posturing designed to placate restive trade unions. Yet a decision by the White House to impose punitive tariffs (35% for the first year, falling by five percentage points a year, to 25% in the third year) on Chinese-made pneumatic tyres now raises serious doubts about Mr Obama’s commitment to free trade.

The duties are to be imposed on September 26th under a part of American trade law known as “Section 421”. The American government argues that these tyres are being imported into America from China in “such increased quantities and under such conditions as to cause or threaten to cause market disruption to domestic producers” of competing tyres.



America imported tyres worth $1.3 billion from China between January and the end of July this year. Under the terms of China’s accession to the WTO in 2001, countries have the right to impose tariffs in response to a “surge in imports” from China. But there is always scope for dispute about what constitutes enough of an export surge to justify the use of tariffs, and China has already notified the WTO of its intention to file a case against America. It has also said that it is considering the imposition of retaliatory tariffs on American exports of car parts and chicken meat.

Poultry and tyres sound like small change in the context of the economic relationship between the two big economies. But Eswar Prasad, a professor of trade policy at Cornell University and a former head of the IMF’s China desk, argues that the American action and Chinese retaliation may presage “more protectionist measures to come from both sides”. He notes that China could retaliate much more broadly than by raising a few tariffs: it could, for example, supplement its implicit export subsidies, including an undervalued exchange rate, with more explicit measures to support its export industries and block imports. This could “easily ratchet up into a broader trade war and inflict economic damage on both countries”.

The decision to use Section 421 is a disturbing one. John Veroneau, a lawyer and a former deputy trade representative, points out that this particular rule “doesn't require any finding of unfair trade practice by China…Chinese tyre exporters were not found to be doing anything wrong or illegal.” This means that it is hard for the administration to pass off the decision as being about tougher enforcement of existing trade agreements, which has been the focus of Ron Kirk, the new American trade representative, since his appointment.没看明白！

Mr Obama’s decision also marks a clear break with recent American policy. His predecessor, George Bush, had four opportunities to take such a step against China, but in each case chose not to do so. Mr Veroneau, who worked on those cases, argues that “based on their negotiations with the Clinton Administration on Section 421, China expected this tool to be used, if ever, only in the rarest and most exceptional of cases”. So China’s pique is understandable, as are worries that this could lead to a slew of other American industries demanding protection against competition from Chinese imports.

Simon Evenett, a trade economist at the University of St Gallen in Switzerland, argues that Mr Obama’s decision is a clear affirmation of the power of American labour unions in shaping its trade policy. It appears that Mr Obama is desperate to shore-up support from unions and the left of the Democratic Party for health-care reform—his most pressing domestic concern—and is prepared to risk repercussions on trade.

If so, heightened economic tensions between America and China are a heavy price to pay. Mr Prasad says that “an escalating trade war between these two large economies has the potential to disrupt the world trading system”. The China-America spat also comes soon before the leaders of the G20, the group of big rich and emerging economies, meet in Pittsburgh on September 24th. Global co-operation has been crucial amid efforts to encourage economic recovery. It would be a tragedy if it that were derailed by posturing over tyres and chicken.

GenevUID：2543794

This means that it is hard for the administration to pass off the decision as being about tougher enforcement of existing trade agreements, which has been the focus of Ron Kirk, the new American trade representative, since his appointment.

因为Chinese tyre exporters were not found to be doing anything wrong or illegal. 中国轮胎进口商没有违反什么规定，所以当局很难借口更严格的实施现有的贸易协定来支持他们的决策。

GenevUID：2543794

A year after Lehman Brothers collapsed

The promised bland

Sep 15th 2009
From Economist.com

Barack Obama marks a year since the collapse of Lehman Brothers with a speech to Wall Street

AP

“THIS sucker could go down.” George Bush’s verdict during the worst of the financial crisis a year ago was crude but penetrating. Barack Obama, delivering a speech in New York on September 14th to mark the anniversary of Lehman Brothers’ failure, managed the opposite trick. He produced plenty of elegant phrases but little that was new, and quite a bit that was confusing.

To be fair, this was not an occasion for detailed policy pronouncements. The big areas of financial reform have been endlessly rehearsed in speeches, summits and papers (which may explain why the occasion felt a little flat). This was more about applying a bit of presidential pressure. By sketching out the rationale behind his principal legislative proposals—a systemic-risk regulator, a new consumer-protection agency, the need for strong capital and better resolution regimes—he reminded Congress that health care is not his only priority. He also used his time at the podium to chide bonus-hungry bankers for failing to learn the lessons of Lehman. Even so, much of what Mr Obama said was disingenuous. He included some helpful words on the responsibility borne by homeowners for taking risks they could not afford. But he also urged banks to bring financial services to those currently outside the financial system, and put the consumer-protection agency first on his list of reforms. He said that the cost of future failures would fall on shareholders and creditors. But it is far from clear that he will force money-market funds, a major source of bank funding, to give up their promise to return their capital to investors intact.

He pledged that if taxpayers ever had to step in again to rescue the system, they would get every cent back, a nonsensical promise. True, as Mr Obama pointed out, taxpayers have earned a 17% return on their “investment” in banks that have since bought the government out. But such figures, which are being disseminated with increasing regularity, ignore the money shelled out on institutions such as AIG, Fannie Mae and Freddie Mac, to say nothing of the myriad financing and bond-purchase programmes put in place to support the banks. Nor do they adjust the returns for risk, the very sin that banks committed during the go-go years.
The intricacies of bank reform were never likely to get a thorough airing in a set-piece political speech. But the casual listener to Mr Obama’s oratory might conclude that the crisis occurred because there were no regulations, that big banks would be allowed to fail in the future and that the proposed constraints of finance will create a new age of prosperity. (They would also think that the incomprehensible decision on Friday to impose tariffs on Chinese tyre imports was designed to save free trade.) The truth is far messier. Reform is badly needed, but people will still be greedy, banks will still need saving and a more stable system will entail less credit flowing through it. Mr Obama is eloquent but too often he does not tell it like it is.

GenevUID：2543794

Taiwan

Go directly to jail

Sep 12th 2009 | TAIPEI
From Economist.com

Is jailing an ex-president a blow against corruption in Taiwan or a sign of persecution?

TAIWAN’S former president, Chen Shui-bian, was sent to prison for life on Friday September 11th after being convicted of various crimes, including embezzlement of government funds, forgery and accepting bribes over a land deal. It is a harsh sentence for the 58-year-old who ruled Taiwan from 2000 to 2008 and who had a feisty reputation for promoting independence from China.

Officials suggest that the punishment, which includes a fine of NT$200m ($6.1m), needed to be severe because of damage inflicted on the country. Mr Chen’s wife, Wu Shu-chen, was also given a life sentence for seven crimes relating to corruption and a fine of NT$300m. The court punished several others, including former aides and the president’s son and daughter-in-law.

The young democracy is now divided between those who are celebrating the fact that even the most powerful are not immune from the legal process and those who see the prosecution, conviction and harsh sentencing of a former president as evidence that the courts are under the sway of politicians.

Mr Chen’s supporters, naturally, claim the latter. His office issued a statement calling the verdict “unconstitutional, illegal and invalid” and claiming that Taiwan’s justice system is unfair. He plans to appeal and his office wants his immediate release from prison. In the streets near the court his noisy supporters let off firecrackers and waved placards, also demanding his freedom. Lines of police stood guard by barbed-wire barricades.

The opposition Democratic Progressive Party (DPP) and foreign analysts point to irregularities in the judicial process. Mr Chen himself claims that corruption charges, which were first put to him three years ago, amount to persecution by the ruling Kuomintang (KMT) that, he says, is attempting to appease China. Mr Chen upset the KMT by bringing to an end its half-century of rule in Taiwan and by tackling the government bureaucracy which was long accustomed to KMT influence. In his controversial years in office he also provoked China, stoking military tensions and talking of de jure independence for the island.

The KMT returned to government last year, led by President Ma Ying-jeou, whose spokesman now denies all charges of political interference in the trial. It is generally believed by the Taiwanese public, analysts say, that Mr Chen had been involved in some kind of wrongdoing, although there is also doubt that the former president has been treated fairly by the judiciary.

One problem is that Mr Chen has already been in jail for over nine months, allegedly to prevent him from collaborating with witnesses involved in the trial. Critics say this is a sign that the courts did not presume his innocence. A panel of judges which released him from prison briefly in December was mysteriously and secretively replaced with a new panel that ordered him back behind bars after criticism from KMT politicians. The same trio of judges presided over the trial.

“To me this is indicative that the legal system in Taiwan has been slow to democratise,” says Professor Bruce Jacobs, a Taiwan expert at Australia’s Monash University. He suggests that whatever happened in this case, the judicial system had long been under the influence of the KMT and has been slow to reform. There is some doubt, too, that the embezzlement charges were appropriate.

The DPP is now in an awkward position. If it defends the former president fervently then voters may punish it for supporting a politician considered corrupt. On the other hand the party does not want to risk alienating Mr Chen’s hardcore supporters. Thus the party produced a careful statement claiming that Taiwan’s judicial system is flawed and supporting Mr Chen’s appeal, but also saying that the ex-president should take responsibility for his actions, for example by remitting large sums of money kept by his family overseas.