Business review from the Economist
GM downsizes, Trump criticizes
Investors welcomed the announcement by General Motors that it is planning to shut four factories in the United States, one in Canada and two others elsewhere in order to focus on making profitable SUVs and prepare for the shift toward electric-powered and autonomous vehicles. President Donald Trump expressed his displeasure. The loss of 14,000 jobs and closure of plants in Michigan and Ohio prompted him to threaten to end the federal subsidies that GM receives for electric cars.
Prosecutors in Japan continued their inquiries into Carlos Ghosn's alleged underreporting of his salary at Nissan. Ghosn, the architect of a three-way alliance between Nissan, Renault and Mitsubishi, was stripped of the chairmanship of Mitsubishi this week, following a similar move by Nissan. Renault, which in effect controls the alliance, has retained him as chief executive and chairman, appointing a deputy to lead the company in his "temporary" absence.
An expert in DNA sequencing in China claimed that he had edited the genomes of twin baby girls while they were embryos. Scientists working in the field of genetics roundly condemned the news.
In a big speech to Wall Street bankers, Jerome Powell, the chairman of the Federal Reserve, defended the central bank's policy of gradual interest-rate rises. He also dropped what investors took to be a hint that a pause may come soon, pointing out that interest rates were just below the broad range of estimates that would be neutral for the economy. That will please President Donald Trump, who has criticized Powell for his "way off base" approach. Stock markets perked up after the speech.
Randal Quarles, who is responsible for financial supervision at the Fed, was appointed chairman of the Financial Stability Board, an international body created at the height of the financial crisis to advise the G-20. Quarles takes over from Mark Carney, the governor of the Bank of England, and is the first American to be handed the job.
Mario Draghi said it remained highly likely that the European Central Bank would decide at its next meeting to end its quantitative-easing program, despite recent disappointing growth figures in the eurozone. The central bank's president described the slowdown as "temporary." Other data point to rising inflationary pressures. The euro area's unemployment rate is at its lowest level since 2008.
Oil prices struggled to recover after a steep sell-off pushed them to their lowest point of the year. Brent crude fell below $58 a barrel. Various factors, including a lingering glut in supplies and U.S. pressure on Saudi Arabia to keep energy costs low, have resulted in oil prices falling by a third since early October.
Danish prosecutors brought criminal charges against Danske Bank over a $230 billion money-laundering scandal that involved Russian funds flowing through one of its branches in Estonia. Investigators are still trying to establish whether any senior managers at Danske should face prosecution.
Global politics from the Economist
Russia exerts more pressure on Ukraine
Ukraine imposed martial law for 30 days after Russia fired on and seized three of its vessels near the Sea of Azov. Since grabbing Crimea, a big chunk of Ukrainian territory, Russia has been throttling Ukrainian shipping through a strait it now controls. A new Russian bridge over the strait is too low for big ships to sail under.
French motorists protesting against higher fuel taxes, called the gilets jaunes (yellow jackets), blocked more roads. Some called for President Emmanuel Macron to resign.
Britain's Treasury estimated that GDP will be 3.9 percent smaller in 15 years' time than it would otherwise have been if the country leaves the European Union under the deal recently agreed with E.U. leaders. Under a no-deal Brexit, it would be 9.3 percent smaller. Theresa May, the prime minister, began the hard slog of trying to whip up support for her deal ahead of a crucial vote in Parliament on Dec. 11. She said there was no plan B.
The rate of deforestation in the Brazilian Amazon rose by 13.7 percent in the year to July 2018, to its fastest pace since 2008. Some 3,000 square miles was cleared, mainly by loggers. That is still 72 percent less than the deforestation that took place in 2004.
Taiwan's ruling Democratic Progressive Party was hammered in local elections, losing more than half the cities and counties it held. The Kuomintang, which lost power to the DPP in 2016 and is more friendly to China, benefited. President Tsai Ing-wen, who refuses to affirm the mainland's formula that there is only "one China," resigned as the DPP's leader.
