COVER: Sell. BUY! Don't Believe The Bears. (All overseas editions). Investor Barton Biggs makes the case for how aggressive government rescue efforts and super-cheap stocks could revive markets. Despite the poor global economic outlook and Obama's populist redistributionist tax agenda, Biggs still believes there is a 50 percent probability of a happier outcome. Markets could be on the brink of a major rally, and the U.S. economy may begin to recover later this year. "First, the financial panic and the collapse of the world economy caught the so-called Authorities (i.e., the central banks and the governments of the world) by surprise," Biggs writes. "They reacted slowly, but nevertheless far faster than the Authorities in the U.S. in the 1930s or Japan in the 1990s...This time around--and this is very important--the Authorities have unleashed powerful fiscal and monetary stimuli that are totally unprecedented in size and scope." Interest rates have been dramatically cut everywhere, and every week, more countries announce new fiscal-stimulus programs. It takes time for these actions to effect economic activity and the actions of the Authorities should begin to boost activity by the late spring.
http://www.newsweek.com/id/188171
The Consumer Is Not Dead. Zachary Karabell, president of RiverTwice Research, writes that the relentless negativity about the state of the American consumer may well be overblown. Assumptions are that as the markets take another step down, American consumers are hoarding what little cash they have. Consumers didn't begin this crisis, but they may end it, even if it doesn't seem that way right now. There is little doubt that people have been putting away money and paying down dept and consumers are already rebuilding their own balance sheets, making the outlook going forward much better. "Not only has disposable income been rising, but consumer-spending power has been boosted by lower energy prices and zero inflation. And as retail and real-estate prices fall, every dollar earned can now purchase a larger array of goods and services."
http://www.newsweek.com/id/188170
Why Rush Is Wrong. David Frum, editor of NewMajority.com, examines radio talk show host Rush Limbaugh's impact on the GOP. Rush is a seriously unpopular figure among the voters that conservatives and Republicans need to reach. He's not popular among independents, according to the latest Newsweek Poll. Limbaugh is especially off-putting to women: his audience is 72 percent male, according to Pew Research. And the host quipped on his broadcast that he should convene a summit because of gender gap in his personal approval numbers. "Limbaugh was kidding about the summit. But his quip acknowledged something that eludes many of those who would make him the arbiter of Republican authenticity: from a political point of view, Limbaugh is kryptonite, weakening the GOP nationally."
http://www.newsweek.com/id/188279
Sarkozy of Arabia. Paris Bureau Chief Christopher Dickey and Correspondent Tracy McNicoll examine French President Nicolas Sarkozy's ambitions in the Gulf, which ring familiar to that of his predecessor, Jacques Chirac. Sarkozy unabashedly hopes to sell Airbuses, fighter planes and nuclear reactors to some of the few countries that can still afford them. Yet Sarkozy differs from Chirac in at least one important respect: while Chirac's stand against the U.S.-led invasion of Iraq turned into a diplomatic confrontation, Sarkozy's policy is to complement American policy in the region--especially when it seems to be stalled.
http://www.newsweek.com/id/188163
The Recession's Green Lining. Senior Editor and Columnist Sharon Begley writes that where environmentalists have failed in their quests to shut down polluters like factories, the global recession has succeeded. "It is no coincidence that some of the world's dirtiest industrial operations are falling victim to the global recession," Begley writes. Since small, corner-cutting, "inefficient facilities tend to both flout pollution laws and be most vulnerable to a sudden drop in demand, the global recession has hit such operations especially hard." She writes that recession is not exactly a long-term environmental strategy, however. "The challenge is to use the downturn to de-emphasize manufacturing in favor of cleaner economic activity, and to reengineer what survives so that when the economy revs up it's not at the environment's expense."
http://www.newsweek.com/id/188200
The Weakest Link. Africa Bureau Chief Scott Johnson reports that for the last decade or so, an economic uplifting in Africa has brought millions out of poverty. Democracy spread farther than ever before and sub-Saharan Africa's 2008 economic growth was 5.4 percent. But recent forecasts predict only 3 percent growth and the specter of economic collapse can wreak havoc in unstable countries. The first thing to implode has been commodity prices and commodities are Africa's bread and butter. As revenues decline, companies and governments are likely to have to scale back development plans, which could infuriate populations who had only recently gained some hope that living standards could rise.
http://www.newsweek.com/id/188161
Britain's Nice Guy. Contributing Editor Stryker McGuire profiles David Cameron, who, according to polls and political chatter in Britain, looks poised to be the next prime minister. That's the good news for Cameron. The bad news is that he is being judged altogether differently today than he was even a few months ago. He's no longer just the leader of Her Majesty's Loyal Opposition; he's prime minister-in-waiting. Especially with the economy on the rocks, the public is paying closer attention to Cameron than it has in the past. Even Cameron's allies acknowledge he's got to raise his game.
http://www.newsweek.com/id/188165
WORLD VIEW: Forget About Fidel. Contributor Richard N. Haass writes that 50 years after the revolution that brought Fidel Castro to power, things are slowly changing in Cuba and the United States should be a part of shaping their direction. Last year's hurricanes cost the already poor island nation $10 billion, 20 percent of its GDP, the global economic slowdown has dampened tourism and the population of 11 million is shrinking, he writes. "Cuba's people, the lion's share of whom were born after 1959, face a future that promises little in the way of either prosperity or freedom." Some American conservatives maintain that all this is reason enough for the U.S. to persist in its policy of ignoring Cuba diplomatically and sanctioning it economically. However, the American policy of isolating Cuba has failed. The country is changing and the question is whether the U.S. will be in a position to influence the direction and pace of this change.
http://www.newsweek.com/id/188147
THE LAST WORD: Sheldon G. Adelson, Chairman of the Las Vegas Sands Corp. Adelson, who was for a time America's third-richest man, discusses the state of the gaming industry and this moment in economic history. "There are cycles in everything. But gambling will come back--it always does. The Chinese in particular are and will be prolific gamers. Not because they are addictive people, but because the concept of luck is such an integral part of their culture."
http://www.newsweek.com/id/188173
