News analysis

• The nightmare before Christmas
  

  No rest for the presidential candidates

  EVEN those who dislike Hillary Clinton want to hitch a ride in her helicopter, inevitably dubbed "the Hillacopter". With a dozen presidential candidates criss-crossing Iowa to scramble for support before the caucuses on January 3rd, everyone following them wants to be in several places at once. And the roads are icy.

  Parking is like curling. The main roads have been salted well, but not perfectly. After dark, the oncoming traffic includes farm trucks with only one headlight. Mrs Clinton only has to dodge heckles. ...

• History lessons
  

  Investors will be watching politics as well as price-earnings ratios next year

  IF HISTORY is any guide, 2008 should be a better-than-average year for America's stockmarkets. Figures culled from the Barclays Equity-Gilt Study show that since 1926 Wall Street has risen by an average of 8.8% in presidential-election years, perhaps because politicians pull out all the stops to ensure they get elected.

  However, although such statistics may be superficially appealing, this could easily be a random effect. After all, 1932 was an election year and it saw the absolute market nadir after the crash of 1929. The markets also fell in 1940, 1948, 1960, 1984 and 2000. In down years for the stockmarket the incumbent party was just as likely to be re-elected as thrown from office. ...

• The coming days
  

  What may make the headlines

  • KENYA goes to the polls on Thursday December 27th. The chances of a reasonably fair ballot are good and there has been no serious violence. Kenya's electoral commission has done a reasonable job of staying independent and working to avoid vote rigging. And the last poll before the election suggests a close contest. Raila Odinga, who helped to defeat Danial arap Moi in the presidential election of 2002, by supporting Mwai Kibaki's coalition, has a good chance of toppling Mr Kibaki from the presidency this time.

  For background, see article ...

• South-East Asia’s Pakistan?
  

  Heading for uncertainty

  "WE'RE not selling fish sauce, this is an election rally," jokes Sombat Ratano as he walks alongside his campaign truck with a microphone, hailing the voters of a rural village in Ubon Ratchathani province. In Isaan, Thailand's poor and populous north-east region, support is still strong for Thaksin Shinawatra, the prime minister deposed by a military coup in September 2006. Mr Sombat is a candidate in the Sunday December 23rd general election. He is standing for the People's Power Party (PPP), a reincarnation of Mr Thaksin's Thai Rak Thai (TRT), which was disbanded after the coup. As he tours the village, he drops Mr Thaksin's name at every opportunity, promising to revive the policies--from cheap health care to farming loans--that made the former prime minister popular.

  Pakistan is not the only Asian country where a dodgy military regime is running a general election under dubious electoral rules in the hope of keeping out a similarly dodgy civilian whom it overthrew. The difference is that unlike Benazir Bhutto in Pakistan, the exiled Mr Thaksin is not being allowed to take part in the vote himself, and there may be slightly more hope that things will come out right in the end. ...

• Farewell tour
  

  George Bush is heading to the Middle East

  The US president, George W Bush, is planning an eight-day visit to the Middle East in early January in a bid to salvage some positive achievements from his administration's largely dismal legacy to the region. The main purpose of the visit will be to try to maintain the momentum of the Israeli-Palestinian peace process relaunched at last month's Annapolis conference. A subsidiary theme will be an effort to stiffen the resolve of the US's principal Arab allies in the face of Iran's perceived drive for regional hegemony. His itinerary starts on January 8th in Israel and the West Bank, after which he will visit Kuwait, Bahrain, the UAE, Saudi Arabia and Egypt.

  With the possible exception of Iraq, which is showing some signs of improvement after a nightmarish four years, few areas of US policy concern in the Middle East give much cause for encouragement for Mr Bush as he prepares for his trip. The Israel-Palestine question has been hit by the all-too familiar twin blight of Israeli settlement expansion and violence in Gaza; US and French efforts to get a president installed in Lebanon have been stymied by local forces allied to Syria and Iran; Gulf Arab states have been confused by the recent US intelligence estimate that appeared to give Iran a clean bill of health with respect to its nuclear plans; and Egypt is once more bridling at conditions set by Congress on US aid disbursements. ...

• Unhappy new year
  

  More subprime damage is revealed

  HOW big the final bill will be is not clear. But most estimates put the eventual tally for defaults by America's subprime borrowers at $200 billion-300 billion. Sensibly with such a big sum, banks are taking the pain in instalments. On Thursday December 20th Bear Stearns was the latest Wall Street bank to add to the $40 billion or so in related losses that its peers have admitted to. The bank suffered a write-down of $1.9 billion in the quarter to the end of November on its exposure to subprime-infected debt and a loss of $854m, its first ever in any quarter of its history.

  The day before Morgan Stanley had released its own bad news, a whopping $9.4 billion write-down in the latest quarter. This led to Morgan Stanley's announcement of its first-ever quarterly loss too, in this case of some $4 billion. John Mack, the bank's chief said the results were "embarrassing" and will forgo his bonus for the year. James Cayne opted for the describing his bank's performance as "unacceptable". He and other top executives at Bear Stearns will also go without bonuses. And both bosses look more vulnerable. ...

• Collision course
  

  New emission rules hit German carmakers

  IF BALI failed to produce much besides cop-outs and compromises, at least the European Commission showed that it means business when it comes to tackling carbon emissions. Transport-related CO2 emissions in the European Union grew by one-third between 1990 and 2005 and now constitute 27% of the EU total. Of these, the commission reckons, cars and vans are responsible for about half.

  On Wednesday December 19th the commission published its final proposals for cleaning up Europe's cars. Although it will be at least a year before they become law and there is still scope for some of the details to change there is now little doubt that in only a few years' time European carmakers will have to meet the world's strictest CO2-emission standards. ...

• Indian state elections
  

  Exit polls point to a narrow BJP victory in Gujarat

  On December 16th the western Indian state of Gujarat completed the process of holding elections to its state legislature. Although the official results will not be released until December 23rd, exit polls suggest that the Bharatiya Janata Party (BJP) will retain power in the state, albeit with a significantly slimmer majority of up to 105 seats out of 182, down from 128 previously. The Indian National Congress party, which is dominant at the federal level, is thought to have made major gains despite being defeated overall--winning at least 70 seats compared to just 51 in the 2002 elections.

  These unofficial estimates may well prove inaccurate. Local pundits have noted that a surprisingly large percentage of voters--some 17%--declined to participate in exit polls. If the BJP's win is confirmed, this would be a blow to Congress's presumed hopes to score a clear victory in Gujarat and use it to build impetus before calling early national elections. However, the narrowness of the BJP's apparent victory may mean that little has changed. Early elections still appear to be the only way for Congress to break the political deadlock precipitated by the government's efforts to implement a nuclear deal with the US. Moreover, the Gujarat election has again brought the BJP's internal weaknesses to the fore. ...

• A landslide in South Korea
  

  Does a new era beckon?

  AS VOTING ended in South Korea's presidential election, exit polls indicated what most in the country had anyway expected: the opposition Grand National Party's Lee Myung-bak was to be the country's president. Mr Lee won a thumping endorsement, securing close to 50% of the vote in a 12-man presidential field. Mr Lee's victory brightens the conservative GNP's prospects of also winning control of the legislature in elections next April.

  So ends a decade of liberal rule by Kim D