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[IMAGE]	[IMAGE]	[IMAGE]	[IMAGE]	Business this week
				June 21st 2001
				From The Economist print edition  
				
				
				Not quite devalued
				
				Domingo Cavallo, Argentina,s economy minister, announced a set of measures, 
including subsidies for exports and tariffs on imports, that will have a 
similar effect to a devaluation. The fixed link between Argentina,s currency, 
the peso, and the dollar has hampered domestic firms. But markets were 
unimpressed: bond yields rose.
				
				See article: Cavallo's latest gamble E+
				
				
				
				
				
				
				
				
				
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				Euro-area inflation rose to 3.4% in the year to May, significantly above the 
European Central Bank,s 2% ceiling. America,s consumer-price inflation hit 
3.6%. The ECB left interest rates unchanged.
				
				See article: Stagflation? E+
				
				Line breaks up
				
				Microsoft and AOL Time Warner broke off talks about including America Online,
s software in a new version of Microsoft,s Windows operating system. AOL 
claimed that Microsoft was unwilling to have RealPlayer, AOL,s streaming 
music and video software, competing with its own system, Media Player. 
Microsoft insisted that broader issues were involved.
				
				See article: From friends to foes 
				
				
				
				Nortel Networks, a large Canadian telecoms-equipment firm, confirming that 
the telecoms business was in terrible shape, said that its losses in the 
current quarter would exceed $19 billion. The company said that it would lay 
off 10,000 workers in addition to 20,000 job cuts that it had previously 
announced.
				
				British Telecom announced that 90% of a o5.9 billion ($8.2 billion) rights 
issue had been taken up, despite speculation that investors would be 
reluctant to acquire more BT shares even at a heavily discounted price. The 
company will use the cash to pay off part of its o30 billion debt.
				
				Against most expectations, Iran,s supreme leader, Ayatollah Ali Khamenei, 
ruled that parliament could investigate the state television and radio 
monopoly.
				
				Oracle, an American software company, bucked the downward trend in the 
technology sector. It announced profits for the latest quarter of $855m, 
beating analysts, expectations. But Infineon, Europe,s second-largest chip 
maker, said that it would make a pre-tax loss in the quarter of euro600m 
($525m), worse than the most pessimistic predictions. The German company,s 
shares slumped. 
				
				Marconi, a British telecoms-equipment maker, reacted to its shares hitting a 
near-six-year low by reducing the strike price of share options for its 
executives. Hard-hit shareholders were less than impressed.
				
				Meat market
				
				America,s Tyson Foods, the world,s biggest chicken company, renewed its 
interest in IBP, a leader in beef and pork, after a court ruled that it 
should not have broken off a $3.2 billion merger last year. Tyson reckoned 
that a merger to create a meat-processing behemoth would beat paying 
compensation.
				
				
				
				
				
				
				
				
				
				EPA
				
				
				
				
				
				
				
				DaimlerChrysler unveiled plans to cut investment at Chrysler, its loss-making 
American arm, by 40% over the next five years to save around $18 billion. The 
company insisted that efficiency would improve and products would not suffer.
				
				General Electric,s planned takeover of Honeywell, already approved by America,
s regulators, seemed likely to be scuppered by the European Commission. Jack 
Welch, GE,s boss, had delayed his retirement to see the deal through, but has 
seen market conditions worsen since the bid was made.
				
				
				See article: Welch squelched E+
				
				Net profits at Lehman Brothers, an American investment bank, in the latest 
quarter were up by 14% compared with a year ago, to $430m. Its 
bond-underwriting business has prospered. Goldman Sachs said that net profits 
were down by 24% to $577m after a slowdown of merger and acquisition activity 
and initial public offerings.
				
				Law and order
				
				Andersen, one of the &Big Five8 accountants, agreed to pay a $7m fine imposed 
by America,s Securities and Exchange Commission to settle a case of auditing 
fraud. Waste Management, a firm audited by Andersen, had overstated profits 
by $1.4 billion between 1992 and 1996.
				
				See article: Andersen's fairy tales E+
				
				The Federal Energy Regulatory Commission announced that it would cap 
wholesale electricity prices in California at all times, rather than just 
during power emergencies. It also extended electricity-price controls to ten 
other western states. The move fell short of even tougher controls favoured 
by Gray Davis, California,s governor.
				
				See article: A turning point, maybe E+
				
				Despite talks with the prime minister, France,s employers, club, Medef, said 
that from the end of July it would cease to take part in running the 
social-security system with the trade unions and the government. It objects 
to the government,s plan to use social-security funds to help pay for France,
s shorter, 35-hour working week.
				
				
				
				
				
				World business on trial.
				
				Visit Economist.com's Business section and get authoritative insights on the 
latest in the mobile-phone industry, E-strategy briefs from Merrill Lynch, 
Siemens, etc., the EU's workers' rights and much more. Also be sure to visit 
the Business this week section to stay informed on the week's key events. For 
concise global business reports click here .  
				
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