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July 6, 2009 Issue Posted June 25, 2009, 5:00PM EST

Executive Summary

Nokia, Meet Intel

Nokia (NOK) has a new dance partner in the wireless handset ball. The world's top maker of mobile phones said on June 23 that it's teaming up with chip behemoth Intel (INTC) to create a variety of devices. The pair agreed to co-develop chips and Linux-based software that will power the gadgets. Intel and Nokia have a history of getting skimpy results from previous partnerships, but analysts say the new accord could shake up the wireless industry and force incumbent chipmakers Qualcomm (QCOM) and Texas Instruments to cut prices.

See "Giant Alliance: Intel, Nokia Try Again"

—Edited by Harry Maurer & Cristina Linblad

Jolting Electronic Cars

On June 23 the Obama Administration opened its checkbook to help push its green-car agenda. The Energy Dept. lent $6 billion to Ford (F), $1.6 billion to Nissan (NSANY), and $465 million to Silicon Valley startup Tesla Motors. Ford plans to use the borrowed cash to help fund a $4.1 billion push into efficient technologies, aiming to put 13 new models on the road, including 5,000 to 10,000 electric cars a year by 2011. Nissan will use some of its funds to make 100,000 electric cars at its plant in Smyrna, Tenn.—a major new commitment to the technology. And Tesla plans to use $365 million to develop a five-passenger sedan called Model S, and $100 million to build a plant that will make lithium ion battery packs. The company hopes to sell the packs and its electric drive technology to other carmakers. The question for all of these companies: Will high-tech cars like these ever sell at a profit?

—Edited by Harry Maurer & Cristina Linblad

Is Globalization Beating a Hasty Retreat?

A new world order is dawning—one in which the West is no longer dominant, capitalism (at least the American version) is out of favor, and protectionism is on the rise. So argues Roger Altman, Deputy Treasury Secretary under President Bill Clinton and now chairman and CEO of investment banking boutique Evercore Partners (EVR), in the July-August issue of Foreign Affairs. "The geopolitical consequences [of the crisis] are now coming into view and they will be profound," writes Altman. The era of laissez-faire economics is over, and statism, once discredited, is making a comeback—even in the U.S. Also out of vogue is globalization: "Much of the world now sees it as harmful."

Global trade is set to fall this year, for the first time in more than two decades, while capital flows to emerging markets are projected to decline by more than half from 2008; commodity prices, with the exception of oil, are in the dumps. That's all taking an especially hard toll on developing nations. The World Bank figures that more than 50 million people living in developing countries will sink back into absolute poverty this year. But one country has come through relatively unscathed: China, thanks to its financial system, which is insulated and not highly leveraged. Beijing also boasts an estimated $2.3 trillion hoard of foreign reserves—by this measure, it's the wealthiest nation on earth. (Foreign Affairs)

—Edited by Harry Maurer & Cristina Linblad

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