November 30, 2009 Issue Posted November 18, 2009, 3:00PM EST

Executive Summary

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Obama and Hu in Beijing: Pledges of cooperation but few concrete agreements Jason Reed/Reuters

Obama in China

Long on theater, short on specifics. Thus go most visits of U.S. Presidents to China, and Barack Obama's first trip proved no exception. Even as Obama and Chinese President Hu Jintao on Nov. 17 offered a lengthy Joint Statement pledging cooperation on climate change, clean energy, and more military-to-military exchanges, little headway was made on the all-too-real economic and trade stresses plaguing the two nations. An increasingly assertive China, aiming to preserve its export juggernaut to the U.S., frequently berates Washington for what it calls protectionism, citing sanctions this year against Chinese-made car tires and steel pipes. Beijing officials also fret publicly about the tanking dollar and the Fed's rock-bottom interest rates, which allow investors to borrow cheaply and fuel asset bubbles in Asia. Meanwhile, Obama's calls for faster appreciation of the Chinese yuan are likely to bounce off a Great Wall of silence.

—Edited by Harry Maurer & Cristina Linblad

Consumers Do Their Bit

Economic tea leaves are often tough to read, but this week's batch seem mostly to spell "recovery." U.S. retail sales made a surprising leap, rising 1.4% in October (though just 0.2% excluding autos). Not counting cars, consumers over the past three months have been spending at the snappiest pace since before the crisis. U.S. inflation remains docile, with both wholesale and consumer prices up by 0.3% in October. The 16-nation euro zone seems to be mending, as GDP grew at a 1.5% annual rate in the third quarter. And take a gander at Japan, where GDP jumped at a 4.8% rate—the highest since early 2007. But then there's housing, where the big trouble began. While economists predicted an uptick, U.S. housing starts tumbled 10.6% in October, and permits dropped 4%, to an annual rate of 552,000. That didn't discourage investors, who by Nov. 18 had pushed the S&P 500's gain this year to 23%.

—Edited by Harry Maurer & Cristina Linblad

Cloudy Climate Summit

It's not going to happen in Copenhagen. On Nov. 15, President Obama conceded there isn't time for the world to work out a legally binding deal to slash climate-altering emissions at December's climate summit. Instead he is backing a Danish plan to move the scrum of squabbling nations towards a political commitment to tackle global warming, with the legal details to be hashed out later. One key reason for the delay: While climate policy in Washington has changed drastically since Obama succeeded President George W. Bush, Congress hasn't yet passed legislation requiring emission cuts at home. Besides that, divisions remain wide between developed and developing countries—and even among the wealthy nations themselves.

—Edited by Harry Maurer & Cristina Linblad

Taxpayers Come Clean

Suddenly the urge to confess seems to have smitten certain American citizens. On Nov. 17 the IRS said more than 14,700 tax evaders who held funds in offshore bank accounts have submitted mea culpas in recent months, paying back taxes and penalties. Needless to say, this wasn't a mysterious crisis of conscience. Rather, the culprits feared painful fines and potential jail time should they have been caught. And the chances of getting nabbed shot up in August when Swiss bank UBS (UBS), having admitted criminal wrongdoing in helping clients dodge taxes, agreed to fork over the names of 4,500 people. When worried clients heard that, they came forward in droves.

—Edited by Harry Maurer & Cristina Linblad

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