Hump Day Headlines - February 3, 2010

Every Wednesday you will find links and top-line summaries to current events around the globe.

Chaos Eases in Effort to Help Feed the Hungry in Haiti [New York Times]

- Four days into a new food distribution program from the United Nations that aims to repair a faltering aid effort, paper coupons that can be redeemed for 55 pounds of rice have become more valuable than Haitian money. For three weeks since the international effort to feed millions of Haitians has been dogged by confusion, transportation snags, security problems and a lack of coordination. Before the coupon program started on Saturday, food giveaways had become a Darwinian sport
- Many are still hungry. As of Sunday, 639,200 people had received a meal from the United Nations’ World Food Program, 32% of the two million estimated to be in need. Aid groups say that they have been knocked back on their heels by a catastrophe they describe as more difficult to manage than famine in Africa or the tsunami in Asia
- The new system for food distribution, devised to address these problems, has two major changes: coupons and a focus on women, who are supposed to be the only ones collecting rice. The process also shifts power from Haiti’s government to foreign aid groups; and from men throwing food from trucks to local leaders giving out coupons

Exxon Grew as Oil Industry Contracted [New York Times]

- While much of the oil industry contracted last year, Exxon Mobil expanded its oil and gas operations in the United States and around the world. Exxon, the top Western oil company, took advantage of the weak climate to bolster its operations, buying smaller rivals and attractive assets as it sought to lay the foundation for growth once the economy rebounds
- In December, it announced the $31 billion purchase of XTO Energy, a leader in natural gas production in the United States. It gained a major foothold in Iraq, the holder of the third-biggest proven oil reserves after Saudi Arabia and Iran. In Africa, it bid $4 billion for a major field off Ghana. It approved a multibillion-dollar project in Papua New Guinea to export gas to China and Japan
- In 2008, Exxon became the world’s most profitable corporation with earnings over $45 billion as oil averaged $100 a barrel. Last year, its profit dropped 57 percent, to $19.28 billion. The company was also displaced by PetroChina as the world’s largest publicly traded company by market value

Toyota U.S. sales hit by recall [Reuters]

- Toyota Motor Corp suffered a sharp drop in U.S. sales last month as its massive recall and unprecedented sales halt allowed rivals to grab market share from the world’s largest automaker. In the latest blow to its once gold-plated quality image, Toyota said on Wednesday dealers in both the United States and Japan had reported complaints from buyers over the brakes in its new model Prius hybrid. Toyota pulled eight of its most popular models including the Camry, Corolla and Rav4 from U.S. showrooms in the last week of January following complaints over sticking accelerator pedals
- Toyota’s monthly sales fell 16 percent and its U.S. market share fell to its lowest level since January 2006 as rivals Ford Motor Co and General Motors Corp surged past. Its monthly U.S. sales dropped below 100,000 vehicles for the first time in more than a decade
- As Toyota sales fell, Ford and Hyundai Motor Co emerged as the big winners, each posting 24% sales gains. Honda’s adjusted sales rose 2.9%. The stock has fallen in eight of the past nine sessions and lost more than $25 billion in value since its initial U.S. accelerator pedal recall on January 21

Deficits May Alter U.S. Politics and Global Power [New York Times]

- In the federal budget two numbers stand out as particularly stunning, for the way they may change American politics and power. The first is the projected deficit in the coming year, nearly 11% of the country’s entire economic output. But the second number, is the one that really commands attention: By President Obama’s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years.
- Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors. Beyond that lies the possibility that the US could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded
- As Mr. Obama’s chief economic adviser, Lawrence H. Summers, used to ask before he entered government a year ago, “How long can the world’s biggest borrower remain the world’s biggest power?” The Chinese leadership, which is lending much of the money to finance the American government’s spending, says it thinks the long-term answer to Mr. Summers’s question is self-evident. The Europeans will also tell you that this is a big worry about the next decade

U.S. seeks calm as China fumes over Taiwan arms [Reuters]

- Chinese state media blasted the United States on Monday for a planned $6.4 billion arms package for Taiwan. The arms sales, the latest by the United States but the first by the Obama administration, has added to a litany of strains between the world’s biggest and third-biggest economies, including the value of China’s currency, trade protectionism, Internet freedoms and Tibet
- The United States switched diplomatic recognition from Taipei to Beijing in 1979, recognizing “one China,” and says it wants the two sides to settle their differences peacefully. The United States remains Taiwan’s biggest backer and is obliged by the 1979 Taiwan Relations Act to help in the island’s defense
- The Pentagon’s 2010 Ballistic Missile Defense Review Report to Congress, published on Monday, said the United States was concerned and closely monitoring China’s missile buildup and increasingly advanced capabilities in the Pacific region. “One regional trend that particularly concerns the United States is the growing imbalance of power across the Taiwan Strait in China’s favor,” the report said.

Oil demand has peaked in developed world: IEA [Reuters]

- Oil use in rich industrialized countries will never return to 2006 and 2007 levels because of more fuel efficiency and the use of alternatives, the chief economist of the International Energy Agency said on Thursday. The bold prediction, while made previously by some analysts, is significant because the IEA advises 28 countries on energy policy and its oil demand forecasts are closely watched by traders and policymakers
- Flat or declining OECD demand may ease any strain on oil prices caused by ever-growing consumption in emerging economies. The Organization for Economic Cooperation and Development (OECD) countries will account for 53% of world demand in 2010, according to the IEA. In its Jan. 15 monthly Oil Market Report, the IEA forecast OECD demand would average 45.48 million barrels per day (bpd) in 2010, unchanged from 2009. World demand is forecast at 86.33 million bpd, up from 84.89 million in 2009
- Interest in peak demand has grown following the surge in oil prices to a record high near $150 a barrel in 2008, a decline in world demand because of the economic crisis and efforts to combat climate change. While non-OECD demand is expected to keep world oil use on a growing trend, some believe global consumption could reach a high point in the coming decades

- Experience in Sports Optional for New Leaders [New York Times]
- Families blame Mexico’s Calderon over massacre [Reuters]
- Are You a C.E.O. of Something? [New York Times]
- Hacking for Fun and Profit in China’s Underworld [New York Times]
- Russia’s Evolution, Seen Through Golden Arches [New York Times]
- North Koreans starving after currency move: reports [Reuters]
- Obama firm on Dalai Lama meeting despite China warning [BBC]
- Feng Shui Master Is Denied Billionaire’s Estate [New York Times]
- Hamas says top commander killed by Israel in Dubai [Reuters]
- J. D. Salinger, Literary Recluse, Dies at 91 [New York Times]