Periscope

Even if that scenario is true, the government's heavy-handed tactics may have created a terrorist problem where none existed. Prime Minister Thaksin Shinawatra has been trying to enforce security in the south while pumping money into the region. But now, officials admit, a terrorist attack could well hit Bangkok as payback for last week's killings. Says one intelligence source: "We know that [terrorists] are there now... and they're waiting."
--Joe Cochrane

RUSSIA
Power Grab

Most Moscow businessmen are convinced the Kremlin means to take over Yukos after the oil giant had its worst week since the October jailing of CEO Mikhail Khodorkovsky. Yukos' assets have been frozen, its credit rating has been slashed and Western banks holding $1 billion in Yukos debt warn of a possible default. The question is just how the Kremlin will finesse the transfer without it looking like renationalization--something foreign investors dread. If Yukos' biggest shareholders are convicted of tax evasion and fraud, it's fairly simple, says one Moscow oil insider. First, levy huge penalties that match the roughly $14 billion value of the company. Then, to pay those fines, sell--most likely to a domestic oil producer loyal to the Kremlin. Sibneft's Roman Abramovich is a leading candidate. Another possibility is Surgutneftegas' Vladimir Bogdanov, who last week toured Yukos' richest oilfield--a key asset that might be sold to pay the tax man or bankers.

The endgame, of course, is the 2008 presidential election. Whoever gets a piece of the Yukos pie will be expected to kick back some of that money to one of the Kremlin's competing factions--no question about it.
--Frank Brown

ECONOMY
So Long, Cheap Money

Money is about to get expensive again. The British and Australian central banks have already raised their key interest rates, and the U.S. Federal Reserve has hinted it will follow. The question: who will get hit hardest?