Defying Gravity

The world's markets have been going gangbusters of late. The Dow is up 24 percent since March. Tokyo's Nikkei has surged 30 percent over the same time period. Europe's bourses have been even hotter, with Frankfurt's DAX leading the pack. The world's soaring share prices have analysts raving, central bankers cheering--and investors hoping that this time the rebound is for real. But how likely is that? Every year since 2000, hopes for a global economic recovery have fed big rallies in share prices. Twice, they have been followed by even bigger crashes.

This time is different, argue analysts, because the basis for a healthy rebound of growth and profits looks a great deal more solid than on previous occasions. Positive signals abound: U.S. companies have begun investing in IT again. In long-stagnant Germany, all-important business confidence has increased three months in a row. Even depressed Japan posted an unexpectedly strong second-quarter GDP. Another key difference: European corporate earnings are showing healthy profits. And perhaps most encouraging, European governments are getting serious about reforming the high tax and expensive welfare systems that hobble their economies.

Still, a degree of cynicism might be warranted. Consider the depths from which these bourses are rising: the star of this show, Frankfurt's DAX, lost 73 percent of its value between its all-time high in March 2000 and its low in March 2003. Compare that with a 39 percent peak-to-trough loss for the Dow. Even after its recent run, the DAX is at only 43 percent of its former high, compared with 89 percent for the Dow. The situation in Europe "just couldn't get any worse," explains Bob McKee, investment analyst at Independent Strategy, a consultancy in London. If it's not yet a turnaround, though, at least the markets are heading in the right direction.


Back Off or Boycott

International criticism of Jewish settlements is a headache for the Israeli government. Now the EU is using its economic leverage to give it a migraine. The EU, which has a free-trade agreement with Israel, has long demanded Israel pay customs on goods made in settlements in areas under Israeli occupation. The cost is only about $10 million a year, but Israel considers the tariffs an admission that the settlements are illegitimate, and has routinely obscured the origin of all its exports to Europe on customs forms. That has prompted several EU countries to demand customs on all Israeli imports unless their source is clearly identified. Last month Israeli exporters told government officials to pay the fee on settlement products and let the other $8 billion in Israeli goods to Europe flow freely. The government has shown no sign of yielding. Prime Minister Ariel Sharon, who helped build many of the settlements, is loath to give in on such a symbolic issue.


Africa's Brutal Buffoon

Idi Amin absurdly declared himself the king of Scotland, reportedly drove himself in his Jeep to official functions while offering lifts to kids along the way, declared that Queen Elizabeth II should step aside to allow him to head the Commonwealth, gave himself the Victoria Cross medal for bravery, and banned hippies and miniskirts throughout Uganda. (He liked kilts though, once wearing one to a royal Saudi Arabian funeral.) But while quirkiness may describe the man himself, the word trivializes his evil actions. During his iron-fisted rule of Uganda from 1971 to 1979, Amin had an estimated 300,000 of his countrymen killed, drove out the country's 50,000 Asians and led his nation to economic ruin. He fled in 1979 after an invasion by Tanzanian-backed military exiles. Until his death on Aug. 15, the former dictator lived largely on handouts from his hosts, the Saudi Arabian government. Few will miss him, and fewer will mourn him.


Fleeing the Fray?

A growing number of attacks around the Kabul-to-Kandahar highway are strangling the flow of aid to southeastern Afghanistan. July and August have seen some of the heaviest fighting since the Taliban fell. Bounties have been placed on the heads of U.S. soldiers and Western aid workers, and explosive experts working to demine this stretch of highway have come under fire from Taliban snipers. The United Nations has advised all relief agencies to avoid using certain sections of the road until further notice, virtually cutting off relief access to two of the neediest provinces.

The upsurge in attacks--occurring at a time of dwindling international funding--is forcing many aid groups to cut programs and significantly reduce the number of personnel on the ground in Afghanistan before the year-end. The UNHCR is withdrawing 40 percent of its expatriate staff. The International Rescue Committee, committed to remaining long term, is still being forced to eliminate eight expat positions. In the heavy Taliban areas, international agencies have been forced to subcontract to local Afghan relief agencies. Both Afghan and expat relief officials admit that some of these local agencies are business fronts for corrupt officials, but the saving grace is that many Afghans working for international agencies have deep ties with their communities. Now the risks are on the rise for Afghan relief workers, too. In Khost, "night letters" warn Afghans not to work alongside foreigners. The U.S. military has told the United Nations it will not provide even emergency first-aid for relief workers. And if the U.S. military can't save the aid workers, who is going to save Afghanistan--especially after American troops are gone?


Stalin Revisited

"Joseph, what exactly are you now?" asked Stalin's aging mother during a visit from her son. "Well, remember the Tsar?" he replied. "I'm something like the Tsar." Her response: "You would have done better to become a priest."

Indeed. According to Stalin's latest biographer, Simon Sebag Montefiore, the dictator was delighted by this motherly critique--and accurate in his self-description. "Stalin: The Court of the Red Tsar" reveals that the Soviet leader could often be as autocratic as a royal tyrant. And like any monarch, he ruled indirectly through an entourage of henchmen, bound by fear and desire for his favor. What emerges is a picture of the intimate existence led by the leader's inner circle, living at close quarters inside the Kremlin.

Through newly opened Russian archives and interviews with the children of Stalin's intimates, Sebag Montefiore's book brings to life this shadowy second family. The author uncovered a mass of details, both chilling and entertaining. For example, Beria, Stalin's secret-police chief, was a serial rapist who used his bodyguards as pimps. On the other hand, life for "responsible workers" was sweet: even in the worst years of Stalin's reign of terror, their families could expect summer holidays by the Black Sea or in the Crimea. Intriguingly, the author contends that Stalin ruled his circle almost as much through charm as fear. And apparently he wasn't quite the joyless philistine often depicted. A keen gardener, Stalin took particular pride in his lemon trees. No doubt his mother--not to mention his country--would have preferred it if he had pursued those passions instead.


Stacking the Deck

Let's face it: the Pentagon never was too good at considering all the ramifications of its actions. But when U.S. Central Command produced playing cards of Iraq's "most wanted" for U.S. soldiers on the front lines, it surely should have realized it was creating fodder for parody. Independent media entrepreneurs Zach Levy, Ben Daily and Ryan Deussing have put out a deck of their own, called Bush Cards, featuring 52 of America's political finest, from George W. Bush (the Ace of Spades) to Condoleezza (Queen of Hearts) Rice to Colin Powell, who's still hanging on as the Ace of Clubs. The jokers are silly rather than wild, featuring cartoons of Bush atop an aircraft carrier and playing T-ball. But the deck's best touches are its guest appearances--Iraqi National Congress leader Ahmad Chalabi as the Four of Spades, for example--and the red resigned stamps adorning Ari Fleischer and the rest of the dear departed (seven down, only 45 to go?). Available online at bushcards .com for only $5, the cards are selling fast--about 500 packs a day--to everyone from liberal college types and Europeans to aides of presidential candidate Howard Dean. Apparently some in the present administration are amused, too; Levy says someone at the Pentagon has ordered a deck. Florida-based CENTCOM, though, is maintaining a poker face. When NEWSWEEK contacted CENTCOM's reps for their thoughts on the cards, they declined to comment.

MOVIES: Lord of the Oscars?

Peter Jackson might want to clear off his mantel. The director of the "Lord of the Rings" trilogy, which has already grossed more than $1.8 billion worldwide, is finishing part three, "The Return of the King," and even without seeing a frame, Hollywood insiders consider it the front runner for a best-picture statuette--and Jackson for best director--come Oscar time. No surprise: the first two films were both nominated. What's remarkable is that in an industry known for vicious battles for Academy Awards, many people who plan to compete against Jackson's film secretly want him to win. "I'm such a fan of his," says a studio head with a film sure to be up against "LOTR." "I've been waiting for the Academy to reward him for his nine-hour movie." It may be even longer. There's rampant speculation about the length of the film--still two months from completion--with reports circulating that "King" will clock in at more than three hours. If it does, that's not likely to matter much to fans, critics or even the studio. The first two installments squeaked in just under the 180-minute mark, and it's hard to imagine they could have made any more money. And while New Line head Robert Shaye shares final cut with Jackson, he has yet to meddle with the director's creative decisions. "We do not talk about length," says studio COO Mark Ordesky. "We talk about the film." So, apparently, does everybody else in Hollywood. They always did like a happy ending. ---Sean Smith


She's cruised the runways in Milan and Paris and faced the cameras in Hollywood. Tyra Banks has now added TV producer to the list, acting as creator-producer of "America's Next Top Model," a recent reality show in which 12 hopefuls compete for a modeling-agency contract. Having walked the walk, Banks talked the talk with NEWSWEEK's Allison Samuels.

The show exposes some ugly truths about the modeling world. Was that your goal? Exactly. I wanted the world to see that modeling can be a cutthroat business. It's filled with pressure to always look a certain way and be a certain way. Yes, it's a great job, but it has its downsides. I think young girls who want this life deserve to see it from all perspectives so they know what they're getting into.

Did you experience some of these situations yourself? Like the girls' not telling each other when photo shoots were to begin?

Yes, that happened to me. I felt the negative attitudes of other models--older models who didn't like me and didn't really want me to succeed. I vowed that I wouldn't do that to another girl.

Do you miss modeling yourself?

Well, I still model for Victoria's Secret, which is cool because they work with my schedule. As far as this gig--I love it. I've never had structure before in my life, somewhere to go every morning. I can't believe what fun I have going to the editing bay and rolling up my sleeves and working nonstop.