INTERNATIONAL EDITIONS: HIGHLIGHTS AND EXCLUSIVES, OCTOBER 20, 2008 ISSUE

COVER: The Bright Side (All overseas editions). Newsweek International Editor Fareed Zakaria writes that we're in for tough times. But amid all the difficulties and hardship that we are about to undergo, the silver lining may be that the crisis has forced the United States to confront the bad habits it has developed over the last few decades. "If we can kick those habits, today's pain will translate into gains in the long run," Zakaria writes. He writes that two decades of easy money and innovative financial products meant that virtually anyone could borrow any amount of money for any purpose. "At some point, the magical accounting had to stop ... The United States-and other overleveraged societies-has now gotten the wake-up call from hell. If we can respond and change our behavior markedly, this might actually be a blessing in disguise."

http://www.newsweek.com/id/163449

 Awakening From the All-American Dream. Zachary Karabell, president of RiverTwice Research and senior adviser for Business for Social Responsibility, writes that President George W. Bush's ownership ideology, which brought the global financial system to an improbable brink of collapse, may end up having the same effect on stable, nuclear families. "The irony is that more homeownership and stock ownership has actually weakened traditional bonds. For the past decade, as homeownership went up, marriages continued to fail. Fewer people are getting married as a percentage of the population than at the beginning of the decade."

http://www.newsweek.com/id/163653

The Ownership Myth. Robert Shiller, Arthur M. Okun Professor of Economics at Yale University, and cofounder of MacroMarkets LCC,  writes in a guest essay that he thinks the broad home-and stock-ownership in the United States and abroad is a good thing. "But limits need to be set. To the extent that an equity culture leads to entrepreneurship and investment and wealth creation, I'm for it," he writes. He likes to think of  "as a game. We need to make sure we structure the rules of the game in such a way that we don't get injured while playing it."

http://www.newsweek.com/id/163575

Dark Days for The City of London. London Reporter William Underhill reports that British Prime Minister Gordon Brown's promise of a £500 billion package intended to recapitalize the country's eight leading banks and ensure their survival signals not only the end of the banks' swaggering and a whole freewheeling, bonus-driven culture. The same charms that lured so many foreign banks to London-little oversight by the authorities and flexible labor markets-are causing its downfall. The doom-mongers talk now of a future City burdened with new regulations and robbed of its competitive edge over New York.

http://www.newsweek.com/id/163581

'This Makes No Sense.' Tokyo Bureau Chief Christian Caryl reports that Japan has become perhaps the most striking victim of collateral damage in the credit crisis. Patrick Mohr, an equity strategist for Nikko Citigroup in Tokyo, cites figures showing that Japanese financial institutions account for a mere 2 percent of the $592 billion in credit-related write-offs worldwide in recent weeks, hardly reason to doubt the integrity of the system. Yet the Nikkei plunged 24 percent in the past week, the steepest decline in 59 years.

http://www.newsweek.com/id/163580

Keeping It Green. Beijing Bureau Chief Melinda Liu reports that China intends to keep in place measures to clean up its polluted capital. China's leaders and Beijing residents were thrilled with the results of the green drive, and ordinary folks have clamored to keep some measures in place. "The Olympics taught us all a good lesson," says Wan Gang, the father of China's green-car R&D program and the minister of science and technology. "Now people all over the country have an urgent desire for a better environment."

http://www.newsweek.com/id/163579

The Realist Resurgence. Middle East Regional Editor Christopher Dickey, Contributing Editor John Barry and Moscow Bureau Chief Owen Matthews report that Russia is weaker than it looks. Most NATO leaders insist the world is too interdependent to allow another cold war. Russia is not the Soviet Union. And Western powers don't want to be drawn into a game of bluff that will only inflate Vladimir Putin's prestige.

http://www.newsweek.com/id/163577

WOMEN & LEADERSHIP: What Matters Most. In this fourth annual installment of Newsweek's ongoing leadership series, 11 women-scientists, entrepreneurs, artists and even an Olympian-talk about pursuing their passions with a determined sense of purpose, often because their life experiences gave them a unique perspective. Featured this year: Tyra Banks; Dara Torres; Anna Sui; Marta Vieira da Silva, football player; Yuriko Koike, former cabinet minister, Japan; and Dalia Itzik, Speaker of the Knesset, Israel. 

http://www.newsweek.com/id/163603

GLOBAL INVESTOR: We Need a New Road Map. Contributor Jeffrey Garten, the Juan Trippe professor of international trade and finance at the Yale School of Management writes that policymakers need to look ahead a few years and to sketch out what the global financial and economic landscape should look like.  However, "any attempt to mandate a definitive architecture for finance would be impossible," Garten writes. He suggests a group of high-level experts not in the fray should be convened to "vent ideas and come up with a few visions of where global finance should be headed."

http://www.newsweek.com/id/163585

WORLD VIEW: The Storm Clouds Spread. Mohamed A. El-Erian, co-CEO of bond specialist PIMCO, writes that this crisis is different from past situations in three key respects. "First is the transfer of problems from Wall Street to Main Street ... Second, the policy response to date has been bold-indeed, unprecedented-and yet insufficient ... Third, the crisis has altered the financial landscape in a profound way, and shifted power away from unfettered markets to greater government interference," he writes. "The result will be a significantly more regulated global financial system that will gain greater short-term stability at the cost of long-term productivity and flexibility."

http://www.newsweek.com/id/163583

THE LAST WORD: Shimon Peres, President of Israel. Peres spoke about his undaunted hope for a peaceful Middle East. "The last government had some achievements. The gaps between us and the Palestinians were narrowed, particularly on land and borders . . . Also, there's a beginning of an understanding on how to solve the refugee problem. There are serious talks on security. We haven't yet touched the burning question of Jerusalem, but we don't start from zero game."

http://www.newsweek.com/id/163584

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