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THE WALL STREET JOURNAL: EUROLINKS DAILY VIEW

Change Set for U.S. Role in World
January 2, 2008

When Iowa voters walk into their state’s caucuses Thursday night, they will be kicking off a milestone campaign year that promises a new political course for America — a course that could change its role in the world.

For the first time in 80 years, no incumbent president or vice president from either party is seeking the White House, creating an unusually unsettled campaign with no obvious front-runner. Power in Congress is divided so evenly between the two parties that neither has really been in control since the 2006 elections. Now, in the wide-open 2008 general election, voters will declare whom they want to run the executive and legislative branches.

Public polling suggests some of the directions voters may push the system this year. Americans are unhappy with the Iraq war, though their displeasure is subsiding as the situation improves on the ground. Perhaps more surprisingly, they are displaying ample doubts about international trade and economic globalization, both of which Americans were more likely to consider good for the nation in years past. That suggests some voters are at least flirting with protectionism.

Read the full report by Gerald F. Seib:
http://online.wsj.com/article/SB119922215077360537.html

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BUBBLING UP: LVMH Moët Hennessy Louis Vuitton’s strategy in champagne provides a window into its overall dominance of the global luxury-goods market.

The conglomerate, controlled by French billionaire Bernard Arnault, has managed in recent years to lay claim to the largest share by far of the Champagne region’s limited grape output. LVMH has done that by cultivating the independent growers who raise most of the grapes — including by offering them free farming help.

The result is that LVMH, which owns six brands including Veuve Clicquot, Moët & Chandon and Dom Pérignon, dominates the $5.4 billion global champagne market. LVMH doesn’t break out its champagne sales, but its wines and champagne revenue in 2006 totaled $2.2 billion. LVMH had 19% of the global market for champagne by volume in 2006, according to Impact Databank, a market-research firm. The company had more than two-thirds of U.S. champagne sales by value and about 62% by volume.

As global demand for bubbly increases, LVMH’s strategy leaves it in a unique position.

Read the report by Christina Passariello:
http://online.wsj.com/article/SB119922507561260601.html

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PAKISTAN DELAY: Pakistan’s government is postponing crucial national parliamentary elections originally scheduled for next week — raising fears of a violent reaction from the supporters of slain opposition leader Benazir Bhutto and protests from other opposition parties.

It is “impossible” for Pakistan to hold a vote on Jan. 8 as scheduled, Pakistan’s Central Election Commission secretary, Kanwar Dilashad, said yesterday. He said the vote would be delayed and that a new date would be announced today. A vote couldn’t be held before the end of February, because of the month-long holiday of Muharram.

News of the delay could spark protests by opposition groups — including Ms. Bhutto’s Pakistan People’s Party — who are demanding the voting proceed to capitalize on expected sympathy over her assassination last Thursday.

Read the report on the election delay:

http://online.wsj.com/article/SB119917405107760209.html

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KENYA IN CRISIS: Kenya’s marred presidential vote and the violence that has spiraled from it are threatening an island of stability in the otherwise volatile horn of Africa and endangering U.S. counterterrorism efforts in the region. At least 260 people have been killed so far in fighting that broke out after election officials said over the weekend that President Mwai Kibaki won last week’s election and international observers criticized voting irregularities.

A mob torched a church sheltering hundreds of Kenyans fleeing election violence yesterday, killing up to 50. Mobs have torched cars and homes. Much of the violence has flared in Kisumu in the west, as well as in cities along the Indian Ocean. Slums in Nairobi, the capital city, also have erupted. Food is scarce in some areas because many shops have closed to avoid looting.

The election has been a disappointment for Africa watchers, who had hoped the country’s fledgling democracy and buoyant economy could serve as an example for other countries on the continent. The current crisis also has significant repercussions for the U.S., its Western allies and their strategic interests in the region.

Mr. Kibaki has been a strong supporter of American counterterrorism efforts in the region. Kenya, meanwhile, has served as a largely neutral but influential force in some of the complex conflicts that have flared around it in East Africa.

Read the report by Sarah Childress:
http://online.wsj.com/article/SB119919428761460307.html

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SHELL CHANGES: Royal Dutch Shell PLC is finalizing details of a corporate shake-up aimed at cutting costs, as the side effects of sky-high oil prices pose a challenge to profits at major oil companies.

High oil prices, once a key contributor to the earnings growth at oil majors, are hurting refining margins, or the profit a refiner makes by processing crude oil into fuels like gasoline or diesel. The high prices are also driving governments to seek better terms for production contracts — at the expense of major oil companies.

As a result, most oil majors reported year-on-year profit declines for the third quarter, even though crude oil flirted with $100 a barrel.

Read the report by Benoît Faucon:
http://online.wsj.com/article/SB119921131970560447.html

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MARKETS REVIEW AND OUTLOOK: European shares are likely to rise this year for one reason: They are cheap. However, a multitude of worries, including falling corporate profits, a fragile U.S. economy and continuing fallout from credit woes, means the gains should be moderate.

Germany’s DAX was Europe’s best performer last year, rising more than 22% as companies enjoyed booming exports. But France’s CAC 40, up 1.3% on the year, and the FTSE 100, up 3.8%, were more indicative of the year’s lackluster gains in Europe’s indexes.

Read the report by Alistair Macdonald:
http://online.wsj.com/article/SB119922699701460737.html

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ONE TEAM, 26,000 OWNERS: The question of who is the boss of England’s small Ebbsfleet United football team is about to get interesting. If all goes as expected, the answer will soon be 26,000 people with Internet connections. This month, via a Web site called myfootballclub.co.uk, those football fans are slated to take control of the minor-league team in southeast England. Members of the group built up their takeover offer by each pledging about $70. If the deal goes through as expected, a professional football team will be run by an online community for the first time in the history of the sport.

Read the report by Max Colchester:
http://online.wsj.com/article/SB119922623784960703.html

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