NEWSWEEK: International Editions: Highlights and Exclusives, March 31, 2008

COVER: Crisis of Confidence. (All overseas editions). Senior Writer and Columnist Daniel Gross writes that the collapse of Bear Stearns, the U.S.'s fifth biggest investment bank, shows just how parlous the state of financial markets has become, as well as the corrosive effect of ebbing confidence. "A lack of faith, as much as a lack of cash, killed Bear Stearns," he writes. "The investment bank failed in large measure because counterparties-other banks, hedge funds and financial institutions-no longer wanted to extend credit to it, no longer felt comfortable trading with the company or leaving their assets in its custody." Gross adds that, "Bear Stearns is emblematic of the woes plaguing Wall Street today: too much debt, lack of transparency, poor risk management, lame leadership."

http://www.newsweek.com/id/128538

http://www.newsweek.com/id/128539 - WAYS TO FIX THE MESS - Economists and businessmen from both sides of the aisle tell us what needs to be done to solve the crisis.

(Photo: http://www.newscom.com/cgi-bin/prnh/20080323/NYSU001 )

The Next Saffron Revolution. Beijing Bureau Chief Melinda Liu reports on Beijing's latest brutal crackdown on ethnic-Tibetan unrest and interviews exiled spiritual and political leader the Dalai Lama. He tells Liu that he had been driven to tears by images of the violence. "But at the deeper, emotional level there is calm," he says. "Every night in my Buddhist practice, I give and take. I take in Chinese suspicion; I give back trust and compassion." Those mantras may be a comfort to the Dalai Lama, but thousands of younger Tibetans are only hardening in their fury. Every Chinese attempt to silence the protests seems almost calculated to do the opposite.

http://www.newsweek.com/id/128543

Washington Cries Wolf. Special Correspondent Andrew Moravcsik reports that although Beijing's new military-spending figures caused some alarm in the Pentagon, a closer look at the numbers, and China-while hardly benign-starts to look a lot less sinister. Earlier this month, China announced a 17.6 percent increase in its 2008 defense budget, up to $58.8 billion. This followed a 17.8 percent increase last year, for a country that already has a 2.3 million-person military-the world's largest. What's misleading is the fact that China's military modernization isn't accelerating; it's been slowing for decades. China's military means are not excessive; they're appropriate to its geopolitical situation.

http://www.newsweek.com/id/128415

Europe's Worst Double Talkers. Special Correspondent Juliane von Reppert- Bismarck reports that although German Chancellor Angela Merkel portrays herself as a defender of European integration and the environment, German policymakers in Berlin and Brussels are taking a different tack altogether. Political leaders know that talking a good game about Brussels is a politically savvy move and evidence of good will. But they also know that Germany is a global powerhouse in its own right with little need or desire for the kind of bureaucracy Brussels imposes on its industrial and manufacturing sectors.

http://www.newsweek.com/id/128416

Germany's New True Believers. European Economics Editor Stefan Theil reports that in an effort to better integrate Muslim citizens into the general populace, German Interior Minister Wolfgang Schauble signed off on a plan to introduce German-language Islamic instruction at public schools throughout the country. German officials hope that state-funded Islamic instruction, support for mosques, and other government favors, will help draw Islamic institutions out of the ghetto, wean them off foreign funds, and turn them into stakeholders in the German system.

http://www.newsweek.com/id/128419

Dumbing Russia Down. Moscow Bureau Chief Own Mathews and Special Correspondent Anna Nemtsova report that it is hard to tell if intellectual life is thriving or dying in Russia. While culture mavens will flock to the Golden Mask theater festival, which will showcase the best of Russia's lively underground drama scene, 99.9 percent of Russians who are not on Moscow's high-culture circuit can enjoy a television gala called "Girls of the Military," a novel kind of beauty-and-talent show that promises to add tanks and aircraft to the usual mix of bikini parades and contestants' mini-biopics.

http://www.newsweek.com/id/128417

Mugabe's Last Stand. Africa Regional Editor Scott Johnson reports on the upcoming election in Zimbabwe and the man who is mounting a daring challenge to Robert Mugabe: Simba Makoni. At 84, Mugabe refuses to ease the grip in which he's held the country since independence in 1980. Like dictators everywhere, he's been sustained by cronies who don't much care what happens to the nation as long as they get their cut. That's why Makoni's political insurgency is so threatening: a former Finance minister, he comes out of Mugabe's inner circle.

http://www.newsweek.com/id/128544

When Barry Became Barack. Senior White House Correspondent Richard Wolffe Senior White House Correspondent Richard Wolffe reconstructs the period when Sen. Barack Obama began using the name Barack instead of Barry-part of his almost lifelong quest for identity and belonging. Wolffe and a team of Newsweek correspondents reconstruct Obama's journey from one name to another and explore what light that journey sheds on his character. Part black, part white, raised in Hawaii and Indonesia, with family of different religious and spiritual backgrounds-seen by others in ways he didn't see himself-the young Barry was looking for solid ground. He changed his name in a period when he was at Occidental College in California and heading to New York, to finish college at Columbia. He was trying to reinvent himself. "It was when I made a conscious decision: I want to grow up," Obama tells Newsweek.

http://www.newsweek.com/id/128633

THE GOOD LIFE: "What the Heel ... ?" Newsweek reviews the latest trend in women's footwear. From Prada's Flower-Heel Mary Janes to Antonio Berardi's 14- centimeter high snakeskin shoes, designers are focusing their innovative efforts on the heel. Berardi's shoes don't actually have any heels. Wearers maintain their balance on thick platform soles that extend to the middle of each arch. There is already a five-week waiting list. Plus: wine glasses that aerate the wine for you and new gadgets for home chefs.

http://www.newsweek.com/id/128429

WORLD VIEW: Hold the Hysteria (for Now). Contributing Editor Robert J. Samuelson writes that there is a disconnect between what people see around them and what they are told about what is happening to the economy. "People talk about a recession as if it were the second coming of Genghis Khan. Some whisper the dreaded word 'depression,'" he writes. "Meanwhile, Americans are expected to buy about 15 million cars, SUVs and light trucks in 2008; though down from 16.5 million in 2006, that's still a lot." Even though the New York Times wrote that the economy may be on the "brink of the worst recession in a generation," the evidence is scant from either conventional economic statistics or mainstream forecasts, Samuelson writes.

http://www.newsweek.com/id/128634

THE LAST WORD: John Hess. The CEO of Hess Corp. speaks with Newsweek about the new world of $100-a-barrel oil and the likelihood of an energy crisis. "To have sustainable economic growth 10 years from now, both consumers and producers need to start acting now." He points out that, "To date, a total of 1 trillion barrels of oil have been produced, and it's conventionally understood that we have 2 trillion barrels left in the ground. That leads a lot of people to assume things are going to be fine. Unfortunately, the frontiers are getting more difficult to access, and some oil-producing nations are giving priority to their political agendas."

http://www.newsweek.com/id/123482