Now it seems on the verge of testing the nostrum that it’s ‘too big to rescue’. Felix Salmon wonders about a Goldman-Citi hookup, but thinks that nationalisation is the more likely option:

A Citi-Goldman merger would give Citigroup much more credible management, assuming that the Goldman guys took over most of the top jobs, and would give Goldman a much-needed deposit base, not to mention huge distribution capacity through Smith Barney. An enormous number of Citigroup investment bankers would surely lose their jobs, but that is probably going to happen anyway. Meanwhile, Goldman’s investment bankers would suddenly see their deal pipeline fill up with the job of selling off all the bits of Citi they had no interest in keeping.

Possibly more likely is the idea that Citigroup will be nationalized this weekend, with shareholders being wiped out. John Hempton today sketches out what might happen if bondholders got wiped out at the same time; I’m reasonably confident that in the wake of the Lehman debacle there’s no way that Hank Paulson would let that happen.

In any case, with Citi shares trading at less than $4 apiece, somethingneeds to be done. That’s one of the problems with having a public listing: everybody can see when you’re in distress, even if you stop displaying the stock price on the screens in your offices. The market is essentiallly forcing the board’s hand here — not to mention that of policymakers. Citi’s managed to muddle through this week. But my guess is that there will be some kind of major announcement over the weekend.

Update: Somali pirates in discussions to acquire Citigroup…

Update II: Cue inspirational music: “Ambitions never sleep. Aspirations never sleep. Goals never sleep. Hopes never sleep. Opportunities never sleep. The world never sleeps. That’s why we work around the world. That’s why we work around the clock. To turn dreams in realities. That’s why Citi never sleeps.” Insert your own snark here.

Hat tip Intellibriefs

The timing’s no accident: the report was deliberately scheduled to emerge after the election but before the inauguration, in order to set out a bipartisan, big picture view of the global context for the incoming President, and to be at the top of the in-tray of his National Security Advisor. In keeping with the increasingly open stance of the Office of the DNI (see David’s post on the DNI Open Source Conference, which he attended in DC earlier this year), the NIC report has been based on intensive engagement with external stakeholders around the world, including two Chatham House seminars.

Although most UK coverage focuses on the report’s key message of the ’sun setting on US power’ (almost identical headlines in the Guardian and the Times), the other standout story here is the prominence given to scarcity issues. Energy, food and water constraints, together with climate change, are all mentioned in the very first paragraph of the report’s executive summary; by contrast, you need to search through the next four pages of the report before you’ll find any mention of the word ‘terrorism’. 

It’s a sobering analysis - and one that poses the question of whether US and international policymaking systems are up to the job.  David and I have an analysis piece in the Guardian this morning arguing that the answer to that is a resounding No.

A few hours later, a truly astonishing new angle on the story emerged.  Guess how much South Korea had paid for its 99 year lease? Answer: Zip. Zero. Nada. Not a cent. The sum total of the benefts for Madagascar, according to a Daewoo spokesman? “We will provide jobs for them by farming it, which is good for Madagascar.” This in a country where 3.5% of people are on WFP food aid…

The benefits for South Korea, on the other hand:

“We want to plant corn there to ensure our food security. Food can be a weapon in this world,” said Hong Jong-wan, a manager at Daewoo. “We can either export the harvests to other countries or ship them back to Korea in case of a food crisis.”

Read the full piece from this morning’s paper here, plus an additional background brief from Javier Blas here.  But if you really want a sense of the dimensions of this story, check out the language in the FT’s leader article (entitled “Food security deal should not stand”):

Pirates are not the only source of concern off the African coast. The deal South Korea’s Daewoo Logistics is negotiating with the Madagascan government looks rapacious … Any agreement must ultimately be in the interest of the local population. The Madagascan case looks positively neo-colonial.

What’s more, as the leader rightly observes, it’s not even as though South Korea could really rely on the deal in conditions of a massive price spike: Madagascar would have every incentive to nationalise the investment in conditions of acute crisis. But for now, the early losers look to be small farmers and the climate:

The Madagascan state may officially own the land in question, but small-scale farmers who have worked it for generations stand to lose their livelihoods. Much of the land, moreover, is currently forest. This potentially valuable resource in the fight against climate change would be destroyed for good.

‘We need to reboot the global economic system’.

‘Cameron attempts to reboot party image in the New Year’.

‘Major reboot needed in square mile’.

‘Brown’s reboot wins friends, party falls in line’.

Government Official: The ‘[insert policy area] is overly complex. The whole system needs to be rebooted’

Colonel David Coffman, Commander of the Marines, USS Boxer (yes, it does have its own website)

“We don’t see [humanitarian missions] as a ‘that might happen.’ We’re preparing for that as a fundamental tasking of what expeditionary strike groups and Marine expeditionary units are forward-deployed to do.”

As David Axe suggests: In other words, humanitarian “soft power” now has taken its rightful place alongside old-fashioned, firepower-heavy “hard power.”

But the news that South Korea has just struck a 99 year deal with Madagascar to lease an area half the size of Belgium to grow palm oil and no less than half of South Korea’s corn demands, is arresting nonetheless.  As Carl Atkin, one of the authors of the Bidwells report on competition for land at the start of the year, comments in the FT: “The project does not surprise me, as countries are looking to improve food security, but its size – it does surprise me.”

As with previous projects along the same lines, the big question is whether developing countries (and particularly their poor people) will really benefit from such projects.  After initially making very enthusiastic noises about the potential for such projects to bring vital investment to bear, the World Bank and the FAO are now sounding a notably more cautious note about who benefits from them, as Javier Blas’s excellent in-depth piece on the trend a few months back noted.

In the case of South Korea’s project, it looks as though benefits for the poor may be very limited indeed: although fully half of Madagascar’s arable land is to be leased, the labour is to be shipped in from South Africa.

Update: unbelievably, it turns out that South Korea acquired the lease for free - see this later post for more.

He had this message for those who will shortly be heading to Poznan:

Let me also say a special word to the delegates from around the world who will gather in Poland next month: your work is vital to the planet. While I won’t be President at the time of your meeting and while the United States has only one President at a time, I’ve asked Members of Congress who are attending the conference as observers to report back to me on what they learn there. Once I take office, you can be sure that the United States will once again engage vigorously in these negotiations and help lead the world toward a new era of global cooperation on climate change. Now’s the time to confront this challenge once and for all. Delay is no longer an option, Denial is no longer an acceptable response. The stakes are too high; the consequences too serious.

Now the NATO Deputy Secretary-General is touring Bosnia-Herzegovina while the EU’s two foreign policy supremos -– Enlargement Commissioner Oli Rehn and Javier Solana, the foreign policy “czar” –  have issued a document that underlines the bloc’s determination to “sort out the situation in Bosnia-Hercegovina,“ while double-hatting EU Miroslav Lajčak as head of the European Commission office too.

Though this renwed attention on Bosnia is welcome, a new report (pdf) by the Democratization Policy Council makes clear more will have to be done to put Bosnia back on the right track.

The authors — long-time Bosnia watchers all — make the following recommendations:

To the GAERC and the PIC:

1. Bolster EUFOR’s credibility by securing enough troops and lift to respond to and deter conflict. Also return to regional basing of forces for rapid reaction. Brčko, Banja Luka, and Mostar all require EUFOR forces.
2. Ensure that the over‐the‐horizon forces tasked to back EUFOR in case of emergency are sufficient in number, type, and readiness to react to contingencies, and then articulate publicly what this force constitutes.
3. Develop with NATO a use for Bosnia’s many former military facilities for basing, transit, and regular exercises, both for Bosnia’s NATO vocation and to bolster deterrence. Special attention should be given to Eagle Base in Tuzla.
4. Identify a list of sanctions that could be applied to politicians in the event of violations of the Dayton Accord. This should include asset seizures, visa bans and possible criminal prosecutions.

To EU member states and institutions:

1. Acknowledge that popularly driven – not top‐down – constitutional reform is necessary for Bosnia’s functionality, stability, and democracy. Make this a requirement, along with the standard acquis package, for EU membership.
2. Define specific EU requirements for Bosnian constitutional reform. These should include all human rights provisions demanded by the Council of Europe. The EU’s guidelines should aim at de‐linking citizenship rights from self‐identification with one of the three constituent peoples (including for public office), external guarantees of state sovereignty, and an end to ethnoterritorialism.
3. The post‐OHR EUSR/EC Delegation mission should only be inaugurated once the PIC’s current five objectives and two conditions are met in full. The new mission should have the attainment of constitutional reform as its declared goal. A strategy to achieve this end should be developed this winter, and the mission should be structured accordingly. The clarity of the goal and structure must be ensured in advance of the announcement of OHR’s closure date.

None of these recommendations will be easy to follow, as most EU governments prefer to focus their attention elsewhere than on the Balkans. But it also seems clear that it will take more than a few high-level visits to put Bosnia-Herzegovina  back on the track to self-sustainable statehood.