Hundreds of al Qaeda-linked fighters battled state security agents for control of two large cities west of Baghdad on Friday in the third straight day of intense violence. Yesterday, radical Sunni militants dressed in black and waving the al Qaeda flag rampaged through Falluja and Ramadi, freeing prisoners from jail, setting fire to police stations, blowing up government buildings, and exhorting their fellow Iraqis to join the fight over mosque loudspeakers. Government troops fought them street by street. On Friday, after a brief lull, fighting erupted again.

Manufacturing output in the Eurozone was way up last month. Even troubled economies like Spain and Italy posted big gains, while Greece’s contraction slowed down. But there was one big loser: France, whose manufacturing sector contracted, hitting a low it hasn’t reached in months, raising concerns that it is losing ground to it’s neighbor across the Rhine. This is bad news for President Hollande, whose popularity is already scraping the bottom. Has the stage been set for a Sarkozy comeback?

As student debt is elevated to a nation crisis, the feds have become very aggressive—some might say abusive—about fighting bankruptcy cases from distressed borrowers. This has touched off a debate on whether the government has overstepped its bounds by going after students. It’s an ugly situation, but the real problem lies with the federal loans themselves.

The tiny island of Taketomi, closer to Taiwan than Okinawa, has become ground zero in a fight involving Japanese politicians, teachers, and the weighty question of how to present Japan’s wartime history to students.

The Lebanese military, considered to be the most broadly representative institution in a country starkly divided into rival religious and political groups, got a major boost from Saudi Arabia last weekend. President Michel Sleiman made the announcement on live television: “The Saudi king decided to give a generous, well-appreciated grant to Lebanon amounting to $3 billion for the Lebanese army, which will allow it to buy new and modern weapons. The king pointed out that the weapons will be bought from France quickly…” President Hollande of France, visiting Riyadh, added: “If there are demands that are addressed to us, we will satisfy them.” It will be the biggest ever grant for Lebanon’s armed forces.

One California venture capitalist has latched on to one of our favorite ideas: splitting up California into a number of different states. As CNN reports, Tim Draper has proposed a ballot initiative to create six states out of the former Golden State. Make no mistake: it’s potentially one of the most important reform possibilities in the US.

America’s Syria policy has been a series of disasters, errors and own goals, humiliating President Obama, devastating his credibility across the region, reducing chances for both a good deal with Iran and peace between Israelis and Palestinians. Oh, and it’s also paved the way for mass death and serial atrocities in Syria.

In many parts of China, officials are caught between two competing priorities: industrial development and food production. Most often, officials’ prime concern is industrial development—characterized by factories and mining, usually—since it is the bigger driver of economic growth. But, predictably, unfettered industrial development results in extremely poor conditions for food production. And it’s getting worse. Much worse.

The financial industry has gotten a bad rap over the past few years, but there are good things happening on Wall Street as well. For a prime example, look to Merrill Lynch, which has just announced a partnership with New York State on a social impact bond aimed at decreasing recidivism for inmates released New York’s prisons. As the Social Finance reports, Merrill Lynch and a group of other investors have pledged to invest in the Center for Employment Opportunities to cover the upfront costs of preparing 2,000 inmates for work outside prison.

The dispute between India and the United States over the arrest of an Indian diplomat in New York is more complicated than it looks. The tiny Indian Foreign Service (just 1,750 people) is an elite body of carefully selected, extremely well-trained and very intelligent career civil servants. The IFS faces some problems, though. First, it is so small that it has a hard time managing India’s growing international portfolio. Second, as Indian politics becomes more populist, life gets harder for the elite bureaucracies, including the foreign ministry, who ruled the roost in India’s post-independence era.