Good morning, Quartz readers!
What to watch for today
Final maneuvering before Tuesday’s US presidential election. Some recent polls show President Barack Obama and challenger Mitt Romney essentially even nationally, though Obama appears to have a slim edge in some tight states that could give him a more solid electoral college win; on that basis Nate Silver, the statistician who correctly predicted how all but one of America’s 50 states would vote in the 2008 election, gives Obama an 85% chance of winning. The Financial Times has now endorsed Obama, following The Economist’s endorsement last week. (For what it’s worth, there’s no evidence newspaper endorsements impact voters’ choices).
Recovering from the wrath of Sandy. Power has been restored to most of the areas on America’s East Coast that lost it during last week’s superstorm, most subway lines are running again in New York City, fuel is making its way into the region, and the week should generally bring more normalcy from a business perspective. But 1.9 million customers are still without power. Meanwhile, Haiti is still struggling to recover from the storm. Its government has issued a new plea for humanitarian assistance.
An eclectic basket of earnings reports. Among those scheduled to report are Chinese travel agency Ctrip.com, James Bond film studio Pinewood Shepperton, electric car maker Tesla Motors, and Weight Watchers International.
The Greek crisis approaches its climax. Greek lawmakers could vote as early as Wednesday on a package of austerity measures that are the sine qua non for a European bailout. Antonis Samaras, the prime minister, warned parliament that if the measures aren’t passed, a Greek exit from the euro could make living standards fall 80% from their 2009 levels. Watch for posturing over the next few days from Samaras’s fractious leftist coalition partners, Pasok and the Democratic Left.
HSBC to face criminal charges. The bank just reported a sharp reduction in profits after setting aside $1.5 billion to pay fines to US regulators following accusations it had handled money that derived from Mexican drug cartels and rogue nations such as Iran and Sudan. It also may face criminal charges. With many of HSBC’s rivals also being set upon by US regulators, British banks’ reputations are suffering.
Brave Indonesian minister starts anti-graft battle. Dahlan Iskan, Indonesia’s popular state-owned enterprises minister, claims to have handed names of lawmakers he alleges extorted cash from state-owned companies to the country’s House of Representatives. Iskan is one of a small crowd of Indonesian politicians—the most prominent of whom is new Jakarta governor Joko Widodo—who the public associate with clean politics in an administration beset by corruption.
While you were sleeping
Sharp might require a government bailout. Speculation has mounted since the Japanese electronics maker last week warned that it expected a ¥450 billion ($5.6 billion) loss in the year to March. A strong yen and weak TV sales are at fault. But like at Panasonic and Sony, management’s struggle to redirect the company to a long-term viable strategy is also to blame.
Australia gave international ratings agencies a good fright. The country’s Federal Court (which is not the highest in the land) ruled that Standard & Poor’s was liable for losses incurred by a group of Australian councils on credit derivatives. ABN Amro, the bank that sold the products, was also found responsible. Australian media claimed this was the first time a court anywhere in the world has ruled that ratings agencies have a duty of care to investors. Claimants have found it difficult to sue ratings agencies (pdf, p.1) because they shield their analysis with a US First Amendment freedom-of-speech defense.
Lufthansa and Turkish Airlines, better together? Turkish newspapers have reported that the two airlines are in merger talks. Both are members of the Star Alliance and already have a regional joint venture in Turkey. Their alliance could help them beat European and Gulf rivals in the Middle East. Lufthansa has so far only responded to the merger rumors with a cryptic statement that “everything that is in the interest of our customers” is possible.
Other news from the weekend
Thanks to force majeure, US voting enters the 21st century. New Jersey is allowing email and fax voting in the presidential election for people displaced by Hurricane Sandy. In a neat legalistic twist, the state will designate displaced voters as “overseas voters”, who are already allowed to vote electronically.
Europe: the long strictness ahead. German Chancellor Angela Merkel said the euro crisis would last at least another five years. She also told members of her political party that time had come for ein bisschen strenge—“a bit of strictness”, signaling her continued belief in the necessity of European austerity measures.
No-friends Noda. The approval rating for Japanese Prime Minister Yoshihiko Noda’s cabinet fell below 18%, according to a Kyodo News poll. The drop comes amid legislative gridlock and pressure from opposition lawmakers to call an election before the end of the year.
China’s slowdown is slowing down. Following data last week suggesting an improvement in manufacturing, new numbers indicated that other sectors of the Chinese economy are rebounding as well, with a notable increase in the non-manufacturing purchasing managers’ index.
Quartz obsession interludes
Steve LeVine on the man the oil industry goes to for a voice of gravitas in the US election, Daniel Yergin: “In recent years, Yergin has morphed into the go-to consultant for high-brow research backing up the main political objectives of the oil industry. If the subject sits at the broiling center of politics, all the better. Last year, Yergin helped apply pressure on President Barack Obama to lift the moratorium on drilling in the Gulf of Mexico. In the Nov. 6 election, Yergin has made the case for one of Romney’s central planks—that he will put Americans back to work first and foremost by opening up more of the country to oil and gas drilling.” Read more here.
Christopher Mims on a website that has convinced some of the world’s smartest data scientists to moonlight for free. “Kaggle hosts dozens of ‘big data’ contests that pit thousands of data scientists against each other, crunching numbers in real time on behalf of various companies. These businesses are glutted with data, everything from users’ musical preferences to US census data. They want skilled number crunchers who can act as the 21st-century equivalent of oracles, using past data to scry the future—like predicting which product a buyer will want based solely on its features. Using Kaggle to round up these oracles turns out to be a pretty good deal for the companies.” Read more here.
Matters of debate
Investors in education are throwing their money away. Fewer than 4% of students in an MIT online course passed the final.
Lego isn’t making enough toys for the coming holiday season (Danish). The controversial Lego Friends series for girls has proved too popular.
Hong Kong’s rule of law is under threat. That is the view of Kemal Bokhary, who stepped down recently as a permanent judge of the Court of Final Appeal and told a TV interviewer that his tenure wasn’t extended because of his liberal views.
Germany’s ThyssenKrupp needs to get out of steel production fast. “In the future, we will work less and think more,” CEO Heinrich Hiesinger told colleagues.
Americans who work in Silicon Valley are emigrating to India to start businesses there.
Britain has invaded all but 22 countries in the world. Guatemala, Tajikistan, and Luxembourg are among the few spared.
Type 2 diabetes has more than tripled in China over the last decade as the country got hooked on fast food. This is bad news for China but great news for drug makers, and shows how much the nation’s tastes have changed since it was held up as a paragon of good nutrition in vegans’ bible The China Study.
The perfect female leg is long and straight, but with short calves. That is the result of 12 years’ research by some British plastic surgeons, who scrutinized icons of beauty from Greek statues to Barbie dolls. It explains why high heels are popular.
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