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Good morning, Quartz readers!
What to watch for today
Serious talks about the fiscal cliff begin. In an attempt to hammer out a deal to defuse America’s looming budgetary adjustment, President Barack Obama will meet with leaders from labor unions and other civic groups Tuesday, while planning a separate sitdown with business executives on Wednesday and a confab with political leaders from both parties on Friday. Meanwhile, former Romney economic adviser Glenn Hubbard (paywall) now suggests that raising taxes on the wealthy is a viable path forward. Watch to see which other prominent Republicans start to deviate from the party’s pre-election line.
Petraeus scandal widens. The email controversy has now engulfed the top US commander in Afghanistan, John Allen, who is also being investigated over inappropriate email exchanges. To recap, David Petraeus resigned last week as director of the CIA and told friends he was shocked to learn of threatening emails his biographer and girlfriend is accused of sending to another woman she saw as a romantic rival. Those emails sparked an FBI investigation that unearthed the affair. Petraeus hadn’t planned to resign until President Obama’s intelligence supremo told him to. Quartz dug in to how the FBI may have got on to the emails. And here’s a timeline of the entire mess.
Arguments rage over what to do about Greece. The EU and IMF are rowing about how to force Greece to cut its debts. That was after a draft document prepared for the current meeting of euro-zone financial ministers in Brussels indicated that Greece will receive more time from international lenders to comply with budgetary goals laid out as part of the terms of its bailout funding plan.
Banking trouble in Vietnam. The South-East Asian nation does not seem to know what to do about rising bad debts in its banking system. The central bank governor is due to explain himself today in front of parliament after making the bizarre comment that he “could not promise anything about the handling of non-performing loans”. Bad debts in Vietnam rose to an estimated 8.8% of total bank lending by June 30 from 8.6% at the end of March, according to (pdf) official data. (Fitch Ratings puts the figure at more like 13%.) Vietnam’s financial sector has looked sickly since state-owned shipping firm Vinashin almost sank under $4 billion of debt back in 2010.
The latest LIBOR-like scandal. The UK’s Financial Services Authority and the British energy regulator are investigating claims that the nation’s estimated £300 billion wholesale gas market has been manipulated in a LIBOR-like price rigging scandal. Whistleblower Seth Freedman noted unusual price submissions, used to set wholesale prices, on Sept. 28. This is the last day of the gas financial year and heavily affects future prices. With energy prices set to soar in Britain, allegations of manipulation are highly contentious. Things could get ugly.
British inflation reared its head again. A hike in university tuition fees caused British inflation to rise to a higher than forecast 2.7% in October compared to the same month last year. The Bank of England now has a tricky juggling act on its hands. It needs to tame consumer prices while not permitting a relapse in growth. Strong signals have already emerged that the country’s short-lived recovery is tailing off.
Vodafone took a big hit in Southern Europe. The phone company announced it was writing down the value of its European businesses by £5.9 billion because customers in these crisis-hit countries are making fewer calls. Unsurprisingly, the company posted a pre-tax loss of £492 million for the six months to 30 September, against an £8 billion profit a year earlier.
Indonesia mulled a 50% minimum wage hike. No wonder retailers are excited about the Asian archipelago’s potential. Indonesia may lift its minimum wage 50% next year, to $208 a month. Quartz has already discussed the strength of the nation’s burgeoning consumer economy. Tackling entrenched public-sector corruption is one way Indonesia could pay for the wage hikes. According to one report, public sector graft in the city of Jambi in Central Sumatra has cost 42.8 billion rupiah ($4.4 million) in the last 18 months. That $4.4 million could finance the 50% minimum wage increase for more than 5,000 public sector staff for a year.
Quartz obsession interludes
Simone Foxman on how Europe is crippling its future by failing to deal with its debt. “As the crisis drags on and European leaders repeatedly wait to step in and “save Europe” at the last moment, a new reality is dawning: brinkmanship and delays could produce a far more severe recession than European leaders have been predicting.”
Matters of debate
Is Sydney heading for a real estate crash? An office building spree in Australia’s largest city is about to collide head on with bank job cuts.
Getting the US budget under control has to include clamping down on the growth of the welfare state, argues one conservative observer of economics.
Fear of capital gains taxes is one factor driving US stocks lower.
Commodities have done truly awfully this year.
Before he became the whiz who flawlessly predicted the 2012 presidential election, Nate Silver tried to pinpoint the best burrito in Chicago using statistical methods. He didn’t succeed.
Desperate for access, reporters at China’s 18th Congress are following delegates to the toilet. This happens rather a lot, according to this column.
A foul-mouthed parrot once shocked St. Louis zoo goers.
A researcher and three of his colleagues gamely allowed bed bugs to feed on them several times after taking a dose of an anti-parasitic drug, and found that it killed the bugs too.
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