Good morning, Quartz readers!
What to watch for today
Political ripples in Japan. Yoshihiko Noda, whose popularity has slumped to an all time low, has announced that he will dissolve parliament on Nov. 16 and called a snap December election. The yen fell sharply on the news, and the opposition Liberal Democratic Party, who look likely to win, have called for unlimited currency printing to stimulate the economy. An LDP win could augur even worse relations between Japan and China. The opposition has taken a deeply nationalist stance on the ongoing spat with China over the uninhabited islands in the East China Sea called the Diaoyu in China and Senkaku in Japan.
Why MF Global collapsed: the truth at last? A Republican-led Congressional panel that investigated the collapse of the brokerage firm is set to release a report today said to be highly critical of Jon Corzine, the former Goldman Sachs executive and Democratic Governor of New Jersey, who presided over the firm’s implosion.
Gloomy data at the heart of the euro-zone. The GDP picture in Germany and France is not expected to be rosy, when updates to third-quarter numbers are released. Recent information on Germany’s all-important industrial sector has suggested that Europe’s biggest economy is unlikely to be unscathed by the debt crisis that continues to roil the region. In fact, the 17-country union that uses the euro is expected to fall into recession when official numbers are released Thursday.
While you were sleeping
China unveiled a conservative new leadership. Xi Jinping, who hails from Communist royalty and is thought to favour state-owned enterprises and social controls over economic and political reforms was named China’s top leader, along with six other members of the Politburo Standing Committee, the supreme ruling council. Notably absent from the line-up were Liu Yandong, who who had been tipped to become the first woman on the committee, and Wang Yang, a reformer who wants to make Chinese people happier. Wang Qishan, an economic liberal popular with Western politicians and businesses, won a junior role.
Obama wants higher taxes on the rich. Taking his first questions from reporters since his re-election, President Obama reiterated his focus on seeing the tax rates of the wealthiest Americans rise as part of any effort to cut deficits and debt. His second and third priorities: immigration and climate change.
Financial markets didn’t like the look of any of it. In New York, stocks fell to their lowest level since June on worries about ongoing wrangling over the fiscal cliff and the violence in the Middle East. The selling got worse into the close of trading, and the S&P 500 fell below its 200-day moving average, a closely watched gauge of support for the market. Yields on US government debt declined slightly, as investors sought safety and braced for bad news.
Vietnam’s prime minister under fire. In a rare show of dissent for the Communist, one-party state, a member of parliament has called for Vietnamese leader Nguyen Tan Dung to step down over his mismanagement of the economy. As we recently reported, Vietnam may be heading towards a banking crisis.
It’s teatime in America. Starbucks agreed to buy Teavana, a loose-leaf tea seller and chain of tea shops based in Atlanta, Georgia. Does the American coffee giant see a coming wave in tea sales? Perhaps, but it’s worth pointing out that Teavana itself was looking north to Canada for growth quite recently.
Quartz obsession interlude
Naomi Rovnick on why China’s economy is still shaky and what the People’s Republic’s new leaders might be able to do. The economic situation might be worse than it appears in the data. She writes: “Some economists are even more than usually skeptical about the data, given that China has been holding its 18th Party Congress and a once-a-decade leadership transition. As London consultancy Capital Economics wrote in a note last week, given that the rosy data “have been published while the Party Congress is in session, some sceptics have questioned whether they can be believed.” Read more here.
Matters of debate
The US must broker a power-sharing deal in Syria between warring factions, otherwise “the Middle East erupts in one giant sound and light show of civil wars, states collapsing and refugee dislocations, as the keystone of the entire region — Syria — gets pulled asunder and the disorder spills across the neighborhood,” Thomas Friedman predicts (paywall).
US public universities have more than their fair share of overpaid bureaucrats.
Do China’s new leaders face an economic turning point? Specifically, the Lewis turning point, when the migration of workers from farms to factories, which has been feeding the country’s industrial boom, runs out.
Obama is not, repeat is not, going to crack down on Wall Street.
Please tax us rich folks more, says Goldman Sachs’ CEO, Lloyd Blankfein.
France is taxing Nutella, and other foods tied to palm and vegetable oil.
A man in a giraffe suit is hitchhiking around Scotland doing good deeds.
Pepsi is selling a “fat-blocking” soda in Japan.
The Romans built their empire on one meal a day. And it was not breakfast, which is often said to be the most important.
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