Good morning, Quartz readers!
What to watch for today.
EU might agree on its budget for the next seven years. Some 40% of the EU’s €1 trillion ($1.34 trillion) budget goes to “agricultural subsidies, cherished by French farmers.” It’s just one of the things Angela Merkel could be pushing to trim. If leaders don’t reach agreement, the EU will have to create a new budget once a year, in a process somewhat reminiscent of the US’s ongoing struggles with its own debt limit.
Get a jump on the Chinese New Year. Starting this weekend, 200 million Chinese are expected to travel for the new year, and “for some, this means entire days on standing-room only trains.” Better to get ahead of that rush, if you can—retailers certainly have. Meanwhile, Rio de Janeiro gears up for Carnival.
Shutdown on the US East Coast. A “historic” blizzard, perhaps even “the worst of all time” is likely to make your colleagues in the US North East inaccessible. If power lines go down, effects of the disaster could linger for weeks.
While you were sleeping
World’s biggest airline crown goes to new champion. A merged US Airways and American Airlines will ferry more passengers than any other airline on the planet, but it won’t lead to a hike in airfare prices. It could also be the last big airline merger for the foreseeable future. Surprisingly, American Airlines’ labor union can take credit for the merger.
Wall Street is at war with Apple, and Apple might blink. Hedge funde boss David Einhorn is suing Apple to get the company to return some of its massive hoard of cash to investors, after the stock has taken a beating in recent months. Apple says it’s “evaluating” his proposal. The deeper story here is an ongoing battle between technology companies that don’t like to be told what to do and those on Wall Street who like to remind them that they belong to their shareholders.
The gas pipeline that no oil company would build gets a push. They went on a roadshow to the world’s capitals, but even so, Turkmenistan, Afghanistan, Pakistan and India couldn’t convince an oil major to lead the $9 billion construction of a pipeline to provide gas to all four countries. No matter, they are going forward with the project anyway, after New Delhi approved the creation of a special-purpose vehicle to manage it.
The Anglo-Irish bank is no more, now please don’t tell Spain or Italy. After Ireland liquidated the IBRC (the nationalized former Anglo-Irish Bank), the European Central Bank grudgingly allowed Ireland to convert a promissory note it had made to the bank into government debt—a back-door way of financing the bank’s bailout. But the ECB is worried that other euro zone countries might follow suit.
The ECB will not strike a blow in the currency wars. Consistent with its mandate, the ECB is addressing inflation by leaving interest rates unchanged at 0.75%, effectively refusing to take any more action against Europe’s ongoing economic pain.
Quartz obsession interlude
Why Chinese companies get away with such transparent accounting dodges. “What unites the alleged fraud at Caterpillar’s Chinese subsidiary, Siwei, with the methods described by Gillis are their simplicity. While Enron hid its losses by conducting derivatives transactions with its own off-balance sheet vehicles and Bernard Madoff went to extreme lengths to conceal his Ponzi scheme with a purported “split-strike” trading strategy, corrupt Chinese companies often inflate sales by fabricating deals and inventing false customers.” Read more from Quartz’s Naomi Rovnick.
Matters of debate
France is a financial mess and no alternative to German austerity. France’s nanny state is headed for a sovereign debt crisis.
India needs to greatly increase access to banking. The alternative is allowing its economy to be crippled by gold imports.
Is Asia casting off its dependence on the West? Changes in how much is being shipped where suggest it’s so.
Elon Musk (CEO of Tesla and SpaceX) may have just solved Boeing’s dreamliner problem. As the CEO of an electric car company, Musk knows a lot about batteries, and he’s sharing his experience.
Need a boyfriend for Chinese New Year? Rent one. This seems improbable in a country with a sex ratio as skewed as China, but fake boyfriends can be had for as little as $8 an hour.
Peanut allergies are more common than ever in rich countries in the West, but not Israel. The key appears to be ongoing exposure to small amounts of the stuff from infancy.
Climate mystery solved. Why are cities even hotter than climate models predict? It’s the direct heating effects of our enormous use of energy.
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