GOOD MORNING QUARTZ READERS IN THE AMERICAS!
WHAT TO WATCH OUT FOR TODAY:
Manufacturing data provide an update on the health of the global economy. The US and Germany are among the countries with economic numbers due out. Tepid demand for exports means the US data are not expected to be especially rosy.
It’s National Day in China, as the country celebrates its Golden Week holiday. This is traditionally a time of record-breaking traffic jams, as migrant workers travel home for their annual break. An estimated 740 million people will hit the roads this week. The good times often begin in the traffic queue. Gridlocked travelers have been playing games and walking their dogs. It remains to be seen whether retail sales (paid) during what’s traditionally a boom week for shopping will be impacted by the broader political and economic uncertainty.
Georgia holds parliamentary elections. President Mikhail Saakashvili’s United National Movement faces a tough challenge in the Georgian Dream coalition led by Bidzina Ivanishvili, the eccentric billionaire who reportedly lives in a glass house and has a penguin zoo. Energy transport through the country and the possibility of contested elections add geopolitical significance to the outcome. Eccentric presidential candidates are quite the rage in Europe right now. This Czech composer with a tattooed face is working on a bid for his country’s leadership.
Biffa may fall into the hands of its bankers. The iconic UK rubbish (this means trash) collector, whose wheelie bins have served as playthings for drunken British students for years, may confirm reports it is about to be taken over by creditors. It seems the English phrase “where there’s muck there’s brass” does not always hold true.
WHILE YOU WERE SLEEPING:
Australia’s Xstrata recommended a takeover by Glencore International. If shareholders vote yes, the combined firm will be the world’s fourth-largest mining company. Xstrata accepted a sweetened deal (pdf) and conceded Glencore boss Ivan Glasenberg could lead the combined group. Xstrata chief Mick Davis is leaving. Glasenberg and Davis, both South Africans, were longtime friends and reportedly university classmates. So their falling out was surprising. Given the headwinds facing the mining sector–including a dropoff in Chinese demand for raw materials–the combined firms’ may not enjoy an easy start to their union.
The BAE-EADS merger hit another setback. The defense giants have been lumbering towards the altar for four months. And now EADS shareholder Lagardere says it dislikes the terms of the deal, which has already been seriously delayed by political wrangling. France and Germany want a combined blocking stake in the combined firm so they can protect their citizens’ jobs. And Britain has a golden share in BAE it could use to veto the merger if UK jobs come under threat. Where will those prized merger synergies come from?
European banks launched crisis-driven deals. Credit Agricole plans to offload its Greek unit for a “symbolic” €1 (possibly worrying if it waited any longer it would only get one drachma). Spain’s Banco Popular is planning a €2.5 billion share issue after realizing it needs €3.2 billion of new capital.
Chinese factories had another bad month. Manufacturing activity declined for the second month in a row in September, according to a Chinese government survey released today. A separate survey by HSBC said September was the 11th month of declines. Right now, bad news about the China slowdown is getting traders excited. They are speculating the Beijing government will unveil additional plans to jumpstart economic growth through the country’s leadership transition later this year. The Chinese currency, the yuan, climbed to a 19-year high last week.
And Japan kept on tankan. That is, the so-called tankan quarterly survey of manufacturers’ confidence by the Bank of Japan showed that the mood darkened for the fourth time in a row. Economists blame slowing external and domestic demand.
QUARTZ OBSESSION INTERLUDE:
Ron Brownstein on the demographic time-bomb facing the US Republican Party: “In today’s media-saturated world it’s not clear that either party can establish the sort of lasting hold on voters triggered by earlier realigning presidential elections, like Abraham Lincoln’s victory in 1860 or Franklin Roosevelt’s in 1932. But an Obama victory that largely reassembles the coalition that elected him in 2008, despite the greatest economic upheaval since the Depression, would send Republicans a stark warning.” Read more here.
MATTERS OF DEBATE:
The Church should pay more taxes. How the question is playing out in Spain.
Angel investors shouldn’t expect to make any money. Data suggest profits are elusive for all but the very connected or very lucky.
There will be one billion people over 60 years old in the world within 10 years. That’s according to this UN report released today, and would represent an increase of almost 200 million from the current number. Around the world, two people turn 60 every second. While you were sleeping, assuming you got the recommended eight hours, 57,600 people turned 60. By 2050, the world will have more people over 60 than under 15. Who is going to support the increased number of retirees? The UN does not seem to know, but recommends governments “recognize the inevitability of population aging and the need to adequately prepare all stakeholders.”
The global diaper production chain goes through a chemical plant in Himeji, Japan. Global diaper manufacturing could be affected following a fire that shut down the factory, which makes 20% of the world’s supply of a key resin used in diaper production.
Pre-historic man went to the dentist. Remains of a man living 6,500 years ago appear to show a beeswax tooth filling.
In urban Taiwan, indoor shrimp fishing is now a popular activity for hanging out with friends and for dates.
US Federal Reserve Chairman Ben Bernanke speaks at the Economic Club of Indiana.
Best wishes from Quartz for a productive day. Please send any news, queries, suggestions for traffic jam entertainment, and questions for Bernanke to firstname.lastname@example.org.