What to watch for today
The Fed minds its language. At its policy meeting the US central bank is expected to keep its bond-buying program going, but may tweak its statement to quash rumors of imminent interest-rate rises. Recent Fed pronouncements have confused economy-watchers, businesses, and even robots.
The US economy grows overnight. While second-quarter GDP is expected to have grown at just 0.9% year-on-year, a set of revisions to GDP going back to 1929 will make overall output look an estimated 3% higher. It’s all about whether you count “Seinfeld” as economic activity, apparently.
Italy’s government hangs on Berlusconi’s guilt. The Italian supreme court could decide today (paywall) to uphold Silvio Berlusconi’s conviction for tax fraud, which would bar him from public office for five years. He might retaliate by pulling his center-right party out of the fragile governing coalition.
Zimbabwe goes to the polls. Prime minister Morgan Tsvangirai will challenge Robert Mugabe for the presidency for the third time. Mugabe, who has been president since 1980, has vowed to step down if defeated, but Zimbabwe-watchers are not optimistic.
Spotlight on earnings. Comcast, the largest pay-TV company in the US, should show strong numbers on the back of price hikes that helped offset a drop in video subscribers. CBS, in a standoff over fees with Time Warner Cable, expects less impressive earnings due to the slowdown in ad spends. Other big firms reporting include Anheuser-Busch, BNP Paribas, Honda, Diageo, and Bharti Airtel.
While you were sleeping
Obama proposed a grand bargain. The US president offered Republicans a deal: to cut corporate tax rates in exchange for more spending on programs that would create jobs. It probably won’t go through.
A global fertilizer cartel fell apart. It’s the end of the Cold War, but with potash. Russian producer Uralkali quit its sales partnership with Belarus’ Belaruskali, ending a cartel that controlled two-thirds of the $22 billion market for the fertilizer ingredient; their main rival is America’s Canpotex. Uralkali said the move would bring down prices by 25% by the end of the year.
JP Morgan shrugged off a record fine. The bank paid a regulator $410 million to settle charges that it manipulated US energy markets. It ends just one of many headaches for the bank, and a pretty small one compared with the $6 billion trading loss of last year’s “London Whale.”
Bradley Manning got off relatively lightly. The US soldier who sent more than 700,000 government documents to WikiLeaks was found not guilty of the most serious charge he faced, aiding the enemy. But he could still get up to 136 years in prison on 20 other counts.
The Spanish train wreck driver was on the phone. According to a statement, he was talking to a railways official. Black box recorders recovered from the wreckage of the crash that killed 79 people last week also revealed that the train was traveling at 95 mph (153 kph)—almost twice the speed limit—when it derailed.
Quartz obsession interlude
David Yanofsky on why traffic jams are a sign of a healthy economy. “Traffic is used as a proxy for economic activity because it measures people going to work and deliveries being made, according to INRIX. While the capacity of a road changes infrequently, the commerce that transits them fluctuates. Congestion on US roads was up 8.3% from last June, according to data released today.” Read more here.
Matters of debate
The Bradley Manning verdict is bad news for Edward Snowden. The case shows that US will show no mercy if it gets its hands on the former NSA contractor.
Japan’s conservatives should get over the war. Dogmatic posturing will only spur angry nationalism in East Asia.
The US should suspend aid to Egypt now, not let American military contractors set its foreign policy.
India’s central bank should raise interest rates, even if it hurts growth. Attracting foreign inflows is the only way to shore up the rupee.
Airbnb is robbing Spain of valuable tax revenue. Private property owners, not hotels, are getting the lion’s share of a recent tourist boom.
Free food doesn’t buy you loyalty. Despite having some of the best perks, Google’s staff are quitting at high rates.
The Bank of England helped sell Nazi gold. The central bank admitted that it helped Nazis sell gold plundered from Czechoslovakia just months before the Second World War.
Milking the “Cronut” craze. It took less than two months for Dunkin Donuts to mass produce the lovechild of the croissant and the donut.
An unexpected fan club for “Fifty Shades of Grey”. The erotic novels are favorites with prisoners at Guantánamo Bay.