What to watch for today
A new dawn at the Bank of England. New governor Mark Carney will use the bank’s August inflation report to issue his first interest-rate guidance. Policy-watchers will get a sense of what economic criteria the bank will use to set monetary policy during his five-year term.
Mexico shakes up its oil industry. President Enrique Peña Nieto is expected to present a plan to end the monopoly of stated-owned Pemex and open the sector to private and foreign investment. Mexico’s economy badly needs the change, but to many Mexicans, it’s blasphemy.
Europe’s engine. Germany releases industrial production data for June. Expectations are high after Tuesday’s factory orders data showed the biggest gain in eight months. US consumer credit and mortgage application data will also be be watched.
More media earnings. Time Warner is likely to report higher profits thanks to bouncy ratings at CNN and strong revenues from its movie division. AOL should do well too thanks to higher advertising revenues. Groupon, Tesla Motors and Carlyle Group will also report.
Yemen on high alert. There are fears of an imminent attack by al Qaeda in the capital, Sana’a, after the US intercepted a call between al Qaeda leaders. The US and UK have evacuated their diplomats.
While you were sleeping
The US saw the smallest trade gap since 2009. The trade deficit narrowed to $34.2 billion in June, as exports hit a record and imports fell due to reduced dependence on foreign oil. Economists say that could lead second-quarter GDP growth to be revised up to 2.5% from the first estimate of 1.7%.
Bank of America got sued for mortgage fraud. On the heels of the conviction of Goldman Sachs trader Fabrice Tourre for defrauding investors in mortgage-backed securities, the government has accused BofA of understating the risks associated with $850 million worth of MBS in 2008.
Obama backed closing Fannie and Freddie. The US president came out in support of a plan to wind down Fannie Mae and Freddie Mac, the government-backed mortgage-financing giants, as a way to limit the government’s role in mortgages and boost the housing market.
Iran ready for “serious” nuclear talks. Newly elected president Hassan Rouhani said he was ready for direct talks with the US, provided that Washington showed “good will.” The cleric had his statements posted on his official English-language Twitter account.
Quartz obsession interlude
Lily Kuo on what a two-child policy could mean for the Chinese economy. ”A baby boom would help compensate, and increase the number of people who can support that aging population. However, it may be too little too late, given that the labor force is estimated to begin declining by as much as 10 million a year starting in 2025, and it will take at least 16 years for the effects of a baby boom that starts today to be felt in the workforce. The authorities may be unable to avoid unpopular measures like raising the country’s retirement age—55 for women and 60 for men.” Read more here.
Matters of debate
Asian countries risk falling into the middle-income trap. The way out is to build accountable institutions, nurture prudent risk-taking, and champion the rule of law.
Getting rid of Robert Mugabe is easy. All it would take is to cut Zimbabwe’s oil supply lines.
Jeff Bezos needs to be hands-on at the Washington Post. The Graham family’s involved approach was what distinguished the Post from its competitors.
The US helped create the new, splintered al Qaeda. The collateral damage of drone strikes has helped the organization decentralize and recruit new fanatics.
The sun’s magnetic field is about to flip. That could disrupt radio and satellite communication, and possibly the electrical grid.
App makers don’t make that much money in the app store. E-commerce licensing and custom apps are much bigger sources of revenue.
Scare tactics don’t deter drug use. Drug users know more about the risks of drugs than people who decide not to use them.
Men and women diet and lose weight differently. And weight-loss companies are now becoming savvier about targeting men.
“It’s your dog, it’s your dog poop.” A town in Spain is bagging dog poop and sending it back to owners who don’t clean up after their pets.