What to watch for today
The White House lays the groundwork for an attack on Syria. US secretary of state John Kerry and defense secretary Chuck Hagel will testify before the Senate foreign relations committee, as part of the Obama administration’s efforts to garner congressional support for military intervention.
South Africa’s gold miners go on strike. The National Union of Mineworkers, which represents about two-thirds of more than 120,000 unionized gold miners, is demanding wage hikes of up to 60%.
US factories sputter. Weakness in domestic activity may have pulled down the ISM manufacturing index to 54 in August. That’s down from a two-year high in July, though still healthy (anything above 50 means an expansion). Construction spending is expected to have picked up in July.
Australia’s central bank in wait-and-watch mode. The bank is set to leave its benchmark cash rate unchanged at a record low of 2.5%. Economists expect it to wait until after a general election on September 7 before making any new policy moves.
While you were sleeping
Vodafone and Verizon finally sealed the deal. After years of on-and-off negotiations, Verizon will buy out Vodafone’s 45% stake in its US wireless business for a total of $130 billion in cash, stock and other transactions. The UK firm will return 71% of the proceeds or $84 billion to shareholders and use $20 billion to pay down debt. It will also cleverly avoid taxes on its windfall.
A way to shield taxpayers from bailing out banks. Proposed new capital rules from the Financial Stability Board, a global task force of regulators, would force banks to hold enough debt to absorb potential losses (paywall), and put the onus of bailouts on bondholders instead of taxpayers.
An economic boom in the euro zone—relatively speaking. The purchasing managers’ index of manufacturing activity hit a 26-month high by not contracting for the second month in a row. However, worries remain: Job cuts continue, and France is still mired in a contraction that started a year-and-a-half ago.
The Muslim Brotherhood faces being banned. An Egyptian judicial panel recommended the Brotherhood’s dissolution as a registered non-governmental organization. While the ruling is non-binding, it may strengthen the hand of interim prime minister Hazem el-Beblawi, who is in favor of banning the group. Meanwhile, Egypt’s generals may be looking to drive Palestinian Islamist movement Hamas out of power in Gaza.
The US reportedly spied on the presidents of Brazil and Mexico. The National Security Agency tapped emails, phone calls and text messages of Brazil’s Dilma Rousseff and Mexico’s Enrique Peña Nieto, according to Brazilian TV station Globo, citing documents leaked by former NSA contractor Edward Snowden to journalist Glenn Greenwald.
Quartz obsession interlude
Roberto A. Ferdman on how Brazil’s former richest man, Eike Batista, lost 97% of his fortune in less than two years. “Most of that is due to the struggles of OGX, the biggest of Batista’s companies. In July the company announced its plans to shutter two of its most productive wells. Last week, a run of more bad news caused the stock to lose 63% of its market value, including a whopping 40% drop on Friday alone. And its financial woes are threatening its very existence. This past June, OGX reported nearly $5 billion in debt and a net loss of over $2 billion during the second quarter. If the company defaults on its heaping pile of debt, it would mark the largest such default in Latin American history, according to Forbes.” Read more here.
Matters of debate
US airstrikes won’t stop the slaughter of civilians in Syria. Better to help the rebels directly.
It’s foolish to fight currency speculators. India’s proposal for emerging nations to jointly intervene in offshore foreign exchange markets is unrealistic.
Improve inspections to fix factories abroad. Fast and flawed inspections by retailers fail to uncover substandard conditions and outright fraud.
Slap a great big “genetically modified” label on those corn chips. Doing so might alarm consumers at first, but will increase their familiarity with GM foods and boost sales in the long run.
Not every child can be a star. Giving children rewards just for participating lowers levels of intrinsic motivation.
US drug agents have access to call records dating back to 1987. The data trove is larger than even the NSA’s, and it’s all thanks to a partnership with AT&T.
The man who smells storms. A 64-year-old with Parkinson’s Disease experiences smelly hallucinations in the lead-up to storms.
The skyscraper that melts cars. A tower under construction in London has been blamed for reflecting light which melted parts of a Jaguar parked across the street.
The sandwiches that get you drunk. A brewery and chocolatier in Italy have joined hands to invent beer you can spread on your morning toast.