Good morning, Quartz readers!
What to watch for today
Hurricane Sandy disrupts business on the east coast of the United States. Sandy is expected to make landfall late today or early Tuesday ET. All US equity markets are closed and federal offices in Washington, DC will be closed to the public. Flights to the East Coast are being canceled. New York state suspended mass transit on Sunday evening, affecting a ridership of roughly 8.5 million people, and New York City closed schools, and is evacuating roughly 400,000 people. Experts say the storm could potentially inflict $18 billion in damage, and leave millions without power for a week or more. Quartz has catalogued the webcams watching the arrival of the storm for the benefit of weather geeks worldwide, and rounded up a few hurricane special discounts.
UBS may shrink back to its private banking roots. The Swiss institution’s public relations staff may soon start calling financial journalists to remind them to “stop calling us an investment bank”. Bloomberg reports that UBS plans to slash 10,000 jobs in capital-intensive trading businesses to reduce risk weighted assets by a massive $107 billion and return to its roots.
Rising optimism for Indian oil projects after the nation got a new cabinet. Prime Minister Manmohan Singh reshuffled his top team to bring in younger, fresher faces ahead of elections that could take place as early as next year. The most interesting change for foreign investors could be 72-year-old Veerappa Moily getting the top job at the oil ministry. His predecessor Jaipal Reddy was criticized by industry for being too slow to approve new oil field developments. Moily has promised to speed things up.
Random Penguin is for real. Pearson and Bertelsmann made it official on Monday that they would join together their rival publishing units, Penguin and Random House. The news follows a rumored News Corp offer to pay £1 billion in cash to Pearson for Penguin. News Corp’s loss is the internet’s gain as the “Random Penguin” name gave good meme.
Former Philippines president faces lengthy corruption trial. Gloria Macapagal Arroyo, who ruled the impoverished South East Asian archipelago from 2001 to 2010, was arraigned by a local court for allegedly diverting $8.8 million in state funds. She has entered a not guilty plea but faces a maximum sentence of life in prison if found guilty. The case could prove Arroyo’s successor Benigno Aquino is getting tough on entrenched corruption in the Phillippines. Or he may just be using a corruption trial to topple an old rival.
While you were sleeping
Euro skeptics broadened their support in Finland. The anti-Euro Finns Party won 12.3% of the vote in local elections on Sunday, according to the most recent reports of the count. The Finnish government has retained power but the strong showing by the Euro skeptics could indicate increased Finnish public support for exiting the euro zone, and bolster pressure on Finland’s government to take a tough stance in negotiations around euro zone budgets and reforms.
While Ukraine’s President claimed victory in parliamentary elections. That outcome is still far from certain, however, as wildly varying exit polls mean the final result is still hours away. There have been some accusations of bribery and ballot stuffing too.
Honda suffered from the China backlash. The Japanese carmaker slashed its net profit forecast by 20% for the full year to March 2013, after Chinese consumers rejected Japanese marques. Honda’s rivals Nissan and Toyota are suffering similar problems from the nationalist backlash spurred by China and Japan’s ongoing spat over some uninhabited islands in the East China Sea. Sales by Honda and its Chinese joint ventures dropped 40% in September on the previous year. Honda had already communicated those bad numbers to the market.
The Chinese coastal port city of Ningbo suspended plans to expand a petrochemical plant following protests. The $8.9 billion expansion of a state-controlled Sinopec plant came under fire over environmental concerns.
Quartz obsession interlude
Tim Fernholz on new estimates of capital flight from China: “Whether it’s the fortune of Chinese Premier Wen Jiabao’s family or the downfall of disgraced party leader Bo Xilai, more attention is being paid to the capital that China’s wealthiest send out of the country. Now we know more about the amount of money that has eluded Chinese capital controls (which forbid citizens to send more than the equivalent of $50,000 abroad) in recent years: $3.7 trillion between 2000 and 2011, and more than $600 billion in 2011 alone. Global Financial Integrity, an NGO that attempts to track illicit capital flows, detailed those findings in a new report.“ Read more here.
Matters of debate
Should the US block Chinese investments until China opens its market wider? Some people argue it should, under the principle of reciprocity.
It’s time to reduce equity holdings. Barry Ritholtz makes the case: “We are more likely to see a normal cyclical recession before Spring 2014 than not.”
A German robot is being trained to challenge human ping-pong players. The project is part of a movement to develop robots that can perform a range of tasks after being guided by their owners.
Steve Jobs’s yacht makes what’s apparently its first public appearance. The luxury ship was photographed in the Dutch city of Aalsmeer more than a year after the Apple co-founder’s death.
The US military and police are training for a zombie invasion. Apparently simulating a zombie apocalypse is a good use of tax dollars. The training exercises will be held on October 31.
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