What to watch for today
Scotland’s independence campaign kicks off. Supporters claim independence would boost the Scottish economy by £5 billion a year, while opponents cite the cost of building a new state and creating new policies. A referendum will be held on September 18. The BBC has a nice sentiment tracker.
Politicians gather in a tense paradise. The annual Asian security summit known as the Shangri-La Dialogue kicks off—an exceptionally ironic name this year, as a large Chinese delegation is expected to confront a querulous Japan and other nations miffed at China’s increasingly assertive regional policy.
Bad signs for Brazil’s economy. The country’s statistics agency is on strike, but that’s not expected to stop it releasing GDP data showing that growth nearly ground to a halt in the first quarter. Amid ongoing protests against the money being spent on the World Cup rather than housing or education, the main federal workers union will today discuss joining the strike too.
Japan finds out what sales taxes can do. In the first inflation reading since Japan’s 3% sales tax hike on April 1, consumer prices are on track to have risen the most in 23 years. Analysts expect core inflation of 3.1% in the year to end-April, compared to 1.3% in March.
While you were sleeping
The US meat wars got even meatier. Tyson Foods, the US’s biggest meat processor, offered to buy Hillshire Brands for $50 a share, trumping a $45 per share bid earlier this week from Pilgrim’s Pride. News of the $6.8 billion deal sent Hillshire shares above Tyson’s offer price.
Europe cashed in on shady activities. EU countries started including all economic activities in GDP counts, regardless of legal status, including revenues from drugs, prostitution, alcohol and tobacco. This will add £9.7 billion ($16 billion) to the UK’s economy, and boost Italian GDP by up to 2%.
A cold shock for the US economy. An initial estimate of 0.1% annualized growth for first-quarter GDP was revised to a worse-than-expected 1% contraction—the US’s first shrinkage in three years. Markets didn’t seem to care; economists put this down to the particularly harsh winter, and said this quarter could bank 4% growth.
Ford pulled a GM. The carmaker recalled 1.3 million vehicles, citing problems with power steering in several of its SUV models, lights that could short-circuit or spontaneously combust, and floor mats that get stuck under gas pedals. Still not a patch on rival automaker General Motors, which has recalled 16 million vehicles this year alone.
The IMF told Africa to take it easy. Christine Lagarde, the International Monetary Fund’s boss, warned that Africa could derail its recent period of growth and stability if it takes on too much debt (paywall). Investors have been flocking to high-yield African bonds.
Quartz obsession interlude
Tim Fernholz on why US companies can earn $51 billion in the Cayman Islands even though its GDP is only $3 billion. “The foreign subsidiaries of US corporations made $94 billion in Bermuda in 2010, the latest year we have data for. That’s incredible work, since only $6 billion of goods and services were produced on the island that year. What does that tell us? It tells us that something fishy is going on.” Read more here.
Matters of debate
Rising housing prices will change’s Britain’s class system. Only the very rich will be able to afford a house and private education.
The sharing economy is feeding economic recession. It encourages people to become part-time cabbies and hoteliers out of necessity.
To spot the next bubble, follow the Harvard grads. They tend to flock to the plushest pastures, and “the getting looks best right before a crash.”
Africa’s debt downgrades are a good thing. They’re a sign that opening up to bond markets will force African governments to be more fiscally prudent.
Disney’s villains have gone soft. The bad guys aren’t the tyrants they used to be; now they all have redeeming qualities and back-stories.
India and Pakistan may be at the beginning of a beautiful friendship. As long as the US keeps out of it, that is.
New Jersey wants to hold Valentine’s Day in August. Or a “Half St Valentine’s,” for everyone who finds February 14 too chilly to get into the spirit of things.
What Mexico is to the US today, Germany was a century ago. An animated map of the US’s changing sources of immigration.
Dots is back, and it’s better than ever. The addictive game now has characters and levels.
The modern man needs a “man bra.” For holding all his wearable tech, of course.