What to watch for today
The US will go over the fiscal cliff. Maybe. US lawmakers came back to the capitol for a rare Sunday session. As both Republicans and Democrats fanned out to the usual Sunday talk shows, they were at first optimistic that some kind of temporary agreement would be reached in Washington, in order to avoid an tax hikes on pretty much everyone in America and oddities like runaway prices for milk. By the afternoon, it appeared that talks had stalled. Then Senate majority leader Harry Reid admitted that Congress was “real close” to the point that negotiations over even a temporary solution would collapse, possibly because of a debate over changes to Social Security. Suddenly, the odds on Intrade of a fiscal cliff deal by the absolute deadline, Dec. 31, plunged to 2.2%. Yet Republican senator Lindsey Graham said the critical 80 votes needed in the Senate were in fact available for some sort of deal, and pundits reminded us that, as always, any public statements about cliff negotiations are probably a lot of posturing. Will the US fruitlessly go over the fiscal cliff, plunging the country into a UK-style double dip recession?
Markets are going to freak out over the fiscal cliff. If it happens. US financial markets have demonstrated a willingness to send the price of futures down precipitously at even the whiff of a breakdown in the talks over resolving the fiscal cliff. President Barack Obama emphasized this point, noting that if lawmakers go home without a deal, markets will have an “adverse reaction.” If selloffs in US markets reverberate across the globe, that could prove to be an understatement: Quartz’s Simone Foxman notes that US markets could end 2012 with the craziest trading day of the year.
While you were sleeping
Japan seizes Chinese fishing vessel. Japan’s coastguard seized a vessel and its captain inside its 200-mile nautical exclusion zone, on suspicion of coral fishing. It’s the latest event in a long-running stand-off over territorial waters between the two.
France will tax its rich, one way or another. A French court may have rejected President François Hollande’s 75% tax on millionaires, but only because it applied to individuals and not households. Hollande’s government will try again in 2013 with a law that conforms to the court’s ruling.
Bolivia nationalizes two utility companies. President Evo Morales accused the Spanish owner of two utility companies of overcharging consumers as he nationalized its Bolivian subsidiaries. Within 180 days, an independent moderator will decide how much compensation Spanish energy firm Iberdrola will get in return for its assets.
OPEC reaps a record $1 trillion in 2012. Some of the world’s largest sovereign wealth funds are about to get a huge infusion of cash.
Egypt’s pound dives. President Mohammed Mursi may have gotten his way on Egypt’s new constitution, but the central bank’s latest currency adjustment highlights an economic fragility that threatens Egypt’s stability as much as any political movement.
Is there an active tectonic fault under Japan’s sole operating nuclear power plant? A team of experts investigating the issue remains divided. The risk appears low, but it’s the sort of long-tail possibility that Japan’s besieged utilities—and the domestic manufacturers who rely on them—don’t need.
Quartz obsession interlude
Zach Coleman on how Asian governments are in expansive mood even as the US reels from self-inflicted wounds. “While the US dithers over just how much to tighten its fiscal belt, Asia’s big economies are loosening theirs. Following their recent elections, Japan and South Korea are joining China in using fiscal stimulus to cope with the sluggish global economy. […] China is planning a 55% expansion of the central government budget deficit next year to 850 billion yuan ($136 billion).” Read more here.
Matters of debate
What’s wrong with the US Congress? Three outgoing congressmen talk about how bad things have gotten in the belly of the beast that ate the cradle of constitutional democracy.
Who gets the blame if the US goes over the fiscal cliff? New York Times columnist David Brooks says the Republicans.
Can Benazir Bhutto’s son save Pakistan’s democracy? He’s 24, he’s got the most famous name in Pakistani politics, and his party is a champion of secularism in a country trending toward Islamism. Can he succeed?
Who is internationally renowned artist and prankster Ai Weiwei, anyway? Mainland China’s government can’t stand him, and here’s a pretty good roundup of the reasons why.
How America’s industrial agriculture machine actually works. America is the world’s largest exporter of grain, and the US Public Broadcasting System is now streaming a fascinating documentary about how it happens.
Girls are joining Hong Kong’s street gangs. And they’re more likely than ever to be leading them. Breaking through the glass ceiling, but not exactly the one we had in mind.
Google’s year in the global unconscious. When you type “how to…” into Google’s search engine in countries all over the world, here are the top results, as suggested by autocomplete.
How to build a billion-dollar company without ever accepting venture capital. It doesn’t happen often, but the brothers behind Guitar Hero did it.
Battling poachers with drones. A fleet of 30 drones like those used by US military will be used to combat illegal hunting of rhinos in South Africa.
US doctors leave a foreign object in patients on average 39 times a week.