What to watch for today
Merkel sounds a gloomy note. German Chancellor Angela Merkel will say in her annual new year’s address that the eurozone “crisis is far from over” and that the economic environment will be “more difficult” in 2013. She appeared to contradict her own finance minister, Wolfgang Schäuble, who said a couple of days ago that the worst was over.
The US will go over the fiscal cliff. Maybe. US lawmakers came back to the capital 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.
Black Monday for the NFL. At least six National Football League teams in the US are expected to fire their head coaches or general managers today in an annual ritual following the end of the regular season.
UN ends peacekeeping in East Timor. The United Nations is counting the seven-year mission as a success after two relatively calm presidential elections and the retraining of the police force. Peacekeepers previously pulled out in 2005 after shepherding the country into independence, but returned the next year amid unrest.
While you were sleeping
Chinese manufacturing survey optimistic. The monthly HSBC Purchasing Managers’ Index rose to 51.5, its highest level in a year and a half and adding to signs of Chinese economic momentum. Survey data indicated the new orders were driven by domestic orders, likely tied to infrastructure development, rather than exports.
Zynga pared its offerings. The social gaming company shut down, or stopped accepting new players for, 11 games including Mafia Wars 2 and PetVille, as part of cost-cutting efforts to focus on more successful games and new titles.
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.
Chávez suffered complications. Venezuelan Vice President Nicolas Maduro said somberly from Cuba that President Hugo Chávez, who has been undergoing surgery on the island, has been beset by a third round of complications related to a respiratory infection following surgery.
Hillary Clinton was hospitalized. Doctors discovered a blood clot during a follow-up exam after the US Secretary of State fainted and suffered concussion while suffering from dehydration and a stomach virus. She already plans to resign once a successor is confirmed; Senator John Kerry has been nominated.
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.
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.
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.
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