Quartz Daily Brief—Europe edition—China’s bad-good growth, GE, Dreamliners, moisturizing jeans

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What to watch for today

Manufacturing boosts GE’s profits. The US industrial titan, widely watched because of the worldwide market for its diverse products, reports its fourth-quarter earnings today, and analysts expect higher profits thanks to a tighter focus on its core products after sales of its media division. Then again, it’s also worth remembering that in terms of overall profit, GE is still basically a bank.

More earnings. We’ll also hear fourth-quarter results from Schlumberger, Wipro, Morgan Stanley, State Street and SunTrust Banks. 

US consumer sentiment check-in. An index of consumer confidence will let us know how bullish Americans are in the first month of 2013.

The internet saves British retailers…  The UK’s remaining retailers are expected to report modest 0.2% sales growth for December on the back of strong online sales over Christmas. A slew of British shop chains have gone bust in recent weeks due to a combination of high rents and losing out to online shopping.

While the UK also threatens to “drift out” of the EU. UK leader David Cameron will say today he has had enough of waiting for reforms, though his Conservative Party, which rules in coalition, has generally always been filled with euro-skeptics.

While you were sleeping

China’s strong growth, its worst since 1999. The country’s GDP grew 7.9% year-on-year in the fourth quarter, and was expected to be 7.7% for 2012 overall. Robust by anyone else’s standards—but for China, the slowest growth in over a decade. Policymakers aren’t expected to overtly push for higher growth in 2013, in part because of fears of rising property prices and over-investment. But Bejiing is likely to keep monetary conditions easy so that local governments can meet their GDP targets via credit-fuelled infrastructure projects.

AT&T may have a $12 billion-sized hole in its pensions pot. The telecoms giant admitted in an SEC filing that it may get a lower return on its pension funds than previously thought, leading to the shortfall. It may not be the only large US blue-chip in this position. Low interest rates caused by the Federal Reserve’s QE3 program have shrunk the interest income that pension funds get from government and corporate bonds.

Facebook users uploaded 1.1 billion photos over New Year’s Eve, it was reported. That will give the company’s controversial new Graph Search function a lot of new data to gobble up.

US indicators stay positive, boosting stocks. Home construction continued to expand in December, while the number of Americans filing for unemployment insurance dropped, in another sign that the US recovery remains steady. Markets reacted positively, with the S&P 500 closing high at a five-year high.

While American investors get excited about IPOs again. Norwegian Cruise Lines has priced its Nasdaq IPO at above its expected range due to high demand for the shares. It’s yet more evidence of a “great rotation”—of US investors are getting exuberant over equities after spending the years since the financial crisis buying bonds instead.

No more Dreamliners flying. After regulators in India, Europe and Japan followed the US Federal Aviation Administration in grounding  Boeing 787 jets over safety problems, Chile’s LAN, Qatar Airways and Ethiopian Airlines all followed suit, thus taking all of the world’s 50 active Dreamliners out of service. All the bad press could cost Boeing in its ongoing rivalry with Airbus.

New protections for US mortgage holders. The US Consumer Financial Protection Bureau issued new rules that make it harder for mortgage servicers to foreclose on homeowners who have stopped paying off their loans. A servicer must now wait until a loan is at least 120 days overdue and give borrowers who miss two consecutive payments alternatives for avoiding foreclosure.

Jakarta stayed submerged in water. Heavy flooding in the Indonesian capital over the last two days has killed at least five people, while thousands have fled. Local media have begun questioning where all the money earmarked for flood mitigation work has gone to. The BBC reports that Jakarta’s drainage system has not been substantially upgraded since Indonesia’s former Dutch rulers left in 1948.

Iraq weighing BP deal. The government is considering a multibillion-dollar deal for BP to redevelop the Kirkuk oil field, though control over it is disputed by the national government and the Kurdish regional government.

Quartz obsession interlude

Naomi Rovnick on the changing economy of North Korea and the prospects of reunification: “North Korea attracted almost $100 million of Chinese investment between 2003-2009, often via Chinese-funded joint ventures….Chinese cash is not enriching most North Koreans yet. But the capital, Pyongyang, has started to seem wealthier, Chosun’s Abrahamian says. Around two years ago, he reports, Pyongyang got a hypermarket that is ‘about the size of a mid-sized Walmart’ and ‘sells relatively modern processed foods such as crackers, fish cakes and long-life bread.’ He has also noticed an increase in cars on the roads of the capital, where three years ago it was rare to see a car. ‘I’ve seen Toyotas,’ he says. ‘And even a couple of traffic jams.'” Read more here.

Matters of debate

Citi’s biggest strength is its biggest weakness. After poor fourth-quarter results, the megabank may be regretting its global emphasis.

Europe’s austerity measures will make depressions and unemployment worse.

Tim Geithner defends his response to the crisis. The outgoing US Treasury Secretary explains the European and American economic situations in terms of basketball. (Quartz’s news editor would not be pleased.)

But Simon Johnson says Geithner did terribly. The IMF’s former chief economist says Geithner helped create, and then failed to fix, the “too-big-to-fail” problem.

The S&P has beaten gold over every 30-year period of history, ever. righteous rant against the goldbugs.

No one in Washington is paying attention to the markets. It’s a Marshall McLuhan moment for the politicians. (Catch the reference.)

Surprising discoveries

A twitter spat between Estonia’s president and Nobel economist Paul Krugman will become an opera. Who says high culture is dead?

American Airlines updates its aesthetic. Or as it’s called in the business, its “livery.” 

We can learn about internet fame from the Red Baron. World War I German fighter aces make the case for achievement.

Wrangler plans to sell “moisturizing jeans”. They apparently keep legs nice and soft, possibly reduce cellulite and are called “Denim Spa”.

What it’s like to live in the International Space Station. Take a tour with the outgoing commander.

Our best wishes for a productive day. Please send any news, comments, and more ideas for denim-based beauty treatments or new media operas to You can follow us on Twitter here for updates during the day.

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