Quartz Daily Brief—Americas Edition—Italian election, music report, Rio Tinto, Rabobank, Chinese shadow banking

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Good morning, Quartz readers!

What to watch for today

Italy tries to work out what next. With all the election votes counted, Italy faces an unprecedented hung parliament, after a massive protest vote against outgoing prime minister Mario Monti’s austerity reforms. Pier Luigi Bersani’s center-left coalition won the lower house, but just barely, and the Senate remains deadlocked. If no governing coalition emerges, an electoral re-run—for which no law even exists yet—might be needed, as well as weeks if not months of instability and uncertainty, both for Italy and for the euro zone, the fate of which depends partly on Monti’s reforms.

Will Ben Bernanke keep the faith? The Federal Reserve chairman’s half-yearly testimony to the US Senate will be closely watched for hints of any course changes on quantitative easing, about which some Fed board members are getting increasingly nervous.

How the music industry is doing. The International Federation of the Phonographic Industry releases its annual Digital Music Report. Last year the industry shrank at the slowest pace in nearly a decade, suggesting that the worst depredations of piracy are ebbing. In other news from the 20th centuryRadioShack reports Q4 earnings.

The state of the US housing market. The Case-Shiller Home Price Index releases numbers for December and the fourth quarter. It’s expected to show a slight uptick. Data for new homes sales in January are also out today.

While you were sleeping

Global markets reacted badly to Italy’s non-result. European indices slumped, the euro touched a seven-week low and the the yen soared. Markets in Japan, Hong Kong, Australia and the rest of Asia remained fragile, while the S&P 500, which had its biggest drop yesterday since November, is not expected to recover very much.

S&P added to Rio Tinto’s woes. Barely two weeks after the Anglo-Australian mining giant announced its first-ever full-year loss and parted ways with CEO Tom Albanese, it is now facing a ratings downgrade from Standard & Poor’s thanks to ballooning debt. Rio’s debt rose to $26.7 billion at the end of 2012, up from $21.5 billion the previous year.

A $440 million fine for Rabobank. The second-largest bank in the Netherlands is close to reaching a settlement with American and British regulators for fiddling four benchmark rates, including the sterling LIBOR, across five worldwide offices. Rabobank is the only Dutch contributor to LIBOR.

Iran came clean on its nuclear program. Haha, no. But it did resume the six-party talks about its nuclear program today in Kazakhstan. The group of six will offer some relief from sanctions but with the economy in a shambles and a presidential election due this year, concessions from Iran may be hard to come by.

China is cracking down on shadow banking. Chinese authorities are reportedly planning to require Chinese banks to disclose off-the-balance sheet investment products. China’s shadow banking industry has jumped since 2008, exceeding official bank lending, to roughly 20 trillion renminbi ($3.2 trillion) or 40% of GDP.

Quartz obsession interlude

Christopher Mims on how to persuade people that it’s OK to wear computers on their faces. “Since Google launched its reality-augmenting Project Glass in June, it’s been pretty much impossible find a picture of Google co-founder Sergei Brin in which he’s not wearing the futuristic eye-piece […] Intentionally or not, Brin is constantly projecting the image of a rich, famous, vigorous alpha-geek whom others might want to imitate.” Read more here.

Matters of debate

The US budget picture isn’t that bad. Seriously.

Having kids makes you miserable. Though hearing “I wub you” makes you forget about it.

Carried interest is a sop to super-rich financiers.  A Rothschild says enough is enough.

China should look to Japan for guidance. Japan’s per capita GDP is about 10 times higher than China’s.

Al-Qaeda is nothing more than a name. And the US is going to fight it forever.

Surprising discoveries

To fight an invasion of snakes, Guam will airdrop poisoned mice on the island.

The average American in colonial times consumed the equivalent of five to six gallons of pure alcohol every year (compared to 2.3 gallons today).

The International Herald Tribune is rebranding as the oxymoronic International New York Times.

“How to Sharpen Pencils” and “Lofts of North America: Pigeon Lofts” are contenders for Oddest Book Title of the Year.

Correction. In yesterday’s newsletter we referred to BP as “British Petroleum”, which it hasn’t been called since 1998.

Our best wishes for a productive day. Please send any news, comments, strange book titles and pictures of yourself wearing Google Glass to You can follow us on Twitter here for updates during the day.

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