Skip to navigationSkip to content

Quartz Daily Brief– Asia Edition — Japanese carmakers, a defense of high-frequency trading, and one million new species

By Tim Fernholz

GOOD MORNING QUARTZ READERS IN ASIA!

WHAT TO WATCH OUT FOR TODAY

Japanese automakers to China after island dispute: さようなら! (Sayōnara!) In further evidence that the two countries’posturing over these uninhabited islands isn’t helping commerce, Nissan and Toyota are cutting production in China over worsening demand, a sign that other Japanese companies will face similar pressure.

Euro austerity madness. It’s chaos in the streets after a day of Greek strikes and Spanish demonstrations  made clear citizens in the European periphery aren’t taking kindly to the austerity policies their governments are bringing to bear. As the euro hit a two-year low, it looks as though measures to contain the crisis are straining against popular complaints.

Tens of thousands of workers are on strike in South Africa. This time, the target isn’t public austerity but complaints about wages and poor working conditions from miners. AngloGold Ashanti, a leading gold mining company, said it shut down operations after most of its 35,000 employees joined in a national campaign of wildcat strikes.  The company fears “the apparent breakdown of the collective bargaining system.

Grades are in for the US and the UK. The latest GDP numbers coming out today are a quarterly referendum on the economy at large, and, deserved or not, on the economic policies of President Barack Obama and Prime Minister David Cameron. Opposition parties, sharpen your swords.

In Cyprus, the French, German and British defense ministers will discuss a potential merger between defense giants EADS and BAE, apparently as a sideline to an informal summit happening on the Mediterranean isle. Here’s what’s on their agenda.

WHILE YOU WERE SLEEPING

In London, a former Credit Suisse banker was arrested for allegedly manipulating the prices of a book of mortgage securities to earn a bigger bonus in 2007. File under: incentives gone too far.

China’s southwestern province of Sichuan announced plans to spend ¥3.67 trillion ($582 billion) on thousands of infrastructure projects by 2013. That’s almost as much as the United States’ $700 financial crisis bailout, its magnitude signifying how seriously Chinese officials are taking warnings of an economic slump.

“Nice Libor. Our six-month fixing moved the entire fixing, hahahah,” RBS trader Tan Chi Min wrote in an instant message to his colleagues discussing their manipulation of the once-relied upon indicator of bank borrowing costs. The message was revealed when Tan sued RBS for wrongful termination, alleging the practice was widely known at the bank.  In completely unrelated news, British banks are conceding their role determining the rate.

Could Liu Yandong be the first woman to reach the top ranks of Chinese leadership? Yandong is a member of China’s politburo with a shot at becoming a member of the nine-member standing committee that rules the country, during the upcoming leadership transitions. While her odds may be long, no one was expecting the leading candidate for the presidency would mysteriously disappear for days, so anything could happen.

Rebels attacked Syrian army headquarters, bombing the building and lighting it on fire before battling soldiers in the streets, a major incursion into the center of the Bashar al-Assad’s regime.

QUARTZ OBSESSION Interlude:

Simone Foxman defends high-frequency trading: “Outsiders have claimed that the high-speed race to execute the fastest trades in opaque markets set off market disasters like the May 6, 2010, flash crash and a $440 million trading loss that crippled Knight Capital Group earlier this year. Insiders are concerned that high-speed trading could get out of hand, causing markets to collapse at an inconceivable speed. Limits on how fast orders can be executed—essentially, a promise by trading firms to honor the price they offer on a trade for a minimum time—are one common proposal for limiting market risk. Yet the data show that, for the most part, HFT benefits long-term investors.” Read more here.

MATTERS OF DEBATE:

Why Asian airlines reign supreme: Airline companies in fast-growing emerging markets offer the best service, but in an age of budget flights, can they keep up the pace?

How social dynamics determine success. A more erudite way to say, “you didn’t build that.

The case for taxing capital more than labor. As labor becomes globally fungible, the only hope for government revenue is taxing capital. (No it isn’t!)

The state of our prediction problem. Seve LeVine interviews Nate Silver about forecasting the future, Big Data and the “wishful thinking” of Ray Kurzweil.

SURPRISING DISCOVERIES:

Scientists discover up to one million new species in the Antarctic Ocean. A 70,000 mile expedition revealed the abundance of unknown microscopic creatures, far more than estimates allowed.

Will the salvage of the cruise ship that ran aground in Tuscany last winter be the most spectacular in the history of seafaring? Der Spiegel reports.

Also on the calendar today:  Japanese unemployment and price level statistics are released. In 1909, the first Model T rolled off production lines;  and, in 1938, the Queen Elizabeth Ocean liner first set to sea.

Best wishes from Quartz for a productive day. Please send any news, queries, favorite Asian airline routes, and thoughts on high-frequency trading to hi@qz.com.

Readers can sign up for the Quartz Daily Brief here, tailored for morning delivery in Asia, Europe, and North America.

Tim Fernholz
Reporter
If you liked my story, you may enjoy Space Business, a weekly email on extra-terrestrial enterprise.