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Quartz Daily Brief — Europe Edition — LIBOR overhaul, Spanish credit and how China creates jobs for Americans

GOOD MORNING QUARTZ READERS IN EUROPE!

WHAT TO WATCH OUT FOR TODAY

UK may replace LIBOR honesty system with something more suited to bankers. The UK financial regulator will today suggest a new system, probably involving more supervision, for the setting of the LIBOR rate that is a benchmark for some $360 trillion worth of loan agreements worldwide. Reforming LIBOR, as the UK regulator will recommend, rather than replacing outright is arguably the best outcome following the massive LIBOR rate fixing scandal.

Moody’s could announce the results of its month-long Spanish credit downgrade review. A budget released by the government yesterday with €40 billion in cuts, about 9% of the overall budget, is an effort to avoid having austerity imposed by external authorities in the bailout scenario many observers see as inevitable. More details are expected today, but initial market reaction was positive.

In other Euro nerves news, France reveals its budget plan. The new socialist president’s first budget will be an important test, but with growth at a standstill and unemployment high, filling a €30 billion budget shortfall will be a challenge.

WHILE YOU WERE SLEEPING

Japanese economic data were lackluster, again. In keeping with tradition, the Japanese government released a host of disappointing data. Deflation is getting worse, industrial production is falling, and monetary easing measures are not working too well. Here is a very good analysis from earlier this year of what is wrong with Japan’s economy and how the Western world is headed for a similar fate.

Blackberry-maker RIM lost $235 million last quarter, but that’s ok. Analysts expect so little of the erstwhile phone innovator that the nearly quarter-billion-dollar loss drove share prices up. Our efficient markets are giving RIM more time to execute a pivot to emerging markets, but competition is just as plentiful in South Africa as it is in Europe.

Mexicans dour, Brazilians bright: Consumer confidence measures in the two countries highlight a divergence in economic perception based on a fundamental question: Are there any good jobs around?

Brewers’ brawl finally resolved. Shareholders voted Singaporean conglomerate Fraser & Neave should sell its stake in Tiger beer producer Asia Pacific Breweries to Heineken for $6.3 billion. The remainder of F&N is likely to be taken over by Chang beer owner Thai beverage. This formally ends a long and complicated scuffle between Thai beverage and Heineken for control of APB. The fight was practically resolved earlier this month when Thai Beverage owner Charoen Sirivadhanabhakdi (try saying that after a beer or two) agreed Heineken could buy APB while he would take over the rest of F&N, which includes property and soft drinks concerns.

QUARTZ OBSESSION INTERLUDE:

Steve LeVine on why China’s slowdown will get permanently worse: “There are demographic reasons to understand the slowdown not as temporary, but the beginning of a long-term phenomenon, one that could become much worse if not arrested. In a June 2012 study, Wang Feng of the Brookings Institution examined young workers—the type that energize an economy with a willingness to migrate and work at repetitive jobs for relatively low wages—and found a striking population decline. In 2010, there were 116 million Chinese aged 20 to 24, but that will fall to 94 million by 2020, Feng forecast, a 20% plunge. And when Feng factored in a fast-rising enrollment in higher education, he foresaw an even smaller population of workers aged 20-24: just 67 million by 2030, a 42% drop from 2010.” Read more here.

MATTERS OF DEBATE:

The Georgian elections may be as important as those in the US. That is because the Eurasian nation is home to crucial oil and gas pipelines and borders a number of political hotspots.

Facebook’s new store might be less annoying than the advertising. Would you rather buy cupcakes than read sponsored stories?

Japan should switch its Olympics dream from Tokyo to Tohoku. The case for bringing the Olympics to the region damaged by the 2011 earthquake and tsunami.

SURPRISING DISCOVERIES:

China creates jobs for Americans, according to this research at least.

Apes are running out of space. Disturbing study shows ape habitats in Africa have declined dramatically.

A SARS-like virus killed two in Saudi Arabia, and five others are being quarantined in Denmark. The virus is too new to have a name.

Spain’s bank run may not actually be much of a bank run at all. An in-depth analysis.

Was this Nazi Buddha statue carved from a meteorite? Yes.

Mens sana in corpore sano: A new study shows that exercising immediately after learning strengthens memory.

Best wishes from Quartz for a productive day. Please send any news, queries, theories on how the UK should overhaul LIBOR reporting, and thoughts on sports that analogize to central banking to hi@qz.com.

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