CWS Market Review – September 30, 2016

CWS Market Review

September 30, 2016

“If I had to live my life again, I’d make the same mistakes, only sooner.” – Tallulah Bankhead

Today is the final day of the third quarter, and for the fourteenth time in the last fifteen quarters, this looks to be a positive one for the S&P 500. Despite a modest uptick in volatility this month, the S&P 500 is still less than 2% from an all-time high.

But there’s still a lot of uncertainty for Wall Street, and at the top of the list is Election Day. The polls indicate that it’s a close race between Hillary Clinton and Donald Trump. In this week’s CWS Market Review, I want to address the very sensitive subject of politics and financial markets.

Don’t worry—you won’t hear me spouting off on politics. Quite the opposite. I want to tell you why politics and investing are a bad mix. I always encourage investors to keep their political passions far away from their investing strategy. Going about your investments should be as coldly rational a process as possible. I’ve seen too many investors let their politics ruin a good portfolio.

Later on, I’ll cover some recent news from our Buy List and the economy. The good news is that the economy continues to move along, but at a slow and meandering pace. For the market, we have Q3 earnings season to look forward to in a few weeks. Before we get to that, let’s take a closer look at the dangerous intersection of politics and the stock market.

Keep Politics out of Your Portfolio

Election Day is now less than six weeks away. The election news seems to dominate everything on television, as well as most people’s conversation. Personally, I can’t wait for election season to pass.

There’s a story that Richard Nixon was once asked what he would do if he wasn’t president of the United States. Nixon said that he’d probably be down on Wall Street buying stocks. This led one old-time Wall Streeter to say that if Nixon weren’t president, he too would be buying stocks.

It’s a funny story, but I don’t think it makes for good advice. This often surprises investors, but I don’t believe partisan politics has a strong influence on the stock market. Stocks have done well under both Republicans and Democrats. They’ve also done poorly under both as well.

I have many friends who insisted to me that President Obama is a radical socialist, yet the stock market has done very well under his tenure. I also have Democratic friends who think the president deserves most of the credit for the bull market. I’m skeptical. The fact is, the stock market doesn’t really care much who’s president.

This type of analysis misses the point on both what the stock market is, and the powers of the office of the presidency. People assume that presidents are like players in a game, and the stock market is the scoreboard. In my opinion, it’s the exact opposite. The market is always the market. It’s never up for reelection: instead, it’s the politicians who alter their beliefs to assuage the market gods.

James Carville, one of Bill Clinton’s advisors, famously said that if reincarnation is real, he’d like to come back as the bond market because “you can intimidate everybody.”

What the stock market wants is actually quite simple—money. Or more specifically, the net present value of all future cash flows. A strong economy obviously helps, but even the relationship of the market to the economy isn’t always so close. The markets rely on a mystical combination of faith, confidence and patience. Meanwhile, the president is merely the leader of one branch of one of our governments. We’ve seen many times where a president´s agenda has been tripped up by Congress or the courts. Or sometimes, they’re simply overtaken by events.

In 1981, Francois Mitterand, a Socialist, was elected president of France. Soon French money found a new home in New York. The franc dropped sharply, and it threaten to hurt the economy. Mitterand chose reality over his beliefs. That happens all the time.

Let me be clear that government policy does impact the economy, and by extension, the stock market. But those policy decisions are usually well removed from the standard partisan debate. The government shutdown is a good example of a partisan effort that riled investors, but even that didn’t last long. Of course, what the Federal Reserve does is important, but that’s rarely an election issue. Plus, there’s no reason to think that a change at 1600 Pennsylvania Avenue will have a great impact on monetary policy.

My advice is to resist the urge to make a market call based on your opinion of the president. The market truly doesn’t care. Instead, focus on strong companies going for good values. Now let’s look at this week’s economic news.

The Economy Continues to Plod Along

This week, we got more news suggesting that the U.S. economy is moving along, but at a weakly positive pace. On Thursday, the government revised Q2 GDP growth up to 1.4%. This is the seventh quarter in a row where GDP growth has been less than 2.6%. That’s not good.

Of course, the second quarter has long since passed, and we’re not wrapping up Q3. At the end of October, we’ll get our first look at how Q3 did, and the number crunchers at the Atlanta Fed are forecasting growth of 2.8%. That would be very nice to see.

I was very impressed by this week’s consumer-confidence report. Consumer confidence reached its highest level in nine years. That’s very good news, and the resilient stock market may be a reason. I suspect the housing market is playing a role as well.

We also learned the initial jobless claims came in at 254,000. This number tends to bounce around a lot, so economists prefer to look at the four-week average. That number just tied its lowest reading in 43 years. In other words, the jobs market isn’t so bad, but next Friday, we’ll get the big September jobs reports. As much as the number of new jobs created, I want to see more improvement in wages. The trend here has started to turn positive, but we need more of it. More wages means more buying, which means more sales.

Looking at the housing market, this week’s Case-Shiller report showed that home prices rose 5.1% in the last year. This is key, because housing is the wealth driver of so many Americans. Remember that the business cycle is to a certain degree the same thing as the housing cycle (here’s a good paper on that subject). This recent recession was different because so many homes were built during the bubble, and it’s taken some time for us to burn off the excess inventory. For now, the fundamentals of the housing market are quite solid. Now let’s turn to some recent news impacting our Buy List.

Buy List Updates

There hasn’t been much in the way of earnings lately, but that will change soon. The first Q3 earnings report will come out in two weeks.

I was pleased to see shares of Wabtec (WAB) get a nice bump this week. The company apparently won approval from the EU for its merger with Faiveley. The EU had some anti-trust concerns, but Wabtec said they’d be willing to sell off Faiveley’s brake-pad unit. Shares of WAB had been in a slump, but they’re now close to breaking $80 for the first time since May.

Barclays upgraded Signature Bank (SBNY) to overweight. This stock has been in a downtrend for some time. SBNY may be ready for a turnaround.

More bad news for Wells Fargo (WFC). This time, CEO John Stumpf got grilled by members of the House. He did slightly better this time, but I’m still holding to my belief that he needs to go. Stumpf agreed to forfeit $41 million in compensation, but that’s pocket change for him. If there’s a silver lining, it may lead WFC to break itself up, which would be good news for shareholders.

Societé Generale initiated coverage of Cognizant Technology Solutions (CTSH) with a buy rating. Look for another good earnings report from CTSH next month.

Some large investors are looking to take a big position in Hormel Foods (HRL), and they’re offering a low-ball price for the shares. I think it’s a bad deal, and the company agrees. Stick with Hormel.

That’s all for now. Next week is the start of the fourth quarter. The ISM report will come out on Monday. The last ISM was pretty weak. We’ll also get a look at auto sales. On Wednesday is the ADP payroll report, plus the ISM Services index. Then on Friday morning, get ready—the government releases the jobs numbers for September. Any strong number will almost certainly be used as evidence that the Fed needs to hike rates in December. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 eight times in the last nine years. This email was sent by Eddy Elfenbein through Crossing Wall Street.
2223 Ontario Road NW, Washington, DC 20009, USA

#Hungary’s anti-refugee vote, #UK nuclear deal, #China’s fake clinical trials

Good morning, Quartz readers!


Hungary holds an anti-refugee referendum on Sunday. The referendum asks whether the EU should be able to mandate the obligatory resettlement of non-Hungarian citizens to Hungary even without the approval of the National Assembly. Voters are expected to answer no, providing a boost to prime minister Viktor Orban.

World leaders attend the funeral of Shimon Peres in Jerusalem. A long list of dignitaries will pay their respects to the former Israeli president and prime minister, including US president Barack Obama, Prince Charles, Bill Clinton, and Palestinian Authority president Mahmoud Abbas. Abbas reportedly sent a letter of condolence to the Peres family, for which he was castigated by Hamas.

The UK releases data service sector data. The country’s Office for National Statistics will publish reports showing how the Brexit referendum impacted this sector—the largest slice of the UK economy.


Qualcomm is in talks to buy NXP Semiconductors for about $30 billion. The US chipmaker is in early talks with the Dutch company, the Wall Street Journal reported (paywall). The semiconductor industry has seen increasing consolidation of late. Recently Japan’s SoftBank Group spent $32 billion acquiring UK’s ARM Holdings.

Japan released mixed economic data for August. Compared to a year ago, industrial production rose 1.5%, household spending dropped 4.6%, and consumer prices fell 0.5%. The sixth straight month of falling consumer prices was unwelcome news for the Bank of Japan as it continues in its struggle against deflation.

Britain signed its first nuclear deal in a generation. The Hinkley Point project to build a new nuclear power station in Britain was put on hold when prime minister Theresa May unexpectedly took office in July. Representatives from China and France, which both support the project, finally met with their counterparts in London to finalize the plans.

A commuter train crashed into a station in New Jersey. The train was derailed and caused massive damage, including over 100 injuries and at least one death. Service in and out of the station in Hoboken—a major transportation hub for the New York metropolitan area—was suspended.


Akshat Rathi on the global health threat of illegally traded wild animal meat: “In 2015, the World Health Organization published a list of the top emerging diseases that are ‘likely to cause severe outbreaks in the near future.’ It’s no coincidence that all the diseases on the list are zoonotic diseases caused by RNA viruses, which turn animals—mostly wild ones—into reservoirs to hide in.” Read more here.


Pop culture demeans women by silencing them. Women in the public eye are constantly punished for raising their voices against the status quo.

Expensive meal services are bad for public health. They’re anunsustainable substitute for a society that understands healthy, environmentally conscious food.

The “private” vs. “public” school debate misses the point. A pragmatic approach to education reform would mean embracing a combination of the two school models.


Don’t miss Quartz’s Making Money Smarter event in London next week. From new forms of community currency to fintech startups that are upending the oldest names in banking, the UK is home to some of today’s most innovative finance ideas. Join Quartz in London this Wednesday to explore the new players in this space and what they’re doing to meet the challenges of today’s global economy. Sign up for the free event here.


Clinical trials in China cannot be trusted… A recent government investigation found that 80% of them are fabricated.

…and neither can official Chinese oil reserve estimates. New satellite data shows that possible oil reserves are much greater than official numbers.

Teenagers who take dumb risks can’t help themselves. Their judgment may be affected by imbalanced neuron activity during adolescence.

A lack of clean air can impact your productivity. When air pollution rises, office workers automatically slow down.

Wearing body cameras can drastically change cop behavior.Police forces in the US and UK that adopted them saw a 98% drop in complaints the following year.

Our best wishes for a productive day. Please send any news, comments, barrels of Chinese oil, and anti-pollution masks You can follow us on Twitter for updates throughout the day or download our iPhone app.

#UberEats expands, artificial pancreas approved, cursing around kids

Good morning, Quartz readers!


India’s vice president vies for influence in West Africa. Hamid Ansari is finishing a trip to Nigeria before embarking on the first high-level Indian visit to Mali in history. India has been touting itself as a preferable alternative to China for foreign investment in Africa, promoting its long history in the region and the potential for mutual benefits.

UberEats debuts in more countries. The ride-hailing giantlaunches its takeaway meal delivery service in Dubai, Amsterdam, Johannesburg, and parts of Tokyo today, and has plans for even more cities in the near future. Next on the hit list: Hong Kong, Bangkok, Brussels, Taipei, Jakarta, and Stockholm.

The galactic tick. A group of science fans thinks it’s a shame that we celebrate Earth orbiting the sun annually on New Year’s Day but never give the sun proper kudos for its voyage around the Milky Way. Unfortunately, it only loops round once every 220 million years or so, so they’ve created “Galactic Tick Day” to celebrate little chunks of the rotation every 1.77 years.


The oil industry’s silver lining. Declining demand for oil might be a blessing in disguise for the industry: Falling prices have created an incentive to increase efficiency through digitization, prompting industry-wide innovation in tools, operations, and human capital. Advertisement


OPEC, for the first time in eight years, agreed to drop oil output. The move surprised traders, who largely expected Saudi Arabia to maintain its pump-at-will policy despite huge budget deficits. Oil prices surged over 5%, and energy stocks in the Asia-Pacific region climbed in morning trading.

California suspended major parts of its business relationship with Wells Fargo. The state treasury made the move because of a scandal at the bank involving unauthorized customer accounts. California will no longer buy the bank’s debt securities. It will also stop using Wells Fargo as a bond underwriter or broker-dealer for buying securities.

Spotify launched in Japan. It will be the first major music-streaming service available for free on an ongoing basis there. Japan has the world’s second-largest music market, largely because consumers still prefer buying their music physically instead of digitally. The nation has more old-fashioned music stores thananywhere else in the world.

The US approved the first artificial pancreas… The Medtronic device is the first to automatically deliver the correct dose of insulin to patients with type 1 diabetes, so they don’t need to continually monitor insulin levels throughout the day. The MiniMed 670G measures a person’s blood sugar levels every five minutes.

…and warned about exploding Samsung washing machines.The US Consumer Product Safety Commission said “certain top loading washing machines made between March 2011 and April 2016” can blow up or fall apart. The South Korean giant is alsocontending with a massive recall of its Galaxy Note 7 smartphones.


Christopher Groskopf on how internet companies delete your right to own your digital purchases. “Terms of Service are essentially very one-sided contracts written by the company selling the digital goods. Often they include provisions that shield the business from liability and even prevent the consumer from going to court if they feel ripped off. Typically a consumer’s only choice is to accept them as they are, or to decline to use the service entirely. An overwhelming majority of internet users agree to them without reading them. In one experiment 98% of users failed to notice a clause requiring them to give up their first-born as payment.” Read more here.


Organizations actively discourage employees’ use of intelligence. Many companies claim to value IQ during hiring, but in the actual workplace, staff members are more likely to be rewarded if they blindly follow bureaucracy.

Civilization hasn’t made humans less violent. Some scientists argue that modern humans have inherited a tendency toward lethal violence from our ancestors that even the state can’t fully cure.

We need new words to describe Facebook and Google. These organizations so fully control everything in our lives that terms like “media company” or “platform” don’t even come close to capturing their power.


Digiday: The New York Times’ global ambitions face tough challenges. Publishers continue to eye overseas expansion as their best chance to grow revenue, but it’s not without its challenges. Case in point: The New York Times wants to drive digital subscriptions and advertising sales outside of its U.S. mothership, but it faces tough hurdles and an ever-growing competitor set.


Mexicans have 300 different ways of referring to corruption. A civil society group has compiled them in a book in a tongue-in-cheek effort to get Mexicans to own up to corrupt behavior in their country.

It’s fine to curse around kids. Slurs and swearing directly at kids is out of bounds, but hearing the occasional f-bomb won’t hurt them.

Manmade reservoirs emit more greenhouse gases than all of Canada. The artificial lakes harbor the perfect conditions to produce more methane than other water systems.

Practice doesn’t make perfect. Success in any field depends more on having the right developmental environment than on repetition, or even having good genes.

The CIA is protecting the privacy rights of a fictional journalist.During the Cold War, “Guy Sims Fitch” was a regular contributor to global papers; now the CIA won’t divulge any info on who or what was behind the pseudonym.

Our best wishes for a productive day. Please send any news, comments, favorite curse words, and one-sided contracts You can follow us on Twitter for updates throughout the day or download our iPhone app.

Big beer decisions, #SpaceX #Mars plan, #AI translators

Good morning, Quartz readers!


SABMiller’s $100 billion merger with Anheuser-Busch InBev faces its last hurdle. The deal, which would create an unprecedented giant in the global brewing industry, has taken nearly a year to win regulatory approval. On Wednesday, shareholders from both companies will weigh in on the proposed arrangement, with some key InBev investors expected to vote against it.

Philippines president Rodrigo Duterte visits Vietnam. During the two-day trip he’ll meet with his counterpart Tran Dai Quang, and isexpected to discuss Vietnam’s role in the South China Sea dispute. The visit marks the 40th anniversary of diplomatic relations between the countries.

Janet Yellen faces the House Financial Services Committee.The plan is for the US Federal Reserve chairwoman to testify on the regulation of big banks. But the hearing is not expected to stay on topic, and Yellen, who was attacked by Donald Trump during the presidential debate (paywall) for keeping interest rates low, might address the central bank’s outlook on the issue.


Former Israeli leader Shimon Peres died. A few weeks ago he had suffered a stroke and been rushed to a hospital near Tel Aviv, where his condition quickly deteriorated. Peres served once as president and twice as prime minister, and he won the Nobel Peace Prize for his role in the Oslo peace accords. He was 93 years old.

Elon Musk revealed SpaceX’s plans to take humans to Mars.He compared the idea to building the first railroad to California: It seemed absurd at first, but eventually became a key factor in the US’s growth. SpaceX will need fully recyclable rockets, ships that refuel while in orbit, and a way to produce fuel on Mars.

Barack Obama nominated Jeffrey DeLaurentis to be the US ambassador to Cuba. It’s been over 50 years since anyone filled that role. Senator Marco Rubio and others oppose a nomination until Cuba enacts political and human rights reforms. DeLaurentis currently serves as the chief of mission at the US embassy in Havana.

Cisco plans to spend as much as $4 billion expanding production in Mexico. The US maker of networking gear will upgrade its factories and create 270 new jobs in the nation, even as it cuts its global workforce by 7%.


Abdi Latif Dahir on the tourists visiting Somalia to see the ruins of a two-decade civil war: “Yusuf visited Berbera, a port city where old Ottoman architectural influences are still visible. She also went to Sheikh town, where her mother grew up, traveling through the winding road with panoramic views of the Sheikh Mountain, built by the Chinese in the 1980s. Startling gazelles and camels along the way, Yusuf said, ‘My sister and I joked that it felt like we were on a safari that we didn’t remember paying for.’” Read more here.


Donald Trump isn’t a master businessman, he’s just a greedy man. The Republican candidate’s pride in not paying taxes and exploiting bankruptcy laws is repellant not only to average US taxpayers, but also to other tycoons: Not one Fortune 100 CEO has donated to his campaign.

Fashion bloggers are “heralding the death of style.” So says Vogue’s editorial team, which may just feel threatened by bloggers encroaching on their turf.

The tool most commonly used to measure China’s economy doesn’t work. Trusting state GDP growth figures leaves investorsopen to considerable risks, while growth there doesn’t necessarily mean more consumer spending.


Money is getting smarter. Join Quartz in London to find out how. Does blockchain, the technology underpinning bitcoin, really have the potential to revolutionize the global economy? Join Quartz in London Oct. 5 for its Making Money Smarter event, and learn how Leanne Kemp, CEO and founder of Everledger, is using blockchain to track the provenance of diamonds and eliminate fraud and theft. Sign up for this free event here.


Fish can be smarter than primates. It all depends on what you value as intelligence. The tiny frillfin goby, for example, escapes predators by memorizing the exact topography of the area around it.

Street talk can help your brain in the same way as being bilingual. Children who speak more than one dialect score almost as well on executive function tests as bilingual kids—and much better than monolinguals.

There’s great news if you like omelettes… The price of eggsdropped 52% in the US this year, with some places selling a dozen for as low as $0.99.

…but bad news if you like anchovies. Invasive jellyfish have been swarming over to the Italian coast on the Adriatic Sea and wreaking havoc on the tasty little fish.

Google is out to prove it really knows languages. The tech giant says its forthcoming translation software has cut down on 80% of errors, and is basically as good as human translators.

Our best wishes for a productive day. Please send any news, comments, smart fish, and translator gigs to You can follow us on Twitter for updates throughout the day or download our iPhone app.

Clinton-Trump debate, Disney eyes Twitter, roller coasters for health

Good morning, Quartz readers!


The Bank of England starts buying corporate debt. It’s part of its plan to support economic growth following the nation’s decision to leave the EU. Over the next 18 months it will buy 10 billion pounds (about $13 billion) worth of sterling corporate bonds from companies making significant contributions to the British economy. Investors will watch the markets for reactions.

Najib Razak escapes the heat in Malaysia and visits Angela Merkel. The embattled Malaysian prime minister will meet with the German chancellor in Berlin to discuss trade and investment. Hisitinerary also includes face time with executives from BMW, Daimler, and Infineon, among other companies.

Nike posts a rare earnings drop. The shoe maker is expected to report a 16% year-over-year decline in first-quarter profit as sales disappoint and competitors turn up the heat. It would mark Nike’s first earnings decline in four years.


Japan will invest $30B across 20 African states. The Tokyo International Conference on African Development (TICAD6) brought public and private leaders together in Nairobi to discuss partnership opportunities between Africa and Asia. Investment from 22 Japanese entities will prioritize health care systems, infrastructure development, and human resource development.


Hillary Clinton won the first US presidential debate. A CNN/ORC poll of debate watchers found that 62% felt Clinton won, versus 27% who thought Trump did. One of Clinton’s best lines: “I think Donald just criticized me for preparing for this debate. And yes, I did.” Trumpbragged about not paying any federal income tax, saying it would be “squandered.”

Colombia’s president signed a peace deal with Marxist rebels.Juan Manuel Santos and rebel leader Timochenko used a pen made from a bullet to sign an agreement ending a 52-year war. The deal also allows the FARC guerrillas to become a political party, making their case through voting instead of violence.

Disney joined the list of potential suitors for Twitter. Other companies reportedly interested in a takeover include Salesforce, Alphabet, and a joint venture between former Microsoft CEO Steve Ballmer and Saudi prince Alwaleed bin Talal. Twitter’s share price has shot up in the wake of the acquisition rumors.

China’s industrial profits jumped the most in three years. Theyrose 19.5% from a year ago to 534.8 billion yuan ($80.2 billion), according to the National Bureau of Statistics. The data suggests further stabilization in manufacturing and a greater ability of companies to pay off debts.


Tim Fernholz on whether SpaceX is a victim of its founder’s ambitions. “In a few days, SpaceX CEO Elon Musk will unveil his plans to explore Mars at a global space conference in Mexico. The event has been widely anticipated by fans of the billionaire entrepreneur and SpaceX. But an enormous fire that consumed a SpaceX Falcon 9 rocket during a pre-flight test on Sept. 1 has dampened the positive mood. Now, critics are asking if SpaceX is taking on too much, too fast.” Read more here.


Modern activists shouldn’t be in awe of Nelson Mandela.Losing faith in yesteryear’s heroes is a positive sign of dismissing false “civil religions” and embracing honesty.

Donald Trump made a great case against electing a businessman as president. In the debate he boasted of his focus on personal enrichment, but that’s not the best place from which to lead a democracy.

Major fashion brands are toying with their customers’ psyches. Their approach to sizing can set women on an unhealthy path to weight loss.


Venetians are dressing up as pirates to chase away cruise ships. The sinking city, where tourists outnumber locals, couldbecome endangered if big boats keep passing through.

Hollywood actors can now have their ages erased from IMDb.California passed a law that’s meant to fight ageism in the film industry.

A devil frog puked up a new ant species. The neon-orange, poisonous frogs get their toxic secretions from the ants, which feed on alkaloids from plants.

Roller coasters can defend against kidney stones. A rocky ride can dislodge the small mineral deposits before they become a bigger problem.

Apple spends an estimated $225 on the parts for each iPhone 7. And it charges customers three times that amount to buy one.

Our best wishes for a productive day. Please send any news, comments, Venetian pirates, and iPhone 7 parts to You can follow us on Twitter for updates throughout the day or downloadour iPhone app.

EU defense meeting, Wang vs. Disney, fish songs

Good morning, Quartz readers!


EU defense ministers gather in Bratislava, Slovakia. They’ll consider various proposals to change the European Union’s defense arrangements. One idea is to create a headquarters for commanding military forces. Britain used to veto that idea, saying such a center would duplicate NATO’s role, but after Brexit it’s more likely to become a reality.

Signs that big oil-producing nations plan to trim output. There’s speculation about a coordinated effort to address prices, which have fallen 60% since mid-2014 (paywall), as OPEC members meet on the sidelines of an energy conference in Algiers starting today. But tensions between Iran and Saudi Arabia will likely stymie any agreement.

Hillary Clinton and Donald Trump finally share a stage. Over 100 million Americans are expected to watch the first of three presidential debates, which Clinton has been studiously preparing for and Trump reportedly plans to wing. Here’s how to watch the 9pm EDT debate, an analysis of Clinton’s special winning tactic in previous debates, and a look at one way Trump could walk away the winner.


The Swiss voted in favor of increased government surveillance. More than 65% of voters were in agreement with the law that gives the Federal Intelligence Service more power to tap phones, read emails, and use bugs and hidden cameras.

China sent 40-plus fighter jets and bombers past Okinawa into the Pacific. In an intimidating training exercise, the planes passed between between Okinawa (home to US bases) and the contested Senkaku Islands. Japan recently indicated it would join US joint training cruises in the South China Sea, ratcheting up tensions with Beijing.

Donald Trump told Benjamin Netanyahu he would recognize Jerusalem as the capital of Israel. The US presidential candidate met the Israeli prime minister in New York on Sunday. The move would mark a dramatic shift in US policy. Palestinians want East Jerusalem to be the capital of the state they aim to create.

China’s richest man, Wang Jianlin, fired another shot across Disney’s bow. Wang opened his second Wanda City theme park in Hefei, the capital and largest city of the Anhui province in eastern China, at a cost of $5.1 billion. He plans to build 20 more just like it as he takes on Disneyland.

A writer was fatally shot in Jordan while heading to his trial for insulting Islam. Nahed Hattar faced charges (paywall) for sharing a cartoon on Facebook that mocked ISIL terrorists. His killing increases fears about the emergence of extremism within the kingdom.


Joon Ian Wong on the implications of an online attack directed at an independent security journalist. “If a botnet is indeed running off hundreds of thousands of connected cameras, it would highlight a major flaw in the internet of things, which experts have long warned of. The software these devices run on is usually not easily upgraded, meaning that security loopholes can remain open for years.” Read more here.


Fashion has lost its magic for millennials. UK spending on clothes and shoes has fallen markedly—partly because young people now find retail boring (paywall) compared to restaurants and travel.

Europe’s regulators are just getting rolling in their efforts to crimp US multinationals. Amazon, Google, Starbucks, and McDonald’s, watch out.

Nobody needs the latest iPhone. Apple’s serial release of new products is indicative of corporate America’s unhealthy obsessionwith growth.


The UK fintech landscape is buzzing, join Quartz in London to find out why. From new forms of community currency to fintech startups that are upending the oldest names in banking, the UK is home to some of today’s most innovative finance ideas. Join Quartz in London on Oct. 5 to explore the new players in this space and what they’re doing to meet the challenges of today’s global economy. Sign up for the free event here.


Germany’s World War II invasion of France was made possible by crystal meth. New research says tablets of the stimulant enabled German troops to stay awake for three days and three nights and push through the Ardennes mountains.

Australia isn’t where you think it is. Every year the continent shifts northward 2.7 inches (6.9 cm), enough to throw off GPS-operated systems.

The future of rollercoasters is maglev. What could be more intense than a coaster ride with no rails, wheels, or friction?

The first pop song ever written by artificial intelligence is pretty good.Daddy’s Car” is a catchy, sunny tune reminiscent of the Beatles.

Just like birds, fish sing in chorus at dawn and dusk.Researchers say they repeat the same call again and again, and overlap with other fish to create a chorus, which helps them stay together during hunts or defend their territory.

Our best wishes for a productive day. Please send any news, comments, maglev coasters, and AI composers to You can follow us on Twitter for updates throughout the day or downloadour iPhone app.

Weekend edition—The crisis of science, Nevada brothels, schizophrenia and shamans

Good morning, Quartz readers!

“When a measure becomes a target, it ceases to be a good measure.” Sociologist Donald Campbell and economist Charles Goodhart reached this conclusion some 40 years ago, after analyzing the measures used in their own professions.

We’ve seen the Campbell and Goodhart law in action plenty of times. Bankers manipulated Libor, a benchmark for borrowing rates, to profit from trades. Businessmen choose accounting metrics to artificially inflate the value of their firms. Facebook has just admitted to overestimating how much video its users watch (paywall), meaning that advertisers have been overpaying.

Now it appears even scientists, among the most trusted professionals in the world, have fallen to abusing metrics. A new analysis of 60 years’ worth of studies in the behavioral sciences found that poor methods have flourished in academia because scientists, under pressure to publish to advance their careers, have focused on the metric of how many papers they put out.

There have been other bad practices too. Pushing negative results under the rug has created a skewed perception (paywall) of our world. Lack of self-policing has helped high-profile scientific frauds to flourish. Cozying up with industry has biased our understanding of everything from prescription drugs to government policy.

As the number of scientists in the world has ballooned—from a mere 1 million in the 1940s to more than 60 million today—bad science has infiltrated every layer of the enterprise. Policymakers and politicians share the blame, for creating perverse incentives while pouring in ever greater sums of taxpayers’ money. But the buck stopswith scientists.

Though they would hate to admit it, scientists are not unlike journalists. Both probe the world for truth, albeit at a different pace and with different methods; and both are under intense pressure to publish. And journalists are among the least trusted professionals. Scientists risk losing their credibility if they don’t mend their methods, and soon.—Akshat Rathi


Nevada’s legal brothels offer more than just sex. At Nevada’s famed Moonlite Bunny Ranch, sex workers are independent contractors. So brothel owner Dennis Hof is dedicated to making sure they are savvy negotiators and financially literate. Quartz senteconomist Allison Schrager and video journalist Siyi Chen to Carson City to learn how it’s done. We also invited the women to answer, in their own words, questions about feminism, intimacy, and their futures.

Explaining “microaggressions” using Hollywood movies.Especially if you’re not American, you may have been puzzled reading about the latest political dispute sweeping US campuses. Hannah Yi uses clips from famous films to illustrate the various kinds of toxic behavior that used to be considered normal conversation.

The real-life cabal behind a global crisis. Worldwide food prices nearly tripled in 2008, driving millions into poverty and malnutrition. New research has revealed the likely culprits were global fertilizer companies collaborating to hike prices, writes Tim Fernholz, suggesting that policymakers have focused on the wrong issues all along.

Hillary Clinton’s secret debate weapon. How will she face up to Donald Trump, who steamrolled his rivals in the Republican primary debates, in their first face-off this Monday? Adam Freelander and Hanna Kozlowska analyze footage from previous Clinton debates to show how she handles an attack by a male opponent and turns it, ever-so-subtly, against him.

Somalia’s thriving democracy, where only 1% of people vote. It may sound like a joke, but, argues Abdi Latif Dahir, the narrow electoral system that will pick a government over the next few weeksis mending the rifts created by the long civil war. The most promising sign: young professionals are getting involved in politics.


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The poster child for Deepwater Horizon. Bob Kaluza, a supervisor on the BP oil rig that blew up and sank in the Gulf of Mexico, was one of the only people prosecuted for the deadly 2010 disaster. Loren Steffy, writing in Texas Monthly, recounts the night of the explosion and the tension afterward between “the public outcry to hold individuals accountable and what some saw as BP’s desire to ensure that those individuals weren’t high-ranking executives.”

Schizophrenia as shamanism? Dick Russell spent 15 years working to find treatment for his son, Frank, who began suffering from hallucinations, paranoia and suicidal thoughts as a teenager. Then they met Malidoma Patrice Some, a titiyulo, or shaman, from Burkina Faso, and began a journey that proved life-changing for Frank, challenging Western approaches to schizophrenia.

The creation and demise of Brangelina. In a piece that will upend your preconceptions both of Buzzfeed and of celebrity reporting, Anne Helen Peterson dissects the strategy of image-making behind Hollywood’s most famous couple, whose 11-year relationship coincided with the disruption of media and big cultural shifts in the relationship between celebrities and their fans.

How Americans helped the Clintons screw up Haiti. The disastrous reconstruction after the 2010 earthquake featured both Hillary and Bill Clinton in starring roles. The flawed development effort has been used to attack them, but Jonathan Katz, a veteran reporter in Haiti, explains that they were simply doing what the American people wanted: continuing a century of US neglect and exploitation.

Technology made me inhuman. In New York Magazine, Andrew Sullivan grapples with his addiction to the chronic distraction of the smartphone and explores the value of silent contemplation, particularly in a secular world where the “roar and disruption” of capitalism have replaced religion’s stillness. It’s worth the long read—and also available in print, should you crave a break from the screen.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, Somali ballot papers, and shamanistic rituals to You can follow us on Twitter here for updates throughout the day.