Quartz Weekend Brief—#America’s weak power, #India’s soft power, paternity leave, political reincarnation

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Some American pundits, especially the hawkish ones, welcomed Barack Obama’s UN speech this week as a sign of a more grown-up, aggressive president—one not afraid to call ISIL “evil,” or Russia a “bully,” one who would admonish his Arab allies for letting extremism fester at home, and call all countries to pull together against big, global threats such as climate change and Ebola. “Obama understands today that the US is the world’s indispensable nation,” wrote our colleague Jeffrey Goldberg.

Another way to look at the speech is as a cry for help and an admission of America’s—and in particular Obama’s—weakness.

Obama touted the unprecedented, 40-country coalition the US has assembled against ISIL. But as much as that’s a sign of ISIL’s perceived threat, it’s also a measure of how desperately the US needs this not to look like a US-led war, and indicative of how many countries there are that would have done nothing on their own, despite ISIL being—for now at least—a much bigger direct threat to them than to the US.

Obama’s response to Russia, meanwhile, is little more than a frustrated stamping of the foot—an admission that neither the carrot (the vaunted “reset“) nor the stick (the sanctions imposed since Russia invaded Ukraine) have any influence on Vladimir Putin and his cronies.

And the president’s call to fight climate change—which somewhat embellished how much the US already has done—also was an implicit reminder that, come November and the mid-term elections, Obama’s party probably will have less room to maneuver on that score.

So yes, America is still indispensable—but we shouldn’t confuse that with being powerful. Obama himself clearly doesn’t.—Gideon Lichfield

Tune into Quartz India for a livestream of Indian prime minister Narendra Modi‘s 9/28 speech at Madison Square Garden in New York City starting at 11 am EST and 8:30 pm IST. We’ll take your comments on our Facebook page

Five things on Quartz we especially liked

The case for paternity leave. Giving mothers plenty of time off to raise kids is considered the enlightened thing to do. Gwynn Guilford counters with the definitive argument for why economies worried about a shrinking workforce need to get mothers back into it faster, and why most incentives to get dads to take time off aren’t sufficient.

Foxconn’s reluctant democracy drive. Faced with growing worker unrest, the Taiwanese electronics giant is giving workers and their unions more power. Or so it says. Lily Kuo talks to activists and workers and finds the reality to be a little less glossy.

India’s remarkable space program. While Mars missions have a notorious history of failure, India’s first-ever Mars probe reached the red planet, and on an astonishingly low budget. Saptarishi Dutta breaks the mission down by the numbers (it cost less per kilometer than a Delhi auto-rickshaw) while Devjyot Ghoshal highlights the work of the women who make up 20% of ISRO, the Indian space agency.

Where Facebook and Google are really competing. You might think of one as a social network and the other as a search engine. Instead, says Leo Mirani, think of them both as identity providers, competing to control the data that define who you are in the online world—and offering a range of tradeoffs to entice you.

Narendra Modi’s flawed big idea. India’s prime minister is pushing “soft power” as a way to build Brand India, pointing to the country’s long history of cultural influences, from Buddhism to Gandhi to Bikram yoga. Just one problem, explains Bobby Ghosh: None of these things came from Indian governments.

Five things elsewhere that made us smarter

Warnings for would-be Wall-Streeters. Michael Lewis, one-time Wall Street broker turned blockbuster author, explains on Bloomberg View how the financial industry pressures its new recruits to gradually accept the moral compromises that lead to them doing things that would have horrified their student selves.

Four stories of living with HIV. Thanks to antiretroviral drugs, most people now think of HIV as just another chronic but manageable condition. Patrick Strudwick for Mosaic meets four Britons who describe a much less pleasant reality of continued stigma, associated diseases, drug reactions, and mental-health problems.

Will this be the last Dalai Lama? For most global leaders, their political troubles are over once they die. But for the Dalai Lama, whether or not to reincarnate has become a serious conundrum, tied up with the politics of China’s control over Tibet, as Tim Robertson explains in the Diplomat.

How to tell when a robot is writing to you. It’s easy to spot those automated letters that are made to look handwritten. But why? Clive Thompson at Medium dissects the telltale signs that distinguish human script and speculates on how more cleverly-designed machines could turn handwriting into the new Turing test.

How languages grow up. In Israel’s Negev desert, a community of deaf Bedouins is developing a new sign language that, unlike every other known language, doesn’t exhibit “duality of patterning,” whereby meaningful elements (morphemes) are composed of smaller, meaningless units (phonemes). Julie Sedivy in Nautilus explains what we’re learning from this about the way languages evolve.

Our best wishes for a relaxing, thought-filled weekend. Please send any news, comments, robot-written letters, and strange, new languages to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

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Quartz Daily Brief—More #Russia sanctions, #Scotland “No” leads, Pistorius’ final verdict, camel leotards

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Good morning, Quartz readers!

What to watch for today

More sanctions against Russia. The US will join the EU in imposing a new set of measures to punish Moscow for its provocative actions in Ukraine. The US sanctions are expected to target Russia’s financial, energy, and defense industries, and the EU’s measures—previously approved, but now actually enacted—will focus on curbing Russian oil production and exploration.

Will Oscar Pistorius go to prison? The South African athlete was acquitted of murder charges but might still face a manslaughter conviction for killing his girlfriend, as the judge presiding over the trial finishes reading her lengthy verdict.

Russia’s central bank stands still. The bank is expected to leave its benchmark interest rate untouched to support an economy weakened by the conflict in Ukraine. But some analysts aren’t ruling out a surprise rate hike, since Russia’s tit-for-tat ban on Western food imports is boosting inflation.

Double data from the US. Retail sales could see a boost thanks to the back-to-school shopping season, after falling flat in recent months. Consumer sentiment figures could also see a turnaround.

Olive Garden’s earnings. Parent company Darden Restaurants will report first-quarter results (paywall) before markets open in the US. Activist investor Starboard Value LP is pushing for a total overhaul of the company’s board.

While you were sleeping

The Arab world threw its weight behind the US. Ten Arab leaders told US secretary of state John Kerry (paywall) that they would join its war against the Islamic State. Kerry didn’t want to call it a “war,” though, but rather “a very significant counterterrorism operation.” Syria, Iran, and Russia are—surprise, surprise—trying to act as spoilers.

Facebook got a thumbs-down in China. The social network “cannot” have access to the world’s biggest internet market any time soon, the country’s top internet regulator said on the sidelines of a World Economic Forum event in Tianjin.

Scotland swung back toward a “No” vote. A new YouGov poll showed supporters of maintaining the union have regained a 52-48% lead.

The Bank of Korea held steady. South Korea’s central bank kept its benchmark rate at a near-four-year low of 2.25%, after lowering it by 0.25% in August, despite the country’s sluggish economy.

Yahoo showed its NSA scars. A federal court ordered the release of a huge trove of court documents showing how the US government threatened to fine the tech firm $250,000 a day in 2008 unless it handed over user data.

Carl Icahn made more inroads into Hertz. Three of the activist investor’s nominees gained seats on the rental car company’s board, boosting its share prices in after-hours trading. Less than a month ago Icahn announced he was the company’s largest shareholder, and at the beginning of the week he forced out its chairman and CEO.

Big donations for Ebola research. Microsoft co-founder Paul Allen committed $9 million to support the fight against the disease that’s ravaging west Africa. Earlier this week the Bill and Melinda Gates foundation pledged $50 million to beat the disease.

Quartz obsession interlude

Leo Mirani on how the internet is getting too big for just one kind of Wi-Fi. “Wi-Fi has come a long way from its first tentative steps in the 1990s. Over the years, as new specifications have come along, the speed at which data can be transferred over the air has increased more than 1,000-fold. It now blankets universities, Starbucks coffee shops and, in some cases, entire cities. But it needs to evolve to as the Internet evolves.” Read more here.

Matters of debate

Banks should offer lottery tickets. “Prize-linked accounts” encourage the poor to save more.

China’s global mining strategy is a failure. An attempt to secure natural resources (paywall) has resulted in a measly 20% success rate.

Liberal democracy isn’t historically inevitable. Francis Fukuyama’s latest book is still much too optimistic about where the world is headed.

The US should let Russia take over eastern Ukraine. It could learn from the pragmatic choices the British Empire made in the 19th century.

Surprising discoveries

Tiffany used to decorate handguns. They were used as showpieces at 19th century gun shows.

The world’s largest flying creature is named after a James Cameron movie. The Ikrandraco Avatar had a 12-metre wingspan and lived among the dinosaurs.

You can do just fine with half your neurons missing. A Chinese woman is one of just nine known people born without a cerebellum, which controls movement and balance.

There’s a jetpack for runners. It’s designed to help soldiers run a four-minute mile.

For the camel who has everything: a form-fitting leotard. A company is developing them to help prize animals race faster and stand taller.

Our best wishes for a productive day. Please send any news, comments, Tiffany handguns, and camel clothing designs to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

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Rate decision in #Russia will depend on scope of new #sanctions announced today 08/09/2014

Quotes from UniCredit Research:

-The rate decision in Russia will depend on the scope of new sanctions announced today by the EU and the US. After NATO’s meeting in Waleslast week, markets anticipate further sanctions targeting the financial and energy (oil) sectors and a 50bp rate hike is already priced in.

-The RUB had a rollercoaster week last week, with news of a possible truce bringing USD-RUBbelow 36.8 (-2.15%) on Wednesday, only to have the good news denied by both Russia and Ukraine. Fighting in Eastern Ukraine, followed by the announcement of another truce (this time between Ukraine and the rebels) increased USD-RUB volatility on Friday, with the pair ending the week above 37.

-With inflation rising to 7.6% yoy in August and core inflation at 8.0% yoy, the danger of RUB depreciation spilling over to consumer prices increases. We expect the CBR to be on hold at 8.0% (in line with consensus), but risks of a hike are significant if the EU and the US propose a meaningful set of sanctions today and the RUB again comes under pressure.

Source: FxWire Pro

Quartz Daily Brief—#NATO and #Ebola summits, #Putin’s ceasefire plan, #Bloomberg retakes control, snail farming profits

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Good morning, Quartz readers!

What to watch for today

NATO’s most crucial summit in years. Although Barack Obama assured Baltic leaders that NATO allies would defend them from Russian aggression, there’ll be much more talk at NATO’s two-day summit in Wales. Leaders will also discuss how to build a coalition against the Islamic State.

A crucial summit for the WHO too. World experts on Ebola converge on the World Health Organization headquarters to make a plan for quick testing of experimental drugs and vaccines. Human trials on one vaccine are beginning in the US this week.

Central bank decisions in Europe. Wholesale price data (paywall), the weakened euro, and Mario Draghi’s big hint at Jackson Hole suggest that the European Central Bank could be close to adopting Fed-style asset-purchasing. At the Bank of England, a divide among policymakers last month brought rate hikes to center stage, but rates are expected to hold, for now.

A US economic data dump. Employment numbers from ADP and Challenger, Gray & Christmas will preview the official US employment jobs report on Friday, which is expected to post major gains. International trade data and Markit’s final composite and services PMI are also due.

While you were sleeping

Putin set terms for a Ukraine ceasefire. The Russian president laid out a plan to end the fighting between Kyiv and pro-Russian forces in eastern Ukraine. Earlier, Russia said it couldn’t sign a formal ceasefire because it is “not a party” to the conflict in Ukraine. (Yeah, right, said Barack Obama.) Separately, The French government suspended its €1.1 billion ($1.5 billion) deal to sell Russia two warships, in the face of growing pressure from its allies.

China and India are skipping the UN’s climate change summit. The absence of the leaders of the world’s largest and third-largest carbon emitters, respectively, will undercut attempts to reach an agreement on cutting greenhouse gases and combating global warming.

Michael Bloomberg is back in business. The former New York City Mayor will once again lead his eponymous media and financial information company, despite his earlier claims that he would focus on giving away his $32.8 billion fortune. Daniel Doctoroff, Bloomberg’s longtime friend and lieutenant, will step aside as Bloomberg LP’s CEO.

New cash cushions for US banks. Regulators adopted rules requiring large banks to keep enough cash—or liquid assets, like government bonds, that can quickly be turned into cash—to survive a funding squeeze. The devil is in the details, namely what kinds of assets will officially count as liquid enough.

Bernie Madoff’s last surviving son died. Andrew Madoff, the convicted Ponzi schemer’s 48-year-old son, had mantle cell lymphoma; his brother Mark committed suicide in 2010. “One way to think of this,” Andrew Marshall once said in an interview, “is the scandal and everything that happened killed my brother very quickly, and it’s killing me slowly.”

Samsung branched out. The world’s top smartphone maker unveiled a strange new gadget with a curved screen. It also revealed its latest Galaxy Note phablet. Don’t laugh, though: Research firm IDC predicted worldwide phablet shipments will overtake laptops this year and tablets next year.

Japan’s central bank declined to make any changes. As expected, the Bank of Japan didn’t announce any new stimulus measures, despite increasing signs that the economy is faltering.

Quartz obsession interlud

Steve LeVine on how Israel is using a gas deal to mend ties with its neighbors. “Israel’s surprising wealth of natural gas—the Tamar and Leviathan fields, together containing the gas equivalent of about 4 billion barrels of oil—was planned for transportation by pipeline or tanker to Europe through Turkey, which could have helped in the current European standoff against Russia. But Israel’s relations with Turkey have deteriorated, putting that plan on the back burner, at least for now. Instead, they will go in large part to Jordan, Egypt and the Palestinian Authority.” Read more here.

Matters of debate

Small victories against the Islamic State are bigger than you think. Advances in Amerli and Tikrit represent “strategic, political, and psychological gains.”

Pakistan’s military is weakening Pakistan. It’s preventing the civilian government from improving.

Carpooling can save the world. Sharing your taxi with a stranger could save time, fuel, the environment, and lives.

Geosynchronous satellites will be humanity’s last remnants. Even after earthly artifacts are gone, there will be a ring of machines 36,000 kilometers (22,369 miles) from Earth.

Surprising discoveries

This German cow has its priorities straight. It escaped a slaughterhouse and headed straight for Oktoberfest.

Microsoft’s Cortana is taking a crack at the NFL. After predicting most of the World Cup matches, the digital assistant is tackling American football.

Chimps can beat humans at some video games. The results suggest they may have a superior memory and grasp of strategy.

There’s money in snail farming. An Austrian man sells 1.5 tons (1.36 tonnes) per year, at prices of up to 80 euros per kg ($50/lb).

North Korea’s volcano mystery might soon be unlocked. The country is giving foreign scientists access to the site of one of the biggest eruptions in human history.

Our best wishes for a productive day. Please send any news, comments, NFL predictions, and snail farming business plans to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

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#Eurozone #stagflation vis-a-vis #ECB #monetary #policy

he European Central bank meeting on Thursday is the prime event for markets seeking clarity on the bank’s response on Deflation in the euro zone.

Euro zone inflation weakned to 0.3% in August, well below the ECB 2% target, raising fears that Europe is sliding towards deflation.

Impact of Ukraine crisis on Europe

Increased Geo political risks from conflict in Ukraine forced Europe to sanctions on Russia. Russia is third biggest trade partner of Europe.

Russia is the fifth largest importer of food after EU, US, China and Japan. Russia is major buyer of European fruit and vegetables.

The EU takes more than 45% of Russia exports but only 3% of EU exports go to Russia.

This sanction on Russia will further reduce the Growth of EU.


ECB president Draghi in Jackson hole economic policy symposium highlighted the role and importance of unemployment in guiding monetary policy decisions.

Reasons for the unemployment are the long recession. The rapid unemployment increase since 2008 can be attributed to two consecutive economic recessions.

The first increase in unemployment occurred after the Great Recession in 2008 which impacted the U.S. and world economies. The 2008-2011 Icelandic financial crisis hit the Euro zone.

What to expect from ECB

Interest rate cut

A cut in all key interest rate by a further 10 basis points, delivering negative deposit rate (-0.2%) and as well as refinancing rate (0.05%).

Other Securities Buying

The market for High quality ABS is small in euro zone. It should buy other securities to the mix such as Mortgage backed securities and corporate bonds. Weakened inflation and Poor growth paved the way for border based asset purchase including government bonds known as Quantitative easing.

The currency markets will have good impact only if ECB introduces new supportive measures such as buying asset backed securities such as the government bonds. The EURO has declined drastically in the past one week because ECB might introduce QE measures like Japan.

Any policy inaction by ECB will reduce volatility and also weakness of EURO currency.

Source: FxWire Pro

Continued Improvement in #Manufacturing Boosts #Transportation #Stocks to New Highs

The US dollar continued to rally against the Japanese yen and dragged US interest rates higher. The 10-year yield rose 7.5bps, it’s worst performance in months, and the curve steepened. More than $13 billion of new corporate credit issuance priced today, exacerbating the declines. Other highly-rated sovereign bonds were also weak, which contributed to the movement in the US.

Geopolitical tensions between Russia, Ukraine, and the West remained high today. Sharp words were exchanged between various EU political leaders and Russian President Vladimir Putin in the past 24 hours. However, news reports later in the day revealed that a new round of financials sanctions on Russia from the EU would not include restrictions on its natural gas exporters (Europe obtains more than 30% of its gas from Russia) or its SWIFT banking system.

Although the S&P 500 (SPX) only finished the day down a single point, many of the underlying sectors were hit hard. Utilities stocks were the second worst performers, falling 1.02%, thanks to the significant weakness in US interest rates. Energy was the worst off as brent and WTi crude oil fell by more than 2% as the market began to reduce the risk of a potential cutoff of Russian supplies.

The August reading of the ISM manufacturing index rose to 59.0 from 57.1 in the month prior, also ahead of the 57.0 expected. New orders, production, and inventories all rose. The single month reading was the highest in more than three years and reflected a continue improvement in the breadth of manufacturing activity. Transport stocks were among the best performers for today’s session.

News was revealed today that Home Depot (HD) was subject to a large cyberhack that may have compromised its credit card system. The stock was immediately hit for a 4% loss and a number of security providers such as FireEye (FEYE) were bid up.

Tomorrow will mainly be another day of waiting for Thursday’s big event, the ECB rate decision. The Fed will release its Beige Book in the afternoon and July factory orders will  be reported in the morning. Auto sales, which finally began to show an inkling of deceleration back in July, will be reported some time around the close.

Unlike in the US, there will be a plethora of important economic data reported overnight. These include preliminary 2Q eurozone GDP, Australian 2Q GDP, two Chinese services PMI’s, similar reports from the UK and Japan, and a speech from Reserve Bank of Australia Governor Stevens. Of the listed, the eurozone GDP report will most likely carry the most weight as it will help determine how dovish the ECB’s statement will be on Thursday.

Toll Brothers (TOL), H&R Block (HRB), and PVH Corp (PVH) are scheduled to report earnings tomorrow.

Quartz Daily Brief—French jobs, $10 billion Snapchat, Russian warming, calm whales

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Good morning, Quartz readers!

What to watch for today

Turkey toys with interest rates. The central bank is under government pressure to drop its benchmark rate again, having lowered it by 175 basis points since January. The government says more rate cuts will slow inflation, contrary to what most economists believe. Most of the brokerages in a Reuters survey don’t expect a cut.

Tiffany and Co. reels in the bling. After reporting revenue over $1 billion last quarter, the retailer and jeweler hopes to continue its strong streak. Despite a luxury brand slowdown in Asia, analysts are expecting the company to report even higher profit than in the previous quarter.

Hopeful news for the solar industry. Yingli, the world’s largest solar panel maker, is expected to report a smaller quarterly loss, amid signs that a long global glut of solar components is coming to an end. Its competitor Trina yesterday reported a 69% jump in shipments (and that was less than it hoped for).

Brinkmanship over Syria. Pressure is growing on the US to bomb Syria after the Islamic State demanded a $6.6 million ransom for an American hostage there; it’s unclear whether she is one of the four missing Americans that Qatar is trying to free. If the US did strike Syria, this is the first town it could hit.

Bad news for French jobs. A day after France’s cabinet had a reshuffle, the country will report on business confidence and jobless claims. Joblessness was at a record high at the end of June, with almost 3.4 million unemployed.

While you were sleeping

Burgers + donuts = tasty, said Warren Buffett. The billionaire investor’s Berkshire Hathaway is financing the $11.4 billion merger between Burger King in the US and Tim Hortons in Canada to the tune of $3 billion, at a 9% interest rate. The combined company will be the world’s third-largest fast-food group, with some 18,000 restaurants in 100 countries.

Poroshenko and Putin talked late into the night. After the Ukrainian and Russian presidents met (with extremely forced smiles) in Minsk for peace talks, they agreed to come up with a ceasefire plan for the separatist conflict in eastern Ukraine, and resume Russian gas shipments. Trouble is, Russia still denies supplying the rebels.

The S&P hit another milestone. The broad gauge of US stocks closed above 2,000, after touching the level on Monday and falling back. But the market gained only 0.1% on the day, even though consumer confidence also hit a new post-crisis high.

Snapchat is now worth $10 billion. Venture capital firm Kleiner Perkins has reportedly agreed (paywall) to invest up to $20 million in the photo-messaging service, valuing it at some $10 billion, five times the level of a year ago. We think that might not be crazy, even though Snapchat still has almost no revenue.

Apple is making an even bigger iPad. It could start producing a tablet with a 12.9-inch screen by early next year. (Current iPads are 8 and 10 inches.) The oft-rumored “iPad Pro”—likely pricier, too—seems aimed at business users. Microsoft recently launched a 12-inch Surface tablet.

Silva gained a lead over Rousseff. Less than a week after the Brazilian Socialist Party made Marina Silva its presidential candidate to replace the late Eduardo Campos, she is emerging as the clear favorite (paywall). A poll after the first presidential debate gave Silva 45% of votes in a run-off, against president Dilma Rousseff’s 36%.

Quartz obsession interlude

Gwynn Guilford on how global warming has hit Russia with a vengeance. “When Vladimir Putin declined to support the Kyoto Protocol, a treaty to limit carbon emissions, he famously quipped that higher temperatures might actually benefit Russia since its people would have to spend less on fur coats. Well, he’s getting his wish… Between 1976 and 2012, average Russian temperatures rose 0.43°C (0.8°F) a decade—more than twice the global average of 0.17°C.” Read more here.

Matters of debate

Gaza isn’t safe yet. A UN resolution would make sure the ceasefire, and all of its clauses, stays intact.

The bombing of Tripoli is a game-changer. The joint Egyptian-Emirati airstrikes paved the way for Arab governments to take action against jihadists in other countries.

Narendra Modi’s been a disappointment. He talked big, but his actions in his three months as Indian prime minister haven’t been up to much.

Burger King’s Canadian acquisition isn’t about taxes. It’s been reported as a “tax inversion” deal, but it’s really about growth.

American journalists shouldn’t take the risk of covering wars. The country is so polarized, their reporting won’t change opinions anyway.

An independent Scotland would be vulnerable to Russia. British defenses would depart and the Russian Navy could carry out bolder incursions.

Surprising discoveries

Toddlers are really good at math. At least, they have a strong aptitude for probability.

Televised confessions are a hit in China. CCTV is broadcasting them from prison.

The online taxi wars are getting really dirty. Uber has a secret plan for sabotaging competitors called Operation SLOG.

A woman single-handedly killed a leopard that attacked her. She was armed with just farm tools.

Whales don’t like to be watched. It stresses them out and increases the risk of boat collisions.

The risk from Bardarbunga isn’t over. A stream of magma from the Icelandic volcano is headed towards a larger volcano system, which could trigger an even bigger eruption.

Our best wishes for a productive day. Please send any news, comments, whale-calming mantras, and televised confessions to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

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