Quartz Daily Brief—Pakistani Taliban atrocity, UK stress-test fail, 2014’s worst investment, McDonald’s rations fries
Good morning, Quartz readers!
What to watch for today
John Kerry tries to mollify the Palestinians. The US secretary of state will attempt to convince the Palestinian Authority not to push for a UN security council resolution that would give Israel a two-year deadline to pull out of the West Bank.
US housing starts. There have been a lot of positive signs from the US economy of late, and it will be interesting to note whether these are translating into confidence in the property sector. Analysts expect a modest rise on building figures from October, reaching an annualized 1.036 million in November.
The Fed meets. The US central bank’s policy committee begins a two-day confab to discuss when to start raising interest rates next year.
General Electric talks 2015. Top executives meet investors to provide their outlook for the coming year. The firm is still slowly boosting dividend after slashing shareholder payouts during the financial crisis.
While you were sleeping
The Pakistani Taliban slaughtered schoolchildren in Peshawar. A handful of militants stormed a military-run school and killed at least 100 people, including about 80 students. The Pakistani army says most of the 500 students that were in the building have been evacuated, but others are still being held hostage inside.
Russia’s central bank took emergency measures. In a surprise overnight move, the bank jacked up interest rates to a shocking 17%, from 10.5%. The currency initially rallied but subsequently gave back most of its gains. The biggest Russian interest rate hike since 1998 will squeeze an economy that is already suffering from Western sanctions and low oil prices.
A UK bank failed a stress test. The Co-Operative Bank said it would sell £5.5 billion ($8.6 billion) of assets to meet capital requirements after it flunked the Bank of England’s first public stress test. RBS and Lloyds barely passed a test that simulated high unemployment, falling house prices, and an interest rate hike.
China’s factory activity shrank. HSBC’s flash purchasing managers’ index fell to a lower-than-expected 49.5 in December (paywall), below the 50 mark that separates contraction from expansion. Analysts blamed weak domestic demand, which adds further pressure on the government to boost stimulus measures.
The euro zone looked healthier. Markit’s flash composite PMI for the bloc rose to 50.8 in December (paywall), from 50.1 in November. This was buoyed by a surprise rise in French activity, though German growth was unexpectedly weak.
Oil slumped below $60. Brent crude fell to a five-and-a-half year low on China’s slowing economy and weakness in emerging market currencies
Rio’s Olympic waters are not fit for sporting events. A superbug resistant to antibiotics and that can cause urinary and other infections is present in seawater where sailing and windsurfing events are planned for the 2016 Olympic Games. A lot of Rio de Janeiro’s sewage is dumped into waters nearby.
Quartz obsession interlude
Matt Phillips on the worst bet investors could have made this year. “There was plenty of ugliness to be found in the markets this year. Ukranian and Venezuelan sovereign debt. High-yield, energy-related corporate bonds. Argentine pesos. Russian rubles. Greek stocks. But none of these investments has been as atrociously awful as bitcoin, the heavily hyped crypto-currency that stormed onto the financial scene in the last few years, threatening to disrupt the cornerstone of global finance that is fiat currency.” Read more here.
Matters of debate
Pornographic sex scenes are not free speech. A California court rules that actors must therefore follow a law requiring condom use.
Hong Kong’s next battlefield is free speech. The public wants unfettered news, but media outlets are dominated by Beijing.
Russia’s economy is doomed. Like the USSR, it’s only as strong as the price of oil.
The space race is over. The next phase of exploration will be a global collaboration, not a contest.
Journalism is permissible thievery. Publishing stolen Sony documents is problematic but necessary.
Surprising discoveries
Alpha males prefer spice. Men with a taste for fiery food have higher levels of testosterone.
McDonald’s Japan is rationing french fries. It will only sell small portions due to disruption of US potato imports.
Canada’s navy is on the wagon. Booze on ships was banned due to drunken misconduct aboard the HMCS Whitehorse.
Denmark claims to own the North Pole. An uncharacteristically belligerent move from a generally peace-loving nation.
Deep-sea snails are super punk rock. One has been named after the Clash’s Joe Strummer.
Click here for more surprising discoveries on Quartz.
Our best wishes for a productive day. Please send any news, comments, spare navy rum, and North Pole claims to [email protected]. You can follow us on Twitter here for updates throughout the day.