Brazil slows, unexpectedly; Ten percent of world are squatters; Saying no to college; After BRICS, here are the CASSH economies

1 Brazil slows, unexpectedly (BBC) Brazil's economy slowed unexpectedly in the third quarter, new data suggests. Latin America’s biggest country clocked just 0.6% growth in the three months to September versus the previous quarter, half the rate expected by analysts. Businesses cut their investment by a further 2%, while consumer spending growth was a sluggish 0.9%. The weak private-sector spending counteracted a big round of stimulus spending unleashed by the government, including tax cuts for businesses.

"It was horrible," said Jankiel Santos, chief economist at BES Investimento in Sao Paulo. "The government is certainly going to be worried about this. The expectation is that they are going to come out with more stimulus measures." In September, the government cut its growth forecast for the year to 2% - a figure that was still seen as too optimistic by markets even before the latest data release. Growth for 2012 now looks set to be closer to 1%, compared with 2.7% last year and 7.5% in 2010.

President Dilma Rousseff launched the first in a series of measures aimed at injecting up to $50bn into the economy over the next five years, and increasing the private sector's role in the economy. The plan included privatising about 14,000km of railways and roads, followed by selling ports and lowering energy costs.

2 Ten percent of the world are squatters (Steven Rose in The Guardian) Squatting may be on the retreat in Europe, but it has exploded in the rest of the world. According to a recent UN estimate, some 800 to 900 million people around the world are technically squatters – over 10% of the world's population. The socio-economic conditions are different: these are overwhelmingly rural migrants settling on the outskirts of cities.

But these are still people occupying land they do not own, without permission. Questions of whether or not squatting benefits society are redundant here; squatting is society. In Mumbai, India, for example, slum-dwellers represent roughly 60% of the population. In Turkish cities, it is roughly 50%, Brazilian cities, 20%.

These squat neighbourhoods are often referred to as slums, shanty towns, favelas or bidonvilles. They are often characterised as grim places, with poor sanitation, high crime rates, drug gangs, and other problems. But it's often a misconception, says Robert Neuwirth, author of Shadow Cities: A billion squatters. He spent two years living in slums in four of the world's largest cities: Mumbai, Nairobi, Istanbul and Rio de Janeiro. "They're not criminal enterprises. They're not mafias," he says. "These are people, law-abiding citizens, workers. People who wait on the tables and clean the rooms in the tourist hotels. People help each other and take care of each other. These were wonderful places to live, once you step beyond the fact that they don't have a sewer system."

In many cases, slum squatters are literally second-class citizens, with no power to improve their neighbourhood, and vulnerable to exploitation. In some cases temporary dwellings have evolved into more permanent neighbourhoods, just as they did in pre-industrial Europe. Rio's Rocinha district, for example, is technically a favela but is no longer recognisable as such; it has multi-storey concrete dwellings, plumbing and electricity. "Where they can, you find people rebuilding their homes over 20 or 30 years, one wall at a time," says Neuwirth. "From mud to cardboard, to wood, to brick, to reinforced concrete, as they save."

3 Saying no to college (Alex Williams in The New York Times) The idea that a college diploma is an all-but-mandatory ticket to a successful career is showing fissures. Feeling squeezed by a sagging job market and mounting student debt, a groundswell of university-age heretics are pledging allegiance to new groups like UnCollege, dedicated to “hacking” higher education. Inspired by billionaire role models, and empowered by online college courses, they consider themselves a DIY vanguard, committed to changing the perception of dropping out from a personal failure to a sensible option, at least for a certain breed of risk-embracing maverick.

Risky? Perhaps. But it worked for the founders of Twitter, Tumblr and a little company known as Apple.  In that oft-quoted address, Steve Jobs called his decision to drop out of Reed College “one of the best decisions I ever made.” Indeed, ambitious young people who consider dropping out of college a smart option have a different set of role models from those in the 1960s, who were basically stuck with the acid-guru Timothy Leary and his “turn on, tune in, drop out” ramblings. Nowadays, popular culture is portraying dropouts as self-made zillionaires whose decision to spurn the “safe” route (academic conformity) is akin to lighting out for the territories to strike gold.

Bill Gates dropped out of college. So did Michael Dell. So did Mr. Zuckerberg, who made the Forbes billionaires list at 23. Such attitudes are trickling down to the small screen, too. In a recent episode of the Fox sitcom “The Mindy Project,” Mindy Kaling’s character, a doctor, grills a teenager about his plans for college. “I’m not going to college,” he tells her. “Why should I load up on debt just to binge drink for four years when I could just create an app that nets me all the money I’ll ever need?” Such tales play well in the eyes of millennials, a generation hailed for their entrepreneurial acumen and financial pragmatism. Why pay money if you can make money?

4 After BRICS, here are the CASSH economies (Michael Pascoe in Sydney Morning Herald) There's a new financial acronym at large: the CASSH economies – Canada, Australia, Switzerland, Singapore and Hong Kong. BlackRock's global chief investment strategist, Russ Koesterich, deadpans that what the financial markets desperately need is another acronym, and thus he coined CASSH. But he's serious about grouping the five developed but relatively small countries as deserving greater exposure in clients' portfolios.

Koesterich argues that the CASSH are fundamentally stronger than the large developed countries. He offers four reasons: 1. Lower systemic credit risk, having come through the GFC without the structural deficits and debt of the larger developed countries. 2. Their markets compete on a global scale – they have profitable corporate sectors that "are at least as competitive" as the larger developed markets (LDM). 3. Potential for future growth, as "countries with a combination of low debt-to-GDP ratios and good fiscal health generally have a positive outlook for future growth potential". 4. Superior projected growth, the CASSH expected to grow by an average of 3.5% in 2012, roughly double the LDM.

What CASSH does have going for it is a solid investment argument – better structure and growth prospects than the LDM, but safer than the emerging markets. Having an equal 20% weighting of the five CASSH nations should balance out the currency risks for investors, as well as offering diversity.