Bleak day for British banking; Who pays for banks' sins?; UK Christianity in dramatic decline; India college bans jeans for girls; India far from overtaking China

1 Bleak day for British banking (Jill Treanor in The Guardian) The reputation of Britain's banking industry took a fresh battering when HSBC was slapped with a record $1.9bn fine by US regulators for money laundering and sanctions busting, the first arrests were made in the Libor-rigging investigation, and nationalised Northern Rock handed the taxpayer a £270m bill to compensate customers affected by a mistake in its paperwork.

The US department of justice (DoJ) detailed how HSBC, Britain's biggest bank, allowed drug traffickers to launder billions of dollars in the US and billions more to be moved across borders to countries facing sanctions, such as Burma, Cuba and Libya. The fines are just the latest setback for an industry which is reeling from the revelations in the Libor investigations at Barclays, where traders offered each other bottles of Bollinger to fix rates. The scandal prompted the departure of Barclays' chairman Marcus Agius, chief executive Bob Diamond and Barclays also received a £480,000 fine from Spanish authorities for under-rating the risk of bonds it sold to clients in 2008.

The rest of Britain's banks are now braced for a series of fines from the Financial Services Authority for manipulation of Libor. The Royal Bank of Scotland and Swiss bank UBS are expected to settle with the FSA in the coming days and both will face huge fines.

2 Who pays for banks’ sins? (Robert Peston on BBC) There is a trend here - which is that every big British bank is struggling to keep control of the costs of fines and compensation relating to a great variety of forms of sloppy practices and misbehaviour in the boom years. It won't be long before we begin to learn the fines that Royal Bank of Scotland will pay to regulators all over the world for its involvement in the Libor interest-rate rigging scandal.

Then there are the stupendous costs of paying compensation to UK retail customers who were missold PPI credit insurance - which, according to the FSA, was more than £7bn by the end of September and looks set to end up being considerably more than £10bn. And then there are the difficult-to-pin-down costs of compensating small businesses who were sold inappropriate interest-rate swaps - which will certainly be rather more than £1bn in aggregate and possibly a multiple of that. In addition, most of the banks face civil cases from disgruntled investors related to these and other alleged failings that stem from the exuberance of the boom years.

All of which is of material interest to the banks' customers and shareholders. The point, as the Governor of the Bank of England said recently, is that banks may not have adequate capital to absorb the full financial cost of all the punishment being meted out for banks' past sins. Capital is expensive. And when banks are obliged to raise more of it, the burden falls initially on investors and subsequently on customers - who are forced to pay more for banking services to reward the providers of the capital. Or to put it another way, we are all punished when banks are found guilty.

3 UK Christianity in dramatic decline (Robert Booth in The Guardian) Government statisticians sliced a cross-section through England and Wales and exposed a place that is healthy, increasingly multi-faith and more likely than ever to be talking in Polish, Hindi or Urdu around the dinner table. The results of the 2011 census of 56 million people, the most thorough analysis yet of how life changed in the first decade of the 21st century, revealed that our towns and cities are global villages with an extra 2.9 million foreign-born people living in England and Wales since 2001 – most from India, Poland and Pakistan – and an additional 1.1 million Muslims, bringing the total to 2.7 million.

Christianity, or at least the number identifying themselves as followers of the largest religion, is on the slide with more than 4 million fewer saying they followed the church than in 2001. The march of the faithless has also continued with 14.1 million people, about a quarter of the entire population, saying they had no religion at all, a rise of 6.4 million over the decade.

Buried in the statistics, changing social mores were writ large. The number of married people fell below 50%; there were 400,000 more single parents and 504,000 extra cohabiting unmarried couples. Four out of five people said they were in good or very good health but the impact of an ageing population loomed, with 2.1 million people reporting that they were giving 20 hours or more of unpaid care for someone with an illness or disability, almost half a million more than in 2001. Growing economic hardship figured with 1.8 million of the economically active population unemployed and 2 million households overcrowded – half a million more than in 2001.

4 India college bans jeans for girls (Dawn) An Indian college announced it had banned girls from wearing jeans, short dresses and T-shirts to crack down on sexual harassment, sparking outrage from pupils and rights campaigners. The Adarsh Women’s College in Haryana state, 70 miles west of New Delhi, said students would be fined 100 rupees (1.8 dollars) each time they broke the dress code. Skinny jeans, T-shirts and other Western fashions have rapidly grown in popularity among young Indians, spreading from cities to rural states such as Haryana, though many older people disapprove of such clothes.

Pupils at the Adarsh college, which teaches girls between 16 and 19, complained that they were being punished unfairly instead of being protected from harassment. “A ban on wearing jeans and T-shirts doesn’t mean that there will be no crimes and boys will not pass lewd comments on you,” Ritu, a college student, said. Mamata Sharma, head of the National Commission of Women, told reporters that sexual harassment in India could not be tackled by ordering girls to wear saris and other traditional styles of dress. “Our country is progressing, we have entered into 21st century and it is very disappointing to hear or see such things,” she told reporters. “The government should take action against the college management or such institutions who impose diktats on girls.”

5 India far from overtaking China (Tom Wright in The Wall Street Journal) The US National Intelligence Council report this week does say India’s economy will be growing at a faster rate than China’s by 2030. But to put that into perspective, it also says China’s economy will be the largest in the world by that date as global power continues to shift away from the US and Europe toward Asia. India will have to wait a lot longer – perhaps until the end of the century – before it overtakes China’s economy, according to the report. 

The report does say India, by 2030, “could be the rising economic powerhouse that China is seen to be today.” It’s worth recapping how far behind India’s economy has fallen, even after reforms in 1991 that opened the country’s economy to greater foreign competition. Back then, gross domestic product per head in India and China were almost equal.  China’s GDP per capita this year will be about $9,000, more than double that of India’s, according to the International Monetary Fund. The report says India’s main advantage in the years ahead will be the age structure of its population. While China’s working-age population is set to peak in 2016, India’s won’t do so before the middle of the century. The portion of the country’s population aged between 15 and 65 will rise to 69% by 2030 from 65% today, the report says.

But the report also lays out a number of issues that India will have to confront. Tensions with its neighbors, including Pakistan and China, could cloud the growth picture. Inequality between India’s citizens is another potential destabilizing factor. Poor education and health services are another negative. And a potential shortage of key resources like water could also throw a wrench in the works.

UK on triple-dip recession alert; China recovery gains momentum; Chinese money changes Australian landscape

1 UK on triple-dip recession alert (Larry Elliott in The Guardian) The City has put the UK on triple-dip recession alert after news that falling factory and North Sea production have sent the output of industry plunging to its lowest level in 20 years. With the financial markets fearful that the final three months of 2012 will see the economy contract for the fourth quarter in the last five, David Cameron said manufacturers were short of skills and needed to learn lessons from Germany in order to develop a modern industrial workforce.

The prime minister was speaking as the coalition's hopes of economic recovery received a setback from far weaker than expected official data from industry – the sector of the economy targeted for growth by the government. Amid signs that a collapse in demand from the crisis-stricken eurozone is affecting UK exporters, manufacturing production dropped 1.3% in October and was more than 2% down on a year earlier.

Germany, the biggest economy in the single-currency area, reported that its manufacturing sector is also stuttering. Output from German factories dropped 2.4% in September. Financial markets were optimistic that UK industrial production, which includes oil and gas from the North Sea and energy supply as well as manufacturing, would post a healthy rise in October. But the Office for National Statistics reported a 0.8% drop in output to a level not seen since the recession of the early 1990s. North Sea production has fallen by almost 50% in the past three years and saw a fresh fall in October. Samuel Tombs, of Capital Economics, said: "The further drop in industrial production in October to its lowest level in two decades raises the chances of a triple dip recession in the wider economy.

2 China recovery gains momentum (Simon Rabinovitch in Financial Times) China’s economic recovery gained ground in November as industrial output and retail sales growth hit eight-month highs. After slowing for seven straight quarters, the world’s second-largest economy appears set to finish 2012 with a moderate rebound, fuelled by looser monetary policy and a burst of government spending on infrastructure.  “We believe the economy will maintain its moderate upturn into next year,” said Liu Ligang, an economist with ANZ. “Fiscal policy has already had a strong impact on the real economy.”

Industrial output in China increased 10.1% from a year earlier in November, up from 9.6% in October, while retail sales rose 14.9% year on year, up from 14.5%. Both came in slightly ahead of most forecasts and were the highest since March. With many European economies contracting and the US posting only anaemic growth, China stands out as a relative bright spot in the global economy. However, many investors consider the Chinese upturn fragile, driven by government actions rather than private investment.

The acceleration in activity has also started to filter into a slight pickup in inflation. Consumer prices rose 2% in November from a year earlier, rebounding from a 33-month low of a 1.7% rise in October. A sharp pickup in price pressures would constrain the government’s ability to stimulate the economy, but Zhang Zhiwei, an economist with Nomura, said inflation would remain below Beijing’s target of a 4% rate for at least the next three months. After slowing for seven straight quarters, the world’s second-largest economy appears set to finish 2012 with a moderate rebound, fuelled by looser monetary policy and a burst of government spending on infrastructure.

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3 Chinese money changes Australian landscape (Khaleej Times) Soaring coal prices fueled by China’s economic growth have made mining parts of the Australian landscape far more lucrative than farming it. It’s one example of how China’s emergence as a global trading power may transform countries in ways never contemplated and not yet fully understood.

The Associated Press analyzed China’s trade with other countries as a percentage of their gross domestic product, using an International Monetary Fund database. It found that, on average, trade with China had climbed to 12.4% of GDP by 2011. By comparison, the peak reached with the US in the past 30 years was 10% in 2001. In Australia, where trade with China hit 7.7% of GDP last year, exports of coal and iron ore have helped Australia fend off recession for 21 years and deliver the largest trade surpluses in 140 years of record-keeping.

China’s rapid rise has given Australia its strongest terms of trade since a global wool boom in the 1950s, says economist Peter Robertson at the University of Western Australia. ‘That boom was fairly short-lived,’ he wrote in an email response to questions. ‘This one’s length is unknown. It may turn out much bigger depending on China’s future growth.’

The former British colony’s relationship with China is deepening in other ways too: More than 29,000 Chinese became permanent residents in the year ending June 30, 2011, for the first time eclipsing the United Kingdom, the traditional source of migrants. While India topped China in the next 12-month period, that appears to have been a blip. China accounted for nearly two-thirds of the 10,407 business visas in the most recent year — investors and entrepreneurs either given residency or put on a likely path to it.

In eastern Australia, the China boom is reawakening the sleepy town of Gunnedah. Construction workers and surveyors in high-visibility, fluorescent green shirts are a common sight, a constant reminder that the plans to mine are the cause of the economic resurgence. Not everyone is happy. The prospect of mining has divided the town of 12,000, including members of the extended Clift clan. There are fears that coal dust, endless coal trains and damage to the aquifers could forever alter a pastoral way of life, perhaps even make it untenable.

EU back in recession; Needed: A financial system to tackle inequality; Rise of the iCrowd; A billion tourists this year

1 EU back in recession (Zoe Schneeweiss, Bloomberg) The euro-area economy was pushed into a recession for the second time in four years as trade slowed and government spending declined. Gross domestic product in the 17-nation currency bloc slipped 0.1% in the third quarter from the previous three months, when it fell 0.2%, the European Union’s statistics office in Luxembourg said, confirming an initial estimate published on November 15. Gross fixed capital formation dropped 0.7% from the previous three months, when it fell 1.8%, while consumer spending was unchanged. Government spending declined 0.2% after a 0.1% drop in the second quarter.

European governments, fighting the sovereign debt crisis that started in 2009, on November 27 eased the terms on emergency aid for Greece and are counting on a bond buyback as a market-based way of cutting the country’s debt, paving the way for continued aid payouts. Economists question whether that will be enough to keep the country in the single currency.

In Germany, Europe’s largest economy, GDP rose 0.2% in the third quarter, down from 0.3% in the previous three months. France’s economy expanded 0.2%, while Italy’s GDP fell 0.2%. In Spain, which locked in a bank bailout earlier this year, GDP declined 0.3%. The economies of Cyprus, Austria, Portugal and the Netherlands also contracted. 

2 German growth forecast cut (The Guardian) The Bundesbank has cut its growth forecasts for the German economy, warning that the financial crisis will have a much greater impact on Europe's largest economy. Next year looks particularly weak, with Germany at some risk of falling into recession in the months ahead.

The Bundesbank expects growth of 0.7% this year, down from 1%. In 2013 it expects growth of just 0.4% (not a typo), down from 1.6%previously. It also predicts stronger growth in 2014, with GDP expanding by 1.9%. The Bundesbank said it was clear that the core of the eurozone was feeling the full impact of the downturn in the periphery.

3 Needed: Financial system to tackle inequality (Joseph Stiglitz in The Guardian) A comprehensive programme to increase economic opportunity and reduce inequality is needed – its goal being to remove, within the next decade, America's distinction as the advanced country with the highest inequality and the least social mobility. This implies, among other things, a fair tax system that is more progressive and eliminates the distortions and loopholes that allow speculators to pay taxes at a lower effective rate than those who work for a living, and that enable the rich to use the Cayman Islands to avoid paying their fair share.

America – and the world – would also benefit from a US energy policy that reduces reliance on imports not just by increasing domestic production, but also by cutting consumption, and that recognises the risks posed by global warming. Moreover, America's science and technology policy must reflect an understanding that long-term increases in living standards depend upon productivity growth, which reflects technological progress that assumes a solid foundation of basic research.

Finally, the US needs a financial system that serves all of society, rather than operating as if it were an end in itself. That means that the system's focus must shift from speculative and proprietary trading to lending and job creation, which implies reforms of financial-sector regulation, and of anti-trust and corporate-governance laws, together with adequate enforcement to ensure that markets do not become rigged casinos.

4 Rise of the iCrowd (Sami Mahroum in Khaleej Times) Countries affected by the Arab Spring now face political spheres that are shaped by crowd dynamics, rather than by genuine political or ideological movements. Crowds are the opposite of organisations; rather than being dominated by rigid hierarchies, they are often led by individuals with no formal rank. In “crowd politics,” emotions often supersede goals.

The real challenge facing the Arab Spring countries, at least in the short term, is not ideological, but institutional. Governments must find a way to prevent small groups from using the crowd effect as political capital, thereby causing crowd sizes to become more decisive than the number of ballots cast. But traditional democratic institutions, such as political parties, parliaments, and consultation committees, are not experienced in coping with such challenges.

Social media are both part of the problem and part of the solution. Unlike Eastern Europe in the late 1980’s and early 1990’s, the crowds of the Arab Spring formed on the Internet before hitting the streets – the first movement of its kind. The Arab Spring, following the lead of Iran’s Green Movement in 2009, ushered in the era of “iCrowds” – attracted, mobilised, and organised through social media.

But social media can also be used effectively to demobilise people, by reducing the chasm between the psychology and power of political leadership and that of the masses. The emerging political class must improve its understanding of iCrowd politics, and learn to harness the power of tools like Facebook, Twitter, YouTube, blogs, apps, and text messages.

For the Arab world’s new political elites, the lesson is clear: crowd dynamics cannot be ignored. When observed carefully, social media can be interpreted like clouds portending storms. If detected early enough, solutions can be found to diffuse tempestuous crowds before they inundate fragile new institutions.

5 A billion travelers this year (Dawn) A record 1 billion people will travel across an international border as a tourist in 2012, according to the World Travel & Tourism Council. That means that one in seven people on the planet will participate in world traveling this year, an activity that just a few decades ago was exclusively for the wealthy. The reasons for the upswing range from prosperity in developing countries like China to a perception of a more peaceful world. The London-based council calculates that the 1 billionth tourist will cross an international boundary on Dec. 13.

“This is an astounding milestone,” David Scowsill, president of the council, said. “There is an inexorable growth in the number of people who want to travel around the world.” While the US and France remain the two largest destinations for world travel, experts say much of the explosive growth in tourism has been to countries such as Guatemala, the Dominican Republic, and the Ivory Coast, which were off the world tourism map a decade ago. The top five destinations in the world are Paris, London, New York, Mediterranean resort Antalya, Turkey, and Singapore, the United Nations World Tourism Organization said.

While evidence of leisure travel can be traced to ancient Babylon, it began to grow swiftly after World War Two. For the US middle class, it became routine after airline deregulation began in the late 1970s when airlines were forced to compete on prices, said David Bojanic, a professor of tourism studies at the University of Texas San Antonio. The inflation-adjusted cost of a plane ticket from New York to London today is about one-fourth what it was in 1960, he said.

Several factors are responsible for the boom in world travel, including prosperity that has lifted tens of millions of people in Asia from poverty into the middle class, whetting their desire to use their new wealth to travel. The number of people traveling internationally from China, for instance, has jumped from 58 million in 2010 to 72 million this year, Scowsill said.

UK youth fight for economic survival; Citigroup to shed 11,000 jobs; Arab spring and a new crop of entrepreneurs; Business without bribery possible in India

1 UK youth fight for economic survival (Laurie Penny in The Guardian) Some months ago prime minister David Cameron spoke contemptuously of people moving from college or university straight on to the welfare rolls. It’s beyond hypocrisy that those in power still treat this as a lifestyle choice for the feckless rather than a cruel necessity brought about by the spending choices of the prime minister and his pals. Plans to remove social benefit for rent from the under-25s are due to be quietly shelved this week. They are being shelved because they are financially unworkable and not because they are unjust; something that was obvious from the start.

Debt, student loans and housing insecurity. Never knowing when or if you’ll ever have a roof over your head, or enough money at the end of a precarious working week to buy decent food. That’s the reality of life for millions of people in Britain today, sapping our energy and sucking away our youth, and it’s fortunate for all of us that some are still finding the strength to organise.

Rent is at the centre of it all. Rent and the impossibility of paying it. Rents in some places in London have risen 20% in the last year, while wages for under-30s have fallen by between six and 10% in real terms over the last decade. In major cities, many of those who haven’t been forced out by soaring prices are living two or three to a room or attempting to camp in empty buildings — of which there are thousands in London, since speculation has continued unabated in the recession.

At least 75,000 young people in the UK are going to be homeless this Christmas — and those numbers have soared, according to housing charities. It’s going to be a cold, hard, angry winter.

2 Citigroup to shed 11,000 jobs (San Francisco Chronicle) Citigroup said it will cut 11,000 jobs, a bold early move by new CEO Michael Corbat. The cuts amount to about 4% of Citi's workforce. The bulk of them, about 6,200 jobs, will come from Citi's consumer banking unit, which handles everyday functions like branches and checking accounts.

Citi said that it will sell or scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay and focus on 150 cities around the world "that have the highest growth potential in consumer banking." About 1,900 job cuts will come from the institutional clients group, which includes the investment bank. The company will also cut jobs in technology and operations by using more automation and moving jobs to "lower-cost locations."

Investors appeared to like the move. They sent Citi stock up $2.17, or 6.3%, to close at $36.46 Wednesday. Job cuts are a familiar template in a banking industry still under the long shadow of the 2008 financial crisis. Banks are searching for ways to make money as new regulations crimp some of their former revenue streams, like trading for their own profit or marketing credit cards to college students. Customers are still nervous about borrowing money in an uncertain economy. And they are still filing lawsuits over industry practices like risky mortgage lending that helped cause the crisis.

Citi fared worse than others. It nearly collapsed, had to take two taxpayer-funded bailout loans, and became the poster child for banks that had grown too big and disorderly. After a long stretch of empire-building, it has been shrinking for the past several years, shedding units and trying to find a business model that's more streamlined and efficient. While the job cuts are among the first major moves by Corbat, they are in line with Vikram Pandit's blueprint. Citi's roster of 262,000 employees is down from 276,000 at this time in 2009.

3 Arab spring and a new crop of entrepreneurs (Abdul Basit in Khaleej Times) The Arab Spring has opened a new world with endless possibilities for young entrepreneurs of the region, according to former deputy prime minister of Malaysia Tun Musa Hitam. “The younger demographic, especially, has the potential to bear great influence on the future of the world economy and can be harnessed through increased understanding of these opportunities which will boost investor confidence and resources they put into tapping this market,” Musa said.

The truth is that business doesn’t and shouldn’t recognise borders, ideologies, race or religion, he said, adding: “It’s all about the opportunities.” Commenting on the challanges for the promotion of Islamic finance, he said: “The word ‘Islamic’ should not inspire fear but be a by-word for opportunity. By communicating the positive benefits of Islamic finance for both the Muslim and non-Muslim communities, we have no doubt that its prevalence will grow and that it will become an appealing alternative across more markets.” It is estimated that Muslims have spent $2.1 trillion on the halal economy, $500-600 billion on food and halal related products.

4 Business without bribery possible in India (Biman Mukherji in The Wall Street Journal) Fewer Indian companies than multinationals believe it is possible to do business in India without bribery and corruption, according to global consultancy KPMG’s latest “India Fraud Survey.” The survey, which canvassed 293 senior company officials in India, found that 56% of respondents from multinational companies said business could be done without resorting to payoffs, compared with 44% from Indian companies.

The report found that 71% of those surveyed said fraud is an inevitable cost of doing business in India. Of the respondents, 55% said that they had experienced fraud in the last two years. “This is dangerous as it could lead to organizations having a tolerant approach towards fraud and subsequently not investing enough in the appropriate fraud risk management and controls,” the survey said.

UK austerity may extend to 2018; Staying up in a down world; Degree inflation? More jobs require BAs; The bizarre tale of John McAfee

1 UK austerity may extend to 2018 (Andrew Atkinson, Bloomberg) Chancellor of the Exchequer George Osborne may have to extend his austerity program by another year to 2018 after a deterioration in Britain’s economic prospects, according to the Institute for Fiscal Studies. The London-based research group said Osborne is on course to miss his target of seeing the burden of government debt falling by 2015, and further tax increases and spending cuts may be needed to erase the structural deficit in five years, the mainstay of his economic strategy. It means the total squeeze may last eight years.

 “The outlook for the UK economy has deteriorated and government receipts have disappointed by even more than this year’s weak growth would normally suggest,” said IFS Deputy Director Carl Emmerson. Osborne may face another hole in the public finances, requiring a further 11 billion pounds ($18 billion) of welfare cuts or tax increases on the top of the 8 billion pounds of welfare reductions already under discussion, according to the IFS. Osborne had originally planned for the cuts to end by the time of the 2015 general election.

Even under an “optimistic” outlook, debt will continue to rise as a share of GDP in 2015-16 instead of falling, the IFS said. It called on Osborne to abandon his target rather than tighten policy to meet it, saying it had little “to commend it in terms of the economics of managing the public finances.”  Net debt climbed to 1.07 trillion pounds last month, or 67.9% of GDP, according to the Office for National Statistics.

2 Staying up in a down world (The Guardian) American motivational speaker and author Zig Ziglar, who died last week aged 86, was a legend in many parts of the US. The self-styled ‘Master of Motivation’ was a direct link to the world of Dale Carnegie and Norman Vincent Peale, authors who rose to prominence in the aftermath of the Great Depression with the hopeful thought that, given the right mindset, a happy and meaningful life might be possible despite the odds. It was an individualist message but not a mean-spirited one. Nor was it delivered without humour. “People often say motivation doesn’t last,” Ziglar often said, in response to his critics. “But neither does bathing. That’s why we recommend it daily.”

The point of positive thinking, Ziglar insisted, was to provide motivation for doing hard work; nothing was possible without labour. Unbridled positive thinking fuelled by the self-help industry, the social critic Barbara Ehrenreich has argued, may also have helped bring about our current financial crises. A belief that success must be both guaranteed and easy is an excellent path, if you’re an investment banker, to catastrophic failure. But Ziglar’s claim was never that life could be effortless.

Nonetheless, the Ziglar approach seems to be on its way out, and this may be just as well. A powerful body of psychological research testifies to the fact that the techniques of positive thinking are often counterproductive — that repeating upbeat affirmations, for example, can make people with low self-esteem feel worse, or that visualising the successful completion of a goal can sometimes make it less likely to be achieved.

Meanwhile, the challenges we face, from economic to environmental crises, are surely too collective and complex to benefit much from a philosophy consisting solely of exhortations to individual hard work, generosity and cheer.

3 Degree inflation? More jobs require BAs (Catherine Rampell in The New York Times) Despite the sob stories you hear about unemployed college graduates, bachelor’s degrees have actually gotten more valuable over time. The wage gap between the typical college graduate and those who have completed no more than high school has been growing for the last few decades. In the late 1970s, the median wage was 40% higher for college graduates than for people with more than a high school degree; now the wage premium is about 80%.

Some of that wage premium has to do with the changing nature of American jobs and the skills (and social networks) attained in college. Some of it may have to do with a change in the mix of students who go to college and those who don’t. As college enrollment becomes more expected of high school students — as of October 2011, 68.3% of 2011 high school graduates were enrolled in college — the shrinking group of students forgoing college may have other characteristics that are associated with lower wages. At the very least it seems as if more employers are using bachelor’s degrees as a signal of drive or talent, regardless of the relevance of the skills actually learned in college.

4 The bizarre tale of John McAfee (Khaleej Times) Prostitutes, gun-toting bodyguards, experimental drugs, police raids, poisoned dogs, murder, elaborate disguises, cloak-and-dagger interviews: welcome to the incredible world of John McAfee. In a plotline worthy of a Hollywood thriller, the American anti-virus software pioneer went on the run from his Belize island home hours after his Florida expat neighbor Gregory Faull was murdered early on November 11. With 20-year-old girlfriend Sam in tow, McAfee has evaded capture for more than three weeks.

In the McAfee story, the truth is an enigma. Did he actually commit the crime? If he did, why leave such an elaborate e-trail? If he didn’t, why go on the run at all? A successful Silicon Valley entrepreneur who cashed out to live the life of an adventure seeker, McAfee amassed huge wealth from the antivirus software that bears his name. He decamped to Belize in 2009 after losing an estimated $96 million of his $100 million fortune due to bad investments and the financial crisis. Jeff Wise, a science and adventure writer who has known McAfee for years, told Fox News that his increasingly odd behavior earlier this year had seen him become estranged from the US expatriate community in Belize.

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.