December 12, 2016 nº 1,821 - Vol. 13

"To be stupid, selfish, and have good health are three requirements for happiness, though if stupidity is lacking, all is lost."

Gustave Flaubert

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  • Top News

Wall Street is europe's landlord. And tenants are fighting back.

Wall Street has become the biggest new landlord in Europe, as American financial firms have swept into cities, suburbs and towns to take to advantage of the fallout from the worst economic downturn since World War II. In the last four years, Goldman Sachs, Cerberus Capital Management, Lone Star Funds, Blackstone Group and others from America have bought more than 223 billion euros' worth of troubled real estate loans around Europe, nearly 80 percent of the total sold. The firms have made the usual calculation: buy distressed investments on the cheap during tough times, betting that the outlook will eventually turn and riches will follow. And the firms are paying little or no tax, by employing complex strategies that often involve subsidiaries with no operations or staff. The huge profits and dubious tax strategies have made Wall Street a major object of frustration and anger, as people grapple with evictions and higher mortgage payments.

German State passes law to force 'dominant culture' on refugees

The German state of Bavaria passed a new law Friday to force the local "dominant culture" on refugees. The ruling Christian Social Union argues the law is necessary after the massive influx of refugees during the last two years. Extra funding will go to schools and daycare centers where immigrants will be taught Bavarian culture and values. "It prevents the emergence of parallel societies governed by Sharia, religious codes or tribal customs, instead of our laws and values," Emilia Müller, Bavaria's social security minister, said in the state parliament. The opposition is concerned that "dominant culture" isn't defined in the law, and that it will lead to social division rather than inclusion of refugees.

  • Crumbs

1 - Investor lawsuit accuses Facebook director of disloyalty - click here.

2 - Arkansas Supreme Court blocks birth certificates for same-sex couples - click here.

3 - Oil drilling advocate expected to be Trump pick for Interior Dept. - click here.

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  • MiMIC Journal

Trump hints US could end 'One China' policy

Trump has questioned whether the US should continue its "One China" policy, sparking fury from Chinese state media. Under the policy, the US has formal ties with China rather than the island of Taiwan, which China sees as a breakaway province. This principle has been crucial to US-China relations for decades. But Trump said he saw no reason why this should continue without key concessions from Beijing. Trump said: "I don't know why we have to be bound by a One China policy unless we make a deal with China having to do with other things, including trade."

Hong Kong holds election for panel to pick next leader

Voting is under way in Hong Kong in elections for the territory's Election Committee, the panel that chooses the next leader. Only 6% of Hong Kong's voters can take part and those who are allowed to cast ballots are seen as mostly pro-China. The vote is widely criticized as undemocratic but pro-democracy groups are putting forward more candidates than ever before. They say they disagree with the system but hope to fight it from the inside.

Small investors join China's tycoons in sending money abroad

Middle-class Chinese are using new technology to move their wealth out of the country and into American investments, from San Francisco to New York.

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  • Brief News

Anti-Semitism: Official definition will fight hatred

Having one official definition of anti-Semitism will mean those guilty of hatred of Jews will be "called out on it." Police, councils, universities and public bodies can use the wording. The International Holocaust Remembrance Alliance (IHRA) hopes its definition, agreed this year, will be adopted globally. The definition calls anti-Semitism "a certain perception of Jews, which may be expressed as hatred toward Jews." "Rhetorical and physical manifestations of anti-Semitism are directed toward Jewish or non-Jewish individuals and/or their property, toward Jewish community institutions and religious facilities." Adopting the international definition would ensure people would not be able to get away with being anti-Semitic because the term was ill-defined, or because different organizations or bodies had different interpretations of it. The IHRA - which is backed by 31 countries, including the UK, USA, Israel, France and Germany - set its working definition of what constituted anti-Semitic abuse in May. The group says having a "legally binding working definition" will give countries the "political tools" to deal with anti-Jewish hate crime.

Investor's remorse follows buyer's remorse as big deals fall apart

Disturbances can be expected at the peak of a merger frenzy and as the cycle starts to turn down. Buyers get more aggressive, testing regulatory, structural and financial limits as well as the patience of their targets' managers. In deals of over $1 billion in the United States, the average wait from a deal's announcement to closing is at its longest in over a decade at 148 days. The longer the lag, the more likely problems will crop up. Even astute M.&A. watchers have been caught wrong-footed. Merger arbitrageurs, up only 1.3 percent this year through October, are the worst performers among event-driven hedge funds and trail the industry broadly. That suggests shareholders should be ready to sell near an offer price in some cases rather than wait around for closing and any later deal benefits. Better to be safe than sorry.

Federal judge rejects Trump's request to stop Wisconsin recount

A federal judge on Wednesday rejected a request by supporters of Presiden-elect Donald Trump to block Wisconsin's recount. Judge James Patterson ruled that "the recount is an inherent part of what ensures the integrity of elections." The challenge came from the Great America political action committee and Stop Hillary PAC, both forming a challenge to stop the recount in the state. The state election committee has stated that the recount is around 88 percent complete, and expects the results to be concluded by Monday. Even if the recount is to go through, it was unlikely that recounts in Wisconsin, Michigan and Pennsylvania would have been able to change the ultimate outcome of the election.

Trump's honeymoon begins: Confidence in the economy is booming

Much of the swelling confidence may come from one political party, but consumers, business leaders and Wall Street show a lot of excitement.

Monte dei Paschi races to raise $5,3bn cash by end of year

Italy's Monte dei Paschi bank has said it will try to raise $5.3bn from investors by year end as it races to avoid a state rescue. The world's oldest bank said it would stick to the recovery plan it outlined on 25 October, which includes issuing new shares. Monte dei Paschi is one of several big Italian banks struggling with a heavy burden of bad loans that are unlikely to ever be repaid. The banks are trying to unload some of these loans by selling them to investors that specialize in dealing with problem debt. Some, including Monte dei Paschi, are also trying to raise new capital to strengthen their financial foundations so they can better cope with losses on their problem loans.

New Brexit legal challenge moves forward before Ireland court

The Irish High Court will hear a new challenge to Brexit after tens of thousands of pounds were raised. The challenge contends that Article 50 is revocable once it is activated. Under EU law, a member state has two years after Article 50 is triggered to leave the union. The case is being brought before Ireland as an EU member state needs to be named in the legal action. The new challenge asserts that the European Council and European Commission may have breached EU law in relation to Article 50. It is expected that the Irish court will refer the case to a higher court operating on a European level.

Brazil's Temer disapproval spikes as economy disappoints

Disapproval of Brazilian President Michel Temer's government spiked as the economy failed to rebound from its deepest slump in decades. Temer pledged to return Brazil to growth by cutting spending and curbing debt growth. But the economy plunged deeper into recession in the third quarter, dashing the government's hopes that a rebound in corporate and consumer sentiment would bring about a recovery.

France state of emergency 'to protect elections'

The state of emergency imposed in France after the Paris attacks must be extended to protect elections next year, PM Bernard Cazeneuve has said. He said he was seeking the extension until 15 July, covering presidential and parliamentary polls from April to June, and Bastille Day on 14 July. Parliament is expected to approve the measure on Tuesday. It will be the fifth extension of the emergency powers introduced after the attacks on 13 November last year.

Lebanon takes step to revoke marriage rape law

Lebanese lawmakers took steps on Wednesday to overturn a law that allows rapists to avoid prosecution if they marry their victims. Article 522 of the penal code was ratified in the 1940s and maintains that those found guilty of rape could be sentenced for at least seven years but that charges could be lifted if the rapist marries the victim. Activists have lobbied for the law's revocation for years and claim that the law empowers rapists and further victimizes those who have been assaulted. The Lebanon parliament will have to vote on the motion to abolish the law.

Gambia leader to contest election defeat in court

Gambian leader Yahya Jammeh says he will launch a legal challenge to contest an election defeat that will bring an end to his 22-year rule. Jammeh initially conceded after rival Adama Barrow won last week's vote, but then backtracked on Friday, saying he "totally" rejected the result. The United Nations Security Council has demanded he accepts defeat.

Accusations of fraud at Wells Fargo spread to sham insurance policies

Three whistle-blowers have filed a wrongful termination suit against the insurer Prudential, saying they were fired for trying to draw attention to dishonest conduct at Wells Fargo.

Proposed law would let guns inside stadiums in Washington state

A new proposed amendment to the Revised Code of Washington would change laws currently prohibiting a private company, such as the Seattle Seahawks, from banning guns from stadiums on public land. It is not currently illegal to carry a firearm into a game under Washington law, but CenturyLink Field, as well as Safeco Field and any other stadium, are allowed to prohibit folks from bringing certain items, including firearms, into said stadiums. House Bill 1015, proposed by three Republican members of the state House of Representatives, would eliminate the stadiums' ability to "prohibit persons with a valid concealed pistol license from carrying a concealed pistol in any facility or on any grounds of a facility."

The rule of law is more important than Donald Trump

While Donald Trump has generally pleased the Right with his Cabinet appointments, he has demonstrated that he cares little for the rule of law and believes not at all in free markets. Arbitrary presidential intervention in the economy "is the way it's going to be," he declared, and "corporate America is going to have to understand." This should worry anyone committed to free enterprise and limited government. And requires that Republicans in Congress and elsewhere to keep him within legal bounds. Of greater concern, however are the president-elect's threats. Not his drive-by-tweeting, despite the unease that it might engender simply because of the president's reputation as "the most powerful man on earth." But his threat to punish and reward companies as he sees fit. The rule of law is supposed to treat all who are equally situated equally.

Something's gotta give partner profit rises while law firm market share declines

Good lawyers are problem solvers. The best ones forestall problems and, when they inherit them, prevent metastasis. So with demand for legal services robust and law firm demand flat three years and counting, law firms have a problem. Its crux is a misalignment of the traditional law firm model with the marketplace—except, perhaps, in certain high-value matters. Is it being fixed? Soaring partner profits (PPP) suggest it is. But the increasing percentage of legal services rendered outside law firms indicates the contrary. Which is it? Short answer: partners have addressed their challenge—how to increase PPP with a declining demand. Firms, on the other hand, have an unsustainable model that remains largely in fact even as clients are seeking options. Faced with competition from corporate departments and an expanding array of service providers--as well as from other firms-- what is the law firm response? Most firms are making course changes, but they are internal ones designed to preserve PPP, not to alter their model. So why are firms not taking more aggressive action to give the customer what it wants? Simple answer: partners—especially senior ones—are prospering even as their model falters. As Richard Susskind says, it’s hard to convince a room full of millionaires that they’ve got their business model wrong.

  • Weekly Magazine Review

Time
TIME's Person of the Year: Donald Trump

Newsweek
Donald Trump and the Cia off to an uneasy start

Business Week
Google Never Had to Worry About Financial Discipline—Until Now

The Economist
The president and business: America's new business model

Der Spiegel
Bundesliga Intern

L'Espresso
Requiem per la politica: elezioni siempre

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