October 31, 2011 nº 1,108 - Vol. 9


"Nothing ever becomes real till it is experienced."

John Keats

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  • Top News

Feasting on paperwork

The draft Dodd-Frank bill is some 1,300 pages long. Almost nobody has actually read those 1,300 pages in full; most people are simply too busy to wade through that paper, even as they prepared – or debated – that bill. But now, those 1,300 pages are the least of the problems. When the bill was finally passed 15 months ago, it had swelled to 2,600 pages, and since then, lawmakers have decided that they will need to make some 243 new rules to turn that bill into law, and conduct 65 studies. That has necessitated the formation of 100-odd committees, each of which is now spewing out consultation documents, which typically run to several hundred pages. Those consultation documents, in turn, generate endless private sector legal memos. And the agencies are receiving more "feedback", too. Officials from the Commodity Futures Trading Commission, for example, say that they have now received no fewer than 25,000 – yes, thousand – comments on the proposed rule reforms; some 15,000 relate to their reforms for commodity trading limits. And the CFTC is only one of the agencies involved in this feedback process. By law, regulatory officials then have to read each and every comment before anything can be done; and those submissions can sometimes stretch – you guessed it – to several hundred pages each. That 1,300-page number, in other words, now multiplies a thousand-fold, if not ten-thousand-fold, across the system as a whole; it makes a collateralized debt obligation look almost simple. The hard reality is that in America's rules-based regulatory system, it is impossible to effect legislative change without discussing the details of rules. Paperwork, in other words, is not unique to Dodd-Frank. But Dodd-Frank has taken this paper chase to a level that has not even been seen in America before, particularly when it is overlaid with the Basel rules. And, as such, it poses at least three interrelated dangers. First, the sheer complexity and opacity of the reform process makes it hard for anyone to forecast with confidence exactly what their net impact will be. Second, this bewildering process forms rich arbitrage opportunities for canny players. The third problem is a yawning democratic deficit: complex financial products are colliding with complex reform processes run by leaders with complex (or unstated) reform goals. So it is no wonder that public frustration and cynicism about finance is high.

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  • MiMIC Journal

China adopts new anti-terrorism legislation

China passed new anti-terrorism legislation on Saturday that will amend current criminals laws by providing a definition of "acts of terror" and establish ways for security forces to deal with such acts. The law defines "terrorists" as "those who organize, plot and conduct terrorist acts as well as those who are members of terrorist groups," and terrorist acts as "those acts which are intended to induce public fear or to coerce state organs or international organizations by means of violence, sabotage, threats or other tactics." In an effort to unify enforcement, authorities will now have the power to publish lists of terror suspects and freeze their assets.

China replaces financial regulators in first steps of leadership shuffle

China moved its securities regulator Shang Fulin to head the nation's banking watchdog, overseeing a 106 trillion-yuan ($17trn) industry that includes four of the world's 10 largest lenders by market value.

China prepares for space launch

China is set to launch a unmanned spacecraft on Tuesday to dock with a capsule orbiting the Earth, as part of its work to build a space station.

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  • Brief News

When humans hit 7 billion, will it happen in India?

The world is anticipating the birth of its 7 billionth person, as the United Nations predicts that the milestone baby will be born on Monday, Oct. 31. Demographers say the baby might be born in India, where an average of 51 babies are born every minute. A visit to the most densely populated neighborhood in one of the world's densest cities offers a look at what life might be like for Citizen No. 7 Billion. Northeast Delhi has more than 29,000 people per square kilometer. That's only slightly more than Manhattan — but Manhattan is a high-rise city, with people stacked up tens of stories high. Dr. Venu Gopal, the medical director at Swami Dayanand hospital, says he is not optimistic about the crowded world that awaits the babies born here. "The culture is going to change," he says. "There will be a lot of intolerance, and more physical violence, probably. And water and food are going to be a major crisis situation." That is, Gopal says, unless the rest of us make room for the 7 billionth baby in a more hospitable world.

Berlusconi defiant as EU's focus shifts to Italy

Berlusconi said he alone can deliver the country's promised deficit cuts as European leaders ramp up demands that his government do its part to combat the region's debt crisis. He ruled out early elections and said the current legislature in Rome will last until 2013. He said the European Central Bank's support will only be maintained if his administration follows through on the pledged measures. European leaders haven't yet delivered a "conclusive answer" to the crisis last week, while expectations are on the rise. Rather than tapping investors or governments, firms are trying to hit the 9% core capital target by adjusting risk-weightings, limiting dividends, retaining earnings, reducing loans and selling assets. Banks had threatened to curb lending, risking a recession, to meet the goal rather than take government aid that would bring limits on bonuses and dividends. EU leaders already are pressing banks to restrain payments to employees and shareholders until they meet the capital target.

ECB head says Chinese help for eurozone is 'normal'

China's President Hu Jintao arrived on Sunday in Vienna for a state visit, before the crucial G20 meeting in the French resort of Cannes on 3 and 4 November. Hu's visit to Europe, his second in a year, comes after EU leaders last week appealed to China to invest in the region's debt rescue fund, to help it overcome a spiraling debt crisis. The president of the European Central Bank has denied that eurozone countries are going "cap in hand" to China.

Law firm expenses grow, demand for services falters

Firms are seeing a decreased demand for services in some practice areas while expenses rise by the highest rate in two years. The report found that overall litigation demand increased 1.5%, and IP litigation in particular saw a five-percent increase, the largest for the practice groups listed. Mergers and acquisitions work was down 2% and capital markets work fell 4% from last quarter. In an indication that might be better for the economy than for firms' restructuring groups, the demand for bankruptcy work declined 6%. Firm expenses jumped by the highest rate in two years, with direct expenses rising more than 5% and overhead expenses up 3.2%. Billing rates were also up -- 3.5% from a year ago. But that increase is marginalized by the fact that firms' "realized rate" -- the rate they are actually paid by the client -- reached an all-time low this quarter. Net collected realizations fell slightly, to 85.4%, which also represents an all-time low.

Russia closing on WTO membership

Russia expects any outstanding issues with Georgia over entry to the World Trade Organization to be resolved by Swiss mediators, clearing its way to join the alliance in December after an 18-year wait. Georgia is the final WTO member to give its approval after the European Union backed Russia's bid last week. Joining the WTO may boost Russia's $1.5trn economy by more than 3% in the medium term, according to the World Bank.

Qantas resumes flights as court orders end to dispute

Qantas has resumed its flights after an independent tribunal ordered a permanent end to the industrial dispute with its union members. The unions have voiced opposition to the plan, which is expected to result in almost 1,000 job cuts at Qantas' Australian operations. Last week, Qantas claimed that the industrial dispute was costing it A$15m ($16m) per week due to flight cancellations and delays.

Historical Royal succession law change

Sons and daughters of any future UK monarch will have equal right to the throne, after Commonwealth leaders agreed to change succession laws. The leaders of the 16 Commonwealth countries where the Queen is head of state unanimously approved the changes at a summit in Perth, Australia. The ban on the monarch being married to a Roman Catholic was also lifted. The succession changes will require a raft of historic legislation to be amended, including the 1701 Act of Settlement, the 1689 Bill of Rights and the Royal Marriages Act 1772.

Canada high court rules rights tribunal cannot award legal costs

The Supreme Court of Canada Friday declared that the CHRT - Canadian Human Rights Tribunal does not have the power to award compensation for legal costs. The high court's 7-0 decision states that the language used in the relevant federal statute does not allow for the awarding of legal costs in the same manner prescribed by most provincial and territorial statutes. The federal appeals court, however, found the tribunal had no jurisdiction to award any legal costs, and the Supreme Court agreed:" The precise interpretive question before the Tribunal was whether the words ... which authorize the Tribunal to "compensate the victim for ... any expenses incurred by the victim as a result of the discriminatory practice" permit an award of legal costs. No reasonable interpretation of the relevant statutory provisions can support the view that the Tribunal may award legal costs to successful complainants. Faced with a difficult point of statutory interpretation and conflicting judicial authority, the Tribunal adopted a dictionary meaning of "expenses" and articulated what it considered to be a beneficial policy outcome rather than engaging in an interpretative process taking account of the text, context and purpose of the provisions in issue. A liberal and purposive interpretation cannot supplant a textual and contextual analysis simply in order to give effect to a policy decision different from the one made by Parliament."

Google pilots indoor photos

Google has started a pilot project allowing the public to look inside shops and other businesses found on its maps. The existing service prompted some privacy complaints from people who claimed the technology was intrusive. However, Google said the new scheme was on a completely voluntary basis. Google said it was beginning the process by inviting the most searched types of businesses to request a visit by its photographers: restaurants, hotels, shops, gyms and vehicle repair workshops. However, it has ruled out big-brand chains for the time being. Hospitals and lawyers' offices have also been excluded.

Federal judge asks SEC, Citigroup to defend settlement

A judge for the US District Court for the Southern District of New York on Friday ordered the US SEC - Securities and Exchange Commission and Citigroup to defend their recent settlement agreement. The agreement concluded the dispute that charged Citigroup with having misled its investors about a $1 billion loan that defaulted. The result left investors to bear the burden while Citigroup reaped $160m in profits from trading and fees. Judge Jed Rakoff directed both parties to answer nine questions pertaining to the $285m settlement. One of Rakoff's principal issues is why the SEC imposed a $95m penalty on Citigroup but imposed a $535m penalty on Goldman Sachs in a July 2010 suit.

European Parliament condemns jailing of Ukraine ex-PM Tymoshenko

Ukrainian authorities should review the conviction of former prime minister Yulia Tymoshenko, says a resolution passed Thursday by the European Parliament that called her imprisonment "a violation of human rights and an abuse of the judiciary designed to silence Ukraine's leading opposition politician." Failing to do so, they say, calls the Ukrainian government's commitment to "democracy and European values" into question and may jeopardize Ukrainian relations with the EU.

Women launch new discrimination claim against Wal-Mart

Lawyers representing women who claimed discrimination by Wal-Mart filed an amended lawsuit Thursday narrowing their claims to California stores of the retail giant. The lawsuit, filed in the US District Court for the Northern District of California, alleges discriminatory practices against more than 90,000 women regarding pay and job promotion. The suit is expected to be the first of many cases against the retailer broken down by state and region. Lawyers for Wal-Mart indicated the new suit relies on the same theories expressly rejected by the US Supreme Court. The new suit seeks back pay for female employees of Wal-Mart in California between December 1998 and at least June 2004, as well as requiring nondiscriminatory pay and promotions criteria.

A simpler rein than the Volcker rule

The Securities and Exchange Commission is moving ahead with proposed rules to implement the Dodd-Frank Act's restrictions on banks' proprietary trading, known as the Volcker Rule. Proprietary trading can be profitable, but also risky. The riskier the trade, the more potentially profitable it is. Shareholders and bank executives make money from profitable trades.

Louisiana must turn over records to BP-U.S. judge

If the state does not hand over the documents it could face dismissal of its lawsuit against BP for losses caused by the Gulf of Mexico oil spill.

  • Weekly Magazine Review

Time
Hillary Clinton and the Rise of Smart Power. Hillary Clinton is an expert at deriving maximum benefit from limited power--which means Obama's top diplomat is using a whole new set of tools.

Newsweek
Money brain. The new science behind your spending addiction. New science unveils how your brain is hard-wired when it comes to spending-and how you can reboot it.

Business Week
Occupy Wall Street; who's behind the mask? David Graeber, the Anti-Leader of Occupy Wall Street. Meet the anthropologist, activist, and anarchist who helped transform a hapless rally into a global protest movement.

The Economist
Europe's rescue plan.

Der Spiegel
Schlaflosigkeit - Wenn die Nacht zum Alptraum wird.

L'Espresso
Il futuro dell'euro è scritto in rete Quando una previsione è la media di moltestime, è affidabile. Un esempio? Le puntate via Internet sulla moneta unica: la probabilità che un paese esca entro il 2012 è al 43 per cento. Malgrado le certezze dei politici.

  • Daily Press Review

Somali 'civilians' killed in Kenyan airstrike
Al Jazeera, Doha, Qatar

Abbas to dissolve Palestinian Authority
Asharq Al-Awsat, Pan-Arab daily, London, England

Syria Assad warns of 'earthquake'
Egyptian Gazette, English-language, Cairo, Egypt

Vandals set fire to Arab restaurant in Jaffa in suspected 'price tag' attack
Haaretz, Liberal daily, Tel Aviv, Israel

Arab League presents Syria with plan for ending uprising
JPost, Conservative, Jerusalem, Israel

Councils warned on slow adoptions
BBC News, Centrist newscaster, London, England

Qantas resumes flights after labor dispute
CNN International, London, England

Mubarak trial postponed to December
Daily Express, Conservative tabloid, London, England

Scientist who claimed 'end of scepticism' on climate change under fire from colleague over 'huge mistake'
Daily Mail, Conservative daily, London, England

Victoria Beckham and baby Harper relax while Romeo and Cruz enjoy a kickabout
Daily Mail, Conservative daily, London, England

Security check for Cannes
EuroNews, International news, Ecully Cedex, France

SYRIA: Arab League awaits Assad response to end crackdown
France 24, Issy-les-Moulineaux, France

Bodies of two Gazans found after Israeli raid
Hurriyet Daily News, (Liberal, English-language), Istanbul, Turkey

The hunt for the lost children of Sierra Leone
Independent The, London, England

Snob editor Yakovlev fired
Moscow News The, Independent, Moscow, Russia

Father of Vincent Tabak's girlfriend thanks 'guardian angel'
Telegraph The, Conservative daily, London, England

Nancy Dell'Olio's halloween routine that saw her knocked out of Strictly Come Dancing
Telegraph The, Celebrity news, London, England

Bang Khen tunnel closed
Bangkok Post, Independent, Bangkok, Thailand

'World of contradiction' awaits 7 billionth person: UN leader
China Post, English-language daily, Taipei, Taiwan

Financial Sector to Rake in Record W30 Trillion Net Profit
Chosun Ilbo, Conservative daily, Seoul, South Korea

Trial of ousted leader Hosni Mubarak postponed
Hindustan Times, New Delhi, India

Kolkata caught in Dawood and Rajan's drug war
India Times, Conservative daily, New Delhi, India

McIlroy claims Shanghai Masters title
Japan Times, Independent centrist, Tokyo, Japan

World's population reaches seven billion - or does it?
New Zealand Herald, Conservative daily, Auckland, New Zealand

ASEAN symposium in Indonesia ahead of summit in Bali
People's Daily Online, English-language, Beijing, China

Australian PM slams 'extreme' Qantas shut down
Straits Times, Pro-government, Singapore

Crean: the artful splodger
Sydney Morning Herald, Centrist daily, Sydney, Australia

Bashar al-Assad goes an unyielding way to Syria
Taiwan News, English-language daily, Taipei, Taiwan

China Vice-Premier Li: Global risks rising
The Economic Times, Business, Mumbai, India

'7 billionth' babies honoured worldwide
Canadian Broadcasting Centre, Toronto, Ontario

Kyrgyzstan’s PM set to win tense presidential vote
Globe and Mail The, Centrist daily, Toronto, Canada

Australian Stock Market Report - Closing 10/31/2011
International Business Times, Business news organization, New York, U.S

MEXICO: Wixáritari Indians Fight Mining in Sacred Desert Site
IPS Latin America, International cooperative of journalists, Rome, Italy

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