December 13, 2010 No. 990 - Vol. 8
"Experience is a good school, but the fees are high."
Heinrich Heine
Insider's view: see how local concerns shape up the global world. Read the daily press review in Migalhas International.
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Read Migalhas LatinoAmérica in Spanish every Tuesday and Thursday. Visit the website at www.migalhas.com/latinoamerica
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EU to target private lenders in future bail-outs
The EU plans to make private lenders cover the losses of any future eurozone debt crisis. The decision may significantly raise the future cost of borrowing for over-indebted eurozone governments. It is part of a new permanent scheme - to be funded by eurozone governments - to replace existing bail-out funds that expire in 2013. The new mechanism will need a treaty change, which may lead to ratification problems in the Irish Republic. In future, Brussels may require a crisis-stricken eurozone government to force losses on its existing private lenders - including investors in government bonds - before it would provide a bail-out package. And if a government got into trouble later down the line, it would be required to default on its other debts, while continuing to make payments on its rescue loans.
Why M.&A. may rebound
After a long drought, companies and private equity firms may be ready to make deals again, oddly enough because of cash, debt and taxes.
Here are the main reasons why:
Cash
A consensus is emerging from several prominent dealmaking experts that mergers are coming back, largely because companies can now afford them. U.S. companies have a near-record $1.93 trillion of cash on hand, according to Federal Reserve data.
Debt
Low interest rates have spurred corporate borrowing and refinancing at unprecedented levels. Private equity firms, which are enthusiastic users of junk bonds, have driven junk volumes to an all-time record this year, according to new data from Thomson Financial.
Big borrowing is likely to continue. Analysts at investment bank Keefe Bruyette & Woods predicted that the Fed will keep interest rates low throughout 2011. That would keep the debt markets open for a long enough time for private equity, in particular, to refinance their companies' crushing debt loads.
Taxes
The potential of new stimulus in the form of tax cuts that will benefit companies and rich individuals. Congress is currently hammering those out.
But despite the increasingly ideal conditions, deal makers may have to prepare themselves for potential disappointment. For one, American corporations may still prove themselves unwilling to spend on acquisitions as long as the economy's growth still looks tenuous.
UN rights chief criticizes actions against WikiLeaks
UN High Commissioner for Human Rights Navi Pillay on Thursday criticized actions by governments and corporations to cut off funding to WikiLeaks, saying it could violate the website's rights to free expression. The comments come following efforts from the US government and US-based companies to cut ties with the controversial website, responsible for leaking more than 250,000 classified diplomatic documents last month and 90,000 related to the Afghan war in July. After releasing the documents last month, Mastercard, Visa, Amazon.com, PayPal and EveryDNS have ended involvement with WikiLeaks, jeopardizing its ability to raise funds and continue operations. In turn, these companies have been subject to retaliatory cyber attacks, in which WikiLeaks has denied involvement. Pillay, who described the exchange as a cyber war, went on to call for an end to these attacks and actions by governments against WikiLeaks taken through third party companies, instead calling for out right prosecution if illegal acts have been committed. Also Thursday, US Senators Joseph Lieberman (I-CT) and Susan Collins (R-ME) praised the actions of these corporations, describing them as "good corporate citizens."
2000 - 2010
Notable quotes
"Two years from now, spam will be solved." BILL GATES, predicting the end of the Internet scourge, at the World Economic Forum, Jan. 23, 2004
"Every decade has an iconic blonde like Marilyn Monroe or Princess Diana, and right now I am that icon." PARIS HILTON, heiress and reality star, on the overpowering nature of her celebrity, July 2006; In the years since, Hilton has experienced various substance·related legal troubles
"In today's regulatory environment, it's virtually impossible to violate rules land] it's impossible for a violation to go undetected, certainly not for a considerable period of time." BERNIE MADOFF, unwittingly foreseeing his own downfall. October 2007
Lexicon: LOCAVORE, FRENEMY, GREEN COLLAR, STAYCATlON, VLOG, WATERBOARDING, TRUTHINESS, METROSEXUAL, SUBPRIME, MALWARE, NETROOTS
Milestones
WIKIPEDIA
JAN. 15, 2001
Supposedly, Wikipedia came into existence in early 2001, but we're not exactly sure, mostly because we checked that fact on Wikipedia.
IPOD
OCT. 23, 2001
The ability to carry 1,000 songs in your pocket-while still listening to the same 30 on shuffle.
THE EURO
JAN. 1,2002
Now gone: francs, guilders, marks, lire, pesetas, drachmas, markkas, escudos.
INTERNATIONAL CRIMINAL COURT
JULY 1, 2002
A place for the world's supervillains, like alleged warlords Thomas Lubanga and Germain Katanga, to go on trial.
CROCS
FALL 2002
This was the shoe that said, "No need to respect me today."
U.S. DEPARTMENT OF HOMELAND SECURITY
NOV. 25, 2002
Twenty-two agencies (including the Secret Service, TSA and FEMA) gathered under the wing of this new Cabinet level department in a massive reworking of the federal government's org chart.
HUMAN GENOME PROJECT
COMPLETED APRIL 14,2003
This map of our genes contains the secrets to what makes us tick as well as what can make us ill. But it's up to us to decipher its coded messages to improve our health.
COLOR REVOLUTIONS
2003-2005
A series of peaceful (and colorfully named) revolutions in former Soviet states: Georgia, Rose; Ukraine, Orange; Kyrgyzstan, Tulip.
FACEBOOK
FEB. 4,2004
Sometime around 2032, pictures of this weekend's kegger will be a key issue in the presidential election.
YOUTUBE
APRIL 23, 2005
America's id was revealed, and it was shaped like kittens.
EMBRYO-FREE STEM CELLS
NOVEMBER 2007
Potentially tons of scientific and medical benefits without the murky moral dilemmas.
G-20 SUMMITS
NOV. 15,2008
This meeting ofleaders of the world's most influential economies has become as vital as any summit at the U.N.
TEA PARTY
FEBRUARY 2009
The most powerful populist movement since the Progressives.
MIR SPACE STATION
MARCH 23, 2001
After IS years in orbit, Mir had to come out of the blue to get Russia's space program into the black. The space station plunged into the Pacific after a fiery re-entry.
THE CONCORDE
OCT. 23,2003
The day British Airways and Air France announced they were grounding the supersonic plane was a sad day for anyone who needed the ability to get from Europe to America very quickly-namely, very wealthy people. Things just never work out for them.
THE OLDSMOBILE
APRIL 29,2004
By the late 1990S, American drivers had abandoned the staid Oldsmobile brand. So in 2000, GM announced it was halting production of the line following its 2004 models.
TELEGRAMS
JAN. 27,2006
Some technologies die slow deaths. Decades after everyone stopped sending telegrams, Western Union finally discontinued the service.
ANHEUSER-BUSCH
JULY 13, 2008
When Brazilian-Belgian brewer InBev acquired the maker of Budweiser, fans feared it would force its fancy foreign tastes into the nation's beer guts. Fortunately, Bud tastes exactly the same.
LEHMAN BROTHERS
SEPT. 15,2008
This investment bank notoriously overleveraged itself on risky investments and had to file for the largest bankruptcy in U.S. history, which helped plunge the global financial system into chaos.
KODACHROME
JUNE 22,2009
The rich colors of Kodak's Kodachrome film are apparent in many iconic photographs-most notably Steve McCurry's famous National Geographic cover featuring an emerald-eyed Afghan girl. But with Kodak hobbled by a market dominated by digital cameras, the film and its complicated development process had to go.
Infrastructure Law of Brazil
The law firm Justen, Pereira, Oliveira & Talamini - Advogados Associados launched in October the book "Infrastructure Law of Brazil", published by Editora Fórum and edited by Marçal Justen Filho and Cesar A. Guimarães Pereira. It contains several articles in English about a variety of issues involving regulation, public procurement, government contracts, concessions of public services, PPPs and arbitration. It also offers bilingual versions of the most relevant Brazilian statutes. Click here and take a chance to have one copy of this excellent book.
Before you open the door to the boardroom, peek through the keyhole!
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China dissident Liu Xiaobo awarded Nobel Peace Prize in absentia
Chinese human rights activist Liu Xiaobo was awarded the 2010 Nobel Peace Prize in absentia Friday in Oslo, Norway. The prize was laid in an empty chair following the ceremony. It would normally be presented to either the recipient or a close relative, as has been the case with other laureates who were being held in detention at the time, such as Myanmar's Aung San Suu Kyi, who was the winner in 1991. Liu is currently serving an 11-year prison term, and Chinese authorities did not allow Liu's family to attend the ceremony. Presenting the award, Nobel committee chairman Torbjorn Jagland explained that Liu was chosen because of his "long and non-violent struggle for fundamental human rights in China."
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Bankers' bonuses to face 'dramatic' change in Europe
European regulators have confirmed tough restrictions on the bonuses that banks can pay their staff. Only 20-30% of bonuses can be paid in upfront cash, according to new guidelines announced by the Committee of European Banking Supervisors (CEBS). The rules are much tougher than those agreed by the G20 countries, raising fears that bankers may emigrate to more lightly-regulated countries. Although they the guidelines for European national financial regulators are not obligatory, a spokesman for the Financial Services Authority (FSA) confirmed that the UK bank watchdog and its European counterparts intend to implement them in detail. The guidelines could mark a profound change in the City bonus culture. In the past, star performers have been able to negotiate big pay deals by threatening to quit and work for a rival bank.
Airbus's Leahy 'investigated for insider trading'
A top executive at European plane maker Airbus has been placed under formal investigation for insider trading by French authorities. Commercial director John Leahy sold shares in parent company EADS before their price fell sharply in 2006. French authorities are investigating whether the sale was triggered by inside information.
Evo Morales introduces radical Bolivia pension reform
Bolivia has passed a new pension law that lowers the retirement age from 65 to 58, bucking a global trend for raising the pension age to cope with rising life expectancies. The new law also nationalizes pension funds and extends the state pension to people working in the informal sector. Morales said he was keeping his promise to create a pension regime that includes all Bolivians.
Privacy project uses cryptography to reduce shared info
A project that could radically reduce the amount of personal information we share in our dealings has been revealed by IBM researchers. The ABC4Trust project is developing an "electronic wallet", with encrypted versions of all a person's details. A query by a device like a "chip and PIN" reader will involve only the information that is strictly necessary. The idea could also be applied to online transactions, and aims to give people more control over personal data.
Madoff trustee files lawsuits worth $20bn
The trustee charged with recovering funds for the victims of Bernard Madoff's multi-billion dollar fraud scheme has filed lawsuits seeking nearly $20bn in damages. Irving Picard has charged nearly 60 people, including a key shareholder in Austria's Medici Bank. Picard accused Sonja Kohn of "masterminding an illegal scheme" to help Madoff defraud investors. Earlier this week, Picard sued HSBC bank for $9bn. It said it would defend itself "vigorously" against the claims. Similar suits have been filed against JP Morgan Chase and UBS banks.
A secretive banking elite rules trading in derivatives
In theory, clearinghouses exist to safeguard the integrity of the multitrillion-dollar derivatives market. In practice, they also defend big banks' dominance.
Sudan civil society group challenges southern referendum
A Sudanese civil society group filed a lawsuit Sunday challenging the actions of the commission handling the January 9 self-determination referendum in southern Sudan. The challenge, filed with the Sudanese Constitutional Court, alleges that the commission violated the procedures for the referendum, set out in the 2009 Southern Sudan Referendum Act and the Sudanese Constitution, in conducting voter registration and in failing to hold to the timetable set out for the vote. The Society Organization Network also accused the commission of placing members of the Sudan People's Liberation Movement (SPLM), a pro-secession party, in senior posts and preventing voters in the north from registering to vote. Members of the SPLM described the lawsuit as sabotage by the National Congress Party (NCP), the dominant political party of the north.
Serbia court acquits 10 accused of aiding war crimes suspect Mladic
The First Municipal Court in Belgrade on Friday acquitted 10 men suspected of helping former Bosnian Serb military leader Ratko Mladic evade arrest. Mladic is one of two high-level targets still at large under the jurisdiction of the International Criminal Tribunal for the former Yugoslavia (ICTY) and faces charges of genocide and crimes against humanity for allegedly overseeing the Srebrenica massacre and other war crimes violations during the Bosnian civil war. The men were charged with helping Mladic by renting apartments in Belgrade for him in 2002. Judge Dragan Garic held that some of the charges were barred by the statute of limitations, which had expired in 2008 and 2009. For the remaining charges, Garic held that there was not enough evidence to warrant a conviction. Prosecutors have announced that they will appeal the ruling to the Court of Appeal in Belgrade.
Supreme Court to hear 3 cases involving labeling of generic medicines
The US Supreme Court on Friday granted certiorari in three cases related to the duty of generic drug manufacturers to list possible side effects on the labels of medicines they produce. The three cases, PLIVA Inc. v. Mensing, Actavis v. Mensing and Actavis v. Demahy were consolidated and will receive one hour of oral argument time. In each of the three cases, the drug manufacturers sought review after appellate courts ruled that the plaintiffs' cases could move forward and that federal law did not preempt their state law claims. Both plaintiffs suffered a neurologic side effect, tardive dyskinesia, from their use of the generic drug metoclopramide to treat gastric reflux.
Massachusetts high court authorizes DNA warrants for unknown suspects
The Massachusetts Supreme Judicial Court ruled Thursday that prosecutors can indict a genetic profile in a rape case, even if they do not know the suspect's name. The ruling will allow prosecutors to indict suspects based on a DNA profile so that once the suspect is identified the prosecution will not be barred by the statute of limitations. The ruling came in the case of Jerry Dixon, whose DNA profile was indicted in 2006 to toll the 15-year statute of limitations on rapes that had occurred in 1991. Dixon was identified in 2007 after being required to submit a DNA sample when he was convicted on separate motor vehicle charges. His lawyer argued that allowing prosecutors to indict a genetic profile provides no notice to the person being charged. The court rejected that argument.
Time
The Best Of 2010. In 50 wide-ranging lists, TIME surveys the highs and lows, the good and the bad, of the past 12 months.
Newsweek
The Meaning of Russia 2018. What the World Cup says about the world.
Business Week
The Colossus of Wall Street. Bestride the bond and equity markets, counseling the Treasury and the Fed, BlackRock CEO Larry Fink is the most influential man you've never heard of.
The Economist
Three-way split. America, the euro zone and the emerging world are heading in different directions.
Der Spiegel
Kampf um das Netz - Vom Streit um die Meinungsfreiheit zum Cyber-Krieg
SYRIA: Getting Away Legally With Assaulting Women
IPS Middle East, International cooperative of journalists, Rome, Italy
PA expresses discontent with current US administration
JPost, Conservative, Jerusalem, Israel
Saudi Ports awards two deals worth $116.2m
Middle East North African Network, Online financial portal, Amman, Jordan
Crown Fibre picks Telecom NZ for UFB initiative in 25 areas
DMeurope, Online news portal, Amsterdam, Netherlands
UNITED KINGDOM: British police join probe into Stockholm bombings
France 24, Issy-les-Moulineaux, France
Malaysia's Anwar in bid to stem WikiLeak effect
China Post, English-language daily, Taipei, Taiwan
Central Asian Women Peace activits deliver to the UN General Secretary regional appeal devoted to SCR 1325 On women, peace and security
Gazeta.kz, Official online newspaper, Kazakhstan
Failed candidates seek re-election
Pajhwok Afghan News, (Independent news agency), Kabul, Afghanistan
Operators of Super Lotto game make it easier to win
Caribbean360, Online news portal, St. Michael, Barbados
Liquor tax licks hotels in Jamaica
Jamaica Gleaner, Independent daily, Kingston, Jamaica
The long, hard road ahead for electric cars
The Globe and Mail, Centrist daily, Toronto, Canada
Residents hide behind steel doors
Trinidad Guardian, Independent daily, Port-of-Spain, Trinidad
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