"Man can believe the impossible, but can never believe the improbable."

Oscar Wilde

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Dewey & LeBoeuf files for bankruptcy protection

Dewey Leboeuf is set to become the biggest law firm to collapse in the US. The firm filed for chapter 11 bankruptcy protection late on Monday and said it plans to liquidate its business after failing to find a merger partner. It was hit by the economic downturn; having promised large guaranteed payments to some of its lawyers. It ran out of cash earlier in the year, which led to the immediate resignation of the majority of its partners. Dewey & Leboeuf was formed in 2007 by the merger of Dewey Ballantine and LeBoeuf, Lamb, Green & MacRae, which left it with more than 1,300 lawyers in 12 countries. It has now reduced that to 150 employees, who will wind down the business. The firm's management promised millions of dollars in guaranteed packages to about 100 of its partners, which left it unable to cope with the downturn in revenues during the recession. "The full extent of the partner compensation arrangements is subject of continuing investigation," said Joff Mitchell, its chief restructuring officer. Thousands of former Dewey & LeBoeuf clients are now seeking new counsel, with potentially hundreds of thousands of client records waiting to be transferred and reprocessed by new firms.

How would Greece leave the euro?

In reality, the new prime minister probably will not announce it on TV one day, between broadcasts of the lottery and the football. The new government will want to renegotiate some parts of the bailout, but if that doesn't happen, then Greece could simply stop paying its debt. That would be a euro default. Actually, a second, as Greece technically defaulted on its debts when it renegotiated a 50% write-off of its debts with its creditors earlier this year. And that would put the ball back in Brussels' court - do the other 16 nations want a defaulter in the euro?

One major issue is that there simply is no mechanism to leave the euro. It was never envisaged by the bright-eyed politicians who created the impetus for the currency, which debuted in 1999. "The treaty doesn't foresee an exit from the eurozone without exiting the EU," the European Commission has said. This is the Maastricht Treaty from 1992, which led to the creation of the euro. The option of leaving the EU was only added in Article 50 of the Lisbon Treaty in 2007. So under its current obligations, for Greece to exit the euro or be thrown out, it would have to leave the EU.

Leaving is straightforward: it involves a member state notifying the European Council - that is, the leaders of EU countries - that it wants to go. The Council then agrees the terms of the exit via a qualified majority.

Would leaving the EU be the end of the world for Greece? Probably not. The key part of Article 50 involves "setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union". The chaos of going from inside the EU to a country outside of it, but still slap bang in the center of Europe, could possibly be even worse than what it is going through right now. "What happens then is that the cure ends up".

Regardless of whether Greece leaves or is thrown out, it will be in the "nuclear option" phase, involving the introduction of a new currency - the new drachma. It would not be easy to make a new currency either. It would take at least four months to plan and introduce new notes and coins. There would probably be an interim period - those four months - during which a temporary national currency would be used. And you would sit back and let supply and demand do what it does. In this case, probably more supply than demand. "The new currency would fall through the floor and inflation would go through the roof."

It would be a legal minefield, as basic financial transactions such as mortgages would have to be redenominated. But that would not be the end of it. Living standards would be hit hard. It might seem like an attractive option, but the short-term costs are massive.

Wouldn't banks - who have already agreed to take a "haircut" of 70% - just accept the devalued new drachma-denominated debt? Well, no, because it may well halve in value again. The assets of banks inside Greece and those outside holding Greek debt would be devalued. And of course, they would not be able to borrow commercially. Greece would probably have to impose capital controls to prevent all the money leaving, much as Malaysia did in 1998 after the Asian financial crisis.

So in the best-case scenario, Greece would have no buying power, everything would be extremely expensive and it would also be broke.

But the idea is that, with its currency so weak, Greece's economy would grow rapidly. People often use Argentina as a comparison of such an outcome, which Nobel-prize winning economist Paul Krugman has said is "an imperfect parallel". Argentina, which had its peso linked to the US dollar, defaulted on $102bn of debt during a financial crisis in 2001-02. In 2005, the country persuaded 76% of creditors to accept a debt swap that reduced the value of their bond holdings by nearly two-thirds. But Argentina had to go through years of pain, and at least had the advantage of its own currency. The mechanics of de-pegging were easier. And it is still unable to borrow in the international debt markets. One comparison is Iceland, which in 2008 had a run on its currency when its banks failed. The Icelandic krona lost more than half its value in one summer. It quickly faced interest rates at 15% and inflation at 14%.

Greece will have to start afresh.

Greek exit from Euro seen exposing deposit-guaranty flaws

The threat of Greece exiting the euro is exposing flaws in how banks and governments protect European depositors' cash in the event of a run. National deposit-insurance programs, strengthened by the European Union in 2009 to guarantee at least 100,000 euros ($125,000), leave savers at risk of losses if a country leaves the euro and its currency is redenominated. The funds in some nations also have been depleted after they were used to help bail out struggling lenders, leading policy makers to consider implementing an EU-wide protection plan.

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• Crumbs

1 - Jury to hear No Doubt video game case - click here.

2 - FedEx buying spree continues, this time in Brazil - click here.

3 - Kim Dotcom can return to luxury mansion, New Zealand court says - click here.

4 - Syngenta pays $105m to settle herbicide lawsuits - click here.

5 - No liability found for sending texts to driver just before crash - click here.

6 - U.S. to fine Ericsson in Panama $1.75m over Cuba shipments - click here.

7 - Texas honor student with two jobs jailed for missing too much school - click here.

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• MiMIC Journal

China to launch yen-yuan trade

China will allow direct trading of the yuan and the Japanese yen next month, in a move aimed at promoting trade between Asia's two biggest economies.

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A 'macabre' process: nominating terrorists to nation's 'kill list'

Obama himself approves "every new name on an expanding 'kill list,' poring over terrorist suspects' biographies on what one official calls the macabre 'baseball cards' of an unconventional war." Those who end up on the list become targets of potential drone strikes. It is the strangest of bureaucratic rituals: Every week or so, more than 100 members of the government's sprawling national security apparatus gather, by secure video teleconference, to recommend to the president who should be the next to die. If, when it comes time to fire a missile at one of the suspects and it appears there might be family members or other civilians nearby, Obama "has reserved to himself the final moral calculation. It is a strange, secret trial in a way.

France court: Google not liable for copyrighted materials on YouTube

A French court ruled Tuesday that Google is not liable for damages to French television company TF1 for copyrighted sports and movies that were uploaded on YouTube. TF1 brought the suit against Google claiming 141 million euros in damages arising out of Google allowing or failing to filter copyrighted content on YouTube. The court instead ordered TF1 to pay for Google's legal fees amounting to 80,000 euros. The court reasoned that Google does not have to monitor and police all content on its website. Rather, Google is able to escape liability by merely informing its users that uploading copyrighted materials without prior consent of the owner is not allowed. The implication of this ruling is that website companies are not liable for unauthorized publication on their websites by their users as long as they remove it upon the owner's request.

Kansas governor signs law prohibiting use of foreign law

Kansas Governor Sam Brownback on Friday signed a bill into law that prohibits state courts, tribunals and agencies from basing any decisions "in whole or in part" on foreign or religious law. The law also prohibits enforcement of any contract made between two parties that is grounded in foreign or religious law and fails to provide either party with the same rights granted under the US or Kansas Constitutions. Supporters of the law, including Brownback, say it is not discriminatory but simply protects citizens from being held to standards of foreign law. CAIR - Council on American-Islamic Relations National Executive Director Nihad Awad had urged the governor not to sign the bill and claims it is unconstitutional discrimination against Muslims. The law does not specifically single out Sharia, but it is suspected that banning the use of Sharia was its main purpose. The law will take effect on July 1.

Romney clinches Republican nomination

Mitt Romney secures his party's nomination for president with a primary win in Texas, making him the first Mormon White House nominee. Projections show he easily won enough votes to pass the threshold of 1,144 delegates needed for the nomination. He is set to be officially anointed as the Republican nominee at the party convention in Florida in late August. Opinion polls suggest Romney is locked in an extremely close race with Obama in November.

Egypt to host run-off election between top 2 presidential candidates

The SPEC - Supreme Presidential Electoral Commission of Egypt announced presidential election results on Monday and declared that there will be a run-off election between the top two candidates later in June. The run-off will be between Muslim Brotherhood candidate Mohamed Morsi and former Hosni Mubarak Prime Minister Ahmed Shafik.

Supreme Court to consider challenge to attorney's fees

The US Supreme Court granted certiorari Tuesday in Marx v. General Revenue Corp. to determine whether a defendant may be awarded attorney's fees in a FDCPA - Fair Debt Collection Practices Act where the plaintiff brought the lawsuit in good faith. The FDCPA allows a court to award attorney's fees "[o]n a finding by the court that action...was brought in bad faith and for the purpose of harassment," while the FRCP - Federal Rules of Civil Procedure allow such an award "[u]nless a federal statute...provides otherwise." The US Court of Appeals for the Tenth Circuit upheld the award of damages, finding it was justified under the FDCPA and the FRCP.

Watching big brother: privacy board delayed

Congress is considering legislation allowing the government to search through Internet traffic for early warnings of cyber attacks. The bills are controversial — worries about government surveillance have led to protests online. The government does have a tool that could calm fears about this kind of legislation — it just doesn't use it: CISPA — the "Cyber Intelligence Sharing and Protection Act." That bill, and similar legislation would allow law enforcement to look for evidence of future crimes, opening the door to a dystopian world where law enforcement evaluates your Internet activity for the potential that you might commit a crime. Fears of Big Brother have become a common refrain in recent years. Whether it be the Bush administration's warrantless wiretapping program or the Transportation Security Administration's use of body scanners, it's hard to convince the public that the government won't abuse its new surveillance abilities. So here's an idea: How about an oversight board — a group of citizens responsible for watching the watchmen? Democratic lawyer Lanny Davis describes it this way: "They are read in, and brought in to the most sensitive intelligence and security programs and are there to review whether they are too close to the line of infringing on privacy and civil liberties rights." As it turns out, there used to be just such an entity — the Privacy and Civil Liberties Oversight Board. The suggestion for the board came from the 9/11 Commission, as a kind of counterbalance to national security laws like the Patriot Act. Davis served on the board under President George W. Bush — until he resigned to protest White House interference. But then a funny thing happened: Congress rewrote the law to make the board stronger — and independent of the White House. On paper, the board is now a formidable check against Big Brother. In reality, though, not so much. "We finally had Congress enact legislation to strengthen the board, to make it independent, to give it subpoena power, and then we haven't had any board whatsoever since that legislation was enacted in August of 2007."

Syria at 'tipping point'

UN-Arab League envoy to Syria Kofi Annan has said the country has reached a "tipping point" after more than a year of conflict. Annan told reporters the six-point international peace plan for Syria was not being implemented "as it must be". "I appealed to him for bold steps now - not tomorrow, now - to create momentum for the implementation of the plan," he said. Annan asked Assad to take bold actions to end the violence. He urged all parties to implement it comprehensively. The Syrian government denied it had breached the agreement and blamed the violence on terrorist groups - a typical message from a defiant government. Assad said the success of Annan's peace plan depended on halting what he called terrorist actions and stopping arms-smuggling. Meanwhile, the United States, France, the UK, Germany, Italy, Spain, Canada, Australia, the Netherlands and Switzerland all took action on Monday to expel Syrian diplomats over Friday's killings in the Houla region.

Blackberry maker RIM warns of loss and job cuts

The company behind the Blackberry smartphone has warned it will make a loss in its latest quarter and make "significant" job cuts. RIM - Research In Motion also said it was hiring JPMorgan and RBC Capital Markets to help with a "strategic review" of the business. It has lost ground as its traditional business clients have switched to iPhones or Android phones. CEO Heins said: "Our global subscriber base continued to grow this quarter to approximately 78 million, driven primarily by growth in international markets, which is partially offset by high churn in the United States."

Spanish savings banks agree merger as debt crisis bites

Three Spanish savings banks - Ibercaja, Liberbank and Caja3 - have approved a merger to strengthen their weakened balance sheets. The merged bank would create the country's seventh biggest lender, with 120bn euros ($151bn) in assets. Spain's government has asked its banks to set aside nearly 84bn euros to cover bad debts. The gap between Spanish and German borrowing costs widens to eurozone record. A sentiment is growing that Spain will need some kind of rescue. Investors are worried about the amount of bad loans Spanish banks could be holding and how the government can afford to keep bailing out the struggling financial sector.

Brazilian indigenous in protest

Groups of Brazilian indigenous people block roads and occupy government buildings, calling for better healthcare in their communities.

Rousseff vetoes parts of forest law

Dilma Rousseff has vetoed parts of a controversial bill which regulates how much land farmers must preserve as forest. Among the 12 articles which President Rousseff rejected is an amnesty for illegal loggers. She also called for 32 modifications to be made to the text. Brazil's farmers' lobby had argued that an easing of environmental restrictions would promote food production. Environmentalists oppose the law, which the say will lead to further destruction of the Amazon rainforest. The bill was approved by the Brazilian Congress a month ago. Environmentalists had urged Rousseff to veto the entire bill.

Business 'intolerant of homosexuality'

The former chief executive of BP, Lord Browne, says companies need to take concrete steps to end discrimination against gays in the workplace. "My sense is that the business world remains more intolerant of homosexuality than other worlds such as the legal profession, the media and the visual arts… I am one of a handful of publicly gay people to have run a FTSE 100 company."

Canada to force striking rail workers back to work

The Canadian government has introduced legislation to force striking workers at Canadian Pacific Railway to go back to work. Almost 5,000 staff took action at midnight last Wednesday, bringing traffic to a halt on 24,000 km (14,900 miles) of track. The government decided to take action after talks stalled over the weekend. Labour Minister, Lisa Raitt said the shutdown of Canadian Pacific's freight service was hurting the economy.

Pakistan judges pressured to apply blasphemy law:

Pakistani judges are being pressured to apply a controversial blasphemy law, UN Special Rapporteur on the independence of judges and lawyers Gabriela Knaul reported on Tuesday. In her initial observations of the Islamic Republic of Pakistan, she expressed concern that judges are "coerced" to rule against the accused without sufficient evidence and fair trials. Moreover, lawyers representing the accused are reportedly compelled to provide inadequate representation and women are one of the targets of the misused law. Pakistani Christians fear that the law will negatively affect their security. According to Knaul, there are additional inadequacies within the judicial system of Pakistan that endanger the courts' ability to provide fair trials. Judges have been threatened and attacked, hindering them from carrying out their duties.

US appeals court allows suit opposing Ten Commandments monument to proceed

The US Court of Appeals for the Eight Circuit ruled on Friday that a lawsuit opposing a Ten Commandments monument displayed on property owned by the City of Fargo, North Dakota, may move forward. The nonprofit group Red River Freethinkers filed suit against Fargo in 2002, claiming that the city violated group members' constitutional rights under the Free Establishment Clause of the First Amendment by displaying the religious monument, which was installed in 1961. The district court dismissed the original suit on the basis that the Freethinkers lacked standing to bring the claim against the city, but the appeals court reversed, finding that the group did have standing. The court determined that there was an injury to the Freethinkers, caused by the city's conduct, and that the injury could be redressed by removing the monument from the property.

Appeals court declines to rehear AmEx arbitration clause case

A 2nd Circuit panel ruled earlier in 2012 that American Express cannot use an arbitration clause to prevent its merchant customers from banding together in an antitrust lawsuit against the company.

U.K. Supreme Court rules against WikiLeaks' Assange

The top court ruled Wednesday that Assange, the founder of WikiLeaks, should be sent to Sweden to face sex-crimes allegations. Assange can conceivably appeal the decision to the European Court of Human Rights but lawyers say such a move is unlikely to stop his extradition for long.

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