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Posted: 06 Oct 2016 07:17 PM PDT
The man has made billions building up a conglomerate spanning real estate, gambling, and hospitality. His name is emblazoned across university buildings. He has been honored by Queen Elizabeth. And, for a time, his net worth propelled him to the title of Asia’s second richest man. But as Lui Che Woo sits in a convention center on Monday morning, the 87-year-old Hong Kong tycoon wants to talk about something else, something he says has stuck with him since childhood. In his words, it’s the importance of world civilization, positive energy, and moral education—one of the lessons he adopted from growing up in Japanese-occupied Hong Kong, and the reason he’s decided to honor former U.S. President Jimmy Carter this week with the Lui Che Woo Prize, a now-annual tradition he says he’ll pass on to his children. This year’s recipients: President Carter, Chinese agricultural scientist Yuan Longping, and the Doctors Without Borders organization. Each will receive HK$20 million (US$2.56 million) for their contributions to international human rights, food supply security, and the treatments of cholera and Ebola, respectively. After all, he was only a boy when he saw bodies piled in the streets during the Second World War. He was still young, he says, when he saw regular people “starving to death.” And he may never forget the day he saw an act of outright cannibalism. “I saw much of the difficulties people faced during that time,” Lui tells Fortune in an interview. “I remembered all this.” It was, among other things, a formative lesson for the future K. Wah Group and Galaxy Entertainment chairman about the meaning of economic empowerment. In particular, Lui says, he wondered why the “Chinese people were mistreated by the Japanese.” “They said, ‘You Chinese are poor and illiterate,’” he says. “I remember that in my heart, even up to this day.” Read More: 9 Billionaires Who Plan to Give Away the Majority of Their Fortunes Lui had to drop out of school in the sixth grade. As a teenager, he made a living selling peanuts and peanut brittle to people lining up to leave Hong Kong’s turmoil. “During those sam nin ling bat goh yuet, we didn’t go hungry,” he says, using the Cantonese colloquialism for Japan’s 44-month occupation. “And in the later stage, I could even make some money.” When the war ended, Lui followed his uncle into a car parts trading company, where he worked as a stock keeper. He later branched out, buying another firm when he was about 20 years old. Then he started hearing about all the leftover U.S. military equipment that was being auctioned off in Okinawa, Japan. The bulldozers he bought there would help create Lui’s meal ticket to Hong Kong’s restrictive and lucrative land development business, at a time when the city “still relied on manual labor to flatten hills and reclaim land,” he recalls. Lui’s empire gradually expanded to launch businesses in the construction materials, property development, and hotel industries. The opportunities he found weren’t lost on him. “I was lucky,” he says repeatedly. About 60 years ago, as he began making money, Lui says he was constantly reminded by the fact that “there were few opportunities for people to study. Why was that? They had no facilities, no campuses, no schools, no nothing.” He started offering to help set up schools in China, a number he’s now lost track of but suggests stretches into the hundreds. Later, he included universities in his donations, returning to the hometown he left at age 4, Jiangmen, to set up a building at the local Wuyi University. “I engage in philanthropy and donate money when and where I think is needed and right,” says Lui. “That’s always been my intention.” While advancements in technology and development reach new heights, values that were “written clearly in religious principles” have been neglected, he says. “How not to fight with one another. How to help one another whenever someone is down,” Lui says. “I want to remind society of how to do these simple things.” Read More: These Are the Richest People in the World The soft-spoken chairman says he’s not particularly religious, choosing instead to adopt basic principles: “to help people, to not do things I shouldn’t do, to help this world.” “I don’t want to just say it—but to do what I really need to do,” he adds. Asked whether he believes enough of China’s rising wealthy class give back to their communities, Lui responds, “However others do it, they still do it out of their good intentions. I, myself, respect each one of them, and will not comment or criticize what they do.” It’s all rather Zen, befitting Lui’s belief in the importance of emanating “positive energy.” But at a time when a not-so-different question of “temperament” is being weighed heavily in the U.S. presidential election, does Lui have thoughts on, say, the discourse around leaders like Hillary Clinton and Donald Trump? How’s their energy? Lui chuckles. “Being a leader in today’s world is hard, very hard,” he says simply. “There are too many people with knowledge and opinions. It’s hard to pacify and satisfy them.” Lui has a relatively low profile outside of China. He is perhaps best recognized for his signature look, a newsboy cap that he wears everywhere, even meeting with world leaders. Today, he’s picked a dark gray from his collection of more than 100 hats, pairing it with a suit and a black and burnt orange tie. Asked why he’s never without the hat, Lui breaks into a smile. The short answer? “I am bald, and I might catch colds easily,” he says. He talks about the air-conditioning at his meetings “blowing in any direction.” Sometimes, people who remember his trademark look give him beautiful hats as gifts, he adds. “On Sundays and holidays, I might even wear fancier hats than usual. The pretty boy hats.” Kevin Lui from TIME contributed research. This article originally appeared on Fortune.com |
Saturday, October 8, 2016
How a Peanut Seller Became One of Asia’s Biggest Billionaires - Fortune
Trump apologised for lewd comments on women in 2005 interview - BBC News
Senior Republicans have condemned obscene comments Donald Trump made about women in a 2005 videotape.
In the video, posted by the Washington Post, Mr Trump is heard telling TV host Billy Bush "you can do anything" to women "when you're a star".
The New York businessman bragged about trying to have sex with a married woman as well as kissing and groping others.
Mr Trump later issued an apology: "I said it. I was wrong, I apologise. I pledge to be a better man."
In a filmed statement on his Facebook page, he added that the videotape was a "distraction" from more important political issues.
Earlier on Friday, when the video first emerged, he had dismissed it as "locker room banter" and added "Bill Clinton has said far worse to me".
He attacked the former president in his Facebook apology.
"I've said some foolish things, but there's a big difference between the words and actions of other people," he said.
"Bill Clinton has actually abused women. And Hillary has bullied, attacked, shamed and intimidated his victims. We will discuss this more in the coming days."
After the video became public on Friday evening, senior Republicans were harsh in their condemnation of Mr Trump's comments.
House Speaker Paul Ryan rescinded his invitation to Mr Trump to attend the Republican Fall Fest in his home state of Wisconsin this weekend.
Mr Trump said that his vice-presidential running mate Mike Pence would represent him at the Wisconsin event.
Senate majority leader Mitch McConnell said the comments were "repugnant," adding that Mr Trump "needs to apologise directly to women and girls everywhere".
Another senior Republican, John McCain, said there were "no excuses for Donald Trump's offensive and demeaning comments".
The video has emerged two days before Mr Trump takes part in the second presidential debate with his Democratic opponent Hillary Clinton.
The two candidates will be in St Louis for the televised encounter, with polling day only a month away.
'Automatically attracted'
The clip was part of unaired footage of an Access Hollywood segment ahead of Mr Trump's appearance on the soap opera Days of Our Lives.
"I moved on her and I failed. I'll admit it," Trump is heard saying. "She was married. And I moved on her very heavily."
"I moved on her like a bitch, but I couldn't get there. And she was married. Then all of a sudden I see her, she's now got the big phony tits and everything. She's totally changed her look."
Later in the conversation, he told Bush he is "automatically attracted to beautiful" women and often tries to kiss them.
"I just start kissing them," he said. "I don't even wait. And when you're a star they let you do it. You can do anything."
says. "You can do anything."
Mr Trump issued a statement shortly after the footage was leaked.
"This was locker room banter, a private conversation that took place many years ago," the statement read.
"Bill Clinton has said far worse to me on the golf course - not even close. I apologise if anyone was offended."
For his part, Mr Bush said he was "embarrassed and ashamed" at the contents of the video.
"It's no excuse, but this happened 11 years ago - I was younger, less mature, and acted foolishly in playing along. I'm very sorry."
Analysis by BBC North America reporter Anthony Zurcher
water for public comments he's made about women over the years. It turns out he's said lewd and disparaging things in private as well. Go figure.
The videotape release comes at a most inopportune time for the Republican nominee, who was trying to use his running mate's well-received debate performance on Tuesday to reboot his campaign after a week of distractions and controversy. On Wednesday he told a local news interviewer that his previous offensive comments about women - which have dogged his campaign since the first Republican primary debate last August - were made for the "purpose of entertainment".
That explanation doesn't fit with the boorish, newly married Trump shown on the video privately boasting about his efforts to seduce a married woman and have his way with whomever he pleases.
Now Mr Trump will enter Sunday's debate with a new cloud hanging over his candidacy. It's almost certain that one of the town hall participants will ask him about it. There may be no easy way to respond - but Mr Trump will have to find an acceptable answer. If he bungles it, everything else he says during the 90-minute debate won't matter.
Hillary Clinton described the comments as "horrific".
"We cannot allow this man to become president," she posted on Twitter.
Mr Trump has said he will not bring up stories about Bill Clinton's infidelities in this Sunday's US presidential debate after previously threatening to do so.
House Speaker Paul Ryan said: "I am sickened by what I heard today.
"I hope Mr Trump treats this situation with the seriousness it deserves and works to demonstrate to the country that he has greater respect for women than this clip suggests."
Friday, October 7, 2016
Trump said 70% of Federal regulations can go - Fortune
Just hours after an adviser said the candidate would seek to cut 10%.
U.S. Republican presidential nominee Donald Trump said as many as 70% of federal agency regulations could be eliminated if he is elected in November, just hours after an adviser said the candidate would seek to cut 10%.
Trump, who blamed regulations for stifling business, told a crowd at a town hall event in New Hampshire on Thursday night that regulations for the environment and safety would remain.
“We are cutting the regulation at a tremendous clip. I would say 70% of regulations can go,” Trump said. “It’s just stopping businesses from growing.”
Earlier in the day during an online discussion with Reuters, Trump campaign adviser Anthony Scaramucci, a Wall Street financier who has raised campaign money for Trump, said Trump would eliminate 10% of regulations.
“We need regulation but immediately every agency will be asked to rate the importance of their regulations and we will push to remove 10% of the least important,” he said.
Another Trump campaign adviser reached by Reuters confirmed the 10% regulatory cut was part of their economic plan.
Jeff Holmstead, a former assistant administrator for the Environmental Protection Agency under George W. Bush’s presidency, said the goal was hard to comprehend.
“You could reduce the number of regulations by 10% without accomplishing very much,” he said.
He added it would make more sense for Trump to try to reduce the cost of regulatory compliance by 10%.
“I think it probably would be possible for a new administration to make changes that would reduce the cost of these programs by at least 10% while still maintaining essentially the same level of environmental protection,” he said.
Officials at the EPA and the U.S. Department of the Interior declined to comment, citing internal policies.
Scaramucci also said that Trump, a fierce critic of the Federal Reserve, would probably get along well with Fed Chair Janet Yellen.
Trump has repeatedly accused the Fed of serving as a political arm of the Obama White House. He says Yellen has put off raising interest rates in order to let President Barack Obama end his term in January without the economic shock that a rise in interest rates might entail.
Scaramucci, a founder of SkyBridge Capital, joined Reuters Global Markets Forum to discuss his views of the campaign. He said Trump would strive for a better balance in federal regulations.
Scaramucci was not as dismissive of Yellen as Trump is, saying he believes the New York property developer would warm to her eventually.
“There are many well-qualified candidates but I think Mr. Trump has to spend some time with chairwoman Yellen. I think knowing what I know about his personality he will like her,” he said.
Trump would seek to streamline regulations as a way to generate economic growth and help the flow of capital, the adviser said. Trump has specifically singled out the energy industry as an area that he would look at for reducing regulations.
“Wall Street is not the devil,” said Scaramucci. “In fact we are at our best when (there) is harmony between Main Street and Wall Street and we hope to restore that.”
Scaramucci singled out several areas that Trump would look to for reforms:
–Labor Department rules expanding the fiduciary standard for financial brokers who sell retirement products would likely be stopped.
–Legislation similar to the former Glass-Steagall Act that limited the banking industry would be on the table for review.
— The Dodd-Frank banking reforms that emerged from the Great Recession of 2008-09 will be reviewed and “the worst anti-business parts of it will be gutted.”
— The Volcker rule will be adjusted. Named after former Federal Reserve Chairman Paul Volcker, it is part of the sweeping 2010 Dodd-Frank financial reform law. It aims to reduce risk-taking by preventing banks from using their own capital to make speculative bets.
How Apple Is Different Now, 5 Years After Steve Jobs’ Death - Fortune
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Posted: 05 Oct 2016 08:39 AM PDT
It’s a different Apple without Steve Jobs. Today marks five years since Jobs died after a long battle with cancer. He was 56. The simultaneously charismatic and controversial Apple leader served as chairman of the board until his death. For better or worse, Apple and innovation ran through Jobs’ blood and carried him to his last day. And many Apple fans and detractors alike can’t help but wonder what the company would look like today if Jobs, who died young, was still alive. Over the last five years, Tim Cook, a decidedly different chief executive, has led Apple. Cook, unlike Jobs, is reserved and quiet. Apple’s current CEO prides himself on Apple’s charitable impact and has, at times, been willing to accept responsibility for mistakes and apologize, like when his company released the error-ridden Apple Maps. Under Cook, Apple has taken a softer (and perhaps nicer) tone, and has shed some of the winner-take-all competitiveness that defined Jobs’ reign as the company’s chief executive. But differences between Jobs and Cook aren’t major. In fact, Cook, who learned the Apple Way from Jobs, might be more similar to his predecessor than some think. Cook, like Jobs, has championed Apple’s obsession with secrecy, and has been able to generate billions in profits by making high-priced (and exceedingly profitable) products that people want. In his own way, Cook pushes his employees the way Jobs once did and, like his predecessor, isn’t afraid of a fight. Cook’s willingness to fight has been on full display in his company’s ongoing battle with Samsung over smartphone dominance and his desire to carry out a protracted patent battle to its bitter end in the U.S. Supreme Court. He was arguably at his most decisive earlier this year when he declined requests by the Justice Department to help the FBI unlock San Bernardino attacker Syed Farook’s iPhone. Cook said he’d be willing to take his fight to the Supreme Court and in one fell swoop, became a privacy and security champion. Like Jobs, Cook has also turned his back on conventional wisdom. He has transitioned Apple’s iPhone business from one that requires major updates every other year to one that delivers those upgrades every three years. More importantly, Cook has eliminated components like the headphone jack, that, for generations, have been viewed as must-have features in electronics. Meanwhile, Cook has followed Jobs’ example of seeking groundbreaking innovation. While his reign so far has been one defined by safe updates to hardware, he’s made moves to improve Apple’s business in healthcare, in music streaming, and in the cloud. He’s also hinted that more innovation will come in similarly burgeoning markets like virtual reality and augmented reality. And although he hasn’t confirmed any plans, the talk of an Apple Car and the company’s desire to break into the automotive industry in the coming years is one that could define Cook’s tenure. Still, some are left wondering what Apple and the world might look like today if Jobs were still alive and running the show in Cupertino. Jobs had a unique ability to get employees to do the seemingly impossible. Is it possible that under Jobs, we would have seen that once-vaunted and now-forgotten Apple television? Would we already have a car that would compete with the likes of Tesla? Would the iPhone already come with an all-glass face and organic light-emitting diode (OLED) technology next year’s model will reportedly offer? Would Apple have made major acquisitions to position itself more effectively in expanding industries? Possible answers have been left to pundits and those who want to speculate about what might’ve been. But even his biggest detractors have admitted in recent years that Jobs was a visionary and someone who, in his own brash and perhaps overly aggressive way, would have pushed the envelope of what was possible. After taking over as Apple’s CEO on an interim basis in 1997 (he turned it into a permanent role in 2000), Jobs turned the company around. Apple was crippled under a corporate structure that had too much bureaucracy and too many products to sell. Jobs eliminated those silos, discontinued product lines, and got down to the business of building high-quality products. Once Apple was stable, Jobs focused on innovation and delivered historically important upgrades to computers. He’s also credited with starting the latest smartphone craze with 2007’s iPhone launch, and showing that tablets could be viable with the iPad. Jobs might not have always been first in delivering products, but he was arguably the best at showing the world what the technology industry could do. And he’s the person who put Apple on a path to Earth-shattering profitability. Cook, meanwhile, served as Jobs’ COO, apprenticing under Apple’s master. Cook learned the art of hype, how to hone in on innovation, and when to cut loose popular but outmoded features. He also learned, in his own way, how to inspire employees. “Steve was in your face, screaming, and Tim is more quiet, more cerebral in his approach,” said Eddy Cue, Apple’s senior vice president of Internet software and services, in an interview with Fast Company earlier this year. “When you disappoint Tim, even though he isn’t screaming at you, you get the same feeling. I never wanted to disappoint Steve, and I never want to disappoint Tim. [Other than them,] I have that feeling with, like, my dad.” Still, despite the similarities, Cook learned the most important lesson of all: he’s not Steve Jobs. Countless times in the last five years, Cook has been unwilling to remember Jobs as someone he could call a colleague, an equal in an industry where unfairly judging another chief executive’s accomplishments has long been fair game. And try as he might to be on the same level as Apple’s co-founder, Cook has resigned himself to the idea that there has never been—and indeed might never be—another Steve Jobs. “To me, Steve’s not replaceable—by anyone,” Cook said in an interview in August with The Washington Post. “He was an original of a species.” Now, five years later, Jobs’ Apple is Cook’s Apple. The profits are still there, the iPhone is ubiquitous, and Macs are still popular. Apple—a company Jobs built, saved, and rebuilt—is now a global force with enough cash to do anything it wants. Jobs might not be here to enjoy the fruits of his labor, but his influence looms large in every product Apple sells. And it’s hard to imagine what the technology industry, let alone Apple, might look like today had Steve Jobs—and all the good and bad that went with him—had not been a part of it. This article originally appeared on Fortune.com |
Thursday, October 6, 2016
Yahoo scans users' email for intelligence agencies - TIME
Posted: 04 Oct 2016 02:55 PM PDT
Yahoo did not deny the report, saying only that it is a “law abiding company, and complies with the laws of the United States.”
According to the Tuesday report, Yahoo acceded to a 2015 government directive to give email access to the National Security Agency or the FBI. Reuters cited anonymous sources including two former employees and another person with knowledge of the events.
Yahoo continues to face questions about a breach in 2014 that compromised at least 500 million accounts.
The Department of Justice and the FBI did not immediately respond to requests for comment.
Posted: 04 Oct 2016 02:55 PM PDT
Yahoo did not deny the report, saying only that it is a “law abiding company, and complies with the laws of the United States.”
According to the Tuesday report, Yahoo acceded to a 2015 government directive to give email access to the National Security Agency or the FBI. Reuters cited anonymous sources including two former employees and another person with knowledge of the events.
Yahoo continues to face questions about a breach in 2014 that compromised at least 500 million accounts.
The Department of Justice and the FBI did not immediately respond to requests for comment.
Wednesday, October 5, 2016
Politicians' racist comments during Brexit condemned - Independent
David Cameron and Nigel Farage among the British politicians and institutions accused of fuelling rising xenophobia in the UK as debate continues to rage over Brexit, the refugee crisis and terrorism.
A report by the European Commission against Racism and Intolerance (ECRI) found a “number of areas of concern” over political discourse and hate speech, as well as violent racial and religious attacks.
Police statistics have shown a sharp rise in Islamophobic, antisemitic and xenophobic assaults over the past year, amid growing tensions in Britain and across Europe.
As well as attacks on religious buildings, migrants from Eastern Europe have been targeted since the vote for Brexit, including a student stabbed in the neck for speaking Polish in Telford and killing of a Polish man in Harlow.
racist violence is on the rise in the UK at the same time as we see worrying examples of intolerance and hate speech in the newspapers, online and even among politicians,” said ECRI chair Christian Ahlund.
“The Brexit referendum seems to have led to a further rise in ‘anti-foreigner’ sentiment, making it even more important that the British authorities take the steps outlined in our report as a matter of priority.”
Government figures have recorded a sharp increase in hate crimebut the true scale of the problem may be far higher than recorded, with the Crime Survey for England and Wales estimating that of 106,000 hate-motivated crimes every year, only a quarter are recorded as such by police.
In a report spanning the period from 2009 and March this year, the ECRI noted positive steps with the enforcement of the Equality Act 2010 and legislation against racism and racial discrimination in the UK, as well as the government’s new hate crime action plan.
But the commission noted “considerable intolerant political discourse in the UK” particularly focusing on immigration, discrimination against Roma, gypsies and travellers, and a spike in online abuse and violent racist incidents.
It singled out statements made by Mr Cameron during his tenure as Prime Minister as examples of degrading terms towards refugees that “contribute needlessly to an increase in xenophobic sentiment”.
groups in condemning his description of asylum seekers risking their lives to reach the UK as a “swarm” in 2015.
The term was criticised by Mr Farage at the time but the former Ukip leader and his party were also cited by the ECRI for comments claiming there was “public concern about immigration partly because people believe there are some Muslims who want to form a fifth column and kill us”.
A representative for Mr Cameron could not be reached for comment but a spokesperson for Ukip defended the party’s record on immigration, particularly regarding Bulgarian and Romanian nationals.
“Ukip is not anti-immigrant as this report states, far from it, we would not pull up a drawbridge, but we do believe that a country should have the right to decide who comes over that bridge,” he added.
“It is demonstratively true that some people are concerned about immigration due to the fact that some in the Islamic community wish us and our liberal society ill.”
The ECRI also took aim at some British media outlets, particularly tabloid newspapers, for “offensive, discriminatory and provocative terminology”.
It cited Katie Hopkins’ infamous column in The Sun, where shelikened refugees to “cockroaches” and sparked a blistering response from the UN High Commissioner for Human Rights, and the same newspaper’s debunked claim over “1 in 5 Brit Muslims’ sympathy for jihadis”.
The report called for the establishment of a press regulator according to the recommendations set out in the Leveson Report, saying the two competing bodies currently in place were insufficient, and that current reporting on immigration, terrorism and the refugee crisis was “contributing to creating an atmosphere of hostility and rejection”.
of Europe’s premiere human rights body, examines all EU member states periodically and released its UK report on Tuesday, offering 23 recommendations for change.
It contended that the shift in public attitudes was contributing to a rise in hate crimes against minority groups including Muslims, Jews, refugees and immigrants.
Tell Mama, an anti-Islamophobia group, has recorded hundreds of incidents that are increasingly targeting Muslim women online.
Fiyaz Mughal, the director of Faith Matters and Tell Mama welcomed the ECRI’s report and joined its criticism of “language that has inflamed community tensions and also scapegoated other sections of society”.
“For example, talking about refugees as ‘cockroaches’ or putting out headlines that ‘1 in 5 Muslims support Jihadis’ is not only irresponsible, it is organised to punch the worst buttons of fear in communities and society,” he told The Independent.
The first six months of this year saw an 11 per cent increase in antisemitic hate incidents recorded in the UK compared to the same period in 2015, according to the Community Security Trust.
The ECRI’s report also raised concern about the lack of a government programme on refugee integration in England.
the Refugee Council, said hate crime has no place in the UK or anywhere else.
She added: “Politicians and the press must condemn and seek to eradicate this behaviour, while ensuring that their own rhetoric and reporting on immigration is responsible.”
In a response included with the report, the Government defended its record and noted progress with a new Cohesive Communities Programme, Hate Crime Action Plan and the Anti-Muslim Hatred Working Group, but said it would not acquiesce to calls to ratify an anti-discrimination protocol of the European Convention on Human Rights.
“We are particularly concerned to see that the Commission repeats controversial and eye-catching press headlines and some alleged statements by politicians, which wrongly implies that these are the prevailing narratives in the United Kingdom and/or are government policy, when there are numerous cases of leading politicians celebrating and speaking out positively about the enormous contributions that minorities have made to this country’s success,” a spokesperson added.
Sarah Newton, the minister for vulnerability, safeguarding and countering extremism, said: “We are clear that there is no excuse for hate crime against anyone of any nationality, ethnicity or religious background - it has no place whatsoever in our diverse society.
“This commitment is underpinned by some of the strongest legislation in the world.”
Tuesday, October 4, 2016
Duetsche Bank racing against time in settling his US financial troubles - TIME Business
FRANKFURT, Oct 3 (Reuters) –Deutsche Bank is throwing its energies into reaching a settlement before next month’s presidential election with U.S. authorities demanding a fine of up to $14 billion for mis-selling mortgage-backed securities.
The threat of such a large fine has pushed Deutsche shares to record lows, and a cut-price settlement is urgently needed to reverse the trend and help to restore confidence in Germany’s largest lender.
Its shares won’t trade in Germany on Monday because of a public holiday, but they will resume trading on the U.S. market later on Monday.
A media report late on Friday that Deutsche and the U.S. Department of Justice were close to agreeing on a settlement of $5.4 billion lifted the stock 6 percent higher, but that report has not been confirmed.
The Wall Street Journal reported on Sunday that the bank‘s talks with the DOJ were continuing. Details are in flux, with no deal yet presented to senior decision makers for approval on either side, the paper said, citing people familiar with the matter.
“Clearly, so long as a fine of this order of magnitude ($14 billion) is an even remote possibility, markets worry,” UniCredit Chief Economist Erik F. Nielsen wrote in a note on Sunday.
Ratings agency Moody’s said it would be positive for bondholders if the lender could settle for around $3.1 billion, while a fine as high as $5.7 billion would dent 2016 profitability but not significantly impair thebank‘s capital position.
POTENTIAL RISK
Deutsche is much smaller than Wall Street rivals such as JPMorgan and Citigroup.
But it has significant trading relationships with all of the world’s largest finance houses and the International Monetary Fund this year identified it as a bigger potential risk to the wider financial system than any other global bank.
Deutsche Chief Executive John Cryan will be in Washington this week for the annual meeting of the IMF, and the Frankfurter Allgemeine Zeitung reported that other executives would join him to try to negotiate a settlement with the U.S. authorities.
Like fellow large European banks also under investigation for mis-selling mortgage-backed securities — Credit Suisse and Barclays — Deutsche will want to get a deal done with the current administration still in power.
A new administration to be installed after the Nov. 8 election will bring unknown risks and likely delays.
Domestically, Deutsche Bank is fighting a rearguard action, seeking to shore up confidence among the public, politicians and regulators who say the bank brought many of its problems upon itself by overreaching itself and then reacting too slowly to the 2008 financial crisis.
It suffered a further blow to its image this weekend with a third IT outage in the space of a few months on Saturday, denying some customers access to their money for a short time.
INDUSTRY SUPPORT
German business leaders from companies including BASF , Daimler, E.ON, RWE and Siemens lined up to defend thebank in a front-page article in the Frankfurter Allgemeine Sonntagszeitung.
“German industry needs aDeutsche Bank to accompany us out into the world,” BASF Chairman Juergen Hambrecht said.
A spokesman for a blue-chip company that did not feature in the article told Reuters he had been asked by Deutsche for an executive to provide a similar supportive comment.
Deutsche Bank and the government in Berlin have had to play a delicate balancing act, emphasising the substance and importance of the bank without implying any need for state aid or willingness to supply it.
The bank has a market capitalisation of only about 15.9 billion euros ($17.9 billion) and would almost certainly have to raise fresh cash to pay the full DOJ demand.
Both the bank and Berlin this week denied reports that the government was preparing a rescue plan.
The Bild am Sonntag newspaper wrote on Sunday that Deutsche‘s chairman had informed Berlin just before it disclosed the potential $14 billion fine but had not asked for help.
The same newspaper quoted the president of the Bavarian Finance Centre, Wolfgang Gerke, as saying that the German government should step in and buy a 20 percent stake in thebank before its value fell any further. The group represents financial services companies in the southern German state.
“Fundamentally, I’m against state interventions,” he told the newspaper, but added that in this case a government stake would be “a signal that could turn the whole market”.
(Additional reporting by Harro ten Wolde and Michael Shields; Editing by Keith Weir, Lisa Von Ahn and David Goodman)
Monday, October 3, 2016
Donald Trump’s ‘Fiduciary Duty’ Excuse on Taxes Is Just Plain Wrong - TIME
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Posted: 03 Oct 2016 05:06 AM PDT
It’s hard to know what to say to the New York Times’ revelation that Donald Trump lost so much money running various casino and hotel businesses into the ground in the mid-1990s ($916 million to be exact) that he could have avoided paying taxes for a full 18 years as a result (which may account for why he hasn’t voluntarily released his returns—they would make him look like a failure). But predictably, Trump did have a response – fiduciary duty made me do it. So, how does the excuse stack up? Does Donald Trump, or any taxpayer, have a “fiduciary duty,” or legal responsibility, to maximize his income or minimize his payments on his personal taxes? In a word, no. “His argument is legal nonsense,” says Cornell University corporate and business law professor Lynn Stout, author of “The Shareholder Value Myth,” and one of the smartest people I know on such matters. “If such an idea were true, we would breach our duties to ourselves by making charitable contributions (which reduce our income) and by earning income in the first place (which increases our taxes). The concept of fiduciary duty simply doesn’t apply to individual decisions to earn income, make charitable contributions, or refrain from using tax loopholes.” In a way, the very notion of bringing “fiduciary duty” into a conversation about bankruptcy-related tax losses would seem to give credence to the idea that he actually did run his businesses into the ground, something he’s thus-far denied (Trump and his camp are always quick to point that he never went into Chapter 11 – only the corporations he either ran or had a stake in did). But then, there are so many worms in the can that the Donald has just opened with the “fiduciary” comment, it’s hard to know where to begin with a critique. As Stout points out, Trump and his campaign seem to be parroting the flawed argument sometimes made by business executives seeking to defend irresponsible or unethical corporate behavior—“fiduciary duty made me do it,” with “it” meaning everything from orchestrating dicey mergers to turn a quick buck, offshoring jobs to cut costs in a way that increases corporate risk (remember the Rana Plaza disaster in Bangladesh?) or using spare cash to bolster the stock price with buybacks rather than making long term investments in things like worker training, better pay and benefits, or new product research and development. Yet even in public companies, experts say that there is no enforceable legal duty to “maximize shareholder value”—the business judgment rule protects independent directors’ decisions about the best way to serve the interests of the corporation and its shareholders, including decisions that reduce share price or profits in the foreseeable future. Despite what corporate leaders (and people like Trump) might say, there’s actually considerable wiggle room in the law that allows a CEO to do the right thing. But of course, he (or she) has to want to. The mythology of shareholder “value” and the corporate excuse of fiduciary duty as a reason to make really dumb and selfish decisions to turn a quick buck has long been a pet peeve of mine. The idea that companies should be explicitly managed for the benefit of shareholders, and shareholders alone, to the exclusion of anyone or anything else, is an odd system in the global context. Most firms in Germany, China, France, and Scandinavia, along with many others in countries like India and Brazil, aren’t primarily managed this way. Indeed, it took quite a while for American business leaders to buy into the idea, despite the fact that it was being pushed vigorously in both business schools and the markets. As recently as 1990, the Business Roundtable, a group of CEOs from America’s largest and most powerful companies, said in its mission statement that it was “the directors’ responsibility to carefully weigh the interests of all stakeholders as part of their responsibility to the corporation or to the long-term interests of its shareholders.” Seven years later, though, the group had finally caved, rewriting the statement to say that “the paramount duty of management and of boards of directors is to the corporation’s stockholders; the interests of other stakeholders are relevant as a derivative of the duty to stockholders.” Today, whether they believe it or not, it’s rare to find a CEO of a public company who doesn’t publicly buy into the idea of shareholder value. Indeed, the only leaders who can openly question this notion and get away with it tend to be high-profile founder-owners who have a certain cult of personality (think Jack Ma, or Howard Schultz—and even they get plenty of blowback). Yet shareholder value isn’t value if it involves doing things that eventually put companies into bankruptcy. Executives have a fiduciary responsibility to create shared value – not just hike quarterly profits – because this is the only way to create any value at all over the long term, which is what shareholder value is supposed to be about. What’s more, fiduciary duty is about taking care of others. When it comes to Trump and his businesses, one thing is very clear – others always end up with the short end of the stick. |
Google, Facebook and More Join Forces for Ethical AI - Fortune
Posted: 29 Sep 2016 07:30 AM PDT
Five tech giants announced on Wednesday that they are launching a nonprofit to “advance public understanding” of artificial intelligence and to formulate “best practices on the challenges and opportunities within the field.”
The Partnership on Artificial Intelligence to Benefit People and Society is being formed by Amazon, Facebook, Google, IBM, and Microsoft, each of which will have a representative on the group’s 10-member board.
The partnership will conduct research and recommend best practices relating to “ethics, fairness and inclusivity; transparency, privacy, and interoperability; collaboration between people and AI systems; and the trustworthiness, reliability and robustness of the technology,” according to the announcement. “It does not intend to lobby government or other policymaking bodies.”
“We’re in a golden age of machine learning and AI,” said Ralf Herbrich, the director of machine learning at Amazon, in a prepared statement. “This partnership will ensure we’re including the best and the brightest in this space in the conversation to improve customer trust and benefit society.” (Herbrich will be Amazon’s representative on the board.)
The remainder of the board will be filled with representatives from academia and the non-profit world, according to a press release, which also indicates that the group is already in discussions with the Association for the Advancement of Artificial Intelligence and the Allen Institute for Artificial Intelligence. Additional corporate participants are also expected, it noted. (Google’s representative on the board will come from its London-based AI unit DeepMind, which developed software that, this past March, defeated the world champion in the ancient Chinese game of Go.)
In the past five years, technological progress and optimism about AI has been exploding, in part due to breakthroughs in a subfield known as deep learning—or, more properly, deep neural networks. Neural networks are software constructs, originally inspired by the way the brain works, that enable machines to teach themselves how to recognize complex patterns. They have already been responsible for enormous strides in machine translation, natural language processing, image recognition, and computer vision, unleashing among other things progress toward making self-driving cars a reality. They’re also the technology that has made speech recognition—which powers Amazon’s Alexa to Apple’s Siri to Microsoft’s Cortana to Google Now—dramatically better than it used to be.
The new partnership comes as its members increasingly use artificial intelligence to compete with one another in categories such as consumer electronics and business productivity software. It appears to be aimed, at least in part, at dispelling and defusing public concerns about artificial intelligence, a phrase that often inspires both rational and irrational fears. The rational ones include the prospect of economic dislocation and loss of jobs, while irrational ones—or at least premature ones—embrace science-fiction scenarios, in which robots rule the earth or society confronts the so-called singularity. (The singularity is the hypothesized point at which machines with superhuman intelligence begin to upgrade themselves without human oversight, starting a runaway cycle that leaves lowly humans ever farther in the dust.)
Earlier this year, Tesla and Space X CEO Elon Musk expressed his concerns that robo-investors could start wars as a way to maximize profits in Lo and Behold, the latest film by German filmmaker Werner Herzog.
“As researchers in industry, we take very seriously the trust people have in us to ensure advances are made with utmost consideration for human values,” Facebook’s Yann LeCun said in another statement accompanying the press release. LeCun, the director of Facebook’s AI research and its representative on the new partnership’s board, is a pioneer in the field of deep learning.
The recent upsurge of interest in AI has been reflected in burgeoning investment in AI-focused startups. Equity funding of such startups reached an all-time high last quarter of more than $1 billion, according to the CB Insights research firm. More than $7.5 billion has been sunk into such startups since 2011—with more than $6 billion of that coming since 2014.
This article originally appeared on Fortune.com
Lawmakers Slam Wells Fargo CEO at House Financial Services Committee Hearing - TIME Business
Posted: 29 Sep 2016 09:26 AM PDT
WASHINGTON — Angry lawmakers heaped another round of blistering criticism on Wells Fargo’s CEO, pressing Thursday for details about what senior managers knew about allegedly illegal sales practices and when any concerns were disclosed.
Chief Executive John Stumpf, newly stripped of tens of millions in compensation, told the House Financial Services Committee that the bank is expanding its review of accounts and will evaluate executives’ roles. But as during the grilling he received last week from a Senate panel, Stumpf remained on the defensive.
Several lawmakers, both Republican and Democrat, alleged that Wells Fargo’s sales practices may have violated federal laws, including the federal racketeering laws, which would constitute a criminal offense. Federal regulators have not said if they have referred the Wells Fargo case to the Department of Justice.
“Fraud is fraud. Theft is theft,” committee head Rep. Jeb Hensarling, R-Texas, told Stumpf.
Stumpf reiterated his words of last week, that he was “deeply sorry.” He said the bank was looking at accounts further back, to 2009, and that bank executives’ roles will be reviewed “across the board” in an inquiry by Wells Fargo’s outside directors.
U.S. and California regulators have fined San Francisco-based Wells Fargo $185 million, saying bank employees trying to meet sales targets, opened up to 2 million fake deposit and credit card accounts without customers’ knowledge. Regulators said they issued and activated debit cards, and signed people up for online banking without permission. The abuses are said to have gone on for years, unchecked by senior management.
Stumpf came under a sustained assault from lawmakers, who face re-election in a little over a month. He insisted that Wells Fargo had taken actions prior to 2013 to bolster its legal compliance and maintain high ethical standards. He bristled at depictions of the culture of Wells Fargo — a bank with origins in the California gold rush — as elevating sales and profits at the expense of ethics.
“This is the behavior of people that we found, that we did not want,” Stumpf insisted.
For many of the angered lawmakers, the scandal is personal. They hold accounts with Wells Fargo or have taken out mortgages. “If I could, I’d pay it back,” said Hensarling.
Republican Rep. Patrick McHenry, who represents North Carolina — where Wells has a large presence due to its purchase of Wachovia in 2008 — was particularly incensed. “You have broken long-standing ethical standards inside the company.” McHenry said.
Stumpf noted new leadership at the retail bank business and the accelerated elimination of sales goals. He said no executives above the branch manager level appeared to be aware of the misconduct.
He also cited the compensation he must return. The Wells Fargo board said it is stripping Stumpf and the executive who ran the retail banking division of millions of dollars in pay. Stumpf, who earned $19.3 million last year, will forfeit $41 million in stock awards.
He also is giving up any bonuses for this year, as is Carrie Tolstedt, the former head of the retail operation. Tolstedt is forfeiting $19 million of her stock awards, and her planned departure was made immediate.
Members of Congress also raised question whether other banks had similar toxic sales cultures like Wells. “We have Wells Fargo before me, but I don’t think you should be alone in this joyous experience,” said Rep. Brad Sherman, D-California.
Stumpf insisted customers’ loyalty to Wells Fargo remains as strong as ever. He also defended his dual roles as chief executive and chairman, positions that some critics have suggested should be split.
Members of Congress also pushed Stumpf on when he informed Wells Fargo’s board about the sales practice scandal, and whether Wells may have violated Securities and Exchange Commission regulations by not informing investors.
Rep. Carolyn Maloney, a New York Democrat, asked Stumpf about his personal sales of company shares at a time when she said he apparently had learned about the fake-account sales practices. Stumpf said he sold the stock with the proper ethics approvals and “with no view” of any misconduct at the bank.
Stumpf also said Wells did not put language in their regulatory filings until this summer, three years after a Los Angeles Times investigation and a year after a Los Angeles City Attorney’s lawsuit.
Stumpf again promised action to make things right for customers who were affected. Customers already have been refunded $2.6 million in fees slapped on unauthorized products, the bank says.
The consumer banking giant, which is also the biggest U.S. mortgage lender, fired about 5,300 employees starting in 2011 in connection with the sales practices. Stumpf said all of the terminated employees were fired because of unethical conduct — not because they failed to meet sales goals.
Whether the unusual takeback from his compensation will be enough to save Stumpf’s job is hard to say.
It was “a step in the right direction, but there are still dozens of unanswered questions,” said Sen. Sherrod Brown of Ohio, the Senate Banking Committee’s senior Democrat. He and the other Democrats on the panel asked Stumpf on Wednesday to answer a series of 58 questions, including nearly two dozen that they said he failed to answer at the hearing last week or for which he promised to provide fuller information.
Few top bank executives have had their compensation clawed back in the years since the financial crisis starting in 2008. While unusual, the move by the board “was the right thing to do,” said Charles Elson, a professor and director of the Weinberg Center for Corporate Governance at the University of Delaware.
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