Thursday, October 19, 2017

Trump announced an antitrust attorney to head the FTC

Trump announced an antitrust attorney to head the FTC

Donald TrumpPresident Donald Trump makes a statement about the mass shooting in Las Vegas, Monday, Oct. 2, 2017 at the White House in Washington.AP Photo/Evan Vucci
WASHINGTON (Reuters) - President Donald Trump has selected Joseph Simons, an antitrust attorney from a Washington law firm, to head the Federal Trade Commission, a White House official said on Wednesday.
Trump is expected to nominate Simons to the agency, along with Noah Phillips and Rohit Chopra to be FTC commissioners, the White House official said. Upon confirmation, Simons will be designated chairman, the official said.
The agency is currently headed by Acting Chairman Maureen Ohlhausen, a Republican, with Democrat Terrell McSweeny the only other commissioner. The president has long been expected to name a permanent chair and fill the three empty commission seats, two Republican and one Democrat or independent.
Simons, a partner at the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, was a director of the FTC's Bureau of Competition from 2001 to 2003.
During Simons' tenure at the FTC, the agency sued to stop Diageo PLC and Pernod Ricard from buying Seagram Spirits and Wine in 2001 to prevent a duopoly in rum. The FTC also filed a lawsuit in 2003 to stop Haagen-Dazs owner Nestle Holdings Inc from buying Dreyer's Grand Ice Cream Inc, which makes also superpremium ice cream. The FTC later settled both cases.
Noah Phillips, who graduated from Stanford Law School in 2005, is chief counsel for U.S. Senator John Cornyn, a Texas Republican. He is also a veteran of the law firms Steptoe & Johnson LLP and Cravath, Swaine & Moore.
To fill the empty Democratic seat on the commission, the president tapped Rohit Chopra, a financial services expert. Chopra, an ally of Massachusetts Senator Elizabeth Warren, is currently at the Consumer Federation of America.
The FTC works with the Justice Department to enforce antitrust law and pursues companies accused of deceptive advertising. It is an independent agency that is headed by a chairman and four commissioners. No more than three commissioners can come from any one party. 
(Reporting by Diane Bartz; editing by Diane Craft)

Wednesday, October 18, 2017

China’s Xi sells his vision of new socialism to the world

College students wave national flags as they watch the opening of the 19th Communist Party Congress in Huaibei in China's eastern Anhui province on October 18, 2017.
STR/AFP/GETTY IMAGES
Xi Jinping, the man shaping a new Chinese era according to his vision of Communist Party greatness, strode onto the massive stage of the Great Hall of the People and bowed twice, once to the thousands of party officials gathered to hear him speak, and again to the elites whose ranks he is about to remake.
Then, for a moment, he directed his words to the rest of the world.
Read also: China's Xi Jinping made the country his own, and he's just getting started
China's way can be your way, too, he said, offering the Chinese system of authoritarian capitalism as an alternative to the Western democracy it is seeking to undermine, in a landmark speech in which he looked back on his first five years in office and sketched a vision for what is to come.
"Socialism with Chinese characteristics is now flying high and proud for all to see," he said.
Xi Jinping trumpets 'new era' of power for China(REUTERS)
The Chinese model has blazed "a new trail for other developing countries to achieve modernization. It offers a new option for other countries and nations who want to speed up their development while preserving their independence; and it offers Chinese wisdom and a Chinese approach to solving the problems facing mankind."
Mr. Xi's comments came early in a speech to open a party congress, held every five years, that will endorse a new generation of party leadership with him at the helm. Claiming success abroad has often been a way for leaders to enhance their standing at home.
But Mr. Xi also offered clear confirmation that his vision extends far beyond his own country's borders as he positions China's illiberal model as a competitor to Western systems of democratic governance and open markets – particularly at a time when the West is seen as fragile and vulnerable, buffeted by demagogic leaders and fractured social structures.
Mr. Xi calls it "socialism with Chinese characteristics for a new era," an ideological banner meant to fly over his vision of renewed authoritarian control at home and "a new type of international relations" abroad, he said.
He cast himself as a promoter of peace, although China's actions have suggested a more divisive attempt to promote its own interests.
"We have seen China seeking to exploit divisions between Europe and the United States, aiming to prevent unified Western positions on matters such as discriminating against foreign companies and growing protectionism in China," one Western diplomat said Wednesday.
Mr. Xi spoke barely 24 hours after Xinhua, the country's central news agency, published a stinging rebuke to world democratic powers in an editorial headlined: "Enlightened Chinese democracy puts the West in the shade."
The echoes of Cold War ideological competition were accompanied by assurances that China will work for global good. But the Chinese President, already a strongman at home, is seeking a legacy that places him in the pantheon of the country's greatest leaders. Burnishing and promoting China's own system would accomplish that.
"The people who initiate new phases often get the most recognition. Mao [Zedong] set up this country; that was a new phase. Deng [Xiaoping] launched the reform and opening up policy; that was another new phase," said Shan Wei, a specialist in China's political development at National University of Singapore, referring to China's two most notable leaders.
Indeed, Mr. Xi's leadership vision has been difficult to distinguish from his own ambitions for power, and his speech did little to quell speculation that he may intend to remain in control for longer than the two terms that has become customary among recent leaders.
"With all his big talk and longer-term plans and visions, it seems like he is maybe laying the ground work to stay on," said Christopher Balding, a professor of economics at Peking University.
Mr. Xi does not appear to have succeeded in gaining a named theoretical contribution, which would enshrine his name in the party's constitution alongside Mao and Deng – an indication that he has not achieved unrestrained internal power. What is clear, though, is that Mr. Xi intends to make China a country that, by building strength at home, takes an increasingly prominent role on the world stage.
"He's put out a blueprint for the Chinese Communist Party and for China for the next 33 years," said Dali Yang, a political scientist at the University of Chicago. "And it's an ambitious set of goals that are designed not only to raise the living standard in China but also China's profile and influence around the globe."
Those goals include becoming, by 2035, a cutting-edge innovator and making the country's soft power "much stronger," while at home improving the environment, setting in place better rule of law and swelling the ranks of the middle class.
By 2050, Mr. Xi wants to ensure "China has become a global leader," he said.
That work is already in progress: sensing weakness in the West, China has already "become much more assertive, pushing its version of globalization – meaning globalization with Chinese characteristics," said Michael Clauss, the German ambassador to China.
Mr. Xi spoke for nearly 3-1/2 hours, colouring his words with soaring rhetoric delivered before the party's assembled elders, including his predecessor Jiang Zemin, who repeatedly glanced at his watch as time slowly passed. At one point, former president Hu Jintao left the room, not returning for nearly 10 minutes. In the cavernous audience gallery, men in uniform dozed and diplomats struggled to keep their eyes open. In Chinese, the printed version of his remarks stretched to 68 pages.
Still, Mr. Xi's comments distilled his vision, including for extensive party control of the country's life. Religions "must be Chinese in orientation"; core socialist values should "become part of people's thinking and behaviour"; works of art should "extol our party"; students should be "well prepared to join the socialist cause"; and the party's influence in the military should strengthen.
"The party exercises overall leadership over all areas of endeavour in every part of the country," he said.
He also promised to abolish shuanggui, the abuse-prone system used by party investigators to interrogate graft suspects without charges. It "will be replaced by detention," Mr. Xi said, as part of reforms to the party.
But he offered no indication that he would ease a clampdown on dissent that has become a hallmark of his tenure.
"We must oppose and resist various erroneous views with a clear stand," he said.
It was an "affirmation of tighter control on freedom of speech, intellectual and media freedom," said Lynette Ong, a scholar of authoritarian politics at University of Toronto.
Indeed, though China may see its experience as a useful model for others, human-rights advocates caution about following its lead.
"By its own admission, China's economic achievements are still fragile, and its environmental and human cost remains deliberately hidden," said Nicholas Bequelin, east Asia regional director for Amnesty International.
"It is too soon to tell whether it constitutes a model or not, and its top-down nature can lead to severe rights violations if it lack strong safeguards."
Mr. Xi gave no corner to critics: "No one should expect China to swallow anything that undermines its interests," he said in a forceful rebuttal that underpins the appeal he hopes China's "new socialism" will hold for others.
"The idea that nations can reject Western universal values in favour of developing their own exceptionalism may be very persuasive to other nations," said Mike Gow, an expert in state propaganda at Xi'an Jiaotong Liverpool University.
"We need to view China's international activity as less about exporting an ideology and more in terms of building regional and global alliances which necessarily undermine and weaken the dominance of Western systems," he said.
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Protectionism, tariffs could slam housing market, CMHC warns

CMHC’s office in Ottawa.
SEAN KILPATRICK/GLOBE AND MAIL
A wave of anti-globalization that leads to widespread protectionism and increased tariffs could cause Canadian house prices to fall by more than 31 per cent in the next five years, according to the results of scenario tests by Canada's national housing agency.
Canada Mortgage and Housing Corp., which insures mortgages against defaults, released the results Wednesday of internal modelling that tests severe economic scenarios. The scenarios – which include a wave of anti-globalization, a severe earthquake, steep oil price declines and a massive housing correction – are all chosen as worst-case events and are not forecast to actually occur, CMHC said.
"We seek out extreme, almost unimaginable situations, and ask ourselves, 'what if,'" said CMHC chief risk officer Romy Bowers. "That is the goal of our stress testing, to measure how we would stand up to these unlikely shocks."
Ms. Bowers said CMHC added the anti-globalization scenario to its testing this year because there has been a wave of protectionist sentiment across the world.
"The scenario we actually modelled is pretty extreme, but that theme was of interest to our board and management as well," she said.
The agency forecast Canadian house prices would fall by 31.5 per cent over the next five years under its anti-globalization scenario as unemployment levels in Canada spiked to 15.3 per cent in five years.
The dramatic scenario assumes a rapid increase in U.S. interest rates and unsustainable debt levels in China would cause large demand shocks globally, spurring greater protectionism, widespread use of tariffs and a euro-zone breakup.
CMHC predicts its core insurance operations could see cumulative claims losses climb to $12.5-billion in total over the next five years under the protectionist scenario, compared with an anticipated base-case scenario of claims losses at $1.7-billion under current conditions.
The scenario would cause CMHC's total profits in its insurance operations to fall to just $118-million over a five-year period from a currently predicted base case of $7.3-billion in profits over five years.
The agency predicted its parallel securitization business – which offers securitized mortgage products to investors – would actually see a small improvement in profits under the anti-globalization scenario, however, because CMHC anticipates the program would be used as a policy tool to provide liquidity to stressed lenders.
However, the agency noted that under all scenarios it studied, it would still remain solvent, and its key capital ratios would remain well above required target levels, indicating it is able to withstand even extreme scenarios.
CMHC's insurance protects lenders in the event of loan defaults by borrowers who have insured mortgages. The stress-testing project helps to reassure banks, investors, home owners and regulators that there will be strong protection for financial institutions even in severe downturns.
The agency's stress tests assume that should any of the studied shocks actually occur, CMHC would halt paying dividends to the federal government to conserve capital.
The most severe impact for CMHC would come if Canada were to suffer a severe housing correction, similar to the correction the U.S. faced in 2008 and 2009, which included a 30-per-cent national decline in house prices and a sharp drop in employment levels.
Under the scenario, CMHC forecasts house prices would fall 30 per cent, unemployment levels would peak at 12 per cent and it would lose $217-million over five years as claims losses hit $11.8-billion. But mandatory capital ratios would still remain strongly positive, the agency concluded.
In 2016, CMHC studied the impact of a sudden spike in interest rates as one of its stress-testing scenarios, assuming a 2.4-percentage-point increase in rates over two quarters would lead to a severe drop in house prices and ultimately the failure of a Canadian financial institution.
The agency did not include the risk in its stress testing this year, however, even though interest rates have recently started climbing and alternative lender Home Capital Group Inc. faced a major crisis in the spring that threatened its viability.
Ms. Bowers said CMHC concluded it did not need to redo the interest rate scenario this year because it had fairly complete information on hand already. CMHC deputy chief risk officer Nadine Leblanc said the anti-globalization scenario also assumed a large increase in mortgage interest rates would occur, so the impact was included in that test.

Ontario rules out new financial incentives to win Amazon headquarters

The Amazon logo is seen on a vehicle at fulfillment centre in Poland.
BARTEK SADOWSKI/BLOOMBERG
The Ontario government has ruled out giving Amazon Inc. any money or tax breaks as part of its plan to convince the online giant to establish a corporate headquarters in the province.
A plan to increase Ontario's number of science and technology graduates is at the centre of the province's plan, Ed Clark, the former TD Bank chief executive, said on Wednesday morning. Mr. Clark was chosen by Premier Kathleen Wynne to head the province's bid team.
"The Ontario government is not offering any new financial incentives to Amazon, nor any incentives that are not available to others who seek to grow or locate such jobs here," Mr. Clark said.
Amazon has said that it intends to spend more than $5-billion to build a second headquarters in North America, a project dubbed HQ2. The new headquarters will need as many as 50,000 employees and, according to Amazon founder and CEO Jeff Bezos, it will serve as "a full equal" to the existing headquarters in Seattle.
According to Mr. Clark, Ontario's key advantage is the province's labour force, which he said provides "great talent at a very competitive cost."
Instead of money to attract the technology giant, Ontario will look to increase the number of postsecondary students in the province graduating with degrees in science, technology, engineering or math – known as the STEM disciplines – by 25 per cent over the next five years.
The plan will also focus directly on artificial intelligence, with a goal to graduate 1,000 master's students in AI-related fields annually within five years.
Mr. Clark stressed that whether Ontario is successful in getting Amazon's new headquarters or not, it will go forward with the plan.
"It turns out that the province's best response to Amazon is to offer what we offer everyone, from companies established here, to those thinking of coming," he said, ruling out any special treatment for Amazon.
EU tax crackdown bruises Apple, Amazon(REUTERS)

Rio Tinto and its former CEO Tom Albanese have been charged with fraud

Rio Tinto and its former CEO Tom Albanese have been charged with fraud

Rio Tinto CEO Tom AlbaneseFormer Rio Tinto CEO Tom Albanese. Feng Li/Pool/Getty Images
US authorities have charged Rio Tinto and two former senior executives, including former CEO Tom Albanese, with fraud.
The Securities and Exchange Commission (SEC) alleges the executives inflated the value of coal assets that were acquired for $3.7 billion and sold a few years later for $50 million.
Rio Tinto, the world’s second largest mining company behind BHP, faces permanent injunctions, return of allegedly “ill-gotten gains” plus interest, and civil penalties.
The company, which has a market capitalization of about $A30 billion on the ASX, in August posted underlying earnings for the half year of $3.94 billion ($A4.94 billion).
The SEC’s complaint filed in federal court in Manhattan alleges that Rio Tinto, Albanese, and its former CFO Guy Elliott failed to follow accounting standards and company policies to accurately value and record its assets.
Instead, as the project began to suffer one setback after another resulting in the rapid decline of the value of the coal assets, they allegedly sought to hide or delay disclosure from Rio Tinto’s board of directors, audit committee, independent auditors, and investors.
The Rio Tinto executives allegedly breached their disclosure obligations and corporate duties by hiding from their board, auditor, and investors the crucial fact that a multi-billion dollar transaction was a failure.
“Rio Tinto and its top executives allegedly failed to come clean about an unsuccessful deal that was made under their watch. They tried to save their own careers at the expense of investors by hiding the truth,” says Steven Peikin, co-director of the SEC’s Enforcement Division.
Rio Tinto plc, Rio Tinto Limited, Albanese, and Elliott are charged with violating the antifraud, reporting, books and records and internal controls provisions of the federal securities laws.
In a statement, Rio Tinto said it been notified of the action by the SEC. “Rio Tinto believes that the SEC case is unwarranted and that, when all the facts are considered by the court, or if necessary by a jury, the SEC’s claims will be rejected,” the company said.
Albanese told the Australian Financial Review: “There is no truth in any of these charges.”
The SEC seeks permanent injunctions, return of allegedly ill-gotten gains plus interest, and civil penalties from all the defendants, and seeks to bar Albanese and Elliott from serving as public company officers or directors.
In 2011, Rio Tinto acquired coal assets in Mozambique shortly after disclosing huge losses associated with its previous large-scale acquisition of Alcan. Both acquisitions took place under Albanese’s leadership.
This table from Rio’s 2011 Annual Report shows the company paid a total of $3.69 billion in cash to acquire the Mozambique coal assets:
Rio Tinto 2011 Annual ReportRio Tinto 2011 Annual Report. BIAUS
The SEC alleges the second acquisition was also unsuccessful as it was based on the incorrect assumption that Rio Tinto could inexpensively mine, transport, and sell large quantities of high-quality coal, chiefly using barges for shipping.
In Rio’s 2012 Annual Report, released after Albanese had resigned, the company announced a post-tax impairment charge of $2.86 billion on its Mozambique mines, citing a lack of surrounding infrastructure and downward revisions to the amount of coal that could be extracted.
The SEC’s complaint alleges that the project suffered setbacks almost immediately, as Rio Tinto, Albanese, and Elliott learned that there was less coal and of lower quality than expected.
The complaint alleges that the drop in quantity and quality of coal, coupled with the lack of infrastructure to transport it, significantly eroded the value of the acquisition.
The complaint alleges that after already impairing Alcan twice, Rio Tinto, Albanese, and Elliott knew that publicly disclosing its second failure and rapidly declining value would call into question their ability to pursue the core of Rio Tinto’s business model to identify and develop long-term, low-cost, and highly-profitable mining assets.
The SEC alleges they concealed the adverse developments, allowing Rio Tinto to release misleading financial statements days before a series of US debt offerings.
Rio Tinto raised $5.5 billion from US investors, about $3 billion of which was raised after May 2012, when executives at Rio Tinto Coal Mozambique had already told Albanese and Elliott that the subsidiary was likely worth negative $680 million.
The complaint alleges Albanese then repeated and reinforced the false positive outlook for the project in public statements.
The SEC said:
“The alleged fraud continued until January 2013, when an executive in Rio Tinto’s Technology and Innovation Group discovered that the coal assets were being carried at an inflated value on Rio Tinto’s financial statements. After an internal review allegedly triggered by the executive’s report to Rio Tinto’s Chairman, Rio Tinto announced that Albanese had resigned and the company reduced the value of the coal assets by more than $3 billion, or more than 80%. After a second reduction, Rio Tinto sold the Mozambique subsidiary for $50 million, billions of dollars below the acquisition price.
Read the original article on Business Insider Australia. Copyright 2017. Follow Business Insider Australia on Twitter.

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