Special report – How lobbyists rewrite Europe’s laws

Fri, Mar 18 2011

By John O’Donnell

BRUSSELS (Reuters) – Few people have taken Klaus-Heiner Lehne up on the invitation posted on his website to find out more about „Europe, politics and me.“ If they did, they might be surprised how much the 53-year-old German fits into his working week.

At home in Duesseldorf, Lehne is a partner at law firm Taylor Wessing. Every Friday he works at the firm’s offices, minutes away from the designer shops of the city’s leafy Koenigsallee. Lehne’s firm advises the business elite of Germany’s most economically powerful state, once home to coal and steel barons and now to many of the country’s biggest industrial companies.

For the rest of the week, you’ll find him in Brussels, where he is a member of the European Parliament (MEP). There, he co-writes business laws, including, in the past, EU rules for company mergers and takeovers, corporate accounting, and investor rights.

Date: 21-03-2011
 Source: The Economist
Subject: A special report on the future of the state

The state almost everywhere is big, inefficient and broke. It needn’t be, says John Micklethwait

Mar 17th 2011 | from the print edition

THE argument sounds familiar. The disruptive reforms that have so changed the private sector should now be let loose on the public sector. The relationship between government and civil society has been that between master and servant; instead, it should be a partnership, with the state creating the right environment for companies and charities to do more of its work. The conclusion: “We are in a transition from a big state to a small state, and from a small society to a big society.”

The Seven Immutable Laws of Investing

The Seven Immutable Laws of Investing

James Montier via John Mauldin’s „Outside the Box“, 21/3

In my previous missive I concluded that investors should stay true to the principles that have always guided (and should always guide) sensible investment, but I left readers hanging as to what I believe those principles might actually be. So, now, for the moment of truth, I present a set of principles that together form what I call The Seven Immutable Laws of Investing.

They are as follows:

1. Always insist on a margin of safety
2. This time is never different
3. Be patient and wait for the fat pitch
4. Be contrarian
5. Risk is the permanent loss of capital, never a number
6. Be leery of leverage
7. Never invest in something you don’t understand

So let’s briefly examine each of them, and highlight any areas where investors’ current behavior violates one (or more) of the laws.

Is Nuclear Power Worth the Risk?

Yves Smith, Naked Capitalism, Mar 20, 2011 1:01PM

One of the interesting features during the Fukushima reactor crisis were the fistfights that broke out in comments between the defenders of nuclear power and the opponents. The boosters argued that the worst case scenario problems were overblown, both in terms of estimation of the odds of occurrence and the likely consequences. The critics contended that nuclear power was not economical ex massive subsidies, that there was no “safe” method of waste disposal, and that nuclear plants were always subject to corners-cutting, both in design and operation, so the ongoing hazards were greater than they appeared.

Inflation and Deflation Revisited

London Banker , Mar 18, 2011 1:15PM

In December 2008 I came off the fence and plumped for deflation as inevitable. Mostly I reasoned that debasement of accounting practice, mismanagement of financial intermediaries, captured regulators that collaborated in perpetuating failure, and extremely poor market pricing of risks and fundamentals meant that there was litte incentive to save and no place safe to invest. I predicted that when the last great bubble in sovereign debt popped, deflation would work its cleansing power to restore fundamentals.

It is now clear to me that policy makers in the West are determined to apply every available resource to underpinning failure, misallocation and executive excess. As this discourages the honest saver from parting with cash, policy makers are ensuring that deflation will wreak its havoc on the financial and real economies of the world. Only when that deflation has played out and rational policies that reward market-based management and returns are restored will it be worthwhile to invest again.

Prepare for a Euro Zone Divided in Two

 Date: 21-03-2011
 Source: The Wall Street Journal

Twenty-seven divided by two equals 17, with 10 left over. That’s the new Euromath.

Sooner or later, the euro-zone financial crisis will be over. Greek, Irish, Portuguese and probably Spanish creditors will have neatly trimmed hair, the banks will have had to shore up their inadequate capital, German exporters will continue to cash the profits from the euro their southern partners have obligingly weakened, and the eurocracy will have found other reasons to meet. But Europe will not be the same.

It will be changed in two very important ways. First, the 27-nation European Union will have fractured into separate groups of 17 and 10. Second, the economies of the Gang of 17 will be centrally managed by a Franco-German coalition, while the nations among the 10 „leftovers“ will fight a losing battle to effect the policies of the EU of which they are paid-up members. Peaceful coexistence between the 17 and the 10 is no sure thing.

Safety on the Cheap

Tuesday, March 15, 2011, Robert Reich

Can we please agree that in the real world corporations exist for one purpose, and one purpose only — to make as much money as possible, which means cutting costs as much as possible?

The New York Times reports that G.E. marketed the Mark 1 boiling water reactors, used in TEPCO’s Fukushima Daiichi plant, as cheaper to build than other reactors because they used a comparatively smaller and less expensive containment structure.

Yet American safety officials have long thought the smaller design more vulnerable to explosion and rupture in emergencies than competing designs. (By the way, the same design is used in 23 American nuclear reactors at 16 plants.)

The End of QE2?

 

The End of QE2?

What Happens When We Come to the End of QE2?

By John Mauldin

 

What happens when the Fed is finished with QE2? I have been letting that filter into my thinking lately as I look at the economic landscape and the data we have seen the past few  weeks. Correlation is not causation, as I often say, but all we can do is look back at what  happened last time and speculate about the future. A very dangerous occupation, but your fearless analyst will plunge on ahead into the jungle of a very hazy future. You come with me at your own risk!

 

Full article  mwo031811

Stuart Rose warns companies must radically change – and work together

Date: 18-03-2011
 Source: The Guardian

 Outgoing Marks & Spencer chairman says business models must be geared towards sustainability and finite resources

 
Sir Stuart Rose, outgoing chairman of Marks & Spencer, has warned that companies will need to radically alter their business models if they are going to cope with a perfect storm of climate change, a growing global population, and finite resources.

He also said that the retailer is only a tenth of the way to becoming a truly sustainable company, despite the success of its Plan A strategy, which itself is held up as one of the most ambitious of its kind.

In one of his last major speeches before he steps down at the end of this year, Rose said the recession has masked the fundamental shifts in the way business will need to respond in order to access their resources, customers, markets and capital.

The Economic Calculus of Japan’s Tragedy

Satyajit Das RGE Monitor, Mar 17, 2011 2:39PM

The behaviour of financial markets over recent days confirms British Prime Minister Lloyd George’s observation that „financiers in a panic do not make a pretty sight„. While workers in the Fukushima nuclear plant risked death trying to bring damaged reactors under control, financiers cowered in fear. Oscillating between boom and doom, they sought opportunities to benefit from death and destruction.