Business

Tag Archives

Trump’s Scotland golf resort proceeds with expansion despite business pledge

President-elects team does not consider multimillion-dollar plans in conflict with written vow to end new foreign investments, which critics call ambiguous

The Trump Organization will press ahead with multimillion-dollar plans to expand one of the president-elects golf resorts in Scotland, despite its apparent pledge to halt new investments overseas.

Trump officials said the plans for the Trump International Golf Course Scotland in Aberdeenshire likely to immediately involve extending its boutique hotel and building a second 18-hole golf course did not conflict with his promise not to pursue new or pending deals outside the US.

Implementing future phasing of existing properties does not constitute a new transaction so we intend to proceed, a Trump Organization spokeswoman told the Guardian.

The expansion plans could see the resort grow substantially, with a new 450-room five-star hotel, timeshare complex and private housing estate. This would greatly increase the value to the Trump Organization of an investment onwhich Trump originally boasted he would spend up to 1bn.

Richard Painter, a former White House chief ethics adviser to George W Bush, said this extra investment was a perfect example of the clear conflicts of interest between Trumps newfound power as president and his familys business interests.

Hes using language which is ambiguous. It clearly illustrates that around the world, he will just simply expand around the various holdings and as they continue to expand, the conflicts of interest expand, Painter said.

Its like [the board game] Monopoly: if you have one house on Boardwalk, its not a new deal to go for three hotels on Boardwalk.

At a contentious press conference on Wednesday, the president-elect announced that his organisation would no longer pursue foreign investments as part of his controversial plans to avoid conflicts between his substantial business interests and his presidency.

In a document issued by the Trump team later that day, the president-elects lawyers Morgan, Lewis & Bockius wrote that his new pledge prohibits without exception new foreign deals during the duration of President-Elect Trumps Presidency.

Trump and his legal adviser Sheri Dillon said control of his property, hotels and golfing empire which includes two golf resorts in Scotland and one in Ireland would pass to his sons Eric and Donald Jr, and Trump executive Allen Weisslberg, before his inauguration as president on Friday 20 January.

There is speculation that Eric Trump will fly to Scotland next week, as that transfer of power takes place.

Trump
Trump International Golf Links, Aberdeenshire, Scotland. Photograph: Mapbox, OpenStreetMap

Crucially, President-elect Trump has not agreed to sell or transfer his shares in the golf resorts, which means he retains ultimate ownership and stands to benefit from increases in the value of those investments. He owns 100% of the shares in the Aberdeenshire course, which has consistently made heavy losses. He has personally loaned it nearly 40m, and it lost 1.1m last year.

The so-called white paper released by Trumps legal advisers on Wednesday, setting out the new management arrangements and announcing a new trust to be run by his sons and Weisselberg, also said the agreement prohibits the Trump Organization from entering into any new transaction or contract with a foreign country, agency [or] any state or local government or any agency or instrumentality thereof, other than normal and customary arrangements already undertaken before the president-elects election.

Trumps legal advisers claim this structure will prevent Trump from breaching foreign bribery rules because any profits earned by allowing foreign dignitaries and leaders to stay at his two Scottish hotels, and his large Irish golf resort and hotel at Doonbeg there, would be passed to the US Treasury.

Walter M Shaub, director of the US Office of Government Ethics, said Trumps plan doesnt meet the standards that the best of his nominees are meeting and every president in the past four decades has met.

Painter added that this structure was not legally enforceable. This is meaningless language, because what is the definition of a new deal? When youre a real estate developer, you are constantly entering into new contracts, expanding existing facilities, refinancing leases.

The phrase new deal is subject to such wide range of interpretation that it can easily be worked around, he said.

Trumps executives in Scotland argue that his new agreement to halt overseas investment cannot affect the Trump International Golf Course Scotland in Aberdeenshire course, which lies 10 miles north of Aberdeen, since its expansion plans predate Trumps election victory on 9 November. A spokesperson for the Trump transition team did not immediately return a request for comment.

The expansion proposals are partly derived from the resorts masterplan, which was approved against fierce opposition from environmentalists by the Scottish government in 2008.

The largest of his two Scottish hotels is the 149-room five-star hotel at Turnberry, which Trump bought with its associated Open championship course in 2014. He has since spent some 60m developing the resort, adding a new ballroom, a 3,500-a-night presidential suite and an ostentatious fountain.

Aberdeenshire councils planning department has recently approved plans to expand Trumps boutique hotel at the resort north of Aberdeen, which he bought in 2006, and is processing a live planning application for the second golf course.

On 2 November, a week before Trump stunned his opponents by winning the presidency, it gave listed building consent to extend the resorts boutique hotel, a converted early Victorian country house called Macleod House in memory of the president-elects Scotland-born mother Mary Macleod, to include a banqueting hall and six new bedrooms.

On 22 December, the council published a further official report on water management plans for the second 18-hole golf course, which is also being named in honour of Trumps mother. The course was a central part of the 2008 masterplan and this application has been in the planning system since September 2015.

The boutique hotel was not included in the masterplan approved by Scottish ministers in 2008 but it has been in use as a hotel for several years. Trumps critics in Aberdeenshire argue that its expansion raises substantial questions about the future of Trumps ultimate plans for the resort.

The Trump Organization had tried to dilute the original masterplan proposals last year by setting out plans for a new 850-home private housing estate and 1,900 leisure accommodation units, thought to be timeshares. Those plans were incorporated in Aberdeenshires draft local plan, although the council said he would also have to build a new primary school and affordable homes for local residents in return for planning consent.

But in December government planning inspectors threw that proposal out and insisted the Trump Organization stuck to the original 2008 plan which requires it to first build the 450-bed luxury hotel, and associated sports facilities, as a prerequisite for approval to build highly profitable private homes.

They said that if he built a new housing estate, he must also provide hundreds of affordable homes, the new school, community facilities and pay for a new roundabout, alongside robust environmental checks during construction.

David Milne, a local resident and vocal critic of the resort, said the decision to press ahead with expanding the boutique hotel suggested the Trump Organization had dropped plans for a five-star hotel at the resort.

I would question whether or not theres any valid reason why the plans are compatible, Milne said. If youre going to be required to do a 450-room hotel, why are you messing around with adding a six-bedroom extension to a boutique hotel?

Read more: https://www.theguardian.com/us-news/2017/jan/14/trump-scotland-golf-resort-conflicts-of-interest


Art market faces uncertain 2017 after falling values and high-profile disputes

A drop in volume, court battles and authenticity issues dogged 2016 and no one is sure if the new presidency will be good or bad for business

Its been a strange, unsettling year in the art market and 2017 looks likely to be just as turbulent. What does a new president who can rattle the world with a tweet mean for an industry so dependent on the international rich? The answer is that no one knows, but it is a hot topic among gallery owners and auctioneers this new year.

In 2016, the art market received what it had purportedly wished for some of the speculative froth came off the top of the market, easing fears that a bubble would burst and hurt the industry. But it also received much of what it probably did not forecast or desire: a 30% drop in overall market volume, a series of high-profile disputes, court actions and authenticity issues that resulted in substantial payouts, and a fall-off in attendance at some art fairs that read to some as cultural cooling-off at the bling end of the contemporary art business.

The two major auction houses, privately held Christies and publicly listed Sothebys, have also undergone substantial changes to their business models whose reverberations are still being assessed.

A dwindling supply of top-quality work, costly seller-guarantee systems and the overheads required to secure lots for sale have proved unsustainable. Both houses saw drops in business, with Sothebys down from $6bn in 2015 to roughly $4.1bn in 2016.

The art market went down primarily because a small number of high-value objects did not trade hands as they had in 2015 and that reduced the overall market volume, says Art Market Monitors Marion Maneker.

Still, both Sothebys and Christies auction houses instigated shakeups of their tradition-bound methods of business.

Christies contemporary art chief, Brett Gorvy, quit after 23 years at the auction house to join Dominique Lvys gallery, which represents Frank Stella and the estate of Yves Klein among others. Sothebys too lost several longstanding department executives and announced plans to start offering management services to living artists as well as artists estates.

That development has galleries rattled. Managing artists has traditionally been a gallerys job not something done by secondary market auction houses. For an auction house to represent a living artist is like MGM representing Fred Astaire you cant tie up all the sides of a transaction, Pace Gallerys Arne Glimcher told the Wall Street Journal.

Warhol:
Warhol: missing from this years sales but is he Trumps muse? Photograph: Christopher Thomond for the Guardian

At the same time, many of the younger artists whose work had been driven up in value over the past several years, saw their work unceremoniously dumped at auction, reflecting the speculative spirit in which it had been purchased.

Collector Niels Kantor told Bloomberg News he paid $100,000 for an abstract canvas by Hugh Scott-Douglas. Two years later, in September, he sold it at Phillips for $30,000. Id rather take a loss, Kantor told the market data service. Its like a stock that crashed.

Phillips estimated that half of the 204 lots in the same sale were below $10,000 an indicator that speculators were dumping work. Instead of new artists, art advisers indicate many collectors are now most interested in rediscovering historically important artists that have slipped past undervalued.

Two high-profile forgeries made headlines in 2016, forcing the business to take steps to reassure customers.

Jurors in the Knoedler Gallery fraud trial in New York, heard how more than a dozen abstract expressionist masters were forgeries, while forensic conservator James Martin concluded that an $8.4m Frans Hals painting sold to a US collector by Sothebys was fake. The auction house quickly moved to hire Martin to provide museum-quality expertise.

But the big unanswered, and perhaps unanswerable, question, is how the new political environment could affect the market.

The softness in the art market in 2016 could be seen in the low attendance at Art Basel in Miami Beach this year and mirrored in sales across most luxury market sectors, including real estate.

Yet the November auction sales proved unexpectedly robust following Donald Trumps election.

Sothebys CEO, Tad Smith, told CNBC that the result had helped boost optimism in the art market. I think theres been a fairly good feeling among the art collectors this week, Smith said in November. Theres just a lot of very wealthy people from all types of countries and they have a lot of capital to deploy.

Market observers have not been slow to note the similarities between Trumps approach to business and that of Andy Warhol, who set up his studio production and promotional publishing machine in ways that correspond to Trumps real estate and self-promotion machinery.

Artnet noted explicit similarities between Trumps business philosophy outlined in The Art of the Deal and Warhols The Philosophy of Andy Warhol: Making money is art, and working is art and good business is the best art, Warhol said succinctly.

Trump meanwhile offered this: I dont do it for the money. Ive got enough, much more than Ill even need. Deals are my art form. Other people paint beautifully on canvas or write wonderful poetry. I like making deals, preferably big deals. Thats how I get my kicks.

Many members of the incoming administrations cabinet, including the treasury secretary, Steven Mnuchin, and commerce secretary, Wilbur Ross, are art collectors. The art market boomed during the Reagan administration and through most of George W Bushs tenure.

Still, Maneker says its too soon to speculate on the art market under Trump.

You can draw two diametrically opposed scenarios based on the same behavior. If Trump raises tariffs and causes global panic, art could then become exceedingly valuable because its portable, easy to store and not a currency. But it could also become worthless. Nobody knows the right answer.

But as the year in art turns, at least there has been some good news for rocks elite in what has been in all other terms a dark year. In the weeks after September 11 2001, guitarist Eric Clapton acquired, in a single lot at Sothebys, three Gerhard Richter abstracts for $3.4m. He sold the last of the three, Abstraktes Bild (809-2), at Christies in November for $22.1m, bringing his total profit on all three works to $74.1m.

There was another winner, too, from the rock world. Christies outgoing head Gorvy revealed last week, he had sold a Jean-Michel Basquiat boxer painting from Christies private selling exhibition via his Instagram feed. The buyer was an unnamed American collector who paid $24m sight unseen. The seller? Metallica drummer Lars Ulrich.

It is incredible for me to think that I have been personally involved in the sale of all top ten works by Jean-Michel Basquiat ever sold, culminating in the record in May for $57.3 million. I can’t say that for any other artist. But credit where credit’s due. Much of my formative understanding of Basquiat comes from my friendship with Lars Ulrich. Metallica fans would have immediately recognized a blurred Lars from this 2002 photo by photographer and director Anton Corbijn. Behind Lars is Basquiat’s “Profit I”, 1982, among Basquiat’s best paintings. I had been working with Lars as an unofficial advisor for a few years, and in 1997 he wanted a major Basquiat. Few knew that Lars was an avid collector, let alone that he is one of the most focused, studied and passionate buyers I have ever met. He had bought the Basquiat catalogue raisonn, and literally spent months studying every work in detail. Highly instinctive, yet methodically intelligent. Fascinating. In the late 1990s, the most expensive Basquiat was around $1 million and there were only five collectors at the top level. Lars was way ahead of the game. He had picked out ‘Profit I’ as his favorite work from the whole short career of Basquiat. It belonged to Bruno Bischofberger, legendary dealer who had discovered Basquiat in 1981 and had propelled him to stardom. It took almost four years of slow burn negotiations to persuade Bruno, an even more obsessive collector himself, to part with his best picture. It was an amazing adventure, that took us to St. Moritz where we painted at 3am in a studio made by Bruno for Basquiat. Meanwhile we got the greatest insight into the artist from Bruno and the close circle who had known Basquiat until his tragic death in 1988, as well as access to so many masterpieces up close and personal. Lars handpicked several other paintings and he made it our mission to source every one. Only collectors like Peter Brant and Philip Niarchos rivaled Lars’ Basquiat collection. Today Jean-Michel Basquiat’s ‘Profit I’ belongs to a Swiss corporation and would certainly exceed the record price for the artist if it ever came back on the market. #jeanmichelbasquiat #larsulrich

A photo posted by @brettgorvy on

Read more: https://www.theguardian.com/artanddesign/2017/jan/01/art-market-faces-uncertain-2017-falling-profits


The solar-powered town: a dream for the environment or a wildlife nightmare?

Babcock Ranch, the brainchild of ex-NFL player Syd Kitson, aims to be a model of sustainability but campaigners fear it will be tragic for endangered panther

Florida real estate has a bad habit of reflecting the boom-and-bust cycles of the US economy but Babcock Ranch, a new development opening early next year and designed to be the worlds first solar-powered town, is hoping it can provide the Sunshine state with a model for sustainable living.

That, at least, is the hope of Syd Kitson, a former offensive guard with the Green Bay Packers turned real estate developer, who is behind an ambitious project that Kitson describes as the countrys most sustainable, most innovative and health-focused new town in the US.

Bordered by the Babcock Ranch preserve and the 65,000-acre Cecil M Webb wildlife management area, Babcock Ranch is at the centre of south-west Floridas newest growth corridor, just 20 minutes east of downtown Fort Myers.

Kitson and his backers bought the estate for more than $500m in 2006 from the heirs of Edward Vose Babcock, a former mayor of Pittsburgh. The developer sold 73,000 acres to the state, creating the preserve, and designated 18,000 acres to the development and 9,000 acres to parkland.

At its completion, Babcock is expected to grow to 19,500 homes, with a downtown with commercial space and extensive infrastructure, including a 75-megawatt solar facility generating electricity for the town, self-driving cars, groves of oak and natural plants for landscaping, community and kitchen gardens, a farm-to-table restaurant, a charter school and an extensive network of lakes and irrigation designed to reduce the developments environmental impact.

Environmentalists
Environmentalists claim the project threatens the habitat of the Florida panther. Photograph: Alamy

I want to prove that development and preservation can work hand in hand, says Kitson. You see the carelessness of new developments in terms of energy consumption, care for the environment, how you think about energy, technology, transportation, theres a responsibility on us to prove it can be done differently.

But can it? Florida is expecting population growth of 6 million by 2030. Many of the states natural resources are under pressure from environmental degradation, including from sea level rise and overuse of ground water. Babcock is 20ft above sea level, and built on land that had been disturbed by rock mining.

Kitsons plan was to make Babcock sustainable from the outset. Gone are energy-draining McMansions and water-demanding lawns. The houses are designed smaller in scale, with dining rooms eliminated, and built in traditional Floridian ranch style with front and back porches.

Were looking at the average house performing 10-20% better than Florida energy code, says Dr Jennifer Languell, a green practices adviser on the project. Ultimately, however, theres no way to get around the demand for air conditioning in Floridas environment.

We can create airflow through the house, but the bottom line is we have to address the humidity and the only way to get the moisture out is to mechanically remove it.

Kitson says he toured large-scale communities to see how sustainability could be incorporated into real estate developments, including Serenbe on the edge of Atlanta; he travelled as far as Abu Dhabi in the process. Kitson says surveys he commissioned revealed that people want to be part of something that is sustainable, and want to know that where theyre going to live is not only not harmful to the environment but actually helps it.

Kitson says his determination was to create a sustainable community that functioned as a complete community. Its about a well-rounded good life, he says, not about being locked away from the world. Its kind of like going back to the way things used to be.

But how much of that is feasible? Egrets and a large alligator moving through a channel in the Babcock preserve suggest that the 10-year delay in starting the development has been beneficial to indigenous species. Kitsons environmental projects include placing a pollinating garden around the solar field to attracting bees and beetles to help the environment and sustainability; the Babcock plans envisage landscaping that can be beautiful but not thirsty.

One expectation is that by using a network of driverless cars, Babcock residents will ultimately scale back on car ownership, bring a familys auto needs down from two cars to one, allowing land that would be used for multi-car garages to be reassigned.

Still, the development of land in south-west Florida is controversial. Babcock lies close to one of the last habitats of Floridas dwindling panther population. Wildlife groups say the Babcock development risks cutting off the big cats passage between the two parcels of land large enough to support a population.

A 2006 report by the Fish and Wildlife Service found there would be no direct effect in the form of mortality or injury of the Florida panther resulting from this project. But it is feared that additional habitat loss from development of land around Babcock, and injury to the animals from traffic and illegal hunting, will further reduce the viability of the population.

The Florida panther is an endangered species and this development is locking them into a small area, says Matthew Schwartz of the South Florida Wildlands Association. Roadkill and habitat loss is just destroying the population because it has nowhere to expand into.

Schwartz says the town of Babcock Ranch is going smack into what the Fish and Wildlife Service identified as a possible expansion area. Thats tragic not only for the panther, but for black bears, eastern indigo snakes, red-cockaded woodpeckers and a whole range of species living under its umbrella.

The environmentalist says the threat to wildlife is not simply the development of Babcock itself, but the development of surrounding areas.

They say theyre only using land that was previously disturbed but other private lands nearby will also be developed once people start moving in. People will want movie theaters and shopping centres, all the things that are part of urban sprawl. This project is making undeveloped habitats around it much more vulnerable.

The developers didnt need to come into undeveloped habitat to start a solar project there are plenty of communities they could have retrofitted with solar, Schwartz adds.

When Babcock opens to the public early next year, it will be greeted as a new model town. How far it can serve as a model for a more sustainable future remains open to question.

Its an experiment, says Kitson. Ive spent half my life hiking, camping, being part of nature. A lot more people are thinking about how theyre living and how theyre affecting their environment. We have a unique opportunity to create a place in a way that hasnt been done before. If we can get it right, we think its going to set a standard.

Read more: https://www.theguardian.com/us-news/2016/dec/25/solar-powered-town-babcock-ranch-environmentalist-panther


Deutsche Bank and Credit Suisse agree multi-billion-dollar settlements with US

Banks to pay out for mis-selling mortgage securities, as Department of Justice launches legal action against Barclays

The US Department of Justice has extracted $12.5bn in settlements from Deutsche Bank and Credit Suisse for a decade-old toxic bond mis-selling scandal. It has also started legal proceedings against Barclays, which, in an unprecedented move, has refused to settle with the authorities.

Deutsche, Germanys biggest bank, will pay $7.2bn (5.9bn) to the DoJ. The sum is considerably less than the $14bn originally demanded. Credit Suisse has agreed to pay $5.3bn. Both settlements relate to the complex packaging of home loans, which was a lucrative business for the banking industry until the 2008 crisis.

The DoJ did not disclose the size of penalty it wanted to levy on Barclays, but it is understood to be $4bn. It accused the bank of plainly irresponsible and dishonest conduct.

The flurry of announcements just hours before the markets closed for the Christmas holiday came weeks before Donald Trump takes over as US president and follows months of negotiation between the banks and the DoJ, led by the US attorney general, Loretta Lynch.

The scandal dates back to 2005 and 2007, when banks packaged up home loans and used them to help create bonds known as residential mortgage-backed securities (RMBS) which were sold to investors. The mortgage repayments made by borrowers then provided a yield to the investor, so long as the borrower kept paying. The schemes fell apart when loans were made to borrowers who were unable to repay.

The penalties are part of Barack Obamas efforts to hold banks accountable, and the first major agreements to be reached with non-US banks. JP Morgan, Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch and Citi have all been punished already.

There are further penalties to come, notably for Royal Bank of Scotland. The bank could face a bill of as much as 9bn, analysts have said. Its shares rose 1% on hopes that it might soon be able to reach a settlement with the DoJ which it had hoped would take place this year or at least start to estimate its own bill.

Deutsche shares, which initially jumped 4%, ended almost 1% higher. Credit Suisse and Barclays slipped 1% in thin pre-holiday trading.

Barclays
Barclays Capital Bank building near Times Square in New York. Photograph: Alamy Stock Photo

Under the settlement, Deutsche will pay $3.1bn and provide $4.1bn in customer relief, such as loan modifications and other assistance to homeowners and borrowers, spread over five years. Credit Suisse will pay $2.5bn and compensation of $2.8 bn over five years.

Much of the focus was on Deutsche, run by Briton John Cryan, which had been contesting the authorities original $14bn fine. When that news first leaked, its shares plunged to 31-year lows over fears about its ability to withstand such a high bill.

There had been fears that Deutsche would need to embark on a cash call or even ask the German government for assistance, but the fact that $4.1bn of its payout for customer relief was not a lump sum helped soothe some of the anxiety.

A key area of concern has been removed, analysts at Goldman Sachs said, noting that the $1.2bn hit Deutsche would take in its fourth quarter was towards the lower end of market expectations.

Some analysts said Deutsche would need to press on with its restructuring to avoid a cash call. Positively, the deal is settled and out of the way, as it was thought that the issue could drag on into 2017, said Thomas Kinmonth, an analyst at ABN Amro, who added that without restructuring a cash call would have to be undertaken before 2019.

Deutsches shares have been pummelled on stock markets during 2016 over fears about its financial position. It had already set aside billions of euros in anticipation of the fine.

Barclays is the first bank to fail to reach a settlement and now faces lengthy court proceedings in New York to defend itself against claims it said were disconnected from the facts.

Two of its executives, Paul Menefee and John Carroll, are named by the DoJ. Crowell & Moring partner Glen McGorty, representing Carroll, said he would challenge these ill-conceived and baseless allegations, and expects to be fully vindicated.

The DoJ did not comment on the announcements by Deutsche and Credit Suisse, but as it filed legal papers against Barclays, Lynch said: As alleged in this complaint, Barclays jeopardised billions of dollars of wealth through practices that were plainly irresponsible and dishonest. With this filing, we are sending a clear message that the Department of Justice will not tolerate the defrauding of investors and the American people.

Where the money will go

The precise detail of the $6.9bn in customer relief, or redress, that Deutsche Bank and Credit Suisse will have to pay for their misdemeanours is yet to be finalised with the DoJ. The schemes, however, are likely to match those agreed with other banks for the mis-selling of residential mortgage bond securities..

Goldman Sachs agreed in April to pay $1.8bn in consumer relief as part of its $5bn settlement. This was described as writing off loans for underwater homeowners and distressed borrowers and making other payments for construction, rehabilitation and preservation of affordable housing. It also had to provide cash to support debt restructuring, to prevent foreclosure, and to back housing quality improvement programmes. Goldman was also told to put $240m into community projects to finance affordable homes for rent and sale.

The DoJ typically deploys monitors, lawyers or housing experts to police the terms of the customer relief. The banks involved in the DoJ settlements do not necessarily have direct relationships with the homeowners, but have packaged up their loans to back the bonds.

Read more: https://www.theguardian.com/business/2016/dec/23/deutsche-bank-credit-suisse-us-mortgage-securities-barclays


Donald Trump’s talk of ‘draining the swamp’ rings hollow

A selection of Goldman Sachs brass past and present as well as some unqualified (and wealthy) nominees leaves one to wonder how long his honeymoon with his working-class constituency will last

On the campaign trail, Donald Trump pledged that he would be an agent of change. He was going to drain the swamp, booting from power the entitled elites who got rich while ordinary Americans struggled. So, just how is that working out? Not very well.

By the look of his appointments so far, voters who were hoping the president-elects cabinet would be handpicked to make the US a better place for ordinary Americans is likely to be sorely disappointed.

From the nomination of Wall Street insiders Steven Mnuchin and Wilbur Ross to key posts atop the treasury and commerce departments, respectively, to selecting individuals whose qualifications seem questionable at best, Trumps choices to fill key business positions in his administration appear likely to favor the elite more than the man on the street.

Lets consider some of these selections.

The upside of Mnuchins yes, there is one is that he understands the industry he would be charged with overseeing. The downside? Well, from the perspective of those of us on Main Street, theres a lot. Trump himself is on record as opposing the Dodd-Frank rules that have made Wall Street a (slightly) safer place in the wake of the financial crisis. Mnuchin, like all good Wall Streeters, clearly would love to see those rules vanish, although he has been discreet about what he says publicly.

Mnuchin himself profited when the distressed mortgage lender he bought at a firesale price, IndyMac, foreclosed on properties owned by tens of thousands of homeowners who had taken out mortgages with his firm prior to the financial crisis. In one case, the firm foreclosed on a 90-year-old woman following a 27-cent error in her payment. Is this someone who will fight for real Americans against insider interests? Or one who is more likely to fight against them on behalf of those insider interests?

Ross is a more complex character. He has made his money as a turnaround investor, taking near-bankrupt companies and salvaging them when possible. Some of those skills might translate to the commerce secretary role, where he would be responsible for promoting economic growth and developing business, as well as trade negotiations with countries such as China. But bankruptcy turnaround also involves cutting jobs, not creating them; its about keeping costs low and acting in the interests of a companys debt holders, and possibly its shareholders. Its workers? Well, their labor contracts, with guaranteed living wages, often serve as a barrier to the kind of restructuring deals that people like Ross want to negotiate.

But then we move on to look at Trumps pick for labor secretary, and the mind is truly boggled.

After several years in which fast-food workers have taken the lead in the battle for higher minimum earnings even going on strike in hundreds of cities to demand a wage of $15 an hour it seemed as if their efforts were finally gaining momentum. In New York City, for example, pay for fast-food workers will hit $15 an hour by 2018.

Trump, however, has just tapped a fast-food executive and outspoken opponent of the push for higher minimum wages, Andrew Puzder, to serve as his labor secretary. Good luck to any Americans looking for support from the government for any living-wage proposals. Puzders response to those who have advocated for the $15-an-hour wage? They should really think about what theyre doing, he has said. We need to keep entry-level salaries low in order to be able to accommodate entry-level workers, he added. No word about what happens when workers are no longer entry level but still earning those meager wages, or when those ultra-low earnings simply leave families eking out an existence just above the poverty line.

Puzder is even a fan of immigration, unlike many of Trumps supporters. Theyre very hardworking, dedicated, creative people that really appreciate the fact they have a job, Puzder told an American Enterprise Institute conference back in 2013. Whereas in other parts of the country you often get people that are saying, I cant believe I have to work this job, with the immigration population you always have the thank God I have this job kind of attitude. So you end up with a real different feeling. Try that speech out at a Trump rally and see where it gets you.

Puzder, Mnuchin and Ross now look set to be joined by Goldman Sachs chief operating officer Gary Cohn, who is rumoured to be Trumps pick to lead the national economic council. Cohn would be the third ex-Goldman banker to get a top slot in the Trump administration this from a presidential candidate who torched Hillary Clinton for her Wall Street ties.

Then theres the nomination of Linda McMahon, the co-founder of World Wrestling Entertainment, to serve as the head of the Small Business Administration. A collective groan may have gone up from the throats of many WWE wrestlers, dozens of whom filed suit against the company earlier this year alleging it deliberately misclassified them as independent contractors rather than as employees so that it wouldnt be responsible for concussions and other major head injuries that have caused long-term brain damage. Its the second time that WWE wrestlers have battled the company over their status. The first attempt failed for procedural reasons, although some legal scholars argue that WWEs classification of its wrestlers as independent contractors appears to be patently wrong.

Lets get this straight: the individual who will be responsible for overseeing the governments policies with respect to small business ensuring that those small businesses treat their employees responsibly and that the government finds ways to help them grow is a billionaire co-owner of a (large, not small) company that may have achieved its wealth in part by exploiting loopholes in labor rules? Thats a great model for those ambitious entrepreneurs to emulate, isnt it?

Im far from convinced that any of these nominees have the public good in mind, and thats what public service is all about. Their history shows an impeccable track record of understanding private good, whether in terms of their personal bottom line or the bottom lines of shareholders or organizations they have been hired to run, oversee or represent. But as Trump himself may not yet have fully grasped, running the United States of America is not akin to running USA Inc. His picks to run business-related portfolios need to include in their calculus more than just conventional business metrics such as return on equity or profit.

Thats particularly true if Trump wants to keep his core constituents happy. Hes in a honeymoon period right now, but if this new cabinet and its denizens of the billionaire swamp conduct business as usual, ignoring the needs of the ordinary workers who arent investors and who arent large-scale consumers or campaign donors, then that honeymoon wont last long.

Read more: https://www.theguardian.com/us-news/2016/dec/10/donald-trump-drain-swamp-cabinet-picks-billionaires


$50m Trump-branded development relied on immigrant visa funds

Critics say Trump Bay Street, now leasing apartments at $3,100 a month in New Jersey, is a showcase for the misuse of a controversial immigrant visa program

The first residential Trump-branded development to open since Donald Trumps election victory last month opened for business in Jersey City, New Jersey, this week.

The gleaming Trump Bay Street complex, a luxury rental project completed under the direction of Jared Kushner, son-in-law and would-be White House adviser to the president-elect, sits across the Hudson river, minutes from Manhattans financial district by train or ferry.

The project was built by the Kushner familys Kushner Co operation, which boasts of completing more than $7bn in acquisitions under Jared Kushner, its CEO, since 2007.

The 50-storey building is not lacking in Trumpian grandiosity. Renters are promised a top-hat-wearing concierge and furnishings chosen by the personal decorator for Ivanka Trump, Kushners wife, in conjunction with the home furnishing superbrand Restoration Hardware.

But critics say Trump Bay Street, which uses the Trump name under licenceand is now leasing apartments starting at $3,100 a month, is also a showcase for something else: the misuse of an controversial immigrant visa program originally designed to promote economic investment to disadvantaged areas through the sale of visas that can ultimately be converted to citizenship.

Kushners development, with its chefs, dining tables and elaborate health and sports facilities, was completed with upward of $50m raised through EB-5 financing, according to a slide presentation by US Immigration Fund.

The EB-5 program is popular with Chinese nationals with $500,000 or more to invest in US development projects. In 2014, the most recent year for which records are available, the US issued 10,692 of these visas 85% to people from China, according to the Department of Homeland Security.

But Trump Bay could soon become a focal point not only of efforts to reform EB-5 but also of the incoming Trump administrations unresolved family business conflicts.

EB-5 is an extremely complicated, corruption-prone way to bring foreign investment into the US, says David North, a Fellow of the Center for Immigration Studies, and in this case it is part and parcel of the conflict of interest issues that are flying around the incoming administration.

North estimates that more than 60% of all EB-5 investment in the US comes into Manhattan and surrounding areas while the majority of applications originate in China.

In recent months, the EB-5 program has been the subject of bipartisan criticism in Washington, with opponents including Senator Dianne Feinstein, Democrat of California, vowing to end the system when it comes up for renewal in Congress this month.

On the Republican side, Senator Charles Grassley of Iowa, chairman of the Senate Judiciary Committee, has described the program as riddled with corruption and national security vulnerabilities.

In August, a report issued by the Government Accountability Office said it could not be sure that the money used for EB-5 was not coming from the drug trade, human trafficking or other criminal activities.

Critics of the system say not only is the $500,000 investment threshold too low but the funds the program raises frequently go toward luxury developments in New York or Miami and not, as originally stipulated, to disadvantaged areas as the scheme originally intended.

A New York University studyfound that EB-5 investment was largely financing luxury developments, including a Chinese-style casino in Las Vegas, a Waldorf Astoria hotel in Beverly Hills and the redevelopment of the Hudson rail yards in Manhattan.

Its hard for smaller states and cities to compete with the glitzy hotels and luxurious condo projects, Grassley argued at a congressional hearing.

But supporters, including the Democrats incoming Senate minority leader Chuck Schumer, who represents New York, claim EB-5 has pumped almost $9bn into the economy and created more than 35,000 jobs since it was created in 1990.

The future of the EB-5 program could now be coloured by Donald Trumps campaign promises to crack down on immigration.

In September, Congress passed a resolution keeping the program alive to 9 December. Legislators will now have to agree on a reform for the program or let it expire.

But some believe Trump will not simply back maintaining EB-5 but expanding it.

His strong stance is against illegal immigration, said the former New York governor George Pataki at a forum in Shanghai soon after Trumps election in November. And EB-5 is a legal immigration program. He understands the need for capital, the need for investment.

With Congress being lobbied to extend EB-5 indefinitely, one of the options open to the president-elect could be to back raising the investment bar and introducing reforms that ensure investment capital flows to disadvantaged areas at the expense of New York or other wealthy areas.

But North, for one, was not holding his breath for that.

The way the program works now is as an asset transfer program for rich Chinese investors to line the pockets of rich New York developers. The administration could make the program less useful to the rich of New York and more useful for the rest of us. Theyre unlikely to do that.

Read more: https://www.theguardian.com/us-news/2016/dec/03/trump-bay-street-new-jersey-relied-on-immigrant-visa-funds


US stocks hit record highs as gains continue following Trump victory

Dow Jones surpassed 19,000 for first time this week, as investors expect lower corporate taxes under Trump

US stocks notched fresh records, capping a week when the Dow Jones Industrial Average breached 19,000 for the first time, as investors continued to bet on a pickup in economic growth and rising corporate profits.

The gains were modest but broad, with utilities rising the most, up 1.4%.

US market indexes have been rising since the presidential election and this is the third consecutive week of gains as investors anticipate reduced corporate taxation and regulation, as well as greater infrastructure spending, under a Trump administration.

Since the election on 8 November, the Dow industrials are up 4.5%. If the markets hold, they will be on track to end the year with 9.9% gains their best since 2013.

Analysts say the markets are rising on recent signs of a pickup in growth in several other major economies around the world.

We havent had a synchronized bounce in growth across the globe ever in this recovery, Jim Paulsen, chief investment strategist for Wells Capital Management, told the Associated Press.

This is the first time youre getting all the economic boats going north at the same time, and I think stock markets are reflecting that.

The stock market is benefitting from an exodus of cash from government bonds as well as real estate and gold even as investors anticipate interest rates rises next month.

The surprising thing after the election was not that we rallied to this level, it was the speed at which we got there, Scott Wren, senior global equity strategist at Wells Fargo Investment Institute told the Wall Street Journal.

Wren added that there is a lot of enthusiasm out there for Trumps policies, including spending on infrastructure, relaxing regulation for big banks and cutting taxes.

Stock trading closed at 1pm eastern time. Trading was relatively quiet as investors returned from the Thanksgiving holiday.

Read more: https://www.theguardian.com/business/2016/nov/25/us-stocks-dow-jones-record-trump


The Art of the Deal by Donald J Trump with Tony Schwartz digested read

A timely reissue of the business tycoon/president-elects collected entrepreneurial advice from 1987 is redacted by John Crace

I dont do it for the money. Ive got more money than Ill ever need. Some of it yours. Lets face it, you dont file for bankruptcy six times if youre planning on paying your dues. The key to making the best deal is to let others take the hit. I do it because I can. If you can get away with losing over $1bn on a deal, youd have to be a schmuck not to. Theres no way that Donald J Trump is ever going to let himself be one of those deadbeat Americans with no hope and no prospects. No sir. And thats why were shamelessly republishing this load of tosh from 1987. Heres a diary of a typical Trump week.

Monday 9am. Call my broker, Alan Greenberg, to buy $25m worth of stock in Holiday Inns. I sense its undervalued. As we speak, its value increases to $30m. My cock goes hard and I decide to sell.

Tuesday 3pm. Try to evict Carly Simon and Mia Farrow from their rent-controlled apartments, but both want to play hardball. Their loss. When you do battle with the Trumpster, theres only one winner.

Wednesday 1pm. Lunch with Ivana. Try to grope her pussy. Probably not the best time to tell her about Melania.

Thursday 5pm. Some kid at the door says hes my son. Tell him to come back when hes made his first $10m.

Friday 10am. The banks foreclose on Trump Taj Mahal casino putting thousands of people out of work. But at least I come away with $50m. My cock goes hard again.

My style of dealing is quite straightforward: 1) Get as much as you can for yourself; 2) Theres always somebody stupider than you out there; 3) Any attention is better than none; 4) Promise people the Earth even if you know you can never deliver; 5) Get yourself a top haircut.

The most important influence on me when I was growing up was my father, Fred Trump. He taught me everything I needed to know about making money. If he had a fault, it was that he was not narcissistic enough. Fred never named a tower after himself. He also wasted too much time buying properties for deadbeats. If theres one thing Ive learned from real estate, its that poor people on zero-hours contracts just dont know how to look after themselves.

My first deal in Cincinnati taught me that lesson. Having persuaded the banks to lend me the money, I put the day-to-day management of the rebuild in charge of a man I knew to be a conman. I figured he would con the contractors far more than he would con me, so I would end up ahead on the deal. No flies on the Don! Though I was glad to sell the houses off for a $10m profit before the market crashed.

In 1974, I moved into the New York property market when I bought the Commodore Hotel near Grand Central Station. It was rundown and operating at a loss and everyone thought it was a turkey, but I could immediately see its potential. As usual, I was proved 100% right and made $280m in an afternoon after renaming the hotel Trump Plaza.

I then built Trump Tower after buying a department store whose owner didnt understand its true worth. That project taught me that most politicians are just in the game for themselves. Its a mentality I just cant understand. With Trump Tower, I was determined to build as big as possible and the results speak for themselves. I have my own apartment on the top three floors and employ some limey called Nigel Farage as my lift attendant. It could be worse. I could have had Piers Morgan working for me. Can you believe that man? I met him once for five minutes on a reality game show and he hasnt stopped going on about it ever since. The guy must have nearly as big a personality disorder as me.

After Trump Tower came Trump Castle, Trump Palace, Trump Island, Trump White House and Trump Great Wall of Trump. Basically, it was the same deal every time. I was fabulously brilliant and made a huge amount of money for myself while everybody else lost big time. I was living the American dream. Bankrupt one day, rich the next. But my biggest success is the 120-storey Trump Toilet that can flush every Muslim, Mexican and gay back into the sewers where they belong. It might even come in useful for this book.

Digested read, digested: The American nightmare.

Read more: https://www.theguardian.com/books/2016/nov/20/the-art-of-the-deal-by-donald-j-trump-with-tony-schwartz-digested-read


Curious George loses his home: world’s only store to be closed down

New building owners plan to replace Massachusetts store dedicated to playful fictional monkey with a stairwell, as customers and enthusiasts push back

Curious George must find a new home. The only shop dedicated to the mischievous fictional monkey is being booted out of its building at One JFK Street in Harvard Square in Cambridge, Massachusetts, forcing the childrens book and toy store to look for a new home.

Real estate investment trust Equity One bought the building last year, and has announced plans the gut the building. A stairwell will replace the current store, named the Only Curious George Store in the World, according to development plans obtained by the Guardian.

Curious George is a mischievous fictional monkey in a childrens book series originally written and illustrated by Margret and HA Rey. The creators of the now-famous series settled in Cambridge after fleeing Paris during Nazi occupation on bicycles with book manuscripts in their backpacks. Seven books were published by Houghton Mifflin Harcourt, beginning in 1941. The series later expanded after the deaths of the Reys, and has been made into a television series.

Houghton Mifflin granted permission to friends of the Reys to open a Curious George-themed bookstore in Harvard Square in 1995. After a brief closing in 2011, the store re-opened in April 2012, with new owners Adam and Jamie Hirsch, and with a new name: the Worlds Only Curious George Store. Some products are solely available at the store.

Curious
Curious George store owner Adam Hirsch at the store in Harvard Square in Cambridge, Massachusetts. Photograph: Boston Globe/Boston Globe via Getty Images

The Hirsches would like the store to remain in Harvard Square, and are currently looking for a new space to rent out. There is a cultural and deep-rooted connection between Cambridge and Curious George that we and other groups would like to see continued, Adam Hirsch said.

The store attracts over 100,000 visitors a year, according to the Hirsches. The small corner store bustles with exuberant children, and a cashier makes room for a stroller behind the counter as a child pulls his mother toward a rack of toys. The classic books sit next to stuffed animals, hats and puppets. Hirsch said, It puts smiles on everyones faces of all ages. Its a place to escape for 20 minutes. Its linked to literacy, education and learning. People want to hold onto that.

The store recently celebrated Georges 75th birthday with a block party that drew over 1,000 attendees, according to Hirsch.

Vanessa
Vanessa Tavares, 8, a Curious George fan whose letter calling for the store to be saved is taped to the shop window. Photograph: Sarah Betancourt

Taped to a window overlooking the square is a colorful letter to Cambridge officials from eight-year-old Vanessa Tavares. Her family drives to Harvard Square from the South Shore to specifically visit the store. Her mother Jennifer Hagan said: I bought her first book there as a baby. We always go to the store when were in Cambridge. She saw it on the news, and I told her, Honey, they might close the store, and she said, Where are my markers?

The building on JFK Street was owned by the Dow Family Trust for over 100 years, and was sold to Equity in fall 2015. Equity One representatives have not responded to repeated requests for comment.

In the meantime, a petition has been signed by more than 5,000 customers and George enthusiasts, urging community members and Commission leaders to support the store in its transition. The Commission will hold a public hearing on 1 December, in which alterations to the property will be discussed.

Read more: https://www.theguardian.com/business/2016/nov/16/curious-george-store-closes-cambridge-massachusetts


Qatar wins approval to turn US embassy in London into hotel

Westminster council accepts plan to build 137-room hotel in Grade II-listed building in Grosvenor Square

The Qatari royal familys property company has won approval to turn the US embassy in London into a luxury hotel.

Westminster council agreed Qatari Diar Real Estates plan for the Grade II-listed building in Grosvenor Square, Mayfair, on Tuesday. The nine floors, three of which are underground, will include up to 137 hotel rooms, shops, restaurants and bars.

The US state department agreed to sell the building to Qatari Diar in 2009 to fund a new embassy in the Nine Elms regeneration project south of the Thames. Estimates put the Grosvenor Square sites value at 500m before it was made a listed building, which would have reduced the value because of restrictions on development.

Qatari Diar, part of the Qatari Investment Authority, has snapped up several high-profile London properties including the former Chelsea barracks, the former Olympic athletes village and most of Canary Wharf. Qatari investment interests also own Harrods and substantial stakes in Heathrow airport, Sainsburys, Barclays Bank and IAG, the parent company of British Airways.

Read more: https://www.theguardian.com/business/2016/nov/16/qatar-wins-approval-to-turn-american-embassy-into-luxury-hotel


Page 3 of 6First...234...Last

Recent Tweets

Call Now Button