Amici Curiae: The Stock Exchange Merger, Tipster Texting, and Blaming Berlusconi Edition

Boehner Weighs in on Birthers

Three years after being elected President, rumours that Barack Obama was not born in the United States are still floating about. That seems to be the state of things after House Speaker, Republican John Boehner’s comments over the weekend on NBC’s “Meet the Press” that, although he believes Obama was born in the United States, it isn’t his job to tell Americans what to think.

For a Wikipedia summary of the Birther Movement, click here. Although its most ardent supporters are generally those on the far right of the American political spectrum, as Mr. Boehner’s comments reflect, it has nonetheless proven a difficult issue for many Republican politicians to tip-toe around. This reality was hammered home during last year’s Congressional elections with the Ken Buck saga.

Momentarily setting aside the validity Boehner implicitly attaches to the rumours by suggesting those who believe them should not be told they are wrong, such a position seems ardently inconsistent with anything the politician has done. It would be difficult to imagine Speaker Boehner suggesting that, while he believes Americans face a debt crisis, it is not his place to tell the American people what to think. That’s okay though – politicians are supposed to listen, analyze, and pass judgment; it’s called governing. What isn’t okay is portraying the tenants of a conspiracy theory smear campaign as but one voice in an equal debate. Like the United States’ debt, Obama’s eligibility to serve as President is a fact that those who oppose it need to acknowledge.

What is most saddening about the pervasiveness of the Birther Movement is what it says about the exclusionary state of certain elements of American politics. As it is intrinsically tied to portrayals of Obama as un-American, such as those which accuse him of being a secret Muslim, it shows that a modern nativism is alive and well in certain American circles. Faced with the possibility of stoking the flames and harnessing this ignorance on the campaign trail last year, John McCain was willing to speak the truth. John Boehner should take note.

Canadian Lawyer at NY Sued Law Firm for Sex Discrimination

Jaime Laskis, a 34-year-old Canadian from Dalhousie Law School, has commenced a lawsuit against the New York office of Osler, Hoskin & Harcourt LLP, for sex discrimination under New York States Human Rights Law and New York City Human Rights Law .

Click here for her statement of claim filed in the District Court of New York.

Laskis was a former associate at the New York office of Osler and was terminated in 2009. She alleges that a senior partner at the firm told her that she “need more than just a pretty face” and that she “wasn’t helping herself coming to work looking well put together.” Laskis also alleged that the individual made negative comments about her to a partner in another firm to interfere with her job search.

This is the second time in recent years that a Canadian woman has launched lawsuit suit against prestigious law firms claiming gender-based discrimination.

Potential Toronto Stock Exchange Merger

It was announced last week that the Toronto Stock Exchange had reached an agreement to merge with its London counterpart. The merger would create the world’s biggest stock exchange, with more than 6,000 companies traded and would be jointly headquartered in Toronto and London.

There is disagreement amongst business and political officials as to what the result of the merger might be, and whether such an agreement would benefit Canada. As such, the government has announced it will review the potential merger before giving its required assent. The potential merger comes after the LSE’s failed attempt to merge with the NASDAQ in 2007.

The Conservative government has had to deal with a number of highly publicized takeover and merger attempts recently. In November of 2010 Industry Minister Tony Clement rejected BHP Billiton’s bid for a hostile takeover of the Potash Corporation of Saskatchewan. The minister is also currently reviewing a bid by Petrochina to acquire a fifty percent stake in Encana.

Berlusconi Trial

Italian Prime Minister Silvio Berlusconi has been indicted on charges of paying to have sex with a minor and abuse of office. After a series of allegations spanning a number of years, Berlusconi has been accused of paying an underage girl (“Ruby Rubacuori”) for sex and then using his political power to cover it up. If convicted, he could face up to 15 years in prison.

The scandal has resulted in protests in support of the charges by centre-left and left political opposition, particularly amongst women. For his part, Berlusconi claims that although he is “disgusted” by the “accusations … without proof,” he is unconcerned. His position as Prime Minister will not be affected as ongoing legal proceedings against a candidate do not prevent him or her from holding office. And while this is not the first scandal Berlusconi has faced, he continues to receive broad political support from the right and centre-right in Italy.

Text Messages as “Tipsters”

A 21-year old man Steven Pieper pleaded guilty to second-degree murder for the death of his former girlfriend Jenni-Lyn Watson in Syracuse, NY.

After the killing, Pieper tried to cover up the killing by sending a message from Watson’s phone to a friend of hers.  Although her phone was never recovered, the investigators reviewed calls and text messages that were made on the phone.

The use of “GTG” in the text messages tripped up Pieper, as this was an abbreviation that was frequently used by Pieper but not Watson. “GTG” is the acronym for “got to go.”

Pieper confessed that he killed Watson at her parent’s home on November 19th, 2010 by strangling her to death and dumped her body at a nearby park. The prosecutor said Pieper did not have a plan to murder Watson.

Abusive Text Messaging Turned into Murder

While as the previous brief demonstrates, a text message may become useful in fighting crime, a message could balloon into a vicious knife attack. Recently, a man stabbed his neighbour over an auto-corrected text message which spelt “mutter” into “nutter.”

The 33-year old Neil Brook sent a text message to his neighbour Witkowski and called him a “mutter,” which is a slang term for a “wannabe streetwise teenager.” However, the predictive text on his phone changed the word to “nutter,” meaning “crazy person.”

Witkowski got offended and exchanged abusive text messages. Finally, Witkowski went to Brook’s apartment and attacked Brook with a knife. Brook counter-attacked and stabbed Witkowski 104 times. Witkowski died en route to hospital.

Brook has been convicted of manslaughter and will be sentenced on April 1.

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6 Responses

  1. Robillard says:

    FYI on the proposed LSE-TSX merger, depending on how you measure size, the LSE is the #2-4 securities exchange firm in the world. The TSX comes in around #7. Even if they did merge, they probably would not be as big as NYSE Euronext.

    I don’t see there being much to lose by letting the LSE and TSX merge (technically the LSE would be buying the TSX). Canadian financial regulators (at the provincial level) would still set standards for the Canadian seruties market. Trading on TSX listings would still be based in Toronto’s financial hub (trading is done electronically, so there is no need to actually be in Toronto). Montreal would remain a centre for the derivatives business. Calgary would remain a centre for the private equity business.

    Also, I would add that European regulators and politicians did not made much of a stink about stock market mergers. The LSE acquired the Borsa Italiana in 2007. Before merging with the NYSE, Euronext was composed of stock exchange operations in France, the Netherlands, Belgium, Portugal and a derivatives exchange in London. I’m not saying that Canada is in the same situation as Europe, but I would say that some kind of industry consolidation is probably inevitable. Canada should let the TSX merge with another exchange on the best terms possible. The proposed LSE-TSX merger sounds decent.

    Incidentally, the real question is why the LSE would want to merge with the TSX in the first place, since the scope for back-office-cost-sharing seems somewhat limited. It’s not clear whether the TSX has much scale in clearing operations and whether merging with the LSE would realise any economies of scale. It’s also not clear whether a merged LSE-TSX would be any better at fending off upstart competition, such as Alpha Trading or BATS.

  2. m.diane kindree says:

    Whether it is global economies, mergers or the debt crisis little attention has been paid to human behavioral science (“complex beyond the measure of price”) and even less attention to the political reality of the problems of debt securitization of other nations against Canada’s sound credit and banking system. Canada’s financial independence and reserve is our credit. What will happen to that credit if we merge with the LSE?

    What is the true extent of Britain’s national debt?

    Back in 2008, Britain had the highest (400% debt/GDP) of the G7. How is Britain paying back what it owes the rest of the world?

    History continues to teach us that inflation can only be controlled by reducing the debt (personal and national) and ensuring that our debt does not make us careless with either our resources and/or our money.

    At this time, is this proposed merger an unnecessary risk?

    Conventional wisdom suggests that relying on the market to exercise discipline in controlling “addictive debt” is irrational and therefore, I hope the government will undertake a thorough analysis of the pro and cons and proceed with caution before clearing the way for this merger.

  3. Christopher Hunter and Ivy Tsui says:

    Robillard and M.Diane Kindree,

    Let me begin by thanking you for your thoughts, both of which make some good points and adds a worthwhile dimension to the discussion. I see today that a number of Canada’s largest banks are lining up against the merger (

    While at this time I cannot offer an excellent reason why the LSE would want to merge specifically with the TSX, I would note that it has demonstrated a strategy of attempting growth through mergers for a number of years now, with would-be partners from around the world. Moreover, and in a tip of my hat to a point brought up by M. Diane Kindree, I suspect there is a significant appetite for those ‘in the know’ to get access to the Canadian market after it demonstrated its relative strength during the recent recession.

    M. Diane Kindree is exactly right in noting the need for a thorough analysis of the pros and cons of the proposed merger. It will be interesting to see what happens going forward. Until then, I will respectfully reserve judgment.

    Thanks again for writing,

    Chris and Ivy

  4. m.d. kindree says:

    Thank you for your prompt responses Chris and Ivy.

    A review of PwC predictions using GDP projections places China in the number one spot by 2025. The other prediction is that China will close the gap in economic size with the US by 2020. And finally, that Asia will increase its share of world GDP from 35% to 43% in 2020.

    What are your thoughts about the future possibility of a tri-party merger (Europe, Asia, and Canada)?

    The results of the proposed LSE-TSX merger is as exciting as waiting to see who won the GG’s this year :)

  5. Robillard says:

    @m.diane kindree
    I think that you may be muddling the issue somewhat here. It is fair to ask what the effects of LSE-TSX merger would have on the equity market in Canada. The TSX has a quasi-regulatory role in the financial system since it partly regulates how Canadian stocks get traded.

    The debt market is a separate beast though. I think only a small number of debentures are traded on the TSX, if any. Debt securitization takes place in the primary market as private deals between investment banks/dealers and institutional investors (pension funds, mutual funds, hedge funds, insurance companies). Once bonds or other debt securities have been issued, secondary market trading takes place in the “over-the-counter” market between investors. The TSX does not play any mediating role in the bond/debt market (except as previously mentioned).

    Any merger between the LSE and the TSX should not have any effect on federal or provincial debt levels. Both the LSE and the TSX are private companies, albeit subject to significant government regulation. Canadian taxpayers are not on the hook for any debts of these private companies. I would also add that I have yet to see an example of a securites exchange going into bankruptcy. (Historically, stock exchanges were mutual entities controlled by their members, and were natural monopolies.)

    The whole issue of Britain’s debts (400% of GDP might be the total debt of governments, individuals and businesses; UK national government debt is less than this, but around 100%) should not have any bearing on the proposed LSE-TSX merger, particularly since there is no way that Canadian taxpayers would have to repay them. The UK and Canada are separate sovereign countries, and an LSE-TSX merger would not change this.

    With respect to the issue of inflation, which is not related to the LSE-TSX merger issue, in fact, inflation is a means of eroding debt. Granted, it’s not a good way of dealing with sovereign government debts. Debt is denominated in nominal currency. Inflation, which erodes the real purchasing power of currency, also has the effect of eroding the real value of debts. Deficit spending by governments can have inflationary effects, and paying down debts can be deflationary (since repaying debts reduces the money supply). Inflation is ultimately controlled by reducing the rate of money creation, slowing economic growth and by changing the expectations of inflation. I would go into the specifics, but this response is already long enough.

  6. m.diane kindree says:

    I appreciate the time you have taken to write an comprehensive professional response.
    My interest in this subject is purely personal (inspired by my late father) and therefore, I may indeed be muddling the issues as you have so respectfully suggested. Thank you.

    The closest example of a stock exchange nearly going bankrupt was Iceland a few years ago. There was a 90% drop in market capitalization of the Icelandic Stock Exchange when three of the country’s major commercial banks collapsed (unable to refinance their debt).

    The unresolved sovereign debt in Europe may spread to Canada (links and hooks)in the form of systemic risk resulting from increase in the volatility of our markets due to possible regulatory changes in the European Community. Will the ultimate power for overseeing regulatory practices and standards be focused in London or Canada? Wasn’t London one of the major centres for the global financial crisis? I guess I am wondering who will really ring the bell…in this proposed “merger of equals.”

    Can private-debt economy sustain a slowdown? Didn’t the London deregulation (1986), of the London securities market, create the private-debt economy which became a global debt crisis? It is my understanding that while the business cycle can survive deflation, the debt bubble will burst?? In 1996-7 Mr. Greenspan raised interest rates to stop an anticipated wage-push inflation which in turn affected the debt-ridden companies. To survive, these companies cut employees and the downward spiral began. At the time, the stock prices were doubled and real-estate prices had tripled. What happens when the economy is driven by artifically strong debt-driven dollar? Can this devaluation have an affect on other global national currencies? What happens to stock options when the debt bubble bursts? Can securitization restructure debt into something beyond recognition through the unregulated credit markets? What kind of disclosure rules are OTC derivatives subject to?

    Recently, stock markets and economies have both been rattled by natural disasters and unnatural disasters (the fight for democratic right and the flight from civil wars) and recovery will create more debt for these countries. What happens when the cost of repaying the debt exceeds the benefits? What happens if you try paying down one debt with a new debt? Isn’t this a Ponzi scheme?

    Looking down the road, I believe Canada will always attract investment because of our wealth of resources and the increasing depletion and/or disruption of other global fossil fuel reserves. If the merger does happen, I hope all the i’s are dotted and t’s are crossed to ensure Canadian interests are being well served and that we really are equal dealmakers and regulators with the LSE.

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