Brex-Hit

Sat, 2016/07/23 - 4:00pm | Your editor

Brexit has hit. The UK purchasing managers index (PMI) fell to 47.7 to mid-July (July 12-21) from 52.4 in mid-June. Anything below 50 marks a decline economic activity. The newly published figures from the Markit/CIPS survey cover both manufacturing and services. Sterling fell about 1% to $1.31. The Eurozone PMI meanwhile barely fell from June's 53.1 to 52.9. That's the bad news.

The good news is that the level in early 2009 during the global financial crisis was lower still. The other good news is that export sales rose boosted by the cheaper pound. Moreover the Bank of England and the government are going to prevent economic decline if numbers come in bad again next month with stimulus and tax cuts.

Nancy Drew thinks she may know where stolen copies of The Economist wind up. Copies were being offered for the full price by foreign youths on foot on the Kings Road in Chelsea, a different part of London from Tower Hamlets.

Asia Times reports that 2 Singapore street food stalls – Hill Street Tai Hwa Pork Noodle (Crawford Lane) and Hong Kong Soya Sauce Chicken Rice and Noodle (Chinatown) – were granted a Michelin star each last week, the first stars ever awarded to street food hawkers.

There will be no tables this Sunday and no blog on Monday when we will fly home via Amsterdam. Here is some news from Britain, Canada, Israel, Ireland, Brazil, Sweden, the Dutch Antilles, and India. There are two results, and a tender offer  to report.

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Getting The Economist in the East End

Fri, 2016/07/22 - 9:38am | Your editor

 

For the second week in a row, our friendly local newsagent could not give us the copy of The Economist we has asked him to hold for us. The newspapers and magazines are delivered here in Docklands by a truck arriving about 5 am which dumps them outside the store which the family only opens at 7 am. On Friday, thieves snatch the magazine which costs £5 and then sell them to other newsagents at a discount which the Indian owner suspects is about half. He is sure that the other local newagent, a Turk (who doesn't sell The Economist) is not the bent vendor, but this is a big city with many newsies.

The last time we were here for a long period we tried to get our US sub delivered to our London base, which resulted in a total screw-up because we had to start a new subscription on our return to the USA. A a reverse address change on a sub was not among the magazine's computer system options. While advertising across the pond works (we have used it), the subscription databases are unlinked. I think it would be a good idea to get them to communicate with each other in the magazine's two major markets and am sending this note to the mag in the hope they will take my advice. I will accept a free ad in return for my brilliant suggestion.

More for paid subscribers follows from Britain, Ireland, Germany, Canada, Spain, the Netherlands, Chile, Israel, Switzerland, and Mexico including 2 new company reports. There will be no blog Monday as I am flying back to NYC (where the same issue of The Economist will probably be waiting for me.)

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Finding Muslim Shoppers

Thu, 2016/07/21 - 7:53am | Your editor

What we need to get are Muslim shoppers. Around 30 of the 84 people killed at the Nice Bastille Day festivities by an Islamic terrorist truckdriver were themselves Muslims. This suggests a way to deal with this spate of self-radicalization to ISIS among Muslims in Western countries. We need to remind other Muslims that they are likely to become victims of terrorism by their relatives or neighbors or mosque acquaintances.

As Muslims realize that supposed religious zeal leading to murder will murder them and their loved ones, they have an incentive to stop the havoc by informing against zealots in their midst. They can be on the lookout for sudden bursts of piety in a petty criminal, or advocacy of terrorism, or sign-ups on extremist websites. They should be encouraged to shop these potential murderers.

Leaving it to Muslims themselves to shop deadly extremists among them is the best way to squelch terrorism at source. Remind the Imams and their congregations that if the new Jihadists cannot kill Israelis or Shias in the Middle East to gain instant entry into Paradise despite their sins, they will kill their co-religionists in the West.

 

Italy is working out a way to bail out what may be the oldest bank in the world, 544 years old, the Monte dei Paschi di Siena, without violating the European Union ban on state support for bankrupt banks which must be sold at market prices rather than refinanced by taxpayers. The EU rules require that banks' creditors must take a haircut when they are recapitalized.

The problem is that many Italian small savers hold euros 231 bn of Monte debt and there is an election coming. So the Rome govt has a work round in sight, to refinance its official bailout backstop fund, Atlante, so it can securitize the bonds held by individual investors in Monte. If this is not done, there will be a tempest at balloting time, and more suicides (two have already occurred along with two earlier govt rescues of Monte).

A work-round EU regulations will again delay need Monte reform, the result of decades of misrule by bankers, regulators, politicians, and marketeers. This nonsensical outcome is another nail in the EU coffin, because the regulators are allowing Italy to do what they prevented Greece and Portugal from attempting over their bust banks. It is not just Brexit that puts the European Union's future at risk.

 

Greece meanwhile has repaid Greece €2.64 bn in debt it owes to the European Central Bank and other creditors yesterday from the money it gots in its 3rd bailout in return for a batch of financial reform measures passing a Brussels “performance review.”

You don't want to rely on a hyper-cautious and secretive central bank allergic to PR for fiscal policy. The ECB has today left rates and stimulus unchanged at its first post-Brexit meeting. Bank of Japan Governor Haruhiko Kuroda broadcast that there was no need and no possibility of “helicopter money” in a BBC radio interview this morning after the yen fell to a new low against the US$. The interview caused the yen to jump the most in almost a month against the US$ but it may have taken place in June. Bad PR is another CB failing.

 

Bloomberg reports that when hackers broke into computers at Bangladesh’s CB early this year and central bank in February and sent fake payment orders, the US Federal Reserve was tricked into paying out $101 mn. But the losses could have been 10x higher had the name Jupiter been part of the address of a Philippines bank where the wanted the money sent. By chance, Jupiter was also the name of an oil tanker and a shipping company under US sanctions against Iran. That stopped 90% of the money from going to Manila.

 

More for paid subscribers on 4 trades plus news from Brazil, Britain, Germany, Israel, Singapore, China, India, Canada, and The Netherlands.

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The Bremain Risks

Wed, 2016/07/20 - 8:12am | Your editor

While much attention is focused on the British risk over its eventual likely exit from the European Union, I also look closely at the inherent contradictions within the EU which will continue whatever Britain does. There is risk galore among the Bremain countries remaining in the EU.

The euro, the common currency, which Britain never shared, is suffering from an inherent problem because of the wide range of different growth and deficit patterns among its members. Without a single unit of account, a country could boost its output by a devaluation of its money, something southern European countries and Ireland would have been able to do had they not been locked into parity with Germany after the euro was adopted in 1999.

In their move to an 'ever closer union', from the terms of the Treaty of Rome which originated the EU, countries are required to adopt 4 'freedoms'.

First they agree to allow free trade in goods. There will be no long-term tariffs across EU borders, although the use of national standards often has a similar impact to charging duty. The standards however are being centralized if slowly and, by the way, annoyingly. Setting the shape of cucumbers allowed to cross borders without hindrance is an example.

This means the rules are written by bureaucrats and cost companies money to comply.

Then the EU members agree to allow free movement of workers. They will not be discriminated against in favor of locals when they cross borders. This part of the treaty was opposed by the inhabitants of Boston (in the UK not in Massachusetts), upset that their cabbage harvest is being brought in by Romanians willing to do the grunt work more cheaply than the Bostonians. Britain's Boston had the highest vote for Brexit in England.

But, in fact, almost every EU country has a gripe about free movement, most notably the nationalistic  former eastern European new members like Slovakia, Poland, and Hungary. And the refugee influx from the Muslim world and Africa means that free movement has become impossible in any case. Borders are not open for people to move freely. Any crackdown on terrorism will add to the border obstacles.

Third comes the right of establishment and provision of services,  in fact not available, since national standards, licensing, and rules cover who may provide services. Hair-dressing or toilet repairs, driving cabs or pleading before the bar, running a hotel  or teaching children, remain under national or even regional regulation. The service sector is local in almost every EU country. But in an effort to overcome these differences, Brussels has undertaken swingeing rule-writing over the most trivial aspects of services, causing resentment among those who now have a license it is seeking to undermine.

Last is free capital movement, also nullified in fact by regulations whose purpose may be to limit money-laundering by criminals or evasion of taxes, but whose impact is to block cross border capital movements. This is the part of EU membership Britain is most anxious to retain. However over-regulated and obstacle-laden, financial services are what makes Britain great, and it want to continue to offer them on existing terms all over the EU. Ambitious rivals, like France and Germany, will plot to complicate matters, hurting not only the exiting British, but also other countries with a liberal approach to money services, from Estonia to Ireland, from Luxembourg to The Netherlands.

In fact European monetary policy cannot be set by all-nighter meetings of the member countries or their elected reps. They are too irreconcilable. It is being left to the European Central Bank's 'super' Mario Dragi to try to reconcile the grouping's conflicting policy aims: growth and employment, a stable euro, and low inflation. Nobody elected Drahi and most countries have a bone to pick with his compromises. There is no European monetary policy, no European fiscal policy, no European regulation of banks (except over state aid).

Focusing on what is splitting Europe regardless of what Britain wants shows that it its future is not secure. The influx of refugees created an unresolved split between countries welcoming young blood like Germany and others who want to maintain their good old monolithic social structure and homogenized ethnicity. Europe is a patchwork of different languages and religions the natives want to defend. The Holocaust reminds us that those of a different religion (not necessarily Jews) and a different ethnicity (not necessarily Roma or gypsies) can become targets. Britain was most execised about Polish immigrants, who more or less look like them, but tend to be Roman Catholic rather than Anglican. Similar NIMBYism afflicts the remain countries.

The unresolved Greek financial crisis and the potential blowup of Italian banks shows that common rules on capital movement conflicts with national needs. And with divergent growth patterns and continued deficit spending in the “Club Med” countries, the gap with Germany and Holland, the countries able to meet the rules, and the rest, will grow.

These internal EU contradictions have been thrown into the spotlight by the British vote. And dissidents in other countries can demand the right to another referendum à l'anglaise, supported by populist parties from the left or the right. The vote could open the door to further exits from the EU by countries ranging from first founders France and Italy to newer members Poland or Hungary (over immigration). Financial issues could lead to a Greek exit. Saving our jobs from Brussels leveling might lead to even Germans crying 'raus'. In fact the whole experiment may come to an end.

In fact, while I regret this, I think the whole EU experiment in unification may fail over the coming decades. And being tougher than necessary with Britain—to stop home-grown imitators—will not stop the move to the exits.

 

More for paid subscribers today starting with a company quarterly, with news from Germany, India, Bermuda, Panama, Costa Rica, Canada, Britain, the Dutch Antilles, Israel, Japan, South Korea, Colombia, and Greece.

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Toppy Markets?

Tue, 2016/07/19 - 6:14am | Your editor

Today markets feel toppy.

The Turkish putsch failed to discourage Japan whose market reopened after a holiday. The Nikkei index resumed trading with another gain as Japanese investors get ready for more government economic stimulus. Ben Bernanke, former head of the Fed, was spotted visiting his Japanese counterpart during the 4-day weekend, which further triggered optimism over tax and interest rate cuts.

The only exception from the bullishness was Softbank, sold off because it is already deeply in debt and now may be overpaying for Arm plc which it is acquiring. Interestingly enough, the negotiations over the takeover took place in Turkey ten days ago.

The Japanese stock market is in a risk-on phase and a reversal is likely. And not just there.

The British stock index hit a new 2016 high yesterday and sterling briefly went to $1.33, also because of the Arm deal. Brokers are looking for other UK listed companies which may become takeover candidates, starting with Arm's Internet of Things rivals, Imagination Technologies and Allied Minds. Other ideas are companies bid for earlier which still are independent, like RSA, the insurance firm which Zurich failed to nab last year along with other insurers like Aviva and Prudential. Even Royal Bank of Soctland which the UK government wants to exit its 80% shareholding in rose yesterday. Chemical producers Victrex and Polypipe are others brokers signal may be bid for. Drug companies Shire and Astra Zeneca are also said to be targets. AZN may enter the fray over Medivation to stop a bid.

It is not that simple. Bids do not necessarily lead to copycat bids, particularly when, as with the Softbank deal, the first ones are viewed unfavorably by the home market. And unless you have insider information, which is illegal, do not buy any share in the hopes of being bought out.

If a foreign company has piles of sterling from its retained earnings, it might be a bidder, to use the depreciated currency strategically. This was pointed out by expert Marc Chandler of Brown Brothers Harriman who has written insightful articles since the Brexit vote on how it can all go wrong. His most recent missive warns that Britain's aim to delay signing article 50 of the EU treaty to negotiate terms of its exit before a 2-year deadline is struck, may be undermined by other terms of the treaty like article 7. Chandler also says that while UK commercial banks may win “passporting” rights to retain access to other European markets by adopting common standards, this may not apply to investment banks and funds. Moreover, British laws going forward would have to copy every change in EU banking regulations to keep that door open.

 

We have news from our companies in Israel, India, Spain, Britain, The Netherlands, Germany, Sweden, Mexico, The Philippines, Ireland, and Switzerland.

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Two Cheers for the Mother Country

Mon, 2016/07/18 - 8:19am | Your editor

There is something to be said for The Mother Country.

The British do not do coups except bloodlessly, within political parties.

Their former trained soldiers don't mass murder policemen because British veterans may not legally own guns. And their cops do not shoot black men because most of them also do not carry guns.

There is now a second woman heading its government.

The 13% drop in the pound sterling is luring in foreign investors.

 

The Turkish coup attempt, easily and bloodily suppressed by president Recep Tayyip Erdogen, is being followed with a purge of the army and, more importantly, the judiciary, the only part of the power structure which has been able to oppose hisincreasingly autocratic regime. Three thousand people have been arrested including many judges and the death penalty is being reinstated. It was abolished in 20014 when Turkey had hopes of entering the EU, now dashed.

Pres. Erdogen demanded that the US hand over Muslim cleric Fethullah Gulen, whom he blames for supporting the uprising and “at war with Turkey. However US Secy of State John Kerry riposted the without evidence, this charge is “irresponsible”, and added that the US “is not harboring anybody”. Gulen used to back Erdogen but after a falling out moved to Pennsylvania.

 

Daniel Rapaport of Leumi Capital Markets in Israel was probably the first to comment on the Turkish coup attempt and its aftermath, because Israeli stock markets are closed on Friday and open on Sunday. He told Globes Israel:

"Turkey is a developing market. To put things in perspective, it should be recalled that the leading indices on Wall Street have risen 5% so far this year, our market has fallen by about 4.5%, while the Turkish market has risen by 15%. It can be assumed from this that the effect of the weekend's events in Turkey will be profit taking on the Turkish market and a strengthening of the lira, but no broader effect is to be expected." The lira is up today because of government support but Goldman Sachs expects it to fall to 3.1 to the US$ from its earlier forecast of 2.95 to the dollar. The Istanbul bourse is down about 5% today but has further to fall."

Rapaport thinks Europe will continue to under-perform in comparison with America: "The US reporting season began optimistically. All in all, the economy there is all right, the macro data are positive, and so it looks as though the trend there will continue." I am waiting until the bulk of Q2 results come in this week before sticking my neck out.

Mr Rapaport's comments on Israeli stocks are below, for paid subscribers.

Today there is news of foreign firms buying British assets cheaply after the Brexit vote. Japan's Softbank is near a deal to buy Internet of Things firm ARM Holdings plc paying a near 50% premium over its Friday closing price, £24.3 bn, about $32 bn. And there is more, three further buys in beaten down Britain, detailed for paid subscribers below. The paid subscriber report starts here with news mostly from Britain, but with items from Finland, Ireland, Sweden, Norway, Spain, India, China, Papua-New Guinea, Canada, Mexico, Bermuda, and Israel starting with a quarterly report.


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The Church Fete

Sun, 2016/07/17 - 8:22am | Your editor

It is a July Sunday in London and we plan to visit the local church fete, on condition the heavy clouds do not turn into rain. I am not sure that the prayers of members of the Church of England get God to do something about the weather.

The other New York-born big-mouth politician with funny blond hair has still got to apologize to Turkey's Pres. Recep Tayyip Erdogan who has defeated a military coup. Luckily Boris Johnson, called "the Trump with a Thesaurus", who accused Erdogan of having had sex with a goat, may get some leeway. While he insulted the trio of US White House inhabitants and aspirants--Obama, Clinton, and Trump--they may back Brois against Erdogan trying to get the US to deliver Turish Muslim cleric Fethullah Gulen to his tender mercies, for having allegedly inspired the coup. Read more »

Terrorism by Truck; Diplomacy by Insult

Fri, 2016/07/15 - 9:15am | Your editor

Theresa May is taking a lesson from Lyndon Baines. Johnson by giving the Brexit Tories so many jobs in her cabinet, starting with the appalling Boris Johnson as Foreign Minister. This is causing all those he has insulted in the past to recoil: women like Hillary Clinton (whom he compared to “a sadistic nurse in a mental hospital”); African-Americans like Pres. Obama (accused of moving out a Churchill bust from the Oval Office because of “his part-Kenyan ancestral dislike of the British Empire”); other Blacks who are “piccaninies”; Turkish President Recep Erdogan (who “sowed his wild oats with the help of a goat”). This despite being of part-Turkish ancestry himself and, at the time, a dual national holding a US as well as a UK passport.

Cheer up, Boris also insulted his fellow big-mouthed blond politician with a weird haircut: “the only reason I wouldn't go to some parts of New York is the real risk of meeting Donald Trump.”  Boris and other supporters of Britain leaving the European Union have all been given jobs working on Brexit, meaning they will have to produce the good results their rhetorical fantasies promised during the referendum campaign.

Or to quote US President LBJ, “it is better that they are in the tent pissing out rather than outside it pissing in.” The leave campaigners now have to negotiate better terms than former PM David Cameron was offered—or face an end to their political careers, starting with Boris. Promises about how leaving the EU would allow stiff immigrant control, financial service passporting, less regulation, more free trade with non-EU countries, faster economic growth, more money for the National Health Service, whatever, will have to be fulfilled by those who made the promises.

 

You don't need guns to murder people, as was shown by a truck-driver terrorist in Nice during the Bastille Day festivities yesterday which at last count killed 84 people and wounded a hundred more.

 

More for paid subscribers follows from India, Britain, Canada, Sweden, Brazil, the Dutch Antilles, Mexico, and Israel.

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Harrods Branded Gold Bars?

Thu, 2016/07/14 - 7:11am | Your editor

Theresa May took over as British Prime Minister yesterday, the second woman to hold that office after Maggie Thatcher. Ms May seems to come from a different part of the Conservative Party, however, having promised “to fight burning injustice” as she arrived at No. 10 Downing St. I think she is reacting to the country-wide dissatisfaction with the power of London financiers and the Tory elite which led to the vote for Britain to leave the European Union. “When we take the big calls”, she added, “we will think not of the powerful but of you”, people who are “just managing.”

She concluded: “We will make Britain a country that works not for a privileged few, but for every one of us.” May, the daughter of an Anglican cleric, wants a system more open to the outs who voted out—even adding worker reps and union officers to the boards of British companies.

Maggie Thatcher would be turning over in her grave at any notion of greater fairness and representation for the poor or the workers.

May, whose husband Philip works in the City of London in customer relations, but not money management, is a reformist capitalist. She wants limits on CEO pay, now egregious enough so even institutions vote against CEO pay packages offered by compliant boards. She likes makers more than financiers. She supports prison reform and in one case blocked the extradition of a British Pentagon hacker to face a long US sentence on compassionate medical grounds.

Inevitably this childless lady politician with a strong academic background, a daughter of a clergyman, is being compared to another: Germany's Angela Merkel. The big difference is likely to be immigration which Merkel welcomes because Germany is short of young people, and Britain is not.
May ran the Home Office (responsible for visas and emigration). Initially she backed a points system like that in Canada for selecting who could become British to favor entrepreneurs and educated foreigners. But as the number of qualified applicants rose, Ms May became alarmed and dropped the points system.

Boris Johnson, the other bigmouth with the funny blond hairdo, will be the new Foreign Minister. Philip Hammond will be the new Chancellor of the Exchequeur. The housing market is now in the dumps, particularly in London, according to the Institute of Chartered Surveyors.

Panicked Britons apparently are now loading up on gold bars and ingots branded with the Harrods Bank label, being sold on-line and in store branches--with its typical markup. You can buy anything from one gram to 12.5 kilograms from Mohammed Fayed.

 

Contrary to what I wrote yesterday and what the punditry expected, the Bank of England did not adopt a 0.25% lower interest rate today and sterling is up to $1.3364 today despite this. In a world of blind central bankers, the one-eyed Canadian (Mark Carney) is king. More for paid subscribers follows from Britain, Canada, Hong Kong, Ireland, India, Israel, Japan, South Africa, Sweden, and a few other places. Today we start with funds.

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Money Printing

Wed, 2016/07/13 - 7:40am | Your editor

The powers of global finance are back to printing money—and no, this does not mean you should buy the shares of De la Rue, the Basingstoke (England) security printer of banknotes. Central banks do not actually use a printing press to print money. What they do is make it easier for banks to supply credit more quickly to borrowers or potential ones: the needy, the desperate, and even the self-sufficient.

Writing in Asia Times, Dion Rabouin explains the Japanese easing after Shinzo Abe used his Senate victory to issue a call for more stimulus:

“Statements by ruling party sources that the stimulus could reach 10 trillion yen ($97.5 bn) helped Japan’s Nikkei stock index jump 4 % and sent the dollar soaring against the Japanese currency. The Bank of Japan is expected to provide additional easing to keep interest rates low and the yen weak to make sure stimulus spending can gain traction.

“'It now looks like there’s coordinated fiscal and monetary policy,' said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. 'If you get a fiscal policy that is expansive … the natural thing is to finance that with money-printing.'” (BMO stands for Bank of Montreal, one of the big 5 Canadian banks.)

 

The European Union countries have asked the Bank for International Settlements, based in Basel, Switzerland, to ease regulations setting standards for the liquidity and leverage of banks under rules set by the Basel Committee on Banking Supervision. Jonathan Hill, the former EU head of banking and finance (who resigned after the Brexit vote) warned that the regulators were moving toward “the stability of the graveyard” with their concerns about bank solvency. “Be brave enough not to regulate”, he added warning of the impact of rules on trade finance and market liquidity.

And with the impact of the British exit still to hit the European countries, his point has now been taken up by Brussels bank regulator successors.

 

Germany has now taken to charging negative interest on its newest bonds. It is cheaper for Germans to hide their money under the mattress than to invest in fixed income. This will not help Deutsche Bank. the sick man of Europe.

 

Britain itself has abandoned its austerity budget and the Bank of England (its central bank) has plans to imminently also cut interest rates.

 

Next week, the Bank of China (a private bank in Hong Kong) will issue $3 bn in BRICS bonds to Chinese buyers, to cover capital spending in Brazil, Russia, India, China itself, and South Africa. This also will boost spending. And the part of the BRICS loans going to China may wind up bailing out its own bankrupt state sector firms. Chinese credit growth is continuing to finance its zombie state firms even as defaults have risen by over 26% from the level of all of 2015 year to date.

 

China needs a boost. The latest figures in US$ show exports off 4.8% from last year while imports (often of intermediate supplies and raw materials) are off even more dramatically, down 8.4%.

 

Meanwhile US interest rates have fallen sharply in the last year, because of delay in the expected interventions by our Federal Reserve, also a form of money-printing (or of failing to limit it.) The market now expects one further US interest rate rise this year—if that. Fiscal policy is on hold in the US because it is an election year, so we are spared tax increases.

 

What all this means for our portfolio will be discussed below. Meanwhile, for whatever it is worth, our return to Britain from EU country Portugal turns out to have been less disastrous than expected, as our conversion to sterling was at a much higher rate. In fact, while the Wall Street Journal today headlined that “Investors Bet Sterling's Slide Isn't Over” after the British currency lost 12% after the vote to leave the EU, the local papers are much more bullish on their money.

Yesterday, sterling his $1.3262 on the Theresa May takeover from David Cameron, up smartly from the $1.28 and change it fell to earlier this month. The upward move of the pound over the past few days means the chatter is bout sterling next testing the $1.40 level again and then maybe rising even higher.

 

Having the strongest currency in the neighborhood is not enough to make America great again. In fact it spells trouble for our country's companies and employment. But if the BMO expert Greg Anderson is right that central banks are coordinating their money-printing efforts, the US is acting as the ballast by keeping interest rates relatively high against those offered elsewhere. To meet its employment and inflation goals, the Fed must be patient over raising interest rates, according to Minneapolis Fed Prexy Neel Kashkari.

 

More for paid subscribers from Canada, Mexico, Finland, Britain, Israel, Spain, Denmark, Ireland, Colombia, the Dutch Antilles, and The Philippines, but nothing to do with South China Sea boundaries. Today's blog is a double version as I didn't file yesterday because I was flying back to London.

 

[My maiden name was Oppenheim, and the UN Law of the Sea rules sanctioning China were based on the international law studies by Lassa F.L. Oppenheim, a distant relative from the Hessian Jewish community from which my parents sprang. Prof. Oppenheim invented international law after he moved to Britain in 1895 aged 42. His work was influential for the League of Nations, the UN, the World Court, and the Permanent Court of Arbitration in The Hague, which ruled in favor of Manila.]

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