Economist 8/1/14

  1. DEFEAT in a New York court on July 31st probably came as no surprise to Microsoft. It had already been told twice to hand over a customer’s e-mails stored in a Dublin data centre to American law-enforcement officials—once in December when a judge issued a warrant, again in April when he dismissed a challenge to his first ruling. Now a further attempt to have the warrant quashed has failed.The government disagrees, arguing that criminals could then conceal evidence simply by registering a foreign address: Microsoft stores e-mails according to where customers say they live. So far the courts have sided with the state.
  2. Characters in films shot at the Atlanta Media Campus and Studios, the largest complex of its kind outside California. The lot has hosted the final two instalments of “The Hunger Games” and “The Fifth Wave”, an upcoming science-fiction film. What ought to worry local residents is Georgia’s inability to produce workers who can build the sets, run the wires or manage the sound for such films. This skills shortage may endanger the $4 billion or so that Jim Jacoby, whose firm plans to redevelop the complex,. More than half of the country’s tradesmen are aged over 45. According to the Department of Labour, America will need 41,700 more cement masons, 114,700 more electricians and 218,200 more carpenters by 2022.
  3. RUSSIA breached its obligations under an energy treaty when it seized the assets of Yukos in 2006; so it must pay the former oil giant’s majority shareholders $50 billion. The award, made on July 28th by an international arbitration court in The Hague, was 20 times the previous record for such a case. Russia has until next January to pay up, after which interest will start to accrue. It is unlikely to do so voluntarily. It called the award “politically biased”, implying it was motivated by Russia’s conflict with the West over Ukraine.If Russia does not pay, the shareholders will have to persuade courts in some of the 150 countries that are signatories to a 1958 convention on the recognition of arbitral awards to “attach” any Russian assets in their jurisdictions—that is, declare that they can be seized. National sovereign-immunity laws ensure that things like embassies and military hardware are off-limits, but assets that are both part of the state apparatus and used for “commercial activity” are fair game. Those lacking the stomach for a long fight may settle for less: last year Dow Chemical waived $300m of a $2.5 billion award against a state-owned Kuwaiti group to secure payment. Another option is to sell, for a discount, into the fledgling secondary market for arbitration awards.
  4. Iliad, owner of France’s fourth-biggest telecoms operator, Free, had made a bid to buy T-Mobile US, America’s fourth largest, from Deutsche Telekom.liad is offering about $15 billion in cash for 56.6% of the American firm, or $33 per share. It thinks T-Mobile’s remaining shares will then be worth $40.50 apiece, on the basis that $10 billion-worth of synergies can be wrung out of the deal.Illiad, which has a market capitalisation of €12 billion ($16 billion), is much smaller than its American target, which is worth $25 billion.. In 2012 Free touched off a price war in the once-cozy world of French telecoms that has left its rivals reeling.Iliad’s bid will complicate matters enormously for T-Mobile and Sprint, America’s third-biggest operator. The two firms have been hatching plans for a merger that is said to value T-Mobile at $32 billion.
  5. The advent of e-commerce—which now accounts for 6.2% of all sales in America—has shaken up the commercial-property business almost as much as it has retailing. Even at successful bricks-and-mortar retailers, goods that once sat in the back of centrally located shops are now held in suburban warehouses.Such modern structures usually lie within 100km (60 miles) of a big city and are near sea- and airports, highways and sorting hubs for couriers like FedEx and UPS. They are much bigger than older types of warehouse: often more than 100,000 square metres (1.1m square feet, or 14 football pitches); and they have high ceilings to further increase their volume.Such fulfilment centres also employ far more people than older warehouses: around Christmas each may have up to 3,000 staff working on shifts.Jones Lang LaSalle, a property-services firm, says that since 2012 the amount of industrial space (of which 75% is warehousing) used in America has grown at an annual rate of 14.5m square metres—double the pace in 2008, the year the property market went south.

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