Union Square Cafe is the restaurant that led Danny Meyer to open a slew of hits including Gramercy Tavern, 11 Madison Park and Shake Shack. Meyer opened Union Square Cafe in 1985 and the restaurant thrived until a major rent increase forced him to relocate. Bloomberg Pursuits restaurant editor Kate Krader sat down with Danny Meyer at Union Square Cafe's new Manhattan location as he was putting on the finishing touches before opening night.
Enlarge ImageEcho devices dominated holiday shopping lists from November 1 to December 19. Amazon Prime is really giving Santa Claus a run for his money. The Seattle-based retailer giant shipped more than 1 billion items around the world for the holiday season, more than five times its sales last holiday season, between November 1 to December 19. The Echo Dot was the most coveted gift out of the hundreds of millions of items shipped from Amazon, which quickly sold out. “Despite our best efforts and ramped-up production, we still had trouble keeping them in stock,” Jeff Wilke, Amazon's CEO of Worldwide Consumers said.
The South Korean smartphone maker's flagship Galaxy Note 7 device came to market ahead of the latest iPhone and sales were brisk, until reports started coming in of handsets overheating and catching fire.
Recalls and battery changes failed to fix the problem; airlines banned the phones from their flights, and Samsung eventually had to make the decision to stop producing its star product.
Billionaire investor John Paul DeJoria on Amazon Prime's Christmas delivery service.
‘What'd You Miss?' co-hosts Joe Weisenthal and Scarlet Fu get you caught up on the most important stories in financial markets, every weekday at 3:30 p.m. EST on Bloomberg TV.
Airbus will sell Iran Air 100 planes worth $18 billion under a deal finalized just weeks after Boeing agreed to sell 80 aircraft to the state-run airline
“Star Wars” actress Carrie Fisher is in critical condition in a Los Angeles hospital after suffering an apparent heart attack on an overseas flight from London. Today, fans and co-stars are sharing their thoughts and prayers on social media. Ben Tracy reports.
This isn't your typical snow fort. Italian architect Luca Roncoroni travelled to the Arctic Circle to design this Victorian Ice Suite for the Icehotel 365 in Jukkasjärvi, Sweden, where rooms can cost $1,000 a night. It took nearly 10 tons of ice and roughly 135 hours to hand-carve every detail. Bloomberg Pursuits watches him work, from start to finish, in one magical minute.
A statue is pictured next to the logo of Germany's Deutsche Bank in Frankfurt, Germany September 30, 2016. Deutsche Bank has agreed to a $7.2 billion settlement with the U.S. Department of Justice over its sale and pooling of toxic mortgage securities in the run-up to the 2008 financial crisis. The agreement in principle, announced by Deutsche Bank's Frankfurt headquarters early Friday morning, offers some relief to the German lender, whose stock was hit hard in September after it acknowledged the Justice Department had been seeking nearly twice as much.
(qlmbusinessnews.com via news.sky.com- – Fri, 23 Dec, 2016) London, Uk – –
The £440m project will connect properties in rural parts of the UK to services “which are at the heart of modern life”.
Around 600,000 extra homes and businesses are in line for superfast broadband services, it has been announced.
Some £440m will be used to connect properties in the hardest-to-reach parts of the UK under the Broadband Delivery UK programme (BDUK), Culture Secretary Karen Bradley said.
The announcement comes a month after Chancellor Philip Hammond pledged £1bn of Government investment in “full-fibre” broadband, a handout which means at least two million more homes and businesses could get access to speeds of more than 1Gbps.
Last week, the Government also faced calls to “play an active role” in the future rollout of 5G, as a report revealed that Albania and Peru have better mobile phone coverage than the UK.
Ministers set up the BDUK project to provide superfast broadband to 95% of the UK by December 2017.
Ms Bradley said the programme is providing homes and businesses with “fast and reliable internet connections which are increasingly at the heart of modern life”.
She said: “Strong take-up and robust value-for-money measures mean £440m will be available for reinvestment where it matters – putting more connections in the ground.
“This will benefit around 600,000 extra premises and is a further sign of our commitment to build a country that works for everyone.”
The fund is made up of £150m in savings from “careful contract management” and £292m released through a clawback system that reinvests money when people take up superfast connections installed under the scheme.
Ms Bradley added: “Broadband speeds aren't boosted automatically – it needs people to sign up.
“Increasing take-up is a win-win-win: consumers get a better service, it encourages providers to invest, and when more people sign up in BDUK areas, money is clawed back to pay for more connections.”
BT said the investment in superfast broadband is “a huge success story for the UK”, adding that the BDUK project “shows exactly what can be achieved through close partnerships between the public and private sector”.
The online retailer gave Angela Davis a look inside their ‘Amazon Prime Now' hub in Minneapolis (2:43). WCCO 4 News At 6 – December 22, 2016
(qlmbusinessnews.com via telegraph.co.uk – – Thu, 22 Dec, 2016) London, Uk – –
Businesses are growing at their fastest pace of the year, as strong consumer growth and recovering confidence gives the economy some Christmas cheer.
A survey by the Confederation of British Industry showed that the proportion of firms with rising sales outweighed those with falling sales by a margin of 17 percentage points.
That is up from a net balance of 9pc in November and the index's highest level since December of 2015, indicating that more firms experienced growing demand.
Shopping is on the up as enthusiastic households remain confident in the economy, while export growth is improving because the weak pound makes British goods attractive to foreign buyers.
Britons are happy to make major purchases, according to a separate consumer confidence monitor from GfK, which also showed that households were confident in their personal financial situations.
Some of that household spending growth may fizzle out next year, however, as inflation is expected to pick up due to the fall in the pound.
“Against a backdrop of Brexit negotiations, the decline in the value of sterling, and the prospect of higher inflation impacting purchasing power, we forecast that confidence will be tested by the storm and stress of the year to come,” said Joe Staton, GfK’s head of market dynamics.
Shoppers are aware of the likely rise in inflation, and so could be bringing forward decisions to buy expensive items, getting in now before prices go up in 2017.
The latest study of the economy in the final three months of the year by the Bank of England’s regional agents found that “some households were thought to have brought forward purchases of larger items such as furniture and electrical goods in the expectation that prices would rise next year”.
By Tim Wallace
In a victory for the California DMV in its standoff with Uber over the company's self-driving cars, Uber on Wednesday agreed to halt the pilot program being tested in San Francisco
Bloomberg Intelligence’s John Butler discusses Apple, net neutrality and consolidation in the telecom industry. He speaks on “What’d You Miss?”
(qlmbusinessnews.com via uk.reuters.com – – Wed, 21 Dec, 2016) London, UK – –
Britain's budget gap narrowed last month, keeping Chancellor Philip Hammond on track to meet his new, less ambitious deficit reduction goals, but the country's fiscal watchdog said future months would pose a tougher test.
Last month Hammond formally abandoned his predecessor George Osborne's goal to run a budget surplus by 2020, as the Office for Budget Responsibility pencilled in a big rise in borrowing and weaker growth after Britain's June vote to leave the European Union.
Official figures on Wednesday showed borrowing in the first eight months of the 2016/17 tax year fell by 11.5 percent compared with a year earlier – more than enough to meet Hammond's new goal to cut the full-year deficit by 10 percent to 68.2 billion pounds, or 3.5 percent of GDP.
But the OBR said this downward trend was unlikely to continue and predicted borrowing over the next four months would probably exceed levels seen a year earlier.
Borrowing over the next four months would only need to be around 500 million pounds higher for Hammond to overshoot the forecast the OBR made just a month ago – which is already nearly 13 billion pounds more than Osborne gave in March.
Weak growth in tax revenue has hampered government efforts to reduce Britain's large budget deficit this year, even before the economy has seen much impact from June's referendum.
The OBR expects this problem to deepen. A surge in corporation tax revenue in October was not expected to persist, and a one-off boost to property sales tax revenue in early 2016 would not be repeated.
Moreover, public spending was likely to rise due to greater investment commitments and the rising cost of servicing index-linked government bonds as inflation picked up, the OBR said.
Britain's finance ministry said there had been “significant progress” in reducing borrowing but it was still too high.
Public borrowing in November alone fell 4.4 percent to 12.6 billion pounds, the lowest for any November since 2007 but less of a drop than most economists had forecast in a Reuters poll.
In the longer term both the OBR and private-sector economists see greater headwinds to deficit reduction.
“The Brexit-related fiscal challenge has yet to really begin,” Investec economist Chris Hare said.
The OBR forecasts growth will slow to 1.4 percent next year from 2.1 percent in 2016, dragging down growth in tax revenue and increasing spending on unemployment benefits.
In total the OBR expects the government to borrow 122 billion pounds more than planned over the next five years as Britain leaves the EU.
Last year's budget deficit was 4.0 percent of GDP – higher than in almost all big advanced economies – and Hammond still expects to run a deficit of 0.9 percent of GDP in 2021, in contrast to Osborne's goal of a surplus by 2020.
By David Milliken and Costas Pitas
Bloomberg Pursuits’ Troy Patterson discusses how Patrick Grant, owner of Savile Row tailor Norton & Sons, is working to convince American clients to embrace the British style. He speaks with David Gura on “Bloomberg Markets.”
(qlmbusinessnews.com via news.sky.com- – Tue, 20 Dec, 2016) London, Uk – –
A 48-hour strike planned by baggage handlers and check-in staff at 18 airports from Friday has been cancelled, says Unite.
Members of Unite employed by Swissport had been due to walk out for the two days before Christmas, one of the busiest times of the year for travellers.
They had voted for industrial action in protest at a 4.65% pay rise over three years but the strike was called off after talks between the parties at conciliation service Acas on Tuesday.
Unite general secretary Len McCluskey said the strikes had been cancelled after a better pay offer was received.
He said: “I am delighted to report that we have reached an agreement which our shop stewards will recommend to our members.”
The airports affected were to include Gatwick, Heathrow, Birmingham, Manchester, Glasgow, Stansted, East Midlands and Belfast.
Aberdeen, Bristol, Bournemouth, Cardiff, Doncaster, Edinburgh, Leeds/Bradford, Luton, Newcastle and Southampton had also expected to be disrupted.
British Airways cabin crew are due to strike on Christmas Day and Boxing Day and talks regarding their dispute – also over pay – are continuing.
Mr McCluskey described progress in those talks as “painfully slow”.
The airline has said it still expects to run a full service, however.
Families of the victims of the Orlando Pulse nightclub shooting are suing Facebook, Google and Twitter. CBS News justice reporter Paula Reid joins CBSN with more on the civil suit.
Lionel Laurent, a Bloomberg Gadfly columnist, discusses the wisdom of British bank Barclay’s system that ranks trading customers by return on capital. He speaks with Scarlet Fu on “Bloomberg Markets.” Laurent's opinions are his own.
(qlmbusinessnews.com via bloomberg.com – – Mon, 19 Dec, 2016) London, Uk – –
The iPhone came out in 2007. So why was Apple still paying taxes like it was 1990?
“The Maxforce” is the European Union team that ordered Ireland to collect billions of euros in back taxes from Apple Inc., rattled the Irish government, and spurred changes to international tax law. You’d think it might have earned the name by applying maximum force while investigating alleged financial shenanigans. It didn’t. It’s just led by a guy named Max.
A European Commission official gave the nickname to the Task Force on Tax Planning Practices in honor of its chief, Max Lienemeyer, a lanky, laid-back German attorney who rose to prominence vetting plans to shore up struggling banks during Europe’s debt crisis. Since its launch in 2013, the Maxforce has looked at the tax status of hundreds of companies across Europe, including a deal Starbucks Corp. had in the Netherlands, Fiat Chrysler Automobiles NV's agreement with Luxembourg, and — its largest case — Apple in Ireland.
Lienemeyer’s team of 15 international civil servants pursued a three-year investigation stretching from the corridors of the European Commission, the EU’s executive arm, to Ireland's Finance Ministry and on to Apple's leafy headquarters in Cupertino, California. Much of it outlined for the first time here, this story chronicles a growing clash between Europe and the U.S. and a shift in the EU’s approach to the tax affairs of multinationals.
The Maxforce concluded that Ireland allowed Apple to create stateless entities that effectively let it decide how much — or how little — tax it pays. The investigators say the company channeled profits from dozens of countries through two Ireland-based units. In a system at least tacitly endorsed by Irish authorities, earnings were split, with the vast majority attributed to a “head office” with no employees and no specific home base — and therefore liable to no tax on any profits from sales outside Ireland. The U.S., meanwhile, didn't tax the units because they’re incorporated in Ireland.
“I can’t see why the tax liability is in Ireland.” —Irish Finance Minister, Michael Noonan
In August the EU said Ireland had broken European law by giving Apple a sweetheart deal. It ordered the country to bill the iPhone maker a record 13 billion euros ($13.9 billion) in back taxes, plus interest, from 2003 to 2014. One example the Commission cites: In 2011, a unit called Apple Sales International recorded profits of about 16 billion euros from sales outside the U.S. But only 50 million euros were considered taxable in Ireland, leaving 15.95 billion euros of profit untaxed, the Commission says.
Though the EU says its goal is “to ensure equal treatment of companies” across Europe, Apple maintains that the Commission selectively targeted the company. With the ruling, the EU is “retroactively changing the rules and choosing to disregard decades of Irish law,” and its investigators don’t understand the differences between European and U.S. tax systems, Apple said in a Dec. 8 statement.
Apple, which has some 6,000 workers in Ireland, says its Irish units paid the parent company a licensing fee to use the intellectual property in its products. The Irish companies didn't own the IP, so they don’t owe tax on it in Ireland, Apple says, but the units will face a U.S. tax bill when they repatriate the profits. Apple expects to pay about 26 percent of its earnings in tax for the most recent fiscal year and has set aside some $32 billion to cover taxes it says it will face should overseas income be returned to the U.S. “This case has never been about how much tax Apple pays, it’s about where our tax is paid,” the company said. “We pay tax on everything we earn.”
Ireland on Nov. 9 appealed the Commission’s ruling at the EU General Court in Luxembourg, arguing it has given Apple no special treatment. Irish Finance Minister Michael Noonan has said he “profoundly disagrees” with the ruling and that Ireland strictly adheres to tax regulations. The government says Ireland has no right to tax non-resident companies for profits that come from activities outside the country.
“Look at the small print” on an iPhone, Noonan said after the EU released its ruling in August. “It says designed in California, manufactured in China. That means any profits that accrued didn’t accrue in Ireland, so I can’t see why the tax liability is in Ireland.”
In the coming weeks, the EU is expected to publish details of the Maxforce investigation. At about the same time, Apple will likely lodge its own appeal in the EU court. Though Apple will have to pay its tax bill within weeks, the money will be held in escrow, and the issue will probably take years to be resolved.
This story is based on interviews with dozens of officials from the EU, Ireland, and Apple, though most didn't want to speak on the record discussing sensitive tax matters. A Maxforce representative declined to make Lienemeyer available for an interview. Ireland's Office of Revenue Commissioners (the equivalent of the American Internal Revenue Service) says it can’t comment on specific companies.
Lienemeyer began assembling the Maxforce in late spring of 2013 with a mandate of scrutinizing tax policies across Europe in search of any favoritism. Direct subsidies or tax breaks to court a specific company are illegal in the EU to prevent governments aiding national champions. His first hire — the person who would oversee the Apple probe — was Helena Malikova, a Slovak who had worked at Credit Suisse Group AG in Zurich. He quickly added Kamila Kaukiel, a Polish financial analyst who had been at KPMG, and Saskia Hendriks, a former tax policy adviser to the Dutch government.
As the four initial members began their investigations, they got a head start from a U.S. Senate probe of the tax strategies of American multinationals. The Senate’s Permanent Subcommittee on Investigations said Apple shifted tens of billions of dollars in profit into stateless affiliates based in Ireland, where it paid an effective tax rate of less than 2 percent.
At 9:30 a.m. on May 21, 2013, senators gathered in Room 106 of the Dirksen Office Building. Included in the evidence presented that day was a 2004 letter from Tom Connor, an official at Ireland’s tax authority, to Ernst & Young, Apple’s tax adviser. Connor’s question: A unit of the tech company hadn’t filed a tax return; Was it still in business? E&Y responded two days later that the division was a non-resident holding company with no real sales. “There is nothing to return from the corporation tax standpoint,” E&Y wrote. The Senate exhibits didn’t include Connor’s response if there ever was one.
At the hearing, Arizona Republican John McCain castigated Apple as “one of the biggest tax avoiders in America.” Democrat Carl Levin of Michigan peered over the glasses perched on the tip of his nose and said Apple uses “offshore tax strategies whose purpose is tax avoidance, pure and simple.” Crucially, though, Levin told the crowded room that under U.S. law, there was little the panel could do to force Apple to pay more tax. Apple Chief Executive Officer Tim Cook passionately defended the company’s actions, telling the senators “We don’t depend on tax gimmicks.”
The Senate revelations raised eyebrows at the Maxforce’s office in Madou Tower, a 1960s high-rise in the rundown Saint-Josse neighborhood of Brussels. Three weeks after the Senate hearing, Lienemeyer's team asked Ireland for details of Apple's tax situation. The Irish tax authorities soon dispatched a representative carrying a briefcase filled with a bundle of bound pages. The Irish could have simply sent the material via e-mail, but they were cautious about sharing taxpayer’s information with the EU and have a ground rule to avoid leaks: never send such documents electronically.
While the Irish government remained bullish in its public statements, saying Apple hadn’t received any favors, behind the scenes tensions were rising. Through the summer of 2013, the Finance Ministry assured government ministers that the EU investigation would amount to nothing, according to people familiar with the discussions. But those assertions seemed less confident than earlier communications. There was a sense that Apple had worked out its Irish tax position in a vastly different era, and no one remembered many details of the negotiations decades earlier.
In 1980, the four-year-old company — the Apple III desktop had just been released — created several Irish affiliates, each with a different function such as manufacturing or sales, according to the Senate report. Under Irish laws dating to the 1950s designed to shore up the moribund post-war economy, as a so-called export company Apple paid no taxes on overseas sales of products made in Ireland.
To comply with European rules, Ireland finally ended its zero-tax policy in 1990. After that, Apple and Ireland agreed that the profit attributed to a key Ireland-based unit, the division discussed in Tom Connor’s letter, be capped using a complex formula that in 1990 would have resulted in a taxable profit of $30 million to $40 million.
An Apple tax adviser “confessed there was no scientific basis” for those figures, but that the amounts would be “of such magnitude that he hoped it would be seen as a bona-fide proposal,” according to notes from a 1990 meeting with the Irish tax authority cited by the EU. The equation didn’t change even as Apple began assembling the bulk of its products in Asia.
Ireland and Apple started to make changes a few months after the Maxforce began looking into their tax relationship. In October 2013, Finance Minister Noonan announced he would close the loophole that let stateless holding companies operate out of Ireland. The EU said Apple changed the structure of its Irish units in 2015, which the company says it did to comply with the shift in Irish law.
As the Maxforce stepped up its probe in June 2014, Irish Prime Minister Enda Kenny was wooing potential investors in California. At a San Francisco event to promote Irish entrepreneurs, Governor Jerry Brown quipped that he had thought Apple “was a California company,” but according to tax returns, “they’re really an Irish company.” News clips show Irish officials looking on stony-faced as the governor makes his jest.
With Lienemeyer’s team digging further into the issue, Apple’s concern deepened. In January 2016, CEO Cook met with Margrethe Vestager, the EU competition chief — and Lienemeyer's ultimate boss — on the 10th-floor of the Berlaymont building, the institutional headquarters of the European Commission in Brussels.
Vestager, a daughter of two Lutheran pastors, has a reputation for being even-handed but tough, cutting unemployment benefits while advocating strict new rules for banks when she served as Denmark's finance minister. While she has acknowledged that her team had little experience with tax rulings — in a November interview with France's Society magazine, she said, “We learned on the job” — Vestager says enforcement of EU rules on taxation is a matter of “fairness.”
In the meeting with Cook she quizzed him on the tax Apple paid in various jurisdictions worldwide. She told the Apple executives that “someone has to tax you,” according to a person present at the meeting. In a Jan. 25 follow-up letter obtained by Bloomberg, Cook thanked Vestager for a “candid and constructive exchange of views,” and reasserted that Apple’s earnings are “subject to deferred taxation in the U.S. until those profits are repatriated.”
Subsequent correspondence became more heated. On March 14, Cook wrote to Vestager that he had “concerns about the fairness of these proceedings.” The Commission had failed to explain fully the basis on which Apple was being investigated, and the body's approach was characterized by “inconsistency and ambiguity,” Cook said.
Apple contended that the EU had backtracked on a 2014 decision recognizing that its two Irish subsidiaries were not technically resident in Ireland, and therefore only liable for taxes on profits derived from Irish sources. Now, Cook said, it seemed the Commission was intent on “imposing a massive, retroactive tax on Apple by attributing to the Irish branches all of Apple’s global profits outside the Americas.”
“There is no inconsistency,” an EU spokesman said in a Dec. 15 statement. Only a fraction of the profits of the subsidiaries were taxed in Ireland, the statement said. “As a result, the tax rulings enabled Apple to pay substantially less tax than other companies, which is illegal under EU state aid rules.”
Cook's entreaties did little to sway Vestager, and in August she phoned Noonan to tell him the results of the Maxforce investigation: The Commission was going to rule against Ireland. Late in the afternoon of Aug. 29, Irish officials began hinting to reporters that Apple’s tax bill amounted to billions and “could be anything.” At noon the following day, Vestager told a packed press conference in Brussels that the Commission had decided Apple owed Ireland 13 billion euros.
Though that would be equivalent to 26 percent of the 2015 national budget, Ireland didn't want the windfall, saying the ruling was flawed because the country hadn’t given Apple any special treatment. The decision sparked a political crisis as left-leaning members of Enda Kenny’s fragile minority administration saw a potential bonanza for taxpayers that the world’s richest company could well afford. Even as Noonan toured television studios vowing to appeal the decision, independent lawmakers demanded that Ireland take the money.
Facing a potential revolt that could bring down the government, Kenny and Noonan eventually bowed to demands for a review of the country’s corporate tax system. But they said they would fight the case, and on Sept. 7, Irish lawmakers overwhelmingly backed the motion for an appeal.
Officials from Lienemeyer’s team and other EU offices say they have gathered tax information on about 300 companies, looking for what they deem to be favorable treatment by governments across Europe. While they don't expect all of those to yield payoffs as hefty as that from their investigation of Ireland and Apple, they say a worrying number require the kind of maximum force that the Maxforce can apply.
“We focus on outliers where you're looking at something that is off the radar screen,” Lienemeyer's boss, 50-year-old Dutchman Gert-Jan Koopman, who is in charge of state-aid enforcement at the EU, said at a Brussels conference in November. “If you're paying a fair amount of tax then there is absolutely nothing to worry about.”
—With assistance from Stephanie Bodoni and Aoife White
(Updates with tax figures in seventh paragraph, clarifies effective tax rate in 13th, adds line about compliance in 21st. A previous version corrected fifth paragraph to show 16 billion euro profit was on sales outside the U.S., not just Europe)
By Gaspard Sebag, Dara Doyle and Alex Webb