Sex, Drugs and GDP: the Challenge of Measuring the Shadow Economy (WSJ)
The U.K., Ireland and Italy are among the nations now moving to include illicit doings when tallying their gross domestic product, the broadest measure of goods and services across an economy. The U.K. could add as much as $9 billion to the value of its GDP by including prostitution and about $7.4 billion by adding illegal drugs, by one estimate, enough to boost the size of its economy by 0.7%. Not to be outdone, Italy will include smuggling as well as drugs and prostitution. Both changes will begin later this year. Other nations in Europe are also poised to fall in line with a European Union call to standardize and broaden GDPs. The EU is following a “best practices” directive laid out in 2008 by the United Nations.
Valeant not just a serial acquirer: Bill Ackman (CNBC)
Valeant Pharmaceuticals is not just a roll-up vehicle that has to keep buying other companies in order to grow its business, hedge fund manager Bill Ackman told CNBC on Monday. He appeared on “Squawk Box” to defend his efforts to help Valeant takeover Botox-maker Allergan. “A bad roll-up is a company that uses an over-inflated stock price and a high multiple and non-cash GAAP earnings, heavily promoted by a CEO, to acquire companies at lower multiples,” he argued. Valeant Chairman and CEO J. Michael Pearson has built a business that “looks a lot more like a Colgate or Procter & Gamble than your typical pharmaceutical company,” Ackman cited as a reason he’s behind Pearson’s vision.
Credit Suisse Said to Mull Selling Stake in Fixed-Income Venture [Bloomberg]
The electronic platform, Wake USA LLC, is a joint venture with high-frequency trading firm Tower Research Capital LLC for U.S. Treasuries and other fixed-income products, according to a regulatory filing showing that the unit gained approval to operate earlier this year. Credit Suisse is in the process of moving clients over to that unit and may sell part of its majority stake to reduce capital requirements, said the person, asking to remain anonymous because sale talks are preliminary.
Lagarde Says IMF ‘Got It Wrong’ on Rallying U.K. Economy (Bloomberg)
The International Monetary Fund underestimated the strength of the U.K. economy when warning against the government’s austerity program, Managing Director Christine Lagarde said. “We got it wrong,” Lagarde told the “Andrew Marr Show” on BBC Television yesterday. “We acknowledged it. Clearly the confidence building that has resulted from the economic policies adopted by the government has surprised many of us.”
Second Wall Street bank picks Brazil in World Cup (NYP)
UBS picked host country Brazil as the odds-on favorite to win the soccer tournament, which starts Thursday. While the Swiss bank is picking the legendary squad to win, it isn’t as sure as the bankers at Goldman Sachs — which issued a report on the World Cup last week. UBS said Brazil has a 30 percent chance of winning — Goldman put the odds of Brazil hoisting the trophy at 46.5 percent.
Hershey sues Colorado edible pot company (AP)
The Hershey Co. has sued a Colorado marijuana edibles maker, claiming it makes four pot-infused candies that too closely resemble iconic products of the chocolate maker. The trademark infringement lawsuit was filed in U.S. District Court in Denver this week against TinctureBelle LLC and TinctureBelle Marijuanka LLC. It alleges TinctureBelle’s Ganja Joy, Hasheath, Hashees and Dabby Patty mimic Hershey’s Almond Joy, Heath, Reese’s peanut butter cups and York peppermint patty candies, respectively. Read more »