Trump University, ‘Funtasy Island’ and the flaws in basic income

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In blunt testimony revealed on Tuesday, former managers of Trump University, the for-profit school started by the Republican presidential nominee, “portray it as an unscrupulous business that relied on high-pressure sales tactics, employed unqualified instructors, made deceptive claims and exploited vulnerable students willing to pay tens of thousands for Mr Trump’s insights”.

Mr Trump has “been insinuating for months” that Gonzalo Curiel, the judge presiding over the class-action fraud lawsuits against Trump University should recuse himself because he’s Hispanic, writes Vox’s Dara Lind. “On Friday, at a rally in San Diego — where Curiel presides — he spent 12 minutes going after the judge: claiming that Curiel is ‘Mexican’ (he is a US citizen), calling Curiel’s court ‘a rigged system’, and hinting, darkly, that ‘they ought to look into Judge Curiel because what Judge Curiel is doing is a total disgrace.’”

In an editorial, the NYT writes that “it is particularly important to note when Mr Trump’s statements go beyond the merely provocative or absurd and instead represent a threat to America’s carefully balanced political system. This is such a moment. It is not too late for Republicans who revere that system to question how they can embrace a nominee who has so little regard for it”. (NYT, Vox)

In the news

US-Europe trade deal falters Washington and Brussels are scrambling to rebuild momentum for a landmark trade accord, amid signs that it is faltering under an increasingly bitter onslaught from politicians on both sides of the Atlantic. Frustrated by hardening opposition from Germany’s influential socialists and the French government, Jean-Claude Juncker, president of the European Commission, has called for the 28 member states to reconfirm their commitment to the deal at a summit in June. (FT)

Xiaomi buys Microsoft patents The Chinese smartphone maker has sealed a deal to buy some 1,500 patents from Microsoft, a move that will help it expand exports and earn the US technology giant some badly needed goodwill in Beijing. The transaction addresses a key weakness facing Xiaomi, which is seeking to sell its devices in countries outside its home market but has been hindered by its relative lack of intellectual property to fend off lawsuits. (FT)

‘Funtasy Island’ error causes diplomatic spat A cartographic blunder by a tropical island resort developer, has prompted a febrile reaction from Indonesian media and forced Singapore to clarify that it does not lay claim to the islands. Singapore’s ministry of foreign affairs said it was “deeply puzzled” by the reports, but by then a detachment of Indonesian military had already travelled to the islands to plant flags, according to local media reports — a move that prompted an angry response from Singaporean commentators. (FT)

Ex-Barclays man charged with passing tips A former director of the bank was arrested on charges of passing insider information on upcoming mergers to his friend, a plumber, who allegedly repaid him in part by doing up his bathroom. (FT)

Tiger cubs found in Thai temple freezer Forty dead tiger cubs have been found in a freezer at a Thai Buddhist temple accused of wildlife trafficking and animal abuse. Police and wildlife officials started an operation on Monday to remove all the living tigers at the Tiger Temple. The site in Kanchanaburi is a popular tourist attraction but has been closed to the public since the raid. (BBC)

Malaysia announces winding-up of 1MDB The country has paved the way for the dissolution of the troubled state investment fund by replacing its board with treasury officials. (NAR)

It’s a big day for

European ties Switzerland will lobby European leaders attending the opening of the world’s longest rail tunnel for faster progress on reworking the country’s relations with the EU. (FT)

Brazil Last year Latin America’s largest economy shrank by the most in a quarter of a century. Economists expect more of the same in 2016 for the scandal-plagued nation and its interim government is responding with a bold plan to shrink the government. (FT)

Food for thought

The flaws in basic income The concept of basic income has attractions for people at both ends of the political spectrum. For the left, it offers a simple and comprehensive answer to concerns about poverty and inequality. For those on the right, the plan discharges social obligation with minimum intrusion into personal affairs. Yet simple arithmetic shows why these schemes cannot work, writes John Kay.(FT)

Christine Lagarde walks into a bar . . .  Tim Martin, owner of UK pub chain JD Wetherspoon, has thrown down the gauntlet, printing beer mats with questions for IMF chief Christine Lagarde. Seeing as it’s tough to imagine Ms Lagarde necking pints down in the local, we’ve attempted to answer the questions on her behalf. It wasn’t difficult. (FT)

‘Twisted logic’ on Snowden For much of the period that whistleblower Edward Snowden has been exiled in Russia, the Justice Department was run by Eric Holder. Now retired, Mr Holder has broken his silence. Appearing on “The Axe Files,” a podcast hosted by David Axelrod, “he acknowledged what has long been obvious: Snowden, in leaking to journalists details about how the National Security Agency was spying on American citizens, ‘performed a public service’.” But Mr Holder went on to insist that Mr Snowden should still go to jail, “because he broke the law and harmed American interests”. (New Yorker)

The future of business? The DAO, or “decentralised autonomous organisation” sounds like a cult, but wants to be a venture capital fund of sorts, writes the Economist. Its debut is a “watershed moment” in the history of financial services, says Quartz. “It demonstrates that autonomous entities can raise huge sums of money without traditional intermediaries. How will venture capitalists and investment banks respond to these blockchain IPOs that crowdsource hundreds of millions of dollars from a global investor base?” (Economist, Quartz)

The most powerful man in banking The most important person in the banking business isn’t a banker. To most Wall Street executives, that title goes to Federal Reserve governor Daniel Tarullo, a brusque, white-haired former law professor who has come to personify Washington’s post-crisis influence over how banks do business. (WSJ)

Video of the day

Draghi’s balancing act While no one is expecting a shift in policy from the European Central Bank this week, its press conference will be anything but dull thanks to the recent jump in the price of oil, says the FT’s Katie Martin. (FT)