  The "Lambda Cold Dark Matter" (LCDM) model of cosmic structure formation is
eminently falsifiable: once its parameters are fixed on large scales, it
becomes testable in the nearby Universe. Observations within our Local Group of
galaxies, including the satellite populations of the Milky Way and Andromeda,
appear to contradict LCDM predictions: there are far fewer satellite galaxies
than dark matter halos (the "missing satellites" problem), galaxies seem to
avoid the largest substructures (the "too big to fail" problem), and the
brightest satellites appear to orbit their host galaxies on a thin plane (the
"planes of satellites" problem). We present results from the first hydrodynamic
simulations of the Local Group that match the observed abundance of galaxies.
We find that when baryonic and dark matter are followed simultaneously in the
context of a realistic galaxy formation model, all three "problems" are
resolved within the LCDM paradigm.
