Ron Kirk is the former Dallas Mayor. He is on track to become the next US Trade Representative, with the tax issues he faced.
No tax..no problem!!
I don't know why it's so difficult for Dem's to pay their taxes!?!?!
Pres. Obama cannot be pleased, at all!
Tuesday, March 10, 2009
Monday, March 9, 2009
Rate cut for what? BOE!?!?
The BOE, reported on this blog and all over, cut rates last week to .50%. However, the BOE put out a report that states that coins and notes in circulation increased.
Seasonally adjusted, notes and coin outstanding in February were, on average, 1.0 % higher than in January. The twelvemonth growth rate increased to 8.3% from 7.8% in January.
Report, Narrow Money (Notes & Coin) and Reserve Balances
February 2009
Is the BOE just winging it?
Looks like...hyper-inflation, on the way!
I guess the BOE, is planning to tax that increase in purchases down the line, re-adjusted to inflation, and hike rates from their historic lows.
Will this sit well with the ECB...who cares!?!?! The UK has no plans on joining the Eurozone.
But, issues will arise in regards to competition and market penetration. Because, if goods will be taxed in the future and, the UK has an advantage in low rates now, their purchasing power, will be increased. In the same token, higher taxes on import goods--which will be the assumption moving forward--will put Euro exports at risk, at least!
The last pre-budget report, analyzed on this blog, read that the assumption is based on global demand increasing in the long future--by the end of this year. This certainly factors in European competitors. Germany, France and Poland, should be concerned.
Also, taxes have not been dramatically decreased--VAT went down in the BOE pre-budget by only 2% (15% from 17%, if my memory serves me correctly) and, it is up until 2010. 2010 seems like a long way, but the BOE gave itself some rope with lowering the rates. But, money is already growing in circulation, MO, out of the BOE vault.
So, savings--by virtue of the hard currency circulation outside of the BOE-- are up as well as the assumption that bank's having money in their tills. Folks have money, or, at least access to money from their finance institutions. At least, at the face of it.
This is a gamble, based on assumptions on the global economic rebound--but, borders right on the hinge of economic pricing disaster.
Seasonally adjusted, notes and coin outstanding in February were, on average, 1.0 % higher than in January. The twelvemonth growth rate increased to 8.3% from 7.8% in January.
Report, Narrow Money (Notes & Coin) and Reserve Balances
February 2009
Is the BOE just winging it?
Looks like...hyper-inflation, on the way!
I guess the BOE, is planning to tax that increase in purchases down the line, re-adjusted to inflation, and hike rates from their historic lows.
Will this sit well with the ECB...who cares!?!?! The UK has no plans on joining the Eurozone.
But, issues will arise in regards to competition and market penetration. Because, if goods will be taxed in the future and, the UK has an advantage in low rates now, their purchasing power, will be increased. In the same token, higher taxes on import goods--which will be the assumption moving forward--will put Euro exports at risk, at least!
The last pre-budget report, analyzed on this blog, read that the assumption is based on global demand increasing in the long future--by the end of this year. This certainly factors in European competitors. Germany, France and Poland, should be concerned.
Also, taxes have not been dramatically decreased--VAT went down in the BOE pre-budget by only 2% (15% from 17%, if my memory serves me correctly) and, it is up until 2010. 2010 seems like a long way, but the BOE gave itself some rope with lowering the rates. But, money is already growing in circulation, MO, out of the BOE vault.
So, savings--by virtue of the hard currency circulation outside of the BOE-- are up as well as the assumption that bank's having money in their tills. Folks have money, or, at least access to money from their finance institutions. At least, at the face of it.
This is a gamble, based on assumptions on the global economic rebound--but, borders right on the hinge of economic pricing disaster.
OECD: Building better tax consensus!
No can't ever say that the OECD isn't consistent. They are always dreaming up ways to re-invent their tax crackdown. The latest is their tax crackdown on transfer pricing of multi-nationals--MNE's.
They recently delivered a list of public comments to their TRANSFER PRICING ASPECTS OF BUSINESS RESTRUCTURINGS: DISCUSSION DRAFT FOR PUBLIC COMMENT
19 SEPTEMBER 2008 TO 19 FEBRUARY 2009...yes, I did just copy and paste the title of the document.
They reckon in the main report that a lack of true oversight in this area, may lead to significant uncertainty for business as well as for governments and possible double taxation or double non-taxation, in the absence of a common understanding.
Sounds fair enough. But, I thought MNE's "outsourced" to gain an advantage and, transfer pricing, comes with that benefit of outsourcing?
In any event, the report, in regards to the strength of its implications, is weak. For example, they have a criteria that would allow for MNE's to be taxed under the rational assumption of domestic businesses, that employ the same tactic. Basically, it's like a dog chasing its tail.
The practice is for an MNE and the cross border effect, is what is at the core. If you are going to set up a criteria that allows it to be taken into account as a domestic firm--along with the same concerns not being relevant-- then, you basically would have to set up a root origin and the national government, would be responsible for the taxation. Not what I think the OECD had in mind, in regards to enforcement of any laws/taxation regulation to come of it.
The comments are rather mixed. Some are weary of the report itself, citing that it's giving over-arching guidelines to governments for more taxation and reasons for it. To others, feeling that it is rather appropriate in many regards. It's hard to bead who's who...but, as more details come out about it, you will get a sense of the politics behind the effort.
The OECD, did not do all of that work, to come up with no sound move forward to tax more!
In any event...the report, is really REALLY boring--why did I read any of it, you ask!?!?!
Enjoy!
They recently delivered a list of public comments to their TRANSFER PRICING ASPECTS OF BUSINESS RESTRUCTURINGS: DISCUSSION DRAFT FOR PUBLIC COMMENT
19 SEPTEMBER 2008 TO 19 FEBRUARY 2009...yes, I did just copy and paste the title of the document.
They reckon in the main report that a lack of true oversight in this area, may lead to significant uncertainty for business as well as for governments and possible double taxation or double non-taxation, in the absence of a common understanding.
Sounds fair enough. But, I thought MNE's "outsourced" to gain an advantage and, transfer pricing, comes with that benefit of outsourcing?
In any event, the report, in regards to the strength of its implications, is weak. For example, they have a criteria that would allow for MNE's to be taxed under the rational assumption of domestic businesses, that employ the same tactic. Basically, it's like a dog chasing its tail.
The practice is for an MNE and the cross border effect, is what is at the core. If you are going to set up a criteria that allows it to be taken into account as a domestic firm--along with the same concerns not being relevant-- then, you basically would have to set up a root origin and the national government, would be responsible for the taxation. Not what I think the OECD had in mind, in regards to enforcement of any laws/taxation regulation to come of it.
The comments are rather mixed. Some are weary of the report itself, citing that it's giving over-arching guidelines to governments for more taxation and reasons for it. To others, feeling that it is rather appropriate in many regards. It's hard to bead who's who...but, as more details come out about it, you will get a sense of the politics behind the effort.
The OECD, did not do all of that work, to come up with no sound move forward to tax more!
In any event...the report, is really REALLY boring--why did I read any of it, you ask!?!?!
Enjoy!
Sunday, March 8, 2009
Another round of rate cuts!
The European Central Bank and the Bank of England cut rates to 1.5% and 0.50%, respectively, last week.
Not all are thrilled. Including Prof. Willem Buiter of the LSE over at the FT in his blog.
Prof. Buiter is becoming sort of a worry wart of sorts. But, he does raise interesting points. The main point for example is that: "It is certainly not helpful from the point of view of getting the banks to use the additional reserves they hold to boost their lending, that the Bank of England has reduced the opportunity cost to commercial banks of holding large reserves, by eliminating the 25 basis points penalty on the operational standing deposit facility."
There is always a danger that when you cut a rate, it has an adverse effect on other rates and industries depending on stable rates. And, on the flip side, you counteract and do the opposite to what you have intended--like Buiter's case.
In his case, the clear issue is that when you lower rates to allow bank's to have more stand-alone capital, through discount windows and other lending agreements, you would lower the rates for the operational standing deposit facility, increasing their demand for short term capital and a cheaper rate--to then, be able to send it back at less the cost. With, still, no increased lending to the average consumer.
Misguided inflation, while not an example expressed by Buiter in this case, is also something that can have many different deflections indeed.
Perhaps the excess in short term liquidity, is supposed to tamp down long term hyper-inflation, while increasing banking confidence to lend responsibly, with increasing the exchange possibilities and avenues to greater capital and liquidity?
I think the issue is keeping the bank's moving, as opposed to keeping them stagnant--zombie-like--without risk of increasing money supply and incurring hyper-inflation.
In any event, in a nutshell, once banks are losing money and the economy the way that it is, expect the rates in the UK to go to zero.
The ECB may not go that low. But, who would have thought that we would have such a financial collapse.
Not all are thrilled. Including Prof. Willem Buiter of the LSE over at the FT in his blog.
Prof. Buiter is becoming sort of a worry wart of sorts. But, he does raise interesting points. The main point for example is that: "It is certainly not helpful from the point of view of getting the banks to use the additional reserves they hold to boost their lending, that the Bank of England has reduced the opportunity cost to commercial banks of holding large reserves, by eliminating the 25 basis points penalty on the operational standing deposit facility."
There is always a danger that when you cut a rate, it has an adverse effect on other rates and industries depending on stable rates. And, on the flip side, you counteract and do the opposite to what you have intended--like Buiter's case.
In his case, the clear issue is that when you lower rates to allow bank's to have more stand-alone capital, through discount windows and other lending agreements, you would lower the rates for the operational standing deposit facility, increasing their demand for short term capital and a cheaper rate--to then, be able to send it back at less the cost. With, still, no increased lending to the average consumer.
Misguided inflation, while not an example expressed by Buiter in this case, is also something that can have many different deflections indeed.
Perhaps the excess in short term liquidity, is supposed to tamp down long term hyper-inflation, while increasing banking confidence to lend responsibly, with increasing the exchange possibilities and avenues to greater capital and liquidity?
I think the issue is keeping the bank's moving, as opposed to keeping them stagnant--zombie-like--without risk of increasing money supply and incurring hyper-inflation.
In any event, in a nutshell, once banks are losing money and the economy the way that it is, expect the rates in the UK to go to zero.
The ECB may not go that low. But, who would have thought that we would have such a financial collapse.
Monday, March 2, 2009
UK lending down!
BOE reports that Net lending to individuals has decreased over the last month and have been decreasing since last year, on all fronts-- secured on lending and consumer credit.
I guess it was a no-brainer.
I guess it was a no-brainer.
Tech issues!
Hi all,
I had some technical difficulties over the weekend. Both my dial up and my wireless went on the fritz, on top of my PC crashing.
So, from Saturday night, I had no service.
Still not out of the clear as yet as I need to update my windows. Which is a simple process, but my product key is out of date--or overused--so, I have to find another way to get me sorted out in the next two days, or else my PC will crash...AGAIN!!
Thanks.
Youri
I had some technical difficulties over the weekend. Both my dial up and my wireless went on the fritz, on top of my PC crashing.
So, from Saturday night, I had no service.
Still not out of the clear as yet as I need to update my windows. Which is a simple process, but my product key is out of date--or overused--so, I have to find another way to get me sorted out in the next two days, or else my PC will crash...AGAIN!!
Thanks.
Youri
It all's happening so fast!
Last week was a horrendous week for the banking industry in Europe and in the USofA and, believe it or not, the Caribbean. There is also some spill over into this week, but, as always, these issues are continually developing. But, while we had bad news on at least two fronts, we also had some "OK" news on one front. Read on...
First, the bad news. The Royal Bank of Scotland (RBS) went to the UK government for 25bn pounds of additional cash into the bank as well as insure up to 325 bn pounds of its existing portfolio. Allot of this comes as a shock to many, who felt that, yes, Sir Goodwin made a bad mistake at the wrong time in acquiring ABN-AMRO, but, it was minimal and his departure, was due to his overall megalomaniac style of acquisition, rather than overtly risky asset management throughout his tenure.
Some may say that this over-purchasing of financial after financial of Goodwin, was overall overt bad management. But, acquisition of good companies in good times, which Goodwin did many times over, is never a bad thing--while he sacrificed dividends on a few occasions, he paid out substantial dividends too, during his tenure.
This government intervention, however, maybe just additional security for RBS. The details are astounding, as Prof. Buiter at the LSE in an FT blog pointed out, though.
The tax payer, will not get their value for money in the first instance because, they will be repaid in B-shares and with being paid with B-shares, the interest will only be 2% of the total insured loan of 325 bn pounds (about 6 bn or so). Which, when adjusted to inflation, will result in a net zero return to investment after the loan is repaid.
All of this, amidst losses of over 9 bn pounds of RBS reported over the last month. The government owns 70% of RBS as of today and may raise the stake to 75%--but no more says officials.
What is done is done and the government, is not about to let the Queen's bank go belly-up!
HSBC on the other hand, has reported that it will be closing some of its operations as well as scaling back ventures in America. Also, they will be issuing a rights share of over 3bn USD. Raising cash in the short term, to buffer itself against possible steepening of the global financial and economic downturn. This is prudent. Although it is a bell weather for bad things to come, it is better to go to the market, rather than to the government.
The third issue--and this hits closer to home--is the ongoing CLICO debacle that started in Trinidad and Tobago and wound its way around the other CLICO subsidiaries around the Caribbean and Latin America.
The CLICO outpost in the Bahamas is in liquidation. The government had just announced that due to this liquidation, as a result of the parent company in Trinidad calling in some of its resources to pay off investors, among other things, will make sure that policy holders will be secured through another insurer as to not incur the losses of capital and money of policy holders, in the midst of this liquidation.
The CLICO branches in Belize, Cayman's and in Barbados, have already wound down and have a net customer bas of about 200--if that.
What should have happened, if it has not already happened, is that government, should insure all policy holders and then sell them to another insurer--if not buy the polices outright and re-sell them to another insurer, at face value.
There may be transaction costs and losses, but, to have policy holders lose their money out right--which in the Bahamas is about 20 thousand plus policy holders, is something no one wants on their hands.
Also, now, more breaking news is that AIG, the giant American insurer, is back to the American government for more bail-out money. The Federal reserve announced the basic terms of the package today and will release more data, as timely as it can.
But, from the outset, it appears as if a direct cash injection of 30bn, now, is a good enough amount to base your sights on.
Bad news and some not so bad news, but, it could be worse all around!
First, the bad news. The Royal Bank of Scotland (RBS) went to the UK government for 25bn pounds of additional cash into the bank as well as insure up to 325 bn pounds of its existing portfolio. Allot of this comes as a shock to many, who felt that, yes, Sir Goodwin made a bad mistake at the wrong time in acquiring ABN-AMRO, but, it was minimal and his departure, was due to his overall megalomaniac style of acquisition, rather than overtly risky asset management throughout his tenure.
Some may say that this over-purchasing of financial after financial of Goodwin, was overall overt bad management. But, acquisition of good companies in good times, which Goodwin did many times over, is never a bad thing--while he sacrificed dividends on a few occasions, he paid out substantial dividends too, during his tenure.
This government intervention, however, maybe just additional security for RBS. The details are astounding, as Prof. Buiter at the LSE in an FT blog pointed out, though.
The tax payer, will not get their value for money in the first instance because, they will be repaid in B-shares and with being paid with B-shares, the interest will only be 2% of the total insured loan of 325 bn pounds (about 6 bn or so). Which, when adjusted to inflation, will result in a net zero return to investment after the loan is repaid.
All of this, amidst losses of over 9 bn pounds of RBS reported over the last month. The government owns 70% of RBS as of today and may raise the stake to 75%--but no more says officials.
What is done is done and the government, is not about to let the Queen's bank go belly-up!
HSBC on the other hand, has reported that it will be closing some of its operations as well as scaling back ventures in America. Also, they will be issuing a rights share of over 3bn USD. Raising cash in the short term, to buffer itself against possible steepening of the global financial and economic downturn. This is prudent. Although it is a bell weather for bad things to come, it is better to go to the market, rather than to the government.
The third issue--and this hits closer to home--is the ongoing CLICO debacle that started in Trinidad and Tobago and wound its way around the other CLICO subsidiaries around the Caribbean and Latin America.
The CLICO outpost in the Bahamas is in liquidation. The government had just announced that due to this liquidation, as a result of the parent company in Trinidad calling in some of its resources to pay off investors, among other things, will make sure that policy holders will be secured through another insurer as to not incur the losses of capital and money of policy holders, in the midst of this liquidation.
The CLICO branches in Belize, Cayman's and in Barbados, have already wound down and have a net customer bas of about 200--if that.
What should have happened, if it has not already happened, is that government, should insure all policy holders and then sell them to another insurer--if not buy the polices outright and re-sell them to another insurer, at face value.
There may be transaction costs and losses, but, to have policy holders lose their money out right--which in the Bahamas is about 20 thousand plus policy holders, is something no one wants on their hands.
Also, now, more breaking news is that AIG, the giant American insurer, is back to the American government for more bail-out money. The Federal reserve announced the basic terms of the package today and will release more data, as timely as it can.
But, from the outset, it appears as if a direct cash injection of 30bn, now, is a good enough amount to base your sights on.
Bad news and some not so bad news, but, it could be worse all around!
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