Tag Archives: taxation

On the purple side

You readers have seen my views in the past. I have been critical of labour and I have given UKIP a pass in the past regarding Brexit, an ideal I am still in favour of, especially as we now see how quick French election promises were shifted like a stab in the back by the French Investment banker turned president. UKIP does not get a soft deal at present, merely because it had a year to prepare, it has a new ‘leader’, one that has nowhere near the charisma of Nigel Farage and charisma or not, they are vying for the top position and if I can chop Labour to size, UKIP deserves no lesser treatment. So what is up with them?

Page 10 gives us the first part “We will fund our schools, build more houses, and rebuild our depleted armed forces. We will do this without adding a single penny to anyone’s tax bill. Our cost-of-living package will also save households £400 a year“, the mere question ‘how?’ should be evident here. The answer given “reduce foreign aid to 0.2 per cent of Gross National Income, and end our financial contributions to the EU budget“, which cannot be done the first year at least, in addition, whatever the UK loses not having to shift into the EU will go into other places, now I am all in favour of giving a chunk of that to the NHS, but the math feels wrong. The reality is that foreign aid often intersects with creating business opportunity and visibility. In my view to get anywhere near all this it will be a lot more than the 0.2% of that national gross, yet how much would be cut exactly and from where? By hiding (read: presenting it like this) they are actually no better than Labour, they have no real idea how to fund their idea’s. In the end they would cut way too much changing the humane image of the United Kingdom that is nowhere near reality and more than that, the UK would lose their face of strength. You see foreign aid is also showing a face of strength. In light of: ‘We can help, we can do this!’ that is a strong message and that strong message cannot be tempered with in light of Brexit, until proper trade paths are set, and properly set in stone, changing the face of England is a dangerous one. In addition, the pledge of more police in light of Manchester just days ago is equally stupid. There is no indication that it would have stopped the Manchester events and more important, labour left the UK with so much debt that we will be feeling that pain for at least 3-4 more years and there is a reality, there will be initial pain from Brexit. UI have always stated that the UK would grow to strength much faster after that, but it is still an issue that will need to be overcome. In addition, as the VAT is removed from the domestic energy bills, the coffers will remain empty, the deficit will go up because that money would need to come from somewhere else. Where will it come from? Tax increases? Extra levies on environmental reasoning’s?

Then on page 12, UKIP does something really stupid, and believe me that stupid is the word for it. As I personally read it, they set into the light, their own Patrick O’Flynn, UKIP MEP for the Eastern region. When we read “Starbucks recently reported profits of £13.4m on a UK turnover of £380m. Its corporation tax contribution fell to £2.7m, down from £7m the year before. How can a vast business that sells coffee in paper cups all over the country for £2.50 a pop end up paying a corporation tax contribution amounting to much less than one per cent of turnover?” Now, the question is valid, but there is a clear side. Turnover (£380m) and profit set at £13.4m, so corporate tax being £2.7m. So we can speculate that it is 17%, that is not too low, consider that Starbucks has shops all over England and in some of the most expensive places in the UK. They have around 800 stores in the UK alone, meaning that there are UK offices too, including the European HQ. So with shops all over London, what do you think the costs are? Now, there are issues for sure, yet in that light to set Starbucks in the limelight whilst the Apple games of legally allowed bookkeeping is setting a very different picture was just stupid. Macworld gives us that part (athttp://www.macworld.co.uk/news/apple/apple-q2-2017-financial-results-revenue-figures-apple-earnings-report-3581769/), when you make $53 billion per quarter, a lot more should be going to the state, yet this is global not just UK, yet it is interesting to see that Ireland was fighting the EU ruling that Apple had to pay back taxes and the Irish government is fighting that ruling, which is insane on a few levels, so far the Irish state has spend €270,000 in legal fees, to fight the demand the EU has that Ireland is due back taxes from Apple. This links to the UK, because the tax system on corporations is an issue, which UKIP addresses on the same page, yet they are just addressing corporate taxation. It is not the issue that is draining taxability, it is the allowance to shift what is charged in the UK.

Let’s show this in an example. A software firm ships software to the UK. The software is set to £0.01 as it goes to the software office from wherever. The software costs £999 and is sold to companies lets say in a package deal with 30% discount. We now see £999 + training £250 + consultancy £750 totalling £1399, discount was £600. Yet the head office wants the agreed £999 software part (or at least the contribution percentage), so the discount is in the books applied to the other two. £1000 minus £600, so we see a taxable amount of £400, now considering the consultancy and training costs in staff, how much is left to tax? That is a multi billion-pound shift, so talking about cups of coffee is a little bogus in my mind. and all this is perfectly legal, because it was set in a package deal. If you make that option no longer an option then that firm either sells a lot less or pays a lot more in taxation, is that not a much better setting? The business side reads nice and it is a nice set-up, I am not sure if it would work like that, but time constraints sets me in the mindfulness that there are a few question marks, but overall the setting of opposition of the small-mindedness of Labour reads nice. In addition, they actually missed the opportunity to offer incentives for businesses to hire aged workers, when that is made more appealing, there would be a business shift that aids in better moral, implying that there would be more competition within a firm which would drive and work eagerness to some degree, which is merely a speculation on my side. Yet they drop the ball with British jobs for British workers. Yes, it has been their voice to do so and I am not against it, yet the voicing of “we should be offering jobs first to our own unemployed, rather than inviting cheap labour from overseas to do the jobs British people are perfectly able to do“, this brings fear to the British Farmers who at times feel lucky to get anyone to take a job outside of the cities. I took special interest on how UKIP decides to solve the housing issue. We get some facts, but there are two elements that are vital to it all. You see, the claim of “a bold policy to roll out high quality, low cost factory built modular (FBM) homes, affordable on the national average wage of £26,000” reads nice, but lacks any solution that would actually work. You see, I can find that (at http://www.hanse-haus.co.uk/house_overview.html), yet the issue is for the most not the house, it is the land and location. Unless the people in the UK are willing to move out of London by a decent distance, the land will be unaffordable, in addition, whatever is built will only fuel congestion in several ways. So it will be about location, infrastructure and availability of services (gas, light and internet). As these parts are often not too lavish or cheap, getting anything at £250K is a stretch at best, in addition, how would there be a working life when the places affordable are on an unholy distance from any location work could be found at. None of the parties has any realistic solution. The Greater London area is so pumped on price per square inch that finding a liveable solution is almost out of the question. so finding a place for 60,000 is almost the unsung drama of the century at present. Page 17 does have some nice parts, parts that I offered as a solution in the past to other parties. I like the restrictions of housing to be for living only and not for any resale other than back to the Housing Development Corporation (HDC). It is close to the only way to get a lid on speculative profiteering in housing projects. I have seen and felt that impact myself in the past. It would enable first home owners a lot more and might help, yet the reality is that this would be outside the Greater London area, which is not a bad thing as there are plenty of cities that could benefit, yet will it work? what reads nice is not a guarantee to be a solution, so I will keep an open mind. When it comes to the NHS, UKIP makes similar mistakes Labour does by merely throwing money at it. For sure the NHS needs the cash, yet the issues are not addressed. The issue is not just “1,500 doctors leave Britain every year for better pay and more relaxed working conditions in Australia or New Zealand“. Addressing that part is essential in solving some of the issues the NHS has, like Labour, throwing money at it will not really work and besides that, where the money is coming from is equally a question that is an issue, because a coffer that has no £9 billion, has no option to spend it, so where is it coming from, merely pointing at the foreign aid budget will not bring forth the coins, so as UKIP has no real solution at present we need to consider alternatives. One alternative could be that any doctor or nurse working a full year at the NHS would see a 5% lowering of their student debt. Would that not be a solution to consider? It would relieve stress, they would actively work and lower the debt without paying and that improves their quality of life especially their first 5-10 years, in there we would see that the NHS could benefit from those 6-10 year veterans, a group that is dwindling down the fastest as I see it. Their part on national not international health care is pretty insane. It is unworkable as refugees and other cases would fall out of the basket. Telling a refugee that this person is not entitled to health care is just not an option. It vilifies the NHS in untold and unacceptable ways. In addition, such paper requirements would give power to insurance agencies in ways I don’t even want to contemplate. Their entire approach to mental health is pretty much food for the waste basket. As we read “Every year, some 150 million GP consultations and up to forty per cent of A&E attendances are linked to mental health issues and drug or alcohol abuse, yet there are insufficient resources for doctors to refer patients to specialist care“, as I see it, Binge drinking needs to be vilified in an open and massive way. It is costing A&E pretty much an arm and a leg in the most literal of ways. Setting the premise that issues on narcotics and binge drinking is either set to private insurance or not treated at all is pretty much the only way left. As the crackdown on binge drinking has failed again and again other steps will be needed. This part in UKIP caters to votes in very much the wrong way. we can see that the healthcare side needs additional help, yet in equal measure it now needs to address that some should no longer be allowed to call for help. The entire mention of cyber bullying was a waste of space and many know that changes are needed, yet as legislation is falling short on technology issues in several ways, there is no answer, so voicing it in consideration is a loss as such. Overall the UKIP manifesto reads better and more believable than the Labour one by a fair bit, I do not believe that the numbers are realistically, as they are mentioning that cuts are to be reversed, yet in all this, there is no valid way where those required funds are coming from. When we consider that with foreign aid ‘The provisional figure for 2016 is £13.3bn‘, and the Gross National Income was predicted to be around £520B, the UKIP idea is to lose £13 billion and spend it in the UK is an issue. With £500 million, there will be no goodwill created outside of the UK, which now implies that business opportunities will go to players outside the UK, on the basis of what is required, what is desired to be cut and what is to be achieved overall, cutting in the wrong pie comes with dire consequences and the ‘upbeat’ story that UKIP provides the provisional voter will not be one that can be maintained to the slightest degree. In all this they focus on corporate tax, yet the tax overhaul that is needed is not seen or shown to the degree it should be. We might love the read on housing, the reality is that the plan has flaws from the very beginning and the protection of farms and farm labour is thrown out of the window as it will be about British jobs for British workers. The least stated on the NHS part the better. I admit, I liked reading their version the best, but like any novel, whether the novel is in red, yellow or in purple does not matter, the life of the people in the UK is not a novel and the reality is that hard times were bestowed on the people (that is excluding Brexit) and the current population needs to deal and suffer that inheritance. Weirdly enough, for the Tories (my blue team), UKIP offers options that the Tories should consider adapting or doing in unison with UKIP, there would be the benefit that some untrained outspoken members could convert to better outspoken people and as they see the light, not only will the quality of UKIP members go up, there is every chance that a more conservative view will be adapted which is good for all of the UK. I have seen messages and forums where UKIP members are and many of them are decent people, only at times drowned out by the loudest speakers rambling more and more extreme expressions, just to get attention. That is merely my view and I believe that this could be solved. As I noticed and reported on in 2015, it seems that people who were not outspoken Labour or Conservative were either Lib Dem or UKIP. It was almost a given that where one was, the other would not be. That is the situation that the Conservatives do not seem to have focussed on (as I personally see it). By offering a wider scope parts of UKIP and Lib Dems would go Conservative which is good as I see it. As Paul Nuttall made three blunders in the last 30 hours alone, he needs to carefully consider where he is moving to. Blaming Theresa May was utterly stupid (wrong does not begin to describe it), being seen as the anti-EU party is a given, but that focus is now no longer valued or valid perse. The issue has been that the spending spree of Mario Draghi was a clear motivator and now we see that Draghi is relabelling a vestment of finance (read: London), as stated by Reuters as “UK financial market infrastructures (FMIs) would be considered as third-country FMIs rather than EU entities“, that part alone should anger the UK people and its bankers. So as Draghi is now stating that the UK stops being European, and set to third country is not only wrong it is a clear statement on a course of blaming of his own failure down the line, and this is happening whilst many parties outside of the UK are questioning the policies of Mario Draghi more and more. the mere mention by the Dutch on how Draghi produced 2.3 trillion out of thin air gives voice that my fears have been forever correct (at least from the beginning of the second wave), that in light that the first wave never actually brought Europe any solid economic growth. The third blunder we see from Paul Nuttall is him calling politicians too cowardly. He wants to recruits thousands of police and troops, but again, there is no way to pay for that. In light of his statement in light of Manchester, he flaws in equal Titanic levels as (thank god for that), it is not up to politicians, but to the intelligence branch and the police to set the stage and the optional solutions, an option made a lot harder by the US lately, a side he did not really touch on. This is also not the time to ‘pounce’ on radical Islam as the path on how to resolve that is actually something that the professionals who are doing just that, are also considering what the best approach is. That is in part the lesson we are now learning from the Manchester Arena. These professionals know what to do and we should let them do that. The attacks on Theresa May, were folly and there was no clear indication on the threat. The evidence now shown that there is a support system in place for Lone Wolves is a really serious issue and I feel certain that the Metropolitan Police and MI5 will know on how to deal with this. So in all Paul Nuttall should have voiced support, not incriminations of any kind. He basically cut his own fingers whilst there was no need to handle a knife at all, as I see it, it will hurt his numbers!

So on the purple side, I have seen some nice reads, yet the reality is that none of the parties can offer anything positive for the Conservatives, they are all in denial of the utter emptiness of the treasury, which does not help their situation either, at least UKIP has the benefit of not trying to push the UK in deeper debt, something Labour is trying to do, straight off the bat. As I see it, the Conservatives remain the strongest, the interesting side is that both Lib Dems and UKIP have opportunities to work with the Tories if they mend their ways and in addition, if UKIP repairs its ability to speak properly and non-extremely on thoughts that were never required to be extreme.

As they presented a purple Union Jack on their cover, they need to realise that this jack is showing shades of purple, attuning their views better to a wider group of British people, who are all optional voters, they need to realise that they are a new party with a visible lack of experience. In all this, I personally believe that Nigel Farage, if persisted in politics could have made a strong gain, in the last week we saw that Paul Nuttall is not up to the job at present, which, if realised by the voters could turn a stronger shift to both Conservatives, yet especially the Lib Dems, because a lot of UKIP and Labour are too uncomfortable with the conservative view (or the Labour view for that matter) and that is fair enough. I just wonder how Tim Farron will deal with the easy slide towards his party. Oh, and that is discounting one part that a lot of people have not considered, which was the case in the Netherlands. The Greens could actually propel forward a fair bit. That part will be known this soon enough.

 

Advertisements

Leave a comment

Filed under Media, Politics

The Taxing Delicious

Taxing delicious is a new sweet tasting Apple, even sweeter than the golden Delicious, and it is to be regarded as healthy for body, mind and government. Yes, in this case it is not a new Irish Cider (which would be a nice idea too), this is about a company getting a bill. You see, the funny part of it was that if there had been no EU, Apple would have been 13 billion wealthier. How doesn’t that beat the odds?

These are some of the thoughts rising within me again as I read ‘Apple tax ruling must be overturned, says US business group‘ (at https://www.theguardian.com/business/2016/sep/16/apple-tax-ruling-must-be-overturned-says-us-business-group).

As I see it, if it is such an issue, why not do an appeal? You see, this entire issue is as convoluted as it is ever likely to get. When I see ‘Ireland Doesn’t Want Apple’s Back Taxes, but the Irish Aren’t So Sure‘ in the New York Times (at http://www.nytimes.com/2016/09/12/business/international/ireland-doesnt-want-apples-back-taxes-but-the-irish-arent-so-sure.html), my initial response to Enda Kenny would be “Are you out of your bloody mind?” Now, let’s be partially fair. There is a method to the governments madness, yet even as giving in to big business might seem appealing, but the US is changing its taxation parameters (as well as tax accountability) and after the elections there is no way to tell how the US governments hats will be pointing, so getting what you can now is not the worst idea. In addition, when Apple et al will make the jump away and to other places, they will leave you with buildings that remain empty and will not have been paid off, so you will have a billion in real estate, whilst not having any return on investment, just empty buildings wasting away. That situation is not as unimaginative or as surreal as you might think. The idea that a government is appealing against a tax bill on behalf of a Forbes 500 company is entertaining, upsetting and obscene all at the same time, but that is sometimes how the cookie crumbles.

What is interesting in all this is how the EU courts will act, you see, if they give in now, it should be regarded as the utter uselessness of that court to begin with. It gives weight that not being part of that very expensive club is indeed the way to go, which will now give weight that Brexit was not a bad move and it will in addition fuel Frexit too. All that over a mere 13 billion invoice. Less than 5% of the costs of Greece, which fuelled Brexit to begin with. This is at the heart of the matter of what the Americans just cannot comprehend. They just received the massive blowback on the lesson that you cannot win every fight and that Economic Status Quo is an illusion that will collapse upon those believing in it.

So as we see the idiotic roundtable threaten those European leaders “In an open letter to the leaders of the 28 European Union countries, the Business Roundtable group defended Apple over its tax dispute with the European commission” and “US businesses have warned European leaders they risk a “grievous self-inflicted wound” unless they overturn Brussels’ demand that Apple pay the Irish government €13bn (£11.4bn)“, I just wonder if they even considered the stupidity of their actions. On the other hand, should those leaders cave, how stupid are the European elected officials to begin with? So as we wonder whether Randall L. Stephenson has looked into the long term issues of his act, when we see that these actions drive Frexit and possibly even Italy’s act on a referendum (although the major influences would be Brexit and Frexit), will Randall respond with a ‘this is much more complex and should not have been pushed by our, what we regard to be a righteous act‘, or will we see a spokesperson state ‘Our Chairman is currently unavailable and is taking his personal time teaching the Youth how to do a proper sheepshank‘? I will let you decide, but consider that tax accountability has been an issue for over a decade and now we finally see an actual result against a large corporation we see people backing down? Perhaps they thought it would never get that far? Just like Brexit was never going to be a reality!

Yet the Irish Times did not remain quiet and less than 24 hours ago reported (at http://www.irishtimes.com/business/technology/apple-fined-in-japan-for-under-reporting-earnings-sent-to-ireland-1.2793469), ‘Apple fined in Japan for under-reporting earnings sent to Ireland‘. So when we read “The Tokyo Regional Taxation Bureau determined that the unit, which sends part of its profits earned from fees paid by subscribers in Japan to another Apple unit in Ireland to pay for software licensing, had not been paying a withholding tax on those earnings in Japan, according to broadcaster NHK“, I just wonder who the Tax Auditor was here.

Now I am not out to make Apple the bad guy, even though they screwed me over twice! What is important is that through all the presentations and all the boasting and ego based actions, there are now 4 groups in play all trying to get Brussels to back down on a legal verdict. We need to wait the appeal on this, yet should this remain and if the US makes noise we will have clear evidence that the EU is no longer something with validity, even stronger, these events are clear signals that the TTIP is an even worse idea than initially thought of in opposition. The one sidedness aside, the fact that American business has basically become the corporate ‘bully’, we need to reassess the situation and remain clear on where our priorities are. I personally remain with the belief as I always have that the Commonwealth nations need to stick together. In these times we now see the Democratic Party under leadership of President Obama do the following “The Obama administration on Thursday took action to limit the use of foreign tax credits by American multinational companies to reduce their U.S. tax bills, a move that followed an EU order that Apple pay back taxes to Ireland“, which I think is not a bad idea. You see, Apple et al might claim how they are so investing everywhere, but that is only done (as I personally see it) to avoid paying tax in America. It is one of the massive reasons why America is so deep in debt (apart from their impossibility to manage a budget) and something has to give. If those tax dollars are used to lower that debt then I would state: “Barack, you legend you, well done!“, because an America with low debt (read: no debt), would be again the superpower it once was and currently pretends to be.

In the end, nations that have a minimal debt, these nations get to decide for themselves, not having their actions overruled by financial institutions or Large Corporation, or by Randall L. Stephenson for that matter. Yes, we can see that those moves will have impact all over Europe and not in a nice way, but that is part of the game. You cannot have it both ways that was never a reality to begin with. Now they only need to fix the holes that Mario Draghi has in his hands and we are possibly perhaps on route to get something sorted.

Yet there is one part we need to get back to and that is the verdict. You see, what is in play here is the statement “an agreement allowing Apple to pay a maximum tax rate of just 1%. In 2014, the tech firm paid tax at 0.005%. The usual rate of corporation tax in Ireland is 12.5%“, this implies that Apple didn’t just get preferential treatment, all the other players were discriminated against. When we see the parts we had already known for a long time, the fact that “Ireland’s tax arrangements with Apple between 1991 and 2015 had allowed the US company to attribute sales to a “head office” that only existed on paper and could not have generated such profits“, which was a given and the result we saw on a global scale “Apple avoided tax on almost all the profit generated from its multibillion-euro sales of iPhones and other products across the EU’s single market. It booked the profits in Ireland rather than the country in which the product was sold“, gives way that a single market is perhaps not the best solution for all but one nation and in addition to this we must realise that the solution I mentioned 5 years ago to set the tax laws that taxation should be set into the nation of the buying consumers physical location could have avoided this and many other issues. A simple taxation change that made all the difference, yet it seems that no one in legislation in those nations as well as those political players ever considered changing that simple law that could have made all the difference.

You see, as the Guardian by-line offers, this case could have another escalation soon enough “Charlie Harrington, 53, a paramedic in Cork, expressed frustration that the Irish government penalized small taxpayers but seemed ready to protect Apple“, which is exactly how millions feel in both France and Italy. If this tax case caves and Apple ends up not being due this invoice, the jump to anti-EU sentiments will go up massively and very fast so. At that point President Obama will only have himself to thank for the mess he started to create when he went 180 degrees on the corporate tax issues discussed in the ‘The Hague Summit of 2013’. That was the first step that could have avoided a few things, this case being one of them.

Cause and Effect

The question becomes ‘What will happen now?’ This is something not easily answered. At present Apple has a few other issues knocking at its door and the iPhone 7 is one of them. The population at large is less money blessed, so paying $1295 for a new phone that according to Forbes is “Purchasing the iPhone 7 this morning from my local Apple Store I found a device that is remarkably similar to last year’s iPhone 6S and the iPhone 6 from 2014. The external design cues remain, the chips inside are faster, and iOS 10 is more polished but is fundamentally the same operating system. Nothing ‘feels’ news even though the package is professional and projects a revolution that is hard to find“, this is at the heart of the matter. Trying to create waves by limiting the system, whilst overall the system is still the same is an issue and at nearly $1300 a very expensive one. That whilst Android competitors are coming into the field with comparable devices, including a headphone jack at 50%-60% of the price of the iPhone 7 and the world is starting to consider the non-IOS alternative. What Apple should fear is not just the market they are losing, the dangers that people could, in regard to the tax pressures they have and the pressure that Apple seems to be able to avoid, is one that could make them feel frustrated and vindictive. The idea that a person could think ‘If the need not pay taxation, they do not need my business either is not that far a stretch‘. People are starting to see the ethical imbalance that large corporations have impressed upon nations and in Europe where the quality of life is not that great at present, seeking the much cheaper alternative that Huawei and LG are offering is one worth considering. That could bring considerable consequences for Apple soon enough. Now I am not stating that the iPhone 7 will be a flop, but for Apple in this stage, should they lose even as little as a 2% market share, the consequence for apple will be intense to state the least. In addition, the fact that the iPad has remained a success for so long could equally be the next problem child for Apple. In that regard releasing the iPad Pro was a really good idea, yet the tablet contenders are starting to realise what it takes to be a contender and if that knowledge is applied properly, there too non-IOS devices (read: android) could start to make a killing and as such undermine that market Apple has at present. The origin is not the device makers, but Google. As Google has been pushing ‘the year of mobile’ for two years, the shift of usage is also growing. There is a growing visibility that at times the mobile screen does not cut it and it gives more and more opportunity to both Phablet and Tablet. These are all examples showing quite clearly that there is no status quo to rely on and the temporary nature of devices shows that Apple needs to really push forward in an innovative way, preferably before the makers of tablets realise that an affordable 128 GB version of an Android tablet is every bit as appealing as the iPad Pro, especially when the Android version could be a lot less than the IOS edition. With Android having its own set of quality games, Apple has more to lose than they are willing to admit to and time is slowly running out for their streak of ignorance to continue. However, it is important to note that Apple has been pretty super innovative with the iPad pro, so there is still a gap to overcome for the competitors. In that regard it is equally interesting that the Android device market have ignored that side of the consumer’s need (read: desire). In all this, it was about taxation and not on markets. Yet one is linked to the other, mainly because if there is no market there is in equal measure no taxable revenue, which gets us to the final part. You see, I have written about these issues before in one form or another and now we see that the Wall Street Journal is finally waking up to this (at http://www.wsj.com/articles/lew-is-right-on-eu-tax-grab-but-lacks-credibility-1473962171), when we read “The Obama administration has had 92 months to tackle corporate tax reform. Now that Europe is making a grab for taxes on profits held by U.S. companies overseas, President Obama is ready to use his last few months in office to address tax issues that were ignored or made worse under his watch“, my response is that neither was done, as stated in earlier blogs in April 2016, when I wrote ‘Ignoranus Totalicus‘ (at https://lawlordtobe.com/2016/04/24/ignoranus-totalicus), he refused to act (as voiced by “Senior officials in Washington have made it known“), so the non-actions are now back firing as event are now escalated. Another iteration of status quo.

What now?

This now all related to the issue at hand. IT corporations decided to maximise their profit by a consumer iterative annual approach of products. The IT market in the US nearly collapsed as it allowed for what was once regarded as a Taiwan Clone (a cheap alternative) to a quality A-brand to catch up. This is the problem with iterative thinking, when you are not in a niche market like Northrop Grumman (who at one stage actually there software patches ‘Iteration version’ I believe), you allow the market to catch up with you. ASUS caught up so and soon thereafter surpassed the original market owners. This lesson was not learned and the Telecom market decided that the profit was good in this way. So, please feel free to correct me. What happened to Ericsson and Nokia? Apple came and overwhelmed everyone and instead of truly remaining innovative, they started to largely iterate their device and called it innovation, now that LG, Samsung and Huawei have caught on and pretty much caught up, they are now offering equal, if not better options at lower prices. So how long will it take Apple to learn that status quo is merely an illusion? I reckon will see that revelation close after Christmas, after the annual sales are gone (and they will be improbable but not impossible a bit disappointing this year).

I reckon we will know in about 15-19 weeks!

Leave a comment

Filed under Finance, IT, Media, Politics, Science

The Sanctimonious pretender

I saw a smaller headline this morning. It was not a text, but a video from the Guardian. The headline read ‘Why is the United Arab Emirates secretly bombing Libya?’ (at http://www.theguardian.com/world/video/2014/aug/29/why-is-the-united-arab-emirates-secretly-bombing-libya-video). The text below the video is “The United Arab Emirates, a small wealthy Gulf state, has been secretly bombing targets in Libya, from bases in Egypt without the knowledge of the US. We explain how the raids reflect new rivalries in the region and are likely to trigger new strains between the west and its increasingly assertive Arab allies“.

There are several sides to this, but let’s start with the obvious ones “without the knowledge of the US“. Since when do we need to tell the US everything? If allies share all information, then can Washington please be so kind to send a 100% backup of their collected NSA data? You see, when we look at the word ally, the Oxford dictionary gives us “A state formally cooperating with another for a military or other purpose“, but the one that is perhaps more apt is “A person or organization that cooperates with or helps another in a particular activity“. So helps or cooperates in a particular activity, not all activities.

There are two questions linked to all this. The first is “how much of an ally is America?” I do not mean this in a negative light. The reality is that as it stands, USA is no longer a super power. They are limited in their actions and as the Democratic administration has given away nearly all power to banks and debt holders, in addition, there is an increasing visibility on just how dependent USA is on their need for oil. The article shapes another side that might have been unintended. It states “they were once united in their fear of Iran“, the fact that USA has been trying to get a dialogue with Iran is unsettling to many. In addition their slow response to the threat ISIS is also seen in a more negative light. The Iranian change has left the impression that USA will talk with all, this left an uneasy taste in the mouths of the conservative gulf monarchies. For if America is willing to take the ‘easy’ path to their oil, as well as the implied move of America to move away more and more out of the middle east is showing them the question, who should be THEIR ally? This could be the economic prosperous situation that the Commonwealth needs, yet would it be prosperous and moreover, how much of an ally will the Commonwealth nations need to become?

This is part of the view that I have had in other areas as well. Big Business seems to regard any nation with a monarchy as a non-positive area. Big Business is all about their powerbase which allows for a more secure hold on any location where politicians are the powerbase for their profit needs, it allows for changes and settings that are beneficial to large corporations. It seems to me that they cannot get the power foundation they so desire. Although phrased in opposition, KPMG made notion (at http://www.dutchnews.nl/news/archives/2012/10/big_firms_consider_leaving_the.php) of this. They stated in the headline ‘Big firms consider leaving the Netherlands, says KPMG report‘, the quote “Some of the Netherlands’ biggest companies are considering leaving the country because of the worsening climate for entrepreneurs, according to a new report by consultants group KPMG“. It is my view that this is not the actual ‘truth’. As I see it, it should read “Some of the Netherlands’ biggest companies are considering leaving the country because of the required freedom of exploitation that is denied to them“. This is of course my personal view, but considering the tax responsibilities firms have and for now, the pressures on both companies and people for tax accountability in the Netherlands. A board of directors have no national allegiance, just an allegiance for profit. I feel that honest values of accountability have for the most been the best preserved in monarchical states. Which includes the UK, the Netherlands, Sweden, and of course the UAE, Saudi Arabia, Oman and Qatar. So is there another factor why there is growing uneasy between these states? It seems to me that both Saudi Arabia and Qatar have absolutely nothing to gain in the long term to support ISIS, so where are these accusations as well as the implied evidence coming from that they seem to support these Islamic fighters?

The fact that Turkey and Qatar are stated to support Islamic movements is a call for more scrutinies investigations, as that implies that Turkey is now in opposition to its allies US and UK, so what quality evidence is there?

This is in the back of my mind when we look at the evidence. Is it truly the nations, or the larger players in these nations? If large corporations are indeed fuelling political needs of change by giving access to Islamic change, then we have an entirely new game in play. If we consider parts of ‘The Mobilization of Political Islam in Turkey‘ by Banu Eligür, we see another supporting side. It is the endorsing view by Jack Goldstone from George Mason University that gives us “Eligur shows how Islamists took advantage of the military’s obsession with the left and thus the military’s willingness to ally with them against leftist parties, the growth of a Saudi-supported Islamic business elite, and rapid urbanization, to create expanded networks and opportunities for electoral gains“. This is the side that is only one part. We tend to consider the side of on how Saudi Arabia and Qatar are involved, but we forgot the ‘western part’ in all this. Who exactly are the Saudi-supported Islamic business elite? These people, are they members of the house of Saud or are they exactly the opposite, Islamic members preparing to overthrow the house of Saud and turn a monarchy into whatever comes next. If that ever happens, then we get an entirely new situation. You see, whomever is in charge next can decide on who is allowed into Mecca, I have absolutely no idea what the consequence will be to that city, however I guarantee you that it might be the one spark to set a massive new strain of wars into motion, a destabilisation ISIS has been aiming for, for some time now.

Even though Jordan states to be ready to counter the radical threat, we see a view of widening support for ISIS among Jordanian Islamist fundamentalists inspired by its recent advances in countries neighbouring Jordan, which is a view that many are for now ignoring (likely until it is too late). This would force a massive military change for Israel and Israeli support as it will then be in a worse situation then it was in 1973, almost exactly 41 years ago.

The question becomes, how are they connected? They are not directly connected as events, yet the destabilisation will give a massive boost to the needs of ISIS as the younger population acts and reacts out, not in favour of ISIS, but against Israel due to a multi generation lecture of hatred (read non-acceptance), of the state of Israel. This might become the act tipping the scales in both Saudi Arabia and Oman. For ISIS it would be a win-win premise, if these two nations act out against Israel to appease its population, ISIS would claim to be the Islamic leader against Israel, if these nations hold off, they would create additional discord within the populations of both Saudi Arabia and Oman, which would only push the ISIS agenda forward more strongly.

So who is the Sanctimonious pretender?

As far as I can tell, they are the members of the boards of directors, in several cases just the man at the top who is pushing through support for certain extreme agenda’s so that a long term profit game can be played. The question would become would ISIS keep their word, or will they divide and exterminate this ‘infidel’ based support later on, for if we regard the meaning of infidel as ‘those who doubt or reject the central tenets of one’s own religion‘, are these people not digging their own graves?

Here is an Islamic view on greed: “Watch out for greed because the people before you perished from it. Greed led them to be miserly so they became misers. Greed led them to break the ties (of kinship) so they broke it. Greed led them to sins so they committed sins. (Abu Dawud)“, a view that was created almost a century before Christians went on the Crusades. Even then, Islamic view opposed the utter destruction that greed embraces.

If we do not start acting (read more than planning) for any solution that stops extremism, we might be left without options and the only oil America gets is whatever they can buy from Venezuela, Canada or Russia, which might make for a very uncomfortable oil price and a future we should all enthusiastically avoid.

 

1 Comment

Filed under Finance, Media, Military, Politics

About that house you wanted!

It seems the Dutch are ready to take on the advice the Wijfels commission is giving. Even though not direct, it will end up that you have to pay 20% cash up front for any house or apartment you desire. And indeed, there was the subtle ‘line’ that if you do not have that kind of cash, you should address your pension funds. Interesting on how they are willing to open up pension funds to fund that.

Am I against it? There are two sides to this. On the one hand investing into your own future is perfectly sane. If only there was some level of certainty. You see, the fact that banks leave its taxpayers with their risky investments is one thing, the issue on your house is another.

How does this differ? Actually, it should not. A good house is a good house. However, consider some of the housing. How these houses are currently so much over any normal affordable income. It is nice to see a newscast in comparison with Germany; however, when we look at the quality and square meter price, then these prices are far from average. Of course, when seeking apartments in places like Munich, then yes, the prices might seem comparable. Yet, where we see average Munich prices, that is pretty an average price for living anywhere in the Netherlands. I agree that it is not fair that those factors are accountable to the banks, yet, they were at the centre of events when the prices were artificially pushed upwards.

As they sold mortgages no one cared too much about prices as the interest was tax deductable. When that 7%-9% is no longer part of tax deductibility, then we have a situation where the consumer now pays for it all. Add to that coming up with 20% (in due time) and someone slyly mentions the need to access ones retirement funds, we see another political play to get pensions into the banking equation. There is supporting evidence from all kind of sources. An interesting read was how on average house prices went down in US/UK and other places by well over 20%, whilst in the Netherlands the prices lowered less than 8%. It is unfair to just name one factor, as several economic factors had been in place in other nations too. The US crash never hit the European sides that hard, Europe might still fighting the backwash from those days, but on average Europe never had too much of the hardship the US faced. Another reason is the fact that the Netherlands is pretty much ‘full’. Whilst many nations have plenty of housing space outside of the great cities, the Netherlands has become a connection of large cities, with next to nothing to separate them.

Still this play as such to push people towards their retirement finds is slightly less than acceptable. There is however the other side that must be highlighted too. According to Ernst & Young, between 1996 and 2012, the outstanding mortgage has gone from 138 to 650 billion Euros, That means that outstanding mortgages currently have risen half a trillion Euro’s in just 15 years. Some might think that this is not a lot, yet, consider that that the Dutch population is under 17 million, which seems like the banks remain dealing with 100% of unpaid mortgages. If these numbers are correct, then it bears reason that these numbers should be looked at. Is that actually true? You see, feeling it is wrong, and knowing it is wrong (even with supporting evidence) seems nice from the writers point of view, however what about the reader?

There we get the issue that gives us the crux. When comparing apartments in the Netherlands and comparing them To Sweden and Germany, I noticed something. I lived in two of these locations, so I know what to look for. I compared the Dutch http://www.huizenzoeker.nl, Swedish http://www.bovision.se and German http://en.immostreet.com/germany. When comparing an apartment in Rotterdam and Kista (outskirts of Stockholm) we see a comparable raise of prices, yet overall we get a lot more apartment in Stockholm then in Rotterdam, for comparable prices (30%-40% more living space). This comparison takes an astute dive when we look at Germany, especially Bavaria; where all over the place we can buy 5 bedroom villa’s for a lot less than a two bedroom crinkly monkey apartment in Rotterdam. As such we get a first inkling; if we need 40K to buy a 5-bedroom villa is one thing, needing the same for a 2-bedroom apartment becomes a whole other matter. Interesting how this was not mentioned.

So why so much issues about the mortgage changes? We see a political engine too eagerly bowing to the needs of banks, bowing to a group that has visibly forsaken a population, a group that have left many billions in debts and we still bow to their ‘needs’? Now with the additional need to open up retirement finances that had remained relatively safe until now.

Yet, with the massive outstanding mortgages, what is left?
In addition, knowing that level of outstanding debts, are their demands out of proportions? That question becomes a whole lot more interesting when we consider the following from Bloomberg (source: http://www.bloomberg.com/news/2013-04-23/dutch-mortgage-bond-market-threatened-by-capital-rules-dsa-says.html).

This part throws a whole new hole in these issues. Banks are pushed to outside influences, and even though the government pretend to be fighting the good fight to protect this market, it is interesting that this part was not that visible on the news. It might be that the Wijfels report shows this, but I have not read it, so I cannot tell.

My issue is now with this part of the Bloomberg article “Dutch banks are the second-largest issuers of RMBS in Europe, relying on sales of the securities to help fill a 452 billion-euro funding gap between deposits and loans, Dutch central bank data show.” Excuse me?

Looking at some quick 2011 population numbers:
Germany 81.8 million , France 65.43 million, United Kingdom 62.74 million, Netherlands  16.69 million.

EXCUSE ME?

How (or better why) exactly are the Dutch banks the second largest in Residential mortgage-backed securities (RMBS)? Even if 100% of the Dutch population is now under mortgage (which is statistically impossible), those numbers are showing an enormous gap. What are we not told? Even if we consider the 25% difference in mortgage funding there are a few questions that should be asked out there. What have the banks been up to, and exactly what questions are not being asked, or better, what part are people and perhaps even politicians not getting information on? Half a trillion Euro funding gap reads like that there is a deficit of half a trillion Euro. That could never be covered by 6 billion in cut backs. Before you think that this has nothing to do with governments then think again, if that shortage is not addressed then that money will have to come from somewhere else. What are the odds that this needs to come from taxation in one way or another next?  More important is the news that people saw over the last year. What buffers do banks have, and if so, how come the Bloomberg (a respectable bringer of news) information was not part of the newscast?

Is this an orchestrate play? It seems to me that a clear yes is in play, however, there are sides to this that do not make sense and they are outside of government controlled sources, sources that currently seemed to remain largely unmentioned. To me it seems that both banks and politicians might need to publicly answer some questions in regards to some of these issues and it would be nice that this is done before banks are given any more leeway or options to shift certain finance issues around.

Leave a comment

Filed under Finance, Politics