In Media on 08/12/2016 at 12:50 pm
From NYT’s Dealbook
The audacity of fiscal hype? – President-elect Donald Trump’s plans might not blow up the budget. “The proposed tax cuts may not have as large of an impact on the government’s finances as some analysts project,” U.S. economists at Deutsche Bank, wrote in a report. – Bloomberg
“If you don’t read the newspaper, you’re uninformed. If you do read it, you’re misinformed.”
What do you think of Denzel Washington’s comments?
Update at 5.08pm:
Salena Zito, writing in the Atlantic magazine, summed up Trump’s election campaign by saying: “The press takes him literally, but not seriously; his supporters take him seriously, but not literally.”
But can the press really stop taking literally what the president-elect says?
That’s quite a dilemma for the next four years
In China on 04/12/2016 at 5:32 am
One country [China] consumes 40 to 50% of the world’s commodities. As we saw in coal this year, when China changes policy, it can turn a market upside down,
says Ivan Glasenberg, the CEO of mining and trading house, Glencore.
I remember the time when the world’s commodity markets danced to the tune of the US economy. So should The Donald.
And how can the US be the number one economy in the world?
In 1980, China had 10 percent of America’s GDP as measured by purchasing power parity; 7 percent of its GDP at current U.S.-dollar exchange rates; and 6 percent of its exports. The foreign currency held by China, meanwhile, was just one-sixth the size of America’s reserves. The answers for the second column: By 2014, those figures were 101 percent of GDP; 60 percent at U.S.-dollar exchange rates; and 106 percent of exports. China’s reserves today are 28 times larger than America’s.
China is number 1
- Trading nation:
- Holder of U.S. debt:
- Foreign-direct-investment destination:
- Energy consumer:
- Oil importer:
- Carbon emitter:
- Steel producer:
- Auto market:
- Smartphone market:
- E-commerce market:
- Luxury-goods market:
- Internet user:
- Fastest supercomputer:
- Holder of foreign reserves:
- Source of initial public offerings:
- Primary engine of global growth:
A study by the Rhodium Group last month found that Chinese investment into the US exceeded US investment into China for the first time in 2015.
The US is the number one economy because it’s the biggest importer using China’s and other countries money to buy their exports.
“The US is the number one economy in the world, and its political power and military power are based on its economy.
German industrialist quoted by FT
But Trump is happy because he can nuke China to the stone age before China can launch a single nuclear missle against the US. Now taz tua kee.
In Uncategorized on 16/11/2016 at 4:33 pm
Possibility of stagflation. Short-term gain for long-term pain? That’s the view of economists at Goldman Sachs, who argue that Mr. Trump’s policies would offset any positive impacts over the long-run. – Bloomberg
And no leh, Jeff, markets are not easily seduced. They are worse than hookers. They’ll change their opinions and analyses to vindicate the victor.
|By Amie Tsang
|Stock markets are easily rattled and they don’t like uncertainty. But they have been on the up since election results came in, so does that mean we are in for more of the same this week and in the long term?
|We don’t know. But, Jeff Sommer says, it does mean that markets are easily seduced. The uncertainty around how Donald J. Trump could mean that the bar was set low for him — and the appearance of normality is enough to keep bears at bay. The Republican sweep of Congress also makes it less likely that there will be gridlock in Washington.
|And then there are the campaign promises that could promote growth and corporate profits. (Some of them could do the opposite, too.)
|Even if we knew how all of them were going to be enforced, it would be hard to know exactly what the result would be.
|And markets have historically been bad at pricing in hard-to-predict seismic events. So what do we do?
|“After so much inaccurate prognostication about what the near-term market effects of a Trump victory would be, having some modesty about our ability to predict how his policies will play out in the years ahead is very much in order,” Neil Irwin writes.
|While this plays out, here are some of the battlegrounds that lie ahead.
|Republicans want tax cuts and the president-elect wants tax cuts. But they don’t always want quite the same ones.
|Mr. Trump has said he was determined to get multinational companies to pay their American tax bills every year. The sting would not be as great if he also cut corporate rates and allowed credits for foreign taxes paid.
|House Republicans have been pushing for a territorial system, in which businesses are taxed solely on goods and services sold in the United States. But that encourages businesses to shop around for lower tax rates, ultimately shifting profits and jobs overseas — not ideal for a president who wants more jobs in the United States.
|Mr. Trump is expected to insist on a deduction for interest paid on debt-financed projects, a provision dear to real estate developers. But otherwise, he may keep his ideas broad, leaving Congress to pin down the details.
|The Federal Reserve
|Mr. Trump has embraced criticism that the Federal Reserve is creating more problems than it is solving, and his advisers would like to rein in the institution. Mr. Trump could overhaul its leadership, filling a majority of the Fed’s seven-seat board with his nominees over the next 18 months, even replacing Janet L. Yellen, the chairwoman, in February 2018.
|Fed officials have opposed increased congressional oversight, saying that would infringe on the central bank’s operational independence, and they are now facing the possibility of a harder push for changes from emboldened Republicans.
From NYT Dealbook
In Uncategorized on 15/11/2016 at 7:28 am
Bart To The Future, first broadcast in 2000, showed how the lives of the main characters might turn out.
A grown-up Lisa Simpson was seen as the White House incumbent, explaining to her staff she has “inherited quite a budget crunch from President Trump”.
She then asks her secretary of state, childhood friend Milhouse Van Houten, how bad the country’s finances are as a result of Trump’s time in office. He replies: “We’re broke.”
Well his plans for massive infrastructure spending while cutting taxes sure look that the US will have a massive deficit wen he leaves office.
Add in the infrastructure spending Mr Trump also wants, and the economy could get much hotter ..
For the record, his infrastructure plans (up to US$1 trillion) are a lot bigger than Socalist Bernie’s plan.
Update at 2pm: A wave of selling sweeping across bond markets resumed on Monday as investors continued to digest the impact of a Donald Trump presidency.
[S]ince inflation and interest rates are seen as likely to rise, investors are seeking assets with a more attractive return. With a Trump administration promising economic stimulus through spending and tax cuts, investors are worried about putting money into low fixed-payment assets, such as bonds.
In Uncategorized on 24/09/2012 at 5:10 am
The US started kicking the Swiss banks in the head over US citizens evading US taxes via Swiss banks. Will the US “tighten the screws” on the likes of MS, and will S’pore get caught in the row? Watch and wait.
The hearing featured a case study involving Microsoft’s shifting of IP rights for software developed in America, and the earnings that flow from them, to divisions in lower-tax Puerto Rico, Ireland and Singapore. One witness, Professor Stephen Shay of Harvard Law School, pointed out that in 2011 these three units enjoyed an average effective tax rate of just 4% and managed to book $15.4 billion of pre-tax profit—55% of Microsoft’s worldwide total. Their 1,914 employees generated an eyebrow-raising $8m of profit each, compared with $312,000 each for the 88,000 working in the rest of Microsoft. Whether or not this apportionment of profits complies with transfer-pricing rules, it is “not consistent with a commonsense understanding of where the locus of Microsoft’s economic activity…is occurring,” said Mr Shay. The claim that fair transfer prices were paid is “just not credible given the bottom-line outcome,” he added.
In 2011, the Senate investigators asserted, Microsoft’s parent company was paid $4 billion by Ireland and Singapore for rights that the two subsidiaries used to generate three times that amount in royalty payments from other bits of the group … A Microsoft man who was grilled at the hearing said the staffers’ sums ignored hefty, regular “buy-in” payments that the foreign subsidiaries have to make to the parent.
In Energy, Temasek on 10/07/2012 at 6:50 am
Recently Lord Rothschild, a 70-something deal-maker and shrewd investor, teamed up with the Rockefeller* family office. He said the US was the place to invest in because of its growing oil production. The two charts in this link explains what he means.
Well Temasek is buying into North America, though its flagship investment is one dog with fleas https://atans1.wordpress.com/2012/05/27/temasek-the-gd-the-bad-and-the-ugly/
Interestingly Lord Rothschild, unlike Temasek, has no plans to invest in Europe. BTW, he has a palace on the Greek island of Corfu. Time to buy the island?
*The first rich Rockeffer made his fortune in oil refining and distribution.
In Banks on 04/10/2011 at 4:29 pm
In a new index on financial secrecy, S’pore is only ranked sixth. The Financial Secrecy Index 2011, puts Switzerland on top, followed by the Cayman Islands, Luxembourg, Hong Kong and the USA.
The Tax Justice Network, the group behind the report, says, “[A] secrecy jurisdiction provides facilities that enable people or entities escape or undermine the laws, rules and regulations of other jurisdictions elsewhere, using secrecy as a prime tool.”
The government’s policy is to encourage the growth of wealth management here so that S’pore can be the Switzerland of the East. Well, the central bank and the Attorney-General’s Chambers have a lot of work to do to make S’pore a better secrecy jurisdiction. Hong Kong is a better secrecy juridiction than S’pore. And S’pore and Hong Kong are rivals in the race to be the leading wealth management centre in East Asia.
At least, this report shows S’pore is a better global citizen than Switzerland, Hong Kong and the USA. But where’s the money in being a responsible, decent chap?
In Economy, Japan on 15/03/2011 at 6:40 am
Higher US (and global) interest rates are in the offing as Japanese govt and investors sell US treasuries to raise funds for reconstruction. Remember Japan is the second largest investor in US government paper. China is the largest.
If so, S’pore’s interest rates could go up. What with Mah Bow Tan building more HDB flats and plenty of private supply coming on-stream, we could be in for some interesting times. And all these before factoring-in a possibility of a US recession as interest rates rise,