Monthly Archives: May 2014

Want a House? Be Rich and Pay Cash

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“Mortgages are much tougher to get these days, requiring higher down payments, more expensive mortgage insurance, lower overall debt levels, and more.  Excessive student loan debt and lingering psychological damage from the last housing bust are deterring first-time buyers.  All-cash-investor-locusts swarmed over the market the past couple of years to buy up property and rent it out.  That has helped drive double-digit price increases in many markets. Unfortunately, wage increases, salary hikes, and population and economic growth haven’t kept pace.  As investors turn from buyers into sellers again, it will put the kibosh on the way-too-fast price increases we’ve been seeing.”

http://www.moneyandmarkets.com/want-a-house-be-rich-and-pay-cash-61593

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U.S. tax deal jeopardizes Canadians’ privacy

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“Imperils the privacy of up to a million Canadians and creates a two-tier level of citizenship in this country, discriminating against citizens based on their ethnic origin.  It could include so-called border babies, Canadians whose mothers gave birth across the border for medical reasons; Canadians who have returned after holding green cards for work in the U.S.; Canadian snowbirds who could be deemed ‘U.S. persons’ based on the length of their stay in the sun; and Canadians born to a U.S. parent who may have never set foot in the U.S.  If you are a Canadian holding a joint account with a U.S.-born spouse, your financial information, too, could be headed to the files of the IRS — and perhaps beyond.”

http://www.thestar.com/news/canada/2014/05/25/us_tax_deal_jeopardizes_canadians_privacy_harper.html

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Russia Mulls ‘Limitations’ On FATCA Information Exchange With U.S.

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“The Russian government may place ‘limitations’ on the amount of information that Russian banks can render to U.S. tax authorities under FATCA, a U.S. federal law intended to crack down on tax avoidance by U.S. citizens, Deputy Finance Minister Alexei Moiseyev said Thursday.  Moiseyev told journalists in St. Petersburg that Russia will not become ‘tax agents for the Americans, that will not happen under any circumstances,’ Interfax reported.  The U.S. in April quit negotiations with Russia over FATCA as part of a freeze on political cooperation following Russia’s annexation of Crimea in March, leaving the Russian government scrambling to adapt its laws to the legislation by July 1.”

http://www.themoscowtimes.com/news/article/russia-mulls-limitations-on-information-exchange-with-us-under-fatca/500669.html

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The Shocking Real Reason for FATCA, and What Comes Next

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“The central planners at the G20 and OECD devised what they call a new ‘global standard’ of automatic financial information exchange between governments (i.e., GATCA) modeled on the US’s FATCA.  However, GATCA would have never been possible in the first place had the US not cleared the path with FATCA.  The G20 and OECD needed the US—the sole financial superpower (for now at least)—to strong-arm and cram down the throats of the rest of the world this privacy-killing measure. There’s no other entity on the planet with the capability to do so.  The very big stick the US wielded was access to the US financial system and the world’s premier reserve currency.”

http://www.internationalman.com/articles/the-shocking-real-reason-for-fatca-and-what-comes-next

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Doug Casey on Taxes & Citizenship & Axel Merk on ECB, Japan, and US

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“Erin sits down with Doug Casey of Casey Research to talk about an extreme form of coercion: the income tax on US citizens abroad. Casey talks about taxes, citizenship, and government waste. Then Erin talks to Axel Merk of Merk Investments to get a handle on the world economy and the monetary experiments in the US and Japan. Merk also discusses what he expects from the European Central Bank in the midst of quantitative easing expectations.”

https://www.youtube.com/watch?v=kh4WTKajNaM

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Biggest Life and Annuity Insurers Make Billions — Tax Free

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“In a review of 2013 year end statutory financial statements of 765 life and annuity insurers, Weiss Ratings found the effective tax rate of the largest 25 insurers by asset size was negative 8.4 percent.  The effective rate for the overall industry, including the top 25 insurers, was 15 percent.  This is an industry of giants with $6.1 trillion in assets; comparable to China’s 2010 Gross Domestic Product (GDP).  The top 25 generated $96.6 billion in investment income during 2013. The largest insurers took more risk with the bond portfolios, investing 6 percent in junk bonds compared with the average of just 2.9 percent invested in junk.”

http://weissratings.com/news/ins_general/042214-life-and-annuity-insurers-make-billions-tax-free.aspx

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Bill Bonner: This Hugely Popular Investment Is About to Blow Up

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Bill-Bonner2

“In a normal world, savers have the choice of staying in cash or quasi-cash and receiving a fair rate of interest. No more. The interest they receive on a 10-year Treasury note is barely over 2.5%. But the real rate of consumer price inflation – according to the most exhaustive survey, done by the MIT, the Billion Prices Project – is 3.91%.  What kind of world is it where an honest householder loses nearly 1.5% a year on his savings? It is an odd, rigged-up and dangerously windy one.   Investors are stretching out their sails to get higher yields. As a result, bond prices have gone up, reducing yields on bonds rated CCC – below investment grade – to the lowest levels ever recorded.”

http://www.bonnerandpartners.com/this-hugely-popular-investment-is-about-to-blow-up/

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Bailout Banks Made Riskier Loans: Study [2011]

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“The government bailout made banks appear safer but actually caused them to take on more credit risk, according to a University of Michigan study released Wednesday. According to a working paper by finance professors Ran Duchin and Denis Sosyura of the university of Michigan’s Ross School of Business entitled Safer Ratios, Riskier Portfolios: Banks’ Response to Government Aid, banks participating in the government’s Capital Purchase Program as part of the Troubled Assets Relief Program, or TARP, ‘significantly increased their investments in risky securities,’ by 10%, ‘displacing safer assets, such as Treasury bonds, short-term paper, and cash equivalents.'”

http://finance.yahoo.com/news/Bailout-Banks-Made-Riskier-tsmf-3581730230.html

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Chasing Yield, Investors Plow Into Junk Bonds

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“Large investors are rushing into the riskiest corporate bonds, frustrated by low interest rates on safer investments and convinced that even companies with shaky finances are in little danger of default.  One sign of that rush: Investors have been buying up corporate bonds with a triple-C rating, a grade that analysts and investors consider highly speculative.  That buying is driving up prices on those bonds and pushing down their yields, which this month fell to 8.187% on a closely watched index—the lowest level on record. The yield gap between junk bonds and U.S. government debt—a measure of the premium investors receive for taking on the risk of junk bonds—has narrowed.”

http://online.wsj.com/news/articles/SB10001424052702304422704579572390216147878

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Language—even profanity—evolves faster than it can be regulated

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“Brighton, Michigan, decided to start enforcing $200 fines against people who swear in public.  This was such a perfect demonstration of the extension of Skwire’s First Law from politicians to those who enforce the laws enacted by politicians that I had to shelve my original plans and devote this week’s column to the question of cussing. (Skwire’s First Law, by the way, cannot be stated in Brighton, Michigan, without incurring a fine. Suffice it to say that it addresses my opinion of politicians.)  What the fine law enforcement agents of Brighton are failing to consider, however, is that language is a Hayekian spontaneous order. That means language changes and evolves faster than it can be regulated.”

http://www.fee.org/the_freeman/detail/frak-has-your-mother-sold-her-mangle

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