Russia & Double Taxing Tax Havens

Russia has proposed to put Switzerland on a black list along with another 118 countries on the provisional list of tax havens. If the list is approved in November by the Russian authorities, threatens Russian companies in Switzerland will suffer double taxation. This also threatens the Austrian economy.
Armstrong Economics

This post was published at Armstrong Economics on November 2, 2015.


t was a day just like most other days… which included an email from some brokerage or bank sending me an email requesting more documentation to better ‘Know Your Client’ (KYC). I’ve sent so much documentation over the last few years to banks and brokerages that I feel some of these banks should at least buy me dinner before they f**k me. I now call it IYC, Irritate Your Client.
In fairness to the banks, however, none of them want to do this. I can’t imagine what the cost of the ‘compliance’ departments of some banks must be to collect all this paperwork on behalf of governments. Any sensible bank or business wouldn’t want to keep harassing their clients for more information about specific details of the lives on an ongoing and never-ending basis.
But this week I got an extra-special email from a brokerage in which I have an account in Luxembourg. The subject header was, ‘Urgent – information for customers holding United States (US) assets’.
Here was what was included. Remember, I am not American (and they know that) and this is from a brokerage in Luxembourg:
Dear Investor,
As part of our obligations to the US tax authorities, we are required to obtain evidence for all clients who are or have been the owners of US investment assets in our custody in order to confirm that they are not a US person.

This post was published at Dollar Vigilante on NOVEMBER 2, 2015.

Here Are The Five “Good News” That Can Cause A Market Selloff According To Bank of America

“If bad news is great for stocks, then is good news bad?”
Bank of America reminded us earlier that just this month, the PBoC cut rates, the ECB confirmed QE2, Sweden announced additional QE, and the BoJ promised additional easing if necessary ‘without hesitation’, and for markets, “the stimulus of October 2015 has worked, with equities and corporate bonds rallying hard.”
The main driver of this newly unleashed central bank intervention? Terrible global economic data.
BofA further says that “central banks are easing because global growth is weak” (in the process making global growth even weaker but at least pushing risk assets to new highs) adding that “global profits are down 4% since February. Even the US has struggled: payroll growth has decelerated and the latest US GDP growth rate was a pitiful 1.5% in Q3. And the level of US inventories is unambiguously recessionary.”
But while “confidence in quantitative success for the economy is nonetheless low” the ‘loss of faith in central planning’ trade which emerged briefly in late August and September, promptly fizzled as “don’t fight the Fed” once again regained its top position on the pantheon of Wall Street aphorisms, right above BTFD.

This post was published at Zero Hedge on 11/01/2015.

Petrodollar Reflux to Hit Treasuries, Other Assets

Oil-producing countries dump assets to fill budget holes. Executive Report with ISA Intel, Oil & Energy Insider: The collapse in oil prices is draining oil-exporting countries of revenue. With substantially lower oil revenues, many of the world’s sovereign wealth funds are dropping in value, which has ramifications for the assets they are invested in. The IMF took a look at this connection between oil prices and sovereign wealth funds and raised the possibility that asset prices around the world could be negatively impacted.
Oil-Backed Sovereign Wealth Funds Sovereign wealth funds emerged in a big way when oil prices started to rise in the early 2000s. An enormous transfer of wealth occurred from oil-consuming countries to oil-producing countries. Countries like the U. S., for instance, had to shell out ever more cash to buy imported oil from, say, Saudi Arabia.

This post was published at Wolf Street by ISA Intel ‘ November 2, 2015.

Dow Closing for October 2015

The Dow closed neutral on our indicators for the month-end of October. We have held support below and bumping against resistance. There are only two possible patterns which is either sling-shot, penetrating last year’s low and then swing to new highs is a blast to the upside. Or, we simply base and then enter a Phase Transition.
The fascinating aspect is looking at our Energy Model. We can see that despite the rally in October, the Energy turned negative in a full blown divergence. This means that the over-bought position of the last few years is being resolved. That opens the door for a Phase Transition.

This post was published at Armstrong Economics on November 2, 2015.

Confusion: US Equities Drift Lower (China Higher), Yuan Surges & Purges As China Manufacturing Misses (And Beats)

Confusion reigns… China’s Manufacturing PMI is in contraction according to both the Official and Markit/Caixin measures (but the former was flat and missed while the former rose and beat “confirming economic stability” according to the ‘official’ press). Following the largest strengthening fix for the Yuan in 10 years, both the onshore and offshore Yuan are weakening by the most since the August devaluation. Finally, having cliff-dived at the open, Chinese stocks have bounced back to unchanged on the Ciaxin PMI beat (but US equities drift lower still).

This post was published at Zero Hedge on 11/02/2015.

Why We Need Private Property to Deal with Scarce Resources

Scarcity of resources exists in many forms and is the problem in economics. If resources were not scarce, there would be no need to economize. The existence of scarcity is true of all resources (such as time, human energy, and natural resources). However, it is not necessarily intuitive that allowing scarce resources to be owned privately is the solution to this problem.
Consequently, socialism appears attractive to many and they turn to having all resources owned collectively for the ‘common good.’ Unfortunately, a society which spurns private property – and hands resources over to government planners instead – often learns the terrible lessons of central planning and the tragedy of the commons (i.e., commonly held resources will be plundered to extinction).
If society spurns allowing private ownership of resources, it must find some other means to prevent the tragedy of the commons and to allocate goods. Historically, the means chosen is the use of force and central planning. Throughout history, most of mankind has been divided into a hierarchical system of masters and slaves with some gradations between the two extremes. The masters (pharaohs, emperors, kings, sultans, warlords, etc.) devised complex rules-based systems for resource distribution that were decided by a small number of people and not by markets. And ultimately, these plans depended upon pure terror for enforcement. But this so-called solution to the problem of scarcity – restricting the people’s liberty through the use of force – does not work.

This post was published at Ludwig von Mises Institute on NOVEMBER 2, 2015.

Partner Of “China’s Carl Icahn” Executed By Local Police After Attempting Escape Following Insider Trading Charges

The name of Shanghai’s Xu Xiang is not a household name in US financial circles. It is in China.
According to a recent profile in Want China Times (as of May 2014) Xiang, who heads the Shanghai-based Zexi Investment (founded in 2009 and since then generating literally impossible returns) is not only one of the richest Chinese investors, but has been called anything from China’s “Warren Buffett” to China’s “Carl Icahn.” He also has a reputation of being an activist within China’s stock market. To wit from May 2014:
The major players in China’s capital market, including equity fund and insurance asset management firms, are gearing up to secure seats as members on the boards of directors in listed companies in a bid to influence these firms to give dividends, putting profit into their own pockets, according to Guangzhou’s Time Weekly. According to the newspaper Xu Xiang, head of Shanghai-based Zexi Investment, is one among these market players in China. Xu, from Ningbo in eastern China’s Zhejiang province, built his wealth from scratch through investments in the secondary capital market. Xu set up Zexi Investment in 2010 and gained a good reputation as a profit maker in the Chinese equity fund market. The fund is reported to currently manage more than 10 billion yuan (US$1.6 billion).
A statistics report on the Shanghai stock exchange revealed that Zexi Investment has raised its stakes in several listed companies, including in conglomerate Ningbo United Group, since the beginning of this year. Xu’s investments have made Zexi more visible in the Chinese capital market.

This post was published at Zero Hedge on 11/01/2015 –.

Your Own Personal Inflation Rate

‘Inflation is as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.’
– Ronald Reagan
‘To me, a wise and humane policy is occasionally to let inflation rise even when inflation is running above target.’
– Janet Yellen
The US economy grew at a 1.5% inflation-adjusted rate in the third quarter, or so said the Bureau of Economic Analysis in its first GDP estimate last week. The number is subject to revision and will probably change. Based on recent experience, revisions could easily push it below 1% or above 2%. Since this is ‘real’ GDP, it also depends on inflation numbers. BEA doesn’t use the familiar Consumer Price Index for this purpose – CPI comes from an entirely different agency, the Bureau of Labor Statistics.
You can get quite different real GDP growth numbers if you use the inflation figures calculated by the Dallas Federal Reserve Bank. The Dallas Fed developed something called trimmed PCE, the use of which would make real 3Q GDP growth 1.1%. Or, if we all decided that the calculation of ‘median CPI’ performed by the Cleveland Fed was what we should use, then GDP growth was about 0.3%. (Which is of course why we don’t use it!)

This post was published at Mauldin Economics on NOVEMBER 1, 2015.

JPM Quants: The Catalyst For The October Rally Is Over; “All 4 Sectors Are Currently Long Equities”

When it comes to predicting the market’s turbulent swings over the late summer, JPM’s quant team has been absolutely phenomenal, with virtually every single call being absolutely spot on. We previously documented the best exampled as follows:
August 21, just before the Black Monday flash crash: “Why The Market Is Crashing Into The Close: JPM Explains“ August 27: “JPM Head Quant Warns Second Market Crash May Be Imminent: Violent Selling Could Return On Thursday“ September 3, before the next leg lower in stocks: “Home JPM Head Quant Is Back With New Warning: “Only Half The Selling Is Done; Expect More Downside“” But it was his final call, that from the end of September, that may have been the most monumental. We flagged it on September 24 as follows: “Bears Beware, JPM’s Head Quant Just Flipped To Bullish: “The Technical Buying Begins” and we noted that, according to JPM’s calculations, quants are about to unleash a major buying spree.

This post was published at Zero Hedge on 11/01/2015.

The Credibility Of Andrew Maguire

Andrew Maguire has been a controversial figure in the gold/silver world ever since he blew the whistle on JP Morgan’s silver manipulation. The information provided by Maguire to GATA was presented by GATA’s Bill Murphy at a hearing held by the CFTC on the precious metals market manipulation in March 2010. Maguire had originally sent an email to someone in the CFTC enforcement which detailed how the precious metals would be attacked two days later when the non-farm payroll report was released. Maguire wrote to the CFTC after the attack:
It is common knowledge here in London among the metals traders that it is JPM’s intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC’s allowing by your own definition an illegal concentrated and manipulative position to continue.
GATA has detailed the entire event in this article: LINK.
After Bill Murphy’s testimony at the CFTC’s hearing, Jeffrey Christian – a known shill for the bullion banks – publicly slashed and burned Maguire’s reputation with highly slanderous assertions about Maguire’s background and experience. Christian’s remarks were intentionally deceitful, but the damage was done. The fraudulent attack on Maguire opened the door of doubt in the minds of many about the credibility of market intel delivered by Maguire to the public via venues like Eric King’s King World News.

This post was published at Investment Research Dynamics on November 2, 2015.

US, Japanese Stocks Extend Losses; Turkish Lira Soars Most In 7 Years As Gold Mini-Flash-Crashes

Despite the world seemingly exuberant at Turkey’s fraud election, sparking the biggest rally in the Lira since Nov 2008 (confirming once again that “markets love totalitarian governments,”) it appears the centrally-planned machinations of the US equity markets are not living up to their promises of wealth for all (and rate-hikes don’t matter). US and Japanese equity futures are opening notably lower, erasing all of the post-Fed exuberance with Dow Futs down over 200 points from pre-BoJ hope highs. Finally, gold futures were hammered lower at the Asia open (on heavy volume) only to rip back to practically unchanged.

This post was published at Zero Hedge on 11/01/2015.

PBOC Fixes Chinese Yuan Higher By 0.54%, Most Since 2005

On Friday morning, after the biggest surge in the onshore Yuan in a decade, we explained it as follows: “capital controls are to some extent counterintuitive. That is, the stricter the capital controls, the more people want to move their money out of the country. Here’s how we put it last month: ‘What better way to spark a capital exodus than with very vocal, and very effective capital controls. Just look at Greece.’
Indeed, China will likely need to completely liberalize the capital account in the coming years in order to pacify the IMF which is poised to throw Beijing a bone and grant its RMB SDR bid. Inclusion could lead to some $500 billion in reserve demand. That helps to explain why overnight, the yuan soared the most in a decade after China moved to loosen capital controls with a trial program in the Shanghai free trade zone that would allow domestic individuals to directly buy overseas assets. The move marks another step towards capital account convertibility, thus bolstering Beijing’s bid for yuan internationalization.
Ironically, this did absolutely nothing to ease the local population’s concerns that capital outflows are accelerating, and certainly did nothing at all to help the Chinese export economy, which as we saw from the overnight PMI numbers, deteriorated once more to new cycle lows.

This post was published at Zero Hedge on 11/01/2015 –.

Greek Banks Need 14 Bn Recapitalization Following Latest Stress-Free Tests

Greek banks did much better than expected in the latest ECB stress test (undoubtedly stress-free). The ECB’s adverse scenario shows Greek banks only underfunded to the tune of 14 Billion.
A scramble is now underway to raise that amount and Stabilize the Greek Banking Sector.
Greece’s four big banks will this week finalise recapitalisation plans to raise 14bn the European Central Bank says they require, in the latest move to stabilise the Greek economy.
After a weekend in which the ECB announced the result of stress tests for the banks and the Greek parliament passed legislation paving the way for the state to inject more funds into the sector, a senior Greek banker said the banks’ needs were manageable, but stressed that time was short.

This post was published at Global Economic Analysis on Sunday, November 01, 2015.

$20 Trillion In Government Bonds Yield Under 1%: The Stunning Facts How We Got There

Last week we wrote that in the latest bout of European NIRP panic, “Over Half Of European 2-Year Bonds Trade At Record Negative Yields” with Italy now paid to issue debt, with a follow-up in which even very serious banks are now looking at the Eurozone’s record 2.6 trillion in negative-yielding debt, and finding that the lower yields drop, the greater the savings rates across the continent…

This post was published at Zero Hedge on 11/01/2015 –.

1/11/15: Digital City Index: What’s Up With Dublin?..

Digital City Index ranks European cities in terms of their ecosystem ability to sustain digital entrepreneurship.
Full data and rankings are accessible here:While one can be sceptical in looking at the data, there are several things jumping out when it comes to Dublin ranking.
Overall ranking for the city is 8th. Not too bad, but not too great either, especially given the hoopla usually accompanies our self promotion as the world’s leading tech hub. In Access to Capital terms, we rank 11th. Not great either. In Business Environment – 17th – oh dear… In Digital Infrastructure – 27th… no comment necessary In Skills – 10th. Again, respectable, but surely not exactly world’s most educated workforce thingy…

This post was published at True Economics on Sunday, November 1, 2015.