Posted by CrabbyCon on May 4, 2009 · Leave a Comment
Oh the irony, I am seriously trying to laugh these days but it is becoming more difficult to do as these things that one would never think were possible are all coming to pass… If we want to root out the tax cheats why don’t we take a look and investigate Obama’s cabinet first?
President Obama announced Monday a plan to prevent U.S. companies using offshore banks to deferr tax payments, saying that the effort to “shelter” money creates an unfair advantage to U.S. companies and amounts to evasion.
There is a legitimate reason that corporations use tax shelters/tax havens and this has everything to do with the economic policies that have been implemented by government officials who have never worked in a corporation or taken business or economics classes. The United States is the only country that requires double taxation on profits. Not only do you have to pay taxes from overseas operations you also get taxed again if you bring those profits back to the States. Tax shelters have been legal for a very long time and for that very reason. The company can use that money to reinvest in their overseas operations without losing additional money from the double taxation policies.
The president also called for more transparency in bank accounts held by Americans in tax havens such as the Cayman Islands.
“The way to make American businesses competitive is not to let some citizens and businesses dodge their responsibility, while ordinary Americans pick up the slack. Unfortunately, that’s exactly what we’re doing,” Obama said.
There is no responsibility dodging which is the amusing part about this statement. Technically speaking, they are responsible by paying their international taxes. This is just another power grab and a way in which their administration can use another avenue to pay off the massive amount of debt will be incurring over the years.
“If financial institutions won’t cooperate with us, we will assume that they are sheltering money in tax havens and act accordingly,” he continued.
Sounds like the beginning of another witch hunt. I feel like we may see a resurrgence of McCarthyism but this time on the other side of the aisle against all of us nasty Capitalists!
Under the plan, companies would not be able to write off domestic expenses for generating profits abroad. The goal is to reduce the incentive for U.S. companies to base all or part of their operations in other countries.
The reason that companies go overseas in the first place has everything to do with taxes that are already in place in the United States. Our corporate tax rate is the second highest in the world after Japan. Most companies like to diversify and have other means of income and more leniency with tax policy. It also gives the company an opportunity to market their products and services abroad. Companies don’t keep all of their money overseas and in tax havens – some of it is brought back over to the Stats to reinvest in home operations but much of it is kept outside the border if they plan on reinvesting that money back into it’s overseas locations. Maybe if Democrats could put their ideology aside due to economic or outside situations, they could actually do what is best for the country ~ cut corporate tax rates to bring more investment from overseas into the United States – this would resolve much of the problems and would help create jobs.
The current law, Obama said, “says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York. ”
Obama said that his plan would generate $210 billion in new taxes over 10 years and “make it easier” for companies to create jobs at home. Over a decade, $210 billion would make a modest dent in the federal deficit, expected to be $1.2 trillion in 2010.
Exactly, due to his ridiculous spend thrift policies, this is just a drop in the bucket and will wind up having more negative effects than positive.
He said the government also is hiring nearly 800 new tax agents “to detect and pursue American tax evaders abroad.”
Oh goody – more jobs that actually produce nothing but will cost those who do produce more money due to all the red tape just like Sarbanes-Oxley (SOX).
The U.S. Chamber of Commerce issued a statement saying that changing the provisions would hurt job prospects.
But why listen to the non-partisan group, the U.S. Chamber of Commerce, let’s just do whatever my socialist agenda tells me to…
This is a nightmare!
Don’t be surprised if the DOW remains up today – this is most likely those lovely limousine liberals on Wall Street who love to sucker regular people into fake rallies. Check out the trade volume before you get any ideas.
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Filed under Double Standards, Economy, Obama, Obama Administration, Socialism, Treasury, Wall Street · Tagged with Economy, Geithner, Hypocrisy, Obama, Obama Administration, Socialism, Tax Cheats, Tax Havens, Treasury
Posted by CrabbyCon on April 25, 2009 · 1 Comment
Are you getting scared yet America?
Citigroup CEO Vikram Pandit’s job security is increasingly in jeopardy as momentum grows in Washington to oust him.
With the bank stress tests wrapping up, sources tell The Post that regulators think they might have to make the bold move of removing Pandit to signal Washington is taking as hard a line with the banks as it did with General Motors when it effectively ousted GM CEO Rick Wagoner.
The talk of Pandit being dismissed comes amid speculation that a visit to Citi’s offices by Treasury Secretary Timothy Geithner a week and a half ago might have been to discuss a change at the bank’s helm. However, people familiar with the meeting said the visit was simply to conduct a checkup on the bank.
Pandit, who took over in December 2007 from the deposed Charles Prince, has voiced his commitment to breathing life into the troubled bank, and is widely seen as not being part of Citi’s problem.
However, amid criticism that Citi hasn’t moved fast enough to clean up its balance sheet and speculation that Citi may need to raise more cash amid rising writedowns from consumer debt, sources said there’s a growing sense Pandit might have to be sacrificed.
Pandit inherited the mess of Citigroup at the end of 2007 and has done a fairly decent job at getting it back on track or at least moving in the right direction. Obama should know all about inheriting messes, since that’s all he can say when he speaks about the economy – does that mean we can oust him since the economy hasn’t turned around since his election? They run a big risk by doing this of completely demolishing Citigroup and the financial system. Pandit’s strides over the past year and his business strategy going forward have helped the company, but it will take time. If they oust him before real results can be seen, we may see the collapse of this company. But then again, that may be what the government wants in order to force these institutions into nationalization.
This is so completely anti-capitalist it isn’t funny! The government should not be allowed to go over the heads of the board of directors or scare a company into making a decision that befits the government’s agenda. Who in their right mind would ever want to become the CEO of a floundering company, when the MSM has put their entire focus and scrutiny on your job performance without giving you a chance to actually enact the appropriate changes? The government and the MSM turn this into a public side show and a witch hunt – something that the Obama Administration is incredibly good at. They turn the focus off of those who really caused this mess, namely the government and some prominent democrats, and spin it into another AIG debacle. This is shameful.
Credit Suisse has caught onto this game and they’re not happy. They are in fact warning about the over-involvement of the government in private business affairs.
The chairman of Swiss banking giant Credit Suisse on Friday warned against excessive government intervention in the lending policies of banks that have been bailed out by the state.
“In view of the growing number of banks relying on government support, however, I have concerns that excessive state intervention regarding the lending policies of banks or the realignment of their structures could have negative implications for the entire sector,” said Walter Kielholz.
Many of Credit Suisse’s competitors, including local rival UBS, US banks Citigroup and Goldman Sachs, have received state funding to weather the financial crisis.
Credit Suisse has turned to private investors, but has not taken government funds.
Kielholz acknowledged during the bank’s annual general meeting that state intervention had been necessary to prevent a meltdown of the entire financial sector.
However, he said the action by governments to inject funds into banks was already giving rise to a “two-tiered banking system.”
“This has led to a distortion of competition, particularly in the refinancing market or in terms of client guarantees,” he explained.
“There is also uncertainty about how and when governments will be able to exit their stakes in these companies,” he added.
In addition, he cautioned against over-regulation of the sector, saying that while stricter supervision has been prescribed for the sector, the “benefits of additional regulation have yet to be demonstrated.”
“In particular, I believe there is a risk that these changes could be exploited as a means of ushering in protectionist measures,” he warned.
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Filed under Bailouts, Economy, Obama, Obama Administration, Socialism, Treasury, Wall Street · Tagged with Bailouts, Banking, Citigroup, Credit Suisse, Economy, Financial Institutions, Geithner, Nationalization, Obama, Obama Administration, Pandit, Socialism, Treasury, Wall Street
Posted by CrabbyCon on April 25, 2009 · Leave a Comment
The media and the Administration are already out there spinning the results of the stress tests. I wouldn’t be surprised if they say that all banks “passed.” But the real suckers would be those who invest in this “bump” in the market before another drop this summer. The banks are still not viable and many are being propped up by distortions in their books and “funny money.” If the results were great in the first place, the government would not have delayed the release of the reports. I wonder if the politicians on Capitol Hill really think we are that dumb!? Roubini, a noted economist and known as Dr. Doom, has been correct on most of his statements about the markets and about banks – he says the following:
The spin machine about the banks’ stress test is already in full motion. Some banking regulators have already served up–to The New York Times–their spin that all 19 banks that are subject to the stress test will pass it. In other words, not one will fail.
But let’s look at the actual data. The macro data for the first quarter on the three variables used in the stress tests–growth rate, unemployment rate and home-price depreciation–are already worse than those in the U.S. government baseline scenario for 2009. They are, in fact, even worse than those for the stressed scenario for 2009.
The government used assumptions for the macro variables in 2009 and 2010 that are so optimistic that the actual data for 2009 are already worse than the adverse scenario. As for some crucial variables, such as the unemployment rate–key to proper estimates of default and recovery rates for residential mortgages, commercial mortgages, credit cards, auto loans, student loans and other banks loans–the current trend shows that by the end of 2009 the unemployment rate will be higher than the average unemployment rate assumed in the more adverse scenario for 2010, not for 2009. Put plainly, the results of the stress test–even before they are published–are not worth the paper on which they are written.
Let us look at how the stress tests are done. According to the U.S. government, there are two scenarios: a more optimistic “baseline scenario” for 2009 and 2010 for the three macro variables (gross domestic product, unemployment and home prices); and a more pessimistic “alternative adverse scenario.”
The baseline scenario assumes–based on the average of the forecasts by the consensus of macro forecasters at the time when the stress tests were announced–that GDP growth will be -2.1% in 2009 and 2% in 2010; that the unemployment rate will average 8.4% in 2009 and 8.8% in 2010; and that home prices will fall 14% in 2009 and 4% in 2010. In the alternative adverse scenario, GDP growth is assumed to be -3.3% in 2009 and 0.5% in 2010; the unemployment rate is assumed to average 8.9% in 2009 and 10.3% in 2010; and home prices are assumed to fall 20% in 2009 and 7% in 2010.
The description provided by the government of the stress test also shows graphs–but not actual figures–for the quarterly behavior of the three macro variables in 2009 and 2010 for both scenarios. Based on these quarterly graphs, in the first quarter of 2009 the unemployment rate would approximately average 7.7% in the baseline scenario and 7.8% in the adverse scenario; the GDP growth rate would be -1.9% in the baseline scenario and -2.1 in the adverse scenario; and home prices would fall 4% in the baseline scenario and by 7% in the adverse scenario.
How do these scenarios actually stack against actual figures for the first quarter of 2009, with current consensus forecasts and with current likely paths for these macro variables?
Read the rest of the bad news at Forbes…
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Filed under Bailouts, Economy, Media, Obama Administration, Treasury, Wall Street · Tagged with Bailouts, Banks, Cover-up, Economy, Insolvency, Media, Obama Administration, Roubini, Spin, Stress Tests, Treasury, Viability, Wall Street
Posted by CrabbyCon on April 23, 2009 · 2 Comments
If I were to guess I would assume it was his patterned ”ums” and “uhs” that probably put Lawrence to sleep. This is certainly uncanny since Good Old Larry is Obama’s National Financial Adviser ~ No wonder we are in this mess!
More from the photo gallery of today’s meeting.
Wasn’t Obama supposed to be the great orator? I guess not to Larry. But if you are having trouble sleeping lately, there will be another prime time press conferenceSnooze Fest on Wednesday by “The One” – what a caring president – it saves me from paying an arm and a leg on Ambien.
President Barack Obama will hold his third prime-time news conference on Wednesday, his 100th day in office.
Obama will answer questions from reporters in the East Room beginning at 8 p.m. EDT, the White House said.
Officials insist that holding the news conference on the 100th day of Obama’s presidency has no special significance. But the 100th day has become one of those milestones by which a new president and his accomplishments are judged.
Just another ego-filled day for Obama! Hope the Teleprompter is ready for another close-up!
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Filed under Budget, Double Standards, Economy, National Security, Obama, Obama Administration, Teleprompter, Treasury, War on Terror · Tagged with Asleep, Budget, Economy, Finance, Larry Summers, Obama, Obama Administration, Snooze Fest, Telemprompter, Treasury
