2013년 11월 28일 목요일

About 'bad debt recovered'|...to have a policy change. There's still a distinction between the good guys and the bad guys. The good guys happen to be governments the US probably...







About 'bad debt recovered'|...to have a policy change. There's still a distinction between the good guys and the bad guys. The good guys happen to be governments the US probably...








A               number               of               large               US               corporations               have               been               moving               their               corporate               registration               and               headquarters               to               Switzerland               from               the               Caribbean               and               Delaware               recently.

This               is               profoundly               bad               sign               of               something               being               very               wrong               for               business               in               the               USA               being               ignored               by               Washington,               D.C.

Then               comes               the               news               that               the               rats               are               jumping               ship               over               at               Citicorp               and               another               danger               sign               is               being               ignored.

The               US               government               has               gone               into               theatric               hysterics               for               tarp               financing               and               automobile               industry               bail               out               legislation               ignoring               quieter               more               dangerous               signs               in               the               economy.

Originally               the               first               company               to               move               it's               corporate               organization               to               Switzerland               in               the               last               few               years               was               the               Philip               Morris               International               unit               from               Atria               which               also               spun               off               Kraft               Foods               a               few               years               before               .

More               recently               a               number               of               other               US               corporations               have               started               moving               to               Switzerland.

Why?

That               question               lingered               a               while               and               then               found               the               answer               began               to               appear               out               of               the               mist.

The               reason               why               is               a               combination               of               Sarbanes               Oxley               with               an               emphasis               on               the               Marked               to               Market               accounting               rule.

A               paper               slip               move               across               the               Atlantic               and               into               the               Alps               can               save               many               a               good               solid               company               from               the               unnecessary               accounting               pressure               of               having               to               value               its               assets               at               the               steepest               decline               shocks               since               the               great               depression.

If               this               is               the               reason               for               the               Swiss               migration,               the               whole               lot               of               American               corporations               should               also               consider               making               the               move.

The               same               sort               of               thing               happened               years               ago               when               virtually               all               of               American               shipping               companies               re-registered               their               ships               in               Liberia               or               Panama,               It               all               had               to               do               with               some               underlying               regulatory               parameters               to               be               avoided               by               keeping               registration               in               the               USA.

The               United               States               never               really               recovered               the               merchant               marine               forces               it               once               had               after               creating               the               regulatory               rational               to               cause               the               whole               fleet               to               re-register.
               What               congress               and               the               president               and               maybe               also               the               president               to               be               are               missing               is               the               simple               fact               that               a               number               of               corporations               will               just               appear               to               be               bankrupt               just               because               of               the               marked               to               market               rule               when               they               are               completely               viable.

The               whole               idea               that               a               company               is               insolvent               just               because               underlying               assets               are               temporary               valued               in               accounting               statements               at               market               value               when               below               the               cost               of               money               borrowed               to               finance               the               acquisition               is               the               equivalent               of               destroying               most               of               the               largest               most               successful               corporations               in               US               history               over               many               years               for               the               sake               of               some               really               stupid               notion               of               what               accounting               "transparency"               means               as               an               ethical               and               moral               standard.

This               is               a               good               reason               for               banks               to               brace               for               worse               times               to               come               by               not               lending               more               money.

Congress               has               not               fixed               the               problem               yet               because               its               know               nothing               by               politics               members               love               the               handiwork               of               their               legislation               because               it               has               all               the               right               sounding               buzz               words               incorporated               including               "Transparency".

It               would               be               absurd               for               anyone               with               a               mortgage               to               be               forced               to               mark               their               home               value               to               market               values               just               because               the               cost               of               their               mortgage               exceeds               the               the               market               value               of               the               home.

That               is               a               great               way               to               produce               a               national               bankruptcy.

Best               thing               happening               for               everyone               is               for               smart               agile               corporations               to               flee               as               fast               as               possible               to               Switzerland               if               that               helps               prevent               stupid               accounting               rules               from               destroying               their               businesses.
               The               announcements               from               citigroup               of               rats               leaving               ship               and               asset               sales               immediately               brings               to               mind               marked               to               market               revelations               coming               there.

Citibank               could               be               sitting               on               a               50               billion               dollar               short               fall               because               of               the               way               accounting               is               now               required?

It               is               just               a               vague               suspicion               but               with               plenty               of               evidence               of               asset               devaluations               and               real               deflationary               pressures               that               make               most               banks               seem               insolvent               if               loans               are               forced               to               be               written               off               or               written               down               just               because               of               temporary               deflation/               devaluation.

This               is               a               big               warning               sign               completely               ignored               even               with               the               migration               to               Switzerland               apparently               catching               on.

Imagine               the               top               500               US               corporations               suddenly               headquartered               in               Switzerland               and               not               in               NYC               or               Chicago.

That               is               the               sort               of               Globalization               that               is               going               to               be               very               beneficial               to               the               US               national               tax               base.

The               business               accounting               becomes               more               opaque               for               those               companies               and               it               could               mean               their               survival               over               rivals               staying               based               in               the               US               and               the               Caribbean.
               Another               danger               sign               completely               ignored               continues               to               be               the               large               US               dollar               cash               holdings               of               sovereign               wealth               funds               and               national               banks.

Having               foreign               debt               has               never               been               the               problem               because               of               Us               currency               inflation.

In               a               perverse               sort               of               way               the               US               government               might               be               better               off               if               foreigners               cashed               out               their               dollars               and               bought               gold,               other               commodities,               or               virtually               anything               else               putting               dollar               currency               into               circulation.

This               is               a               big               point               being               missed.

Foreign               governments               are               actually               loosing               money               based               on               holding               US               dollar               reserves               as               they               are               loosing               purchasing               power               will               do               so               soon               as               the               US               government               is               being               forced               to               print               new               dollars               to               circulate               because               of               the               foreign               irrational               hoarding.

It               is               beyond               the               Us               government's               ability               to               stabilize               all               the               countries               of               the               world               so               that               US               dollars               are               the               safe               refuge               of               choice.

Gold               is               way               better               for               silly               hoarding               if               that               is               what               foreigners               want               to               do.

Everyone               excited               by               gold               doubling               in               value               in               X               number               of               years               is               missing               the               longer               term               charts               showing               it               is               an               even               poorer               long               term               investment               performer               than               real               estate,               fine               art               and               stocks.

It               would               be               better               to               have               China               selling               off               its               US               dollar               treasury               bonds               in               exchange               for               over               priced               gold               if               they               want               to               sit               on               it               and               feel               rich.

That               would               really               be               a               stupid               luxury               purchase.
               Let               them               buy               Gold.

Let               them               eat               it               too               and               put               the               dollars               into               circulation               for               orders               for               US               products               directly               or               after               the               dollar               purchases.

The               simple               way               to               encourage               dollars               into               circulation               and               out               of               treasury               bonds               one               might               think               are               low               yields               but               the               better               way               is               to               give               foreign               purchasers               a               spending               bonus               of               as               much               as               20%               which               gives               them               added               wealth               for               having               traded               with               the               US.

The               bonus               would               only               apply               to               a               point               in               time               when               the               dollars               would               become               worth               less               than               a               dollar               to               encourage               less               trading               and               more               spending               now               when               it               is               needed               most.

There               is               no               reason               the               US               Treasury               cannot               work               out               such               a               plan               to               reduce               government               debt               and               put               dollars               into               international               orders               for               US               products,
               The               US               should               have               zero               capital               gains               taxes               and               overall               taxes               as               low               as               the               lowest               the               industrial               world               has               to               offer               so               investment               capital               goes               into               US               banking.

The               whole               deleveraging               thesis               is               based               on               the               idea               that               the               US               is               a               debtor               nation               because               of               foreigners               holding               nothing               more               than               unused               trade               credits               .

It               is               true               there               was               too               much               leverage               being               used               and               too               many               derivatives               of               derivatives               and               hypothocations               of               hypothocations               of               capital               and               condominiums               kitchens               in               condominium               apartments.

De               leveraging               is               over               played               rhetoric               that               Washington               is               too               ignorant               to               see               as               the               extrapolation               that               it               is.

Congress               and               the               President               seem               to               think               that               the               way               to               make               real               estate               solid               is               to               somehow               stop               valuations               from               falling               in               the               market               place               and               these               same               people               are               talking               about               the               need               for               de               leveraging.

Home               prices               are               best               if               they               fall               to               levels               where               actual               buyers               can               afford               to               buy               homes               not               best.

Homes               naturally               depreciate               and               high               real               estate               costs               do               not               help               with               economic               development               as               much               as               lower               prices.

Those               calling               for               slow               ten               year               de               leveraging               want               their               cake               and               to               eat               it               too.

Collectivist               sympathy               for               those               who               paid               too               much               for               homes               and               for               banks               that               were               stupid               enough               to               loan               too               much               are               really               calling               for               socialized               housing.

The               government               lowers               interest               rates               to               banks               to               zero               percent               interest               and               still               banks               are               not               refinancing?

That               is               a               sign               the               country               needs               new               banks               with               access               to               that               zero               percent               fed               money.
               Washington               has               no               memory               of               what               banking               originally               was               in               this               country.

The               bank               of               Morgan               like               many               others               was               founded               on               financing               international               shipping               trade               in               what               today               we               use               the               buzz               word               "globalization"               to               signify               today               as               if               it               is               new               and               special.

The               US               Treasury               is               the               main               agency               that               needs               to               leverage               if               any               institution               does               by               getting               foreigners               out               of               lending               it               money               and               spending               it               now.

No               one               see               it.

The               US               leads               the               world               economy               and               we               hear               from               the               financial               news               media               is               the               need               for               China               to               take               control               which               is               just               pure               nonsense               with               everyone               in               Washington               dc               nodding               their               heads               along               with               the               stupid               drum               beat               from               the               press.
               Next               we               hear               about               more               special               stimulus               programs               with               give               away               money               freshly               printed               and               the               status               quo               which               really               means               US               consumption               of               foreign               goods               on               an               immediate               level               and               useless               digging               holes               and               filling               them               work               for               Obama's               big               public               works               programs               nonsense.

That               money               will               be               tightly               controlled               and               go               to               the               politically               worthy               and               will               only               re-inflate               a               small               part               of               the               economy               that               is               not               really               suffering               anyway               with               existing               national               gas               taxes               already               paying               for               maintenance               as               one               example.
               The               economy               in               the               USA               booms               when               we               have               a               gold               rush               effect.

Gold               rush               effects               like               the               INTERNET               boom               and               the               housing               boom               seem               to               do               the               most               for               most               participants               in               the               economy               always               with               an               eventual               fall               out               of               a               few               winners               and               a               lot               of               looses               but               these               seem               to               be               better               as               an               alternative               to               planning               the               economy,
               One               really               good               idea               that               would               make               for               a               much               better               US               and               world               economy               would               be               for               the               US               congress               to               pass               a               different               kind               of               stimulus               program               such               as               one               offering               the               Russians               a               trillion               dollars               in               US               dollars               for               it's               Eastern               Coastal               Lands.

Another               way               would               be               to               offer               American               Citizens               the               opportunity               to               buy               US               own               land               in               the               west               in               a               big               auction               and               allow               development               of               all               sorts               on               that               land               .

The               environmental               stranglehold               in               the               US               is               the               reason               the               Russian               Frontier               might               be               a               better               investment.

Countries               in               Africa               could               be               offered               big               dollar               outlays               to               be               recolonized               for               US               redevelopment               and               Cuba               too.

These               kinds               of               foreign               outlays               of               US               dollars               for               value               might               be               better               than               blowing               money               on               fixing               highways               that               only               need               regular               maintenance.
               Washington               is               as               ignorant               of               what               the               warning               signs               mean               as               they               are               to               creative               solutions.

We               always               had               a               boom               and               bust               economy.

That               is               not               going               to               change.

There               is               no               evidence               to               support               the               idea               that               big               government               spending               on               band               aid               fix               its               of               the               economy               is               going               to               net               a               big               new               boom.

People               in               Washington               are               uniformly               power               brokers               not               entrepreneurs               who               will               make               a               difference.

Expanding               the               area               of               US               land               area               by               offering               money               for               the               next               Alaska               purchase               or               Louisiana               purchase               would               be               one               of               the               best               ever               US               stimulus               packages.

Less               regulation               and               lower               taxes               can               bring               on               a               boom               otherwise               otherwise               why               not               just               have               Congress               pass               a               leveraging               gone               bust               and               stay               busted               program               which               is               what               they               seem               to               be               doing?
               Opportunity               happens               when               government               lets               it               happen               or               in               spite               of               government.

The               American               People               need               to               decide               if               they               want               control               freaks               rewarding               their               friends               with               the               special               opportunities               or               open               opportunity               for               everyone               and               anyone.

The               American               people               have               to               decide               if               they               want               the               right               to               have               a               raw               economic               boom               or               a               controlled               survival.

Economic               busts               are               the               cost               of               booming               but               history               shows               that               successive               booms               and               busts               bring               the               country               to               a               higher               level               of               economic               prosperity               when               the               cycle               is               unimpeded.






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