How does an economic crisis work? David Harvey reasons that crisis is an intrinsic part of capitalism itself. Harvey discussed his views in a talk at the Royal Society for the Encouragement of Arts, Manufactures and Commerce.
How well dow you understand financial markets? In the post-Brexit haze, lots of Remain voters are citing the falling pound and the volatile FTSE index as signs of disaster. Is the UK in the mire? Are they right? Helping you make sense of it all is Robert Shiller. He was one of the few voices who foresaw the housing bubble burst 2008. This is the first lecture from his series of talks at Yale University.
The post-Brexit UK was, as the Daily Mirror put it with a front-page photo of a large black hole, a leap into the unknown. Where the Mirror saw danger, chaos and, if the country voted Leave and thereby fell into that hole, death for all, others saw adventure and opportunity. Who embodies the spirt of rosy-fingered dawns over new horizons better than Sir Richard Branson, founder of the Virgin brand and the man who signed the Sex Pistols – those working-class dupe-proof advocates for Anarchy in the UK and a rejection of the tired, old Establishment.
Branson opines axiomatically on his company’s website, “In order to think outside the box, avoid getting into one. There is no need to accept accepted thinking. Remember, it was once accepted that the world was flat.”
“If you don’t let anybody build a box around you, then you will never have to think outside of the box. Basically, in order to think outside the box, avoid getting into one.
“But if you do find yourself getting boxed in, think to yourself: I will only think outside the box when the box is empty. Get everything you can out of a situation, but keep an eye out for the next opportunity.”
The box was the European Union. The vote to get out of it was a vote for a bigger planet view that doesn’t end where the EU border lies. But Branson is scared. He is not eyeing the next opportunity. Sky News reports that this knight of the realm “has held secret talks with Theresa May in an effort to boost his plea for a second referendum on the UK’s membership of the European Union (EU).”
In a blog-post published on 27 June, Sir Richard wrote:
“The vast majority of MPs voted in by the electorate want the UK to stay part of Europe. In light of the misrepresentations of the Leave campaign, Parliament should reject the results of this non-binding referendum as Nicola Sturgeon has announced she will do in Scotland’s Parliament.”
How’s that for thinking outside the box? Ignore the anti-Establishment risk-takers, the people who voted for change, and side with the elite who want to snuff out democracy. ‘Safety-first,’ says box-ticking bureaucratic Branson. Big business must take priority over independence and “screwing it, just doing it”, something he advises we do in one of his “lessons for life”. Richard is now of the “screw you, the multi-nationals and connected are in charge”.
To paraphrase the Sex Pistols, We Do Mind the Bollocks. We voted against it.
To Chicago in search of nominative determinism. We find Larry Gambles. Mr Gambles just won a $1,050,000 Lucky Day Lotto jackpot prize. He says: “Nine years ago, I won $50,000 playing the numbers from the jerseys of my high school basketball team. I’ve been playing the same numbers ever since. I can’t believe they paid off again.”
Wondering what to study at college to earn a living when they spit you out? Mark J Perry has news on how to use your time:
a. A 2-year degree from the Community College of Denver in Dental Hygiene has an ROI of $612,991, which are the additional earnings a graduate can expect to earn over 20 years compared to a high school graduate. Average first-year wages are about $61,000 and the cost of the degree is less than $16,000.
b. A 4-year degree from the University of Colorado-Boulder in Women’s Studies has an ROI of only $173,545, at a cost of more than $92,000 and estimated first-year earnings of only $23,461.
John Oliver is the news king of talk telly. But unlike Oprah, he’s not giving away free cars – he’s burning cash! The host of HBO’s Last Week Tonight is a hero:
“Any idiot can get into it, and I can prove that to you, because I’m an idiot and I started a debt buying company and it was disturbingly easy,” Oliver said. John Oliver forgave nearly $15 million of medical debt with a tap of a giant red button on Sunday night.
The Indy says it was #15m
No. Wrong. It was cracking TV. But he did not do as CNN said he did. He purchased his lot on the secondary market at a huge discount.
Last Week Tonight spent about $50 to create a debt-acquisition company in Mississippi. The corporation’s name is Central Asset Recovery Professionals Inc – also known as Carp. According to Oliver, soon after its creation, Carp was offered a portfolio of medical debt worth $14,922,261.76 at a cost of “less than half a cent on a dollar, which is less than $60,000”.
Not $15m, then. And at $60,000 it was a marketing and PR bargain.
In March 2005 Chelsea secured the legal rights to Jose Mourinho’s trademark for 20 years. This means that should Manchester United hire Mourinho, a move that seems as certain as Katie Price sleeping on her back, the Red Devils will be unable to stick their new manager’s name on such items as teddy bears, aftershave, computer games and all manner of tat. But how important is the Jose moniker?
In an “exclusive”, the Times says Chelsea’s ownership of the Mourinho trademark “will not delay his appointment at Old Trafford”.
Or as the Mirror puts it: “Jose Mourinho’s appointment as Manchester Untied manager is being delayed because Chelsea still own his signature.”
Not so, say the Times, which states: “Until recently Mourinho’s former employers [Chelsea] also owned the rights to reproduce his signature, but that ten-year trademark expired earlier this year…”
The Mirror then says United “face a six-figure bill to secure the rights to his signature and name”.
The Times says Chelsea could demand “several million pounds”.
The Sun says United will have to “£1million -plus” to use the name Jose Mourinho on merchandise.
The Mirror – not an exclusive but not all correct, either
The Mail says the 20-year licence Jose signed with Chelsea in 2005 expires in, er, 2013. That Mail says it’s between 2013 and 2015. The Times says it’s 2025.
When Oxfam began to bemoan ‘tax avoidance’, it was inevitable some would cast their eyes on the charity’s tax affairs. Oxfam is hot on everyone paying there ‘fair share’, having published such articles as:
As does the Institute of Economic Affairs’ Richard Teacher, who writes:
While it is commonly assumed that charities are exempt from tax, that is not actually the case. Although they are exempt from tax on certain types of income (from donations, rent or investments), the profits they make on business or “trading” operations are taxable, except in specific circumstances. By setting out the very limited circumstances in which trading profits are exempt (see section 524 of the Income Taxes Act 2007), Parliament made it very clear that it intends charities’ other business income to be taxable.
The reaction of Oxfam, and most of the other charities, has been to run their business operations through a separate company. That company would be taxable on its profits, but it donates all its profits to its parent charity through the “Gift Aid” scheme, which exempts them from tax.
This fits the standard definition of tax avoidance – an artificial structure (separating out some of the charity’s activities into a separate legal entity) that gives it a tax advantage.
Of course I do not think there is anything wrong with Oxfam doing this; like all good tax avoidance it is perfectly legal and it is an ingenious way to escape a tax liability. But should Oxfam really be criticising other businesses for avoiding taxes when it does just that with its own?
On Yahoo! news (via Press release) of student loans and student debt:
Eight in 10 U.S. adults with student loans (81 percent) say they made financial or personal sacrifices because of the amount of their loans. Half (50 percent) say they delayed contributions to retirement accounts, a 22 percent jump from 2013, when 41 percent delayed saving for retirement. An increasing number of Americans are working a second job as a result of their monthly loan payments, with 46 percent in the current survey saying they’re moonlighting, a 48 percent increase from the 31 percent who did so in 2013. These are among the latest findings of a new telephone survey of 1,005 U.S. adults conducted in March by Harris Poll on behalf of the American Institute of CPAs.
As Tim Worstall, often of this site, puts it: “Presumably it would be better if everyone had to struggle with their tax bills to pay for the university educations of other people?”
Let’s bemoan the state of education that allows the Daily Mail’s Julian Robinson to miss up his seas:
A luxury Mediterranean winery that produces Sir Cliff Richard’s own brand of plonk has been put on the market – for more than £7.5million. Quinta do Miradouro and neighbouring winery Adega do Cantor in Albufeira in Portugal’s Algarve are up for grabs after 15 years of producing the singer’s wine, Vida and Onda Nova.
Anyone keen on inspecting the place should now that The Algarve is on the Atlantic Ocean.
How clueless and lacking in direction is the Left? Get this from Polly Tonybee in the Guardian. She’s talking about off-shore tax idylls, like the British Virgin Islands and Jersey:
Today Cameron’s promise fell far short of that genuine transparency. He needs to get tough with the treasure islands and follow Charles de Gaulle’s example. When Monaco refused a tax measure he requested, he forced them to surrender by surrounding the kingdom with soldiers and turning off their water supply.
And you still wonder why the colonialists on the Left all loved Tony Blair?
You might not like David Cameron, but anyone sane should know that the fuss over his tax affairs is nonsense. The business pages of the Press – and the BBC’s own Money Box show – is full of tips on how to pay less tax and tax plan. In this video, the BBC speaks to tax expert James Quarmby. It slowly dawns on the financially illiterate BBC journalist that her big story is hollow:
Up the tofu mountain we trudge to Highgate, where James Atherton is looking to rent out his toilet. James owns a standalone bog inside a block of flats at the bottom of Highgate West Hill. He tells the Camden New Journal:
““The bus drivers in Highgate don’t have a toilet. I thought they might be interested in buying it, or maybe three of them could get together and rent it.”
Instead of pissing on Parliament Hill Fields, drivers will spend a penny £3,000 to slash all over James’s plumbed potty. He then puns:
“I hope they don’t shut the public toilets in Pond Square because they are needed but it would be good news for me in a business sense.”
Says one local: “It’d make an ideal starter home.”
More tax illiteracy in the Guardian, which has seen David Cameron’s tax return:
It’s not all hardship, though. The prime minister’s own party supports him where necessary, the returns reveal. Expenses met by the Conservative party have varied between £5,105 and £13,149, which have been declared as taxable benefits. They cover travel, clothes and other associated expenses for Cameron and his wife.
When the PM next berates Jeremy Corbyn over a shabby suit, the Labour leader will be able to reply that, unlike Cameron, he isn’t receiving a taxpayer subsidy for it.
No. He paid tax on his work clothes. Sheesh!
In other news, his m other didn’t fancy leaving her kids with big inheritance tax bill. Nothing illegal.
Big news in the Guardian on David Cameron’s tax affairs:
David Cameron’s father sought legal advice on best tax havens
Did Ian Cameron, for it is he, seek advice from the same experts who advise the, er, Guardian? And isn’t seeking legal advice entirely sensible? We might not like schemes designed to cut tax bills, see them as “morally wrong” (source: Da. Cameron), but when did trying to stay on the right side of the law become a “revelation”?
In other news: corruption, Russian names, Chinese bigwigs, Middle Eastern despots and nutzoid amounts of cash squirrelled away in moves facilitated by London-based companies.
Ten faces on the Mirror’s cover. Simon Cowell (telly), Mark Thatcher (lost), El Chapo (pharmaceuticals), the Duchess of Windsor (choppers), Nick Faldo (Sir), Paul Burrell (ma’am), Willian (Chelsea), Jackie Chan (film), Andy Cole (Manchester United) and David Cameron (monster raving looney). All are part of the paper’s story on the Panama Papers, the massive haul of leaked documents that told us – shock of shocks – rich people don’t like paying tax.
You could add, of course, that poor people don’t much like paying them, either. But the poor don’t have link to off-shore tax havens. So they’re not news. And, indeed, you might wonder why these people are news because as early as paragraph two we’re told, “there is no suggestion of any illegality.”
Is this, then, a moral story? If it is, are we to suppose that these people are not allowed a private life? And if David Cameron is now “Dodgy Dave” because his late father Ian “pumped cash into tax haven” is Ed Miliband still Ed The Red, the son of a dead Marxist who”hated Britain”.”It’s hateful when you have your father targeted in that way, traduced in that way. There is no question about that,” said David Miliband, quoted in the Mirror. The paper called the Mail’s “smearing” of the dead man a “disgrace”. Is that still the case?
No. Because this is about money. We want to bash the rich, blame them for hurting the country. But there’s that pesky thing of nothing being illegal about any of it. It’s all legal. So can it be immoral to invest your money overseas? Labour MP Jess Phillips, quoted in the Express, says “the sins of Daddy Cameron were not illegal but they were utterly disgusting”.
Sins. Who made her a priest? Why bring god into it? She sounds so small-minded and provincial. Isn’t her job to come up with ideas for making an economy the rich would want to invest in? And can we move on about the Panama Papers being about tax avoidance. Too dull. We want to read about corruption. That’s the juicy stuff.
You’ve heard news of the Panama Papers. The Guardian is hot for them:
In the files we have found evidence of Russian banks providing slush funds for President Vladimir Putin’s inner circle; assets belonging to 12 country leaders, including the leaders of Iceland, Pakistan and Ukraine; companies connected to more than 140 senior politicians, their friends and relatives, and to some 22 people subject to sanctions for supporting regimes in North Korea, Syria, Russia and Zimbabwe; the proceeds of crimes, including Britain’s infamous Brink’s-Mat gold robbery; and enough art hidden in private collections to fill a public gallery.
Can it be that the corrupt are corrupt? As the Guardian studiously ignores its own off-shore tax arrangements, the Mirror leads with David’s Cameron’s link to the Panama Papers. It asks: “So, do you STILL have family money stashed in a secret offshore tax haven, Prime Minister?” To which you might asks, “Does the Mirror have any investigative journalists or is it all clickbait?”
Before more on Cameron, a few words on the source. The 11.5 million documents were leaked by someone at Panama-based law company Mossack Fonseca, and shared with more than 370 journalists affiliated with the International Consortium of Investigative Journalists.
The ICIJ is the watchdog journalism branch of the Center for Public Integrity, a Washington nonprofit, nonpartisan investigative group.
Founded in 1977, Mossack Fonseca is headquartered in Panama but has a presence in dozens of countries including known tax havens such as Switzerland, the British Virgin Islands and Seychelles. It specializes in helping companies and individuals set up offshore, tax exempt entities, according to its website, and is reportedly the world’s fourth largest provider of such services. According to the Guardian, one of the two U.K. publications that partnered with the ICIJ in the investigation, one of the firm’s partners said in a leaked memorandum that “ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes.”
Mossack Fonseca has strongly denied any wrongdoing, saying in an initial statement to ICIJ that it conducts “a thorough due-diligence process” before helping to incorporate companies. The company also provided a more detailed response, which can be read in full here.
The leak is the biggest in history, greater than the cache of documents released by Wikileaks, and contains information from 1977 to December 2015, including the details of 214,000 entities, such as trusts, foundations and shell companies that can be used to hide the true ownership of assets.
Back to Cameron. The Times also leads with the Cameron link. And it’s a good read:
Blairmore Holdings, set up by Ian Cameron [Dave’s dad] in 1982, held board meetings abroad and allegedly placed up to 50 Caribbean officers including a lay bishop in executive positions to legally avoid being taxed as a British company.
The Bahamas-based investment fund, which managed tens of millions of pounds on behalf of wealthy families, used anonymous “bearer shares” to shield its clients from public view, according to a data leak that has implicated world leaders, celebrities and businessmen in offshore tax avoidance.
Bearer shares can be used to facilitate money laundering and tax evasion as they enable investors to hide ownership and transfer assets without a paper trail. The prime minister banned them last year and has called for an international crackdown on aggressive tax avoidance and evasion. Last night Mr Cameron said that his family’s tax affairs were a private matter. Downing Street would not be drawn on whether the Cameron family still had a stake in the fund.
The Mirror says they are not a private matter. Of course, what is and what is not private is far from being the Mirror’s special area of expertise, what with it being embroiled in phone hacking payouts for invading people’s privacy.
The row came after an unprecedented leak of 11.3 million documents from Mossack Fonseca, a Panamanian law firm. Jurisdictions such as Panama offer companies and individuals the chance to legally mitigate tax bills and maintain anonymity, but failure to declare assets to the taxman in their own country can be illegal.
The Mail leads with much the same, although early on it points out that Bearer shares are now banned in the UK. Over on Page 9, the Mail looks Putin’s “£1.4bn if shady deals”. To which cynics might say, ‘and the rest of them aren’t?’
It’s all murky stuff. But given the levels of secrecy and massive wealth, the cast of billionaires, celebrities and global leaders, what do we expect to be the result of it all?
Former BBC staffer and Newsnight journalist Paul Mason and Tory MP Ken Clarke are talking about the steel industry on BBC Newsnight. The one thing you can’t escape noticing is how often Mason gurns and interrupts. The other thing is that not so long ago Mason was presented to viewers as a unpartisan expert, Newsnight’sEconomics Editor giving it to us straight:
Terry Bollea, the retired pro wrestler known as Hulk Hogan, was awarded a total of $25m in punitive damages on Monday, in his invasion of privacy lawsuit against Gawker Media.
These damages come on top of the $115m already awarded to Hogan last week which concluded a nearly two-week trial in St Petersburg, Florida. There, jurors heard how Hogan, 62, had not been contacted by the website before it posted a nine-second video clip of the wrestler having sex with the wife of his friend, DJ Bubba “The Love Sponge” Clem. Hogan has said he didn’t know he was being taped.
Gawker Media itself was hit with a $15m judgment, while its owner, Nick Denton, was personally ordered to pay $10m in damages.
Ouch. That’s one pricey / lucrative shag.
Turkel said Gawker Media’s gross revenues in 2015 were $48.7m and that founder Nick Denton has a total of $121m, including a $3.6m Manhattan condo. Gawker Media is worth $83m, the lawyers said.
How much of that $121m is tired up in Gawker stock? And with this hanging over the company, isn’t that same stock now worth a whole lot less?
How does new journalism work? Stephen Hull, editor-in-chief of Huffington Post UK, was talking with Steve Hewlett on Radio 4’s Media Show yesterday. He was asked why the website doesn’t pay for content. His answer is remarkable:
I’m not getting unpaid workers for a large corporation to suck them dry; I’m keeping you real, man.
What a visionary Hull is. To prove his dedication to a world free of filthy lucre still further, we can expect him to dispense with a salary, and give away the money he’s been paid to write during his time as Head of Content at Metro and with the London Olympics editorial team. He will then become authentic – a real journalist in this brave new age of opportunity.
Note: Hull reminds us that the HuffPost is no longer owned by minted socialite Arianna Huffington. She sold it for £300m. It’s now owned by Verizon, whose market cap stands at $202.5 billion. In March 2014, Bloomberg reported:
Verizon Communications Inc. Chairman and Chief Executive Officer Lowell McAdam received $18.3 million in total compensation last year, a 16 percent increase. McAdam’s base salary was $1.58 million, $100,000 more than in 2013, his cash bonus fell to $3.8 million from $4.13 million, and his stock award jumped 28 percent to $12 million, the company said Monday in a regulatory filing.
But if McAdam were to decided on a new career in journalism at his own organ, surely he’d do it for free. Purity is all at the HuffPost.
When The Financial Timeswrote a few words on Hewlett Packard Enterprise CEO Meg Whitman, the company’s marketing chief, Henry Gomez, was upset by the article’s tone. He threatened to stop placing he company’s ads with the newspaper, warning that “FT management should consider the impact of unacceptable biases on its relationships with advertisers.”
My piece was not biased and I fear you misunderstand our business model. It is my editors’ steadfast refusal to consider the impact of stories on advertisers that makes us the decent newspaper we are. It is why I want to go on working here. It is why the FT goes on paying me.
The Anorak Inbox features this plea: Nigerian Astronaut is lost in space needs $3Million to come home
Subject: Nigerian Astronaut Wants To Come Home
Dr. Bakare Tunde
Astronautics Project Manager
National Space Research and Development Agency (NASRDA)
Garki, Abuja, FCT NIGERIA
Dear Mr. Sir,
REQUEST FOR ASSISTANCE-STRICTLY CONFIDENTIAL
I am Dr. Bakare Tunde, the cousin of Nigerian Astronaut, Air Force Major Abacha Tunde. He was the first African in space when he made a secret flight to the Salyut 6 space station in 1979. He was on a later Soviet spaceflight, Soyuz T-16Z to the secret Soviet military space station Salyut 8T in 1989. He was stranded there in 1990 when the Soviet Union was dissolved. His other Soviet crew members returned to earth on the Soyuz T-16Z, but his place was taken up by return cargo. There have been occasional Progrez supply flights to keep him going since that time. He is in good humor, but wants to come home.
In the 14-years since he has been on the station, he has accumulated flight pay and interest amounting to almost $ 15,000,000 American Dollars. This is held in a trust at the Lagos National Savings and Trust Association. If we can obtain access to this money, we can place a down payment with the Russian Space Authorities for a Soyuz return flight to bring him back to Earth. I am told this will cost $ 3,000,000 American Dollars. In order to access the his trust fund we need your assistance.
Consequently, my colleagues and I are willing to transfer the total amount to your account or subsequent disbursement, since we as civil servants are prohibited by the Code of Conduct Bureau (Civil Service Laws) from opening and/ or operating foreign accounts in our names.
Needless to say, the trust reposed on you at this juncture is enormous. In return, we have agreed to offer you 20 percent of the transferred sum, while 10 percent shall be set aside for incidental expenses (internal and external) between the parties in the course of the transaction. You will be mandated to remit the balance 70 percent to other accounts in due course.
Kindly expedite action as we are behind schedule to enable us include downpayment in this financial quarter.
Please acknowledge the receipt of this message via my direct number 234 (0) 9-234-2220 only.
Yours Sincerely, Dr. Bakare Tunde
Astronautics Project Manager