Money in the news and how you are going to pay and pay and pay
WONGA is lending to businesses. Hurrah, Hurrah! It looks like the credit crunch is over, business will get all the loans it needs and things will be just perfect again, kittens will gambol in the sun and puppies chase balls once again:
British online payday loans provider Wonga.com launched a credit service for small businesses on Monday, aiming to fill a gap in the market left by banks who have been hamstrung by tight lending conditions imposed since the credit crunch.
Wonga, which has made 4 million short-term loans to consumers since its launch in 2007, will offer small businesses loans of 3,000 to 10,000 pounds ($4,800 to $16,200) for periods of between one and 52 weeks.
Interest rates will be fixed at between 0.3 and 2 percent per week, depending on how risky the loan is judged to be.
Well, OK, it’s not going to be quite that miraculous. The amounts they have available to lend really aren’t going to cover the entire gap. And those interest rates are a bit high for anything except the most short term of lending.
TWO stories on banking errors. The first involves the €18m deposited into Laura Hughes’s bank account. Hughes, of Athenry, Co Galway, was surprised to see the new balance in her Ulster Bank account of €18,099, 425.99 – a figure that includes the 35c she had saved before the windfall.
Hughes moved €9,000 into another account. She thought about buying a new Nissan Micra car. She says her “gut instinct wouldn’t let me do it”. Then the bank shut down her account. How fair is that? They make the error and hen forcibly close your account?
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Read the rest of this entry »
GIVEN that Facebook is just about to come to the stock markets for the first time, how much is it really worth? The length of string comes to mind, obviously, but your and my opinion is what counts here: the value of a company on a stock market really is just the aggregation of what everyone believes it is worth.
The actual answer is we don’t know but my own impression, along with that of the FT, is almost certainly not as much as a lot of other people seem to think:
How to put all this into a Facebook valuation? To justify the big numbers being tossed around – $100bn and up – several things must happen in the next five to seven years. The business needs to become much less capital intensive (inclusive of acquisitions) over time, as Google and Microsoft have done. That is the easy part. But margins must also stay near today’s level of about 50 per cent – which would be uncharted territory. And sales would have to grow at least sixfold in this period.
MORE than 2,000 senior public sector officials are being paid through private companies rather than the government’s payroll in an attempt to minimise their tax bill, according to a leaked Treasury document.
What horrors, eh? Absolutely disgusting in fact!
The disclosure follows an outcry over the practice which has allowed civil servants to save themselves tens of thousands of pounds a year in tax. The practice has cost the government millions of pounds in lost revenue.
RUPERT Murdoch is not fit to run a media company. So says a committee of MPs:
Rupert Murdoch is “not fit” to run a multinational corporation after demonstrating “wilful blindness” in his handling of the phone-hacking affair, which killed off his company’s 168-year-old Sunday tabloid News of the World, MPs concluded today.
That’s interesting really. The idea that the man who has built the world’s largest media conglomerate isn’t the right person to run a media conglomerate.
HA-JOON Chang is writing in the Guardian about red-tape and competition. He is utterly wrong. Sigh.
Would-be red tape cutters believe that the more regulations there are, the less investment there will be. However, regulation is only a minor factor in investment decisions. Things like growth prospects, technological progress, quality of labour force and infrastructure are far more important. The truth is that, if there is money to be made, businessmen will invest regardless of the level of regulations. This is why the 299 permits that were needed to open a factory in South Korea in the early 1990s did not prevent the country from investing 35% of its income and growing at 10% per year at the time.
No one at all has ever said that factories won’t get opened because there is red tape. The argument is that fewer factories will get opened the more red tape there is.
WHEN the Sun discovered Claire Squires was making news for having died at the London Marathon, it asked readers to Make It a Million. The paper embraced Claire in its halo logo and exhorted the world to give. Of course, donors didn’t need the Sun. It’s more likely that the Sun needed Claire Squires. It gave £5,000 to showcase its good heart and make itself feel better. The paper’s grandstanding might stick in the craw, but if money is raised and people feel good for giving, then what harm done? The Sun is cynical. But the person who wrote the paper’s cheque might not be. Indeed, the chances are that they like to give. It make you feel good. Giving under your own free will is good for your mental wellbeing:
SO. Why has the security bil for the London Olympics rocketed? It’s yet another example of how the costs for the Olympics keep spiralling upwards. Sadly it’s too late to phone Paris and ask if they’d really still like to have them:
Earlier this year the number of security guards required for the Games increased from 10,000 to 23,500 at an additional cost of £271 million.
Elements of the main contract with private security provider G4S have ballooned by up to seven times. At a hearing of the Public Accounts Committee on Thursday the most senior civil servant in the Department for Culture Media and Sport, Jonathan Stephens, was taken to task for agreeing the new contract.
There are two good answers to how this happened.
APPLE’S results are out and they’ve had another giganticly stonking quarter. But there’s something I do wonder about. There’s a campaign in the US to make companies pay US corporation tax: at the moment, if a US company makes money offshore and doesn’t bring it into the US then it doesn’t pay tax on those profits.
We’ve had a similar argument here over Vodafone. That was all about whether a Luxembourg part of Vodafone should pay UK tax on the profits it made selling phones in Germany to Germans.
THE worst headline of the day. From the New York Times:
With Venezuelan Food Shortages, Some Blame Price Controls
It’s one of the most basic concepts in economics. Cut the price of something to below the market clearing price and supply of it will fall and demand for it will rise.
Thus there will be shortages.
The business group dismissed accusations that large companies enjoy a cosy relationship with HM Revenue & Customs, and said public anger over tax avoidance and evasion stems from “misunderstanding” of the complexities of the tax system.
John Cridland, the CBI’s director general, said: “Business is paying its fair share of tax – we are much misunderstood. Today is the beginning of the fightback to say we’re paying the right amount of tax and the way to get the economy moving is lower rates of tax which will lead to more tax being paid.”
The point being that business cannot be paying the “right” amount of tax because business never pays tax, not a red penny, ever.
THERE are indeed reasons not to like fracking for shale gas. Yes, those earthquakes but they’ll only be happening in Lancashire so who gives a crap? They’re also small, about the same as we used to get from coal mining and we dealt with those well enough for a century or more.
It’s also true that having lots of cheap gas around will keep us all warm and toasty for the next century or two. There are those who disapprove of that, might stop us from regressing to the peasant lifestyle which will make us all so much better human beings.
THE Argentinian Government has just decided to
nationalise steal a Spanish oil company.
The Argentine government has been tightening the noose on Repsol over recent months, withdrawing operating licences and accusing the company of failure to invest adequately in its Argentine operations.
Yes, yes, that really works, doesn’t it? Encourage more foreign investment in the country by confiscating foreign investment in the country.
FRACKING is back. The Government is expected to give the thumbs up to fracking – extracting natural gas by hydraulic fracturing. There will be earthquakes as Blackpool turns into a giant trampoline. And that is not all. Fracking might infect groundwater and cause your taps to turn into flame throwers. Careful with that toothbrush!
FACEBOOK, Google, Apple, Amazon and eBay are all tax dodging scumbags. At least this is what the Daily Mail would have you believe, that the big five internet firms, Facebook, Google, Amazon, eBay and Apple are all tax dodging bastards:
Figures from the companies’ American filings suggest that the five made revenue of £12.2billion in Britain in 2010 from British consumers and advertisers.
On the basis of their global profit margins for the year, that would mean profits for the five from sales to British customers would have amounted to almost £2.5billion. Corporation tax at 28 per cent would have seen them pay £685million.Instead, subsidiaries established by the five in Britain paid just over £19million in 2010, or 0.8 per cent.
The problem with this is that it’s all entirely bollocks: because we’re in the European Union.
AT the Labour Party conference at NUI Galway, protesters angered by austerity measures stormed Garda barricades. Pepper spray was deployed at no little cost. Someone took a pike along. Who? And where do you get a pike from? Who in times of austerity has money to lash out on a pike? Given the state of the Irish building industry, surely a cement bag and some bricks is the preferred method of enacting judicial revenge..?
THE latest nonsense coming out of Brussels is this, on bankers’ pay:
Austrian centre-right MEP Othmar Karas has called for an end to massive bankers’ bonuses, which in some cases amount to 10 times the basic salary.
“We are looking at a set limit,” Karas told the parliament’s economic affairs committee in Brussels on Thursday (12 April). He explained that under his model, bonuses should not surpass a ratio of one-to-one on fixed salaries.
Now maybe it’s a good idea that bankers’ bonuses should be restricted. Maybe it’s not: I happen to think not but that’s just my view.
That is indeed what is happening though, the poor are moving out to the suburbs:
Outer London has seen rising levels of poverty while the number of poorer areas in central London is reducing, according to a new analysis of official deprivation data.
Although the poorest places in the capital are still in the eastern centre of the city, there are fears that poverty is being pushed out into the suburbs amid evidence of a significant increase in deprived areas in the outer boroughs between 2004 and 2010.
HOW will Greece leave the Eurozone? Painfully it seems.
There’s a general agreement among realist economists (ie, not those drunk on some nonsensical dreams of European unity) that the euro as it was set up was a decidedly bad idea. That even if it had been better set up Greece certainly shouldn’t have been part of it and that it would be better for Greece and everyone else if Greece were to be out of the euro.
All of this is simple enough. The problem is how do we get from here to there? As this column points out in what for economists is sneering and vitriolic language, erm, actually, we probably can’t.
POLLY Toynbee has called for everyone’s tax returns to be public information. To help things along she’s decided to release her own income figures:
Personal statement, to get in early: I have always advocated total tax transparency, and like George Monbiot, I am open about my own earnings: I was even asked about it by a parliamentary select committee so it’s on the record. Last year my Guardian pay was around £115,000. I have never had any kind of company, and I have always paid PAYE as an employee. I would welcome all journalists agreeing to transparency, especially those writing about the earnings of others.
No, sorry, I’m afraid that is something of a fail.
IT’S always a little difficult going over and reading the dark side, the spouting of the ecoloons. For they’re so far from any connection with reality that it’s confusing trying to work out exactly what it is that they’ve got wrong.
For example, our friend here, seems to think that capitalism requires growth: it doesn’t. He also seems to think it requires markets: it doesn’t. He even name checks Adam Smith but then use the wrong book (Theory of Moral Sentiments is about philosophy, Wealth of Nations is about economics).
WHEN Baltimore McDonald’s syrup server Mirlande Wilson claimed she had won $105m on the Mega Millions lottery, the New York Post paid her a visit. Says Wilson:
“I have no idea where it is. I’m not sure I have it.”
Think, Mirlande. Think!
“I’m still looking for it. I haven’t even looked in my uniform pants yet. I’m still looking everywhere to find it, in my purse, everywhere.”
AS we all know a rattling good shag helps clear the mind, reduce stress and generally makes everything better. Thus three lads at a German university have selflessly offered themselves up to the female students as providers of such rattlingly good shags.
For, as they say, studying for exams can be stressful, it can cut into the time available to maintain (or even seek new) relationships so why not just send the lads an email and they’ll come around (fnar) to root out (fnar, fnar) that stress with a booty call.
Oskar and his partners then reply: “Many students are too stressed out during exams to go out at night. This leads their sex lives to languish.” But armed with the knowledge that regular physical exercise brings health benefits and helps with studying, the young men behind Bib:Love are more than happy to provide support. Female students who spend their evenings drained and fatigued in the library and are in the mood for a little closeness and intimacy are encouraged to send an email. Then one of the three men will meet with them. If the circumstances are right, the meeting ends in sex.
THE usual suspects have got all outraged at the fact that Amazon doesn’t seem to pay very much tax in the UK:
Amazon.co.uk, Britain’s biggest online retailer, generated sales of more than £3.3bn in the country last year but paid no corporation tax on any of the profits from that income – and is under investigation by the UK tax authorities.
Regulatory filings by parent company Amazon.com with the US securities and exchange commission (SEC) show the tax inquiry into the UK operation, which sells nearly one in four books sold in Britain, focuses on a period when ownership of the British business was transferred to a Luxembourg company.
Well, yes, the clue is in tat last part there, it’sd not a UK company so of course it doesn’t pay corporation tax in the UK. It’s a Luxembourg company and so it pays tax in Luxembourg. This is all part of the great EU project. You pays your corporation tax where your company is, where the head office is, and then you can sell anywahere in the EU. To change that you’d have to change the basic design of the EU.
YOU may or may not be lucky enough to see posters around the place arguing that all cigarettes should be sold in plain packages. This, it is said, will reduce smoking and thus thousands of faerie folk will frolic in our woodlands. That it will do nothing of the sort is only a trivial point.
The background is that at present the government is carrying out a “consultation exercise”. This is where they pretend to listen to people and then decide whether to do whatever it is. Now, if people wish to influence this consultation exercise they’ve every right to do so. This is a democracy with free speech after all.v This is actually what we’re supposed to do, tell the fuckers who rule us how we want to be ruled.