Baltic Dry Index. 830 - 06
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"We don't pay taxes. Only the little people pay
taxes"
Apple, Amazon, BASF, Google, Starbucks, Volkswagen, with
apologies to Leona Helmsley, who was just a little ahead of the times.
For more on the story of optional missing
taxes, scroll down to Crooks Corner and more on our two tiered world.
While we await Fed Boss Bernanke’s testimony
later today, to find out if his planted story in the WSJ about tapering off QE
purchases later this year is real, we open with a major development in America’s
growing scandal that might, if it leads into the White House, just topple
President Obama, although we are far from that at present. Yesterday’s
development, according to the LA Times, the head of the IRS is going to plead
the fifth amendment against self incrimination. Explosive stuff and sure to add
gasoline to the already raging fire.
Top IRS official will invoke the Fifth Amendment in congressional hearing about tea party targeting program
By David Martosko PUBLISHED:| UPDATED:The Los Angeles Times reported Tuesday afternoon that Lois Lerner, who heads up the Internal Revenue Service's tax-exempt division, plans to invoke the Fifth Amendment to the U.S. Constitution in a hearing Wednesday before the House Committee on Oversight and Government Affairs.
The Fifth Amendment provides that U.S. citizens may not be compelled to offer testimony if telling the truth would incriminate them.
Lerner's defense lawyer, William W. Taylor III, wrote to the committee on Tuesday that his client would refuse to answer questions related to what she knew about the extra levels of scrutiny applied to conservative nonprofit organizations that applied for tax-exempt status beginning in 2010.
More
Meanwhile back in the Fed’s final bubble, the one that
ends in the destruction of the Great Nixonian Error of fiat money, two Fed
officials poured scorn on the leaked idea that the Fed is about to start
tapering its 85 billion a month QE purchases, at least any time soon. More
gasoline added to the raging inferno of the latest stock bubble. Stay long
physical precious metals. We all know how the Fed’s bubbles end, we just don’t
yet know when or why.
I
served seven years as the chair of the Princeton economics department where I
had responsibility for major policy decisions, such as whether to serve bagels or
doughnuts at the department coffee hour.
Dr. Ben Bernanke.
May 21, 2013, 4:38 p.m. EDT
U.S. stocks rise after Fed officials’ QE signal
Apple in the hot seat over taxes; Home Depot gains after results
NEW YORK (MarketWatch) — U.S. stocks rose on Tuesday, with the
Dow industrials and S&P 500 finishing at record highs, after comments from
two Federal Reserve officials suggested that the central bank is not close to
tapering its bond-buying program.
The Dow Jones Industrial Average DJIA +0.34% gained
52.30 points, or 0.3%, to end at 15,387.58, notching its 19th consecutive
Tuesday rise.
The S&P 500 index SPX +0.17% climbed
2.87 points, or 0.2%, to 1,669.16, with health care the biggest gainer and
telecommunications the biggest laggard among the 10 major industry groups.
----Stocks
gained after New York Fed President William Dudley, who is also vice chairman
of the Federal Open Market Committee, said that the Fed may
adjust the pace of asset purchases up or down depending on the economic
outlook and that he was unsure which way the next change will be.
And St. Louis Fed President James Bullard said Tuesday that the central
bank should continue
with its present bond-buying program and adjust the rate of purchases in
view of incoming data on growth and inflation. He said the program is the best
policy option and has been effective.
----On
Wednesday, Federal Reserve Chairman Ben Bernanke will
testify before Congress about the economic outlook, and the Federal Open
Market Committee will release minutes from its latest meeting.
More
Fed officials dampen talk of imminent bond buying cutback
NEW
YORK/FRANKFURT | Tue May 21, 2013 7:59pm EDT
(Reuters)
- Two senior Federal Reserve officials on Tuesday played down the chances that
the central bank would signal a readiness to reduce its bond buying at its
meeting next month, dampening speculation the Fed's ultra-easy monetary policy
might end soon.
New York
Federal Reserve Bank President William Dudley and St. Louis Fed chief James
Bullard, both of whom will vote at the June 18-19 meeting, made clear further
economic progress was needed before they would support curtailing bond
purchases.
----"Inflation
is pretty low in the U.S.," Bullard told reporters after delivering a
lecture in Frankfurt. "I can't envision a good case to be made for
tapering unless the inflation situation turns around and we are more confident
than we are today that inflation is going to move back toward target," he
said.
-----In
addition to boosting stocks,
the U.S. dollar softened and prices for U.S. government debt moved higher on
Bullard's remarks, and were given a further lift by Dudley, a close ally of Fed
Chairman Ben Bernanke who said the central bank's asset purchases could go up
as well as down.
More
We end for the day noticing trouble in Moscow.
Unable to fire workers in old socialist France, trouble French bank SocGen is
crushing them in Russia. My guess is that SocGen and France will now get even
less business in Russia. With trouble rising at the bank, enquiring minds are
likely to wonder if SocGen’s depositors will be the first French depositors to
get Cyprussed under the new EU template?
Investment banks manage to go bankrupt through their
investment-banking activities, commercial banks manage to go bankrupt through
their commercial-banking activities.
Dr. Ben Bernanke.
SocGen’s Russian Unit Said to Cut Hundreds of Jobs in Moscow
By Fabio Benedetti-Valentini
& Jason Corcoran - May 21, 2013 11:01 PM GMT
Societe
Generale SA (GLE)’s Russian consumer-banking unit, OAO Rosbank
(ROSB), is cutting hundreds of back office jobs as it continues
cost-reduction efforts, two people with knowledge of the matter said. Rosbank is eliminating the positions at its Moscow headquarters, the people said, asking not to be identified because the matter is confidential. The Russian firm employs about 13,500 people. Officials at Societe Generale and Rosbank declined to comment when reached by telephone.
Societe Generale, France’s second-largest bank by market value, aims to attain 900 million euros ($1.16 billion) of cost savings by 2015 globally, with half the effort coming from its consumer-banking businesses, the Paris-based lender said May 7, without giving more details on Russian cost cuts.
Societe Generale, based in Paris, merged Rosbank with its other Russian branch network BSGV in 2011, while mortgage lender DeltaCredit and consumer lender Rusfinance both became Rosbank’s fully owned subsidiaries at the start of that year.
----Rosbank went through an unexpected management shakeout last week as Chief Executive Officer Vladimir Golubkov was charged with commercial bribery and faces as long as seven years in prison if convicted. Golubkov denies any wrongdoing. Rosbank (ROSB) named First Deputy CEO Igor Antonov as interim head and is cooperating with the authorities, it said last week.
More
I assure this committee that, if I am confirmed, I will be
strictly independent of all political influences... essential to that
institution's ability to function effectively and achieve its mandated
objectives.
Dr. Ben Bernanke.
At the Comex silver depositories Tuesday final figures were: Registered 44.17 Moz,
Eligible 120.75 Moz, Total 164.92 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today its more on the scandal of America’s
corporate tax cheats. The free lunch for Apple, Amazon, Google, and Starbucks
is about to end. Every nation under the sun is about to seek to get even. In
Europe, where German austerity programs have the destitute poor increasingly
resorting to suicide, the avarice of the giant Yankee corporations especially
grates. The EU is now looking to get even with the tax cheats and their
enablers Ireland and Luxembourg. Too big to hide any more, the EU has all the
time in the world to build its case. I suspect that even America is outraged at
the brazenness of these companies, although outrage, like irony, isn’t
something America generally does very well.
I am very proud of my nerd-dom. In fact, the world needs more nerds.
Dr. Ben Bernanke.
The Irish loophole behind Apple's low tax bill
LONDON |(Reuters) - Apple's (AAPL.O) ability to shelter billions of dollars of income from tax has depended on an unusual loophole in the Irish tax code that helps the country compete with other countries for investment and jobs.
A U.S. Senate investigation revealed Tuesday that Apple, maker of iPhones, iPads and Mac computers, channeled profits into Irish-incorporated subsidiaries that had "no declared tax residency anywhere in the world.
Apple said on Tuesday that the arrangements dated back over 30 years and had been negotiated with Ireland's government, which has long angered European economic peers such as France and Germany by helping multinationals to avoid paying tax on sales it makes to their citizens in their domestic markets.
Apple's annual reports show that over the past three years, Apple paid taxes worth 2 percent of its $74 billion in overseas income.
Apple now channels most of its overseas sales through three companies that are incorporated in Ireland but for tax purposes are resident in no jurisdiction. U.S. rules that allow companies incorporated abroad not to pay U.S. taxes complement that arrangement.
Apple tax head Phillip Bullock told the U.S. Senate Permanent Subcommittee on Investigations on Tuesday that one of these three subsidiaries, Apple Operations International (AOI), had not submitted a tax return anywhere for five years.
All three were registered in Ireland in 1980 and reregistered as unlimited companies in 2006, which means under Irish law that they do not have to publish annual accounts, so the subcommittee's report was the first time the current structure had been publicly revealed.
Peter Vale, tax partner at accountants Grant Thornton in Dublin, said it was unusual for companies incorporated in Ireland not to be tax resident there, but it is legal.
Apple relies for tax benefits on contrasting approaches to determining tax residence in Ireland and the United States.
Vale said that if a group has at least one trading Irish subsidiary - as Apple does, in the form of units that employ 4,000 staff - it can establish a corporation that will not be deemed tax resident in Ireland providing this unit's "central management control" is outside the country.
The subcommittee said AOI and Apple Sales International (ASI) held board meetings in the United States and most board members were based there. That means the units would not be deemed to have Irish management control, accountants said.
Apple documents released by the subcommittee showed that current Chief Executive Tim Cook and current Chief Financial Officer Peter Oppenheimer were board members of all three Irish units during the late 2000s, typically holding their meetings at Apple headquarters in Cupertino, California.
Apple told the subcommittee that AOI has no employees and no physical address. Its assets are managed by employees at a subsidiary, Braeburn Capital, located in Nevada, while the assets are held in bank accounts in New York. Primary accounting records are maintained at Apple's U.S. shared service center in Austin, Texas.
Despite this, AOI did not have tax residency in the United States, because, said Lyn Oates, professor of tax and accounting at the University of Exeter Business School in the UK, the United States determines tax residence on the place of incorporation only.
Britain also used to allow companies to be incorporated there without being tax resident, but changed its system over 20 years ago to stop tax avoidance, said Penelope Tuck, associate professor of public finance and policy at the University of Warwick.
More
EU leaders look to end Apple-style tax avoidance schemes
BRUSSELS/PARIS |(Reuters) - Growing concern in European capitals about aggressive tax avoidance by high-profile corporations such as Amazon, Google and Apple looks set to steal the agenda of a European Union summit in Brussels on Wednesday.
The summit was originally called to discuss energy policy and tax coordination, but press reports in Britain, France and the United States exposing how little tax major international companies have been paying by carefully structuring their European operations has forced the issue up the agenda.
France and Britain in particular have grown concerned by the sheer scale of the legal tax schemes, with a U.S. investigation revealing on Monday that Apple Inc (AAPL.O) had paid just 2 percent tax on $74 billion in overseas income, largely by exploiting a loophole in Ireland's tax code.
That followed reports that the British unit of Amazon (AMZN.O) paid just $3.7 million tax on 2012 sales of $6.5 billion, and similar revelations concerning Google's (GOOG.O) and Starbucks's (SBUX.O) UK operations.
In all, officials have said that tax avoidance and evasion costs the EU around 1 trillion euros a year.
----A draft of the summit's declaration, which is agreed in advance but can be changed, set out nine specific proposals for strengthening tax policy and coordination, including fighting tax avoidance schemes and the process of routing profits abroad.
"Work will be carried forward as regards the Commission's recommendations on aggressive tax planning and profit shifting," a draft seen by Reuters read.
"The Commission intends to present a proposal before the end of the year for the revision of the 'parent/subsidiary' directive, and is reviewing the anti-abuse provisions in relevant EU legislation."
More
But it’s not just those damn Yankees who’re avoiding their fair share of
tax. Leaving aside the tax and work shy Latin Europeans of Club Med, even the
wealthy German corporations are at it too.
Corporate Tricks: EU Faces Tough Battle to Close Tax Loopholes
Wealthy
businesspeople shift millions of euros abroad while profitable companies use
accounting tricks to minimize their taxable earnings and assets. The EU finally
wants to create effective policies to curb these practices, but faces strong
opposition from member states.
BASF, the world's largest chemical group, is primarily known for its paints, state-of-the-art plastics and perhaps its natural gas dealings with Russia. The down-to-earth managers at the company's headquarters in Germany's Palatinate region have occasionally criticized the greedy banking sector, but otherwise have quietly gone about their business of generating billions in profits. But innovation isn't the only source of BASF's profitability.
The chemical group, based in
Ludwigshafen in southwestern Germany, has a large tax department, whose work
consists partly in moving money around between continents. But now the company
has discovered a tax haven right at home in Europe.
In addition to a large plant, the company operates the BASF Belgium Coordination Center in Antwerp. Some 160 employees at the center spend a portion of their time searching for legal ways to reduce BASF's tax bill. In 2011, the company paid taxes on its many millions in profits at a rate of only 2.6 percent.
BASF is by far not the only company to take advantage of favorable tax conditions in a neighboring EU country to improve its bottom line. Volkswagen, currently the most profitable company in Germany, was even greedier. In 2012, Belgian subsidiary Volkswagen Group Services paid no taxes at all on profits of €153 million, and in the previous year it raked in €141 million in tax-free profits -- and it was all completely legal.
Profitable Tax Carousel
Again and again, major European multinationals manage to take advantage of loopholes in national tax laws. They outwit the tax authorities in different EU countries by moving around their capital and profits, and not just to faraway tax havens in the Caribbean, but to nearby countries like Belgium, Ireland and the Netherlands.
More
It's the price of
success: people start to think you're omnipotent.
Bernocchio
The monthly Coppock Indicators finished April:
DJIA: +133 Up. NASDAQ: +139 Up. SP500: +170 Up. Another Fed bubble underway. But when to jump
off before it ends?
No comments:
Post a Comment