Posted by Larry Doyle on June 19th, 2013 8:10 AM |
At one point in time, the USA may have been viewed as the preeminent world leader on major financial issues.
While many arrogant bankers, regulators, and political leaders here in the USA might care to continue to believe they hold that leadership position, I think most who might read this blog know that those days have passed.
Dodd-Frank reformed our financial system? Really? Then why is it that bankers from Citigroup are virtually writing entire new legislation under the heretofore now designated Fraud-Dank umbrella?
If we care for a more honest assessment of the comparably incestuous, crony, corruptible dynamic at play within these parts, let’s redirect our focus across the pond. (more…)
Posted by Larry Doyle on June 14th, 2010 2:25 PM |
Spending money one does not have and making promises one can not keep is no way to run a business let alone a country.
The changing of the guard at 10 Downing Street has also brought about a change in the willingness of the British government to face these realities. The reality of the British economy may not be pretty but it is real and it will not change based purely upon false hope and government artifice.
The Financial Times highlights the ‘tough love’ and ‘financial rigor’ that the regime of new British Prime Minister David Cameron is serving the British populace. (more…)
Posted by Larry Doyle on December 9th, 2009 9:04 AM |
You’re a mean one, Mr. Grinch…!!
Are British bankers headed to the pub early today to drown their sorrows? Little doubt, as the Chancellor of the Exchequer Alistair Darling (British equivalent to Treasury Secretary Tim Geithner) announced that year-end bonus pools for British banks will be hit with a one-time, top line tax of 50%!! Ouch!!
Bloomberg provides a brief synopsis this morning in writing, Darling Levies 50% Tax on U.K. Bank Bonuses Above 25,000 Pounds:
Chancellor of the Exchequer Alistair Darling said he will impose a one-time 50 percent tax on banks for all bonus payments of more than 25,000 pounds ($41,000).
The tax, effective from today until April 5, will be levied as a surcharge on the employer. It will apply to all banks and building societies operating in the U.K., including subsidiaries of foreign banks.
The Treasury estimates the tax will raise about 500 million pounds and affect about 20,000 bankers.
What does this mean? Take 50% off the top line of the bonus pool and then distribute the balance. Those bonus proceeds are then subject to the U.K.’s current tax rates, the maximum of which is right now 40%.
Add it all up and the effective tax rate for the majority of the bankers impacted is between 65 and 70%!!
What does the crowd in Washington and on Wall Street think about that?
While I am not one for increasing taxes, the fact is the British banks and the U.S. banks were saved by the taxpayers. This tax is merely a return of some of the taxpayers’ money.
While the bankers will view Darling as Mr. Grinch, do you think the unemployed laborer in the U.K. or here in America has any real sympathy for those in the City or on Wall Street?
Would the crowd in Washington have the stones to impose a similar one-time hit on Wall Street?
Posted by Larry Doyle on October 23rd, 2009 9:01 AM |
Are we witnessing the virtual fall of the United Kingdom? Reports this morning indicate the UK remains mired in recession. The UK GDP registered a very disappointing -.4%. Analysts expected the report to register a +.2% increase.
With the report, are we witnessing an acceleration in the demise of this ‘kingdom?’ I believe we are. The Wall Street Journal offers insights into the economy of this once proud and productive kingdom, in writing, The U.K’s Unbelievable Shrinking Economy:
A note from Goldman Sachs said it all. The U.K.’s latest gross domestic product data showing the economy shrunk by 0.4% in the third quarter and by 5.2% over the past year is “Unbelievable. Literally.”
This result wasn’t just wildly at odds with the Bank of England’s forecast for growth of 0.2% — also the consensus estimate in the markets — but is out of line with recent survey data showing a considerable pick-up in economic activity. These forecasts indicated growth of nearer 0.7% in the third quarter, according to Goldman Sachs.
If the official statistics are right, then the U.K. is in even more trouble than the market already thought. A sixth straight quarter of economic contraction would confirm this as the worst U.K. recession since World War II.
The reaction to this report was an immediate decline in the value of the British pound. Analysts project the British government will have to engage in further quantitative easing and fiscal stimulus. The money needed to support those government initiatives is money the U.K does not have.
The WSJ adds further:
With the latest government borrowing figures showing the Treasury is already on course to overshoot its £175 billion borrowing forecast this year, the biggest risk to the U.K. remains that the markets conclude its Triple-A rating is also literally unbelievable.
The U.K’s AAA-rating is nothing more than a joke at this point propagated by the rating agencies which have little credibility. I would venture that the UK has not been downgraded simply due to political pressures.
Long live the Queen, but given the current economic situation and projected ongoing fiscal deficits, the UK is a ‘kingdom’ in name only.