Finance

Tax Burden in U.S. Not as Heavy as It Looks, Report Says

Tax Burden in U.S. Not as Heavy as It Looks, Report Says:

We’ve been told repeatedly that the United States has the highest corporate tax rate in the developed world — 35 percent — which is higher than the nominal tax rates in places like Ireland (12.5 percent), Britain (21 percent) and the Netherlands (25 percent) and the 24.1 percent average rate of all countries that are part of the Organization for Economic Cooperation and Development.

All of that’s true, but Professor Kleinbard contends that most United States multinational companies don’t pay anywhere near 35 percent. Companies paid, on average, 12.6 percent,

Cutting those rates will not get companies to bring more money into the US economy. They would still keep the money were it could be moved more easily. And that is in commonwealth nations that can easily do business with London banks.

I Crashed a Wall Street Secret Society

I Crashed a Wall Street Secret Society:

Kappa Beta Phi was, in large part, a fear-based organization. Here were executives who had strong ideas about politics, society, and the work of their colleagues, but who would never have the courage to voice those opinions in a public setting. Their cowardice had reduced them to sniping at their perceived enemies in the form of satirical songs and sketches, among only those people who had been handpicked to share their view of the world. And the idea of a reporter making those views public had caused them to throw a mass temper tantrum.

I have heard of KBP in passing before so I already knew it existed. I had no idea their annual event was so crazy.

SEC Charges Texas Man With Running Bitcoin-Denominated Ponzi Scheme

SEC Charges Texas Man With Running Bitcoin-Denominated Ponzi Scheme

The SEC alleges that Shavers promised investors up to 7 percent weekly interest based on BTCST's Bitcoin market arbitrage activity, which supposedly included selling to individuals who wished to buy Bitcoin "off the radar" in quick fashion or large quantities. In reality, BTCST was a sham and a Ponzi scheme in which Shavers used Bitcoin from new investors to make purported interest payments and cover investor withdrawals on outstanding BTCST investments. Shavers also diverted investors' Bitcoin for day trading in his account on a Bitcoin currency exchange, and exchanged investors' Bitcoin for U.S. dollars to pay his personal expenses.

Jack Welch versus Milton Friedman

Jack Welch versus Milton Friedman

On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy... your main constituencies are your employees, your customers and your products. Managers and investors should not set share price increases as their overarching goal... Short-term profits should be allied with an increase in the long-term value of a company.

Welch basically invalidating the theory of the firm, inspired by Friedman.

Ray Dalio calls for more stimulus

Ray Dalio calls for more stimulus

We will also need fiscal stimulation by the government, which of course, is very classic. Governments have to spend more when sales and tax revenue go down and as unemployment and other social benefits kick in and there is a redistribution of wealth. That’s why there is going to be more taxation on the wealthy and more social tension. A deleveraging is not an easy time. But when you are approaching balance again, that’s a good thing.

Dalio leaves Team Friedman and joins Team Keynes.

Under the rule, banks need to provide the government with a blueprint for a quick and orderly dissolution in case they were to fail. That requirement, a key provision of the Dodd-Frank financial reform law, is intended to avoid the widespread confusion and haphazard actions that occurred during the recent financial crisis, in which some of the world's largest financial institutions collapsed and threatened the entire financial system in the process.

Under the rule, banks need to provide the government with a blueprint for a quick and orderly dissolution in case they were to fail. That requirement, a key provision of the Dodd-Frank financial reform law, is intended to avoid the widespread confusion and haphazard actions that occurred during the recent financial crisis, in which some of the world’s largest financial institutions collapsed and threatened the entire financial system in the process.
Fed requires ‘living wills’ for big banks - The Hill’s On The Money

These rogue traders are out there because their bosses don't want to know what they're doing. I never get a "rogue burrito" at Chipotle because the management wants people to get burritos that are rolled properly. But suppose the management wants people to obtain the kind of high returns that can only be achieved through unduly risky trades. Well, you can't very well issue a directive telling people to make unduly risky trades. You certainly can, however, create circumstances under which incentives, control, and supervision are structured so as to make it the case that "rogue traders" will pop up here and there and then there rogueishness can be blamed ex post for undertakings that go badly.

These rogue traders are out there because their bosses don't want to know what they're doing. I never get a "rogue burrito" at Chipotle because the management wants people to get burritos that are rolled properly. But suppose the management wants people to obtain the kind of high returns that can only be achieved through unduly risky trades. Well, you can't very well issue a directive telling people to make unduly risky trades. You certainly can, however, create circumstances under which incentives, control, and supervision are structured so as to make it the case that "rogue traders" will pop up here and there and then there rogueishness can be blamed ex post for undertakings that go badly.
ThinkProgress

When you hear someone on Bloomberg or CNBC attribute a change in the financials markets to profit taking, it is usually safe to assume they are BSing.

Wall Street Whitewash

Last week, reports Shahien Nasiripour of The Huffington Post, all four Republicans on the commission voted to exclude the following terms from the report: "deregulation," "shadow banking," "interconnection," and, yes, "Wall Street."

From Wall Street Whitewash - NYTimes.com

They don’t want to mention Wall Street in a report on the financial crisses. WTF? This should have been a bigger story.

Wall Street Whitewash

Last week, reports Shahien Nasiripour of The Huffington Post, all four Republicans on the commission voted to exclude the following terms from the report: "deregulation," "shadow banking," "interconnection," and, yes, "Wall Street."

From Wall Street Whitewash - NYTimes.com

They don’t want to mention Wall Street in a report on the financial crisses. WTF? This should have been a bigger story.

Post-Meltdown, Banks Still Rule Derivatives Trade

In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks.

The banks in this group, which is affiliated with a new derivatives clearinghouse, have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available.

Banks' influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small, like Dan Singer's home heating-oil company in Westchester County, north of New York City.

This fall, many of Mr. Singer's customers purchased fixed-rate plans to lock in winter heating oil at around $3 a gallon. While that price was above the prevailing $2.80 a gallon then, the contracts will protect homeowners if bitterly cold weather pushes the price higher.

But Mr. Singer wonders if his company, Robison Oil, should be getting a better deal. He uses derivatives like swaps and options to create his fixed plans. But he has no idea how much lower his prices - and his customers' prices - could be, he says, because banks don't disclose fees associated with the derivatives.

"At the end of the day, I don't know if I got a fair price, or what they're charging me," Mr. Singer said.


From Post-Meltdown, Banks Still Rule Derivatives Trade - NYTimes.com


Why regulation maters.

Post-Meltdown, Banks Still Rule Derivatives Trade

In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks.

The banks in this group, which is affiliated with a new derivatives clearinghouse, have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available.

Banks' influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small, like Dan Singer's home heating-oil company in Westchester County, north of New York City.

This fall, many of Mr. Singer's customers purchased fixed-rate plans to lock in winter heating oil at around $3 a gallon. While that price was above the prevailing $2.80 a gallon then, the contracts will protect homeowners if bitterly cold weather pushes the price higher.

But Mr. Singer wonders if his company, Robison Oil, should be getting a better deal. He uses derivatives like swaps and options to create his fixed plans. But he has no idea how much lower his prices - and his customers' prices - could be, he says, because banks don't disclose fees associated with the derivatives.

"At the end of the day, I don't know if I got a fair price, or what they're charging me," Mr. Singer said.


From Post-Meltdown, Banks Still Rule Derivatives Trade - NYTimes.com


Why regulation maters.

Wall Street Firm Uses Algorithms to Make Sports Betting Like Stock Trading

Jimmy is operating more like a daytrader than a traditional casino sports bettor, moving in and out of positions on the fly, looking for hedges, capitalizing on fleeting moments of inefficiency. And that is not an accident. Since 2009, the sports book at the M has been run by Cantor Gaming, a division of the Wall Street financial services outfit Cantor Fitzgerald. The resort's new bookmaker openly boasts that it's bringing the pace and style of Wall Street trading to betting on baseball, football, and basketball-and dabbling in everything from horse racing to golf.

From Wired

Worth a read.