One Morning In The Office Take 2

Aside

One Morning In The Office

@realdonaldtrump

"Sean"
"Mr President."
"Good press conference"
"I thought so to."
"Why no questions though?"
"That would have been difficult."
""Why?"
"Well Sir I followed your instructions about fake news."
"Good so you banned all the organisations that have written a story that was not true."
"Yes Sir."
"And..."
"There's no one left."
"No one?"
"No one?"
"So how are the American people going to hear about all the great things I've been doing?"
"I've lined up some replacements they'll be here in the morning if we can get them an exemption."
"Oh good, what exemption?"
"They're due in school so we need permission to take them out of class and bring them in."
"Understandable which college, Yale, Standford?"
"No Mr President we have representatives from Washington Kindergarten Grade 1."
"Will they be positive?"
"As long as they have a choice of colours with the crayons they have asked us to supply."

 

Trump – Spot The Difference Competition

Spot the difference competition for all readers…

29906170001_5293742523001_5293734054001-vs navypromocertsignhitler-03

Hitler was democratically elected so was Trump – Hitler won 43.9% of popular vote in March 1933. Trump won 45.9% in November 2016

Hitler favoured edicts and decrees – so apparently does Trump based on evidence since inauguration – even ones that have a law for them e.g. No torture congressional law

I make no other comparison

Re-Moaners and Trump’eters

Another few weeks drift past and yet the same issues which seem to have been in the news all year, remain.

The US never-ending election still has over 3 weeks to run and just when you think the behaviour and approach of both camps can’t get any worse they manage to achieve it. If it’s not sexual abuse allegations it’s more leaked emails. I pity the American voter. I thought our choice this side of the Atlantic was pretty bad but the candidates there look appalling.

I watched the clip of Gary Johnson who is apparently also standing as a Libertarian Party candidate – I mean really? Over five years into a civil war in Syria and this man who wants to be President of the most powerful nation on earth does not know what Aleppo is?

At least Trump and Clinton have managed to answer some questions on the subject. It’s not unusual for foreign affairs (not the sexual kind) to play little part in a US election, but one might have expected that confrontations with Russia over Syria, Ukraine and Crimea, to have some impact. Likewise relations with China over the Spratley Islands rather than ridiculous notions of simplistic arguments over manufacturing jobs in the US should have some policy. It remains completely unreported what either candidate’s plans for North Korea are. Better not ask Trump but his rhetoric can’t be worse than the accusations from US Security services that NK was behind the Sony attack.

What still amazes many commentators is that Trump is still popular with large swathes of the US electorate despite all the gaffes. It demonstrates how unpopular Clinton is but more importantly how upset many American voters are with the established political class which Clinton embodies.  Here we have some of the parallels with the UK EU debate despite the referendum.

Although there is an element of the moaning bad loser side in some of the pronouncements from what was the remain side, many did set out the risks to the economy an no-vote would bring. Several senior economists have stated that the currency changes that we have seen since end of June were a long overdue correction to Sterling’s position just exasperated by the vote for exit and on-going uncertainty of what that means. In the percentages shown everything is referred to the currency position post 23rd June, failing as usual to mention that Sterling’s value had risen significantly in the lead up to the vote.

Euro over 5 years from here shows a different story than the headlines might have you believe on 19th Oct 2011 the exchange rate was 1.14 and it closed on 14th Oct 2016 at 1.11. In particular, the rise of the pound in 2015 and the lead up to the vote is dramatic. US Dollar to Sterling is a significant fall over the same period 1.57 to 1.21 and the comments on reserve currencies should be concerning, but at the same time interest rates have been signaled upwards in the US and stay the same or lower in the UK which does not help Sterling investors. By the way Euro to US Dollar has gone down from 1.37 to 1.11 in the same time period.

I have picked an arbitrary period but some of us can remember much better and worse Pound to Dollar rates. It reached a low of 1.05 in February 1985 after the ERM fiasco and was as high as 2.11 in November 2007 as sub-prime crashed the dollar

What do we learn from that brief history- currencies fluctuate – sometimes a lot – thousands of traders around the world make money doing that.

Final discussion for today is on Credit Rating Agencies and their comments – yes the same folks that branded those sub-prime investment funds as AAA, are doing all their warnings on where the pound might go next. All the discussion is based on what the UK might do as if what might happen in the Euro (How is Greece by the way and Italy, Portugal, Spain?) will have no impact. Remember Euro zone and other EU exports to the UK, exceed UK Exports to the EU – we both have a lot to lose if we are stupid and put in unnecessary tariffs.  World trade will be damaged if Trump introduced tariffs to protect American jobs and cancels NAFTA. Likewise what will be the impact on the dollar if Trump wins and implements that piece of rhetoric.

Guess what the pound might go up or down or sideways.  Can we moan about currency traders instead?

Panama and Voting

Hot news, apparently, dictators, the super rich, corrupt politicians and criminals try to hide their ill gotten gains. Add to this list the moderately rich and various investments funds try to to avoid paying as much tax as possible. This is news?

In the spirit of openness I too have investments in offshore funds. It’s called my pension. I can’t confirm that I don’t own shares in Panama registered companies. Don’t look shocked, I have heard lots of people say that recently. Why can’t I confirm? Investment funds.

The pension company offers multiple funds in which I can buy units. Some of these funds trade in oversea shares. Frankly I have no idea if any of these units are linked to operations in Panama, The Cayman Islands, Belize and many other tax efficient locations. Just because I am several steps removed from the investment and income does not mean I do not want a good return on the deal. I want interest and investment gain too.

Of course I will have to pay tax on the income just like I already do on my salary, savings’ interest and directly invested share dividends. By the way every single person in this country that has an ISA is trying to avoid tax. Every investment in a personal pension avoids more tax. Every claim of business expenses is another bit of tax avoidance, why do you think your employer wants a VAT receipt? A little less hypocrisy please.

I think we all knew that bad people do bad things. The 11 million Panama sourced documents just confirmed this knowledge. It used to be the notorious Swiss bank account. The use of shell companies and hidden investment funds should also be no surprise. If anyone has watched The Big Short or read any of the extensive reviews of the financial crash, the rich bankers were peddling AAA rated investment funds as if they were solid gold. In reality they were derivatives bundled with other derivatives sold into other funds. Your pension fund may well have invested in these funds.

This was probably criminal behaviour, although precious few have gone to jail, whereas avoiding tax may be morally questionable but it is not illegal. Those few of you who have been kind enough to buy my book, The Persuasive Man, know that I have included a lot of financial wheeling and dealing in that fictional account. Fictional yes, but based on several financial stories and some personal experience.

Avoiding tax is a national pastime. Ask a tradesman if he’ll do the job for cash and you contribute to tax evasion which is illegal. Of course morally we are happy to have got a deal. We, the purchaser, have not done anything wrong. It is not our responsibility to declare the income, but are we a co-conspirator?

Directly in the UK, the Prime Minister has been dragged into the mess as the documents showed that David Cameron and his spouse had shares in an investment fund set up by his father. As usual with political scandals it’s not the actual thing that’s the problem, it is the cover up or the failure to come clean. Then of course we have the reporters dramatically trying to turn a drama into a crisis

The BBC were interviewing voters in Bedfordshire about whether they have changed their opinion of the Prime Minister, then came the most ridiculous question. Will you vote for him? Last time I checked, Cameron’s constituency was Whitney in Oxfordshire not Dunstable in South Bedfordshire; so how exactly were these voter going to vote for him? He has also said he will not stand at the next election. Therefore, no one is going to be able to vote for him.

You can vote in May local elections. In June you can vote for the EU referendum. Scotland, Wales and Northern Ireland have their respective Parliament and Assembly elections, (English Democratic deficit anyone?) but except for by-elections no UK MP will get elected until 2020. It’s like asking the vox pop interviewee, the archetypical man on the street if they would vote for Trump – had to get him in somewhere – irrelevant and just bad journalism.

With 11 million documents to sift through who knows which name will turn up next. Of course Cameron has got himself in this mess for not being open and forthright at the start of the week, not for what he has actually done with a relatively small amount. Yes, I know £30,000 is a lot of money to most of us, but compared to the billions hiding in Panama shell companies, it’s not really.  By the way as the shares were co-owned by him and his spouse that’s £15k each. Capital gains are only due on the element above the yearly allowance depending on how long the investment had been held. Income from the fund should have been declared each year on the individual tax return. So a £30k fund on a very good year may have paid out 10 percent per annum so £1.5k per year each at 40 percent tax is £600. Not exactly a new duck pond. The selling story is already 6 years old.

Jeremy Corbyn the Leader of Her Majesty’s Opposition is making political hay out of the alleged scandal but is it just me? Not many Labour MPs are making a song and dance about this nor Liberals. Even the Scottish Nationalists are being relatively quiet. Have I missed something?

We can add UEFA and FIFA to the list of those being embedded in the scandal, Iceland has already lost its Prime Minister. It seems this leak even makes other news disappear although the press are desperately trying to link the revelations to the EU in/out referendum. After all we need something to make that more interesting.

Meanwhile 1.5 million migrants/asylum seekers/immigrants/terrorists (delete as applicable) have tried to enter the EU and the new deal with Turkey has allowed 200 to be returned to Turkey. Perhaps we are missing the scale of the problem and not addressing the priorities. Mr Putin (be respectful) seems to be connected to Panama via some friends who seem to have a lot of state money. What about EU funds are there no documents connecting EU officials. Of course we have the overseas aid budget from the EU and the UK which have often been suspected of ending up in odd bank accounts. No news there then.

Back to the scale of the financial misconduct, what efforts are actually being made to get the money. Has the Panamanian Ambassador been called in, have any executives of the legal company been arrested, is anyone going to be charged with anything? Is any money going to be returned? More likely it will all disappear, the money and the story.

Perhaps a sequel is needed but would anybody buy it? Perhaps I should set it up as an offshore investment fund opportunity?