[QUOTE=ewmayer;299406][url=www.theaustralian.com.au/news/world/eduardo-saverin-gives-up-us-citizenship-avoids-us600mn-tax-on-fb-stake/story-fnb64oi6-1226354622304]Facebook's Saverin gives up US passport[/url]: [i]THE billionaire co-founder of Facebook has renounced his US citizenship, avoiding $US600m in tax when the company floats.[/i][/QUOTE]

Denninger and I disagree on this issue:

[url=http://market-ticker.org/akcs-www?post=206109]Senators File "Screw Capital" Bill[/url]:
[QUOTE]There's dumb and then there's real dumb. [url=http://www.politicspa.com/sen-bob-casey-jr-targets-facebook-co-founder-in-new-bill/35748/]This is in the latter category[/url]:
[i]
During the 2012 election cycle Democrats are positioning themselves as the “defenders of the middle class,” and Sen. Bob Casey Jr. is honing that message by attacking the top .001 percent of income earners, including Facebook co-founder Eduardo Saverin.

Along with NY Sen. Chuck Schumer, Casey is introducing a bill that would prevent U.S. citizens from renouncing their citizenship in order to avoid taxes.
[/i]
Good luck Senators.

People with enough money to care about this also won't care about your bill. They'll leave, take their money with them, and never come back. You can chuckle about how "you got them" but the truth is that they got you, and all of America.

There's a point where people get what is commonly called "**** you" money. As the name implies it enables them to say exactly that to anyone they disagree with and who*****es them off -- including petulent little Senators and their petty games. Facebook's co-founder has no reason to come back into the United States, and you can't reach him beyond our borders, so what I expect you'll see is a giant middle finger erected in your direction -- from Singapore.

There is no material revenue impact from this bill that will be forthcoming. There will, however, be a capital drain that will accelerate and harm America.[/QUOTE]
I say, if you got rich thanks to building a business in the US and enjoying the US capital markets' monetizing of your stake in that business, you must be liable for your fair share of taxes. BTW, folks like Saverin are not beyond the government's reach - Facebook shares trade on US exchanges, there is much leverage the government could apply via that route.

If the tax code is "unfair", it needs to be made fair for all, not just the .001%ers.

[QUOTE=ewmayer;299721]If the tax code is "unfair", it needs to be made fair for all, not just the .001%ers.[/QUOTE]

Does that include everyone in the world?

Including those who make $1 a day making $100 shoes?

[QUOTE=ewmayer;299721]
I say, if you got rich thanks to building a business in the US and enjoying the US capital markets' monetizing of your stake in that business, you must be liable for your fair share of taxes. BTW, folks like Saverin are not beyond the government's reach - Facebook shares trade on US exchanges, there is much leverage the government could apply via that route.[/QUOTE]

According to this article, [url]http://www.dailytech.com/article.aspx?newsid=24704[/url], Saverin savings only come on the stock's appreciation [i]since he renounced his citizenship[/i]. I really don't see much problem with the current law.

[Quote]However, Saverin will have to pay an exit tax on the estimated capital gains from his stock holdings at the time that he renounced his U.S. citizenship. This means the Saverin will have to pay $365 million.[/quote]

Why did initial news report vilify Saverin with little to no mention of the fact that he will owe hundreds of millions in U.S. taxes?

Anyone want to take a guess at when Greece will exit the Euro? I'm reasonably certain it will be in the November/December time frame. The factors driving it include the Greek socio-economic mindset and the increasing exasperation in Germany. The rest of the eurozone will do a lot of talking, but in the end, it will get down to a Greek/German face off. Greece will scream loudly and take their marbles and go home to a new currency that they can inflate at will. This will result in years of Greek isolation and economic stagnation.

DarJones

[QUOTE=Fusion_power;299753]Anyone want to take a guess at when Greece will exit the Euro? I'm reasonably certain it will be in the November/December time frame. The factors driving it include the Greek socio-economic mindset and the increasing exasperation in Germany. The rest of the eurozone will do a lot of talking, but in the end, it will get down to a Greek/German face off. Greece will scream loudly and take their marbles and go home to a new currency that they can inflate at will. This will result in years of Greek isolation and economic stagnation.

DarJones[/QUOTE]I suggest August/September this year.

They've been screaming for many years but the British Museum still won't let them take their marbles home.

Paul

/begin OT/
So we are down to posting puns are we. As a gardener, you should appreciate this one. It is true as you can find out by googling the bean name which is available in Australia.

Someone got the bright idea of naming a bean "Sex Without Strings". Needless to say, it is a blond bush snap bean.
/end OT/

More on topic, the news out of Spain is not good. The bank downgrade has sent share prices down and outflows of money as deposits are withdrawn and moved outside the country are exacerbating the situation. The end result is the banks are being squeezed between higher interest rates and loss of deposits. This is not a major problem yet, but has the potential to be devastating.

One of the problems confronting Greece is that they are losing deposits at a very high rate as anyone with a lick of sense is withdrawing their savings from Greek banks and sending funds elsewhere in the EU or else hiding them in the mattress. This was a trickle a few months ago but is at flood stage now. The likely response will be the Greek govt taking action to stanch the outflow which will induce economic mayhem. People don't like being separated from their money.

I'm going to speculate that EU banks, including in Greece and Spain, are going to have a major upheaval with extensive damage control efforts over the next few days.

DarJones

[QUOTE=Fusion_power;299240][QUOTE=cheesehead;299220]It was devised in the billionaire-funded conservative think tanks of the latter 1970s in order to concentrate wealth in the wealthiest 1%, among other purposes.[/QUOTE]
Attribution of purpose in the above is not logically supported by other comments. In other words, you are spin doctoring.[/QUOTE]I didn't really mean to let this hang unargued other than the lack of refutation. So, to positively supply the "missing" (it is simply derived from previous postings, though not specifically repeated above) logical support:

As has been pointed out in the past, among the goals of the late-70s conservative think-tank strategy changes were:

- reducing government transfer payments, which went mainly to the poor and middle-class

and

- reducing the top tax bracket rates.

Put those two together: reducing income of the lower and middle classes, and increasing income of the wealthy. What do you get? Transfer of wealth from the poor and middle-class to the already-wealthy. How many are the already-wealthy? The top few percent.

Here, we reach the one point I'll grant you about "spin": in my statement you quote, "1%" was consciously taken from a figure made recently popular by the Occupy movement, not from the late-70s context. To de-"spin" that, simply replace "1%" by "few percent".

"It was devised in the billionaire-funded conservative think tanks of the latter 1970s in order to concentrate wealth in the wealthiest few percent, among other purposes."

Q.E.D.

George, I'll reply to your Bruno Saverin note once I dig up some more data - I want to make sure I have a clear picture of how much money he stands to save - if any - from renouncing his US citizenship just prior to the IPO.

As ZeroHedge correctly points out, it is rather hypocritical to propose special legislation to go after folks like Saverin when multi-national corporations have been gaming the tax laws for decades, for truly massive, triliion-dollar-totals:

[url=http://www.zerohedge.com/news/simple-question-senator-schumer]A Simple Question For Senator Schumer[/url]:
[quote]As many already know, earlier today Senator Schumer announced the cleverly named Ex-PATRIOT act, which seeks nothing short of exile for anyone who effectively declines their US citizenship for tax avoidance purposes. So far so good. We have, however, one simple question. In light of recent media reports of rampant abuse of various international tax loopholes by US corporations (recall the Double Irish with a Dutch Sandwich), but much more importantly, the glaring abuse of offshore tax shelters by hedge funds - organization such as Paulson & Co., RenTec, York Capital, etc., and financial institutions, such as Lazard, Blackstone, and Credit Suisse, can Senator Schumer please rep, warrant and guarantee that none of his corporate sponsors, i.e., his Top 100 Contributors, have ever engaged in any form of explicit or implicit tax avoidance, tax offshoring, and tax shelter. To facilitate his checklisting, we have presented his top 100 contributors below. Because if he can't, one may be left with the impression that his whole anti-tax tirade and legislation is, you know, hypocritical.[/quote]
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Facebook shares have already slid below their open price of $42 (which represents a mere 10% premium vs the official IPO price), and are now threatening to go below even the IPO price of $38, which the algos appear to be defending desperately: volume rapidly approaching 500 Bln shares - compare that to today's actual float. While that still values the company very richly relative to earnings (and in my view, prospects of future earnings growth), some "blockbuster IPO" there. Those European-premarket buyers, some of whom apparently paid well over 50 Euros/share, are going to be just a bit miffed. Guess we'll have to wait a few more days for the shares to triple in price, as several PermaBull sell-siders have predicted. Folks outside of Silicon Valley have little idea of the insanity of the media (both worldwide-financial but even more local here) about the FB IPO. It`s been simply nuts. First China was gonna save the global economy (ad the CA budget), well now that that didn't pan out, it's Facebook that's going to make the world safe for tech-bubble investing again.

One of the more amusing local TV stories about the impending IPO was one featuring a gaggle of gussied-up, gold-digging Bachelorettes hanging out at some pre-IPO party in Palo Alto, hoping to score themselves an eligible Facebooker. It reminded the line from [i]An Officer and a Gentleman[/i], where the one gal says to the other, "I wanna marry me a Naval A-vi-a-tor". Let`s see how the 21st century tech-media version sounds:
[i]
"I wanna marry me a fast-fingered Facebook programming nerd-ling-er."
[/i]
Hmmm ... It seems to lack a certain emotional ooomph, but perhaps I`m just jaded.

-------------------

Remember all those trillions in bad-loam losses left over from the collapse of the housing bubble, many of which have allegedly been sitting on the TBTF banks` balance sheets at fictitiously high valuations resulting from the government`s 2009 squeezing of the Financial Accounting Standards Board (FASB) to get them to suspend their longstanding mark-to-market valuation rules? (Similar stuff has gone on in Europe). Well it appears a lot of those "assets" haven`t just been sitting. The FT explains, and it seems JP Morgan`s recent $2Bln - oh wait - they just raised their estimate to $3Bln - "hedging" loss (it wasn`t hedging, but that is the official lie) may end up being quite a bit bigger, since they still own over $100Bln (notional) of crap-MBS paper they need to sell to unwind the massive position Mr. Iksil & co. got them into, and worse, everyone *knows* they need to unwind the trade:

[url=www.ft.com/cms/s/8ef035de-a043-11e1-88e6-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F8ef035de-a043-11e1-88e6-00144feabdc0.html&_i_referer=http%3A%2F%2Fmarket-ticker.org%2Fakcs-www%3Fblog%3DMarket-Ticker%26page%3D2]JPMorgan unit has $100bn of risky bonds[/url]
[quote]The unit at the centre of JPMorgan Chase’s $2bn trading loss has built up positions totalling more than $100bn in asset-backed securities and structured products – the complex, risky bonds at the centre of the financial crisis in 2008.

These holdings are in addition to those in credit derivatives which led to the losses and have mired the bank in regulatory investigations and criticism.

The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage-backed bonds and other complex debt securities such as collateralised loan obligations in all markets for three years, more than a dozen senior traders and credit experts have told the Financial Times.[/quote]

---------------------

[b]Friday Condolences[/b]

Much as I'm tempted to join in the Greeks-have-lost-their-marbles jokemeistery, sorry, no funnies today, just the sad news that (probably my personal favorite) econo-blogger Mish`s wife [url=http://globaleconomicanalysis.blogspot.com/2012/05/my-wife-joanne-has-passed-away-stop-and.html]JoAnne has died[/url]. Mish only recently let on that his wife was suffering from ALS.

[QUOTE=xilman;299768]I suggest August/September this year.

They've been screaming for many years but the British Museum still won't let them take their marbles home.

Paul[/QUOTE]


I see what you did there.

[QUOTE]Remember all those trillions in bad-loam losses left over from the collapse of the housing bubble[/QUOTE]

Too late Ewmayer, you are a punster too. Mortgage loam!

DarJones

Here's a whopper for all you economists
 

[URL="http://www.dailyfinance.com/2010/06/09/risk-quadrillion-derivatives-market-gdp/"]Big Risk: $1.2 Quadrillion Derivatives Market Dwarfs World GDP[/URL]

[quote]One of the biggest risks to the world's financial health is the $1.2 quadrillion derivatives market. It's complex, it's unregulated, and it ought to be of concern to world leaders that its notional value is 20 times the size of the world economy.[/quote] For those of you who know better than me and would complain that "notional value" isn't actually money moving around, they do qualify it.
[quote][Running example]...The actual cash amount of the interest rates swaps might be 1% of the $1 million debt, while that $1 million is the "notional" amount. Applying that same 1% to the $1.2 quadrillion derivatives market would leave a cash amount of the derivatives market of $12 trillion -- far smaller, but still 20% of the world economy.[/quote]