Posted June 1, 2012 at 3:28 am
by Bill Bonner
What would the world be without chumps? Suckers? Bagmen and patsies?
Who would buy a ladies handbag for $1,500? Or blue-jeans for $150? Who would buy an oversized show-off pickup…or a $4 million McMansion?
Who would buy Facebook?
The Facebook IPO seemed to attract dumb money. Billions of it. Investors thought they could buy it at the offer price and get an almost guaranteed “pop.” They thought the fix was in.
They were right. Trouble was, the fixers ‘f’ed up. The fix was broken even before the market opened. Smart insiders were supposed to sell their shares — which they got in the IPO — to the dumb outsiders on the open market.
But so many investors had gotten shares at the IPO price, and hoped to get out at a higher price, there wasn’t enough dumb money to take their shares. Everybody lost money…with the stock falling to $28 yesterday.
It made us think more about what a vital role dumb money plays in our economy.
Typically, lottery and IPO winners have dumb money. Sports stars often have dumb money too. Of course, a lot of wealthy people — the ‘patsy rich’ — have money so dumb it should be forcibly sterilized.
When poor people get money it is usually dumb money. They don’t know what to do with it. So, they do dumb things. That’s why they’re poor. They pay more than they should…often for things that aren’t worth buying at all. Fancy cars…fancy houses…fancy restaurants… They think the idea is to get rid of money. Usually, they part company with their loot quickly…and they’re poor again.
People think the rich are different. They think the rich are smart about money. But very often, it ain’t so.
Wall Street is a sophisticated industry. It has developed products that appeal to every taste and every budget. It’s good at separating the poor and middle classes from their money; they put their dough into mutual funds and Facebook shares. They’re even better at separating the rich from their money. Why? The rich have more money to lose.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Were it Not for Dumb Money…" ]
Posted May 31, 2012 at 2:23 am
by John Stossel
People like the idea of licensing. We license drivers. We license dogs. It seems prudent. People naively think this government seal of approval makes us safer.
This naivete is used to justify all sorts of rules that kill competition.
Las Vegas regulators require anyone who wants to start a limousine business to prove his new business is needed and, worse, will not “adversely affect other carriers.” But every new business intends to beat its competitors. That’s the point. Competition is good for us. Las Vegas’ anticompetitive licensing rules mean limo customers pay more.
In Nashville, Tenn., regulators ruled it illegal for a limo to charge less than $45 a ride. One entrepreneur had won customers by charging half that, but the new regulations mean the established car service businesses no longer have to worry about him.
Perhaps Nashville’s and Vegas’ regulators really believe “this is an area where the free market doesn’t work,” as the manager of the Nevada Transportation Services Authority put it. But it’s fishy that charging big fees for licenses just happens to be a very effective shakedown operation. Vegas cab and limousine businesses give “substantial” donations to Vegas-area political candidates, according to the Las Vegas Sun.
Our big government has justified its existence (at least since the Progressive Era) by claiming it is a “countervailing influence” to corporate power—when it is, in fact, incestuously entwined with corporations.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Why Business's Desire for Profit Is a Good Thing" ]
Posted May 30, 2012 at 12:05 am
by Quentin Fottrell
Lawyers say the social network contributes to an increasing number of marriage breakups.
More than a third of divorce filings last year contained the word Facebook, according to a U.K. survey by Divorce Online, a legal services firm. And over 80% of U.S. divorce attorneys say they’ve seen a rise in the number of cases using social networking, according to the American Academy of Matrimonial Lawyers.
“Affairs happen with a lightning speed on Facebook,” says K. Jason Krafsky, who authored the book Facebook and Your Marriage with his wife Kelli. In the real world, he says, office romances and out-of-town trysts can take months or even years to develop.
“On Facebook,” he says, “they happen in just a few clicks.” The social network is different from most social networks or dating sites in that it both re-connects old flames and allows people to “friend” someone they may only met once in passing.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Does Facebook Wreck Marriages?" ]
Posted May 24, 2012 at 5:29 pm
by Simon Black
This week, the universally stupid brainchild of US Senators Chuck Schumer and Bob Casey known as the Ex-PATRIOT Act inched a bit closer towards becoming law.
‘Ex-PATRIOT’ is an absurd acronym that stands for “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy”. I call it the Tax Slave Act… and it proposes three key provisions:
1) Individuals who are deemed, in the sole discretion of the US government, to have renounced US citizenship in order to avoid US taxes, will be permanently barred from re-entering the United States.
2) Such individuals will also be required to pay a 30% capital gains tax to the United States government on ALL future investment gains derived from the US. Currently, non-citizens who do not reside in the US pay no US capital gains tax.
3) These proposals are RETROACTIVE, and, if passed, would apply to anyone who renounced his/her citizenship within the last 10-years.
During a Sunday interview with ABC News, House Speaker John Boehner threw his support behind the bill… certainly a big step towards its eventual passage.
In the years since the exit tax on assets was established, two things have happened:
1) The number of Americans renouncing US citizenship has risen steadily, from 235 people in 2008 to 1,780 last year (according to Schumer’s office).
2) The asset bubble has burst, and assets are worth much less than just a few years ago. As such, the government isn’t collecting as much revenue from the exit tax.
My sense is that the government has been watching the number of expatriates rise over the years, and simultaneously watching the value of the exit tax fall… and they’ve been looking for an excuse to make sweeping (i.e. retroactive) changes.
Eduardo Saverin is the perfect excuse. The Facebook co-founder’s recent renunciation of US citizenship has become a rallying cry for politicians to go back in time and steal money from former citizens retroactively…plus establish a larger base for future tax revenues.
This is a truly despicable thing to do considering that these former citizens followed the appropriate rules at the time, paid the tax, and moved on with their lives.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "US citizens now one step closer to becoming permanent tax slaves" ]
Posted May 24, 2012 at 1:59 pm
by Bobby Casey
What isn’t so widely distributed is the news of Facebook founder Eduardo Saverin renouncing his US citizenship to presumably save 10′s of millions of dollars in taxes. With a 4% stake in the company, Saverin stands to make about $4B with his shares so the savings would clearly be tremendous.
Saverin was born in 1982 in Sao Paulo, Brazil and grew up mostly in Miami, Florida. Being born in Brazil he holds Brazilian citizenship and a passport. Once his family came to the US, they naturalized as US citizens making Saverin a dual American/Brazilian citizen.
Since 2009 however, Saverin has been living in Singapore. In 2011 Saverin renounced his US citizenship and is now a Brazilian citizen and permanent Singapore resident. Sounds like Saverin really understands the meaning of Geo-arbitrage.
While the press on this is relatively light, what is out there is attempting to eat him alive. He is being labeled as un-patriotic, a tax cheat (he stands to save 10′s of millions of dollars in taxes since Singapore has no tax on capital gains), and generally an immoral human being for robbing the US of taxes due.
I could likely write a book about this topic (maybe I will…), but for sake of time and space let’s leave out the concept of immorality with regards to income taxation.
The US is the only developed nation in the world that still taxes its citizens and permanent residents based on their citizenship, not residency. Every other country in the world only taxes its people when they live in the country while the US taxes its people no matter where they live in the world.
This is an absurd concept. If a German citizen moves to Australia he no longer files a German tax return or pay German tax. He would only be subject to Australian tax since that is where he lives.
As an American, if you move to Australia, you would still file a US tax return and pay taxes in both the US and Australia.
Of course there are some complicated tax treaties and the US earned income exclusion, but if you have investment income or are a high earner, you will owe tax in both places even though you are only consuming the public resources in your country of residence.
From my perspective, Saverin should not have been paying any US taxes since he moved to Singapore in 2009. Why would he? He isn’t using the public services in the US. It just doesn’t make any sense.
Like any smart businessperson, he made an intelligent business decision – he renounced his US citizenship and gave up the most expensive passport in the world.
In the business world there is a profit motive and the free trade of goods and services for money. Businesses compete with other businesses for quality people to employ in their work force. It is only rational. They provide competitive salaries, benefits and perks to attract the smartest and most productive employees.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Are You an Un-Patriotic, Immoral Tax Cheat?" ]
Posted May 13, 2012 at 5:47 pm
Bumbling TSA agents at the Ft. Lauderdale, Fla., airport recently pulled an 18-month old girl, named Riyanna, and her parents off of a JetBlue flight as they tried to head home to New Jersey because – get this – the toddler appeared on the terrorist suspect “no-fly” list.
You can’t make this stuff up.
As the couple and their daughter eased into their seats minutes before the plane was scheduled to take off, an airline employee approached and asked them to disembark the aircraft because TSA agents wanted to speak with them.
“And I said, ‘For what?’” Riyanna’s mother told local ABC affiliate WPBF-TV. “And he said, ‘Well, it’s not you or your husband. Your daughter was flagged as no fly.’ I said, ‘Excuse me?”
Needless to say, little Riyanna’s father was as incredulous as he was angry.
“It’s absurd,” he said. “It made no sense. Why would an 18-month-old child be on a no-fly list?”
Good question. But apparently, no one at the TSA knows.
Eventually the TSA bureaucracy caught up to common sense and released the family, though they told the local ABC television affiliate that no one from the agency bothered to apologize or even explain what had happened and why (and, for that matter, if their daughter was removed from the no-fly list). Embarrassed, they refused to re-board the plane and left the airport.
But they still want to know what happened, and who could blame them?
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "TSA flags 18-month-old baby as terrorist, forces family to disembark plane" ]
Posted April 18, 2012 at 11:56 pm
Tennessee lawmakers don’t want to stop at teaching teenagers to abstain from sex. A bill working its way through the legislature — and already approved by the Senate — would require public schools to urge students to swear off any kind of romantic contact that could lead to hotter and heavier stuff before marriage.
Discouraging heavy petting and more intense shenanigans is one thing. But critics of the bill say it’s so vague that activities as innocent as “holding hands and kissing could be considered gateways to sex,” says Jerica Phillips at WMC-TV. The bill also says parents can file a complaint, triggering an official investigation, if they believe a teacher has mentioned or demonstrated a “gateway sexual activity.” So watch out, teachers…
[ Details / Source: The wording above is our hand-picked KEY excerpt(s) from this full article: "Is Tennessee Trying to Ban Hand-Holding?" ]
Posted April 1, 2012 at 5:13 pm
by Cork Gaines, via Business Insider
How big of a rivalry is Kentucky and Louisville in basketball?
Kentucky has won seven national championships, and yet when they beat Louisville last night in the national semifinals, students took to the streets and started setting fires to couches and cars.
We’re not sure when things stop being just a bunch of drunken idiots damaging property that belongs to other people, and when it officially becomes a riot. But our sense is that last night’s scene in Lexington, Kentucky was more of the former and less of the latter.
In other words, it was just a bunch of idiots being idiots. And once the police get through with all the YouTube videos, several kids are going to have a new line on their arrest records.
Here is one of the cars being set ablaze (via SportsGrid)…
Posted February 16, 2012 at 2:22 am
by Simon Black
The Foreign Account Tax Compliance act, or FATCA, is one of the most arrogant pieces of legislation ever conceived. President Obama signed the Act into law in 2010, and there are a some key provisions that are important to understand.
Reporting Requirements of US Tax Serfs holding Foreign Financial Assets
According to the IRS, “FATCA requires certain U.S. taxpayers holding foreign financial assets with an aggregate value exceeding $50,000 to report certain information about those assets on a new form (Form 8938) that must be attached to the taxpayer’s annual tax return.”
In other words, the law extends the existing reporting and disclosure requirements for US citizens and residents holding certain assets abroad.
Reporting Requirements of Foreign Financial Institutions
This is the part that’s really arrogant. The US government is requiring any foreign organization it deems to be a “financial institution” to enter into an information-sharing agreement with the IRS.
Posted February 8, 2012 at 3:50 am
by Ron Paul
While much has been made recently of the President’s unconstitutional appointment of Richard Cordray to be director of the Consumer Financial Protection Bureau (CFPB), lost in the hubbub has been any discussion of the unconstitutionality of, or the need for, the CFPB itself.
Proponents of the CFPB claim that this new bureaucracy will help consumers by protecting them from fraudulent activity. In reality, it will only expose consumers to more financial harm.
Housed within the unconstitutional Federal Reserve, and funded not through Congressional appropriations but through the Federal Reserve’s interest revenue off the trillions of dollars of US government debt it holds, the structure of the CFPB ensures that it is run by unelected, unaccountable bureaucrats, with no effective oversight from Congress.
Given broad power to regulate the activities not only of banks, but also of any other entity which the government deems offers a financial product, there is almost no limit to the scope of financial activities which the CFPB can oversee.
Giving impetus to the CFPB’s creation was the poor reputation of Wall Street banks and financial firms that developed as a result of the financial crisis, banks which received trillions of dollars of taxpayer-funded bailouts turned around and shafted their customers by foreclosing on homes, raising credit card interest rates and introducing numerous new fees.
But rather than keeping Wall Street in check as its proponents allege, the CFPB will end up placing further restrictions on the ability of Main Street Americans to engage in productive financial endeavors. Current law already allows only the richest Americans to invest in potentially lucrative ventures such as hedge funds because such investments are deemed to be “too risky” for the average American to invest in.
The government in its paternalistic wisdom treats American investors as too stupid to know what to do with their own money, and “protects” them, supposedly, by keeping them poorer than they otherwise would be. We can expect even more of this once the CFPB is running in full stride.
The CFPB will further harm consumers by [continue]…