All global financial institutions now in bed with the IRS?

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.

They’re effectively trying to regulate [continue]….

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Trust us; we’re the government

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]…

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Shady numbers behind Suze Orman’s new investment newsletter

Posted February 7, 2012 at 3:41 am

by Jason Zweig

What business has an estimated one million clients, operates on the fringe of securities law and can say just about anything without immediate consequences?

Just ask followers of Suze Orman, the personal-finance icon. In March 2011, she and Mark Grimaldi, an investment manager in Wappingers Falls, N.Y., launched a monthly newsletter called The Money Navigator.

Ms. Orman has since given away more than 50,000 trial subscriptions to the newsletter, which costs $63 a year and now reaches 65,887 subscribers. She and Mr. Grimaldi are 50-50 owners, according to Mr. Grimaldi and Ms. Orman’s spokeswoman.

Mr. Grimaldi also manages a mutual fund called Sector Rotation, which has about $25 million in assets. His firm, Navigator Money Management, oversees a total of about $120 million in the fund and other accounts, according to its financial filings. That makes it a minnow in the money-management business.

The cover story in the December issue of the Money Navigator, adapted from a November 2011 article in the newspaper Investor’s Business Daily, said “Sector Rotation produced an average annual return of 10.25% from August 31, 2002, to October 31, 2011, vs. 5.47% for the S&P 500 Index, according to Morningstar.”

Yet the Sector Rotation fund wasn’t launched until Dec. 31, 2009. The earlier return, Mr. Grimaldi says, was produced by [continue]….

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Horror: more people in U.S. prison than in the gulags

Posted January 31, 2012 at 2:49 am

by Adam Gopnik

A prison is a trap for catching time. Good reporting appears often about the inner life of the American prison, but the catch is that American prison life is mostly undramatic—the reported stories fail to grab us, because, for the most part, nothing happens.

One day in the life of Ivan Denisovich is all you need to know about Ivan Denisovich, because the idea that anyone could live for a minute in such circumstances seems impossible; one day in the life of an American prison means much less, because the force of it is that one day typically stretches out for decades.

It isn’t the horror of the time at hand but the unimaginable sameness of the time ahead that makes prisons unendurable for their inmates. The inmates on death row in Texas are called men in “timeless time,” because they alone aren’t serving time: they aren’t waiting out five years or a decade or a lifetime. The basic reality of American prisons is not that of the lock and key but that of the lock and clock.

That’s why no one who has been inside a prison, if only for a day, can ever forget the feeling. Time stops. A note of attenuated panic, of watchful paranoia—anxiety and boredom and fear mixed into a kind of enveloping fog, covering the guards as much as the guarded.

“Sometimes I think this whole world is one big prison yard, / Some of us are prisoners, some of us are guards,” Dylan sings, and while it isn’t strictly true—just ask the prisoners—it contains a truth: the guards are doing time, too.

As a smart man once wrote after being locked up, the thing about jail is that there are bars on the windows and they won’t let you out. This simple truth governs all the others. What prisoners try to convey to the free is how the presence of time as something being done to you, instead of something you do things with, alters the mind at every moment.

For American prisoners, huge numbers of whom are serving sentences much longer than those given for similar crimes anywhere else in the civilized world—Texas alone has sentenced more than four hundred teen-agers to life imprisonment—time becomes in every sense this thing you serve.

For most privileged, professional people, the experience of confinement is a mere brush, encountered after a kid’s arrest, say. For a great many poor people in America, particularly poor black men, prison is a destination that braids through an ordinary life, much as high school and college do for rich white ones.

More than half of all black men without a high-school diploma go to prison at some time in their lives. Mass incarceration on a scale almost unexampled in human history is a fundamental fact of our country today—perhaps the fundamental fact, as slavery was the fundamental fact of 1850.

In truth, there are more black men in the grip of the criminal-justice system—in prison, on probation, or on parole—than were in slavery then. Over all, there are now more people under “correctional supervision” in America—more than six million—than were in the Gulag Archipelago under Stalin at its height. That city of the confined and the controlled, Lockuptown, is now the second largest in the United States.

The accelerating rate of incarceration over the past few decades is just as startling as the number of people jailed: in 1980, there were about two hundred and twenty people incarcerated for every hundred thousand Americans; by 2010, the number had more than tripled, to [continue]…

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The war for the internet has begun

Posted January 23, 2012 at 12:55 am

by Anthony Wile

By now, people who use the Internet seriously, and even plenty who don’t, are aware of the arrest of six-foot-seven, 300-pound Kim Dotcom, an outsize figure in the business of facilitating Internet downloads.

The problem with his company, Megauploads, according to the US Justice Department and the FBI that carried out the arrest, is that his brainchild allowed users to traffic in “stolen” – copyrighted – entertainment on which no royalties had been paid.

In this article, I’ll comment on the arrest of Kim Dotcom and try to show how this one action is actually the beginning of an entirely new phase of what we may call the Internet Wars.

I’m not the first to notice this. As Kurt Nimmo and Alex Jones, of Infowars fame, pointed out in an article posted today entitled “The Great Internet Wars Have Begun,” we wake up to an entirely new Internet era this weekend.

Yes, a war has been joined and human history shall never be the same. For one thing, the outcome is NOT certain – and the power elite that seeks to control and constrain the Internet may yet end up taking a step back – at least in these early rounds, anyway.

For another, the directed history that the Anglosphere power elite has been so clever at inculcating over the past century is gradually fading away. That’s perhaps an even more important point. The Dotcom arrest actually reinforces this observation, as I’ll try to show in a moment.

There is no doubt, in my view, that the elites practiced directed history in the 20th century, setting up wars and economic catastrophes designed to consolidate world government. But in the 21st century, with so many understanding and evaluating the mechanisms of the elites, this is a considerably harder trick to pull off.

The elites actually have a limited playbook when it comes to [continue]…

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The coming privatization scam

Posted January 13, 2012 at 3:51 am

by Russ Winter

All the discourse about deregulation or regulation is a diversion from the real fact that the vehicles to steal keep being put into place. The criminal oligarchs are going to set the stage through the back door while everybody is talking about Dodd-Frank, consumer regulatory side shows, etc.

Since the big banks were not busted up, these side shows are nothing more than smoke screens and diversions! How does one “regulate” a trillion dollar bankster?  And is it really necessary to put more regulations on a $100 million banker?

Meanwhile, the LTRO exchange debt for assets mechanism in Europe, (discussed in my article Peak Heist) is a shocking model of how it will work, yet nobody has seen through it. When the debt crisis arrives in the US, (I think this year), a version of this will be rolled out.

In fact without shrinking the power and size of banksters before shrinking government, this sets the stage for abusive privatization transactions. The notorious parking meter scam in Chicago is an example. I also fear tax farming will be employed. These are up front payments in the form of debt exchanges in return for future tax revenues. Although I have no strong objections to shrinking government this is not the way to do it.

The Republicans are so champing at the bit to shrink government that it is easy to visualize them literally giving away government assets to bankster cartels for a song.

The Democrats are every bit as cynical and corrupt,  but their real motivation is to allow the same process under the guise of fiscal crisis to “save programs” and “save the financial sector”.

So the end game here will be [continue]…

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You’re not entitled to anything other than this:

Posted December 18, 2011 at 11:44 pm

A commenter, on this post (What the Great Depression Did That This Recession Won’t) writes:

It is in our humane nature to find someone to blame for all the bad bets, unlucky breaks, or bad loans we have agreed to, it’s easy and natural.

Why do we think we are entitled to a government social safety net in the first place?

I believe we were a much greater people when we did not believe we were entitled to anything, other than Life, Liberty and the pursuit of Happiness. (notice pursuit, not guarantee)

What has happened to the American that just wanted opportunity, to be self reliant, responsible for our actions and decisions. The American that was not afraid of hard work or taking a job that might be less than what we would like.

Seems the stigma for not wanting to default on our debts is easy to shed but the stigma of taking a job or two that might require us to get dirty or work below our education is out of the question.

What has happened to us America? I pray that we will once again yearn for freedom, self reliance, and a belief in ourselves and the God of our constitution.

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The inequality blathering must stop

Posted December 9, 2011 at 3:08 am

by David Merkel  

This is not likely to be a popular post.  Just warning you.

I have a bias that modernity is more fragile than commonly believed.  One aspect of that is income/wealth distributions.  Inequality was far more pronounced in the past, and was fairly stable in being so.  So why should the last 150 or so years not be viewed as a possible aberration?

Let me give you five or so reasons why the middle class should shrink:

1) Education — middle classes in the developed world were relatively large when the education systems produced a large portion of the educated people of the world.  That is no longer so, and relative education levels have tipped against the US.  Any surprise that we fall behind?

2) Lazy choices for majors/jobs — “follow your bliss” is stupid advice if no one wants to fund your bliss.  All prosperity comes through serving the needs of others.  Follow their bliss, not yours, and you will do well.

3) Technology — some technological advances aid equality, and some aid inequality — we have been getting more of  [continue]….

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Trading stock on inside information?

Posted November 16, 2011 at 1:11 am

by Vedran Vuk

This 60 Minutes segment [ watch video here ] on Congressional insider trading is simply outstanding. However, I would like to correct it on some points. The video points out that some Congressman made trades after negative briefings with the Fed. That part might not be so bad.

After all, consider who was running these briefings – the same people who said that everything was fine only a few years ago. If one had acted on Bernanke’s past advice, one’s portfolio would be nothing to brag about. At the end of the day, you’re hearing someone’s opinion about the market.

However, purchasing shares of healthcare or insurance companies right before a vote on a major health care overhaul… well, that’s something entirely different.

While this story covers Congress, think about everyone else getting rich from this information – from staffers to relatives to just random residents of D.C. One really doesn’t have to be far on the inside to acquire tradable knowledge.

For example, when I worked in D.C., I had a pretty good idea that the first bailout vote was not going to pass.  Remember the one where the market fell over 700 points in a single day?

I was just a lowly intern at the time, but still I could gather enough information to understand that the panic on the Hill was much worse than what CNN was reporting at the time. If the information leaks that far down, just think about how much money is being made up there.

Vedran Vuk graduated with a BBA in Economics from Loyola University of New Orleans. Currently, he is pursuing a M.S. in Finance at Johns Hopkins University. He also spent time on a PhD. economics program.

His publications include academic journal articles, book chapter contributions, newspaper columns, and online articles. Prior to Casey Research, he worked in think tanks, government affairs, and corporate governance. Utilizing his experiences with academics, Washington politics, and financial knowledge, Vedran’s analysis often seeks to find the mid-point between these different areas.

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Quit complaining and go create something

Posted November 8, 2011 at 8:59 pm

by Leigh Drogen

I’ve been fired or laid off from every job I’ve ever had. No joke, I’ve been fired from delivering pizza, stringing tennis racquets, being a boating instructor at a summer camp, I was laid off from Geller Capital in early 2009 after David got sick and wound down the firm, fired from the private wealth management firm I worked at for a short time after that, and I was (technically) fired from StockTwits in March of 2011 after Howard told me that I was “an entrepreneur”, and it was “time to go make some real money”.

Every time I was fired, I went back to working for myself, and ended up loving it. I lived on a girlfriend’s couch for a few months and ate ramen noodles one time, but I loved it.

As a kid I used to sell painted rocks, shells, other arts and crafts, and even once put my little 5 year old sister out in front of the wagon with a sign saying that we were donating all money to the ASPCA, we wanted a cat, we raised $250 in an afternoon.

When I got older I leveraged my notoriety as a great tennis player to teach private tennis lessons for $50/hour, it beat delivering pizza for $4/hour, or camp for $12/hour. When I was fired from the private wealth management firm, I formed Surfview Capital to build my own asset management firm which I successfully ran for 2+ years with great returns and growing assets.

And when I got fired from StockTwits, I started Estimize where I’m able to execute on several different ideas I had while at StockTwits which were never going to get built there.

Until recently I didn’t understand the definition of entrepreneur. Building businesses and making money on my own was always just something that I did when I was forced to, I didn’t think of it as a job or a career. Until recently I didn’t understand the idea that being an entrepreneur permanently wasn’t something that should be looked down upon.

The story of why it took me 25 years to figure this out says a lot about my generation, the pain and disappointment many of them are [continue]…

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