5/06/2013

The capture of tax haven Ireland: "the bankers, hedge funds got virtually everything they wanted"

The capture of tax haven Ireland: "the bankers, hedge funds got virtually everything they wanted"

Cross-posted from the Treasure Islands blog

‘The Financial Times is carrying an important and fascinating story about the tax haven of Ireland. It focuses on a particular issue which is dear to my heart, and the subject of a whole chapter of Treasure Islands.

This is, at heart, a story about how small financial centres become entirely 'captured' by financial services interests, with the deliberate removal of democratic checks and balances and carte blanche given to financial services interests to write laws in secret. This is exactly why I call offshore the 'smoke-filled room,' where gentleman arrange the world's financial affairs over cognac and cigars....

“The bankers and hedge fund industry got virtually everything they asked for while the public got hit with a number of austerity measures”.

There you have it...The last sentence epitomises the captured financial state. ...

Now take a look at what happened in Cyprus. The very same phenomenon, in different form. It's just the same in Jersey. And in Delaware. And the same, in more diluted forms, in Switzerland, the United States, and the UK.

This is what's happening, all over the world. Anyone wanting to understand the offshore phenomenon needs to understand: this is what it is all about.’

Posted in Tax Justice Network.

The power of bankers and hedge funds to control financial centres is not new. They have even controlled the operations of stock markets around the world. They determine how stock markets should be run, the rules and operating systems.

Stock markets that are modelled around New York Exchange have similar features that were dictated by the bankers and hedge funds to give them undue and unfair advantages over the innocent investors.

The main features that change the game plan of stock markets are as follows:

1. They demanded the Exchanges to allow them to plug in their super computers to the Exchange’s trading system to have privy information of the ‘buys and sells’ in the market and use their computers to compute and take the best positions against other innocent traders.

2. They insisted that the trading bits be downsized to the smallest unit possible to enable them to trade in big volumes and ensure profits by simply scalping the system.

3. They insisted that commission will be neglible for them to make profits while normal traders could not do so. They mostly trade at minimal charges or no charges at all.

4. They made Exchanges to invest in high speed super computers to match their super computers while normal traders were trading manually at snail pace.

5. They made Exchanges to provide large scrip lending facilities for them to cover their big short positions when they sell down the market for profits.

6. They made exchanges run continuously without lunch breaks to facilitate their computer trading.

7. They made HFT legal when it is illegal, HFT is basically front running.

8. Above all, they made unfair trading activities legal when they are against the laws of securities trading.

9. And together with bankers, they create high risk and toxic products in derivatives and made them legal for sale and tradings. Derivatives are a big financial nuclear bomb that is waiting to blow up the western financial system.



Charlie Munger, the right hand man of Warren Buffett, has openly denounced the bankers as cheats, cannot be trusted, and needed to be reined in before they blow the whole financial system up. And while all the Exchanges were coerced to allow HFT knowing that it is illegal, it needs a brave man like Munger to call a spade a spade, that HFT is illegal. And this is not the only thing that is illegal in the finance and securities industry. When the bandits or robbers are dictating the law, dictating how the system should be played, and the law is either on their side or simply helpless to touch them, the exploitation will continue till it blows up on its own face.

How and what should govts do to bring an end to such criminal activities in the finance and securities industry? Not doing anything will make govts accomplices to these horrendous crimes against the innocent traders and investors. Who is robbing the people? Would the Americans start to clean up their house and set the standard for the rest of the world? If the Americans continue to allow the bankers and hedge funds to cheat the main street, the rest of the world will just follow this fraudulent system blindling, thinking that since the Americans are doing it, it must be ok.

14 comments:

Anonymous said...

Theodore "T.R." Roosevelt, Jr. was the 26th President of the United States (1901–1909).

The USA President who stopped big businesses from exploiting the American workers.
And in the process, created the American middle class.

http://en.wikipedia.org/wiki/Theodore_Roosevelt

You can also watch his achievements in the History Channel documentary called "Innovators".
He appears in the episode entitled "Ford"

Ⓜatilah $ingapura⚠️ said...

There is little doubt that bankers are liars and cheats.

However, most taxes are unfair and therefore can be considered as THEFT or at least EXTORTION (pay up or else).

Since the world runs on capital, it is important for entrepreneurs to protect their capital. Unfortunately that means criminals and corrupt politicians can also use the same facilities to protect themselves from justice.

There is no such thing as "tax justice" -- that term is a laughable play on words. TAXATION IS THEFT becasue the state transgresses the idea of PRIVATE PROPERTY RIGHTS -- which many of the loser-have-nots don't agree with anyway, so they've adopted the idea of using POLITICAL MEANS to relieve the "haves" of their wealth.

Well, good luck to all these wankers who seek "tax justice". Tax havens are alive and well, despite the yammerings of these anti-capitalistic nut cases as well as the OECD <=== laughing stock.

Singapore and Hong Kong are bona fide tax havens. To me the phrase "tax havens" is a blessing, not bad words as most people and the ball-licking media think they are.

Chua Chin Leng aka redbean said...

The tax haven might come to an end on 1 Jul when more transparency will be imposed by the Americans and Europeans to demand disclosure of suspect accounts.

Ha, having too much money is like criminals and there are countries under all kinds of guises and trying to hide these criminals and their wealth. The game is coming to a close with the noose tightening.

But it will only work when all countries are prepared to live be a set of common rules or some will call themselves Virgin Islands and continue to prostitute themselves to the super rich and the thieves.

Veritas said...

I am a believer of honest living. All these financial center thing will come back and hurt us.

This is karma.

We cannot expect to help drug lords, blood monies, pimp, corrupt officials hoarding their $$$ without incuring God's wrath.

We need to repent.

Anonymous said...

Before July 1, all financial institutions in Singapore must identify accounts they strongly suspect hold proceeds of fraudulent or willful tax evasion and, where necessary, close them. After that, handling the proceeds of tax crimes will be a criminal offence under changes to the city-state’s anti-money laundering law

Anonymous said...

There will be no difference between before and after July.
If any, it will be fraudsters getting more professional in their connings and more aggressive.
Regimes will also upgrade their skills in tandem to work more efficiently with the fraudsters.

Anonymous said...

'The tax haven might come to an end on 1 july..'

It will not. Those people who drafted those laws will make the laws to suit their own personal gains. They are the exact same people who created the tax havens. This world is full of lies and tax (direct or indirect) is day and night robbery. Bankers are just like tax offices and governement - they are the new age vampires.

Anonymous said...

The rich should be tax at 50% at least because most of the defence budget is to protect their assets. Currently, the poor and middle class are subsidizing the rich by paying all the indirect taxes so the rich enjoyed a relatively low tax regime.

Anonymous said...

You can't change the taxation rate UNLESS you change the government.

Edmund Lim said...

Hi RB,

On 21 July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into Federal Law in the United States by US President Barack Obama.

Amongst its many aims, it was enacted to prevent abuses in the financial system.

Two other significant financial reform acts legislated over the last 100 years probably are the 1932 Glass-Steagall Act and the Banking Act of 1933 but the later is often also popularly referred under the former's name.

One major provision in the Banking Act of 1933 was to separate commercial banking from investment banking.

The subsequent repeal of this provision in 1999 under the Gramm-Leach-Bliley Act was often cited as one of the likely underlying root causes for the last financial crisis in 2008/ 2009.

Moving further back in history, in the late 18th century, Classical Economics was probably developed more to provide answers to the political and social situations at that time than anything else.

Then, there was the "titanic power tussle" between landowners and industrialists.

In late 19th/ early 20th centuries, Neo-Classical Economics attempted to solve the perennial power struggle between industrialists and workers. In 1871, labour unions were legalised in England.

In the late 20th century, under Reaganomics and Thatcherism, powerful labour unions in the US and UK were respectively tamed in the 1980s by the late former US President Ronald Reagan ( 1911 - 2004 ) and the late "Iron Lady", former UK PM Baroness Thatcher ( 1925 - 2013 ).

Over the last 250 years or so, economics powers have shifted from landowners to industrialists to workers and now "capital owners".

Just as we have witnessed in the past quarter millennium, going forward, in the foreseeable future, the means and origins of such change will still likely emanate from the West than any other power centres of the world.

And if past history is anything to go by, it is likely to be precipitated by a major crisis or severe economic downturn.

Cheers :)

Happy "Blogging",
sgpropertymatters.blogspot.com

Anonymous said...

ST Forum 07May

[Why remisiers not keen on new exam]

Vincent Khoo


"IT WOULD be interesting to know
just how many dealers and remisiers are 'scrambling' to pass the Capital Markets and Financial Advisory Services Module 6A examination before the June 30 deadline
('Remisiers scrambling to clear new exam'; April 29)."


http://www.straitstimes.com/premium/forum-letters/story/why-remisiers-not-keen-new-exam-20130507

Anonymous said...

Reuters

[INSIGHT: How Singapore's currency club fell apart]

by Rachel Armstrong


* Rate-setting scandals in US, London triggered review in Singapore

* Review finds NDF traders colluding to manipulate currencies - Reuters

* Banks fire dozens of traders, review continues

* Traders say they had to "chat" to find "price discovery"

* They say rate-setting by central banks in region too opaque

* Bank Indonesia acknowledges weaknesses, says reforms coming - Reuters


http://www.reuters.com/article/2013/05/06/singapore-ndf-idUSL3N0C103720130506

Chua Chin Leng aka redbean said...

Hi Edmund, the writings are all over the wall. The bankers are the criminals in cahoot with the US Congress. They should all be put behind bars.

patriot said...

And what if the rulers, the enforcement agencies, the judiciary, bankers, businesses and cronies are in it together?

Even the prison authority in many countries are in the system. See how Chen Sui Bian, suharto, Estrada, Gloria Arroyo and the Marcoses live in their bungalow cells? Were all their ill gotten wealths forfeited? Were their successors implicated?