04-01-2008, 10:14 AM
|
#227 (permalink)
|
|
Banned
|
Quote:
|
Originally Posted by loquitur
Host, if you operate in an industry where you deal with other people, as a general rule you need reasonable relations in order to do business. People will get burned and then refuse to deal with you unless they have no choice. That's why ruthlessness only works short term in most instances.
Of course, "ruthlessness" is open to interpretation.
|
Ruthlessness and evidence that the corporatism that enables the tax incentives described in the first article, calls into question the notion that "our capitalist system" is as beneficial to "our great nation", as many assume:
Quote:
http://news.morningstar.com/newsnet/...01084_univ.xml
Prof Suggests Review Of Sovereign Wealth Funds' Tax Breaks3-6-08 4:56 PM EST | E-mail Article | Print Article
WASHINGTON (AP)--An academic credited with being an early critic of U.S. tax breaks enjoyed by private-equity firms and hedge funds has set his sights on a new target: investment funds run by foreign governments.
Victor Fleischer, a law professor at the University of Illinois, said in an online posting this week that tax exemptions benefiting sovereign wealth funds - large pools of capital controlled by governments across Asia and the Middle East - may deserve a closer look by Congress.
Fleischer, who couldn't immediately be reached for comment, was among the first researchers to highlight the ways that partnerships such as private-equity firms and hedge funds pay substantially lower tax rates than corporations. Legislation was introduced in Congress last year that would have changed those rules, but it stalled in the face of heavy lobbying by private-equity groups.
Because they are exempt from paying taxes on a wide range of investments, sovereign wealth funds have an unfair advantage over foreign and domestic private investors because they can offer better terms to U.S. companies, Fleischer argues, when lending money or purchasing complex securities.
While foreign governments are taxed on profits they earn from commercial activities in the United States, they don't have to pay taxes on proceeds from stocks, bonds and other passive investments - and sovereign funds benefit from that exemption.
"Encouraging foreign investment in the United States generally increases overall welfare," Fleischer wrote in a blog post Tuesday. <h3>"But ... it is not at all clear that we should give state-owned funds a competitive advantage that crowds out private investment."....</h3>
|
Quote:
http://www.cfr.org/publication/15251...lth_funds.html
Sovereign Wealth Funds
Author:
Lee Hudson Teslik, Assistant Editor
January 18, 2008
....What sorts of investments do SWFs make?...
.....Several SWFs have gained public attention for specific investments. China’s fund drew recent headlines for investments in major U.S. financial firms. Analysts at Morgan Stanley says these purchases represent a broader trend—they estimate that Temasek Holdings, a fund managed by the government of Singapore, had invested 38 percent of its portfolio in the financial sector as of September 2007. In 2005, a United Arab Emirates-owned company, Dubai Ports World, stirred controversy in the United States by purchasing a British-owned shipping company, thus giving it control over parts of several U.S. port facilities. Dubai Ports World is a state-owned business, not a sovereign wealth fund, but the concerns provoked by the incident mirror concerns over SWFs purchasing business interests that had formerly been the domain of private companies.
What are the geoeconomic implications of SWFs?
Experts say the emergence of sovereign wealth funds represents a fundamental shift in the reasons governments invest money. “To the extent governments have traditionally held investment assets, it was to protect domestic currencies and banks from crisis,” writes the Economist. Modern sovereign wealth funds go well beyond this basic agenda. Writing in the Washington Post, Sebastian Mallaby, the director of CFR’s Center for Geoeconomic Studies, says global government currency reserves have expanded “way beyond their prudential needs and more than triple the amount in the world’s hedge funds.”.....
|
Quote:
http://www.bitsofnews.com/content/view/6331/
Pol/Econ: China Sovereign Wealth Fund Could Buy Every US Company
Monday, 22 October 2007 Written by Bill Bonner
....While wages in the USA haven’t risen in 30 years, in Asia they’re going up about 10% per year. The Asians are making money…and getting richer. And in the process they’re accumulating huge stacks of dollars. Many of those dollars end up in the new Sovereign Funds – immense private equity funds owned by governments. <h3>Lenin said that capitalists would sell the ropes that he’d use to hang them.</h3> Well, the communist Chinese are ready for a buying spree. Currently, those funds have about US$2 trillion in them. They’re expected to have about US$17 trillion by 2010 – enough to buy every publicly-listed company in America…with change left over.
What will they do with all that money? Well, what would you do?
Yesterday, the dollar hit new record lows. The euro rose to nearly US$1.42. Since we live in Europe…and pay our bills in euros…but earn our money in dollars…every day, your editor loses more than he makes. His dollar assets go down. He’s getting tired of it. Surely, other dollar holders/earners are too – including foreign treasuries. What will they do? They will try to trade their dollars for something solid, while they still can.
Companies. Land. Gold.
Whatever they can get.
What they will do is to use their paper US dollars to buy America’s valuable assets.
The dollars, of course, are essentially worthless. The United States can create as many as it wants at negligible cost. But the companies…the factories…the land…the resources – those are really valuable. When the foreigners gain ownership, Americans’ own wealth – and independence – is reduced.....
|
|
|
|