Offshore Inn for International Real Estate, Overseas Jobs, Asset Protection, Expatriate Resources and Overseas Retirement
It is a peculiar irony. A year ago, the the UK’s Inland Revenue began a crackdown on offshore savings. Banks operating out of the Channel Islands and the Isle of Man had to hand over details of British customers, and depositors who confessed were rewarded with an amnesty. Thousands did and many must have given up on offshore savings. Inadvertently, the taxman’s crackdown must have saved some depositors from the collapse of the offshore subsidaries of Icelandic banks.
Thousands were not so lucky and could now lose most of their savings …
Consider if you will be a sole proprietorship, partnership or corporation.
‘You’re so lucky, being able to work abroad.’ I’ve forgotten how many times I’ve heard that statement.
If you have assets, you are most likely a target. When your assets are visible, you are the bullseye.
Do you need a job? Just got a question? Pop it in here and you’ll get an answer from our Inn Team.
Tip the scales in your favour, protect your home and family with asset protection programmes for partnerships, corporations and individuals.
Inquiring minds are tired of the spotlight on Greece (believe me I am as sick as anyone of Groundhog Day).
Given the world will not end when Greece defaults, whether in March of this year or next, let’s turn our attention to a country far more significant.
Chinese Electricity Consumption Fell Massively In January
Business Insider reports Chinese Electricity Consumption Fell Massively In January, And The Chinese New Year Doesn’t Explain It
Ultra-brief note here from Nomura’s Zhiwei Zhang :
According to the China Securities Journal, China’s electricity consumption in January fell by 7.5%. We estimate this may be the first decline since 2002 (excluding the financial crisis period in 2008-09), indicating industrial production may have slowed sharply in January.
They don’t have any more answers here at the moment, except they say that if you’re thinking it has something to do with the New Year, then you are incorrect.
For now it’s just one of those things that make you go hmm…
China Pressures Iran On Oil Prices
China has stepped up the pressure on Iran in the face of Europe’s oil embargo. Business World reports China’s Oil Imports From Iran Reduced Again
China will reduce its crude oil imports from Iran for a third month, sources said today, as the two remain divided over payment and price terms, although they plan to meet again for talks as early as this week.
China is the top buyer of Iranian oil and also the fastest expanding major oil importer, putting it in a strong position to negotiate for better terms after it more than halved imports for both January and February.
The reductions for March-loading supplies will be largely the same, if not deeper, than the previous two months, industry officials with direct knowledge of the supply situation told Reuters.
China, which buys around 20 percent of Iran’s total crude exports, cut its January and February purchases by about 285,000 bpd, just over one half of the total average daily amount it imported in 2011.
China Central Bank Vows Housing Support
In a sure sign that property prices in China are crashing faster than the Chinese government wants, China Central Bank Vows Housing Support
China’s central bank pledged support for first-home buyers as a crackdown on real-estate speculation threatens to trigger a property slump in the world’s second- biggest economy.
Officials will increase support for construction of affordable housing and ensure that “loan demand from first-home families” is met, the People’s Bank of China said on its website yesterday evening.
Policy makers aim to limit public discontent by making housing more affordable, with Vice Premier Li Keqiang, a possible contender to be the next premier, describing the distribution of low-cost homes as a key test of government credibility. At the same time, the ruling Communist Party aims to avoid the economic “hard landing” that Fitch Ratings said yesterday is a key global risk.
“The government doesn’t want to see home transactions slide too fast — that may hurt economic growth,” said Lu Ting, a Hong Kong-based economist at Bank of America Corp.
Too Late to Prevent a Hard Landing
Given the massive size of China’s property bubble, it’s far too late to prevent a crash landing. The only way to prevent crashes is to not let bubbles get so big in the first place.
Asia Real-Estate Bull Turns Bearish
MarketWatch reports Asia Real-Estate Bull Turns Bearish
Asia’s gradually cooling property markets aren’t the great buys they once were, according to one expert in the region, who says better bargains can be found in the depressed markets in the West.
Tim Murphy, the Hong Kong-based chief executive officer of property advisory group IP Global, says he’s telling his clients to look more towards New York and San Francisco for deals, although London also ranks well in terms of rental yield in some projects.
Back home in Asia, the only market he likes is Malaysia, where average prices in its big cities are about one-tenth of those in Hong Kong, while its commodity-backed economy should outperform its export-dependent regional rivals.
What’s changed? Murphy says the ongoing debate in Asia during the current soft patch is being driven by inflation concerns that were absent during previous periods of economic weakness.
Specifically, he sees a “role reversal” from the regional crisis that unfolded in 1997, as fresh barriers to foreign investment and speculative activity are now enacted across many parts of Asia, while hard-hit cities in the West are offering tax breaks and other concessions as incentives to invest.
Today, governments around the region, and particularly in China, are wary that too much liquidity could stoke a U.S.-style housing bubble and inflict long-term damage upon the economy, he said.
“Singapore and Hong Kong are two of the freest economies in the world, yet you pay more in stamp duties [real-estate transaction taxes] now than you would in London, because they are very worried about the markets continuing to overheat,” Murphy said.
Infomercial for Property-Advisory Firm IP Global
As much as I agree with the headline message, I have to comment the same message could have and should have been said years ago. Given the illiquid nature of real estate, one cannot sell on a dime when the market turns.
“We see what’s happening as a great chance for Asians to buy overseas at the moment,” Murphy said, adding that in December he opened an office in Shanghai to tap the growing interest among China’s newly wealthy for overseas homes.
Given the entire two-page article was about Murphy and his firm, I have to ask “Was that an news story by MarketWatch or an infomercial for Tim Murphy?”
Regardless, anyone who bought in China in the last couple years and has not sold yet is now likely trapped.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Greece bailout talks that were postponed on Friday to Saturday, then Saturday to Sunday, then Sunday to Monday, then Monday to Tuesday. They have been postponed again, this time for a reason that makes perfect sense “Political Suicide”.
The New Work Times reports Greece Puts Off Decision on Austerity Measures Amid a Strike Protesting Them
As thousands of Greeks walked off the job in a general strike on Tuesday to protest stringent new austerity measures, there was a growing sense that the country was reaching a critical point in its efforts to survive the debt crisis.
Greek political leaders postponed for yet another day a decision on an austerity package — including 20-percent cuts to base pay for workers in private companies and a loosening of public sector job protections — in exchange for the billions in loans Athens needs to prevent a default in March. With elections looming as soon as April, the parties fear that they are essentially being told to commit political suicide to save the country.
If that indeed is the case, analysts here say, it is not clear what will replace them, making Greece a potential laboratory for a volatile mix of austerity, populism and social unrest.
Not that the old order, widely derided as corrupt and inefficient, is likely to be deeply mourned.
For most Greek voters, the two larger parties participating in the fragile tripartite coalition of Prime Minister Lucas Papademos — the Socialist Party and the center-right New Democracy — were already drained of political capital before the debt crisis by decades of self-interest and corruption. That has now been capped by two years of unrelenting austerity that has hurt most Greeks but has ultimately failed to revive the system, or even change it in any significant way.
With unemployment at 19 percent, businesses closing, credit scarce and the proposed new wage cuts expected to further decimate the shrinking middle class, the hard left and extreme right are rising.
With Greek popular anger at the country’s foreign lenders rising — a German flag was burned in front of Parliament at a demonstration on Tuesday — the Socialists and New Democracy are treading a fine line: They want to push back against the troika enough to regain some political capital — and keep more Greeks from falling into poverty — but not push hard enough to precipitate a default.
If the Greek political leaders do not agree to accept the new austerity measures in the coming days, Greece will run out of time to complete a broader deal for the voluntary write-down of Greek debt before a bond comes due on March 20. If Greece cannot pay the bond, it will default, which could result in its leaving the euro zone, among other ill effects.
Most Greeks say they have lost what little faith they had in the political system. “None of the parties we’ve been voting for have anything to offer,” said Vassiliki Karanasou, 42, an employee in a biscuit factory north of Athens who was participating in a demonstration outside Parliament on Tuesday.
Eventually, Will Come a Time
I keep repeating Eventually, Will Come a Time When
Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the “bail out” debt foisted on their country to be null and void. That person will be elected.
Flag-Burning Trigger
For Greece, “eventually” may be at hand. The only thing missing is a party leader willing to stand up and tell Germany to go to hell.
That is not a comment on the desirability of telling Germany to go to hell, rather a comment that is likely to happen. However, the austerity measures imposed by Germany and the Troika cannot possibly work, even though the worker reforms are badly needed.
What is causing the revolt? The sad irony of this mess is the flag-burning and latest strike is over the one thing that is needed: work rule reform.
The flag-burning incident could easily be a trigger.
All sides handled this very poorly straight from the get-go. Greece would have been better off defaulting 2 years ago and the EMU and ECB much better off to simply let it happen. Now Greece is totally and completely trashed, having agreed to austerity measures that cannot work and resisting work rule changes that can work, but only years down the road.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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BP brought cheer to Britain’s pension funds yesterday as the oil giant hiked its quarterly dividend by 14 per cent.
As the Pentagon attempts to refocus the U.S. military strategy toward Asia, the department is facing major budget constraints. Experts disagree on how to balance the fiscal challenge with the country’s national security priorities.
In a short sale, banks forgive the difference between what is owed and the sale price of the house. Recently, however, banks have started giving cash back to the sellers. So far, the programs are a drop in the bucket. There are millions of pent-up foreclosures and JP Morgan is doing 5,000 short sales a month, hardly enough to make a dent.
Still, “short sales represented 9 percent of all U.S. residential transactions in November, the most recent month for which data is available, up from 2 percent in January 2008, according to Corelogic.”
Please consider Banks Paying Cash to Homeowners to Avoid Foreclosures
Banks, accelerating efforts to move troubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.
Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices. Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing large cash incentives, said Bill Fricke, senior credit officer for Moody’s Investors Service in New York.
Losses for lenders are about 15 percent lower on the sales than on foreclosures, which can take years to complete while taxes and legal, maintenance and other costs accumulate, according to Moody’s. The deals accounted for 33 percent of financially distressed transactions in November, up from 24 percent a year earlier, said CoreLogic Inc., a Santa Ana, California-based real estate information company.
Karen Farley hadn’t made a mortgage payment in a year when she got what looked like a form letter from her lender.
“You could sell your home, owe nothing more on your mortgage and get $30,000,” JPMorgan Chase & Co. (JPM) said in the Aug. 17 letter obtained by Bloomberg News.
Tom Kelly, a JPMorgan spokesman, declined to comment on the company’s incentives.
“When a modification is not possible, a short sale produces a better and faster result for the homeowner, the investor and the community than a foreclosure,” he said in an e-mail.
Lenders spend an average of 348 days to foreclose in the U.S. and an additional 175 days to sell the property, according to RealtyTrac. In New York, a state that requires court approval for repossessions, it takes about four years to foreclose on a home and then resell it, the company said.
Lenders can often afford to forgive debt, offer the incentive and still make a profit because they purchased the loan from another bank at a discount, said Trent Chapman, a Realtor who trains brokers and attorneys to negotiate with banks for short sales.
What’s Really Going on Here?
If the answer is “it’s faster, quicker, cheaper” than foreclosures, then why don’t we see more of them, lots more of them?
Could it be these are the real problem loans with clouded titles, questionable practices by lenders, or huge numbers of written complaints by borrowers? Add to that a dearth of willing new borrowers and I think you have the answer.
Addendum:
Reader Bruce comments …
Hello Mish
The only solution, is as you have said, to speed up the process. Unfortunately, this begs the question, how much more insolvency can the banks sweep under the carpet?
All the best Mish! fight the good fight!
Not to mention the fact that politicians are against foreclosures and have delayed, at great cost, stepping up the foreclosure process.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Nicholas Noe argues that an internationally led reconciliation effort and subsequent peace-keeping presence in Syria would bypass the resulting destruction of a military intervention or civil war, while still keeping the diplomatic upper hand.
Elliott Abrams says the United States must take the steps to ensure the demise of the Assad regime in Syria.
Adam Liptak of the New York Times writes that the U.S. Constitution no longer acts as the model for modern states. He cites the consitution’s conservative interpretation and relatively few secured rights in making it a poor model in light of newer constitutions that reflect modern values and contexts.
I do not know enough about algorithm-driven High Frequency Trading to comment intelligently other than to say 100% without a doubt that someone is making a huge pile of cash from HFT or it would not be done.
You can watch an animated GIF that chronicles the rise of the HFT Algo Machines from January 2007 through January 2012 by clicking on the link.
The GIF starts out slow and boring, but watch the progression through the end.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Steve Coll, Robert Grenier, and Daniel Markey look at changes in U.S.-Pakistan relations over the past year and make recommendations for moving forward.
Robert M. Danin states, “Monday’s Fatah-Hamas unity agreement announced in Doha marks the latest in a series of unimplemented accords between the two Palestinian adversaries.”
CFR’s James M. Lindsay discusses Nelson Mandela’s release from prison in February 1990 and his subsequent rise to the presidency to show how individuals shape history.
Jagdish Bhagwati criticizes U.S. President Barack Obama for failing to close the Doha Round, decrying outsourcing, and surrending to the “manufactures fetish.”
The Merkel proposal for Greece to cede budget sovereignty to a European commissioner has finally been trashed. In its place is a Spaghetti-O loop proposal to give Greece money only if Greece earmarks the funds to immediately pay back bondholders.
Please consider Greece bail-out funds could be split
European officials are insisting any new Greek bail-out programme specifically earmark funds to pay off remaining holders of Greek debt, giving lenders the freedom to withhold aid to Athens without risking a messy default that could reignite panic in financial markets.
Under a new Franco-German plan that senior European officials said is likely to be included in a new Greek rescue, eurozone officials would create an escrow account to accept new bail-out funding instead of paying it all directly to Athens as in the past.
The new fund would then ensure bondholders are paid off, while additional cash to run the Greek government could still be withheld if Athens did not live up to tough new reform demands.
Eurozone officials said they believed the escrow account would give European Union and International Monetary Fund lenders strong control over Greece’s use of bail-out funds without stripping Athens of its budgetary sovereignty
“This is a better idea than the proposal of a debt commissar,” said the senior French official. “It is more acceptable.”
Although the idea originated in Berlin, Nicolas Sarkozy, the French president, embraced it during a news conference with his German counterpart, Angela Merkel, following a joint cabinet meeting between the two governments in Paris. Ms Merkel also signalled her support, saying it would ensure “this money will be reliably accessible”.
Mathematical Nonsense
The proposal is of course mathematical nonsense, at least in regards to the portion of money going straight back to the bondholders (most of it).
In regards to the portion that goes to Greece, I still have to wonder.
Creditors either give Greece the money or don’t. Once again, there is little reason for the middleman unless they want the IMF to be the judge as to whether or not Greece is living up to the agreements.
Essentially, the EMU is taking 130 billion out of their wallet, putting 110 billion (or whatever) right back in their wallet and calling it 130 billion in “new funding”.
The only thing that can be construed of as “new funding” is the additional amount that actually goes to Greece.
Why the Mathematical Farce?
I suspect the answer is to make it appear as if Greece is paying back debts, when it isn’t.
Weren’t dotcom and mortgage frauds based on the same methodology? In the case of dotcoms, intracompany arrangements were made to make it appear there were actual revenue flows when there weren’t. In the case of housing, such maneuvers could be used to make it appear someone was making payments on their mortgage when they really weren’t.
This setup is either mathematical ignorance or a scam to prevent triggering of credit default swaps. I lean towards the latter.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Figures for the full year to December 2011 have revealed the value of residential property in the US fell by 4.7 per cent, compared to 2010.
However, CoreLogic noted in its December House Price Index that, excluding distressed sales, the cost of buying a home in the nation only fell by 0.9 per cent.
Mark Fleming, chief economist at the firm, commented: "While overall prices declined by almost five per cent in 2011, non-distressed prices showed only a small decrease. Until distressed sales in the market recede, we will see continued downward pressure on prices."
There are some states where the value of residential real estate climbed last year, even when distressed assets were taken into account.
Montana experienced the biggest increase at 4.4 per cent, while Vermont, South Dakota, Nebraska and New York also saw property values climb by between 1.7 and four per cent.
Research published by the National Association of Realtors in January revealed pending home sales in the US fell by 3.5 per cent in December, compared to the previous month, but that they still remain 5.6 per cent higher than at the same time in 2010.
There are expected to be "attractive opportunities" for investors in the Spanish retail real estate sector over the course of 2012.
Danny Kinnoch, international investment director at Savills, commented that buyers who are not relying on finance from banks will be able to take advantage of some of the best deals on offer.
He stated: "There is scope for strong returns assuming market recovery over the medium term, which will keep international players acquisitive."
Meanwhile, debt sales of such Spanish real estate assets will provide chances for "opportunistic investors", Mr Kinnoch added.
Savills has predicted that yields in the country’s retail property sector will be steady over the course of 2012, with returns currently standing at 6.5 per cent for prime shopping centres and seven per cent for prime retail parks.
Research published by Jones Lang LaSalle last month revealed the volume of investment in Europe’s retail sector was expected to break the €28 billion (£23 billion) mark in 2011, a significant increase over the €20.7 billion recorded in 2010.
There was a rise in the number of enquiries about property in Cape Verde during January.
According to TheMoveChannel, searches for real estate in the island nation jumped by 2.8 per cent at the start of 2012, compared to the final month of 2011.
Director of the firm Dan Johnson explained some investors are looking for alternatives to the more popular markets of Spain and the US.
"With its building tourist numbers and relatively un-crowded real estate market, Cape Verde’s imbalance between supply and demand is seeing these buyers turn to somewhere smaller in the hope of bigger returns," he stated.
Last month, The Heritage Foundation 2012 Index of Economic Freedom highlighted Cape Verde’s strengths as a place to do business, noting it is ranked fourth in Sub-Saharan Africa based on its economic credentials.
The organisation commented private property is "fairly well protected" and revealed the investment climate in the nation has become more favourable over the past year.
Ed Husain argues that it is impossible to tell whether Bashar al-Assad’s time is running out, but containing–not fanning–the current conflict in Syria is in everybody’s interests.
Ed Husain argues that it is impossible to tell whether Bashar al-Assad’s time is running out, but containing–not fanning–the current conflict in Syria is in everybody’s interests.
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