#taxtherich

ALP, first find a purpose before you choose your next leader

On what planet does Shadow Treasurer Chris Bowen honestly believe he is a viable candidate for the ALP leadership? Of course the Coalition welcome such an appointment as they’ll be guaranteed another 3 years in government. Does Bowen believe that the electorate will grant what he calls a “blank canvas” and give him a fair go? Like any good retail store, the best assets are put on display where people can see them first. If the repudiated policies of the election just finished were the best he had to offer, what hope has he got ‘connecting’ with the base? Will this be the “these were the policies I wanted but Bill Shorten didn’t let me run them” campaign? If that were so Bowen stands for nothing so will fall for anything,

Bowen co-led the most dreadful campaign. Telling hope owners to forget if their houses slipped into negative equity and throwing two fingers up at self-funded retirees telling them if they didn’t like it not to vote for Labor. At least that message cut through.

Tanya Plibersek withdrew her nomination stating she “wasn’t ready”. Is that what a deputy for 6 years does when her boss vacates the top job? She clearly sees the next 3 years as toxic. So her loyalty to party is limited to her own ambitions of taking the top job once other members of the team have become political cadavers. CM spotted her pre-election in Hermes in Sydney so she is most definitely a champagne socialist.

Anthony “Albo” Albanese is the true Labor man who has never been given a title shot. He too is of the left, but he is eminently likable. He is a down to earth battler. However will his party see him as one to lead them back out of political oblivion? The hard left has been the problem.

Then that leaves Jim Chalmers. He is young. Served as an advisor to Rudd. He was pretty ordinary on Q&A last night. He won’t prosecute like Albo can.

The ALP first has to find a purpose before it selects a leader. If it does it the other way around it will only foul up the works and elevate the chaos this unlosable election has already brought upon them. To make a rash choice and then in-fight over policy direction will turn them into a carbon copy of the US Democrats

The lesson was loud. The electorate rejected radical climate change policy, punishing pensioners, identity politics, class warfare and the politics of envy. That Chris Bowen thinks he can lead the party back from the pits of despair with that legacy behind him means he is more delusional than Malcolm Turnbull.

It is worth remembering that experience is a hard teacher. You get the test first and the lesson afterwards.

The Ant and The Grasshopper

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Two Different Versions…. Two Different Morals

OLD VERSION

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.

The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.

Come winter, the ant is warm and well fed.  The grasshopper has no food or shelter, so he dies out in the cold.

MORAL OF THE STORY: Be responsible for yourself!

MODERN VERSION

The ant works hard in the withering heat and the rain all summer long, building his house and laying up supplies for the winter.

The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.

Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while he is cold and starving.

Channels 7, 9 and 10, the ABC and SBS show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food.

Australia is stunned by the sharp contrast.

How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so?

Kermit the Frog appears on the ABC with the grasshopper and everybody cries when they sing, ‘It’s not Easy Being Green.’

The CFMEU stage a demonstration in front of the ant’s house where the news stations film the group singing, ‘We shall overcome.’

The Archbishop of Melbourne then has the group kneel down to pray to God for the grasshopper’s sake.

Prime Minister Shorten condemns the ant and blames Scott Morrison, John Howard, Robert Menzies, Capt James Cook, and the Pope for the grasshopper’s plight.

Tanya Plibersek exclaims in an interview on Today Tonight that the ant has gotten rich off the back of the grasshopper and calls for an immediate tax hike on the ant to make him pay his fair share.

Finally, Labor in conjunction with the Greens draft the Economic Equity & Anti-Grasshopper Act retroactive to the beginning of the summer.

The ant is fined for failing to hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the Government and given to the grasshopper.

The story ends as we see the grasshopper and his free-loading friends finishing up the last bits of the ant’s food while the government house he is in, which, as you recall, just happens to be the ant’s old house, crumbles around them because the grasshopper doesn’t maintain it.

The ant has disappeared in the night, never to be seen again.

The grasshopper is found dead in a drug related incident, and the house, now abandoned, is taken over by a gang of spiders who terrorise the ramshackle, once prosperous and once peaceful, neighbourhood.

MORAL OF THE STORY:  Be careful how you vote on May 18, 2019.

Ultra High Net Worth Individuals (by country)

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In an ever growing world of haves vs have nots, Elliman has released an interesting update on the statues of global wealth and where it is likely to head over the next decade. It suggests North America has 73,100 UNHWIs at an average of $100mn each or $7.31 trillion. To put that in perspective 73,100 North Americans have as much wealth as Japan & France’s annual output combined. Over the next decade they expect 22,700 to join the ranks.

Europe has 49,650 UHNWI also at the magical $100mn mark (presumably the cut off for UHNWI or the equivalent of Japan.

Asia is growing like mad with $4.84 trillion split up by 46,000 or $105mn average. In a decade there are forecast to be 88,000 UHNWIs in Asia.

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I am not sure what the World Bank was smoking when coming up with the coming forecasts I’ve rthe next decade but the figures smel fishy.  Then it all comes down to this chart.

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1) Political uncertainty? Everywhere you look – Trump, Brexit, Catalonia, Australia, France, Germany, Austria, Czech Republic, The Netherlands, Hungary, Poland etc etc

2) Potential fall in asset values – looks a very high chance of that. Current asset bubbles are almost everywhere – bonds, equities, real estate etc

3) Rising taxes – maybe not the US or Canada (if you follow the scrutiny over Finance Minister Morneau), but elsewhere taxes and or costs of living for the masses are rising

4) Capital controls – China, India etc

5) Rising interest rates – well the US tax cuts should by rights send interest rates creeping higher. A recent report showed 57% of Aussies couldn’t afford an extra $100/month in mortgage – a given if banks are forced to raise lending rates due to higher funding costs (40% is wholesale finance – the mere fact the US is raising rates will only knock on to Aus and other markets).

Surely asset prices at record levels and all of the other risk factors seemingly bumping into one another…

So while UHNWIs probably weather almost any storm, perhaps it is worth reminding ourselves that the $100mn threshold might get lowered to $50m. It reminds me of a global mega cap PM who just before GFC had resplendent on his header “nothing under $50bn market cap”. Post GFC that became $25bn then eventually $14bn…at which point I suggested he change the header entirely.

I had an amusing discourse on LinkedIn about crypto currencies. The opposing view was that this is a new paradigm (just like before GFC) and it would continue to rise ( I assume he owns bit coins). He suggested it was like a promissory note in an electronic form so has a long history dating back millennia. I suggested that gold needs to be dug out of the ground – there is no other way. Crypto has huge risk factors because it is ultimately mined in cyber space. State actors or hackers can ruin a crypto overnight. There have already been hacking incidents that undermine the safety factor. It does’t take a conspiracy theory to conjure that up. To which he then argued if it all goes pear shaped, bitcoin was a more flexible currency. Even food would be better than gold. To which I suggested that a border guard who is offering passage is probably already being fed and given food is a perishable item that gold would probably buy a ticket to freedom more readily as human nature can adapt hunger far more easily in the fight for survival. I haven’t heard his response yet.

In closing isn’t it ironic that Bitcoin is now split into two. The oxymornically named Bitcoin Gold is set to be mined by more people with less powerful machines, therefore decentralizing the network further and opening it up to a wider user base. Presumably less powerful machines means fewer safeguards too although it will be sold as impervious to outsiders. Of course the idea is to widen the adoption rate to broaden appeal. Everyone I know who owns Bitcoin can never admit to its short comings. Whenever anything feels to be good to be true, it generally is. Crypto has all the hallmarks of a fiat currency if I am not mistaken? While central banks can print furiously, they will never compete with a hacker who can digitally create units out of thin air. Fool’s Gold perhaps? I’ll stick to the real stuff. I’ll take 5,000 years of history over 10 years any day of the week.