China – the contrarian

Recently, we have seen Chinese manufacturing and production figures decline and statistics appearing about how many consecutive months they have been decline or below a certain figure denoting a contracting economy.

Streaks come to an end and trends do weaken and reverse.

China’s greater growth cycle is still in its infancy and even more so are its political and economic reforms.

When growth in a country slows, reforms then speed up.

25 Great Truths & Possibly The 5 Best Sentences

GREAT TRUTHS

1. In my many years I have come to a conclusion that one useless man is a shame, two is a law firm and three or more is a congress. —   John Adams

2. If you don’t read the newspaper you are uninformed, if you do read the newspaper you are misinformed. —   Mark Twain

3. Suppose you were an idiot. And suppose you were a member of Congress. But then I repeat myself. —   Mark Twain

4. I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle. —   Winston Churchill

5. A government which robs Peter to pay Paul can always depend on the support of Paul. —   George Bernard Shaw

6. A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money. —   G. Gordon Liddy

7. Democracy must be something more than two wolves and a sheep voting on what to have for dinner. —   James Bovard , Civil Libertarian (1994)

8. Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries. —   Douglas Casey , Classmate of Bill Clinton at Georgetown University

9. Giving money and power to government is like giving whiskey and car keys to teenage boys. —   P.J. O’Rourke , Civil Libertarian

10. Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. —   Frederic Bastiat , French economist(1801-1850)

11. Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. —   Ronald Reagan   (1986)

12. I don’t make jokes. I just watch the government and report the facts. —   Will Rogers

13. If you think health care is expensive now, wait until you see what it costs when it’s free! —   P.J. O’Rourke

14. In general, the art of government consists of taking as much money as possible from one party of the citizens to give to the other. —   Voltaire   (1764)

15. Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you! —   Pericles   (430 B.C.)

16. No man’s life, liberty, or property is safe while the legislature is in session. —   Mark Twain   (1866)

17. Talk is cheap…except when Congress does it. —   Anonymous

18. The government is like a baby’s alimentary canal, with a happy appetite at one end and no responsibility at the other. —   Ronald Reagan

19. The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery. —   Winston Churchill

20. The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin. — Mark Twain

21. The ultimate result of shielding men from the effects of folly is to fill the world with fools. —   Herbert Spencer , English Philosopher (1820-1903)

22. There is no distinctly Native American criminal class…save Congress. —   Mark Twain

23. What this country needs are more unemployed politicians. —   Edward Langley , Artist (1928-1995)

24. A government big enough to give you everything you want, is strong enough to take everything you have. —   Thomas Jefferson

25. We hang the petty thieves and appoint the great ones to public office. —   Aesop

FIVE BEST SENTENCES

1. You cannot legislate the poor into prosperity, by legislating the wealth out of prosperity.

2. What one person receives without working for…another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it.

5. When half of the people get the idea that they do not have to work, because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation!

Could inheritance tax make a comeback?

Retirement and baby boomers continue to be a large growth demographic for the legal and financial industry, but I think retirees are becoming disenchanted about the various pieces of advice that they are receiving.

My experiences of Estate Planning have often involved either buying life/trauma insurance and establishing a will, while family trusts are used for tax minimisation and the distribution of income.

Although many retirees have an attitude towards their wealth of either, “It’s no use to you when you’re dead” or “That you can’t take it with you”, they do feel concerned what happens to the money after they have died.

Yet, it seems that even the best estate plans still end up in arguments and disputes.

Bickering over estate assets may be curtailed if estate planning advice extends beyond the selling of insurances or pre-paid funeral packages.

One aspect of estate planning that I don’t hear being discussed is “asset protection”.

When I think of the phrase “asset protection’, it’s often based around protecting your wealth from creditors and soured family, personal or business relationships. In other countries, asset protection also involves planning for inheritance tax.

Maybe a company, a family trust or my pension fund should own more of my assets. After all, these entities “keep on living” after I have passed away.

Planning for taxes?

Australia abolished inheritance tax (sometimes called death or estate duties) in 1979. Some readers will have experiences of how devastating this tax was on their family wealth.

We are now heading into a period of a massive transfer of generational wealth. At the same time governments are now looking to distribute wealth “wider and more evenly”, while also searching for more revenue.

Australians should at least prepare for a possible return of estate taxes.

Be careful what you wish for

When emotions such as anger, disgust and frustration infiltrate the collective sentiment of the population, consensus “group-think” doesn’t provide the sensible, safe answer or result that it might be traditionally assumed.

2010 10 30 - 9442 - Washington DC - Fear-Sanit...

Image by thisisbossi via Flickr

The protests that are occurring around the world are rebellions to the status quo. However when the anger of belligerent protestors is countered with violent reactions by authorities, the decisions being made don’t seem to have the desired effect.
Politically, I think the outcomes that protestors are hoping for, will not turn out how they dreamed.
Whether it’s Mubarak, Putin, Sarkozy, Gillard or Merkel, perhaps it may be the case of better the devil you know.
I anticipate weakness in the U.S. stock market throughout 2012 with a clearer downtrend commencing from the March/April timeframe and lasting into late October.
By the time November 2012 comes around, Obama will stand little chance of being re-elected but a Republican President won’t prove to be any better and may be a worse outcome for the next 4 years.
Under this scenario, governments still won’t find the ability to plan beyond the next 18 months, for soon after, they’ll be back on the campaign trail for the next election.
China’s ability to have rolling 5-year plans should be envy of policy makers everywhere.

Pineapple Socialism

pineapple

Australian’s are an accepting lot. A very compliant, submissive and subservient group indeed.

Industry and government say anything they wish and we believe it.

We have reserves of gas and coal, yet our energy prices are rising.

We have a huge beef and lamb herd yet we pay astronomical prices.

We have taxes imposed on every product and service.

We have 22 million people living in a land mass the size of the United States, yet our property prices are more expensive than Hong Kong?

It costs no more today to build a house of comparative standards than it did 10 years even after accounting for the increase in labour.

The government needs to release land to the population and not to the land-banking developers. There is no land shortage in Australia.

The trend we have seen is food, energy and land inflation coupled by asset and product deflation. So, my assets are falling in value yet I am paying more for my staple requirements. No why wonder I feel poorer!

I see this trend continuing.

As many are having difficulty paying for their staples including accommodation, heaven forbid should we engage in some luxury such as a $4 cappuccino or try to buy a sandwich for under $9. Don’t get me started on the cost of city parking, fruit or vegetables.

Last week I bought a Nestle branded bottle of water in an Indonesian airport for 40 cents. Four hours later I landed in Perth, Australia and paid $4.50 for the same bottle of water which also happens to be three times the cost (on a per litre basis) than the price of petrol I used on my drive home. How is this so?

The rest of the world is securing supply of necessities while Australians pay more and more, for much of the product that we already produce here.

Why?

I hear reasons that include dwindling supply, higher global demand and rising farming production costs but there will be a limit to how much jargon the population can handle involving words such as transparency, “best practices” and accountability.

I don’t know the answers but if recent protests in Israel about the rising cost of living are any indication, social unrest will also be an emerging and relevant trend. Unfortunately such an event would drive these prices even higher.

My rant is about the high cost of necessities and not the cost of electrical goods and many other products which have actually become cheaper but I do think it’s time that retailers can stop crying poor as to why we won’t pay $75 for T-shirt.

I wonder how long we are going to be fooled by Australia’s facade of free market capitalism and democracy, when we should probably sooner accept the government evolution to socialist capitalism. The problem is, it feels like a sort of socialism without the social benefits and control. After all, thousands still sleep rough in Australia’s cities!

Whichever way this turns, the population could decide for themselves and not cop the rough end of the pineapple anymore?

Stop complaining Australia!

In answer to the "Is the glass half empty...

Image via Wikipedia

I can’t help observe the pessimism that is permeating into the conversations and attitudes of Australians, more so than I have noticed over the the past 20 years. It’s easy to blame economies around the world, bank and politicians. Perhaps using the choices available and also taking responsibility for one’s actions is the obvious answer to effecting the change that a person needs?

Maybe we can re-think this unconscious or expectant idea of deservedness. Why do people have the notion that the world, your local community, the capital markets or government for that matter, are required to present them with a continual ‘fair & equitable’ existence.

Is the glass half-empty or half-full?

It seems as if we are losing the ability to “get on with it”. Obviously negativity and defeatism is an easier condition to accept. This may be understandable when we are bombarded with news stories that range from continual personal and corporate failures, increased family stress, xenophobic immigration, terrorism threats and rising nationalism.

I’ve probably got you shaking in your boots? Ready to sell your retirement portfolio and buy a hut by a river, buy a gun, learn to fish and bake bread? It’s a free country!

We happen to live in a wonderful country blessed with many benefits and indeed privileges, yet Australians are complaining.

Recent news stories that I have read include towns complaining about the influx of “fly in-fly out” miners who don’t spend money in the area whilst working there, calls for more indigenous, minority and women workers to feature prevalently in medium to high-end jobs OR complaints how a solar panel industry operator will suffer due to the government’s subsidy ceases to ‘back-stop’ their business.

Do you want democracy, free-markets and capitalism OR socialism?

If you prefer the former, then what about being competitive? How about offering an excellent, friendly service or developing a competency and tenacity that puts you in a position to compete for a terrific job (and rely on discrimination law if it’s applicable).

I have spoken to numerous friends in the United States over the past month. They too, are aware that the ‘world’ is telling them that the ‘sky is falling’, yet they are all trying like heck to be positive, get back to doing business, working hard and trying to spend their way out of out of recession.

Restaurants in San Francisco, plastic surgeons in Dallas and cruise ship operators in Miami are doing quite well.

Australia – let’s get on with it!

I’ll leave you with an adaptation of an old story about a hot dog vendor and psychology.

A Man lived by the side of the road…and sold hot dogs.

He was hard of hearing, so he had no radio. He had trouble with his eyes, so he had no newspaper. But he sold good hot dogs.

He put up a sign on the highway, telling how good they were. He stood by the side of the road and cried, “Buy a hot dog, mister!” And People bought.

He increased his meat and bun order, and he bought a bigger stove to take care of his trade. He got his son home from college to help him. But then something happened. His son said, “Father, haven’t you been listening to the radio? There’s a big Depression on. The international situation is terrible, and the domestic situation is even worse.”

Whereupon the father thought, “Well, my son has gone to college. He listens to the radio and reads the newspaper, so he ought to know.” So, the father cut down on the bun order, took down his advertising sign, and no longer bothered to stand on the highway to sell hot dogs.

His hot dog sales fell almost overnight. “You were right, son”, the father said to the boy. “We are certainly in the middle of a Great Depression.”

Boycott the disclaimer

I wish law firms had publicly traded shares that I could own – however this could be too unethical for my portfolio.

It is becoming nutty out there. Nearly every email contains a disclaimer, executives can’t have meetings unless a compliance officer is present, directors need to have initiatives, motions, documents or publications “signed off”.

The robotic conformity of prefacing or defending many aspects of life with a disclaimer can’t be healthy nor productive especially for small business.

It’s time to think, take responsibility for yourself, stop complaining,  get on with it and calling “A Current Affair” won’t help either.

Bring back the handshake !

All I got was a Madoff

27 months later, the S&P 500 Index is practically trading at the same level prior to Lehman Brothers’ demise.

Following a crisis in finance and confidence, not a single banker, board member, audit firm, CEO nor politician has been convicted.

The only scalp is a bloke that not many of us had heard of before, Bernie Madoff.

Makes you wonder, doesn’t it ?

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