Sunday, February 4, 2018

Is The Global Game Of Golf On The Downswing?

Used to be the preferred leisure activity of the economic savvy, has the game of golf been on a global decline during the past 28 years?

By: Ringo Bones  

During a recent survey taken during the first week of 2018, it was found out that there are one-third less Americans playing golf compared a decade ago – this was despite of the recent inclusion of golf by the International Olympic Committee during the 2016 Rio Olympics. The recent findings could scare the global golf industry which is currently worth 70-billion US dollars a year - and yet globally, golf has been in decline during the past 28 years. Should golf equipment manufacturers start to worry? 

The decline in the global game of golf was first noticed back in 1990 and, ironically, it was first noted in Japan – a country well known for its obsession of golf where even insurance companies there issues a so-called “hole-in-one-insurance” for serious golfers. Even the rise of Tiger Woods during the 1990s only raised a brief anomalous peak of new golfers – but only in the United States. But why are many leaving the game of golf and why did it failed to raise new recruits?

Since the late 1980s “Lincoln Savings And Loan Scandal” broke, the game of golf – which unfortunately most of its enthusiasts work in the top-tier world of finance – acquired a perception of a game only for rich old folks, as in “elitists”. And most importantly, a typical golf course wastes more water than a high-end gated community in the middle of the Nevada desert; which probably makes golf an easy target during times of class warfare by environmentalists. Add to that the climate change denial stance of Donald J. Trump and his ilk, it seems like every left-leaning intellectual had been abhorring golf not just for reasons Mark Twain quoting: “Golf is a good walk spoiled.”

Monday, January 22, 2018

Could Mainland China’s Ticking Debt Bomb Destabilize The Global Economy?

Some economic pundits say that debt is just a manageable byproduct of an ongoing economic boom, but could Mainland China’s looming “debt bomb” destabilize the global economy this 2018?

By: Ringo Bones

To anyone familiar with modern economic science will also be familiar with some “Keynesian economic pundits” stating that debt is just a merely manageable byproduct of a booming economy, but could the massive debt pile – often called “Mainland China’s ticking debt bomb” – that is a byproduct of the economic boom that created the world’s second biggest economy the trigger that could destabilize the global economy this 2018? But first, here’s a brief history on how Mainland China’s public and private debt grew to such monstrous proportions as to scare a significant number of economic pundits who just recently acquired a semblance of confidence on the direction of the global economy. 

Back in 2007, around the time when Mainland China overtook Japan as the world’s second biggest economy, both public and private debt stood at around 6-trillion US dollars. Ten years later, the Mainland Chinese public and private debt reached 23-trillion US dollars. What worries some economic pundits the most is not mainly the monstrous debt size but the slowdown in economic growth since the end of the first decade of the 21st Century as Mainland China moves from a developing to a developed economy. Because Mainland China is now a main driver of global economic growth, the solution to the country’s ticking debt bomb is now everybody’s concern. 

Weaning the nation off that debt without intensifying its ongoing economic slowdown can be tricky. Despite Mainland China’s growing by 6.9-percent in 2017 beating the government target of 6.5-percent growth forecast, it is a mere shadow of the 10-percent or more annual economic growth the country experienced during the middle of the first decade of the 21st Century. Cleaning up the nation’s banks is one approach. Propping up borrowers to prevent defaults is another, but propping up borrowers could leave the country mired in bad debt and make it susceptible to years of economic stagnation like what happened to Japan that started back in 1991 which it has just more or less recently recovered.     

Monday, December 4, 2017

Donald J. Trump’s Six Corporate Bankruptcies: Sign of Good Business Acumen?

Given that his six corporate bankruptcies has since become a matter of public record, how could U.S. President Donald J. Trump “Make America Great Again”?

By: Ringo Bones

His supporters call it MAGA-nomics as in “Make America Great Again Economics, but given his six corporate bankruptcies is now a matter of public record, despite he has yet to make his tax returns public, can U.S. President Donald J. Trump really has the business acumen to make America greater than this predecessor – i.e. U.S. President Barack Obama? And another thing, given that some skilled entrepreneurs have managed to profit from their “skillful” declaration of Chapter 11s, is this an economically viable way to sustainably create wealth?

Trump has filed Chapter 11 Bankruptcy for his companies six times. Three of the casino bankruptcies came during the recession of the early 1990s around the time of the post-Operation Desert Storm euphoria, both of which contributed to hard times in Atlantic City, New Jersey’s gambling facilities. Trump also entered a Manhattan hotel and two casino holding companies into bankruptcy. Technically, Chapter 11 Bankruptcy allow companies to restructure their debt or wipe away much of their debt to other companies, creditors and shareholders while renaming in business but under the supervision of a bankruptcy court. Chapter 11 is often called “reorganization” because it allows the business to emerge from the process more efficient and on good terms with its creditors. One point of clarification though is that Trump has never filed personal bankruptcy, only corporate bankruptcy related to his casinos in Atlantic City.

Here is a list of Trump’s six corporate bankruptcies; The details of which are a matter of public record and have been widely published by the news media and even discussed by the president himself. The 1991 bankruptcy of the Trump Taj Mahal, the Trump Castle Hotel & Casino, Trump Plaza Casino and Trump Plaza Hotel in 1992, Trump Hotels &Casino Resorts in 2004 and Trump Entertainment Resorts in 2009. But can Donald J. Trump flip a profit by declaring Chapter 11 on America and share most of the proceeds to the American Taxpayer?

Monday, June 20, 2016

Vintage Watch Collecting: An Economically Viable Alternative Investment Scheme?

Given the Brexit scare and an increasing number of  Eurozone banks resorting to negative interest rates, are rare vintage watch collecting fast becoming an economically viable alternative investment scheme? 

By: Ringo Bones 

With the Brexit scare and an increasing number of Eurozone banks resorting to negative investment rates – i.e. the client will have to pay these banks a set fee in order to keep their money safe instead of the bank client’s money earning a set interest rate, the investment savvy are increasingly looking into alternative investment schemes like prime real estate or vintage wine. But as of late, the once rarefied world of rare vintage watch collecting had attracted the attention of investment pundits. 

In major metropolitan centers of East Asia, like Hong Kong and Singapore, the amount of money changing hands in the rare vintage watch collecting scene had experienced a 68-percent rise over the last decade despite of the global credit crunch of 2008. Dr. Bernard Cheong a noted rare vintage watch collector who has been at it since the age of 15 has recently been on the East Asian investment spotlight after giving a press interview showing the ropes of how to make money in the relatively esoteric hobby of rare vintage watch collecting.   

But watch expert Su Jian Xian warns that potential investors should be careful because rare vintage watch collecting requires specialist knowledge, that more often than not, is only available to those seasoned rare vintage watch collectors – if you want to get the most out of your initial investment. The fickle sway of fashion often dictates item valuation. Rare vintage watches that fetched 10,000 to 12,000 US dollars back in 1998 and 1999 could have since doubled or probably have halved in value today, but who knows, that World War I era Patek Philippe wristwatch that you’ve inherited from your grandfather back in the early 1990s might probably cost a tidy sum by now which could make rare vintage watch collecting one of the most lucrative alternative investment schemes you ever delved into.    

Tuesday, April 5, 2016

Are Offshore Structures and Tax Havens Illegal?

With the recent Panama Papers Leaks of the offshore law firm Mossack Fonseca raising the issue yet again, are offshore structures and tax havens illegal? 

By: Ringo Bones
Ever since the Occupy Wall Street movement of few years ago went global, most of the world’s richest one percent had been viewed with increasing suspicion and trepidation by the rest of us and with the recent Panama Papers Leak of the offshore law firm Mossack Fonseca, it is as if a global class warfare is on the verge of inability. But given that most of us average income folks could serve lengthy prison terms if we fool around with paying our taxes, are offshore structures and tax havens technically illegal? 

At present, using offshore structures to lessen one’s tax burdens is entirely legal. There are many legitimate reasons for doing so. Business people in countries such as Russia and Ukraine typically put their assets offshore to defend them from “raids” by criminals and to get around hard currency restrictions, while others use offshore structures for reasons of inheritance and estate planning. But why is it that some people who use offshore structures are viewed as crooks? 

In a speech last year in Singapore, the UK Prime Minister David Cameron said “the corrupt, criminals and money launderers” take advantage of anonymous company structures. The government is trying to do something about this. It wants to set up a central register that will reveal the beneficial owners of offshore companies. From June, UK companies will have to reveal their “significant” owners for the first time.   

The records were first obtained from an anonymous source by the German newspaper Sϋddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners – including the Guardian and the BBC. The documents show the myriad ways in which the rich can exploit secretive offshore tax regimes. Twelve national leaders are among the 143 politicians, their families and close associates from around the world known to have been using offshore tax havens and a significant number of them are incumbent members and immediate families of the Beijing Communist Party. Ever since the news about the Panama Papers Leak went global, Baidu – The People’s Republic of China’s equivalent of Google and the only search engine authorized by the monolithic communist party to operate in Mainland China – had been blocking the story for frat that it may be just a “Western Plot” against the Beijing Communist Party.

A 2-billion US dollar trail leads all the way to Russian strongman Vladimir Putin via the Russian president’s best friend – a cellist named Sergei Roldugin – is at the center of a scheme in which money from the Russian state banks is hidden offshore. Some of it ends up in a ski resort where in 2013 Putin’s daughter Katerina got married. And despite the legality of the leaked documents, Russia’s official news agency had dismissed the revelations as a “Western plot” against Vladimir Putin. 

Among the other national leaders revealed by the Panama Papers Leak to have offshore wealth are Pakistan’s Prime Minister Nawaz Sharif, ex-interim prime minister and former vice-president of Iraq Ayad Alawi, president of Ukraine Petro Poroshenko, Alaa Mubarak – son of Egypt’s former president and the Prime Minister of Iceland, Sigmundur Davíỗ Gunnlsughsson. And what irked the international community most is on how Mossack Fonseca helped governments that are under imposed economic sanctions by the UN Security Council to still do business with impunity – like North Korea and Russia since the unlawful Donetsk Region annexation by the Putin regime.    

Mossack Fonseca is a Panama-based law firm whose services include incorporating companies in offshore jurisdictions such as the British Virgin Islands. It administers offshore firms for a yearly fee. Other services include wealth management. The firm is Panamanian but runs a worldwide operation. Its website boasts of a global network with 600 people working in 42 countries. It has franchises around the world, where separately owned affiliates sign up new customers and have exclusive rights to use its brand. Mossack Fonseca operates in tax havens including Switzerland, Cyprus and British Virgin Islands and in the British crown dependencies of Guernsey, Jersey and the Isle of Man. 

Monday, March 28, 2016

Is Inflation Good For The Economy?

Even though it is the ruin of every country’s mismanaged economy, but did you know that the right amount of inflation is vital for a thriving economic system? 

By: Ringo Bones 

It is one of those things that either too much or too little is a bad thing and even though there had been news in the past that it was already cited as the ruin of some country’s mismanaged economy, the right amount of inflation is vital for the sustainable management of a thriving economy. But if it is important, how much inflation is necessary to make an economic system truly sustainable? 

At present due to weak energy prices since the latter half of 2014, global inflation levels are currently at unsustainably low levels. An annual inflation rate within 3-percent, give or take a few percentage points, is necessary for economically viable conditions. While too much inflation – the rapid increase of price of goods in too short a time - is usually a sign of an mismanaged economy or a result of some economic sanctions that will eventually lead to economic collapse, too little of it will foster inflation’s “evil twin” called deflation – where prices of goods decline over time. Deflation can be disastrous for a thriving economy because consumers will keep on postponing their purchase until prices fall further which could stifle economic activity to a virtual standstill. 

Keeping inflation rates at just the right levels was the raison d’être for the decision of the U.S. Federal Reserve to increase the overall interest rates before the end of 2015 but the Fed indefinitely postponed further interest rate increases for fear that it may stifle the ongoing economic recovery of the United States. But most economic experts say that if the Fed keeps on postponing their other scheduled interest rate hikes, the U.S. economy could experience deflation problems by 2017.