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How "Killer B" and "Deadly D" Strategies Allow Companies To Repatriate Billions And Find Higher IRR Alternatives To Hiring
One of Zero Hedge's greater contributions to society in 2010 was finally putting the "cash on the sidelines" BS that was every emptyheaded pundit's go-to line when cornered and with nothing else to retort, in the trash bin of intellectual sophistry where it belonged. What surprised us is that it took as long as it did before someone dared to point out the flagrantly obvious. That said, today Bloomberg has released a terrific piece of investigative reporting, that may very well refute much of what we said, since it appears that contrary to legal permissions, companies have been very busy using the gray area in the tax code (the same that gets ordinary citizens in lots of trouble with the IRS but not mega corporations, never mega corporations) to repatriate tens, if not hundreds of billions in the past few years. Meet the "Killer B” and “the Deadly D" just two of the strategies that have allowed the following to happen: Merck & Co. bringing more than $9 billion from abroad without paying any U.S. tax to help finance its acquisition of Schering-Plough Corp.; Pfizer Inc. importing more than $30 billion from offshore in connection with its acquisition of Wyeth and taking steps to minimize the tax hit on its publicly reported profits; Eli Lilly & Co. carrying out many of the steps for a tax-free importation of foreign cash after its roughly $6.5 billion purchase of ImClone Systems Inc. in 2008. In other words, despite America's deplorable budget condition, where every dollar in organic revenue is matched by one dollar of debt issuance, companies are doing more than ever to avoid paying any taxes... anywhere.
From Bloomberg:
At the White House on Dec. 15, business executives asked President Obama for a tax holiday that would help them tap more than $1 trillion of offshore earnings, much of it sitting in island tax havens.
The money -- including hundreds of billions in profits that U.S. companies attribute to overseas subsidiaries to avoid taxes -- is supposed to be taxed at up to 35 percent when it’s brought home, or “repatriated.” Executives including John T. Chambers of Cisco Systems Inc. say a tax break would return a flood of cash and boost the economy.
What nobody’s saying publicly is that U.S. multinationals are already finding legal ways to avoid that tax. Over the years, they’ve brought cash home, tax-free, employing strategies with nicknames worthy of 1970s conspiracy thrillers -- including “the Killer B” and “the Deadly D.”
The explanation, in case anyone is confused:
“Sophisticated U.S. companies are routinely repatriating hundreds of billions of dollars in foreign earnings and paying trivially small U.S. taxes on those repatriations,” said Edward D. Kleinbard, a law professor at the University of Southern California in Los Angeles. “They devote enormous resources first to moving income to tax havens, and then to bringing those profits back to the U.S. at the lowest possible tax cost.”
The trade off is not big: about the size of one bond auction.
U.S. companies overall use various repatriation strategies
to avoid about $25 billion a year in federal income taxes, he
said.
Then again, that is about two months' worth of unemployment benefits to those who actually pay taxes. But when one has the sheep happily paying their share of corporate tax evasion, and the Fed even more happily monetizing debt, why should the IRS care?
And since it is now obvious that (tax) laws are meant to be if not broken, then certainly bent, one can now speculate just why companies such as Microsoft have to misrepresent their tax reality and claim they are issuing bonds when in fact they do have full recourse to all that lovely offshore cash:
“The fact that they have these cash hoards suggests that investment is not being constrained by lack of cash,” Slemrod said.
U.S. multinationals boost earnings by shifting income out of the country via transfer pricing, a system that allows them to allocate costs to subsidiaries in high-tax countries and profits to tax havens. Google Inc., for example, cut its taxes by $3.1 billion in the last three years by moving most of the income it attributed overseas ultimately to Bermuda, Bloomberg News reported in October.
The tax benefits from such profit shifting can have a greater impact on share price than boosting sales or cutting other expenses, since the reduced rate goes straight to the bottom line, said John P. Kennedy, a partner at Deloitte Tax LLP, speaking at the conference in Philadelphia Nov. 3.
In other words, in the biggest of paradoxes, as long as companies are allowed to use tax schemes to defraud America, they will have even less of an interest to actually hire, as the IRR to the bottom line from tax evasion is greater than that from organic growth! Please reread this sentence as it is critical, and goes to the heart of America's gradual transition to what some call a fascist corporatocracy, coupled with ever increasing unemployment. For all those wondering why the unemployment is and continues to be sky high, look no further than the corrupt tax gatherers.
And some memorable buzzwords to should allow the peasantry to grasp and recall just how big the worries of corporate treasurers are when it comes to tax avoidance (and evasion):
The “Killer B” maneuver is named for section 368(a)(1)(B) of the Internal Revenue Code, which deals with tax-free reorganizations. A U.S. company using the technique would sell its shares to an offshore subsidiary, bringing cash back to the U.S. tax-free. The offshore unit could then use the stock to make an acquisition. In 2006, the IRS issued a notice aimed at shutting down the maneuver.
The “Deadly D,” also named for a section of tax law, allows a U.S. company to attach the high tax basis in a newly acquired company to one of its existing foreign units. In some cases, doing so enables the U.S. parent to pull cash from the subsidiary up to the amount of the recent purchase price tax-free. The Obama administration has proposed changing the provision that enables the maneuver.
And since nothing is ever covert in any newly developed Banana Republic, here is how tax-deminimis status is spun at fully open and public gatherings:
Willens, the independent tax adviser, said the steps indicated a likely D reorganization, or another method “to extract earnings from overseas without tax consequences -- of course.” Lilly had no comment beyond its filings, said David P. Lewis, the company’s vice president for global taxes.
The KPMG panel discussion in Philadelphia, called “Global Cash Tax Management Plans and Repatriation Planning,” dissected other techniques, including one that took six slides to explain. It works like this:
Soon after a U.S. multinational has purchased another U.S. company, the new unit promises to pay the parent a large amount of cash pursuant to a note agreement. Since both parties are U.S. companies, there is no tax bill for the parent under current U.S. law.
Then the new acquisition converts to a foreign company. So when the payment pursuant to the note is made, it comes from overseas. That means the foreign cash is treated as a nontaxable payment under the note, instead of a taxable dividend.
Going Offshore
The newly converted foreign subsidiary could access the multinational’s existing offshore cash by borrowing from a foreign sister unit, said Glenn, the KPMG tax partner. He and Zollo were joined by colleague Frank Mattei, as well as Don Whitt, a Pfizer tax official.
“This basic transaction is something that at least a couple of taxpayers have done, and I know a number of others have evaluated,” Glenn said. The strategy’s name follows the alphabetic tradition of Bs and Ds. It’s called “the Outbound F.”
Remember: if US individuals even think of doing something as tax evasive as the abovementioned, the thought police will be knocking at your door. So unless one is a corporation, preferably a monopoly, and best of all: so massively leveraged (think GE) it needs its own propaganda station, and endless Fed and taxpayer backstops, don't even try to visualize a world in which the rules that apply to corporations can even remotely be applicable to ordinary US peasants. Perhaps this is why those who are bored and actually look at the final 2010 Treasury Direct Statement will find that the US government collected $1.3 trillion in individual incomes taxes net of refunds...and $160 billion in corporate.
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If Obama, Biden and Pelosi were on a boat in the middle of the ocean and it sank, who would be saved?
AMERICA
Change 3 puppets and you expect results?
/shrug/
Besides, grease floats.
Agree. Now if you could put congress in your boat with the executive branch and the senior leadership of both corrupted parties, we'd have a start...
It is funny how capital finds its way to the country where it is treated best.
If the US wishes to improve hiring, then lower the corporate tax... easy.
Maybe 15%, then everyone would pay it instead of paying auditors/bankers (however, the $$$ diverted to the salaries of auditors/bankers is taxed at regular income tax levels).
You smoke too much of your last name.
GS paid 1% effective last year. They'll pay 1% effective or less, if the rate is 15% or even 2%. Them's bonus dollars and they don't need 'income' if they get options and can trade on inside info when it's profitable as long-term gains.
If I'm not mistaken Japan recently or is about to, cut it's corporate tax rate.
Now...finally...there's a real shot at us being #1 ;-)
What would happen if we permanently set the corporate rate to 0? Corporations don't pay taxes anyway - they either charge more for products, pay lower dividends, or suffer lower growth. In the end, it is an individual taxpayer who pays that burden. If we're only getting 3 Maddoff units a year ($50B each) from corporations who go through ridiculous hoops to avoid the tax, just chuck it. That money will flood home and employers lose the disincentive to hire people.
Flat tax is the only true panacea for this; but then who would contribute to the retirement plans of our corruptocrats?
+1
How about this, Tyler:
"Despite corporations' lamentable decumulation of capital, and despite the increasingly hostile environment in which they try to do business, employ people, build plants, keep their books in dollars, etc., bankrupt and profligate governments everywhere are eyeing their cash as if it was some sort of mythical "social surplus" that could be looted to temporarily stave off the ongoing crisis."
What if the tax lawyers and accountants and such never really get a chance to fudge anything, by the determination and collection of any particular transaction being taxable or not happen at the time of the transfer.
And what if there were no such motion of money that did not incur the tax?
The only way to remove loopholes is to remove the whole distorting mess.
Replace it with what I have lately been calling the "Fiat Fee" -- the miniscule fee paid at every transaction measured in FRN.
When there is no need to discriminate, there is no need to report anything but daily totals. No need to report.
Like all tax codes, corporate tax law is meant to only apply/suppress the little guy.
It can't be repeated enough...
In other words, in the biggest of paradoxes, as long as companies are allowed to use tax schemes to defraud America, they will have even less of an interest to actually hire, as the IRR to the bottom line from tax evasion is greater than that from organic growth!
Why are tax evasion and hiring mutually exclusive? Textbook corporate finance (as much as one disdains textbooks) would say you take on all positive NPV projects. Just because one has a higher IRR means little if investible capital exceeds the highest IRR (NPV) project.
You missed the part where the tax guy says that avoiding tax goes directly to the bottom line. Hiring or equipment purchases do not. In fact, the latter, even if profitable, will dilute IRR, thereby lowering the metric used to calculate most executive bonuses.
II say eliminate the corporate tax altogether, but only as part of a law that eliminates their legal status as "persons". If they don't want to pay for the government that protects their assets and allows them to exist, take away all of their rights to participate in our democracy. Sounds harsh? That's exactly what happens to any individual who is caught not paying tax on his/her income --- a felony conviction and removal from society that forever denies the individual the right to vote.
Interesting proposal to de-person corporations. Surely Delaware would secede.
Who disputes that avoiding taxes increases profit and bonuses?
My point is that if a corporation invented, say, a new way to slice bread, and this allowed terrific margins, and required capital and labor input, it has no exclusory power, dependency or relationship to tax evasion. If anything, the tax evasion would augment the pool of available investible capital.
Just sayin.
That is the problem. It's tough (if not close to impossible) to create a profit by making things (certainly in the short term). Investors aren't interested in companies that make things. Profits are now generated by understanding the arcane details of how the (tax) system works and having lawyers and accountants exploit those details. One financial guy that can find a loophole is worth way more than a salesperson.
If your argument went something like this, then I would see a valid claim:
Executives have a minimum bonus threshold. They will select the least risky means of achieving the minimum required profit to ensure the required bonus. Once that minimum profit is assured, they take no further risks. This precludes hiring.
Interesting, but I think your straw man has a few faults:
1. From my experience, marginal bonus compensation increases once past the minimum
2. Regarding risk aversion and behavior towards bonus compensation, I think we need to look no further than the current mortgage mess/MBS/Rating organizations, etc.
+2
SoCalBusted wrote:
In other words, in the biggest of paradoxes, as long as companies are allowed to use tax schemes to defraud America, they will have even less of an interest to actually hire, as the IRR to the bottom line from tax evasion is greater than that from organic growth!
All I can say is what Samuel Clemens penned 100 years ago:
It's better to keep your mouth shut and be thought a fool than to open it and leave no doubt.
Sir (Dick Crab Grass),
Although I did not author the line your are attributing to me (it was copy/pasted from the original post), please elaborate on "all you can say", because so far, you have not said anything of substance.
If the tax code can be used to increase the bottom line with a stoke of a pen in a second, what do you think the CEO is going to do? It is as simple as marginal cost/marginal benefit, with a little bit of risk thrown in. In which case, hiring somebody, let's say a salesperson is going to take some time to get a return (let's say a year, but depends on sales cycle, product and ASP) would be the less optimal option.
Corporate totalitarianism bitchez!
Marxist perspective on the crisis: http://bit.ly/giztH4
Good Link. Amazing how often I find my thinking and worldview adapting and identifying with concepts I always thought were wrong, thanks to ZH and the sharing of ideas here.
Corporations don't pay taxes, they collect them from the people. To optimize their prices/profits, they seek to minimize the amount they collect.
You're conflating the sales taxes passed on (cost of DB) with the income tax on the corporation's profits.
No, he is actually not. A corporation accounts for all its expenses when building the price of its products. That includes taxes. If corporation A calculates that it will pay .02 cents per unit sold in taxes, it will find a way to minimize the tax or increase the price of each widget to compensate for the additional .02 cents per unit. If the market can not handle the .02 cents, corporation must now find a way to shelter the income, defer the taxes or convince the customer to pay the .02 cents. Either way, customers pay the tax, not the corporation.
Like the countries where those US companies are, are making it easy for them :)
In the EU, they will have to pay extra taxes to pull the money out. And once they will go ahead with it, they will make it more difficult for them.
Why should corporations be taxed at all? Tax all salaries capital gains and dividends equally. Capital should be treated equally with labor in regard to returns.
"In light of the new salary taxes, C.B. we've instead agreed to buy you a small nation in compensation...heh heh...Slaves included of course! HA HA..HAHAHAHHAAAAA"
kill corpoRAT amerika
Corporations should be taxed at individual income tax rates because for some reason, in America, corporations are people. They can contribute to political campaigns. By allowing corporations to skip on taxes, and still make campaign contributions, people who do pay taxes become slaves of the corporatocracy.
What can a small business guy do? Can you start a foreign owned business, lets say, internet biz and live in the US leaving the revenue/profits accrue outside the country? And take a smaller salary up to an exclusion? either repatriate during a future tax holiday or get dual citizenship elsewhere? How does the little guy figure this stuff out?
The tax breaks available to small business are so varied and plentiful, I usually find it difficult to use them all. Americans, if they work for a wage and are tired of being raped, can easily file a DBA, start a business and lose money for seven years, taking a percentage of their expenses for home, car, utilities as legitimate business expenses. People who do not use this simple method to reduce their taxes just give the feds more reason to overtax the general populace. Anyone in the 15 or 28% bracket can save literally hundreds or thousands of dollars in taxes annually.
If you are a small business and aren't getting your fair share of tax benefits, I suggest you find a better accountant.
Tyler's ranting about how average Americans can't use the tax code to their advantage is misguided, ill-informed popular propaganda.
Take a look at depreciation and amortization if you really want to have some fun with Schedule C. Grow a pair, learn the simplest parts of the tax code and laugh every April 15 like I do.
Okay, I have an idea on how to creatively deploy our military assets to collect some cash...
Fuck these monopolies. Break them all up, this shit is out of hand. It's like an infection, an infestation, a borg-ed-i-zation, it must be stopped.
No such thing as a down stock market, stock market not permitted do fall ever again.
I thought every dollar in organic government revenue was now matched by $1.36 in government spending, and that this spread is likely to grow wider?
"Killer B" and "Deadly D
Ms Burnett & MCC is what first crossed the desk when reading that headline....
Its a Slow day ;->
The Golden Era has begun
I'd like to put A and B together please. How much you wanna bet that many of these companies holding funds off shore have also received bailouts and other US GOVhandouts. Come on, how much ya wanna bet.
Fuckers.
Yep, and they make campaign contributions with their tax free money.
Or "exercise their right to political speech" by buying millions in ads.
Thanks, SCOTUS!
It is sad and yet amusing, that regardless of the amount of collusion reported by media, people fail to see the root of the problem is two fold: the existence of government as a coersive police power and the control of money by private bankers through legal tender laws and taxation.
The solution is simple: government without taxation and no legal tender laws.
Good for them. Tax accountants and tax lawyers are heroes. Avoiding getting robbed by the US government is the highest form of patriotism. They're not "defrauding" other people in the US. They're simply avoiding getting robbed. And by the way, the above companies produce goods and services that have made people's lives materially better. If they're capable of not surrendering even an additional penny less to the government and allocating it to something else in their operations, good for them and good for us.
If the small business person had access to the same strategies, I might agree with you. They don't. I don't. And the reason they get away with it is because they bribe (cough) pardon, lobby the government to get the rules to go their way. The whole thing stinks, they are not patriots they are oligarchs, your lords and masters, who determine your fate because they have more money than you do and the people you trust to enforce the rules, don't and won't because they got bought off too.
[edit: Don't just junk me bros, that does not educate me. Post and tell me why I am wrong.]
With all due respect, you know not of what you speak. The corporations mentioned above are simply seeking to avoid "double taxation" on their earnings. The foreign based capital has produced income that has already been taxed in the country in which it resides-outside of the U.S. Current U.S. tax law does not allow credit for taxes paid on foreign based income, except in limited cases, thus you see cash building up offshore refusing to "come home". Only an idiot would bring those earnings back to the U.S. and subject them to a second full 35% U.S. Tax. The "whole thing stinks" but not in the way you describe it. The problem is the government is full of people who have no business experience and certainly no experience in foreign investing at the corporate level, such as yourself.
Well...in Tyler's referenced post about the "Hordes of cash on the sidelines" he confirms that tax credits for international taxes paid do apply, as I would have thought. So, you are subtracting from the sum of knowledge when you post.
BS
Corporations use public services and should pay for them with taxes just like you and me. And what makes you think profits go back into operations and not into dividends for year end bonuses?
Another one...ass-up, defending the people enabling the dismantling of the American economy piece by piece who would steal the ability to feed a family from your countrymen so you can have cheap sneakers.
Why does so much cash accumulate "offshore"? Because out-sourced labor is soooo cheap.
Snowball, tell us, as CFO of a corporation with foreign based earnings, would you wish to subject those earnings to taxes at the rate of 70 to 80% by repatriating cash back to the states? This has nothing to do with "labor that is soooo cheap" and more with idiots like you who don't understand the first thing about running an international business. Get a clue before you opine.
It's not the question in which country "value" is created in a manufacturing process and taxed, but in the transfer of intangible assets to a country via transfer price contracts to low tax countries. Do you really think that the innovations booked as intangible assets from Google have been developed in Ireland?
When will you people learn that the law only applies to the have-nots and voters. If you are a congressman/women or a corporation you don;t need to follow the law...just change it so it workd to your advantage.
"Killer B"
I don't know about the IRS but Dodge made a mean 1969 "Super Bee" Killer Bee.
I don't think that is what they meant by a "Tax Dodge," but it's cute.
I see the young lady is copping a buzz at a party.
I should have know it would be the MsCreant who caught the "Dodge" angle. Thanks for proving I'm not the only one here on ZH who's crazy. :>)
Pope to Issue New Bank Norms Amid Laundering Probe
http://abcnews.go.com/Business/wireStory?id=12498735
Every institution we have is infested. They don't need to hide funds offshore, they do what they do tax free because they are a religion. Eat shit corporations, you are amature cons compared to these professionals.
If the Corporations will not pay taxes, then neither should the Citizens.
Maybe if the federal government did not have the money to pay jackbooted morons at TSA the Republic would be better off. Its not like there is any regulation being enforced anymore.
The IRC is a joke, only you have to pay a $500/hr tax attorney to get the punchline.
Frankly, it does not matter what happens. Under the widely understood morally bankrupt kleptocracy in Washington, the Corporations will hire their lobbyists to rewrite the laws to greenlight or conceal whatever fraud they wish to exploit.
What is slowly happening is that mandatory "tax payments" are going to bypass the government and go directly to Corporations. Do not pass Go. Do not collect $200.
The individual mandate as part of Obamacare is just the tip of the iceberg.
The privatization of "Social Security" is next.
Tell me what is going on that is getting better.
Japan recently cut its corporate tax rate, leaving the US with the highest corporate tax rate in the world by a sizable margin.
I'm shocked, I say shocked, that companies would do everything in their power to avoid such confiscatory taxation.
Fine, I agree and the next time one of your corporate citizens need some protection out there in the mean old world they can go on hands and knees to the Japs and let the Japs come a running to protect their god given rights to profits via a military protection racket world wide.
I am all for that trade off ., you clown , no that's too insulting to clowns, you foolish empty shill.
A reasonable person would admit there is something wrong with the US corporate tax rate when it is the furthest outlier among the 190+ countries in the world. How often do your orders get filled when they are furthest from the market?
Every single other country in the world is putting their money where their mouth is in saying that the US corporate tax rate is excessively high. No other country feels that a corporate tax rate of 35% (plus an average state corporate tax rate of 6.6%) is reasonable, regardless of whatever dubious "protections" they provide. Even the "progressive" "don't be evil" crowd at Google recognizes that you would have to be a complete moron to pay corporate taxes at those rates.
Unlike karzai, a reasonable person would understand that doing the right thing means taking advantage of tax loop holes and putting as much profit as possible into the back pocket. So what if conning the American Sheeple into being the world police at great cost, without any real benefit, is part of the game.
But you knew that.
Even if the tax rate was $1.00 per year, corporations would say it's too high.
Straight-up plutocracy.
Howard Hughes was famous for never paying tax.
Of course to avoid spending, say, $35 in tax you'll need to spend $100 in ways in which you may not have otherwise been inclined to spend that money.
The turnover of money is a very important element in both tax revenue and economic activity and to the extent that anyone is willing -or can be convinced- to spend $100 to avoid spending $35 it should be encouraged as it will eventually find a place where it will be taxed rather than saved.
Like "Brewster's Millions", multinationals (and others with the ability to raise enourmous amounts of capital or borrow) should only be taxed on the money they "save".
Big crony capitalism, new normal.
Institutional owners all the same.
Each sector of economy, same thing
Tax avoiding "schemes" are all wrong. Everyone should seek to pay the most the law provides for! No one should use tax provisions that everyone else does not use - especially those really complicated ones.
And we should tighten any "loopholes" or "schemes" so it is even more economically onerous to bring back cash to the US -- there are better opportunities outside the US. Corporations should pay much more taxes - never mind it is just individual shareholders and consumers who foot that bill -- they must pay more (you know, they've got tons of money) and many of them are actually evil.
Wow.
I was with ya up to the end.
But, this is going to shock you , but ya some of them are evil in the majority of their actions. Very few are totally evil.
Nowe go crawl back under the covers , it's dangerous out here.
Guess what, bobbyo, they can leave if they don't love it here.
We won't miss them.
Understand all the evil corporate actions --- they try to minimize what they pay their workers and do not provide them with a "fair" wage and benefit package, they minimize what they pay in taxes by contorting their behavior to fit between the tiniest cracks in the tax code, they try to crush their competitors (big and small) in unseemly and painful ways, they look to source the least expensive product ingredients (processes, materials and labor) worldwide, they try to charge as much for their product as they can get away with, they unduly influence poor innocent politicians (who are clueless that they are being "used") to limit the pain they inflict on their business, they single-handly ruin the environment with their reckless manufacturing -- all done in the name of passing along their ill-gotten filthy profits to their money-grubbing shareholders.
I think you are right -- they should take their business outside of the US. Fortunately more of them are taking your advice and doing so (and let's attack them for doing that too). It is almost like there is so very little good they do. Get 'em outta here.
Hey, man... if you can't beat 'em -- join 'em!
I'd like to be able to pull pa less taxes too but if the question is: would you rather let companies like Merck hang on to an extra $25b/year or have that money go the federal government as taxes?....I think I prefer the former.
If you think Merck is benefiting hugely here, go buy some MRK. Even if you don't own any U.S. debt you're already tied to the fate of the U.S. government more than you want to be. Full up in the name as it were...
Corporations only avoid $25 billion a year in taxes? Add a zero, or two, and i might believe that.
Beautiful. Once again it's exposed the shell game overrides all. Next up, who needs to hire anyone, for anything, just ride the hyperinflation wave on commodities up. Just remember to jump out as the first pitch fork masses storm the federal reserve to get The Bernank off the computer adding zeroes. At some point, by hook or by crook, it'll be stopped. Selling anything after that, is a real crapshoot. Prepare for Splash Mountain (circa 1990's...when it was relatively new) type exit lines.
The REAL economy isn't built off bullshit. Talk about a waste of time, decades, etc. But as every metric of business is slighted towards believing all dollars are produced and acquired equally, with no outside factors ever attributable, and any way the money comes in via ponzi or it's 'never can compete red headed step child REAL PHYSCIAL ECONOMY', are of equal value. Since Ponzi 'profits' can outpace 'real physcial economy' profits, guess which one the Queen's monetarism will go towards. Guess what WE the people should expect? Less ponzi? More ponzi? Well since corporations have to take the money, or else be in violation, and since most are staffed with religious like economic cultists exactly espousing such lunacy built up by watching their mentors for decades making the same monetarist decisions, does anyone believe anything else would happen at all? It's like EVERY one of these assholes trained under Joseph Hazelwood and Edward Smith, yet none realize it. (Those are the captains for the Exxon Valdez and the Titanic). We now have the equivalent of these assholes, being paraded as experts, as they watch everything unfold around them, and yet completely clueless about it all. (or can't believe it so...double down)
It's all about psychology you know. Perception. If bullshit is being bought, bullshit is worth something.......No, it isn't, even if someone for the moment is buying. But that's the Queen's monetarism. That's what America has become, despite what NerO-bummer or the Fucktard Pauls, the two 'in the light' factions of monetarism that are creating the 'wrong debate' about what we face. You won't get a correct debate if the two sides are being debated by idiot Barack and idiot Pick your Paul. It's like saying a good display of the NFL is the practice squads of Carolina and Buffalo. Just because the media thinks so, it must be true, until a NE/Philly *non practice squad* matchup happens and blows the idiots perceptions out of the water.
It's all about the monetary system. It's all about these fucktards Keynes or Austrian. Monetarism of all stripes is forbidded by the constitution, something both sides of the same British coin forget. That includes the supposed patriot (really a tory) Ron and Rand Paul. Not just keynesian (but new found post election fascist republican) NerObama.
Ahh yes, in corporate fascist land, the ends don't matter, just the bottom line. Sure the Queen would hire 1 billion people if it made money for her and her monetarist cronies. But she'll fire 1 billion people first because she KNOWS it''ll make her MORE.
The fucktards of supply side, shown to be naked again. When they created this fucktard supply side thought, were they hanging around a bath house naked? What a nasty thought. Maybe it's bad it wasn't a SF 1980 bath house.
But again, that's the Queen's monetarism, adopted by rich tory Americans, who somehow think it's patriotic to be against the founding fathers and everything they fought for. All monetarists are TORIES. Just most are too stupid to realize it yet. Most think it's a little 'white lie' type of thing. It's not the same now. We're different. Yeah, we in sorry ass fashion are. There's more tories now than in 1775.
Who needs a real recovery, when the Queen is trying hard to push ponzi profits up enough to hide the effects of the collapse. To decouple so that no matter how shitty the real economy is, they have the power consolidated to push more shit onto you. Make the ponzi the ultimate source of wealth, not actual physical economy. Forget reality, invest in the ponzi, and BTFD.
What a crazy dream that is. How stupid can someone be to even think that was possible, let alone surviving the pushback that would come as a result. Pushback from anger as a direct result from decisions based on monetarist folly.
So once again, ZH shows how our monetary system gets things ass backwards, 100 percent going for zero-sum ponzi gains, at the expense of the economy; short, middle, long term, or on the federal reserve's dime. Not as one time messups or things that can't be avoided, but as a general practice of the system we liv e in. The types of mistakes in decision making going on the last few years, is the new MONETARY SYSETEM normal, and in fact (well a little early), these will be the good ol days before things really go batshit. As a direct result of our superior (sarcasm), debt based Monetary system, used by imperialist conquestors of usually British lore, joined by tories since 1913, especially since Truman's 100 percent diametrically opposite viewpoint of the British Monetary system after WWII compared to FDR (the anti-keynesian); in 1945, Indochina war, Inter Alpha group's emmergence as planned from the destruction of the Bretton Woods system in '71, to outsourcing and derivatives, and all things backed (unsecured loan) securities as per Glass-Steagall, and all things free trade. I won't even go into post 2000.
This is our monetary system, and one million more unsaid things like it....and this is when it's 'good'.
Good job ZH. When our economic system becomes solely the aggregation of one million ass backwards acts, and those acts are ballyhooed as the great American system (when it's British/Venetian) by the prophet seekers on CNBS and all equal media outlets, then our economic system....just might be a redneck (oh a real answer?,....just might[certainly] be irrevocably broken and based on bullshit). Well red is the british color, including many tory monetarists who would rather feign ignorance than face facts.
Just remember everybody, without the masses believing sophsitry, market psychology is a real motherfucker.
We do have one thing going for us in the digital world. With Glass-Steagall and digital non-printed money, it's alot easier erasing zeros in a computer than collecting printed hyperinflated money.
So while things look really bad, we can still win. Or should we forget that General Washington was in such a position, right before his and the United States' victory? His legacy, Trenton. Our legacy, Ponzi-off.
Woah. That was super long.
WTF? Corporate cash isn't for investment or hiring people, it's for paying fucking executives their bonuses. That's what corporations EXIST for.
Everything is secondary to getting executives their bonuses, even the viability of the business. Bankruptcy? WTFever, just PAY ME my fuckin bonus. Retain that talent, like AIG, LEH, GM, fuckin pretty much everyone.
Shit, company's in Ch 11? Pay needs to GO UP.
Good article and review as to what the multinationals continue to be up to maximize their profits. Not a bad deal, they get offshore labor to generate foriegn profits and then use tools and tricks like this to get their cake and eat it too. Let's face it, why should multinationals ever hire American workers again in a meaningful way with this format for profit maximization. We all know this but just a reminder, these corporations do not have a conscience and do not feel any accountability to the American public. Their single objective is to maximize shareholder wealth in all legal ways possible. If American workers can help bring that about for these companies, great, if they can not, American workers are exited out as we continue to see today. Step onto the campus of any large corporation today and compare it with 10-15 years ago, the complexion of who is at these companies would be quite striking indeed with far fewer Americans.
And our beloved Fed helps these organizations out by offering emergency lending programs in its new role as Central Banker of the world. So while capitalism suggests that what they are doing is fine and within the rules, then these corporations should stop asking for help from the government or the Fed when things don't go well. Oh yeah, right, that's not going to happen, is it?