By Neil Chatterjee
The U.S. has promised it will hunt down tax evaders.
And it seems tax evaders are on the run.
DBS bank, based in the growing offshore financial centre of
Singapore, told Reuters it had been approached by U.S. citizens
asking for its private banking services. But when told they would
have to sign U.S. tax declaration forms, the potential clients
disappeared. Swiss banks also approached DBS on the hope they could
offload troublesome U.S. clients to a location that so far has
not been reached by the strong arms of Washington or Brussels.
DBS said no thanks. In fact many private banks and boutique
advisors now seem to be avoiding U.S. clients.
Will this spread to other nationalities, as governments
invest in tax spies and tax havens invest in white paint?
Is this the end of offshore private private banking?
Stephan Dolezalek, Managing Director of VantagePoint Venture Partners and Tom Werner, Chief Executive of solar power company SunPower, sat down at Reuters’ Global Climate and Alternative Energy Summit in San Francisco and shared their views on global warming, investment and cleantech.
Dolezalek sees industrialization in developing countries as a more predictable impetus for investment than global warming.
Werner sees global warming as a stimulus for new business and a tool for adaptation.
What are your thoughts? Is global warming an economic stimulus, an unreliable driver for investment, neither or both?
(Editing/video by Courtney Hoffman, pictures by Kim White)
Hardly a day goes by now without some Chinese firm striking a deal to buy assets overseas, but the country’s best prospects for growth may be right in its own backyard. Vivi Lin in Beijing reports on how the world’s workshop is fast becoming one of the world’s top consumers.
Japan’s population has peaked and all the projections have it sliding sharply in coming decades, raising questions about investment opportunities when emerging markets, in particular, offer much more obvious growth opportunities.
By 2055 government researchers expect Japan’s population to slide 30 percent to below 90 million from around 128 million with mushrooming numbers of retirees to be supported by a dwindling workforce.
Yet Japan will still be an important destination for world investors, argues Hiroyuki Arita, the Japan head of Blackrock, the world’s largest money manager.
Women, having not made such a big move into jobs as elsewhere, will cushion the decline in the Japanese workforce by taking up more jobs, he says.
Arita also sees Japan as a continuing oasis of stability in an increasingly volatile world.
Yes, there may be more growth in China and other emerging markets. But where will investors feel their money is safest if Eastern Europe, parts of Asia or other less stable areas suffer a meltdown?
The Japanese yen is already a safe haven for investors in tough times, although Japanese stocks have proven less of a refuge with a record 42 percent drop in the Nikkei share average last year.
Yet, Arita acknowledges that Japanese investors are struggling to have confidence in investing, never mind attracting others to view Japan well.
The hammering of world markets has turned Japanese people even more into a land of savers, rather than investors, Arita told the Reuters Japan Investment Summit, and that might take five years before venturing out from safety to invest again.
Japan’s people have around $15 trillion stashed away in overall savings, and asset managers have struggled to get their hands on it.
But Arita has hopes of grabbing more, once memories of the global financial crisis fades. He sees room to double or triple the current funds under management to around 200 to 350 trillion yen (around $2 billion to $3.5 billion) from just 50-90 trillion yen now.
The sprouting of privately-held alternative trading venues has seriously mucked up the trading landscapes in the United States and elsewhere, or so says Thomas Caldwell, chairman and chief executive of Caldwell Financial.
Caldwell, founder of a major exchange investment firm, sees a world that has quickly evolved into one of nimble, electronic players coupled with more and more trading venues with the proliferation of alternative trading systems, or ATSs.
(They’re also called electronic communications networks (ECNs) in the United States and multilateral trading facilities (MTFs) in Europe).
These new venues, which can include the ominously-named dark pools, or alternative venues, where they can secretly match buy and sell orders, leads to, among other things, “deeply flawed” pricing for market participants, in Caldwell’s view.
The idea of bank-backed stock trading venues is also suspect, says Caldwell.
“Publicly-owned exchanges, open and visible trading, an auction market environment,” he said during the Reuters Exchanges and Trading Summit in New York.
“These are centerpieces if you really want an economy to grow and you want to encourage entrepreneurs with access to capital. The more we get into gamesmanship and side products and all this other stuff it depletes from this.”
(Posted by Jennifer Kwan)
Anyone expecting investors to start galloping back into riskier assets in a rush might have something of a wait, according to Kathleen Hughes, who runs money funds for JPMorgan Asset Management in Europe. They are more likely to wander back in.
"Risk appetite returns in stages. It leaves on a horse but comes back on foot," she rather neatly told a Reuters funds summit being held in Luxembourg.
There are nonetheless some signs around that show leather is getting some wear. Fund trackers EPFR Global says that although overall fund flows fell during the second week of March, there were some signs of growing risk appetite. Commodities, technology and energy sector funds as well as global emerging market equity and non-Japan Asia funds all saw net inflows.
Perhaps most noteworthy, money market funds, the bellwether for investor risk aversion, had net outflows of $381 billion in the week.
Hughes says she has seen something of the same. The size of the safest-of-safe segment of her money markets funds -- the short-dated U.S. Treasury paper bit -- has halved since the fourth quarter of 2008.
So there is some walking going on even if the horse remains in the stable.
Wars have numerous costs and most of those are unimaginable for most of us not in the middle of one.
But, aside from the tragic cost of death or injury, wars also cost a lot of money to finance and President-elect Barack Obama will be facing some of those costs (as well as a whole mess of other stuff) when he takes office in January.
As the United States grapples with a severely struggling economy, a number of federal bailouts and questions about our overall financial shape, Obama will also have to decide rather quickly how he will prosecute the wars in Iraq and Afghanistan and the staffing of the military.
On Monday, Loren Thompson of the Lexington Institute and Richard Aboulafia of the Teal Group spoke at the Reuters Aerospace and Defense Summit about the kinds of challenges Obama will face and just how much this is all going to cost.
Thompson (who you hear speaking first in the audio clip) and Aboulafia have been at our summits before and are always highly engaging and well-informed guests. But this year, maybe more than we’ve ever seen, the two warned that the problems facing the country and the defense sector were as serious as they have seen.
Staffing the military is an expensive proposition and it’s getting more so, the two concurred. And a government with a lot on its plate might be forced to take a second look at staffing committments. They think Obama will.
The Aero and Defense Summit is the final one of the year. In 2008, Reuters has had 33 summits around the globe and have as many or more planned for 2009. Our previous gathering, Reuters Investment Outlook Summit, provided clients with an excellent look at how to manage through what will certainly be a challenging 2009.
The world is a more dangerous place because of the global economic meltdown, according to Northrop Grumman Chief Executive Ronald Sugar, whose company provides specialized aircraft, radar and other electronics to meet that threat.
Sugar acknowledged that hunger and thirst could not be solved with his company’s products but argued that diplomats dealing with the world’s woes would be more likely to be successful if diplomats followed President Teddy Roosevelt’s famous dictum.
“You only talk if you have a big stick,” he said.
The Aero and Defense Summit is the final one of the year. In 2008, Reuters has had 33 summits around the globe and have as many or more planned for 2009. Our previous gathering, Reuters Investment Outlook Summit, provided clients with an excellent look at how to manage through what will certainly be a challenging 2009.
– Additional reporting by Diane Bartz in Washington
At the Reuters India Investment Summit we asked Managing Partner of IBM Global Services Sandip Patel about the first thing he would like to outsource from his daily life. His response, perhaps instinctively, was automating the cleanup of thousands of his emails.
Anantha Radhakrishnan, Vice President at Infosys BPO, yearned for extended telecommuting to cut down on travel time (and probably cost as well!!) when asked the same question.
Evidently, productivity improvements and radical cost-cutting measures are weighing heavily on the minds of corporate big wigs these days.
The BPO services industry, which was once able to fund disproportionately high wages and lavish perks for employees, is now plagued with rumours of disappearing stationary and depleting entertainment budgets all in the name of cutting costs.
Head honcho of outsourcing giant Genpact, Pramod Bhasin even expressed delight at the plight of BPO professionals who are being forced to settle for slower wage growth, disappearing perks and restricted job hopping.
“We got no guarantees when we were young. We had to work hard and with some of this notion coming back I tell you I look forward to it,” Bhasin said.
A comment that perhaps several would like to contest passionately.
