Monday, 11 May 2015

Taxes do have effects - Bank Levy a case in point

Now that we are free of a the potential of Socialist interference in markets, we can look once again at what the new Government is doing and whether that will really help much.

One interesting article in the Financial Times (much a better read when there is no election coverage in its dripping pink pages. Seems the Keyensians has been routed too there), which describes how many of the Investment Banks are taking a dim view of the Governments continuing bank levy.

In a world of low interest rates and free QE money for the Banks, it can be hard to make a buck. So the Bank levy, which has been increased each year just to raise as much as the year before, can have a big effect.

Lots of the trades banks are now doing make very little real money. The Repo desks are a haven for this.  Billions of dollars of transactions for fractions of a percent profit. (All Socially useless once might say, but that one is currently drinking himself into a stupor in North London).

Yet these trades are hi by the Bank levy and also the Bank are less than impressed about real regulation which has caused them to be fined repeatedly for market abuse. The latter no one can doubt, the Banks hate getting caught rigging markets but of course this is exactly what needs to happen to make a market work.

The fact the Banks want to go to Hon Kong or elsewhere where they can openly abuse their clients is their look out. Moves in the that direction are welcome as the reasons for it are unjust.

The Bank Levy though is different, it relies on Banks no shrinking their balance sheets to raise revenue when of course its imposition incentiveses banks shrink their balance sheets. Moving UK operations to other places in Europe or the US where there are no Bank Levy's is a bad thing.

The City in the UK, despite the past few years, is in a delicate state. The large investment banks are mainly gone, destroyed by the financial crisis. RBS is shut, Barclays heading the same way. UBS and Credit Suisse are a shadow of what they were. In their place is Sovereign Wealth Funds, moving in with their money. But they are not the same and not really HQ'd here and one day we will discover they can use Sovereign immunity to help erase their poor commercial decisions.

The West needs a robust capital industry more so now than ever, with QE money sloshing around and huge fiscal challenges to be overcome in the next two decades. Some thought around tax incentives would be welcome in the June emergency budget.


Demetrius said...

If you see my blog to day referring to Google's coming in the markets the implication is that it is going to be a whole new world and very soon.

Electro-Kevin said...

"The West needs a robust capital industry more so now than ever"

Were we flat earthers right after all these years ?

I don't believe this 'jobs factory of Europe' baloney.

It seems that we're creating jobs in the hope that they will beget industry rather than the other way around. Many of those jobs in house building on flood plains where there are yet to be factories.

We live in a country where 'industry' includes prostitution and where appreniceships include tyre fitters and burger flippers.

Electro-Kevin said...

I've responded to Pogo on the previous topic.

I think I have a profound point to make, this time on behalf of the Tories (who are no longer my friends.)

dearieme said...

What the hell's wrong with tyre fitters?

Electro-Kevin said...

Dearieme - Oh not you too !

(I've had this debate already elsewhere)


There is absolutely nothing wrong with tyre fitters.

Nothing at all. A perfectly honorable and decent job.

I take issue with David Cameron's claim to be creating 50,000 apprenticeships.

As usual this is a deceit.

Why ?

Because the people who might be impressed with this think of apprenticeships as three years of time-serving with day release at college and lots of exams at the end of it.

A tyre fitter does not need an apprenticeship. He can be a trainee tyre fitter - but to call him an apprentice is stretching things.

How many weeks do you think it takes to train him ? And why is he not paid more than minimum wage ?

Now I invite you to go on your local site to see what the government allows to be called an apprenticeship these days.

In my area there are Apprentice Salespersons, Apprentice Tyre Fitters, Apprentice Office Administrators, Apprentice Pub Cook...

Not Apprentice Airframe Technician to work on Jumbo Jets, nor Apprentice Gas Fitters to make 50k a year.

Sorry for the length of this post. I'm trying to head off the row that my last foray into this topic errupted into (and it wasn't me losing my temper.)

Suffragent said...

Been away from the home computer for a few days (If anybody could tell me how to post a comment on my iphone* I would appreciate it) so a belated congratulations to right minded people giving the socialists a damned good trouncing at the elections. It was just one happy story after another on Friday. Well done to all the kippers. It’s been stated in the press over here how unfair the electoral system is in the UK and the EU must be bricking themselves over a referendum.
CU-As I I’ve said before, Cameron should let slip the Dogs of finance but tell them not to sh!t in their own back yard. It might let them carry on their games for a little longer. In the end, the demise of the financial markets is of their own making. They have twisted and corrupted everything they have touched, broken every rule and peg until nothing has any value. I think it is only a matter of time before the rest of the world dumps the Petro-Dollar and associated financial wizardry and in the meantime are using up their ones and zero’s to buy up as many hard assets and, knowledge as they can.
Demetrius, what happened to all the leisure time I was promised at school because the robots would do everything. You’re forgetting the paperwork involved.
There is nothing wrong with tyre fitters but a job that takes a morning to learn, isn’t an apprenticeship.

*right the message. Enter my name, the message disappears without any capcha?????

Electro-Kevin said...

Suffragent - Correct me if I'm wrong, but the Tories won with 25% of those eligible to vote.

Of those that did vote the Tories took 35%.

(Splitting the UKIP vote down the middle and sharing equally between Left and Right - more Ukippers had switched from Labour than Tory)

The Left took 45% of the vote but were split between a number of parties.

Suffragent said...

I’m not sure what your disagreement is? As I stated, it has been recognised how unfair the current system is (but don’t expect the cons to change this any time soon. A few changes to the boundaries and the Marxists won’t see power for a long time.)
I think under the current system, we got the best result we could have had. The percentage vote was never going to transfer into seats for Ukip and Cameron only has a slim majority (We all know how by-elections go for the standing government).
The positives
Complete rejection of the union stooges and their lies.
Kippers should congratulate themselves because while they didn’t get many seats (not expected) they have changed the Media narrative on the continent. Even in the Euro elections they were referred to as the right wing racist party (but now anti EU). With their current percentage it’s been shown that it’s not just a few nutters. The press are well aware of the tactical voting because of our current system and all eyes are firmly on Cameron. The referendum is not something he can sweep under the carpet.
There are now more voices questioning the benefits of the EU. I had lunch yesterday with some very worried Germans (more so, when I suggested they could become single parents, with no maintenance payments :-)).
It’s not just about your own troop numbers, it’s far better to route the opposition (and I’m not hearing support for the EU from anybody).

Electro-Kevin said...

Well not only that...

Nick Clegg's currency didn't slump fully until the debate with Farage.

To a lesser degree Farage reduced the Labour vote in Northern constituencies - the Tories have a lot to thank him for.

I'm not disagreeing with you. I merely stating a frightening fact.

Those QT audiences might not be deliberately biased after all. Most of the electorate is Leftist.

Heaven help if Chuka turns out to be the Left's Farage.