Tax them & they'll run away !!!

Did you know almost two thirds of  Britain's  million-pound earners disappeared from the country after the  introduction of the 50 % top rate of tax ? Who can blame them? One they could afford it, two who in their right mind wants to pay more tax, especially not the very rich!  

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs. This number fell to just 6,000 after Gordon Brown introduced the new 50 % top rate of income tax shortly before the last general election. ... 

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes. Experts said  Labor's ideological tax hike led to a tax cull of millionaires. Far from raising funds, it actually cost the UK £7 billion in lost tax revenue !

Interesting isn't it? The rich don't pay tax! But are we really that surprise...lol????

Bad living conditions for many in HKG, raises virus risk

During the 2003 SARS period, more than 40 residents of Amoy Gardens, a middle-class, high-rise private housing estate, died and 329 were infected . The investigators found severe watery diarrhea from infected people carried the virus into other people’s apartments in the form of tiny aerosols that were probably drawn by exhaust fans into the air from the building’s sewage system.  

The coronavirus began spreading in a Hong Kong hotel after it was introduced by an infected doctor visiting from Guangdong. From there, it passed to other hotel guests, who took it with them on airplanes to Canada, Ireland, the U.S., Vietnam and Singapore, illustrating the city’s potential to cultivate and disseminate pathogens internationally.  

 

Economic Shock  

 

SARS infected 1,755 people in Hong Kong, killing 300, and caused economic losses totaling HK$3.8 billion ($490 million) in two months alone as tourist arrivals dwindled and businesses from restaurants to taxi cabs slumped.  

 

Last year, 56.5 million people transited the city’s airport -- 65 % more than in 2002. By the time SARS petered out in August 2003, the virus had spread to more than two dozen countries and three regions, causing 8,096 cases and 774 deaths.  

 

Hong Kong acts as a transit point from China to Hong Kong, and Hong Kong to the world, That virus was discovered in a goose in Guangdong in 1996, seven years before it infected members of a Hong Kong family who had traveled to mainland China. The bird flu strain then spread across Asia and into Europe and Africa.  

 

Since SARS, Hong Kong established a Centre for Health Protection in June 2004 with a HK$500 million donation from the Hong Kong Jockey Club. The center now has an annual budget of about HK$1.6 billion. The government has also established a HK$500 million research fund for the control of infectious diseases after the SARS outbreak in 2003. That’s strengthened the city’s ability to detect and respond to emerging infectious disease threats.  

 

While newer laboratory testing tools have made surveillance more efficient, the city’s growing population and status as an international hub have increased the challenge of detecting potential threats. Cities are where some infectious diseases love to move between people nice and efficiently.  

 

Hong Kong has added more than 400,000 people the past decade. Many newcomers usually travels frequently to the Mainland and willing to sacrifice personal space for higher earning potential in the world’s 10th-largest banking center and third-busiest container port.  

 

‘Cage Homes’

Hong Kong electrician Chan is one of them, he shares a mold-stained toilet with his neighbors, says he’d move out if it weren’t for the rising cost of accommodation.  Chan’s one-room dwelling is smaller than some single-person cells in the city’s correctional centers, which are typically 62 square feet at Stanley prison and 77 square feet at the Lai Chi Kok Reception Centre.

These Cramped living space in ‘cage homes,’  has become the reluctant choice for thousands of Hong Kong people.   Even as officials pledge to improve the affordability of housing, a scarcity of land, long waiting lists for public housing and the constant influx of people mean prices will stay high in the short term.  Chan barely survives on a monthly wage of HK$11,000 ($1,418) -- close to the HK$12,000 median income in Hong Kong -- after paying his bills and sending money to his family in mainland China.

And If you have seen these "cage homes", you'll know how lucky you are!

WMP ,China's version of a Ponzi Scheme??? 3

The Risk 
More than half of off-balance-sheet wealth-management products are linked to asset pools rather than specific investments, making it impossible to know the real returns. The maturity mismatch, poor transparency and lack of clarity about bank responsibility add to the risks.

The wealth-management products are actually a type of investment products. It is different from deposits, and investors must shoulder some risks. The question is do they know the risk. Apparently not right, if not why would anyone rush in? But shouldn't the bank tell them? 

Some banks display a sentence about the risks on a screen at the entrance to their branches. Still, investors have sought and received compensation for losses in the past.

Full Repayment  

For the first default of such a product, the principal was repaid in full after regulators stepped in and a guarantee firm bought the assets.  It was believed that Huaxia was the distributor and affiliated with the issuer.

Bank of Communications Co. also is compensating investors for a wealth-management product whose value dropped 20 % in two years. With these as the precedent, how would investors learn, it almost seems safe !!!!

Many believe -The big question is not only how do banks meet their ever-growing obligations, but also how to make hundreds of millions of investors realize that these are not real deposits. The best solution is to just stop the bank from selling such products in the first place...lol....

WMP- China's version of a Ponzi Scheme ??? 2

The WMP market has grew so huge, that should something goes wrong,  Chinese banks have their reputation on the line, and they face the risk of compensating investors because of pressure from the general public.  

Chinese banks, almost all state-controlled, have relied on such products to beef up their deposit base and finance long-term loans, some of which are held off their balance sheets and repackaged into assets to be sold to investors. Banks time the distribution and maturity date for the last days of the month so that the money can be returned to a saver’s deposit account and await purchase of new wealth-management products on the first day of the following month. That allows it to be considered a deposit on the bank’s balance sheet at month-end.  

Risk Perceptions 

Problem is it seems lenders and wealth-management investors have inconsistent perceptions of risk. While banks say the products’ returns are volatile and should reflect market realities, most customers regard them as de facto deposits and expect to make yields irrespective of all dangers.

The central bank on June 20 allowed the worst cash crunch in at least a decade and warned lenders to avoid raising short-term money to finance long-term loans as part of efforts to crack down on issuance of the products.  

While the two-week surge in borrowing costs was designed to reduce risky positions, the initial impact was to drive investors out of a plunging stock market and further into the shadow-banking system as lenders offered higher yields to attract savers’ money to ease their own liquidity shortage.  

Under certain conditions, the music must stop when investors lose confidence and stop their buying or withdraw from WMPs. The rollover of a large share of WMPs weighs heavily on formal banks’ reputations, because many investors firmly believe that banks won’t close down and they can always get their money back.