Americans exit stage left, pursued by weird tax rules

American citizens are running away. In 2013, 2,999 Americans renounced their citizenship, up 211% from the previous record in 2011. The Foreign Account Tax Compliance Act of 2010 (FATCA), now being phased in, not only makes it unadvisable for foreign banks to accept American taxpayers as customers (UBS, DB, etc. already don’t) even if the Americans in question are living abroad. Not only that, compliance is difficult for the 6 million Americans living abroad; those who can find banking services face onerous reporting requirements and criminal penalties for errors.

As for American corporations, will the US politicians’ opposition to Pfizer’s move to the UK prompt a rush for the exits? Ron Wyden, chairman of the Senate finance committee is threatening retroactive legislation to prevent this. It would certainly be prudent for multinational corporations to get while the getting is good.

The government seems to assume that no one has any legitimate reason to be abroad, nor to do business there. The concept of globalization is foreign to them.

We fear death, so we focus on the present

People are revoltng in Europe

Of the EU's six original members, three are expected to see "populist or far-right parties" (are they the same thing?) finish first or second in the upcoming European Parliament elections.  These three are France, Netherlands, and Italy.

Irish (CPAs') eyes are smiling

From today’s FT.  Any comment would be superfluous, except that Irish eyes are smiling, along with those in Germany and Canada.

Shareholders in London express revulsion to excessive compensation

British firms are apparently now required to submit executive compensation plans to binding shareholder votes. Over 40% of Standard Chartered's shareholders have just voted against the company’s plan because the incentives were tied to annual rather than longer performance. 

WIth Barclays' downsizing, there is no longer any British bank in the bulge bracket

Barclays is cutting 7000 jobs from its investment bank (one quarter of the staff) and moving over half its investment banking-related assets into a bad bank.  Barclays’ focus will be the U.K. and the U.S.  Higher capital requirements and more deferred pay put at a disadvantage, they say, UK banks compared to those in France, Germany, and the U.S.  Wasn't the U.K. supposed to benefit from banking restrictions on the continent?  The banking sector worldwide is in secular decline as debt/GDP shrinks.  According to the FT, Deutsche and the Wall Street players will be the only bulge bracket banks left.  Where does this leave London and Paris?

Informed money launderers prefer dollars to bitcoins.

CNBC just had a discussion of bitcoins and a couple of similar digital currencies that I had never heard of.  Concern was expressed that miscreants and low-lives could use bitcoins to launder money. 

I asked myself the following question:  If 99% of all money laundering is in US dollars, which it is, isn’t it the security of the dollar the issue? The dollar's vulnerability is putting too much of a burden on the intermediaries to police transactions, which is driving up transaction costs. The provenance of each bitcoin is contact within its code so every transaction is recorded automatically.  Why can't this be done with digital dollars?