At the End of the Day

Tonight’s bonfire of the insanities and vanities:

  • It’s a global world. Well that’s to say – it is until part of it f**ks up, in which case the disaster is far, far away on the dark side of the Planet, involving problems we don’t have. Like falling exports, shadow banking debts, financial corruption, a Bourse bubble, huge debt & massive wealth inequities.
  • 60,000 new Labour members will lose the right to vote in the leadership election, but we’re not allowed to know the criteria used for disenfranchising them….even though the system was invented by the previous leader.
  • A new deal on funding between Camerlot and the BBC has been agreed, but we’re not allowed to know the details. I mean, why should we? We only pay for it when all’s said and done. What was that liberty principle again? Oh yes, “No taxation without represention”. Which rhymes with information. As in, Freedom of Act. Black Jack Straw is on the case.
  • A property developer billionaire with a big mouth on his face and an ill-fitting rug on top of his head is miles ahead in the race for the GOP Presidential candidacy. His name is Trump, and so obviously he is the Elephant in the room. In focus groups, it has emerged, he is the only candidate who can be forgiven almost anything because he abhors pc and says what he thinks. This is the backlash we’ve been predicting for a decade.
  • George Osborne slipped through a tax change unnoticed in the last Budget. It concerned that triumphant Tory Buy-to-Let thing, heralded as a way to give the lower end of the social scale access to a home. Basic rate older landlords deprived of income on savings by, er, bank-saving Zirp, will now find themselves pushed into a higher rate tax band. The draconian tax rate will wipe out any income these people could get from buying to let, because it only applied to those who needed mortgages to buy the properties. The very rich who did not need a mortgage will not be affected at all. There is something existentially odd about GGOO, the most mendacious Chancellor in history. Needless to say, the old trying to make ends meet are selling up. I don’t fancy their chances when the property correction hits. But perhaps George Gideon Oswald Osborne could give some more unsuspecting first-time buyers Help to Buy and thus mop up the unwanted properties: after all, he no longer needs artificially high prices to make the voters feel good. #British Psychopath

Tomorrow’s lead in your Soaraway Slog: why the share slide will soon begin again

6 thoughts on “At the End of the Day

  1. The biggest story: as usual concealed among all fear-mongering shares-are-down-this-week bollocks – Andrew Lansley, former Tory health secretary, revealed in a speech to businessmen that Cameron’s planned renegotiations about Britain’s relationship with the EU were elaborate balderdash. Lansley admitted that the PM will not be able to win any major concessions from other member states before the referendum. Instead, Cameron’s tactics are going to be:

    1) lower public expectations in advance
    2) then exceed them
    3) “choreograph” a huge row with the French to give the false impression of a major British victory.

    Smoke and mirrors have defined our relationship with the Common Market that was since day one. The only surprise is Lansley has openly admitted it. Don’t get fooled again. Vote No.

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  2. “Basic rate older landlords deprived of income on savings by, er, bank-saving Zirp, will now find themselves pushed into a higher rate tax band. The draconian tax rate will wipe out any income these people could get from buying to let, because it only applied to those who needed mortgages to buy the properties.”

    This is a contradiction, surely? If people have invested in buy-to-let because they have been denied a return from other investments, then they are merely using their own money to buy property, and have no need of a mortgage loan. They will be subject to the normal taxation on both the rental income (net of maintenance and other trading expenses) from the properties purchased, and on any subsequent capital gain that may occur on disposal of the properties. This is exactly the equivalent of someone who has chosen to invest their accumulated wealth in stocks and shares.

    On the other hand, there are people who have identified the possibility of joining a carry trade involving the borrowing of money on one hind, and the gaining of a greater return from rents/capital growth on the other. If individual people, as opposed to registered traders, were to seek to do the same thing with stocks and shares – to calculate taxable income after deducting borrowing costs from dividends/capital gains – neither the authorities nor the general public would allow them to do so.

    Osborne’s logic is that bank interest should only be allowable as a trading expense for people who are genuine traders, and who submit themselves to all the other requirements and regulations of trading status. This should not be allowable to people who are casual investors in property, in the same way as it is not available to casual investors in stocks and shares, for example.

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