2013 July FIRE Policy News

Issue Date: 
July, 2013
Newspaper PDF: 

While a U.S. Senate subcommittee recently took Apple Inc. to task for allegedly using “offshore tax havens” to avoid paying U.S. taxes on foreign income, the July issue of FIRE (Finance, Insurance, and Real Estate) Policy News notes much of the world considers the United States itself to be one of the world’s biggest tax havens.

Also in this issue:

  • In 2007, the 6,000 residents of Ulysses, Kansas were given big promises and high hopes with the proposal of a second major ethanol processing plant. Now, the town and the ethanol plant’s Chinese investors feel duped by a project that has come to a grinding halt.
  • Federal investigators say City of Harrisburg, Pennsylvania officials misled the public and investors about how bad the municipality’s finances really were. The Securities and Exchange Commission charged the city government with securities fraud in connection with misleading financial statements made to the public.
  • There seems to be only one kind of loan bankers want to make: SBA loans. SBA stands for Small Business Administration, a federal agency that guarantees certain loans made by banks that operate within its guidelines. Lawmakers portray SBA lending as a boost for small businesses. The program is actually a form of corporate welfare for some of the nation’s largest banks. While banks reap profits, taxpayers cover the losses.
  • Since 2009, as the Fed has loaded up on U.S. Treasuries and mortgage-backed securities, cash assets of foreign banks with operations in the United States have moved up pretty much in tandem, now totaling more than $1 trillion. In short, the Fed is printing money to prop up foreign banks.
  • The Commodities Futures Trading Commission plans to unveil new speculative commodity position limits. If one could make the case that “excessive speculation” caused recent price spikes in various commodity markets, then presumably the CFTC could demonstrate speculative commodity position limits are indeed “necessary and appropriate.” But it’s difficult to apportion causality for a price spike when a particular commodity has low inventories relative to consumption.

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