Sunday, December 31, 2017

Brexit Guts British Science and Risks Graphene Innovation - Bloomberg

Brexit Guts British Science and Risks Graphene Innovation - Bloomberg

How Will the New Tax Law Affect My Real Estate Investments? | The Real Estate Crowdfunding Review

How Will the New Tax Law Affect My Real Estate Investments? | The Real Estate Crowdfunding Review



Show me the "20% deduction"!

The good news for income-oriented real estate investors is that many of us will see a large reduction in taxes in 2018. 20% of all real estate income that comes through pass-through entities (LLCs, S Corp.'s, etc.) will be deductible. This will boost returns for many income-based real estate crowdfunding and syndication investments (core/core plus strategies and real estate debt), as well as REITs. 

Note that this only applies to income and not to capital gains. So value-added and opportunistic strategies which depend mostly or all on price appreciation are out of luck and will see less or almost no tax sheltering.

Also, if you make too much money (more than $207,500 single or $315,000 MFJ), the deduction may be limited(More information on those fairly complicated limitations are here.)
 
So in 2018, you may wish to prioritize more favorable income-producing strategies, if you've been putting them off. (Information on the top core/core plus funds and top hard money loan options are here).

And the same for your REIT allocation as well (as described in this Wall Street Journal article)

Also, if you own real estate directly and have been holding it in your own name rather than a pass-through entity, now is the time to talk to your attorney about a change. This will not only protect you from liability, but also take advantage of this new deduction.

Get it back to me faster!

Also positive news for almost all real estate investors are the more favorable rules for expensing when acquiring new properties. This will allow investments to recover costs quicker, which gets investors money back faster than before. This is unlikely to make a very large or noticeable difference on many investments, but it still will be a welcome small net positive.
   
  • Bonus depreciation: Can expense certain business assets (with recovery period less than 20 years) 100% instead of 50%. Note that depreciation has to be paid back to the IRS when you sell a property. So this will have less effect for short-term investments, and more effect on longer-term buy-and-holds.
  • Can now expense up to $1 million instead of $500,000.
  • Expenses now allowed for roofs, heating, ventilation, air conditioning, fire protection alarm systems, security systems.
       
That's the good news for all. Now the bad and mixed news…
     

The Homeowner Triple Whammy

Owning a home in many high tax markets will get much more expensiveand become unaffordable for some.

The doubling of the standard deduction will mean that many people will not be getting a tax break for their mortgage like they do now. Then the capping of the state and local tax deductions to just $10,000, means everyone will have to pay significantly more in taxes to own a home instead of rent. And the elimination of the ability to deduct property taxes will make this even worse

Together, these 3 things will cause significant lowered demandnet selling of residential properties in these areas and home prices to fall. This will negatively affect investors who own properties in these areas that depend on growing price appreciation.

On the positive side, multifamily investors in these areas should see increased demand as more people are forced to rent. This will decrease vacancies and perhaps allow rents to be raised higher than they would have been before. Also, the price drops could provide an opportunity for income-based residential property investors to pick up rental properties at a lower price.

(Update: December 28, 2017. Some financial advisors (and the financial press) have been recommending that homeowners in high tax states prepay future property taxes in 2017 to get an extra deduction (since the since removal of the deduction doesn't occur until the first day of 2018).

However, the IRS has posted additional guidance clarifying that this will not work for most people. You cannot get a deduction if the taxes have not yet been assessed.  And no jurisdictions have assessed them yet. Simply guessing at the amount in the future will not get you a deduction. More information here.)

Friday, December 29, 2017

The twilight of Donald Trump - The Boston Globe

The twilight of Donald Trump - The Boston Globe



...Each of us decides, at some point in our lives, which dramatic genre we inhabit. Is your life a tragedy? A comedy? As an academic, I aspire to live my life as a rather exalted BBC documentary, but somehow it always gravitates back to sitcom. I have friends who shoot for Hollywood costume drama, but inevitably wind up in low-budget soap opera.


Some American presidencies have been authentic tragedies: certainly John F. Kennedy’s. Indeed, it would take an Aeschylus to do full justice to the Kennedy family’s version of “The Oresteia.” Other presidencies have been more comedic: Aristophanes would have enjoyed Bill Clinton’s presidency, not least because Clinton had the genially bawdy personality that the Athenian playwright liked to give his heroes.

...But what will Donald Trump’s presidency turn out to be? If you believe the prophets of American tyranny, it is already a tragedy — a ghastly combination of Coriolanus, Macbeth, and Richard III. I’ll take the other side. This, my friends, is a comedy. It may even be a full-blown farce.

Speak less softly but don't forget the big stick, Opinion News & Top Stories - The Straits Times

Speak less softly but don't forget the big stick, Opinion News & Top Stories - The Straits Times






Speak less softly but don't forget the big stick
Niall Ferguson
PUBLISHED DEC 29, 2017, 5:00 AM SGT

As 2017 draws to a close, the world has seldom been so
binary. You either love Donald Trump or you loathe him. You either adore Brexit
or abhor it. This polarisation has been fostered by the giant online social
networks of our time and the phenomenon that students of networks know as
"homophily". In plain English: Birds of a feather flock together.

Facebook encourages you to like or not like what you see in
your news feed. Twitter allows you to retweet or like other people's tweets or
block those users who offend your sensibilities. Pretty soon you are in a
filter bubble inhabited exclusively by people who share your view of the world.

The result is a paradise not just for fake news but also for
extreme views.

In the wake of the exposure of Harvey Weinstein as a sexual
predator, shrill voices insist all men are potential rapists. Since the death
of a (white) protester in Charlottesville, Virginia, other zealots insist all
white people are racists. White men must therefore be racist rapists. Dare to
dissent from this new doctrine and you will only confirm the hypothesis -
because you would say that, wouldn't you, if you were a racist rapist.

In this binary world, there is not much room for
ambivalence.

I have had a tough time this year explaining even to friends
why I can like some aspects of the Trump administration while at the same time
disliking others. And I wish I'd had a bitcoin for every time someone has
complained that my position on Brexit has flip-flopped. No: I'm just
ambivalent.

I had a great deal of sympathy last year with those voters
who expressed their dissatisfaction with the status quo by voting for Brexit or
Mr Trump. But I was also keenly aware there would be significant difficulties
with both these populist ventures, as has indeed proven to be the case.

This was not flip-flopping. This was what used to be known,
in a bygone era, as nuance.


ST ILLUSTRATION : MIEL
A good occasion for more ambivalence is the Trump
administration's new National Security Strategy (NSS). As usual, there were
plenty of commentators ready to denounce it and to predict the imminent end of
days, similar to the calamities supposed to follow the ending of Net neutrality
- the policy requiring Internet service providers to treat all data equally -
and the passage of the Republican tax cuts.

In reality, this new NSS is a great improvement on the last
administration's essays in "strategic patience".

Gone are the highfalutin but vacuous proclamations of virtue
that were Mr Barack Obama's presidential signature tune. Instead we have a
muscular and unambiguous identification of the principal threats to America and
a clear commitment to meet those threats by force if necessary.

The idea that this document will destroy the "liberal
international order" supposedly established in 1945 and unleash the Third
World War is absurd. On the contrary, it was high time to call out China, which
has become increasingly brazen in its assertion of power, not only in the South
China Sea but further afield too.

This was Mr Obama's 2015 NSS: "The scope of our
cooperation with China is unprecedented... The United States welcomes the rise
of a stable, peaceful and prosperous China. We seek to develop a constructive
relationship with China that delivers benefits for our two peoples and promotes
security and prosperity in Asia and around the world. We seek cooperation on
shared regional and global challenges... While there will be competition, we
reject the inevitability of confrontation."

Compare and contrast with the 2017 edition: "China
seeks to displace the US in the Indo-Pacific region, expand the reaches of its
state-driven economic model and reorder the region in its favour... China
gathers and exploits data on an unrivalled scale and spreads features of its
authoritarian system, including corruption and the use of surveillance.

"It is building the most capable and well-funded
military in the world, after our own. Its nuclear arsenal is growing and
diversifying... China is using economic inducements and penalties, influence
operations and implied military threats to persuade other states to heed its
political and security agenda."

I know which I prefer. I also agree wholeheartedly that it
was naive to assume - as the past three administrations tended to - that
including Russia and China "in international institutions and global
commerce would turn them into benign actors and trustworthy partners".

In reality, (the Trump administration's new National
Security Strategy) is a great improvement on the last administration's essays
in "strategic patience". Gone are the highfalutin but vacuous
proclamations of virtue that were Mr Barack Obama's presidential signature
tune. Instead we have a muscular and unambiguous identification of the
principal threats to America and a clear commitment to meet those threats by
force if necessary.

A new report on China's "sharp power" by the
National Endowment for Democracy shows just how wrong this was.

Those who worry about the alleged collusion between the
Trump campaign and the Kremlin last year ought to welcome the NSS' tough talk
about Russia. Those who feared Trump would terminate Nato should be reassured.

My concern about the NSS is simply that it is a
fundamentally old-fashioned document. Its main preoccupations are with threats
posed by established nation states - China, Russia, North Korea, Iran - to
America and its allies. The document says much less about the new threats that all
nation states now face.

Earlier this year, I participated in an eye-opening
conference at the Hoover Institution at Stanford University, California,
convened by the former secretary of state George Shultz.

At the age of 97, Dr Shultz remains astonishingly
forward-looking. As he argues, cyber-warfare has the potential to disrupt vital
infrastructure without warning. A new strain of influenza could devastate the
world's population with astonishing speed. Nanotechnology could fundamentally
alter the calculus of conflict by threatening conventional forces with
overwhelming swarms of hostile devices.

Climate change is conventionally cited as the principal
common danger facing all the world's states. But it is only one of a number of
such dangers and by no means the most proximate. The new NSS alludes to some of
these threats, but it does not make clear how America is going to combat them.
Coming in the wake of a tax Bill that significantly reduces the federal
government's tax base for the foreseeable future, the NSS can make only vague
commitments to increase expenditure on national security.

The new NSS is therefore just another aspect of the Trump
administration about which it is right to feel ambivalent. It's an improvement
on the bromides of the Obama era. But it falls a long way short of explaining
how America can be made great again.

As the authors of NSS 2017 note, however: "China,
Russia and other state and non-state actors recognise that the US often views
the world in binary terms, with states being either 'at peace' or 'at war',
when it is actually an arena of continuous competition."

This insight applies equally well in the realm of domestic
politics, where binary thinking is the enemy of rigorous thought.

And if you like only parts of what I've just told you,
that's just fine with me.

South Florida’s Real Estate Reckoning Could Be Closer Than You Think - Bloomberg

South Florida’s Real Estate Reckoning Could Be Closer Than You Think - Bloomberg

Who Wins, Who Loses From MiFID II Shakeup? - Bloomberg

Who Wins, Who Loses From MiFID II Shakeup? - Bloomberg

Wednesday, December 27, 2017

How the New Pass-Through Limits Work in the Tax Plan

How the New Pass-Through Limits Work in the Tax Plan



How the New Pass-Through Limits Work in the Tax Plan

The House and Senate blended their provisions on a crucial piece of the new tax break for pass-through businesses that aren't in professional service industries.
The House version was based on a company’s capital investments, giving firms the ability to get more of their income at a 25% rate if they had more capital invested.
The Senate’s version limited the tax break to 50% of wages paid.
The final version combines the two approaches. Now, the 20% deduction is capped at either 50% of wages or 25% of wages plus 2.5% of capital assets, whichever is greater.
Compared to the Senate bill, that’s a benefit for capital-intensive companies that don’t pay a lot of wages or any wages at all.
These limits only apply for businesses whose owners have individual income exceeding $157,500 or joint filer income of $315,000.

Breaking the Sovereign-Debt Doom Loop - Bloomberg

Breaking the Sovereign-Debt Doom Loop - Bloomberg



The world's central banks recently signed off on the Basel III rules for bank capital...One of the most important concerns the treatment of sovereign bonds on banks' balance sheets.

Banks that hold large, concentrated portfolios of their own governments' bonds can be a threat to financial stability. This practice needs to be discouraged. Unfortunately, the Basel Committee decided, for now, not to act.
National regulators can choose to treat government bonds denominated in domestic currency as safe -- and they do. All the committee members use this freedom to set the risk weight on such bonds at zero.

Monday, December 25, 2017

Chinese officials in Guizhou told to fight pollution or forget about promotion | South China Morning Post

Chinese officials in Guizhou told to fight pollution or forget about promotion | South China Morning 

.Post



...The ruling Communist Party’s efforts to clean up the country’s notoriously polluted air, rivers, lakes and soil have been stymied by its cadres, whose career prospects have for decades depended on their ability to drive economic growth.

But with environmental protection now a priority for the coming five years, Beijing is trying to change the mindset of putting growth first by judging its officials by a new measure – green targets.



Friday, December 22, 2017

Wealthy Americans Are Already Trying to Exploit the New Tax Law - Bloomberg

Wealthy Americans Are Already Trying to Exploit the New Tax Law - Bloomberg

After Federal Overhaul, States Weigh Changes to Their Tax Codes - Bloomberg

After Federal Overhaul, States Weigh Changes to Their Tax Codes - Bloomberg



...Lawmakers say the new rule could depress home values as residents choose to live elsewhere, thereby making it harder for local governments to raise much-needed revenues of their own. Finances in the tri-state area are already among the most strained in the nation and analysts say the situation could deteriorate further under the new code....



In Vermont, more than 10 percent of residents’ incomes goes toward state and local taxes,...



...The change to the mortgage interest deduction is also likely to slow home construction and sales, which could suppress home values and property tax values in higher-price markets, ...



...Legislators say states could replace the income tax with payroll tax that are levied on employers. They could also turn their state taxes into charitable donations, in which residents could receive a state income-tax credit for the full amount of their gift and qualify for a federal deduction.






Thursday, December 21, 2017

The Morning Ledger: Companies Weigh Last-Minute Tax Strategies as Bill Clears Senate - btbirkett@gmail.com - Gmail

The Morning Ledger: Companies Weigh Last-Minute Tax Strategies as Bill Clears Senate - btbirkett@gmail.com - Gmail



according to Joachim Lang, managing director of the German industry association BDI. "The U.S. legislative package, with improved depreciation and tightening regulations, provides significant incentives for international companies to relocate corporate functions and investments to the U.S.," Mr. Lang said in a statement. A lowered corporate tax rate of 21% is "well below" the 25% that companies on average pay in other developed countries, Mr. Lang said. The drop in the corporate tax rate heightens international tax competition, he added.

Wednesday, December 20, 2017

Protecting the Shaky Russia-gate Narrative – Consortiumnews

Protecting the Shaky Russia-gate Narrative – Consortiumnews



Protecting the Shaky Russia-gate Narrative

Save
 
Exclusive: The New York Times continues its sorry pattern of falsifying the record on Russia-gate, giving its readers information that the newspaper knows not to be true, reports Robert Parry.

Even efforts to test the Russian-hack claims through science were ignored or ridiculed. When former NSA technical director William Binney conducted experiments that showed that the known download speed of one batch of DNC emails could not have occurred over the Internet but matched what was possible for a USB-connected thumb drive — an indication that a Democratic insider likely downloaded the emails and thus that there was no “hack” — Binney was mocked as a “conspiracy theorist.”

Tuesday, December 19, 2017

The Current Sex Panic Harks Back to the Era of Coddling Women - Bloomberg

The Current Sex Panic Harks Back to the Era of Coddling Women - Bloomberg



... You might, in other words, adopt something like the Pence Rule, so recently mocked for its Victorian overtones. (Or worse still, work hard not to hire any women who could become a liability.)

This would obviously be bad for women, who would lose countless opportunities for learning, advancement, friendship, even romance -- the human connections that make us human workers superior to robots, for now.

Friday, December 15, 2017

Coal Is Fueling Bitcoin’s Meteoric Rise - Bloomberg

Coal Is Fueling Bitcoin’s Meteoric Rise - Bloomberg



another side of bitcoin



"...The global industry’s power use already may equal 3 million U.S. homes, topping the individual consumption of 159 countries, according to the Digiconomist Bitcoin Energy Consumption Index. As more bitcoin is created, the difficulty rate of token-generating calculations increases, as does the need for electricity.

“This has become a dirty thing to produce,..."

Wednesday, December 13, 2017

2018: A Year of Tenuous Stability

https://gallery.mailchimp.com/781d962e0d3dfabcf455f7eff/files/51f56f65-69f4-4f9a-a89d-cec806ac41c5/Forecast_Video_SR2.pdf



(intro) The year ahead promises to be a lively one, full of discrete conflicts and
crises. Or so it would seem. Sure, the world is complex, and when we
analyze it we tend to do so by breaking it down into its constituent parts –
North America, South America, Europe, and so on. But studying these
regions in isolation can obscure the bigger picture.



...And so it is that after nine years the EU
still cannot function as it did pre-crisis. It
is unable to make core decisions
collectively, and now its defining features
are regional and social tensions fueled by
economic issues and different cultural
values.



China’s Wary Rise



... The government is
trapped between conflicting economic
and political realities. It cannot sustain
breakneck growth on a foundation of
low-wage exports, but it does not yet
have the middle class needed to boost
domestic consumption to levels that
would insulate it from downturns in
distant consumer markets....



... the reforms themselves,
particularly reducing industry capacity
and introducing measures to cool real
estate markets, will slow China’s growth,
leading to job losses and discontent....

What Hedge Funds Will Do After the Hedge Fund Model Dies - Bloomberg

What Hedge Funds Will Do After the Hedge Fund Model Dies - Bloomberg



... the number of publicly traded companies in the U.S. is, at about 3,700, half what it was in 1996.....



...Low rates mean funds earn nothing on the cash produced when they sell a stock short....



...The biggest inflows this year have gone to long-biased or long-only products run by the quantitative funds, which use computers to decide what to buy and charge lower fees than most....



...Longford Capital Management raised $500 million for what’s known as a litigation finance fund: It focuses on financing corporate lawsuits and taking a piece of settlements or judgments....



Alpha Capital Management in Atlanta, helps institutions find investment consultants, and ... "Now they want to double down on private equity and private debt."

Saturday, December 9, 2017

GE and The Value Destruction That Comes With Digitization.

GE and The Value Destruction That Comes With Digitization.



...

Digital Goods Are Less Valued Than Physical Goods

In their research on customer perceptions of physical vs digital goods, Ozgun Atasoy (Postdoctoral research associate at Basel University) and Carey K. Morewedge (Professor of Marketing at Boston University) suggest that
‘in five experiments, people ascribed less value to digital than to physical versions of the same good…even though digital goods are, in many cases, substantive innovations relative to their physical counterparts’
In experiments run by the authors, tourists were unwilling to pay more for a digital copy of a holiday picture than for a physical version of the same picture. Even though the digital picture could be shared, was perceived to be of higher quality and would degrade less quickly than the physical version. The conclusion is that, for the consumer, there is a greater sense of psychological ownership with the physical product. 
...The expertise that the current employees, who are experts in this industry, bring to the table will be invaluable to companies that are causing the digital disruption. As competitors move into the space there will be a need to understand the underlying levers and drivers of the industry, to disrupt a thing you have to understand it thoroughly. ...

Shenzhen High Tour by Makers – Medium

Shenzhen High Tour by Makers – Medium

Why Shenzhen is Amazing? Talk at HuaQiangBei

One Maker and One Ecomomic researcher, and One Shop owner told at HuaQiangBei.
A quite interesting talk, I recorded 3 of presentation and QA Session.
Maker TAKASU Masakazu (Me!)Who is most experienced person about Maker Faire in Asia, came from Singapore and also a part of a Maker Faire Shenzhen team. I told about Why Shenzhen is amazing in Maker Movement.
Start from an Open source culture in US, Then How democratized ecosystem for innovation in Shenzhen.
Economic researcher Asei Ito,Associate professor of Tokyo Univercity, And he stays Shenzhen Univercity a once a year. He is just connecter between maker sector and economic researchers. Innovation in Shenzhen is popular in Japan, because of him.
He told criteria of Shenzhen and Chinese government policy works in Shenzhen.
MJ is Shop owner in HuaQiangBei. He spends a time about 10 years in Shenhzhen, 7 years of current job. He succeeds his business, with bring and follow ecosystem in Shenzhen. He told a life in Shenzhen, and 26 old young shop owner who how thinking the Shenzhen and how thing for the future.
We really enjoyed talking each other, mostly QA session, We still going on how understand and share about here awesome city Shenzhen!