US Tax Reforms Is Bad For Us But Are Americans Are Losing Their Homes ?

HIA (Homeland Investment Act) is back in Obama’s 2nd of 7 speeches last night.

It looks like the 2 trillion held offshore by US companies will be taxed whether it goes home or not and at a nice preferential rate of 5.25%. Money is going home.

And a revamp of corporate tax down from 35% to 28%, is even better in the long run because there is less need to hide.

Of course all this is still in the air but the implications would be vast and coming in a time of EM slowdown, this is bad news.

“This impact of a change to a territorial (or semi-territorial) US corporate tax system is likely to be very USD positive. Unlike 2005 when there significant selling of the foreign currencies in which the earnings were held, this time the vast bulk of unrepatriated earnings are likely to be held in USD. However, the ability of US firms to use assets productively that were previously trapped abroad will probably lead to cleaning up of balance sheets and other asset market positive shifts. In short, the USD will be attractive because the attractiveness of US assets will generate portfolio inflows, not because there is much direct selling of foreign currencies by US firms. Nevertheless there is likely to be some selling of foreign currencies to buy USD. Most unrepatriated earnings are held in G10 currencies such as EUR, GBP and CAD. With the growth outlook for EM weakening, this could hurt some less liquid EM currencies. ” taken from Citi FX

US Housing Recovery is Bullshit ?

We saw all the highs in the NAHB Market Index not seen since 2005 yet home ownership rate is at an all time lows not seen since the mid 90’s. Renting is the new trend with the rental units at all time highs.


Looks like a joke until we read that Chinese and HongKong investors are the second largest investors in US properties, after the Canadians.

“The state-owned Bank of China has become the largest foreign lender in commercial real estate deals in the United States, replacing big European banks.” NY Times

I have been shown these new US residential real estate funds that promise decent IRRs for 5 year lock ins. Looks like we know where the recovery is coming from – the rest of the world except Americans.

Don’t laugh at this because Singapore seems headed down that path too.

July 30 (Bloomberg) — Study of transactions above S$50
million and since global financial crisis showed Chinese capital
in Singapore real estate was nearly S$5 billion, Business Times
reported, citing broker CBRE Group Inc.
• Chinese funds represented 69% of foreign capital invested in Singapore property market in first half of 2013 for transactions above S$50 million, newspaper says

69% of foreign capital ?!!!!

Thank God for a vigilant government !