[DrBubb]

THE RICH FEAST IN LONDON HAS LEFT A PROPERTY BUBBLE IN ITS WAKE
Is this going to be followed by a Huge Hangover and an attack on the Super-Rich?


. . .
THIS is where things stand now:

The former Chancellor Gordon Brown, who was one of the principal architects of the so-called miracle, has taken over as the new prime minister. He is proud of the decade of strong growth, but few beneficiaries of that growth have been willing to look behind the curtain, and see how it has been engineered. The UK economy is in a debt-bloated bubble, which has well-suited the wealthy, and those many workers and professionals in the City and Estate Agencies that have benefited from the rapid growth in asset values (and debt) which have brought matters to their current over-stretched condition. But so-called miracle has not delivered much at all in the way of increases in the disposable incomes of the average voter. Such income gains as have been seen, have been mostly eaten up by higher taxes, something that Brown as Chancellor had proved expert at increasing with various clever stealth methods. Pensions in particular have been hard-hit by taxes he introduced. And many have turned to property as a place to park their pension money. They are hoping that a huge cyclical upswing, which has already lasted twelve years, will defy all previous cyclical indicators, and be maintained indefinitely. That's another heroic assumption, going along with all those who have taken on massive debts, that it is safe to borrow huge multiples to their incomes.

...more: http://www.financial.../2007/0705.html

This post has been edited by DrBubb: 05 July 2007 - 08:41 PM

[DrBubb]

(here's another EXCERPT for those that found the article too lengthy):

"There is beginning to be some antagonism towards the wealthy. Rising property prices are not an unalloyed blessing. Other prices, for things like restaurant meals, and personal services have also risen in the wake of rising rental costs. And for those who have not yet bought (because they were too young to "get on the property ladder" before it rose out of sight), and for those who sold out 2-3 years ago, when property was just beginning to stretch beyond historical levels of affordability, the high prices create stress, and delay important life-decisions, like "settling-down" and starting a family. Many of these people now have a feeling of being dispossessed by the property boom. And the dispossessed, as a percentage of the political electorate is rising in number, as older property-owning folk pass on, and are replaced by new voters as non-property owners reach voting age. They are a force not-yet-exploited, but one that the political parties, are increasingly likely to turn to, to win votes in future elections.

In Britain, there has recently been a lively debate about the tax advantages afforded to private equity investors, who pay small long term capital gain taxes on gains. This seems like favoring the rich, who then wind up paying a lower percentage of taxes than their secretaries and their cleaners. Rumblings about how the British approach to taxing those domiciled elsewhere continue to be heard from time-to-time, but as a Chancellor to PM Blair, Brown never pushed too hard to close these loopholes. Might things look different to him now that he occupies number 10 Downing Street himself?

We are already getting some signs that New Labour under Brown may take up different causes than New Labour under Blair. Once known as the stealth Chancellor, Mr. Brown is capable of becoming the Chameleon Prime Minister, turning against policies that he supported as Chancellor, on the basis that it is politically expedient to change his stripes."

This post has been edited by DrBubb: 05 July 2007 - 08:54 PM

[Starcrossed]

Not just politically-expedient, DrBubb, it is a whole philosophy. It seems Brown is attempting to show his scorn for Blair and his ways by doing exactly the opposite to him in style and possibly, in time, substance. It shows how complicated and mutually frustrating the relationship between the two of them has been all these years.

Of course, it is politically expedient too...by setting the clock at 'zero', Brown hopes to be able to persuade us all that this is a completely new start and that he can't be blamed for anything that came before.

It may work.

[DrBubb]

Starcrossed, on Jul 5 2007, 10:08 PM, said:

Not just politically-expedient, DrBubb, it is a whole philosophy. It seems Brown is attempting to show his scorn for Blair and his ways by doing exactly the opposite to him in style and possibly, in time, substance. It shows how complicated and mutually frustrating the relationship between the two of them has been all these years.

Of course, it is politically expedient too...by setting the clock at 'zero', Brown hopes to be able to persuade us all that this is a completely new start and that he can't be blamed for anything that came before.

It may work.

Good point, Starcrossed.
Ironic, isnt it. He is doing his best to act as if he is delivering substance rather that style.
In reality, he is trying to spin away from much of the programme which he created as Chancellor.
In my view, his programme is doomed to failure, and will be a longterm disaster from the country.
(Small example: selling half of Britain's gold reserves.) He shoudl carry the can for these mistakes.
It would be a great shame if he is allowed to spin away from responsibility for his own actions.

- Hence my article exposing him and his "two deals with the devil", as I call them

The article is over-long. But it will be interesting in 3-6 months to see if it is still topical.

[Catflap]

Great article - you should be a journalist!. Do you not think it's all part of the Brown masterplan though? - after 10 years of feeding these pigs they are truely fat and ready to be slaughtered. Brown wants to be PM for nearly as long as Blair was and he's got the trump cards all ready and waiting like removal of mortgage tax relief for BTL's and a new form of MIRAS for FTB'ers when the time comes. Despite what others think about Brown carrying the can for when the economy goes bad - he won't and he'll blame the super-rich and may well bring back the 60% tax rate which will win still more votes.

[DrBubb]

CATFLAP, on Jul 5 2007, 11:54 PM, said:

Great article - you should be a journalist!. Do you not think it's all part of the Brown masterplan though? - after 10 years of feeding these pigs they are truely fat and ready to be slaughtered. Brown wants to be PM for nearly as long as Blair was and he's got the trump cards all ready and waiting like removal of mortgage tax relief for BTL's and a new form of MIRAS for FTB'ers when the time comes. Despite what others think about Brown carrying the can for when the economy goes bad - he won't and he'll blame the super-rich and may well bring back the 60% tax rate which will win still more votes.

Master plan?
Maybe not, but Brown is clever enough to find a way to benefit from the mess he has helped to create.
By betraying the rich, he regains his socialist credentials, gains some tax revenues, and distracts people from the pain felt by the peakees.

This is one of many scenerios that may unfold. Let's see if he follows my little script.

This post has been edited by DrBubb: 06 July 2007 - 06:21 AM

[The Three Little Pigs]

"The new PM will then seek to shift the blame away from himself, and onto others. An obvious target will be the super-rich, who have been one of the causes of the big jump in property prices, particularly in London."

Brown said he would end non-dom and he backed away. If he goes for it the capital will flee the capital - is the political benefit worth the economic loss?

I expect the builders to be put in the frame for "hoarding" land and the planning system to get tweaked - the OFT enquiry into the builders, to be published mid 2008, seems to have excuse planning built in.

But at present the political argument seems to get no further than Yvette Cooper accusing any Tory of Nimby-ism. Her stock answer is "...all we want to do is build more houses...but our plans are being blocked by him/her/them" Until the opposition links house prices and government economic policy in voters minds Brown and Cooper will be able to wriggle free.

[DrBubb]

The Three Little Pigs, on Jul 6 2007, 08:40 AM, said:

Brown said he would end non-dom and he backed away.
If he goes for it the capital will flee the capital - is the political benefit worth the economic loss?

I expect the builders to be put in the frame for "hoarding" land and the planning system to get tweaked - the OFT enquiry into the builders, to be published mid 2008, seems to have excuse planning built in.

It is worth the economic loss for Brown- if it gets him re-elected.
If we see a downturn, he needs to blame it on someone else, and the
"greedy rich, fleeing because they have loss their their tax benefits" might be a perfect target.

[DrBubb]

The Cheating of America: How Tax Avoidance and Evasion by the Super Rich Are Costing the Country Billions--and What You Can Do About It (Paperback)
by Charles Lewis (Author) "Moved by nostalgia for television of the 1980s, several hundred thousand people flock to the Southfork Ranch each year..." (more)
Review:
From Publishers Weekly
Probing everything from smart legal maneuvers to outright tax fraud by the wealthy, this fascinating, highly readable survey explores the tax code's haphazard evolution since 1913, and how it has favored rich individuals and large corporations over average taxpayers. Citing IRS Commissioner Charles Rossotti, who testified in 1998 that tax evasion costs the federal government $195 billion annually, Lewis and Allison et al. (The Buying of the President) note that almost 1,000 families earning more than $200,000 paid no income tax in 1995 and that corporate income taxes, which made up 28% of federal tax revenue in 1956, now are only 10%. Familiar ploys like hiding money in offshore trusts, tax shelters and nonprofit fronts figure in these sensational tales, but people like movie producer Saul Zaentzwho stashed profits from One Flew over the Cuckoo's Nest offshore and later settled the IRS claim for $26 million with a payment of $1.5 millionloom larger. Despite stiff competition, Joseph and Pamella Ross inspire the most outrage for fleeing in 1986 from a grand jury investigation of Joseph Ross's tax evasion on the government contracts that made his fortune. The couple's elaborate travels and disguises bear astonishing witness to how far some people will go to avoid paying the taxman. As these tales of privilege and chutzpah set readers' blood to boil, the authors judiciously urge their audience to demand fair tax treatment from lawmakers. What the rich don't pay, the rest of us do, they remind us. Little guys everywhere will read this book with righteous indignation

...more: http://www.amazon.co...o...4699&sr=1-1

[UNSHURE]

DrBubb, on Jul 6 2007, 07:19 AM, said:

Master plan?
Maybe not, but Brown is clever enough to find a way to benefit from the mess he has helped to create.
By betraying the rich, he regains his socialist credentials, gains some tax revenues, and distracts people from the pain felt by the peakees.

This is one of many scenerios that may unfold. Let's see if he follows my little script.

Yes, but not until after the next election. If he turns socialist before, the media will hound him out of office.

[war]

A nice article in this context:
Creating bubble

I wish Brown would take the appropriate action early enough rather than leaving the country to suffer- but the chamelion as he is, he would rather win the election than than protect economy!

Link: http://www.iii.co.uk...p;cp_sub_id=168

This post has been edited by Doubtful: 07 July 2007 - 08:58 PM

[South Lorne]

UNSHURE, on Jul 7 2007, 09:36 PM, said:

Yes, but not until after the next election. If he turns socialist before, the media will hound him out of office.

...today's tax efficiency move over his London flat blows all socialist sentiment sky high......forget it....he is now a man protecting himself from the tax man........how ironic..........!

[Dames]

South Lorne, on Jul 7 2007, 09:59 PM, said:

...today's tax efficiency move over his London flat blows all socialist sentiment sky high......forget it....he is now a man protecting himself from the tax man........how ironic..........!

Got a link for that one Lorne?

D

[HPC Convert]

South Lorne, on Jul 7 2007, 09:59 PM, said:

...today's tax efficiency move over his London flat blows all socialist sentiment sky high......forget it....he is now a man protecting himself from the tax man........how ironic..........!

GB has 18 months at the most. His party are a bunch of crooks and he lacks the charisma of Blair to pull off the lies. He is a little man whose only virtue is patience.