Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

$2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

antimoneylaunderinglaw.com

Post reply on HN
Print view View original

111–120 of 174 posts

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#111

Post by petecox »

sanswork wrote: post #91
cmurf wrote: post #88

Earlier quoted context omitted.

Well that would be true if things were normal, like 10 years ago. But the rate of return on real estate is much higher than the rate of return of say the S&P 500.

10 years ago things were very much not normal in housing prices and 8 years ago a lot of people lost everything because they counted on prices increasing at way above historic norms. Much like you're doing here.

pundits have been predicting the bubble bursting here since the GFC. But the 'economic miracle' of the housing boom keeps rolling on in Sydney and Melbourne.

With Australian interest rates at record lows, property investors keep borrowing unperturbed.

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#112

Post by neurostimulant »

mathattack wrote: post #77

Interesting about this on a per-capita basis. Is ~$2K per citizen a lot? I wonder what comparable #s for the US and Russia are. (Note that with 16,000-18,000 people doing the moving, it's very large per intermediary)

Average annual household income in China is around $10k, so yeah, $2k is quite a lot.

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#113

Post by wycx »

jussij wrote: post #98
cmurf wrote: post #87

Earlier quoted context omitted.

OK and what's the failure mode if broad GDP growth remains stagnant, but the narrow real estate market continue to grow and increasingly unobtainable? Does it fail or does it in effect behave as two economies?

If the GDP remains low and inflation remains low then property prices will continue to rise. In fact if this happens the rate of rise may well increase over the short term. To fight low inflation and low GDP central banks around the world have all been singing from the same song sheet by adopting the policy of Quantitative Easing (QE). QE is basically a policy of printing money and it was designed to grow inflation,…

Keep in mind that the poor Australian GDP growth is also whilst we are running record levels of immigration. GDP per capita, and perhaps more importantly, real net national disposable income (RNNDI, [1]) per capita have both performed poorly since 2008. Indeed, RNNDI per capita has declined to be only 0.4% higher than it was in 2008, and has declined continuously since December 2011[2], i.e. living standards in Australia have been falling for five years! House prices keep on rising.

Inflation is not a problem for Australia. Our problem is debt deflation. We owe so much to the rest of the world for our shitty $1 million fibro and brick veneer shacks that as terms of trade decline, servicing that debt (private debt, not public debt) will suck up all the income we have.

[1] http://www.abs.gov.au/ausstats/abs@.nsf/0/3FA94A5DA5F20EDDCA...

[2] http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/5204....

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#114

Post by wycx »

a13xb wrote: post #82
a_bonobo wrote: post #56

Earlier quoted context omitted.

Probably negative gearing: https://en.wikipedia.org/wiki/Australian_property_bubble#Inf... Edit, better link: https://en.wikipedia.org/wiki/Negative_gearing#Australia >Interest on an investment loan for an income producing purpose is fully deductible if the income falls short of the interest payable. The shortfall can be deducted for tax purposes from income from other sources, such as the wage or salary income of th…

Negative gearing is only one piece of the puzzle. There is also a 50% CGT discount if you hold an investment for more than a year. And yes, it applies to shares too, but it's not possible to get this amount of debt leverage for buying shares. There is also 100% CGT exemption if the property is owner-occupied. The worst part is that it extends up to 6 years after you move out (e.g. to rent somewhere cheaper). So you c…

Centrelink has been speculatively invoicing people to recover undeserved welfare payments based on crude data matching with income tax datasets.

How nice it would be if they did some data matching to determine who was actually living in a property as their primary residence, vs. changed their mailing address to that of their residential property to pretend it was their primary dwelling, and issued invoices for unpaid CGT.

Given foregone tax from the CGT discount and negative gearing represent significantly larger sums than that spent on Newstart, chasing property investors would seem to be lower hanging fruit...

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#115

Post by misja111 »

cmurf wrote: post #106
jussij wrote: post #98

Earlier quoted context omitted.

If the GDP remains low and inflation remains low then property prices will continue to rise. In fact if this happens the rate of rise may well increase over the short term. To fight low inflation and low GDP central banks around the world have all been singing from the same song sheet by adopting the policy of Quantitative Easing (QE). QE is basically a policy of printing money and it was designed to grow inflation,…

OK but not all asset prices are going up, it's pretty much just real estate and in particular residential real estate. Commericial real estate is doing well, but it's lagging compared to residential. Bank loans are roughly 1/3 real estate mortgages, 1/3 commercial, and 1/3 consumer. QE affects all of these. So why is QE not resulting in growth elsewhere in the economy, being narrowly focused on real estate mortgages?

QE is not resulting in enough growth in the Western world, because there are just not enough profitable businesses for investors to pour their cheap money into.

Supplying cheap money is only one half of the equation to get investors to sponsor businesses: the other half that is needed is businesses with profitable business plans. And there the Western world has a problem: globalisation is moving mainstream business away to cheaper area's in the world. That is not a new thing, and traditionally Western economies have compensated that with new innovative businesses. And although there certainly is some innovation, it is not enough to keep up and keep the GDP growing. The aging populations in most Western countries contribute to that effect because younger generations are much more likely to take risks and start new businesses than the older.

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#116

Post by rahimnathwani »

a13xb wrote: post #82
a_bonobo wrote: post #56

Earlier quoted context omitted.

Probably negative gearing: https://en.wikipedia.org/wiki/Australian_property_bubble#Inf... Edit, better link: https://en.wikipedia.org/wiki/Negative_gearing#Australia >Interest on an investment loan for an income producing purpose is fully deductible if the income falls short of the interest payable. The shortfall can be deducted for tax purposes from income from other sources, such as the wage or salary income of th…

Negative gearing is only one piece of the puzzle. There is also a 50% CGT discount if you hold an investment for more than a year. And yes, it applies to shares too, but it's not possible to get this amount of debt leverage for buying shares. There is also 100% CGT exemption if the property is owner-occupied. The worst part is that it extends up to 6 years after you move out (e.g. to rent somewhere cheaper). So you c…

"it's not possible to get this amount of debt leverage for buying shares"

But it's easy to buy a call options on shares, which is equivalent.

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#117

Post by raverbashing »

prklmn wrote: post #67
aianus wrote: post #40

Earlier quoted context omitted.

This. I did the math when I rented an apartment in downtown Toronto and the rent was less than mortgage interest + condo fees + property tax + maintenance.

So let's say you save 10¢ on every dollar by renting in your scenario. You'd have to have a hell of a return on that 10¢ you saved to beat the 90¢ you would have invested in the property but instead flushed down the drain in the form of rent....

"flushed down the drain"

Oh not this crap again

https://www.youtube.com/watch?v=KAMeI4uHAFE

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#118

Post by ac29 »

non_repro_blue wrote: post #28

That's a big number, way too large for anyone to take personally in an emotional sense. But it's definitely big enough for a purge. Jailing, disappearances and more. This is a pretty large economic tide. Almost twice the size of California's economy, all at once. Ranking it The Fifth Largest Economy, worldwide, if it's worth thinking in those terms. Given that an approximate number of participating Chinese nationals…

>This is a pretty large economic tide. Almost twice the size of California's economy, all at once.

Well, not all at once, that number (USD 1.5T, the 2T number is CAD) is cumulative from 1995-2013, per the article.

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#119

Post by pjc50 »

sytelus wrote: post #109

Simple question: when some invests his corruption money in US, doesn't it automatically become "public" and hence traceable? For example, if you buy a house for X dollars in US then shouldn't Chinese government be able to easily trace you down? My understanding was that so called "black" money stays black only as long as you use it in form of cash, not investments.

Traceable to whom or what, though? If you've got enough money it's easy for the registered owner of the house to be e.g. a Cayman Islands company with anonymous directors.

Re: $2T in Proceeds of Corruption Removed from China and Taken to US, AUS, CAN, NL

#120

Post by pjc50 »

djrogers wrote: post #78
ChuckMcM wrote: post #33

Earlier quoted context omitted.

I'll just say if you're using house sales in Vancouver or the Bay Area to launder your money you are really moving a lot of money around. I bought a house for cash in Las Vegas after the crash and the bank never once asked where I got the funds to do so. I'm pretty sure they were supposed to.

> I bought a house for cash in Las Vegas after the crash and the bank never once asked where I got the funds to do so. I'm pretty sure they were supposed to. Umm, no. It only. I, but that's frightening. You have a right to privacy in a private transaction like that. Where you will run in to a ton of questions is when you use a big chunk of money for a down payment on a mortgage. In that case the bank wants to make su…

The US has no general right to privacy, and all large transactions are potentially notifiable to the anti-money-laundering authorities. This is what HSBC got in a lot of trouble for not doing.
Post reply on HN