David McWilliams & the US billions plan

[jgavig]

ok, my first post so apologies if this query is inappropriately placed. I was listening to Rte Radio 1 on early on Saturday afternoon a week gone by when I heard McWilliam put forward a fantastic fix for all our financial woes.
to keep it simple it goes like this.... US companies who have headquartered themselves here for the last 10-15yrs or longer to take advantage of our fantastic corporation tax rate have so far accumulated approx $740bn ( I know...I could not believe it either..) that they cannot bring back in to the US without getting hammered by the IRS thereby defeating the reason for their being here in the first place. Mcwilliams suggested that the Irish government approach these companies to use the funds to invest in Ireland over a ten year period by which time by means of some obtuse financial shenagins their money would no longer be tax liable in the US and they could extract their investment, and a possible divendend, more moulah, avoid liabilities in the US and Irish companies would access to a government championed $740bn investment fund.....now I'm sure this plan is full of holes however to my amateur financial ear this sounded almost viable however.....what y'all think?

 

[JEON50]

Part of our solution is to get the confidence of US Corporations. The Irish Goverment should IGNORE France and Germany and Invest in INTEL Corp, we have lost to many projectS and investment to other countries, BECAUSE ON EU INTERFERENCE. INTEL gave us confidence as a Nation, as much as Jackie Charlton. LETS SUPPORT US INVESTMENT, WE ARE PEOPLE LOOKING FOR JOBS AND CONFIDENCE. HAVE THE IDA DISAPPEARED ?

 

[Sunny]

I would like to see McWilliams data to back up his assertion are sitting on $740 billion of cash that US multinationals can't repatriate.

 

[RMCF]

Sorry but the figures don't add up for me.

I'm guessing the figure of $740bn is the amount the US multi-nationals have turned over since they have been here, not profit. But sure they don't have that money any more, most of it will have been reinvested.

Correct?

Sometimes I think McWilliams just likes to be heard.

 

[Howitzer]

I have no idea if MacW's figures are correct but I do know that there's an unofficial 20 year cycle in the US whereby the Govt has some sort of amnesty or reduced tax applicable to repatriated income from US multinationals.

The last one was introduced by George W Bush in his last term. If this mega cash pile exists then their accountants either weren't on the ball or a lot of profit has been accrued in the last couple of years (of a recession).

 

[T McGibney]

This does add up for me either. It is well known that multinationals here repatriate their profits abroad. McWilliams is no fool and it sounds to me like he was misquoted.

 

[aristotle]

You are not going to be able to convince large multi-nationals to invest into public finances of a country, especially Ireland due to the mess it is in.

These companies have shareholders too who won't be pleased and would want investment back into the company itself or even extra dividends rather than into a country. It makes no sense to me.

 

[Duke of Marmalade]

What maccers actually said was that we could grab 10% of that 740bn and the US MNCs would hardly notice. We would then invest that 74bn in Ireland and if after 10 years the investment paid off we would return the money. Maccers was suggesting a confiscation not an attractive investment proposition put to US MNCs to take it or leave it.

On the same program he said we should let Anglo simply go. Okay lots of sympathy I'm sure with that idea. When Rachel English asked what would happen depositors he replied that we could take care of them with an insurance policy. I kid you not.

He also stated on the same program that the government, instead of putting 3bn into AIB to get 90% share, should have bought it on the market at 0.5bn and own 100%. What he missed in this crackpot suggestion was that after buying AIB the government would still have to inject 3bn. In other words he was asking the government to increase the amount invested in AIB.

Finally, on the same program he stated that there is nothing in the law to say depositors and senior bondholders rank equally. When asked by Rachel why the Attorney General had ruled that they were in law equal he said that the political elite, including the regulator, the AG and international bondholders were in a conspiracy to maintain the status quo.

I have read that maccers is a very clever economist. Therefore I assume he knows these ideas and others are total looney tunes. The fact is maccers is now in the entertainment business. He is the lead act in a four days economics fest to be held next month in Kilkenny.

 

[onq]

Finally, on the same program he stated that there is nothing in the law to say depositors and senior bondholders rank equally. When asked by Rachel why the Attorney General had ruled that they were in law equal he said that the political elite, including the regulator, the AG and international bondholders were in a conspiracy to maintain the status quo.

Never mind what "McW the Entertaining Economist" said - what's the legal position, regardless of the AG's take on it - he's not the Supreme Court - surely there is case law and precedent?

ONQ.

 

[onq]

You are not going to be able to convince large multi-nationals to invest into public finances of a country, especially Ireland due to the mess it is in.

These companies have shareholders too who won't be pleased and would want investment back into the company itself or even extra dividends rather than into a country. It makes no sense to me.

Asking for help when you need it always makes sense.

These companies have hugely invested here and have hugely benefited here.

Only the Washington elite and the Military are nutters - all other Americans I have met are incredibly moral people and understand loyalty.

ONQ.

 

[Duke of Marmalade]

Never mind what "McW the Entertaining Economist" said - what's the legal position, regardless of the AG's take on it - he's not the Supreme Court - surely there is case law and precedent?

ONQ.

McW is an Economist, an Entertainer and a Chancer. He is NOT a lawyer. There is abundant case law that all creditors rank equally unless contractually they are subordinated (subbies) or by statute they are superior (Revenue). I sense that you are prepared to back McW the EEC against one of the most senior legal persons in the land on this very basic legal question.

Whilst we're on the subject a couple more McW classics:

1) "We should let Anglo go and refuse to honour its debts to our Central Bank. Jayz, doesn't he know that is welching on the taxpayer.

2) We should leave the euro and immediately devalue. Besides the fact that almost all commentators now accept that leaving the euro is not practicable, the reality is that what he is proposing would make our debt crisis far worse as our external liabilities would remain in euro, dollars, sterling etc. but the tax collection powers of the government would be reduced by the devaluation.

 

[Protocol]

This does add up for me either. It is well known that multinationals here repatriate their profits abroad. McWilliams is no fool and it sounds to me like he was misquoted.

Note that a lot of accumulated MNC profits stay in Irl, i.e. simply on deposit for example.

The income is not Irish income, so it causes the gap between GDP and GNP, but it doesn't have to flow out of Irl.

 

[TurboTim]

I have read that maccers is a very clever economist. Therefore I assume he knows these ideas and others are total looney tunes. The fact is maccers is now in the entertainment business. He is the lead act in a four days economics fest to be held next month in Kilkenny.

You are so right ! Problem is a lot of people hang on his every word cos he predicted the crash. (Even if he did so for the 10 years before it happened. When was the last time he said anything that wasn't dramatic and controversial ?

It's all about DVDs, documentaries and TV appearances and for that you got to be interesting and controversial and he really does talk some nonsense.

 

[TurboTim]

McW is an Economist, an Entertainer and a Chancer. He is NOT a lawyer. There is abundant case law that all creditors rank equally unless contractually they are subordinated (subbies) or by statute they are superior (Revenue). I sense that you are prepared to back McW the EEC against one of the most senior legal persons in the land on this very basic legal question.

Whilst we're on the subject a couple more McW classics:

1) "We should let Anglo go and refuse to honour its debts to our Central Bank. Jayz, doesn't he know that is welching on the taxpayer.

2) We should leave the euro and immediately devalue. Besides the fact that almost all commentators now accept that leaving the euro is not practicable, the reality is that what he is proposing would make our debt crisis far worse as our external liabilities would remain in euro, dollars, sterling etc. but the tax collection powers of the government would be reduced by the devaluation.

On Prime Time tonight both Richard Curran and Simon Carswell make comments that perpetuate the myth that Senior Debt ranks below
Depositors/Creditors. - 03:45 In and 18:40 or so.

I'm just a humble accountant but I really get fed up seeing these experts display such a lack of understanding of how corporate law
functions in a civilized country. All this talk about "Burning Bond Holders" has made us a laughing stock.

A few weeks ago McW was asked by Pat Kenny which of the Anglo bond holder's we should Burn and he replied "All of Em". (Spontanious eruption of applause from the audience)

I seriously doubt he understood the difference between Subordinated and Senior debt and also the fact that 11bn of the 16bn was covered by
ongoing Govt guarantees that could not be broken.

He then goes on to say and I paraphrase a bit:

"They expect to be burned - They can't believe they havn't been burned yet" (I was waiting for the bit "They Wan't to be burned" but it didn't come.)

Last week the Bond Markets sent us a message:

"Be Careful or we will BURN the IRISH!" . The politicians got the message but a lot of the Media still do not get it.

 

[shnaek]

Also this idea by McWilliams is like a lot of other ideas I see bandied about (increase VAT on events, tax lottery winnings, sell the ESB) - all these ideas have one thing in common - they believe there is some magic pot of gold out there that is going to save the day. People need to wise up - there is NO pot of gold. It is going to take time and pain to get us out of this hole. There is nothing out there to save us but our own graft.

 

[Complainer]

On the same program he said we should let Anglo simply go. Okay lots of sympathy I'm sure with that idea. When Rachel English asked what would happen depositors he replied that we could take care of them with an insurance policy. I kid you not.

Such as deposit protection scheme that was in place during Sept 2008, covering up to €100k per person?

 

[Duke of Marmalade]

Such as deposit protection scheme that was in place during Sept 2008, covering up to €100k per person?

Complainer, sorry but that is a silly comment. The DPS is a self funded scheme to meet the hopefully remote possibility of a call on its funds. DMcW has in mind that we precipitate a default on Anglo's deposits and then get an insurance company to cover it. Let's say the depositor shortfall on wind up would be 10bn, what do you think the insurance premium would be to cover that event? McW is on record as saying an insurance company would bite the Minister's hand off to get that volume of business. I suppose they would, the premium would be 10.5bn.

A very basic premise of insurance is that the event to be insured should be remote so that the premium is small relative to the loss being insured.

McW's suggestion is completely and utterly off the wall. It amazes me how some seek to see some merit in it or to justify it.

 

[Purple]

People need to wise up - there is NO pot of gold. It is going to take time and pain to get us out of this hole. There is nothing out there to save us but our own graft.

Well said.

 

[onq]

McW is an Economist, an Entertainer and a Chancer. He is NOT a lawyer. There is abundant case law that all creditors rank equally unless contractually they are subordinated (subbies) or by statute they are superior (Revenue). I sense that you are prepared to back McW the EEC against one of the most senior legal persons in the land on this very basic legal question.

I've had a lot of experience with senior legal persons over the past twenty years, including one state appointed attorney general.

Good people most of them but they are not the surpreme court which is why I asked for case law, as opposed to colloquial legal reference.

For the record, I think McW is a bit of a populist airhead, but some of wht he says makes sense, some of the time.

To paraphrase an old chestnut - an infinite number of McWilliams typing on an infinitive number of computers for an infinite length of time might produce all the works of Shakespeare, but while the singular one we have is good for a soundbite now and again, some of its just hot air.



ONQ.

 

[onq]

Also this idea by McWilliams is like a lot of other ideas I see bandied about (increase VAT on events, tax lottery winnings, sell the ESB) - all these ideas have one thing in common - they believe there is some magic pot of gold out there that is going to save the day. People need to wise up - there is NO pot of gold. It is going to take time and pain to get us out of this hole. There is nothing out there to save us but our own graft.

I agree, and the trick will be ensuring we get out of it in one piece.

I propose a credit interest freeze on debt with an upper limit on the amount of interest chargeable.

Otherwise some of these debts will never be paid off.

ONQ.