Capital Eyes on the Market – Thursday 14th February 2013

We take a look at some of the recent activity and events taking place in the UK and globally. For a more in-depth insight into how things may impact on your own financial planning priorities, please do get in touch. Enjoy a financial conversation as part of your regular financial planning review at SewellBrydenGunn. Why not get in touch?

Markets open today in a rather lack lustre fashion after weak German GDP figures released….

Some hedge funds make money from speculation on economic shifts by trading currencies, bonds and derivatives – in particular they have “cashed in” betting against the Japanese yen in recent months. Over the last thirty years the Japanese economy has seen little significant growth although it has to be recognised that markets do not always necessarily correlate and investment in Japanese financial and commercial ventureshas taken many forms, speculative or otherwise…..

Eurozone financial transaction tax (EFTT) has been criticised by Wall Street and US businesses claiming it overreaches borders and is tant amount to flauting international treaties and national identities – indeed from an “outside in” perspective the EU’s EFTT could be seen as high handed and an arrogant attempt to grab from international financial trade that which is not theirs to have. It is reported that anti avoidance measures would catch some trades executed in New York London and Hong Kong even when no eurozone entity is buying or selling the product. UK and Luxembourg stand together in rejecting the EU wide tax and if the EFTT proposal goes ahead then it is likely to be challenged by some EU governments and large US and EU financial groups both from a fiscal as well as a legal basis, it is reported. SBG Black Diamond Portfolio takes the (layman’s) view that such a tax could well contravene international tax law and jurisdictional treaties and customs already established and in place for many years leading to double and multiple taxation, a deterioration of international tax co-operation and an increase in trade protectionism. In our humble opinion, this could end up causing some unwelcome and unexpected consequences such as increased frequency of removal of trading entities to “offsite” or “offshore” locations which in itself goes against all the work that has been done to “tidy up” the world’s traded markets……

UK Government’s latest response to the Long Term Care Fee Funding “black hole” has been met with a mixed response – ” OK/good but well not really good enough – must try harder – lacks imagination – do they really understand the challenges that need to be met? – very 2D, where’s the 3D solution? – Drop in the ocean..” and son on. Our take on this issue briefly is we are still not seeing the “elephant in the room”. In the same way in which we have tackled delivery of nationwide medical care by having the NHS which works – with its challenges – for the majority of UK citizens, we need to tackle the challenge of delivering social care by the UK Government firstly accepting the existence of the problem as a national government level problem rather than simply the need for a government solution to an essentially private issue borne by individuals on a voluntary basis! Yes of course progress has been made, but not really enough to achieve much more than to “peel this apple”. Coupled with the fact that people are suffering today with the financial burden of care fee funding but the latest proposals have a start date of 2017-2018, the effective proposals could be seen by many as dissappointingly tardy…..

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