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Saturday, April 30, 2016

EU-US Trade Negotiations: TTIP Rhetoric and Reality: Europe's Regulations at Risk - by Frank Ackerman

TTIP:downward harmonization 
outweighing optimistic estimates
During the final week of April 2016, New York City was playing host to U.S. and European trade negotiators for the 13th round of talks on the proposed Transatlantic Trade and Investment Protocols agreement (TTIP).

That it is still even under discussion reflects not only the vast political influence of multinational corporations, but also a certain automatic orthodoxy among many economists. The latter assert that trade liberalization can create huge worldwide economic benefits.

If those benefits sound important, I hope you enjoyed them – because they have already happened. In the “bad” old days – think 1990 or earlier – there were real barriers to international trade. Tariffs, import quotas and many varieties of protectionist legislation did appear to limit the flow of goods between nations.

But then, NAFTA and CAFTA (the Central American Free Trade Agreement equivalent) opened up Western Hemisphere trade. Next, China joined the World Trade Organization (WTO), and WTO rules lowered worldwide trade barriers.

Also, a longstanding textile quota agreement was allowed to expire as well.

Meanwhile, the European Union continued to expand its single market across more and more of Europe. Bilateral and regional trade agreements, too numerous to mention, continued to pop up on every continent.

Analyses sow there are enormous benefits from multiple areas of European regulation. In chemicals policy, the EU requires manufacturers and importers of chemicals to provide well-defined evidence on the safety of their products.

In the U.S., unfamiliar chemicals are treated as innocent until proven guilty, with almost no requirements for safety testing.

In climate change and renewable energy, Europe is far ahead of the United States. Thanks to feed-in tariffs and other policies that promote renewables, more than 25% of EU electricity now comes from renewable energy.

This has climate benefits, because it avoids CO2 emissions from conventional generation (usually coal-fired, in Europe).

It has health benefits, because it avoids the other pollutants caused by coal combustion.

And there are more than 1.2 million jobs in renewable energy industries throughout the EU.

The benefits of just these two areas of European regulation, chemicals policy and renewable energy, are almost as valuable as the entire economic benefit of TTIP to Europe (as estimated by TTIP advocates).

So suppose that Europe accepted TTIP and gained as much income as the trade optimists predict. If this came at the price of downward harmonization to U.S. standards,

Europe would lose about as much in the benefits of chemical safety and renewable energy as it gained in higher incomes. 

Since many other valuable areas of regulation would also be at risk, the overall losses from downward harmonization would greatly outweigh the optimistic estimates of the gains from slightly expanded trade.

The rhetoric of trade liberalization lives on. Only the reality has changed. As Janis Joplin might have put it, is free trade just another word for nothing left to lose?

We need another word for orderly, democratically governed trade between sovereign nations that are free to protect their citizens from social and environmental harm.

TTIP and similar proposed treaties have nothing in common with the international agreements we need to promote the common good.

Read more: TTIP Rhetoric and Reality: Europe's Regulations at Risk - The Globalist

Friday, April 29, 2016

Turkey: Clearing customs - "but we also come with heavy bagage"

"We were also paid €6 billion to change our flag"
Serhan Turkoglu stands outside one of Istanbul’s many visa-application bureaus, clutching his flight and hotel bookings, travel insurance, proof of employment, social-security registration, recent salary slips and bank statements, and a vehicle licence. Mr Turkoglu, an accountant, needs all of this simply to secure a holiday visa to Spain. For his next European holiday he will have to go through the whole rigmarole again. “It makes you feel like a second-class citizen,” he says.

Turkish diplomacy towards the European Union is focused on obtaining visa-free travel. It is easy to see why. Turkey has been negotiating to accede to the EU for more than a decade; it is the only candidate country whose citizens still need visas to enter the bloc’s Schengen area. Peruvians, Malaysians and Mexicans, by contrast, no longer need visas to travel there.

Europe’s panic in the face of mass migration from the Middle East has provided Turkey with a new opening. In March, in exchange for a pledge to re-admit thousands of migrants deported from Greece, the EU offered Recep Tayyip Erdogan, the country’s president, €6 billion ($6.8 billion) in aid, progress in the moribund membership talks and visa-free travel for his people by June.

To qualify, Turkey must meet 72 benchmarks by late April, from biometric passports to better data-protection. Turkey’s prime minister, Ahmet Davutoglu, claims that his country already meets most of the conditions. But the EU says much more needs to be done. “The criteria will not be watered down,” insists the European Commission’s president, Jean-Claude Juncker.

In fact, it is hard to see how Turkey could meet the political conditions for visa liberaliation. These include bringing its terrorism laws into line with the EU’s, and guaranteeing the rights to assembly and free speech. But for quite some time, Turkey has been restricting political activity and going in the wrong direction on human rights.

The government is prosecuting a group of academics on terrorism charges, after they signed a petition to end a crackdown against the Kurdistan Workers’ Party (PKK) that has raged in Turkey’s south-east since last year. Two journalists face life in prison for reporting on covert arms shipments to Syria.

Last week a Dutch columnist was detained and barred from leaving the country pending trial; her offence was a profane tweet and an article calling Mr Erdogan a “dictator”.

If the commission agrees that Turkey meets the benchmarks, on May 4th it will recommend that the EU’s 28 governments (as well as the European Parliament), approve visa-free travel for Turkey. In theory this could be done by a qualified-majority vote; in practice, rejection by a large country would torpedo the deal. Far-right anti-Muslim parties are surging in many parts of the continent.

With Marine Le Pen looking stronger in the run-up to France’s presidential election in 2017, notes Marc Pierini, a former EU envoy to Turkey, “France cannot afford to vote yes” to visa-free travel.

Turkish officials warn of a diplomatic train crash if they do not get their way. The first victim would be Europe’s migrant deal. “If the EU does not keep its word, we will cancel the readmission agreement,” the country’s foreign minister, Mevlut Cavusoglu, said recently.

Note Insure-Digest: If Turkey cancels the agreement because of Europe's democratic election system, respect of human rights, and freedom of expression - one can only say - "Mr Erdogan -  it takes two to Tango, and if you want to shoot yourself in your foot, be our guest".


Read more: Clearing customs | The Economist

Thursday, April 28, 2016

TTIP - Why German scorn could kill Europe's trade deal - by Therese Raphae

In Hannover on Sunday, Barack Obama sought to convince a hostile German public of the merits of a transatlantic free-trade deal. Pitching European Union membership in Britain was a walk in the park by comparison.

It's hard to overstate the level of opposition to the new deal in Germany. The Transatlantic Trade and Investment Partnership, or TTIP, is more unpopular in Germany these days than President Obama in a room full of Tory euroskeptics. Ask an American what they think about investor-state dispute settlement provisions and you are likely to get a blank face. Ask a German, and there's a good chance you'll get an earful.

That wasn't always the case. Two years ago, when negotiations for a new transatlantic trade deal were announced (it was Germany that pushed for an agreement then, by the way), more than half of Germans favored the deal. A survey released last week showed only one in five Germans want it now. To Germans, TTIP reflects a capitalism that is too finance-driven, dominated by large multinationals, cavalier about privacy and not as serious about product standards.

A new round of negotiations -- the 13th, for anyone keeping track -- started in New York Monday for a pact that would liberalize trade affecting 40 percent of the global economy. The key to a deal, as Obama's Hannover visit suggested, rests with Germany. That a global exporting powerhouse and Europe's biggest economy has become such reluctant partner ought to be at least as worrying as the prospect of losing Britain's voice in the EU.

It's unusual even in these highly charged times for a trade agreement to receive the kind of attention that TTIP has in parts of Europe. But TTIP isn't a typical free-trade agreement. For one thing, it's much bigger than anything attempted before. It would create the world's largest free market of some 800 million people. According to U.S. chamber of commerce estimates, it would add 119 billion euros (nearly $134 billion) to Europe's economy and 95 billion euros to the U.S. economy, creating thousands of jobs in the process.

But the real difference is qualitative. While tariffs are already low between the two economies (they would be reduced further under TTIP), the main thrust of the agreement is the removal of non-tariff barriers in agriculture, services, procurement and other areas. It is this large-scale regulatory liberalization that many Europeans, and principally Germans, find dangerous.

Americans, too, are losing their appetite for free trade agreements, but their reasons are rather more prosaic. Among Americans opposed to the deal, half say they are worried about job losses and lower wages. Only 17 percent of Germans had those concerns. Germans, instead, are focused on what they see as inferior American standards (something that will strike many Americans as ironic after the Volkswagen emission scandal), concerns about privacy and also lack of transparency in the negotiations.

These sentiments took American negotiators by surprise. America is the destination of over 8 percent of German exports; some 600,000 German jobs directly or indirectly depend on that trade, according to a 2013 study by the Cologne Institute for Economic Research. German trust for America's business standards has been low for a while -- there was near hysteria over chlorine-washed U.S. chickens, even though a German body declared them perfectly safe -- but many figured France would present bigger obstacles to clinching an agreement.

They hadn't reckoned on the Snowden effect. TTIP was announced only weeks after revelations in 2013 by U.S. intelligence contractor Edward Snowden of government surveillance programs that enraged privacy-oriented Germans. With German opinion becoming more skeptical, politicians who supported a transatlantic deal grew quiet. Meanwhile anti-TTIP organizations and unions (with support in the European Parliament) whipped up resistance, which has included mass petitions and protests.

All of that fed a growing sense after the financial crisis that something was awry in American capitalism. "Germany is a country that is very proud it's not as finance-driven as the Anglo-Saxon economic model," says Peter Sparding, a fellow at the German Marshall Fund, noting that German politicians have referred to hedge funds as 'locusts.' "It's not just about TTIP; it's about the image of America as standing for a kind of capitalism that is finance-driven and has lower standards in general."

In the post-Snowden, post financial-crisis world, there is little tolerance for the kind of secrecy that is typical of trade negotiations. Responding to criticism from Germany and other countries about lack of transparency in January 2015, the EU's ombudsman rejected a complaint that the European Commission had overstepped itself. But she made 10 suggestions for greater openness and noted there were "significant delays" by the Commission in granting public access to some TTIP documents.

Disclosing negotiating documents would undermine the Commission's position and its relations with the U.S., said the ombudsman. She also referred to a European Court of Justice ruling that while transparency isn't irrelevant in international negotiations, institutions decide whether disclosure of documents would work against the public interest.

The Commission argues it has gone beyond the usual practice and published negotiation position papers, conducted stakeholder meetings and launched a public consultation process over investor-state dispute settlement. That's a losing argument; the transparency debate is a proxy for the underlying mistrust in both EU processes and American standards on everything from hormone-treated beef to labor-market regulations. The EU will have to do more to overcome those objections or risk further losing public trust. The German Marshall Fund's Sparding suggests the unconventional approach of releasing intermediate negotiating results.
As he said in Hannover, Obama would dearly like to see agreement on the trade deal before he checks out of the White House. Obama and other proponents see TTIP as more than a stand-alone trade deal; it's a way to reinvigorate the transatlantic partnership and set new global standards for trade.

But time is running out, as is German Chancellor Angela Merkel's political capital with an electorate already deeply tested over immigration and other issues. America's presidential contenders don't see much percentage in touting free trade either; quite the opposite. The new U.S. president, even if he or she has a change of heart, will be busy filling positions in their administration. With major elections in France and Germany in 2017, the political timetable is working against an agreement.

Perhaps if the idea for TTIP had never been broached, nobody would miss it. But having gone this far, failure would be costly, and not just in terms of lost economic opportunities. It would stand as a sorry symbol of allies and close trading partners who couldn't overcome their difference over chlorine-washed chicken.
- - -
Therese Raphael is a Bloomberg View editor in London, writing about European politics and economics. She was previously editorial page editor of the Wall Street Journal Europe
.
Read more: Why German scorn could kill Europe's trade deal - Chicago Tribune

Wednesday, April 27, 2016

USA: Why Health Insurance in America Is Like Playing The Lottery ( "are Europe's new Privatized Insurance Schemes On Same Route?) - by Josh Sabey

Insurance has followed a similar path, and shares more than a few similarities with the lottery. The two businesses hire from the same pool of actuaries and employ them to rig similar “games.”

To survive, insurance requires the vast majority of people to lose most of the money they put into it. It’s a gamble that instead of asking people to imagine the possibility of a jackpot asks them to imagine something quite the opposite. That’s why insurance is much more successful than the lottery, causing U.S. citizens to spend about a trillion dollars a year on it instead of the relatively modest $70 billion of the lottery. In the end, people hate losing things a lot more than they like getting things. The economic term that describes this phenomena is called “loss aversion,” which means people respond disproportionately to gaining $100 versus losing $100.

If a phone company raises its monthly cost, more people leave than would join if they lowered rates instead.People just hate losing things once they have them. This is also why people tend to overvalue their own possessions—a similar phenomenon titled “the endowment effect.” Ziv Carmon and Dan Ariely asked owners of NCAA Final Four tournament tickets to predict how much they could sell their tickets for.

The predictions averaged 14 times higher than the average hypothetical buying price. So while people are much more vulnerable to the rhetoric of insurance than the lottery, both succeed by convincing us to believe in a fundamental deception. In the lottery’s case, people are willing to throw away a few dollars at a time so they can imagine the bliss of winning.

Because the average lottery user’s day-to-day stresses and dissatisfactions are generally situated around money, they believe that obtaining a vast sum of money all at once would solve most of their problems. But this does not seem to be the case.

Several studies have explored the surprising dissatisfaction of lottery winners. One study compared lottery winners with people who became quadriplegic around the same time, and found that the lottery winners were no happier and took significantly less pleasure in simple beauties.

A lot of people are buying tickets just for the chance to imagine a happiness that does not seem to actually exist. The lottery doesn’t succeed because people aren’t good at calculating probabilities; they know they have almost no shot at winning. It succeeds because it convinces us to believe in an inaccurate equation: lack of money causes stress, stress drains happiness, therefore more money will mean more happiness.

A similar miscalculation takes place with health insurance. The average person assumes good health equals medical care, and medical care means access to care, which equals health insurance. Or, in the other direction, health insurance means access to care, which means good health because it mitigates the risk of disease and injury.

 But this also does not seem to be the case. People with health insurance are no more likely to be healthy than people without it.

The vast majority of health is the result of personal lifestyle, genetics, and environment. Health-care services account for less (possibly much less) than 10 percent of your actual health. This means access to health care has very little to do with what we think it does. The national debate about health care has focused around what Brent James calls “rescue care,” or the imperative we feel to save a life no matter the cost.

This is the dramatic rush to the hospital and end-of-life care. This sort of care has not actually increased life expectancy for several years. It is miraculous and wonderful, but it won’t make us live any longer or any more healthfully.

But, as with the lottery, Americans continue pouring their money into a system that does not actually perform. If, instead of focusing on a few rare cases, we spent our money improving our lifestyle—buy a better chair, change unhealthy habits, or (as some studies suggest) even meditating—our overall life expectancy would dramatically increase.

 But instead we continue to believe a false equation. In 2014, U.S. lotteries raised more than $70 billion. This number is astounding because it suggests the average person spends $220 a year on the lottery. But that’s assuming the price is evenly distributed across all people. We know children aren’t participating, and in certain states the lottery is still prohibited. So for those who play, the average is much higher. Several studies have also shown that poorer counties spend twice as much as wealthier counties.

In North Carolina the poorest counties produced $400 per person per month. That’s $4,800 a year. If those same people invested that money in any number of ways, they could have more than a million dollars by the time they retired. That’s winning the lottery. So just imagine what could be done with the much larger amount of money that is now being pre-allocated (before it’s needed) to a host of medical services.

Over time, lotteries have had the same basic story line, and health insurance now fits right in: "The state legislates a monopoly for itself; establishes a state agency or public corporation to run the lottery (as opposed to licensing a private firm in return for a share of the profits); begins operations with a modest number of relatively simple games; and, due to constant pressure for additional revenues, progressively expands the lottery in size and complexity, particularly in the form of adding new games. (National Gambling Impact Study)"

Insurance has followed a similar path, beginning as “friendly societies” and ending in nationalization—Obamacare. The nationalization is natural and even necessary. In England, early insurance agencies offered fire insurance, which meant homes were monetarily and physically protected because the insurance agency also ran the fire department.

But insurance companies drew criticism when they refused to put out the fires of homes whose owners had not previously purchased the insurance. This is an example of market failure. If the insurance company did put out the fire, then no one would buy the insurance.

The way to make sure all the fires are fought is to pay for a fire department through taxes. This way everyone pays into the insurance and every fire is extinguished. Today the same thing has happened with hospitals. A lot of people won’t pay for insurance if they can go to the emergency room and still get help, help that the hospital is required to give whether they’re paid for it or not. 

So we turn healthcare, like the fire station, into a “tax” that stops people from getting a free ride. There is certainly some utility here, so insurance ought to exist and it probably ought to be governmentally run, but the chance of you ending up ahead is about as likely as your house catching fire. A good health insurance system would be like a good fire station.

You call them when you need them, but most of the time you get your own cat out of the tree. That means low premiums and high deductibles. But that’s probably not what will happen. If this progresses like any other lottery, we can expect it to just get bigger, advertising higher and higher “jackpots” (bigger, all-inclusive packages) because as the government gets involved in the business it will be under pressure to sell ever-increasing and ever more inclusive health-care packages.

They’ll be tempted to insure more and more services, “to invent new games,” and “additional revenues.” But if our goal is to encourage actual health improvements, we will need to devalue insurance, cut down traditional health-care spending, and create policies that turn people away from doctors and towards things that have a much larger impact on health. We have to find ways to, as Dr. David Blumenthal says, “Invest our health-care dollars in ways that will allow us to live longer while enjoying better health and greater productivity.”

The biggest lie health insurance tells us is that it’s a way of mitigating risks. Bad habits, low exercise, poor hygiene, genetics—those are your largest risks, and health care has proven to be very ineffective at dealing with those risks.

If we want to encourage people to live longer, healthier, and happier lives, the best thing to do is convince them to eat well, sleep enough, and go to the gym rather than pumping their money into a system that will only produce yet another ineffective doctor visit. But we want to believe doctors can take care of us. It’s sure nice to imagine, so we commit to buying another ticket tomorrow.

Note Insure-Digest: hopefully some of Europe's "new" privatized insurance schemes are not taking the same route as that of the US Insurance Industry?

Insure-Digest
For the complete report go to : Why Health Insurance Is Like Playing the lottery /

Tuesday, April 26, 2016

U.S. economy seen growing 0.4 percent in first quarter - the Atlanta Fed said on its website - by by Richard Leong

The U.S. economy is growing at a 0.4 percent pace in the first quarter following the latest data on home resales and durable goods orders, the Atlanta Federal Reserve's GDPNow forecast model showed on Tuesday.

This mwas a touch faster the 0.3 percent annualized pace for U.S. gross domestic product seen for the first three months in its prior estimate on April 19, the Atlanta Fed said on its website. 

Read more: U.S. economy seen growing 0.4 percent in first quarter: Atlanta Fed | Reuters

Monday, April 25, 2016

TTIP Rhetoric and Reality: Europe's Regulations at Risk - by Frank Ackerman

TTIP: Overall losses outweigh gains.
During the final week of April 2016, New York City is playing host to U.S. and European trade negotiators for the 13th round of talks on the proposed Transatlantic Trade and Investment Protocols agreement (TTIP).

That it is still even under discussion reflects not only the political influence of multinational corporations, but also a certain automatic orthodoxy among many economists. The latter assert that trade liberalization can create huge worldwide economic benefits.

If those benefits sound important, I hope you enjoyed them – because they have already happened. In the “bad” old days – think 1990 or earlier – there were real barriers to international trade.

Tariffs, import quotas and many varieties of protectionist legislation did appear to limit the flow of goods between nations.

Trade liberalization can, according to many economists, create huge worldwide economic benefits. If those benefits sound important, I hope you enjoyed them – because they have already happened.

In the “bad” old days – think 1990 or earlier – there were real barriers to international trade. Tariffs, import quotas and many varieties of protectionist legislation did appear to limit the flow of goods between nations.

But then, NAFTA and CAFTA (the Central American Free Trade Agreement equivalent) opened up Western Hemisphere trade. Next, China joined the World Trade Organization (WTO), and WTO rules lowered worldwide trade barriers.

Also, a longstanding textile quota agreement was allowed to expire as well. Meanwhile, the European Union continued to expand its single market across more and more of Europe. Bilateral and regional trade agreements, too numerous to mention, continued to pop up on every continent.

The real agenda of the TTIP negotiations is not to eliminate the last few trade barriers, but to create pressure for downward harmonization of social and environmental regulations, adopting the weaker of American or European standards.

Special-purpose tribunals, outside the judicial systems of any of the participating countries, could allow corporations to sue foreign governments for damages allegedly caused by strict national regulation.

Innocuous-sounding mechanisms for “regulatory coordination” would ensure that corporate perspectives and preferences are reflected throughout the process of drafting and adopting regulations.

American standards are usually, though not always, weaker than European ones. Thus downward harmonization frequently means imposing lax U.S. rules on European countries that have had, or would prefer to have, stricter regulations.

The debate usually overlooks the very real, if hard to quantify, benefits of regulation that Europe would lose in this process.

There are enormous benefits from multiple areas of European regulation. In chemicals policy, the EU requires manufacturers and importers of chemicals to provide well-defined evidence on the safety of their products.

In the U.S., unfamiliar chemicals are treated as innocent until proven guilty, with almost no requirements for safety testing.

In climate change and renewable energy, Europe is far ahead of the United States. Thanks to feed-in tariffs and other policies that promote renewables, more than 25% of EU electricity now comes from renewable energy.

This has climate benefits, because it avoids CO2 emissions from conventional generation (usually coal-fired, in Europe). It has health benefits, because it avoids the other pollutants caused by coal combustion.

And there are more than 1.2 million jobs in renewable energy industries throughout the EU.

The benefits of just these two areas of European regulation, chemicals policy and renewable energy, are almost as valuable as the entire economic benefit of TTIP to Europe (as estimated by TTIP advocates).

So suppose that Europe accepted TTIP and gained as much income as the trade optimists predict. If this came at the price of downward harmonization to U.S. standards, Europe would lose about as much in the benefits of chemical safety and renewable energy as it gained in higher incomes.

Overall losses outweigh gains.

Since many other valuable areas of regulation would also be at risk, the overall losses from downward harmonization would greatly outweigh the optimistic estimates of the gains from slightly expanded trade.

The rhetoric of trade liberalization lives on. Only the reality has changed. As Janis Joplin might have put it, is free trade just another word for nothing left to lose?

We need another word for orderly, democratically governed trade between sovereign nations that are free to protect their citizens from social and environmental harm. TTIP and similar proposed treaties have nothing in common with the international agreements we need to promote the common good.

Insure-Digest

Sunday, April 24, 2016

Insurance Industry: Is Travel Insurance Worth It - by Ed Perkins

Travel insurance is a virtual necessity for some trips, yet worthless for others. So before you buy, assess your risks.

Risk 1: Loss of deposits or prepayments.You often have to pay in full or provide a stiff deposit months in advance for a cruise, a tour, or a vacation rental. And if you have to cancel, you may lose a big chunk of those payments in cancellation penalties and non-refundables. Trip cancellation insurance (TCI) reimburses you for non-recoverable deposits and penalties if you have to cancel before you start.

Risk 2: Extra expenses of returning home before your trip ends. If you have to abort a trip because something happens to you, your traveling companion, or a family member at home, getting home quickly may be expensive. Trip interruption insurance (TII) reimburses the non-recoverable extra costs of returning home early or of continuing as a single traveler if your companion has to return early.

Risk 3: Medical expenses. If you get sick or suffer an accident when you're away from home, you may face some stiff immediate medical bills. The main risk occurs when you're outside the U.S. Your own medical plan may cover you anywhere in the world; but some don't. Medicare doesn't cover you outside the U.S., but many Medicare supplements do. In any event, you typically have to shell out big payments on the spot and argue about reimbursement when you return home. Primary travel medical insurance (TMI) pays up front.

Risk 4: Emergency transport home. On your trip, if you're so sick you can't fly home, or if you fall and break your butt in some remote area, getting you to a hospital in a helicopter or back home on a private jet could cost a fortune. Medical evacuation (ME) insurance pays for any such requirement.

What to buy: You can easily determine the risk of lost prepayments or cancellation penalties. Consider TCI any time you have more advance payments at risk--the net of what you can recover in refunds--than you can comfortably absorb if you have to cancel a trip. The corollary is obvious: Don't pay to "insure" recoverable payments. TCI is "named peril" insurance that pays for only the contingencies specified in the policy-- typically related to sickness and accident, and excluding work-related reasons. That's why we recommend "cancel for any reason" insurance: It is more expensive but you get to decide whether to cancel, not some insurance company bean counter. TCI policies generally exclude payment for pre-existing medical conditions, but most insurers waive that exclusion if you buy the insurance as soon as you start paying for your trip.

TM and ME are available separately by the trip or in six-month or yearly policies for frequent travelers. We recommend primary TM, so you don't have to max out your checking account or credit card on the spot. Prices for bundled policies and separate TM and ME policies depend on destination, duration of trip, and age. They range from 5 percent to 15 percent of your total trip cost--sometimes even more for very senior travelers.

What to avoid: Don't rely on a tour operator's or cruise line's cancellation waiver. It isn't true insurance; instead, the cruise line or operator agrees to waive its own cancellation penalty. Waivers cover fewer risks, and many limit reimbursement to a credit toward a future booking rather than a cash refund. Similarly, don't blindly accept a travel supplier's "opt in" insurance, which may be more expensive than an independent policy or offer insufficient coverage.

How to buy: We recommend buying through one of the several independent online agencies that specialize in travel insurance that provides comprehensive search and comparison systems.

For additional information contact your local Insurance Agent.

Insure-Digest

Saturday, April 23, 2016

USA: The United States of Insolvency - by James Grant

This much I have learned about debt after 40 years of writing and study: It is better not to incur it. Once it is incurred, it is better to pay it off. America, we have a problem.

We owe more than we can easily repay. We spend too much and borrow too much. Worse, we promise too much. We conjure dollar bills by the trillions–pull them right out of thin air. I won’t insist that this can’t go on, because it has. I only say that it will eventually stop.

I don’t know the date, but I believe that I know the reason. It will stop when the world loses confidence in the dollars we owe. Come that moment of truth, the nation will resemble Chicago, a once prosperous polity now trying to persuade its once trusting creditors that it is actually solvent.

To understand our financial fix, put yourself in the position of the government. Say you earn the typical American family income, and you spend and borrow as the government does. So assuming, you would earn $54,000 a year, spend $64,000 a year and charge $10,000 to your already slightly overburdened credit card. I say slightly overburdened–your outstanding balance is about $223,000.

Of course, MasterCard wouldn’t allow you to run up that kind of tab. At an annual percentage rate of 15%, the cost to service a $223,000 balance would absorb 62% of your pretax income. But the government is different from you and me (and Chicago). It has a central bank.

The Federal Reserve is the government’s Monopoly-money machine. It sets some interest rates and influences many others. It materializes dollars. It regulates–now regiments–the nation’s banks. It pulls levers to make the stock market go up.

Congress is the source of the Fed’s power. The Constitution is the source of Congress’s power. The parchment enjoins Congress to coin money and regulate the value thereof. The founders viewed money as a scale or yardstick, something that measures value. The Fed views money as a magic wand, something that creates value.

Dollars aren’t so much minted these days. Rather, they issue from the Fed’s computers in billowing digital clouds. The cost of producing them is only the energy expended on tapping the keys. The Fed emits these electronic greenbacks to attempt to control the course of economic events. It’s a heaven-sent monetary system for a big-spending government.

You may struggle to pay that midteens rate on your outstanding credit-card balance. The Treasury gets by paying an average of just 1.8% on that portion of the debt, held by savers and investors both here and abroad. Defined in this way, we owe $13.9 trillion. The $19 trillion figure ticking upward on the famous National Debt Clock adds the debts the government owes itself. (How does this pseudo bookkeeping work?

The Social Security Administration takes in–temporarily–more than it pays out. With the surplus it buys Treasury bonds. The bonds enlarge the debt clock’s debt.) It’s not so important that the government pays itself on time. What is important is that the government pay its public creditors on time. So cast your eyes on the exact numerical rendering of that slightly smaller sum: $13,903,107,629,266. It is unmanageable.

One can assume that the creditors trust the currency in which they expect to be repaid. I wonder why, and for how much longer. The Fed once fought inflation. Now it actually sets out to cause it–about 2% a year is the target. Striving to inflate, it presses down interest rates and rustles up new dollars.

From the nation’s 18th century founding until 1971, the dollar was defined as a weight of gold or silver. Americans did business with paper, of course. But these commercial bills and banknotes were convertible into monetary bedrock, the precious metals. The expression sound as a dollar derives from the ring of a gold piece when you plunked it on a counter.

Sound money coincided with balanced budgets. Government borrowings climbed in wartime and subsided in peacetime. The pattern was disarranged by depression in the 1930s and war in the 1940s. It was broken by the Johnson Administration’s guns and butter and entitlements programs in the 1960s. Richard Nixon administered the coup de grâce on Aug. 15, 1971, when he announced that the dollar would derive its value from the say-so of the government. The Fed could print as many green bills as the traffic would bear.

Many applauded that sea change, then and later. Easy money rarely fails to please–at first. It buoys stocks, bonds and commercial real estate. House prices jump, and car sales zoom. (Average auto-lending rates, now 4%, have been nearly sawed in half since 2007.) Politicians, noticing how a bull market fattens public pension funds, ratchet up the benefits they promise to retirees (a fact that state and federal pensioners are encouraged to remember on Election Day).

Periodically, the buzz wears off. What remains is a hangover of debts and promises. The proliferating dollars facilitate heavy borrowing. Ultra-low interest rates mask the cost.

I don’t ask that we return to some long-lost fiscal and monetary Eden. None has ever existed, even in America. Crises and business cycles are always with us. I merely observe that sound money and a balanced budget were two sides of the coin of American prosperity.

Then came magical thinking. Maybe you had a taste of modern economics in school. If so, you probably learned that the federal budget needn’t be balanced–it’s nothing like a family budget, the teacher would say–and that gold is a barbarous relic. To manage the business cycle, the argument went, a government must have the flexibility to print money, to muscle around interest rates and to spend more than it takes in–in short, to “stimulate.”

Oh, we have stimulated. Between the fiscal years 2008 and 2012 alone, federal deficits totaled $5.6 trillion. The public debt nearly doubled in the same span of years, to $11.2 trillion. The Federal Reserve tickled $1.6 trillion in new digital dollars into existence. True, our Great Recession proved no Great Depression, but the post-2008 recovery is the limpest on record.

It’s tomorrow’s trillions–the ones we’ve grandly promised to pay ourselves–that lie at the heart of the problem. The granddaddy of far-off commitments was Social Security, which dates from the 1930s. Medicare and Medicaid in the 1960s and the Affordable Care Act in 2010 duly followed. The debt, as big as it is, is the measure of past spending in excess of tax receipts, a pattern of bad fiscal habits that traces its intellectual roots to John Maynard Keynes and has its dollars-and-cents origins with Lyndon Johnson and his Great Society. What awaits us and our children and their children is the unpaid tab of the future.

“Nobody knows anything,” screenwriter William Goldman wisely observed about the accuracy of Hollywood box-office forecasts. The economists, in general, are no better than the studio executives.

You can’t blame people for not paying attention. America has forever defied the doomsdayers. The very language of government debt is calculated to tranquilize the critical mind. We speak of the Department of the Treasury rather than the Department of the Debt. (There’s no net treasure in the Treasury.) We say entitlement instead of taxing Peter to pay Paul and Social Security trust fund when we mean just another ordinary government account at the Department of Debt. (There is no trust fund because there is no division of assets, no accounts containing funds earmarked for you, the citizen, who so faithfully “contributed” your payroll taxes.)

Today’s miniature interest rates constitute another form of public sedation. You’d suppose the doubling of the debt would jack up the cost of servicing the debt. Nothing of the kind. As the debt has doubled, the rate of interest has halved.

In 2007, we owed $5 trillion and paid an average interest rate of 4.8%. Net interest expense: $237 billion. In 2016 we’ll owe $14.1 trillion and pay the average interest rate I already mentioned: 1.8%. Net interest expense: $240 billion. It’s a wonder we didn’t think of this financial perpetual-motion machine about a thousand years ago.

Debt per se is neither good nor bad, though less is usually better than more. How it’s priced and how it’s used are what tips the scales. If chocolate cake cost a penny a slice, the best of us would be tempted to break our diets. Well, government debt is priced at less than 2%, and Washington fell off the wagon years ago.

How do we escape from our self-constructed fiscal jail? According to the Government Accountability Office, unpaid taxes add up to more than $450 billion a year. Even so, according to the Tax Foundation, Americans spend 6.1 billion hours and $233.8 billion each tax season complying with a federal tax code that runs to 10 million words. Are we quite sure we want no part of the flat-tax idea? An identical low rate on most incomes. No deductions, no H&R Block. Impractical? So is the debt.

So is the spending (and the promises to spend more down the road). We need to stop the squandermania. How? By resuming the principled fight that Vivien Kellems waged against the IRS during the Truman Administration. It enraged Kellems, a doughty Connecticut entrepreneur, that she was forced to withhold federal taxes from her employees’ wages. She called it involuntary servitude, and she itched to make her constitutional argument in court. She never got that chance, but she published her plan for a peaceful revolution.

She asked her readers–I ask mine–to really examine the stub of their paycheck. Observe how much your employer pays you and how much less you take home. Notice the dollars withheld for Medicare, Social Security and so forth. If you are like most of us, you stopped looking long ago. You don’t miss the income that you never get to touch.

Picking up where Kellems left off, I propose a slight alteration in payday policy. Let each wage-earning citizen hold the whole of his or her untaxed earnings–actually touch them. Then let the government pluck its taxes.

“Such a payroll policy,” wrote Kellems in her memoir, Taxes, Toil and Trouble, “is entirely legal and if it were universally adopted, in six months we would have either a tax revolution or a startling contraction of the budget!”

Black ink, sound money and the spirit of Vivien Kellems are the way forward. “Make America solvent again” is my credo and battle cry. You can fit it on a cap.

Read more: The United States of Insolvency | TIME: Insolvenc

Friday, April 22, 2016

Wall Street Under Pressure: Russia, Saudi Arabia to pump as much as possible

 Ahead of the doomed Doha talks last weekend, Russia and Saudi Arabia said they were willing to discuss freezing oil output, but less than a week later both have threatened to ramp up production. On Friday, the head of the Oil Industry and Markets Division at the International Energy Agency (IEA) told CNBC that he believed both producers will continue to "pump as much oil as possible."

"In the post-Doha world, when we're still in what is essentially a free market for oil, they (the Russians) will pump as much oil out as the market will absorb and the Saudis have said much the same thing," the IEA's Neil Atkinson told CNBC."

"We're back to where we were before Doha where people produce what they can, sell what they can for whatever price they can achieve and the market takes care of the surpluses in time."

Atkinson noted that "as far as the Russians are concerned, even in the run-up to Doha when they were going to be party to an agreement to freeze production, they were actually pumping up production anyway."


 Russia, Saudi Arabia to pump as much as possible: IEA expert

Thursday, April 21, 2016

The Netherlands Life Insurance in the Netherlands,Trends, Estimates and Forecasts to 2019

The Timetrics 'Life Insurance in the Netherlands, Key Trends and Opportunities to 2019' report provides detailed analysis of the market trends, drivers and challenges in the Dutch life insurance segment.

It provides key performance indicators such as written premium, incurred loss, loss ratio, commissions and expenses, total assets, total investment income and retentions during the review period (20102014) and forecast period (20142019).

To view complete report go to : http://www.marketresearchreports.biz/analysis/489952

The report also analyzes distribution channels operating in the segment, gives a comprehensive overview of the Dutch economy and demographics, and provides detailed information on the competitive landscape in the country.

The report brings together Timetrics research, modeling and analysis expertise, giving insurers access to information on segment dynamics and competitive advantages, and profiles of insurers operating in the country. The report also includes details of insurance regulations, and recent changes in the regulatory structure.

Dutch Insurance executive Jolanda van Mil noted: "this is a good overall report, but when it comes down to the "bolts and nuts" of an insurance policy, the best thing you can do is to sit  down with an insurance expert from a reliable insurance company and get a "tailor-made" program which meets all your requirements".   

To read the complete  report click here

Wednesday, April 20, 2016

Russian Debt Crises: Russia’s in the red - by Sean Guillory

On 5 April, in the town of Iskitim in Novosibirsk oblast, four masked debt collectors broke into the home of Natalia Gorbunova, beat her husband and 17-year-old son, and then raped her in front of them.

Gorbunova had taken a 5,000 rouble ($75) microloan from two companies, Money Now and Money Quickly, in 2014. She couldn’t make the payments.

But how could she? According to them, Gorbunova now owned them 240,000 roubles ($3,586). The beating and rape weren’t the loan sharks’ first resort. They’d been threatening her family on the phone for two years. A week before the collectors raided Gorbunova’s home, they tried to assault her son, but he managed to get away. The identity of the assailants is still unknown. The cops are scrambling to find them.

Many in the foreign press have noted that revelations of Vladimir Putin’s connections to the Panama Papers weren’t reported in Russia’s federal media. But the reality is that for most Russians who are struggling to stave off constant harassment, threats, and outright violence from predatory lenders,

Putin’s alleged two billion dollars matters far less in their immediate daily life. It’s a reminder of the old Russian adage that “God is high above and the Tsar is far away.”

Nevertheless, federal media did report the crime against Gorbunova and her family. National broadcaster NTV even has a topic page devoted to debt collector violence. Indeed, there is growing public concern — in 2015, the amount of outstanding personal debt rose by 25% to 870 billion roubles ($13 billion).

Collector violence is even getting the attention of the Tsar and his minions. For example, Investigative Committee head Aleksandr Bastrikin has taken the Gorbunova case under his personal control.


Russia’s usually lackadaisical politicians have also been jolted into some action. Several have spoken out about the need to reign in debt collectors, and in Kemerovo oblast, Governor Aman Tuleev and his regional legislature banned collectors outright. (Collection agencies quickly denounced the move as “populism” and the Justice Ministry said that the law was a blow to “economic freedom”.)

The Duma has passed the first reading of a bill that restricts debt collectors’ activities and their interactions with debtors, prohibits harassment, threats and violence, and raises fines by ten times to two million rubles.

A week ago, even Putin spoke out and demanded an end to the lawlessness, threats, and psychological and physical abuse by “quasi-collectors”.

Read more: Russia’s in the red | openDemocracy

Tuesday, April 19, 2016

Grocery Business: Germany's Privately Owned Aldi Challenging Walmart and Trader Joe's in the US

20% lower prices than Wallmart
Add Aldi to Walmart’s list of growth challenges. Already a force to be reckoned with more than 10,000 stores worldwide, including across Europe and Australia, the German retailer is catching on with shoppers in America, too.

Now operating 1,500 stores in 32 US states, Americans are getting to know Aldi - one of the world’s largest privately-owned companies, a scrappy Walmart-fighter with substantially lower grocery prices than the once-unassailable, homegrown low-price leader. And now Aldi has its sights set on more of the American pie.

While Aldi stores are typically only a fraction as large as a Walmart supercenter, with fewer national brands and an overall slimmer selection, Aldi grocery prices can average 20 percent lower than a Walmart in the same market, Bloomberg reported.

How is it undercutting Walmart? For a start, Aldi brings efficiency to its operations — a store can operate fully on just a handful of employees. Presentation is no-frills. Frugality is such that the chain makes customers pay a 25-cent deposit per cart, refundable only if they return it before they leave. That way, Aldi doesn’t have to pay employees just to go gather carts in the parking lot.

Aldi’s West Coast expansion inspired queues last week when it opened eight stores in Southern California, including one in Palm Springs. The Orange County Register chalked up the frenzy to “pent-up anticipation for the international grocery giant, known for its deep discounts and knockoff brands. If it continues, Aldi is expected to trigger upheaval in the crowded Southern California grocery sector.”

Insure-Digest

Monday, April 18, 2016

International Education: Pros and cons of getting that degree abroad - Here's what you need to know before you set off - by Kelley Holland

Are you the type of person to study abroad?

Not for a semester, as roughly 300,000 American college students do every year. But, for four years to earn your degree.

About 45,000 U.S. students are now pursuing a college or graduate degree in another country, according to the latest preliminary data from the Institute of International Education, roughly in line with the institute's data for 2013. With tuition at American colleges and universities continuing to rise, and some prestigious universities in other countries charging little or nothing for tuition, college overseas holds obvious allure.

For the right students, it's a terrific experience and it will help them have a global career, said Peggy Blumenthal, senior counselor to the president of the institute.

Certainly, the numbers are compelling. In Germany, for example, many universities charge overseas students little or nothing in tuition.

In Britain, the most popular destination for American students pursuing degrees overseas, the tuition savings are smaller. For example, overseas students at Oxford pay about $22,000 to study politics or history and $33,000 to study engineering or computer science, less than a private college in the United States but more than an in-state public university. The University of St Andrews, in Scotland, charges roughly $23,000 for most degrees for overseas students and $35,000 for medical science.

But tuition is not the only cost when students attend college. There is food and lodging, as Americans studying overseas clearly do not have the option of living at home.

Transportation is another cost to consider: Flights to and from Europe cost a lot more than a few car trips home from the state university. Visa costs are another factor for students studying overseas. And depending on where they attend, students may not be eligible for all the financial aid they might receive in the United States.

Read more: Pros and cons of getting that degree abroad

Sunday, April 17, 2016

The Netherlands Economy: Vice crime pumps over €2.5 billion into Netherlands economy - by Janene Pieters

Criminal activities involving drugs, illegal prostitution, illegal gambling and similar crimes contribute about 2.7 billion euros to the Netherlands’ economy a year. That means that criminal activities account for about 0.4 percent of the Dutch economy, according to an estimate by Statistics Netherlands at the request of broadcaster RTL Z.

The estimated value of the criminal economy was 2.6 billion in 2010, which means that the growth does not seem to be very strong. Though Statistic Netherlands emphasizes that it should be noted that it is very difficult to make a reliable estimate.

According to Statistics Netherlands’ estimates, the added value of drugs and illegal prostitution increased somewhat, while money earned by illegal downloads providers decreased. Previous calculations showed that drug production and -trade accounts for 55 percent of the criminal economy, followed by prostitution with 21 percent. Illegal downloads and illegal gambling accounts for about 9 percent.
Read more: Vice crime pumps over €2.5 billion into Netherlands economy - NL Times

Saturday, April 16, 2016

European Economy - Peoples Capitalism: Crowdfunding helps Europe’s businesses boom

Peoples Capitalism
Crowdfunding is no longer a niche, it’s booming in Europe. In this edition of Business Planet, from Finland, Serge Rombi finds out how platforms work and what makes a successful campaign.

“Global crowdfunding was more than 30 billion euros last year,” Lasse Makela, CEO of the Invesdor crowd-funding platform, told euronews’ Serge Rombi.

“It’s growing by more than 100 percent per year. And it’s going to be larger than venture capital financing this year.”

In the autonomous Aland islands in the Baltic Sea, a family-run SME produces 100 percent natural lemonade, using only local products.

In 2014, Tony Asumaa – founder of Amalias Limonadfabrik – realised that he needed to expand production and he immediately opted for crowdfunding.

“We chose crowdfunding because it was cheap, efficient, fast and, above all, non-bureaucratic – to get new capital into the company,” he said.

Through Lasse’s platform, Tony won more than 86-thousand euros in equity crowdfunding.
In other words, those who invested in his company are now shareholders.

“We have 163 new shareholders. As our ambassadors, they promote our products, they sell them. Some restaurant owners sell products throughout the country,” said Tony.

Friday, April 15, 2016

EU to Keep Part of TTIP Trade Deal Papers with US Under Wraps says Commissioner Malmstroem

Transparency in question
The European Commission does not plan unveiling all documents on the EU-US "free trade deal", Europe's top trade official said in an op-ed published inFrench newspaper Le Monde on Friday April 15.

The publication in Le Monde comes less than two weeks before the 13th round of EU-US talks on the Trans-Atlantic Trade and Investment Partnership (TTIP) kicks off in New York on April 25.

"Certain documents must stay confidential, either those related to tactical comments directly referencing Europe’s negotiating stance or those citing US documents, which are not for us to publish," EU Trade Commissioner Cecilia Malmstroem said in the article.

The TTIP deal, which aims to deregulate trade US-EU trade, has been criticized for lack of transparency, prompting the Commission to publish some of the TTIP documents.

Malmstroem stressed that TTIP documents in question would be made available to national parliaments of EU member states, offering a degree of openness that had not been there before. Parliaments will also be the last to decide on the trade pact once the Commission is done negotiating it, she added.

European lawmakers have laid down a set of principles they want to be observed during the ongoing talks, including greater transparency, inviolability of social and environmental standards, and respect of EU’s red lines, she continued.

Last year, the secretive deal sparked widespread concern that it would lower environmental, health, safety, and workers’ rights standards in Europe, as well as enable the extra-judicial settlement of disputes in circumvention of national sovereignty.

Read more: EU to Keep Part of TTIP Trade Deal Papers Under Wraps – Trade Commissioner

Thursday, April 14, 2016

Italy: Insurance Industry: How Italy's Generali Is Connecting U.S. With Its Global Network - by L.S. Howard

Global Reach & point-of-sale expertise.
The U.S. branch of Generali’s Global Corporate & Commercial business unit has recently  launched a property insurance product for U.S.-based multinational corporations.

GC&C is a relative new kid on the block in insurance terms, having launched quietly three years ago. Since then it has carefully chosen a suite of products and a geographic spread that matches its intention to
provide point-of-sale expertise.

GC&C’s newest product, called TRIBUNE, has a global capacity of up to $250 million and provides comprehensive coverage for U.S. corporations’ domestic and overseas exposures via a “controlled master program,” which leverages the global capabilities of Generali.

TRIBUNE customers will be able to access the global loss control and mitigation services provided by BELFOR Property Restoration, said a statement issued by GC&C.

With the ability to issue admitted policies in 145 countries through its network, Generali provides “the advantages of an established global network, such as cross-border premium transfers, local claims adjusting and claims settlement as well as local servicing capabilities and a very broad international network of loss control engineers,” said Andrew Sims, senior vice president of Property & Construction at GC&C in New York City, during a recent interview.

“In an increasingly interconnected world, when you have multiple insurers handling your insurance, you run the risk of certain risks falling between the cracks,” he said. “One of the reasons a multinational program is so attractive is because it provides global consistency.”

“TRIBUNE was specifically designed to respond to the unique challenges of cross-border risk management for multinational corporations based in the U.S. and to avoid the pitfalls of insurance fragmentation across country lines,” said Sims in a statement issued by GC&C.

A controlled master program provides a centrally administered global program in addition to local policies with local claims adjusters, loss control engineers and servicing. The master policy wraps around “the local coverages and provides a consistent level of global coverage,” Sims explained in the interview, noting that this is especially important for manufacturing companies dealing with complex supply chain exposures.

A controlled master policy is a bit like a speed dial, he continued. “You don’t have to keep a list of 50 different insurers that are insuring your assets.”

If something goes wrong, the customer makes one call to its account executive at Generali in New York, Sims said.

Founded in Trieste, Italy in 1831, Generali has had a branch in the U.S. for more than 50 years. Approximately 1,200 people work in the U.S. under different brands such as European Assistance and Generali Employee Benefits—businesses that generate $1 billion in annual revenue for Generali.

EU-Digest

Wednesday, April 13, 2016

EU: Corruption costs EU ‘up to €990 billion a year’ – by Ryan Collin

EU Corruption costs: close to  € 1 trillion a year
The EU has a corruption problem that could cost it up to €990 billion a year, according to a study commissioned by the European Parliament and released on Monday.

Corruption in the EU comes in many forms and has multiple economic, social and political effects, according to the Cost of Non-Europe in the Area of Corruption Study by RAND Europe. Based on three scenarios using different methodologies that included both direct and indirect effects, the study found the EU suffers losses in its gross domestic product that range between €179 billion and €990 billion each year.

The figures are much higher than a 2014 estimate by the European Commission of €120 billion. However, the Commission’s study focused only on direct effects of corruption.

“Corruption is a big black hole at the heart of the European economy,” said Carl Dolan, director of Transparency International. “If companies see the public procurement process is rigged then they are not going to take part in that bid and therefore the public loses out because these aren’t competitive tenders.”

The study found that corruption related to public procurement was estimated to cost nearly €5 billion per year. Procurement corruption includes deliberately removing companies from the bidding process so there is only one viable candidate and limiting the amount of time a company has to respond to a tender for a new contract.

To reduce it, RAND Europe suggested that the EU implement a Union-wide e-procurement system, which would bring down the cost of corruption by an estimated €920 million. Another measure to cut corruption would be establishing a European Public Prosecutor’s Office, the study said. Such an office would investigate corruption cases and could reduce corruption costs by €0.2 billion per year.

Read more: Corruption costs EU ‘up to €990 billion a year’ – POLITICO

Tuesday, April 12, 2016

Tax Havens: Europe Will Force Big Companies to Disclose How They Use Tax Havens

The European Commission will propose rules on Tuesday to force major companies to publish details of where they make profits and where they pay tax, as it moves to clamp down on tax avoidance following the Panama Papers revelations.

Companies will have to disclose activities in tax havens, an amendment which has been added to earlier proposals, but campaigners say the measure may be toothless as European Union (EU) states have no common view of what constitutes a tax haven.

The commission wants to apply the measure to all firms with global annual turnover above 750 million euros ($856 million), meaning US companies such as Google and Facebook — which have faced criticism for their complicated tax avoidance mechanisms — will be subject to them.

The original plan had been for big companies to show only how much they paid in each EU state, with the rest of the world treated as a single item. Now, EU officials say, the draft will propose that they also list how much of their money outside the EU flows through each state classed by EU governments as a tax haven.

The problem, transparency campaigners say, is that there is no agreement among EU member states on the definition of a tax haven.

Read more: Europe Will Force Big Companies to Disclose How They Use Tax Havens | VICE News

US Market Place; Bank Of America: What To Expect - by Oguz Erkol

Bank of America (NYSE:BAC) has been heavily penalized year to date primarily due to the reduced expectations about Fed rate actions with weaker economic outlook and perceived risks to the energy industry.

The stock has fallen by 23% since the beginning of this year while the financial sector ETF (NYSEARCA:XLF) has been only down by 7%, indicating that it has been a high beta stock with a negative return. The question is now whether we will be able see similar action from BofA when the market bounces back.

Despite the current pessimism, I still believe that there is significant upside potential for BofA and it could emerge as an outperformer in the mid-term.

Summary

I believe that macro level concerns over the banking stocks have been overplayed.

Bank of America has some features which distinguish from other banks such as the plenty of room for efficiency improvement.

After a long period of underperformance BofA is an attractive investment with relatively cheap multiple

Monday, April 11, 2016

EU Report On Drug Trade: The Netherlands remains major European drug trader

the re-designed  Dutch Flag
A new EU report on drugs says the Netherlands remains a main hub for drug production and trafficking across Europe. The in-depth analysis, published last week, says EU citizens spend more than €24bn a year on drugs, 38% of it on cannabis.

The Netherlands and Spain are major hubs for cannabis and cocaine trafficking, while Holland and Belgium are Europe’s leading producers of ecstasy and amphetamines. Europol and the European Monitoring Centre for Drugs and Drug Addiction, which authored the report, say the drugs trade is getting more sophisticated, globalised and with production increasingly nearer to home.

According to the Parool, it is a pat on the back for Dutch criminals’ ‘innovation and entrepreneurial spirit’. The paper reports that the vast majority of ecstasy taken in Europe and the US comes from labs mostly in the south of the Netherlands, while about half of the €5.7bn a year of cocaine taken in Europe comes through Rotterdam. In 2014, Rotterdam port handled 7.4 million containers, and the report adds: ‘It takes about three minutes for traffickers to illegally open a container and retrieve a consignment of…100 kg of cocaine distributed in four or five duffel bags.’

Organized crime and international violence are characteristic of the drug trade, and crooks help one another too, offering ‘crime-as-a-service’. The report notes a rise in Dutch ‘grow shops’ that sell what you need to cultivate cannabis, and sometimes buy your harvest too – possibly operating online as the police crack down. It also looks at the environmental impact of drug production, with toxic waste dumped at 157 sites in the Netherlands in 2014.

Cannabis is the most frequently taken drug, with 1% of European adults using it on an almost daily basis, and 22 million adults in the EU taking it in the last year. While most people consume cannabis grown in the EU, resin from Morocco has also been ‘increasing in potency and may be trafficked to the EU alongside other illicit goods and human beings, a trend potentially exacerbated by instability in North Africa and the Middle East’, the report says.

Heroin is the number two drug, estimated to be worth €6.8bn a year and responsible for a “significant proportion” of deaths and social costs. Meanwhile, cocaine is Europe’s most commonly used stimulant, with coca cultivation on the rise.

Note EU-Digest: European (Dutch) policing of drug trade and drug traffickers not functioning properly and seemingly not properly coordinated on a European level.. 

The Netherlands remains major European drug trader: EU report - DutchNews.nl

Sunday, April 10, 2016

Economic Mission: Dutch Companies Invited to Apply for Economic Mission to Miami - April 17-20

Dutch companies that specialize in innovative solutions in life sciences, healthcare, and sustainable urban solutions are invited to join an economic mission to Miami April 17-20 that will explore opportunities to collaborate with their counterparts in the US and Latin America.

Lilianne Ploumen, the Netherlands’ Minister for Foreign Trade and Development Cooperation, will lead the mission with the Netherlands Enterprise Agency, the Netherlands Network for Innovation, Technology and Science, and the Miami Consulate General of the Netherlands.

The mission is intended to introduce and connect promising Dutch IT-driven innovations in life sciences and healthcare to counterparts in the United States and Latin America.Companies and knowledge institutions that are active in sustainable urban solutions, healthcare IT, educational tools in healthcare, or other high-tech solutions with medical applications are welcome to join this mission. IT companies that focus on entertainment, media, gaming, educational technology and finance will also be present at the eMerge Americas conference.

As part of the mission, participants will have the opportunity to attend the eMerge Americas Showcase/Conference April 18-19 and take part in matchmaking and company visits on April 20. IT companies that focus on entertainment, media, gaming, educational technology and finance will also be present at the eMerge Americas conference.

eMerge Americas is a unique platform for the advancement of technology, a forum for idea exchange, and a launching pad for innovations to Latin America, North America, and Europe.

The Netherlands Consulate General in Miami sees opportunities for the Dutch IT and life science and health sectors specifically for the rapidly emerging opportunities in healthcare in the U.S. and Latin America.

Think you might be onto something? Showcase your innovation at eMerge Americas in Miami and compete with other startups from around the globe. With hundreds of angel investors and venture capitalists on the expo floor, the exposure alone is powerful. Winning has its perks, too — up to $175,000 in cash and prizes.

The Netherlands Consulate General in Miami is helping Dutch startups to showcase their technologies. Email Barbara Staals, Miami Consulate General of the Kingdom of the Netherlands, to learn more.

See also: Learn more about the mission (in Dutch), including instructions to apply.and watch video eMerge Video.

Insure-Digest

Saturday, April 9, 2016

Brexit: Britain's choice: economic security with the EU, or a leap into the dark - by David Cameron

This is the world we could wake up in if we leave Europe – with the massive knock-on effect on jobs, prices and living standards in our country. Because the longer this referendum campaign goes on, the clearer it becomes: those campaigning to leave Europe are inviting the British people to make an extraordinary choice – to be the first major economy in history to deliberately choose a second-rate, more restrictive trading relationship for its biggest market. They want to rip up our membership of the single market – a market that Britain practically invented – in the hope of renegotiating a new arrangement.

We are duty bound to take this proposition very seriously. So let us properly examine the consequences for our economy. What would a new tailored arrangement, of the sort Canada or Switzerland have with Europe, mean for us?

If we take the Canada free trade deal as a guide, we know it would be damaging for agriculture and manufacturing. Our beef and pork exports would face tariffs, and our car manufacturers forced to comply with rules imposing additional costs based on where they buy their components. And of course, there is British steel. We are doing everything we can to help British steel in these difficult times, but the idea that leaving Europe is the answer is a dangerous fallacy: more than half of our steel exports go to Europe. As Stephen Kinnock, the local MP has said, the last thing his constituents in Port Talbot need is to be cut off from Europe.

Leaving the single market would also hit our service industries hard – and this is where our economy faces the biggest risk. Today, British brainpower and ingenuity are in demand. We’re the country that designs the building, advises on the deal, arranges the finance, insures the business, draws up the contracts, produces the film, creates the advertising campaign, sells the product and audits the accounts. All these are service industries.

The figures speak for themselves. Our service industries are growing at a rate of nearly 3% a year on average. They account for almost 80% of our economy. And they amount for 40% of all British exports – with Europe being by far our economy. And they amount for 40% of all British exports – with Europe being by far our biggest exporting market. Indeed, an extraordinary 116,000 small businesses export services to the EU. And new analysis shows that 2 million jobs are either directly or indirectly linked to these exports.

Each of these jobs represent someone with a pay packet; someone providing for themselves and their families. As politicians, we have a duty to tell them what we think the future holds. I can tell each of them, with certainty, that if we stay in Europe their employer will keep the current guaranteed rights to offer services anywhere in the EU.

Those advocating leave can do no such thing. No real-world alternative to EU membership would come close to what we have now. Even the most ambitious trade deal on services the EU has ever struck – with Canada – falls radically short of single market access.

The latest draft of the Canada deal runs to over 1,500 pages – 800 of which are reservations and barriers. A huge proportion of the deal is about restricting business opportunities, not opening them up. We could see new barriers for British business in every key services sector. Here are just 3 examples.

One: aviation. Currently, UK airlines are free to operate routes both between and within other EU member states. But under their deal, Canadian airlines are only allowed to operate routes in Europe if they start or end at a Canadian airport. If this rule was applied to British airlines, they would have to scrap hundreds of routes.

Two: broadcasting. Under EU rules, once a broadcaster is licensed in 1 member state, it can broadcast in all. If we replicated Canada’s deal, companies would have to choose between seeking separate licences in all EU states they want to broadcast in, or moving out of the UK altogether.

Britain's choice: economic security with the EU, or a leap into the dark — MercoPress

Friday, April 8, 2016

Central Banks: Mohamed El-Erian: ‘Central banks are like doctors’- by Rudyard Griffiths

Mohamed El-Erian
In this report, Rudyard Griffiths, chair of the Munk Debates, Canada’s leading public-affairs forum, who discusses issues and trends just over the horizon with renowned analysts and policy-makers, interviews Mohamed El-Erian, chair of U.S. President Barack Obama’s Global Development Council and also chief economic adviser to financial-services multinational Allianz and author of the recently published The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse

Q Are central banks becoming a threat to the global economy?

Central banks are like doctors. They will not walk away from their patient, the patient here being weak economic growth. Like a doctor, they will try to prescribe whatever medication they have, even if it simply buys time. So central banks have been prescribing medication that buys time. It doesn’t deal with the underlying weaknesses of the global economy. It simply buys time for the politicians to get their act together. Now, as any patient will tell you, at a certain point when you rely excessively just on pain killers, not only are you not solving the underlying problem but you risk having side-effects. And that is what we’re seeing. We’re seeing the side-effects of excessive reliance on just pain medication. Now that’s not the fault of the central banks, because the providers of the better medicine, our political leaders, haven’t stepped up to the plate. In sum, central banks will continue to treat the patients, even though they know that their medication will not restore perfect health.

Q: What is your take on negative interest rates?

I am worried. You need only look to Japan to see what that danger looks like. The Bank of Japan surprised everybody by following the European Central Bank into negative policy rates. It did that with the hope that, by taking interest rates negative, they would weaken their currency and therefore help their exports, and they would boost their equity market. The exact opposite happened. The currency strengthened and the equity market sold off. Within two days, the officials were dragged into parliament and basically read the riot act. When you take rates negative, you risk not only getting the wrong response out of the economy, because people simply disengage at this point. The sale of home safes has soared because people are saying, “Why should I keep my money in a bank that’s going to take money away from me? I might as well keep it at home in the safe.” People disengage from the financial system. Political outcries become more frequent and the political process starts looking into what you’re doing. I think all this is a warning to central banks to be careful. But the key problem remains, which is they are unable to hand off the task of sustaining economic recovery to our political leaders. Back to my analogy of the patient and doctor, they won’t step away from patients when there is no one else to care for them if the treatment they are providing risks the patient’s health.

@: Will negative interest rates come to North America?

We have built a very sophisticated capitalist system that assumes that nominal interest rates are positive. So the minute you take the negative, things start breaking. For example, banks start turning away deposits. Second, providers of long-term financial protection – pension funds, insurance companies – find it very hard to sell new products. They can still service the old products, but it’s very hard to sell new products if the safe interest rate is negative. So you start creating institutional breakage, and there are no other institutions to step in. It’s not as if you can replace them. You cannot replace something with nothing. So the system starts operating less efficiently. I think that the Federal Reserve realizes this and they would like to avoid. Now they’re lucky because the U.S. economy is in a better place than Europe. But having said that, even if the U.S. economy were in the same place as Europe, I don’t think that they would go to negative.

Q. How should investors protect themselves?

The first thing to realize is, we are living on borrowed returns. The second thing is we’re coming out of a period of artificially low volatility that’s going to give way to unusually high volatility. And the third thing is, because central banks have intervened so aggressively, they have altered the correlation among asset classes.

These are three consequential hypotheses. If you agree with them, then much of the conventional wisdom about investing starts being challenged. The first is that diversification provides for risk mitigation. This is no longer true. If the traditional correlations between asset classes break down, then diversification, while still necessary, is not sufficient. Second is that you should just be a long-term investor. Don’t worry about the short term. But if you’re going to have massive volatility in the short term that can break out one way or the other, you need to pay attention to the short term.

The third assumption is that cash doesn’t belong in a strategic asset allocation. If you read basic investment books, they’ll say have minimal amounts of cash. Cash is a dead asset. That’s no longer the case. In fact, cash is the only way to get protection in the world we’re living in. I tell people, “You have to think about cash being 25 to 30 per cent of your asset allocation.”

At the end of the day, the individual investor needs three characteristics in a portfolio to be able to navigate the challenging period ahead: resilience, the ability to navigate a lot of volatility; optionality, the ability to change her or his mind when you get more information, and agility; the ability to move quickly when others are still like deer stuck in the headlights.

EU-Digest      -    Globe & Mail Canada

Thursday, April 7, 2016

International Trade: Boston Mayor De Blasio Rips Trans Pacific Partnership, Calls NAFTA a ‘Disaster’

Free Trade : Not Always Benefiting Everyone
Mayor Bill de Blasio of New York today joined a slew of city politicians to decry President Barack Obama’s proposed Trans Pacific Partnership trade deal—comparing it to North American Free Trade Agreement, which he deemed a “disaster.”

“There’s such passion on this issue because we’ve already been to this movie,” Mr. de Blasio said at an anti-TPP rally in front of City Hall this morning. “We saw it with NAFTA. We saw what a disaster NAFTA was, and we’re not going to repeat that mistake in our time.”

Mr. de Blasio’s opposition to the TPP is not surprising: almost all of the city’s Congressional delegation is opposed to the deal, which is hated by unions. The pact would ease trade barriers and a host of regulations between the United States, Australia and several Asian and Latin American nations.

But the mayor’s comments come at a time when free trade has become a major issue in the presidential race, and not one that has been particularly good for Mr. de Blasio’s chosen candidate, Hillary Clinton. As President Barack Obama’s secretary of state, Ms. Clinton was instrumental in creating the free trade accord, though she has since disavowed it.

Her opponent for the Democratic nomination, Vermont Sen. Bernie Sanders, has emphasized his long-time opposition to free trade deals like the TPP, and to NAFTA—which was passed by President Bill Clinton. And while Mr. de Blasio and Republican front-runner Donald Trump have little in common, they’ve now shared language on NAFTA: Mr. Trump, too, has called that free trade deal a “disaster.”

Mr. de Blasio framed his opposition to the president’s trade deal in familiar terms—as part of his crusade against income inequality.

“It’s a fight we have to win because this goes to the heart of the matter—if we’re going to fight income inequality in this country, we have to fight TPP because it will take us backwards, it will take us in the wrong direction,” Mr. de Blasio said. “And there is such a powerful coalition that has come forward to make sure that our trade deals actually don’t hurt our own people. That’s what this comes down to.”

He said the country could not “sacrifice the American middle class to the all mighty dollar.”

“And NAFTA was that. NAFTA took away almost a million jobs in this country—tens of thousands of them here in New York State. We saw places all over this country—towns and cities devastated. We saw people who had solid middle class lives have the rug pulled out from under them,” Mr. de Blasio said. “People who had done everything right, who had played by the rules, who had worked hard, suddenly were left with nothing—that’s what NAFTA did, and we have every reason to believe that TPP will do the same. And that’s why we have to stand up and fight against it.”

The president, with the help of the GOP House majority, obtained “fast track authority” last summer— meaning he has the power to negotiate the act himself, and Congress will get only an up and down vote on the deal.

Read more: De Blasio Rips Trans Pacific Partnership, Calls NAFTA a ‘Disaster’ | | Observer