Societe Generale analyst Albert Edwards repeats call for S&P to drop to 450

The bears seem to be coming out of the woodwork in droves. The latest being Albert Edwards of Societe Generale who famously called for the S&P to drop below March 2009 lows back in May 2012 (see video). This week Mr. Edwards repeated his call for the S&P to drop to 450. In a report titled We still forecast 450 S&P, sub-1% US 10 year yields, and gold above $10,000 released this week “There are some ever-present truths in this business. Economists usually forecast a return to trend growth and will never forecast a recession. Equity strategists tend to forecast the market will rise 10% each year and will never forecast bear markets.” Well, apparently Mr. Edwards strongly believes in being the contrarian. Last year his call was completely wrong, will he get it right this time around? There is mounting evidence to suggest that his call may again be wrong this year but then every contrarian does have his day. Time will tell if Mr. Edwards' call proves to be correct or if he will be forced to repeat this call again next year this time around.

Does an offshore investment trust make sense for resident Indians or NRIs?

Indian residents and NRIs with children settled outside India have always faced a very difficult dilemma when it comes to estate planning and leaving a legacy for their children. Very often, Indian residents who have worked all their working lives in India have their retirement assets in a Public Provident Fund or similar structures. Besides this, they typically have substantial cash savings in Bank accounts or investments in stock markets along with property all denominated in Indian rupees. Leaving such a legacy for children who are settled outside India and who have no intention of returning back to India only complicates problems for the children who have to sort out this mess and bribe their way through the Indian bureaucracy to claim what is rightfully theirs. You begin paying bribes starting with the death certificate - this phenomenon is quite wide spread throughout India with some crematorium officials in Mumbai asking as much as US$ 1000 in bribes.



These problems can best be avoided by setting up an offshore trust in a UK jurisdiction such as the Isle of Man or the Channel Islands in a hard currency of your choice. RBI now allows every Indian resident to transfer up to US$ 200,000 every calendar year through their Liberalised Remittance Scheme. This is a very effective mechanism for Indian residents to transfer their wealth abroad to leave a legacy for their children. NRIs returning back to India after a lifetime spent working overseas may also wish to leave a legacy for their children using this offshore investment trust mechanism to avoid taxes on transferring wealth to India.

State of the European Union - enough to make you cry!

Spain's unemployment hit a new record of 27.2% (over 6 million unemployed) with the unemployment rate for the under 25 a staggering 57%. France followed suit with a new record unemployment rate of 10.2% (over 3.2 million unemployed). Even though the UK managed to avoid a triple dip recession with a modest growth in GDP in 1Q2013 of 0.3%, as Ed Balls descries it, the UK economy is essentially flat lining with no new job growth. Inflation figures are massaged by all the EU nations. The citizens of the Eurozone have to sponsor the banks without knowing whether there will ever be return on investment, not to mention return of investment. It’s become increasingly hard to conclude whether the mainstream media is bringing us ‘independent news’.Child hunger in Greece is exploding. Some families are trying to survive on pasta and ketchup. People in Cyprus are being robbed of their savings. Even the Cypriot children who became orphans after their parents died in the 2005 plane crash and who have been paid damages, ensuring them a security for their future and education, have been confiscated a very large portion of their money with the closure of Laiki. Former customers of Irish IBRC (former Anglo Irish) have been informed that their retirement savings had no cover.

Pensions schemes and retirement funds are excluded from the deposit guarantee scheme. Goodbye retirement savings ! And you want us to have confidence in you ? No one is sure whether contributions towards pensions are secure. Those of us who have a job, will need to work until they have the two feet in the grave. - Poverty rates are soaring and the middle-class is disappearing. - The financial sector is moving away from Europe to Dubai, Hong Kong, SingaporeTo add to this gloom, German Chancellor Angela Merkel said on Monday that euro zone members must be prepared to cede control over certain policy domains to European institutions if the bloc is truly to overcome its debt crisis and win back foreign investors. Where have we seen this scenario before? Way back in the 1930s during the great depression ofcourse. History is repeating itself  and we are perhaps a few meals away from a social revolution (see video).

Retreat of Austerity from Europe may bring more opportunities for British expats working in Europe

For the last three years or more, Austerity has been the mantra in Europe blindly adopted by the governments of almost all the EU 27 nations. This policy has prolonged recession in Europe and especially in the UK which is showing signs of going through a triple dip recession. As the video shows, the calculations behind the Austerity programs are now more suspect and may be the result of something as mundane as an excel coding error. Gavin Hewitt, European editor of the BBC writes today that the austerity believers are in retreat since Europe's leaders and officials fear more now is unemployment, recession, and growing disillusionment with the eurozone that seems unable to deliver. Reducing debt is no longer the priority. This turning point is probably the beginning of the creation of a great jobs boom by next year as Governments ease on austerity and target unemployment. British expats, already well placed in Europe will now see their horizons open up as more job opportunities start to appear. Time to revisit plans for setting up a QROPS or QNUPS or an offshore bond.