Deutsche Bank AG and Signature Bank, two of President Trump’s preferred lenders, are distancing themselves from the president and his companies in the aftermath of 6 January’s deadly riot at the US Capitol building, the New York Times first reported.
Deutsche Bank had done a large amount of business with the president and is owed around $340 million in outstanding loans to the Trump Organisation. The bank has now “decided to refrain from personal business with Trump and his money” according to sources familiar with the matter, though Trump’s debt will not be wiped away.
It was reported in November that Deutsche Bank was growing weary of the “serious collateral damage” and bad press rooted in its relationship with the president, to whom it has been lending since the late 1990s. In the two years leading up to November 2020, it lent Trump more than $2 billion.
The bank’s head of US operations, Christiana Riley, condemned Trump supporters’ violent breach of the Capitol building in a LinkedIn post last week.
“We are proud of our Constitution and stand by those who seek to uphold it to ensure that the will of the people is upheld and a peaceful transition of power takes place,” she wrote.
Signature Bank, the New York-based lender that helped finance Trump’s Florida golf course, is closing two personal accounts in which the president held about $5.3 million and is calling for him to resign his position ahead of president-elect Joe Biden’s inauguration on 20 January.
“We have never before commented on any political matter and hope to never do so again,” a Signature spokesperson said. “We believe the appropriate action would be the resignation of the president of the United States, which is in the best interests of our nation and the American people.”
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The two banks come as a range of businesses cut ties with Trump and his businesses in condemnation of last week’s violence. “Let it be known to the business world: Hire any of Trump’s fellow fabulists... and Forbes will assume that everything your company or firm talks about is a lie,” Forbes editor Randall Lane wrote in an op-ed last Thursday.
The PGA of America also stripped Trump National Golf Club of the 2022 PGA Championship on Sunday, citing brand damage, and eCommerce company Shopify has shut down merchandising outlet trumpstore.com.
To move abroad and leave the US can be a life-changing decision and is of course a big step. To make this step happen, a lot of things need to be considered before you are actually settled in your host country. How should you apply for a visa? What about the visas of your family? How can you apply for rental property abroad? A lot of things need to be arranged locally, but for US citizens there is an extra requirement to consider which is often forgotten by US expats. This could result in an annoying administrative burden and a risk of being audited by the IRS. This article outlines why you should file, what to consider and how to file.
Specific IRS forms for Americans abroad
When you as a US citizen live abroad, all your foreign income should be reported on your form 1040 as usual. As you most likely also pay tax locally, form 1116 and form 2555 make it possible to reduce your US tax bill by claiming the Foreign Tax Credit or the Foreign Earned Income Exclusion.
Different tax terminology
The tax terminology is very different from how it is in the US. Form 1116 and form 2555 use Foreign Tax Credit, Foreign Earned Income Exclusion, Foreign Housing Exclusion, Physical Presence tests and many more. This does not make it easy to easily understand your return.
Tax software not supporting the expat forms
Most tax software providers do not support these specific forms as they are not specifically designed for the expat market, but more for the US domestic market. Even if the forms are supported, it is still difficult to complete as the tax terminology is different. However, there is some DIY US expat tax software designed specifically for the US expat market that can aid in quickly e-filing US tax returns with the IRS platform.
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Tax professionals not familiar with form 1116 and 2555
There is a good chance that your trusted tax professional is not familiar with the forms 1116 and form 2555 as they are specifically for Americans abroad.
How to file from abroad
These are the options you have as a US expat:
- Do it yourself and fill the forms 1116 and/or 2555 yourself.
- Use DIY software.
- Hire a US expat tax professional. This can easily cost you $500 or even more.
Conclusion
Clearly, you need to file your US taxes when living abroad. This is often forgotten and could result in unwanted hassle which you really just don’t want. A lot of Americans will owe no taxes, but still have the obligation to file. Just file, it is not that difficult to get your US taxes filed!
Also expect that these forms will be new to you and that different terminology will be used from that which you are used to. These new forms 1116 and form 2555 are often not supported by tax software and you should check whether your trusted tax professional is able to complete these forms.
When you have plans to move abroad, just research the options to make sure you pick the right fit to file your US taxes.
With the dust finally settling on the US presidential election, reactions from world leaders have been largely predictable. Heads of state have rushed to congratulate President-elect Joe Biden almost as soon as the vote swung his way in key states, with Canadian Prime Minister Justin Trudeau and French President Emmanuel Macron being among the first to call the former US Vice President on 7 November. More followed soon afterwards, seeking to reaffirm alliances and build early ties with the next head of the nation.
This has not been the case for all world leaders. China’s President Xi Jinping conspicuously refrained from congratulating President-elect Joe Biden on his election victory, apparently waiting until the confirmation of his winning Arizona on 13 November – and therefore depriving Trump of any conceivable comeback – to finally extend a hand. Xi’s reticence speaks to the Chinese government’s deep distrust of the US, and perhaps of the incoming administration more than the one outgoing.
Though the CCP has remained largely silent on Biden in official statements, it has made its opinions known elsewhere. "China should not harbour any illusions that Biden's election will ease or bring a reversal to China-US relations, nor should it weaken its belief in improving bilateral ties,” read an editorial published in the state-run tabloid Global Times on Sunday. “US competition with China and its guard against China will only intensify.”
To an observer, this hardly makes sense at first glance. In many respects, a Biden presidency is likely to prove beneficial to the Chinese government and economy. One of the main planks of the Trump administration’s foreign policy has been the imposition of tariffs on hundreds of billions of dollars’ worth of Chinese goods, sparking a trade war that Biden has slammed as “the wrong way” of confronting China and is likely to be rolled back during his term. The Trump administration’s severe restrictions on Chinese student visas are all but certain to be lifted as well, as are more minor swipes made by the outgoing government. Most of all, a Biden administration will not be prone to the same unpredictable outbursts as its predecessor, sometimes hailing Xi Jinping for his “hard work” and “transparency” and sometimes condemning him as “totalitarian”.
“US competition with China and its guard against China will only intensify.”
However, Biden’s administration will differ from Trump’s in one crucial respect: its willingness to embrace cooperation on the world stage – and, consequently, leave fewer openings for China’s ambitions. Though the Trump administration was characterised by an unpredictable foreign policy, this did not always manifest in the form of sanctions and tariffs; several abrupt policy shifts have had the effect of ceding leadership to China in key political and economic areas.
We have seen shades of this occurring recently in the White House’s refusal to join the 170-nation-strong COVAX alliance on the grounds that it was “influenced by the corrupt World Health Organisation and China”, leaving a leadership vacuum that China gladly filled. The administration’s earlier move to withdraw the US from the WHO and the United Nations Human Rights Council, both also pitched as repudiations of Chinese influence, gave the CCP further room to increase that same influence.
These are the splits that have had an obvious net positive effect for China and its image, but there have been other divergences from the international norm that have driven a wedge between the US and the international partners it ordinarily relies on in trade and diplomacy. A prominent example of this was the fracturing of the Iran nuclear deal, a high-profile break from diplomatic consensus that left allies scrambling to save trade agreements built up in the deal’s aftermath. Another was the Trump administration’s systematic blocking of nominees to the WTO Appellate Body, which renders it unable to form the quorum required to hear and resolve international trade disputes. While both of these departures were less concerned with rebuking China, they confounded America’s allies and eroded efforts to present a unified international front against threats like China’s growing economic dominance.
The chances of this erosion continuing under the Biden administration, which has posited the explicit aims of “working with our allies to stand up to China” and restoring the United States to a “position of global leadership”. Foreign leaders’ rush to build ties with Biden, even as Trump contends that the election is not over, illustrates even further that the old alliances are looking for a return to form. China is right to be wary; despite outside appearances, its economy is not an unstoppable machine. Even prior to the outbreak of the COVID-19 pandemic, its GDP growth in 2019 fell back to the lowest levels seen since the early 1990s, and the continual exodus of its young professionals is an albatross on its development.
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As it moves to expand trade with other nations through agreements like the Regional Comprehensive Economic Partnership – a free trade pact spanning a third of the global economy, formed in the aftermath of the US withdrawal from the rival Trans-Pacific Partnership a year after Trump took office – and pledges to open its economy even further, China will thrive in the void of competition left by America. It remains to be seen how long this void will be maintained.
A new report from the Labor Department – the last that will be issued before the presidential election in November – showed that US employers added 661,000 new workers in September, far below the Dow Jones’ projected addition of 800,000.
Unemployment saw a notable decline, falling to 7.9% from 8.4% at the end of August. Unemployment among African Americans fell from 13% to 12.1%, while the Asian American rate fell from 10.7% to 8.9%.
The addition of 661,000 non-farm payrolls cements September as the fifth consecutive month of net job gains. Leisure and hospitality employers were responsible for the largest share, as 318,000 jobs were brought back. Two thirds of these returning jobs are reported to have come from reopening bars and restaurants.
Retail also added back 142,000 jobs, a significant step down from the 261,000 the sector added in August despite making up a considerable portion of September’s gains.
Government jobs were the only sector to post net losses during the month, with over 216,000 education jobs cut as schools remain closed. A number of temporary census workers hired in August were also let go in September.
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The report reflects surveys conducted three weeks prior to publication, and notes that 26 million people in the US were collecting some form of unemployment benefit as of the middle of September. Last week, 1.4 million people applied for unemployment benefits.
Overall, just over half of the 22 million US jobs that were lost in March and April have now been recovered.
A new wave of layoffs is likely imminent as government stimulus measures are phased out. United Airlines and American airlines have announced that around 35,000 staff will be placed on indefinite furlough or cut altogether as federal aid runs dry, and The Walt Disney Company has stated that 28,000 jobs will be cut at its California and Florida theme parks.
US, European and Asian equity futures fell sharply on Friday in response to news that US president Donald Trump and first lady Melania Trump had tested positive for coronavirus.
“Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!” Trump said in a tweet on Friday morning.
The White House also released a letter from the president’s physician, Dr Sean Conley, saying that he and the White House medical team will “maintain a vigilant watch” over Trump’s health. “Rest assured I expect the President to continue carrying out his duties without disruption while recovering, and I will keep you updated on any future developments,” he wrote.
The news had a swift impact on global stocks. Japan’s Nikkei closed 0.6% down in a reversal of its earlier gains, and Australia’s ASX 200 closed 1.4% down.
European markets fell at the open, with the German DAX, French CAC 40 and UK FTSE 100 falling by 1.4%, 1.3% and 1.1% respectively. The pan-European Stoxx 600 also fell 0.8% in early trading.
US futures naturally took a hit, with S&P 500 and Dow Jones futures each losing 1.2% while Nasdaq futures fell by 1.6%. Overnight in mainland China, the Shenzen Component ended flat and the Shanghai Composite closed down 0.2%, while the Hong Kong Hang Seng rose 0.8%.
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“This is potentially a strong market negative,” said Jeffrey Halley, senior market analyst at Asia Pacific OANDA, noting that the possibility of COVID-19 spreading to Senate leadership could damage markets and the wider economy further by potentially halting recently resumed negotiations over fiscal stimulus.
Market analysts have been paying close attention to the looming presidential election, with deVere Group noting that investors’ greatest fear for 2020 is the possibility of a disputed result.
European stocks opened cautiously on Wednesday morning as investors woke to the aftermath of the first US presidential debate between incumbent Donald Trump and Democratic challenger Joe Biden, which was marked by rancorous exchanges.
The French CAC 40 and German DAX were both down 0.2% in early trading, while the FTSE 100 inched up 0.1%.
US futures dipped in the hours following the debate, with S&P 500 futures falling as much as 1.3% before settling at 0.7% down on Wednesday morning. Dow Jones futures and Nasdaq futures were both trading 0.8% lower.
Bitcoin was also trading 2% down on Wednesday morning. The value of the dollar held steady.
With a little over a month to go before 3 November, investors are paying close attention to the US election, the outcome of which will shape the future of the world’s largest economy for years.
A contested presidential election is currently the number one concern for global investors, according to a poll from deVere Group. 72% of respondents described a contested US election as their “biggest investment worry for the rest of 2020”, with 18% fearing a COVID-19 second wave and 5% fearing a US-China trade war. The remaining 5% described other geopolitical issues, including Brexit.
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“Investors around the world are beginning to freak about the US presidential election,” deVere Group CEO and founder Nigel Green commented, noting that the possibility of a disputed outcome sparked greater fears than a Biden or Trump victory.
In an exclusive report on Sunday, the New York Times released an array of previously unseen information regarding President Donald Trump’s taxes over two decades, revealing new details about his income and companies within his business empire.
According to the report, which cites tax-return data in addition to public and confidential interviews, Trump paid only $750 in federal income tax each year during 2016 and 2017, when he was inaugurated as president. In 10 of the 15 years preceding 2016, he allegedly paid no income tax at all, despite receiving $427.4 million from his work on The Apprentice and various other licensing deals and endorsements.
The Times reported that Trump was able to minimise his tax bill by reporting heavy yearly losses across his various businesses, funding his lifestyle by writing off personal purchases as business expenses. Among various details included in the report were an alleged $70,000 business write-off on “hairstyling for television”, and $747,622 in fees paid to an unnamed consultant for Trump Organisation hotel projects in Hawaii and Vancouver. Ivanka Trump’s public disclosure forms filed upon joining the White House showed that she had received an identical sum that year through a consulting company that she co-owned, the report stated.
Trump also allegedly reported a loss of $47.4 million for 2018, despite claiming an income of at least $434.9 million in a financial disclosure that year.
The Times emphasised that the documents referred to in the report concerned only what Trump revealed to the government about his businesses and did not disclose his true wealth.
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Information regarding President Trump’s taxes had become highly sought after since his 2016 campaign, where he took the extraordinary step of neglecting to release his tax returns, going against a precedent set by every presidential nominee since Nixon.
During a press conference on Sunday, Trump described the New York Times report as “totally fake news.”
Democratic presidential candidate Joe Biden has not yet commented on the report, though his campaign released a short attack ad on Sunday night comparing Trump’s reported $750 income tax bill in 2016 with the sums paid by other professions in the US.
Treasury Secretary Steven Mnuchin said in a statement to the Senate Banking Committee on Thursday that the Trump administration and Democratic leaders are set to revive negotiations on a coronavirus relief bill.
“I've probably spoken to Speaker Pelosi 15 or 20 times in the last few days on the CR, and we've agreed to continue to have discussions about the CARES Act,” Mnuchin said.
The CARES Act, signed by President Trump at the end of March, was drafted as a $2.2 trillion relief bill containing, among other measures, a $600 weekly enhancement to unemployment benefits. This lapsed in July, to be replaced by a £300 weekly enhancement issued via a presidential memorandum in August. This, too, will expire before the end of the month unless further measures are instated.
Negotiations regarding potential follow-up stimulus halted in late August as House Speaker Nancy Pelosi refused to go lower than her party’s proposed $2.2 trillion stimulus package, while Republicans have refused to consider a bill greater than $1.1 trillion.
Pelosi confirmed Mnuchin’s suggestion of further negotiations, telling reporters on Thursday, “We’ll be hopefully soon to the table with them.”
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The need for further stimulus has grown more urgent during September, with economic recovery slowing and more than 870,000 new unemployment claims being filed in the US during the past week.
Both Mnuchin and Federal Reserve Chairman Jerome Powell have stated that the government’s main priority should be to give further support to the millions of Americans who are currently unemployed, both to bolster the economy and prevent the continued spread of coronavirus cases.
Powell noted: "If people start to run through it what resources they have, they're at risk of losing their homes or having to move out of the place they're renting, maybe move back in with family, and those things are not necessarily good for controlling the spread of the virus.”
US stock markets ended mostly lower on Wednesday following the release of a policy statement from the US Federal Reserve, with futures pointing towards a stock sell-off on Thursday.
The Fed announced that US interest rates would remain between 0% and 0.25% and indicated that they would likely remain that way until 2023 at the earliest. No additional stimulus plans were announced, though Federal Reserve Chair Jerome Powell pledged that the Fed “will not lose sight of the millions of Americans that remain out of work.”
Investors who had anticipated new stimulus measures were left disappointed by the statement. US stocks fell following Powell’s press conference, with only the Dow closing in the green. Thursday morning saw US futures skewing sharply negative; Dow Jones futures were down 1.3%, S&P 500 futures were down 1.6%, and Nasdaq futures were down 1.7%.
The negative sentiment had a ripple effect in European markets, which opened in the red on Thursday. The FTSE fell by 1%, the DAX 30 by 1.4% and the CAC by 1.3% in early trading.
Asian stocks also saw an overnight sell-off, though not so sharply. Japan’s Nikkei index fell by 0.6%, while South Korea’s KOSPI shed 1.2%. The Hong Kong Hang Seng suffered most, sliding by 1.7%., while mainland Chinese indexes were relatively unaffected; the Shanghai Composite slipped 0.4% and the Shenzen Component remained flat.
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In addition to the absence of newly proposed stimulus measures, analysts noted that investors were likely spooked by the news that two officials on the Federal Open Market Committee voted against the move to keep the Fed’s inflation benchmark rate unchanged.
Connor Campbell, financial analyst at SpreadEx, said that the “no” votes indicated “a brewing hawk camp in an FOMC full of doves.”
Karoline Gore shares her thoughts on the evolution of fintech in insurance with Finance Monthly.
The lockdown restrictions imposed in the UK this year have seen the adoption of fintech increase exponentially, according to a survey commissioned by AltFi. The insurance sector has been faced with strong competition in recent times as a number of other industries have started to offer financial solutions that can rival traditional insurance. Not only is the healthcare industry offering ‘medical memberships’ that eliminate the need for insurance, but banks are also quicker at providing loans to help remedy financial damages. It is for these reasons, among others, that operators within the insurance sector have to ensure that they have an advantage over their competition. With the aid of fintech, this goal becomes significantly easier to achieve.
Apps and digital platforms appeal to a younger clientele
As of 2018, Millennials enjoyed a greater spending power than Baby Boomers. Tapping into this segment of the market can be very fruitful as Millennials can provide business for a significantly longer period of time than older generations. Fintech can make insurance offerings increasingly appealing to a younger, more tech-focused client base. Smartphone applications can be designed with businesses, their clients, or both in mind and can streamline traditional insurance processes considerably. Popular features of mobile applications include a policy overview section, premium calculator, and payment processing area. Many apps as well as dedicated websites also provide clients with a range of relevant reviews. If you are looking at taking out car or home appliance insurance, for instance, reviews can cover aspects such as premiums, service fees, and even cancellation policies.
Machine learning improves data utilisation
Machine learning, which is classified as a type of AI, is another form of fintech which is greatly transforming the insurance industry as we know it. In essence, it is a technology that makes it possible for a machine to ‘learn and adapt’ over a period of time. Typically, insurance operators collect substantial amounts of data on an ongoing basis. Unfortunately, only approximately 10% of the data collected is adequately utilised, rendering it almost useless to the business. Thanks to machine learning, insurance companies can put the collected data to better use. It can be used in a number of ways including fraud detection, risk modelling, underwriting, and demand modelling.
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Niche products become more prevalent
Apart from smartphone applications and machine learning, there is a range of other emerging fintech solutions such as telematics, big data, and comparators that are influencing insurance in numerous ways. Thanks to these technologies, insurance companies are becoming more adept at offering niche products (that more traditional insurers won’t touch) to their clients. A good example of this is London-based Bought by Mary, who made it possible for clients with underlying medical conditions such as cancer to obtain travel insurance. Similarly, a partnership between a leading worship centre insurer in the USA and another entity resulted in the creation of an insurance product that made provision for the protection against frozen pipe leaks in low-tenure buildings.
Fintech has had a great impact on the insurance industry. Apart from improving customer service, fintech can also aid in new customer acquisition while saving the company a significant amount of money.
European stock markets opened higher on Tuesday, building upon the unusually strong gains seen on Monday in spite of the reported contraction in the German economy.
Most major markets were up by 1% at the opening bell before fading later in the day. By mid-afternoon the DAX had risen by 0.6%, the CAC 40 by 1% and the IBEX 35 by 1.1%.
The FTSE 100 was a notable exception to the rule, having slipped 0.2% -- likely influenced by UBS having downgraded its forecast for UK GDP in 2020 earlier in the day. The FTSE MIB, however, gained 0.8%.
It is likely that investor sentiment was boosted by the outcome of a phone call between US Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He, in which steps were taken towards a Phase 1 trade deal.
“Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement,” the US Trade Representative’s office said in a statement on the call.
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News of the call had a definite impact on Asian currencies and global stocks, as IKON Commodities’ director of advisory services Ole House remarked that the positive US-China talks were “bullish for most commodities”.
The day’s stock market gains came in spite of new data released in Germany confirming that its economy contracted by 9.7% in Q2 which, while steep, largely beat analysts’ expectations. Dutch bank ING hailed the release as evidence that Germany was past the peak of the COVID-19 pandemic, calling the data a “final glance in the rearview mirror”.
The Department of Labor’s jobs report was released on Friday and, in a piece of unexpectedly positive news for the US economy, showed that 2.5 million American jobs were created in the month of May, reducing the nation’s unemployment rate to 13.3% – down from 14.7% in April.
The news came as a surprise to many economists, who had estimated an unemployment rate of 19-20% and 8 million lost jobs.
“To add more than two and a half million jobs is, quite frankly, a stunning result,” said Robert Alster, head of investment services at Close Brothers Asset Management. “These figures have quite simply caught everyone off guard.”
The figures’ release saw a positive effect on stocks worldwide. In Europe, the FTSE 100 roseby 1.8%, the DAX by 2.7%, and the CAC 40 by 3%.
American stocks naturally saw a boost of their own, with the S&P 500 rising by 2.34%, the DOW by 2.9% and NASDAQ by 1.4%.
The Department of Labor’s new figures seem to indicate that the US economy is bottoming out, though the recovery is likely to drag on for some time yet. Jay Shambaugh, an economist from the Brookings Institution, commented, “a 13.3% unemployment rate is higher than any point in the Great Recession. It represents massive joblessness and economic pain. You need a lot of months of gains around this level to get back to the kind of jobs totals we used to have.”
