michael's moving house

The beautiful room below is in Woodland House, for many years the home of Michael Wiinner - one of my all time favourites. Film director, restaurant critic, larger than life character - a loveable, kind and hugely generous man, a great and discreet giver to charity,  and an all round genuine and nice human being.

The room is presently his bedroom in his house in Holland Park, which he has just put on the market for more than £60 million.

The architect Richard Norman Shaw built the house in the Queen Ann style during Queen Victoria's reign for the artist Sir Luke Fildes,  and Edward V11 had his portrait painted by Fildes in this room,  which was originally Fildes's studio.  The king commented that he considered the room one of the finest in London - I certainly agree, it's an absolute stunner.

The house is Michael's childhood home, he moved in with his parents shortly after the war in 1946.  Then the house was leased out as two separate flats and the basement was damp and mouldy.   It is now a home cinema, as below.

Determined to keep the property after his parents moved out in 1972, Michael bought it for £150,000 and started to buy out the tenants.
Originally, he planned to leave it to Kensington and Chelsea council,  but it is leasehold and I understand the council wanted him to purchase the freehold, which would cost £15 million.

If he sells the property at the asking price, he will pay something in the region of £28 million in tax. Below are a couple of views of the exterior of Woodland House.

The property has 46 rooms, 7 bathrooms, 9 lavatories and a swimming pool and  Michael now feels it's just too much trouble to keep up.  Even a simple task like changing the light bulbs is a major job -  'it costs me a fortune to have man in to do it,' he says, 'I paid £1000 the other day.'

At 75, and about to marry for the first time, Michael and Geraldine are looking for a simpler life style, and Geraldine finds the property 'a bit forbidding.'  An apartment, they think. A penthouse with great views, and a terrace with flowers, perhaps.

Much will have to go from the great house, some nice pieces of jade have already been auctioned off at Sotheby for £460,000, and there will be a bigger Christie sale shortly.  Meanwhile, several Old Masters have already been sold.

And a much loved neighbour will be left behind, Jimmy Page, the heart and soul of the greatest rock band ever, Led Zeppelin.  Once a truly demonic, or more accurately, daemonic character, who really set the bench mark for bad behaviour and who now, Michael says, is teetotal and all that, and just bobs up and down the road with his shopping, quiet as a mouse.   Jimmy, you always had style, and you've still got it, style and class.

So, all moves are a type of rite-of-passage, and a little sad, however much we look forward to the next place, the next stage in the journey, and after all, Michael will be leaving behind a house full of astonishing memories of some of the greatest people in show business, who partied and loved and laughed in that big old place.

But Michael's a big character and though the new place may be smaller, he will be just as big, with that great big heart of his, so I wish him bon voyage, happy landings, safe journey to the new home -  and much happiness in his new lifestyle as a solid married man, at last.

Cass

(thanks to Daily Mail and particularly to Murray Sanders, for that beautiful photo of a beautiful room).

How rich is the Queen

It's difficult to avoid the royal wedding, so, as this blog is about money, let's look at the wealth of the royals, starting with the queen, and one of her favourite castles.

Her private wealth is estimated at $500 million.
This comes from property, including Balmoral Castle in Scotland (above),  stud farms, a fruit farm, and marine land throughout the UK, extensive art and fine jewellery and one of the world's largest stamp collections, started by her grandfather.

In the lists of the rich $500 million is not very impressive.  That is because most of her wealth is tied to her position and belongs to the Crown Estate and not to her personally. That includes $10 billion worth of property, plus Buckingham Palace, worth an extra $5 billion approx, and the royal art collection.
She also receives from the government an annual  stipend of $12.9 million.

Of course, that $500 million personal wealth is only an estimate.  It would be odd if someone in possession of that amount of personal money did not follow the suggestions of her advisers and place some of her money off shore.  I suspect we are looking at the tip of the iceberg here, because of course the figure given concerns only those assets that can be readily traced.

(I've given value in dollars, following Forbes research).

Tomorrow, let's look at what we know of the financial affairs of her son, the heir to the throne, Prince Charles, and his sons, including the bridegroom to be, Prince William.

Offshore Banking, Numbered Accounts, and bye bye UBS

This is about bank privacy in the age of Wikileaks.
If you want expert advice of course you would go to a financial adviser. What follows are my general thoughts on offshore banking, from the point of view of the very interested observer. And it involves much talk about the IRS (the tax collecting arm of the US Treasury).

First, it needs to be said, and said often, that these days the majority of people go offshore for perfectly legitimate reasons, being more interested in asset protection and capital preservation - and privacy and not having their details leaked all over the internet - than anything to do with tax.

And remember, tax planning, tax avoidance is NOT illegal. Tax evasion is.
The United States Supreme Court has stated that "The legal right of an individual to decrease the amount of what would otherwise be his taxes or altogether avoid them, by means which the law permits, cannot be doubted." See Gregory v. Helvering.

After the UBS/IRS storm a lot of investors, not surprisingly, are wary of Swiss banks.



You're a beautiful little country, Switzerland,
but we're saying Good Bye!
(photo from Switzerland.trips.com)

 Privacy is an important part of international planning and the feeling now is that privacy is under threat in Switzerland.

There has been a big fall-out from the UBS debacle, when the bank handed over names and private details of 4,450 of its clients to the American I.R.S. UBS has closed thousands of accounts where American residents or citizens were involved as signatories, including those who had been with them for decades. I make no more comment on the behaviour of UBS than to say this tells me all I need to know about Swiss banking.

Sadly but understandably after all this, Americans are not these days sought after as clients and their options are becoming limited.

So, for offshore banking, where are we now?

In earlier days one was recommended to the smaller Cantonal Banks in Switzerland, small local banks unknown outside their local area of Switzerland, who operated *numbered accounts (see below) and who did not outsource yet had the sophisticated expertise of their bigger cousins. The cantonals were thought to be safer, and because of their low profile less likely to be the target of people like the IRS. There are 24 of these small commercial banks, who account for 30% of Swiss banking business.

However, the IRS have opened branches all over the place, and are bustling about the world busying themselves with everyone's private affairs, and are at this moment chasing one of the larger cantonals, Basler Kantonalbank, and prosecuting a former UBS banker turned investment adviser, for advising his American client to conceal a cantonal account from the IRS. So that's the end of Cantonal Banks for most people. And Switzerland, too, as far as I'm concerned.

The fact is that, in the climate created by the IRS, no financial advisers or banks want anything to do with the unfortunate American client these days, because they would expect to have the IRS breathing down their necks at every turn.  It's as though the IRS doesn't want Americans to take their money out of the US.  America of all places is the land of  the free but these days Americans don't seem to have much freedom of movement with regard to their own money. It;s more a case of  'listen up, dude, keep your money at home or we're going to hound you to hell and back'.

*(All bank accounts are numbered, of course. But what is traditionally meant by the Numbered Account is one which does not appear on the bank's computer system. Your name and details will be in the bank's vault, and accessible and known only to a very few people, often just the President of the bank and one other highly placed person. The Wikileaks problem only arises when your private details are accessible to comparatively junior members of staff, who have no real stake in the bank, and usually have a grudge against their employer, and are simply looking to make money through their inside knowledge. So, in these days of Wikileaks, it is essential to have a classic Numbered Account as described above.)

So, if not Switzerland, where?

We have to refer to citizenship here. These days, because of the IRS, US citizens' options are more limited than, say, Canadians or Australians - many offshore banks no longer accept Americans as clients.

But even if you are a European, including UK citizens, you have to be careful. For you, the European Union Savings Tax Directive applies, so you must look for one of the tax-haven banking countries that is not a signatory to this treaty. That cuts out Switzerland (see what I mean), Andorra and the Cayman Islands for a start, and means you must look further afield to places like Panama or Singapore.

Obviously, Singapore has attracted a lot of attention, particularly from American investors. But again, it seems to me one has to be careful. Canadians might be OK, but be aware that both the EU and especially the UK, have strong influences there, and have proved very antagonistic to quite legitimate offshore banking.

Anyway, Europeans are not the target market for Singapore, though they are generally welcome. And Americans? They will be accepted, but the number of banks willing to work with Americans is smaller, I hear, and the entry level in terms of minimum deposits is quite a bit higher.

Personally, I agree with the advice that it's better to go for less high profile banks, and most certainly a bank that does not have offices or branches in your own country. And no out-sourcing. Glossy ads and high profile marketing attract far too much attention.  And do not go for convenience. Keep as far away as possible, geographically and culturally, from your home country and the places where all your fellow countrymen do their offshore banking.

For Europeans, think Latin America, maybe Panama and Uruguay. For Americans, look in the more obscure corners of Europe. But basically, look around and check them all out for yourself, because everyone's requirements are different.

And look for the culture of the bank and of it employees. Because we now have the added problem of the leaking culture, the disloyal, grudge-bearing syndrome of those that take their employers wages and then turn on them and their clients and sell private information to the highest bidder. And don't tell me there's any other nobler motive. It's done for money, pure and simple.

Insist on a real Private Numbered Account.

And monitor the situation the whole time, because things, institutions, laws, change - so keep your eyes on your investments, don't leave it entirely to your advisers, check everything frequently and keep watchful.


And Good Luck.

The Good, the Bad, and Swiss Banks

When I was a child I was taught that there were only two certain things in life: death and taxes. When I became a teenager, I amended that. There were three things that were certain: death, taxes - and the privacy of a Swiss Bank account.

In an uncertain world, you could put your faith in the numbered account of a Swiss bank, and know that your assets were safe, hidden from prying eyes, accessible only to yourself. In a world in which you could trust no-one, the one exception was the Swiss bank.

Now death and taxes reign supreme. As for the Swiss banks - how are the mighty fallen.

A year or so ago, after a protracted, bitter fight with the American IRS (the US Treasury office that deals with income tax affairs), UBS (United Bank of Switzerland) caved in and handed over many names and details of its clients' private financial affairs.


counter hall of UBS Zurich

Following this painful episode, new legislation was put into place making it more difficult, for instance, for plundering rulers to open accounts in Switzerland.

What now is the position of the Swiss banks? If discretion and secrecy have gone, what rules are we left with? UBS have frozen the funds of several dictators in the past few months. Why? Let's take the case of Hosni Mubarak, the fallen former President of Egypt.

UBS held funds for Mubarak for years, apparently quite happily, with no reservations, and considerable profit to themselves.

This situation lasted until Wednesday, 10 February 2011.
On Thursday, 11 February, Mubarak left office, and retreated to his home in Sharm-el-Sheikh. Within two hours the bank had frozen his assets for approximately 3 years.

A couple of questions come to mind. Under a freeze, does a bank still take a fee for holding the assets, and can that bank still lend that money out at interest? UBS do not at this time appear to be returning it immediately to the Egyptians, though, to be fair to the Swiss, they have an extremely good record recently in returning money to the country of origin.

And James Nason, of the Swiss Bankers Association, speaks forcibly in defence of Switzerland in that regard:
" The case of the late Nigerian dictator Sani Abacha was a classic example. The Swiss investigation into Abacha funds at Swiss banks revealed that a substantial proportion of his plundered funds had first been laundered by banks in the US and UK. A subsequent investigation by the UK banking regulator (FSA) in fact revealed that between 1996 and 2000, 23 British banks laundered some USD 1.3 billion of Abacha’s illicit assets. In September 2000 Nigeria’s ambassador to Switzerland, Mr. Ogbe Obande, told Swiss Radio: “I’m happy to say without equivocation that so far Switzerland has given the best cooperation to Nigeria in its quest to recover the looted property stashed in banks across Europe and the Americas.”


Switzerland remains the only country in the world to have returned Abacha funds to Nigeria and Nigeria remains frustrated at the lack of cooperation from the UK and US. Yet the media continue to give the impression that Switzerland was the only country whose banks accepted Abacha funds.


But one can't blame people for asking - if Mubarak is such an offensive client, why did they accept his money in the first place? He's still the man he was, and the money they're holding is still the same money they've been holding, I presume for some time.

How do the Swiss themselves explain this? James Nason has been telling Robert Brookes of http://www.swissinfo.ch/ that Swiss banks are obliged by legislation to stick to strict regulations when opening and handling accounts.

"There are very strict procedures in place, so-called due diligence procedures, basically "know your customer” rules," he says. "First the bank has to decide if it wants a business relation with this person. If you’re a so-called “politically-exposed person” (Pep), that means somebody holding an important public office in a foreign country, the bank has to assess how much of a legal or reputational risk you might pose.


If it decides to go ahead, one basic question is: Can you prove your identity? The banks are obliged by law to verify the identity of the client so they will want to see some kind of official identification document. Then the third and a very important step is to find out: Are these your assets you’re bringing to the bank or do these assets belong to someone else? The bank is also legally obliged to find out who the beneficial owner of the assets is or are."

Know your customer. Unless Swiss bankers all live in monastic seclusion high up in the Alps and never read the papers, how could they not know of Mubarak. He was a world figure, had been in charge in Egypt for 30 years, the bank had 'known' him and his character and his way of running his country, for years.

Presumably, when opening his account, they had inquired "Are these your assets you’re bringing to the bank or do these assets belong to someone else?"

And, presumably, the answer given was satisfactory, otherwise they would have refused him as a client.

Though in defence of the Swiss, it should also be pointed out that sometimes monies paid into a Swiss Bank have already passed through other banks, say in the US or the UK, where the 'know your customer rules' are not as strict.

Mr Nason also explains that they "put clients in different risk categories, so for example an 80-year-old grandmother from the next village would be a low-risk client whereas a 28-year-old casino owner from St Petersburg, for example, or a defence minister from a country notorious for corruption would obviously be considered to pose a higher risk."


One would assume the President of a country notorious for corruption would pose as high a risk as a defence minister. Certainly, immediately Mubarak fell from power, the bank took a strong moral view and froze his assets.

Mr Nason goes on: "There are very clear regulations in place. If a bank notices a suspicious transaction or it has well-founded suspicions that something like money laundering is going on, the bank is obliged by law to freeze the account and report it to the authorities, the Money Laundering Reporting Office. In some countries a bank would have to wait for a court order in order to freeze the funds but in Switzerland a bank can act on its own initiative. The authorities then have five working days to investigate and then they will tell the bank what to do."

Things now being as they are, one wonders why anyone these days would place their money with a Swiss bank who assesses a client as suitable, strikes a contract with that client to look after their funds, maintains that position for years, and then in a matter of two hours turns on the client, and freezes all their assets. If Mubarak's money was legitimate when he was in power and the bank accepted it, then surely it was still legitimate when he was no longer in power?

Swiss authorities explained the quick freezing of the account by saying it was taken "to avoid any misappropriation of Egyptian Government assets."

That doesn't quite answer the question.

I'm not discussing morality here - it's a murky area, one person's morality is another's immorality - I am simply looking at the business side of things.  But if morality comes into it, then surely it comes in on both sides. 

A bank is in the business of attracting wealthy clients, offering them expertise, protection for their assets and advice. That is the contract they strike with the client.  Surely, if they take the client's funds, earning good profits out of doing so, they owe some loyalty to that client. Wouldn't it be reasonable, when seeing that client heading for the rocks, to give them some advance warning - something along the lines of 'look old man, your future is not looking good, we advise you to remove your money from our bank pdq otherwise we will be forced to freeze your assets.'  Whatever the banker thinks of the client privately, he has taken the money, entered into a deal with the client and used it to the advantage of his bank. 

Mind you, even as I write this a little voice in my head says softly are you sure freezing an account is exactly what you think it is, are you sure there aren't angles you've missed? No, I'm not sure, because money is a complex creature, where money is there will always be angles, tricks of the trade, ways around things - angle within angles!  I can think of a couple myself . . .


There's no denying that the agonising battle between UBS and the Americans has cast a very long shadow on the Swiss banks.
And regarding the rash of frozen funds lately, there does seem to be something interesting happening on two fronts, both in relation to the rich and the Swiss Banks, and attitudes by the Swiss Banks to American clients.

More of than on the next post - and where to put money now the Swiss have fallen from grace.

(You can read the whole interview with Nason at www.swissinfo.ch dated 1 February 2011.)

the photo of UBS is from a 'wallpaper' site which encourages me to pass the contents of the site onwards, to facebook etc, so I take it I am able to use what is a very good photo).





It's the money, stupid

Who says money can't buy you health?  Below is the list of the average age of death of citizens of various countries.  Look who is at the top.  Good old Monaco. See? Being rich is good for your health. Which should motivate everyone to get out there and make as much money as possible.

Remember the words of the old song:

What happens when you're 70,

Must come a time, 70,

When you're old and it's cold

And who cares if you live or you die.

Your only consolation's the money

You may have put by.



The Prince's Palace, Monaco 



The Casino, Monaco

               

        Monaco          89.8         

Japan              82.2

Australia         81.7

Canada           81.3

   France            81.l    

Italy                80.3

Ireland            80.1

UK                 79.9

Netherlands    79.6

Germany         79.4

U.S.A.            78.2

China              74.5

India               66.5

Russia             66.
Angola         38.5

(with thanks to the late, great Lionel Bart for the lyrics quoted above).

GOLD ETERNAL

This is the second piece about gold I 've done recently. That's because I love gold. I love its beauty, I love the sheen of it, the way it glows magically in a softly lit room or against a dark background.  But I also love it because it's the only thing in the shifting, unstable world of fianance that is real. In the end, when trouble really hits and all that currency paper and coinage is valueless, gold will still be there, glowing amid the revolutions and the war and the flames. Gold is eternal money.

 Gold is what it is. It doesn't represent anything but itself.  It's not made by man. And it can't be destroyed by man. It doesn' t react with water. It doesn't corrode. It can be melted but that doesn't change its value. It's still gold, pure intrinsic wealth.

That's why the really rich don't bother trading it.  They keep it, and when they die they pass it on to their children.  It's the ultimate insurance, the ultimate security.

The stock market may collapse, your great houses fall about your ears,  the country you're in disintegrate, all you may be left with is your gold. And that is all you need. Because gold is eternal money.

The last post on gold discussed which nations hold the most gold.  At No 1 was America.  The US keeps its stock of gold at Fort Knox.  And below is one of the most awesome photos I've seen.  It was taken at Fort Knox and it shows a room lined from top to bottom with solid gold bars.   Imagine standing in the middle of that room. Breathtaking.  And I wonder how many rooms there are like that.

Photo courtesy of solarnavigator.net - I site I came upon accidentally, and I thank the site for a really great photo.

This post takes another look at gold economically, this time from the point of view of what the Telegraph calls 'gold gobblers' - those nation who have the most passion for acquiring gold.  Wise nations.

India

India had the highest consumer demand for gold in 2010. The country bought 963.1 tonnes of the precious metal, valued at $38.1bn (£23.4bn).
The main driver behind Indian demand is jewellery, with a 47pc increase in Q4 2010 demand compared with Q4 2009. This was boosted by Diwali celebrations, the biggest gold consumption period in India.

China and Greater China
Greater China lies in second place in terms of gold demand, although when combined with demand from the mainland, it easily sits in top spot.
Consumer demand was valued at $24bn for 2010, with demand on the mainland (ranked in third place) valued at $23bn last year

USA
US demand for gold jewellery has been slowing over the past 10 years, while investment demand has risen. Demand stood at 233.3 tonnes in 2010, with a value of $9.4bn.

Germany
European gold consumers were mostly driven by concerns over sovereign debt in 2010. and fled to gold for safety. Germany have even started offering gold in vending machines in Berlin's first 'Gold To Go' gold bar dispenser at Galeries Lafayette, where customers can buy gold bars weighing between one and 250 grams.
German demand stood at 126.9 tonnes in 2010, with a value of $5.04bn.

Turkey
Following several quarters of decline in the Turkish jewellery market, Q4 demand in 2010 was up 7pc compared with Q4 2009. Total demand in 2010 was 114.6 tonnes, valued at $4.5bn.
Consumers in Turkey are now focusing more on buying 22 carat gold, rather than 14 carat, in recognition of gold's investment properties.

Switzerland
Switzerland, which is one of Europe's largest gold investment markets, saw total gold demand of 91.7 tonnes in 2010, valued at $3.6bn.

Vietnam
While gold jewellery demand outside India and China lagged behind in 2010, Vietnamese consumer demand remained robust.
Total demand reached 81.4 tonnes in 2010, with a value of $3.2bn.

UAE
The UAE experienced a 6pc decline in gold jewellery demand in 2010. However, gold demand for investment rose 37pc.
Total demand stood at 72 tonnes in 2010, representing a value of $2.8bn

I never agreed diamonds were a girl's best friend.  Diamonds can be destroyed, throw one in the fire and it burns down into the carbon it basically is.  You can't do that with gold. Gold is forever.

Man's best friend lives the good life in China.

Money changes everything, sometimes in the most unexpected ways.

With wealth and the rise of a prosperous middle-class in China, the dog has come into its own. 

The dog loving community is on show everywhere, and its beloved pooches will be decked out in jackets, and smart cravats, with bows in their hair and bells on their toes - well, on their feet,  anyway. 
                                                                   

(AFP in Daily Telegraph)

Sad, you think? Think again. Think Money.

That's just what 34 year old Tang Yang thought, when he realised his girlfriend was spending approx. £45 a month feeding her pet rabbit.

He dreamed of a sort of Facebook for pets. And so www.goumin.com (loosely translated as dogpeople.com) was born.

Now, seven years on, Mr Tang already has 530,000 pet owners registered on his site, with 600 joining every day. He reckons he will have no trouble raising the $10m (£6.2m) to fund his expansion plans, with a possible public listing in a few years.

It's estimated that pet owners spend somewhere around $2 million a years on their pets.

It's the same old story. Find what lots of people like and, regardless of what you think about their choices, you'll find that's where money is to be made.

However, with wealth come the problems of over supply and flooding of the market.  So much so that a new law has had to be rushed through. From May 15, only one dog per houseshold will be permitted. However, people who already have two or more licensed doggies can keep them.

But from May 15th puppies must be given to eligible no-dog households or government-approved agencies, before the pups are 3 months old.

Rather sensible really. It's all apart of the regulations concerning the environment, in regard to unscooped waste and sanitation rules.

So doggies like this buddle of fluffy fur with panda eyes, will have to be as well trained and well behaved as their middleclass owners the world over.  (photo courtesy of Daily Telegraph, AP).

Yes, it's a dog's life in China these day.