What is this idiot talking about?

Any sufficiently advanced technology is indistinguishable from magic, and the accountants of Silicon Valley have proved Arthur C Clarke’s third law to be as true of tax avoidance as it is of tech. The most recent outrage is Apple’s $252bn offshore cash pile, as exposed by the Paradise Papers investigation. More valuable than the foreign currency reserves of the US or the UK, it represents all the money that the world’s most valuable company has siphoned out of the global financial system for the benefit of its shareholders.

You what?

Money invested in T-Bills an the like (which is where Apple’s money is) is siphoned out of the global financial system?

How does this shit get published?

30 comments on “What is this idiot talking about?

  1. And how is building up a big cash pile of benefit to its shareholders? It means they haven’t been giving the money to the shareholders when they could have.

    I know there is the argument that they are waiting for the US to declare a tax holiday before repatriating it and distributing it, but even then they are unlikely to suddenly dump all that spare cash on shareholders.

  2. It’s worth reading the whole article (if only to know how these idiots think). It’s complete and utter drivel from start to finish.

  3. The Mole – you don’t think a big cash pile will make the company be more valuable? Allow it to buy additional money making businesses? Invest in new technologies?
    To bring it back into the US means to lose a chunk of it to the government.
    Its worth more outside the country.

  4. The cash isn’t even outside the US tax system. Subsidiaries of US corporations (CFCs) are effectively within the US tax net, it’s just that the US chooses not to tax some income of those subsidiaries even when they are in tax havens.

  5. This is heading towards the development of General and Special Theories of Apple Tax Returns, which will probably prove that the whole fabric of the space-time continuum is not merely curved, it is in fact totally bent.

  6. By definition if there is a really big cash pile then the company isn’t investing it in either acquisitions or new technology, it is just sat there gaining interest. Having some cash reserves ready to make strategic investments make sense, but considering $400 million on Shazam is its largest investment, clearly $252 billion is way beyond the level needed for this. Therefore it is bad value for shareholders.

    As to losing a chunk to the goverment i directly addressed that with the comment there is the argument they are waiting for a tax holiday for that, but even if money was ‘lost’ to the government I imagine many shareholders would rather still get the hard cash than money sat doing nothing to Apple’s growth. Although presumably that cash pile is great for the countries it is invested in.

  7. The most recent outrage is Apple’s $252bn offshore cash pile, as exposed by the Paradise Papers investigation. More valuable than the foreign currency reserves of the US or the UK, it represents all the money that the world’s most valuable company has siphoned out of the global financial system for the benefit of its shareholders.

    Wouldn’t Apple have had to declare any cash balances in their annual accounts?

    As for “siphoning it out of the global financial system” doesn’t this communist mean they made it in profits, selling their goods? Also, is it all now under Steve Jobs’ bed?

  8. David Pegg is a reporter at the Guardian. He previously worked at The Bureau of Investigative Journalism and for Channel 4 Dispatches.
    That explains much, particularly the well-discredited BIG.

  9. Of course Apple raised a lot of debt and bought back its shares, so effectively brought the cash on shore anyway.

  10. It’s worth reading the whole article (if only to know how these idiots think). It’s complete and utter drivel from start to finish.

    You think the article’s bad; try reading the comments.

  11. I thought of this quote when the EU described the UK of ‘magical thinking’ re technological ways of avoiding a hard border. Just confirmed my view they’re the sort of backward morons who stare at aeroplanes.

  12. Moron I may be, but in many ways not that backwards. I’m quite happy to embrace technology where i find it.

    And I quite often stare at aeroplanes.

  13. The Mole – if investors are not happy with the board of Apple they will replace them. As they haven’t replaced them, perhaps the investors are happy to have such valuable shares and such a board.
    People who want money in their pocket instead of in the company will buy shares in other companies. Oh wait, those other companies don’t have the same profitability, the same growth, the same value…

    Put it bluntly, the investors are happy enough. If you aren’t an investor in the company you don’t get to have a say in what will make them happy.

  14. They investors may or may not be happy with situation, but my point was the building up such a big cash pile isn’t going to give any significant benefit to the shareholders as it isn’t being invested into growing the company or being returned to the shareholders.

  15. In days of yore (your? you’re?), newspapers had someone called a subbie who acted as a sort of gatekeeper as to what was allowed to enter the hallowed portals of reportage. Now that any hack is allowed to write directly into the page, journalism has become indistinguishable from blogging.

  16. Southerner,

    Not really, most bloggers have some knowledge about the subjects they write about and don’t just regurgitate press releases from their favourite sources, be they on the left and or right.

  17. @The Mole,

    “Cash Pile” does not literally mean a huge chest full of Gold coins buried on an off-shore island.

    It refers to a positive balance (not overdraft) in bank accounts, like your “cash pile” savings account, ISA, pension. Bank uses it to finance loans to others. It is not siphoned out of the global financial system,

    Grow up.

  18. For many groups the cash held offshore is used as loan finance to other members of the group. The time comes when HQ has to decide how best to use that cash. Intra-group loans or dividends. That is where tax comes into play. Grow up, Mole. Read proper manuals of corporate finance. Remember that Krugman knows zilch about actual international tax.

  19. The Mole – its being saved for the future. To be returned to the US if there is another amnesty or if tax rates drop enough.
    Will this happen? Yes.

    The whole point is the investors. They are the owners, they decide.
    Much to your annoyance perhaps but that’s a bonus.

    They will have a better idea of what they want to have happen to the money than you do.

  20. “a big cash pile isn’t going to give any significant benefit to the shareholders”

    If you are not an AAPL shareholder, you should shut the fuck up.

  21. “a big cash pile isn’t going to give any significant benefit to the shareholders”

    Except for having a huge impact on the value of their shares, as they own shares in a company which has $252bn in ‘cash’? Sort the expected value of shares from highest to lowest in the following companies:

    A company with $252bn in cash
    A company with no ‘cash’
    A company with net debts of $252bn.

  22. I’m perfectly happy for the investors to choose what to do – if Apple want to keep all their money in that is up to Apple, the board and those investors powerful enough to sway the board. (It should be noted that what is good and desired by institutional investors with lots of votes is not necessarily in line with what little investors would wish, obviously that’s tough for the little guys and is life).

    I’d also agree that a company with 252bn in cash is probably worth more than a company with no cash and that is probably worth more than a company with net debts.

    However a company with no cash as they’ve just invested it all in the next big thing which is sure to make lots of money may be worth more than the one just sat on a cash pile doing nothing. Even more importantly if the cash pile goes from 252 to $254bn there total share value is unlikely to go up by $2bn, the market will value that marginal increase as less valuable than the total and so not giving as much shareholder value as perhaps what the money could otherwise have done.

  23. A large ‘cash’ pile can be useful to the company (and equity owners) in another way.

    Apple has long term debt of $97bn. Long term ‘cash’ is nearly $195bn.

    Anyone know what their cost of capital is?

  24. Its the Scrooge McDuck version of international finance. Every dollar Apple gets their greedy hands on ends up in a big vault where Apple board members get to dive in and swim around in it, while poor people are shipped in to watch from behind bullet proof glass windows.

  25. @The Mole, December 13, 2017 at 2:41 pm

    However a company with no cash as they’ve just invested it all in the next big thing which is sure to make lots of money may be worth more than the one just sat on a cash pile doing nothing.

    What is the name of this clairvoyant company which knows what “the next big thing” is?

    How much have you invested in their shares?

    With every post, you’ve reduced your credibility.

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