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Hong Kong still has the world’s priciest office rents

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Rents are rocketing up to USD255.5 psf per year.

Knight Frank’s Skyscraper Index reveals that in Q2 2015, Hong Kong, at US$255.50 per sq ft per year, retains the title of the most expensive place in the world to rent office space in a tower building.

According to a release from Knight Frank, meanwhile, London (10.7%) and San Francisco (8.2%) are seeing the fastest rental growth for high-rise offices in the six months to June 2015, reflecting a buoyant occupier market in gateway cities.

Despite the uncertainties in the stock markets and the devaluation of the RMB, Thomas Lam, Senior Director, Head of Valuation & Consultancy, Knight Frank expects Hong Kong to continue to enjoy moderate rental growth with sustained demand from Mainland Chinese companies.

In 2015, around 40-50% of new lettings in Central involve Chinese firms. Meanwhile, Central’s office buildings are aging, with more than 50% of the district’s Grade-A offices being over 25 years old. For some of them, the need for renovation is seen.

Together with the shortage of new Grade-A offices in Central, such renovation will lead to a long-term impact to the district’s Grade-A office supply. Overall vacancy rates in Hong Kong decrease to 1.7% in September, and Central’s vacancy rate was as low as 1.4%, close to the historic low of 2008.

Here’s more from Knight Frank:

Hong Kong will still have the lowest prime yields (2.9%) among 20 global cities in the world by the end of 2015 as office property prices surged in previous years.
Looking ahead, Thomas Lam expects rents in Central will increase no more than 5% in 2016 and rents will slightly drop 0-5% in Kowloon East with abundant new supply in the pipeline.

Despite the concentration of quality stock and attractive rents in Kowloon East, we believe CBD2 cannot replace Central in the short term because only some firms or operations prefer relocating to Kowloon East. In the long term, the emerging CBDs will serve as complements, rather than direct competitors, to Central.

As some significant projects like CBD2, redevelopment of Wan Chai government offices have already been put in place to provide new office space, Knight Frank research shows that, Hong Kong is likely to face a shortage of office space of around 2 million sq ft (equivalent to an office tower of a comparable size to Two IFC) by 2020.

Thomas Lam remains positive about the long-term outlook for premium and Grade-A office buildings in the city, due to sustained long-term demand boosted by the Mutual Fund Recognition Scheme.

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FREE Bank Guarantees – No Money Down

Once upon a time in a city far far away a lonely man with no money decided it would be fun to start a rumor…. He had played the game of Chinese Whispers before and thought it would be a great joke if he told everyone that…… You could get Free Bank Guarantees, without paying any money until the BG was delivered to the funder.

Free BG

Free BG

In a daring moment the lonely man spread the rumor to all his friends, within weeks everyone was talking about how you could get Bank Guarantees worth Millions of Dollars for FREE, without ANY Money Upfront, Free Bank Guarantees. The news spread like wildfire as desperate people latched on to the hope of a pipe dream that was started as a lie and was in fact 100% Untrue the entire time!

The Sad Reality is our industry is full of people that believe the fairy tale that Bank Guarantees can be obtained with NO MONEY UPFRONT. The fact is they can’t! They never have been able to be purchased for free and they never will be! ALL banks especially Top 25 banks charge fees to create and transmit the Bank Guarantee to a Funder. NO BANK will do that for free! No Bank will take the risk on a transaction for the customer. NONE!

If the bank is not paid, no Bank Guarantee will EVER get sent. And if the customer (you) are not paying for the bank guarantee to be sent…. then it wont be sent and no deal will ever be concluded! You can be absolutely sure that NO BG ISSUER is going to pay the bank fees for you, why would they? If they own the BG and they pay the Bank Fees as well, why do they need you as the customer? They may as well transmit the BG to the Funder themselves and keep all the profit for themselves. Why would they share a cent with a client who has put up no money and taken no risk?

Free BG

Free BG

Its just a bad joke that people believe the free BG fairy tale! Regrettably so many people are busy believing the “I can get a Bank Guarantee with No Upfront Fees Lie” that they waste hundreds of hours each year trying to find the Gold at the end of the Rainbow that DOES NOT EXIST & NEVER HAS EXISTED!

Our $1,000 Reward Offer

We will pay any client $1,000 who can show us documented evidence of all stages of a BG Transaction being Issued, Funded and over 1 Million Dollars being paid to the clients account with the client putting No Money Upfront. Yes thats right, we will pay any client who has transacted a deal $1,000 if they can show us accurate, factual, irrefutable documentary proof that they have completed the funding of ANY BG transaction (must be a recent transaction of no more than 3 months old) with ANY rated bank and banked a profit of over 1 million dollars.

Please, I beg you, prove us wrong! If there are hundreds of people doing Bank Guarantee Deals for Free…. and there should be because everyone is talking about it…… then come take our $1,000 money!

IMPORTANT NOTE – As of the date you are reading this article…. NOT ONE SINGLE PERSON has EVER come forward with ANY evidence EVER that ANY one has EVER completed a Bank Guarantee Deal for FREE!

The truth is this….. too many people have been scammed out of Upfront Fee Money, and as a result of having a bad experience those same people made up an investment rule up in their mind that they would now only enter a transaction if they did not have to risk any money or put any money up front. This effectively created a rule that prevents them from having ANY success or EVER completing ANY BG transaction because without money paid upfront to cover the bank costs, NO deal will ever get concluded!

Try going to your local airline and telling the airline i need you to fly me across the country for free and when i get to my destination i will pay you then! See how many plane rides you can take….. NONE! Freeloaders get Nowhere!

The problem with most people is they haven’t thought through their own logic, they are so caught up in the greed and dream of making millions of dollars from nothing that they have never considered the possibility that they are believing in a lie. There are no free lunches in life, there certainly are no free million dollar lunches in life, if you don’t pay for it you don’t get it, its that simple. You get what you pay for, pay nothing, get nothing. Its the most fundamental economic principle and Bank Guarantees are operating in the centre of the economic world.

If free Bank Guarantees were a reality….. There wont be any poor man in the world today. infact Every homeless person in the world today would be doing BG deals every week.

But FREE Bank Guarantees are not a reality, they are a fairy tale, a legend promoted by poor people to live on the hope of a dream to get rich from nothing. You have more chance of buying a lottery ticket and winning the lottery than ever completing a BG Deal for free. At least with the lottery ticket you paid the money to receive the chance.

With BGs, if you don’t pay to play, you will never get your money day. Thats the simple truth. 

If you need Loan, project funding, Bank Guarantee, SBLC, DLC or Letters of Credit please contact us immediately. 
Skype: loanandinvestments

Brokers are paid good commission on each successful transaction so if you want to work for our company as a broker, agent or mandate please contact us for more information.

Tunisia exports the highest number of ISIL fighters of any country in the world

Tunisia is where the Arab Spring began. And of all the countries enveloped in the revolutions that followed, it is the only one where hopes of a democratic future remain strong. Just last week, the Nobel committee awarded the Tunisia’s National Dialogue Quartet this year’s peace prize, commending the group for “decisive contribution to the building of a pluralistic democracy in Tunisia in the wake of the Jasmine Revolution of 2011.”

But the forces of democracy in the country are being challenged by darker elements in their midst. Tunisia has been troubled by repeated terror attacks this year, and is now believed to contribute the highest number of fighters for Islamist terror group ISIL.

According to the latest data from the US House Homeland Security Committee, of the 25,000 fighters thought to be working for ISIL in Iraq and Syria, 5000 are Tunisian.

The government sees ideological militancy among its citizens as an issue of national concern. “The fight against terrorism is a national responsibility,” Habib Essid, the country’s prime minister said after a local beach resort was attacked by a gunman in June. “We are at war against terrorism which represents a serious danger to national unity during this delicate period that the nation is going through.”

This delicate period, while it has opened up the democratic space, has not eased the economic challenges the country is facing, which analysts say has created an opening for ISIL to exploit.

Four years after the revolution Tunisia’s economy is contracting. After 2.3% growth in 2014, the World Bank and IMF project GDP growth for this year at a measly 1%. Overall unemployment is at 15.2%. And for university graduates, unemployment is even worse at a staggering 34%, estimates the African Development Bank (AfDB).

All these factors have created deep disillusionment about post-revolutionary Tunisia. And ISIL recruiters have exploited this air of dissatisfaction to devastating effect, luring young people to their cause. They offer monthly salaries of up $2,000 and the promise of a life of meaning, fighting to correct injustice as epitomized by the Bashar Assad regime in Syria. Where jobs are scarce and those who can find them earn meager wages of $100 a month, what ISIL is offering has proved to be a compelling alternative.

If you need Loan, project funding, Bank Guarantee, SBLC, DLC or Letters of Credit please contact us immediately. 
Skype: loanandinvestments

Brokers are paid good commission on each successful transaction so if you want to work for our company as a broker, agent or mandate please contact us for more information.

ICBPO is illegal because it has been Banned

ICBPOs Illegal

ICBPO (Irrevocable Conditional Bank Pay Orders) are now banned and have been made illegal by most governments. BG and SBLC Issuers that continue to ask for ICBPOs as payment are completely out of touch by seeking a form of financial payment that has been made illegal in most countries. Any supplier that requests payment by ICBPO clearly doesn’t understand the Bank Guarantee Industry and is an amateur not a professional. You cant be a credible financial supplier and request your customers pay you using illegal means eg ICBPO.

So why have most governments banned and made ICBPOs illegal?

Answer: When an ICBPO (Irrevocable Conditional Bank Pay Orders)  for 500 Millions Dollars is lodged with a Bank in Country A to “Irrevocably” pay a Bank in Country B. The National Balance of Payments Accounts in BOTH Countries is immediately effected!

Country A incurs a 500 Million Dollar Balance of Payments Debit (Deficit) and  Country B receives a 500 Million Dollar a Balance of Payment Credit. This immediately affects BOTH countries National Debt Balance Sheets and can also have an affect on the countries exchange rate because of the sheer size of the transaction.

The the above action occurs immediately when the Bank Pay Order is written because the Bank Pay Order is “Irrevocable” meaning it cannot be cancelled.

The situation gets worse when Bank A issues the ICBPO for 500 Million but Bank B doesn’t deliver the Bank Guarantee and defaults on the transaction…. This leaves Bank A unable to cancel their ICBPO or recover their 500 Million Dollar payment for a transaction that did not occur. AND Leaves Country A with a 500 Million Dollar Deficit when no goods or services were transacted!

ICBPOs Illegal

Most Governments have now recognized the extreme risk and effect ICBPOs have on their economies and as a result they have banned them and made ICBPOs illegal for all parties except for very large specially licensed financial institutions that have been given direct government approval. Those institutions are few and far between and rarely operate in the Bank Guarantee Industry.

So ICBPOs are well and truly off the Bank Guarantee menu! Normal BG and SBLC Payment Guarantees of MT799 have replaced them.

If you need Loan, project funding, Bank Guarantee, SBLC, DLC or Letters of Credit please contact us immediately. 
Skype: loanandinvestments

Brokers are paid good commission on each successful transaction so if you want to work for our company as a broker, agent or mandate please contact us for more information.

Code42 Snares Huge $85M Series B Investment

Code42, the Minneapolis-based developers of the Crashplan enterprise backup tool, announced a massive $85 million round today. Code42 doesn’t do them small. It has had onlyone previous round for $52.5 million at the beginning of 2012.

The company could have gotten more if it wanted it, according to CEO Joe Payne. “This was the amount of money we needed for the next stage of our growth,” he said. They were reluctant to take more and risk diluting existing shares.

Code42 went with two big rounds separated by several years, but this could be it says Payne. “This is the last private round we need to do. It gives us years of runway and capital to invest in our business,” he said.

The round was led by JMI Equity and New Enterprise Associates, Inc. (NEA). Existing investors Accel and Split Rock Partners also participated. Today’s investment brings the total to $137.5 million over the two rounds.

Crashplan began life as a tool for backing up your laptop, pivoted to the enterprise and has been growing fast — 100 percent year over year, according to Payne. One of the advantages of Crashplan is that it’s easy to use, and rarely requires IT intervention after it’s in place. Files are backed up automatically and Payne claims end users can restore files themselves in most cases.

The tool is platform agnostic, so it backs up even Macs and Linux machines and it backs up to the cloud, so users can recover their files from anywhere, even on a new machine. It’s important to note that backup is different from storage. You store stuff on your hard drive. You back stuff up in case something goes wrong and you need to get your files back — and Crashplan is designed to backup from laptops and mobile devices, as opposed to backing up the entire datacenter.

While cloud storage can act as a backup in some cases, that’s not necessarily its primary purpose. That means in practice that Crashplan isn’t competing with Dropbox and Google Drive so much as DruvaDatto Backupify (which is designed for cloud to cloud backup) and EMC, HP and the traditional enterprise vendors.

The company typically sees either Druva or the traditional vendors in deals, according to Payne. Customers include Intuit, Adobe, Stanford University, Lockheed Martin and Mayo Clinic.

One of the ways Code42 plans to use the money is to expand its understanding of the data that comes through the system. Like many SaaS vendors, the company collects a tremendous amount of data just by the nature of its business.

It could potentially start to root out information such as when a file carrying a virus entered the system and who opened that file or show that an exiting employee who just gave you a clean laptop, actually transferred 500 files to a private Dropbox account earlier in the week.

This kind of information moves Code42 from a pure backup and restore service into something much more valuable. Being able to access and report on the data about the backup could transform the company in significant ways.

It’s not there yet, but the plan is to move in that direction, Payne says. That could result in an entirely new set of services for IT and security admins over and above what it offers today.

68 Chinese Lawyers Make Urgent Statement on Disappearance of Bao Zhuoxuan and Two Others in Myanmar

Beginning on July 9, 2015, human rights lawyers in China came under cruel assault. Bao Zhuoxuan (包卓轩), the 16-year-old son of disappeared rights lawyer Wang Yu (王宇) and activist Bao Longjun (包龙军) has been subjected to extralegal and inhumane treatement.

On July 9, Bao Zhuoxuan was intercepted and prevented from leaving China at the Beijing Airport, while witnessing his father being arrested. After that, he was put under surveillance at his grandmother’s home in Tianjin. Then he was sent to Inner Mongolia by the police, where he was made to study at a school the police designated, and monitored by local police while he did so. With his freedom limited and passport and other identification seized, he was unable to go to Australia for his study abroad program. Nor could he return to Beijing and live in his own home. He was even warned by police not to hire defense counsel for his parents.

Bao Zhuoxuan is not suspect of any crime, nor is he a criminal. The illegal measures taken by the Chinese police against this minor have violated the most basic human principles. Article II of the United Nations’ Convention on the Rights of the Child, to which the Chinese government is a signatory and ratifying party, says: “States Parties shall respect and ensure the rights set forth in the present Convention to each child within their jurisdiction without discrimination of any kind, irrespective of the child’s or his or her parent’s or legal guardian’s race, colour, sex, language, religion, political or other opinion, national, ethnic or social origin, property, disability, birth or other status.” The police of China have followed, surveilled, and restricted the freedom of Bao Zhuoxuan. This not only violates international law, as well as China’s own provisions in the “Law on the Protection of Minors,” but also involves in the crime of abuse of power.

On October 6, Bao Zhuoxuan, along with Xing Qinxian (幸清贤) and Tang Zhishun (唐志顺), friends of Bao’s parents, disappeared in Myanmar, in a region along the border with China. Numerous signs indicate that China’s police have an unshirkable responsibility for the disappearance of Bao and his companions.

For this reason, we the undersigned lawyers now make the following demands:

  1. That the Chinese government, as a signatory to the UN’s Convention on the Rights of the Child, guarantee the personal safety of Bao Zhuoxuan and others, assist the Myanmar government in expeditiously tracking their whereabouts, and notifying their relatives or guardians;
  2. The Chinese police, as one of the parties responsible for the disappearance of Bao Zhuoxuan and his companions, should ensure that the individuals inside the police force responsible for the incident be subject to the appropriate legal sanctions;
  3. Chinese police should immediately cease the harassment of Bao Zhuoxuan and the family members of other lawyers disappeared during the ongoing crackdown on lawyers that began on July 9. They should also cease illegally obstructing Chinese human rights lawyers and activists, and their family members, from leaving the country, and guarantee the right of Chinese citizens to exit and enter their homeland;
  4. The United Nations, governments around the world, and human rights organizations should express strong concern over the disappearance of Bao Zhuoxuan and others. They should fulfill their international obligations and protect the personal freedom and safety of Bao Zhuoxuan and his companions in Myanmar, and after they’ve left the Chinese border, so as to prevent unlawful infringements against them.


Yu Wensheng (Beijing) 余文生(北京)

Zhong Jinhua (Shanghai) 钟锦化(上海)

Teng Biao (Beijing) 滕彪    (北京)

Tang Jitian (Beijing) 唐吉田 (北京)

Zhang Tingyuan (Chongqing) 张庭源  (重庆)

Lin Qilei (Beijing) 蔺其磊 (北京)

Ma Lianshun (Henan) 马连顺 (河南)

Jiang Yuanmin (Guangdong) 蒋援民  (广东)

Chang Boyang (Henan) 常伯阳 (河南)

Feng Tingqiang (Shandong) 冯延强 (山东)

Ge Wenxiu (Guangdong) 葛文秀 (广东)

Ge Yongxi (Guangdong) 葛永喜 (广东)

Li Weida (Hebei ) 李威达 (河北)

Lan Zhixue (Beijing) 兰志学 (北京)

Tan Chenshou (Guangxi) 覃臣寿 (广西)

Ren Quanniu (Henan) 任全牛 (河南)

Wen Donghai (Hunan) 文东海 (湖南)

Wu Kuiming (Guangdong) 吴魁明 (广东)

Chen Jinxue (Guangdong) 陈进学(广东)

Tan Yongpei (Guangxi) 覃永沛 (广西)

Lü Zhoubin (Zhejiang) 吕洲宾 (浙江)

Li Jinxing (Shandong) 李金星 (山东)

Huang Hanzhong (Beijing) 黄汉中 (北京)

Li Fangping  (Beijing) 李方平 (北京)

Tan Weijin  (Guangxi) 覃玮进  (广西)

Zhang Lei (Beijing) 张磊 (北京)

Huang Zhiqiang  (Zhejiang) 黄志强  (浙江)

Deng Linhua (Hunan) 邓林华 (湖南)

Wang Xing (Beijing) 王兴 (北京)

Wang Qiushi  (Heilongjiang) 王秋实  (黑龙江)

Xu Hongwei (Shandong) 徐红卫 (山东)

Liang Xiaojun (Beijing) 梁小军  (北京)

Ran Tong  (Sichuan) 冉彤  (四川)

Fu Ailing  (Guangdong) 付爱玲  (广东)

He Weimin  (Guangdong) 何伟民  (广东)

Gao Chengcai (Henan) 高承才  (河南)

Wang Qingpeng (Hebei) 王清鹏  (河北)

Yu Quan (Sichuan) 于全  (四川)

Liu Shuqing (Shandong) 刘书庆 (山东)

Chen Nanshi (Hunan) 陈南石  (湖南)

Lü Fangzhi (Hunan) 吕方芝  (湖南)

Xiong Dongmei (Shandong) 熊冬梅  (山东)

Tian Yuan (Hunan) 田园(湖南)

Qu Yuan (Sichuan) 瞿远(四川)

Jiang Tianyong (Beijing) 江天勇  (北京)

Wu Liangshu (Guangxi) 吴良述  (广西)

Me Minfu (Hebei) 么民富(河北)

Liang Lanxin (Hebei) 梁澜馨  (河北)

Li Dawei (Gansu) 李大伟  (甘肃)

Liu Shihui  (Guangdong) 刘士辉  (广东)

Sun Qiang (Hunan) 孙强  (湖南)

Chen Zhizong (Beijing) 陈智勇  (北京)

Xi Xiangdong (Shandong) 袭祥栋  (山东)

Zhang Chongshi (Hunan) 张重实(湖南)

Zheng Enchong (Shanghai) 郑恩宠  (上海)

Zhang Jiankang (Shanxi) 张鉴康  (陕西)

Li Yuhan (Beijing) 李昱函  (北京)

Yang Hong (Zhejiang)杨红 (浙江)

Wang Guofang (Guangdong) 王国芳  (广东)

Zhao Xianfeng (Shanxi) 赵险峰 (陕西)

Liu Changzhong (Hunan) 刘长中 (湖南)

Wang Fengming (Hebei) 王凤明 (河北)

Fan Guogang (Jiangsu) 范国刚  (江苏)

Chen Jiahong  (Guangxi) 陈家鸿   (广西)

Shu Xiangxin (Shandong) 舒向新  (山东)

Liu Zhengqing  (Guangdong) 刘正清  (广东)

Liu Wei (Henan) 刘伟  (河南)

Tong Zhaoping (Beijing) 童朝平  (北京)

The declaration was made by the Chinese Human Rights Lawyers Group, a voluntary and open platform composed of over 280 Chinese human rights lawyers. We welcome more colleagues to join us to sign this statement. Please send your name and location where you practice to

Since its establishment on September 13, 2013, the group has organized joint petitions, aided lawyers in joining rights cases or incidents, and made a variety of similar efforts to protect human rights and promote the development of the rule of law in China. Any Chinese lawyer who share the same human rights principles and are willing to defend citizens’ basic rights are welcome to join the group.

Contact persons (in the order of Pinyin):

Chang Boyang 常伯阳 18837183338

Liu Shihui 刘士辉 18516638964

Tang Jitian 唐吉田 13161302848

Wang Cheng 王成   13616501896

Yu Wensheng 余文生 13910033651

If you need Loan, project funding, Bank Guarantee, SBLC, DLC or Letters of Credit please contact us immediately.
Skype: loanandinvestments
Brokers are paid good commission on each successful transaction so if you want to work for our company as a broker, agent or mandate please contact us for more information.

Why India needs a new constitution

The widely acknowledged fact that non-resident Indians (NRIs) are successful in the US, in general—and the Silicon Valley, in particular—stands in sharp contradistinction to the fact that Indians are not very successful in promoting their country’s prosperity. Even after seven decades of independence, India has failed to become a developed nation.

The question why so needs an answer not for any academic reason, but because the prosperity of more than a billion people hinges on it. Without understanding the precise reasons for India’s continued under-performance, it is unlikely that the country will break out of this trap.

A quick review of factors that could potentially prevent a country’s economic growth is useful. Among those factors that destroy all possibilities of wealth creation are devastating foreign invasions or protracted wars; decades-long chronic internal civil conflict; frequent countrywide natural disasters such as earthquakes, floods and droughts; acute lack of natural resources; and total lack of human, social and cultural capital.

Clearly, in India’s case, those factors do not apply—either individually or in combination. That leaves just two other factors that were not mentioned, but could explain India’s case. One is divine decree and the other is poor governance. Assuming that the gods are not maliciously inclined towards India, we focus on the government factor.

The claim made here is that the proximate reason for India’s lack of progress is policies that prevent sustained growth—and that these policies ultimately derive from the Constitution of India.

The constitution affects policies

Economic policies flow from the type of government and its objectives. Growth-oriented governments implement policies that promote economic development. Contrast that with governments that implement extractive policies, which retard or altogether prevent development, primarily because extractive policies are not consistent with development. It is the Constitution that directly determines what kind of government a nation has, and thereby indirectly the economic policies.

Economic policies have consequences. How an economy performs depends on policies that the government implements. Nobel prize winning economist Douglass North observed that “economic history is overwhelmingly a story of economies that failed to produce a set of economic rules of the game (with enforcement) that induce sustained economic growth.”

Is there any reason to expect Indian governments to be exploitative? History provides a plausible answer. For nearly a century, India was under comprehensive colonial British rule. As can be rationally expected, the government that the British imposed on India was not primarily directed towards development, but rather towards extraction. That is only reasonable because wealth extraction is the rationale for colonial rule.

The British, therefore, created the institutional structures, which necessarily includes the government that controlled India through comprehensive government control of the economy. This structure administration and control was left intact when the British decided to leave India, and was taken over by the government of Independent India. Although India attained political independence from the British raj, Indians did not become free of a controlling—and extractive—government.

Independence brought political freedom to Indians, but not economic freedom. The positive correlation between economic freedom and the prosperity of a country is so robust that the causal link between the two is impossible to miss or deny. Countries with the most economic freedom are the most prosperous. Consider the Fraser Institute’sEconomic Freedom of the World: 2015 Annual Report, in which they rank 157 countries for the year 2013. In the first quartile, the most economically free, you find the prosperous large advanced industrialised countries such as the UK (10th rank), the US (16th), Japan (26th) and Germany (29th). The fourth quartile is the least free and understandably economically backward countries like Iran, Brazil, Argentina and Venezuela. India falls near the bottom of the third quartile (114th), behind Mexico (93rd), Russia (99th) and China (111th).[pullquote]Indians are not incapable of creating wealth. Where they have economic freedom, they do prosper.[/pullquote]

As noted at the beginning, Indians are not incapable of creating wealth. Where they have economic freedom, they do prosper. Indian Americans constitute the most economically successful of all ethnic groups in the US, with a median annual household income of around $100,000, which is nearly double that of the US as a whole. This fact is noteworthy because it points to a fundamental structural difference between India and the US even though they are both large democracies. This is a consequence of the “different rules of the economic game,” which arises from differences in the Constitutions of the two countries.

India’s Constitution is very large, gives the government enormous powers to intervene in the economy, allows the government to enact laws that discriminate among citizens based on attributes such as sex, religion, and caste, restricts freedom of speech, and limits the right to property. In short, it allows deliberate political and economic exploitation. The US constitution, by contrast, is short, grants freedom of speech, protects property rights, prohibits discrimination among citizens, and limits the power of the government.

The most salient distinction between the US and Indian Constitutions lies in the relationship between the people and the government that the two define. The US Constitution places the people as the principal and the government as its agent. This is evidenced in the limits that the Constitution imposes on the power of the US Congress. The Indian Constitution places the government as the principal and the people as its agent—as can be expected of a government that is essentially colonial in nature. Like the British government before it, the governments of post-1947 India impose what’s known as the “permit, permission, license, quota control raj.”[pullquote]The wealth Indian Americans create for themselves and their adopted country is immense, but it also represents the wealth that could have been potentially created in India but was lost.[/pullquote]

The deleterious effects of the license-control-quota-permit raj are too evident. Economic policies frame the economic environment and, therefore, the economic opportunities. Competent people who lack economic opportunities vote with their feet—if they are able to—in search of greater economic freedom. Looked at it this way, Indian Americans are economic migrants and economic refugees. The wealth they create for themselves and their adopted country is immense, but it also represents the wealth that could have been potentially created in India but was lost. The government of India, while celebrating the successes of NRIs, must also do a bit of soul-searching and ask why so many Indians are compelled to leave India.

India is a functioning democracy. General elections are regularly held and power is transferred routinely and peacefully. Every election is met with great hope that with different political leaders, that things will change for the better. But, although the governments and leaders change, there is very little real change. Regardless of which party or coalition of parties is in power, the policies hardly change.

A nation of free individuals

Nobel laureate economist, James Buchanan Jr, wrote, “It is folly to think that ‘better men’ elected to office will help us much, that ‘better policy’ will turn things around here. We need, and must have, basic constitutional reform, which must, of course, be preceded by basic constitutional discourse and discussion. This is our challenge.”

The conclusion has to be that India’s problem is structural and systemic, and not idiosyncratic. If the Constitution were to change, the ultimate rules of the game would change, the policies (the derived rules) will change, and thus the action on the ground (the play of the game) will change, and therefore the outcome will change.

India needs a new Constitution that is consistent with a nation of free individuals living in a complex, modern, large economy. This modern Constitution has to be one that guarantees economic freedom to the individual, prohibits the government from making any laws that discriminate among citizens, guarantees freedom of speech and the press, prohibits the government from entering into businesses that are properly the domain of the private sector, and so on. In other words, India needs a Constitution that protects the comprehensive freedom of the individual: economic, social and political.

India’s journey will not be successful by doing a new paint job on the car, or even getting a more competent driver, if the basic problem is under the hood. Perhaps India needs a new engine because the old one is broken and can never deliver the power needed for the journey.

Consumers improve finances as interest rate hike looms

The much-anticipated and long-delayed Federal Reserve hike in interest rates could slow the economy a bit when it finally comes. But Americans generally appear to be in better shape to handle higher borrowing costs than even a few years ago.

Not everyone would be adversely affected anyway. A lot of people just don’t do much borrowing, from affluent seniors who have no need for loans to low-income individuals who couldn’t qualify. About 27% of Americans are unbanked or underbanked, according to Federal Reserve research, meaning they’re outside the financial system or tangentially connected to it, and thus not applying for conventional loans.

Nor would all types of loans feel the pinch. For example, 30-year mortgages are tied to yields on Treasury notes, which the central bank doesn’t directly affect. Their yields move more in response to inflation and inflationary expectations.

And more to the point, Americans gradually have been getting their finances in better shape, making them more resilient to a rate increase.

“I think people are better prepared than, say, five years ago,” said Bruce McClary, a spokesman for the the National Foundation for Credit Counseling, which represents 75 credit-counseling agencies around the nation. “Even though wages are relatively flat, people are doing a better job managing their finances.”

Probably the biggest reason for improvement is that more people are working than when the recession was in full swing. Job losses are key catalysts that push people over the financial edge. As employment has risen, bankruptcies have dropped sharply in recent years — nationwide filings in September were down 54% compared with September 2010, report the American Bankruptcy Institute and Epiq Systems.

Many newly hired individuals aren’t making much more money than they were years ago — personal incomes remain sluggish — but at least they’re drawing paychecks. After shedding 8.8 million jobs in the wake of the recession, the economy has added 13.2 million since then.

And there are other heartening signs. FICO credit scores have reached a 10-year high. Credit scores reflect both a willingness and ability of consumers to handle debt payments.

The most recent score of 695, on a scale of 300 to 850, is up from 687 five years ago. Perhaps of more significance, fewer people are scoring at the low end, below 550. That’s an encouraging trend that suggests consumers are managing credit responsibly, the company said in a blog. And more people are creeping into FICO’s top tier, with scores above 800.

And while it doesn’t always seem like it — and the gains haven’t been shared equally — Americans are doing a better job accumulating assets. Household net worth, which bottomed during the recession below $57,000, currently stands around $85,700, the Federal Reserve reports. Overall consumer debt payments now eat up 9.8% of personal income, down from 13.2% when the recession hit.

People with adjustable-rate loans would feel the impact of a Fed rate hike more than others. Credit cards are a good case in point, since cards generally come with variable rates. Yet credit card delinquencies have dropped significantly, with just 2.5% of bank cards 30 days or more past due, below the long-term average near 3.8%, reports the American Bankers Association. On eight other consumer-loan categories tracked by the association, delinquencies of 1.4% are down from a 15-year average of 2.3%.

“By paying off credit card debt, consumers have reduced their costliest debt burden and one that is set to become costlier when interest rates start to rise,” said Greg McBride, chief financial analyst at

Credit card reform legislation enacted in 2009 limits certain rate hikes on existing credit card balances while giving borrowers more advance notice. These changes could ease the bite from rising interest rates.

McClary cautions that credit card balances have risen significantly this year, but he also sees that as a sign of rising consumer confidence. Besides, he feels financial literacy has improved, with fewer distressed individuals seeking help from consumer-counseling agencies. “Definitely, there’s an increased awareness,” he said. “People are very much in tune with their budgets.”

Like mortgages, auto loans are another type of borrowing where fixed rates are more prevalent. That’s important because Americans have been adding auto-loan debt at a robust pace — the $932 billion in balances as of June 30 was up 24% over the past two years, reports credit bureau Experian. Nearly 86% of new vehicles are purchased with a loan, and the financed amount and average term have been creeping higher — to a recent average $28,500 finance amount and 67-month average term, Experian said.

Yet consumers so far have been up to the challenge. A modest 2.3% of vehicle loans are 30 days or more past due and just 0.6% are past due by 60 days or more, Experian added. Those figures have held steady over the past year.

Higher fixed rates on auto loans wouldn’t make that much of a difference to the typical budget anyway, assuming the change is modest. An increase of one-quarter of a percentage point would add just $3 to the monthly payment on a $25,000 loan, McBride said, referring to someone who waits until after a rate hike to buy.

Student loan costs eventually could push higher, but that won’t happen for a while. Several types of college loans are pegged to 10-year Treasury notes, with rates resetting each July 1. For the 2015-16 school year, undergraduate loans now carry a rate of 4.29%, down 0.37 of a point from the prior year. Rates on loans for graduate students and Plus loans taken out by parents also dipped by 0.37 of a point. Though fewer people are seeking credit counseling help for credit card debt, student loan inquiries are rising, McClary said.

​With memories of the housing meltdown still fresh, anything that might unsettle real estate could prove worrisome. Sharply rising rates could dampen prices by discouraging potential buyers, but a big rate uptick isn’t likely. Home buyers with adjusted-rate mortgages would face higher payments, but these loans represent only a tiny slice of the market these days — about one in 14 new loan applications, reports the Mortgage Bankers Association. Fixed-rate loans dominate.

Housing affordability remains positive from a long-term perspective, and rates would need to rise a lot to discourage potential home buyers. The typical mortgage payment consumes 12.4% of household income, well below the 40-year average of 19.6%, according to JP Morgan Funds.

“By paying down debt, paying off debt and refinancing into fixed rates, Americans have reduced their monthly debt burdens as well as their sensitivity to rising interest rates,” McBride said.

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Poor people are getting terrible investment advice

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You’d think the response to the question “How should I invest for retirement?” would be further, deeper inquiries about the individual hoping to retire someday, and then a nuanced plan considering that information. However, when you boil it down, age is the single most important factor when determining the investment advice you’ll receive from the retirement industry. The guiding principle: younger people get more stock (considered more risky), older people more bonds (less risky). But if you look around your office, you’ll see people with varying income and career trajectories, so the idea that everyone should have the same investment strategy—and risk tolerance—because of age seems beyond nuts.

That’s not the only way in which investment advice can suffer from oversimplification. Consider people with lower incomes, who are often lucky to have a retirement account at all. Several states are now stepping up and offering retirement accounts to people who don’t get such benefits through their employer, which tend to be low earners.Each state is taking a different approach to how the money will be invested. While most don’t offer much choice, there is a uniform push toward low risk investments. The thinking? Low income people can’t afford to lose any money in the market. That also means they have no shot at upside either. For that reason, some in the industry argue the states have it backwards—low income people should have riskier portfolios because they’re already starting from a lower asset base and need to be aggressive.

The states’ approach is closer to how lower earners currently invest. Using data from the 2013 Survey of Consumer Finances, the chart below shows how much stock Americans age 35 to 50 hold in their retirement accounts, segmented by income. I focus on retirement holdings because low-wage Americans often don’t have access to the stock market, but everyone with a retirement account has equal access to the market and is faced with similar investment choices.

As you can see, higher earners typically invest in stocks significantly more than middle to lower earners.

Researchers at Morningstar argue it should be the other way around. It’s not as crazy as it sounds. They point out that lower earners receive a more generous Social Security benefit relative to the income they need to replace in retirement. That benefit ends up representing an overwhelming share of their assets. Assuming Social Security is a safe asset, low earners, from a diversification perspective, should be positioned to take on more risk elsewhere. Another argument is that low income people are being left behind as the economy increasingly favors the owners of capital. Owning stock gives them a way to join that party.

That’s the theory and it makes a compelling argument that low earners may want to take on a lot of investment risk. But the reality is many low earners have meagre savings beyond their relatively small retirement accounts. The figure below takes the same group above—people with a workplace retirement account age 35 to 50—and takes the median liquid assets (checking, money market, or saving accounts) for different levels of household wage income.

The lowest income group has less than $2,000 in liquid assets. That means they have almost no financial cushion should they lose their job, need car repairs, divorce, or have a medical event. That leaves their retirement accounts as an emergency saving vehicle. Sadly, many people do use it this way: According to a survey from Aon Hewitt, low salary people withdraw from their retirement accounts at twice the rate higher income people do. Risky investments are a bad idea for an emergency fund because you may need to sell just when the market tanks.

As more people with diverse financial situations have retirement accounts, one thing is for certain: A one-size-fits all investment strategy based on age or some presumed risk tolerance is completely inadequate. There needs to be full consideration of your savings and income—both present and future—to figure out how much risk you can take.

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