Here’s what we have for you today:
• Join the Buffett
• Loose chains
• The state of Apple
Warren Buffett’s take on banking
His view: Warren indicated that the current crisis of confidence in banks should prompt efforts to discover the “dumb” things that bankers have done, in particular mismatching assets and liabilities and questionable accounting.
The account: According to Warren, “Accounting procedures have driven some bankers to do some things that have helped their current earnings a little bit and caused the recurring temptation to get a little bit bigger spread on record, a little more than earnings.”
The backer: Warren appeared as a savior during the financial crisis in 2008. Through his Berkshire Hathaway holding company, the investor granted a $5 billion lifeline to Goldman Sachs to prevent it from going the way of Lehman Brothers.
In 2011, he also injected $5 billion into Bank of America, whose shares had plunged due to large losses related to subprime mortgages, which were the origin of the financial crisis of 2008.
Blockchain and US crypto regulation
The view: Caroline Malcolm, the global head of public policy at Chainalysis, says there’s one thing both crypto’s boosters and skeptics can agree on: The US needs better regulation for the industry.
Control: “Even if the only thing you care about is consumer protection, and you think this space is ‘bad,’ the only path forward is regulation,” she said.
In addition: She pointed to other areas, including Dubai and Switzerland, that have created policy frameworks specifically for digital assets, including crypto. As some have suggested that crypto companies may seek to move abroad because they think the US regulatory landscape is increasingly flimsy.
Local tax conflict at Apple
The deal: The tax agreement in connection with Apple Inc. and its hometown of Cupertino, California, has come under question from state regulators, potentially slashing the amount of money that the company sends to the city.
The review: The California Department of Tax and Fee Administration launched an audit of the arrangement in 2021.
In question: At issue is the company’s treatment of online sales. Under California law, a local portion of sales tax goes to the location where the transaction takes place, not the location of the customer.
Background information: Apple treats all online purchases of products in the state of California as if they were made in Cupertino, setting aside the 1 percentage point local portion of the 7.25% state sales tax for its hometown. The arrangement applies to Apple’s online sales to consumers in the state, as well as transactions with other businesses in California, sales at its two retail stores in Cupertino, and use tax on the company’s own equipment purchases, the city officials have stated.
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