9 ms·

I'm sorry, but does that article offer ANY evidence at all for the impact of money laundering, except for the "just so" story in the middle? ("money launderers

I'm sorry, but does that article offer ANY evidence at all for the impact of money laundering, except for the "just so" story in the middle? ("money launderers beat up prices, and the rest of the market just runs with it" - as if people were able or willing to pay arbitrary prices).

Ensorceled 6y ago
Yeah, the article just assumes that a) money laundering via real estate is happening, b) it is increasing prices and then c) is trying to explain the logic behind it. But the title is misleading because the never actually establishes a) and b) ... it just meanders around in c)
- itsoktocry 6y ago
  >Yeah, the article just assumes that a) money laundering via real estate is happening Sort of like how people are walking into BC casinos with half a million dollars in $20 bills and authorities are being told not to ask questions? Yeah, we don't "know" there's money laundering, but reasonable people ask questions... https://www.msn.com/en-ca/news/canada/rcmp-detachment-head-warned-e2-80-98the-monster-is-growing-e2-80-99-when-bc-casino-opened-in-2004-inquiry-hears/ar-BB1asaS1 https://www.msn.com/en-ca/news/canada/rcmp-detachment-head-w... https://www.msn.com/en-ca/news/canada/virtually-no-controls-over-money-laundering-in-bc-casinos-commission-told/vi-BB1auxTA https://www.msn.com/en-ca/news/canada/virtually-no-controls-...
  - Ensorceled 6y ago
    Oh, I'm very, very sure money laundering is happening in BC. I'm certain money laundering via real estate is happening all over Canada; Chinese investors are buying abandoned farm land in Northern Ontario for some reason.
    - itsoktocry 6y ago
      I agree, and frankly I understand why Chinese people want to get here. It's a great place! But we can't have vast sums of capital, of unknown origin, flooding our country and pricing out our own citizens.
      - Ensorceled 6y ago
        Agreed. We definitely need New Zealand style property ownership laws, this is getting out of hand.
      - barbecue_sauce 6y ago
        Do they really "want to get" there? Don't they just buy the assets and leave them unoccupied?
        itsoktocry 6y ago
        >Do they really "want to get" there? Don't they just buy the assets and leave them unoccupied? I'm sure it's both, and it's really hard to determine in advance.
        Ensorceled 6y ago
        It's a combination of getting cash out of China etc. and having a safety bolt hole.
      - eisbaar 6y ago
        I'm not sure the former owners of the houses would agree. They made good money from the houses they sold to Chinese people. Is that necessarily a bad thing?
        pchristensen 6y ago
        No, but it is a tragedy of the commons situation - the individuals make out like bandits while the social capital is drawn down.
        Ensorceled 6y ago
cool_dude85 6y ago
They offer an indirect source for the one explicit claim made in the article: 20% of the price increases in London due to laundering. It's not linked, and I wasn't able to find an article online, but the claim is credited to "Christoph Trautvetter of Netzwerk Steuergerechtigkeit" Aside from that concrete claim, they offer a plausible explanation for why something that may make up a small proportion of sales could cause an outsized increase in prices. And they do draw comparisons to known cases in stock markets. So I think it's still an interesting article.
- eisbaar 6y ago
  "A plausible explanation" - sorry, no. They offer a "just so" story. Science it ain't.
JanSolo 6y ago
Have you ever lived in Vancouver? It’s a strange place. Everything is expensive and you see ultra rich people everywhere, but there is little in the way of local industry to explain all this wealth. Everyone who lives there will recognise this uneasy feeling of ‘Where did all the money come from?’ For ‘normal’ people it feels like there’s this richer strata of society that exists but there is no clear path into it. Almost like royalty. This article may offer little evidence, but it rings very true for people who live there.
- refurb 6y ago
  I’ve been to Vancouver a number of times and yes, it has the vibe you describe. However, money laundering isn’t the only driver of that vibe. I just got the sense it was a lot of money from Hong Kong that flooded Vancouver. So no industry was needed to support the high housing prices, it was being supported from foreign money. But again, that’s different than laundering money.
  - bsanr2 6y ago
    My understanding is that much of the reason for parking money in these properties is to get around local (that is, their local, our foreign) tax laws and wealth regulations. If that's the case, it's not different from money laundering. "Tax avoidance" is tantamount to money laundering.
    - jdmichal 6y ago
      Tax avoidance is not money laundering. Not even close. TFA does a good job of describing the process, of which zero pieces fit "purchasing foreign property to avoid local taxes". Reintroduction of these funds back into the local economy after performing whatever tax avoidance tricks might qualify as money laundering.
    - mtnGoat 6y ago
      Tax avoidance and tax circumvention are not the same. First lesson my tax attorney taught me. ;)
maest 6y ago
I agree with what you're suggesting - the article presents a theory that, while interesting, is only supported by circumstantial evidence.

Ensorceled 6y ago

Yeah, the article just assumes that a) money laundering via real estate is happening, b) it is increasing prices and then c) is trying to explain the logic behind it. But the title is misleading because the never actually establishes a) and b) ... it just meanders around in c)

itsoktocry 6y ago
>Yeah, the article just assumes that a) money laundering via real estate is happening Sort of like how people are walking into BC casinos with half a million dollars in $20 bills and authorities are being told not to ask questions? Yeah, we don't "know" there's money laundering, but reasonable people ask questions... https://www.msn.com/en-ca/news/canada/rcmp-detachment-head-warned-e2-80-98the-monster-is-growing-e2-80-99-when-bc-casino-opened-in-2004-inquiry-hears/ar-BB1asaS1 https://www.msn.com/en-ca/news/canada/rcmp-detachment-head-w... https://www.msn.com/en-ca/news/canada/virtually-no-controls-over-money-laundering-in-bc-casinos-commission-told/vi-BB1auxTA https://www.msn.com/en-ca/news/canada/virtually-no-controls-...
- Ensorceled 6y ago
  Oh, I'm very, very sure money laundering is happening in BC. I'm certain money laundering via real estate is happening all over Canada; Chinese investors are buying abandoned farm land in Northern Ontario for some reason.
  - itsoktocry 6y ago
    I agree, and frankly I understand why Chinese people want to get here. It's a great place! But we can't have vast sums of capital, of unknown origin, flooding our country and pricing out our own citizens.
    - Ensorceled 6y ago
      Agreed. We definitely need New Zealand style property ownership laws, this is getting out of hand.
    - barbecue_sauce 6y ago
      Do they really "want to get" there? Don't they just buy the assets and leave them unoccupied?
      - itsoktocry 6y ago
        >Do they really "want to get" there? Don't they just buy the assets and leave them unoccupied? I'm sure it's both, and it's really hard to determine in advance.
      - Ensorceled 6y ago
        It's a combination of getting cash out of China etc. and having a safety bolt hole.
    - eisbaar 6y ago
      I'm not sure the former owners of the houses would agree. They made good money from the houses they sold to Chinese people. Is that necessarily a bad thing?
      - pchristensen 6y ago
        No, but it is a tragedy of the commons situation - the individuals make out like bandits while the social capital is drawn down.
      - Ensorceled 6y ago

cool_dude85 6y ago

They offer an indirect source for the one explicit claim made in the article: 20% of the price increases in London due to laundering. It's not linked, and I wasn't able to find an article online, but the claim is credited to "Christoph Trautvetter of Netzwerk Steuergerechtigkeit" Aside from that concrete claim, they offer a plausible explanation for why something that may make up a small proportion of sales could cause an outsized increase in prices. And they do draw comparisons to known cases in stock markets. So I think it's still an interesting article.

eisbaar 6y ago
"A plausible explanation" - sorry, no. They offer a "just so" story. Science it ain't.

JanSolo 6y ago

Have you ever lived in Vancouver? It’s a strange place. Everything is expensive and you see ultra rich people everywhere, but there is little in the way of local industry to explain all this wealth. Everyone who lives there will recognise this uneasy feeling of ‘Where did all the money come from?’ For ‘normal’ people it feels like there’s this richer strata of society that exists but there is no clear path into it. Almost like royalty. This article may offer little evidence, but it rings very true for people who live there.

refurb 6y ago
I’ve been to Vancouver a number of times and yes, it has the vibe you describe. However, money laundering isn’t the only driver of that vibe. I just got the sense it was a lot of money from Hong Kong that flooded Vancouver. So no industry was needed to support the high housing prices, it was being supported from foreign money. But again, that’s different than laundering money.
- bsanr2 6y ago
  My understanding is that much of the reason for parking money in these properties is to get around local (that is, their local, our foreign) tax laws and wealth regulations. If that's the case, it's not different from money laundering. "Tax avoidance" is tantamount to money laundering.
  - jdmichal 6y ago
    Tax avoidance is not money laundering. Not even close. TFA does a good job of describing the process, of which zero pieces fit "purchasing foreign property to avoid local taxes". Reintroduction of these funds back into the local economy after performing whatever tax avoidance tricks might qualify as money laundering.
  - mtnGoat 6y ago
    Tax avoidance and tax circumvention are not the same. First lesson my tax attorney taught me. ;)

maest 6y ago

I agree with what you're suggesting - the article presents a theory that, while interesting, is only supported by circumstantial evidence.