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Top 10 at 10: Dow near lows in gold terms; Beneficiaries galore; China's ghost city; Dilbert

Posted in News

Here are my Top 10 links from around the Internet at 10am. I welcome your additions and comments below or please email your suggestions for Monday's Top 10 at 10 to My apologies for the delay today. It's been a tad frantic. 1. Dow near lows - When compared with the gold price, the US stock market remains near record lows, this chart from Rolfe Winkler at Reuters points out. HT Troy Barsten. Not sure what it says, other than more people don't trust the US dollar and that US stocks are in a value-free bubble. 2. Fair enough? - Rob Mackintosh has sent me a useful data series from the Ministry of Social Development on the number of beneficiaries in New Zealand, which shows the number of sickness and invalid beneficiaries is up around 59,000 over the last 10 years, while numbers on the dole are down 84,000. Here's Rob's view, which I share.

It would seem a large chunk of dolers have been shoved onto the sickness or invalids benefit. When all is spent and done we have only 1.7 million full-time workers supporting a population of 4.3 million, including 330 000 working age people on benefits, not to mention the burgeoning Super bill and the legions of unemployed gainfully diverted into training.

3. Titanic problem - Landon Thomas writes in the New York Times about a looming disaster in the banking industry in Europe as shipping lines go bust under the weight of a 25% fall in global trade in the last 18 months. There's US$350 billion of debt in them thar ships apparently.

Banks with large shipping industry portfolios "” among them Royal Bank of Scotland and Lloyds, and HSH Nordbank and Commerzbank in Germany "” could face meaningful write-downs as ship owners confront plummeting charter rates from a 25 percent drop in global trade. "Peak of defaults is generally one year after the trough of the economy," said Scott Bugie, a European bank analyst at Standard & Poor's. "In the U.S., the debt workouts have been faster and the economy also bottomed out before Europe." HSH Nordbank, a leading lender to the shipping industry, set aside close to $800 million in provisions for its shipping-related loans this spring, and it has already received 13 billion euros ($19.4 billion) in support from its owners, the regional German states of Hamburg and Schleswig-Holstein. And while global trade appears to be gradually on the mend, a glut of previously ordered ships due in the coming years is expected to limit the extent of a meaningful price recovery. "The problem is that there will be more bankruptcies and foreclosures if the ship owner can't operate his ship," said Anthony B. Zolotas, a shipping industry banker at Eurofin in Athens. "At that point he will give the keys to the bank and say, "˜Sorry, mate, I just can't do this anymore.' "

4. Yikes - Here's some quotes from a book written in 1997 about a coming crisis in America known as the Fourth Turning. The evocatively named 'BurningPlatform' blog points these quotes out. Hard to know if it's the usual tin hat crackpots or unusually prescient. Good fun to read. HT David George via email.

The known problems of unsustainable debt, civic rot, and global chaos have been festering for decades. They will now coalesce into a violent denouement. Strauss and Howe wrote their book, The Fourth Turning, in 1997. These are their chilling words describing the onset of the next Crisis: "It is unlikely that the catalyst will worsen into a full-fledged catastrophe, since the nation will probably find a way to avert the initial danger and stabilize the situation for awhile. The new mood and its jarring new problems will provide a natural end point for the Unraveling-era decline in civic confidence. As the Crisis catalyzes, these fears will rush to the surface, jagged and exposed. Distrustful of some things, individuals will feel that their survival requires them to distrust more things. This behavior could cascade into a sudden downward spiral, an implosion of societal trust. If so, the implosion will strike the financial markets "“ and, with that, the economy. Aggressive individualism, institutional decay, and long-term pessimism can proceed only so far before a society loses the level of dependability needed to sustain the division of labor and long-term promises on which a market economy must rest. Through the Unraveling, people will have preferred the exciting if bewildering trend toward social complexity. But as the Crisis mood congeals, people will come to the jarring realization that they have grown helplessly dependent on a teetering edifice of anonymous transactions and paper guarantees. Many Americans won't know where their savings are, who their employer is, what their pension is, or how their government works. The era will have left the financial world arbitraged and tentacled; Debtors won't know who holds their notes, homeowners who owns their mortgages, and shareholders who runs their equities "“ and vice versa."

5. China's Ghost City - This is a fascinating documentary piece from Melissa Chan at Al Jazeera about Ordos, a ghost city in China built to make GDP figures look good and help spend US$565 billion of stimulus money. This looks like Japan's 'bridges to nowhere'. HT Gertraud via email and Tyler Durden at Zerohedge

Related Topics

All those who have spent late hours playing SimCity 3000 and never understood why the damn thing would never get any people to move into it, will derive a deranged pleasure from the following clip. In China, where 8% GDP is guaranteed and has to be "goal seeked" by any and every increasingly more deranged economic project, the authorities have taken the game of SimCity and applied it to real life. Alas, they started out on "difficult" level. Ordos is a hyper modern city, full of brand new glass walled residential and commercial buildings, yet devoid of inhabitants. In its attempt to present a "growing" economy, and to "invest" its $585 billion stimulus into anything and everything, courtesy of comparable idiocy on the other side of the Pacific, China's communist party is now ruling over ghost towns. One wonders just how many such "efficient" projects sustain China's magical 8% growth.

6. Lest we forget - Ed Harrison at Credit Writedowns has picked up on a piece by Jim Chanos warning about the 10 things investors should never forget from the global crisis because it seems we're destined to forget quickly.

1. Duration mismatches (borrowing short and lending long) 2. Accounting (Mark-to-market, deferred tax assets and a lot more) 3. Conflicts of interest (no Chinese walls, ratings agencies) 4. Regulation (especially given poor risk controls) 5. Risk management (is Meriwether a leading indicator?) 6. Investment Banking vs. Utility Banking 7. Too big to fail (they must be downsized) 8. Heads I win, tails you lose (socialization of losses is crony capitalism) 9. Quantitative easing (QE has costs) 10. Hedges instead of capital My baseline thinking at the moment is that we are seeing the beginnings of a cyclical recovery built on the back of asset relation more than anything else. The underpinnings of this uptrend are tenuous. So, when this latest burst of reflation hits the wall, all of the aforementioned issues will re-appear and policy makers will again do the who-could-have-known routine we saw in 2001 and again in 2008/ But the broader public is increasingly wise to this song and dance.

7. Oh the irony - Andy Warhol's screen print of 200 one US dollar bills has just sold at auction for US$43.8 million, Bloomberg reported. Now that's inflation caused by money printing...

Five bidders vied for Warhol's 1962 "200 One Dollar Bills" at the Sotheby's sale last night and it went to an unidentified phone buyer. The 7 1/2-foot wide silkscreen canvas comprises repetitive images of one-dollar bills, reproduced in tones of black on grey, with a blue Treasury seal. Karpidas offered the work, according to two people familiar with the situation. She paid $385,000 for the painting at a 1986 Sotheby's sale. "We've seen nothing like this recently," said New York dealer Tony Shafrazi. "This is a masterpiece."

8. Je ne regrette rien - Felix Salmon from Reuters points to some interesting comments on bankers by Andrew Ross Sorkin, who wrote the definitive book this year on those crazy few weeks in September and October last year when the financial world appeared to be ending. It seems the bankers are not sorry.

One of the key drivers of the crisis was the hubris and general lack of humility of senior bank executives. This is connected to the issue of executive pay: almost everybody thinks he deserves what he's earning. But the only way you can deserve an eight-figure pay package is if you're really on top of what's going on in your bank. Ergo, everybody thought they were on top of what was going on in their banks, even when they weren't; lower pay and more humility would have helped enormously in curtailing some of the most egregious excesses. If bank executives (with the notable exception of John Reed) see no need to apologize for destroying the global financial system, they are still part of the problem and are very unlikely to be part of the solution. Which bodes ill for the future.

9. Dollar doom loop - Simon Johnson and Peter Boone at Baseline Scenario take a good look at the US dollar outlook. They take a longer view and it's not pretty. It's well worth a read.

The 1980s classic, Stephen Marris's "Deficits and the Dollar: The World Economy at Risk," stresses that a rapidly falling dollar would push up United States inflation, resulting in higher interest rates and a deep recession. Writing in the latest edition of Foreign Affairs, Fred Bergsten emphasizes that such outcomes are still possible today. A weakening dollar will cause inflation fears, so yields on long-term government bonds will rise to compensate investors for inflation, and we will need to pay more and more to finance our large debts. The idea that the American dollar might follow emerging markets such as Russia in 1998 and Argentina in 2002, or Britain in the 1970s "” and so depreciate by 50 percent or more in a relatively short time "” is certainly implausible now. But such a "doom scenario" is not unrealistic in the future without change. In this context, the American government needs to control its budget deficit to keep this adjustment on track, and to stop confidence in the dollar from falling further. Our government collects far too little in taxes for what it spends. There is no choice but to raise taxes soon and rein in spending. Short-term rates (controlled by the Fed) will stay low, while long-term rates (market-determined and affected by trust in our Treasury and Fed to keep the value of dollar strong) will rise as people fear their dollar investments will be debased. There is no doubt that both the Fed and the Bank of England know what is happening. The spread between short- and long-term rates (known as the "yield curve") will rise, and banks will benefit; would-be home buyers and people with overdrafts or outstanding credit card balances pay more, while savers get little. This is how the public pays for the past losses of our financial system. We don't have to do this again and again. We could start by changing our financial system from the roots. We need to credibly remove the promise to bail out our large banks each time they fail. This means forcing them to hold more capital, dividing them up so they are smaller, and then letting them fail when they make poor gambles. The Treasury's past and current close connections to Goldman Sachs, Citigroup and other major investment banks illustrate how our own doom machine functions. We need to break up these "banks" so they are small enough to fail, and also ensure that no bank, regardless of its connections, is able to demand that the Fed and the Treasury support its solvency in the future to prevent financial collapse. In this context, a weakening dollar helps the administration to put an unstable financial system back on its feet "” and to crank up our "doom machine."

10. Crash for clunkers - The Cash for Clunkers scheme has hurt the demolition derby industry, The DailyShow reports.

The Daily Show With Jon Stewart Mon - Thurs 11p / 10c
Crash for Clunkers
Daily Show Full Episodes Political Humor Health Care Crisis

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Do the 1.7 million workers

Do the 1.7 million workers include Govt and local body employees? If so then we are really in the cr*p.

Yep, we're in the crap

Yep, we're in the crap AJ. No doubt about it. Maybe John and Bill think the economy can be like SkyTv...'play it again John"

Don't worry - there will

Don't worry - there will be work for everyone. We use fossil fuel at the equivalent rate of having 1000 slaves apiece. That's quite a lot of effort we're going to have to find someplace else.

Out with the scythes, boys and girls.

Don't know if I can foot it with the last poster, though

That beneficiaries is interesting. DPB

That beneficiaries is interesting. DPB looks relatively constant - regardless of economic conditions - that needs addressing. But, I'd like to see that chart with DPB taken out of the mix - becuase it is amazing to see how unemployment dropped to nearly nothing in the boom years. Albeit there might have been growth in sickness and invalids but nothing in comparison to the net decrease over that period. And without DPB in the mix - the chart picture would be even more dramatic.

re: China’s Ghost City Please

re: China's Ghost City

Please take this one out, it is totally absurd. (I Can't believe you quote from Al Jazeera TV!)

Ordos City was founded on February 26th 2001 and it is still a fast developing city.
The video clip was taken in the very new suburb called Kangbashi (don't know its English name) Phase III, which is still being built.

By the end of 2001 it already has a population of 1.29 million.

2004 the figure reached 1.5 million

By the end of 2008 the population was 1.94 million.

and the city area is 902 square kilometers (Auckland is about 1050 square kilometers if I remember it correctly) and the great ordos is about 86k SKM

I love your top 10 @ 10 but you must do your own research. This is a city with half the population of NZ, you can't call it a Ghost city.

Thankyou Chinese Cash Buyer .

Thankyou Chinese Cash Buyer . The 10 @ 10 often has a tittilate & shock manner . Good for you to put some facts to the story .

Chinese Cash Buyer --- we

Chinese Cash Buyer --- we could really use some of those builders and project managers over here. They certainly know how to build things fast. Maybe if they ever decide to build Transmission Gully in Wgt they could give some help.

Bernard, I was going to

I was going to post a reply to your bit on gold, but its turned out a bit long.

It is here:

My reply to - Dow near lows in gold terms by Bernard Hickey

I hope that helps you out on why that ratio is so important, and explains why the DOW-gold ratio is no where near a low.

The social development chart shows

The social development chart shows almost nothing. It shows unemployment rising and falling and the other things seem to stay the same. No transference from one category to another at all. The chart seems to be designed to be useless since it is rotated and shaded and other fancy graphical stuff that looks impressive and is totally destructive in term of the charts information value.

Well said, Simon. About all

Well said, Simon. About all I can get out of that chart is that unemployment goes up and down and everything else stays about the same - which is in direct contradiction to Rob and Bernard's assertions. Come on Bernard, you can do better than this....

Would it not be helpful

Would it not be helpful to ponder the saying of the old philosopher:


All the signs are positive

All the signs are positive for recovery because the signs are riding on the back of a FED that has been feeding an asset bubble with cheap US paper. The trick they want to pull off is to generate US economic growth on a world market lift caused by an asset bubble that is not in property. The demand for US iou paper is a fraud. My bet is most of it is being bought by the FED through third parties with QE "money". Gold upside is much higher. Not the stuff to be short in. China India Asia growth story is real. So demand for commodities will strengthen, especially with much of Europe starting to climb back from the recession. As for real growth and probably stagflation ahead with an exodus of skills to aus. Falling property values....oh yeah....Goodbye to finance company shites. Hello to govt guarantee payouts to depositors. That means more pain on the fiscal side. More tax increases. Falling real disposable incomes. Rising interest rates. The future here is misery in spades but hey...Bill has a 'strategy' and John has a "NO".

A slight aside. I've just

A slight aside. I've just listened to an interview by Kim Hill with Naomi Prins ( sp?) , the lady who worked for Goldman Sucks but now writes "against" the Wall St marvel. One interesting comment she made was that everyone blames the crisis on the subprime market. But she believes this was just a small issue . She says the total subprime loans were "just" $1.5 trillion so if all those loans defaulted and the houses " burnt down"
(ie. there was no residual value in the collateral for the loans ) then the crisis would have totaled $1.5 Trillion but the total Fed subsidization of the financial industry is now in excess of $10 -12 trillion.
She also thinks the stimulus packages have really just delayed things coming to a head in many areas.

Ross, sorry I missed the

Ross, sorry I missed the Kim Hill interview, sounds like this Naomi is on to it.
Subprime mortgage is just the tip of the iceberg, what we have is the implosion of an entire Ponzi economy.

"The economy is 70% based on the consumer, and the consumer has been trained over the last 30 years, just like Pavlov dogs to expect ever decreasing interest rates and attendant increasing property prices. However the Fed have a problem they have no more food for the dogs, as they are now at 0%.

When you look at the chart above, have the Fed actually been setting interest rates? Or have they simply been adjusting them, to maintain the downward sloping trend line of the 30 year bond?

In the good old days as soon as the consumer creaked the rallying call went out DROP INTEREST RATES. The theory being if he/she can afford 50,000 of debt at 10% then he/she can afford 100,000 of debt at 5% !!! the 50,000 of new debt money will be spent in the economy and can be booked as "Growth".

The Consumer is tapped out, so now the Government has taken over the perpetual debt machine, as they are the only big debt spender left in town.

The so called economy is nothing more than a consumption Ponzi Scheme. That has needed continuous feeding with a diet of ever decreasing interest rates and ever increasing consumer debt to survive. When you take on a loan they only lend you the PRINICIPAL they do not loan you the INTEREST, so either more debt is created by continually dropping interest rates, to cover this interest. Or you make the population bigger, more people entering the perpetual debt machine and taking on debt, hence all the immigration over the last 10 years. Whatever happens the total debt outstanding made up of Government, Consumer and Corporate debt. Must, I repeat, MUST get bigger or the system implodes. PONZI SCHEME.

Now we are at the 0%, and this gigantic Ponzi scheme of an economy has been exposed for what it really is; nothing more than an elaborate financial PONZI SCHEME, there is no plan B. Apart from the Government spending lots of freshly printed Dollars therefore devaluing the purchasing power of all existing Dollars, Ultimately, it will be death by inflation"

David -- as is common

David -- as is common in these interviews she was promoting a new book , but I cannot remember the name of it but if you go onto the National Radio website in a few days time the interview should be there ( if it is not already on the site ). It is great listening

Re:5 So that's what Australia


So that's what Australia digs holes in the ground for....

Interesting to listen to the

Interesting to listen to the cnbc jabber this morning. The weight of argument supports this bull market run continuing until Bernanke is happy that inflation has started! Merryl L picking copper to average $7125 in 2010 and go higher in 2011. Wow! The US$ to continue with the slide. I guess for Noddyland the question is when will the Kiwi spit the dummy? If it does, we can expect higher fuel costs and inflation in general, meaning Bollard will have to get a move on. Sure seems to look like 2010 is set to see the property ponzi madness end in a big splatter.

Talking about digging holes Mike

Talking about digging holes Mike M, there must be locations in NZ where a bloke can buy some land and dig himself a family cave. Maybe in Otago.

@AndrewJ: "Do the 1.7 million

@AndrewJ: "Do the 1.7 million workers include Govt and local body employees?" I would assume so and hospital workers etc as well...however I think that the so called productive private domestic sector is a what earns us money and makes us richer is exports, or anything that brings $ into NZ. So whether its Govn providing a service to NZers or private industry it doesnt really matter as long as its efficient and effective. My experience with large private organisations and Govn organisations is similar, they are internally politicised and loose touch with internal sections fight with each other over who pays no matter who owns the orginisation. So either way can be in-efficient, in-effective and lose or cost money.


@kate: the sickness % has

@kate: the sickness % has definately grown, the Q is not that its grown but is it were unfit for work ppl on the DPB before and have now moved to where they should be, or are fit enough to work ppl on the sickness benefit. My own experience of being un-employed is there are a small % of ppl that consider the welfare payments enough that they have no intention of working ever/again, they shjould be delt with, but most ppl Ive met simply wanted work, the last segment almost needed it desperately for the last two groups really wanted work and were prepared to re-train and do any sane thing to get it.


<i>Do the 1.7 million workers

Do the 1.7 million workers include Govt and local body employees?"

I don't think it does. The last statistic posted here was that we have 1.8 million workers in the private sector, having to cover the benefits and state sector wages of 1.7 million. That's almost 1 person doing something that actually creates wealth, having to support 1 person who wastes that wealth (and if in the State, often will be getting paid to hold the productive person back). The tipping point for any Nanny State surely, and an indictment on every recent government we have had.

@David &amp; Ross: The sub-prime

@David & Ross: The sub-prime is from what I can read minor, not even 1trillion until you allow for the multipliers of the CDSs, its these that made sub-prime such a big issue that and lack of regulation....So even now the ppl who invented the CDSs and bought and sold them happily based on sub-prime are blaming sub-prime....for ruining their shonky business model.

Ditto the "forcing" of banks to lend to un-creditworthy ppl, its just a partisan lie and a minor issue....

In terms of interest rates, USA credit card interest seems to have been 7 or 8%? is that normal? (lower?) and now its 30% (the new normal?). So no wonder US consumers are paying down debt, the real cost of borrowing has gone through the roof for them...The US banks seem to have bought the gun, loaded it and now aiming at their own feet...or maybe its crotch....I have no sympathy.


<b>Steven</b> said <i>Ditto the “forcing”

Steven said Ditto the "forcing" of banks to lend to un-creditworthy ppl, its just a partisan lie and a minor issue"¦.

Steven needs to read many of the articles at the Mises Bailout Reader which will expose his own partisan lies:

Especially the articles on Fannie Mae and Freddie Mac. But particularly the articles on the Community Reinvestment Act, which did 'force' banks to lend to uncreditworthy people, and was by no means a minor issue.


'... the federal government's 1977 Community Reinvestment Act (CRA) under which the Fed and other financial regulators have pressured/extorted banks into making more loans to less-than-creditworthy borrowers than they would normally be willing to risk. ...

By ignoring the role of the Fed in creating the whole housing-market mess, Gordon's pronouncement that it is entirely a result of "market failure" is laughable on its face. He also flatly denies that CRA lending has had anything to do with why so many uncreditworthy borrowers have defaulted now that the Fed-generated housing bubble has burst. This, too, is an untenable position.

When the CRA was created during the Carter administration, the administration also funded with tax dollars numerous "community groups" that have helped the Fed, the Comptroller of the Currency, and other federal regulatory agencies to enforce the act. Under the CRA, if a bank wants to make virtually any change in its business operations "” merging, opening up a new branch, getting into a new line of business "” it must first prove to regulators that it has made "enough" loans to the government's preferred borrowers. The (partially) tax-funded "community groups" like ACORN (Association of Community Organizations for Reform Now) can file petitions with regulators that stop the bank's activities in their tracks, perhaps defeating them altogether. The banks routinely buy off ACORN and other "community groups" by giving them millions of dollars as well as promising to make even more dubious loans.

In order to try to diversify the risk of these loans, the Federal Home Loan Mortgage Company ("Freddie Mac") pioneered the "securitization" of bundles of these high-risk loans so that they could be sold on secondary markets. ...

The government also "streamlined" the regulatory requirements for CRA loans in 1995, allowing "” and indeed pressuring "” banks to make such loans without the benefit of many traditional credit-worthiness criteria, such as the size of the mortgage payment relative to income, savings history, and even income verification! Instead, the Fed told banks that participation in a credit-counseling program, many of which are federally funded, could be used as "proof" of a low-income applicant's ability to make his mortgage payments. In other words, federal bank regulators required banks to make bad loans based on nonexistent credit standards.

In his April 26 New York Post article on the CRA entitled "The Real Scandal," Professor Liebowitz explains how the government's Fannie Mae Foundation singled out one bank in particular as the role model for all other banks in America in terms of its commitment to CRA lending: Countrywide, the nation's largest mortgage lender, had committed to $600 billion in low-income or "subprime" loans as of 2003. Today, Countrywide is essentially bankrupted and has been merged with Bank of America.'

And read the rest of that article ...

The Mises Bailout Reader will also how how the credit crisis was not a matter of not enough regulation, it was a matter of not enough laissez faire.

Anyone know of a council

Anyone know of a council anywhere in NZ that has a policy of reducing rates?

Simon, you may have a

Simon, you may have a point on the graph ( and 3D gimmickry) but clicking on it will take you to a pdf with a data table and a few other graphs that perhaps better illustrate the point.
Take two quarters separated by 6 years - September 2003 and September 2009. We have a similar number of people on benefits (332,422 and 326,811) Those on the dole made up 28% in 2003, 18% in 2009. The % on sickness and invalid's benefits has increased from 33% to 43%, from 109,000 to 141,000. The DPB has remained the same at around 33%.
Since March 08 when beneficiary numbers bottomed out at 255,000, 41,000 have joined the dole queue and another 26,000 have hopped on the DPB, sickness or invalid's benefits.

The point of the exercise was not beneficiary or MSD bashing but to illustrate the true magnitude of our unemployment problem. Is there a party with the political will to do something about it?

Mark- the vindication of Ludwig

Mark- the vindication of Ludwig von Mises grows steadily closer. 'Voluntary abandonment of the credit induced prosperity scam - or total destruction of the currency system involved". Mises explained the options - soon we must choose!

Thanks Ross :) She's done

Thanks Ross :)
She's done quite a few interviews.

Not closer <b>Malcolm</b>, he is

Not closer Malcolm, he is vindicated. He predicted what's happened, and he prescribed the cure: pity every Western government is doing precisely the opposite. I posted a link to an excellent Wall Street Journal on von Mises and just this point (lost the link now, and the thread in here) - did you read that?

Rob said: ... our unemployment problem. Is there a party with the political will to do something about it?

Yes. And we know which one it is: unfortunately it has no MP's at this stage.

Thanks Rob, your figures illustrate

Thanks Rob, your figures illustrate one of the key points of the chart missed by several earlier posters. The trend over the last 9 yrs has been for a massive transferral from the dole to sickness and especially invalid benefits.

Would be interesting to see a break down of categories of invalid benefits somewhere, there must be some kind of rapidly escalating health problem out there. I presume.

However what I would have really liked to have seen is the rapidly growing proportion of superannuitant beneficiaries included as part of that graph. I suspect it would dwarf everything else. So, 330,000 or so on benefits. How many on superannuation? (including how many perfectly healthy 60-somethings?)
And don't they receive more than most other beneficiaries?
But I forgot, they are diligent voters, aren't they?

Alex: could you please remove

Alex: could you please remove my comment from 4,19 am, does not make sense now, as it was in response to a prior comment which you obviously deleted.(UGGGG boot ugg etc.) right....Libertarian MPs.....yeah right.... re right....Libertarian MPs.....yeah right....


Give me evidence to refute

Give me evidence to refute my post against your statements, Steven. I have completely discredited your view, it's up to you to try and save your untenable position.

@Rob: you cant magically cure

@Rob: you cant magically cure do it in the short term would need massive Govn intervention and destroy just about everything else, and in due course jobs as well.

Further there will always be some unemployed if only those in the wrong place with the wrong skills with not enough intelligence for the particular job...


Its certainly a thing to look at is to see if that trend is also happening in other countries. If it is it maybe "natural" or a systematic way to reduce the dole numbers....I'd probaby go with the latter I admit.

Age of population over 65.

2006 = 12.3% over 65...and the kicker, 2031, 22.3% almost double, but by 2051 its 26.3%....over double.

so 495,000 over 65 in 2006 , 508,000 for 2009, rising to 1,079,000 and 1,325,000 by 2051....

and why do ppl think that voting block wont vote themselves anything they want? after all they wont be around to pay for it.

@Mark H, there are 2.6million NZers between 15 and 65 - 1.8million, - 1.7million - beneficieries = < 0, does not compute.

Allowing for beneficieries and non-workers I think that's 1.7~1.8million total workers of all types....but Im willing to be corrected if you have better data, it should be the in the Govn stats somewhere.

is 2.6million of working age.....

2.2million employed...

And I think you are wrong on who creates wealth or wastes wealth. Exporters create wealth...they bring in $, the rest just churn it or make individual wealth for themselves....that isnt wealth for whether its govn employes churning or private churning...its non-productive in terms of National wealth generation. What wastes wealth is shipping $NZD out to buy crappy(TM) imports or as profits for foreign owned NZ companies....

@Mark H, no you have

@Mark H, no you have linked to a fringe economic website, that isnt evidence thats at best minor opinion. There are more than enough other websites that shoot those points down, my repeating them here isnt necessary, my position and my vote is mine and determined on more reasonable grounds. just remember how well the Libertarian's did in the last election......1000 votes, even Destiny church and the Bill and Ben party bettered that.....let alone mainstream parties....

@Rob: you cant magically cure

@Rob: you cant magically cure do it in the short term would need massive Govn intervention and destroy just about everything else, and in due course jobs as well.

Further there will always be some unemployed if only those in the wrong place with the wrong skills with not enough intelligence for the particular job...


Its certainly a thing to look at is to see if that trend is also happening in other countries. If it is it maybe "natural" or a systematic way to reduce the dole numbers....I'd probaby go with the latter I admit.

Age of population over 65.

2006 = 12.3% over 65...and the kicker, 2031, 22.3% almost double, but by 2051 its 26.3%....over double.

so 495,000 over 65 in 2006 , 508,000 for 2009, rising to 1,079,000 and 1,325,000 by 2051....

and why do ppl think that voting block wont vote themselves anything they want? after all they wont be around to pay for it.

@Mark H, there are 2.6million

@Mark H, there are 2.6million NZers between 15 and 65 - 1.8million, - 1.7million - beneficieries = < 0, does not compute.

Allowing for beneficieries and non-workers I think that's 1.7~1.8million total workers of all types....but Im willing to be corrected if you have better data, it should be the in the Govn stats somewhere.

is 2.6million of working age.....

2.2million employed...

And I think you are wrong on who creates wealth or wastes wealth. Exporters create wealth...they bring in $, the rest just churn it or make individual wealth for themselves....that isnt wealth for whether its govn employes churning or private churning...its non-productive in terms of National wealth generation. What wastes wealth is shipping $NZD out to buy crappy(TM) imports or as profits for foreign owned NZ companies....

@David: "a consumption Ponzi Scheme",

@David: "a consumption Ponzi Scheme", very well put....I hadnt considered it like that ie a PONZI but yes I agree....


No <b>Steven</b> you link me

No Steven you link me to the evidence against. von Mises just had a very respectable write up by the Wall Street Journal, you show me the weight of your evidence.

Again, you made a statement, I destroyed that statement with facts, citing the Community Reinvestment Act. Balls in your court ... The system I advocate frees you from me, and me from you. The tyranny of the majority you tie me to enslaves me to financing your life choices, even though I have a fundamental disagreement with your world view, so you better bloody well give me the evidence that allows you to enslave me. (Hint: you can't. Freedom of the individual is sacrosanct).

Ludwig von Mises predicted this crise decades ago, charted the exact causes and course it has taken. He also prescribed the solution, which our Western governments have refused to follow, instead following Hayeks hypothesised, now proven, Road to Serfdom, intruding the State even further into our economies and our lives, and are thus taking us to economic ruin, and societal ruin. Read von Mises writings, they are irrefutable.

Mark - the reason you

Mark - the reason you have no votes, is that there aren't many Kiwis silly enough to think that unfettered selfishness, particularly when accompanied with 100% blame-shift, is much of a solution.

Most of us see it as chip-on-shoulder immaturity.

More primary school debating from

More primary school debating from Powereddown. I refuted Steven's lies with facts, forget the Libz, give me an actual argument, based on facts. The crisis was caused by lack of laissez faire, the Austrian School of Econmics predicted the crisis, and got it completely right: their solution, laissez faire, is the correct one, not more government tyranny which caused the crisis in the first place.

@Mark H: stating the bleeding

@Mark H: stating the bleeding obvious isnt anything special....Steven Keen and Minsky also clearly pointed to the pending doom...and these are on the opposite side of the economics spectrum...

The WSJ has also come out defending its in effect reader faithful, did you really expect ppl will believe the bankers rag paper to denouce its clienttelle? be serious.

If you want links there are some off PK's blog...some interesting pieces...

"even though it has been extensively debunked." oh look by Harvard...

"The Community Reinvestment Act (CRA) encourages banks to expand mortgage lending in the communities in which they have branch offices, subject to maintaining overall levels of financial safety and soundness. Some have argued that this regulation forced banks to lower their credit standards and engage in riskier mortgage products in order to extend credit to lower-income individuals, who perhaps should not have received such loans. However, data provided by the Home Mortgage Disclosure Act (HMDA) reveal that loans covered by the CRA accounted for only a fraction of mortgage lending to lower-income borrowers and neighborhoods. This is
especially true of higher-priced, or subprime, mortgages.

Now I have to work....such fun things on a Sunday....


Well well well...what have we

Well well well...what have we here then...another wave of urban sprawl set to ruin the countryside in the UK ...the benefits of immigration! Sod off.
Just the sort of garbage we shall soon face from our hopeless moronic govt. Open the gates and let them in..another million immigrants should pork the property scheme long anough to con the stupid voters into sending these fools back into power again and again. Nothing like a burst of building activity is waving a magic wand....all sorts of positive looking numbers for the poodle media to paste on the front pages. It's the 'real strategy' being cooked up in the Cabinet and not the humbug blather English has been hawking. Expect a repeat of the splurging idiocy. Greater debt for more Kiwi families...unaffordable housing for decades to come...No worries for some right John?

YoungTel, Invalid's Benefit breakdown: Psychological

YoungTel, Invalid's Benefit breakdown: Psychological or psychiatric conditions 29%; Intellectual disability 13.1%; Musculo-skeletal system disorder 12.1%; Nervous System disorders 7.6%; Cardio-vascular disorders 7.6%; Accidents 5%; Cancer and congenital conditions 7%; other disorders and conditions 18.7%.
Sickness Benefit breakdown: Psychological or psychiatric conditions - 40.5%; Musculo-skeletal system disorders 14.6%; Accidents 8%; Cardio-vascular disorders 5.6%; Pregnancy-related conditions 2.3%; Other disorders and conditions 29%.
Source: MSD Benefit Fact Sheets September 2009

Houston, we have a mental

Houston, we have a mental health problem! I wonder what percentage of those relate to chronic alcohol and drug abuse - my guess, probably over 90% of them.

Wally, what we are now

Wally, what we are now going to witness in Britain is 'phase two' of the deliberate process of social and environmental destruction. 'Phase one' has involved displacing the historic population from the major urban centres and into the towns and smaller cities in the hinterlands. Already under major pressure the quality of life for people in those places - to which they have effectively been 'displaced' - will now fall further. It is probably fair to say that we have not seen utter contempt and loathing for the 'indigenous' population of those islands since the events that led to Queen Boudicca's Iceni uprising during the rule of Emperor Nero.

Mark - the crisis was

Mark - the crisis was predicted by the likes of me, to the decade, three decades ago, and to the year, one decade ago.

I did it on tracking the rates of extraction of real resources (particularly the linchpin - energy), and the need for fiat wealth to eventually buy something. Growth of same had to overrun the supply of real stuff, and therefore would be expressed in terms of existing 'assets' being valued more and more optimistically.

That bubble had to pop, and every re-creation from here on will do so too.

The sub-prime was a symptom, not a cause, and continued fascination with it is merely continued cognitive dissonance. Laissez faire or any other approach won't change anything - you and Sue Bradford are just arguing about who gets what share of the cake, folk like me are pointing out that it's a finite - and dwindling - cake.

When I find my audience not comprehending, I tend to lower the level at which I pitch the content. I used to read out 'One Fish Two Fish', but that was before folk like you decimated the resource - now it's 'One Fish if you own quota - but off a diminished base'.

The last tree was chopped down on Easter Island, by somebody. That symbolically represented the end of that civilisation, although it must have been obvious beforehand. What was going through his mind? If anything?

Same question is asked by the likes of me, of the likes of you. Quoting other committed tree-choppers doesn't address the real problem. I'm simply telling you we are half-way through the forest, and chopping at an exponentially-accelerating rate.

I'm away now - gotta bolt the swords to me hubcaps..........

@powerdownkiwi: "the need for fiat

@powerdownkiwi: "the need for fiat wealth to eventually buy something" and this is one of the nasty things....really nasty...paper valueless wealth not used for productive enterprise in the real world/economy now is rushing into the real economy...and the effect is I think disasterious/ruinous...for joe the likes of me.

Sue there's a right (or should I say left) of the reasons Im not re-newing my Green Party membership is they are too socially and not green focused. Really the loony left are just as destructive as the rabid right....AGW doesnt exists because that threatens workers jobs....etc etc....AGW doesnt exist because that threatens businesses etc etc....same tune slightly different words...I find their ignorance and stupidity mind knumbing. They simply ignore as you point out the cake is or will very shortly get smaller...and this is where I part with PK, we cant spend billions upon billions for years trying to get un-employemnt down...because we cant recover and "grow" lack of energy wont let us...

Boy are there going to be some p*ssed ppl when that light goes on above their heads...


Quite right (pun intended!) There

Quite right (pun intended!) There was a time when it was legitimate to fight over the cake - and the Labour and Communist movements were spawned in that time.

It was also legitimate to fight against environmental degradation, and the Green movements were likewise a product of their times.

They could only fight a rearguard action though, always defending - a bit like black in chess. That could only buy time, and the time had to be used to educate the populace.

That time has now run out. If anything, the populace is less aware that they were in the early eighties, and more a collection of good little credit-card-waving consumers.

Led by folk who think the answer is to consume more, voted in by the shallow-thinking (Down with the Nanny State, and who was it banned cell-phones in cars, again, if not the Nanny State?) mass. Orwell described them as "four legs goooood, two legs baaaaad", Bach described them as 'Breakfast Flock". Same mass.

Those of us who have seen that the crash is/was inevitable, have spent the recent time demonstrating how to live 'beyond the Thunderdome", and interestingly, it beats 9-to-5 hands down.

In Libertarian (read: 'no') hands, it's Mad Max'. Under good leadership, a society can at least address impactive paradigms with some cohesion, but I wouldn't rely on 'market forces'. Too slow, too dumb, and only reactive, never proactive.

Interesting (!) times.

Personally I think PK is

Personally I think PK is losing it here, there is nothing to recover to....drastic changes to the global economy are here, continuning to re-nail the norwegian blue to the purch is a waste of time.

So throw even more Trillions at it...sadly its munted mate, let it sink and collect the lifeboats afterwards. I just cant see how this is going to work out well myself....

"Under good leadership, a society can at least address impactive paradigms with some cohesion" - agreed...except I think its going to be draconian leadership....I think the best example is looking at Russia after the Collapse of the USSR. In extremis I wouldnt even be surprised if elections in NZ are canned during the coming crisis....The pollies will get together and look after themselves IMHO.


Wonder which oligarchs we imprison?

Wonder which oligarchs we imprison?

<b>Bernard Hickey : Bollard Beats

Bernard Hickey : Bollard Beats the World ( NZ Herald , today ) If this shiny new lever , can achieve all that is promised , I will apologise to Alan Bollard , for the multitude of mean things that I have said about him , on this site ! If ! And for the sake of our fair land , I pray that I have to make a humungous grovelling " sorry " to the fellow . 'Cos we are all in the game . We all need some workable solutions to the unbalanced economy we have built . Good article , Bernard . Pity that it didn't show up here , on ............ummmmmm , your website ! Cheers , big guy .

Will we see the masters

Will we see the masters of the universe, the stone cutters themselves show their faces and let us all see how they jerk the puppets in the Beehive this way and that? Probably not but it would make for a fun end to the year. Bollard looking like a moody ten year old asking "can I play with my TOYS" but "NO" he's told. The bubble rumbles on sucking more and more capital and freshly printed credit in from fools who read the shite from the banks and believe the spin. Don't worry too much Alan, the economy is is a punch bowl of opportunity with a housing turd floating in it and the best advice is to drop the rotting thing over a cliff edge.

Might as well include the

Or maybe this link

Or maybe this link

with this quote

Agent Daryl Spense said the market was strong.

"It's back to where it was in late 2007. There's an excess of demand over supply."

Has anyone thought (?) to

Has anyone thought (?) to divide the available square-meterage by the population?

All we've done is build huge houses for aging baby-boomer couples to rattle around in.

Watch for a repeat of the dividing of mansions into flats - one per ensuite, at a guess.

Powerdownkiwi - its already happening

Powerdownkiwi - its already happening in Britain.

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