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Top 10 at 10: South Canterbury losses?; China bubble to pop?; Mad Butcher vs Chrisco; Dilberts
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 Tuesday's Top 10 at 10 to bernard.hickey@interest.co.nz 
1. New losses for South Canterbury? - David Hillary has highlighted in his 'Lost Soul' blog the potential for more losses at South Canterbury Finance that would cause it to breach the capital adequacy requirements in its prospectus. The most interesting bit is the disclosure from the Sunday Star Times that three prominent Auckland bars (Lenin, Minus5 and O'Carrolls Irish Pub) were put into receivership by South Canterbury Finance last week. What on earth was Allan Hubbard lending money to a bunch of Viaduct bar owners?
Any more losses will put SCF in breach of its capital adequacy requirements in its trust deed (see p 23 of the prospectus), unless the company can book profits from other sources to offset the losses. The lack of provisioning calls into question whether the accounts of SCF, after 30 June 2009, are true and fair, and whether SCF is engaging in accounting trickery to avoid breaching its trust deed and to keep the trustee off its back. However, stories of SCF losses have been emerging since 9 days after it registered its prospectus:
- On 29th Oct 2009, it was reported 'South Canterbury Finance is the third-biggest PGC shareholder with just over 4 per cent, preserving its previous more than 4 per cent stake by taking part in the rights issue.' On 30th June 2009 the shares in PGC closed at $2.03, today they are about $0.48, and the rights were not of significant value. This translates to about $6.4m in losses for South Canterbury Finance on this shareholding.
- On Friday November 13th, the front page story in the National Business Review (paper edition) provided a story about South Canterbury Finance subsidiary Face Finance repossessing three helicopters of Auckland company Heliflight (a fourth was crashed damaged). Helicopters aren't cheap, and although these helicopters, used for pilot training are probably at the cheaper end of the market, they could cost about $300k each. 'Mr McKay [Heliflight Managing Director] told NBR he decided to sell Heliflight as a going concern in July after his wife fell sick. He said he had a deal on the table but Face Finance "hijacked" the process and proceeded to try to sell the Whitireia contract and the helicopters to another buyer. That never eventuated.'
- Today's Sunday Star Times (15 November), has an article by Greg Ninness titled Kiwi pubs hard hit by the recession, where it was reported: Meanwhile, problems in the hospitality sector have highlighted the riskier lending practices of South Canterbury Finance. Although SCF likes to promote itself as being mainly involved in so-called heartland industries such as farming, recent collapses have exposed the company as a significant player in the bar and pub business, which is regarded as high-risk even in good times.As well as being the major secured lender for the Lenin, Minus 5 and O'Carroll's bars which went into receivership last week, SCF was the major financier of the Cargo restaurant and bar chain which was tipped into receivership in July. The company operated 12 outlets around the country, including the Boiler Room and Minus 5 in Queenstown and Merivale Ale House in Christchurch. The receivers' report shows the company had debts of $10.1m, with $7.8m owed to SCF.
So, it appears that, SCF although it has stopped making provisions for bad loans, hasn't stopped experiencing bad loans. Withreceiverships in early November, one has to ask why there were no provisions in July, August, September or October before the 20th?
2. Hear hear - Brian Gaynor hammered away again at the Securities Commission in his NZHerald column on the weekend, pointing out that our watchdog seems to have ceded its role to Consumer magazine and that it failed in its monitoring of Hanover Finance. Too right.
The important issue here is that the industry's main regulator, the Securities Commission, continues to allow companies to make optimistic and unrealistic comments in the front sections of a statutory document even though these statements are inconsistent with the main body of the report.
The integrity of these statutory documents is extremely important because shareholders and directors of insolvent companies will nearly always prefer a moratorium over receivership. This is because a receiver can take legal action against former directors, whereas there is far less prospect of a legal action under a moratorium.
Hanover, its shareholders and directors were particularly susceptible to legal action because of the $86.5 million of dividends paid in the two years to June 30 last year. The moratorium vote almost certainly removed the prospect of any legal action in relation to these huge dividend payments.
3. Astonishing stories - My favourite television programme at the moment is Save our Home. It's a TVNZ reality show where couples who are on the verge of losing their homes because of big debts are coached on how to save their homes. Last week's episode featured a wealthy Auckland couple who had binged on debt with an investment property and an overpriced section. It's the colour of the stories I love. You get to see what people really think about debt (we love it!) and property. It's on Wednesday nights at 8pm on TVOne. Congrats to the producers, who are providing a real service to the nation.
Lisa and Stu are bright enough to be big earners, but are clueless about their cash outflow, and they've just made a mistake with a section they can't afford.
4. Hampsta vs Chrisco - Rob Stock at the Sunday Star Times has an excellent backgrounder on the dramas in the Christmas hamper market in New Zealand. New entrant Hampsta (The Mad Butcher) is very grumpy about Chrisco and vice versa, it seems.
The Mad Butcher, a driving force behind the launch of Hampsta in August last year, alleges Chrisco's 2010 meat hampers cost between 44% and 56% more than they would at its stores. Competition between Chrisco and Hampsta has since become intense. The newcomer energetically denounces its rival at every opportunity while Bradley portrays Hampsta as a gadfly. Hampsta, which offers a pre-paid debit card, had an opportunity for more sniping when Chrisco launched a pre-paid Visa card in response before Visa approved it. (Mad Butcher CEO) Morton was still sniping last week. "We talk to their suppliers, so we know they are hurting."
5. Lobbyists win - It shouldn't surprise anyone who looks closely at the US political system, but this piece in The Nation on how Wall St corrupted the latest legislation on deriviatives reform is still an eyeopener. HT Gertraud via email.
The "reform" legislation approved by the House Financial Services Committee on October 15 is a fiesta of exemptions, exceptions and twisted legalese that effectively defeat the original purpose. Only experts can divine the actual meaning of the bill's densely worded provisions, and many of them have reacted with disgust. Who drafted this dubious piece of legislation? Bankers (or their lawyers) did. The leading sellers of derivatives are an exclusive club of five very large financial institutions--Citigroup, JPMorgan Chase, Bank of America, Morgan Stanley and Goldman Sachs--that hold 95 percent of the derivatives exposure among the largest banks (the total contract value exceeds $290 trillion). These are the same folks who toppled the global economy and compelled government to intervene with gigantic bailouts. Michael Greenberger, a University of Maryland law professor and veteran federal regulator, studied the House committee's 187-page bill and detected the fine needlework of Wall Street lawyers. "It had to be written by someone inside the banks," Greenberger said, "because buried every few pages is a tricky and devilish 'exception.' It would greatly surprise me if these poison pills originated from anyone on Capitol Hill or the Treasury." A well-informed Congressional source confirmed that the original language in the draft legislation was written by financial-industry experts. It "was probably written by JPMorgan and Goldman Sachs," he told me, "and possibly the Chicago Mercantile Exchange."
6. China collapse ? - The conventional wisdom is that China will pull the world out of recession and will power strong growth in commodity producing countries such as Australia, our largest trading partner. But Eamon Javers at Politico.com highlights a view from billionaire hedge fund investor Jim Chanos (the guy who blew the whistle on Enron) that China's growth is false and vulnerable to collapse. HT Gertraud via email.
There's a growing group of market professionals who see a different picture altogether. These self-styled China bears take the less popular view: that the much-vaunted Chinese economic miracle is nothing but a paper dragon. In fact, they argue that the Chinese have dangerously overheated their economy, building malls, luxury stores and infrastructure for which there is almost no demand, and that the entire system is teetering toward collapse. Chanos and the other bears point to several key pieces of evidence that China is heading for a crash. First, they point to the enormous Chinese economic stimulus effort "” with the government spending $900 billion to prop up a $4.3 trillion economy. "Yet China's economy, for all the stimulus it has received in 11 months, is underperforming," Gordon Chang, author of "The Coming Collapse of China," wrote in Forbes at the end of October. "More important, it is unlikely that [third-quarter] expansion was anywhere near the claimed 8.9 percent." Chang argues that inconsistencies in Chinese official statistics "” like the surging numbers for car sales but flat statistics for gasoline consumption "” indicate that the Chinese are simply cooking their books. He speculates that Chinese state-run companies are buying fleets of cars and simply storing them in giant parking lots in order to generate apparent growth. Another data point cited by the bears: overcapacity. For example, the Chinese already consume more cement than the rest of the world combined, at 1.4 billion tons per year. But they have dramatically ramped up their ability to produce even more in recent years, leading to an estimated spare capacity of about 340 million tons, which, according to a report prepared earlier this year by Pivot Capital Management, is more than the consumption in the U.S., India and Japan combined. This, Chanos and others argue, is happening in sector after sector in the Chinese economy. And that means the Chinese are in danger of producing huge quantities of goods and products that they will be unable to sell. The Pivot Capital report was extremely popular in Chanos's office and concluded, "We believe the coming slowdown in China has the potential to be a similar watershed event for world markets as the reversal of the U.S. subprime and housing boom."
7. Double down - Paul Krugman is now suggesting a second stimulus programme to spend US$300 billion to boost employment, Calculated Risk reports. 
8. Chinese blockages - Alan Kohler at BusinessSpectator has an interesting view on why China might not manage a smooth transition from export powerhouse to consumption powerhouse. Here's his conclusion:
So, two things need to happen at once for a dramatic increase in Chinese consumption: corporate ownership reforms that would force more profits to be distributed to the people and more political democracy so that the Chinese leadership is driven to distribute more money in the form of welfare transfers.
In other words the unelected political and corporate elites of China are hoarding the cash. Unless they let go of it, China won't become a consumer society. And with the export model dead, that means lower growth and lower commodity imports.
9. No Fed hike until after 2011 - Rolfe Winkler at Reuters points out that the Fed's promise to keep rates low for an extended period might last until after 2011. I agree with his conclusions here.
I've argued in this space many times that the Fed is trapped. Our monetary system, which is fueled by credit expansion, simply doesn't work in reverse. To avoid deflation, credit must always be expanding in the aggregate. If the private sector won't borrow, the public sector must"¦.and vice versa. If they de-lever in tandem, we get deflation. We're told to be panicked by the prospect of deflation and yet the solution we've been given "” unprecedented public credit expansion + inflation of new asset bubble "” leaves us worse off than when we started. Alan Greenspan's 1% interest rates inflated a disastrous credit bubble. We think 0% rates and quantitative easing will lead to a different result?
10. For no good reason - The Onion asks if Americans should close down the national money hole. My favourite line is when the lady who likes the money hole says she loves it when gasoline is poured into the hole with the money and set alight.
In The Know: Should The Government Stop Dumping Money Into A Giant Hole?
69 Comments
Three cheers for Brian Gaynor
Three cheers for Brian Gaynor : Hip-Hooray , man . Brilliant . And a bouquet to NZ Consumer magazine too .
Worth a look - Bernard
Worth a look - Bernard Hickey: Bollard leads world
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1060...
Good try Dr B. about time, what took you so long? Almost a four year wait... A welcome step in a better direction, however, methinks "lead" is overstating it a bit Bernard, considering this is akin to tinkering and we still don't know how 'loop-hole' tight it is. Isn't this the real problem though:
DOLLAR DECEPTION: HOW BANKS SECRETLY CREATE MONEY, Ellen Brown, July 3rd, 2007
http://www.webofdebt.com/articles/dollar-deception.php
"Price inflation is only one problem with this system of private money creation. Another is that banks create only the principal but not the interest necessary to pay back their loans. Since virtually the entire money supply is created by banks themselves, new money must continually be borrowed into existence just to pay the interest owed to the bankers. A dollar lent at 5 percent interest becomes 2 dollars in 14 years. That means the money supply has to double every 14 years just to cover the interest owed on the money existing at the beginning of this 14 year cycle."
Isn't this a real solution, NZ could REPEAT again:
WAKING UP ON A MINNESOTA BRIDGE: HOW TO SOLVE THE INFRASTRUCTURE CRISIS WITHOUT SELLING OFF OUR NATIONAL ASSETS, Ellen Brown, August 4th, 2007
http://www.webofdebt.com/articles/infrastructure-crisis.php
"Located among the British Channel Islands just south of Great Britain, Guernsey is so small that it has been able to stay under the radar long enough to try some experimental financing without raising the hackles of the international banking establishment that is normally in control of such things. When the Guernsey government needs funding, it simply issues the money it needs. In 1994, Dr. Bob Blain, Professor of Sociology at Southern Illinois University, wrote of this remarkable island:
In 1816 its sea walls were crumbling, its roads were muddy and only 4 1/2 feet wide. Guernsey's debt was 19,000 pounds. The island's annual income was 3,000 pounds of which 2,400 had to be used to pay interest on its debt. Not surprisingly, people were leaving Guernsey and there was little employment.
Then the government created and loaned new, interest-free state notes worth 6,000 pounds. Some 4,000 pounds were used to start the repairs of the sea walls. In 1820, another 4,500 pounds was issued, again interest-free. In 1821, another 10,000; 1824, 5,000; 1826, 20,000. By 1837, 50,000 pounds had been issued interest free for the primary use of projects like sea walls, roads, the marketplace, churches, and colleges. This sum more than doubled the island's money supply during this thirteen year period, but there was no inflation. In the year 1914, as the British restricted the expansion of their money supply due to World War I, the people of Guernsey commenced to issue another 142,000 pounds over the next four years and never looked back. By 1958, over 542,000 pounds had been issued, all without inflation.
Guernsey has an income tax, but the tax is relatively low (a "flat" 20 percent), and it is simple and loophole-free. It has no inheritance tax, no capital gains tax, and no federal debt. Commercial banks service private lenders, but the government itself never goes into debt. When it wants to create some public work or service, it just issues the money it needs to pay for the work. The Guernsey government has been issuing its own money for nearly two centuries. During that time, the money supply has mushroomed to about 25 times its original size; yet the economy has not been troubled by price inflation, and it has remained prosperous and stable."
What's good for the Guernsey, could be good for the Kiwi, AGAIN:
http://publiccreditorbust.blog.com/2009/09/11/michael-joseph-savage-expl...
Why not?
Jacko - useful comment here, it got me delving back into 'Web of Dept', the NZMEA submission with the North Dakota State Bank solution, and then Iain Parker's blog:
http://www.interest.co.nz/ratesblog/index.php/2009/11/13/opinion-tax-kiw...
Roger - I reckon ND would be too cold for you, maybe try Guernsey - no CGT! Maybe if they did they'd be below the 20%.
7. I have time for
7. I have time for PK, but here I think he is wrong, he's right to want to create jobs, but they have to be real jobs. Yet another stimulus means forcing a recovery with what they/we have, the status quo....so [re-]creating similar jobs to the jobs ppl have had over the last 5~30years only makes sense if you can carry on as we have done over the last 5~30 years. I think lack of energy ie peak oil means a huge re-think, new direction(s) and expenditure to do it...there need to be new, different jobs....so re-training etc. Just getting ppl back into work by say 1014 in time for yet another recession and yet more stimulus and yet more debt just isnt going to work at some point.
This is also one of the reasons I also think Obama is a plonker...he's wasted his good will from the American ppl to really change things in the short time frame he has...this time or next time round its going to be unpleasant...In fact I agree with PK on Palin being the next President, the backlash has to be huge and that means Obama wont see past 2012...
regards
regards
Les : We rarked up
Les : We rarked up Bernard yesterday , for putting that piece in the NZ Herald , and not here , amongst the more evolved primates . The upshot is , Bolly has had a grand idea , at first blush . 4 years to wait , you reckon . So it cost us $ 2 000 000 for that inspiration from Alan . But it does seem to be a doozy . Let's crack on with the arguments pro & no !
Bernard - You missed the
Bernard - You missed the 4th advantage of the RBNZ policy. If floating mortgages are lower than fixed, the ratio of floating to fix will rise. This will make any increases in the OCR more reactive on the economy. We wont have the short term interest rates going thru the roof, drawing in hot money while the effect on the domestic economy is nil as people sit on their 2 yr fixed.
Roger - it'd have been
Roger - it'd have been laudable if it'd been his 'unique' idea, but it ain't. As I said, a step in a better direction, how effective it'll be, time will tell. Thing is, there are more functionally effective ways to deal with the problem, again nothing 'unique'. Few things ever are. What would be unique, on both sides of parliament, is sufficient WILL for nettle grasping and more positive change. So scooting off still might be your best way, but if you try ND - dress warm.
Les : Better that Bolly
Les : Better that Bolly flags the idea , than do a John Key " No " to any suggestion within ear-shot . But let us back up the Bolly folly with some fiscal reform from the Gumnut too . No one thing in isolation . Get several " shiny new levers " operating together . ( ND is not my choice , per say . But an example of how dislocated real estate values in the US are from here in NZ . A nice rolly-polly corn-fed lass will keep one warm through the long winter nights . Or spend their winter down here , as Sore-Loser pointed out . )
Les Rudd, I love the
Les Rudd, I love the Guernsey example. I had no idea that they operated in such a fashion, seems to make total sense.
Which means there's no chance it'll be implemented here, sadly.
Bollard is absolutely on the
Bollard is absolutely on the right track, the question is if the cat is too far out of the bag.
Anne Tolley is doing her bit too, don't forget. Literacy in schools may lead to a whole echelon quoting "neither a borrower nor a lender be...."
Here in Nelson SCF have
Here in Nelson SCF have pulled the pin on at least one restaurant in the last 6 months........
Anyone here with any experience
Anyone here with any experience or knowledge of:
1. investing money in SCF debentures about August this year, and then pulling out of the investment when SCF was downgraded? (they say no investors pulled money out)
2. any borrowers getting into trouble in July to November 2009 (SCF made no provisions between 30 June and 20 Oct)
I'd like to hear anything more
Treasurey estimate that National's Emission
Treasurey estimate that National's Emission Trading Scheme , generous in free carbon allowances to big polluters ( i.e. Rio Tinto's aluminium smelter at Bluff ) will add $ 110 billion to Gumnut debt by 2050 . ........ . Yikes !
Mozart - yeah, like you've
Mozart - yeah, like you've taken another 'Red Pill' eh. (Or was it blue, I can't recall.) Plus, nil inflation, huh. That'd be the push-back on this kind of public-credit thingy, but as explained in the other 'Web of Debt' article I quoted, in one sense it's zero-sum (or effectively better) in comparison to government selling bonds to banks in return for 'currency' and interest bearing debt, as they just skip the bond sale and issue currency direct - but the the "or effectively better" factor evenuates as currency is only issued to meet demand for requisite public goods and services - and there's not so much of an 'inflation hunt' for the 'interest' part of the transaction - as there ain't any interest coverage to hunt for.
One thing I found interesting is, this system for public credit sitting side-by-side with commercial banking for private credit. My guess is any inflationary effect emanating from private credit is offset by the a deflationary effect by the public credit component? Dunno, just guessing. Anyway, I wonder how this kind of 'combined' public and private credt system would affect the value and volatility of NZD and prospects for us as a small nation with an export imperative?
3. I watched the same
3. I watched the same show. The best bit was when the young partner/wife says to her partner/husband about the section which was losing value ''But you said it was a sure thing". It would appear not.
* 9 Rolfe Winkler is
* 9 Rolfe Winkler is absolutely correct about the Fed I have said as much the same for many months. The Fed is trapped and is unable to withdraw the support. This is Japan all over again and some. A withdrawal 2011 perhaps a baby step try 2016-19. Deflation is evitable and there is no way to avoid it. For those who want to learn more read Robert Prechters work on deflation its fascinating stuff
Andy, I am a fellow
Andy, I am a fellow Nelsonian.
I know of one new bar they have bankrolled in the last few weeks down here...
Mozart - this is interesting
Mozart - this is interesting too. WoD gives us a mench in this article:
ANOTHER WAY AROUND THE CREDIT CRISIS: MINNESOTA BILL WOULD AUTHORIZE STATE BANKS TO "MONETIZE" PRODUCTIVITY
http://www.webofdebt.com/articles/minnesota-bank-proposal.php
"The solution to this conundrum is to authorize banks to monetize the production of real goods and services, creating supply and demand at the same time. There is substantial precedent for this approach, stretching as far back as the early American colonies:
* In the early eighteenth century, the colony of Pennsylvania issued money that was both lent and spent by the local government into the economy, producing an unprecedented period of prosperity. This was done not only without producing price inflation but without taxing the people.
* When Abraham Lincoln needed money to fund the American Civil War, rather than paying 25 to 36 percent interest charges, he avoided going into debt by printing Greenback dollars that were "legal tender" in themselves. Again, historians of the period attest that this issue of Greenbacks was not responsible for price inflation.
* A successful infrastructure program funded with interest-free "national credit" was instituted in New Zealand after it elected its first Labor government in the 1930s. Credit issued by its nationalized central bank allowed New Zealand to thrive at a time when the rest of the world was struggling with poverty and lack of productivity.
* The island state of Guernsey, located in the British Channel Islands, has been funding infrastructure with government-issued money for over 200 years, without creating price inflation and without government debt."
Why not eh?
3. Bernard, this line of
3. Bernard, this line of yours; "... featured a wealthy Auckland couple .." is part of the problem! They were in my opinion near bankrupcy! There combined income was not sufficient to sustain the three mortgages (x2 houses and a section) - and the only reason they hadn't gone under yet - was because they hadn't yet settled on the section! So, they were hardly wealthy - as they had no assets, only debt! Any "assets" were contained in unrealised potential capital gains. And the section was going to be a certain capital loss.
The real estate agent "helping" them seemed to offer a 'false hope' regarding the potential capital loss on the section - and recommended they only sell the property (the section) that was going to produce the loss, rather than sell the properties that might be able to produce the gain. Unbelievable.
I don't know how long ago that program was filmed, but it would be very interesting to find out what eventually happened to this couple - because the program did mention that after 3 months the section had not sold. It's possible they will have had to sell one of the houses and are still perhaps struggling with the remaining debt on the other house + section.
I thought they were cashflow positive but heavily debt laden (likely a fair amount of hire purchase debt as well) - and any minor disruption to income would have had very severe consequences.
Les : You been stirring
Les : You been stirring up Walter again ? The lad's been quiet all weekend ! W.Kunz : come on and play with the other children , don't sulk , boy . Time to go kindergarten !
Ive got friends with investments
Ive got friends with investments in SFC both pulled out in October. I will ask them how they got on this evening.
Not sure if anyone noticed,
Not sure if anyone noticed, but the China article is really scary if true. China is seen as the only significantly growing economy in the world at the moment (and Australia because of exports to China picking up again).
If Chinese growth is really a mirage in the desert like Dubai was, it is the biggest single risk to the world economy. A collapse of the illusion would be guaranteed to be catastrpohic.
If China suddenly needed to access funds to cover themselves, the USD would collapse for a start as they cashed in the assets they have accumulated the last few years.
Consumer credit card debt is
Consumer credit card debt is causing americans to spend 15-20 billion dollars a month just on the interest on OLD credit card debt. It is helping nobody to siphon off any countries consumers wealth on old credit card debt.
Just get consumers to pay down their debt and local economies would stimulate, if it takes zeroing out interest charges on old debt to get debtors to pay down their total debt, that is superior to just having them give up on the debt.
http://www.thecatwhoatechasebank.com
http://www.bloggersagainstchasebank.com
http://www.daily-protest.com
Have you all heard of
Have you all heard of "Parallel Foreclosure"?
http://dailypuma.blogspot.com/2009/11/chase-banks-parallel-foreclosure-p...
Where do they get the
Where do they get the cash to pay down the principal, Allessandro? Then what? Take American's credit cards off them?? Like, that's going to happen! I thought it was all about the consumer spending us out of this mess? No consumer credit; no consumer spending; no US economy.The real US economy left the room years ago, and it speaks Mandarin.
Alot of those blogs read
Alot of those blogs read to me like people lving beyond their means looking for every avenue/excuse under the sun to continue to live beyond their means.
What grass roots Americans need to come to terms with is that their temporary affluence was always a crock. Same goes for many Kiwis. Consumerist expectations outgrew the reality of what was actually affordable based on the illusion of unrealised capital gains.
What I can't understand is why someone who never owned a majority share of an asset they are living in becomes so surprised when the majority owner comes calling. The whole notion of 'equity loans' was a nightmare waiting to happen. If a person wanted to release equity in a property, the only way to legitimately do that is to sell it and actually realise (i.e. earn) that equity.
Kate & Harriet, As always,
Kate & Harriet,
As always, precisely hitting the point! I think you need to start your own blog and you'll have a good following rather promptly... (call it the "good 'ol fashion common sense" blog :)
Oh, wait, start your own new political party and go for parliament I say! I would finally have some alternative worth considering to vote for next time round.
The mandarin economy is going
The mandarin economy is going to implode in turn. It's built on the same unsustainable forcings that the USSR - indeed all of us - used.
Watch the desertification, the erosion, the aquifer depletion, the numbers of rivers which fail to make it to the sea......
Their 'Pollies' survive by peddling hope - when reality bites, expect them to lose control.
When? Less than a decade.
The knock-on should be a levelling of the income disparity with our cuzzies to the west. Them down, not us up.... Should make Brash happy.
Kate : You nailed it
Kate : You nailed it . People behaving frivolously , irresponsibly , and then not taking responsibility for their actions . Adults who havn't grown up . Pity them ? Yeah , right !
Cheers ctnz and Roger T
Cheers ctnz and Roger T - but as ctnz says, it's just common sense.
However, the globalisation polticians in cohorts with the elite of the finance world were hell bent on instilling an ideological 'utopian' belief system into the general population, such that few in the general population were able to "see" their own reality.
I recall watching that program "The Nanny" (Fran Drescher) over 10 years ago - where she paid off a credit card with another credit card which she paid off with another credit card - and celebrated the fact that she was getting all kinds of 'rewards' points - and thinking how hillarious that thinking was.
Problem is the comedy became reality - and the masses started thinking/acting like that!!
:-)
I aware of number of
I aware of number of hotels/bars/pubs financed by SCF, they are in distress however have not gone through yet.
This is a sector which requires high equity before the main banks will look at it.
Assuming #6 is correct (
Assuming #6 is correct ( add AEP's comments http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/657588... ) then where does that leave our friends over the ditch ???
All power to you Les
All power to you Les and other public credit advocates. Work has once again seen me down in Bulls for 5 days with limited internet access. If you bother to look the evidence from the horses mouths is irrefutable, it is heartening to see knowledgeable people have the courage to now cut to the chase as time is most certainly of the essence.
Likewise ,all power to Les
Likewise ,all power to Les re public credit.Was talking to 90 something former Social Credit candidate thru the 1960`s and we were saying that public(social) credit wasn`t ever socialist,or "funny money",not anywhere near as funny as todays finances.
@David Hilary. I could name
@David Hilary. I could name people from both classes you refer to. SCF haven't sent a statement to someone for 3 months who stopped making payments 5 months ago. (They owe approx. 1 mill to SCF.)
Presumably SCF are getting around to doing mortgee sales.
SCF needs a magician. Lovely new building in Timaru starts to look a little bit silly.
Harriet sort of asked...."Where do
Harriet sort of asked...."Where do they get the cash to pay down the principal, Allessandro? Then what? Take American's credit cards off them?? Like, that's going to happen! I thought it was all about the consumer spending us out of this mess? No consumer credit; no consumer spending; no US economy.The real US economy left the room years ago, and it speaks Mandarin."
---------------------
Not every person has credit card debt in the United States. There are waves of different kind of debtors. The key is to not get them all to give up. As those who can afford to pay down credit card debt do so, they will have more spendable money each month to actually pay for services in cash, or to make actual deposits. As real, actual liquid cash becomes more available, more local jobs will be created.
There is an actual US economy made up of small businesses. You just don't hear about it because our insipid media has Wall Street on the Brain. It is essential that money that comes from actual jobs be circulated locally before it goes to the banks to pay down debts.
As for who would want to get out of debt, there are growing legions of people upset with the banks and their recent behavior.
Have you seen the Debtor's Revolt video? http://robotsagainstchase.blogspot.com/2009/09/debtors-revolution-youtub...
I would like to suggest an additional solution as well but I don't want to make this post too long. No, consumer spending will not get out us of this mess, main street knows that wall street is whacked. Barack Obama has managed to fool his ACORN followers into thinking he is for them when he is for the banks first and foremost.
One of the ways to
One of the ways to separate Main Street from Wall Street has to do with the internet. It appears as if Wall Street has purposely prevented Main Street from actually conducting internet commerce amongst ourselves.
Lets say you have written a book and you want to sell it on the internet. One of the more logical approaches would be to approach blog owners you know and ask them to run an ad for your book on their blog. In exchange for running the ad about the book, the moment anybody were to actually purchase the book from the blog owner's blog, the blog owner would receive an instant payout commission for each and every sale.
Sounds like a reasonable trade off. Instant split commission every time someone purchases the book. Did you know what I just described is not possible!
Yet on Wall Street, there is every possible machination available for instantly trading, selling, shorting, or longing stocks. Creating profit by buying and selling shares, a process which actually adds nothing to the company's bottom line is instantly possible on Wall Street, but Main Street trying to do internet business with others on the internet in just as a timely a fashion, that is not possible.
What is wrong with that picture? Is it a conspiracy?
@Alessandro: Exactly! Encourage waves of
@Alessandro:
Exactly! Encourage waves of credit card holders to progressively surrender their debt. That's why the banks are now charging 30%, up from whatever the pittance of a charge it was ( 12%?). The time for using the carrot is gone; the stick is what will work in this environment. It's time for individual repsonsibilty to be forced onto the citizenry; one way or another.
How the Servant Became a
How the Servant Became a Predator: Finance's Five Fatal Flaws, Bill Black
http://www.newdeal20.org/?p=5330
Alessandro --can you explain why
Alessandro --can you explain why the senario with the book is not possible , please. What is stopping that happening ?
Why would you want to
Why would you want to pull out of an investment in SCF with a Govt Guarantee?
Unless their investments were for dates after the Oct 2010 Govt G period.
Ross, I don't know. It
Ross, I don't know. It is one of the most basic, simplest concepts imaginable.
I am guessing that because a split pay commission creates a true, person to person economy, the banks aren't that keen on supporting it. Maybe it's out there, but I have searched for quite a while and not found it. Apparently, for a while, Pay pal might have been supporting this concept for their affiliate sales programs, but no longer.
One workaround I have considered is simply sending a commission as soon as I get an order. However, I can see problems with this method if I am not around when a sale is made and there is a noticeable delay for the blog owner getting their commission.
I would hate for a buyer to tell the blog owner, I just bought a book from your site, but the blog owner has not yet received their commission, or the buyer is expecting a thank you email from the blog owner, but because the payment is delayed, the blog owner has no clue that they have even purchased the book or product.
The instant commission concept could help reinforce local commerce among small businesses and blog owners, and right now I would welcome that more than any more government stimulus money that goes to the banks but never reaches main street.
Mozart, Iain, Alex - thanks
Mozart, Iain, Alex - thanks for the encouragement. There were two things that finally got me over the line, 1) just as my thermodynamics lecturer told us, "Entropy is caught, not taught." - I finally caught how money is created, from a 'whole system' perspective, and that brought the issue and need for alternatives into sharp relief - particularly when considering the discussion on this site about Tobin taxes, capital adequacy ratios, their efficacy, or otherwise - and the effect extraordinary money creation has and is having on the tradeable sector; 2) we pay $250mio a week in public debt interest - I considered how utilising 'public credit' would positively impact this problem in say 5, 10, 20 years time, BUT more importantly, what would this Gen X&Y assigned debt-millstone be NOW, had we implemented a 'public credit' approach 5, 10, 20 years ago?
It was that last question that empowered me the most. I cannot see how we cannot consider this option given the moral injustice we perpetrate on our children and grandchildren by ignoring the possibility this kind of approach offers us. It almost seems criminal - like inter-generational theft - to carry on without challenging the status quo.
Cheers, Les.
<a href="http://www.ugg-mall.net/Ugg-Fluff-Flip-Flop.html" rel="
Ugg Fluff Flip Flop
Ugg Infant Erin
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Les - and this is
Les - and this is the Al-Hussein [the mother of all] of inter-generational theft....>
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10609616
Responsibility and Accountability should fit as a Hand in a Glove... but all we have here is slight of hand, and a slap on the face with the glove.
mouse - I sympathise with
mouse - I sympathise with your view on this subject, alhough as you know I have my doubts etc. However, if we are going to ensure we are not living in the toliet than lets be fair and equitable about it, regarding our context among other nations, between sectors of our economy and between generations, rather than keep uttering lofty spin, but duck-shove it to others - some of whom aren't even born yet.
Am still more of a skeptic than not, but, what if we skeptics are wrong? If so it is indeed the fact that tomorrows' people will pay, not me/us, that motivates me to be open to chnage, more than any bleating and brow-beating about GG's and GW etc. I wonder if the pro-GW side might also compromise on reduction, likley impact given context - and again, leaving future generations with the kind of prospects we have enjoyed?
It's late. Cheers, Les.
Les have a read of
Les have a read of this
http://economicedge.blogspot.com/2009/11/winter-is-coming.html
Its scribd so its easier to download it first.
You got it Les. What
You got it Les. What we have to do is hand on a 'going concern' no worse than we found it.
Physically no worse, that is.
The lead-times mean that inaction is not a valid social approach.
Where we perhaps fail, is that society still has a residual mental hangover from the religious days - the vague feeling that somebody bigger is 'looking after things'. We are actually 'it', and as Gordon Brown said "There is no Plan B".
I think Labour annoyed me today more than the Govt - disingenuous numbers being used to scare, when ironically the bigger scare is not being addressed.
A plague on both their houses.
Re: 6 Finally others are
Re: 6
Finally others are now realising that China can't boom without somebody (western world) buying all their crap to keep their surpluses going and allow the Chinese government to maintain the false economy.
Re: 8 Couldn't agree more.
Re: 8
Couldn't agree more. For China to evolve into a consumption economy, something's going to have to give with regards to the country's leadership.
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Andrewj - thanks, I recall
Andrewj - thanks, I recall you referring me to this website before. Had quick scan, looks interesting, will read later.
PDK - yes, a going concern, neither a toilet, nor compost heap - as always, it's about getting a balance. Maybe easier if your'e a 'cherry picker' recognising the complex adaptive:
http://www.interest.co.nz/ratesblog/index.php/2009/11/06/opinion-how-neo...
"Under a new Entrepreneur Plus
"Under a new Entrepreneur Plus immigration category - effective on November 30 - entrepreneurial migrants who create at least three fulltime jobs and invest $500,000 in their business will be offered a fast track to residency"(herald)...this is Key's dream...when in the shite, the tool to use is immigration...no worries right Key?..even some fool in a govt dept is there to say modelling proves the country can do with another 1.5 million!!! so let them in and be quick about it before those socialist morons get back to have themselves a swag of rubbish rush on in....the promised Labour support...best let in as many likely National voters first...right Key? Will this take the economy away from being a property ponzi speculators dream where average kiwi cannot afford a roof over their heads....NO....but it will please the RE liars and the banks and the 'developers'...oh yeah remember them don't we...upstanding citizens...National Party Stuff...
Heh - I remember Douglas
Heh - I remember Douglas and Co urging us to emulate all the 'Corp's of the 'eighties.
No thanks I said, we seem to differ in moral codes: - I've got one.
The next few years it will be like watching the action on the Titanic. Folk of all classes from all decks, scurrying around bent on short-term survival. Almost none will grasp the big picture.
Interesting times...
Wally, puh-lease!!! Please get your
Wally, puh-lease!!! Please get your words right! Its not "property ponzi speculators dream" that we are encouraging. According to the Herald it is "property development"!
"Property development, education, training and tourism were among the most popular areas for potential investment, an Immigration NZ spokesman said."
I want you to write 100 times, "Property development, not property ponzi speculators".
We know that these immigrants are suitable for being fast-tracked into residency, if they already understand that the route to true wealth in NZ is property. They are already Kiwis at heart.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10609740
Yeah...sorry Philly...sposed to toe the
Yeah...sorry Philly...sposed to toe the Cabinet line...sort of makes it very clear where this shite of an economy is heading doesn't it...I wonder if Bollard has been given the word...Hey Alan..what's with the BS about new tools..Key wants more speculation..more bubble stupidity...more of the same failed policies..you just sit back Alan and let the Stone Cutters cut the stone.
Now...more important matters...what's me copper/gold
Now...more important matters...what's me copper/gold up to...jeeez will you look at that.......and some bugger suggested I invest in NZ ...haaaaarhaahaahaa.
Here's the good bit, though,
Here's the good bit, though, Wally. When all this "Entrepreneur Plus immigration category" stuff kicks in, there'll be an uptick in the Kiwi as the funds slosh in. This will be THE LAST CHANCE to get our funds offshore. I, like you, am cashed up and looking for a new business venture. We were going to do it here. But, no longer. We're leaving the Land of the Long White Houses; the getting Shakier by the day Isles, for a shot at a really productive future.
A shot at a real
A shot at a real future.... so you're not investing in Noddyland then! Oh go on Harriet...capital is made to be wasted and where better to waste it than an investment in a nuthouse run by the inmates.
Nope, sorry, Wally, even your
Nope, sorry, Wally, even your entertaining repartee won't keep me. I've done all the capital wasting I want to do for this lifetime. On that score, I made the descision to permanently reside in New Zealand. What was an eminently sensible choice 16 years ago has now , sadly, turned out to be a financially regretable one. The only thing I made money on here, was hosuing! How ironic..C'est la vie and Bon Voyage!
Where are you buggering off
Where are you buggering off too?...a second go at Rhodesia? ..who knows, maybe if mugarbage is tossed to the crocs, the place might boom.
Harriet, housing and (likely) exchange
Harriet, housing and (likely) exchange rate... doubly ironic!
:-)
<b>Wally</b>, in a default sense,
Wally, in a default sense, and essentially via an Austrian prescription, Zimbabwe is indeed starting to boom again:
http://www.321gold.com/editorials/field/field111109.html
Perhaps the only way to get back to 'sound money' is to take counterfeit capital to its logical, tragic conclusion, as Mugabe did.
(Though to truly get back on track, they have to boot the tyrant out).
Harriet - i've noticed that
Harriet - i've noticed that there are things in life besides money. Those who focus on it sometimes forget what it was for, and is based on.
From here on in, all trading (and particularly speculation/investing/gambling) will be carried on under the sinking lid of real supply. Slowest parachute wins.
If of course the system can hold up in that scenario.
I'd be reckoning that NZ is as good a lifeboat as there is - you might not get rich, but you will have a life.
Productivity, sadly, will be one of the buzz-words which are viewed with distaste in hindsight.
Now efficiency - that's a different story.
Well I've spoken to someone
Well I've spoken to someone in the know about SCF who has explained why there weren't any provisions for 30 June to 20 Oct. The story is that the auditing process was looking at the post balance date data up to when the audit was signed off on 30 Sept, and so the 30 June figure incorporated information post balance date, so that the next regular internal provisioning date is probably 31 Oct.
Think I posted this on
Think I posted this on the wrong thread:
Compulsory reading for the "˜Immigration will make us rich, immigration will make us rich, all debate racist' brigade:
http://www.guardian.co.uk/world/2009/nov/15/ireland-pay-immigrants-go-home
As always, New Zealand is 10-20 years behind.
David Hillary , what of
David Hillary , what of the losses reported in the NBR last week at Shed 5 development Napier (Satuit Properties) , via Kelt Finance? Perhaps $10m loss is the talk although remaining units still to be sold.
John Key Interview in Sydney
John Key Interview in Sydney Morning Herald...>
http://www.smh.com.au/environment/nz-leader-puts-his-faith-in-science-no...
Q: What science John?
Q: Where are these trees?
Perhaps the real reason John Key is not going to Copenhagen, Is that he is nervious that a small child in the audience might make the observation... eh, that he's actually Naked!
Price inflation is only one
Price inflation is only one problem with this system of private money creation.
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