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Wednesday's Top 10 with NZ Mint:Why the lights are going out in Athens; Britain's 100 mln pound house; Hong Kong house prices to fall 25%; 'I fired Greenspan'; Dilbert

Wednesday's Top 10 with NZ Mint:Why the lights are going out in Athens; Britain's 100 mln pound house; Hong Kong house prices to fall 25%; 'I fired Greenspan'; Dilbert

Here's my Top 10 links from around the Internet at 6 pm in association with NZ Mint.

I welcome your additions in the comments below or via email tobernard.hickey@interest.co.nz.

I'll pop the extras into the comment stream. See all previous Top 10s here.

My must read today is #1. It's from deep inside Greece and explains graphically what is wrong. No wonder their bonds are trading at over 200%.

1. The lights are going out in Athens - Greek crime novelist Petros Markaris has written a detailed, impassioned description of life in Athens and the lay of the political and social landscape there.

It is an enlightening and nuanced view of what's going on in Greece and what's wrong with Greece.

It's written from the point of view of a disillusioned insider who knows where the bodies are buried and who's rorting whom.

It's a fascinating tour through the bowels of Greek society.

I won't be buying Greek bonds any time soon...

HT Andrew via email.

 Here's the piece, originally published in German in Die Zeit and translated into English, on the Breach of Close blog:

One is met with the bleak sight of empty shops all over Athens, even in the more upscale shopping districts such as Patission Street. Patission, as the Athenians call it, is the oldest of the three long streets that run through the center of Athens and a boulevard of the middle class. I know the street very well, since I live nearby. Patission was always dimly lit, but that didn’t matter, because the shop windows shone so brightly. In these days the street is pitch dark; every second shop has closed down. The few shops that have survived eke out a living with special sales.

Aiolou Street in the city center, a traditional lower-income shopping street, looks even more desolate. There are still some shops open but they’re empty. No customers. Aiolou Streethas become a pedestrian walkway without pedestrians. “How much longer can I hold out?” asks the owner of a small shop for men’s clothing where I’ve bought a pair of socks. “Days go by before a single customer wanders in.” At the same time you think twice before entering a shop because once you’re in, the owner or a shop-clerk will besiege you with how bad things are. The woman with the men’s clothing shop couldn’t hold out: as I was walking along Aiolou Street yesterday, I noticed that her shop, too, had closed.

2. Chinese property prices need to fall 30% - Bloomberg reports a Chinese legislator thinks house prices need to fall that much to become affordable.

Sound familiar?

Housing prices will be at a “reasonable” level when they are equivalent to about six years of salary for a family, the senior lawmaker said, according to the transcript of an interview with China National Radio.

“Based on this, property prices may need to fall 30 percent,” He said, according to the transcript on the broadcaster’s website. “But it doesn’t mean prices will go down in every region, every city. The exact extent of the decline will depend on demand.”

China reiterated this year it won’t back away from housing curbs including tighter mortgage requirements, while Beijing and the financial center of Shanghai are among Chinese cities that have said they will continue imposing home purchase restrictions this year.

3. There's something wrong in the world - Britain's economy is in recession and unemployment is at multi-decade highs. Yet luxury property prices are at astonishingly high prices in London. This shift in wealth and income to the 1% from the 99% is driving a lot of the grumpiness now spilling over into political scenes and (sometimes) onto the streets.

The stripping of Sir Fred Goodwin's nighthood is symptomatic, as is the uproar over the bonus (since revoked) of the Royal Bank of Scotland CEO. There's even something similar going on in Christchurch. When the masses are grumpy they will not tolerate naked displays of wealth. Come the revolution...

Here's the gory detail via Bloomberg

A home in the U.K.’s most expensive neighborhood is being offered for more than 100 million pounds ($158 million), according to the broker handling the sale.

The neo-classical house is located at 6 Palace Green in Kensington, one of London’s few private roads where no passing traffic can enter, Aylesford International Managing Director Louise Hewlett said. The 16,000-square-foot (1,486-square-meter) home is owned by Tamzen Ltd., a closely held company incorporated in the British Virgin Islands, according to the U.K. Land Registry.

Overseas buyers are driving London’s luxury home values, which have performed better than other parts of the U.K. real estate market. Prices have gained for 14 straight months as investors compete for a smaller number of homes for sale and seek safer assets amid geopolitical and economic instability.

4. Portugal is next - Bloomberg reports yields on Portugese 10 year bonds rose to more than 18% last night despite the ECB's money printing and the deficit deal.

Investors just don't believe the problems are solved. They see a big ugly Greek-style haircut coming their way,

Yet the Portugese PM still believes this is just a confidence issue and many in the bond markets think the ECB will eventually keep them whole by buying the bonds anyway.

Portugal Prime Minister Pedro Passos Coelho reiterated yesterday that there was no risk of investors being asked by government officials to take losses on Portuguese debt. “What matters the most at this time is that all the financial stress is removed,” he said while at the EU summit in Brussels.

The ECB will remain active in “supporting government bond markets of the countries that have come under pressure,” said Bill Dinning, the Edinburgh-based strategy chief at Kames Capital Plc, which manages about $75 billion. “I don’t think we should doubt the motivation, which is to continue with the euro zone in its current construction.”

5. Here it comes - Bloomberg reports Hong Kong property prices are now expected to fall a further 25% this year after falling 6% in the second half of last year.

No worries then...

Asian real estate markets from Singapore to Beijing to Mumbai are stalling or have started declining as governments seek to curb the type of housing bubble that brought down the U.S. economy. In Hong Kong, rising borrowing costs, extra transaction taxes and higher down-payment requirements imposed by the government have fueled the slump.

“We’re in for a very challenging first half,” said Wong Leung-sing, associate director of research at Centaline Property Agency Ltd., the city’s biggest closely held realtor. “The drop in secondary mortgages means buyers are having trouble borrowing from the banks the full amounts they need. The ones that are taking the biggest hits right now are the middle- to lower- priced housing segment.”

6. A theme for years to come - US and other large governments are cracking down on tax cheats hard. They're targeting banks and others who help them. It's like Kim Dotcom, but for bankers.

Can't say I have much sympathy.

Here's the fallout in Switzerland. A major private bank in Switzerland has just had to sell itself after being attacked by US tax authorities, Swissinfo.ch reports.

7. 'I fired Greenspan' - Naked Capitalism has the story about how Michael Hudson once fired Alan Greenspan for fudging some numbers.

Greenspan was sort of the hack that was hired. When I was on Wall Street, Greenspan was hired as part of a study I was doing on the balance of payments of the Oil Industry. And one day my boss, John Deaver came into my office and said he really worried about Greenspan being a part of this report because he was known as a hack that always gave …his clients what they wanted instead of something actual.

So he (JD) gave me Greenspan’s figures on depreciation of oil producing refinery assets in Europe and asked me to find out where the faking is? He said he couldn’t believe that Greenspan by himself wouldn’t of just faked the figures and it took me about a week to figure out where the faking of the figures came out (from) and that was Greenspan had simply picked up depreciation rates relative to output for the United States and projected them onto Europe.

8. By the way - Bloomberg reports the state government of California faces a cash crisis by March.

9. Totally relevant video of former Citigroup Chairman John Reed explaining how America's 'Too Big To Fail' banks were created and how they put America's regulators to sleep through the 1990s and 2000s. These are the same banks fighting to kill off the Volcker Rule right now that would force them to shut down their proprietary trading (ie gambling) divisions.

John Reed on Big Banks' Power and Influence from BillMoyers.com on Vimeo.

10. Jon Stewart and Stephen Colbert do battle over their Super PAC. There's a long chase. Good stunt doubles.

(Updated to corrected day of week....blinking useless provincial holidays...)

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25 Comments

Bernard, todays Wednesday, its ok its still Tuesday in north America

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Andrewj

Thanks. Sorry. Have fixed. Blinking holiday has messed my body clock right and proper.

cheers

Bernard

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Ironic that 2/2/12 is Groundhog Day.

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Hey Aj.  If you are travelling around farms in Nth America - have you heard any comments regards mineral feed there causing salmonella in cattle?

Heard a grumble back here about imported US mineral feed.

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You might have to reboot, its painfull but just has to be done, you need to work Saturday for a month and slowly wean yourself off having a holiday on Monday.

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Consider this.  Euro200k = 320k NZD.  The values are not that different, to our house prices ex Auckland.

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Fair enough.  Was just food for thought really.  Pleanty of other factors to consider like PPP/wages and stuff.  I was curious how far our dollars would go in a place where the housing bubble has burst.

Watch what they do, not what they say.  If our economy was going great and strong, and the banks were fine.  Why are real interest rates close to zero, why are deficits at 10%?  No we are on the fast track to Rome, but we still have time to rearrange the deck chairs as the band plays.

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Yeah, the US is going after outsider tax evaders.  Meanwhile Jon Corzine is a free man, after stealing 1.2 billion from his clients. 

 

The only theme worth watching this year is, What are the Central Banks doing?  Massive interventions, which will be dismissed by the deflationists, as gold continues to march higher. 

Manipulation, and many more back door bailouts.  All the "dubious" activities conducted during the GFC, have been legitimised by the governments, and the courts.  Setting the stage for more and more of the same. 

 

All the deflationists arguments, and gold bugs arguments are known known's.  I often ask myself, if I was The Bernanke, and I actually wanted to save the monetary system, would it be possible?  Trouble is they can only do one thing, ctrl+p

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OT FYI:  I live in a small rural town, and a lot of people I know are on a waiting list for broadband.  How long ago was the broadband plan started?  It's not like were way out, 40 min to a main centre, and the main highway runs through the town.  Poor buggers waiting, I suppose all of Auckland has fibre to the door or something.

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Skudiv I am 40mins drive from the Auckland CBD outside of rush hour. In fact the area is known as Remuera North. But still NO broadband.

Except for someone creative like me that has wireless broadband. Bonus is it is cheaper than the copper, the fishook was I had to mount the dish myself 8m up a tree because the contractor didn't have the balls.

Look into the Kordia network, it was set up by the government for rural schools.

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Too many hills here for wireless.  I used to have satalite (was about $200 month for 7 Gig), but changed once we got landline stuff.  Some friends that live 5 min walk from the centre of town, are still on a waiting list.  In other words when someone leaves town, they move along the que. 

Telecom and Vodafone are expected to begin the roll out of RBI infrastructure mid-year. It will be completed over the next six years.

Last November (2010) Telecom and Vodafone submitted a joint proposal to the government’s $285 million tender for the provision of broadband services in rural New Zealand.

 we will have 252,000 customers in rural New Zealand getting access to high speed broadband that compares well to urban levels of service and prices.

Works out to be $1,100 per person if they can keep to budget.

 http://www.beehive.govt.nz/release/rural-broadband-initiative-underway

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Mate Telecom have been spinning a story that they are going upgrade the hardware in six months since I got here three years ago. They are full of it and It will be a sad day if I ever have to go back to such a piss poor company.

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The Chorus site shows Rural BB coverage upgrades for the next year.

http://www.chorus.co.nz/service-availability-tool

This site shows the cabinets and exchanges that will be upgraded under the RBI and the year it is programmed to happen. It doesn't show the actual coverage but if you are within 5km you should be covered.

http://nztelco.com/content/?p=389

 

 

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See my comment to Skudive Neville. I always make a point of stopping to talk to the Chorus technicians out this way, and they seem to be frequent visitors due to the antiquated systems. I hate to be so coarse but quite frankly the claims of broad band services pending are bullshit.

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I am still waiting to see what the charges will be for this 'new' service.  We use satellite on the farm and Orcon wireless at home. 

 

Looks like it will be 5 years before we get the benefit of the RBI - too little, too late.

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Just in from reading the South China Morning Post and yes property prices are due to tumble as stated @5# The govt here is acutely aware of the  looming financial crisis. Meanwhile NZ just borrows and hopes.

 

Feb 1 (Reuters) - Hong Kong unveiled nearly HK$80 billion ($10.32 billion) worth of measures to support its economy and people on Wednesday, but warned that the outlook for exports is grim and the risk of a sharp deterioration in the external environment is increasing.

Speaking in his last budget speech, Financial Secretary John Tsang said he expected economic growth to slow to 1-3 percent in 2012 from 5 percent last year , and cautioned that bleak economic prospects in Europe and the United States were cause for concern.

A Reuters poll of 23 analysts forecasts economic growth of 3 percent in 2012.

Highlighting the growing pressure facing the economy, Tsang forecast a consolidated deficit of HK$3.4 billion for the 2012/2013 fiscal year, which begins on April 1.

That compares with a provisional surplus of HK$66.7 billion for 2011/2012. During the 2010/2011 fiscal year, there was a surplus of HK$71.3 billion, the second highest on record.

"Our external demand has been faltering. I am not optimistic about Hong Kong's export performance in the first half of this year, and if exports of goods were to plunge in the first quarter, the overall economy might take a downturn in that quarter," Tsang said.

Asian and emerging market economies have seen a noticeable slowdown in growth momentum recently, he added.

 

GOVERNMENT UNDER PRESSURE

With Hong Kong's economy expected to slow significantly in 2012 and exports already declining on the back of weaker demand in the U.S. and Europe, the government is under pressure to support the economy from external headwinds.

On Wednesday, Tsang announced a series of measures to support the economy and appease disgruntled lower-income groups, including a personal tax rebate of up to 75 percent for 2011/2012, with a ceiling at HK$12,000, and loan concessions for small and medium-sized enterprises.

"The budget measures should to an extent, help to buffer local household spending from the impact of slower global growth," said Donna Kwok, Greater China economist with HSBC .

Tsang said the new budget would focus on six areas: supporting enterprises, preserving employment, caring for people, stabilising the financial system, increasing land supply and strengthening social capital.

On the property front, Tsang expanded a program of waivers on levies that property owners pay the government. In the coming fiscal year, the cap on waivers will be raised to HK$2,500 per property per quarter, from HK$1,500 per home per quarter at present.

He said 90 percent of properties in Hong Kong would not have to pay any rates in 2012/2013 as a result, meaning the government will forgo HK$11.7 billion in revenue.

Unlike last year, when Tsang led off his speech warning about the risk of avoiding property asset bubbles, he didn't stress issues with home prices.

Hong Kong property prices have eased about 4 percent since mid-2011, while property deals in 2011 fell 33 percent. ($1 = 7.7545 Hong Kong dollars) (Additional reporting by Alex McMillan; Editing by Charlie Zhu and Richard Borsuk)

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China - Soft landing or hard landing?

Here in Aus and NZ we should be praying for the former cos we are in big trouble if property prices plunge there

Its hard to read whats happening there 

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#7 I have a lot of regard for Hudson. A link here a month or so ago is well worth re-reading as he nails the historical political process by which we got to this point. We are at an inflexion point where we either have complete reform of the political and economic system or submit once more to a quasi fascist corporate/banker oligarchy.

http://www.nakedcapitalism.com/2011/12/michael-hudson-debt-and-democracy-has-the-link-been-broken.html

"Democracy involves subordinating financial dynamics to serve economic balance and growth – and taxing rentier income or keeping basic monopolies in the public domain. Untaxing or privatizing property income “frees” it to be pledged to the banks, to be capitalized into larger loans. Financed by debt leveraging, asset-price inflation increases rentier wealth while indebting the economy at large. The economy shrinks, falling into negative equity.

The financial sector has gained sufficient influence to use such emergencies as an opportunity to convince governments that that the economy will collapse they it do not “save the banks.” In practice this means consolidating their control over policy, which they use in ways that further polarize economies. The basic model is what occurred in ancient Rome, moving from democracy to oligarchy. In fact, giving priority to bankers and leaving economic planning to be dictated by the EU, ECB and IMF threatens to strip the nation-state of the power to coin or print money and levy taxes....

Neither banks nor public authorities (or mainstream academics, for that matter) calculated the economy’s realistic ability to pay – that is, to pay without shrinking the economy. Through their media and think tanks, they have convinced populations that the way to get rich most rapidly is to borrow money to buy real estate, stocks and bonds rising in price – being inflated by bank credit – and to reverse the past century’s progressive taxation of wealth.

To put matters bluntly, the result has been junk economics. Its aim is to disable public checks and balances, shifting planning power into the hands of high finance on the claim that this is more efficient than public regulation. Government planning and taxation is accused of being “the road to serfdom,” as if “free markets” controlled by bankers given leeway to act recklessly is not planned by special interests in ways that are oligarchic, not democratic."

 

 

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*&%^ the Teleconopoly.

Get Broadband through 0800 Scorch if you are lucky enough to be in the right area.

Much better (less slowdowns) than my mates on "Ultra Fast Broadband".

Kids play fast action online games with NO problems. 

Excellent service, Reasonable cost and still NZ owned ;)

0800 Scorch

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That looks like the Kordia Network that I mention above. You have to be able to get line of sight to their repeater, in my case the dish is up a tree on public land:-) There are other companies doing wireless and my plan is the same as Scorch top one but at 2/3rds the cost. If you are confident enough you can do away with the copper altogether and go to VOIP for even more savings.

Downside can be reliability. When they Christchruch earthquake happened they flew all the techs down there, but then the main server went down in Auckland and they had no one to fix it. The network was down for a week.

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(6) = end of the free West. Of course you have no sympathy.

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The article has a sidebar, which has this little gem.

"It has eight managing directors, each of whom has accepted an “unlimited liability” for the fortunes of the bank – meaning they are personally liable for the commitments of the bank."

Now that is style,   that is a real Bank.

Go down and ask your local ASB or Westpac drone about how much the MD considers himself personally liable for your funds, they will usher you quickly out the door.

It continues ......

"The business was able to weather the turbulence of the first half of the 20th century and celebrated its 250th anniversary in 1991."

I have plenty of sympathy, believe me.

 

 

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http://en.wikipedia.org/wiki/Democratic_development_in_Hong_Kong

Should we be concerned that the end of free west appears to coincide with a move towards democracy in Hong Kong? Hong Kong appears to be the closest to universal suffrage it has ever been, though the development is inexorably slow. It says a lot that this situation has persisted under both British and Chinese ownership.

The notion of an end to a 'free west' in the east which doesn't afford universal suffrage to its citizens implies something quite telling about what is represented by the rhetoric of western freedom. I have absolutely no sympathy for this hypocritical ideal, absolutely none.

 

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