sign up log in
Want to go ad-free? Find out how, here.

Friday's Top 10 with NZ Mint: Crouching Tiger, Hidden mistress; China's empty 'gold bar' apartments; Is unlimited growth a thing of the past?; Europe's fiscal suicide multiplier; Clarke and Dawe and the very loud Alan Jones

Friday's Top 10 with NZ Mint: Crouching Tiger, Hidden mistress; China's empty 'gold bar' apartments; Is unlimited growth a thing of the past?; Europe's fiscal suicide multiplier; Clarke and Dawe and the very loud Alan Jones

Here's my Top 10 links from around the Internet at 10.30 am today in association with NZ Mint.

As always, we welcome your additions in the comments below or via email tobernard.hickey@interest.co.nz.

See all previous Top 10s here.

My must read story is #3 from Martin Wolf. It explains a lot and is immediately both eye-opening and eye-watering.

1. The shattered dreams of grey years of growth - Alan Kohler writes colourfully at BusinessSpectator about the paradox of thrift sweeping the globe in this piece.

It is a fundamental problem, driven as much by demographics as market failure.

How are we to deal with this? If nothing is done the old and wealthy will sit on their trillions while tens of millions of young people labour under huge debts and unemployment.

What will break the logjam?

Ultimately it will be money printing and direct government investment to offset the household deleveraging and to create inflation to make the debt go away.

It happened in the late 1930s and 1940s and it will happen again. Let's hope we don't have to have a war to spark the spending.

The main purpose of saving is for retirement. Up to 2007 the world’s population was able to rely on a combination of investment returns and government welfare to subsidise them in old age. That belief has been shattered, either by the obvious bankruptcy of governments or the end of the housing and equities bubbles.

The result is the paradox of thrift at work on a grand, global scale. This was the phenomenon identified by John M Keynes which states that if everyone tries to save more during recessions, then aggregate demand will fall and actually lower total savings in the population.

Savings rates in Japan, already high, went up even further after the crash of 1990 and stayed, contributing to Japan’s “lost decade”, now in its 22nd year.

2. 'Our crisis of bad jobs' - Jeff Madrick at New York Review of Books writes about the poor quality of jobs left in America. Sounds familiar.

When one counts all those looking for full-time jobs and unable to get them, the true unemployment rate is close to 17 percent. Meanwhile, the US faces looming threats of a new European recession and a slowdown in China and other parts of the developing world. But the starkest evidence that something is seriously amiss in the American economy is the dramatic deterioration of the middle class. Median household income—the midpoint income of all American households—was reported by the Census Bureau (whose data is a year or so behind) to be down in 2011 compared to 2010, despite an economic recovery that began in mid-2009. More disturbing, that figure is now down to around $50,000, which is 7 percent or so below what it was in 2000 and its lowest level since 1996, adjusted for inflation. Incomes are falling still more sharply for black households.

The reason that the economic recovery is coinciding with middle class decline is increasingly clear. America is creating jobs, but they are bad jobs: retailing, food preparation, and table waiting, for example—in other words, jobs that don’t pay much. Economists like David Autor of MIT and Larry Mishel of the Economic Policy Institute have been talking for years about the hollowing out of middle-level jobs in offices and manufacturing.

Annette Bernhardt of the National Employment Law Project did the hard empirical work recently and found that most of the job losses from 2008 to early 2010 were in the middle-income category, jobs that pay from roughly $14 to $21 an hour. What is disturbing is that in the job turnaround since then, only one in five such jobs came back. Instead, very low-end jobs, paying $7.70 to $13.80 an hour, accounted for most new employment. This is a stark continuation of the hollowing out.

3. Is unlimited growth a thing of the past? - That's the question Martin Wolf asks in this excellent FT column

Here's the academic paper it's based on: Is US economic growth over? Falterning innovation confronts the Six Headwinds"

Might growth be ending? This is a heretical question. Yet an expert on productivity, Robert Gordon of Northwestern university, has raised it in a provocative paper. In this, he challenges the conventional view of economists that “economic growth ... will continue indefinitely.”

Yet unlimited growth is a heroic assumption. For most of history, next to no measurable growth in output per person occurred.

What growth did occur came from rising population. Then, in the middle of the 18th century, something began to stir. Output per head in the world’s most productive economies – the UK until around 1900 and the US, thereafter – began to accelerate. Growth in productivity reached a peak in the two and a half decades after World War II. Thereafter growth decelerated again, despite an upward blip between 1996 and 2004. In 2011 – according to the Conference Board’s database – US output per hour was a third lower than it would have been if the 1950-72 trend had continued (see charts). Prof Gordon goes further. He argues that productivity growth might continue to decelerate over the next century, reaching negligible levels.

And here's the sobering kicker:

Prof Gordon notes further obstacles to rising standards of living for ordinary Americans. These include: the reversal of the demographic dividend that came from the baby boomers and movement of women into the labour force; the levelling-off of educational attainment; and obstacles to the living standards of the bottom 99 per cent. These hurdles include globalisation, rising resource costs and high fiscal deficits and private debts. In brief, he expects the rise in the real disposable incomes of those outside the elite to slow to a crawl. Indeed, it appears to have already done so. Similar developments are occurring in other high-income countries.

For almost two centuries, today’s high-income countries enjoyed waves of innovation that made them both far more prosperous than before and far more powerful than everybody else. This was the world of the American dream and American exceptionalism. Now innovation is slow and economic catch-up fast. The elites of the high-income countries quite like this new world. The rest of their population like it vastly less. Get used to this. It will not change.

4. Talking with one hand and the other - Peter Martin reports at SMH.com.au on how much longer it takes Australia's big four banks to pass on rate cuts than rate hikes.

A study in the prestigious Economic Record has found Reserve Bank rate rises have ''a much larger and more instantaneous impact on the mortgage rate than rate cuts''.

The size of the difference is shocking. Using monthly Reserve Bank statistics on its cash rate and mortgage rates over the two decades to 2011 the paper finds Australian banks have on average passed on 116 per cent of each rate rise and only 84 per cent of each cut.

5. 'Over my dead body' - Paul Mason at BBC's Newsnight has an interesting discussion here about the tensions building inside Spain. I've quoted this General's quote before, but Mason's view is useful.

"Independence for Catalonia? Over my dead body… and those of many soldiers." That was how Francisco Alaman reacted to the 1.5 million strong demonstration in Barcelona last month, with many calling for independence for the region.

It's a view. Quite strongly held not just on the right in Spain but on the centre left. However Alaman is a serving soldier: a colonel. And it wasn't the only incendiary thing he said.

In the week tens of thousands of protesters surrounded parliament, he told the website Alerta Digital: "The current situation is very similar to 1936, but without blood. Unfortunately, the data indicate that the situation will only get worse in the coming months and years."

6. A British drug addict - The Telegraph's Philip Aldrick writes here about PIMCO's comments that Britain's government is a government addicted to debt and bond holders risked being 'burned to a crisp'.

Bill Gross, PIMCO’s founder and chief investment officer, compared the UK to a drug addict who is hooked on debt and struggling to kick the habit in his monthly investment outlook. His comments were part of a broader warning that the US would turn into Greece within a decade if the government did not find $1.6 trillion (£990bn) of savings “over the next five to 10 years”.

In his latest outlook, Mr Gross picked up the theme of government debt and deficits again, with a particular eye on “the possibility of a fiscal train wreck over the next decade” in the US. He said the US, with its high level of national debt and government borrowing, belonged in the “ring of fire” with Greece, Spain, France, Japan and the UK, where “only gold and real assets would thrive” unless spending is cut and taxes rise.

Describing the list as a “sort of a rogues’ gallery of debtors”, he said: “The US and its fellow serial abusers have been inhaling debt’s methamphetamine crystals for some time now, and kicking the habit looks incredibly difficult.”

7. China's housing bubble - The Washington Post reports on China's housing bubble here. This helps explain why the government there is so reluctant to do another 2008/09 style stimulus.

Guo gestured to the wall behind his couch. His neighbor? He owns six apartments in this compound alone. Guo’s friends, too, all own at least two homes each. “There is definitely a bubble,” said Guo, whose homes have tripled in value in roughly a decade. As home prices have skyrocketed, many Chinese households have gone all in on real estate by pouring years of savings into buying as many homes as they can.

But as the country’s economy slows to its worst pace in years, China’s dependence on real estate for growth — it’s a bigger driver than even exports now — has put the government in a tough position.

Allow prices to continue rising and help the economy in the near-term, but the real estate bubble gets worse. Cool things off and the entire economy slackens too much.

The nightmare scenario, though, is a bubble that bursts. A major drop in prices would ripple through the Chinese economy and potentially the rest of the world. Real estate investment constituted 13 percent of the country’s gross domestic product last year. The sector feeds steel, concrete and dozens of other industries.

I found this point most interesting:

The obsession with real estate is also embedded in the culture. People are expected to own homes before they get married, and there is a deep faith that real estate is a fool-proof investment.

Since private homeownership has existed here only since the 1990s, no one has ever seen firsthand what happens when housing prices start dropping.

“Just like in the U.S., that’s what the speculators thought in Vegas and Florida, that there’s only one way to go but up,” Lardy said. “Expectations could change very dramatically.”

And this looks awfully familiar. We're seeing quite a bit of this around Epsom at the moment: empty homes bought purely as 'gold bar' type investments.

People have bought so many homes for investment that they often leave them sitting empty.

On a recent evening driving around the outer edges of Beijing, it was easy to spot residential high-rise buildings along the highway that did not have a single window with a light on.

In an area called Daxing, one hour south of the city’s center, two security guards stood in front of a gate leading into a massive compound of 545 Italian-style, million-dollar mansions, almost all of them empty. The compound, Weilai deVille, boasted a clock tower, a grocery store and a giant fountain past the entrance gates. But just after dinnertime, there was little sign of life. The houses, row after row of them, were darkened, silent hulks. Some areas of the compound were so empty that the street lamps were turned off to save electricity.

There are 3.8 million vacant houses in Beijing, according to a report in June by the Beijing Municipal Public Security Bureau, though officials later tried toargue that the number was probably too high.

8. Mistresses and corruption go hand in hand - Here's Bloomberg on what's happening in China.

Which came first? The corruption or the mistresses? In China, they most often go together.

The stories abound: from the corrupt official in Fujian who, in 2002, held the first (and only) annual competition to judge which of his 22 mistresses was most pleasing, to Liu Zhijun, the former railway minister deposed in 2011 for allegedly embezzling the equivalent of millions of dollars -- and maintaining a relatively modest 18 mistresses. The association is so strong, in fact, that it’s all but taken for granted in China that when an official falls due to his -- and it’s almost always a he -- misdeeds and miscalculations, the mistresses will be uncovered next.

And so, when Bo Xilai, the now deposed former Chongqing party secretary once widely expected to ascend to China’s ruling Politburo Standing Committee, and his wife were first connected to corruption and murder this spring, rumors of mistresses accompanied the allegations. Of these rumors, the most spectacular involved Zhang Ziyi, the popular Chinese actress best known in the West for her starring role in “Crouching Tiger, Hidden Dragon” (and her friendship with Wendi Deng Murdoch). Zhang’s lawyer has denied the allegations, going so far as to insist Zhang has never met Bo, and the movie star is suing media outlets which reported the accusations.

9. Multiplying Europe's fiscal suicide - Here's Ambrose Evans Pritchard explaining why the austerity treatment in Southern Europe is killing, rather than curing, the patient.

The entire EU austerity plan is based on a false premise. This disastrous error is now clear beyond any reasonable doubt. The Teuto-Calvinists believe – or profess to believe, since much of their dogma is national self-interest dressed up as theory – that the fiscal multiplier is around 0.5.

That is to say, fiscal retrenchment worth 1pc of GDP will cut output by half as much, or around 0.5pc over two years. There is pain, but at least there is gain. This is based on the IMF's analysis of fiscal crises over the decades.

Well, it has not worked out like that. Ireland has contracted at nearly seven times the speed, Spain four times, and Greece three times. The multiplier is around 1.0 for the big countries, which is why France can expect a devastating year in 2013 as it tightens pointless by 2pc to comply with EU rules. And why the world faces a full-blown shock if the US goes over the fiscal cliff and tightens by 4pc next year.

10. Totally Clarke and Dawe on Alan Jones. There is a sound problem.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

77 Comments

PDK, meet Martin Wolf.  Let the mutual admiration Begin!

Up
0

Actually, it's Robert Gordon should be admired. Wolf is merely doing the repeating bit.

 

T'ain't rocket science. Economics was simply a discipline which evolved as it went along, with nowhere to look but backwards.

 

I used to liken it to driving towards a brick wall. You haven't stopped yet, but you will. To refer to your acceleration further back down the road, means diddly-squat in terms of what is ahead. That's simply a calculation of mass times deceleration, and the best way to mitigate that, is to begin the deceleration early.

 

Always said that Econ students should do Physics / Energy Studies papers as a mandatory part of their course. We treat them as gurus, and they're no better than witchdoctors.

Up
0

Yup, Economists have all the inductive reasoning of a man falling from a tall building, "16th, 17th, 18th balcony I've passed and the view is great and things a getting faster...."

Neven

Up
0

And some Ecology 101 would be useful too... particularly the bits about population, resources and limiting factors.

Up
0

Well when you do maths 1+1 always equals 2 no matter where you do it.

unlike your world it seems.

regards

Up
0

At no point in the Wolf article or the Gordon paper is the statement that economists think that economic growth will continue indefinitely, substantiated.  That is a strawman. 

Up
0

MDM-

 

Nobody said the article stated that.

 

We said that.

 

No strawman involved.

 

But I note that you have no rebuttal of the content....... :)

 

Regardless, name me one - just one - NZ economist - or economics journalist - who has consistently pointed out that growth must cease at some point, and who has worked out where that point might be?

 

 

Up
0

That's a falsehood, Mist. Econ 101 it may be, but total horseshit.

 

When you get to the point in a finite system (you seem to have trouble with that concept, perhaps you should buy one of those little globes) where you cannot increase resource supply - and that goes for all finite substitutes, the only variable in the equation being 'time' - then you are at the end of growth.

 

Period.

 

Economics teaches a lie. A straight-out porky. Is it that hard to see through it?

Up
0

Do I take it correctly that when you say " resistance " , you're referring to the " dead hand " of government , weighing down on progress , stifling innovation & freedom ?

Up
0

GBH - it is the dead hand of Government weighing down on progress, stifling innovation and freedom that is the problem and there's huge resistance.

 

The nursery rhyme Baa Baa Black sheep comes to mind.

 

One bag for the Government

One bag for the Bureaucrats

and none for the lttle boy who lives cries down the lane (his bag went in costs of production)

Up
0

You know the earth isnt flat dont you?  For the last 80 years we have kept doubling....

The resistance you imagine is just that......

regards

Up
0

I fail to see your point.  Where do they say its finite? and the next answer, to when is that reached? Do you really think we can double energy output again?

At even 2% energy growth thats a max of 35 years...we could justifiably say fossil fuel dropped off that rate around 2004....2006 at the latest.  The result of that has taken energy costs to the upper limits of what an economy like ours can stand. Consider what I and PDK have been saying in here for 4? 5? years....its now starting to be repeated in the mainstream media....expensive energy is  hurting us....

You are living in la la land if yiu think we can meander on like this, not when we fall off the mbpd plateau....

regards

 

Up
0

Tra la la la la...la la la laaaa. See I can do music as well as physics.

Up
0

Scarfie - all this physics should have taught you - THAT WHAT WE RESIST PERSISTS !!!!!!

 

Resistance is not just physical, it has mental and emotional elements as well.

 

Tra la la la la....laaaaaa

Up
0

Mist42nz - that reminds me of the economy and the current account deficit......And a few other things.

Up
0

 

How are we to deal with this? If nothing is done the old and wealthy will sit on their trillions while tens of millions of young people labour under huge debts and unemployment........

You there you dirty hoarding old coot, ....yes you sitting on that pile of payola doing nothing but forming warts n roids....fork it over , or we'll be forced to declare you mentaly incompetent, criminaly neglegent, and the root cause of anything else that ails us....!

Who me...?, when did all this happen..?  I thought I worked hard , saved really hard, showed patience in not wanting too much too soon, took care of my childrens education, and planned a future that allowed me some comfort when I retire.

Never mind all that....we the New age Victims of Society cant afford our cellphone bills and buy a house too, ....so we want your money confiscated as restitution for you life of crimes against us...got that  you grizzeled old nob...!

Well Bernard my son , we thought we'd done our best for you , but I guess it's time for you to bugger off, wake up, and find out life can be tough at times.

What will break the logjam...? I should think a dose of Metamucil, or one of those fig bars. 

 

Up
0

5 or 6 prunes...

LOL.

regards

Up
0

Yet again , Count , the Gummster is comefuddled by the Hickster's inconsistencies ...... he bellyaches that we are too indebted , that we spend too much , live beyond our means .....

 

.... but if we don't do those things , if we're prunedent with our money , save , invest , build up a nest egg , and self-fund our retirement ...... Hickey calls us hoarders !

 

Which is it , Bernie ...... should we save , or spend ? ...... be self reliant , or suck off the state ? ..... invest , or indulge ? ...... you flip-flop so often I'm gonna have to re-name you " the wibbly-wobbly  jelly-back man " ...

 

.... which is kind of a pity , 'cos I'd gotting used to calling you " Chicken-Little Hickey "

Up
0

GBH - very well said !!!!  I notice Mr Hickster has a lot of company.

Up
0

BH talks about the paradoxs, it seems you are not bright enough to fathom that....

There is an interesting parallel between different personality types, I posted that last week.  For instance a hoarder is really a gold buyer, they take money / value out of the system and squrrel it away where it is of no "use"  You on the other hand buy shares, so the money isnt hoardered...its re-used, big difference.

etc etc.

Interesting comment on ppl using the last bit of equity on their home to buy an iPad, the complete opposite.  Im not aware Ive met anyone like that....

regards

 

Up
0

#7 Chinese property obsession

We have guests from China who arrived last week. Staying with us in Mt Eden. 4 bedroom house on good size section in what is apparently now a $1m suburb.

 

Conversation straight away went to local property prices. All our guests are active property investors.

 

They could not believe how cheap the prices for houses in Mt Eden were compared to Shanghai apartments, even those 40 minutes from central Shanghai in gated communities with no view.

 

A lot of their conversation was about which would appreciate in value faster. These are people who I would describe as having middle class white collar jobs.

 

On a slightly different track, one thing that is never discussed about Chinese property is how shoddy the construction is. I have lived in apartments in Shangahi & Chengdu that were less than 10 years old, but visably crumbling.

 

Up
0

EW says: "They couldn't believe how cheap Mt Eden house prices were compared to Shanghai apartments"

 

Therein lies the essence of what is happening to property prices in Auckland. It has been mentioned here before that Auckland property prices are half those prevailing in mainland chinese cities, and Hong Kong, and Singapore. And that is the attraction. While that continues it tells you where prices are going. The tidal wave will continue.

Up
0

.....until a politician or party with some guts and feelings for his/her voters sees the light and boots these investors(?) out.

It ain't John Key (who don't give a xxxx) or Bill English from Double Dipton (somewhere beyond the black stump, I've heard)

C'mon Winston, get the bit between your teeth on this one.

A lot of xenophobia is bad, a little of it gives a signal that willget action.

Up
0

Why do you think Winston would put the boot into property owning oldies, who are reliant on it for their retirement.?

Up
0

one thing that is never discussed about Chinese property is how shoddy the construction is. I have lived in apartments in Shangahi & Chengdu that were less than 10 years old, but visably crumbling.

 And then ew, how shoddy are any of their exports...? clothing , shoes , cars , t.v's all crapola.......yet ,still it comes like a never ending river of junk.

Let's hope their Nuclear facillities and weaponry are built to a better standard  than their mass produced copies  the world seems to enjoy soooo much.

Up
0

You are totally correct.

 

This is a culture that adds chemicals to baby milk formula to make a bit of an extra profit. What will they not do for a few $$ ?

 

An excellent book is Poorly Made in China. http://www.amazon.com/s/ref=nb_sb_ss_i_0_15?url=search-alias%3Dstripbooks&field-keywords=poorly+made+in+china&sprefix=poorly+made+in+%2Cstripbooks%2C490

 

Seriously recommended reading for anyone who wants to understand what we are importing and get a wider view into the Chinese business psyche . After reading this book I always look at product labels in the supermarket. Where is your home-brand shampoo being made? 

 

 

 

Up
0

"anyone who wants to understand what we are importing"

That's the problem. The Chinese are quite capable and do produce some fine products, it's the importers that are to blame. A good example is the ubiquitous market umbrella, imported in their tens or hundreds of thousands by the Warehouse. They all have the same problem - excessive grain run out in the ribs, knots even. The first time it gets knocked over they break. Now this is really basic stuff and unless you specify the quality the manufacturer is going to use the crappiest timber they can get. TWH buy these things for less than $5. Who's ripping who off?

Up
0

There is no doubt about the point you make there KiwiD...but shutting down importers demands for low cost , would have both positive and negative effects.

 As in it would level the playing field somewhat in Global exports...Pos+

It would put millions of Chinese factory workers out of a job....Neg-

As ..ew said..there is a problem on thew ground in China with their building industry perpetuating the demand for cheap and quick.

Up
0

Please read the book, it is jaw dropping

 

The business model is that the Chinese manufacturer will quote very low on price to get the order. They will initally meet all quality standards. However because they quoted low on price they need to make their money by cutting costs.

 

The manufacturer will shave a tiny bit off the quality & see if the buyer notices, if not they shave a bit more and repeat etc

a 1 cent cost saving in production costs per item over a long production run means big money to them.

Up
0

I have heard of this chinese business model somewhere else Ew. I had a bit of a laugh a week ago, I had cause to call into a motorbike shop. The easy way to enter was from the back of the workshop. On a rather large sign was this. " We do not service chinese made bikes"  hmmm I wonder why.

Up
0

Lets be clear when you see the above its often a case of criminal behaviour.  

In some ways its our mistake.  For instance specify a button on a suit has to be sewn on 24 times and while we assume it means 24 seperate loops, a chinese manufacturer will do 24 at once the result is the botton falls off soon afterwards.  If we'd actually said 24 seperate times then that is what we would get and it wouldnt fall off.

Devil and profit is in the detail...I have lot of good stuff all made in china, they are very good...Ive also seen no name crap....simple, dont buy it, ever.

Supermarket, yes too true....I recently saw Pak-n-sav label some veg "produce of NZ/china", I not only didnt buy I complained and made sure I made it clear I wouldnt buy chinese food and wanted to know where it was grown.

Since then the packaging has been very clear, good on them.  Same applies to USA btw, I wont buy GM so automatically no US produce.

Same with prawns etc I wont buy produce of vietnam/thailand/china its NZ or OZ or no, are you listening Countdown?

regards

Up
0

I have a friend that until recently was a electrical enginner/project manager for a company specialising in fuel delivery systems. His experience with Chinese manufacture is that you have to camp on them 100% of the time or they will take shortcuts. It goes down the chain as well, he says a single component like a capacitor will be manufactured by some guy whose workshop is the dirt street in front of his house, he may decide to cut costs by sourcing the raw materials cheaper. End result is that a piece of machinery worth then of thousands will fail because of a single poorly made capacitor.

 

Xreference the take over bid of F&P from Haier, and F&P already have crap electronics!

Up
0

#1.   Same old tripe.    What does Bernard think will happen to the property the old now have.  "The old sitting on their Trillions".  When they die, quite soon, he seems to think the houses will go with them.Or disappear - or something?

When I was young I didn't have much and the companies and property mostly were owned by older people.  Whats different now ?  Those older people are long dead.  The companies and property are still there- owned by people like me and Bernard.

Yes, we do have some disfunctional distribution.  Yes, there is over consumption and a crazy debt thing.   But bashing the older people is not the solution.(Bernard - you are old you know)

Up
0

Gummy has been thinking , Bernard ( I know , it's only October .... my annual Thought-Fest came early this year ) ..... we really can't have full employment without accepting inflation ...

 

...... as long as central bankers target tight bands of inflation , 0 - 3 % , or thereabouts , we will have higher rates of unemployment ... we need to set a 3 - 6 % inflation level ....

 

Indulging ourselves in maintaining a minimum wage also keeps youngsters out of obtaining ongoing work .....

 

As for the oldies sitting on their $ Trillions , KH is correct ..... same old boring refrain ....

Up
0

Maybe National Bank could have got a few tips from Bernard on Flogging a Dead Horse. 

Up
0

Elley's French , and a reknowned chef ..... she could give us tips on how to butcher and to cook Bernard's dead horse ....

Up
0

I think she's in pastry GBH....that's a Gerry B sized pie you talking there.

Up
0

So; anything in the bank over 1Mil gets taxed heavilly (reardless of which country you try to hide it in).

OMG; I might have to buy an asset or invest in something...

Sudden spur to economy...

Fancy that...

Lead the way Gummy...

Up
0

Re #2 and #3, we are seeing this right here in NZ as well - declining middle class pay as the good jobs are replaced with lower skilled and lower paid work or no work at all.

Just out is Statistics NZ annual survey of incomes. The median wage has gone up $10/week to $560 - just over $29k pre tax per year.  The basic necessities - food, power, insurance, rent, fuel are all up substantially. Middle NZ is going backwards.

What was Key saying? We'd be enjoying four or five% real wage growth, as I recall. 

 

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10838377

Up
0

The median wage has gone up $10/week to $560 - just over $29k pre tax per year

 

That is not what the article says. It says the median income from WAGES and SALARIES has gone up to $806 per week which is $41,900 a year. The numbers you are quoting is median income from all sources. ie includes people not in employment

Here is the link to the stats web site.

http://www.stats.govt.nz/browse_for_stats/income-and-work/Income/NZIncomeSurvey_HOTPJun12qtr.aspx

 

as an aside. Minimum wage in the UK is £6.19 an hour for Adults. Thats about $12.17. What is wrong with the NZ economy that we need a higher wage structure than the UK. Something is seriously not right here 

http://www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/DG_10027201

 

 

 

 

Up
0

Thanks for pointing that out Ew. The median income I quoted is for income from all sources so folk on the super, for instance, are included in this. However the number on benefits is way less than 50% (20%?) so this figure,or less is what a huge chunk of our working folk earn - the working poor.

Interestingly the increase for the median wage and salary earner was even worse than the all sources median - 0.7% or  $6.00/week! They are definately going backwards.

It's difficult trying to compare wages between countries. They do have a higher threshold before you pay income tax in the UK, here it's basically from the first few dollars - Key is even hitting the paper boys.

Up
0

You missed out the next highest cost other than labour, the lease. Which of course is profits going offshore to Australia via the banks. Like I have been saying, interest is the method for the redistribution of wealth.

Up
0

One of life's equisite little ironies , that Bluescope Steel has exhorted the Australian Federal government to place a 17.5 % tarriff on the overseas competitors , whom they claim are dumping sheet steel cheaply upon the Australian market ....

 

.... but the Australian car manufacturers ( who themselves receive $A billions in subsidies ) are against the plan , saying it will drive up costs to them , as they use imported steel in their car plants , not Australian ....

 

Ah , the tangled web we weave when we potter down the path of protectionsim ...... the irony of it all ..

Up
0

 potter down the path of protectionsim .

If Mutton Head wins the U.S.election expect that path to become a highway  ..

The debate was a shocker for Obama......anything like that in Foreign Policy debate and the "Yes we can's" will stay home to be "no we better not's".

Up
0

Listened to it in the background....Romney did very well IMHO and he seemed to have flipped on policies mind you, but he talked well and didnt put a foot wrong.

Obama did Ok but as someone says when the otherside is prepared to lie to your face unless you can catch them out its hard to argue against especially with huge detail necessary to show Romney is a lieing.

I was Quite surprised on the presentation, I expected Obama to be more charasmatic but he seemed flat and I actually found Romney more so......interesting stuff....

regards

 

 

Up
0

yes ...Stevo,... I flicked you post on it over at Thursdays top ten early this morning , was interested to see what you thought...but I gotta say Obama does not look like a man who wants it. 

Up
0

Yeah I have not watched/listened it all yet though.  Romney of course has a history of digging his own grave.  So right now on these debates he's fighting for his political life IMHO.....Obama on the other hand just has to take no risks....maybe the tide will yet turn.

http://krugman.blogs.nytimes.com/2012/10/04/romneys-sick-joke/

regards

Up
0

They're just two factions of the same "status quo" party. Obama the Fraud (where's the change you promised) and Romney the Liar, who changes his message on a daily basis to suit the audience. Both of them are pro military, pro Wall St, pro big oil. So Obama's half black. So what? Martin Luther King Jr will be turning in his grave at Obama's effort. Ask South Africa's poor what the ANC has done for them in the last 15 years. Money, greed and corruption are colour blind. The sad thing is too many see no viable alternatives and just don't vote. Less extreme but the same thing happening here, Australia, Britain.... mass disillusionment with the political process but instead of revolution we have abstention and disengagement allowing the political and economic elites to plow ahead regardless.

 

“The election of Obama was one more triumph of illusion over substance. It was a skillful manipulation and betrayal of the public by a corporate power elite. We mistook style and ethnicity – an advertising tactic pioneered by Calvin Klein and Benetton – for progressive politics and genuine change.” - Chris Hedges

 

http://unframednz.wordpress.com/2012/07/03/chris-hedges-the-corporate-state-faux-liberalism-the-sham-of-democracy/

Up
0

I don't disagree at all WTF....nevertheless one will be King for a time, and I'll stay interested for my own interests.........even here in shitty little Godzone when you can't fix all the problems, I guess most resort to what's in it for them while they are there...if they haven't done so before becoming the incumbent.

Up
0

Yep, isn't that exactly what I said democratic media would be doing in Thursdays top 10? You can expect Obama to have a pretty decent go at this pre-existing condition thing next debate, and the democratic media to try to make this point well before then.

The Romney grave digging actually happened in front of your eyes in the first debate, with Mitt getting tied to some election promises, though we have to see if the media can get this point across and Romney gets burried in it.

My pick, Obama to come back fully revitalised in the next debate.

BTW, thats not a massive endoursement of his policy, he would prefer not to be tied down to any promises at this stage either. Also its not like Obama, Romney, Bush, Clinton etc... actually do much policy selection. The only reason to vote Democratic in the US is they have a marginally better record domestically, but its far from a huge margin.

 

 

 

 

Up
0

Christov, i though Americans were more interested in what happens to Big Bird.

Up
0

Well that too Mike B..........cradle to the grave...it's all about someone else keeping them amused.

Up
0

Big Bird's in New York City , isn't she ..... third highest perch at the U.N. I believe ....

Up
0

I must have missed that news. What about Kermit, is he okay?

Up
0

...... he's doped out in a South Auckland flop-house , collecting WFF ( Miss Piggy had a lotta litter , that Kermie is a sex bomb ) , and surviving off rental supplements ......

 

Still dreaming of his return to Hollywood , to the green green grass of home .......

 

...... anyhoo , what about Mr scarfie , what's new pussycat ?

Up
0

Real US un-employment is somewhere between 15 and 20%. Do you know what I heard, Mutton Head saying? jobs, jobs jobs....that will I suspect resonate well with the voters.

He also pushed the energy costs / independance button....another huge pain point for Americans....

I dont know if he can rise from the dead but if that performance was anything to go by he could.....total bollocks, but he was convincing....Obama better pick up his game.

regards

 

Up
0

#1
tens of millions of young people labour under huge debts and unemployment.

What will break the logjam?

Hmmm, have you ever thought about NOT borrowing what you can't afford?
Oh, Yeh, i forgot, it's not your fault you were forced into borrowing money for things you didn't really need. Sorry.

Up
0

And if ever you stop, dont worry the government will step and borrow in your place, they will even force interest rates down with the long tern consequence of destroying asset values.

Up
0

If inflation takes off to eliminate debt then i bet house prices will beat, or at least keep up with, the inflation, capital gains or not.

David Chaston did a very good article the other day showing the relationship between house prices and gold. To me this clearly showed the extent of the degradation of money over the past 20 years. It is the constant degradation of the money that is causing all the problems. People still think that rising prices is the cause of inflation when clearly it is the degrading of money that pushes up prices, as is easily seen with gold and property.

Up
0

It's Friday...YaY.....Today we will stay with the Problem Mortage theme...

 

 

For his birthday, little Bernie asked for a 10-speed bicycle.  His father said, "Son, we'd give you one, but the mortgage on this house is $280,000 and your mother just lost her job.  There's no way we can afford it."       The next day the father saw little Bernie heading out the front door with a suitcase. So he asked, "Son, where are you going?"       Little Bernie told him, "I was walking past your room last night and I heard you telling mom you were pulling out. Then I heard her tell you to wait because she was coming too and I'll be damned if I'm staying here by myself with an $280,000 mortgage & no friggin bike!"    Happiness...enjoy you leisure time.!!!
Up
0

Three men were drinking in a bar , heatedly debating which of them had the best memory ....

 

" Well " brags the first guy , " I can clearly remember my first day at primary school ! "

 

" Pah ! " says the second drinker , " I can recall my first day at kindergarten ! "

 

" I can remember going to a high school dance with my dad " , says the third man , " and coming home with my mother !!! "

Up
0

Nah SoreL...it wouldn't stand the edit...but I'll think some more on it you betcha.

Up
0

The gorgeous young blonde suspected that her husband was having an affair ..... so on the way home from Blonde Skool , she popped into the Guns & Fishing shop , and bought a pistol .....

 

.... upon entering her house , she heard giggling and moaning coming from the bedroom ......

 

She rushed in , to find her worst fears confirmed , her hubby in bed with a ravishing redhead ....

 

.... the blonde cocked the pistol , and pointed it towards her head .... panic stricken , the husband leapt out of bed and pleaded with his wife  not to kill herself ...

 

..... " Shut up , you cheating bastard  " she screamed at him , " you're next ! "

Up
0

Voting for the next president of the USA is akin to voting for who is to be the new chef on the titanic; the diet may change depending on your status, but the outlook remains the same.

Up
0

offcut - I'm pleased that someone else understands the sideshow that is the U.S. presidential election.  The same financial, defence and healthcare companies fund both their election campaigns, so whoever wins will have very similar policies to please their backers.

Up
0

Romney I would think be far worse for the world.  Obama would stagger along....but yes both will face plant, thought bear in mind Obama doesnt need a re-election fund this time...he might do something....a very big MIGHT though.

regards

Up
0

Fat chance. Obama's a Wall St government. Even his old 2008 mate Matt Damon has gone cold on him. All style, no substance. Romney is just a dangerous, greedy, amoral idiot. Obama more dangerous in my opinion because of his duplicity.

Up
0

And further to the 'growth will take away the pain' .. NOT!!

The launch of QE3 (and similar measures by the European central bank (ECB) in Europe) is like the crack! of a starting-gun to human psychology that carries the following, urgent message: Hey, humans  go get those resources quickly, before someone else does! Indeed, the most powerful lever for monetary policy remains our capacity for social competition. The open-ended promise to pursue a faster rate of growth at the expense of inflation, mal-investment, bubbles, and the environment places a new and fast pressure on human economies to perform.

http://www.zerohedge.com/news/2012-10-04/guest-post-war-between-credit-and-resources

Up
0

Trouble brewing @ Tiwai....

http://www.stuff.co.nz/business/industries/7776931/Smelter-at-risk-as-n…

 

Meridian trying to bluff Rio Tinto? 

 

Up
0

I have a number skills that could have been of great benefit, including managing emergency response teams and a practical knowledge of construction. However in an attempt to offer my services I could not find a point of contact that could accept that help. That situation persisted for 4-5 days to a point that I give up. Heck at a very minimum I could have managed a help desk to collect, assess and co-ordinate volunteers. From the outside the response looked a bloody disaster. I am certain the casualty toll is higher because of the inadequacy.

Up
0

Seems the sharks are circling kiwisaver,

http://www.stuff.co.nz/business/7779504/KiwiSavers-unintended-consequen…

"Veal and two United States-based Kiwi mates had the idea of forming a "fund of funds", now called Matakite Capital, to enable Kiwis to invest in alternative asset classes such as global leveraged buy-outs and venture capital. The obvious place to look for investors, he said, was KiwiSaver - but what they found was surprising."

oh we cant feed, oh bother...

regards.

Up
0

At least another 6 years, only 6?

"Oliver Blanchard make a few things clear. The crisis, recession, depression, whatever you choose to call it, will last another 6 years or more.

During that time, the people of Europe will get poorer as they go along. So will the people of America."

http://theautomaticearth.com/Finance/the-imf-inadvertently-condemns-the…

regards

Up
0

"If Mitt Romney and Paul whatshisface don't do something spectacularly dramatic soon, they'll have lost the election. They have nothing left to lose. That is, unless they're patsies, and were set up to lose."

http://theautomaticearth.com/Finance/will-the-collapse-of-spain-put-rom…

regards

Up
0

bulldoze all of chch.

give every family their insurance money with the following proviso.

if you remain here no one will insure you and the govt won't come running next time.

in other words you are on your own.

this chch rebuild is going to drag on forever and be a burden on the tax payer for decades.

get out now

Up
0

No  no no no no no no no no no ! .......very bad idea ......

 

.... it wouldn't be nearly such a burden on the rest of the country if the government , the Christchurch City Council , and CERA were told to piss off !

 

And let the citizens get on with repairs and rebuild as they see fit ....

Up
0

except insurance companies have pretty much said you wont get insurnace if this continues....you'd be mad to rebuild and not have insurance.....and you wont get a mortgage...sale price? oh dear.

Sure lets turn chch into a libertarian ghetto move them all down there, watch everyone else leave....what an excellent solution....its far enough away from me....as well.

regards

Up
0

oil trending down...I wonder if we'll see a blip after the election winner is announced....and will it be up or down I  wonder.

http://oil-price.net/

Up
0