Here's my Top 10 links from around the Internet at midday today.
As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
See all previous Top 10s here.
My must read is #1 on some of the problems with the TPP.
1. Beware the 'free' trade agreement - America's Big Tobacco lobby is licking its lips at the prospects of using the Trans Pacific Partnership (TPP) 'free' trade deal with New Zealand and others to roll back some of the restrictions on tobacco use and marketing put in place around the world.
The use of the 'investor state' rules in agreements like the TPP is the favourite tactic of the tobacco firms.
The benefits of the TPP to New Zealand are debateable at best. America's dairy lobby has no intention of letting Fonterra in.
America's drug lobby wants to use the TPP to gut Pharmac and its movie/music studio lobbyists would love to use it to impose draconian controls on use of the Internet and intellectual property.
Here's a useful Quartz guide to how the tobacco lobby wants to use 'investor state' to water down the various moves to reduce tobacco use.
Malaysia is fighting the good fight, though:
Malaysia, where there is a strong anti-smoking movement, has proposed that tobacco be removed from the deal, so the TPP countries can apply restrictions without violating the terms of the partnership, a move also supported by anti-smoking advocates. Bollyky argues that a broad public health exemption for tobacco products should be included in the bill, following the Framework Convention for Tobacco Control, an international treaty signed by 176 countries. This would allow countries to pass anti-smoking measures without fear of challenge as long as they don’t blatantly favor domestic producers.
The US initially released a proposal to create a specific safe harbor for anti-smoking laws in the TPP, but then walked it back to a more general public health standard that still leaves room for tobacco companies to bring disputes. While this partially reflects the still-considerable political clout of the shrinking US tobacco industry, the bigger fear in the business community is that it will open the door to safe harbors for other controversial products like alcohol, genetically-modified crops and sugary soft-drinks.
2. 'Just make it up' - Many people have distrusted the detail in China's economic statistics for a while. Here's a BBC piece on how the Yunnan county government made up its economic statistics.
According to the Xinhua report, 28 companies in Luliang in south-west China reported a total of 6.34bn yuan ($1bn; £660m) in industrial output value in 2012. However, initial calculations showed the actual value was less than half of that - 2.8bn yuan. For their part, the companies alleged if they did not provide inflated data, then their reports were sent back by local government departments.
"They also said that fake reports would ensure they would enjoy favourable policies such as securing bank loans," the Xinhua report said.
3. Keep an eye on Italy - We haven't had a European crisis over our winter (their summer) for the first time in five years.
But this piece from Ronan Keenan at Macromonitor shows all is not well in Italy. Silvio is making a nuisance of himself again and could bring down the government. The economy, meanwhile, is still in deep, deep trouble.
There is little evidence of a recovery in Italy. The economy has contracted for eight consecutive quarters with the manufacturing sector experiencing a striking decline as output has fallen more than 25% from its peak in 2007. The nation’s unemployment rate is 12%, but this would be higher if not for a government policy introduced in the 1970s which aids struggling factories by paying “unused” workers 80% of the salaries while their employer attempts to solve its problems.
Earlier this week there were headlines trumpeting a rise in eurozone manufacturing aided by a surge from Italy. Export sales drove output in August but the same manufacturing survey also showed that employment in the factory sector fell for the 25th month running, and at a slightly faster rate than in July. On Wednesday it was announced that Italy’s services sector contracted by more than economists’ consensus, highlighting weak domestic demand. Overall, the manufacturing and servicing reports illustrated that while the wider global economic recovery is gathering steam, Italy remains stagnant.
4. New Irish bubble? - Who would have thunk that five years on from Ireland's crisis there would be fresh talk of a bubble in some parts of Dublin's property market.
Foreign buyers are at least partly to blame, albeit often from expat Irish returning home. Here's Reuters with the latest:
While prices began to rise again annually in June, some urban pockets are driving the recovery, with properties in Dublin being sold for 8 percent more than a year ago and higher still in affluent areas where 30-somethings outbid one another.
Having built the wrong stock in the wrong places during the boom - huge apartment complexes and out of town housing estates - there is now a big lack of supply in the capital and need for a battered construction sector to take the heat out of prices that some estate agents say are rising by 1 percent a month.
"There's an element of craziness creeping back into it where people are getting frantic," said Scott, a 37-year-old father of two young children, after wading through the crowds to view a four-bedroom, semi-detached house in leafy south county Dublin.
Property consultants Savills say 20 percent of its buyers are from abroad - mainly Irish residents keen to move home - piling even more pressure on frustrated domestic buyers.
5. Problems for Europe's Financial Transactions Tax - The FT reports there is trouble brewing for (continental) Europe's tax aimed at bank trading of wholesale financial instruments.
Europe’s plan for an expansive financial transaction tax hit a wall after the top legal adviser to finance ministers concluded it exceeds national jurisdiction, “infringes” on EU treaties and “is discriminatory” to non-participating states.
The unusually blunt paper from the EU Council legal service, obtained by the Financial Times, deals a heavy blow to a European Commission proposal to introduce a €35bn eurozone levy with global reach.
6. A 50 year bond - There's no better way to extend and pretend away an economic problem than to issue a 50 year government bond. Here's Spain's plan to do just that, courtesy of Reuters.
7. Not quite so happy - The UN has released its latest report on World Happiness from its Sustainability Development Solutions Network. Reading that title made me slightly less happy, but certainly people like the Treasury are now starting to use these sorts of Happiness indices to measure a nation's 'health' rather than pure GDP growth.
This UNSDSN report shows that New Zealand was officially the world's 13th happiest country from 2010-2012 with a score of 7.221. Denmark was the happiest and Togo was the least happy. Singapore and France were surprisingly unhappy. But it also shows our happiness fell between 2005-07 and 2010-12.
Here's some explanation via LA Times and report author Jeffrey Sachs:
After analyzing tens of thousands of responses, the researchers identified six main dimensions to happiness, including income, mental and physical health, social support, freedom to make your own choices, being inclined to help others, and living under a government that doesn't seem corrupt.
"There is no one key to a society's well-being, but if you take these variables, they explain about three-quarters of the observed variation across countries," said Jeffrey Sachs, director of the Earth Institute at Columbia University and an author of the report.
8. Same old, same old - China's factories are starting to hum again, which has reassured some, but it seems much of the Chinese growth is of the same 'bad' old types involving investment in concrete and steel, rather than spending by consumers.
It does appear that the “mini stimulus” outlined in July might be having some effect. BAML’s Xiaojia Zhi and Ting Lu say that Premier Li Keqiang “will likely “taper” his pro-growth rhetoric started in late June” now that the 7.5 per cent growth target looks well within reach.
SocGen’s Yao is wary of how this number is being reached:
The significant acceleration in infrastructure investment was clearly the major push. Although this set of data puts clear upward pressure on our short-term forecast, the dominating role of infrastructure played in the sudden turn-around confirms our concern over the sustainability.
9. China and diabetes - Here's the NY Times on one of the results of a the modernisation of China.
10. Totally The Daily Show on Syria. The duck from Wonder Pets makes an appearance.
68 Comments
Be careful Gummy Friday the 13th is coming our way soon.
Interest.co.nz should run their own happiness poll. I'm not happy with compliance. I'm not happy with all the Bureaucrats. I'm not happy with....all the red tape. I'm not happy with....WFF, or other subsidies, I'm not happy with Dunne and Turia not supporting the changes to the RMA.
High time that Wild Bill stared down those two ornery backsliding varmits , Turia and Dunne ...
... threaten them with a snap election , John Boy ...
They'll soon come to heel ( in both senses of the word ! ) ...
Labour are a side-show shambles at the moment anyway .... headless chooks !
Wild Bill does f #&$ all but stare down GBH, so they may not notice any change in demeanor....but I give credit on the backsliding honery varmits.....yes it's a slippery slope when back-peddaling.
I think turia is seizing the opportunity to show some chihuahua teeth....make it look less cozy...as The Maori Party is on a hiding to nothing in most of there seats.....young Maori think they sold out, and.....there probably spot on there.
Dunne the squirming weasel is in survival mode...even if I agree with caution in review of Nationals proposals on reforms, I wouln't want that Benedict Arnold advocating for me.
Told you he was completely dodgey years ago.....
I better go cook tea ..she's looking at me funny like.
Ah, that's it. The Irish just have to release land.
Nobody has to think any further than that.
Excellent.
The fact that there are no other fields capable of carrying the next global doublng-time (I pads don't do it) has nothing to do with it then?
This is the biggest remaining game in town. It was always going to get a second shove, in lieu of any alternative. Just means a bigger pop when the bubble goes. Which it must.
... actually Hugh , Mr PDK could be alot more wrong ... but that's another story ....
But look , precious few Kiwis realise that a tiny proportion of the population are housed on " lifestyle " blocks which are gobbling up vast tracts of farmland , nearly 5 times the land area of our towns and cities ....
... sprawl ? .... oh yeah , that's sprawl all right ... you can drive around much of the Waimakiriri and not be in the wide open spaces ... it's all 4 ha. blocks and ponies ....
I find it funny when some of the bloggers here moan about urban sprawl , as if that's a worse thing than " lifestyle sprawl " ....
.. at least urban developments keep infrastructure concentrated on a smaller land area , and don't chew up so much of our productive farm land ...
I've been whittering on about a new town near Eyrewell forest for some time , and a new bridge across the Waimak River ... short-cutting Oxford to Christchurch .... which would decentralise the city .... and put folks on bare stoney earthquake resistant land , which is only good for radiata pines anyway .... but it'll never happen ...
... hmmmmm , time for a refreshing cup of Yorkshire Gold methinks .... yah ... life is good ....
The double irony is that the "costs of sprawl" are a myth anyway. Anyone in a US city one third Dorkland's density, gets to work in half the time. It's all about dispersion of jobs, low traffic congestion, and the affordability of housing anywhere anyone might get a job near.
We are idiots and suckers for lies from the anti-car mob, by believing the opposite of the truth. Check out the TomTom annual congestion index, which now includes NZ cities for the first time.
The cover has been blown on NZ cities absurd inefficiency. But thanks to our comatose, supine, lap-dog mainstream media, no-one knows this in time to get Len Brown ignominiously tossed out.
PDK is one of these utterly confused neo-pagan theocrats who wouldn't know an objective enlightenment value system if he tripped over it.
If you put a new bridge where new roads between ChCh to Oxford and Rangiora to Rolleston bisect you would have SH1 bypass, direct access between the two fastest growing parts of Canterbury and speed up the access from the Western Waimak area to ChCh on a new less congested road.
And then you put a new town with cheap rural priced land by the bridge to solve the housing supply problem....
Yeah I can see logic for that : )
.. a new town there , along the lines of Pegasus , would be a fishers & boaties paradise !
Quick access to Harewood & the city .... easy peasy trip out through Oxford / Darfield back the other way ... ski fields within cooee ....
.. and all we have to do is to clear some scabby old radiata pines , to produce this wonderland ... And construct a new bridge across the mighty Waimak ...
Well Gummy you solved it.
It would be ironic if National loses the next election because it has done too little about housing and Labour announced that this is where they are going to put Canterbury's share of Kiwi homes.
So the new town might be a Stalinistic version of Pegasus
We'll call the new town Helengrad , comrade , in honour of our former leader ....
... chatting to a farmer from Eyrewell today , he told me the storm had uprooted thousands of pines on his property .... but his brother-in-law has buggered his log splitter ....
So it seems that nature is clearing the site for us !
Have a quick look on a cadastral map, folks.
Harewood Road is the exact route: it was one of the old dray tracks from the Oxford Bush to Chriuctschurch and is still mostly formed up, plus crosses the Waimak at a do-able shallow angle.
And GBH is right about the land: the north bank of all the braided rivers in Canterbury is stones and struggling sheep farms unless ya sticks a straw into Gaia and runs an irrigator or three. It's because the Nor-west drives all the silt and dust onto the South banks, which of course are simply fabulous cropping country - a century-and-a-half and counting, on literally metres of loess and silt.
I agree Gummy - it's a great location and would suit mighty fine. If your coming in from Rangiora to Chch around 4.30 to 5pm the traffic is fairly heavy heading to Rangiora so maybe that new bridge will have to be constructed anyway.
I have heard some of those 4ha lifestylers are wanting to add second homes to their blocks for other family members to build so maybe some pressures to open things up a bit could occur.
The Syria issue has been perplexing from a couple of angles but here is an angle on it from George Friedman that seems reasonable.
For you interest a quick look on Wikipedia shows that Syria, like Egypt, has become a net importer of energy in the last few years. Since we import probably 60% of our energy then what is the prognosis here for the next decade?
Very good analysis there Andrewj, nice discovery.
It corraborates the thesis in the Guardian I linked to in the previous discussion about the Syrian conflict. Its obvious this is a very complex, multifaced conflict involving many different players all with their own agenda's and political, religious, and economic objectives. They're obviously willing to play dark and dirty to achieve them. This is a very, very high stakes and high risk game.
The uprising and attendant conflict also has an economic dimension that isn't related to oil. I've been observing and researching political conflict over the years and a pattern has begun to emerge. Nearly all the major geopolitical upheavels in the past two decades have followed domestic economic crisises, all of which can be decisively linked to IMF instigated Structural Adjustment programmes. Somalia 1991, Rwanda 1994, Yugoslavia 1991, Iraq 2004, and in virtually all countries undergoing political revolt in the Middle East, including Syria.
In my view, its only too apparent that the world elites, are willfully employing economic reform as a lever to leverage very vulnerable fracture points in the most poverty striken countries in the world in order to forment turmoil and strife, in order to fulfill variety of strategic imperatives. The British, French, and American's have been practicing these same strategies since the early colonial era.
Scarfo....go back to Fridays top ten, I think and read Anarkist's piece on the Friedman article being a piece of suitable posterior wipe paper.
Roger W. put this up that day....Anarkist tore it to bits and provided some excellent input along the way.....
If you can't locate it I'll find it for you......
P.S. there is no such thing as ex CIA. just dead CIA.
Interesting and informative piece of Golems that Andrew linked to although I still see that the yanks could sit this one out and leave the Froggies and whoever else to it. I am sure Germany would oppose up front but help behind the scenes as in the long run a second supply of gas helps them. So for me the Friedman angle probably makes more sense.
Funny how the energy theme seems to permeate everything. I didn't find the Anarkist one, he was only Hugh bashing on Fridays 10.
OK that Scarfo....I'll find it for you..!
And here you go....scroll up and read the whole debate first...a goodn 4sure
Gotcha thanks. I skimmed that one as it was started off with the chemical weapons issue. You would have to have rocks in your head to believe anything in MSM on that issue. I have been thinking that Syria was the backdoor for the US as Iran is their real long term interest. But the fracking boom has given them a few years breather so had expected them to warm the bench on this one. With Syria now on the energy run downhill then they don't need to back anyone or supply any weapons, they will be doing with machetes and knives quite nicely before too long anyway.
Whatever the play it is longer term strategy at work, although I have seen incompetence alleged.
I have no dawg in this fight: YMMV and it clearly has, although Godwin looms...
However, his earlier point about America reducing itself to a bit player internationally has some legs: see Nile Gardiner in the Torygraph, f'rinstance.
The US new motto: speak bigly and carry a soft stick.
Seriously waymad.
Obama was playing the role of "reluctant warrior" beautifully, an Oscar deserving performance, only for the plans of his warhawks to be disrupted by John Kerry's blunder at the press conference in London, which provided the opportunity for Russia to offer a credible alternative solution to the crisis.
I think people tend to overplay the power of the United States. The U.S. is only able to fulfill its geopolitical objectives with the assistance of regional allies such as Saudi Arabia, Quatar, Jordan, and Turkey, whose own goals coincide with America's. Military power achieves only so much. Diplomacy and coincidence of goals much more. Who's to say who gains most from the arrangement? It certainly costs the U.S. the most.
#4 There was approximately zero control of housing developments in Ireland in the period 2000-2007. Build anything, anwhere. Politicians and civil servants taking backhanders all over the place. In the end, the people occupying the houses were those building them, builders, plumbers, electricians from all over Europe. All fuelled by cheap money. When the subprime housing crisis hit the USA, all the cheap money stopped and the American banks called in their loans from Europe, the European banks called in their loans from Ireland, the Irish banks called in their loans from the developers, who all went bust.
When the house building stopped, all those builders and plumbers and electricians lost their jobs and went home, end result is something like 250,000 unoccupied houses in Ireland.
So, the government bails out the banks for something like 150 billion euros, and the Irish taxpayers will be paying that for 20 years or more. Not to mention all the interest on the bailout loans. And of course the economy has collapsed.
A failure in governance all the way back. Not to mention plenty of greed from everyone concerned. Government, banks, developers, plus lots of property investors, and even your average house buyer, getting a mortgaqge way beyond their limits and spending the capital gains on shiny new toys.
The Auckland housing boom to some extent has a different cause, lack of supply, but it's still being pushed along nicely by cheap money.
The above is probably a bit coloured by the fact that I'm Irish and still have a house there, still paying the mortgage even though my house has dropped 70% in value.
I'm still responsible for the mortgage - it's not like the USA, I can't just hand in the keys.
The house was on the market for 2 years with not a single viewing, never mind an offer. If I sell up now I'll suffer a major loss, so the only option now is to hang on in there and hope things improve, or at least spread the loss over a longer period of time. I don't think the market will get any worse.
Just to make the point that property buying/investing is not a guaranteed win. Bad, very bad things do happen.
Well, not having defaulted, I'm not sure, but I believe it's the same as here. If you have a debt, you have a debt and you have to pay it. If the bank forecloses on you, you're still liable for any debt left after the house is sold. I don't think prison is any more a risk than here, it's more likely you will be declared bankrupt.
Given the scale of the problem in Ireland, there's a lot of pressure on the banks to ease off on foreclosure threats, but it does still happen. The banks are all owned by the government as part of the whole bailout, but they are still getting away with all the usual sharp practice happening elsewhere in the work. Of course the top echelons are not suffering, they own everyone else....
Hamilton..?.James007....? I shall name you Jacques Bonk henceforth....I would not wish it upon the young of this country to visit Hamilton let alone reside there..! Dreadful place, dull, close to nothing unless your a motor head, and the mullet is still the doo of the day including the ...ladies ?...ghastly place...
Pokeno..? at least it would be what you make of it..!
When I moved here, I left house in place as a rental, with the idea of selling a couple of years later when I gained permanent residency here. After all, what could possibly go wrong? By the time I did get PR, property prices were in freefall. I don't see the house recovering its value in the next 10 years. Maybe 20.
Real estate speculation consumes wealth, it doesn't increase it.
I do want to stress that Ireland's houseing boom was very different to New Zealand's, and while I have tremendous sympathy for those caught in it, because the causes are different, I think the lessons from it should be used with care.
Ireland's boom was primarily caused by internal borrowing, New Zealand's was not. This is abundently obvious if you look at a graph of house prices and debt for the two countries (NZ blue, Ireland red. Prices solid line, Debt in relation to prices dotted line).
https://www.dropbox.com/s/vgx2p35zyhf9vnc/NZIE.png
If you look at the boom years (2002-2006 for Ireland), you can see the way Ireland Household Debt is rising along with house prices (because debt is being converted into house). On the other hand, in New Zealand, the value added to the house prices is coming from somewhere other than New Zealand Household debt.
You can also see the debt hangover in Ireland from the economy collasping so unpayable debt building up with house prices falling. NZ is nowhere near as exposed to this as an entire country, as debt is not pumping up the housing market in the same way.
dh - well, you can have a rise in prices because you all agree your houses are 'worth more'. Let's all add $100,000 to our Valuations. Simple. Did Ireland just build more new, in proportion? Has the drop in values resulted in increased debt through knock-ons? Are we yet to see our own readjustment?
As you say, everyone could agree that there houses are worth more, but eventually someone has to actually buy a house, at which point a relationship between debt and house price is made. Now, even in the boom period Ireland's house prices related to household debt (though that went to pieces when people could no longer flick on their houses to even more in debt folk).
In NZ it used to be the case that there was a strong relationship to house prices and household debt, up until 2003, at which point more money began going into the housing market than can be explained by NZ household debt. To put a hard estimate on it, since 2007 18% +/- 3% of house prices in a year cannot be explained by NZ household's borrowing money to buy houses.
This is a big enough difference in relationships that I would maintain you cannot treat the NZ and Ireland experience in the same way.
As to are we yet to see our own adjustment? It hasn't adjusted yet. I would say at the moment I see no reason for that 20% or so of capital of unknown origin to leave the housing sector, so I don't know if it will.
Now, to put myself on the line about this, I have actually started writing this analysis up, and the current draft is at
But I had better warn people that the feedback I have had from this draft is that it is too complicated and needs to be dumbed down.
Malfunction: I would like to know a bit more.
As the original posting (#4) pointed out, all the building was in the wrong place or of the wrong kind; hence there is scope for another price bubble to be forming already.
So it strikes me as wrong to claim that there was "zero control".
You also point out yourself that there were back-handers going on, which hardly indicates that politicians and local government had no "control" to exercise at their discretion.
This was a classic bubble created by government for its own temporary benefit. First, plan and ration growth in the right places, and construction of housing of the sort people actually want. Then once the price bubble is well underway, join in the chase for "planning gains" and let stupid developments happen anywhere, with speculators rather than genuine demand driving it.
I am very aware that there is potential for an increase in "supply" here in NZ to still be captured by the vested interests in "planning gain". I am sickened by every suggestion of "x" number of new houses being built on "x" years supply of land "released" by the government. I can confidently predict that this will not stem our price bubble.
It was absolutely insane for the Irish to sit by idly while their government nationalised banking sector equity losses. Iceland got it right. Why didn't you? Far better to let the finance sector collapse and the pig-troughers get wiped out, and start again sadder and wiser, than hobble the whole economy and society for 20 years. The troughers are all ready to do it again right now, even as you ordinary Irish are already in hock for 20 years for the troughers last systemic malfeasance.
One common anecdote I enjoy about Ireland, and I frequently warn a certain kind of NZ-er about this; is that all the wise-ass "property can't fail" self-appointed experts of 2000 - 2008 are ashamed to show their faces in society now and live semi-reclusive lives......
There is nothing like the RMA in Ireland. I'm sure there is some legal framework in place, and in theory the planners had control of the developments. Not everyone was taking backhanders of course, but a lot of people who should have known better were asleep at the wheel or unwilling to rock the boat.
I don't think the very slight rise in prices is the start of another bubble, but what you do have is a situation where prices have hit rock bottom. The economy is so down that locals still have little or no access to mortgages. But if you do have money, you can get yourself a bargain or three.
As for why the Irish government bailed out the banks and Icelands didn't, well, all kinds of (conspiracy) theories. 1: The banks lied to the government about the scale of the problem. The original request was for about 6 billion euros, worth it to save the banking system. The bill is currently at 150 billion euros. 2: Because not bailing out the bondholders would have exposed all the European banks to major losses, there may have been pressure by the EU to bail out the banks. The Irish government claims this, the European goverment denies it. Take your pick. It doesn't matter which government you elect, there islittle difference in policies between the main parties, and now Europe has complete control of the purse strings.
Singapore, the unhappiest place in the developed world. What's up with that? Wasn't it Don Brashes favourite place in the whole world - the way of the future, great success and everybody rich and happy?
Turns out there's a few rich pricks and everyone else is stressed out, poor and miserable. No Thanks.
Much better Hugh! Glad to see you listen...
There is clearly enough land in Chch, Waimak and Selwyn for subdivision - just needs a few more (affordable?) houses on the land to really increase the supply side. Is the land on the "fringes" really that affordable anymore?
By the way, I am not a GCSB agent nor on their payroll :)
Well, in theory the Irish planning system was "smart growth" like we see in urban areas of New Zealand, but on a national level there was little or no regulation or control of the housing boom. The whole process was subverted by corruption by developers, bankers, public servants and politicians. Of course it wasn't everyone, but there's plenty of blame for everyone all the way to the top and bottom.
Ireland joining the euro was a bit of a double edged sword - a booming economy, but no ability to change interest rates or manipulate the exchange rate. And of course, extremely low interest rates internationally.
The end result was a free for all, a frenzy of speculative development. Developments permitted anywhere and everywhere. That included lots of high density in the cities, plus housing developments decreasing in size with distance from the main cities.
The general public were getting sucked into the whole thing by the promise of wealth.
Want a house? Here - have two instead. Better buy you when you can, prices are going up and up, they'll never fall. Interest rates are as low as they have ever been, don't worry if the house cost more, you can still afford the repayments".
As for my view of the Auckland situation, Len Brown and Nick Smith are two ends of the spectrum. One wanting ever denser development, one wanting more sprawl. The solution has to lie somewhere between the two. Lots of people working in the CBD want to live close to it, and partments work for them. Others want to live and work in suburbia.
On a wider NZ scale, of course half the problem would go away if people moved to the rest of the country, but let's face it, the main urban centres are where the jobs are. The whole thing feeds on itself, industry and commerce goes where the people are, people go where industry and commerce are. Auckland just has that critical mass and sucks everything in. The immigration system favours young, educated, skilled people, and the majority of these will want to live in urban areas. The regions just don't have the same level of high-paying jobs that these people want.
I'd better stop now before this turns into a rant, I've tried to keep it calm up to now :)
Malfunction, I am really interested to discuss all this - I asked a few things above. What do you see as the difference between Ireland with its combination between oversupply and price bubble; and "lassez faire" housing markets such as cities in Southern USA that can grow from 3 million to 4 million population in one single decade (Atlanta) without house prices inflating relative to incomes? Have you looked into this at all?
I personally believe the difference is this. In Southern USA, there is such a freedom to "develop", that no politician or local government has the power to "game" the process of granting permissions or rezoning or providing infrastructure or anything. You wanna build a whole new city 30 km from Houston; you just get on and do it. You register a new municipality, float a bond issue to finance infrastructure. and go for it.
Ireland and Spain achieved the worst of all worlds by having both a price bubble and "oversupply" - of the wrong type and in the wrong places. This makes the crash more volatile.
But is tighter constraint the "solution"? What has happened in the UK over the last few decades? Higher and higher and higher real cost of urban land per square foot; space per person shrinking even as the real cost of housing rises. Of course the FIRE sector loves this.
But most western nations outside the UK managed to have affordable, stable-price housing markets for several decades following WW2. What changed? I say it was local government's attitude to growth. It was no longer regarded as a good and moral thing for the sake of following generations; a plausible excuse was environmentalism and "conserving land and resources"; but really the whole thing has been driven by vested interests, both in the FIRE sector and grasping local government that has failed to control its costs and wants new sources of revenue.
Hmmm, it think it's just a matter of scale. Houston growing from 3 to 4 million and sprawling is nothing on the scale of the USA. The country, even Texas, could absorb that and hardly notice.
Ireland and New Zealand are both small countries, you really have to scale your solutions down to match the population and area. Auckland growing from 1.5 million to 2 or 3 million is absolutely massive on the scale of NZ.
I see the Auckland house price situation as a combination of all the factors mentioned here daily. Artifically contrained supply. High development costs. Cheap money. Lots of immigration demand. Foreign property investors. Maybe chuck in a building materials cartel as well for jollies. Each of these on their own is not an insurmountable issue, but add them all together and it's a recipe for disaster. Equally, solving any one of these issues won't fix the problem either, you have to tackle all of them together. As for the rest of NZ, a lot of these pressures don't exist to the same degree, hence much "weaker" housing markets.
#1. It's not just cigarettes "they" try to peddle, or to dismantle Pharmac, that's just the tip of the iceberg.
I don't like the idea that so many of the discussions are done in secret and behind closed doors with so much at stake.
As the NSA (sort of) says: "if you got nothing bad to hide, you don't mind if we have a look-in"
Here 2 articles:
http://www.naturalnews.com/041965_TPP_GMO_labeling_Monsanto.html
I think our politicians should have a good/better look at what's in the small print.
I'll be a lot happier when the TPP is negotiated out in the open. The american tobacco industry and the pharmaceutical industry are like annoying mosquitos that wont let you sleep compared to the malaria bearing american financial sector that will be unleashed to parasitise the NZ economy if the TPP is allowed to proceed without public input.
#11. Trade Minister Grocer has just announced millions of Tax Payers dollars to be paid to injured parties to Fonrera's botulism debacle! Unbelievable (tis fontera that should be paying the nation). This ugly monster monopoly is going to ruin the country one day.
Ergophobia
But in the meantime, phobic, Dairy/Meat/Oil (in that order) pay all of our bills (well, almost all - we do somehow seems to have expensive import tastes)....
So tackling Font Error around the knees is gonna have, shall we say, Unintended Consequences.
Ain't Reality a b..ch?
Kumbel shire is the happiest country on earth right now. A handful of trees down over driveway and fences. Two days without power but plenty of two-stroke for the chainsaws. After first hot shower and first cold beer for two days grateful we only have first-world problems. But quick drive around and the damage is obvious.
Have heard stories about linemen in the local power companies basically tearing up the OSH playbook and doing heroic work. Grateful thanks.
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