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Top 10 at 10: Beckham, Pitt hit by Dubai’s sandy, bankrupt mirage; Gold bugs booted; Muppets’ Bohemian Rhapsody; Dilbert
November 27th, 2009Here are my Top 10 links from around the Internet at 10am. I welcome your additions and comments below or please email your suggestions for Monday’s Top 10 at 10 to bernard.hickey@interest.co.nz There are no concrete underpants at interest.co.nz
1. Poor dears - David Beckham and Brad Pitt are believed to be two of the stars caught out in the collapse of Dubai’s Nahkeel, a major developer owned by the government. Beckham, Pitt and a whole bunch of soccer players bought properties in the now infamous Palm Jumeirah resort below, Hugh Tomlinson reports for TimesOnline from Dubai.
The concern is that Nakheel will be unable to continue developing the Palm and neighbouring projects, leaving Dubai and its coastal waters an ugly, unfinished construction site.
When the 2,000 villas and townhouses on the Palm went on sale in 2002, they sold out in a month. Passing through en route to the World Cup in Japan and Korea were the England football team, and several players stopped off to sign up for £1 million properties on the artificial island, with Michael Owen, David James, Joe Cole, Andy Cole and Kieron Dyer, it was reported, joining Beckham on the beaches. Pitt and Angelina Jolie are also said to have bought homes.
Joe Cole was one of the few who got out in time. The Chelsea player sold his villa for about $3.5 million (£2.1 million) last summer as Dubai’s property bubble approached bursting point.
The Dubai government has done its best to deny that a problem exists, claiming recently that the population would rise this year by 400,000, flying in the face of all independent assessments, which predict a sharp fall. The anecdotal stories of cars abandoned at Dubai International airport with credit cards in the glove box have become the stuff of legend, and not the image that the government has sought to project.
2. Turning back to sand – This piece from John Hopkins at TimesOnline goes behind the scenes at Dubai’s World Golf Championship tournament on at the moment to find out what is happening in the bankrupt kingdom. It also details how golf was a driving force behind Dubai. The courses were all built on sand and fed by billions of litres of desalinated water. And debt.
A further example of not all being what it once seemed is that the Greg Norman-designed course on which the events will unfold over the next four days, while well conditioned, is little more than a resort course that was tweaked to make it more difficult after construction had begun, particularly the last four holes.
Then again, the players are competing for $15 million, which is hardly chickenfeed. Yet the clubhouse is temporary, all the houses on the Jumeirah Golf Estates are empty and there is no mains electricity (it is provided by generators)
3. Peak of the boom – My daughter loves those Discovery channel programmes about engineering marvels and was particularly taken by one recently about the Burj Dubai, the world’s tallest building currently being built in Dubai. Here is an excellent slideshow from The Telegraph with juicy pictures of a building far from finished, but due to open in January 2010.
4. A tad complicated – This makes Blue Chip look simple. At the heart of the Dubai debacle is this company called Nakheel, which is a tad complicated, as can be seen by this chart pointed out at FTAlphaville.
Questions are also being raised about the structure of the Islamic ‘bond’ known as a Sukuk underpinning Dubai generally and Nakheel in particular, the FT.com reports. The whole Islamic bond market is in danger.
The Nakheel sukuk has been seen as an important indicator of how Dubai will manage the liabilities of its multifarious government-related entities, but a failure to repay the bond fully and on time could impact the global sukuk market, estimated at over $100bn.
“There is a lot of shock and a little bit of anger,” said Nish Popat at ING Investment Management in Dubai. “This is a major blow to the sukuk market. If it defaults, it would be the third one in the Gulf, and the largest Islamic bond default ever, and we’re still waiting to see how sukuk-holders are treated in situations like this. There aren’t any precedents.”
And, of course, S&P and Moody’s have bolted the door after Dubai’s horse bolted by downgrading various securities connected to Dubai. And we trust these guys to give us warnings on our banks and finance companies? Remember Fitch’s brilliant downgrade the day after Hanover defaulted? Meanwhile HSBC and Standard Chartered have some exposures to Dubai, Goldman Sachs points out.
5. Is Greece the next domino? – Many investors looking for the next trigger for a market collapse in Europe and more widely are watching Greece closely. It is inside the Euro but has a major budget problem that is causing all sorts of grief, Bloomberg reported.
EU finance ministers will reprimand Greece next week for failing to take “credible and sustainable” measures to reduce its budget deficit toward the EU limit of 3 percent of output, a draft document shows.
Public finances deteriorated as many of the deficit-control measures adopted this year were never implemented. The government failed to control spending and was unable to make good on pledges to boost tax collection.
“There is sovereign risk in Greece that is spilling over to corporate risk,” said Francisco Salvador, co-strategist at Dexia Iberian equities in Madrid. “The public deficit and macro situation is worrying not only European authorities but investors too.”
National Bank of Greece SA, the country’s biggest lender, fell 9.1 percent to 20 euros, the lowest since August. EFG Eurobank Ergasias SA, Greece’s second biggest bank, dropped 7 percent to 8.30 euros, a four-month low.
6. He saw it coming – Ron Brierley has spoken to Denise McNabb at BusinessDay about GPG’s apparent interest in buying Hanover Finance’s loan book. He doesn’t give too much away, but does have a few choice words for New Zealand’s financial regulators.
In Sydney this week Sir Ron said he recalled seeing a television commercial for one finance company (Richard Long advertising Hanover) while visiting New Zealand a couple of years ago and thinking, “This isn’t right”.
“I thought this company has got problems. The way they were advertising so strongly for funds suggested to me all was not well and sure enough, that eventually proved to be the case.”
Sir Ron said he believed there were still repercussions to come for New Zealand in terms of finance companies or semi-finance companies. Finance company collapses had been largely a New Zealand phenomenon. “There was no regulatory control so they ran amok, without the Securities Commission, without the boundaries,” he said.
But he did not think regulations had much to do with companies succeeding or failing. ”What was thought to be good business has proved to be not so good business, notwithstanding so- called independent directors, and page after page of alleged corporate governance in the annual reports. It’s ridiculous.”
7. Gold bugs booted out – HSBC has had such a rush in demand by gold bugs to store gold in its vaults in New York it has asked them to leave to make room for more lucrative institutional investors, the Wall St Journal reports. HT Troy Barsten via email.
HSBC’s decision has created a logistical nightmare for both the investors and the security teams in charge of relocating the gold, silver and platinum to new vaults across the country. Many of those vaults are also feeling pressure from the surge in demand for space from clients that have stocked up on metal.
Investors have been loading up on gold this year amid worries about inflation and the stability of the U.S. dollar. As gold has continued to set new records, other investors have flooded in. Many of them are taking possession of the metal, rather than just trading financial contracts linked to it.
8. Negative equity – Almost one in 4 US homeowners homeowners with mortgages are now in negative equity, the Wall St Journal reports. HT Gertraud via email.
These so-called underwater mortgages pose a roadblock to a housing recovery because the properties are more likely to fall into bank foreclosure and get dumped into an already saturated market. Economists from J.P. Morgan Chase & Co. said Monday they didn’t expect U.S. home prices to hit bottom until early 2011, citing the prospect of oversupply.
Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20% higher than their home’s value, the First American report said. More than 520,000 of these borrowers have received a notice of default, according to First American.
Most U.S. homeowners still have some equity, and nearly 24 million owner-occupied homes don’t have any mortgage, according to the Census Bureau.
But negative equity “is an outstanding risk hanging over the mortgage market,” said Mark Fleming, chief economist of First American Core Logic. “It lowers homeowners’ mobility because they can’t sell, even if they want to move to get a new job.” Borrowers who owe more than 120% of their home’s value, he said, were more likely to default.
Just months after showing signs of leveling off, the housing market has thrown off conflicting signals in recent weeks. Jittery home builders and bad weather led to a 10.6% drop in new home starts in October, and applications for home-purchase mortgages have dropped sharply in recent weeks.
9. It was THAT close – Details are emerging now about how close the British banking system was to complete collapse in September and October last year. It turns out the Bank of England gave a secret 25.4 billion pound loan to HBOS and an even bigger one to Royal Bank of Scotland in those dark few days. Details of the loans emerged in Lloyds HBOS prospectus for its monster capital raising this week. Now there are are lot of Lloyds shareholders, who hated the HBOS deal from the start, saying they were misled. Fair enough. Here’s the latest from TimesOnline.
The £25.4 billion extended to HBOS by the Bank of England has been widely perceived as evidence that the mortgage lender was far closer to collapse than was previously thought.
Lawyers acting on behalf of Lloyds shareholders who want to sue the bank for buying HBOS said that the disclosure of the loan added significant weight to their case against executives. Jim Rai, a lawyer for Lloyds Action Now, a shareholder lobby group, said that it would strengthen claims being prepared against the banks’ directors for failing to act in shareholders’ interests when they recommended that the lender acquire the near-bust HBOS.
Mr Rai said: “If a loan of this size was made, the bank’s clearly in trouble, yet nothing was disclosed in the prospectus. They allowed shareholders to take the bait.”
Lord Myners, the City Minister, defended the Bank of England’s decision to keep the loan quiet for a year. He said: “Parliament gave the Bank of England the right to operate covertly to support the banking system. We now know that the banking system was within a matter of hours of collapse. We are now seeing how true that was.”
10. Totally irrelevant video – I know I can never really be famous because I will never be invited onto the Muppet show. But at least I can watch this. My favourites are always Animal and Beaker. Here they sing Bohemian Rhapsody because you can never make too much fun of this song.
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November 27th, 2009 at 10:52 am
So finally Dubai couldn’t find the last sucker/greater fool to offload. Even cousin Abu Dhabi refused to play along anymore. Who knows what else is under the sand ? The news all talk about 60bil but I think there is at least twice as much not revealed yet…
3 years ago when I visited my brother in Dubai (Who was working there as an engineer, but quit after only one year) I mentioned that all these will be buried in the sand in 100 years….guess I was too optimistic. Their economic model never made any sense…now reality shows all that gliters is not gold but sand ??
Seems like the next leg down is finally showing her heels, and its in one sharp and long stilleto….who’s next in sovereign debt default ?? Greece ? Spain ? Eastern Europe brotherhood of debtors?……watch it NZ mortgagers….the money is getting expensive by the day !! ( I just say Wespac “online special’ at 5.2% for 12 months on sandwich board outside my Westpac branch)….think I will hold out for 6% next month….after I load up on Gold first (waiting for retracement to 1050/1080)???
November 27th, 2009 at 10:56 am
On Dubai, there was an Auckland Real Estate Agent last year who renamed herself an “Investment Director” and started hawking a 100 million fund in Dubai to invest in property!!!
What a winner. Wonder what she and her clients think now. The fund was called Cougar Investments which was funny given she was a woman of a “certain age”.
November 27th, 2009 at 11:01 am
Bernard, your headline for 8. is wrong,
It is not 1/4 of homeowners in negative equity, but 1/4 of mortage holders. around 1/.3 of homes in the US are mortgage free,
It is around 15% of homeowners with neg equity, (still not a nice number, but nowhere as bad as your headline)
November 27th, 2009 at 11:06 am
Welly,
You are quite right. My mistake. I have corrected.
cheers
Bernard
November 27th, 2009 at 11:18 am
Hello – anyone out there without DEBT or near Bankruptcy !
November 27th, 2009 at 11:20 am
Speaking of housing…it seems the worthless USD is now officially back by ever increasing inventory of worthless housing.
http://www.doctorhousingbubble.com/real-city-of-genius-today-we-salute-pasadena-when-losing-300000-is-actually-a-gain-for-housing-values-shadow-inventory-twice-as-big-as-public-data/
@ W
I have zero debt!
November 27th, 2009 at 11:30 am
Speaking of debt! Here is a good Frontline about the debt trap that I unfortunately witnessed both my neighbors and family members engaged in. The never ending death spiral of “Keeping up with the Jones” have left everyone I known the US in a state of bankruptcy.
http://www.pbs.org/wgbh/pages/frontline/creditcards/?utm_campaign=homepage&utm_medium=bigimage&utm_source=bigimage
November 27th, 2009 at 11:31 am
Yes Walter : I am here . Hello . My only debt is one of gratitude , to the makers of gummy bears . Bless them all .
November 27th, 2009 at 11:32 am
Hello – anyone out there without MORTGAGE, DEBT or near Bankruptcy !
November 27th, 2009 at 11:34 am
W.K.
Yes Me. I sir. I cannot tell a lie. NO DEBT, what so ever.
They do not have me by the short and curlies.
That is why I can spend time on this site. AD NAUSEUM …for now.
I would prefer to be TRAVELLING and ENJOYING my life. That can wait.
November 27th, 2009 at 11:37 am
Muppets! Outstanding.
So if Dubai ‘falls over’…. what will that do to oil? Anything? Nothing?
November 27th, 2009 at 11:41 am
Oil will be rude and turbulent soon – squeezed and burning between Israel and Iran.
November 27th, 2009 at 11:44 am
Oh yeah , the makers of the Muppet Show . Bless them too . That is a classy act……………Wonder how’d they go running a small country………Hmmmmmm ?
November 27th, 2009 at 12:38 pm
Sore loser wasnt reside in NZ, or else he definitely wold have debt associated to his homeland.
I have plenty, unfortunately I wasn’t born as a boomer so I had to get a mortgage to buy my one home while competing with people buying 11+ houses.
I also have a massive bank loan, however this is secured against business assets in the productive sector. Nothing wrong with that debt (hopefully)
November 27th, 2009 at 12:49 pm
Here is a good story about the darker side of life in Dubai
http://www.independent.co.uk/opinion/commentators/johann-hari/the-dark-side-of-dubai-1664368.html
November 27th, 2009 at 12:59 pm
F.O.
I get SORER by the day…
Wrong diagnosis & Your choice…
Debt is always about choice. I learnt to choose.
And I do not have 11 + houses, though perhaps I could, if I was a gambler.
PS..why blame Baby Boomers for all this fiasco, it is not all about them.
Is BECKHAM a Baby Boomer?. All of Dubai, America….??
Debt is the problem and greed and stupidity and an unfair playing field, which needs addressing.
Other-wise we have learnt NOTHING.
November 27th, 2009 at 1:00 pm
Troy Says:
November 27th, 2009 at 11:30 am
Speaking of debt! Here is a good Frontline about the debt trap that I unfortunately witnessed both my neighbors and family members engaged in. The never ending death spiral of “Keeping up with the Jones” have left everyone I known the US in a state of bankruptcy.
This story tells it all http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10611949&pnum=0 , on how a typical NZ family has purchased an overpriced house, has been sucked in by a drop in interest rates and borrowed more money to buy a car, and now can’t afford to buy food. They are actually earning an ok income, but are far too indebted and have been given some bad advice. Hate to think how they are going to cope when Bollard raises the rates next year. I think the actual story is not particularly well written, and twists the figures because it quotes after tax incomes, and per week ones and has been written so it looks like they are earning unde r$1000 per week. When infact their income is over 70k before tax, which is well more than most NZ families earn. These people want everything, the house, the car, the lifestyle,b ut they haven’t worked to even save for the deposit for the house. I think this is common type of story throughout NZ, and I hate to think what is going to happen next year.
November 27th, 2009 at 1:29 pm
FO
“so I had to get a mortgage”
no one twisted your arm to do this……Well hopefully not.
November 27th, 2009 at 1:45 pm
An example
A person I know has just gone BANKRUPT to the tune of 1.5 million.
He would not listen either. 2nd time Bankrupt, 1st in Holland.
Pity their financial history does not TRAVEL well. Maybe BECKHAM is regretting the same in reverse.
Three banks regretting the day with the person I know.
So too will the customers of those banks as they screw some more suckers to replenish that equity lost.
A little local knowledge and a deal of World knowledge is required to survive these idiots.
Have I got a deal for you.
I could have been a multi-billionaire with no MORALS.
So the moral of the story here is do not blame me I am only trying to help Change things.
I live rather simply, but am not SIMPLE.
November 27th, 2009 at 2:07 pm
@Rob
I read that. And there was some confusing math, which is probably why they are in the predicament they are in. It comes down to the fact that most people unfortunately do not understand money or wealth. At pubs I often ask people what they think wealth is…and I get a variety of answers. Everyone has an opinion on what wealth is. There is no right answer, but it’s interesting to hear their ideas. However, if you ask them what money is they often fall flat on their face.
Here are a couple of good pub tricks to win free beers. Tell you mates you can read their minds. First have them pick a (2) digit odd number from 1-50. Now tell them that both digits of the number can not be the same…so no 11, 22, 33, 44, etc. Now tell them their number is 35. You have a 75% chance of being right. The other two numbers people often pick is 37 and 13. If you get this wrong tell them you can do it again this time the bet is double or nothing.
In this version have them pick a number, any number. But tell them there is a bit of math involved so keep the number easy to remember. Now tell them to double the number. Then add 12…then divide then number by 2. Then subtract the original number. Tell them the answer is (6). It will always be six as long as they can do simple math. Do this with tow friends simultaneous to make them freak out.
November 27th, 2009 at 2:18 pm
@ Troy: I chose 13, then 6.
November 27th, 2009 at 2:25 pm
@Alex
Congratulations! You’re an outlier, outside the standard deviation! Most people never pick 13 for superstitious reasons.
November 27th, 2009 at 4:18 pm
Central bankers to take over the world (Iain some who agrees with you)
http://economicedge.blogspot.com/2009/11/central-bankers-taking-over-globe-with.html
November 27th, 2009 at 4:23 pm
@ W. Kunz
No debt
No student loan
No mortgage on property (or on family property)
Gen X that went through Uni
Save/invest 45% of income
Not interested in cars, sky or latest blinky blink things
Grow own veges, do baking and preserves and eat farm killed meat
November 27th, 2009 at 4:43 pm
Troy! Your second trick is really THE explanation of Q/E. Well done. Just print at the beginning what you subtract at the end.. Easy. It’s the subtracting at the end bit that worries me.
November 27th, 2009 at 5:20 pm
Quite right Rob..I read it too and laughed. Trouble is, they are probably typical of Kiwi families. Unable to use the word “NO”. Bet the mortgage broker laughed like hell as well. These are the people Key thinks should be protected from a fall in property prices…an implosion of the bubble…Key would rather more Kiwi families joined this bunch in taking out stupendously massive mortgages to pay idiotic prices for crap property. He really doesn’t understand the need for the market to correct down so that families can afford property and save income. The current govt policy is just feeding the banks which are feeding offshore lenders.
November 27th, 2009 at 5:31 pm
Dubai ay, the jewel in the crown of the world of virtual money and unsustainable bullshit comes crashing down. There is one box missing from the chart in no4, that of the privately owned central banker primary bond buyers who monetised with electronically created credit the bonds pledged by Dubai, and who now have divs on anything of any real value by way of receivership.
Maybe Dubai could sell some of its fast diminishing oil reserves before the international financail institutions receivers get hold of it and use the money they get to help fund a global class action against these slaveminded elitist carrying out this predatory lending pyramid scam.
November 27th, 2009 at 5:33 pm
Not very flattering coverage of NZ’s ETS in the WSJ
http://online.wsj.com/article/SB10001424052748703499404574558643475554968.html
November 27th, 2009 at 6:34 pm
Ross, that’s cute … suddenly the previously heralded golden boy of fiscal constraint is running “…the nominally conservative Key government”.
I guess he’s off their Xmas card list!
November 27th, 2009 at 7:25 pm
RT – “Oh yeah , the makers of the Muppet Show . Bless them too . That is a classy act……………Wonder how’d they go running a small country………Hmmmmmm ?”
Frank Oz is dead (RIP), so could not do worse than our current mob. Which Muppet for PM? I vote for Sam the Eagle, he should bring some seriousness to Parliament.
Youtube has many wonderful clips from the Muppets.
November 27th, 2009 at 10:48 pm
@Ross: The WSJ isnt reknowned for its green outlook…..if anything they are firmly in the deniers camp…so its not surprising that any legislation even weak and inconsquential gets a rude write up…
November 27th, 2009 at 10:54 pm
@Kate: WSJ is a GOP rag….Adolf Hitler would probably be classed a leftie on their pages…
regards
November 28th, 2009 at 5:38 am
Hitler WAS a leftie . Socialist fascism = Leftie . D’uh !
November 28th, 2009 at 7:27 am
Artilce on Dubai fm Telegraph…>http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6668281/Dubais-financial-crisis-a-QandA.html
and this…>http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6671257/Dubai-may-sell-QE2-to-tackle-debt-crisis.html
Debt Deflation… anyone out there with real money – Bling going cheap?
November 28th, 2009 at 7:38 am
Dubai Folly for sale…make an offer…100 billion down the dunny, which is quite funny… it was a tiny state with an economy built on debt and property speculation waiting for a collapse to happen…..reminds me of….now what’s the name of that place again????
November 28th, 2009 at 7:57 am
Hey Mouse…have a squeek at this: http://www.marketwatch.com/story/why-money-launderers-might-want-your-home-2009-11-27
What’s the bet Noddyland property is being used to washup the drugs money. I’d say it’s a 100% certainty….
November 28th, 2009 at 8:01 am
hmm – I thinck 1 or 2 banks in Oz might be feeling rather uncomfortable with their exposure. God it was eighten months ago now that I mentioned that Dubai could not hope to pay its bills. Funny how these things never rise above common consciousness – there must be a huge market for a seriously improved crap detector to the public. This is going to send shock waves for anyone invloved in construction and banking. This is beginning to look like an add for a sequel for ‘Property Shock II’ a horror story visiting an Ozzie bank near you (that has recently curbed their exposure to property). Oh and of course they crossed their fingers (in line with current business model practice/methodology) hoping the reality wouldn’t hit the fan.
November 28th, 2009 at 8:41 am
Here’s an interesting summary of the US economy, from Conrad Black:
http://www.nationalpost.com/news/story.html?id=2273635
“The economic recovery is too soft to turn off the spigot now, but the 70% of the stimulus package that has not been spent should be scrapped and partially replaced with a payroll tax cut.
“Cap-and-trade should be dropped sine die, and tax increases should be confined to three measures: (1) a serious gasoline tax, with rebates to those who make their living in gasoline-intensive occupations such as trucking. This would incentivize conservation, reduction of oil imports and aggressive pursuit of new domestic sources of energy. (2) There could also be a tax on securities trades and merchant banking transactions and related professional expenses. These activities have been horribly over-indulged, scandalously over-compensated, have attracted too many talented people and have led to too many bad deals that should not have been done. (3) A small, self-terminating wealth tax on very large fortunes could be imposed to provide funds for those taxpayers to engage in legitimate anti-poverty projects they would devise themselves and have certified, like charities. The tax would decline as sensibly defined poverty declined, and would evaporate when poverty did. The greatest commercial minds in the private sector would have a vested interest in eliminating poverty and would produce a variety of imaginative methods of doing so.”
November 28th, 2009 at 8:41 am
Yep, steven – I don’t disagree with you about the WSJ.
This is why I found their reporting on this one so funny.
When Key’s government is following their philosophical viewpoint – they’re the voice of reason – when doing something they want to discredit – they are a conservative government in name only.
November 28th, 2009 at 8:48 am
Wally – Not Sure about the being used to washup Drug Money… But definately used to washup that wotz been thieved fm the Taxpayer… The Hon. Lindsay Tisch seems to have a Black Belt in structure design.
November 28th, 2009 at 8:48 am
Given the mess in Dubai, could we see a drop in longer term fixed interest rates? Don’t think we have to worry about inflation anytime soon.
How much longer can the RBA continue to hike rates?
November 28th, 2009 at 8:55 am
Re money laundering, Wally, we had this happen a couple of weeks ago.
Chinese chap made a conditional offer to buy a property based on what he’d seen on the web site. Sent a cheque from a US bank for the full amount ($500k) and asked for it to be lodged in a solicitors trust account till uncon, also for some of the money (200k) to be lodged in a separate overseas account of his. .
Naturally the local solicitor checked it out (as they are supposed to)
The US bank could not confirm identity or verify purchaser as bona fide. He refused to lodge the funds.
Sounds like this is not just an isolated incident. They probably think we’re a bunch of dumb asses – take care.
November 28th, 2009 at 8:59 am
Here he is unfiltered (not for the faint of heart)
http://article.nationalreview.com/?q=MzdiYTRkYTg4NjNmOTMwNzE3MmNlMDY3YWJmOWNhZTc=#more
“To sell on any real market any serious amount of this debt in the next decade would require torqued-up interest rates, which would be steroids for bulging debt, while strangling economic growth. It would be the 30-year-old bugbear of stagflation.”
(Conrad Black)
November 28th, 2009 at 9:06 am
Private sale. Posh home. Cash offer. 10% above asking price!. Buyers just in from Asia. Desperate to own a home. Just loved the place. Here, take the payment in US dollars(cash) with an extra 1% to deal with the paperwork. Sign here and here. Payoff the lawyer in cash..a friend for life. Pay the outstanding mortgage at the bank with cash..”love to see you..here borrow some more”. Done and dusted.
November 28th, 2009 at 10:55 am
http://www.bloomberg.com/apps/news?pid=20601081&sid=aIEDEpJhweWA
CBA thinks Dubai crisis is a ’storm in a tea cup’ and that investors should buy Oz dollars on the decline. No vested interests in that misinformation then.
November 28th, 2009 at 11:35 am
My guess David…..the gate is wide open…the loot has been flowing in for some time…bet the banks see many arriving to change US into Kiwi…never very large amounts of course…only a fool would think it is not going on.
November 28th, 2009 at 12:12 pm
“UK PM Gordon Brown and French President Nicolas Sarkozy have proposed a multi-billion-dollar fund to help developing nations deal with climate change”(herald)…see…and you lot thought we would have to pay extra taxes…as a rapidly undeveloping country we can line up with Zimbabwe and Somalia for a free handout…hurry up Bill…get in line.
November 28th, 2009 at 12:18 pm
Wally,
BILL has his own BILLS to PAY….with other peoples money. As per usual.
GORDON has no money EITHER.
French friend sent me photos of the protests there.
At least the TAXPAYERS do something in FRANCE.
November 28th, 2009 at 12:23 pm
Oh bugger…I thought Noddyland would fit right in between Zim and Som. Just read this in the Herald: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10612184
seems the property market for batches at the beach is in freefall. This event is coming to the urban area near you! It’s just a question of time.
November 28th, 2009 at 12:24 pm
Let us borrow from the YANKs instead…
http://www.dailyfinance.com/2009/11/27/need-a-loan-why-the-banks-and-fed-are-saying-scrooge-you/
November 28th, 2009 at 4:12 pm
regards mascot finance and retail deposit guarantee,treasury paid out the interest owing depositors on friday,8 months after receivers took over.so if you depend on the interest to live on dont assume the guarantee will ensure timely return of interest owing.
November 28th, 2009 at 5:19 pm
Conrad Black……now there’s a corrupt douchebag…..
November 28th, 2009 at 6:36 pm
here,a bit of lite reading if anyone.s bored. this forum started in dec 08 + is up to page222—background—people morgtaged their homes and brought shares +used those shares as security+brought more[margin loans] the market tanked and they lost the lot+still have morgtages. a lot of these folks are retired with no income !
lots of people are claiming its the banks fault?debts range from 400k —12million –site storm financial group page 1 aussie stock forums
November 28th, 2009 at 6:41 pm
@Mike M: Just past the point China’s economy collapses, ie demand for OZ’s raw materials collapses….
China doesnt look good….in fact does anywhere look good?
How about India? Ive not heard anything bad about them….
regards
November 28th, 2009 at 6:45 pm
steven they are all in brisbane driving taxi,s badly
November 28th, 2009 at 10:41 pm
there are no concrete underpants on interest.co but at the weekend it is the muppet show!
November 28th, 2009 at 11:33 pm
Ive been reading some of the debate in Aust over the ETS. Interesting looks like Nick Smith jumped the gun.
November 29th, 2009 at 9:02 am
The Senator needs to get an education regarding the definition of pullutants. Last time I looked they were defined as 3 types – fund, stock and notable. CO2 is a fund pollutant – one which does not cause damage to the environment until its production rate exceeds the rate at which the environment can absorb it (via plant growth etc).
Its not a difficult concept to grasp. Another example is very obvious here in NZ. Nitrates – which the farmer adds to soil to stimulate plant growth. Add the right amount – great, flourishing plants. Add too much – runoff and eutrophication in local rivers.
November 29th, 2009 at 9:07 am
Another week gone and another $250oooooo in debt..way to go Noddyland..borrow and splurge..that’s our govt mantra that is..stupendous stupidity by silly people hell bent on buying another three years in power..no worries because Bill has a ’strategy’ and a tax rorting group and even some old coot called Don Brash with his very own thunk tank of thunkers who are thunking our way to wealth..best of all the property ponzi bubble is still receiving govt aid and Reserve Bank support because the last thing the trading banks intend to allow to happen is an end to their feeding frenzy…I wonder how many peasants are making the slow walk to a church to pray for salvation from the satanic banks demanding their pound of bloody flesh this Sunday morning! …oh the rugby game is on the new LED tv bought on HP last week.
November 29th, 2009 at 9:08 am
PRICELESS: PRIZE PRICK PETRICEVICH PUMMELED
Things only got worse for Petricevic when he entered the al fresco dining area. The witness looked over to see the former financier sprawled in the gutter with another punter on top of him. A bouncer had to step in, he said, while another customer pinned Petricevic against a wall and said: “F— off, you’re not wanted here.”
The witness said: “He’s arrogant, he kept driving his Porsche up and down Remuera Rd, past all the people who’d lost money, it’s ridiculous.”
A manager at Moreton’s, who gave his name as Dave, confirmed Petricevic was roughed up.
“He’s certainly not popular. It was basically a bit of rough treatment from the guys; they told him in no uncertain terms he’s not welcome here, that he’s really arrogant, [and] has cost people a lot of money. He left pretty quick; it wouldn’t have been a very comfortable environment for him.”
http://www.stuff.co.nz/business/3106541/Angry-investors-rough-up-Bridgecorp-boss
November 29th, 2009 at 9:25 am
Dont worry Wally, the IMF will sort us out,
<blockquote>
Serbia Gets 3 Billion Euros From IMF to Counter Global Crisis
By Aleksandra Nenadovic
March 25 (Bloomberg) — Serbia and the International Monetary Fund agreed on a 3 billion-euro ($4.1 billion) bailout to help the country repair the damage to its economy by the global financial crisis, Economy Minister Mladjan Dinkic said.
The accord will last two years, he told reporters in Belgrade today.
Last year, Serbia opened a $516 million credit line with the IMF, joining countries including Hungary, Ukraine and Latvia in seeking outside help to cope with the effects of the crisis. Like other emerging markets, Serbia is grappling with a lack of credit and a plunging currency as the economy contracts for the first time in a decade.
Serbia is also hoping for additional commercial loans from the World Bank and the European Union that will be negotiated on March 27 in Vienna. Serbia already has received a $600 million aid package from the World Bank.
On March 24 central bank Governor Radovan Jelasic said Serbia’s economy may contract 2 percent this year. There is a “downside risk” to this forecast because the government doesn’t have enough funds to spur the economy through spending, he added.
Finance Ministry spokeswoman Kristina Radovic said on March 17 that Serbia didn’t draw any funds from the original credit signed in November.
BINGO! Ding, Ding… Johnny, we have a sucker on the line! And in this way Serbia now must conform to the conditions of the loan or they will be cut off. What did the central bankers do to “earn” this money? What and who gave them the right to mint money on the global stage and to indebt entire nations? I think you know the answer to that… they gave themselves the power to do so, no one would stop them as the politicians and the judges are bought off along the way.
And because all their “money” is debt, this is the end result…
http://economicedge.blogspot.com/2009/11/central-bankers-taking-over-globe-with.html
November 29th, 2009 at 9:35 am
SORER-LOSER: “At least the TAXPAYERS do something in FRANCE.”
Yes. Do something. At least to see how many TAXPAYERS know…
Savoir…
E.
November 29th, 2009 at 9:36 am
http://market-ticker.denninger.net/
There is some history behind this, is there not?
The American Bankers Association secretary James Buel expressed the bankers attitude well in a letter to fellow members of the association. He wrote: “It is advisable to do all in your power to sustain such prominent daily and weekly newspapers, especially the Agricultural and Religious Press, as will oppose the greenback issue of paper money and that you will also withhold patronage from all applicants who are not willing to oppose the government issue of money. To repeal the Act creating bank notes, or to restore to circulation the government issue of money will be to provide the people with money and will therefore seriously affect our individual profits as bankers and lenders. See your congressman at once and engage him to support our interest that we may control legislation.”
That would be 1890 Mr. Bernanke. More than 100 years ago. Once a viper, always a viper.
November 29th, 2009 at 9:45 am
Crunch time arriving fast for the fools in the Beehive! To carry on doing stuff all about the dying economy where a decreasing tax revenue is now light years away from an increasing govt expenditure, or will they decide the spin and BS has gone too far…will we see Treasury’s numbers bring an end to Key’s game? Jobs on offer across the Tasman and plenty of skilled Kiwi ready to make the move. The coastal holiday batch boom dead as with prices down and heading lower. The future promising mortgage rates will rise and rise. 2010 consumer spending set to fall, again. Yet more layoffs and pain. Meanwhile we have a govt clearly paralyzed in the headlights just like Pete the possum and set to be squashed under Mr Markets wheels.
November 29th, 2009 at 10:00 am
alan stewart : Proved your point , bit of an ” own-goal “, dude !
November 29th, 2009 at 11:17 am
David- yours 9.08am: I’m truely surprised it has taken this long! Was this ‘the first shot’ in a bigger war?
“When you’ve lost it all, you have nothing to lose”
November 29th, 2009 at 11:25 am
OT but a follow up to my prior comment re Chinese imperialism.
Quit kidding ourselves; they are NOT interested in buying our products, why would they when they can just move in to low cost countries and treat them as their own?
http://www.time.com/time/magazine/article/0,9171,1943087,00.html
November 29th, 2009 at 11:29 am
I’d better get Time, David! By the look of the date on your captioned article, they obviously know what’s going to happen to the market this week….
November 29th, 2009 at 11:33 am
Life used to be so frigging simple. I was born on a farm sent to those schools Cullen hated so much(by the way boarding school at 9 really screws your kids up if anyone was wondering). You know summers at the beach and so on. But before I left school Lange and Douglas screwed my life. I learnt to shear and went out as a fencing contractor, which i really enjoyed. Tried a season at the meat works which was a bit depressing but gave me some drive to get the hell out of there. Got married in my early 20’s while shearing in the UK,took over the family farm struggled for years. Sister got a million and so on, had quite a few kids, summers turned into drafting lambs and lease farms,winter to break feeding cattle.
Then along comes a bright dairy farmer, big degree ’smart as’ you know the type,offers me enough money for the family farm to have to check all the zero’s.Was I doing the right thing,i mean this guy is smart, degree(honors),shit he is so much smarter than me( i never got to Uni) but that offer is bigger than my phone number with the area and country code and he hasn’t even driven all over the farm in fact he looked at it for 5 min’s rang his bank manager and made an offer on the same day, which i accepted in 1 hour.
So im a bit like Jed Clampett ,out from the ground came a bubbling gold, white gold,baby formula,cheese,yogurt,butter,well the next thing you know, I still living where i have for the last 10 years as i didn’t live on the farm. A secret i learnt when I worked on an orchard, a prick of a man but he taught me that its always best to sell and move than develop what you have, so live off your farm ( so your family don’t have an emotional tie to your business) It worked for him he bought and sold his way to be a major player in the Kiwi fruit and apple business.( i guess he’s a big prick now)
Well next thing you know, Im reading on the web because Ive so much time, found Hickeys a few years back when Chaston was running the 90 @9. I try and read as much as possible because Ive got some friends in banking and they think we are going to be kicked so far backwards that when we talk about our clubs it isn’t going to be our golf clubs,if you know what i mean.
Ive worked bloody hard for my money but at the end of the day these sh*t heads running the country and yes Im a member of the National party,been on commitee’s etc but I think Iain Parker is onto it, these guys are robber barons and they are after our wealth and the master stroke was to create the impression that debt was as good as money,so gear up.
That guy with the degree doesn’t look that well now going a bit gray got a stoop and a worried look on his face. I mean im a dumb stook but Im convinced that there will be an attempt to destroy my wealth and destroy debt by inflation the good news is that these guys couldn’t fight their way out of a paper bag so in the sort term I feel safe but Ive got a EU passport and p*ss all NZ $ one phone call and Im out of here while you lot fight it out with those clubs. I cannot see anyway that we can keep paying 40 billion a year in interest to these Aussie banks, we have to have debt destruction the cold hand of capitalism is coming our way the big question is who’s going to be on the other side, ‘the yellow man’? yep wally we are screwed its just a question of who’s going to be on the other end.
ps I not voting for these turkeys anymore.
November 29th, 2009 at 11:34 am
David : Must be a Time Machine . Damned clever , these media folk ( sniggers quietly )
November 29th, 2009 at 11:53 am
I’ve read your post for the umpteen time now, andrewj, looking to betut it. The best I can do is to say, that I didn’t think boarding school at that age was all that bad.
How well you encapsulate the frustrations of many posters on this site.
November 29th, 2009 at 11:59 am
Amen AJ.
November 29th, 2009 at 12:23 pm
Tell me AJ , who do we vote for , now ? The turkeys totally rule the roost . Great story man , a few lessons , thanks for that ………….Boarding school at 9 ! Ye gads .
November 29th, 2009 at 12:52 pm
Well Roger, it was supposed to make a man out of me.
What is happening is savers are being forced to take risks with their money by Bollard keeping rates low. Sound familiar another transfer of wealth coming to a town near you. They are just waiting for the top then they pull the rug out ,Goldman S and co are just biding their time milking as much from the pensioners and savers as possible. Then oh sh*t no demand for metals,gold,etc bad luck boy’s. Game is stacked. I am hoping that inflation wont get a grip for a while if it does, housing being the only place the average punter can gear up, should give warnings signs like low listings etc.
Ive just got of the phone with a friend who has spent the last two weeks in the USA,he is a property investor. He tells me he can buy fantastic houses on a lake in Florida for 180k us. He tells me that the housing market in the USA is facing the music and in the real world. Here he thinks we are in some kind of twisted time warp and he now expects a complete housing collapse, took him a while to figure that one out.
Said a lot of Chinese buying in California and a lot they lease to mates for cash and send all the money home. Arnold is bringing in 25% withholding tax until proof of tax paid in California to stop them. Thinks you could get 12% plus return on houses but rent falling fast. Prices in many places are a quarter of old valuations. Thinks our welfare state will collapse as unemployment rises until our Govt goes bust under the weight. He pulling out of NZ 100% however he won’t be missed as he never created wealth anyway. The only trouble is he is selling to dick heads who are borrowing %80 off some Aussie bank so he is leaving lots of lovely debts to be paid of in the never never unless some unforeseen event like the 40 billion of interest tips then out.
I don’t think who you vote for makes a difference.
this guy has some advice on Totalitarianism.
http://www.strike-the-root.com/archive/kleen.html
November 29th, 2009 at 2:06 pm
Andrew J, compelling story, keep’m coming.
Regarding creeping totalitarianism, one outfit that stick up for themselves is the Maori people. I used to think “stirring troublemakers” I may not always agree with the grievance but now I say good on you,. We are getting sold out to foreign interests on a daily basis yet how many are aware, prepared to fight? Is this what we’ve become, cowered in fear and chained in debt, a lap dog to anyone we think’ll take a few pounds of butter off us?
What’s next, a bailout out from the IMF and servitude in perpetuity, our assets divvied up among the Bankers and corporate thieves?
Pathetic.
BTW the Time article is dated for the magazine – makes it look real fresh at the newsagents I guess.
November 29th, 2009 at 2:24 pm
Re your friends observation of USA housing, andrewj.
I found it interesting to see on TV what a certain golf-playing car-crasher ( sounds like wifey was chasing him down the driveway WITH the golfclub, to me!) gets for his US$2mio to live in; and he gets to choose… anywhere! From what I see I would be hard pushed to get anything near that type of “house” in Auckland for just NZ$2.75mio.
November 29th, 2009 at 2:28 pm
I made this point two weeks ago , a random search through North Dakota farms , found bargains galore . As did Detroit house listings . Local economy aside , solid 3 BRM houses down to $US 10 000 , and 320 acre ” hobby ” farms for $US 270 000 . Full range of buildings , silos , and house . Crikey , we pay alot for so little here in NZ .
November 29th, 2009 at 2:41 pm
What wonders will the TWG deliver on Tuesday?…not much I should guess and anyway Key has already said “NO”. The good news is Mr Market has obviously decided the time has arrived to kick the living you know what out of Noddyland’s property ponzi economy. We have seen the rural collapse and the coastal holiday home collapse…just the residential bubble to go now. Rates will sort that out very quickly. Watch as they rise, leaving Bollard to follow the curve, again and when they pass 10% expect some real pain. The most exposed bank will be first to scream for a govt splurge…immigrants fast…let more in…our balance sheet is turning red…aaaarrrrrrrrrrrrhhhhh. Banks die with so much noise. Remember the BNZ 90s bailout…some screaming went on then.
November 29th, 2009 at 2:58 pm
Will have to see after my TRIP away…….Wally….etc.
Keep em on their toes.
November 29th, 2009 at 3:26 pm
We don’t have to Roger..that’s the trouble..too many too stupid to know the value of property.. and too easy to borrow too much. At least the collapse in prices is well underway in the rural sector and those coastal holiday “oh look you can see the water” batches. I expect the rising rates will do to the residential bubble in due course. Funny how Kiwi are so useless when it comes to financial matters. Must be something in the water. Perhaps when Tolley gets back on her trolley she can insert some standards tests to ensure the little tots are forced to learn to save and not to borrow.
November 29th, 2009 at 3:33 pm
The value of a property , Wally , ought to be in relation to it’s earning potential . Or in the case of Gold , the depth of chicken-little’s ” the sky is falling ” panic . Any asset needs to stack up against other asset classes . If bonds yield 4 % , shares 5 % , gold 0 % , a dairy farm 2 % , where’s the logical place to stow the dough ?
November 29th, 2009 at 3:34 pm
Employment is the key at the moment. When NZ has more businesses go bust, the housing market will follow.
My 2 cents worth.
And that piece about Petricevic getting beaten up was great. A bit more of that and he will think twice about poncing about. I wonder if Hotchin has a bodyguard?
November 29th, 2009 at 3:35 pm
Next to collapse is stock market. Der Spiegel, the weekly newsmagazine, ran the sensationalized 12-page article asserting that the question is not whether the present stock market bubble bursts, but when…
November 29th, 2009 at 3:37 pm
The enormous stock market bubble that has formed over the past eight months is seen as the biggest source of danger of another crash. The most important share indices—the Dow Jones, the Japanese Nikkei and the German DAX—have risen by around 50 to 60 percent since March. The prices of crude oil, copper and other raw materials have also more than doubled. These enormous increases are not based upon any corresponding economic growth. On the contrary, economic activity has fallen in numerous countries …”
November 29th, 2009 at 3:57 pm
Tend to agree with AnrewJ and few others. It seems to me that Key is creating a huge hole between National and ACT in the political landscape. If some smart person were to set up a party NOW that fit into that gap ( politically — center right ) and showed that they understand the real state of affairs they would create real change in NZ politics. Labour would be pushed further left . National would be substantially reduced in size. Not sure what would happen to ACT.
November 29th, 2009 at 4:25 pm
You can tell the share markets going to blow when they stop quoting P/E ratios, as happened last week in the States, (P/E averages over 140) not long to go now. Still appear to be enough fools who think that any return on capital is good, and the risk of losing their capital is justified as long as the income flows are good. Even if they are on paper and caused by a speculative bubble emerging from the feds behind, without the backing of cash flow, profits and such trivia.
Has anyone tried to earn capital in this country, try, get a job and save 20% see how hard it is and how long it takes with our high taxes and cost of living, once the benefit of inflation is removed from the equation its almost impossible. Yes we live in a high cost country. Cash is going to be a rarity once these little bubbles bust.
As for farming we appear to be living an a world that is over producing the kind of food that we grow. The milk price will stay volatile until the realisation that production exceeds demand as is happening in the Beef and Sheep markets as we speak ,then expect a long slow decent until production is brought in line with consumption.
I wish I could go back to a simple life where the problems are; a broken water pipe or rain interrupting shearing. That door is closed to me until this mess is sorted, as profits are rare in my trade, today.
What im trying to say is that I cannot make my capital back if I lose it. I don’t have the skills and getting for one of those sweat Govt jobs would be nigh impossible. I made my money though inflation all my life Ive been short of cash. Luckily some dickhead banker gave a bog Irish dairy farmer enough money for me to exit in time. I’m holding it close,trusting know one.
November 29th, 2009 at 4:45 pm
AndrewJ.. You are not alone mate. There are many of us around the world.
TRUST is the word we do not use here in NZ, no wonder I use the NDP…SORE-LOSER.
Just getting SORER by the day.
Anybody want to buy a Dessert Island collectively….. and start again.
What Trade?.
November 29th, 2009 at 5:11 pm
@ Andrew J – “You can tell the share markets going to blow when they stop quoting P/E ratios, as happened last week in the States, (P/E averages over 140) not long to go now”…
The last time I heard of anyone stopping the quoting key stastics was in the good ol’ USA about 2 years ago… when the Fed stopped reporting M3 as they saw no value in reporting it… It’s apparently just a measure of Bank Lending, and consequently not that important.
You’ve gotta laugh!
November 29th, 2009 at 5:14 pm
@SORE LOSER – “Anybody want to buy a Dessert Island collectively….. and start again” … Yep.
Lets call it New Zealand… Oh Wait, That’s been done before…. what about “Aotearoa”?
November 29th, 2009 at 9:51 pm
@Ross: Re: centre right party. The only reason National got elected was it (supposedly) moved to the centre ground. Take an example of 2005 with Brash, clearly a right winger who should have been in ACT IMHO….one disaster. I would suspect the National party faithful are really still quite centre right…there is a public facing image and a real core, same with Labour, same with Green’s etc….but to get elected you have to eat doggie doo doo….and smile. So go ahead and form a party….add examples of Dunne and NZF…[almost] no MPs and no say. The biggest challenge is the mind block, ppl have voted for their party for their entire lives and parents before them. It strikes me that these faithful are the ones being done over and happy for it….loyalty to “the party” gets you diddly….its the swing voters “The party” needs to win, so its them that get bribed.
@AndrewJ and mouse: Watching the talking heads suggest to me investor confidence is now obviously being lost….nerves are getting on edge….its the old fear and greed. No one wants to jump off due to greed, but they are starting to fear being too late when it does go and I think they expect it to go. So I agree….and I just wonder how bad….the share prices are insane in an energy constrained and consumer munted world the companies simply are not worth these P/E especially when the E is going south. ie company earnings are giving the ilusion of doing well bt I wonder just how real it is. I think its slashing of things like R&D, you can save $ but it bodes ill for the recovery and I wonder just how creative their accounting is. I also wonder how bad US corporate debt is….
Tick….tick….tick, I wonder what will finally do it…will we ever know….
regards
regards
November 30th, 2009 at 11:52 pm
@AndrewJ
Thanks for your contribution to this thread. Good stuff. Largely in agreement with your sentiments.
Question re saving. I save 45% of what I earn – and I’m not in 6 figure territory.