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Top 10 at 10: Are pensioners bankrupting the western world? (including NZ); Volcker rule fading; Dilbert
February 4th, 2010Here are my Top 10 links from around the Internet at 10am. I welcome your additions and comments below or please send suggestions for Thursday’s Top 10 at 10 to bernard.hickey@interest.co.nz
1. ‘Eat your words’ – Brian Fallow writes an excellent column in the NZHerald today arguing why Prime Minister John Key needs to abandon his pledge to resign before he changed the rules around NZ Superannuation. I agree. The promise to keep paying all 65 year olds 66% of the average wage forever is unsustainable and the government’s own research proves it.
Winston Churchill said that he had sometimes had to eat his words and found it a wholesome diet.
Prime Minister John Key needs to follow the great man’s example with respect to his pledge to resign rather than tamper with the entitlement parameters of New Zealand Superannuation.
The long-term fiscal projections the Treasury released late last year show that current policy settings (not just for super but across the board), combined with prevailing trends in underlying economic variables, set us on a course for a crushing level of public debt by the middle of the century: twice the size of the economy, give or take, compared with just 15 per cent now.
2. The penny drops – Max Fisher at The AtlanticWire asks the very valid question: Are seniors bankrupting America? HT Blair Rogers via Twitter
Here’s the problem: those same elderly Americans are outraged at the rising tax rate and growing federal spending. Seniors are using their tremendous political weight to push a conflicting agenda, expanding services to seniors while reducing the taxes need to pay for them.
The New York Times’s David Brooks laments that “Far from serving the young, the old are now taking from them.” They are “taking money” (the federal government spends $7 on the elderly for every $1 on children), “taking freedom” (tax revenue is completely tied up in programs for the old, limiting new programs) and “taking opportunity” (the focus “will mean less growth and fewer opportunities”).
Sound familiar?
3. Year of sovereign risk – Mohamed El-Erian, the co-CEO of bond fund manager PIMCO, has warned that 2010 will be the year of sovereign debt risk in this Bloomberg piece.
Greece is “Europe’s big game of chicken,” El-Erian, 51, said in a Bloomberg Radio interview today. Europe needs to provide “significant aid” to the country, while the Greek government works to adjust its fiscal deficit, he said.
Greece, which had the European Union’s widest deficit at 12.7 percent of output last year, has struggled to convince investors it can bring the budget shortfall within the bloc’s limit of 3 percent. European Union Monetary Affairs Commissioner Joaquin Almunia endorsed the nation’s deficit-cutting program announced yesterday that pledged to freeze state workers’ pay, boost fuel taxes and raise the retirement age to reduce a deficit that is more than four times the EU’s limit.
“Widening of Greek spreads happened so quickly you have quite a few people that are still stuck in the trade,” El- Erian, a former deputy director at the International Monetary Fund, said in the interview. “Market liquidity is limited.”
4. This chart from the Economist helps tell the story on the fiscal and sovereign pain ahead.
5. Breathing space? – Greece won a bit of breathing space overnight when the EU endorsed its austerity plans with heavy monitoring, although the political challenge in Greece is enormous, the New York Times points out.
Greece’s economic predicament is particularly toxic. Not only is its deficit huge, but the country’s debt also amounts to 113 percent of G.D.P. Though it was hit by the global financial crisis, Greece failed to get its finances in order during the previous decade, when economic growth was generally good.
Worse, a sudden and drastic upward revision of its deficit after a change of government last year exposed alarming deficiencies in Greece’s ability to produce reliable economic data.
Domestically, Mr. Papandreou has a difficult balance to strike with the risk of widespread unrest if he pushes his austerity measures too far.
Daniel Gros, director of the Center for European Policy Studies, said it was one thing for the Greek government to agree to implement public sector pay curbs, but that the crucial question was “whether the body politic of Greece allows them to do it. If you have a general strike and the trade unions don’t agree, what do you do?”
Moreover, a wage cut of around 20 percent in the private sector was required, he argued. “They are not out of the woods,” Mr. Gros said. “They have taken the first step into the woods and they have to see how dark it becomes.”
6. Glass Steagall Crash course – CNN Money explains in this 3min video what happened when the Glass Steagall Act was passed in 1933 and after it was repealed in 1999. It also looks at moves afoot to bring it back. It’s well worth watching. HT Emma Geraghty via Google chat
7. Just walk away – The number of Americans with mortgages in negative is forecast to rise to a peak of 5.1 million by June or 10% of those with mortgages, the New York Times reports.
The difference between letting your house go to foreclosure because you are out of money and purposefully defaulting on a mortgage to save money can be murky. But a growing body of research indicates that significant numbers of borrowers are declining to live under what some waggishly call “house arrest.”
Using credit bureau data, consultants at Oliver Wyman calculated how many borrowers went straight from being current on their mortgage to default, rather than making spotty payments. They also weeded out owners having trouble paying other bills. Their estimate was that about 17 percent of owners defaulting in 2008, or 588,000 people, chose that option as a strategic calculation.
Suggestions that people would be wise to renege on their home loans are at least a couple of years old, but they are turning into a full-throated barrage. Bloggers were quick to note recently that landlords of an 11,000-unit residential complex in Manhattan showed no hesitation, or shame, in walking away from their deeply underwater investment.
“Since the beginning of December, I’ve advised 60 people to walk away,” said Steve Walsh, a mortgage broker in Scottsdale, Ariz. “Everyone has lost hope. They don’t qualify for modifications, and being on the hamster wheel of paying for a property that is not worth it gets so old.”
Mr. Walsh is taking his own advice, recently defaulting on a rental property he owns. “The sun will come up tomorrow,” he said.
8. Volcker rule disintegratin rapidly – Hopes that Obama’s new-found cohones and Paul Volckers’ ‘Rule’ to break up the ‘Too Big to Fail’ banks and stop playing on market casinos with government guarantees looks like it is fading away to nothing. Felix Salmon at Reuters points out there is plenty of uncertainty and scepticism in the US Senate about the rule, although some clarity is emerging and it’s not attractive.
The contours of a Volcker rule are slowly emerging all the same, and that they carve out two enormous loopholes.
Firstly, the Volcker rule seems to apply only to depositary institutions: if you don’t take deposits, then you’re exempt. The result is that it’ll be easy for Goldman Sachs and Morgan Stanley to get around the rule just by returning their current (tiny) deposit base and voluntarily withdrawing from access to the Fed’s discount window.
But the point here is that banks with deposit bases are already insured and regulated, by the FDIC. The definition of a bank isn’t an entity which takes deposits; it’s an entity which borrows short and lends long. So long as the likes of Goldman Sachs can fund themselves in the wholesale market and continue to lend money to large clients in things like the syndicated loan market, they’re banks, and they should be subject to rules like Volcker’s which apply to banks.
Secondly, it seems that banks might be allowed to continue to own hedge funds, private-equity funds, money-market funds, and the like, just so long as they’re run for clients, with client money, rather than being vehicles for the investment of the bank’s own capital.
This too is dangerous, because the history of the financial crisis is clear: Bear Stearns ended up bailing out its internal hedge funds even when it didn’t legally have to. Large banks ended up bailing out clients who invested in auction-rate securities. Fund managers ended up putting up their own capital to stop money market funds from breaking the buck. Banks with SIVs ended up bringing them onto their own balance sheet, taking enormous associated losses. Etc etc. Essentially, a bank might say that it has no exposure to such things, and that all the risk lies with its investing clients. But that’s never, ever true.
Plus ca change. Until voters kick out the senators and replace them with a truly sceptical lot who are not beholden to their bank donors nothing will really change in America. The Supreme Court’s decision to allow big businesses to spend on politicians again looks like cementing that. When are the American taxpayers going to really revolt? (ie with pitchforks and guns etc)
9 Just how corrupt? - Robert Reich, a former Secretary of Labour under Clinton, (ie no nutter or teabagger) has this to say at Huffington Post about just how corrupt policymaking has become in Washington. Not to FTA negotiators in NZ. Don’t trust the bastards.
Personally, I want the government to limit the pay of financial executives, regulate greenhouse gases, and reform health care. And no one wanted a financial meltdown. But I’m appalled by the process that’s been used to reach these objectives.
A big piece of the problem is this: Washington is now so overrun by lobbyists representing moneyed interests that it’s become almost impossible to make policy in the open. If the Treasury and Fed tried to decide publicly which industries and firms should get hundreds of billions, they’d be inundated. Wall Street lobbyists are blocking real financial reform.
The energy industry has filled the House’s cap-and-trade bill with special subsidies and exemptions. Big Pharma and Big Insurance would have killed off the health-care reform if they hadn’t been bought off. When it comes to the long-term deficit, Congress is incapable of acting because so many special interests have their hands out.
10. Totally relevant video making fun of economics – Fair enough too.
Tags: Top 10 at 10
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February 4th, 2010 at 11:29 am
Fund charges exposed as fees outstrip returns
http://www.telegraph.co.uk/finance/personalfinance/7134695/Fund-charges-exposed-as-fees-outstrip-returns.html
Copper Market Set for ‘Catastrophe’
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAid0.8z1qBs&pos=6
February 4th, 2010 at 11:47 am
AAAAAAAARGHH! YOu Bas#@rds……..
We were always told…Work Harder someone on Welfare Depends on it.
Well now it’s our turn and you thieving little sh@ts wanna steal our wallets…?
Wouldn’t it just be easier to have us put down …to make more room for all the wonderful contributors to the fiscal economy being born on mass at the mo…who will spend a good portion of thier adult life on welfare…….?
Let Fallow take the Welfare junket out of the mix and see how it stacks up then.
Before anyone saddles up thier horse and donkey here………Yes I appreciate people need help in times of great difficulty…… but geesus H it’s a suckhole for a multitude of deadbeats as well…..
Sort that lot out Fallow,.. before you get on your… I’m gonna be alright trip….jagup
February 4th, 2010 at 11:54 am
@Chrsitov
Tell us how you really feel. Don’t hold back.
*slowly steps toward the door*
February 4th, 2010 at 12:06 pm
The Best US Cities to Buy a Foreclosed Home
http://www.cnbc.com/id/35078932?slide=1
February 4th, 2010 at 12:26 pm
Thing is TC, it pays to realise the traders will game the market with reports of asteroid hits and so forth, knowing dam well they stand to cream off millions on a commodity price drop. Wider reading on the subject points to western demand rising if slowly and Chinese demand continuing to increase. If there is a major collapse in commodity prices…it will be because the whole world has collapsed into a depression and it will not matter what you own. Everything will be toast.
I do not see the Chinese govt ending their diversion of investments from US paper into metals and commodity companies. This programme got underway last year. It will continue and many of the smallcap miners are likely to be snapped up at prices which in 5 years will seem very cheap indeed.
The traders live on market turmoil. The rules do not prevent them causing the trouble.
February 4th, 2010 at 12:52 pm
Churchill the great political orator:
Winston Churchill said that he had sometimes had to eat his words and found it a wholesome diet.
Unfortunately Key is not even fit the lace up his shoes. Though I hope the May budget proves me wrong. I’ll have a tasty feast if he does.
February 4th, 2010 at 1:06 pm
Pensioners are not bankrupting the Western world – populist democracy is.
It’s simple – over the long term, you can only spend as much as you earn.
The Western world has continually spent more than it has earned both at a private level and at a public level. They have funded that by borrowing from the future and by encouraging debt fuelled asset price inflation.
This model has hit the wall and the West now needs to get its head around the fact that our standard of living will decline for the foreseeable future. This is inevitable.
The decision as a society we need to make is: who bears that lower standard of living? If one group (i.e. pensioners) refuse to accept any reduction in living standards, then someone else has to take their pain. At the moment we seem happy to pass that pain onto our children or grandchildren, because they are not old enough to vote!!!
The reality of our individualist Wetern culture is that no politician will pre-empt the issue by factoring in lower standards of living now but instead will wait until we completely hit the wall and then ALL forms of govt spending will stop… zero welfare and limited health or education spending because we simply have no money to pay it and as a bankrupt nobody will lend to us. This is how things were in the Western World post WWII and what they do in many parts of the developing world, hence why people in Asia work and save so hard – there is no back-up. You have no money, you don;t eat. Simple – back to basics.
February 4th, 2010 at 1:19 pm
Sidelines……..Well put and last pargraph spot on (for me)….BUT
I STLLL WANT MY PIECE A PIE OR SOMEONES GONNA … well you know I just want some pie is all….
February 4th, 2010 at 1:41 pm
Why don’t we just shoot all pensioners and unemployed people?
February 4th, 2010 at 1:59 pm
Too simple to blame it on the pensioners.
Pensioners have payed taxes for years.”Taking money”, bullshit ,they”ve given.They lived within their means,something that politicians ,speculators and young people need to learn………if you can’t afford it you can’t have it!!
Look at the huge sums spent on education,how many can’t even get the dumbed down NCEA! These people are stealing from their own future and the taxpayer.Then onto welfare.
How much does the US spend on the military,it’s huge.(I think the US is great but foreign wars and a lack of domestic manufacturing are bankrupting the place,not pensioners.)
February 4th, 2010 at 2:46 pm
Andrew….. that’s a lot of lead………….something more enviro friendly….Ta
Let’s say…. for a section of the unemployed you could…give em a job and scare em to death.
For a section of the sickness benificiaries……give em a placebo, tell em thier cured, then a job ..same outcome
For us retired or retiring folk you could…………..BORE US TO DEATH WITH YOUR WHINNING……… that way we get little violins with it….. how nice.
February 4th, 2010 at 2:57 pm
Message to Jelly Key : learn from Winnie’s stupidity :
Own up to your mistake ,
Apologise sincerely ,
Remedy the situation .
……… . Ahhh , that’s Winston Peters (above) , of course .
February 4th, 2010 at 3:45 pm
Kowtow, the question is not so much the “taking money” of the pensioners more that the demographics and nature of society has changed from when they were working and paying taxes.
The generations below now pay taxes for the pensioners to enjoy retirement, fully knowing that they will never enjoy the same, thus have to save for their own retirement. This places too much burden on the current work force, thus the good ones leave to every other country on the planet that doesnt have a universal non means tested pension.
February 4th, 2010 at 4:05 pm
Fairfax ORourke………..Jesus mate you must have a low threshold for enjoyment if you see how half of em live
Matter of fact that statement of yours was just plain dumb……..Enjoy huh where the f#$k did you compile that little pile o bull from..? your vast knowledge of the subject..?
no..? it shows.
February 4th, 2010 at 4:40 pm
Whoa, Christov I fear you protest a little too strongly.
Please explain which part of my statement was “plain dumb” and which was a “pile o bull”
The fact is a pensioner currently enjoys receiving a non means tested universal pension, not available to any other western country. Gen x, y or whatever you call them will not enjoy this as it is totally unaffordable. Thus those generations are paying an unaffordable pension for the retired currently, whilst attempting to plan for their own, all this on a shrinking tax take. Read that article in number 1.
Jeez mate imagine if I had actually said something inflammatory like the boomers are pretty much responsible for every problem mankind is facing with their materialistic self interested greed that will enslave their grandchildren in debt.
February 4th, 2010 at 4:52 pm
Instead of shooting pensioners and unemployed people we could just take away their vote, and while we are at it middle aged woman as well.
That way at least self interest voting would benefit the productive poriton of society.
I still can’t figure out how some one can work for 40+ years and not have enough passive income to live decently?
Of course some people won’t want to lose the vote so we could shoot them. Less lead and a better place to live.
Death to the old,
Christov which would you choose give up your vote or bullet (government funded of course, we wouldn’t want you paying for it. After all you have paid your taxes your whole life “yawn”.
February 4th, 2010 at 4:54 pm
Fairfax your quite right…….. my apologies for the kneejerk …. it in fact was the word “enjoy” that riled me.
I do a bit of community work here and there and a lot of em just plain don’t get to ENJOY as you put it.
Funny thing is when they retire the bills don’t…… Anyhoo I withdraw the “dumb” remark and once again apologies for any offence caused.
But I still want my piece o pie………..
February 4th, 2010 at 5:15 pm
Andrew said…………..Christov which would you choose give up your vote or bullet (government funded of course, we wouldn’t want you paying for it. After all you have paid your taxes your whole life “yawn”.
Well maybe I have maybe not………ah maybe your right Andrew….. we could start with your mum and dad.
February 4th, 2010 at 5:51 pm
From their celestial clouds , today’s oldies may one day look down upon us – in our dotage – with envy ; ‘cos we won’t have the government dictating our finances ! If we need to continue working , or to create other life-styles and living arrangements , we will be more challenged , and consequently better for it . Ye gads , maybe some will continue in the same abode as multi-generational households . Now there’s an old idea , due for trialling again .
Bugger sitting back and hoping for the hopeless flipping government of the day to look after us . Where’s the dignity in that ? And when have we ever had a gov’t that you’d trust implicitly ……….Expect them to buck up their ideas in the future ?
February 4th, 2010 at 5:57 pm
That would be great… If you could make it look like an accident….
February 4th, 2010 at 8:31 pm
how lucky we were to know who our parents and grandparents were and loved.now we have the results of broken homes and solo parents that are disconnected.they dont want to pay and they want everybody to have a miserable old age.no wonder the ACT party is getting traction.
February 4th, 2010 at 8:55 pm
I am 48 (the tail end of the baby boomers). I have watched, over the years, the generation before me vote to transfer income from the rest of the population to themselves, and I used to think it was just that generation of old people that was the problem. Now I see that it is human nature, and that the baby boomers (my own generation) are going to be even worse because they have even more voting power.
I also used to think the generosity of National Superannuation would have to end because it would become unsustainable, but I see now that it is maybe more a function of voting power than anything else. It is, I guess, sustainable for old people to go free on Waiheke if we do not spend money on reading recovery or the prevention of rheumatic fever in young people.
I have 7 children (aged 5-22) and dislike very much the way older people criticise the young and accuse them of being bludgers etc at the same time as they take from them.
What is happening seems to be a problem of democracy. Large voting groups can vote cohesively for wealth to be transferred from others to themselves. Perhaps the votes of those dependent on National Superannuation could be reduced to a certain proportion of the total vote. Or, maybe one day younger people will vote cohesively against benefits for the old in the same way that old people now vote cohesively to obtain those benefits.
Yes, Andrew, I am a middle-aged woman. You wouldn’t happen to be about 25 and working in IT would you?
February 4th, 2010 at 9:26 pm
My pick is Andrew is about 53 – 54
February 4th, 2010 at 10:47 pm
Either way, he definitely doesn’t like the way his Mum makes his sarnies, and keeps confiscating his ‘gentleman’s magazines’.
February 4th, 2010 at 10:56 pm
What is happening seems to be a problem of democracy.
It’s called a tyranny of the majority. You need to vote Libertarianz, Dragonfly.
February 5th, 2010 at 12:31 am
Key bought the votes he needed to inhabit the throne – and not just on the super issue but on WFF, student loans, guaranteed tax reductions – you name it – he bought it.
He’s quite happy if that meant sinking the ship, as he’ll catch a lifeboat to Hawaii as Sir John.
The man is a poser.
February 5th, 2010 at 1:45 am
Sign up Gareth Morgan to be Libertarianz leader , Mark , and you’d get 10 % + of the vote overnight !
February 5th, 2010 at 8:01 am
Andrew……….. completely do-able tell me where the coots hang out…….. I’ll ave a word in thier shell and when they find out sonny boy is a treacherous little @#$%%^ it ought to take care of itself…………… I’ll send you payment details on a secure line.
to whom above it may concern on a note about bankrupting our grandchildren……. i figure unless I live to be say 150 , it will be my kids who will enjoy a relaxed dotage ,that is unless they squander the lot because of the “I want it now” syndrome.
I will never understand how that little shit of a girl in Willy Wonka (original) could gain so much traction with genX and have had so few lines. A posthumus Oscar may be in order.
Churchill may have said…”.but we will never surrender Bla Bla bla”
She (the little shit) said…..” I WANT IT NOW” and it stuck, huh go figure?
February 5th, 2010 at 8:38 am
A ….BULLET-IN to the young and avaricious.
As most of you young things are probably employed by PENSIONERS via their investments, I should be a little more circumspect in who you disparage.
Including DADDY & MUMMY.
Like TELECOM is planning, most jobs here in Sunny NZ can be outsourced to countries that actually WORK for a living, not expect a gravy train ride through life and be OVERPAID to fund their over borrowed existence.
Our Benefits funded life-style for the shirkers would be most welcome to the poor and downtrodden of the world.
Do not ever knock the person who PAYS you. It may have a penchant to rebound.
Then you may not be able to BORROW to afford the McMansion of your dreams…..at ANY PRICE.
A lifestyle of ease funded by those who were frugal and invested wisely and saved for their old-age is probably not in your future, given these comments.
So be warned…..never upset those you are be-holden to….otherwise the HOLDEN you can afford may be a clunker.
The LATTE lifestyle of the poor New Zealanders is funded by a rocky platform. The train may be leaving the station soon.
You may have to go to India or China soon….to do the SAME job to eat.
The trains there are very overcrowded.
Make the most of what you currently HAVE, not desire.
Unemployment is rising…..here.
Go figure…if you have to GO THERE.
EH……..Christov…..it is a WILLY WON-KEY WORLD.
February 5th, 2010 at 10:08 am
India and China do not have a welfare system so lower taxes, however there is a tax and it is quite a severe one and it’s called corruption. My trip to South East Asia last year was a real eye opener on back handers. I would rather have higher taxes than corruption tax. I also can’t believe that we allow people to be on welfare without giving something back, say 20 hours a week upskilling or doing some physical exercise such as planting native forest parks etc which at a minimum would keep a work ethic going and not take business off established businesses. I am no ACT supporter or Sue Bradford fan (in fact Rodney is the first one I would deep six) however you can’t just take take.
February 5th, 2010 at 10:40 am
Re: 7 “Sound familiar?” yes and it has not seriously started here yet….However I left the healthcare areas 10 years ago and even then (the older) doctors and nurses were commenting that the makeup of the wards had changed, “these days” it seemed most occupants of wards are the elderly clinging onto the last few months (or at most 2 years) of life at horrendous cost and at the expense of younger ppls quality of life…ie a bed / treatment used for a person under say 60 usually gives considerable improvement in quality of life for a long period…
@kowtow: “if you can’t afford it you can’t have it!!” exactly, you didnt save (enough) for it…its not fair that those younger pay a disproportionate cost of supporting.
The BBs have not saved for retirement, “they [have not] lived within their means” just look at the debt. They will bankrupt countries over the next 20~40 years…The BBs have voted for JK and National who have crippled the “Cullen fund” in order to keep the debt bubble growing or at least inflated now…so BBs dont lose the paper value of their homes or their un-sustainable life styles……..
February 5th, 2010 at 11:02 am
Come on people keep the faith.
My opinion on Key goes like this: To get his feet under the table he had to get people to believe in him. A lot of non core national voters have believed the spin from Helen and her cohorts that National pollies are a bunch of liars, that they will rip you off as soon as look at you, and break the poor and needy.
This electoral system is impossible for hard and tough immediate action.
I am hopeful that this first 12 months to 3 years he is taking baby steps, and bringing NZers with him. Not go in there with a big stick. Get people to first trust.
Lets face it we have had a lot of years of no trust. Remember Helen telling us she would never pass a law that said we couldnt smack our kids.
Working for Families is a rort for some. But for others it is a lifeline. To take it away straight away would be too much of a fiscal shock for many. He needs to give a lot of warning, so families can adjust.
All this talk of bringing in a land tax or whatever is great. Especially while he distances himself from it. It gets us deciding. Not him. It gets the population of New Zealand thinking about it, not just forced on us.
I am still positive about his leadership. He’s no pussy, and I reckon he has a plan. Fools rush in. John Key is getting all his ducks in a row first I think (and hope).
Rather a bit slow and measured, than 3 years of crazy moves, then Goff for the next 6.
February 5th, 2010 at 11:09 am
Farmer Will
sadly I don’t think NZ has the luxury of that much time.
February 5th, 2010 at 11:35 am
I would agree with you Sharonv, however we are in the minority. Which makes things politically very difficult for Key. So many bleeding hearts out there.
February 5th, 2010 at 12:07 pm
@The Chairman: Not sure about the copper one, what’s stored is finite…ie yes we might see a short term drop/collapse as those who have stock piled dont buy anymore and run down the inventory…but even if say china stopped buying for 6 months….its only 6 months…..a fly speck in time…
regards
February 5th, 2010 at 12:16 pm
I think much wil happen this year. Once they have sorted out the tax issues around property, the following property shock sydrome might necessitate interest rates going down rather than up. The general sinking feeling purculating through the economy might ecourage a different kind of thinking and an awareness that medicine must be taken by everyone. Kiwi’s will not be able to imagine that NZ is immune to the GFC for much longer. In that respect Key’s has all of his ducks in a row – these opportunities don’t come around often.
February 5th, 2010 at 12:20 pm
@christov: “We were always told…Work Harder someone on Welfare Depends on it. Well now it’s our turn and you thieving little sh@ts wanna steal our wallets…?”
So now you see were lied to by Pollies…you trusted the Pollies?
The “social system” was setup in a flawed way, when it first started in the 1940s/1950s those who were working supported the OAPs fo the day, so those OAPs got a “free ride’….the social contract was then future generations would support the current ones as they retired…
At a theoretical level, Dont you think its immoral to force someone not yet born….to support you? Surely a fair contract is where both parties gain something?
Further how many of the BBs enjoyed a free tertiary education? bet it was many if not all…today the “thieving little sh@ts” have to fund their own and the retirement of the greedy BBs…..
Also the BBs are a blip….what we should be seeing is they are as more numerous actually put an amount of money aside to cover that excessive blip….the Cullen fund aimed to do that…ie there should have been enough high earning BBs that there should have been an excess amount of money….instead the BBs etc are spending it, demanding tax cuts to pay the debt they have got themselves into….
As far as I am concerned the “thieving little sh@ts” are in fact those retiring now or will be soon ie the BBs. They have pillaged the planet, wasted huge resources and lived beyond their means….and now want to continue to do so into retirement….sorry that isn’t fair and its not doable.
Just look at Greece today, what you are your greedies want to do is live like Greece until it collapses….of course if you have died of old age by then, you wont care will you?
ie @From the sidelines: agree 100%….
regards
February 5th, 2010 at 12:34 pm
A great analogy of democracy is two wolves and a lamb sitting down to vote what to have for lunch. The minority is always gonna shafted and in the future that will be the tax paying worker. Something will need to be done otherwise the country will be bankrupt.
The problem with SuperAnn is that it is not prepaid to any great degree, even with the Cullen fund. The biggest myth is that the taxes you pay now will pay for you super in the future.
“I paid my taxes all my life so I deserve my super etc.” is the biggest crock spouted by the older generation. What you paid in the past was spent by that government so your super is coming out of the current tax take.
This is not the biggest problem however, it is the fact people live a whole lot longer on the pension and often in bad health which is going to kill us.
If the retirement age is 65 and the average person lives to 85, that is twenty years on the pension. This is not sustainable.
In the not too distant past the average time on the pension would have been no more than probably 5-10 years.
February 5th, 2010 at 12:39 pm
@Christov: “I do a bit of community work here and there and a lot of em just plain don’t get to ENJOY as you put it.”
My parents were always poor but they saved during their working life, (the Great Depression influenced them that much). They watched many of their contemporaries spend their way through their working life and did without. Today they watch as those who spent and lived it up then are now pretty much penniless while they use their private savings to enjoy their retirement….
So when we look at the work of Greenspan etc, I think it was fundamentally flawed to remove recessions, ppl no longer feared bad times so no longer saved to protect themselves….this is the legacy this idiot and his right wing zealots have left us.
The result it too many ppl today in the Western world are too busy living for the now and not thinking of tomorrow…
In terms of retirement I dont think I will ever retire, I wont be able to, I agree the bills keep coming in….I will have some savings/private pension however I bet it will be means tested and that my private savings/pension will count against me…so i will be little if any better off than someone who has saved nil.
Then throw in peak oil and AGW….the party is over, you just dont know it yet….
AGW is something the later generations will suffer thanks to the BBs…however peak oil will be pay back on them as its within a decade. Treasury’s forecasts dont allow for an ever dwindling GDP…Pollies tell it in reverse….”GDP and the economy will grow etc and that will make us all better off”…wake up, its a lie…while you believe them they are feathering their own nests and the nests of their mates at your expense…
Further, pitchfork time is coming…but you know you willing accepted the lies….didnt look behind the vail….
regards
February 5th, 2010 at 12:40 pm
“Also the BBs are a blip….what we should be seeing is they are as more numerous actually put an amount of money aside to cover that excessive blip….the Cullen fund aimed to do that…ie there should have been enough high earning BBs that there should have been an excess amount of money….instead the BBs etc are spending it, demanding tax cuts to pay the debt they have got themselves into….”
The worst thing is that for all the 850,000 odd BBs they only produced 650,000 children. Too greedy and self centred to be bothered having enough children and so 200,000 tax payers are missing to pay for their retirement.
February 5th, 2010 at 12:41 pm
Sean: When I was living in China a couple of years ago their top income tax rate was 45%. Corruption, as in backhanders, is in the eye of the beholder – to some it is just a cost of doing business.
Are we missing something here with our tax spend. Oz and UK may have slightly higher tax rates, (though my friend in London argues NZ is more highly taxed overall) but has free health care. I pay $16 (up from $15 2009) to go to the doctor where I live, yet my elderly parents pay $52 to see their doctor in a different part of the country.
Perhaps its time we followed the Dutch model – super is determined by how much you have contributed via taxes etc. The more you have paid the more you get. Don’t pay any and you only get the basic allowance.
I agree with you farmer Will – The Man has a Plan.
February 5th, 2010 at 12:43 pm
@Dragonfly, I think we are classed as “Generation Jones’s” a cross between the BBs and the X’s.
Oh and I work in IT….
So that makes me?
;]
regards
February 5th, 2010 at 12:47 pm
Thanks Steven, just reread From the Sidelines. Makes a lot of sense. I regularly feel apalled at what I see amongst the BBs I know. That includes family.
Some of the huge debt taken on for instance. Interest only loans. I have a rellie who is putting money into kiwisaver and is only paying interest on the large farm mortgage. It seems nonsensical. At the same time buying expensive TOYS.
Others, in their 50s having just bought an expensive new home, borrowing around 500k, with equity of 100k.
There is the BB who lives in a bus, has a pretty good wage and spends all of it every week. No thought to the future.
The BB who has 20 ( seems like it) offspring and will never be able to save a cent coz the minute he starts earning any dosh, most of it goes to social welfare. Although mid 50 If his track record is any thing to go by will still be having kids into his 70’s.
There are other BBs who have borrowed millions to farm. Buying farm after farm, and are now so indebted they dont know where to turn.
Some having to sell the property they spend years accumulating, will probably lose it all.
Then there is the older crew who have lost most of their wealth. MFL ING Western Bay Finance. What was nice nest eggs, gone.
It feels like the final days of Rome. The boats, the cars, the bling, the big houses, and now the broken bank accounts. Our greed and selfishness will indebt our children for a long time. But we cling to our right to our social welfare like parasites.
February 5th, 2010 at 12:52 pm
@farmer Will: Remember Shipley? JK has to be aware that at any time he could get rolled…then we see a lurch to the right….(or whatever)….
So do I see change? not really just read BE’s lips….it will be like Obama an empty worthless shell…our democracy has I think got to the stage it no longer functions, the monied’s etc have figured out all the pressure points and loop holes and own them….the result is our so called democracy is hog tied with invisible rope…and every three years we happily tie another knot for a few illusionary baubles…
regards
February 5th, 2010 at 12:59 pm
@Farmer Will: “It feels like the final days of Rome.” it does indeed….I have not read enough on Rome’s fall yet, there is so much more, but Im a struck by how similar it is with today, 2000 years later….
The sad thing about the “older crew” losing is some simple regulation setup in the 1980s would have offered considerable protection…ie transparency it was rejected by those who would have “lost out”….about the only good thing is the SFO is looking at some cases so there might yet be some jail time…yet the Govn of the day could have avoided pain this so easily….
February 5th, 2010 at 1:06 pm
Steven@12.40 “these days” it seemed most occupants of wards are the elderly clinging onto the last few months (or at most 2 years) of life at horrendous cost and at the expense of younger ppls quality of life…ie a bed / treatment used for a person under say 60 usually gives considerable improvement in quality of life for a long period…”
I know of many BBs who would love to have the option of voluntary euthanasia when they get near the end of their life. Family in Holland have taken this option, rather than live in a state that if they were an animal, society would demand they be put down due to the intense suffering they would be facing. If as a country, we could be brave enough to embrace this, there would be savings in health costs and a quantum of dignity to the their life’s end. I am hearing of more and more people who are now refusing medical care when it will only prolong their lives without increasing quality. Funnily enough they have all been BBs.
February 5th, 2010 at 1:21 pm
“our democracy has I think got to the stage it no longer functions” . Yup, sort of.
The media has a lot to answer for. It drives issues to death. But in saying that a very strong personality that can say the right things at the right time should be able to shut down the crap the journalists and media generate.
But for me I think the media is so vapid, issues are dealt with with the intelligence of a flatworm and real discussion, real responses just dont happen.
Look with what they did to Paula Bennett. They bullied her something wicked over just bullshit. The minute a polly shows any weakness, they are like pitbulls on a child. And it is the fight that gets them going, not the issue. Its the weakness.
Hone and his whites raped the land or whatever he emailed. So blardy wot. Why arent they digging into this good news for Maori, where they can get a loan to build on their land. Why has it taken so damn long. Why didnt labour do it years ago? But guess what, its all maori flags and will John Key get spat on today. All the cameras there waiting for it.
I wana hear about Jim down the road, being able to build a home on his land for his kids. Where he can grow some veges and attend the local marae, instead of renting some overpriced white mans dump in town.
February 5th, 2010 at 2:52 pm
Steven………… I dont have to worry and no i don’t give a rats phatoot about taking money from your unborn baby as well.
You wanna be clever just don’t have any (babies)…… solved!!
p.s. thanks for the fun it’s been a real giggle…… work hard now boys n girls won’t you?
February 5th, 2010 at 3:08 pm
Steven remarked….@Christov: “I do a bit of community work here and there and a lot of em just plain don’t get to ENJOY as you put it.”
Steven cant you read didn’t say…. I…. was poor… I said I did a fair bit of community work.
I’ll be just fine pension or not,.. although I could always use your money for that cruise or what have you .
A little tip for ya bud …… lighten up a bit ,.. you’ll get old before your time sheeesh!
February 7th, 2010 at 9:16 am
BBs are not bankrupting the Western world, the mathmatically flawed western banking system is slowly but surely transfering the entire means of productions across to those at the top of the banking pyramid.
When their games cause depression and misery, they use their media control to defer blame away from what they have caused and the financially illiterate commoners attack each other as every difference becomes ecentuated in a dog eat dog fight for survival.
Lets get wise and beam in on the true cause for a change.
February 7th, 2010 at 9:48 am
Is that your ’sermon on the mount’ for today Iain?
February 7th, 2010 at 9:52 am
Got me easy chair ……..Got the gummy bears …………Feet up on a nice soft poof ( oooooooops , sorry Tarquain , not you ) ………….Ringside seat : OK Iain & Wally : You know the rules , play the argument and not the man ; come out fighting ; and may the best man win ……… ……..DING DING
February 7th, 2010 at 12:35 pm
Wheres Wally?
Q
http://www.interest.co.nz/ratesblog/index.php/2010/02/02/opinion-tax-changes-must-not-shift-burden-to-middle-and-low-income-families/comment-page-1/#comment-58332
A
http://www.interest.co.nz/ratesblog/index.php/2010/02/02/opinion-tax-changes-must-not-shift-burden-to-middle-and-low-income-families/comment-page-1/#comment-58527
February 7th, 2010 at 12:44 pm
Round one : 10 / 8 : to Parksy ..( two good scoring shots , and no defence from Wal )……….Seconds out ! …. DING DING
February 7th, 2010 at 1:11 pm
“and the financially illiterate commoners”… “those at the top of the banking pyramid”…!!!
Gosh Iain, do we all fit into one camp or the other.
February 7th, 2010 at 1:34 pm
While Iain is away gathering links to throw at me….if Gerry the driller strikes oil or gas any time soon…what does that do to the estimated govt debt position….in the space of an hour the red ink turns blue and the Kiwi heads for the moon.
Meanwhile check this out:
http://tvnz.co.nz/business-news/bollard-we-can-t-compete-aust-3349822
Bolly and Jonkey having a war of words it would seem!!!!
February 7th, 2010 at 2:00 pm
Laydeeeeeeeeez and Gentlepong : Rounds 2 & 3 to Wally , the ring-side scorers give it 10 : 9 to the chump …. sorry , … champ ! …………A nice little jab & upper cut in each round . …………DING DING ……….. Round 4 . Keep the blows up , lads . Good luck .
February 7th, 2010 at 3:30 pm
Hey RT…I’m a tad worried about Iain…seems to have got himself lost in the links…maybe Iain’s a golf ball?
February 7th, 2010 at 3:37 pm
Wally, have to disagree again Im afraid, if oil is struck, it may well be added as a positive to our GDP, but look a little deeper and see just who has benefitted the most from the unlocking of our mineral and petroleum resources. We receive a little from exploration licenses, a little from tiny royalties, a few jobs as most of plant fabrication is now done offshore in slave sweat shops, most profits flow offshore to central banker controlling stakeholder owned corporate subsidiaries.
The same occurs with the mineral resources of Australia, the unlocking of which is recorded as massively benefitting all Australians, but in-fact in the main only benefits the few at the top of the banking pyramid.
Do ya want some links or you going to take my word for it?
Sadly dont get to play much golf anymore, as when Im not on the hampster wheel, Im trying to show people just what the banking hampster wheel is.
February 7th, 2010 at 3:38 pm
Hey ludwig…check this out:http://www.theage.com.au/business/hold-your-nerve-its-time-to-jump-in-20100206-njtw.html…..the very same lot who were scrrrreaming about bubbles and just happened to be shorting everything but the kitchen sink…different tune today!!! they must have sold their shorts and gone long….wonderful ethical upstanding people.
February 7th, 2010 at 3:43 pm
I am beginning top get the idea that you are a wee bit of a socialist Iain….come on…out with it….Marx is under the bed right?….we read Trotsky for entertainment don’t we?….
February 7th, 2010 at 3:50 pm
Sorry Ludwig!
February 7th, 2010 at 3:50 pm
Wally,
““and the financially illiterate commoners”… “those at the top of the banking pyramid”…!!!
Gosh Iain, do we all fit into one camp or the other.”
Sadly Wally I do think that is exactly where we are at, those at that top of the banking pyramid are small in number and most commoners being intent on only trying to get from one end of life to the other with dignity intact, not wanting for food, water or shelter, are financially illiterate, I am not saying it is nearly their own fault as they have experienced something akin to the burning of the books in they way that the bankers have dominated what we are taught in education facilities and what we are told to think via a media which they majority stakeholder own and control.
February 7th, 2010 at 3:51 pm
Back to normal. Some guff just out across the ditch that Swann has said the bank guarantee game is to finish. End of Dec 2010 it ends. What’s that mean for us Bill?
February 7th, 2010 at 3:54 pm
And which camp are you in Iain?
February 7th, 2010 at 4:01 pm
Rounds 4 thru 8 are even : Punch met with counter-punch . A few solid blows . But the combatants appear to be holding something in reserve for the closing rounds . Mouthguards in boys . Seconds out ……….. DING DING
February 7th, 2010 at 4:05 pm
Unfetterd extreme socialism favours only the bankers, just as unfettered extreme capitalism does, both lead to imperialist-fascism where locally recruited co-operatives of global financial powers extract tribute from nationstate majorities, including their own peoples, to fund their global dominance across borders.
If anything comes close to describing me it would be a Humanist, I believe nature will determine how long our stay on this planet will be, that we can determine how enjoyable it will be, that thus far we have made a dogs breakfast of it, that if you study deep and wide enough you will find at the core of most every human upheaval a slaveminded group that gained a monopoly of the supply of money, thus we need to shore up the checks and balances around the money supply, especially the credit creation mechanism at its base.
February 7th, 2010 at 4:10 pm
Woweeee , who saw that one coming ! Parksy lured Wal in with the ” wounded duck ” routine , and snuck in a devilishly quick sucker punch . 10 : 9 round to the challenger ……………. DING DING : Round # 10 ……… [ Bernard , someone , whizz out and get me some more bags of gummy bears , please . This is too good to miss . The fight of the incomprehensibulls . ]
February 7th, 2010 at 4:12 pm
Wally,
“And which camp are you in Iain?”
neglected to add(oversight, only human) that their lie in between a few financially literate commoners who have chosen to ride in the bankers coat tails for personal profit and those with integrity and knowledge that attempt to whistleblow the pyramid scam, I put myself in the whistleblower camp.
February 7th, 2010 at 4:18 pm
Good one , Iain . On top of the battle now . C’mon Wal , make a fight of it , man . Onto round 11 , knuckle dusters out !!!!!!!! DING DING [ Feck ! Have to go and get me own gummies . Fight clean , whilst the idiot savant ref is away , OK ? ]
February 7th, 2010 at 4:19 pm
Have to find out who got the decision later tonight Rog, gotta go finish digging some spuds, pick some beans and tend to the ever growing weeds, I nearly dislike weeds as much as I dislike core owners of the international banking network, weeds discribes them quite adequately.
February 7th, 2010 at 4:24 pm
Gotcha ahead , marrowly at this stage Iain . Wal’s the sorta guy who can have a scrap with no one else in the ring . So the crowd won’t notice your absence . But the linking of reefing out the garden weeds to international banking has got you a head of broccoli …………sorry , ahead of Wally at this midway point of round 11 .
February 7th, 2010 at 10:21 pm
Hey Wally : Any idea why the market has trashed PNA stock price over last week or so ? Been through latest quarter & year results , and they’re amazingly good . Forward guidence is exceptional too . A Buffett moment to back in the proverbial truck , and load up !
February 8th, 2010 at 12:49 am
RT,
Its called gambling in the banker crossownership market casino. Mathematically the global economy is rigged in favour of the private central bankers who designed with an in built over-riding systemic fraud that sees the most of the money supply issued as debt with interest attached, creating a debt loop of doom. Then inside that you have all the other games(markets) that are rigged in favour of the house, rort with insider trading, will give a little out in prize money every now and then to keep the victims keen, but much of the time the victims will be left scratching their heads and chasing their tales wondering why nothing does what it appears it should.
RT unlike Buffet, you ain’t, I presume, got the money to by sufficient enough shares to get one or more of your own a place around the directors table, thus the inside running on when to get in and out whilst the banana skins are still suppressing the noise in the gear box.
February 8th, 2010 at 3:25 am
Jeepers , Iain . Clobber the ref one more time and we’ll have to disqualify you ! DING DING : Round 12 .
February 8th, 2010 at 6:33 am
Retirees the losers in super money grab
http://www.businessday.com.au/business/retirees-the-losers-in-super-money-grab-20100201-n90j.html
Peter Huljich funds under fire
http://www.stuff.co.nz/business/3300366/Peter-Huljich-funds-under-fire
February 8th, 2010 at 7:44 am
Re pna RT…I’m told it was because Daily Reckoning put the word out to the clients to short the stock. But you are right, great report and the Banho gold outcome due this quarter. Always has been violent by nature. Thing to note is the very small vol of stock traded.
February 8th, 2010 at 7:54 am
“if you study deep and wide enough”….give it up Iain…the blokes on white coats will come and collect you soon…Why don’t you apply to Goldman Sachs for a job in their PR department…I’m sure they would love to see you.
February 8th, 2010 at 9:04 am
Solid knock to the solar-plexis . Round 12 to you , sir . DING DING . Seconds out . Round 13 .
[ Thanks for info . All reports from the company point to solid earnings this year and 2010 ]
February 8th, 2010 at 9:23 am
To those who exhort more “saving” as the answer. If when you say “savings” you mean “investments” then you are off the hook. If you think the solution is as simple everyone having higher bank balances then you are wrong. If the economy can’t produce the output when it comes time to spend it then all the money in the bank is no good to anyone, expecially if the bank has leveraged that deposit into non-productive loans and investments in derivatives.
February 8th, 2010 at 9:30 am
R.T. …from ringside I thought Parker had the better of it…technically proficient with a great bag o shots to select from just lacking that killer instinct is all….. you see the pious won’t resort to the low blow………..and so are exposed.
Thought Wally demonstrated the headbutt well..a little too late in the fight though (men in white coats) ……
All the world loves a “whistle blower” albeit a bit more mysterioso…makes for good movies….
Actually I think if Parker had a bit more of the Wally in im I fink he could be a real contender.
February 8th, 2010 at 9:43 am
Ahhh , pardon me , but it’s round 12 of 15 ! Only wusses go for 12 . Iain & Wally are two old fashioned heavyweights , a’la Butterbean and Oliver McCall .
February 9th, 2010 at 2:10 pm
R.T. …..Butterbean…..Roy butterbean..? are you sh@#ing me ..his fat wouldn’t survive the fifth and you have to keep waking McCall up and reminding him wut he wuz doin..!!
February 9th, 2010 at 2:35 pm
Classic heavyweights those lads . Remember the look on ref Mills Lane’s face when big Oliver stayed on his stool , and burst into tears . Now that is brilliant .
And Butterbean , did they have to reinforce the ring supports to withstand that guy’s bulk ?
Are you implying that Parksy & Wal are better than that ? C’mon , respect class when you see it !