Here are my Top 10 links from around the Internet at 10 to 1. I welcome your additions and comments below or please send suggestions Thursday’s Top 10 at 10 to firstname.lastname@example.org
1. A$300/hour tea ladies - BusinessDay reports
there's a senate inquiry going on in Australia into how much liquidators make. I wonder how much the liquidators and receivers are making from the finance company collapses here. Here's our estimate in our 'Deep fees' list
, which is a companion to our 'Deep Freeze' list.
(Geddit...deep fees and deep freeze...ho ho ho....so much fun is had at interest.co.nz)
HIGH-FLYING liquidators can earn $6 million a year as they bill $300 an hour for their tea ladies and an ''entire colony'' who feed on the corpses of companies that they should have saved, a Senate inquiry has been told.
Top-earning liquidators could make $4 million or even $6 million a year from failing companies, with no need to explain a parade of ''time keepers'' clocking up fees in the background, at a huge mark-up that inflated their own income. Billable hours extended to clerical staff, the tea and coffee lady - each at perhaps $300 an hour.
One top-five liquidation firm served coffee to creditors at a meeting and it came to $80 a cup. ''Nice cup,'' suggested the inquiry's chairman, the Liberal senator Alan Eggleston.
2. A flood there too - The Telegraph reports
a flood of new listings into the UK housing market. Sound familiar? HT Kiwiexpat via email
According to the influential monthly survey conducted by the Royal Institution of Chartered Surveyors, more and more home owners are putting their houses up for sale, raising fears that the recovery in the property market could come to an end.
The surprisingly strong performance in house prices last year was driven by a severe shortage of supply. With nervous home owners deciding not to put their houses on the market, buyers ended up chasing a small pool of properties and bidding up prices.
3. South Island slow - The Press reports a Deloitte analysis
showing the recovery in the South Island is likely to be slow and cautious because of the sluggish agricultural sector. Farmers are trying to reduce debt and the South Island financial mafia/brotherhood have their own problems...It could be another tough year or two for the mainland.
The market value of South Island listed primary sector companies collectively rose 7.4 per cent in the year ended March 31, but Munro said this rise derived largely from PGG Wrightson's $180m capital-raising late last year rather than real business growth.
The South Island primary sector's market value was still 30 per cent lower than two years ago and many of the worst-performing listed companies in 2009 were involved in agriculture.
4. Capital surges - The IMF warned overnight
about the dangers of capital surges into healthy developed countries (such as New Zealand) and developing countries, particularly given all the money printed in the last couple of years, which is now starting to look for more lucrative homes.
The unprecedented liquidity created by countries to fight the economic crisis could create problems for policymakers in some advanced and emerging market economies with relatively strong growth prospects and higher interest rates, the International Monetary Fund said in a new report.
The longer countries where the crisis originated maintain their low interest rate policies, the more likely it is that inflow surges will continue as investors will seek higher returns in stronger economies.
In a special analysis that is part of its latest Global Financial Stability Report, the IMF discussed some of the after-effects of the global financial crisis—a surge in capital inflows arising from ramped up money supply and liquidity in the advanced economies meant to ease the effects of sharply curtailed credit.
5. Oh the irony
- China (!), the ultimate one party state rife with legislated monopolies, may start a monopoly probe into BHP Billiton, Rio Tinto and Vale over apparent price fixing on iron ore, Bloomberg is reporting.
6. Lower for longer - Nouriel Roubini, the guy who predicted the crisis, tells Bloomberg in this interview
he sees the US Federal Reserve keeping its main official rate near zero until at least the first quarter for 2011. And he sees more money printing... HT ZeroHedge.
That's not going to change. In my view, the Fed funds are going to stay at zero until at least the first quarter, if not the second quarter, of next year, given we're going to have anemic economic growth, and we'll have more deflation than inflation. And the Fed might try to start mopping up some of the liquidity. But I think that actually chances are they're going to resume further quantitative easing, because if they're going to have a backup in mortgage rates or ten year treasuries, the last thing that the Fed can afford in an election year is having a crowding out of the recovery of housing that is already an (inaudible) recovery during an election year.
So if a backup in yield were to occur and mortgage rates go higher and higher, the Fed is going to eat its own words, reverse what it said, lose some reputation, and resume further QE directly or indirectly. They could use, for example, Fannie and Freddie as a way of effectively backstopping the mortgage market. So I see zero rates and maybe more QE rather than less QE.
7. 'Not so good'
- The Fonterra Shareholders Fund proposal was widely applauded by farmers and investors, but there is at least one doubter. Lincoln University Agribusiness professor Keith Woodford says on his blog
that it does not solve the long term redemption risk problem and creates a new problem of more rigorous disclosure for Fonterra. That's a problem?
It would appear to solve the short term redemption issue from share capital washing in and out due to factors such as drought. And this is important. But it does not protect Fonterra, despite the claims, from long term loss of capital as a result of losing suppliers to new start up companies. In that situation, Fonterra would need to buy back shares to bring the percentage of dry shares back within constitutional limits.
Fonterra needs some fixed capital which is not redeemable. Tradability has the potential to help achieve this, in that it makes dry shares non-redeemable. With the proposed overall cap of 20%, there is potential to add close to a billion dollars of dry share capital.
If this scheme proceeds than there can no longer be ‘off the record’ conversations between directors and milk suppliers. All communication will need to be on a formal basis to ensure that all suppliers have access to exactly the same information. This will require a major change of culture, which will come as a shock to many farmers.
8. 'He ran like a dog'
- A JP Morgan Chase executive made the mistake overnight of promising a bunch of congressmen at a public hearing in Washington that he would talk to any home lender with problems. Lo and behold, a bunch of 50 such disgruntled borrowers in the audience at the congressional hearing mobbed him, Reuters reported.
HT Gareth Vaughan.
The activist who organized the protest said Lowman did not want to talk and left the hearing.
"He ran. He ran like a dog with its tail between his legs," said Bruce Marks of the Neighborhood Assistance Corporation of America (NACA), which helps homeowners avoid foreclosure. "He was scared to death because he doesn't really want to talk to homeowners."
9. Fat German lady yet to sing
- Far be it from me it call anyone fat (or German), but this Greek rescue package is far from a done deal, according to Ambrose Evans Pritchard in the Telegraph
. HT Andrew via email.
The German taxpayers' union accused Chancellor Angela Merkel of caving into pressure, saying Germany would be left on the hook for huge liabilities.
Christoph Steegmans, spokesman for the finance ministry in Berlin, insisted that "nothing had changed" as a result of the weekend pledge by eurozone states for €30bn of loans. Help is "not automatic" and cannot be activated if any state objects. "The fact that the fire extinguisher has been primed says absolutely nothing about the probability of a fire," he said.
Frank Schäffler, a Free Democrat finance expert in Mrs Merkel's coalition, said the rescue deal is "clearly a subsidy" and violates the EU summit deal in March. "We're on very thin ice legally," he said, hinting at likely court challenges.
Professor Ekkehard Wenger from Würzburg University said the aid for Greece is "another step on the slippery slope downwards. All rational economic rules are being thrown out of the window. This is a bottomless pit." "In the short-term this may calm things but within 10 years the eurozone is not going to exist any longer in its current form," he told Handelsblatt.
10. Totally irrelevant video - Stephen Colbert wants to know where Wikileaks are and whether a gunship can shut them down. A sad story to be true. As a former Reuters journalist, the real video
is one of the most disturbing I have ever seen. It makes my blood boil.
And here's a rare interview with the guy behind Wikileaks Julian Assange... It's funny, although hit's hard to laugh about anything in this saga