Bernard Hickey details the key news over the weekend in 90 seconds at 9 am in association with Bank of New Zealand, including news the Australian dollar briefly hit parity versus the US dollar on Friday night before lurching lower.
All the talk on global currency markets is about the US Federal Reserve's plans for a second round of quantitative easing, which is pressuring the US dollar lower against many currencies, including those seen to have stronger economies and benefiting from high commodity prices. The Australian dollar is among the strongest.
However, Australian Treasurer Wayne Swan almost seemed to welcome the milestone as a badge of honour for a strong Australian economy, saying Australia would take a hands-off approach to its currency because it acted as an automatic stabiliser that helped control the inflationary effects of the biggest mining boom in more than 100 years.
The New Zealand dollar remains weak versus the Australian dollar at around 76.2 Aussie cents, helping to boost New Zealand companies exporting to Australia and tourism operators welcoming in Australian tourists keen to spend their bulked up currency.
Meanwhile, the opposition Labour Party announced a major turnaround in its policy on foreign ownership of New Zealand farmland and monopoly assets.
Labour Leader Phil Goff announced at the annual Labour conference that acquisitions of farm land would only be approved if they included the creation of new jobs with processing facilities.
Sales of more than 5ha would be blocked and sales of more than 25% of monopoly assets would be blocked, he said.
Ministers would be given the authority to block any acquisition worth more than NZ$100 million.
Here's some of the details below of his speech.
It is time we reconsidered what we get from the sale of farm land offshore, and what are the costs. Kiwi farmers are the most efficient in the world. We are not going to make them more efficient by making more of them overseas owned. Selling off our farmland won’t increase production or export earnings.
There are big overseas buyers with money to burn who want to control and own the supply chain for food production. Instead of adding value to production here in New Zealand, they could decide to do it overseas. That would cost us jobs. They’re coming here to buy what’s currently ours and they will be doing it more often. We are more vulnerable as land values fall. Assets like the Crafar farms have been put up at the behest of banks.
But what is in the banks' interest is not always in the wider interests of New Zealand. We are at risk of our land being priced on an international market beyond the reach of New Zealanders. When New Zealanders have to compete against overseas buyers, we have to ask ourselves - what will happen if the prices paid lock us out of owning our own land? Where does it end up if we say to ambitious young New Zealanders that you can only buy into our best and productive assets if you come from overseas or you are born into a wealthy family.
That is not the New Zealand I want. No overseas person has the right to buy our land - it is a privilege. It is a privilege we have granted too easily. Today you have my commitment that Labour will turn the rules on selling land to foreigners on their head. We’ll guarantee that New Zealand’s interests are put first. We will reverse the presumption that any foreign purchase of our rural land is good for New Zealand. This will mean that rather than most applications from foreign buyers going through, most will be turned down. Buyers will have to prove that selling land to them will be good for our economy.
We will force would-be buyers of New Zealand rural land to invest in New Zealand and our people by bringing jobs, transferring technology, increasing exports or bringing other benefits for New Zealand. These rules will apply to sales of rural land over 5 hectares. We will also introduce new rules around investment in monopoly infrastructure to guarantee these crucial assets, such as airports, seaports and water services remain in New Zealand hands.
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14 Comments
It's great isn't it....like going to the circus...the best act is when the Elephants stride into the big top and waltz around doing flipflops and headstands for the peasants...one of them is named Goofy and oh man does he do an act...
As with all socialists who believe they know better than the masses what's really good for the peasantry, our breed of mostly home grown Labourites smell votes to be harvested for doing no more than promising stuff.....it's so bloody easy making promises!
Yes it is the same bunch who made dam sure the property ponzi bubble grew to such vote gathering heights...kept them at the pig trough didn't it....9 years of Labour to achieve what...a mountain of debt.
And they want you to vote for them......are you really that bloody stupid?
Looks what's happening just 2 hours away by jet....Noddy's skilled unemployed workers must be packing their tools...who wouldn't be!
"THE booming mining industry is luring skilled workers away from building infrastructure, threatening a shortfall of ''many thousand'' by 2012,"
http://www.theage.com.au/business/building-industry-faces-skills-shortfall-20101017-16p5o.html
Now, what will this mean for the property ponzi economy of the South Pacific...you don't spose demand for rentals will drop do you...that maybe the demand for buying price bloated properties will shrink even more.....
Got to vote for sombody. Basically it will be National-Maori or Labour- Greens. Labour is now bringing itself more to align with the Greenies. They might win too especially if there's a bust up down the track between the Nats and the Maoris
Haaaaaaaaaaaa hahahah ha
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=10681239
"They are in a panic over whether their paintings are also forgeries. Everyone's taking a second look." The panic is so acute that collectors are even seeking refunds on unquestionably genuine works."
And now for a good gork at the turd that is Aymereekan housing/economy:
http://www.marketoracle.co.uk/Article23558.html
"... if the chain of title of the note is broken, then the borrower no longer owes any money on the loan.".
It's hard to believe that this could be true but it's backed up authoritatively here
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1469749
and here
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1684729
Lots of knowledgeable comments here
http://www.zerohedge.com/article/are-all-mortgage-backed-securities-scam
Wonder how the securitisation that is being done here complies with our property ownership and conveyancing laws.
This is worth a look as well
And you lot reckon there's no growth in the NZ economy ! Have a decko at these , a beautiful set of numbers !
2006 $ 107 million
2007 $ 215 million
2008 $ 283 million
2009 $ 548 million
2010 $ 748 million ! .........
........... Released by IRD are the yearly levels of debt " owed " to them by insolvent individuals and companies . .....
...... You're bust , but you're still beholden to us ........ We'll follow you to the grave ; beyond , even when you're dust !!!
This is the guts of the problem in Aymereeka today.....check out that link above !
"People still haven't figured out what all this means. But I'll tell you: if enough mortgage-paying homeowners realize that they may be able to get out of their mortgage loans and keep their houses, scott-free? That's basically a license to halt payments right now, thank you. That's basically a license to tell the banks to take a hike.
"What are the banks going to do...try to foreclose and then evict you? Show me the paper, Mr. Banker, will be all you need to say."
Meanwhile here in Noddyland the RBNZ is all gungho about getting the securitised mortgage backed BS underway to pork the credit market and boost the lending.....what about the law ?......do we have our very own version of this...festering in wgtn?
Our old friend ALF ( Allied Farmers ) has sunk to all time lows of 1.7 cents !
Now Rob old lad , it is time to do a share consolidation ...... Say a 100 to one new share . That'll reduce the listed scrip to just 19 million .......... Then do a 10 to one rights issue at 10 cents apiece . That'll raise the scrip back to 209 million shares , and bring $ 19 million of new munny into the balance sheet . Theoretically the new shares will eventually trade on the NZX at 34 cents ....... a twentifold increase from today's trading !
It's all smoke-and-mirrors stuff , of course ........ But all this jiggery-pokery stuff appeals to the punters ...... they'll think that you're ontop of things ( hee hee hee , I know , fools that they are ) , and you'll keep the creditors at bay a little longer .......... and keep the $ 400 000 flowing into your account .
Hell , if you " save the company " 'like this , grant yourself a decent pay rise .
Hey Gummy Bear..we read you are about to be blown into China...gotcha roof nailed down?
Yup ! And the breakwater is finished ......... Gotta head off to the Animal Bites Centre for another two shots of anti-rabies vaccine ............ Coming here , that was a good idea ... Yeah right !
[ the really painful bit ( excuse pun ! ) is being off the booze for 6 weeks ! Ouch . ]
US Property market is burnt toast, Got Gold ?
http://www.oftwominds.com/blogoct10/foreclosure-collapse10-10.html
The Coming Collapse of the Real Estate Market (October 14, 2010)
The system for financing mortgages and regulating that financing has failed, completely and utterly. The mortgage and real estate markets are now in collapse.
Yesterday I wrote about how positive feedback loops lead to collapse. Welcome to the U.S. housing and mortgage markets. As I have documented here numerous times, the entire U.S. mortgage market has already been socialized: 99% of all mortgages are backed by the three FFFs--Fannie, Freddie and FHA--and the Federal Reserve has purchased a staggering $1.2 trillion in mortgage-backed assets in the past year or so to maintain the illusion that there is a market for mortgage-backed securities.
There is, but only because the mortgages are backed by the Federal Government and propped up by the Federal Reserve.
The mortgage market is completely dependent on government guarantees and quasi-Government purchases of securitized mortgages. If the mortgage market were truly socialized, then the Central State would own the banks which originate, service and own the mortgages.
But then the private owners and managers of the "too big to fail" banks would not be reaping hundreds of billions in profits and bonuses. And since the banking industry has effectively captured the processes of governance (that is, Congress and the various regulatory agencies), then what we have is a system of private ownership of the revenue and profits generated by the mortgage industry and public absorption of the risks and losses.
Could anything be sweeter for the big banks? No.
The incestuous nature of the system is breathtaking. The Fed creates the credit which enables the mortgages, the Treasury guarantees the mortgages via Fannie, Freddie and FHA, the Fed buys the mortgages ($1.3 trillion in mortgages are on their balance sheet) and the private banks collect the fees and profits.
One of the core tenets of the Survival+ critique is the State/Financial Plutocracy partnership. There are many examples of this partnership (crony capitalism in which the State is the "enforcer" which collects the national income and distributes it to its private-sector cronies), but perhaps none so blatant and pure as the mortgage/banking sector.
But now the entire legal basis for that privatized-profits, socialized losses system has dissolved. The foreclosure scandal is not just a "scandal" in which various frauds were brought to light; it is the failure of the entire system of originating mortgages that props up the entire real estate market.
I recently reported on the depth of the crisis for AOL's Daily Finance: The Foreclosure Crisis: Eroding Trust -- and Ending the Recovery?
The Mainstream Financial Media has been forced to gingerly poke around the delicate topic, and surprise, it is difficult to put a positive spin on the crisis:
Document Questions Cloud Recovery: Agents Fear Housing Could Stall as Uncertainty on Foreclosures Unnerves Buyers, Especially Investors.
"Title companies would be crazy to ensure title on anything remotely associated with a foreclosed property because we don't know how this is going to resolve itself," said Mark Hanson, an independent housing analyst in Menlo Park, Calif.
The result: Not only could sales slow on foreclosures now listed for sale, but it could also become harder to sell or refinance properties that have been foreclosed upon at some point in the past few years.
Real-estate agents are particularly worried about the situation's impact on investors, the buyers who fix up foreclosed homes for resale. Investors accounted for 21% of all home sales in August, according to the National Association of Realtors.
Little-Known MERS Faces Big Challenges in Foreclosure Battle:
Success in challenging MERS’ role in a foreclosure could mean the owner of a mortgage holds a loan without claim to the house as collateral, Mr. Weissman said. That result could set off a chain reaction reducing the value of mortgage servicing rights, an asset many banks keep as an investment.
Are We Headed for Housing Armageddon?
So to summarize:
1. The banks which depend on revenues collected from mortgage servicing are facing the possibility that millions of distressed mortgages will enter legal limbo and not be paid; additionally, millions of underwater homeowners realize they can stop paying their mortgages with no near-term consequence because the foreclosure system is frozen.
If you doubt this, please read Gonzalo Lira On The Coming Middle-Class Anarchy.
2. The mortgages which the banks are holding on their books as income-producing assets at full face value are in effect either worthless or depreciated to some significant but unknown degree. If this fact were reflected in their balance sheets, all the big banks would all be insolvent.
3. Evictions based on foreclosures can be halted, delayed or even cancelled. Consider this alternative response to wrongful eviction: Evicted Family Breaks Into Their Former House (WSJ.com)
4. Pending sales of properties that were foreclosed are now of dubious legality.
5. Anyone buying a house in foreclosure, or a house that was foreclosed, cannot get title insurance.
6. Investors who have been propping up the housing market by snapping up properties in foreclosure (REOs or "distressed properties") face high risks and uncertainties in buying any real estate that was in or is in the foreclosure pipeline. That means markets will lose 30% to 50% of their buyers.
7. Buyers who closed on foreclosed homes now face legal challenges to their ownership and potentially even "clawback" of the property as the previous owner can claim he/she was defrauded by a flawed/defective foreclosure process.
8. Real estate attorneys can rejoice: everyone will get sued, in every court in the land. Banks will get sued, title insurance companies will get sued, realtors will get sued, foreclosure mills will get sued, MERS will get sued, and so on. The attorneys general of the states will all sue the banks and mortgage mills, claiming billions in damages.
Anyone who thinks this is all trivial technicalities is wrong.
9. The real estate market will collapse as the imbalance of buyers and sellers swings to extremes. Buyers vanish as trust in the institutions of real estate finance and property rights has collapsed, and millions of distressed/defaulted mortgages don't get paid. Underwater sellers have a stark choice: either dump the house for cash (assuming the bank allows a short-sale and eats a massive loss) or stop paying the mortgage and see what happens.
That sets up a new positive feedback loop in a very tenuous market: millions of underwater homeowners will realize their homes are plummeting in value and "recovery" is hopeless. Millions more who were on the edge will be pushed underwater as prices fall. The incentives for the newly underwater are clear: stop paying the mortgage, since price "recovery" is hopeless and the foreclosure process is frozen.
The imbalance between few buyers and millions of properties on the market or in the shadow inventory has only one "capitalist" resolution: the destruction of price down to levels that clears the inventory.
Las Vegas offers a example of this clearing: condos are selling for 15% or 20% of their bubble-era valuations--and this is with massive Federal subsidies of the mortgage market.
10. There is a fundamental legal battle playing out between the property rights and rules of law embodied in state laws, and the Central State/Federal laws which enable MERS to transfer ownership of mortgages as securities. You can't have both systems at the same time; either transfers of mortgages and ownership and the procedure of taking real property (foreclosures) meet state laws or these laws have been rendered moot.
Either there is due process of law or you have a kleptocracy/"banana republic" oligarchy. At present, that is the decision we face as a nation. If the banking Elites and their partners in the Central State (Fed and Treasury) are allowed to "win" and gut the property laws of the states, then the U.S.A. will be revealed as a kleptocracy/"banana republic" oligarchy.
If state laws are upheld, then the "too big to fail" banks are insolvent and they will fail. Then the question of kleptocracy arises once again: will the banks be allowed to fail as per Classic Capitalism, that is, their owners and managers will have to absorb the losses of that bankruptcy/failure, or will the Central State use its powers to collect taxes and cover the private losses of the Bank/Financial Power Elites? Privatizing profits and socializing losses has been the entire game plan since the global house of cards collapsed in 2008.
It's decision time, citizens. Either the banks/Central State "win" and we are a kleptocracy/ "banana republic," or they lose and the U.S. mortgage/ banking sector implodes and is either formally socialized (i.e. owned lock, stock and barrel by the Central State) or rebuilt from scratch without big banks, Federal guarantees and the Fed's incestuous interventions. ("We create the credit that enables the mortgage, you issue the mortgage, and then we buy the mortgage.")
There is no "fix" or half-measure that can patch this over now.
The non-mainstream media can speak the truth directly. For example, here is the excellent Acting Man blog:
The biggest question of all, is there anyone working on a solution? I know the answer to that: No.
We now have socialized housing. If you disagree, just imagine the consequences if government intervention were withdrawn. Real estate markets would collapse immediately. The government is the market. There is no exit strategy.
The feedback loops are in full runaway mode, and the end-state will be a collapse of one system or the other: either the incestuous banking cartel/Fed/Treasury system of "private profits, socialized losses" implodes, or property rights and the real estate market implode.
Right now, both are imploding, and each system's implosion reinforces the other's collapse.
What rubbish . . . here's the memo http://my.barackobama.com/page/community/post/ericasagrans/gGMzzm
Funny how 'Turnaround' sounds so more controlled and unemotional than 'Flip-flop'
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