Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that US industrial output was softer than expected and talk has resumed of a second round of a Quantitative Easing or money printing by the US Federal Reserve.
This talke of money printing and the resulting devaluation of the US dollar helped lift the NZ dollar back towards 76 US cents and the Australian dollar back to 99.4 USc.
The Federal Reserve System's Atlanta Presiden Dennis Lockhart commented that additional monetary stimulus was needed to revive the US economy, saying it would encourage investment in riskier and more productive activities.
He is not a voting member of the Federal Open Market Committee, but his comments suggest the mood is growing within the print for more QE.
The low US dollar and low interest rates is helping to boost the stock market as investors hunt for higher yielding assets and celebrate higher US dollar profits from foreign earnings.
The Dow as up 0.7% in late trade.
The talk of money printing is also encouraging companies with US dollars to buy assets offshore. Yesterday private equity giant KKR bid A$1.75 billion for Australia's Perpetual Ltd.
Meanwhile, South Korea's Central Bank has announced plans to start investing more in gold as it looks to diversify its foreign reserves away from US dollars.
The gold price was firm around US$1,372/oz in overnight trade.
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23 Comments
Hi Bernard
Anychance you or one of your contributors could write a peice on buying at mortgagee auctions
Pros , cons , pitfalls , what to watch out for etc .
Im quite interested on the Purchasers pre-settlement insurance options etc for willfull damage and that sort of thing and the ways that you can protect yourself from the owners trashing the place or refusing to move out
May be quite useful information for a lot of people looking for a cheap entry into property given the current climate
what do you think ?
Pants down
Unrelated to any topics but interesting to mull over.
A world clock as you have never seen before, data collected from different sources for the year 2010.
Nicholas , Im not looking to debate the morality of the process but at the end of the day if people cant pay there debts they loose there house it an unfortunate fact of life . Mortgagee auctions are a reality
although its benifiting off someone elses misfortune at least Its one way to get on the ladder in Auckland for young first homebuyers who are locked out at current market prices without needing a needing a mortgage that will suck out the majority of income . Just base the price on the risk
Have you seen a mortgagee sale contract? It basically says " This is the property ", that's it. All the other standard clauses are deleted. That's the clue! There are no guarantees, warantees or protections that can be taken, if the reluctant vendors decides to 'take action'. If they have nothing~they have nothing to lose, and you'd be hard pushed to get any insurance cover at an economic price to protect yourself. Just getting them 'out' can be a trick and a half.
I guess one thing you could do is try and get immediate possesion on auction day and make sure the damn thing is vacant on auction day and move in stat. People win and lose in life and it seems these people aren't big enough to lose. I bet they were the also the people annoying us with thier bragging about thier property smarts around the bbq in the summer of 2006.
Yes I've seen plenty and Indeed your right , that's why they usually end up being sold heavily discounted to account for the risk that is entirely on the purchaser .
People who look at buying through mortgagee base there math's on worst case scenario
Pre-settlement Insurance can sometimes be arranged through brokers , I'd like Bernard to comment on what can be done to mitigate the risk and what steps if any can be taken to resolve the specific issues that arise when buying at mortgagee auction
"....If we completely ban it land prices will fall."Key.....doh.....that would mean young Kiwi famers could start farming without a crippling bank debt...wouldn't it?....oh I see what you mean John, heaps are already up to their eyeballs in debt to the banks .... and the sale prices would likely fall so far so fast the equity would go poof and the banks would be in the shite for hundreds of millions on the bloody balance sheets..gosh we can't have the banks losing money can we....quite right JK...bugger the young farmers...save the banks!.
Thankyou Kravis Kohlberg Roberts ............ Anyone wanna counter-bid for my Perpetual Trustees stake ? .......... We're in the Gummys , the yummy funny gummys ....... oooooooooooooooooh yeah !
[ Moral : Kiwis can freely buy assets in other countries , and repatriate ALL of the profits back to NZ .............. Hmmmmmmmmmmm ...... Must run that past dear Goofy and the Labour-Hickey Party ]
Yes , I would like to see a comment on the process at Mortgagee Sales . Did anyone see The Weekend Herald Property insert had more Mortgagee sales advertised than I have ever seen before, so it looks like these sales are rising in number ?
In Auckland , many of these are investor owned , and the ones I have viewed have all been vacant
I also agree with the person who said if you cannot pay your debts , you cant keep the property ( which you don't own anyway ). Its like the youngster who goes out an finances a Holden V8 only to discover he cannot afford the installments. It gets repo'd.
What people fail to understand is that when you get a mortgage , you become a tenant of the Bank , but the Rent is not fixed ,it goes up and down , and you have to pay all outgoings for rates , insurance and maintenance .You also carry all the market risks. For this you get any capital gain on 'sale' . You can of course pay it off , but in essence you remain a tenant of the mortgagee until the mortgage is paid up .
China has rised OCR a few hours ago, what a diferent scenario for commodity exporters as of tomorrow. Chinese funds will find interesting rates at home and will gradualy leave emerging mkts behind. NZ has been right about not allowing foreigners into the farm land ownership, the exodus of those capitals would have plunged farm prices to extremes not seen before.
Micheal, It is not odd at all they have a bigger plan. It is called loss leading. By providing cheap labour they have captured the worlds wealth (the west is also dependent on them for a vast proportion of manufacturing etc) then they lent the money to back at cheap rates until the west are in hock to them to monumental proportions.
The chinese can now raise the value of their currency so it becomes virtually impossible for the west to pay the debt back.
Basically the chinese can now call the shots. Its a bit worrying actually (understatement)
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