Bernard Hickey details the key news over the weekend in 90 seconds at 9 am in association with Bank of New Zealand, including news from late on Friday night that Equitable Mortgages has been put into receivership owing NZ$190 million.
Treasury said NZ$178 million of that was covered by the extended government guarantee. See more here.
This was the last of the large government guaranteed property financiers to fall over in the wake of the collapse of South Canterbury Finance and Allied Nationwide. See all our Equitable Mortgages stories here.
Meanwhile, the Pike River Coal Mine has been wracked by more explosions and the coal seam is now reported to be on fire. The government is expected to announce a Royal Commission of Inquiry into the disaster later today, which would also look at the safety of underground coal mining. Mining is not expected to start again until after the completion of the inquiry. See more here from a Pike River coal announcement to the NZX this morning.
Meanwhile overseas, Ireland has formally agreed an 85 billion euro bailout and a series of austerity measures that triggered a protest march by more than 50,000 Irish voters.
The deal formalises the effective bailout of European banks and bond holders who lent to Ireland's banks. The Irish government guaranteed the banks with taxpayer funds and has now had to agree a bailout of its own finances after the hole in the banking system proved too large.
Meanwhile Spanish, Portugese and Belgian bond yields rose sharply on Friday night on fears the Irish crisis could not be contained and that the long term future of the euro is in doubt.
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21 Comments
What's wrong with the ad, and the concept overall? They're offering unsecured loans at a discounted interest rate (and with some fees waived) which is pretty generous given the amounts involved. (Lending tens of thousands, unsecured, is pretty risky for a bank.) ASB isn't forcing a single soul to take out loans with them for IVF - it's just presenting a choice, take it or not, as it suits you. If you've got a problem with the trauma of infertility, the expense of IVF (and the related limitations to government assistance), then that's a different matter - but don't blame ASB for offering a better-than-the-alternatives package to those who might like to consider it.
I see the scum in Auckland are back at work.....
"Canadian Caitlin Hardie had been in New Zealand less than two hours when all her belongings were stolen." herald
No doubt if the scum are caught and convicted they will face a stiff telling off from the judge and WINZ will be there to support them since they will get home detention and it will be days before they can get back to thieving.
How long before the Auckland island detention camp is started...how long before the scum get arsed out a chopper door with a blanket and fishing line?
I wonder how much of the money gained in illegal activities such as the Canadian couple has experienced is going into the hands of landlords via rents.
Another point. Perhaps it is time to have CCT cameras installed at all popular parking sites or maybe have a few vehicles equipped with hidden cameras that can be moved around to all potential danger spots. I see that cars parked for the Karangahake Gorge walkway are also frequently burglarised.
Regarding Ireland, and the new fraud being perpetrated by out of control Nanny States on the individuals for whom the state was supposed to be their servant, a timely essay from economist George Reisman:
'Raising Taxes is not Reducing Government Spending':
http://georgereismansblog.blogspot.com/2010/11/raising-taxes-is-not-reducing.html
Quoting the summation:
In sum, the danger exists that Left and Right are about to unite to accomplish a colossal political fraud in the form of enormous tax increases sold to an unsuspecting public as reductions in government spending. The American people need to stand up and refuse to accept any form of the absurdity that in not taxing them, the government is spending their money and that the path to lower spending and taxes is raising their taxes. The basis of tax reform must be reduced government spending, not higher taxes.
The country on fire !
As a minister not performing to a high standard Mr. Browlee should be sacked. Other ministers importing of infrastructure in the billions in stead of supporting our own NZworkforce with decent, skilful jobs, reducing our account deficit - etc. should go too.
A number of changes need to be done on top – urgently - for a better performing NZeconomy.
Is this a government money over people’s health policy ? – Shame on you !
It seems to me the allowance of Pike River operation is another act from the government in desperation to generate revenue in order to lower the massive account deficit – yes a sad tragedy, but classical example of our “Patchwork economy”
Coal mines seem to be hurting the very people who are supposed to be gaining the most economic benefits from their presence. “We know that in West Virginia we have high rates of poverty and illness, and we’ve been led to believe by government and industry that the coal companies help by creating jobs. But that’s not true,” says Hendryx. “Premature mortality is strongly linked to socioeconomic conditions where people live, and the evidence is that those areas of West Virginia that do not have coal do better. They develop economic alternatives.”
In the study, Hendryx calls for more diverse career opportunities that won’t pollute drinking water and air, including energy from wind, the sun, small-scale agriculture, outdoor tourism, or sustainable timber operations.
http://www.rodale.com/health-problems-coal-mining-areas?page=0%2C1
A profile here :
http://www.abnnewswire.net/companies/en/32805/Pike-River-Coal-Limited
While this milestone was a significant boost for the company and its investors, the fact remained that the geological challenges we had been facing for some time, continued to have a negative impact on our production forecasts, affecting the rate of underground mine development and ultimately progression to full production: a frustration shared by both us and you. This, of course, has a roll-on effect and, inevitably, net cash-flow is impacted. As a result, the company embarked on a $50 million capital raising exercise to provide working capital to help complete the underground mine development. That was successfully completed in May 2010. A pro rata rights issue that raised $40 million of the package saw more than 6,100 investors take up their rights entitlements for 43.4 million shares - 95% of the total offer of 45.45 million shares. Prior to that, a $10 million placement was completed with New Zealand Oil & Gas, Gujarat NRE and institutional investors.
Please, read and understand this comments in context with many of my other articles.
Mr Browlee on another issue about national safety & health:
http://thestandard.org.nz/brownlee-concerned-about-safety-yeah-right/
..and then this a few hours ago:
http://www.geonet.org.nz/earthquake/quakes/latest.html
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10690854
..in stead of pushing for sustainable NZmanufacturing more “Patchwork Economy”
from Brownlee/ Joyce.
http://www.telegraph.co.uk/finance/comment/liamhalligan/8164877/Haircut…
Have politicians got the courage to make those who earn money share in the risk as well?" Merkel boomed in Berlin on Wednesday – in a speech that was disgracefully under-reported by the Western media.
Bondholders and almost all other Western governments don't want to hear it. But Merkel is completely right. The most galling aspect of this entire sub-prime debacle is the disgraceful extent to which those who bankrolled the banks - as they took on ever more debt, "levering-up" their balance sheets 20-, 30- and 40-fold - have been protected from their consequences of their actions. Powerful vested interests have so far ensured - amid much scare-mongering of what would happen if sanity prevailed - that such losses have been shoved on to taxpayers instead.
As a result, the balance sheets of most European governments have now been stretched to the limit and beyond, with some protected merely by the mirage of printed money. That's why the financial buck looks increasingly likely to stop with Germany – Europe's economic powerhouse.
The problem Ireland has is that during the economic boom years before 2008, Irish banks borrowed cheaply and pumped out loans on homes and construction projects, helping to fuel a US-style housing bubble. This was a failure of prudence and regulation on a very large scale – there can be no denying it. And now the country's banks are in so deep that their massive liabilities are threatening to bankrupt the Irish government.
BazzaMcKenzie 15 hours ago Recommended by13 people tim
Institutions lend money based on their belief about the likelihood of repayment, not on whether it is a "strong" or "weak" currency, whatever that actually means.
Lenders may be concerned about whether a currency is going to get stronger or weaker over time, relative to the lender's domestic currency. If the borrower's currency gets stronger, then the lender effectively receives a bonus in terms of the amount loaned in their own currency. If it gets weaker the lender loses something.
However, even that is not necessarily a great concern since lender's can use exchange rate hedging to protect the currency risk of their loan, if they wish.
Now back to the first point, which is the lender's belief (or disbelief) that the country will be able to repay its loans.
It should be blindingly obvious to everyone by now that as long as Ireland remains in the euro (and therefore cannot devalue), and is required to impose a massive austerity program on the country as a whole in order to repay to other EU countries debts incurred by Irish banks but not by the country itself, then Ireland will have no chance of growing its economy and therefore of being in a position to repay any future debt.
Currencies get stronger when the country is able to export more than it imports. That possibility would be open to Ireland if it broke from the euro and floated its own currency. In which case it would become more attractive to lenders than if it remains in the euro and has no freedom to grow its economy through exports.
In addition, if the banks default, for possible future lenders that is a black mark against those banks but not against the country. However, if the Irish government foolishly takes responsibility for the banks' debts, as it appears bent on doing, and later Ireland recognizes the reality and then defaults, that is certainly a black mark against sovereign loans to Ireland.
It appears the Cowen government is going for the trifecta in finding all possibly ways to stuff the country.
"The problem Ireland( delete..insert New Zealand) has is that during the economic boom years before 2008, Irish(delete insert NZ/Australian) banks borrowed cheaply and pumped out loans on homes and construction projects, helping to fuel a US-style housing bubble. This was a failure of prudence and regulation on a very large scale – there can be no denying it. And now the country's banks are in so deep that their massive liabilities are threatening to bankrupt the Irish(delete insert New Zealand) government.
The Irish times commentators and comments are an interesting read too...
Strongest argument against a State default has disappeared
comments mainly!
I thought you would all over this Bernard?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10690819
FYI story here 28_29 yr old - http://www.interest.co.nz/news/sfo-says-after-3-month-investigation-han…
"Noosa Heads, Australia has experienced ... a 70 per cent fall in the value of a major property....In Noosa the value of run-of-the-mill apartments has fallen between 20 to 30 per cent and similar declines would have been experienced on the Gold Coast....(the Nossa property,including) 15 'super luxury' dwellings that were marketed for just under $3 million each...In effect, the RACV has bought the dwellings (at mortgagee sale) for an average price of just $400,000 each with the restaurant and other faculties thrown in for nothing."
Looks like Aussie...and us...aren't that different after all.
"The New Zealand Institute of Economic Research's latest quarterly report, published today, forecasts "wintry" economic conditions as the country heads into summer but spending remains muted"...tvnz
"muted"....and why....because the banks are bleeding the country of what would have been investment savings, had not the clowns Clark and Cullen porked the bubbles and this latest bunch moved to protect the banks.
Note that this "muted recovery" exists even though there is a dairy and timber export bonanza...!
So what's wrong....debt is what's wrong...rural debt and residential Elephant sized debt...families are being farmed by the banks and farmers are being fleeced.
Spending is not the solution anyway...paying down the debts is the way out...ending the bubbles....removing the bailout support for the banks...
Govt needs to end the landlord subsidies....slash the welcome home to greater debt loan benefit scheme....remove the landlord's tax deductions for interest payments benefit scam....Take the demand pressure out of the market and watch the property values fall all the way down to where low income Kiwi families can afford to buy them on much much smaller mortgages...then they will have the spare income to spend or save.........
Nope...too difficult for English and Key.....carry on kicking the can along the road....
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