Greek political crisis re-arises; fraudsters target deaf ANZ customers; oil, gold and copper all fall; UST 10yr yields lower; parity talk rises; NZ$1 = 77.8 USc, TWI = 79.2

Today, Rodney Culleton and his sons are just visitors.



Their 15-year, interest-only mortgage was with specialist rural lender Landmark, which was owned by the Australian Wheat Board. At the height of the GFC, Landmark's banking future was looking shaky, and its loan book, valued at a billion dollars, was bought out cheaply by its big city competitor, ANZ Bank.

Little do people realise the savage impact higher present values of future debt principal (bullet) and interest rates payments exact , when yields fall as precipitately as they have in Australia.

The proceeds of the Yen carry trade only bless the anointed few - examples here, here, and here.

Very sobering.  NZ farmers should read this.  Hopefully the NZ bank funding is more securely based than a bunch of CDO instruments.

Well if it's a scam based on the old land for railway seizures in the US,

the next step is for some corporates, themselves heavily indebted and with weak share positions, to start offering equity pools (as done by the stock and seed companies in the now illegal US model ).    Also suppliers with cheap entry costs, but solid looking returns will be offering solid contracts for the farms produce - some of these will involve large property owners or interest parties (this was the actual starting model for NZ's own co-op system) but these places will suddenly be brought out by the older and larger companies....normally they offer larger share holding packets to those large property holders and influential experts who had their names behind the assurrance of the bait - often the experts get promised a support contract and funding for their own company working on their specialisation. (not to different to our LIC ).    However because the contract owning company is gone, the contracts are worthless .  Future Shorts make a fortune once the deal is done.   Farmers are left with excess stock they can't carry, a mortgage they can't pay and the perfect buyers market.



This is exactly why NZ moved to a co-op system, and why it was absolutely imperative that suppliers and process owners were alligned with the collective.





FYI, this market competition is also how the spice trade works in the coasts of Africa.

places were the farmers are so poor that an entire days wage wouldn't buy a single novelty bar made with their commodity (eg is for the Cocoa farmers).





As long as commodity prices can be forced below price of production, labour, and rent that's the financial maths of the situation.  This is because the risk is being forced onto the producers, not passed on to the consumers choice.  This is because a failed efficient farmer WON'T be replaced in the market by "someone who can do the job" - because of the forced model, its acting as a "poisoned pill" with all the extras coming to rest at production, not at market.   In the classic "fisherman" or "baker" model used to illustrate basic economic forces ... just what do you think will happen if the business owner is forced to "gold plate and sell only the perfect fish" and the customer is the price setter?  If a new shop opens it does not create new money, it only operates while it's owners have deep enough pockets (eg it's home country has enough savers, or it can print currency) until it can gain effective monopoly and force market control back at the customer - if not it will just suck money from the business owners.



For the personal angle: the mechanic stuffed my tractor so I'm the only one who can use it,  New rules for ACC,   who pays for the NEW tractor?    As was told when Fonterra first announced a >7.50 price tag, Fonterra is borrowing from next years profits - because the way the commodity system works there can be no "great years" because that would imply a _premium sale price_ which is nonsense for commodity trading due to the very nature of the commodity trading system - which you all damn well know.



So with price wars at the supermarket coming home to roost.

Who is supposed to pay for the labour cost?  or the constant certification of physical machinery used in all weather and their expert operators (most barely paid more than minimum wage)?   who is paying for the new MPI equipment, or the extra equipment demanded by ACC new safety regulations?  let alone the increase in insurance costs.

And why can the government not see this, if I can; and why are the government spending all the profits...when the farmers can't even make the rent.