Here are my Top 10 links from around the Internet at 10 past 1pm, brought to you in association with New Zealand Mint for your reading pleasure.
I welcome your additions and comments below, or please send suggestions for Wednesday's Top 10 at 10 via email to bernard.hickey@interest.co.nz.
I'll pop any surplus suggestions I get into the comment stream.
1. 'Why worry?' - Gareth Morgan seems remarkably relaxed in this NZHerald column about foreign investment in New Zealand land.
He argues foreigners can afford to pay higher prices and seem to be more realistic about expected strong demand for protein.
He also reckons they might be easier to control and cajole than our own landowners on the issues of water rights and emissions. Good luck with that Gareth. Greenhouse gases may not be top of mind for May Wang....
Encouraging foreigners to buy our land also doesn't solve our current account problem or protect us from being swamped by newly printed US dollars.
But here's Gareth point of view.
An unexpected benefit of foreign ownership might be that by having foreigners own our land, perhaps we will be able to regulate the methane and run-off pollution caused by farms without a backlash from the Neanderthal farming lobby. Foreigners don't get a vote for a start, and China is leading the world in terms of progress on emissions now, while New Zealand is distinguished by its lethargy.
Maybe we could even get them to pay for their water. In summary, the availability of cheap credit, growing demand for animal protein and fears over food security are all adding up to this foreign demand for New Zealand farms. The only lingering question is why New Zealanders don't see the same long-term opportunity.
2.. 'Move slowly' - Michael Pettis is a Beijing-based economist who is closely watched on the hot topic of China's trade surplus and its economic relationship with America.
He reckons in this Bloomberg column everyone should be more patient with China on the issuing of revaluing its currency.
With household consumption at an astonishingly low 36 percent of GDP, a rising trade surplus and expanding investment are the main sources of China’s growth. But China is so over-reliant on investment that many say, correctly, that it already invests far too much for its level of development.
The most sustainable way of rebalancing is to engineer an increase in household consumption. Rather than lag GDP growth by two or three percentage points, as it has for the past decade, household consumption must grow faster than GDP by at least three to four percentage points for the next several years for China to achieve any meaningful rebalancing of its economy. But raising consumption has proven difficult.
China depends on constraining consumption to boost manufacturing, and it will prove impossible to increase consumption at anywhere near an acceptable rate without restraining growth dramatically or restructuring its economy. It would require that China reverse a series of transfers from households toward investment and manufacturing, whose growth would slow without such a move.
3. High frequency trading - CBS 60 minutes has done a good job of uncovering High Frequency Trading or Algo-trading for a broad audience. This is where mathematicians and IT geeks design programmes and computers and really fast connections to trade stocks and bonds in nanoseconds. They are blamed for the flash crash and the fact many individual investors are shying away from the US stock market. HT Zerohedge.
4. Google Inflation index - Google's Chief Economist Hal Variam (yes they have one) is planning to use Google's unprecedented access to real-time data and the ability to process it quickly to come up with a Google Price Index (GPI) to more quickly measure inflation, the FT.com reports.
I wonder if TradeMe could do the same here.
While the Federal Reserve is unlikely to panic just yet, Mr Varian said that the GPI shows a “very clear deflationary trend” for web-traded goods in the US since Christmas. Although the data are not seasonally adjusted, Mr Varian said that prices rose during the same period a year ago. The ‘core’ CPI in the US, which excludes food and energy, rose 0.9 per cent on a year ago in August.
“It’s a quite different picture if you go to the UK where you see a slight inflationary trend,” Mr Varian said. He attributed the rise in the UK GPI to the weakness of sterling. Mr Varian emphasised that the GPI is not a direct replacement for the CPI because the mix of goods that are sold on the web is different to the mix in the wider economy. Housing accounts for about 40 per cent of the US CPI, for example, but only 18 per cent of the GPI.
The GPI shows a “pretty good correlation” with the CPI for goods such as cameras and watches that are often sold on the web, but less so for others, such as car parts, that are infrequently traded online.
5. 'Just what we need' - With the Australian dollar near 10 year highs versus the New Zealand dollar and house prices at sky high levels over there, Australian property investors are looking to get into New Zealand. Anneli Knight from the Sydney Morning Herald reports.
This is how bubbles spread. Time to block the purchases? Tenants in our own land? Check out the last quote. 'It's so marvellous!' HT Gareth via IM
Pam Russell has had an interest in property investment for 30 years and owns a couple of rental properties in rural NSW. Two years ago, she went on a property education tour in New Zealand and was so enthused by the opportunities there she now owns seven investment properties.
“I’ve got two in Tokoroa [middle of the North Island] and the rest are in the South Island. My philosophy is to have cash flow positive [properties] – and there is more opportunity to do that in New Zealand than in Australia."
"Where in Australian can you get a house for $58,000 and the rent is $170 a week? There’s no stamp duty, there’s no land tax. It’s so marvellous.”
6. Here come the Australians - Australian companies are gearing up for overseas acquisitions with their newly bolstered currency, the Australian reports.
Guess where they'll look first. HT Gareth via IM.
THE soaring Australian dollar has chief executives and boards of locally listed global firms examining their acquisition opportunities abroad.
ANZ Banking Group, Orica, WorleyParsons, Ramsay Health Care, Toll Holdings, Sonic Healthcare and UGL are among a band of companies that are either publicly, or believed to be privately, looking at overseas deals to take advantage of the strong $A.
7. Now the bankers are getting worried - Yves Smith at Naked Capitalism picks up on the growing sense of panic in the US banking industry about the Robo-signer crisis.
"One senior Wall Street executive told Morning Money over the weekend: ‘President Obama should be very cautious about aligning himself with Congressional leaders who are playing politics with the foreclosure issue. With foreclosed properties comprising one in every four homes sold in the United States, the spreading moratorium could disrupt real estate deals in progress, slow down the process of clearing the backlog of troubled home loans and [endanger] the economic recovery.’
So we are back to Wall Street calling the shots, the very same Wall Street that invokes the “give us what we demand or we’ll shoot the economy” demand whenever its pet interests are threatened. Here the securitization industry was colossally irresponsible in its conduct, and has created a mess that will be monstrously difficult to remedy….and we’re supposed to plow onward in business as usual mode?
And notice the false dichotomy: the banks who screwed up yet again (and will need to be recapitalized again, trust me, foreclosure moratorium or not, there is a tsunami of litigation on the horizon that will bury servicers and the major trustees on securitizations) versus “Congressional leaders who are playing politics.”
8. 'Help the patsies' - Mike Konzcal at Rortybomb writes a nice 'How to' guide on the US Robo-signing mortgage scandal and what it might mean for the multi-trillion mortgage securitisation market in America.
We need to watch this one. It could easily blow up into the next round of the Global Financial Crisis. HT Steven via email.
Meet the robo-signer who kicked it off here at this WaPo story. I almost feel bad for this patsy; the real battle here is between junior and senior tranche holders, and this doofus could end up in jail in order to keep John Paulson rich. After reading about this guy I’m asking our elites to take care of their patsies better
9. Totally relevant video - We've all seen The Downfall scene in the bunker where Hitler unloads on his generals. This one uses the scene to do a parody on the Robo-signing scandal. Pretty good.
10. Totally irrelevant video - Liquid mountaineering. Obviously a shoe ad in disguise, but sort of fun. I hope the Ad agency paid themselves lots of money... HT Alex via IM.
41 Comments
Dont worry the bankers will still get their bonus to pay for us whores.
LOL
FYI Useful NYTimes piece on the growing tensions between the US and Chinese military. Sigh.
http://www.nytimes.com/2010/10/12/world/asia/12beijing.html?src=twt&twt=nytimes&pagewanted=all
cheers
Bernard
But Bernard, just think what a military skirmish would do for both countries GDP! Especially if a few citizens are killed off, the ratio is improved even further...!
In all seriousness, though, the Chinese, through their policy of essentially pegging the yuan to the dollar, have taken it upon themselves to import US fiscal policy. If the US prints, the Chinese have to move in lock step, to maintain the artificially low and fixed exchange rate. You can't fix and then complain about the ramifications.
Perhaps what NZ should do to stymie hoards of Aussies and East Asian investors from buying all our land is to declare all of NZ tapu, so that way these potential investors would be forbidden from completing the deal while anyone on their team was menstruating or pregnant.... Local iwi would also benefit as they would get the koha *coughkickbackcough* for lifting any tapu, too - wouldn't want any pesky taniwha from interrupting any development again, as happened on SH1....
The Japanese are very superstitious but their "threat" has dwindled in recent years. The Chinese are reasonably superstitious and are petrified of the number 4 which symbolizes death. Change all the flight #s; make all residential addresses "4" (4, 44, 444, ....); and then perhaps make all land sales represent 4 (444,000, 4,000,000).
The Aussies are a different proposition altogether. Upside crucifixes probably won't work because they're not a very pious bunch. Perhaps a mail drop threatening capital gains taxes and overseas investor surcharges would be the only deterrent for the Aussies.
Here's Nouriel Roubini on the risks to the global economy. He thinks governments and central banks don't have much ammunition left.
"Advanced economies are running out of policy bullets. In 2009 when the global economy was in free fall, all policy options were available: pushing policy rates to 0% and sharply increasing base money through quantitative easing (QE); running fiscal deficits of 10% of GDP in most advanced economies; backstopping, ring-fencing and bailing out financial institutions. But today, if growth sharply disappoints – let alone double-dips – fiscal deficits cannot be sharply increased, as bond vigilantes are waking up and most advanced economies are in fiscal austerity mode, including the US where a fiscal drag is incipient.
Central banks will do more QE, but this “QE2” will be ineffective: US banks are sitting on $1 trillion of excess reserves earning near 0% and not lending: why, then, would they lend the second trillion, after QE2? Monetary policy is becoming impotent and so cannot deal with private debt and solvency problems that constrain credit creation. States’ ability to bail out the financial system – if another downturn occurs – is limited. Banks too big to fail are also too big to be saved or bailed out because fiscally stressed sovereigns – especially in the eurozone – do not have the resources.
In short, we are running out of policy bullets to prevent another downturn, should it materialize."
cheers
Bernard
We all listen to world famous Roubini, Schiff, Friedman, Stiglitz, Zhang and Hickey ------------- and corrupt bankers and politicians- endlessly – day in day out with yes, yes, yes, or no, no, no and it’s all over anyway.
The time will come, where philosophers must (will) run the world, especially in dominating politics and economics – a new unspoiled, pure world order – excluding greed and megalomania. The sooner it’s happening the less problematic are the chances for positive changes - we need a new beginning.
..and bankers, real estate agents, property developers, farmers, economists, pharmacists, likorstore owners, polis, lawyers, and other "worldzoopersonel" - please don't reply it only makes me angry.
Aaaeehhh - R. Hide here - agree with you !
I wonder if that aussie knew that her tokoroa property could be worthless if the mill were to close down?
Her clue should have been that she was able to buy it for less than $60,000 - it's damn-near worthless already. That's like comparing Allied Finance shares to ANZ shares and concluding the former are a bargain.....
Even more worthless if the Dept of Social Welfare closed down.
Seriously mate, have you noticed that when you drive through many smaller towns the flashest building there is often the WINZ office! Granted this is likely to have happened under Liarbour, but still, I find this rather telling....
Seriously mate, have you noticed that whenever the nats have been in government, more people need outfits like WINZ, just to survive? I find this rather telling....
Nice one....
regards
And 2 years ago the exchange rate was far higher than now; got to .9200 at one stage. So Pam's taking a hit on conversion rate as well! I hope she knows her $58k is getting smaller in Aussie terms by the day.
Might be some positive news coming up as the government has evidently told the MOE to inform teachers if they call off their strike on Thursday it will be worth their while coming back to the negotiations- may be all the money hasn't gone to bailing out finance companies and they are going to pay teachers a good wage afterall??
How come NZ mortgage floating rate (6.4) is the same as Australia - when our OCR is 3 and Aus OCR is 4.5 and rising?
Re #5 and #6 - Australians are welcome here anytime. At least they look and sound like New Zealanders. In any case, they already own most of our farms and houses through the banks. Our MPs, most of whom own multiple investment properties must be salivating at the thought.
Paul, is that you? ;-)
FYI here's how the folks at Goldman Sachs in New York live, according to Vanity Fair (and it should know....)
This is where all the government guaranteed money and multi-million dollar sign on bonuses are going...
"Today’sNew York Post reports on the disruptive nightlife of Goldman Sachs director Richard Kimball Jr. “There have been a lot of parties and a lot of noise. There have been complaints,” one neighbor of 99 Jane Street, where Kimball rents a $16 million penthouse, told the Post. Kimball is recently divorced from his wife, author Holly Peterson, and sources tell the tab that the split has spurred the “flowing champagne and legions of scantily clothed girls” who are now reportedly regulars at the West Village apartment."
And why aren't there heads on pikes in New York?
cheers
Bernard
Sebastian Mallaby at FT.com writes about the scepticism now abounding in policy circles about completely unfettered movements in capital globally. HT John via email. We are one of the Sads -- sclerotic ageing democracies.
"A decade ago, crises in east Asia, Russia and Latin America hurt the case for cross-border capital flows. The US Treasury and the International Monetary Fund were derided for championing capital account liberalisation, and free traders explained why the case for mobility of goods and people should not be extended to mobility of capital. But the world ignored the intellectuals. Far from reining in cross-border capital flows, policymakers let them accelerate. In the wake of the 2007-09 crisis, the question is whether financial globalisation will be tamed this time.
It certainly looks as though it might be. The finance ministers at the IMF’s weekend gathering were in no mood to celebrate capital flows, and the Fund’s own economists have softened their former opposition to border restrictions. Emerging economies that have resisted opening up their capital markets – notably China and, to a lesser extent, India – are smugly pleased about their caution; those that liberalised more hastily – including Brazil, Taiwan, Indonesia, South Korea and Russia – have reimposed various restrictions. In the sclerotic ageing democracies – the Sads, one might call them – there is talk of erecting barriers to Chinese capital inflows."
It seems I'm not the only one.
cheers
Bernard
Careful Bernard...you're a threat to a good many banking fingers in the pie....and you know what bankers do when their fat wee profits are under threat....expect the peasants to be deluged with good news stories about the benefits to be had from more Chinese munny flowing in....the usual BS about jobs and higher incomes....wealth even!
The only barriers to be errected will be those that stop the Kiwi peasants seeing the dirty little tricks going on.
I wonder what a severe bear market would look like!
"But overall (in China) a mild bear market for property is settling in. It may last five years. Bottom-line prices will likely fall by half, .... Land prices will fall much farther: Land prices in Zhejiang's hottest market may decline 80 percent."
I traveled to the States in 1980 and got $1.10 us for my Kiwis.
US physics professor: 'Global warming is the greatest and most successful pseudoscientific fraud I have seen in my long life'
http://blogs.telegraph.co.uk/news/jamesdelingpole/100058265/us-physics-…
Yes, andrewj, brought to our attention yesterday by steve netwriter in the 90 sec at 9 thread;
Interesting discussion ensued - spread throughout the thread..
Its intriguing - an 87 year old physicist with no publication record in any field relating directly (or indirectly for that matter from what I can see) to climatology or atmospheric sciences (his expertise (which was no doubt profound) was initially in nuclear physics, then more esoteric branches of theoretical physics) resigns from a professional society because he does not agree with the science of AGW - and this is somehow elevated to major news via the blogs of the Daily Telegraph?
As can be read here (http://www.aip.org/history/ohilist/4742.html) in an interview he did back in 1986(!!) he freely admitted (3rd answer down) - he had trouble then keeping up with papers published in his own field, when he was a mere 63. Now 24 years later we are being led to believe that the musings of this long retired physicist have some relevance to the debate on AGW?
Some claim there are dark conspiracies at the heart of the AGW scientific debate. If there are I think its time we took a close look at the anti-camp (rather than the just the pro-camp) and who funds them, because some of the witnesses that get trotted out on their behalf really are desperate.
Hello bernard
When we click on a link from your page, it opens up a new website over-riding the www.interest.co.nz page. This means we have to click back after reading the article. Why don't you create the links to another article so that a new webpage opens up in a new window, then after reading the article, we just shut that page down and your page is left open?
Or am i making no sense - which is terribly likely
Peter C
Interesting question. The convention in the blogging world is not to have the link open up in a new tab or browser. The theory being people don't like it when a new browser is opened for them, so to speak.
The theory is people are more comfortable using the back button.
Here's the policy the BBC has adopted recently. They are very keen to provide links 'out' of their site. I agree with them. My approach is to provide lots of useful links around (our site) and out onto other useful sites.
http://www.guardian.co.uk/media/pda/2010/oct/08/bbc-link-guidelines
I figure people will come back if we're useful and friendly. No point trying to lock people in.
What do people think.
cheers
Bernard
Agree. If I want a new window I'll hold down the Ctrl key when I click. It's better to be in control than click-and-pray.
"The Serious Fraud Office (SFO) dealt with more than 200 inquiries and more than 100 cases in the year to June and needs more staff to deal with the work, the agency says in its annual report, released today." nzh
What aboot that bloke what was the science boss for that military mob and done well on BS. He'd know a fing or two.
52% of Aussies in SMH poll think Time to sell houses - prices are too high and will fall
17% think Time to buy - rates and prices are moderate
http://www.smh.com.au/polls/business/housing-market-view/20101011-16ezn.html
But in another SMH poll the majority think prices will increase by 0-10% in the next year
http://www.smh.com.au/polls/business/house-price-outlook-oct/20101012-16h6w.html#poll
Have any NZ polling organisations asked for the publics thoughts on NZ house prices lately?
FYI
For all those gold bugs out there
"Gold may rally more than 20 percent from this month’s record to a high of $1,650 an ounce in 12 months as the Federal Reserve takes action to stimulate the U.S. economy, according to Goldman Sachs"
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a40oShPvaB4w
Why gold Bernard? Why not Thorium?
Watch out Bernard, GS was calling for oil 200 a barrel as they were jumping off the wagon at 150 ... very GS isn't it ?
Property Prices arent coming down anytime soon. How's this AUD $32 million (NZD $41 million) for a pull-down
http://www.theage.com.au/national/sydney-mansion-link-to-china-elite-20101011-16g0n.html
Sydney mansion link to China elite. A MYSTERY couple proposing to demolish and rebuild a $32 million, 100-year-old mansion on Sydney Harbour are believed to be the son and daughter-in-law of one of China's most powerful politicians. Former vice president Zeng Qinghong is known in China as the most important organiser behind a loose faction of ''princelings'' - children from leading revolutionary families. He is said to have brokered the surprise deal that anointed Xi Jinping as the likely next president of China.
"Gareth Morgan states New Zealand has just under 9 million hectares of productive farmland - and we don't even know how much is already in foreign hands".
The absence of information is the problem. Wouldnt you think it's time to find out? It's a simple exercise. Every local council has a rates database. Link them together using a Cray computer and add up the amount logged to non-residents. Would the public perception change if it came up with a figure of 50%?
Could be an expensive on-going excersise (yours 6.50pm)! "Woollahra Council last night (11/10) refused to approve the demolition and construction of the new home for the third time" Also...."..which they bought two years ago for $32.4 million" Back before the rot set in?
Re # 5 ; Dam so I now have to compete with Aussies in buying a first home. Dam it! CGT and international buyers tax on residential properties?
Bizarre article by Gareth Morgan.
“The only lingering question is why New Zealanders don't see the same long-term opportunity” most people with half a brain do see the opportunity keeping our land provides, that is exactly why we want to keep it here, so we benefit, and not some guys on the other side of the world who could give a rats about us.
The one debatable benefit that he floats is much easier to argue the other way, regarding whether it would be easier to control farmers over their farm runoff, I think it would be harder to control their pollution.
Bigger cheque books = more clout with the government, what makes him think votes has anything to do with it?
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