Here are my Top 10 links from around the Internet at 10 to 10pm for the Long Weekend, 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 Tuesday'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
It's not altogether successful in New Zealand.
Gaynor also thinks the government was right not to put South Canterbury Finance's assets into his hands.
There are clearly big differences between receivers and deal-making businessmen, as the former have specific skills and stay the distance whereas the latter have limited experience and often depart before finishing the job. Saville quickly moved on from Utilico International and FinMedia and Resimac didn't contribute to Allied Farmers although a NZX announcement said the company had a signed agreement to do so.
As far as Allied Farmers is concerned, Loughlin resigned in August and managing director Rob Alloway is quitting his position in December. The company still has major problems and the Hanover assets have not been dealt with fully.
The Government would be extremely stupid to give control of SCF to an outside party that contributes little capital. This is the unfortunate situation facing Hanover Finance investors, who have been handed a huge timebomb covered in beautiful gift wrapping.
2. Current account deficit targets - G20 Finance Ministers are meeting in Seoul this weekend to try to hammer out some sort of solution to the Currency Wars. The Americans are proposing targets for current account imbalances, with 4% being the key level, Bloomberg reported.
New Zealand would have breached that target from 2004 to 2008 inclusive. We also breached it in 1995, 1996, 1997, 1999 and 2000.
Bankers are meeting in Gyeongju, South Korea, after weeks of accusations that countries from the U.S. to China risk sparking a trade war by relying on weaker exchange rates to spur economic growth. Seeking a solution, U.S. Treasury Secretary Timothy F. Geithner proposed in a letter that G-20 members pursue policies to reduce trade surpluses and deficits “below a specified share” of their economies. That suggestion yesterday split the forum of emerging and industrial economies.
By turning the focus to current accounts away from currencies, Geithner is hoping China will be more agreeable to accelerating the yuan’s appreciation after limiting its gain to about 2 percent against the dollar since June.
Without naming any country, he said governments should not use exchange rates to seek “competitive advantage” and urged those with “significantly undervalued currencies” to allow an adjustment.
Chinese officials have countered by promising a gradual increase of the yuan, saying that a sudden rise would cause social and economic disruption. The U.S. recommended deficits or surpluses of no more than 4 percent of gross domestic product. The International Monetary Fund this month estimated China’s surplus will swell to 7.8 percent of GDP in 2015 from 4.7 percent this year.
I wonder what our IRD thinks of this. Should New Zealand companies buy advertising via Google? Are they aiding and abetting tax avoidance in New Zealand?
The heart of Google's international operations is a silvery glass office building in central Dublin, a block from the city's Grand Canal. In 2009 the office, which houses roughly 2,000 Google employees, was credited with 88 percent of the search juggernaut's $12.5 billion in sales outside the U.S. Most of the profits, however, went to the tax haven of Bermuda. To reduce its overseas tax bill, Google uses a complicated legal structure that has saved it $3.1 billion since 2007 and boosted last year's overall earnings by 26 percent.
While many multinationals use similar structures, Google has managed to lower its overseas tax rate more than its peers in the technology sector. Its rate since 2007 has been 2.4 percent. In Bermuda there's no corporate income tax at all. Google's profits travel to the island's white sands via a convoluted route known to tax lawyers as the "Double Irish" and the "Dutch Sandwich." In Google's case, it generally works like this: When a company in Europe, the Middle East or Africa purchases a search ad through Google, it sends the money to Google Ireland.
The Irish government taxes corporate profits at 12.5 percent, but Google mostly escapes that tax because its earnings don't stay in the Dublin office, which reported a pretax profit of less than 1 percent of revenues in 2008. Irish law makes it difficult for Google to send the money directly to Bermuda without incurring a large tax hit, so the payment makes a brief detour through the Netherlands, since Ireland doesn't tax certain payments to companies in other European Union states. Once the money is in the Netherlands, Google can take advantage of generous Dutch tax laws. Its subsidiary there, Google Netherlands Holdings, is just a shell (it has no employees) and passes on about 99.8 percent of what it collects to Bermuda. (The subsidiary managed in Bermuda is technically an Irish company, hence the "Double Irish" nickname.)
4. Even Time has noticed - The debate about the coming second round of quantitative easing is raging in America. Here's Time magazine. HT Darryl via email.
Lower rates do tend to favor borrowers over savers. And the largest borrowers in the country are banks, speculators and large corporations. The largest spenders in our country though tend to be individuals. Consumer spending makes up 70% of the economy. And the vast majority of consumers are on the low-end of the income scale.
So I think it is a valid question to ask whether the Fed's desire to drive down interest rates at all costs policy is working. Companies are already borrowing at low rates. They are just not spending.
5. Devaluing America's currency - Dr Housing Bubble has a definite idea about why America is devaluing its currency. HT Darryl via email.
The banks have an effective way of laundering money. First, they proclaim that they are turning a “profit” with TARP funds but fail to mention the trillions of dollars of leverage they garner through the Federal Reserve. The cost is indirect through inflation and the debasing of the U.S. dollar.
Next, Fannie Mae and Freddie Mac just announced that they might cost U.S. taxpayers $368 billion. Maybe I learned finance incorrectly, but a $368 billion loss is not a profit in my book. Fannie Mae and Freddie Mac don’t make loans directly to the public but allow banks, the same robo-signing variety, to issue loans on their behalf. These losses are merely a reflection of their horrible lending practices and a sophisticated method of laundering money into the economy by debasing the value of the U.S. dollar.
That is why today, when people ask me what is at the root of the housing problem I tell them that home prices are simply too expensive because incomes are weak.
6. The currency wars widen - Now even South Africa is trying to work out how to protect its export sector from the wave of cash flooding its way out of America and China as investors get ready to spend all their freshly minted new money on something solid in a currency that is not being printed out of existence. HT Kevyn via email. Here's the AllAfrica.com story.
Countries such as South Africa have a range of policy choices, but none of them is likely to be effective. The first is to try to impose controls or taxes on hot money entering the country, as Brazil has already done - without much success. So far this year, the only emerging-market currency to have risen higher than the rand is the Brazilian real.
SA's financial authorities seem at odds about whether to go the same route. The second option is for the Reserve Bank to buy up dollars in the market. This, too, is more attractive in theory than in practice. The bank has resisted this, even as it has increased reserves. The result has been a gradual increase in the losses racked up as the bank earns less in interest on foreign currency reserves than it pays on the bonds it sells to soak up excess liquidity.
The third option is to provide direct support to exporters, an option supported by Reserve Bank governor Gill Marcus recently.
7. Foreclosure crisis must read - BusinessWeek has an indepth look at the foreclosure crisis. It's packed full of disturbing detail. Here's a sample. HT Hugh via email.
Even if the documentation problems turn out to be manageable—as Bank of America (BAC) and others insist they will be—the economy will still suffer long-term consequences from the loose underwriting that caused the subprime housing bubble. According to an Oct. 15 report by J.P. Morgan (JPM) Securities, some $2 trillion of the $6 trillion in U.S. mortgages and home-equity loans that were securitized during the height of the bubble, from 2005 through 2007, are likely to go into default.
The report says the housing bust will ultimately cause losses of $1.1 trillion on those bonds. Laurie Goodman, a mortgage analyst at Amherst Securities Group, said in an Oct. 1 report that if government doesn't step up its intervention, over 11 million borrowers are in danger of losing their homes. That's one in five people with a mortgage. "Politically," she wrote, "this cannot happen. The government will attempt successive modification plans until something works." Wall Street's unspoken strategy has been to kick mortgage losses down the road until an economic recovery reinflates the housing market.
The faulty-foreclosure crisis has forced the issue back into the present tense, triggering a fight over who will bear the brunt of those losses. The combatants—all of whom are trying to minimize their share of the damage—include homeowners, lenders and mortgage brokers, loan servicers and the underwriters of mortgage-backed securities, the buyers of those securities, title insurers, rating firms, and the federally controlled mortgage buyers Fannie Mae (FNM) and Freddie Mac (FRD). J.P. Morgan predicts that bondholders will absorb most of the estimated $1.1 trillion loss—but may succeed in foisting about $55 billion on banks.
If the bank losses turn out to be steeper than J.P. Morgan and most other analysts expect, taxpayers may be asked to inject more capital into the financial institutions. Fannie Mae and Freddie Mac, already wards of the state, might require more capital as well.
8. Holders of securitised mortgage bonds are calling their lawyers to start suing the banks - Here's the Bloomberg report below. HT Gertraud via email
9. 'Savage austerity required' - Citigroup's Chief Economist Willem Buiter thinks America will eventually need to copy Britain's savage budget cuts, Bloomberg reports.
“The only question was really the timing and the composition,” given the finite willingness of financial markets to endure budget shortfalls, New York-based Buiter said in a roundtable interview today on “Bloomberg Surveillance Midday” with Tom Keene.
“This is very savage, but no more savage than what the U.S. will have to endure when it gets going.”
The U.S. will still be able to borrow for a while at “risk-free rates” because its markets remain bolstered by the dollar’s role as the world’s reserve currency, Buiter said. “It won’t last forever, that buffer of protection,” Buiter said. “Market discipline is being eroded by the burden of unsustainable deficits.”
10. Totally irrelevant video - Stephen Colbert talks about taxing rich people.
| The Colbert Report | Mon - Thurs 11:30pm / 10:30c | |||
| Intro - 10/13/10 | ||||
|
||||
50 Comments
Cracking link here from Stephen Roach. HT Stephen
http://www.zerohedge.com/sites/default/files/Japan%20Syndrome%20Roach.p…
Contrary to the view of many, the Great Crisis didn’t have to happen. I reject the excuse offered by many of the apologists that it was a once-in-a-century tsunami that would have occurred in any case – that policy makers could have done little to forestall the outcome. Yet nothing could be further from the truth. Defensive and steeped in denial, policy makers are ducking responsibility.
The recent crisis is a painfully visible manifestation of the greatest failure of central banking since the 1930s. Out of basis points, relying on dubious quantitative easing strategies, and still agnostic when it comes to coping with asset and credit bubbles, monetary policy has become the weak link in the daisy chain. Yet in the rush to re-regulate, central banks have largely been let off the hook. Nor are ever-profligate fiscal authorities exactly a beacon of hope in this crisis battered world.
Out of the darkness of the 1930s, a new approach to fiscal and monetary policy was borne. That renaissance is now over. The Great Crisis of 2008-09 demands a rethinking of the strategy and tactics of orthodox stabilization policies. Glaring shortcomings in our policy architecture must be addressed if the world is ever to learn the most important Lessons of Japan. As day follows night, a failure to learn these lessons almost guarantees another crisis in the not-so-distant future.
I am reminded of a quote by Winston Churchill , that mankind occassionally trips over the truth , but then gets up again , dusts itself off , and carries on as if nothing had happened . ............... . Clearly he knew well the minds of politicians and central bankers .
Well well ...look at what Dr Housing Bubble said......
" That is why today, when people ask me what is at the root of the housing problem I tell them that home prices are simply too expensive because incomes are weak."
.....about the USA economy...or was it the New Zealand economy!
"...move along please...nothing to see here...recovery is on the way...go and spend some borrowed money...."
As the property and rural land bubbles decline..slowly...the recession drags on and on because the losses are being kicked down the road. The govt clings to its tune that the export sector will save the economy. This is just wishful thinking.
The RBNZ has been given the nod to make a start on QE....the nuclear option...that is what is at the heart of the covered bond rort and why the govt guarantee is needed over the bond sales...to keep the cost down...so you can be sold the spin that it's time to splurge on property again with the cheaper for longer credit.
As we crawl into next year, expect the hype and spin about the economy getting a big boost from the Rugby...but take a look at the effort going into keeping a film production put at risk by a bunch of marxist unionist shites.....that should tell you just how serious this situation is.
Note to readers:.Labour have made no comment about this marxist effort to destroy the film industry....but they will have had a hand in it for sure......
"...sites that were $8m to $10 m are now around $3 million..." said Queenstown Real Estate Agent, Barry Robertson of Bayleys in todays Sunday Star Times ( D8-Property). " ...sections that were $300k to $500k are now available for between $180k and $250k...".
That's fine Barry. But why are they STILL for sale...??
I wrote that many times and do it again - so it sinks in like propaganda (Bush jun.)
Considering the worldwide situation and beyond our economy need a complete new strategy. This cannot be achieved by the private sector only, but needs dedicated politicians/ policymakers in government with an understanding of economics and a vision. It is now a matter of leaving behind traditional ideological thoughts (eg. NZMEA ?!) working together in order to achieve results for the best outcome of our nation. Real productivity garanties almost full employment. The reduction of quality imports improves skill and knowlege, lifts wages and reduces our massive account deficit. Real productivity is a major contributors for positive changes and balances uncertainty on the export front.
With the worldwide current economic scenario and beyond, we do need urgently a "Mixed Economiy Model" - a rather structured economy -
What a laugh!...
"after two days of heated negotiation, the G20 said it would “move towards more market-determined exchange rate systems”.....Japan immediately broke ranks to declare that, contrary to the spirit of the communique, it would continue to devalue the yen if it saw fit."
I went out last night, still got a friend, just the one. Anyway met an old contact from the wine industry. He is mainly in the tourist side of the industry,was he blue. NO tourism wine is still falling in price as wineries dump for cash flow. It was the 'no tourists' that caught my attention, he thinks its the year of the big sort out. If tourism is as bad as he said the the world cup could be a bit of a bummer.
This from a friend in France
Merci de rejoindre la grande e-manif de la majorité silencieuse
Vous appartenez à la majorité silencieuse, celle qui ne supporte plus le climat insurrectionnel imposé par les syndicats, alors bienvenue sur e-manif, site de contre-manifestations virtuelles. 3 Millions de manifestants bloquent le pays, il est temps que les 57 millions qui souhaitent travailler se fassent entendre. Une seule solution: la contre-manifestation. Et comme vous avez mieux à faire que d'aller dans la rue embêter tout le monde, je vous propose de vous faire connaître en e-manifestant. Il vous suffit pour cela de venir sur le site et d'inciter tous vos contacts à faire de même, le compteur fera le reste. Merci de cliquer sur le lien suivant http://e-manif.e-monsite.com
Venez sur le site autant de fois que vous êtes de membres dans la famille
Nous devrions rapidement être assez nombreux. Nul doute que cela intéressera les médias. Si cela ne les intéresse pas, cela aura au moins l'avantage de nous rassurer sur la normalité de ceux qui pensent que le travail est plus efficace que les piquets de grève.
Merci et à bientôt pour la prochaine e-manif!
Seems like some French people have actually had enough of the constant strikes about one thing or another. Amazing.
Ed Hugh points out Spanish property prices are now down 18% from their peak and falling.
Spain's Tinsa Price Index was out last week, and showed Spanish property prices fell again in September, and at an accelerating rate. As Tinsa point out in their report, both "Metropolitan Areas and municipalities on the Mediterranean Coast," whose rates experienced a significant drop from the previous month, have contributed decisively to this steep decline".
http://globaleconomydoesmatter.blogspot.com/2010/10/mr-zapatero-said-what.html
cheers
Bernard
Mr Market doing his thing...brings an end to the life of bling.
Here's William Black, the former US banking regulator, over at HuffPo on the scale of fraud in America's banking system. I still haven't quite worked out why Americans aren't more angry. It does however show the potential for much more financial fallout in America.
http://www.huffingtonpost.com/2010/10/20/nine-stories-the-media-is_n_769620.html
cheers
Bernard
Bernard : Excuse my ignorance , but whatever happened to Brian Spondre ? After the Crafar incident with Sam Webb , did he go professional with that bare-knuckle fist fighting stuff ?
Gummy,
Brian Spondre no longer works for interest.co.nz. He's moved on to other things, but nothing connected to the Crafar incident. Brian did a fantastic job taking pictures that day. I wish of course he hadn't been punched, but he was a real pro in handling it.
I wish him all the best.
cheers
Bernard
But you got Gareth ; and Alex is back ...... Win two good'uns , lose one , still winning the game !
[ thankyou , St. Nick : And the lovely Emma . 3 wins , 1 loss , for interest.co.nz ]
Andrew King from the Auckland Property Investors Federation told a Federation meeting it was time for landlords, particularly those in Auckland, to put up rents, Landlords.co.nz reports. HT Les
They must be getting frightened! "Stick together boys, and we'll be right!". Isn't that something along the lines of what the G20... said....
Agreed. They do sound a little desperate - if they go a litle further they may be colluding on setting rents.
An excellent summation of the American situation from Robert Reich. He's no nutter either. A Democratic insider. HT Troy via email.
"The perfect storm: An unprecedented concentration of income and wealth at the top; a record amount of secret money flooding our democracy; and a public becoming increasingly angry and cynical about a government that’s raising its taxes, reducing its services, and unable to get it back to work.
We’re losing our democracy to a different system. It’s called plutocracy."
And the lovely...Emma...was it...?
@2
The German Economy Minister has the guts to call out about Geithner's hypocrisy:
http://www.zerohedge.com/article/germany-calls-out-geithners-hypocrisy-…
steven : You said that America is dead , that it has no future . Well cop a load of this , buddy ; head over to Forbes.com and download their list of the 100 top companies in America with sales revenue under $US 1 billion each .
With me so far ? Goody !
Take that list over to Yahoo finance , and begin researching each company . I am . And guess what I found , 100 dynamic smaller companies in such an array of industries that'd make Les Rudd and Walter Kunz drool with envy ! Mark Weldon of the NZX would have fits of orgasmic joy it stocks such as these were domiciled and listed here in NZ . ..... ... NZ , we'd be rich !
And that is all NZ needs to do , set a framework that encourages thrift and enterprise . Build public faith in the regulators . We should be so lucky to be as hopeless as you claim the US is , steven .
ISIS / GeoResources / VSE / Deckers Outdoors / FTI Consulting / Medifast / UFP Technologies / RF MicroDevices / Transcend Services / LoopNet / Nuan Communications / etc . Among the 100 littlies , are bound to be some that are winners on the world stage , behemoths , future household names . Seen anything like that on the NZX , steven ?
".....all NZ needs to do , set a framework that encourages thrift and enterprise . Build public faith in the regulators..."----haaaahaaaaaahhhaaahah
I spose it must be something in the water over your way Gummy Bear.....!
I know , I know ! It won't happen in NZ anytime soon . But it is possible to revamp and strengthen the NZ economy ............. Impossible with Labour-Lite currently in power , and Labour-Heavy waiting in the wings .......... Too many Hobbits in the wrong place , in Wellington .
Aliens Gummy Bear...we will be visited by wool loving aliens who pay in gold and rare earths before you see any hint of "it" happening.
According to astrophysicists the heaviest element in existence after the " big bang " was iron ( FE ) ............. Only after stars began supernovaring were the temperatures and pressures great enough to create the rest of the elemental table . No rare earths until that time . Apparently iron is the strongest , most stable of all elements .
[ Just a wee snippet to drop at the next Marlborough Sauvignon Blanc tasting weekend ........... if the conversation is palling ............ ]
Not the full monty Gummy Bear...the iron did not come until the proto stars spat the dummy along with the gold and silver etc etc...before that you only had the Hydrogen and Helium and any of the 16 sub atomic bits still doing their thing. Gold is probably the most stable.
I stand corrected ! ......... My school report did say " Dumb Arse " ......... I do wonder if that particular teacher is shivering in NZ , on a pension ; while this dumb-arse sits under a coconut palm , on Panay Bay , with the nubile Cherry feeding me lanzones and mango ............ Hmmmmmm ?
Sure that wasn't the teacher's signature Gummy Bear?
GBH.......this isnt a now or tomorrow thing, you are quoting looking at today, my comment is the coming decades. Look at whats happening in the developing world v the developed world.....the developing world has (such as it is) whats left of the raw materials and/or cheap labour. What does America have to employ 17+% unemployed americans with? sure there are big corporations but they dont really employ americans, they employ cheap mexican, malay or thai labour...and as for raw materials America is now mostly mined out....it imports huge quantities of oil, 75% of its needs...and the USD is set to depreciate, by 50% probably....So its 700billion? oil bill will double.....Americans on $6 a gallon petrol? yeah right.....they screamed at $4....let alone $6....
The battles of the future (next 50 years) will be over oil and resources. NZ has enough of those to probably be self-sustaining.....We will have to start making stuff here in NZ because imports will be far lower.....Les, Walter and Mark will see NZ manufacturing grow because after teh cost of energy for transport is considered making ithere will make sense....thats the good news, the bad news is our economy in terms of GDP will be in the region of 50% to 75% of what it is today....
NZX is a zombie.....its been gutted by greedy self-serving CEOs and institutions....
You know its simple GBH, I have my opinion and you have yours and its your money, invest it as you see fit....
regards
"The beleaguered wool industry is lobbying government and the New Zealand Rugby Union (NZRU) to have All Black supporters' gear made of wool rather than man-made fibres."herald
Yeah...well how come the All Blacks don't play in 100% wool...greasy wool...that way they get to slip the tackles....
The beleaguered NZ film industry is gathering together tar , feathers , and pitchforks ; and heading around to see Helen Kelly , Simon Whipp , and Robyn Malcolm , to renact " the Bonfire of the Vanities " !
Whipp has run back to Aus to hide behind Jewleya.
#6 Currency wars
If everybody is devaluing their currency, wouldn't their value relative to each other be maintained? Say for example if the USD devalued by 1% and NZD also devalue by 1%, then USD-NZD exchange rate should still remain the same isn't it?
Yes....all else being equal.....but this isnt a game of economics, its a game of fool the voter....
The "west" has huge debt held by the "east" The west cant pay more than 50% of it....so its inflate 1/2 of it away, tough on the east but who cares its them or us. This would work if everyone else was OK and not basket cases as well and if we were not heading into deflation / depression because the hole is so huge that even printing 2 trillion wont fix it, or 2 trillion more...
regards
CURRENCY WAR = PRICE WAR
Billy , In theory you are right . In reality however the NZ ReserveBank or the Govt is totally unable to devalue the currency . Its at the ravages of the free market .
The problem is actually akin to a price war in say the retail sector or airlines. Everyone drops their prices to remain competitve . Its good fro consumers for a while , but you end up going out of business
Whats stopping them QE'ing?
"going out of business" , yep for a good deal both sides have to win make a profit....if one doesnt it wont be around the next time....I find lots of ppl cant see that..........
regards
And the Kiwi slips below 76au again...with the RBA set to raise their rate in a week and again at least another whole 1% during 2011...but not the RBNZ because this economy is dead in the water....now what do you think will happen to the Kiwi/au cross rate as a result?
Somewhere, around about here, I'm going back the other way.
'(...the Australian economy. ) We have completely given up on manufacturing. Agriculture is a useful source of income but doesn't create many jobs by adding value to primary production. Finally, mining is booming but all mining booms end. Sooner or later we will have nothing left.....The simple truth is that if we employ 80 per cent of the population in activities that contribute 21 per cent of our exports, we are going to go broke. .... The question is when, not if. The intellectual bankruptcy lies in the minds of those who can't see that we have to stop selling the mines, and farms and beaches and factories and our ... homes to pay for our import consumption.'
http://www.theage.com.au/business/services-sector-strategy-cant-save-us-20101024-16z6k.html
I had a read NA but couldn't find anywhere the suggestion that Australians cut back on the imports...which is one way of bringing a better balance. Any idea how big the hole in the heart will be when the ore runs out mate?
Pretty big, according to the leading graph, here :
Wonder if our RB has done a similar chart for NZ.
What's up with this? http://en.wikipedia.org/wiki/Gold_reserve. Fiji makes it onto this list.
In the latest issue of New Zealand Science Review, Gluckman said until recently, successive governments had "not given much more than lip service" to the role of science in improving productivity. We live on a past glory that probably was never there. Actually, we don't punch above our weight – indeed, our productivity is lousy," he said. "Despite the national myth, we are not as innovative as we pretend."
Full article: http://www.stuff.co.nz/national/4269183/NZ-needs-to-wake-up-top-scientist
In the current economic situation productivity preferable manufacturing, building our own infrastructure needs should go hand in hand with science, eg similar to NZagriculture.
As a small nation we do need a NZnational industrial & science park http://www.highbrook.co.nz/default.asp?s1=Business where major NZmanufacturers and NZscience are based and work together. A centre of advanced technology where talented Kiwis go to engineering school and other youngsters have a change to learn skill in trades of the future - a future for our economy and for the next generation.
The administration of a NZ Industrial & Science Park should work regularly with the media. Creating awareness among the public what sustainable production and its positive potential mean for the nation is essential. Such educational developments lead over time to fundamental changes in our political and social environment – a culture change - away from consumption to a rather productive society.
The Singapore Stock Exchange (SGX) has launched a friendly take-over of our neighbour's stock exchange , the ASX . $A 8.4 billion buys you alot of friends ! The combined super-exchange will provide sterner competition to the powerful Hong Kong Stock Exhange .
No mention of the NZX in all of this . Why bother ! Under Mark Weldon's stewardship , the New Zealand Stock Exchange has lost all relevance , as few credible new listings have occurred in a decade or more . And delistings have gutted the NZX of depth and strength .
Today’s “New World” grocery bill for two: NZ$ 158.70 - ouch ! Because of other price increases (insurance/ acountant/ petrol/ etc), we are now considering to increase our prices too ! The wheel of Inflation is definitley moving.
Kunst, I dont think so, are you witnessing an increase in money supply or is it a result of insufficient competition in the food retailing industry? 10 billion $ of debt paid back or destroyed I would think leads to deflation, at least in the short term. You may increase your prices but does anyone have the money to buy them? Our politicians short term thinking is going to catch up with us one day soon.
What you may be witnessing is a decline in our standard of living. Im surprised that in a recession the fuel price hasn't dropped, in fact its going up. That is my biggest concern at present, energy prices could cripple us.
There are big arguments about deflation vs. inflation among experts – my personal view - deflation is the forerunner of inflation up to the point where societies can’t afford the prices and collapse. In that scenario a decline of standard of living is the consequence of any low wage country.
With a low NZ$ dealing in the tourism sector price increases are possible to a point. In comparison with others – yes we can – because we never played the greedy game.
Andrewj,
I'd like a little more information about this 10 billion $ of debt paid back or destroyed.
In terms of total outstanding debt, both private and public, I am sceptical that there has been a net repayment of debt. The Government has been acting as debtor of last resort for the last two years. While prifate debt may have been repaid, there has been a large slug of government debt taken on and that dosh infused into the economy....
The total amount of outstanding mortgage debt has continued to grow, albeit slowly..
Data source would be appreciated.
Reserve bank statistics here http://reservebank.govt.nz/statistics/az/2989608.html if you want them in spreadsheet form.
Balance sheets of all the banks etc. There are summaries right here on interest.co.nz as well.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.