Here are my Top 10 links from around the Internet at 10 to 6 pm, 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 Friday'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. 'We stood back and did nothing' - James Weir from the DomPost reports former BNZ chairman and current Working Savings Group chairman (and Institute of Directors President) Kerry McDonald saying the collapse of finance companies "was probably the most damaging event in our commercial history, but we stood back and did nothing."
He's right.
Here's a column I wrote for the Dominion Post on March 19, 2005. This was over two years before the collapse of Bridgecorp:
"There’s an elephant in the room and it’s getting bigger very fast. It’s now so big that it could stop economic growth in its tracks if it fell over. But trying to force it back into a safer place could actually trip it up. So everyone is waiting and hoping it can walk out the door without an accident. That could be a short wait with painful consequences. So what am I talking about? The sustainability of the amazing growth of finance companies.
"They have borrowed more than $10 billion from “mum and dad” investors in the past seven years. They have then lent this money to all manner of property developers, used car owners, small businesses and basically anyone who can’t borrow the money from a bank.
They don’t play by the rules of the banks. They don’t put some of these deposits away into very safe securities for a rainy day. They don’t have to make sure their shareholders have a good chunk of their own money at stake when they lend. Most of them are well managed and profitable. Some have been around for more than five years, but most have not.
"Many have never had to survive an economic downturn and a property slump. Some have single loans worth eight times their equity. Some have equity-to-debt ratios of less than 5 per cent. They can do this because they are virtually unregulated. The big question is what happens when the economy cools and property prices fall? What happens when one of the bigger ones falls over? Will the flow of fresh money from mums and dads dry up for the rest?
Privately, every financial bureaucrat and banker is deeply concerned. It’s also a subject few politicians really want to tackle. Helen Clark and Michael Cullen are thought to be privately concerned about it. It is suggested it is one of the reasons they appear so keen to have an Australian-led joint banking regulator. That’s because an Australian regulator would also oversee finance companies. The danger for the Government is that, if it tries to impose tougher capital controls, it could push many out of business.
"Warning mum and dad voters about investing in them would be even more damaging. The best option is for mum and dad to check very carefully. Then they should cross their toes and hope the elephant doesn’t squash them."
Nothing came of the column. I didn't receive a single email or phone call or anything from anyone in any position of authority. I got a grumpy letter from a property developer telling me he was sick of my negative approach.
As is the New Zealand way, everyone looked at their toes and refused to be critical of each other. Or they sued anyone who was critical.
I spent a good chunk of 2005 and 2006 fending off legal threats from lawyers behind finance companies such as Blue Chip, Bridgecorp and Hanover. We got a lot of stuff out there but not nearly enough.
I am currently dealing with a legal threat from a Property Syndicator backed by a big Auckland law firm after I wrote a critical column.
It's much easier to say nothing and let the little guys take the pain. It's much easier and cheaper to try to shut down criticism or public debate.
I'm a tad cynical now. And tired.
But here's Kerry McDonald saying after the fact that more should have been done and more people should have spoken up.
The government should have considered appointing statutory managers, and regulators should have looked at charging companies at an early stage.
"The lack of response [from government] was very damaging and a lot of people lost a lot of money," he said. "And a lot could not afford to lose that money."
All of the government's agencies fell down, including the Reserve Bank, Securities Commission, Commerce Commission and Companies Office, but ministers had oversight of them all, Mr McDonald said. "There was a lack of engagement. No one was taking effective action at the time," he said.
And the powers-that-be wring their hands about why Mums and Dads don't trust our capital markets or securities laws...
2. Lo and behold - The Timaru Herald reports that Allan Hubbard told his supporters in Timaru last night he is determined to get back in the game and start shuffling his his investors' assets and money again.
Mr Hubbard spoke last night at a launch for his biography, Allan Hubbard: A Man Out of Time, by Virginia Green. He gave a feisty speech, promising to return to business.
"I'm in advanced talks to take over Hubbard Managed Funds by the end of the year," he said.
He would then work to take back control of Aorangi Securities, his other investment company which is also in statutory management.
3. 'Schemes of the rich and greedy' - Here University of Missouri Economics Professor Michael Hudson tees off here about the Irish bailout and the Icelandic collapse, along with what's happening in America.
The 30-year campaign of the wealthy to rig our economic system – especially the tax component – for their own benefit will accelerate with the GOP capture of the House of Representatives and the likely capture of the presidency and Senate in two years.
For a foreshadowing of what is to come, a dress rehearsal has been conducted in Latvia, Iceland, Ireland and other financially strapped countries. Latvia has been burdened with the world’s most regressive tax system, while Iceland and Ireland have become record setters in tapping taxpayers to bail out financial crime syndicates, a.k.a. banks.
The Irish bailout will encumber its people with perhaps as much debt as a $9 trillion bailout would be here in the United States. The Irish also are expected to also gut unemployment insurance, their minimum wage and similar social safety nets while boosting interest rates and home property taxes to pay tribute to the European creditor agencies that have “rescued” them. They will relinquish ownership of much of Ireland to their creditors, capped by ownership of government policy-making. The new banks will be owned by foreigners, who will put Ireland on a debt treadmill to transfer its taxable surplus to mainland Europe and Britain.
Just as the U.S. taxpayer saved Goldman Sachs and the other high rollers from taking a loss, the Irish are being forced to “socialize” (that is, oligarchize) the losses of the banks.
Think of how the Federal Reserve gave the banks 100 cents on the dollar for the some $2 trillion of toxic assets they took off the books of the banks and you get a sense of how the Irish bailout money will be used. It will keep the banks and creditors whole.
5. 'There wouldn't be anything left' - The Guardian reports Capital Economics has estimated a Spanish bailout would empty the 750 billion euro fund set up for European bailouts. A little factoid of interest. Spains construction industry made up 25% of the economy before the bubble burst.
Amid growing fears that pressure on Portugal will be followed by financial trouble for its Iberian neighbour, Capital Economics said the cost of a rescue providing the equivalent funding security offered to Greece and Ireland would be a ''whopping €420 billion ($A578.84 billion)''. Jennifer McKeown, Capital's senior European economist, said there was €660 billion available from the EU and the IMF, of which Ireland was due to get €80-90 billion.
''If we knock off the similar amount that might be required to meet Portugal's needs, we are left with just €490 billion. That suggests that Spain's needs could barely be met by current arrangements.''
Ms McKeown said the risk of a Spanish bailout was still fairly low, even though the country's borrowing costs rose yesterday to their highest level since the creation of the single currency more than a decade ago. But should Spain require help, the cost would be ''devastatingly high''.
6. Stopping work - CNN reports three million Portugese staged the first general strike in 22 years on Wednesday. This came after the opposition accused the government of hiding a big deficit in a Greek-like manner. No wonder the European bond markets are selling off. An angry mood is building.
Voters are beginning to understand that taxpayers in Europe are being sacrificed to save the banks and the bankers.
Portugal says it will cut its budget deficit to 7.3 percent of its gross domestic product by the end of 2010 by trimming public salaries by 5 percent, raising value-added taxes from 21 to 23 percent, and reducing pension benefits and other government spending. But with unemployment at 10.9 percent, the country's two largest unions argue that the ruling Socialists' austerity measures will only make things worse.
"We have got 200,000 people in a population of around 10 million who are in soup kitchens," said Aquino Noronha, a flight steward who joined Wednesday's walkout. "This cannot go on. What we feel, those of us who are on strike, is it's only the workers who have to pay for this."
7. 'Income inequality is the real problem' University of Chicago economist Raghuram Rajan talks in a Money Magazine interview about how income inequality helped trigger the US housing boom because politicians pushed for poorer voters to get access to cheap credit to become home owners. He speaks a lot of sense. Did the same thing happen here?
In the 1980s we saw a widening of income inequality. Typically the political reaction to that is to redistribute wealth. But in the '80s and '90s there was a sense that we'd had too much redistribution, too much welfare. So you had to find something else, and housing fit the bill for both political parties. The Democrats thought it was wonderful to support home ownership for the poor, their natural constituents.
The Republicans figured property owners would eventually vote Republican. Congress, of course, can't make loans. But Fannie Mae and Freddie Mac both enjoy this tremendous government subsidy, and politicians used that as a lever.
So you had a massive amount of money flow into housing. Homebuyers were told there was no risk of loss -- that ever since the Depression we've never had an across-the-board housing price fall. They were also told homes are a great way to build equity, and you can borrow against that equity.
The brilliance of the home-equity loan, which was a substantial feeder of consumption growth, was that people could borrow without guilt because the rise in home values offset that additional borrowing. What people didn't realize was that some of this asset value was illusory.
8. It's Belgium next - The Telegraph reports financial markets are targeting Belgium as the next domino in the European financial contagion. HT Kokila via email.
Like Ireland, struggling to fend off criticism of its austerity package, there are signs that international bond investors are starting to view Belgium as living on borrowed money and borrowed time. To make matters worse, it has a broken political system and is without a government since April.
International money market traders today pushed the cost of insuring Belgium's debts to record levels. The interest payments still fall short of those charged for Spain's government the Portuguese, but analysts said the gap was narrowing quickly.
9. Totally Kung Fu kick video - I mentioned Eric Cantona's backing for a European bank revolt on December 7 in comment on an earlier Top 10. The idea is that everyone pulls their money out of the bank on one day and brings the corrupt system down. Here The Telegraph have picked up on it.
"What is the system?" Cantona reflected in a video interview with French newspaper Presse Ocean. "It revolves around the banks, the system is built on the power of the banks, so it can be destroyed through the banks."
"The three million people in the street, they go to the bank, withdraw their money, and the banks collapse ... That's a real threat, there's a real revolution," he said in the video that has gone viral on the web.
And here's the video. The grizzled old Kung fu kicker 's in full philosophical 'Seagulls' mode.
10. Totally hilarious video - Some clever clogs in Ireland has done a version of The Downfall video with reference to Ireland's financial debacle. There's a quite a few in jokes, but it still captures the mood. And the best of all, it's a different Downfall clip. It's the courtroom scene and the Hindenberg scene , not the bunker scene. HT Andrew J in yesterday's Top 10.
My favourite line is: "Supporting Anglo Irish Bank is like putting an anchor from the Titanic around the neck of a budgie and hoping it will swim."
71 Comments
On "we stood back and did nothing.":
That's not true. The government guaranteed the deposits at these finance companies, which has already costs us billions.
What we should have done is: nothing.
Indeed, nothing. It's called a free market. It's your money. If you invest it badly, you lose it. That's what the definition of a free market is.
If you invest badly, and the government bails you out, it's no longer a free market. It's crony capitalism, where the gains are privatised, and the losses are socialised.
And rules won't help. The most heavily regulated industry, our banks, blew up. Regulations do the opposite of what they intend to do: they reassure the investor, who is no longer buyer-beware, and the regulated do whatever they do anyway.
And please, lefties, don't tell me that the banking industry was deregulated. Tell me exactly how many pages of regulation were dropped since 2000 and 2008. Ever heard of Sarbanes–Oxley?
Billions? slight exagertation? thought it was some millions?
Our banks have not blown up...oh wait are you American living in America? or a NZer in NZ?
The US banking industry was de-regulated, wow I guess everyone is left of a fundie libertanz...and what regulation that was left was not enforced....guy called Black is well worth reading and listening to.
Some countries that didnt de-regulate and servived pretty well, India, Canada and NZ, OZ survived but I dont class that as because they didnt de-regulate rather because the ponzi scheme hasnt imploded yet due to the mining boom.
Yes and S-O does not apply in NZ to NZ owned and operated companies....its success is dubious, mostly because its probably been well neutered by the US lobyists.
Adequate but minimal rules would have helped and probably would have stopped the blow up....the ones enacted after the great depression almost certainly would have worked very well....
The free market losers decided to remove them....
regards
Berend,
I was talking mostly about the pre-2006 period. I'm sympathetic on the issue about whether finance companies should have been included in the Guarantee scheme. If they had been left out they would have all collapsed in a heap at once. It would have been painful, but it would not have bought down the economy.
But I'm less sympathetic about the idea that any regulation is bad and that every man, woman and child should be left to fend for themselves in a world of sharks.
That's what we just tried over the last 10 years. It didn't work.
If only markets and the participants were pure and fully informed it might be alright.
I've seen too many devastated Mums and Dads who did not have the wherewithall to examine the claims of the unregulated. Unfortunately we did not have the free agents such as the media to real put those claims under the spotlight. I tried (see above) but failed.
I'm trying again and we're building up a strong independent knowledge basis, but there's a long way to go.
Welcome your thoughts. And your help! ;)
cheers
Bernard
Theres no such thing as a free market when you have a small group with a very large concentration of wealth (finance companies, property developers and banks) VS a large group of investors who are mostly independant from eachother with no concentration of wealth (mum and dad).
The guys with the largest concentration of wealth will employ the best professionals to spruik their message (lawyers, accountants, real estate agents, valuers, media, rugby heros). Can you really blame the mum and dad investors for believing them?
Any market will be slanted in favour toward the group with the highest concentration of wealth. This is why we need regulation.
Re # 1 : As I recall , Gareth Morgan was trumpeting the dangers of finance companies for several years ........ But his voice was drowned out by the celebrity endorsements of those giants of finance , Richard Long , and Sir Colin Meads , " solid as , I'd reckon ! "
There is a point where if investors are so mind-numbingly thick , you just gotta walk away and leave them to their fate . ............... Not prop the silly feckers up with a taxpayer funded bail-out , euphamistically sold as a " Government Guarantee " .
Re number 1.
I remember well your carefully reasoned warnings and questions that investors should ask themselves and the finance company. I had a friend at the same time who was crowing about 11% interest from an outfit with lots of small loans in the car business area. Your words of caution worked for me and I still have my capital!! So a big thank you!
For NZ to lose up to $2 billion of life savings in this unregulated environment is truely significant, and the regulators and the main steam media (all pocketing huge advertising revenues promoting the scam) have been major contributors to this sad outcome.
Education can only do so much to protect people from doing silly things, goal time for master minds would be more effective.
Who cares about those who lost out in collapsing finance companies? Not me. My money is safe. But I used to worry about those people, just not anymore. They deserve their fate. Hard fact, but a true one.
Of course we all got shafted by the "government guarantee" rort, even when we didn't "invest" even a cent in FCs, but then 57% of the country voted for the troughing pigs now in government, so maybe it's the inevitable punishment?
Indeed, a double whammy....not only the loss of capital that could have benefited businesses with investment but income, many it seems were/are pensioners....who now have less to spend day to day....and many who now will be a lot more conservative with investments after being ripped off.....
Silly but all they had to do was have a regulating body and the chances are like the banks most would have been very sound and survived this...and of course wouldnt have needed or called on the Govn to bail them out....
regards
....... but we did have a regulating body ! At the tax-payers' expense , the Securities Commission was " active " during this period . Do you know what Jane Diplock and her fellow generously renumerated commissioners were doing , whilst the finance companies were running amok ?
Even when ASIC in Australia refused permission for Bridgecorp to launch a prospectus to Australian investors , back in NZ not a twitch nor a murmur from Plane Jane . That refusal by ASIC triggered no response from the regulators , back in NZ , Bridgecorp's home base .
plus ... ASIC, APRA, ACCC and RBA (all financial oversight authorities) have to front separate Senate enquiries at least once a year to be quizzed, examined, smacked, and held to account for what they have or haven't done, and the Senate examinations are held in public and are not kind or gentle. Can be entertaining.
1. Think not that you've become cynical, Bernard, rather I'd say you've become enlightened. With the power of insight and understanding we all become freer and our ability (and motivation) to choose to oppose the status quo and to make (force) change for the better.
Which leads me to
3. Note Michael Hudson's words, "especially the tax component". Our present Government is in full swing on this "dress rehersal". They refuse to even consider any form of capital taxation; instead they increased GST (the most highly regressive tax of all). Next they'll axe in-work tax credits for our most poorly paid and decrease ECE and other education subsidies. Funding will increase to private educational institutions, while at the same time decrease to public ones. We'll see a plethora of new (conveniently named) PPPs - prisons the primary first-off-the-block .... the quickest way to ensure NZ can "compete" in the world-wide low (slave) wage economy.
Bernard you missed this,
Germany cannot keep paying for bail-outs without going bankrupt itself," said Professor Wilhelm Hankel, of Frankfurt University. "This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings."
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/816099…
Life's but a walking shadow, a poor player
That struts and frets his hour upon the stage,
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.
Macbeth, Act V, scene v
And so ends the EU - and with it to the dustbin of history will follow all her UK gaggle of lying cowardly traitors, Mr. Heath, Mr. Blair, Mr. Brown, Lord Hesseltine, Mr. Clarke, and the rest.
Make your choice Mr. Cameron - on which side of history do you want to be?
Jonathan
Yes same here - I can remember reading that article Bernard.
At the time both my sister and I were given a good solid lump of money from our mother's estate - that was spread amongst the usual suspects - Bridgecorp, Strategic etc
As they matured - we cashed them out - and took the funds elsewhere.
The writing was on the wall - and some of that writing was your's.
I'll shout the next coffee. Will be my pleasure.
Wonderful news that the Greenback is being bypassed . And a step in the right direction by China , allowing its currency to trade against the Rouble .
Were that we could get more splendid news such as this , here at interest.co.nz , to counter-balance Bernard's daily gloomsterisationalysing .
This will put some Australians in a bit of a bind.
Oz has dedicated itself to becoming the United States of Australia almost from day one.
They slavishly follow the Yanks around and enthusiastically support their every whim.
How are they going to keep the Chinese cash rolling in while avoid offending their American idols?
(Assuming the Americans even notice of course, although Australians tell themselves that the USA is as devoted to Oz as Oz is to the USA.)
Larcus M. you have it in one.... this little outpost of Americana will comply to fulfil what it (see's as a Nation) it's obligations, let alone it's underlying desire to identify with American culture.
That said I would not underestimate the importance of Australia to America...strategically alone...priceless.
Kate I've been calling this for a while now and the answer to your question is Australia ...will...fall into line with the USA even at a cost to it's economy....don't bet against it you would lose .
As I said a while back the The Americans would be proactive well before this event and ask their allies to ....Choose.
Bit like bullrush really...you pick a side...and run the gauntlet.
Bernard,
interest.co.nz has been invaluable in raising the quality of the debate and educating us (the great unwashed) about what's going on. I thank you for that. I know you've had the occasional beat-up from Cactus Kate, Olly Newland and a few of the resident nutbars, but you deal with it respectfully and with good spirit. We're not all going to agree but a more informed debate is definitely worth having. You have been instrumental in pointing us in the right direction.
Cheers,
J.C.
.......... our Lord Almighty , as one of the " resident nutbars " ............. thankyou for deigning to grace us with your magnificient presence ............ I know that we're forbidden from uttering your real name , J.C. .............. but you are " him " aren't you , our saviour , God and master ............ John Cleese ?
Cleese was born in Weston-super Mare ......... the son of an acrobat and an insurance salesman ................ clearly peasant stock , particularly if you had to jump through hoops to read the fine print on your policy ............. so don't feel bad about your ignorance , grasshopper , there's alot of it about here .............
[ And dude , we don't call a spade a spade any more , we call them Afro-Americans . ]
Yep, Gumbo..she's all good..the waters warm, i'm out charter fishing tomorrow in the gulf and the money shysters here are easy to read.
and ,of course, heaps of cheap wine..better than that crap you and the nymphets are forced to drink up there in the Phils....wanna catch up for a margarita and a mushroom omelette down on Boracay sometime?
Except these are not real businesses making real things....out of interest I assume our national productivity is based on total GDP?......so if these "businesses" turned up and boosted our GDP I assume our productivity would also rise? all the while not actually making anything but hey great for the stats....what they actually mean is they pay less tax somewhere....so somewhere voters pay more tax to compensate. I think someone mentioned our productivity has declined, Im assuming despite the fact that NZers work some of the longest hours that because of the rush into PI and other financials that really we are no richer as a nation.
At some stage as Govn get desperate for income I will assume that where your subsidary based in Ireland only pays 10% while elsewhere its 30% that there will be changes in tax laws to negate that "advantage"....
regards
"All of the government's agencies fell down"......think about that!
"..but ministers had oversight of them all,".......
9 long years of useless incompetent lazy snouts in the trough, who are now about to hit the road loaded with promises that they have the answers, that they should lead the country.......Goofy...and his followers.......!
Gobshites the lot of them.
Mr Market is not happy...do you owe any money? If you do...you are stuffed because Noddyland is rushing to join the debt Q...if you don't, expect to have your savings stolen from you by the govt one way or another, to bailout the banks..the banks are important...you are not!
"Greece's 10 year yield continues to trade at a high 12% despite the Euro 110 billion bailout at 5%, because Greek bond holders continue to discount a highly probable eventual debt default / restructuring as a deflating economy has sent public debt to GDP soaring to 135%.
Ireland's yield has surged higher to stand at 9.2%, following Monday's bailout low of 8%, again suggesting debt restructuring given depression inducing public debt at 95% of GDP.
Portugal's yield has crept higher to a new credit crisis high of 7.1% from Mondays low of 6.7%, confirming that a bailout of Portugal at an estimated Euro 40-80 billion is imminent for an uncompetitive economy carrying a rising debt to GDP ratio at 83%.
Spain's yield has now crossed above the 5% bailout rate to 5.2%, which suggests that the market is pricing in a bailout for Spain, which is not surprising given the exposure of Spanish banks to Portuguese debts, official debt is put at 64% of GDP but this does not fully take into accounts Spanish banks bad debts that as with Ireland could easily send Spain's debt to GDP to well over 100%.
Italy's yield has trended higher to 4.42% putting Italy firmly in the queue for a debt crisis blowout given that public debt is already at 120% of GDP.
Belgium's yield rose to 3.7%, which illustrates an elevated risk as a consequence of the failure of the political parties to form a new government and public debt is already at 100% of GDP.
UK - Whilst not part of the eurozone has seen its 10 year yields continue to trend higher to 3.3%, marginally below the recent high of 3.4%. The lower UK yield despite Britains huge debt mountain illustrates the flexibility afforded by being OUTSIDE the euro-zone as it allows Britain to continue to stealth default on its debts by means of printing money induced high inflation that the Eurozone countries cannot do individually I.e. the UK government prints money that it loans to the bankrupt banks at 0.5% to buy UK government bonds at 3.3%, hence why the yields are lower than the likes of Spain and Italy, which acts as a safety valve preventing outright bankruptcy but the price paid is in high inflation, with the doctored official inflation measure of CPI is at 3.2%, the more recognised RPI at 4.5% and real inflation at 6% as the following graph illustrates"
Isn't it wonderful how those of us who didn't succumb to borrow-n-spend fever will probably have to lose at least as much as those who did, once we are forced to pick up their tab?
Good ol' baby boom generation: thanks a lot for sticking the rest of us with the results of your slobbering greed and utterly embarrassing lack of intelligence.
Hey you need to be aiming before squeezing the trigger magnum....me an Gummy and a few others didn't splurge with cheap debt....and those fingers worming their way into your wallet belong to govt....you can thank that useless Clark and her lapdog Cullen for most of your future troubles...plus some help from Bill...
Us BBs gotta cark it sometime and some of us have heaps of dosh to use up between now and then......we might end up being the foundation under any future growth story....then again we might drink it and waste the rest on crumpet.
Come over to Panay Bay , Wolly , and waste the wedge on some of the bubbly scones that shashey around here ........... Betta yet , I'll show you Camiguin Island , where the crumpet is so hot and sweet ........... Hmm , hmmmmmmmmm !
Sadly , it seems that we let the BB's down ! We didn't take on cheap debt , we didn't let that prize fool Cullen corral us into investment properties , and we didn't agree with government guarantees ............. a disgrace to the name BB , is we ........ alas !
"And the powers-that-be wring their hands about why Mums and Dads don't trust our capital markets or securities laws."
lol...........I wonder why that is.......no wonder we have had so many ppl going into PI....its relatively shark free as we are finding out and you can see you really own something and not an IOU.
and the changes National has proposed so far?
regards
Markets will always eat the naive and unwary, no matter what kind of market it be.
Almost all of those who piled into shares in the mid '80s had absolutely no idea what they were doing and what they were buying, and so they were fleeced.
Ditto the property market, where most of the country strutted about chanting the mantra "Ya can't lose with property", just before they lost with property.
Lazy people never do any homework and they always end up sitting around bitching about some injustice or other they were done, ignoring the reality that is they were just too damn stupid and greedy and bone idle to do the necessary hard yards.
It's called Darwinism and a good thing for the species in the long run.
To a certian extent I agree...but mostly I dont, many "investors" are just ordainary ppl who simply have limited idea on how to invest.....its not all lazy its the complex instruments out there that could be made far more transparent and easy to understand. Sites like this help a lot IMHO....but when the most complex financial thing you have done for 30 or 40 years is balance your household budget thats a recipe for disaster....which is what we have had. Now the 1980s was interesting here in NZ, from what I could read during the aftermath there was opportunity for some effective regulation but that was lobbied out of existance....
The second point is then the most telling, the end result of course is ppl wont invest....
regards
If you don't understand, learn until you do. Don't invest in anything until you properly understand it.
The problem of course can be that many, perhaps most, wouldbe investors believe they do understand something when clearly they do not.
Unless they are very lucky they will always get eaten or fleeced or whatever by the market the don't understand.
Oh yes, how did I miss this!
"Why don’t central banks, and the governments they front for, ever learn? The only way to prevent macro-economic damage from a collapsed asset bubble is to not allow a bubble to develop in the first place. Once a government takes the path of winning popular favor with the temporary prosperity that’s produced by asset price inflation, there is no easy way out, as Japan re-discovered in the 1990s, the US found out again in the 2000s, and China will experience soon enough. As part of our project to map out the coming decade, this week we investigate the prospect of the collapse of the Greenspan Credit Bubble with Chinese Characteristics.
Monday China embarked anew on a treacherous program of rate hikes to end a property bubble that took root there in 2005.
Here is a game readers can play at home to simulate the genius of a central bank managing an asset bubble down via interest rate hikes.
Find a cinder block and a bungee chord. Place the cinder block on the far end of your kitchen table. Attach one end of the bungee chord to the cinder block and put the other end between your teeth. Kneel down so that your face is level with the tabletop and pull the chord until it is taught.
Now it’s time to begin “tightening” the way central banks try to, bit by bit, to bring an asset bubble to a benign end, or so they believe.
Pull ¼ of an inch. If nothing happens then pull another ¼ inch. If nothing happens then do it again, and again.
Silly game, you’re thinking. A child can see how this will turn out. Sooner or later that concrete brick will sing across the table and smash your face.
As obvious as the outcome might be to a 10-year-old, the brick-in-the-face lesson remains lost on central banks. They must be slow learners because repeat it over and over. Or perhaps there is a common institutional neurosis shared among central banker’s that compels them to repeat the same mistake, to recreate the experience of concrete on teeth.
For years I’ve referred to China’s asset bubble economy as a Greenspan Credit Bubble with Chinese characteristics. This week we find that not only the policies that created China’s bubbles but even the policy responses to attempt to tame them mirror Greenspan’s.
http://www.itulip.com/forums/showthread.php/17311-China-Crash-2011-Part…
Enjoy.
If our Government monetised the $250mil debt it was raising each week it would drive down our $ and it would avoid this when the IMF boys come calling.
http://www.zerohedge.com/article/memo-ireland
All it needs to do is allow the RB to buy treasury bonds when they are sold.
It needs to be done now before it's too late.
Cue Wolly can't do that because "that would be against the rules".
Conventionally yes thats the path to hell..........Paul Krugman for instance thinks it is an acceptable idea given the alternatives one of which is very high un-employment. The problem I see is that when the bond markets have had enough it happens in a space of weeks....and then cant be contained easily and the cost of borrowing rockets.....I think NZ is caught between a rock and a hard place, either way hurts....or could hurt very fast....
Also companies and ppl are not borrowing anyway so printing money that then sits in a bank vault achieves diddly....does it not.
regards
"printing money that then sits in a bank vault"
It's not actually about doing that. The banks are busy selling covered bonds, this means that they end up with cash in their vaults. What it also means is that overseas investors will own the borrowers' promissory notes. This is effectively a loss of economic sovereignty. Who's going to come calling when/if the banks go under.
Our economic sovereignty is bleeding away before our very eyes.
What my suggestion means is that the Government deficit isn't "neutralised" by selling bonds. The deficit ends up as bank deposits and this is poison to the banks. They will oppose this by whatever means possible including "sovereign credit rating assessments". Our pollies will cower before these threats, some may even be privately bought off, and Wollies that don't understand the mechanics of what is being done will decry the move as "being no answer to our woes" not appreciating that this thinking plays right into the hands of the banks.
Of course there's a cosy relationship between the banks and the reserve bank. Government servants like the idea of being employable elsewhere, it's only natural, it's self preservation, not only that they aspire to the day when they might be a bank CEO one day, so privately they applaud the fat salaries being paid out since it only gives them more ammunitiion when the HSC does their thing. So are they ever going to do the tough thing and propose the obvious, no. It's going to be expressed to the pollies in academic papers papers as unthinkable and irresponsible. In the meantime we are all fools as we rush headlong into the same trap that has caught Ireland.
See confessions of an economic hitman by John Perkins.
Its not really....the land is fee simple its still owned by the Govn in extremis....the best the foreigner can do is sell it on the open market.....I dont see it as significantly different to how things are today....the mortgages are an asset of the bank they are simply not pre-allocated to an investor which is what covered bonds would do. However there seems to be a concern that in effect these foreign investors jump the queue to before deposits....but as long as its locked down to say 5 maybe 10% I cant see it being a huge issue.
regards.
"The Irish bailout will encumber its people with perhaps as much debt as a $9 trillion bailout would be here in the United States. The Irish also are expected to also gut unemployment insurance, their minimum wage and similar social safety nets while boosting interest rates and home property taxes to pay tribute to the European creditor agencies that have “rescued” them. They will relinquish ownership of much of Ireland to their creditors, capped by ownership of government policy-making. The new banks will be owned by foreigners, who will put Ireland on a debt treadmill to transfer its taxable surplus to mainland Europe and Britain.
Just as the U.S. taxpayer saved Goldman Sachs and the other high rollers from taking a loss, the Irish are being forced to “socialize” (that is, oligarchize) the losses of the banks.
Think of how the Federal Reserve gave the banks 100 cents on the dollar for the some $2 trillion of toxic assets they took off the books of the banks and you get a sense of how the Irish bailout money will be used. It will keep the banks and creditors whole."
The Irish people have had enough. They now recognise the ineptitude, incompetence, dishonesty & self interest of their political leadership. This bailout will not be supported by the Irish People. A by-election was held yesterday in rural Ireland and the two main parties were well beaten by the minor, left leaning Sinn Fein. The current political leadership is a rogue leadership without a mandate. They will be driven from power.
None of what Michael Hudson has written will come to pass. I don't know what will happen, but a bail out of the scale that has been discussed recently is now universally viewed in Ireland as unworkable, Ireland simply can't afford it. The people of Ireland see what their political leaders refuse to recognise & that is the Euro experiment is a failure. It is at deaths door.
Iksteve, don't call it an "experiment" call it for what it really is, "extend and pretend" for the US$ as the world's reserve currencey since the US reneged in 1971 on their promise after the war for the US$ to always be redeeemable for gold. The one off siegnorage gain passed back to the US while the recipients got the stimulus derived from freshly printed currency to spend. The sort of stimulus Wolly rails so strongly against.
It was no experiment, it was a deliberate ploy by those that understand how banking really works.
If you know anyone in Ireland, send this on to them please From ZeroHedge originally....
Memo to Ireland
"Tell the EU and IMF to Shove It!"
By MIKE WHITNEY, originally published at CounterPunch
Imagine that Yasser Arafat had succeeded in ending Israeli occupation and establishing a Palestinian state in the West Bank and Gaza. Now imagine that 10 or 15 years later, new Palestinian president, Mahmoud Abbas, agreed to hand over control of his country's budget to the IMF so his people's future would be controlled by outsiders. Do you think Palestinians would praise Abbas as a patriot or denounce him as a traitor?
Irish Prime Minister Brian Cowen is Mahmoud Abbas. He's caved in to the demands of foreign capital and transferred control over the nation's budget to the EU and the IMF. Here's an excerpt from a November 24, article in Reuters:
"Ireland's teetering government will announce plans on Wednesday to cut welfare spending sharply and raise taxes to help pay for the country's catastrophic banking crisis and meet the terms of an international bailout.
The four-year plan to save 15 billion euros is a condition for an EU/IMF rescue under negotiation for a country long feted as a model of economic development that has become the latest casualty in the euro zone's emergency ward.
Prime Minister Brian Cowen told parliament no final figure had been agreed for financial assistance, "but an amount of the order of 85 billion (euros) has been discussed.
The finance ministry said the austerity plan would be published at 1400 GMT and posted on the official government website." (Reuters)
This is a black day for Ireland. The Irish people will now face a decade or more of grinding poverty and depression thanks to their venal leaders. As soon as the ink dries on the IMF loans, the second occupation of Ireland will begin, only this time there won't be armored cars and Paramilitaries in fatigues, but nerdy-looking bureaucrats trained in the art of spreading misery. In fact, the loans haven't even been signed yet, and already IMF officials are urging the government to cut jobless benefits and the minimum wage. They're literally champing at the bit. They just can't wait to get their hands on the budget and start slashing away.
And don't believe the hype about European unity or saving Ireland. My ass. This is about bailing out the banks. The bondholders get a free ride while workers get kicked to the curb. Here's a clip from the Financial Times that spells it out in black and white:
"According to data compiled by the Bank of International Settlements, the three largest creditors to the Irish economy at the end of June...were Germany to the tune of €109bn, the UK at €100bn and France at €40bn. These sums amount to 2 per cent of France’s gross domestic product, 4.5 per cent of Germany’s GDP, and 7 per cent of British GDP."
See? Another bank bailout. Ireland is being asked to cut to social services, slash wages, renegotiate contracts, and dismantle the welfare state so that undercapitalized banks in France and Germany can get their pound of flesh. But, why? They're the ones who bought the bonds. No one put a gun to their head. They knew they could lose money if Irish banks went south. That's the risk they took. "You pays your money, and you takes your chances." Right? That's how capitalism works.
Not any more, it doesn't. Not while Cowen's in charge, at least. The Irish PM has decided to bail them out; make all the bondholders "whole again." But who made Cowen God? Who gave Cowen the right to hand over his country to the IMF?
No one. Cowen is a rogue agent kowtowing to international capital. After he finishes his work in Ireland, he'll probably join globalist Tony Blair on the French Riviera for a little hobnobbing with the tuxedo crowd.
It's revealing to watch the way Cowen works, as though the interests of foreign bankers mean more to him than those of his own people. For example, the Green Party withdrew from the government last night calling for new elections, but even though the government is in a shambles, the slippery Taoiseach wants to stay in power long enough to push through a new 4-year budget that will leave Irish workers on the brink of destitution. Who is Cowen working for anyway?
This is from the Irish Times:
"Opposition parties have today stepped up pressure on the Government as it seeks to push ahead with passing next month's budget.
Fine Gael again called for an immediate general election and said the four-year budgetary plan should only be implemented by a Government which has a proper mandate....
"What is best for the country is that the negotiation about a programme for four years be done by a government which has four years to serve, that has a mandate from the public so that it has the authority and the credibility to not only develop and negotiate it but to implement it. I think that is in Ireland's best interest," he said. ("Opposition steps up pressure", Charlie Taylor, Irish Times)
The prospective belt-tightening measures will include the firing of 28,000 public employees, a boost in property taxes, a 10 percent cut in welfare benefits, and higher taxes on low-wage workers. Cowen believes that taxing low income families is preferable to making billionaire bondholders eat their losses. The whole thing stinks to high-heaven.
Is there a way out for Ireland? Economist Mark Weisbrot thinks so. Here's what he thinks should happen:
"The European authorities and IMF can loan Ireland any funds needed in the next year or two at very low interest rates....Once these borrowing needs are guaranteed, Ireland would not have to worry about spikes in its borrowing costs like the one that provoked the current crisis....The European authorities could scrap their pro-cyclical conditions and, instead, allow for Ireland to undertake a temporary fiscal stimulus to get their economy growing again. That is the most feasible, practical alternative to continued recession.
Instead, the European authorities are trying what the IMF... calls an "internal devaluation". This is a process of shrinking the economy and creating so much unemployment that wages fall dramatically, and the Irish economy becomes more competitive internationally on the basis of lower unit labour costs."
It's all de rigeur for the IMF. It wouldn't be an IMF program unless someone was starving. That's the benchmark for success.
Ireland doesn't need structural adjustment programs that shrink GDP, dismantle popular social programs and strip wealth from workers when low interest funding and fiscal stimulus can bring the economy back to life. This is politics not economics. The EU and IMF are using the crisis to push through their own agenda. Their real goal is to crush the unions, shred the social safety net, and roll back the gains of the Progressive Era.
The Irish people are left with no choice but to resist. Presently the Cowen government is collapsing. Bravo. Now it's off to the barricades to see if the damage can be undone. Ireland needs to withdraw from the EU and start fresh. It'll be a bumpy road at first, but there's no other way. Economist Dean Baker sums it up like this in an article in The Guardian. Here's what he said:
"Even a relatively small country like Ireland has options. Specifically, they could drop out of the euro and default on their debt....Like Ireland, Argentina had also been a poster child of the neoliberal crew before it ran into difficulties.
But the IMF can turn quickly. Its austerity programme lowered GDP by almost 10% and pushed the unemployment rate well into the double digits. By the end of the 2001, it was politically impossible for the Argentine government to agree to more austerity. As a result, it broke the supposedly unbreakable link between its currency and the dollar and defaulted on its debt.
The immediate effect was to make the economy worse, but by the second half of 2002, the economy was again growing. This was the start of five and a half years of solid growth, until the world economic crisis eventually took its toll in 2009."
The Irish people didn't struggle through centuries of famine and foreign occupation so they could be debt-peons in the EU's corporate Uberstate. Like Sinn Fein president Gerry Adams said, "We don't need anyone coming in to run the place for us. We can run it ourselves." Right. Tell the EU plutocrats to take their Utopian Bankstate and shove it.
"Once again, fishing illegally in New Zealand waters has proved expensive for the owners of a foreign fishing vessel. The Taiwanese owners of the Vanuatu flagged tuna long-liner Fu Chun 126 have acknowledged that their vessel fished illegally in New Zealand waters and have paid $NZ220,000 in sanctions to the New Zealand Government.
Another tuna long-line vessel was also identified the same day by the RNZAF crew, around 12 miles away from the Fu Chun 126. The owner of that vessel, the Taiwanese flagged Ta Chun 101, also made a payment of NZ$220,000 to the New Zealand Government in September 2010 after acknowledging the vessel had breached New Zealand fisheries law." voxy.co
Wow what a punnishment...one tuna $80ooo....done it many times caught once....hahahahah
and after a quick name change and a few bucks to their corrupt local officials...it's straight back down to Noddy waters to fill the hold with more tuna....
Finance sector regulation, mortgage securitisation, SOE market intermediaries, tax rates, fiscal policy, loose monetary policy, all "contribute" to these housing bubbles. But there is only one underlying "causative" factor. More on that later.
For those who think "regulatory bodies" are the answer, can someone point to ONE example in the world of a "regulatory body" that was responsible for stopping a housing and mortgage debt bubble?
ITEM 7: "........The Democrats thought it was wonderful to support home ownership for the poor, their natural constituents.
The Republicans figured property owners would eventually vote Republican. Congress, of course, can't make loans. But Fannie Mae and Freddie Mac both enjoy this tremendous government subsidy, and politicians used that as a lever.
So you had a massive amount of money flow into housing. Homebuyers were told there was no risk of loss -- that ever since the Depression we've never had an across-the-board housing price fall. They were also told homes are a great way to build equity, and you can borrow against that equity.
The brilliance of the home-equity loan, which was a substantial feeder of consumption growth, was that people could borrow without guilt because the rise in home values offset that additional borrowing......".. ...............""""
WHO, anywhere in the world, saw anything wrong with that? Politicians? Bankers? Regulators?
Actually, no other nation had any equivalent of Freddie Mac and Fannie Mae, no other nation had any equivalent of Greenspan's ultra low interest rates, no other nation had any equivalent of Wall Streets Mortgage backed gambling system; YET, 13 out of 17 OECD nations SIMULTANEOUSLY had a housing bubble bigger than the single biggest single-nation one observed by the OECD.
There is ONE deciding factor. Urban planners enabling a de facto racket in urban fringe land. Australia, tick. Ireland, tick. China, tick. Spain, tick.
Who missed having this bubble? Most metros in the USA and Canada; Germany, Switzerland. Check out the price of their urban fringe sections. There's your answer.
Phil this is a narrow description of the causative factor. Given that a loan prints money into existence the second that you extend a loan on an existing asset, three to ten times the original cost to build, that has little or nothing done to it since the time it was built then you have facilitated inflation right there and then. Of course for a Govt there's two ways to stop this; - one on the underwriting standards side (decrease loan to valuation ratios), artificially increase interest rates (fail), reserve ratios. - The other on the supply side, depress prices by selling it's own housing stock, building & selling houses at cost, and freeing up land. But in the end if there is no work no one can afford a house. If banks want to lend into housing instead of productive businesses, good luck to them but let them go bust when it all goes wrong. If the Govt created the conditions where there was productive enterprise why would it (or councils) need to get involved in social housing? I just don't see how freeing up land is "a" or "the" solution. This is not sustainable in the long term. Back in 2004 when I was bemused by the fact that a rising OCR caused a "mortgage war" between banks, before I knew about Uradashi's and the world bank's involvement in them and before mortgage brokers drove around in yellow Dodge Ram Hemi supercharged SUV's I would have laughed at Iain's suggestion that it was all planned. Now I'm not so sure.
Yep - the hypothesis is that urban planners - the rotters - set out to swindle good, honest, socially-useful developers.
Then you defend it.
Blindly.
Mathematically, in a regime of growth of global activity, the latest bubble will tend to be the biggest, and the one at the peak (there's always a peak with exponential growth) was always going to fail to be underwritable.
Who cares what the bubble was? Sure, there will be folk who stay too long and get burned - see that Sharon Astyk piece - she likens it to a fire in a theatre, and a stampede for the door. It wouldn't have been a bubble without them, would it?
Any exponential growth - including bubbles - will come up against the ceiling with a thump. It's to do with momentum - mass vs time.
PDK
If developers and planners had a clue they would be pricing oil at $150 by mid next year in their spreadsheets, so we at least have a chance, and within 3 years "the unit of account" won't be the USD so in a sea of competing fiats it's priced in ounces of gold and what it is in USD will be irrelevant. What do you reckon oil's price is in gold right now?
I'm reading the Daily Bell http://www.thedailybell.com/1554/The-Insider-Trading-Promotion.html at the mo and after my chores will have a look at what Sharon Astyk writes.
here it is:
http://www.energybulletin.net/stories/2010-11-23/how-not-write-essay-oi…
it's worth reading the article she critiques, and comparing it to Roger Kerr's little effort. She trashes the better one!
Yes, the new Dunedin Mayor is Peak Oil savvy, knows that debt will be sequentially harder to service. It's coming - just too late. I guess that would always be the way - Easter Island, the Greenland Norse, the Romans, Maya - if they reacted at all, it went unrecorded. Possibly that is because of the societal stress at the time, but most likely they actually intensified doing what they knew.
With all those historical precedents, I find the 'we need more cheap land' nonsense quite amusing.
As for oil - yes, the days of $30 barrel oil (the IEA forecast to 2020 3 years ago, I seem to recall) are long gone, and every time things look better, the price will ramp until they don't.
PDK
All I can do is cut and paste this piece of truth telling from that Daily Bell article
"... irradiated parts of the Middle East, caused the death and suffering of untold thousands, including their own troops; sent unmanned drones into houses containing women and children; gunned down reporters and civilians from helicopters; refused to reinvestigate 9/11 despite evidence that shows that military intelligence and the Bush administration lied repeatedly about it; created a Homeland Security department that spends further billions "keeping America safe" with the flimsiest of rationales; distributed backscatter scanners that produce an unknown amount of radiation aimed at recipients; further poisoned senior citizens and children with vaccines that are evidently and obviously unsafe; attacked the natural health and vitamin industry with an eye toward making natural nutrition illegal; prosecuted medical inventors who have apparently created cures to numerous supposedly incurable diseases; participated in the growth and dissemination of Afghan heroin (overseas and likely at home); pursued a drug war that has poisoned addicts and ruined the lives and families of millions and undermined whole countries (Colombia and Mexico most recently); instituted the unnecessary and invasive "war on terror" and suspended civil liberties to do so; exhibited strange intimacies with "terrorists" who supposedly had in mind setting off explosives on planes; advocated torture and rendition as a matter of policy; declined to investigate more than US$2 trillion in mislaid Pentagon funds; misspent more trillions on failed, bloody wars; appropriated US$700 billion from the public treasury to pay off crony "banksters"; spent another US$2-10 trillion (no one knows how much) on illegally bailing out banking entities worldwide; evidently and obviously manipulated the gold and silver markets, costing investors untold billions if not trillions over at least two-three decades; removed the dollar (and the pound) from the gold standard and further debased the currency; created a tax structure that allows corporations to opt out but endlessly punishes and threatens the middle class; allowed the Fed to fix prices over a century long period resulting in vicious recessions and two major, worldwide depressions (including this one); bankrupted businesses and whole industries with the ongoing, debt-based, fiat-money business cycle; put millions of families out of their homes during the current downturn; created ongoing, never-ending fear-based promotions that are provably false, including global warming which has been buttressed by phony academic and UN statistics; produced a variety of certifiably manipulable electronic voting machines that lack a verifiable voting trail – resulting in an unknown amount of fraudulent elections; conspired with foreign governments to create a series of "trade" treaties that have sucked wealth and treasure from the nation; attempted to build a NAFTA "superhighway" through the center of the US, thus bifurcating and further balkanizing it with an eye toward creating a North American super state consisting of Canada, America and Mexico; created a judicial caste system that has created a slave society of 3-6 million inmates working within a prison-industrial complex; continued to pursue unconstitutional wiretapping and other privacy-invading technology via 16 separate intelligence agencies that serve the one-world Anglo-American agenda by intimidating critics and harassing libertarian-leaning legislators ..."
And then say, I was sitting in front of a vietnam vet in the plane the other day and overheard what he was saying about agent orange, looked it up and then was reminded about what it actually is. They sprayed it over enemies and friends alike.
Excuse me please for another (accredited) cut and paste, from the Daily Bell.
"Posted by John Danforth on 11/26/2010 8:58:57 AM
Another "You Lie!" moment.
The beauty of the internet is that the truth-telling virus that is eating away at the loins and joints of the beast is buried within 100 times more volume of noise.
Porn, Facebook, games, and every other imaginable useless waste of time and bandwidth make up the torrent of information. The mindless cows of society use the internet for entertainment, social contacts, and frivolity. It has become so important to most of them that any government that tried to pull the plug would risk being overthrown for it.
Add to that the time-and-money-saving nature of all the business that is routinely transacted via internet. CAD drawing files via email, conference calls, remote tech support, etc. No way could a government risk turning it all off.
No, if they want to stem the tide, they will have to attempt to filter out objectionable content somehow. But this is extremely problematic. It is extremely difficult to pull off technically, somehow the information leaks out anyway.
The intellectual revolution was born on pure-text bulletin boards. Attempts by government to filter and control information on the internet have already resulted in the public domain release of encryption technology, steganography, and other technologies; governments have lost the battle on trying to contain it. The information flow can be easily kept up on low-bandwidth encrypted channels and if necessary buried within frivolous content to escape detection. Techies will consider it a fun technological challenge game to immediately go around any restrictions imposed.
The cat is out of the bag. It's like trying to prevent information on how to make firearms, explosives, or poisons from getting into the wrong hands. It's impossible, and the attempt invites both disobedience and disrespect for those who attempt it.
Any government that talks out the side of its mouth about freedom will lose credibility if it tries to restrict content on the internet, and will not only fail but will appear ridiculous in the attempt. The only other way possible would be to scare people into avoiding the intake of dangerous information. Even this will be risky in the extreme.
The longer the information flow goes on, the more people are awakened to the nature of the relationship between the individual and the State. The tipping point of no return has probably already been reached. Who knows what the next tactic of those who believe they are destined to rule over us might be? The problem for them is that they are running out of options, and their old tools have been rendered useless."
God I remember that article, seems like a lifetime ago! A lot of water under the bridge since then. Shows the desperate powerlesness that prevails when something like this blows up - damned if you do and damned if you don't. Everyone was looking the other way, not least the polititians. What annoys me is how we (after events like this) , as a country, regularly top those fuzzy, feel good "least corrupt" poles. Actions (or rather lack of action) like this amounts to corruption as far as I'm concerned.
This is a very interesting read I think:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10690469
" Willie Nelson busted for Pot " , from the Stuff website , this shocker .............. Willie is on the weed . ....... Ummmmmm , Fairfax , d'uh ! As if anyone hasn't known for decades that the old guy likes a toke , or 6 ounces of the shit . And who cares !
Now Fairfax , big bad Brian , it is you guys that are the joke , not the singer . You're nationalising your state and regional newspapers in Australia and NZ ......... and subscribers know it ! They aren't stupid , and as falling readership figures show , they aren't buying it .
And your remedy for the firm's lack of direction , and failure to emerge from the recession , more savings from production costs . Another round of staff cuts ? ........ More of your trained people heading off to the arms of your opposition .
Geez Fairfax , you're still one of the biggest bunch of thickos on the ASX !
Interesting link and data re. Europe on zerohedge via Nomura:
http://www.zerohedge.com/article/european-debt-crisis-cheat-sheet
http://www.benzinga.com/10/11/646596/ireland-is-bankrupt-a-letter-from-…
Hope we don't end up saying this.
"I am currently dealing with a legal threat from a Property Syndicator backed by a big Auckland law firm after I wrote a critical column."
Until the Govn acts and gets the financial industry in order, then anyone would be stupid to invest in sectors who do things like this....
regards
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