Here are my Top 10 links from around the Internet at 10 past 1 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 Wednesday's Top 10 at 10 via email to bernard.hickey@interest.co.nz.
I'll pop any surplus suggestions I get into the comment stream.
1. Here comes Wikileaks to a financial market near you - Julian Assange says in this Forbes interview that he has leaked documents that make take down "one or two" large US banks.
Yikes.
Wikileaks has already caused a stir in diplomatic circles, revealing that Saudi Arabia wants America to "cut off the head of the snake" (bomb Iran), that China is sick of Kim Jong Il and wants North Korea to unify with South Korea, and that Prince Andrew fancies himself as an entertainer/diplomat.
Now the blonded one is sitting on financial dynamite.
Could it be the Goldman Sachs?
He says it will be like the Enron.
It will give a true and representative insight into how banks behave at the executive level in a way that will stimulate investigations and reforms, I presume. Usually when you get leaks at this level, it’s about one particular case or one particular violation. For this, there’s only one similar example.
It’s like the Enron emails. Why were these so valuable?
When Enron collapsed, through court processes, thousands and thousands of emails came out that were internal, and it provided a window into how the whole company was managed. It was all the little decisions that supported the flagrant violations.
This will be like that. Yes, there will be some flagrant violations, unethical practices that will be revealed, but it will also be all the supporting decision-making structures and the internal executive ethos that cames out, and that’s tremendously valuable.
2. America's courts choked with debt collectors - This WSJ piece details the problems in America's court system with a mountain of foreclosures and law suits against people who have defaulted on their debts. The scale of the problem is sobering. HT Andrew via email.
Handing debt over to collectors is an important step in cleaning up the financial system, but the explosion in lawsuits—many for small sums—creates problems for the legal system.
"There exists a real danger that the courts will be perceived as mere extensions of collection agencies," says Thomas Donnelly, an associate judge in Cook County, Ill.
There are no nationwide figures available, but a survey of 20 judges across the nation by The Wall Street Journal yielded anecdotes of court calendars choked with debt-collection suits. For example, Judge Donnelly says he has heard as many as 400 cases a day, filed by debt buyers, debt collectors and their attorneys who have often lugged their filings to his courtroom in crates.
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3. An efficiency problem - CNN Money reports China is now the world's largest energy consumer, largely because its industrialisation and use of less energy efficient steel plants. It is also using an awful lot of iron ore, which is keeping the Australians happy.
"They are building massive amounts of infrastructure," said Lynn Price, a scientist in the China Energy Group at Lawrence Berkeley National Laboratory, a U.S. Department of Energy research lab. "It takes incredible amounts of these energy-intensive commodities."
Over the next 15 years China is expected to build the equivalent of New York City -- 10 times over. The Chinese use a different technology than that used in the United States, the result of having to use more iron ore and less recycled steel in the manufacturing process.
4. Too right - Andrew Gawith writes at NZHerald that our most important industry, agriculture, appears to be one of our least commercially rational.
The idea that businesses should generate a return sufficient to cover the cost of capital doesn't seem to apply to farming. That is, the yield most farmers and horticulturalists achieve does not cover the cost of fully funding the market value of the assets they purchase. It seems silly to have so much of the nation's capital tied up in businesses that don't meet this basic financial test.
The rise in land values over the past 20 years may, of course, largely reflect financial deregulation and falling inflation. Lower funding costs (interest rates) have made it easy for purchasers of land to pay more.
The downswing in interest rates has now played out - the best that can happen from here is that interest rates stay low. Higher interest rates are more likely, and that would most certainly cramp land price inflation.
5. 'The Germans aren't as as righteous as they appear - Marshall Auerback at Credit Writedowns points out that the German banks lent like drunk sailors to the Irish and all the smug German voters bleating about having to bail out the profligate on the periphery are a bit too cute.
Auerback predicts a Yugoslavian style break up of the Euro-zone. Ouch. Today's must read
The truth of the matter is this: the eurozone seems rotten to the core, literally. Germany represents that core. The Germans might occupy the penthouse suite, but it is the suite of a roach motel. And we know what happens to those who enter such “ establishments.”
Yes, longer term the problems currently afflicting the eurozone could be sorted via the creation of a supranational fiscal authority — a “United States of Europe”. But with each crisis (Ireland today; Portugal and Spain tomorrow; Italy and then France next?), the political forces are coalescing in a radically different direction.
The Germans are becoming increasingly resentful as they perceive their country as the bailout mechanism of last resort (even though the Irish experience suggests that their bankers are also guilty of many of the same excesses as the “Celtic Tiger”). The PIIGS themselves are seeing that the benefits of euro membership have been vastly overstated and in fact now act as a cancerous influence through the Germanic embrace of austerity.
(Paradoxically, it has been the “profligate” behavior of those so-called lazy Mediterraneans that has enabled Germany to retain its export-driven model, as well as allowing it to run lower budget deficits than most other countries.)
6. Nick Leeson says Ireland should default - The Galway City Tribune (yes I spread a wide net) reports international financial markets expert Nick Leeson now lives in Ireland and thinks it should default on its debts. Chortle.
The trouble is he is right, despite being the ultimate rogue trader. Leeson is now the CEO of football team Galway United.
Nick Leeson, who was sentenced to six and a half years in a Singapore prison for his actions at Barings Bank, says that given the relatively small size of the Irish population, the country cannot afford the bailout being offered to the Irish Government as it would cripple the country for years to come.
“Ireland has to default on its debt to the bond holders, and the time to do that is now – if you get involved with the IMF, it will be too late,” said Mr Leeson, who now works as CEO of Galway United.
“The Government needs to postpone the budget, resign and call a General Election, because any other course of action will be too severe for the country. The size of the bailout being discussed cannot be repaid by a country with a population of less than five million people, it just can’t be done.
5. 'Time to tighten' - Caixin online reports that a new member of China's monetary policy committee is saying it's time to tighten China's loose monetary policy.
Li Daokui, who was added to China’s monetary policy committee earlier this year, said the loose monetary policy was introduced to stimulate the economy affected by a sharp export decline in the wake of the global financial crisis.
6. Problems in the China miracle? - Morgan Stanley's Chief Economist for China Wang Qing writes at China Stakes that China's Business Conditions Index fell sharply in November.
This is a weaker reading for two consecutive months since October, pointing to a significant deterioration in business conditions amid rising inflationary pressures and attendant policy uncertainties. Renewed uncertainties about the economic and policy outlook of late may have contributed in part to the softening in MSCBCI.
First, the rise in inflation will likely trigger further policy tightening, and monetary and credit conditions will turn much less accommodative. We expect new bank lending for 2011 will likely be set at Rmb7tn and three 25bps interest rate rises through mid-year.
Second, the effect of anti-inflation policy will be reinforced by existing austere measures against property market speculation, pointing to deceleration in growth down the road.
7. 'Sucking out the cash' - Beijing University Economics Professor Fan Gang (great name) writes here at Project Syndicate that Chinese authorities have been successful so far in sucking a lot of liquidity (cash) out of the economy in the wake of a massive build up of foreign reserves, which normally create a money supply surge and inflation.
China is using 'unconventional' ways of tightening monetary policy rather than putting up interest rates. It is soaking up cash with various sterilisation measures and locking up some of the rest by increasing reserve asset ratios (RRR) at its banks, forcing them to leave money on deposit with the Peoples Bank of China.
In September alone, China’s foreign-currency reserves increased by almost US$100 billion compared to August. With the global economy recovering, China’s trade surplus began to grow. Moreover, capital inflows increased significantly, owing to real investment opportunities in the high-growth economy and the expectation of renminbi revaluation.
But rapid growth in foreign-exchange reserves means an increase in the domestic money supply, because the PBC issues RMB6.64 (down 3% since June) for every dollar it receives. That means that money supply increase by nearly RMB700 billion in September.
The two 50-basis-point RRR increases just locked up the same amount of liquidity. A country with current-account and capital-account surpluses and increasing foreign-exchange reserves normally sees an excessive money supply and high inflation. But, while excessive money supply is a reality for China – the PBC now holds more than US$2.6 trillion in foreign reserves – inflation has been quite moderate so far, thanks to the sterilization policy.
8. Not a good position - New Zealand has one of the worst current account deficits in the world, this great list from the IMF on Wikipedia shows.
9. Totally hilarious video - RIP Leslie Nielson. This video is funny. Sad to hear he's gone. 84 not too bad though. HT Alex.
10. Totally political video - Johnny Carson pretends he is a politician who is hooked up to a lie detector. There's a lot of buzzing. You may need to turn down your sound. HT Cosmo
71 Comments
Clearly, the Debt Crisis Is Accelerating. .............. the Bailouts Are Not Working!
Remind me again , why are we bailing out , are we sinking or summit ?........... If bankers and investors make dumb decisions ............ We bail them out , why ?
If bondholders accepted a 5 % coupon rate , then they didn't do due diligence , they oughta arsked for a 40 % yield on those Iceland / Irish / Pork'n Cheese certificates .
And the bankers who lent 'like drunken sailors ........... f*ck them ! The survivors and new-comer bankers will have learnt a valuable lesson .
I don't know Bernard...can't seem to see what all the fuss is about...the piigs govts need trillions of euro so they can pay back the banks...the taxpayers fork out the loot or have it stolen from them at gun point to pay back the ECB and IMF which dreamed up new money to lend to the piigs for the purpose of bailing out the banks...then the piigs govts borrow more credit from the banks and dish it out as benefits and Keynesian pork...which means everyone is happy and all the fat bankers get to keep their bloated salaries and bonuses...so they can donate heaps to the pollys in power...leading to policies that protect the banks and bugger the peasants...seems fair to me!
meanwhile.....the latest from the US dairy farms........
Dairy Farmers Miss Boom as Feed-Cost Surge Compounds Milk Glut#8 is for 2007
From NZ stats Table 8 http://stats.govt.nz/~/media/Statistics/Browse%20for%20stats/BalanceOfPayments/HOTPJun10qtr-correction/bopiip-jun10qtr-tables-corrected.ashx
2007 -14459 (NZD)
2008 -16234
2009 -5204
That hobby horse is getting another flogging!
Jun 2010 -5600
And a big chunk of Dairy Holdings is on the block - http://www.nzx.com/news/4403532/Big-chunk-of-dairy-firm-goes-for-sale
And remember the RBNZ reckons SCF paid almost twice as much as it should have - http://www.interest.co.nz/news/south-canterbury-finance-paid-almost-twi…
I'll be interested to see whether they can even sell it. Seems a strange time to try...Maybe the banks want their money back.
Possibly they spot the window of opportunity to grab some " hot " Chinese money , and to get out with a haircut , rather than be totally scalped .......... Hanover investors who got Allied Farmers shares have seen the folly of holding and hoping . Learn from their lesson ..... Take the loot and scarper !
GBH, very negative today. For the right price Dairy Holdings is an attractive asset and should (if NZ’s capital markets really functioned) be an attractive asset for real mum & dad New Zealanders to own. As we all know dairy is the bed rock of the NZ economy and currently Mum & Dad can’t invest in this sector without the joys of investment syndicates with little liquidity, diversification and obscene management costs.
Listing this asset would be a great move (Plus the Kiwisaver funds should be looking at getting in on this one too). Dairy Holdings is the old bones of Howard Paterson’s Tasman Agriculture & Dairy Brands – which had a great dividend stream. Until Ray Parker got too bored running it.
If you could get Dairy Holdings to list at say an enterprise value (we don’t know the debt levels) of $25/kgms and a commitment to pay dividends, it could be quite lucrative. Murray & Co. have the ability to do this and have an ACC investment committee member on their Board – Come on NZ lets back our own!!
I am probably dreaming but it disappoints me that Olam, Mitsui or Bright are likely to get hold of such significant part of the NZ economy.
Would you pay an 80 % premium for a property ? They paid $ 76 million for $ 42 million worth of dairy farms .......... How dumb is that ! ....... But you gotta laugh at that sly old fox Alan Hubbard , he's still firing on all cylinders . ...... And he sold some of the bedrock of the NZ economy , as you put it . Why do you suppose he did that ?
GBH, very negative today. For the right price Dairy Holdings is an attractive asset and should (if NZ’s capital markets really functioned) be an attractive asset for real mum & dad New Zealanders to own. As we all know dairy is the bed rock of the NZ economy and currently Mum & Dad can’t invest in this sector without the joys of investment syndicates with little liquidity, diversification and obscene management costs.
Listing this asset would be a great move (Plus the Kiwisaver funds should be looking at getting in on this one too). Dairy Holdings is the old bones of Howard Paterson’s Tasman Agriculture & Dairy Brands – which had a great dividend stream. Until Ray Parker got too bored running it.
If you could get Dairy Holdings to list at say an enterprise value (we don’t know the debt levels) of $25/kgms and a commitment to pay dividends, it could be quite lucrative. Murray & Co. have the ability to do this and have an ACC investment committee member on their Board – Come on NZ lets back our own!!
I am probably dreaming but it disappoints me that Olam, Mitsui or Bright are likely to get hold of such significant part of the NZ economy.
Who's gloomy , when the " Pink Pussycat " night-club is just across the road ........... The trick is getting across the road without having your pockets picked , or having a jeepney mow you down .
Did'ya see building consents roar up 9.3 % in Australia . ........... And Bernard thinks that " the bubble has burst " .............. Poor deluded boy ....... The bubble may be deflating , losing air slowly , kind of 'like one of those farts yer grandad used to do , that went on and on , seemingly endless . ...........Hardly a " burst " .
#4 - complementary:
http://www.stuff.co.nz/sunday-star-times/business/4395255/A-deficit-of-debt-ideas
"Rod Oram asks the question, "Shouldn't we finally get serious about transforming the economy?"
Answer, "No freaking way if it risks disturbing OUR status quo - get real Rod! Plus, we don't like that MMP thingy, coz it's harder to, directly, dictate the things we want toward supporting our 'Fiefdom for Feudalism', or FF for short."
Sad, but true.
Cheers, Les.
Les : Do you get the niggly naggly feeling that " NZ Inc. " is a slow moving train crash ? That the pollies on both sides will fudge and deny , until crisis forces them to act .
Kind of alike the crisis that gave birth to the Lange/Douglas reforms . ............. We seem to have forgotten our own history . A period of sobering up after the property boom party seems inevitable .
We haven't all forgotten GBH....why it was only today I imparted that little gem to ROBO.....have you finished the guest house yet...?and do try to put some fish in the bay prior to arrivals....I am soooooo warming up my hunter gatherer skills......the big dry almost over is it..?
The big wet is finished , typhoon season ending ......... Come on over . Sadly for me though , I'm still as dry as a dingoes arm-pit ...... doctors' orders !
Currently in Manila , the big smoke ........... and that is literally , you gotta see the brown sky , full of diesel fumes .
But the city is bustling with construction . A far cry from 2001 , when I first visited .
There is a family of pick-pockets around here . One needs NuSkin as I banged the taxi door on her arm when she tried to steal my Gummy bag ! ............ I noticed bandages on her fingers , clearly she hadn't learnt from previous attempts at theft .
[ Yeah , got the " big dry " reference ........ Trying to blank out the thought of plonk . The next time I get a bottle of SM Pale Pilsen in my gummy mitt , I'm gonna start singing that old Herb Alpert ballad , " This Guy's In Love ! " ]
Yeah , we fly through Cebu when it's practical to do so . But Manila is progressing . And alot more foreign money in here .
Samal Island sounds great . We had a trip through Cagayan de Oro / Bohol - Panglao / and Camiguin . Brilliant !
We quit NZ in September . ............ Awesome little country ............ But being screwed alternatively by either the Labour party as government , or by the National party .
its only funny cos it's true.....
i'd like to peg their salary to inflation too.....
and make them stay in university halls style accomodation.....
and replace Gerry Brownlee with Farouk al-Kasim....
and include a 'none of the above' box on the ballot paper and that vote to be counted as a cast vote...
and introduce a prohibition of deception act that makes it illegal for MPs to knowingly lie....
and make it so anybody convicted for fraud should be forced to dress as pirates in whatever job they get in the future.....
Failure is looking more likely
"Taoiseach Brian Cowen and Minister for Finance Brian Lenihan had made it clear they would not submit the bailout to a Dáil vote, he said.
However, Article 29.5.2 of the Constitution said “The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann”.
Asked if he would consider taking court action to vindicate Bunreacht na hÉireann as he saw it, Mr Rabbitte said he would “not rule out anything” but first wanted to examine the Government’s response.
Minister of State for Children Barry Andrews said the EU-IMF programme was not an international agreement for the purposes set out in the Constitution and neither the Oireachtas nor a future government was restricted by the agreement.
A Government source said yesterday a draft of its memorandum of understanding with the EU and IMF may be published later this week to give the public and the Opposition sight of the conditions attached to the €85 billion rescue package ahead of the budget.
The memorandum, which will give legal status to the bailout, cannot be formally adopted until it is approved by the IMF board in Washington. It is understood the earliest that this can be done is Friday, December 10th, three days after the budget".
http://www.irishtimes.com/newspaper/frontpage/2010/1130/1224284435830.html
This explains why all the bond owners in all the piigs, are feeling a tad sick.....
Depends on what is causing the deficit, which way it is moving and whether the economy is gowing faster than the deficit.
If the deficit is caused by importing productive equipment that will increase exports in the future then is it is not a problem.
If it continues to improve it isn't a problem.
Whatever, it is 60% better than the 2007 Wiki number.
Do you think our current account deficit is a result of buying equipment for investing in productive businesses or because we spend too much on imports of goods (and services) for consumption?
Here's what Stats NZ said with the last Current Account deficit stats.
"Consumption goods imports increased slightly, while imports of capital goods fell during the latest quarter."
cheers
Bernard
Dont need visa, with long term interest free deals GBH......Think the time to buy will be next month....DSE 48 months interest free....discounts soon as well me thinks..... So waiting for the 46inch LEDs to get sensible ie <$2k.....cheap to run and long lasting.....maybe xmas next year....no real hurry.....lets see how it goes.....
regards
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/816922…
"Spreads on Italian and Belgian bonds jumped to a post-EMU high as the sell-off moved beyond the battered trio of Ireland, Portugal, and Spain, raising concerns that the crisis could start to turn systemic. It was the worst single day in Mediterranean markets since the launch of monetary union.
The euro fell sharply to a two-month low of €1.3064 against the dollar, while bourses slid across the world. The FTSE 100 fell almost 118 points to 5,550, while the Dow was off 120 points in early trading.
"The crisis is intensifying and worsening,"............"
Yes it sure looks like it.......throw more debt at the problem of too much debt....at some point we will see that in effect the entire EU will be "socialised" the tax payer will in effect be the last lender of resort and have to buy it all.........at many times its true value/worth.
Somehow these clowns cant see this is heading towards that one ending, the EU breaks up and the debt has to be wiped.....it simply wont be paid....it cant be......at some point in the next few years voters will vote in a Govn somewhere that has the mandate to default....the difference between defaulting and paying is paying off the debt will actually be worse....ppl will I think sooner or later see that.......if of course this doesnt implode long before that.....
regards
Do you really think it can hold? (anyone?) I cant see it.....the private investor must surely see its a question of time before they get haircuts as a result from the Germans baulking...if only because its forced by the German courts....(I wish we had that avenue ie something to make Pollies carry out their promises or fall on their swords). The EU pollies are saying haircut that must surely make bond holders fill their pants....the junior ppl have taken a hair cut, bet thats the like of you and me....its now survival and the Polies hold the winning cards....well actually no one wins....maybe I should pull out some $100 bills this week.....
I love Ambrose he has a great penmanship....some of the others at te torygraph are good as well though...
regards
I'm a fan of Umair Haque. Here's why: a parable of a country that got by without banks -- Ireland
cheers
Bernard
Asking for help from our readers. We've started a page detailing how much money has been raised by property syndications in recent years. It's just a start.
Email the address mentioned with any details we've missed.
The headline is that almost a quarter of a billion dollars has been raised by property syndicators in the last few years.
http://www.interest.co.nz/Saving/Commercial%20syndications
We'll keep updating and trying to report on what's happening in this sector
cheers
Bernard
And here's Ambrose again with an excellent piece on Germany's choice. Bail out Spain or lose the Euro.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/81661…
It is clear to those working in the bond markets that the debt crisis in the EMU periphery is nearing danger point, and risks spiralling out of control as quickly as the Lehman-AIG-Fannie-Freddie crisis in 2008.
Prof Willem Buiter, chief economist at Citigroup, said last week that Portugal is likely to need a rescue before the end of the year and that Spain will follow “soon after”.
Madrid must attract €226bn of good money from Spanish savers, German pension funds, French banks, Japanese life insurers, and China’s central bank, so that an incompetent government (this one happens to be socialist, but the Greek conservatives were worse) can continue to run budget deficits of 7pc to 8pc of GDP in 2011. Why should they lend a single pfennig, having already been told by EU leaders that they will face scalping if Spain ever needs a rescue?
“The economy is highly indebted and has one of the most negative international investment positions (IIP) among advanced countries,” said the IMF. Its external accounts are under water by 80pc of GDP.
Furthermore, Spanish banks will need to roll over €220bn in 2011 and 2012, according to Enrique Goñi, head of Banca Cívica. “We’re in the antechamber of a new liquidity crisis. We’re living through a financial pre-collapse,” he said.
“All debts of Greece, Cyprus, Italy, Spain, Portugal, and Ireland will be fused immediately with German debt; a single treasury will control spending, and issue euro-bonds for all Euroland,” or some such formula.
This is the sort of game-changer that may now be required to save EMU and the Monnet dream. Germany must contemplate doing for Euroland what it has done for its own Volk in the East over the last 20 years – pay big transfers – or watch its strategic investment in the post-War order of Europe collapse with a bang, and in hideous acrimony. Tough call."
And meanwhile GBH happily sails into the sunset....
regards
Point of fact , I prefer to sup a mango slushy , served by dusky maidens , as the sun sets ...... ......... Swinging gently in my hammock , with an improving book at hand ( Niall Ferguson : The Ascent of Munny ) ............... Aha ............... Life is good steven , very good . Cheers !
Ed Harrision reckons the eurozone faces three choices: monetisation, default or breakup.
"My view is that some combination of monetisation and default is the most likely scenario for Europe."
Read more: http://www.creditwritedowns.com/2010/11/monetisation-default-dissolution.html#ixzz16k7eZu8E
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8166440…
Bernard
When you get to the stage that effectively everyone is talking about asset bubble implosions or soverign / state defaults it has to be a very brave investor still out there....every morning now I wake up expecting to see the equiv of 9/11 on the world's financial markets on TV......
GBH if you are out there....play safe.....
regards
Thanks steven ........... But the Gummy one is heartened by the incessant hickeysterical gloomsterisationalysing in the economic world today ! .. Because whilst the greater chunk of the planet's the wealth is tied up in boring old bonds , I'm running mad through the world's stockmarkets , loading up on bargains ............. And there's still alot to be had .
When the warning sirens are silenced , and the market commentators and certain financial journalists give investors the green light , to tippy-toe back into the equity markets ................ then steven , the vapour trail you see will be GBH getting the hell out !
FYI it appears house prices are starting to fall in Queensland. Is the Australian bubble about to burst?
HT Hugh
http://delusionaleconomics.blogspot.com/2010/11/truth-about-queensland…
Dwelling prices have now fallen for three straight months and are likely to continue to do so into next year. The falls aren't great and the deflate is most likely to remain mild –assuming full-time jobs can continue to be created, interest rates don’t rise too much and that first home buyers (and baby boomers entering retirement) don’t sell en masse.
Interestingly, nearly all markets are slowing down, with many experiencing falls in end value. An increase in dwellings for sale, plus tighter credit, are to blame. These conditions are likely to remain in play for much of next year. Queensland is facing a particularly hard 2011, with migration falling and approximately eight months (up from five months last year) worth of resale stock already on the market. Any hiccup in the Queensland economy could see prices fall sharply. Fingers crossed.
Wikileaks a CIA PsyOps snapped by Cryptome.
http://www.thedailybell.com/1561/WikiLeaks-Clever-PsyOps.html
What to believe?
GBH we need you......stay safe....
Interesting read at zerohedge - article suggests Americans should bail outta the place - rather the stay and fight - but, where to go?
NZ gets a great deal of mention - far more than Aus (which surprised me) - and here's the opinions of our little place in the sun from two expat Americans living in NZed;
-------------------------
I bugged out to New Zealand in 2006 and found a good job with friendly co-workers and a nice boss. No regrets. Yeah, the bureaucracy sucks but it's not as bad as in America, and it lacks the Orwellian flavor.
NZ bureaucracy tends to revolve around "green tape" and onerous planning / zoning / building ordinances. If you don't own a house or a business, it will be mostly invisible (except for the car inspection mafia, and the higher cost of living).
Overall taxes are a bit lower than in America, despite an overly generous dole and "socialized medicine" which actually works.
If any Zeroheads are interested, I can provide advice, logistical support and even free rooms, if available. Email ValisRising attttt g-m-a-i-l dotttttt com.AND
-------------------------------
I went xpat to New Zealand 4 years ago, with my wife and kids. Best thing I ever did, but also one of the most difficult. The US looks much different from the outside than it did while living there. Love NZ, though like any country, some areas are better than others. Some differences vs. the US: no capital gains tax (including on gold), no inheritance tax, simple tax code (4 page tax return max), low property taxes, firearms are legal (with a permit), public health system with an optional parallel private system, high degree of freedom and personal liberty, prostitution and gambling are both legal, very little censorship in the media, low population density outside of the cities (4M people total; only 1M on the whole south island), simple but effective legal system (4 page contract to buy a house; no huge sums awarded in court settlements), police are actually friendly and helpful -- not to mention the awesome beauty and clean air and water.
To those who think leaving the US is running away from something: I see it as running toward freedom. Most Americans have immigrant ancestors, who left their homeland in the hope of leading a better life in a land of freedom and opportunity. The same motivations, reasons and morality exist today.
My point is this that Dairy Land as an Asset is one which NZ retail investors seldom get an opportunity to participate in. Dairy Brands and Tasman Agri were both solid companies. If this could be packaged and priced correctly assuming our financial markets functioned, it deserves to be listed.
The NZ economy is largely driven by the Dairy Industry. It accounts for $11b in export revenue. GBH you must be very bearish about NZ, if you’re bearish about Dairy. Over the long-run (20yrs), it has outperformed the cash and the share market.
GBH, I should probably add that after reviewing your comments and looking at David Hillary’s blog. The shares at a $25kgms on 2009’s books possibly have a negative market equity value. At your valuation of $13.90 they are not worth much at all. Factor in share milk/management contracts, liquidity discount, minority shareholder discount and we could even guess that Shareholder Loan Guarantees are also involved it could be a lot worse.
2009 kgms
$/kgms
EV
2009 Liabilities
Equity Value
% on offer
Parcel Value
15,100,000
25
377,500,000
407,762,000
(30,262,000)
28.80%
(8,715,456)
15,100,000
13.90
209,722,222
407,762,000
(198,039,778)
28.80%
(57,035,456)
So my original qualifier stands – pricing is all important.
That said I note Alan Pye is not selling and he is definitely is not stupid.
I’m not a mind reader especially of a demented diabetic old coot, who once upon a time was a respected and intelligent businessman yet failed to retire with grace and surrounded himself with fools. But GBH, you raise an interesting point, why is Alan Hubbard still ‘firing on all cylinders’ on the Board of Dairy Holdings? Suppose he is still collecting Directors fees?
Ref: David Hillary- http://www.lostsoulblog.com/2010/08/dairy-holdings-whats-it-worth.html
The NZ economy is largely driven by the Dairy Industry. It accounts for $11b in export revenue.
And therein lies much of NZ's economic problems.
Dairy farming locks up vast swathes of the landscape and pollutes even more of it, along with the water on and under it. Yet the sum total of income derived from all of that is barely in the double figure billions.
On the other hand, a single company such as Google, IBM or Intel earns more than ten times as much (in $NZ) and employs as many people, if not more. (IBM worldwide = 380,000 employees.)
Naturally someone will attempt to claim that Google's datacentres or Intel's fabs are as environmentally damaging as NZ's dairy industry, but it doesn't take much effort to discover that's an absurd assertion.
NZ is trapped in a third-world agrarian mindset: the agindustry is determined to convince NZers that they are the backbone of the country, and NZers are determnined to believe it. Meanwhile we stay poor, polluted and stinking of cow shit, while real and tremendous opportunities for advancement and development are ignored.
Cars, cow shit and houses...the NZ obsession.
Having spent a few years living in Gran Canaria back in the late 70's I learned that the largest investors in commecial real estate where German firms. If that aplies to the other Club Med countries then one concludes that Germany is Bailing out its own investments. So the Euro crisis is born in Germany... like sour kraut.
Oh no ! Not more good news breaking out , around the world ......... Bernard , double quick , block your ears and start screaming ... " IT'S NOT GLOOM , I WON'T BUY IT " ......
...... But Lakshman Achuthan ( COO and co-founder of ECRI ) claims that the US economy , from his long-leading indicators , appears locked onto a soft landing track ........... A growth revival is imminent ! And this is good news for the bulls . It will at least support current market valuations , but not necessarily propel them further upwards .
Fingers out of your lug-holes , Bernard ..... The good news is over , for now ................ Whew !
Back to the hickeysterical gloomsterisationalysing , old buddy .
"locked onto a soft landing track "...yeah sure Gummy..so why do I have this view of a parachute slowly falling apart...the cords snapping and the sod at the bottom looking down several thousand metres at an active volcanic landscape?
You need to up your research level Gummy....the US is 40 years into the final chapter..the big decline...the end of all the ends...only the garbage loads of BS spewing from every rotten media outlet and all the govt flunkies spinning the good spin, are slowing the plunge but the red hot lava lakes are getting larger!
....... I did some research , and the red hot lava lakes appeared to be on Hawaii Island , not on the mainland USA . .............. Question for Gummy : Do I take my guidence from the Economic Cycle Research Institute .............. or from Wolly ................ ummmmmmmmm , tough one , that !
YOU did some research!.....jeez Gummy....can you do that sort of thing in a hammock where you are?.........actually the centre of mainland usa will one day be a big friggin volcanic hole in the continent when Yellowstone spits the dummy....I wonder if that's the 2012 black swan the natives were on about....
Bernard, I'm shocked. I thought you read John Mauldin. The current account deficit is the consequence of borrowing too much as a country. It is the accounting double entry to the borrowing. Fix the lack of saving problem (put up interest rates, reduce government wages) and the country's problems disappear.
Difficulty is once the number of people on the government teat (particularly high paid ones who are most culpable) gets too high it means no sane government gets elected. This is the difficulty the western democracies have.
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