Here's my Top 10 links from around the Internet at 10 past 7 pm in association with NZ Mint.
I'm a Crusaders supporter today. To be fair, whenever any New Zealand team is playing the Waratahs, I'm going to support the New Zealand team. But the guys in red and black are definetly my team tonight too. Go the Crusaders.
I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
1. How to get rid of the US dollar - China seems desperate to break the US dollar's role as the world's reserve currency, for obvious reasons.
It wants to be less exposed to all that risk tied up in US Treasury bonds at the moment.
So it is doing all it can to help reduce the dependence of its exporters and importers on trading in US dollars.
What better solution than to allow traders to settle all their trades in yuan and start using it as the reserve currency.
Reuters reports the People's Bank of China as saying overnight it wanted to allow all traders to settle in yuan by the end of this year.
The International Business Times has this take on a barely reported announcement. HT Zerohedge
Moreover, China will “respond to overseas demand for the yuan to be used as a reserve currency” and allow the yuan to flow back into China more easily. This is all part of China’s plan for the internationalization of its currency, which may, in the decades to come, threaten the global ‘market share’ of other currencies like the US dollar.
Previously, China also announced that bilateral trades with Russia and Malaysia will begin to be conducted with the yuan and the ruble and ringgit, respectively. Other moves on the part of China to internationalize its currency include allowing foreign companies to issue yuan-denominated bonds and relaxing rules for foreign financial institutions to access the yuan.
2. One reason Kiwis might not move to Australia - It now costs so much to live there. Simon Mortlock at eFinancialCareers held a forum with 16 recruiters from financial organisations and found living costs were a major problem for Australian recruiters trying to hire overseas right now.
Maybe this is an opportunity for NZ recruiters, to point out we're a bit cheaper than Australia.
Another reason why we have to get house prices down somehow...particularly in Auckland.
Representatives from several large firms said the rising cost of living in Australia is making it more difficult to recruit or internally relocate overseas candidates, especially professionals with young families.
Candidates from Europe think Australia is a “paradise where the sun always shines” and they have high expectations about working here, said one delegate. But that’s before they do the salary, tax and cost of living calculations, he added.
“Global competition for talent is heating up, especially with the growth of Asia, and we have recently lost candidates from Europe to low tax places like Singapore and Hong Kong,” said another attendee.
Employers need to re-educate candidates that Australia is not a cheap destination. “It’s very important to mention costs early on in the hiring process. We don’t want to get to offer stage and they say ‘wow, Australia’s so expensive, no thanks'.”
3. Customer satisfaction - Australian bank customers 'can't get none'. Choice published a report this week for the Australian government with a bunch of recommendations to improve competition in Australia between the banks.
Although Elizabeth Knight at SMH.com.au does point out that National Australia Bank is now trying hard to break up with the other banks and force some competition.
More recently National Australia Bank has led the charge on the introduction of discounting/abolishing some bank fees. A rather catchy advertising campaign has been mounted by NAB around breaking away from the industry.
Findings published yesterday from a brand research group, Forethought Research & Forebrand, suggest NAB has overtaken the Commonwealth Bank as most price competitive by consumer measure. The others have moved - kicking and screaming - to match these initiatives.
But Choice has a few more recommendations on how to improve competition.
Top of this list is remuneration for bank executives based on customer satisfaction. While this is already one of many features included in the composition of executive bonuses, it should probably receive a bigger weighting. But this is an issue that bank boards need to decide on rather than have regulated or legislated.
The portability of account numbers between banks is one that probably falls into the too-hard basket at this stage despite the fact that it operates in other industries like mobile telephony. Even Swan signals this as difficult.
Here's Wayne Swan...and Joe Hockey talking about carbon prices...
4. The Marxist critique - I've referred to this entertaining version of a Youtube verrsion of a speech by British academic David Harvey before.
But it's worth repeating, given news from FT.com this week that the Top 10 hedge funds made US$28 billion in the second half of last year, which was more than profits from Goldman Sachs, JP Morgan, Citigroup, Morgan Stanley, Barclays and HSBC combined. We're talking about US$28 billion in earnings for a few hundred people.
The hedge funds of course are not restricted by regulations from leveraging up with cheap borrowing under the Fed's print and trickle down policy.
Is this the solution? Matt Taibbi recently asked in Rolling Stone why no one from Wall St was in Jail.
And here's the response.
Sorry I meant here's the response.
5. Stresses in Saudi Arabia - Oil traders are nervously watching the political situation in Saudi Arabia, where the king rules and a lot of angry young men in the east of the country are demanding housing and jobs and the like. As Bloomberg reports in this story, it's proving difficult for Saudi Arabia to solve its housing problem because there is such little lending for housing.
The King's pledge this week to spend a further US$15 billion on housing is just a drop in the bucket.
Much of the property investment in recent years has gone toward the upper end of the market or on commercial real estate without addressing the housing needs of the wider population. Banks have shied away from mortgage lending in Saudi Arabia because of unclear regulation that could lead to lengthy court disputes in cases of default, leaving the country’s real estate fund unable to meet the demands of a growing population.
Less than 1 percent of all Saudi home purchases are financed by mortgages. That compares with 7 percent in the neighboring United Arab Emirates and 66 percent in the U.S., Deutsche Bank estimated in November.
“To say this is scratching the surface is perhaps too derogatory, but it’s very partial solution,” Kotilaine said of the increased spending on housing. “The kinds of numbers that we are seeing in Saudi Arabia are going to require a solution of a completely different magnitude.”
6. The problem with oil - There's isn't enough of it to meet rising demand. Here's The Economist with an excellent precis of the overall situation.
OPEC’s spare capacity now is put at anything between 6m b/d (by OPEC) and 4m-5m b/d (by industry analysts); Saudi Arabia’s share of that excess is perhaps 3m-3.5m b/d. The oil price has retreated from its peak in the past ten days largely because Saudi Arabia says it is pumping up to 600,000 b/d to replace the shortfall in Libyan exports. It has invested heavily in expanding capacity, with plans to spend perhaps $100 billion on wells and infrastructure by 2015. It has also been far more open about letting the world see what it has done. OPEC’s stated aim of stabilising oil prices relies on traders believing that the Saudis really do have the capacity to pump more when prices rise.
Why, then, are traders still so nervous? The answer is that the long-term trends of supply and demand were already unfavourable when the Arab shoe-throwers intervened. Before the uprisings, a barrel of Brent crude was commanding close to $100 a barrel. World demand grew by an extraordinary 2.7m b/d in 2010, according to the International Energy Agency. It will probably keep growing by another 1.5m b/d this year and the same again next, as the rich world recovers and demand surges in China and the rest of Asia.
Net expansion of non-OPEC supplies is likely to be negligible in the coming years. Though the rich world’s inventories are high, with cover of around 50 days, it is not clear that Saudi Arabia can pump much more than it did in 2008; and the speed of oil released from government reserves, such as America’s Strategic Petroleum Reserve, also has upper limits. If disturbances hit Algeria and threaten its oil industry too, the buffer of spare capacity would fall below where it stood in 2008. But demand now is much higher, so spare capacity as a proportion of that demand is much lower
7. Utah to recognise Gold - The state of Utah is about to pass legislation recognising gold as legal tender, FoxNews (!) reports. This is nearly 80 years after FDR banned it as a medium of exchange and 40 years after Nixon removed the US dollar from the gold standard.
The Utah House was to vote as early as Thursday on legislation that would recognize gold and silver coins issued by the federal government as legal currency in the state. The coins would not replace the current paper currency but would be used and accepted voluntarily as an alternative.
The legislation, which has 12 co-sponsors, would let Utahans pay their taxes with gold and also calls for a committee to study alternative currencies for the state. It would also exempt the sale of gold from the state capital gains tax. The bill cleared a state legislative committee on Wednesday, the first of 11 similar bills in statehouses across the country to do so.
8. Here's a global map of fiscal risk - New Zealand is seen as in the same boat as Canada, America and Australia, but not quite as bad as most of continental Europe, this report from Maplecroft says.
9. Today we are all wearing red and black - The team at ASB dressed in Westpac colours to show their support for Christchurch. And then tweeted about it. To which Westpac NZ responded in good humour. Nice to see inter-bank rivalry being put aside for a day or so.
We are all with Christchurch today.
10. Totally unAmerican video - A guy walks across America in a very sped up fashion. This would never happen in real life.
Americans tend not to walk anywhere when there's a gas guzzlin' pickup they could drive instead.
11. Totally American video - An Islamic community group in California tried to have a fundraising dinner for a women's shelter.
Then this happened. This video is worth watching to see just how broken and divided and hopeless America is right now.
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