Here's my Top 10 links from around the Internet at 1.30 pm in association with NZ Mint.
I'll pop the extras into the comment stream. See all previous Top 10s here.
I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
This goes with my bearish party piece from yesterday.
1. 'Borrow, borrow borrow' - Westpac, the bank that is advertising 95% home loans again most prominently, is telling staff in Christchurch to get on with the business of lending, Stuff reports.
Yet our Reserve Bank is perfectly relaxed.
It's true that lending growth is weak.
But it feels a lot like the banks are flogging a dead horse...and there's risk they over reach in that desperation to lend.
Westpac is very aggressive. As is CEO George Frazis, or as we like to call him, the NZ$6 million man.
To be fair, it's not the only one. ASB and BNZ are also very busy these days offering 90% plus home loans. ANZ and National not so much.
Here's Roeland van den Bergh reporting at Suff:
Westpac said yesterday that demand for lending had returned to levels before the September quake and it was recruiting more staff to meet customers' expectations.
Westpac said yesterday that demand for lending had returned to levels before the September quake and it was recruiting more staff to meet customers' expectations.
But Finsec legal organiser Oliver Christeller said there had been a disproportionate amount of concern raised by Westpac staff in Christchurch compared with other banks. Workers were calling on Westpac to follow the example of other banks and ease sales targets to reflect Christchurch's circumstances.
"Westpac tellers feel pressure to sell financial products where they don't always feel they are in the best interest of the customers," Mr Christeller said.
2. Inflation anyone? - NZ Funds CIO Michael Lang tells Stuff he expects inflation to go to 5-10% with in the next 5 years.
Mr Lang said the expectations in the June survey were a "20-year high" and the Reserve Bank's inability to curb it "is a precursor to inflation getting out of control".
"If businesses expect inflation to rise next year they will put up their prices in anticipation this year. This in itself creates inflation, validating their concerns and turning inflation expectations into a reality," Mr Lang said.
3. Does anyone see the irony in this? - Bloomberg reports Greece has started selling more of its main Telecom monopoly to Deutsche Telekom.
I suspect the Greeks don't (see the irony). The Germans might. Either way no one is really very happy. Some memories are long, particularly in that Greco-German relationship.
OME-OTE, the umbrella group for unions at the Greek company, said today that it would hold a series of walkouts to protest the state “retreating” from OTE. A three-hour walkout is scheduled for June 2, with a 24-hour strike called for June 9 and again on June 15.
The Greek operator saw the steepest annual loss in sales among all of Deutsche Telekom’s national units in the first quarter as phone-line users and mobile customers defected amid the country’s economic slump.
4. How the US middle class is being crushed - Businessinsider points to a new report.
The American middle class is being crushed by rising prices in everything from healthcare, to education, to food, while simultaneously suffering from a weakening employment and wage situation, according to the New America Foundation's presentation "The American Middle Class Under Stress."
The report, by Sherle R. Schwenninger and Samuel Sherraden, details how all of these factors are coming together to inhibit to damage the core of the American economy. It also details the decline in social mobility for middle class Americans and how debt is still playing a big role in the economic class' position.
5. Savers are at a disadvantage for years - Here's PIMCO boss Bill Gross on the outlook for inflation, interest rates and US debt. He's always worth a watch.
"What we're trying to do is find countries that are less financially repressed," Gross said.
“Savers are being disadvantaged” when compared with debtors, Gross said during an interview on Bloomberg Television’s “Surveillance Midday” with Tom Keene.
“What policy makers are trying to do is rebalance this imbalance, in terms of too much debt and too attractive rates on savings. It’s basically called financial repression. We call it pocket picking.”
He's talking about puting money anywhere but America, where interest rates are zero %.
How about NZ? Much higher here.
You'll have to compete with the Chinese....
6. The scale of things - Just in case you were wondering what's going on across the Tasman, the Herald Sun reports there are A$173.5 billion worth of resources projects on the go in Australia. That's equivalent to 100% of our GDP.
This figure represents 94 advanced projects -- including big iron ore expansions by BHP Billiton, Rio Tinto, Fortescue Metals Group and the $US16 billion Gladstone LNG venture.
Another 305 earlier-stage projects were in the pipeline, the Australian Bureau of Agricultural and Resource Economics and Sciences said.
"Commodities attracting the most investment are oil and gas, iron ore and coal and associated infrastructure, which collectively account for around 92 per cent of all committed capital expenditure," ABARES acting deputy executive director Terry Sheales said.
7. Not long - How long before Hong Kong drops the Hong Kong dollar in favour of the yuan? Simon Black at sovereignman has a view. HT Troy via email.
Yuan-denominated deposits in Hong Kong banks have more than TRIPLED this year as people look for ways to protect their purchasing power. Because the Hong Kong Monetary authority pegs its currency to the US dollar, Hong Kong ends up importing US inflationary monetary. This is acutely felt. Since Hong Kong is little more than a barren rock, nearly EVERYTHING is imported… so prices are rising in accordance with US dollar inflation.
To guard against this constant loss of purchasing power, many Hong Kong’s residents are converting their savings to Chinese Yuan. While the Chinese Yuan closely shadows the US dollar, it has steadily appreciated and is perceived to have significant future upside should the Chinese ever allow it to appreciate more quickly.
8. Will they or won't they? - Karyn Scherer at the NZHerald has a look at whether Jiang Zhaobai will be allowed to buy Crafar Farms.
She also looks at how farmers feel about encouraging such sales to foreign interests. Conflicted is one description.
Here's a sample.
"Where's that fresh capital going to come from? It's not coming in great speed from existing farmers because we're still a bit cagey about what we've been through, and we're not sure what's around the corner. A bit of stuff is coming out of the cities... but the big dollops are from those countries with the cash and the real drive to secure some more food assets."
As we have all learned in the wake of the global financial crisis, the bottom line is that far too many Kiwis - in the country and the cities - have borrowed far too much money and few are in any position to borrow any more.
"Sure, we've got to be careful of not losing too many of our assets offshore where we do have a competitive advantage, but we also have to recognise that we do need outside capital. We are over-indebted. We've seen what's happened to our forestry assets and our banking assets and we all look back in hindsight and say: 'What a shame we all let that go'. But basically it's our own fault. Whether we're going to learn this time, I just don't know."
9. Not so much oil - Remember the massive Brazilian oil find a year or two ago that was going to save us all?
It's not as big as we all thought, Bloomberg reports.
Brazil’s oil regulator reduced its estimate for the Libra field after conducting a drilling program at the site, director Magda Chambriard said.
The agency, known as the ANP, said the field likely holds 5 billion barrels and may contain as few as 4.5 billion barrels, Chambriard said today at the Latin Oil Week conference in Rio de Janeiro. That’s down from a previous estimate of as many as 15 billion barrels.
The agency said in October that the field may hold “gigantic” reserves almost twice as large as those of Tupi, which has since been renamed Lula and was the biggest discovery in the Americas in the past three decades. Brazil is counting on large discoveries in the so-called pre-salt region offshore to fund social programs aimed at reducing poverty in South America’s largest economy.
10. Totally Clarke and Dawe - Fred Dagg is in Paris covering the French Open. Not one of their best, but the patois is amusing
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