Here's my Top 10 links from around the Internet at 10 am in association with NZ Mint.
I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
I'll pop the extras into the comment stream. See all previous Top 10s here.
Bit hectic yesterday. Fresh one here now.
1. MED gets a cyber-shellacking from a Naked Capitalist - An apparently anonymous correspondent on Yves Smith' Naked Capitalism (one of my favourite reads) takes a swipe at the New Zealand Ministry of Economic Development's protections against global scam artists and fraudsters using New Zealand's light touch to do fancy things.
I have no way to know if it's accurate.
But it doesn't look good.
Perhaps the newly muscular FMA could have a look.
HT quite a few correspondents.
Here's anonymous Naked:
Quite possibly, actual bad people don’t care a bit about the legal penalties for putting dodgy entries on the NZ company registrar (1993 Companies Act). There may be a whole bunch of them doing it already! Or maybe just one guy out in cyberspace somewhere. You just can’t tell.
If I were the NZ police, with no travel budget, and searching for the chimerical Rod Alvar, I’d now be very curious about the denizens of 9/22 Curran Street, and all of the people who’ve left their digital fingerprints on NEW ZEALAND INTERNATIONAL SAVINGS & LOAN LIMITED. And of course, any other company on the register with associations to any of these bods or that address, is tainted.
Happy searching. There will, I suspect, be plenty to find.
2. Long term damage - PIMCO's Mohamed El Irian writes in the Washington Post about the problems with the game of chicken playing out in Washington.
The very vocal and visible recent bickering is causing more than transitory damage to U.S. growth and employment prospects. Remember, this debt crisis is not the result of an inability to pay; nor is it being forced on the United States by hesitant creditors. Rather, political posturing on what had been a relatively obscure and non-threatening legislative requirement — Congress gets to control the nation’s spending and taxes through other means each year — the debate on the debt ceiling has managed to bring forward in a very dramatic and disorderly manner fiscal challenges that lie down the road.
In this political mess, already-weak business and consumer confidence is being dealt a further blow. Companies with massive cash holdings now have yet another excuse to stay on the sidelines. Foreigners have been stunned by the political dysfunctionality of the country in which they have placed factories, whose financial instruments they buy with their savings and whose money serves as the global reserve currency.
3. Here's Gareth Morgan talking about how America's debt problems will affect New Zealand.
4. The new Murdoch? - Yves Smith wonders whether Standard and Poor's has become the new Rupert Murdoch and is throwing its weight around in Congress.
Standard and Poors is evidently meeting with high-stakes gamblers and letting them know where to place their bets as they manipulate the global economy.
But they are also playing a much more sinister game. Like a cat toying with a mouse, they are also inserting themselves in the political process and setting themselves up to be kingmaker in the 2012 election.
5. Pretty (ugly) charts - This is a fantastic interactive chart over at WSJ that allows you to compare public debt/gdp ratios between countries, including New Zealand.
6. Yes it is a problem - The US Treasury has warned it will struggle to pay its bills from August 2. Some have suggested America could last a week or two.
Treasury said tax receipts were in line with expectations after Wall Street analysts suggested that stronger-than-expected tax income meant that the United States would not default on its obligations until mid-August.
"Tax receipts were as expected for June and July. The fact remains that the U.S. will exhaust borrowing authority on August 2 and after that date there is no way to guarantee we will be able to meet all of the nation's obligations," a Treasury spokeswoman said in a statement.
7. One in 5 young New Zealanders thinking of leaving - Here's a Fairfax poll showing how young New Zealanders are protesting and voting with their feet.
8. 'Get your 'a** into line' - CNN reports That's what Republican House Speaker John Boehner said to Tea Party colleagues opposed to his plans.
9. And the Chinese are appalled - Morgan Stanley's Stephen Roach told Bloomberg's Paul Panckhurst (a former NZ Herald reporter) the Chinese government is privately appalled about the situation in America.
“Coming so shortly on the heels of the subprime crisis, the debate over the debt ceiling and the budget deficit is the last straw” for China, New York-based Roach, 65, said in an e- mailed note today. He said his assessment was based on visits to Beijing, Shanghai, Chongqing and Hong Kong.
In another sign of concern within the nation that is the biggest foreign owner of Treasuries, the official China Securities Journal said today that the U.S. stand-off signals long-term dollar weakness that will push up commodity prices and pose inflation risks for the world. In Mumbai yesterday, a former central bank adviser, Yu Yongding, repeated his call for China to reduce its Treasury holdings, adding that a default would be “disastrous.”
Roach cited an unnamed Chinese policy maker as saying in mid-July that “we understand politics, but your government’s continued recklessness is astonishing.” In the past, the economist has met with officials including central bank Governor Zhou Xiaochuan.
10. Totally Clarke and Dawe on the Carbon Tax in Australia. Wayne Swan is on the nose, as they say in Australia
55 Comments
The USA has got China by the balls and they can't do sh*t about it !! hahaha!!
The Chinese deserve to lose their shirts in having "faith" in green paper in return for their sweat and tears. This is the direct result of their "export at all cost" nonsense economic and political stupidity.
The USD as a loser currency is well know but they still kept on accummulating it like there is no alternative.....Duh !! never hear of Gold ??
not to mention the astonishing pollution Kin. they can't export that.
Totally agree re Chineese.
I would be very careful with gold. It has some utiliterian value but most of it's present value is borne of emotions; fear and greed. Emotions are very volatile.
You forgot to the mention the emotion of
"safe haven"
NZ is still borrowing $250,000,000.00 per week so I dont think we should be too judgemental on US pollies having a meltdown over US deficit levels.Actually our parliament should be debating the same issues but its Too Hard , and any sort of call to reason e.g from Rog Douglas is laughed out of town.
goNZ...agreed...Roger Douglas and Don Brash get laughed out of town...when at the end of all this borrowing like no tomorrow, the lefties will then realise that "gee, they were right - we had a structural deficit"..."maybe Govt should have been downsized and we borrow less.."
or, raise taxes....
regards
Very curious posts...disconnect comes to mind or is that cognitive dissonance?
Govt was downsized in 1987 thats where telecom etc came from and SOE's.
But tell me was the unemployment it created worth it?
That bout of redundancies never really went away and has had a definite lingering affect on our society has it not?
Oh I guess some temporary jobs for a couple of years made things look good for a while i'll concede that. However how many skilled tradesman were produced during 2000-2006?
Hows the knowledge economy working out?
If I remember rightfully wasn't the "brain drain" also occuring under the previous National Govern in the 1990's?
How do you explain that way?
Of course Roger Douglas and Don Brash get laughed out of town -- they are comedians after all.
Douglas and Brash aren't the only ones laughed out of town.
Why would you treat with any cred, folk who advocate endless growth, while failing to count either inputs or outputs.
They have to be either stupid or disingenuous.
No third option.
Compared to other governments, New Zealand's state debt isn't so bad - aproximatly 25% of gdp. Our government is much better positioned than other governments.
It's our PRIVATE debt which is of concern.
not 250M/wk
As posted in News on Jun7
******************
“But on average, if you go and look at it, the deficit this year was NZ$16.7 billion – that has a new borrowing requirement of NZ$320 million a week. It dramatically reduces next year – it halves – and in the year after it’s gone.”
There were no games being played for the government in terms of how much it needed to borrow, Key said. The government had been talking about borrowing on average NZ$300 million a week for the current financial year, which had risen lately to NZ$380 million as borrowing was brought forward due to low interest rates so the government had cash to pay for costs such as those associated with the Christchurch earthquake.
The government's NZ$16.7 billion deficit for the year required an average NZ$320 million a week over the year, Key said.
******************
FYI Serious people now suggesting US Treasury should mint two US$1 trln coins to fund deficit http://bit.ly/qLlJkp #makingamint
Well, the US can print / mint as much currency as they like, what they cannot create however is value... an important distinction lost on most politicians, economists, and now lawyers it seems.
The US can not print and hasnt done since 1913.
The US ceased to be a country in 1933, it is owned...
It is the Federal Reserve that prints.
A private for profit corporation thats neither federal or a reserve!
The US treasuary does mint the coins = less than 1% of money supply. Similar to NZ, look at a coin. There are no marks to RBNZ. The notes are owned by the central banks with trust to be paid back/ viz the citizens tax reveune backs it up. This physical paper accounts for less than 3% of supply.
Most of it is not printed, it is actually electronic backed by physical paper bonds (IOUs).
Anyway, minor points. The guts of yr view are probably right. All one needs to learn about is 'seigniorage' = intrinsic vs face value & bingo!
Paper (intrinsic) cost = 12 cents (possibly less)
Face value = e.g. 100.00 dollars + interest (e.g. 3 %) = $103.00 return p.a.
Actual book return = $102.98 = 85,817 % return
And the bamkers claim the taxpayers get ALL profits made by them! really ...
Now how come the tallest and biggest buildings in most large cities are usually 'the banks'. Ever wonder why? This is 'fractional reserve lending', this compounds the 'seigniorage'. For every $100 created can be lent out about 10 times = $1000 added to the system. Of which a proportion must be keep as a reserve arcoss the 10 banks lending out with the central bank. At 10% reserve with each bank = $100 in reserve with the cental bank. So, give out $100, charge interest and require a reserve value of $100. Wow interest on nothing from nothing :)
Now try work out the return!? ha ha ha
1. The IRS is not a U.S. Government Agency. It is an Agency of the IMF. (Diversified Metal Products v. IRS et al. CV-93-405E-EJE U.S.D.C.D.I., Public Law 94-564, Senate Report 94-1148 pg. 5967, Reorganization Plan No. 26, Public Law 102-391.)
2. The IMF is an Agency of the UN. (Blacks Law Dictionary 6th Ed. Pg. 816)
3. The U.S. has not had a Treasury since 1921. (41 Stat. Ch.214 pg. 654)
4. The U.S. Treasury is now the IMF. (Presidential Documents Volume 29-No.4 pg.113, 22 U.S.C. 285-288)
Very good, thank you. So who is claiming ownership of these agencies?
Who claims the seigniorage, etc?
Careful what you say, the cloud is watching/ recording!
lol...why don't you go figure that truth out yourself ?
Say high to the cloud....
Sepherial,
If the US Treasury us the IMF then perhaps the US doesn't have a debt problem, the IMF does.
I thought the US Treasury was part of Goldman Sachs :-)
UCC etc.
Interesting eh?
Can not argue with your logic raf!
I can offer this observation on the true nature of things...
Wheels within wheels...
;-)
Yup. The wheels are definitely turning right now.
Drop me a line raf At sustento Dot org Dot nz
Bernard this is where the idea was first floated. Few people are correctly attributing it to them though. I guess raising awareness of MMT will also raise some unpalatable truths though.
MMT?
Modern Monetary Theory
"MMT is a description of the monetary system within a nation operating a fiat currency which involves an autonomous monetary system, monopoly supply of currency and floating exchange rates. MMT describes how a government creates, destroys and utilizes its monetary unit and also how the private sector utilizes the state’s monetary unit for its own benefit."
http://pragcap.com/resources/understanding-modern-monetary-system
Re #4 S&P influence - 'Support Uplift' (Golem X1V) - may go someway to explaining their increasing 'influence' .
"Support Uplift is the term used to describe how much financial "support" a national government is giving or is likely to give to its banks. By 'financial support' the agencies mean any and all of the various bail-out and bail-in measures from buying of bonds to taking bad debts on to the public purse - anything which 'helps' the bank."
i.e. Will the debt be socialised. How far will countries go to protect their banks from failure.
3.&8. i think it will go past 2nd August...
http://politicalticker.blogs.cnn.com/2011/07/27/the-tea-partys-big-mome…
The tea party want it to, they want to shut agencies down....if you are a nut case, why vote for an increase in the debt ceiling which you dont want when you can get what you want now?
regards
There are really some nutters in the Tea Party:
"You do that by cutting things you don't need like the Environmental Protection Agency," Washington D.C. tea party organizer Joanne Abbot said. "Just think of all the money that we would save. It doesn't do anything," she added.
ZH - Stop The Presses: The Fed Can Fund The Treasury With Over Half A Trillion In Emergency Capital
http://www.zerohedge.com/news/stop-presses-fed-can-fund-treasury-over-h…
This could drag on for a while - until it doesn't.
Also, would love to know what Gareth Morgan means by "this is only temporary".
Temporary until the US hits the ceiling again? Before the next crisis?
Where's the growth going to come from? We have an economic system predicated on continual growth, in a world with accelerating demand for post-peak oil.
Things are not going back to the way they were.
Regarding NZ being a soft touch for foreign fraudsters I totally disagree! Kiwis are smart, shrewd and have fantasticly honed bull$ite o'meters.... the governement would never allow these crims in or to get away with these alleged crimes....
That said I am member of the Nigerian Governement and have obtained NZ$ 13 308 068.38 in legitimate oil revenue and am looking for you dear one, to assist me in getting this money out of Nigeria...
Great post. Yes, Kiwis are so astute, sophisticated and literate. It's why we believe "economy" is another term for "selling houses to each other at ever increasing prices".
it is really sad actually and the only people to suffer are the next generation of kiwis... sigh!
The Republican leadership have cancelled their Thursday vote and haven't rescheduled after a Tea Party revolt meant they would have lost the vote on the floor http://on.wsj.com/ppr35G #buckleup
lol obviously not there cup'o tea then Bernard!
And now the fear is transferring to the money market funds. These funds 'breaking the buck' are what transformed Lehman's bankruptcy into 'The Lehman moment'
http://online.wsj.com/article/SB10001424053111903635604576474580203604662.html
Rising signs of strain emerged across financial markets on Thursday as investors pulled out billions of cash out of money-market funds, in turn driving the funds to rein in lending in short-term markets.
Financial markets have become increasingly alarmed at the deepening divide in Washington and the potential that the U.S. could be downgraded by credit-rating agencies or, worse, default on its debt.
Banks, meanwhile, are scrambling to design emergency plans to avoid a trading logjam in the huge markets for Treasurys and short-term funding facilities if Congress fails to raise the U.S. borrowing limits by next Tuesday's deadline.
Money funds are now largely restricting their lending to overnight, preferring the safety of stashing cash in banks, one senior trader said. That is reducing the pool of cash available to corporations, banks and investors. Money funds are also selling asset-backed securities and other debt, the trader said.
Investors pulled $9 billion a day out of money funds this week, according Nomura Securities International Inc. The outflows in the past day could be even higher, traders say. Some $62 billion has left money market funds in the past two weeks, according to the Investment Company Institute.
mandalay....how much do you need......I have a very good finance company which I am a director of......plenty of other peoples money to dish out for you Nigerian Government people.
Theres an old fella I know in Timaru....he may tip some in as well..........
ah sweet... I'll be in contact... also a friend of mine is an Inspector in the London Met and he thinks you are the rightful heir to a further 5million ... Pounds of course, US $ down the googler.
Send all your bank account details and signing power (we need this to verify you are you only) to nigerianripoff@youhavebeenconned.com
Is this unusual....my old mum had a visitor a couple of days ago, a similarly aged lady of about 70, she was a bit het up, she had had to move some money around to pay some bills, $6000. She wanted cash from the bank. The bank refused to give her larger notes. Apparently she was given, $5 dollar notes and change! Bags of it. (I dont know why she wanted cash)
This from the non-partisan Congressional Budget Office:
http://www.cbo.gov/doc.cfm?index=12353
Republicans save $917 Billion
Democrats $2,100 Billion
The world is watching the way the US business is run, and is feeling insecure. The tea party have chosen a foolish time to force their agenda.
House GOP - finally - passes debt limit plan
And the Senate kills it! ha ha ha
No one will be laughing if they fail to compromise and prevent a default.
Yip, not a joke. But Congress looks like a joke :)
"Prime building space in Cleveland is worth $15.03 a square foot. The building assessed at $44 million went for $7.15 million, "priced low to attract bidders".
If you want confirmation that Spain is Buggered read this
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8671468…
I addicted to the Telegraph these days, anyway this was interesting.
Savers desert stock market amid fears of another global recession
Savers are abandoning the stock market at a rate not seen since the financial crisis of 2008 amid fears that another global recession is looming, The Daily Telegraph has found.
http://www.telegraph.co.uk/finance/personalfinance/investing/8672005/Sa…
On the WSJ's Debt to GDP charts, the stated definition is "each nation's debt-to-GDP ratio" does not say Public debt i.e. Govt debt or total debt i.e. public + private.
ALL countries have seem to have debt . If so which are the creditor countries ?
Can all countries be debtors in the financial world ?.
On the WSJ's Debt to GDP charts, the stated definition is "each nation's debt-to-GDP ratio" does not say Public debt i.e. Govt debt or total debt i.e. public + private.
ALL countries have seem to have debt . If so which are the creditor countries ?
Can all countries be debtors in the financial world ?.
Looks like the dairy industry is about to go through some interesting times
IDFA warns producers to not cut back on production because exports represent a commitment to the international community and a cut back on milk production could cause a loss of market and a subsequent collapse in prices. IDFA and others warn producers that, with or without a price collapse, price volatility is to be expected for dairy product prices and milk prices and appropriate measures should be taken to protect against sharp price decreases. IDFA warns producers to not expect to be paid prices that are unduly high. IDFA recommends the use of forward price contracting for producers. [The next such price crash, if it follows the timing of the last three, will occur sometime next year.] And commercial real estate in the USA http://globaleconomicanalysis.blogspot.com/2011/07/foreclosed-475789-sq…
phew... hard times around the world. Just as well we're in Nu Zullin' and we are our own world economic power-house... anywhere else and we'd be in the dwang... maybe the world should look to adopt the Kiwi Dollar... US $ and EURO be damned!
The Chinese are saying their banks can absorb a 50% drop in home prices.
http://cnbusinessnews.com/chinese-banks-can-afford-50-drop-in-home-pric…
Eurofail
Spreads are back to where they were...so the lastest mating ritual in Europe has it seemed, failed....the result is still born.
http://krugman.blogs.nytimes.com/2011/07/28/eurofail/
Shell books record profits while "Z"? whos the chump I wonder.
http://peakoil.com/bussiness/profits-surge-for-exxon-mobil-shell/
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.