Friday's Top 10 with NZ Mint: Now Key agrees with English's view of slump for a decade; How to deleverage banking; The case for a WPA; 'Just spray and walk away'; Dilbert; Clarke and Dawe

Here's my Top 10 links from around the Internet at 1 pm today in association with NZ Mint.

We welcome your additions in the comments below or via email

See all previous Top 10s here.

My apologies for no Top 10 yesterday. All got a bit hectic yesterday in Wellington. My must reads today are #6 on markets failure and #7 on Chinese communism's failure.

1. Finally - John Key seems now to be realising that something different is going on in the global economy.

NZ Listener reports from an interview with Guyon Espiner that Key says he now agrees with Bill English that the global economy could be in a slump for 10 years.

So he now needs to ask what that that means for his government and our economy.

The Reserve Bank rammed this home yesterday with its halving of New Zealand's growth rate potential to 1.5%.

The question for John Key now is: how do we get that growth rate potential up to a sustainable level north of 3% when the corporate, small business and household sectors are not investing in new plant, equipment, training and buildings.

I believe there is a role now for government, as there was in the 1930s and 1940s, to use its access to cheap money (government bond yields are under 4%) to borrow and invest in physical and human infrastructure.

Here's Key in the Listener:

On the global economic slump and Bill English:

“When Bill first used to say that this will go on for 10 years, I thought he was wrong. Now I think he is right."

Even though he knew it was the biggest financial collapse since the Great Depression, he thought “the fluidity of the modern economy” would allow those issues to be resolved.

“But what is different is the destruction of capital and huge structural change that has to happen, so this is about real, fundamental, core change.”

If Key accepts he was wrong, he believes he was wrong for the right reasons. “That optimism is not only well-placed, it is important to the national psyche,” he says. “Finance Ministers are paid to say no and Prime Ministers are paid to say yes. That’s the way it works. Who the hell wants a Prime Minister who is down in the mouth?”

2. Deleveraged banks - Boston economists Christophe Chamley and Laurence Kotlikoff have an interesting idea here at to remove the risk of runs on banks that are inherently unbalanced.

It's called Limited Purpose Banking (LPB) whereby banks are simply intermediaries between savers and borrowers, rather than taking risks in their own right. Here's more detail from Kotlikoff himself.

Here's the thinking via

There is, however, a truly new way to cut Europe’s vicious cycle, which would fix the banks for good and allow countries choosing to default to do so without bringing down their banks or leaving the euro. It is called limited purpose banking.

LPB transforms all banks into mutual fund holding companies that do one thing only – issue 100 per cent equity-financed mutual funds.

These mutual funds (unit trusts) give investors shares, not IOUs, in exchange for their money. The mutual funds then invest these monies in the securities in which they specialise, such as mortgages, small business loans, corporate stock, sovereign bonds and cash.

In moving money from those who buy the mutual funds’ shares to those who sell securities to the mutual funds, mutual funds act like small banks. But they are small banks that cannot fail because they never borrow. Conduct all financial intermediation through LPB mutual funds and you have an entire banking system that never fails. Add a regulator that verifies and discloses on the web, in real time,
all the securities held by the mutual funds, and you have a banking system that people can trust.

Mutual fund banking already accounts for 30 per cent of all intermediation in the US. It is also very similar to the two-century old covered bond mortgage system in Denmark, Germany and Sweden.

3. Not so 100% pure - Here's an interesting piece that cropped up  on Forbes criticising New Zealand's 100% pure image and its (over?) reliance on dairying.

Nauru is probably the most extreme example of a country, albeit a very small country, that has essentially ceased to exist because it extracted all the phosphates it had and nothing was left in the end, except a landscape ravaged by mining and a population stricken by poverty. I travelled around the entire South Island and my empirical observations indicate that right now the free market is winning and the dairy industry is doing its best to retain it position of global dominance.

For the majority of the tourists who stay along major highways, New Zealand generally lives up to its image as a clean green place. The rest of us, who take a turn along a quiet country byway, discover very quickly that while New Zealand may be marketing itself as 100% pure, the reality has a lot more bull.

4. Share the work - Berkeley economics Professor Barry Eichengreen writes here at Project Syndicate that one response to mass unemployment in an era of ageing populations is work sharing.

For those unfortunate enough to experience it, long-term unemployment – now, as in the 1930’s – is a tragedy. And, for society as a whole, there is the danger that the productive capacity of a significant portion of the labor force will be impaired.

What is not well known, however, is that in the 1930’s, the United States, to a much greater extent than today, succeeded in mitigating these problems. Rather than resorting to extensive layoffs, firms had their employees work a partial week. The average workweek in manufacturing and mining fell from 45 hours in 1929 to 35 hours in 1932. We know this from a 1986 article by my Berkeley colleague James Powell and his co-author, none other than – wait for it – Ben Bernanke.

The 24% unemployment reached at the depths of the Great Depression was no picnic. But that rate would have been even higher had average weekly hours for workers in manufacturing remained at 45. Cutting hours by 20% allowed millions of additional workers to stay on the job. They continued to earn an income. They continued to acquire skills. They had hope and the possibility of advancement.

Why was there so much work-sharing in the 1930’s? One reason is that government pushed for it. In his memoirs, President Herbert Hoover estimated that as many as two million workers avoided unemployment as a result of his efforts to promote work-sharing.

5. The case for a new Works Progress Administration  (WPA) - Economics history buffs will know that US President Franklin Delano Roosevelt helped reduce the pain of the 1930s Depression by creating jobs through the WPA.

Reuters' state and local government  bond reporter Cate Long makes the case here for a new WPA, arguing that local governments are not employing people.

If President Obama wants to spur hiring he should go to Capitol Hill and fight for a program along the lines of the Works Progress Administration. Rather than pass the hiring baton to state and local governments, he should add workers to the federal government’s payrolls as FDR did during the Great Depression. I believe American taxpayers would be more open to pay for a national jobs program to build public works projects than to closing deficits in far-away states. The size and success of the program was quite impressive:

6. Too much faith in markets denies us the good life - British economists Robert Skidelsky and Edward Skidelsky argue in this Bloomberg piece for a universal basic income, work sharing and more leisure time. Sound familiar?

Two major objections are raised against basic-income proposals: that they would provide a disincentive to work, and that society cannot afford them. Yet when the goal is not to maximize growth but to secure good lives, the aim is precisely to reduce the incentive to work by making leisure more attractive. Furthermore, a rich society can increasingly afford to pay its citizens a basic income.

An unconditional basic income, in the form of a single capital endowment or a guaranteed annual income, would start to give all workers the same choice as to how much work to do, and under what conditions -- a privilege now possessed only by the wealthy.

7. The macroeconomics of Chinese Kleptocracy - Sydney based short selling hedge fund manager John Hempton has written a must-read about how China's economic system works. New Zealand needs to be much, much less naive about the sources of Chinese money invested here.

We risk becoming (and already may well be) an easy place to launder stolen money. The picture below is of a hallway built at a Chinese SOE.

China is a kleptocracy of a scale never seen before in human history. This post aims to explain how  this wave of theft is financed, what makes it sustainable and what will make it fail.

 start this analysis with China being a kleptocracy – a country ruled by thieves. That is a bold assertion – but I am going to have to assert it. People I know deep in the weeds (that is people who have to deal with the PRC and the children of the PRC elite) accept it. My personal experience is more limited but includes the following:

(a). The children and relatives of CPC Central Committee members are amongst the beneficiaries of the wave of stock fraud in the US,

(b). The response to the wave of stock fraud in the US and Hong Kong has not been to crack down on the perpetrators of the stock fraud (so to make markets work better). It has been tomake Chinese statutory accounts less available to make it harder to detect stock fraud.

(c). When given direct evidence of fraudulent accounts in the US filed by a large company with CPC family members as beneficiaries or management a big 4 audit firm will (possibly at the risk to their global franchise) sign the accounts knowing full well that they are fraudulent. The auditors (including and arguably especially the big four) are co-opted for the benefit of Chinese kleptocrats.

This however is only the beginning of Chinese fraud. China is a mafia state – and Bo Xilai is just a recent public manifestation. If you want a good guide to the Chinese kleptocracy – including the crimes of Bo Xilai well before they made the international press look at this speech by John Garnaut to the US China Institute.

8. The real problem in Europe - The only people buying Southern European government bonds now are the banks in those countries.

They in turn borrowed that money from the European Central Bank.

Now those same banks are sitting on huge unrealised losses on those bonds.

Here's a chart via Zerohedge showing the craziness:

9. 'Just spray and walk away' - Credit Agricole, which has bonds issued in New Zealand, is planning to walk away from its subsidiary in Greece, the WSJ reports.

The owner of Greece's largest foreign-held bank is making plans to walk away from the bank if the country leaves the euro zone, the latest sign of growing international concern over the future of Europe's currency union.

A senior banker at a large Greek lender said between €600 million ($754 million) and €900 million has left the banking system daily over the past few days, a number he expects to increase leading up to the vote. Other people familiar with the banking system confirmed the estimates.

Separately, the finance minister of Cyprus hinted Wednesday that the country could seek a European bailout to rescue its struggling banking sector as soon as this weekend. Speaking to a business forum, Vassos Shiarly said that any request by Cyprus for financial aid would come "when the markets are closed" and signaled that Sunday's Greek vote could be a catalyst for deciding.

10. Totally Clarke and Dawe - Tony Abbott is saying No an awful lot.....

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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China has been trying to build a market based economy without the moral foundations required for it to last.  It will be very interesting to see how far they get.
This quote from Hanping Zhang, Chairman of Aihao one of the largest pen manufacturers in the world.
Trust is in short supply today in China.  Government officials are often corrupt.  Business counter parties cheat.  Workers steal from their employers.  Young women marry and then vanish with hard earned dowries.  Baby food is knowingly produced with toxic ingredients and school building built with effective materials.

The  Western World has built a market based economy without the moral foundations required for it to last.  It will be very interesting to see how far they get(For the latest updates see Europe). 

I would suggest the foundation was built at lot longer ago than perhaps you are thinking.
For example, it was the moral force of the Western Nations, notably the United Kingdom, who abolished world slavery by moral will and application of military force.
We have allowed that foundation to erode for sure but it suggest it never existed is to deny historical evidence in my opinion.

Are you referring to the colonization of by the UK of the "commonwealth" countries or are you referring to Ireland.

Are you referring to the colonization of by the UK of the "commonwealth" countries or are you referring to Ireland.

Are you referring to the colonization of by the UK of the "commonwealth" countries or are you referring to Ireland.

Another viewpoint
You have to laugh at the whole “China will collapse crowd” on CNBC and even
respected sites like Zero Hedge. Personally, I love the Zerohedge stuff.
They understand the ponzi-financial fraud-money printing-welfare state economy
that now envelops the West. But China is a real economy, with real demand.
They have people who work hard, strive for education and pay in cash. The banks
are controlled like utilities and speculators are kept on a short leash.

China will not least not for the next ten years. The risk profile on
China is more geared toward geo-political issues in the south China Sea and the
countries eventual transition to a democracy which I believe will happen sometime
in the next 10-20 year timeframe. Dont’forget all of the Asian Tigers grew up as
one-party dictatorships. Taiwan and South Korea did not even get democracy until
the 1980′s. It will happen here as well.

Car sales in China rose 22.6 percent in May from a year earlier, according to
data released on Saturday, extending the double-digit gain made in the previous
month, as new models premiered at April’s Beijing autoshow started to hit the
China is really good at transferring hundreds of millions of people from poverty to the middle class. They have done it in China, they seem to be doing it in Africa and probably anywhere else that they seem to turn to.
They have their aid eyes on the South Pacific too. Who knows, maybe in the future Naru will prosperous again.
When it comes to elevating people out of poverty China is showing up the world big time.

That was an infomercial proudly brought to you by the Communist Marketing and Propoganda Dept.
China is really good at transferring hundreds of millions of people from poverty to the middle class. They have done it in China, they seem to be doing it in Africa and probably anywhere else that they seem to turn to........National Geographic style..!
Opinion on Africa is divided ...China say's they deliver them from poverty...The Africans beg to differ.
 Take care with that sort of thing  there Kiwi...I was censored here once, for saying there was no pollution  or such things as Aids in China ......and I was only repeating what they were printing.

"Opinion on Africa is divided "
Thats because they are just getting started. Give them a few more years and lets take another look..

Give them a few more years and there won't be an endangered species left in more like it...
 please don't make me put up the link to back that up wouldn't like it nosireeebob..!

Reading "Mao - The Untold Story" was an eye opener for me. The only question with China is how long they can hold it together? 10-20 years? I can't see it.

Christchurch's largest landlord  is Chinese (1000 properties). This is the sort of person who will make himself very wealthy.

Could be a descendant of the Otago Gold Fields era, a fair-dinkum 5th generation kiwi, or could be a recent arrival, land-banking laundered money out of the PRC. A bit swingeing.

Who are you are refering to?
I've never heard of any one person owning that many properties in ChCh.  I know the Yee family own a lot of commercial properties but no where near that number.
Could you please enlighten me or are you making things up?

China is really good at transferring hundreds of millions of people from poverty to the middle class. They have done it in China, they seem to be doing it in Africa and probably anywhere else that they seem to turn to........National Geographic style..!
this is the sort of thing mike Moore says.. however free trade seems to average things out. While millions have been lifted out of poverty there are many many more waiting in line and there is no guarantee  there will be enough resources to lift everyone in the world out of poverty. Meanwhile workers in the west see their wages drop and land prices rise.

#1. Bernard's comment; "I believe there is a role now for government, as there was in the 1930s and 1940s, to use its access to cheap money (government bond yields are under 4%) to borrow and invest in physical and human infrastructure".
Isn't that the same as suggesting increasing the debt burdon on the taxpayer? 

Not necessarily.
Debt isn't always bad. If you borrow money to build a new asset that generates much more income than the cost of the debt then it's 'good' debt.
The problem is borrowing to consume or invest badly, which is what New Zealand has done in the last decade or so.
There are other options for government spending apart from borrowing. One option is to print the money as long as it doesn't generate inflation. That's quite possible if we have deflationary pressures build up.

BH - Very happy to see you're finally opening your eyes to the fiscal capacity of the sovereign NZ$ issuing NZ government.
Your readers need to learn that the NZ government is not fiscally constrained like an individual, family, corporation, or... Greece.

In theory the 'Roads of National Significance' RONS and the fibre network are sort of doing this assuming they generate nore income than they cost.

According to the cost benefits before NZ Transport Authority had to cook the results showed two of the roads of national significance (the holiday highway and earthquake gully/airport) as being a net cost, the Victoria Park tunnel as paying more than 5 times the cost.  Links to Hamilton and the bypass to Tauranga also looked good.  There is the potential to invest at least a billion a year on infrastructure with a better return than the holiday highway and the earthquake gully/airport link.  For example lots of new houses? 

There are other options for government spending apart from borrowing. One option is to print the money as long as it doesn't generate inflation.
What about the dilution in value of the outstanding savings?
Who decides who gets the first margin bite of the printed dosh? 
What method of intermediation do you propose should be adopted?  

"What can be good is creation of an asset that provides some incomes, yet reduces costs/overheads for the NZ consumers."

aren't we just about to sell 49% of them.

Exactly...........but..........(here's the catch)  where is the  generated profit coming from? Could it be..........the NZ taxpayer anyway? Selling 49% just gives the government a 'get out fo jail card' when power prices go hyper

Wrong, Bernard.
Debt is always bad.
And impossible to underwrite at some point, guaranteed.

hmmm yes and no....if as I think globalisation is toast then borrowing money from abroad to build critical infrastructure wont ever be paid back.

Debt is always bad.
Thats a pretty resounding indictment on a monetary system where all money is somebodies debt.

"Debt isn't always bad. If you borrow money to build a new asset that generates much more income than the cost of the debt then it's 'good' debt."
Sorry? WTF are you talking about Bernard. Your statement RELIES on the assumption that the percieved "profit" (more income) is based on some real tangible increased value or worth.
Should for example I 'borrow' money to buy gold? buy shares in Facebook? or build a house? Which is good debt in your eyes? How about borrowing  to grow garlic, limes or broccoli? 
It has become quite obvious to me and others that your lack of understanding regarding the global monetary system is at it's limit. Understandable.......You have debts, you  have children, you have vested bank interests in your website. 
But........please don't make me doubt your motives. Has Olly got to you?  
By the way the US FED would not appreciate our own RBNZ creating NZD when they rely on the interest from the $9 billion credit swap they did with us in 2008. The RBNZ is in the US FED's pocket

...... and then again , someone on Radio National ( Australia ) this morning , claiming  that Australia has a shortage of 500 000 houses ....
Pity they can't ship a few across from Detroit !

Ms Kelly has said that the current environment was a return to old-fashioned banking and the days of massive borrowing by Australians were over.   I don't think so.
Her comments were backed by Reserve Bank governor Glenn Stevens, who pointed out to business leaders that one of the main reasons Australians were so "grumpy'' was because of the dramatic change in the economy since the glory days of the housing boom.  It's a worry when a Reserve Bank governor thinks a housing boom is a good thing.

I don't see that the reserve bank governor indicated that the housing boom was a good thing at all. He just seems to say that Australians are grumpy because of the ensuing bust. Actually I don't know what he was going to do about it in any case.
Actually the most rubbish statements in the whole piece are by this Westpac CEO, she clearly calls the housing bubble in the Australian economy 'wealth' and then goes on to explain in plain english that is was actually just borrowed (well duh!), inflationary and actually most workers have not been getting less and less real pay and further into debt.
I think its pretty clear from this what is meant by the term 'wealth creators'.

Government to borrow and hope Bernard  ?  Been there.  Done that.
The setup needs to be huge reduction  Government spending nearly all poor quality  And the money should be kept in the hands of individuals and SME's by reducing taxation.
That money will be spent all right,  just the same, and will stimulate economic activity.  But the quality of the spending will be much better and return more bangs for bucks for Kiwis. 

Who says SMEs and businesses and wealthy individuals will spend it?
They're the ones madly buying government bonds at the moment, in part because they are at a stage in their lives where they either don't spend as much on themselves (not so many parties, holidays, baby cots, fridges etc) and they prefer to save in low risk assets such as government bonds.

Actually I disagree, its pretty clear where this money is being 'spent' from this graph.
I think the investment in government bonds is a shift but there has always been roughly this amount of investment in things which are regarded as 'safe' investments. I think this sticks out of the statistics, because the people behind this investment don't carry a lot of debt, so they are not influenced by the recession much (except they are looking now at a different set of 'safe' investments).
But can you really justify this as a demographic shift? It seems pretty obvious its driver has been the global financial crisis, and the recession following, which rules out a shock caused by a massive demographic shift. Really how much can there be a demographic shift over a 3/4 year period anyway.

Interesting and the facts behind this are?  Why then is our public education system (government spending) so good?  And the public health system (government spending). Lots of people were housed with government spending (state housing). 

I think you are using the wrong kind of blinkers Andrew. Your confusion is understandable, you need to assume that all government spending is inefficient, just imagine a counter factual reality where there is no government and everything is dirt cheap, and nobody is ever mean to anybody else.
This world is depicted accurately in the movie Demolition man, but they spoiled it by writing in the fictional characters played by Stallone and Snipes. I think its obvious from the story that everything was perfect there until Stallone and Snipes came along and cocked it all up.
I think that makes it more clear where the comment is coming from.

Ah got you, thanks.

No. 6  --  The assumptions of this article are very questionable.
1.  … as people became more efficient at satisfying their wants, they would, and should as rational agents, work less and enjoy life more.
Firstly, they provide not a shred of evidence this was believed by Keynes and a whole generation of economists.
Secondly, the assumption contains the assertion that work and enjoyment are mutually exclusive.  That work cannot be enjoyable and that therefore enjoyment means by definition leisure.  The additional barb is to suggest anyone who does not believe or pursue this is irrational.
It is true that some people do not enjoy their work.  It does not follow that all work is not enjoyable.  Many people I know (and have known) love their work.  It could be argued people who struggle to find any happiness in their daily pursuits are missing the best part of life. Doomed to chase the empty wind of "if only".
2.  But why, if we already have enough, should we strive for a larger presence in emerging markets?
With millions of Americans living below the poverty line it hard to see how they maintain the argument that "we have enough" unless one is very narrow with the view of who "we" is.  Anyone with open eyes can see there is plenty of room to help the material standard of life for many New Zealanders.  If a good and valued contribution can be made to help why would we not make it?

From Keynes, "Economic Possibilities for our Grandchildren": Now it is true that the needs of human beings may seem to be insatiable.  But they fall into two classes-- those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their staisfaction lifts us above, makes us feel superior to, our fellows.  Needs of the second class, may indeed be insatiable; for the higher the general level, the higher still are they.  But this is not true of the absolute needs-- a point may soon be reached, much sooner perhaps that we are all of us aware of, when these needs are satisfied in the sense that we prefer to devote our further energies to non-economic purposes.
Maybe the authors of 6 just mistakenly assumed people had some knowledge of Keynes writings?

"“Finance Ministers are paid to say no and Prime Ministers are paid to say yes. That’s the way it works. "
We live in interesting times when Prime Ministers admit that they say things to keep people happy.
Now, do they really think that Europe will muddle through? or are they just saying that because its important for the National psyche. What are they being paid to say?
P.S I'm not sure I would like to be Prime Minister. It must feel good having all that power and having journalists hang on every word that you say, but a lot of them(journos) end up being cynical and really mean, especially in the 2nd term. 

......... just when did Sir Michael , as Finance Minister , say " no " to anyone connected with  Helen Clark's Labour government ..... for money to establish any half-baked feel-good projects , when he'd run out of ideas of his own ?

So true, Sir Michael was not by any means a conventional finance minister. I suspect in retrospect you would have seen more, not less, of his unconventional ideas if he has seen the global financial crisis coming.

Actually on second thoughts I think Journalists are really nice people, without them the forth estate wouldn't really work.
I'm sure Prime Ministers are really nice in their own way too. Its just the system itself is so corrupt.

..... here's a little food for thought , from Sir Winston Churchill , when asked what qualifications were essential for a politician :
" The ability to fortell what will happen tomorrow , next month and next year - and to explain afterwards why it didn't happen . "
..... Wild Bill has got it sussed !

Obviously you mean Donkey has got is sussed. Most likely Wild Bill is on the money with his statements.
I know you are trying to put on the happy face for, but I am still surprised you don't call Donkey out for his post election change in rhetoric. I guess some prefer being lead by an intelligent politician and some by a spin doctor.

It's Friday YaY.!!.......
In Regard our beloved Prime Minister John (boy) Key and his never ending sense of benevolence.......
 One afternoon John Boy was riding in his limousine when he saw two men along the road-side eating grass.


Disturbed, he ordered his driver to stop and got out to investigate.


He asked one man, "Why are you eating grass?"


"We don't have any money for food," the poor man replied. "We have to eat



"Well, then, you can come with me to my house and I'll feed you," John Boy said.


"But sir, I have a wife and two children with me. They are over there, under

that tree."


"Bring them along," J. B. replied.


Turning to the other poor man he stated, "You may come with us, also."


The second man, in a pitiful voice, then said, "But sir, I also have a wife and SIX children with me!"


"Bring them all as well," J.B.answered.


They all entered the car, which was no easy task, even for a car as large as the limousine was.


Once under way, one of the poor fellows turned to John Boy and said, "Sir, you are too kind."



"Thank you for taking all of us with you.!"


John Boy replied, "Glad to do it.   You'll really love my place...... The grass is almost a foot high."




...... overheard at a downtown bar , two Fairfax journalists drowning their sorrows over a libation or seven ......
One guy bemoans the state of the news media , and the effect of the internet , " Just what sort of industry are we in " he wails .....
" We're a Charity ! " reposts his buddy .
" Ay ? ........ how do you figger that ? "
...... " well , we're a non-profit organisation .... we didn't mean to be , but we are " ...

John Waters was on the telly today , and he said Imagine if John Lennon was still alive today , he'd be blogging & tweeting his every thought , all day long ....... John would fully embrace the new technologies , and have a ball letting the world know his opinions ...
..... ahhh , what a tragic loss to us all ....We get left with McCartney , instead  : Bugger !

All I can say is ...........WELL DUH!
Who do they think they are kidding? ohhh.......themselves

About time.
Key is wrong. As PM he can actually say things are weak, and tough. As long as he backs it up with meaningful plans on how to address those things. I don't think anyone benefits from pretending things are strong when they are not. Its actually deceitful.

re: #1 "how do we get that growth rate potential up to a sustainable level north of 3%" 
Bernard - Isn't "sustainable growth" an oxymoron?  have you read anything by Prof. Albert Bartlett on this matter -
"The greatest shortcoming of the human race is our inability to understand the exponential function." 

So that's how we spell depression these days, I was wondering.
I just hope John Key is willing to accept that it his and his ilk's shenanigans back in the Merrill Lynch days that caused all this rubbish. Thanks mate.

key was the go to man for a derivative. could miss-lead just about anyone.
tis a national past time, now, unfortuneately.

N01 with a bullet...
good last a little honesty. a glimmer of hope, a staged whisper. stage right.
Knowing what is wrong is half the process of putting it right. Denial is/was not helping...
total denial has not helped these past years. she'll be right....from all and sundry.
tinkering and shifting debt and interest margins onto others, not guilty of any wrong doings, is never gonna work, it is a scam,  it alienates people, marginalises them, not bonds people together. (yes bonds)
I only point out the obvious....and to me it is obvious, but do not think of these stages as person, think of them as an economy, that has been broken and now needs fixing.
No quick fix however.
7 Stages of Grief...

You will probably react to learning of the loss with numbed disbelief. You may deny the reality of the loss at some level, in order to avoid the pain. Shock provides emotional protection from being overwhelmed all at once. This may last for weeks.

As the shock wears off, it is replaced with the suffering of unbelievable pain. Although excruciating and almost unbearable, it is important that you experience the pain fully, and not hide it, avoid it or escape from it with alcohol or drugs.
You may have guilty feelings or remorse over things you did or didn't do with your loved one. Life feels chaotic and scary during this phase.

Frustration gives way to anger, and you may lash out and lay unwarranted blame for the death on someone else. Please try to control this, as permanent damage to your relationships may result. This is a time for the release of bottled up emotion.
You may rail against fate, questioning "Why me?" You may also try to bargain in vain with the powers that be for a way out of your despair ("I will never drink again if you just bring him back")

Just when your friends may think you should be getting on with your life, a long period of sad reflection will likely overtake you. This is a normal stage of grief, so do not be "talked out of it" by well-meaning outsiders. Encouragement from others is not helpful to you during this stage of grieving.
During this time, you finally realize the true magnitude of your loss, and it depresses you. You may isolate yourself on purpose, reflect on things you did with your lost one, and focus on memories of the past. You may sense feelings of emptiness or despair. 

7 Stages of Grief...

As you start to adjust to life without your dear one, your life becomes a little calmer and more organized. Your physical symptoms lessen, and your "depression" begins to lift slightly.

As you become more functional, your mind starts working again, and you will find yourself seeking realistic solutions to problems posed by life without your loved one. You will start to work on practical and financial problems and reconstructing yourself and your life without him or her.

During this, the last of the seven stages in this grief model, you learn to accept and deal with the reality of your situation. Acceptance does not necessarily mean instant happiness. Given the pain and turmoil you have experienced, you can never return to the carefree, untroubled YOU that existed before this tragedy. But you will find a way forward.
7 stages of grief...
You will start to look forward and actually plan things for the future. Eventually, you will be able to think about your lost loved one without pain; sadness, yes, but the wrenching pain will be gone. You will once again anticipate some good times to come, and yes, even find joy again in the experience of living. 
me...i am still in the rant against the system...stage. but I see a glimmer.

I suggest that #1 makes more sense if you consider that Key was of course doing political spin. Frankly I doubt Key has changed his ideas at all about this at all, but he is indicating that the rhetoric will be different from here on. Probably some recent poll shifts have indicated that the old rhetoric has reached the end of its worth.

#2 its another model of full reserve banking. Of course for LPB, you have to change all banks to mutual funds, or keep them well away from some classes of assets (like housing), because a fractional reserve bank pays less for its funding which makes them much more competitive (and risky).
Funny normally when you mention this full reserve banking idea you get loads of comments. I guess the jargon used matters.

yes Hugh, Aus won't escape the pain, it's merely been able to delay the pain. One shouldn't pay much attention to the strong GDP growth for Q1 - things are looking grim as we move forward
SA's finances are a mess too.
All this messiness occurs when housing bubbles are created, States rely on taxes from the bubbles, they go on big spending sprees, the bubbles burst, then all hell breaks loose . We have a generation of selfish and short sighted government to thank for this. What makes one really angry is all this was self evident years ago
Key's denial of the problems just sums things up!!!!!!
Don Brash for PM!

Is Fran O'Sullivan the head of the Key Supporter's club???

MIA.  After reading that article I recalled a  comment made by Mark Latham re John Howard's relationship to George Bush.
"Pandemonium, simply because I called Howard an arselicker in today's Bulletin. If anything, I was restrained - Howard has got his tongue up Bush's clacker that often the poor guy must think he's got an extra haemorrhoid." (26/6/02, The Latham Diaries, Mark Latham, 2005, p 195)
Which made me go off to urban dictionary to see whether there is a related definition that might be useful to define Fran's relationship via that article to the Donk.  I think you would have to read it and make your own mind up....

Is Fran O'Sullivan the head of the Key Supporter's club???

No1's just a glimmer as i said yesterday.......
i should have read more before i had to leave the dunny.
i think doing number twos is the answer.
wtshtf, those who did the right thing, will not have to bail-out those who did the wrong thing.
anyone want to start an LPB bank.??.............calling mr key.....
paging mr key....where the f is he when ya want him.......
calling mr english..........where de hell are they all....
mr bollards, calling mr bollollards, mr bollards.....calling...oh what the heck...
seems we are shite out of luck......maybe we are already in the crapper.
or they are  just OUT TO usual.

Reading that article it is clear Brownlee has no idea about anything (which we all already knew!)
He reckons that you would have to gut houses to relocate them.  What a load of bollocks, existing homes can be relocated without having to meet requirements such as double glazing.  Obviously insulation can be dealt with without gutting and most homes have compliant electrics already.
Talk of having the CCDU developing whole blocks and taking ownership from individual owners is insanity.  This is pure COMMUNIST, STALINIST, FASCIST politics.  You can't start taking people's land, demolishing their buildings unless it is for essential public works.
We have a divisive bunch of bureaucrats trying to bankrupt the country with think-big stupidity that will spell the end of Christchurch.
It's an absolute disgrace that our history, our heritage and our sovereignty is being forfeited so a bunch of half-wits can dictate and impose themselves on others.
Everyone left will just pack up their money and leave, if they haven't done so already.
We need these clowns out of here.
By the way, where exactly is the money coming from?  Most CBD owners either had little insurance, or if they did have replacement, the insurers have come up with generous offers to dissuade an expensive rebuild.
My estimate is that there is probably well less than $500m of insurance money on privately owned CBD buildings that will be used for rebuilds.  The rest will be cash or replacement (settled with existing buildings).
Sheer lunatics, with no idea about the ChCh market or property development in general appear to be on the verge of making dastardly decisions, which will leave the city with white elephant developments and debt to the eyeballs.

From that article in the Press:
"Land can be amalgamated, by force if necessary.  Owners are even being warned that new buildings that get in the way may get knocked down."
"if we have to get rid of a land owner or two ... we will .."
If that is what we can expect from the CCDU and CERA then CHCH is doomed.

The NZ Government has soul & exclusive executive power EVEN over our own Judiciary. You do know that right?
Way before any earthquake or CERA..
"In a properly functioning democracy, there are three branches of the State - the Executive [the Government], the Legislature [Parliament] and the Judiciary. Each branch has a role to act as a check or balance on the excessive powers of the others.

But New Zealand does not fit that category. Traditionally the Executive dominates the Legislature, and both dominate the Judiciary.

Proof of the latter can be seen in numerous court cases. In 1991, for example, Justice Robertson ruled that "The constitutional position of New clear and unambiguous. Parliament is supreme and the function of the Courts is to interpret the law as laid down by Parliament. The Courts do not have a power to consider the validity of properly enacted laws."

Something I have mentioned here before. The reason we can't have a constitution is because of the 1835 Declaration of Independence of New Zealand. As things wind down watch for a power play by the Northern Tribes to assert this independence.

Hugh, seriously......are you surprised? I think the problem in this country is we all got brought up thinking this was "godzone"( no pun intended) but it's not it is it.  Socialism only breeds bigger and bigger government and government are there to only create ONE thing............more redtape to stop us living lives of personal choice who appointed the CCC? Could it be the people of CHCH? 
Now....tell me again,
"I have every confidence these issues can be dealt with effectively through the normal political process."
WE (the people of CHCH and greater NZ) ARE THE PROBLEM!
Is Brownlee a list MP? 
A dose of 'reality' would be nice also

[re-]insurance problems spread from chch......
"James McGhie of Apex General says commercial buildings date back to 1935 and earlier and insurers are imposing premium increases from 200 per cent to 500 per cent."
and wellington's "valuable" CBD? beginning to look screwed....
"Also under the spotlight will be reclaimed land in lower Queen Street and Wellington's Lambton Quay."
"And commercial buildings constructed between 1936-1965 won't escape a hike in premiums, with McGhie predicting they will have a likely increase of at least 50 per cent."
AMP the big pension provider, now looks like it owns buildings of dubious worth....ouch. Tower? also I believe....

Wow, I was a bit blown away by the strength of the Herald's editorial on Key and the super issue. Usually old nanna Herald is pretty lame, good on them for this important piece:

...... and who would you replace him with , Hugh ..... who amongst the current crop of parliamentary oafs is less worse than all the rest ?
[ .. for what it's worth , Jolly Kid is a waste of a vote , being more motivated by watching the polls , than doing any actual good for the country.. ]

... yup , heard that speech on BBC ( radio ) this morning ....
 Her point is pertinent to Kiwis too ,( who get too insular about their lives & their land ) , we are all a part of a great big world .... we're not a bunch of Robinson Crusoes ....
Tim Shadbolt for PM ...... if the guy can  father  babies at 65 years , he's still got enough energy to run the country ....... Top man !

.... it has been  many a long moon since NZ had a PM who genuinely cared about the people , and thought of him/herself as their servant , and not the other way around .....
Until Colin of the Conservatives gets some decent poll numbers , I suggest you all begin a " Timmy ( Shagbolt ) for PM " campaign .......

carbon dating today is two idiots (or more) meeting to ensure personally that carbon does not date as they burnt it already.
Some people think that making amends, is making someone else, make amends for their stupidity and example and profligacy.
poll-lies flitting around from pillar to post, does not endear me to em, in this day and age.
nor does dating and eating stuff flown in from around the world, at the taxpayers expense, then trying to save it from .....oblivion..
sheeeeeeeeesh....what an example.
and who is the biggest prime waster of em all....

Ineptocracy....In-ep-toc' -ra-cy
A system of Government where the least capable to lead are elected by the least capable of producing,and where the members of society least likely to sustain themselves or succeed , are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.


Nice try Count....


But I still prefer "Bollards" has a certain ring of  con-fidence and self denial.


Unfortunately both will probably go down in the history books of this fair nation. 


(AND OTHERS, wot I plan to write about).


"Anals of a Historic Failure", is my working title.


Want to co-write.....over a glass or two, or three of illusion juice.


We could spin a see whose name is first....


Or we could get a prime mover to put a different spin on it.


(Or is more spin, more than ye can take).


I was gonna get it marketed, buy that FACEBOOK walla, cuts a good deal. 


We could get Hugh to write the Caterbury Tales forward as he can write two and three.


Might be a sure bet, but don't BANK on it....any of you.


But there might be a little interest.........and a bit of a time lag.


Cue cera cera...whatever...will be....


Wolly can be chief scribe.


Who wants to buy shares.........any takers..