Friday's Top 10 with NZ Mint: Why we face another 15 years of deleveraging; Put up the top tax rates; London banks 'incompetent profiteers run by spivs'; Why treasurers are hoarding cash like there's no tomorrow; Clarke and Dawe

Friday's Top 10 with NZ Mint: Why we face another 15 years of deleveraging; Put up the top tax rates; London banks 'incompetent profiteers run by spivs'; Why treasurers are hoarding cash like there's no tomorrow; Clarke and Dawe

Here's my Top 10 links from around the Internet at 12 pm today in association with NZ Mint.

We welcome your additions in the comments below or via email to

See all previous Top 10s here.

My must reads today are #1 from Jamil Baz on how the world faces 15 years of grindingly slow deleveraging. The Adam Posen video at #5 is also worth a watch to see a central banker actually challenging the group-think of central bankers. Wish ours would do the same.

1. This is just the warmup act - Jamil Baz, Chief Investment Strategist at Man Group's GLG Partners, writes in this piece that the weighted average debt of the 11 countries being watched closest by debt markets has actually increased to 417% from 387% since June 2007.

Baz says the required deleveraging hasn't even really started.

And when it does...

He says it will take 15 years for the debt ratio to come down by the 150% of GDP.

I agree that massive deleveraging is needed. The how is the difficult part. Here's Baz:

Deleveraging is proving impossible to execute. The world is still staggering under a mountain of debt, the costs of which extinguish the “animal spirits” which ought by now to be coming to the rescue. Based on this analysis, we can make five predictions.

First, as deleveraging has not even started yet, the crisis of the world economy has not begun either. All the perceived unpleasantness of the past few years is merely a warm-up act for the greater crisis still to come. The need to get debt levels down is as pronounced as ever in the eurozone, particularly in southern Europe, but also in the US and Japan.

Second, it will take a minimum of 15 years or so for the economy to reach escape velocity and attain a level consistent with healthy growth scenarios. This is because debt levels need to come down by at least 150 per cent of GDP in most countries. History suggests you cannot reduce debt by more than 10 percentage points a year without unleashing major social and political dislocation.

Third, when we do finally start cutting our debt, the economic impact will be massive. Countries such as Japan and the US need to increase their primary balance by more than 10 points of GDP, in order to stabilise the ratio of public debt to GDP to 2007 levels: considering negative feedback loops between deficit cuts and growth, each stands to lose more than 20 per cent of GDP against trend.

And this does not account for the required private deleveraging. The precise level of economic devastation is a function of the so-called multiplier, which measures the impact of spending reduction on economic growth. The International Monetary Fund has calculated that, under current circumstances, the multiplier can be as high as two: every dollar cut from the deficit will lead to a two dollar reduction in GDP. The multiplier is as much as four times higher than in pre-2008 conditions.

Fourth, risky assets are set to perform badly for a long period. Corporate profitability is highly correlated with changes in leverage: reduce debt to meaningful levels and profitability will fall. The equity risk premium on indices such as the S&P 500 is at historically low levels and needs to rise dramatically in order to compensate investors for multiple market risks, ranging from sovereign default to inflation, deflation and geopolitics.

The fifth point is that there is no magic bullet. In the past, policy makers had various instruments to cushion the impact of measures taken to stabilise debt levels: they could cut interest rates, for example, or allow their exchange rates to fall, leading to export-driven recovery. But in an era of low or zero interest rates, with most countries competing to devalue their currencies, such policy tools have lost effectiveness, hence the high multiplier.

2. Get those top tax rates up - Paul Krugman is right to point out here that tax rates on the rich in America have never been lower.

All these estimates show that taxes on the rich are the lowest they have been in half a century. But what about before 1960? Well, we know that the top marginal tax rate was even higher in the 40s and 50s than in the 60s; and it was very high by modern standards through much of the 30s too.

So I think it’s safe to say that taxes on the rich are currently lower than they have been for not 50 but 80 years. And if Mitt Romney gets his way, we’ll bring those taxes down to levels not seen since Calvin Coolidge.

3. The world's first in-car espresso machine - Just what the world needs. Here's autoblog with the latest accessory from Fiat for its new model 500.

4. 'Banks are now viewed as incompetent profiteers run by spivs' - So says Martin Wolf, the FT's main commentator, in this piece titled '7 ways to clean up our banking cesspit'.

Who would have thought even a few months ago that the FT would ever write such a thing.

We are never going to turn bankers into saints. But we can change the incentives facing bankers, the structure of banking and the focus of regulation. Where I would go further is towards substantially lower leverage and significantly greater transparency. Not least, I would do everything I can to eliminate the idea that the state stands behind investment banking. That is an insane idea.

5. 'Stop treating banks as a strategic industry' - Adam Posen, a member of the Bank of England's Monetary Policy committee, says in this speech below to a banking conference people need to drop their bank fetish and call the bankers' bluff.   HT Ian Fraser.

I wonder which industry we fetishise in New Zealand. Dairying?

He also talks about how housing bubbles are the most destructive of any type of bubble for any economy and that central banks can't use monetary policy to 'prick' them. He talks about using automatic counter-cyclical housing market taxes.

Watch the video below. I have yet to hear anyone from the Reserve Bank or Treasury talk like this. A pity, because New Zealand faces many of the same issues, including Too Big To Fail banks, an over-leveraged financial system, a housing bubble  and a captured regulator.

“Governments who promote particular industries …  tend to distort political decision-making and tend to distort the incentives for that industry to behave..

“Every major economy has its protected industry that gets romanticised. In the US it’s usually agriculture; in France it’s agriculture; in Japan it’s rice farming, even though they don’t eat rice that much any more; in Germany it’s automobiles — pick your country, pick your poison.

“In the UK, however, and this is where it makes it worse, the fetish is banking. And the problem is, if you have an auto industry that you favour and you waste too much money on it and you protect it, you basically put a tax on everybody in society because it’s big  and because everybody pays too much for their autos and you probably get less good cars; it’s bad. But it’s essentially just I write a cheque and some of the cheque goes to nothing.

6. What is wrong with the world? - BusinessInsider points out this super-yacht, the Anastasia ,was launched in 2008 and is now on the market for US$155 million. It has a 27,000 litre acquarium in the dining room and can handle 12 guests.

Too much money has accumulated into too few hands and is now not circulating in the real economy to employ people and resources. Investors (and the super rich) know this. That's why they're hoarding their cash and spending the rest on personal pleasure. It's just not sustainable. Marx was right on that.

7. The hoarding of cash by companies - Gillian Tett at FT reports on how corporate treasurers fearful about the future and clueless about how to invest money in real things and people are hoarding cash like there's no tomorrow.

98% of Treasurers surveyed by the Association of Finance Professionals say their top priority is making sure they don't lose their cash rather than making yield.

Before 2007, as the AFP survey shows, most companies kept their spare cash at modest levels – and corporate treasurers put this into capital markets instruments and banks, to earn a reasonable return. But these days, companies are stuffed with unused cash: 41 per cent of treasurers say this has grown over the last year, and most expect further growth.

That is partly because many American companies are profitable. But it is also because companies are holding onto this money, rather than spending it on productive investments or giving it to shareholders, so fearful are they about the future. Cash has thus become like a corporate security blanket, something executives cling to in frightening times.

The cumulative impact of the shocks of the last five years may now have scarred – and scared – company executives to such a degree that they may have become addicted to their cash security blankets. If so, it could take years before they really start feeling confident enough to take long term investment bets again. The velocity at which money moves around the system - and cash is used in a productive way - may have now slowed in a more permanently; doubly so since the banks themselves are very risk averse and wary of lending.

Perhaps this is no bad thing; after all, in the credit bubble, the velocity of money soared in dangerous ways. But a world where money has slower velocity is also a place where it will be harder to produce growth. Little wonder, then, that treasury yields are so low; or that so many investment managers feel so challenged. This corporate “freeze” may be subtle, but it is painful indeed.

8. Totting up the losses - FT reports Morgan Stanley estimates the losses for the banks from litigation and fines in the LIBOR scandal could be around US$22 billion.

No worries. Cost of doing business. Just add a few more points on over the next few years...

9. Four reasons why China's shadow banking system might collapse - Here's Bank of America's China Strategist David Cui looking at 4 triggers that could take down China's shadow banking system. HT BusinessInsider.

  1. (Illegal) Ponzi schemes falling apart: Cui notes that this has already started happening, writing that "since mid 2011, there are at least 14 reported cases of Rmb500mn+ Ponzi schemes gone bust, with eight occurring so far this year."
  2. A wave of defaults in highly-leveraged loans: Shadow banking entities make money by borrowing from the banking system at low interest rates and lending out at high interest rates to high-risk borrowers. Since most entities don't also take deposits to back these loans, what you have, according to Cui, is a "thin capital base [that] can be wiped out fairly quickly" when "loan demand starts to weaken and their investments (loans) go bad."
  3. More turbulence in the Chinese property market: Many of the borrowers from the shadow banking system, according to Cui, are "low-tier developers who have limited access to the official loan market." And the collateral being pledged against most of the loans from shadow banking entities: "probably property." So, if property prices tumble, that collateral quickly becomes worthless and causes loans to default.
  4. Shrinking corporate sector earnings: A host of Chinese financial products have guaranteed high returns lately due to high inflation rates. However, with the real economy weakening in China as demand disappears, profits are decreasing. Essentially, if earnings in the real economy can't support the investment returns that the shadow banking system has promised to investors, Cui says that "the divergence may become unsustainable, resulting in significant bad debts in the shadow system.

10. Totally Clarke and Dawe talk to Avery Tiredman on the Tour de France and current affairs.

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?

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.


FYI Queenstown may end up spending NZ$43.7 million building a conference centre, including a NZ$20 million contribution (possibly) from the central government.
"The study draft, leaked to Mountain Scene, was commissioned by a Queenstown council-appointed work­­ing party. 

It suggests the Government should be hit up for $20m, council for $17.5m and Otago and Southland regional councils for $2.5m with the balance from private and community funding. 

Any land cost is not included.  It’s understood Prime Minister John Key has suggested the Government could stump up $10m."
What is it with our Prime Minister thinking the path to greatness is building conference centres and rugby stadiums? How many high paying jobs generating high value export returns do these generate?

What is it with our Prime Minister thinking the path to greatness is building conference centres, rugby stadiums,
And uneconomic irrigation dams?
Lets first reply with the most positive spin we can: Maybe he is just not competent at economics.

Bread and circuses? Oops,you said positive..

Yep - plenty of other options but I think I cornered the most positive interpretation.
Bread and circuses should benefit the masses but these examples are very wide of the mark in that respect. So what could be the other motives for the stupid spending if JK is competent in economics?

most hotels in hamilton have conference rooms
we also have the rugby stadium facilities,the te rapa racecourse,the claudelands events centre and plenty of halls etc.
how many conferences can a small country have
after all most of them are overpriced talk fests wich don't result in anything.

@Kate - I could not help but notice a familiar lament in the first link about the rise in homeless Wellington women:
"It's hard to find suitable, affordable accommodation. The cost of everything has gone up.
Is it not time to review the re-introduction of price controls?
We are seemingly comfortable with state controls imposed upon the cost of money (RBNZ -OCR) which allows errant Government Ministers to raise cheap capital to subsidize landlords offering rental accommodation to beneficiaries, at a rapidly rising cost since the disbursements get capitalised.
Why not extend the net to other areas that may benefit the wider community rather than the few? 

What I can't figure is how we can have organisations in civil society - staffed by ordinary people (likely not a Vic Uni polysci grad amongst them) get their predictions so right ....
 "The problem was highlighted years ago when the Salvation Army said they didn't believe an accommodation supplement would do anything other than increase the cost of housing."
Rental price controls will happen in my opinion as accom supplement costs went from $1b to $2b inside the last few years.
Perhaps the good news is that lots of homelessness is really bad news for convention centre business, e.g.;
So perhaps Key as Tourism Minister will get onto it!

Many thanks for those links. Hadn't seen most of them.
A lot of money spent to ensure warm, dry places for politicians to speechify and hand over trophies.

Aww come on Bernard. You never know, if you play your cards right you might get a knighthood one day.

If they are building a conference centre are they thinking of building a casino as well or does Queenstown already have a casino.
According to Andy Xie Casinos are very popular with the Chinese. Singapore has lots of Casinos and it . really helps the finances.
Actually I don't like Casinos, they seem to attract lots of corrupt activities, drugs, laundry money etc.

There you see...! Kiwi,........ that's funny ! and well ahead of the 4.30 deadline, I am so sorry I ever doubted you....keep it up, had me in stitches.
You a funny guy.

Look Christov, behind that tree, is that a communist hiding?

Oooh where...where..!.? oh shucks, you got me, good one Kiwi but in the immortal words of George W
Fool me once...shame on you...errrr
Fool me an you

Heh heh. Actual quote ~
"There's an old saying in Tennessee -- I know it's in Texas, probably in Tennessee -- that says, fool me once, shame on --shame on you. Fool me -- you can't get fooled again."
Ah.. The good ol' days.
Also ~
"Our enemies are innovative and resourceful, and so are we. They never stop thinking about new ways to harm our country and our people, and neither do we."
"I know the human being and fish can coexist peacefully."
More Bushisms...
A great man whom I'm proud to call someone elses ex-president.

Queenstown already has TWO casino's! A Lasseter's and a SkyCity.
Note to Hugh P - there is also enough land zoned residential for another 10,000 sections in Queenstown but it hasn't affected the price of land / property in Queenstown. Still as expensive as Auckland.

There's also a big conference facility that will seat 750 that would be a better investment of our $10m. There's a church facility down there, about 5 minutes drive from the airport, that was designed to seat 750 people (current stage 1 capacity is 400 odd?)
Its a top class building, fully sealed carpark, the church only uses it a few hours a week for meetings and the cost to get it to the full capacity it was designed for would be about 1% of the projected cost the Government is thinking of.
Google maps - 3 Hansen Road, Frankton, Queenstown.

Government does not stump up for anything. Ist rule Reality 101.
2nd rule, Council does not stump up for anything.
3rd Rule, costs never come in under budget, nor dissapear, they compound as does the interest.
4th rule, watch the rulers...they cannot measure and cannot rule sensibly.
Give em an inch and they will take a meter, install it and then charge for the priviledge.
SERIOUSLY....because for once I is Friday the 13th...after all.
The gullible ratepayer and taxpayer will get the bill, along with all the other inflated costs of these delusions of grandeur.
Cost benefit analysis done by over priced...vested interests....and pricy con-sultants.
And they are not.....repeat!
Even when you spread em thin over the thick, over borrowed....future Ire-ratepayers and Taxpayers.
And that you can bank on, especially if the tourists do not come and spend up large....(They am so affluent...overseas as some, but not all.... can percieve, know, read, listen, hear and digest...or are we only gonna cater for the this Un-conventional Centre), 
(Or are we gonna double our tourists conventionally, whimsically, socially or when we have hit the Sky City, cheap rates and cheap dates...ala...LOST VEGAS)

Spot on.

And this:
Britain's fiscal outlook over the next 50 years remains "clearly unsustainable", despite the government making some progress in reducing current borrowing and public-sector pension commitments, an official watchdog said on Thursday.
The Office for Budget Responsibility said it expected public sector net debt to fall from 74 per cent of GDP in 2016-17 to a trough of 57 percent in the mid-2020s, before increasingly quickly back up to reach 89 percent of GDP in 2061-62.

One of the biggest problem of western societies :

Here's Larry Kotlikoff pointing out America's social security system is hopelessly broke, via Bloomberg.
The proof is buried deep in the trustees’ own 2012 report in a complex table, numbered IV.B6. The system’s actuaries prepare the report’s tables. But what the trustees make of them is up to the trustees. Clearly this year, as in others, the trustees ignored table IV.B6. How else could they have come up with their blase statement that Congress should address Social Security’s finances “in a timely way”?
Table IV.B6 is a long-run balance sheet for Social Security. It shows that the system’s $88.9 trillion in liabilities exceed its $68.4 trillion in assets by $20.5 trillion. The $20.5 trillion fiscal gap separating Social Security’s liabilities and assets -- its unfunded liability -- is enormous; it is 1.4 times U.S. gross domestic product and 34 times annual Social Security taxes.

It doesn't help that they count amonst their assets the US Bonds that are purchased for them by Treasury.
One branch of Govt borrowing from another... Classic House o' Cards.
"Treasury invests trust fund income not required to meet current operating expenses, primarily in interest-bearing obligations of the U.S. Government."

Bernards comments under #5 are interesting.
I wonder how he would react when the reporters come calling after the headline in tomorrows Herald is
" Commentator says Reseve Bank captured by banking cartel."
I imagine he has a suitcase full of evidence for that. Or at least he better have.

Or at least he better have.
Pray tell!

I imagine some of the evidence could be:
Allowing unlimited bank controlled speculation in the $NZ, causing among other things a 20% overvaluation of the currency, at huge cost to manufacturers, tourism, etc.
Limited controls on credit growth, or on where that credit originates- whether offshore, or just created by the banks.
Delegating profit, revenue and interest cost reduction tools and opportunities from the Reserve Bank to the commercial banks. 
The most profitable banks in the world, operating in a small country with close to recession like conditions for the last 3-5 years.
That's my simple outtake of the situation. Others will know the details far better than me; but Bernard's opinion is a fairly held one, given those circumstances. 
At worst, or best, if the Reserve Bank feel somehow offended, it is for them to challenge those assumptions with logic and first principles. To date in my opinion, the Reserve Bank have been woeful in explaining why they do what they do; and why alternatives being practised by other major central banks are not being followed here. It is difficult given that lack of communication, not to conclude that they are acting in the interest or advice of other parties- those parties being the main banks operating here.

Nice work Stephen forgot to mention being under the direction of a catatonic shrinking violet...who showed in his tenure, zero ability to have an inspired thought  of his own, dissappeared into the shadows while senior staff  were found guilty of incompetance at least, made announcements pre-emted by the Finance Ministry while claiming independance from Govt. influence........I used to honestly believe he was a doll they kept in a cubboard somewhere trotted out for pre-recorded announcements designed to bring on a claustrophobic sense of De Ja Vu among the reporting could hear some of them whisper "kill me God" as he started his repetitious drivel.
But all that time rolled out in his Sunday best for the free doughnuts and drinks., maybe even a wee chat with anyone who hadn't died at the monologue.
Goodbye Bolly , I for one may miss you, well I have with every bullet so far,......but hey "Let's just wait and see and wait some more shall we"

You forgot to mention a monetary and fiscal system that massively favours their service:
A goods and services tax on bread (a product) of 15% but a free pass on interest (a service), in this way nice clean finance is favoured over nasty dirty manufacturing.
A capital cost allowed as an operating deduction ( interest is allowed as a deduction even though the decision to borrow or use equity (ie savings) is an ownership decision, not an operating one).
A monetary policy that favours borrowers by targeting inflation at 1-3% and actually running at 2-5% per annum.
These are embedded so deeply in the system I cannot see them being changed. To me they are the three  rorts that make property based business more attractive than production based ones. It's not how I would run things but you must sail with the prevailing wind.

exactly right.

Time and again over the five years I've been covering the Reserve Bank it has bent over backwards to help the banks with their funding (special facilities in late 08/09 and a delayed Core Funding Ratio increase) and with delaying and tweaking Open Bank Resolution.
Also, the Reserve has investigated loan to value ratios for mortgages at least twice and has always backed off.
I've spent a lot of time talking to bank executives and I'm comfortable with saying the Reserve Bank is captured. That is not controversial, given most central banks and regulators are. Otherwise they would have controlled leverage ratios much more tightly and helped prevent the housing bubbles all around the world, including New Zealand.

The function of the RBNZ would appear to have been to protect the banks from the consequences of their own stupidity rather than to protect the citizens from the predatory nature of the banking system.

The Reserve Bank is captured (a captive of the banks)
Kudos to Wolly .. he was right .. he's been trumpeting that as long as I can recall

"captured" or CORRUPTED?
Bernard, WE all know who is pulling the strings at the RBNZ. They meet with their master regularly as you know. US FED 

Personally Justice, I think the conduit is the IMF......the Fed by enlarge doesn't give a flying frig about the small things, they leave that to the paid watchdogs......the IMF is the compliance desk.....for the Fed and greater Fed interests.

Oh, your 100% right, they too are involved, but..........I believe more from a Treasury debt point of view, hence I believe the IMF are the ones pushing the government to start/continue selling national infrastructure items such as our power stations..........
We are slowly but surely being played the same way they played African nations. Ramp up their national debts and then take assets in return to pay the debt back to negotiated ratios and credit streams/ratings

Never been in doubt about it Bernard....and I think posts from three years plus back would back that up..........the big Four run the show here....mind you sometimes perhaps we overthink it.....Has the RBNZ a moral duty that outweighs  percieved fiscal depending on where you sit at the desk both standpoints can find justification.
This may have been the dilemma for the squishy Bolly involving his thoughts with the greater good ( by perception) opposed to confronting control by stealth in the interests of long term fundamentals. 

Actually I don't really understand this, it seems that to say that the reserve bank is captured has a negative connotation, right? But I can't understand it because if you look at any of the stuff in their charter, any of the theory around a central bank, their purpose is and has always been to maintain bank stability. If this is the same as being captured, then the constitution of this institution needs to be changed.
Also, some people do need to realise that the central bank literally can't control bubbles by fiddling with the OCR, its not enough of an incentive to prevent bubbles occuring. are wrong. The RBNZ have publicly admitted that they failed to take note early on of the property bubble being produced directly because of too cheap a credit via a too low OCR from 2001-2007. They put it up way too late. 
Sure banks have a degree of self governance over their rates but..........they still need to borrow and only have limited streams of credit available to them IF they decide to ignore or discourage domestic savers. Hence they must borrow from overseas banks or other RB's. The OCR can be used to screw their base rate IF set high enough. Sure banks will just pass on those increases but that's the point! Maybe people during 2003-2008 would not of been so eager to pump more debt into a ponzi scheme based on ever increases property prices with no regard to inflationary effects!
The biggest failure ( due to the previous RBNZ governor) was to remove property/mortgage growth figures from the CPI. Homes & land has become a "commodity", bought and sold simply for profit. The game changed, it was dead obvioius to anyone with an IQ above 100 

I suggest the video #5 through, and when the speaker says you can't prevent bubbles with the OCR, take him seriously. Counterfactual analysis never provided evidence to support anything.

@ #5 Bernard, so we fetishise the Dairy industry?  Probably. We also indirectly fetishise the Banks here via their complicity in the property bubble but the genius of the banks is that to most punters they are invisible enablers in the destructive meth binge that is our housing and dairy farm bubbles.
Banking should be a utility. Financial infrastructure. Allocate capital and price risk. Its out of balance but no politician in power over the last 2 decades has admitted it.

I reckon its more the accountancy industry and their pals the trust lawyers .. our convoluted tax/welfare regime keeps these folks in what has become one of the fastest growing businesses for quite some time.  Think of the farmers, small business owners, property investors and PAYE earning NZers that wouldn't need an accountant if we had simpler (i.e. non-avoidance orientated) tax legislation.

It's certainly the legal right of the accountancy profession to glibly dismiss the need to publish the full extent of 'off balance sheet' transactions undertaken by banks and any other legal body - including government. 
Disclosure remains a myth while this privilege is not torn down in the glare of public inquiry.

Bernard, finally you admit to a cow fetish, being a sheep farmer my interests are in a diffrent arena.
   Thinking about a spin on the Anatasia, anyone want to join me?  Just need to check if they take a Rabo NZ cheque anymore.

You're absolutely right, particularly about this: "Banking should be a utility. "

Yes, its kind of obvious of course when we stop missrepresenting banking as anything other than then implementation of the payments (e.g money) system. If you asked people if their means of payment system should be privatised they would say no, but of course banks (all banks) can and do create the money of society. If they are in the business of doing that I don't think there is any argument that this should be
1) anything other than highly transparant (meaning regulated towards the common interest).
2) the level of profit (e.g incentive) should effectively be subject to public opinion (e.g there is such a thing as too high a reward for banking, in practise).
This probably fits Bernards definition of a 'utility'.

Does banking require growth to function? I mean when you are growing then banking is taking a share of this new growth, so it appears that no one misses out. But if you are shrinking then the banks are taking a cut of a diminishing pie.

No banking doesn't, but a lot of people in the economy have business plans which do require growth or at least inflation to function (including some financial institutions). The amount of profit acrued to the banking system should grow or shrink with the economy, not out of proportion to it, if its functioning as a utility.

In a survey from Pew Research, 2% of Greeks think their country is in a "good national economic situation"

In other words, 2% of Greeks are hilarious

Re: #1, scary, but just simple maths isn't it?
Many people I know think the boom times are just around the corner again (several were saying that back in 2009 - still waiting....). That's just ill informed, wishful thinking. 

Even more surprising is the number of genuinely smart people who believe we have nowhere to go but up.  I'm all for optimisim but a lot of the time it's 'head in the sand' stuff.  Scary.

To those with a long memory, price controls are easily circumvented by re-description.  Because unless it's on paper and signed, it's hearsay.  And needless to say, the smartest minds are not well represented in the massive bureaucracies needed to run said PC's.  So the re-describers rule.
That's not Liquor, it's Drench.
That's not a Residence for Rent, it's a Garage for your car with attached sheds/dosshouse.
That's not <insert your controlled item here>, it's a <insert your Uncontrolled item here>.

It's Friday YaY....the 13th to be scary.....Anyhoo in honour of the beleaguered E.U.
I would like to offer some options that may not yet have come to their attention.....and as we are so adept at it round here, there is some thing for everyone I''m sure...#3 for Bolly
  Dead Horse Options


Preference for this situation


1. Change riders.


2. Buy a stronger whip.


3. Do nothing: "This is the way we have always ridden dead horses".



4. Visit other countries to see how they ride dead horses.


5. Perform a productivity study to see if lighter riders improve the dead horse's perrformance.


6. Hire a contractor to ride the dead horse.


7. Harness several dead horses together in an attempt to increase the speed.


8. Provide additional funding and/or training to increase the dead horse's performance.


9. Appoint a committee to study the horse and assess how dead it actually is.


10. Re-classify the dead horse as "living-impaired".


11. Develop a Strategic Plan for the management of dead horses.


12. Rewrite the expected performance requirements for all horses.


13. Modify existing standards to include dead horses.


14. Declare that, as the dead horse does not have to be fed, it is less costly, carries lower overheads, and therefore contributes substantially more to the bottom line than many other horses.


15. Promote the dead horse to a management position.


Happiness to you.!!

16: Label the horse(s) to identify lawyers, politicians and bankers.
!7 : Collaterise their death certificates and sell this investment to retirement funds

Nice one...
Butt.....Ya forgot one...Count.
At last count......
16... Turn the nether regions into a real live talking Politician with fiscal aspirations and herd em all together to generate a heat source to combat both global climate change and a declining oil supply.
(Light blue touch paper, stand well back...and kiss yer ass...good...BUY.).

What a beautiful example of where it's going Alter Ego........appreciated.

I appreciate the humour.....Pity most do not have any. (I pity em...they is gonna need it)
And this is for real.
Just fed the real horses.....
(No...not  that rorting FED in the USA, nor not that grass...what are ye smoking.............hard feed, these is eventers...and what an event...and a palav -ver)....
Costalottadough brand.....tis special hard feed..(well it does, but not what it is actually called)
(Just ones cost  feels like feeding the Wife and a polly and a bwanker , but without the benefits  of a free nag and a free ride...and a nagging suspicion ye have backed the wrong horse and it has come in last and crapped on yer...again....and kicked yer in the goolies...and stood on yer toes..............but I digress)
If we han't had horses...I could have retired years ago.
Daughter fell orf one as a wee child and been on em ever since.
Cost me an arm and a leg....and I did not know I had to buy a vet and a shoe factory.
So please do not Compare Horses for COARSES again.
They is gentle creatures...and worth every penny...I  have....left.
Which is more than I can say for a Poll-lie and a Bwanker....who also came along......for the FREE RIDE.

Another layer comes off the onion.
Q: Who went from RB Governor to Leader of the National Party to Board of Australian Bank?
Answers on a postcard.

Conquistador your stallion stands, I must pay my respects.

And though I came to jeer at you
I leave now with respect.
Takes be back.......        :)

Great day's PDK...we were blessed.....although if you want I'll revise those two lines for you..
 whatever the case .....great days.

Spent all that summer on the coast, looking for the 16 vestal never mind, probably too late anyway.

then her face , it burst just Ghostly....turned a whiter......

Ah yes, it's all coming
back to me

gnight PDK stay well.

 Does anybody rememberb Rodders Deane...Bolly's mirror opposite.
Here you go Bernard, this wil be an eye spinnner if youv'e not already studied it....

#1 Describing debt is like describing an elephant - it depends which bit you are fondling.
Why don't the markets care about Japan's200% debt-GDP ratio and yet infarct over some of the Club Med country figures that are much "better"? It's because not all debt is created equal.
In a world where private businesses have an average lifetime of 40 years and households experience a major change every 7(?) years the public sector is FOREVER. A simple example is your local council building a road bridge. The design life is a minimum of 100 years but more like 150. Is it fair that your community pays up front for this asset? Your great-grandchildren will still be using the asset you have just paid for but getting it for free. In practical terms, debt funding is the fairest way of managing trans-generational equity issues because your descendants will have to pay their share of the capital even 100 years out. Debt funding in this case may be sustainable and nothing to get alarmed about.
I agree in general with Baz's outlook but the winnersand losers scorecard in 15 years time will depend very largely on the quality of debt - who owes what to whom and why - not on the quantity.

Also the climate is warmer in Egypt than New Zealand. You might want to point this out to daily mail readers as well. Thats basically a refutation of science as everyone knows.

Fortunately we know Hugh is just acting up to get attention. He is no longer getting enough reaction from his other silly ideas any more. Most people grow out of this by about six years old, but there are exceptions.

Very......interesting. Especially the 2012 posts.

This is a legitimate study unlike some of the stuff that gets posted here. You can see an increase of temperature at the onset of the industrial age. Remember that the climate of Northern Europe is heavily influenced by the Gulf Stream. You need a meta-study of all climate data to determine what is going on at a global level.

Another one the warmy wonks won't like either, Hugh , as they shout you down ;-)

One really needs to see him in person to get the full effect, Lord Monckton is very well spoken for somebody who is not a member of the house of lords.

For all the wailing on here about politicians building monuments to themselves. How much of a discussion to a solution such as direct democracy even gets so much as a comment?

Oh dear!
"NEW YORK (Reuters) - Ralph Lauren's stylish uniforms for the U.S. Olympic team, complete with a jaunty beret, have sparked a political row because the red, white and blue outfits were made in China."