Tuesday's Top 10 with NZ Mint: China's frightening shadow banking system; An amazing nano-trading chart; Gareth Morgan says wait for the NZ$ to fall; Thuggery and banditry in China; Dilbert

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

As always, we welcome your additions in the comments below or via email tobernard.hickey@interest.co.nz.

See all previous Top 10s here.

My must read today is #1. Having spent the last five years covering finance company collapses here, the detail about the size and activities in China's finance company sector is truly frightening.

1. "Golden Elephant No 38" - Reuters reports in detail on what China's shadow banking system actually looks like.

These investment vehicles and trusts are worse than finance companies here. By a long shot.

The numbers are astonishing. Over US$1.9 trillion was invested in the first half of 2012 alone.

This is not going to end well. They are called Wealth Management Products....

Particularly when you look at the details of the property dreck these things are investing in.

Here's what the "Golden Elephant No 38 looks like:

Absent from the product's prospectus is any indication of the asset underpinning Golden Elephant: a near-empty housing project in the rural town of Taihe, at the end of a dirt path amid rice fields in one of China's poorest provinces. "They haven't even built a proper road here," said Li Chun, a car repairman, who said he lives in the project. "The local government is holding onto the flats and only wants to sell them when prices go up."

Golden Elephant No. 38 is one of thousands of "wealth-management products (WMP)", instruments aimed at monied investors, which have shown phenomenal growth over the last five years.

Reuters reviewed more than 50 wealth-management and trust loan products, available online and at bank branches in China, with the aim of tracking, for the first time in certain cases, where investors' money in these products ends up. All, except two, failed to explain or even display the underlying asset behind the product. The China Banking Regulatory Commission, which oversees banking products, said more than 20,000 wealth management products were now in circulation, from a few hundred just five years ago.

"Some banks have been using new (wealth-management product) proceeds to cover losses from previous products in the pool," said David Cui, a strategist at BofA Merrill Lynch. "In our view, this is not fundamentally different from a Ponzi scheme. The music may stop at a certain point if and when WMP asset size stops expanding."

2. Why real people are scared of the US stock market - This animated Gif below from Nanex (HT Felix Salmon) explains perfectly what has happened on the US stock market in recent years. It has been taken over by machines trading with each other. These algorythmic trading bots now make up a large proportion of all trade.

Last week Knight Capital, which is the market maker for 10% of stock trading there, blew up after a software glitch on one day saw it make US$440 mln of losses within hours.

The chart shows the progression of High Frequency Trading (HFT) over the last five years. Watch the date change at the bottom left. The spikes at either ends of the day are when trading starts and ends. The different coloured lines are for the different exchanges. No wonder everyone is buying US Treasuries.

Here's Felix explaining at Reuters why this makes a financial transaction tax a good idea:

Back in 2007, I wasn’t a fan of a financial-transactions tax; today, I am. And this chart shows better than anything why my opinion has changed. The stock market is clearly more dangerous than it was in 2007, with much greater tail risk; meanwhile, in return for facing that danger, society as a whole has received precious little utility. Are spreads a tiny bit tighter than they might be otherwise? Perhaps. But that has no effect on stock-market returns for long-term or even medium-term investors.

The stock market today is a war zone, where algobots fight each other over pennies, millions of times a second. Sometimes, the casualties are merely companies like Knight, and few people have much sympathy for them. But inevitably, at some point in the future, significant losses will end up being borne by investors with no direct connection to the HFT world, which is so complex that its potential systemic repercussions are literally unknowable. The potential cost is huge; the short-term benefits are minuscule. Let’s give HFT the funeral it deserves.


3. Remember this? - US Treasury Secretary Timothy Geithner wrote this New York Times editorial in August 2010 titled 'Welcome to the Recovery'.

4. Don't intervene? - Gareth Morgan writes on his blog that people calling for Reserve Bank intervention to bring the New Zealand dollar down should be patient and wait for it to fall naturally.

That assumes the currency is simply a reflection of the relative economic growth and commodity price outlooks. The trouble is the New Zealand dollar has been disconnected from the fundamentals for some time. The IMF estimates it is around 15% over valued. Even the Reserve Bank says it is overvalued.

I wonder how long we can or should wait when it's clear central banks around the world (except in Australasia) are printing money hand over fist to devalue their currencies and boost their export sectors. America, Britain, Switzerland, Japan and China are all manipulating their currencies in one way or another. See #8 below for the lastest from China.

Morgan also says printing would worsen our current account deficit (and worsen inflation?).

Wouldn't it make sense then to impose some basic capital controls, including perhaps a loan to value ratio limit on mortgage lending to stop the capital from flooding in?

Here's Gareth explaining why we should wait:

There are calls for the Reserve Bank to intervene but as always that would be high risk. What we’re witnessing is a rise in the currencies of all the commodity producers as the capital markets perceive world growth will slowly pick up despite Europe’s recession. For now that expectation is leading the recovery of commodity prices.

Unless The Reserve Bank thinks printing and selling NZDs into that enthusiasm will unhinge us from the upward pressures on other commodity currencies, it would soon find itself doing little else but stimulating the domestic economy, possibly with no sustained effect on the NZD. That would exacerbate the current account needlessly.

5. The frightening lessons of the Bo Xilai affair - The Economist writes here about what we should learn about the sacking of high profile Chinese politician Bo Xilai.

The episode gives the lie to many of the myths they foster: that, despite being unelected, they are “meritocrats”, in their jobs because they are good at them; that they are, if not entirely honest, then at least corrupt within forgivable bounds; and that the way a new generation of leaders is chosen every ten years is orderly and consensual. The Bo Xilai case has lifted a curtain on a world of thuggery, banditry and vicious, personalised power struggles, reminiscent in some ways of the ten-year nightmare from which the country spent a generation trying to awaken: the Cultural Revolution.

Thanks to the internet and microblogs, however, Chinese citizens now know things about the Bo family that make the party look, well, not quite the vanguard of the proletariat. Mr Bo was a Politburo member until April, and until the previous month was party secretary in the city of Chongqing and its province-sized hinterland. Tales have spread of the Bo family’s millions—or billions—in assets salted away overseas, of their son’s education in elite British and American institutions, of his mother’s access to the private jet of a tycoon buddy.

6.  Chinese profits slumping - Gordon Chang at Fortune reports on how most Chinese listed companies are now reporting big profit falls and profit warnings.

The list of companies forecasting profit declines is impressive.  Air China, the nation’s flag carrier and the world’s second-largest airline by market value, has said profits will fall by more than 50%.

Huawei Technologies, China’s largest manufacturer of phone equipment, reported a 22% drop in H1 operating profit.  The profits of Huawei’s rival, ZTE, fell by 12%.  ZTE’s result appears suspicious because just two weeks before it had warned profits might fall as much as 80%.  The company, when issuing its warning in the middle of last month, blamed “postponement of tenders” by Chinese network carriers and other reasons for a precipitous fall.  Also not helping ZTE is China Telecom paying bills slowly.

What Chinese companies tell the public is one thing; what they say in private is another.  As Patrick Chovanec of Tsinghua University in Beijing notes, “Of the companies that I talk to throughout China, there isn’t a single one that is looking at an increase in revenues or an increase in profits this year.”

7. How much? - Eric Crampton at Offsetting Behaviour points to an apparent leak in NBR's NZ Property Investor showing Christchurch's covered stadium, convention centre and sports centre could cost a combined NZ$1.6 billion, with half of that paid by the central government. Really? That sounds an awfully high number.

NBR NZPI has been supplied with figures by a reliable source who cannot be identified due to possible repercussions. The covered rugby stadium is tipped to cost  $506 million, the convention centre $460 million and the metro sports arena $227 million. Other elements of the plan make up the balance of the $1.6 billion.

By contrast the recent parallel city plan based on the "Share An Idea" programme with residents allocated about $200 million for a rugby centre, $150 million for a convention centre and $120 million for a metro arena.

According to NBR NZPI informant, the government has indicated it would come up with roughly half the money for the Rolls Royce plan. But subsequently there have been calls for the city sell assets to pay a greater share. A community leader Reverend Mike Coleman described the scale of the plan as "bizarre." "It's emporer's clothes stuff. To even talk seriously about a rugby stadium or convention centre at these prices is absurd. We are not a big city in the scheme of things, we are a large town of about 300,000 people. We don't want to end up stuck with millstones like the Dunedin stadium."  

8. China set to devalue - New Zealand may have given up on trying to influence its currency, but China certainly hasn't, and won't. We are being incredibly naive about this and risk being the last man standing in this game of 'print and devalue to beggar thy neighbour'

Here's MNI reporting from Chinese official newspapers that the Yuan will be 'allowed' to depreciate.

 Leading official newspapers said Monday that the yuan is officially being allowed to depreciate as the government shifts policy towards shoring up domestic growth and shielding the economy from the European debt crisis. A politically-charged front-page editorial in the official China Securities Journal said, "the market is gradually accepting that the yuan has begun a period of depreciation" because of Europe, dollar strength and slowing domestic growth.

"For the purposes of boosting exports, stabilizing inflation expectations and managing money supply, appropriate depreciation and depreciation expectations at the present stage are good things for monetary policy," it said.

9. A slow death for Swiss Banks - It's hard to feel much sympathy, but Switzerland's notoriously secretive and...er...open banking system looks like it may die a death of a thousand cuts due to the intense pressure being exerted by tax authorities and politicians all over the world trying to chase down tax avoiders, drug lords and terrorists.

Here's the Bloomberg report:

Western Europeans may pull as much as 135 billion francs ($139 billion), or 15 percent of their holdings, from Swiss banks, said Herbert Hensle of Cap Gemini SA. Bank Sarasin & Cie. AG reported last week that private clients withdrew 3 billion francs from Swiss locations in the year through June.

Switzerland built the world’s biggest offshore wealth center during an era of “black money” that ended when the U.S. suedUBS AG (UBSN) three years ago. Many of the highest fee-generating European and American customers are withdrawing funds as the hunt for tax evaders widens. As many as 100 Swiss banks will vanish, according to Vontobel Holding AG Chief Executive Officer Zeno Staub.

“It will not be a big bang, but an erosion as amnesty programs are put together and as clients declare themselves and come clean,” said Francois Reyl, chief executive officer of Geneva-based Reyl Group, which manages 5.5 billion francs of assets. “Those banks which don’t adapt will die a slow death.”

As much of one-third of the $3 trillion of private wealth managed in Switzerland may be undeclared and at risk from foreign tax collectors, said Benedict Hentsch, chairman of Geneva-based Banque Benedict Hentsch & Cie. SA.

“Non-declared offshore assets were traditionally the most profitable assets,” said Andreas Lenzhofer, of Booz & Co. in Zurich. “There was very little client interaction, very little cost of compliance and the clients weren’t sensitive to prices. Now offshore clients are becoming the most expensive, challenging the profit model of the banks tremendously.”

10. Totally Jon Stewart on Mitt Romney's tax returns and baseless accusations. I love how he calls HuffPo the Sideboob Gazette, which is now about right.

(Updated with correct link to Gareth Morgan's blog here.)

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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Recall for us what happened in 2008?

They'll plunge alright when the time is right or a cascade of stop losses get triggered by the machines. Steven's right. 2008 and the NZD was going down up to 10% a day. Flash crash a couple of years ago and I watched the NZD drop more than 10% in 30 minutes. When the US markets go down, our dollar goes down even harder. All the public angst about the rise of the NZD is usually a sign its topping out for a while and about to correct.

Strictly speaking the conditional is not a tense #Williams cartoon). To the grammarian Draghi is preserving (against the tide) the subjunctive mood.
The beauty of the subjunctive is that is even more vague than the conditional - it has the force of "if only" or "maybe".
[Benefits of a proper education, eh, PDK]

Don't believe anyone when they quote a price for a stadium or convention centre.
Don't believe them when they tell you what the ecomonic benifits will be.
Believe me when i say ''they all speak with a forked tongue'

Re #7 - How Much
Yep--billion dollar rip-off time.   
Just like Welly's transmission gully road, Christchurch Grand chanellor demolition (The total cost of the demolition is in excess of $10 million--FFS)
Oldtime vested interests like Fletchers and all the local monopolists sees this crisis as an opportunity to price gouge and make fat profits.  
Unless we have serious overseas competitive bids e.g. from Aus, China, Brazil etc, we should not be letting any tender out.
And before anybody say "China ? Ppfft.. shoddy work"   just us think about the Southland Stadium, the PGC building,  and the new dance floor caving-in in Canty Uni.

Blowhard Bollard in the Herald was a fun read today.  Explaining how he does not understand anything nor actually know very much. Can we have our $600,000 back now please
Bollard acknowledged the Reserve Bank has been surprised by the tepid nature of the economic recovery and puzzled at why there was not more excess capacity in the economy, given how weak GDP has been.
"Like most other central banks we have been surprised at the way policy rates [like the OCR] have needed to, and been able to, remain so low for so long," he said.
He went  on to say that " Sure I have my foot on its throat but I cannot for the life of me understand why it is still breathing, it should be dead by now" (Ok he didn't really say that bit, but he could have).

#4 Which fund do you think is safer, GMI's KIWIBANKSAVER or the Golden Elephant #38?  GMI investers will be slaughtered in a currency event.  

I am thinking you may of posted the wrong link for this story.

http://www.theburningplatform.com/ - It's a Matter of Trust
A civilized society cannot function without trust. The downward spiral of trust enveloping the world is destroying our global economy and will lead to collapse, chaos and bloodshed. The major blame for this crisis sits squarely on the shoulders of crony capitalists that rule our country, but the willful ignorance and lack of civic accountability from the general population has contributed to this impending calamity. Those in control won’t reveal the truth and the populace don’t want to know the truth – a match made in heaven – or hell.
“Most ignorance is vincible ignorance. We don’t know because we don’t want to know.” – Aldous Huxley
http://www.oftwominds.com/blogaug12/perspective8-12.html A Little Perspective on What Lies Ahead
Many finance-oriented critiques start from the position that our problems largely stem from the financial/political dominance of Elitist cartels and cabals. Clearly, the malinvestment, exploitation, predation and disregard for the law that characterizes the rule of political-financial Elites in both developed and developing nations have wreaked havoc on societies and economies around the globe.
The unpayable debts are only symptoms of a deeply flawed system. To see the debt as the problem is to ignore the system which created the "need" for that debt:
You see the point being made here: living within our means requires a massive structural downsizing of assets, employment and expectations. An economy that has lived on the creation of debt (phantom assets) cannot be transformed by the mere writedown of debt: the entire structure that created and enforced that debt must be torn down, and everyone who skimmed off a profit or livelihood from that reliance on the machinery of debt will experience a decline in their standard of living.

I think Gareth Morgan may be stretching the facts more than a little, through self interest probably, although not sure exactly what that self interest would be.
The IMF suggested the NZD was ...at least...15% overvalued during the period where commodities were 20% higher, now that is a world of hurt away from the watered down wait n see we are copping from Gareth M...........
I called Christine L for comment on the NZD currently, the man who answered the phone wanted to know how I got this number......I told him Telecom gave it to me when I joined.....he hung up.
Love the Desert Island cartoon to pieces........

I would love to read Morgan'sblog comment but it links to a Reuters article

thks vm

#2 (Automated trading) and #4 ( Exchange rate not connected to fundamentals).
A transaction tax, which need only to be very very small, would put a stop to the freaky distortions.   

KH....as I said last week there is a bill before the senate at the mo for an FTT, I ear marked it as one to watch, believing that we would follow suit in due course.
But you can bet your posterior,.............we are not going to lead.

Knight Capital tried that but they set their own transaction tax :-)   ... to the tune of US$440M
Cheers TP

Re: #2  That's an awesome animated graph.  A massive increase in computer trading.
I looked into the feasibility of automated trading a little while back, but if you're a small player the overheads for each transaction kill the idea pretty quickly.  The big boys are lucky, having low transaction costs and fast connections are the things that make this insanity possible.

"The stock market today is a war zone" no, its a killing field.....there is no balance, one side has all the tech, speed, weapons and positions.....its like using an Abrams tank on the Americans plains v native indians on horse back.

That aside Steven, (and I don't disagree )"killing field " is a perfect terminology.
The inescapable reality in,  the trading of non existent money, that is not underwritten by any form of productivity ,is a cancer in need of excision.
 The very parasitic nature of " the Business" plays a significant role in the position exporters find themselves unable to deal with.

and what pray happens to the share market price when the non-existant money gets removed in 25 milli seconds?
I just think of all the Americans with 401k's(?) which are basiclly share portfolios...So a carry trade not just on currencies but shares as well.....
Yes its a cancer....its not doing any real workers any good and in fact its detrimental.....but then 1/2 the country wants to vote in a specialist in such endevours. 
Re: exporters, hence also I think there should be a tobin tax....make it un-attarctive to specualtors and traders where they are not trading in real things...though Im sure some bright spark will figure a way around that...

As I just said Steven.....the reality is inescapable....while proving deferrable , less so everyday.
I fully understood the stock investors component in the equation, separated inevitabley when the speculative portion outweighs the productive portion.

Private investors who've made serious wampum in the stock market , will tell you to steer clear of the big end of town , the large cap companies , where the dealers and hedge fund cowboys pack serious iron ...... keep yerself way clear of that Valley of Death , friend .. lessen you wannabe be filled with lead ......
...... you stray onto their patch , and you'll be scalped pronto , Tonto ....... skun alive , and your gizzards hurled to the buzzards , without regards ......
Stay in the smaller end of town , with the little companies , the start ups and tech wannabes ..... the greenfields , where the air is fresh , and the buzz of entrepreneurship is to be heard ...
......  there's a " free lunch " waiting for you , if you're brave enough to step up and smell the coffee , pardner ......
Hey ho , Silver ..... the Loan Arranger !

Tonto thank you Kimosabe.....Tonto know much about the way of the white eyes......have many sqaw chewing  Buffalo hide....makum good coat for long winter ahead.
Too many Chief say ,not enough indian......Tonto say, too many Chief.
Heyum ,smokum if you gottum.

Read the carefully crafted comments describing the old NYSE 'specialist' system and tell me it was any better or more transparent.to retail players. .

A killing field stretching from the mid-west to the Far East?  One billion NATIVE INDIANS would decimate every Abrahms tank the Yanks could mount an attack with.  And besides, they cant shoot THAT far...

FYI Warwick McKibbon, a former board member at the Reserve Bank of Australia, has just called on the Reserve Bank of Australia to intervene to drag the Australian dollar down to offset all this central bank buying of Australian dollars by Europeans and others desperate to diversify out of Euro-zone and other bonds.
He describes it as a pure 'portfolio shock' not linked to the fundamentals.
This is a pure portfolio shock generated in the financial market.
If foreigners want to hold more Australian dollars in order to park these dollars in foreign exchange reserves and will not be using these dollars to buy Australian goods and services, then the best response is for the Reserve Bank to print more Australian dollars. These additional dollars should be sold to foreign central banks in return for foreign assets. The foreign assets would appear on the RBA balance sheet exactly balancing the increase in money supply. There would be no effect on the domestic economy from this global shock if the RBA undertook this transaction.
This policy could be carried out either by direct transactions with foreign central banks or it could be done in the foreign exchange market by the Reserve Bank buying foreign currency equal to the amount they know foreign central banks are buying of Australian dollars. It is the case that the Australian money supply would increase but this would be by the amount of purchases by foreigners and thus domestic liquidity would be unchanged and domestic monetary policy and economic activity would be unaffected.

What McKibbin is proposing, and you are endorsing, is tantamount to hedging. As many of the hedge funds have discovered in the past 2 years, (to their utter dismay) is when both legs of the hedge go in the opposite direction to what was expected. BOOM. ie the spread widens at an alarming rate, instead of narrowing or holding.

McKibbin is correct : We ( Oz & NZ ) are suckers in the world of currencies and interest rates ......
...... whilst our central bankers do the prudent thing , keeping interest rates up a tadge , to offset our two government's which are each spending like drunken sailors  on borrowed money ....
... overseas most major jurisdictions are deliberately slamming their currencies into the ground .... Bugger everyone else ...
Warren Buffett said that if you're playing poker , and after 10 minutes you still hav'nt figured out who the patsy is ..... the patsy is you ...
Sucker !

Surely it makes more sense to introduce a form of FTT under NZCER to solve both our problems together .. given we're both seen as such 'safe havens'. 

We are only safe as long as there are no impediments to money transfers - sentiment has a habit of changing fast - the unintended consequences outcome should be given careful advance deliberation. 

If foreigners want to hold more Australian dollars in order to park these dollars in foreign exchange reserves and will not be using these dollars to buy Australian goods and services, then the best response is for the Reserve Bank to print more Australian dollars.
Nonsense - the Buba or other central banks would buy Aussie sovereign debt, which by default would transfer these Aussie Dollars to the seller of same bonds which could then purchase goods or more bonds - who knows.  Doesn't Aussie run a current A/C deficit so no shortage of AUD.
Or what say the Buba creates a credit line with a local Aussie bank to settle the purchase of the bonds - new money created and the bonds purchased?

I'm not sure which bit of his argument you think is nonsense, while the rest of your answer is somewhat cryptic and unintelligible.
What seems to me to be his fairly simple argument, is that if foreigners buy Aussie dollars purely as a "safe haven" with relatively high interest rates, and not with any intention to otherwise buy Aussie goods and services, then that has and will artificially lift the Aussie dollar. That lift hurt exporters, tourism and manufacturers.
In response, as I understand his argument, the RBA should make matching purchases of foreign currencies/assets to have a correctly valued Aussie dollar- where I'm assuming correctly valued would be a balanced current account.
I personally think there are alternatives, such as dissuading the main commercial banks from encouraging foreign Swiss/Japanese/Chinese aussie bonds, and replacing them with direct Aussie government bonds; or in our NZ case, buying back foreign debt of the SOEs or government, until the currency is fair value.

FYI Warwick McKibbon, a former board member at the Reserve Bank of Australia, has just called on the Reserve Bank of Australia to intervene to drag the Australian dollar down to offset all this central bank buying of Australian dollars by Europeans and others desperate to diversify out of Euro-zone and other bonds.
Stephen L , central banks never lend unsecured funds to a bank - if they buy the AUD on the open AUD/EUR market the only home they will consider is Aussie sovereign debt - what unintelligible - they will exchange the AUD with the local institution/broker selling the bonds - the AUD will be credited to a domestic bank A/C - a bank will then lend it out for purchase of goods or whatever.
For the rest of your thoughts think cross currency basis swaps if you consider them  important.

Bloody hell, the animated gif is an arresting chart sight if ever I’ve seen one!
Who would have thought that a visual representation of HFT would start looking like a smouldering fire that eventually turns into a raging inferno?

Why can't a FTT be large, say 5% and replace other taxes like GST and income? Can't avoid it, collected by the banks instantly (under IRD supervision) and progressive as the wealthy make bigger transactions. Could make it on every transaction going in and out of a bank. Would capture a lot of the black market too that doesn't pay tax at moment. Would kill scalping type speculation dead.

Try parking in a parking building for free !!. Or at a parking meter. There is a fee plus GST. Yet the currency-cowboys can park their (hummer) hot-money without incurring any local charges. Same principle applies. A parking fee. An FTT.
Tell you what. Transfer responsibility to Local Body Councils. They'd fix it quick smart.

Because an FTT is there to prevent price distortions produced by technical and split second trading so that market prices reflect the fundamentals better. 
Put over simplistically, we would want foreign exchange transactions to be about the export of our produce and the import of goods.   We are wanting trading in currency for short term split second advantage to cease. 
A large FTT would produce distortions of a different kind in peoples trading.
If transactions were reduced by a small FTT, which is the aim, very little income tax would be produced.  Which in my view would be a good thing.  And a large FTT would reduce trading even more, so it would be self defeating as a tax gatherer.



10:22 PM (4 minutes ago)


to me






Good evening
As a business we have responsibilities to a range of stakeholders, not the least our shareholder-suppliers.
The current procurement pricing environment creates a position where we do not recover even the cost of processing let alone overheads.
Whilst we supply a number of markets where we do make a margin, these markets require a limited volume of stock, which we are buying on the spot market or sourcing from our term Backbone supply contracts.
We appreciate others may be offering higher spot prices, which is their prerogative and reflects their own positions.
We, however, do not believe we are mandated to ignore the realities of the marketplace and the new highs of currency, which would see us sending the wrong pricing signals to suppliers, and worse, disrupting the store market and effectively subsidising winter procurement pricing from main season procurement.
We understand suppliers will make choices on the back of our decision to reduce our processing capacity to a bare minimum for the balance of winter, to serve key global customers and limit the volume of livestock required.
However, we are here for the long haul; we believe it is incumbent on us to act responsibly and in the long term interests of our shareholders, suppliers and customers, rather than fuel and further distort the livestock market.
We trust this gives you some clarity to our position.




FTT/Tobin taxes are only useful if imposed:

  • uniformly (to stop arb possibilities as between differing rates)
  • globally (a geographical variation on rate arb)
  • at the same moment (to stop time-based arb)

Now stop and think to yer selves - just exactly how is all this to be agreed, communicated, implemented, enforced, and measured?
Europe would be the working example of a unified - um - something along these lines, actual point escapes me, and the inmates all seem to want out, but hey, the Project is well-intentioned...