Monday's Top 10 with NZ Mint: Aussie direction; optimal tax rates; the platinum solution; French fizzer; GE pirouette; 'Lets get fracking'; 'Kill the subsidies'; Dilbert

Here's my Top 10 links from around the Internet at 10:00 am today in association with NZ Mint.

Bernard will be back with his version tomorrow.

As always, we welcome your additions in the comments below or via email to

See all previous Top 10s here.


1. How to look at a glass at half volume 
Is Australia about to tank, and take us down with it? The gloomy view is everywhere, including in official circles. Pessimism is now the mainstream. The only problem is that the optimists are making decisions with a different reality. Clancy Yeates at the SMH looks at the data from an Aussie point of view.

Two starkly different views of Australia's economy were on display this week. One suggested trouble was around the corner. ''Emergency lows'' was the catch-cry of market pundits and media outlets on Tuesday after the Reserve Bank cut the cash rate to 3 per cent, a level not seen since the depths of the global financial crisis. Clouds over the outlook darkened further after Wednesday's sluggish economic growth figures sparked fresh criticism of Labor's plan to return to surplus during a slowdown.

Global investors, however, appeared to take a different view. For all the excitement about the lower cash rate, international currency markets that determine the dollar's value pushed it sharply higher after the Reserve's decision. Clearly, there is a big gap between the view from overseas and the gloomy economic mood within Australia.

For all the challenges facing the economy and individual industries, however, Richardson concludes there is still reason to believe the glass is ''half-full''. To make his case, he points to what economists call the ''misery index'' - the inflation rate plus the unemployment rate. Australia's score on the index is 7.2, compared with 10.1 in the US and 13.9 in Europe. ''It's very close to its lowest level since the 1960s. We should be calling it the 'happiness index','' Richardson says.

2. Optimal capital taxation
Bloomberg (the editors - I wonder what the owner thinks?) says that given the current distortions in wealth, the "optimal tax rate on capital ... would be as much as 60 percent". It points to a recent paper that modeled the issue. Essentially they are saying that the wealth distortion is now so large that the benefits of shifting to high wealth taxes now outweigh the costs - at least for the US and the EU.

What does all this mean for the current U.S. tax system? It suggests that if you think the government needs more revenue to reduce its budget deficit, raising taxes on investment income is a good solution. What should the rate be? Anything above the current level would be an improvement. It would have the added advantage of reducing the incentive to game the system by, for example, classifying carried interest, the equity some investment managers receive as compensation for their work, as a capital gain instead of ordinary income.

3. Two can play that game
If President Obama wants to avoid an economic calamity next year, he could always show up at a news conference bearing two shiny platinum coins, each worth ... US$1 trillion. Okay, that sounds utterly insane. But some economists and legal scholars have suggested that the “platinum coin option” is one way to defuse a crisis if Congress cannot or will not lift the debt ceiling soon. At least in theory. Brad Plumer explains:

Under current law, the Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases. Under this scenario, the U.S. Mint would make a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue.

“I like it,” said Joseph Gagnon of the Peterson Institute for International Economics. “There’s nothing that’s obviously economically problematic about it.” In theory, this is much like having the central bank print money. But, Gagnon said, the U.S. government would simply be using the money to keep spending at existing levels, so it would not create any extra inflation. And if it did cause problems, the Fed could always counteract the effects by winding down some of its other programs to inject money into the economy. Is the platinum coin option really legal? Apparently so.

4. A French fizzer
François Hollande began his presidential campaign by declaring, “My enemy is the world of finance.” Since he took office in May, France has unleashed a barrage of taxes and regulations on bankers and financial firms.

So far, his enemy appears largely unscathed. Carol Matlack at BusinessWeek reviews how investors have run rings around the French president.

Consider the 0.2 percent tax on share purchases that France started collecting this month. The first in Europe, the transaction tax was supposed to rein in hedge funds and other market speculators. Yet brokers can escape the tax by selling so-called contracts for difference, which let clients bet on a stock’s gain or loss without actually owning it.

That leaves less sophisticated individual shareholders more likely to pay, says Jacques Porta, who helps manage $627 million at Ofi Patrimoine in Paris. “The target was supposed to be finance with a capital F,” Porta says. “Instead, we are punishing small investors who aren’t to blame and already are frightened off by losses in the market.” The government initially estimated the tax would raise €530 million ($688 million) this year and €1.6 billion in 2013, but the finance ministry now says it’s too early to tell whether those targets will be reached. At a Nov. 13 press conference, Hollande himself said the effect on financiers is likely to be “modest.”

5. Waste management
This week, the New York Times ran an important series of articles on state and local incentives to business. The reporting was terrific, but even better is the data set the Times put together on the scale and scope of these incentives. The conclusion? These programs are a waste of public money. Here is the result of some analysis done by Richard Florida at Atlantic Cities: (Also see #8 below.)

Our biggest takeaway: there is virtually no association between economic development incentives and any measure of economic performance. We found no statistically significant association between economic development incentives per capita and average wages or incomes; none between incentives and college grads or knowledge workers; and none between incentives and the state unemployment rate.

6. Avoiding investment fraud
Unless you are a financial adviser yourself, how are you supposed to avoid getting caught up in an investment fraud? When so many so-called smart-money people are victims themselves, it is a worrying issue. There have been a series of high-profile fraud failures in New Zealand and the standard advice is to "find someone [qualified] you trust". But most investment fraud victims thought they had done that. The NY Times has been looking at the issue.

“People like Drier and Madoff were highly intelligent individuals, they were very charismatic and they were giving people what they wanted,” Mr. Simon said. “It is harder to bring into question those who are providing you something you want.”

Randall A. Pulman, a lawyer in San Antonio who represents many victims of Mr. Stanford’s fraud, agreed that the will to believe was what ensnared people. “For you and me, it’s too good to be true,” he said. “For the guy who has been working in the oil fields, how is he supposed to know?”

Of course, fraud and just plain bad advice are not limited to the poor or unsophisticated. Robert P. Rittereiser, the former chief financial officer of Merrill Lynch and former chief executive of E. F. Hutton, is working as the receiver for two funds suing J. Ezra Merkin, a former money manager who steered money to Mr. Madoff. Mr. Rittereiser did not think investors in Mr. Merkin’s funds knew that their money was simply being passed on to Mr. Madoff. But even if they did, they may not have seen anything to be concerned about. “They were investing money and getting appropriate returns for the kind of fund it was,” Mr. Rittereiser said. “Most of them had a relationship of some kind and confidence with Merkin and the people he was dealing with.”

Their full story is worth a read, but in the end they did not come up with any comforting strategies - except perhaps, diversify your advisers as well as your investments. They sort of suggest having three ... if you have a big enough portfolio.

Investing is work - and for many people, hard work. If you are looking for good returns with no risk, and with no work, maybe you are not an investor; maybe you are a gambler.

7. Meanwhile, back at the plant ...
GE's giant manufacturing complex in the US, Appliance Park, once employed 23,000 workers. It was also known as 'Strike City'. Then 'outsourcing' happened and the workforce fell to 1,863. It was so big, they couldn't find anyone to sell it to. But something remarkable is happening on the site - 'insourcing'. GE is not alone. Charles Fishman has an exploration of the startling, sustainable, just-getting-started return of industry to the United States. It is a longish read, but inspiring in its own way.

In fact, insourcing solves a whole bundle of problems—it simplifies transportation; it gives people confidence in the competitive security of their ideas; it lets companies manage costs with real transparency and close to home; it means a company can be as nimble as it wants to be, because the Pacific Ocean isn’t standing in the way of getting the right product to the right customer.

Many offshoring decisions were based on a single preoccupation—cheap labor. The labor was so cheap, in fact, that it covered a multitude of sins in other areas.

The approach to bringing jobs back has been much more thoughtful. Jobs are coming back not for a single, simple reason, but for many intertwined reasons—which means they won’t slip away again when one element of the business, or the economy, changes.

8. 'Kill the Hobbit subsidies to save Regular Earth'
Joe Karaganis is not keen on incentives to make movies - and he keys off on New Zealand. He calls our approach a 'suckers game'. Is he right? Or is his just a 'losers lament'? His opinion is on Bloomberg:

Let’s start with the obvious. Film money is the hottest of hot investment money, fast in and fast out. Production is very mobile, and studios have become adept at extracting subsidies from governments for a few trinkets and promises of jobs.

The worst part is that, for most of the wannabe Hollywoods, it’s bad economic policy on every level. The productions bring in mostly low-end, temporary jobs, while the high-end jobs remain in Hollywood or New York. Call it the Curse of Harry Potter.

9. 'Let's get fracking'
Science writer Matt Ridley has a different take on fracking, albeit with a British eye. Do we really "all benefit" if they succeed?

Yet still the environmental movement, deep in bed with the subsidised renewable energy industry, wants to impede shale gas, fearful that it might succeed. Until recently it looked as if the [UK] Government’s energy policy was to go beyond picking winners to pick losers – how else do you describe an policy that hands out the most money to the most expensive ways of generating power? – and even ban winners. How else do you explain repeated pronouncements about not letting shale gas production go ahead until we know it will work?

Let the drilling companies try extracting shale gas. If they fail, that’s their look-out. If they succeed, we will all benefit, because the price of energy will come down. In America they have driven down the cost so far that many shale gas companies are in trouble – too successful for their own good. The same thing happened with railways in the 1840s – most entrepreneurs went bust, but the traveling public got a railway system. As Joseph Schumpeter explained, that is how the market works – the consumer gets most of the benefit of innovation, not the producer. Whereas if subsidised wind fails to cut emissions or electricity prices, then we consumers pick up the bill. Bad deal.

Shale gas is everywhere, it seems. More here. Something "substantially large" is developing in Australia too. Check out this map.

10. 'European banks thriving ...'
Now there's a headline that generates a double-take. Its from the NY Times, and it is pointing out that investors have grown confident the EU banking crisis will be solved and is now more of an official issue, rather than a banking system issue. The accompanying table also shows how easy it is to focus on a 'few' bad cases (Banksia, Commerzbank, Caixabank) while overlooking where most of this sector is headed.


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 or click on the "Register" link below a 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.


re:#6: Investing is work - and for many people, hard work. If you are looking for good returns with no risk, and with no work, maybe you are not an investor; maybe you are a gambler.
Stop moralising, gambling involves significant risk - good financial returns with no risk, and with no work, simply do not exist since all of us would be at the beach already.

How about that no longer an option. Do all savers need to be "investors". Money by definition needs to be both a medium of exchange and a store of value. 
Most of the returns for all this "hard work" is eaten up by the devaluing currency. We are running harder, riskier to stay in place. 
This is the crux of the issue.

How about that no longer an option
Where and with whom?

I simply use the question to illustrate how difficult it is to save, as opposed to invest. The point is important for many on modest incomes with long time horizons.
Savings are for the future, investing is for today. Sorry if I am being obscure but the option has historically been there to defer interest income for capital security. That is simply not possible with currency.

"We are running harder, riskier to stay in place."
You have just described growth by the expotential function and its describe how it ends.

I guess we all know how it ends but to spell it out. Debts that can't be repaid won't be repaid.
All debts have corresponding savings/investments on the other side of the balance sheet. When debt blows up savings will blow up. We are seeing it now, pensions being defaulted on. Workers told they are greedy have to tighten their belts. Old people told to not be so sick as there is no money. Nothing for education.
Why? Because the interst stream to creditors MUST continue or all is finished. Hence QE3 etc....


re: #3 - Surely it's a joke article.

Without doubt - the calamity of outstanding metal revaluation would bust the financial system more than it already is.  Imagine being short - quite funny really.

No, it's a joke financial system and it wouldn't surprise me if the free lunch fools in charge were to try a stunt like that.

Comment from the (#3) article:


Chuck Ellinger


Shiny fiat. The Treasury should give themselves some flexibility. It should mint $1 billion coins instead, then every Friday the Treasury could announce how many $1 billion coins it minted that week. It'll be like Fed watching. Will they be deposited right away? Will they be heading for Fort Knox? Great sport!


Gold used to extinguish debt. Debt payed back by gold dissapeared. Debt payed back by currency is simply transferred, the interest stream continues unabated. Does this 1 trillion coin retire the debt, cancel the interest stream as gold did? Or is it smoke and mirrors?
I think the answer is obvious.

#9 -the standard idiocy.
"we will all benefit, because the price of energy will come down".
The whole-and-only story about fracking, shale-plays, bituminous goop and the rest, is that you don't go for them if you've still good-quality sources.
They'e all a degree of 'dregs', all take more energy to produce, that that which has gone.
Welcome to the bottom of the barrel. The 'price' won't come down.

You are so right.
The price won't come down but the price of extracting it will go higher and higher.
So the only winners will be the people selling it.

Dont forget the parasites, the bankers doing the deals, and the forex speculators etc etc.....the CEO's of the likes of Exxon keeping the game going so they can collect their huge bonuses.
Next stage is we'll find lots of such "high flyers" will be looking for safe bolt holes....somewhere to park their money tax free and have a nice lifestyle block to boot they can sell tax free....oh wait...........
regards is a proxy for energy.  When EROEI is less than 10:1 maybe even 8:1 then its robbing someone to pay someone else at an un-sustainable rate.  The equation has to balance, its compulsory, so "we all benefit" is an outright lie...I cant even see it as being mis-informed, its sounds to wilful.
"price come down" no, but I expect the next call will be "it wont go up as much if we do".
The tune for the musical chairs seems to be becoming rather um ...speedy....

Is money (debt) still a proxy for energy? Credit can be created independent of economic growth.
Credit has been created far in excess of growth since no avail. Resulting in asset bubbles that we call investments.
You have to wonder about this oil boom in the States. What a herculean effort to get it out.

Yes....both are a future call for work.   Both are really an IOU...
yes, the shale oil boom should be watched like a hawk.
yes the herculean effort is just doesnt add up.
1) The eroei needs to be 10 to 1 or better for the way our industrail society works...shale doesnt even make 5 to 1....ergo some other process or sector is robbed....or its a debt on the future.
2) OPEC is saying they expect oil demand to drop so they will cut back on their output....a brilliant move to mask their decline and blame someone else, well tahst one possibility.
3) IEA now saya all is well that the shale play lets us off the hook.  Them also of course are let off the hook by this.
Strikes me that the shale oil frausters are making calims that cant and wont be substantiated but other players are now saying whoopppee we get off for free.
sit and watch....nothing else to do.

I admire your confidence in Peak oil and oil decline in general. I have read Matt Simmons book "Twilight in the Dessert"  and it paints a dire picture, but we are seemingly trucking on. I am more sanguine about big oil's ability to muddle through.
Nevertheless I agree with you in principle.
Problem is in the long run we are all dead......

You had to be careful reading Simmons.
He was an 'Investment Banker to the Energy Industry', and a more vested-interest p.o.v., I can't imagine.
Twilight in the Desert was long on words and short on content - I could have precied it in about 5 pages.
Made some weird comments about the GoM disaster too, although they might have been distorted on the way through the wash.
Is sanguin a desert version of a penguin?       :)

Good piece. I don't always agree with Krugman, but yeah this makes sense. Either way it's a minefield for Joe Kiwi trying to save for the future. 

I dont always agree with him either, but he makes more sense more often than many.
Its expect that the future will be highly volitile, hence investing becomes un-sustainably risky...IMHO.  Saving is of course putting away money for a future need.  I'd suggest that the problem will become more and more not to lose your life savings as opposed to not making poor profits.  I lost 22% of a fund in 2008 after 30 years savings...I expect it will be worth zero in the not to distant future.....

Sorry for your misfortune....
Yeah those unit trusts / mutual funds are a dog's breakfast. We were out just before dot-com crash and 2007 crash (fund manager argued with me both times!). 
Now I am more careful. Liquidity is the name of the game, and a solid hedge against currency devaluation (inflation if you will). I am sure sovereign debt will be defaulted on and that the creditor will be hurt badly. Is that the taxpayer, pension plan, bank? This is the question.
Either way it will be ugly.

Experience is an eye some ways its not so bad, I have learned that the so called promises were empty.  On the bright side consider what I could have done, at the time instead of a simple table mortgage I could have taken out an insurance fund/policy that proposed to pay out on maturity the cash sum of the house plus some extra $s, in the meantime I only paid the interest.....think of the losses I could have in some ways very lucky.
I took that out at was carefully studied by my father and was one of the best.  For 10~15 years it did quite well then got sold and sold again,,,til it was making little...then the huge loss. Hence why when I came here 17 years ago and got ripped with yet another company pension fund (via Tower) I determined that I'd do my own thing and by shares, I didnt do badly.....bailed a while back and cleared debt (mortgage)
"the creditor will be hurt badly. Is that the taxpayer, pension plan, bank? This is the question." 
all of them....
Its a monolithic culture/setup, its more and more optimised and inter-linked for profit/efficincy at the expense of when a severe shock comes it will be large.
Pension plans are gone, shares just have to tank first....they are really parasites ie only interested in short term gains and 7% "profits" to generate the returns promised....
The next domino is the banks which have to be bailed/supported by the tax payer...
Default is 100% assured, just look at this chart and te "un-identified projects"
So by 2030 we will as a global economy demand 108 mbpd, "guaranteed" supply will be 43mbpd (and whats actually available on the open market is another thread)....the only price mechanism we have is price..
The problem is what will the price of petrol / etc be, $5NZ?  that price is then too high for most to we wont be buying.....That says a massively deflated economy, which with low tax receipts says default.
The only Q is how far is it away.

the price of gas in the US has gone from $14 to $2.

Profile - you miss the point.
of which the pick is perhaps this:
Perspective, all is perspective (Tolstoy got it wrong...)

Interesting opinions predictions.. The point is the price has come down. Earlier you commented that the price wouldn't come down.

Ah, but you can't use rational argument against dogma ;-)

The discussions (the Oil Drum, the Energy Bulletin, Staniford's  Early Warning, and others, all suggested that there would be a glut of natgas in the US, but that the decline-rates would be steep - many-drillings-just-to-stand-still.
The glut was predicted to bankrupt many of the current Co's, and the bounce will be courtesy of the new owners requiring profit on investment, and indicative of the scramble to change to gas from whatever.
Given that all energy prices impact all other sources, the price has to rise. Or at least, the demand has to rise. Given that income - and therefore the ability to pay - is energy-backed 100%, maybe we need a better measure. Come down to it, where debt is accruing in the process of paying, are we indeed paying?

No, yours is not a rational statement. The price of Natural gas is a glut in the USA....has that effected the price in say the UK? no.  Price of US petrol? I said its almost a waste product.
So what you see is a "local" anomally nothing more. To suggest PDK is wrong based on that makes no sense.
Beyond that, price is demand based as much as anything, so we had $147 in july 2008 and it then collapsed to $35, now its back at $90 to $110....
Now its threatening to go way down again....or up again....such volitility in a post peak world....the point is the price is up above what we can afford to pay when we can afford to pay it.
Oil at an average of <$50US for years is a thing of the past, the new normal is now $100USD...

Gas as in natural gas?  and so what?
gas as in petrol is,  $3.80
So back in 2008 petrol was $4, no shale play as such, today big shale play and its $4 again.
In which case what you should see that these are not inter-changable or substutable for one another. If they were, natural gas would displace petrol, it isnt....and it cant really.....
The thing they really want is oil or an oil like fluid to turn into petrol....gas is almost a waste by-product....
Gas is also un-exportable by US law, so its not a global priced commodity....petrol and crude are, hence are, a global price.

Have your heard of cars running on CNG? Cleaner burning, quieter, cheaper... I guess waste Management must be stupid converting their entire fleet to CNG.

Hvy goods (18 wheelers) cant run CNG, for long distances and at high spped and load, that takes deisel.  Converting millions of American cars to CNG takes thousands of conversions plus storage of CNG at gas stations and transportaion to them, neither are in place and none are cheap to do.
BTW the price you quote is US for US gas and not NZ for NZ gas...not the same thing.
"Waste management, recently announced the launch of a new fleet of 25 compressed natural gas (:CNG) trucks and unveiled the first public-access, 24-hour CNG fueling station in Louisville, KY.

The new fleet of state-of-the-art vehicles will replace the existing heavy-duty collection trucks and will run on CNG, a cleaner fuel compared with to conventional gasoline or diesel fuel. The new fueling station will provide first-of-its-kind infrastructure to supply CNG fuel in Louisville."
One fueling station? 1700 vehicles? of how many tonnes each? at what speed and distance?
What you quote is a very specific instance, a micro issue and not a macro, to justify what btw?
Dont like the message? so trying to shoot the messenger?

LOL. He was simply pointing out that the claim made that "it wont go down" wasn't true. It did go down. In the worlds largest economy.
Facts are by nature very specific, it's the generalisations that end up being hollow.

Its doesnt matter about a short term dip in a localised context that can be explained by these factors.  The point is crude oil is $90 (ish) that is the marginal cost of extra production.  It will only go higher even if some sell it at a lesser amount just to get by.  
Beyond some point private entities wont drill for crude oil as the return with a temp price drop would send them makes no sense. Or the return they will demand will be too high for those who need it....they simply cannot pay.
So what are you trying to say here? that PDK is wrong in this specific instance is is wrong overall? or what?
If you dont believe it then fine ignore it.

Inflation will start to bite next year in a big way if the series of articles ending in this one is correct. Watch the oil price start to surge along with all commodoties, might test that issue of running trucks on natural gas and the 20+% power loss.

The only fly in the inflation ointment is debt deflation.....the central banks will need to be committed to squash that.

I think they are commited, the probelm is they are the last bastion and can be overwelmed by consumers and businesses not spending.  The xmas buying silly season has started in the US...if its bad (results in Feb?) oh dear...

zerohedge are un-hinged IMHO, calculated risk is way less fruity its wrong....It will be deflation.
Throw in that such nut jobs have been screaming inflation and bucket loads of it just around the corner for 4 years....its no where to be seen. 
Oil price surging has the fundimental problem of ppl cant pay the price so stop buying, that means contraction....or they buy less of something else....
Not just power loss but a whole lot of related engineering problems...

I have taken an interest in the shadow banking series because it backs up the math. If you create interest bearing debt then the question is how do you pay it off? You can't, one mans deleveraging causes a default somewhere else. The options are default or print. Default has been happening but just not marked to market. Although the Fed has been printing and buying the faulty debt, so it isn't really deflation or default at all, it is printing that will eventually express somewhere.
The money supply will eventually go parabolic IMHO.

Running on gas is a lot better than running on petroleum or diesel, CO2-wise
Many of my contemporaries, for many years and at great effort (it got progressively harder to find somewhere to fill up) used it totally. I tried running the old crawler on it once, but the comp ratio wasn't quite there....
But it's still a fossil-fuel, still finite. It's entirely valid to use it - sparingly - to effect the morph to sustainable energy forms, but no point in using it merely to continue BAU. The problem comes when you alter your infrastructure to deal with it, but there isn't enough to replace the decline in oil, and the mass-use of it induces the (entirely predictable) decline in gas supply too.

David i was interested in your first piece RE Australia , i believe that 2013 will be a very interesting year for the Australian economy , i feel that interest rates will nosedive , unemployment will hit 7-8% , and that the big four banks will find themselves in a position you would not expect to see , if i were a holder of these shares i certainly would be exiting these positions.
What i would like to see is if in fact the Australian economy tanks how do you see this affecting the NZ economy ??  especially our dollar position  , or the fundamental issues of a Australian economy stopping would play out in NZ ??

In terms of exiting the shares, so far if anything here the banks profits have improved during the down turn.  Now in extremis yes, if you see a Greater Depression and banks collapsing.  The Q is then how big a fireproof safe do you get for yourself to extract your deposits....or, better how much gold....(its denser and fireproof and cant be canceled or de-valued unlike fiat money).

busman your venerable finance man Bill English and a few of his chums were on a fact-finding trip (read: tax paid junta) in WA recently and after seeing a few really big trucks moving some coal around he came to the conclusion that everything was hunky dory and there is every reason to feel great about the NZ economy.

With that kind of cracking research you can rest assured that the NZ govt is much better informed that you are. So don't worry, be happy...

France going bye bye?
"Sales of French cars fell 28% in November from a year earlier, with Citroen down 26% and state-owned Renault down 33%. Foreign brands fell just 7.9%. "The middle class, which tends to buy standard French cars of between €10,000 and €20,000, has been particularly badly hit by the crisis," said the CFFA’s François Roudier.
The severity of the decline stunned analysts and suggests that France has at last been engulfed by the festering crisis across the Mediterranean region.
The country has been bouncing along at near zero growth for a year and half but has managed to keep out of technical recession, partly because it has been cocooned by a Leviathan state and has put off hard decisions.
The economy seems to have buckled abruptly over the autumn, shedding more than 40,000 jobs a month. Unemployment has risen to a euro-era high of 10.7%."
la wallet she shut...
Of course our beloved leader over at the RB is watching such things like a hawk....10.7%.....seems way more likely than 4.9% to me.

Perhaps you should provide a little perspective on who the authors are you are selecting for your top 10 Mr Chaston. Take No 9, written by Matt Ridley. This individual is a noted libertarian and climate change denier (which may or may not colour your views on him). However, he is often touted as someone who 'can see the future, and the future is bright'.
Lets go back a few years. The said Matt Ridley was once upon a time non-executive chairman of Northern Rock bank in the UK from 2004 to 2007, having joined the board in 1994. (it is of note that his father had been chairman from 1987 to 1992 and sat on the board for 30 years - nothing like keeping it in the family then, but then libertarians always were a bunch who state do as I say, not as I do). From wiki:
'In September 2007 Northern Rock became the first British bank since 1878 to suffer a run on its finances at the start of the credit crunch. It was forced to apply to the Bank of England for emergency liquidity funding, following problems caused by the US subprime mortgage crisis.[19]
Matt Ridley resigned as chairman in October 2007, having been blamed by members of parliament for not recognising the risks of the bank's financial strategy and thereby "harming the reputation of the British banking industry.''
So there you have it then. He wasnt very good at seeing the future of Northern Rock, so you'll forgive me if I dismiss his views on the future of anything else. His inability to see the future saddled the UK taxpayer with billions of pounds of debt. He is a failed ex-banker (on a massive scale) and now you Mr Chaston are holding him up as some expert on fracking and natural resources? Give me a break.

Comment from the (#8) article
  Hmmm I think whoever wrote this clearly doesn't live in Wellington, or understand film making.
  The flow on effect in the wider Wellington / NZ area has really surprised my since shifting back to NZ.  I have worked in post-production both before Weta and now and can see the amazing impact it has had on the New Zealand 3D industry.  Also there  seem to be smaller businesses from Restaurants / bars ( in and around Miramar ) to many other smaller technology companies all over the country thriving because of the now 10 year technology boom Weta has started.  Many of these have been started by people recruited into Wellington from abroad and have now set up shop in NZ with mostly international clients.
  My brother and many friends work for Weta and they certainly aren't on the small wadge short term contracts that is mentioned here.  I know he is referring to the shooting and production ( not post-production ) side of things, but that highlights the very narrow view at which this person is taking. 
  Another point that is made is clearly wrong was the point about the good high paid jobs staying in New York or LA.  This clearly show a lack or understanding of how large scale post-production facilities are run.  You simply can't do these jobs from afar. You need to be working on-site.  The large number of international talent working in Wellington reflects this.
  The tax breaks that John Key has provided is certainly worth it when you take a slightly wider view at what has happened to our technology scene over the last 10 years.  That's without even mentioning tourism.

The tax breaks that John Key has provided is certainly worth it when you take a slightly wider view at what has happened to our technology scene over the last 10 years.  That's without even mentioning tourism.
Since John Key is committing taxpayers money, not his own, please explain how I get to benefit as a stranger to Mr Jackson and his US minders' efforts.

#7 hopefully this growing trend back to insourcing will lead to the sensible business practice wherein any manager that even suggests outsourcing operations/development/call centres to India, without having actually been there themselves, is instantly sacked.

If they suggest it after having been to India, then a much stronger punishment should ensue!

I should point out though that this process is entirely circular and comes round every 5 to 10 years. This is because of the Peter Principle. Most managers are incompetent and have no idea what they are doing but in order to look like a 'take charge' kind of guy/girl, they resort to the outsource-insource cycle...

In any given year about 50% of managers are deciding to outsource certain parts of the operation to 'streamline' the business, take advantage of 'competitive cost structures', explore 'alternative service delivery models', leverage synergy across the organisation, and several other Dilbert-speak jargon-phrases and acronyms designed to make you think he/she has any idea at all.

The other 50% are proactively onshoring certain operations that were offshored by the previous manager, to 'centralize operations', save on travel/transport costs, take advantage of 'core local skills', 'customerize' the business, etc etc.

Every 5 -10 years these managers move on to new employment opportunities and the cycle of off-shore/in-house continues unabated keeping a lot more people (managers mostly) in well paid employ.


All I was saying is the price of gas in the US did go down not up. Given it is the first country to fully get on board with fracking perhaps it is likely the price will go down in other countries too. I am not trying to shoot the messenger. Lets say in the long run oil is high and gas in low in the US. Business will adapt. Perhaps they will start using more CNG and less petrol to run cars/trucks. You can't predict these things but we do know the price of gas went down and nobody predicted the shale gas revolution. I feel like worrying about peak oil is like worrying about London drowning in horse shit back in 1910.

Your last sentence is what you're really about, eh?
We've had that 'debate', although it was too lightweight to really be called one.
How much work (in the physics sense) was being done in 1910? How many people on the planet? How much consumption per head? What oil-in-place?
Actually, the gas was always 'discovered'. You can't develop what you haven't discovered, as a general rule. What was a bit of a surprise, was the speed with which it all got tapped simultaneously.
Business will adapt? Good luck adapting a growth-needin system to a sinking real-energy lid.
Don't ever look back to prove forward. That's a horseshit exercise     :)

Yes, I am an optimist. Have it your way if you want, pretend the price of gas went up. Don't let the facts get in the way of a good prediction.

or emotions.

OK "optimist" in that time frame where has the price of petrol gone?  because its transport fuel as the problem, not gas.
"U.S. consumers will inevitably face higher costs for electricity and goods as international pricing pressures come to bear on the U.S. domestic natural gas price".
It's worth the full read. Funny how some folk see a dry deckchair and extrapolate that there ain't a sinking going on. Me, I ask why?

"the recent USGS report of all shale plays in the U.S. Based on actual production data, the USGS reserve estimates confirm that operators have significantly overestimated reserves by a minimum of at least 100% and at times as much as 400-500%. In other words the wells are not producing as well as operators claimed. Moreover, the Haynesville wells are already showing considerable declines."
In one word, fraud.
For deloittes and NERA all I can say is prostitute.......the laughable thing is of course the data is quickly showing what they are saying is a lie......credibility..........plonk............bin.

Since John Key is committing taxpayers money, not his own, please explain how I get to benefit as a stranger to Mr Jackson and his US minders' efforts.
-- Do you have friends or family who would ever want to work in New Zealand's wider technology sector.
-- Do you have friends or family who could benefit from the air transport / ground transport / catering / many other jobs that the production provides.
-- The large amounts of over sea's people bought in need places to live / eat / be entertained....maybe you can benefit from this.
-- Are you involved in NZ tourism. The film industry has had a huge impact here
-- Do you believe that creating more high paying knowledge based jobs is the way forward for the NZ economy. ( I certainly do ).  Weta has helped out massively here.
The benefits really do stretch far beyond Mr Jasckon and his US mindersas you suggest.

Jamin -  a nice list of benefits - none of them apply to me and yet I get a demand to contribute - could it not be a case of user pays and leave me and my cohort out of it. If this is such a successful, useful venture surely it can function without subsidies from the totally disinterested and otherwise committed.

Maybe you should stop thinking

And so should those seeking the tax credits from uninterested parties. I and other people would rather spend our tax dollars contributing to the needs of the not so well paid.members of the community.

Yes, very moving. It is much better than Mr Key's policy of bailing out failed finance companies and failed insurance companies, I'll give you that. But if you were looking to support kiwi technology, industry and innovation then I bet there's a whole heap of more efficient solutions than giving tax breaks to American companies for extracting said tech, industry and innovation, no? thing to achieve this would be to bring back tax breaks for research and development for NZ companies.  R&D is a bit risky financially for smaller company's, but is where the big developments are made.  We need to be helping companies with some of this risk as it really does pay off long term.

I'd add one criteria, they would have to be NZ owned companies the profits are not exported tax free.

JK's or really the Govn's (labour are no different) reason for the bailout is simple, if they didnt there would be bank runs and the economy would literally collapse....
What efficient solutions?
Im curious.
The US govn has a 60+ years history of huge R&D' most of it around military needs.....I dont know of anything else that has been so "successful"