Gareth Vaughan on the milk powder paradox, a Chinese farmer's big sharemarket loss, Ambrose out of his bunker, things going wrong for a well intentioned boss & more

Today's "guest" Top 10 is by interest.co.nz's Gareth Vaughan, his first one.

As always, we welcome your additions in the comment stream below or via email to david.chaston@interest.co.nz.

And if you're interested in contributing the occasional Top 10 yourself, contact gareth.vaughan@interest.co.nz.

See all previous Top 10s here.

1) The milk powder paradox?

Some readers may remember the book by ex-pat New Zealander Michael Parker that we promoted on interest.co.nz four years ago. It was called The Pine Tree Paradox; why creating the New Zealand we all dream of requires a great university. Here's a video interview I did with Parker in 2011.

Parker's key argument was that exporting wasn't going to make New Zealand rich. His prime example was pine trees.

"You can grow a pine tree in New Zealand seven times faster than anywhere else in the world and that feels like the kind of competitive advantage that should make us rich, it should make us the Saudi Arabia of timber," says Parker.

"Instead what happens is that if you’re a forestry company in Canada or the United States, Scandinavia or Russia even, and you’re facing this disadvantage in terms of growth rates, you simply plant more trees."

Developments in the global dairy sector over recent months have reminded me of Parker's point about pine trees. Is New Zealand now suffering the same experience with milk? There's a glut of supply with increased competition from countries that, whilst perhaps not as efficient at producing milk and dairy products as New Zealand, have much greater scale than us.

Here's a Canadian take from The Globe and Mail as the latest TPP talks broke down with dairy, inevitably, one of the key sticking points.

Advocates of opening our dairy market to global competition insist it would be a boon to the most efficient farmers and processors, allowing them to grow by exporting their products internationally. But that belies the painful fate that would likely await the vast majority of Canada’s 12,000 dairy farms. Having been sheltered from competition for so long, the relentless demands for lower costs and higher productivity would overwhelm most family-run dairy farms.

Those demands are only growing fiercer. The European Union’s move earlier this year to abolish milk quotas is expected to lead to a surge in production in countries with the most efficient dairy sectors, particularly the Netherlands, Denmark and Ireland. They are aiming to take on New Zealand in the Chinese market and will push for wider access to Canada’s dairy market than the tiny amount they stand to get in the pending Canada-Europe free-trade agreement.

Then there’s the United States, where industrial-sized dairy farms with more than 10,000 cows are not uncommon. (The average Canadian dairy farm has 77 cows.) At the TPP talks, the United States is pushing harder than any other country for access to the Canadian dairy market.

New Zealand’s dairy sector rode the Chinese boom until growth there flinched. China now has big stockpiles of whole-milk powder, New Zealand’s main export, leading most analysts to predict that low global milk prices (and a weaker Kiwi economy) will be around for a while.

2) How a Chinese farmer lost it all to the stockmarket.

Some of the stories filtering out from the big recent falls in the Chinese sharemarkets bring to mind comparable tales from 1980s New Zealand, and the post 1929 crash United States.

There's money to be made and everyone wants a slice of the action. But things don't always end well.

Here's the sad tale of farmer Yang Cheng, courtesy of the CNBC video below. The initial lack of diversification in Yang's investing was certainly a concerning start.

Yang put his savings of US$164,000 in the bull market and invested his relatives money too. He bet it all on one stock, a local mining company.

And then, CNBC reporter Eunice Yoon says, Yang took some bad advice, which "doomed him."

What doomed him was margin trading. His brokerage convinced him  to try it. He borrowed US$1 million, more than five times his portfolio. When the market hit a low point in early July his brokerage forced him to liquidate. In an ironic twist he now owes roughly the same amount he originally invested.

A tearful Yang says;

I have ruined everyone in my family.

3) "Happy New Year, good health and ceaseless wealth."
On the subject of Chinese investors losing money, I've recently written two stories about Euro Forex, which appears to have been a major international financial scam run through British companies registered on the New Zealand Financial Service Providers Register. The stories are here and here. Most of the victims are apparently Chinese with one telling me they haven't been able to access their money for two years now.

My second Euro FX story featured quotes from, and links to, three videos of speeches by CEO David Byrne. In the first one he says a new account Euro FX is launching will enable clients to "experience forex trading for themselves." He signs off by wishing the audience; "Happy New Year, good health and ceaseless wealth."

The video below shows off London's Heron Tower, home of a "representation office" described as "one of the proudest achievements of the Euro FX brand to date." Euro FX's office was located on the same floor as Capital World Markets, which was raided by the police earlier this year with 13 arrests made on suspicion of fraud by false representation and money laundering.

One thing I've noticed in all the Euro FX videos I've watched is there's scant detail on what the company actually does. And something doesn't seem quite right about the guy presenting this video... 

4) Ambrose comes out of his bunker.

Ambrose Evans-Pritchard, possessor of a very English public schoolboy sounding name, has featured regularly in our Top 10s over the years. Always interesting and entertaining, he often paints a very gloomy picture of the global economy. To be fair to him there has been plenty of material to work with on this front in recent years given he's based in Europe.

This week, however, he was sounding almost optimistic, albeit perhaps only for the short to medium term.

In Europe, the monetary kindling wood of recovery is clearly catching fire. Spain is growing at its fastest pace since the post-Lehman crisis. So is Ireland.

The triple effects of quantitative easing by the European Central Bank, a 12pc fall in the trade-weighted index of the euro in 15 months and the fall in Brent crude prices from $110 to $50 have together lifted Euroland out of its six-year depression.

And;

The chances are that the growth scare of 2015 will prove to be a false alarm, much like the nasty episodes of 1987 and 1998 when market tantrums – frightening at the time – turned out to be innocuous. The cycle had another two years’ life both times.

On China;

It is not a return to the manic uber-stimulus of the boom years, but it is unlikely that China will spiral deeper into its slump over coming months. The Communist Party controls the quantity of credit through the state-controlled banks, and it is using that lever to pump-prime the economy.

5) Greece is, however, still between a rock and a very hard place.

Despite Ambrose pointing to some encouraging signs elsewhere in Europe, things in Greece remain grim. I have relatives there and here's what one of them wrote in a recent email to my mother;

You say you find it hard to understand what is going on in Greece - you should try living here! We box on as best we can but (there are) still limits on how much we can take out of the bank. They have put up GST to 23% but it hasn't really started to bite yet. It's August and most people are on holiday - wait till they all come back and they all have to face higher prices on less money. 

And one of Ambrose's colleagues at The Telegraph, Szu Ping Chan, had an interesting article on the extent of Greece's debt woes, based on analysis from the National Institute of Economic and Social Research (NIESR).

By the end of 2016, the economy is forecast to be 30pc smaller than at its peak in 2007 and 7pc smaller than before it joined the euro in 2001.

“We don’t see Greece getting back to the level it was when it joined the euro in 2001, let alone anywhere near where it was before this crisis struck, so this is a prolonged and severe depression for Greece,” said Jack Meaning, research fellow at NIESR.

Economists said Greece’s creditors would need to write-off or restructure €95bn of its €320bn debt pile, or around 55pc of gross domestic product (GDP), in order to reduce its debt stock to around 130pc of GDP, from a projection of 186.9pc this year.

NIESR said this would make an International Monetary Fund (IMF) debt target of 120pc of GDP by 2020 - which it considers to be the maximum sustainable level - “at least possible.”

6) A global oil glut has tanked prices and cut profits—so why won’t Shell give up on the north? 
So asks an indepth Bloomberg article.

...on July 30, Shell’s chief executive officer, Ben Van Beurden, announced that as a result of $50-a-barrel oil, a 55 percent decline since last year, the company’s profit fell by a third in the second quarter. Expecting prices to “remain low for some time,” Van Beurden announced plans to eliminate 6,500 jobs, part of a broader contraction in a reeling industry. Even against this challenging economic backdrop, Shell won’t postpone or downsize its Arctic dreams. The offshore Alaska field, Van Beurden said, “has the potential to be multiple times larger than the largest prospects in the U.S. Gulf of Mexico, so it’s huge.”

This raises the question of why Shell is doubling down on the Arctic amid a worldwide supply glut, and at the same time that many politicians are vowing to address global warming. Among the major oil companies, it stands out for its frank discussion of the threat posed by its business to the world’s climate. Its top executives have even professed a desire to rethink fossil fuels and move toward renewable energy sources. And yet it’s assuming immense operational risks to drill in the Arctic.

Shell executives don’t deny the apparent contradiction. “We do believe in climate change,” says Pickard. Shell’s Scenarios group, an in-house think tank that management points to as an emblem of its open-mindedness, has done extensive work undergirding the company’s support for government policies encouraging development of renewable energy sources, she says. But the Scenarios research also justifies aggressive exploration for more crude. With the global population rising from 7 billion to more than 9 billion by 2050 and total energy demand nearly doubling, “hydrocarbons are going to be needed for an awfully long time,” Pickard says. “That’s where Alaska fits into the picture.” 

And here's Shell's intimidating sounding top executive for the Arctic, Ann Pickard, effectively saying the Arctic exploration is a bet on oil prices recovering, and other companies will follow if things go well for Shell.

Pickard acknowledges that if 2030 oil prices are no higher than today’s, all the effort will have been for naught. If prices are 40 percent higher, or $70 a barrel, Chukchi oil would be “competitive,” she says. At $110, which the company sees as a realistic possibility, it would be a smashing success. The vicissitudes of petroleum pricing aren’t Pickard’s concern right now. A Norwegian oil regulator she’s friendly with reminded her recently that if Shell makes progress, other companies and nations will be emboldened to try the Arctic. “A lot’s riding on your performance,” the Norwegian told her. “The world’s watching you.”

7) An interesting test case.
Law firm Chapman Tripp has issued an interesting brief counsel on the civil proceedings taken by the Financial Markets Authority against Milford Asset Management portfolio manager Mark Warminger. The interest, Chapman Tripp's lawyers say, lies in trying to establish improper behaviour in the thin and highly responsive New Zealand sharemarket.

The FMA is seeking pecuniary penalties against Warminger for trading carried out while employed by Milford between December 2013 and August 2014. Warminger's lawyer, Marc Corlett, says Warminger denies that he manipulated any market and will defend the case. 

Chapman Tripp points out the FMA allegations are in three categories: 1) placing small trades directly on market in one direction, followed by large off-market trades in the opposite direction, 2) trading that manipulates the closing price, and 3) trading conducted in order to set the price rather than for a genuine commercial purpose.

The FMA made the choice to take a civil rather than a criminal action. Maximum criminal sanctions are imprisonment for five years and/or a fine of $300,000 for an individual, $1 million for a body corporate. Civil proceedings, which can be launched by either the FMA or by investors, can yield compensation orders and a penalty of (i) three times any gains made, (ii) the consideration for the transaction or (iii) $1 million, whichever is the greater.

The principal advantage to the FMA of civil proceedings in this instance is that they require a lower standard of proof – on balance of probabilities rather than beyond reasonable doubt. There is also no requirement to prove that Mr Warminger actually knew his trading would have the effect of creating a false or misleading appearance. It is sufficient to prove that he ought reasonably to have known this.

And a civil claim is open to settlement – whether a banning order or a fine – whereas a criminal prosecution will deliver a win or a loss. If the FMA proves its case, it may open the way potentially for third parties to sue Milford and/or Mr Warminger. But the fact that the FMA has settled with Milford means that the claimants will be on their own in taking action for compensation against Milford. The FMA cannot join them.

The problem for the FMA in proving its case could be New Zealand's thin trading volumes.

The novelty – and the challenge for the FMA – lies in the peculiarities of the New Zealand market, the relative thinness of which means that entirely legitimate trades can look like market manipulation.

Fund managers with a large position in a small company who legitimately decide to off-load their holding can move that company’s share price. Similarly, on some stocks, a broker might be the only trader in the stock on a particular day.

8) Here comes Samsung Pay.
Much has been made of Apple's push into the world of iPhone payments through Apple Pay, which is yet to reach New Zealand. And now Apple's great South Korean smartphone rival, Samsung, is preparing to launch Samsung Pay. Here's Alphr with more.

As with Apple Pay, Samsung’s payment service uses the MasterCard Digital Enablement Service (MDES) to carry out contactless payments, but it also features an alternative method of transaction.

 Earlier this year Samsung bought LoopPay for an alleged $250 million (£138 million), and the American startup’s Magnetic Secure Transmission (MST) will play an integral part in the success – or failure – of Samsung Pay.

MST technology works by emulating the process of swiping a standard debit or credit card through a payment terminal. By directly beaming the same magnetic information found on traditional debit and credit cards to normal payment machines, Samsung Pay is able to “trick” them into thinking they’re reading a card.

As a result, Samsung’s service will be compatible with more merchants than Apple Pay – particularly in the US, which hasn’t been as fast to implement contactless payment technology.

9) US$70k minimum annual salaries back fire on the boss.
Earlier this year I saw a story on TV of how Dan Price, CEO of US firm Gravity Payments, had decided to introduce a US$70,000-a-year minimum salary, up from US$48,000 previously, for his staff. Price even cut his own US$1 million annual salary to US$70,000. Why did he do this? Apparently because of a study on happiness he'd read that said emotional well-being rises with income, but there's no progress beyond US$75,000 per year.

Naturally Price was popular with his staff. But it seems things haven't panned out too well for Price himself, as MarketWatch reports.

But since then he has faced some harsh consequences, and tens of thousands of emails. “I’m renting out my house right now to try to make ends meet myself,” he told the New York Times in this video.

“I haven’t made this little amount of money since I was in my early 20s. It helps that I’m 31 and don’t have any kids, too, and no girlfriend, no girlfriend to tell me I’m crazy.” One writer told him: “Dan, this is actually a recipe for disaster,” and three clients of Gravity told him that he made their job tougher.

Shortly after his announcement in April, he was served with a lawsuit by Lucas Price, his brother, and co-founder and minority shareholder in Gravity Payments, alleging that Dan Price breached his rights as a minority shareholder. (Lawyers for both parties did not respond to requests for comment.)

10) Tackling California's water woes.
The four places I've lived - Auckland, Wellington, London and southern Japan, are seldom short of rain for too long. So it's with some lack of comprehension that I look at seriously dry places and their struggles with water. One such place is California. 

This Boing Boing article looks at which water technology could save California from its drought. The two major technologies in development and "begging for attention from innovators" are desalination and water reclamation. Both, Boing Boing says, involve separating freshwater from "the things that make it unsuitable for human use" such as salts, pollutants and human waste.

Desalination is typically thought of as the refinement of saltwater by plants built in coastal areas, whereas reclamation deals with purifying water that was fouled by human or industrial use. The two main issues affecting their use and implementation are cost and environmental concerns.

When it comes to desalination, those plants that are in existence use a well-established, yet fairly old process, called reverse osmosis, which forces water across a permeable filtration membrane. The lion’s share of the cost lies in the energy, usually supplied in the form of expensive electricity from the power grid, required to move the water across that membrane. Additionally, membranes get dirty, require cleaning with chemicals, and need replacing on a regular basis, which adds substantially to the cost of running the plants.  

Then there is the salty, chemical-filled brine after-product of desalination to consider. Where does it go? Often it is pumped right back into the coastal ecosystem—where it can increase local salt concentrations far beyond the normal range—but there are other brine disposal options available that depend on specifics of a plant’s location. Regulations are also in place to ascertain that any proposed desalination plant properly assesses effects on marine life and the environment.

In California’s more recent history, investment in desalination plants has faced an uphill battle resulting from generally low water costs compared to the cost of water provided by such a facility, periodic booms in water supply, and legitimate concerns over environmental impacts.

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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49 Comments

#6 The surprise for me here is that with the popular consensus that we are past the peak of known hydrocarbon reserves (yes I am sort of changing my tune), that the major oil companies are not investing in identifying alternative power/ energy sources to replace hydrocarbons. Is this a case of blind faith in the future, total self interest at the expense af the planet and species, blatant stupidity or what? Do they have a plan for the business beyond the end of oil? The sooner a viable alternative is identified, the sooner it can be used to suppliment the use of hydrocarbons (hydrogen power cells, solar power while not yet very economical or practical are just two examples) drawing out the "used by date" and providing more time to identify alternatives to the less flexible uses of hydrocarbons.

a) " not investing in identifying alternative power/ energy" BP etc did this for solar decades ago, their conclusions were they could not make money at it.
b) "sooner a viable alternative is identified," there is not one transport/liquid fuel for the present global industrial economy/society to stay as is.
c) "Do they have a plan" no one has a plan except the Greenie tree huggers who "everyone" thinks are nuts.
d) "examples" always look at the total EROEI, nothing goes above 8 to 1 see b) and what we have to do see c)

Great Top 10 Gareth!

Loved this: The average Canadian dairy farm has 77 cows.

Blinking heck.

cheers

Bernard

Bernard they have some big farms too. Go to Alberta and look at some of the operations, no one in NZ gets near to them. Dairy farms in Canada are at a disadvantage as they don't have access to the cheap immigrant labour they have in the States, that and it's gets too bloody cold.
I'm a supporter of smaller family farms, the other option is to play into the hands of the big corporates.

Have you read this Journalists experience in the EU? You can download it as aPDF file, free.

http://fraudcastnews.net/

Seems those that should be beyond government subsidy are also in need of support.

The nation’s largest bank by assets plans to announce Wednesday that it is lowering the minimum credit score and down payment it requires for mortgages as big as $3 million.

The New York firm’s moves follow similar steps at Bank of AmericaCorp., Wells Fargo & Co. and other banks on requirements for “jumbo” mortgages—those that exceed $417,000 in most parts of the country or $625,500 in pricier markets. At the same time, some big banks are backing away from smaller loans where they see higher regulatory costs and litigation risks. Read more

Good call Stephen.

Been some heavy rain in California, my ranching friends have got their water back, talked to them yesterday. Fires are a normal event in California, lots of dry thunderstorms, lots of lightening, lots of big country.

the el nino unfolds....

So the EuroFX spivs have gone tits up. Good!
I'm more worried about the fish. Who's looking after the fish?

up
19

The milk powder paradox. Later today we’ll find out just how paradoxical the paradox is.

In the meantime, how could this possibly have happened? To Fonterra? ‘Dairying for Life’ and all that. The swanky new waterfront headquarters. The signwriting they paid for on the cars, ‘Towards sustainable dairying’. (Good word, sustainable.) The salaries. The hundreds of thousands paid for the best people – because you have to pay what they’re worth – and they sure have the best, the very best. Because it’s all about results. The objectives. The strategy. The execution. Then there’s the constant restructuring to make sure it’s all about performance, that too. The corporate vision. The mission. The values statements. The power-points.

How indeed? Fonterra’s influence in Wellington is almost as large as China’s. The government has dutifully done whatever Fonterra has wanted. It has adopted Fonterra’s hare-brained scheme to double production as a national agricultural strategy. An elected environmental council has been turfed out of office in favour of government and industry stooges (no small matter in a democratic country). The ‘polluter pays’ principle has been shoved out of the way, so the industry could trash the country’s soils and waters with impunity. The environmental bills? They can send those to the tax-payers and the rate payers. This alone is an enormous industry subsidy. Even the country’s emissions policies, its climate change accords, etc, have been rewritten to protect the industry. Nothing’s been too much trouble. The alchemists at Fonterra know how to turn milk powder into gold, real gold.

The bankers and their trained economists have cheered the whole thing on. To have a government enthusiastic about getting a major national industry, and a commodity oufit at that, into deeper and deeper debt is pretty rare. It must have seemed a fantasy come true. The Australian banks – for it’s to them the bulk of the tens of billions are owed – must have thought they were dreaming. (Perhaps they thought Solid Energy was a one-off. But, no, this how the New Zealand government works.)

What could possibly go wrong? What more could the government do? Well, Fonterra doesn’t lack imagination when it comes to China. Here was a pipeline of money such as the country has never seen. With dollar signs spinning before its eyes, Fonterra produced new, even more colourful, power-points. Establishing dairy farms in China, they say, will obviously encourage Chinese consumers to buy dairy products from New Zealand. Who could doubt it? All we need to do is get closer to China, even closer.

So the government piles in. No policy is too ludicrous. Last year’s ‘Comprehensive Strategic Partnership’, improbably but genuinely, commits New Zealand and the People’s Republic of China to ‘develop and implement a long-term engagement plan for defence engagement’. (The illiteracy around all these ‘engagements’ is part of the document’s charm.) The massed forces of China, North Korea and New Zealand. Defending whom? Against whom? Don’t ask. As John Key say’s, it’s all good. He apologised, gave her a bottle of wine.

Anyway, with this other-worldly pact in place, and the dairy industry still sliding further and further into its effluent pond, we now think we’ll get our milk products welcomed into the US, Canada and Japan. Our TPPA cosying-up having got nowhere so far, and Fonterra, the banks and farmers now at risk of completely going under, the government is left wondering what TPPA promises it has made to New Zealanders it can get away with breaking. They’ll think of them. Anything for Fonterra. When you’re this far gone, what’s a little bit more?

If it weren’t all true it would be utterly comical. But it is true, and now, standing in the ruins of piled-up political and economic delusions, amidst the shambles to which he’s delivered the country, all John Key can identify to keep the nation on side is that ‘a new flag will be worth billions’ and Chinese property buyers are making 500,000 Auckland homeowners wealthy. As he said, he apologised. He’s a fun sort of guy. Everybody likes horsing round with John Key. He’s the Prime Minister. Own a house? Then lump it. You’re getting rich.

A rock star economy? The only rock star with any relationship to things as they are in New Zealand is out-of-it, left-behind, befuddled Phil Rudd.

" The government has dutifully done whatever Fonterra has wanted."

Other way around- Fonterra has always been stuck with a "Do it or else" and "We gave you a monopoy so you have to be our bitch/hand" ultimatiums.

Great summary.

But, voters do not have an alternative to vote. So, the National is still safe.

Keep the excuses coming - thankfully, voters always get what they collectively deserve.

There's always an alternative.

...nailed it again.

Fantastic post Workingman!

Only a sovereign nation has a flag. A sovereign nation has borders that it guards. It has citizens that it protects. A sovereign nation creates environments to feed, educate and house it's citizens/legal residents. If the NZ Government refuses to behave as if leading a sovereign nation, I propose a WHITE FLAG. Our government is selling us down the river behind our backs. NZ could be a giant amusement park? Maybe Disney or Serco could run the entire operation?

The Maori have a flag, are they a sovereign nation? Same as Scotland, Britain, Ireland.

Hi Cowboy
Of course your are correct. Even Briscoes has a flag, "Sale!". I was just being metaphorical. When I look at the struggles and deaths our soldier, miner, farmer, serf, sailor, slave, peasant, merchant, artisan forebears endured so that THEIR DESCENDANTS (us) could live in a fair society (not feudal) I feel sick, for their sake. (We are not honouring their sacrifices). The entire flag thing is a ruse to divert our attention from the crimes being committed aainst our sovereignty.

I don't "honour their sacrifices"
I grew up on a poor farm with hardworking family that made great sacrifice every day.

I got to play chess with those who had returned from the wars when I was young.
I got to hear how they were treated by "Real soldiers".
I got to hear the reasons why they signed up.
A few went to "protect the future" most went to give Jerry a hiding.
Or because their girlfriends got all shiny faced when they heard of heroes or watch men in uniform.
Some just went for the money.
There's a reason Odin gets half the honorable dead, and Freya the other half.

When not at home we were at the dojo.
I grew up in the culture of bujitsu and budo.
I know well the rules of the warriors path.
A practicing neo-pagan my dedications are to Athena
Studied more than a few tactics and wars

As a maths savant I also understood well the nature of games and puzzles.
Watching patterns, spotting what isn't shown
showing what needed to be seen.
Troops in those wars were never told where they were, or what they were doing.
Even the officers never received more than their next destination.

Much of our economic woes stem from the fact that politicians and bankers haven't a war to thin the population of fit young competitors nor create a massive gulf of economic damage.
Why do you think the US loves Haliburton so much?

the slaves will serve,
and the sheep will be served.

"Much of our economic woes stem from the fact that politicians and bankers haven't a war to thin the population of fit young competitors nor create a massive gulf of economic damage."
Dead right, and we are now at the point where another mass cull of a young generation is due or we figure out a way to live a decent life minus growth.
I think I have figured out that life will not feature greatly, corporations, so its going to be a bit of an uphill battle to achieve it. Oh there we go, a cull of the young generation

I've been thinking that too, particularly looking at levels of youth unemployment in Europe and around the world. That excess labour force, with no prospects and building frustration, will be seen as a threat and the traditional response by the powers that be has been to feed that excess into the meat grinder before they revolt.

Don't want to write a whole essay about it, but thinking of the existing network of treaties and obligations, such as the NATO nations bordering on Russia, and looking back to 1914, when one minor incident set plans into action, which in turn triggered counter-plans and it couldn't be stopped ... it could get very ugly.

Ok, fine, I read it and shared your angst, even went along with the John Key bashing. But I draw the line at Phil Rudd. He's an honest broker from the bank of rock, and doesn't deserve this kind of indignity. Besides which, if you keep up these obliquial remarks against the guy he'll take out a hit on you.

#7LOL - The novelty – and the challenge for the FMA – lies in the peculiarities of the New Zealand market, the relative thinness of which means that entirely legitimate trades can look like market manipulation.

So this so called market is as useless as tits on a bull? - something or someone needs to close it and do us all a favour.

Puzzlement

I'm puzzled by this.
Trading on the ASX thru a bona fide broker they will not accept orders from a retail trader on both sides of the market. Tough when the broker can do it but you cant. What are the NZX rules?

Is it different in NZ?

Supposedly the broker has many independent clients wishing to execute orders on both sides of the market simultaneously - how else could it work?- but not for the broker's house account or the same client A/C - but again limit/stop orders away from the last sale price must be permitted on both sides? But I don't trade stocks - too heavy on the research.

Depends on the service provider. Local "Straight Through" (eg internet) services used to allow that but I dont recall many of them being left.

"Local" brokers that are part of a chain overseas frequently have rules against doing that as "it provides no added value to the underlying asset" ie it's a seen as a manipulation rather than an interest in purchasing or selling equity in an underlying company - the rule stretches back to the original founding of stock markets and the post Great Depression shake up.
It also forces the trader into accepting a risk position, which theory says must be part of a making a profit. Often this means the gambler is not the one making the profit against the house.
IMO it's for the gambling aspect that the rule is kept, but the other points make it an easy sell to the legislators and overseers.

It's silly really. Why wouldn't any person, seeing that the market is quite flat, be prepared to put a small sell and then put a buy on the market. It's not guaranteed but doing so is reasonable diligence, and requires no knowledge that isn't available to every other technical trader. (or vice versa). After all technical trading is all about predicting market movement.

#9 how terrible that they have difficulty making ends meet on $70k US... what about everyone else... boycott their imbecilic company time

#9 Should read - Why, when your in business you never put your head inside a socialist written article anywhere!!!

can't understand how people can get to that level of development and never had serious challenges to teach them why such a socialist agenda doesn't work.

How exactly were his actions "socialist"? Are you saying that compassion for his staff is socialist? The reasons his actions may not have panned out as expected:

The lifestyle he has become accustomed to can't be supported at his new income level.

$70k may have been a little generous initially.

The main reason and it's a simple one - pure ego.

Breaking down what has actually happened in #9 from a number of different articles:
- Dan Price has needed to adjust
- his brother is suing him over stock ownership issues, which could happen to anyone.
- he has made a lot of rich people very uncomfortable. He gets shouted at in social events by business owners for setting a bad example
- his company business has expanded massively since to the point he has needed to take on new staff to cope (at 70000 each), so the business itself is doing really well from this
- a couple of employees have quit because they were so upset at new people also getting paid 70000.

" They have put up GST to 23% but it hasn't really started to bite yet. It's August and most people are on holiday - "

Now there's a measure to stimulate the economy. lol. how is that a government being austere?

#3 Sounds like a normal ad to me - looks like someone got a "selling points for Asia" list and strung them together in an ad.

All I see, as a business person, is a _lot_ of shockingly expensive overheads.....

Exactly, the video consists entirely of "Come see our flash offices in this great building in London - There's a big aquarium in the foyer!" and "We can get you seats at London restaurants!". Virtually nothing about what they actually do.

"Provide quality services to our premium clients". But for the ultra rich money is something tht takes care of itself, its dealing with quality and being in the right places tht shows you're dealing with the best/important people. everything else takes care of itself, thats why you have people to do that for you.

#1 Yes that's exactly whats happening. And very difficulty to develop USD with a raw material advantage when the NZ government (a) steals all the resources, (b) micromanages without seeing economic return, (c) capitulates to foreign interests (eg providing fonterra to build IP reveal in China and South America), (d) Actively encourage competitors to establish vertical integration in NZ, while (e) flooding the market with the raw base material for competitors to take up (eg the DIRA milk to competitors quota). Such action pretty much _covers_ the range of things _not_ to do.

With Universities what also has to be said:
1 - The economic climate must be created or managed if it is not that way at the moment, so graduates can gain jobs. I have been saying this for a long time now. And high immigration is the anti-thesis of that. Import high quality teachers, not import quality competition for the students jobs!

2 - Universities have to be cheap and efficient both for traditional research and quality driven, and also with areas that serve the business and economic community. This makes them available to more of the business community and so students can become more national valuable without destroying their financial future. This includes those who attend and do might fail or find themselves with a degree of little financial use as reducing these parties to poverty does absolutely nothing for the country or anyone. Crippling student loans and $900+ per paper are again the opposite of what should be done, especially as our high taxation and low incomes do not allow for "saving for the college fund" done in the US...and remember we're competing against places like Scandanavia where education including tertiary, even casual tertiary, study is FREE.

3 - The actual instruction has to be of quality. As I have returned to university this semester I'm shocked at the teaching methods now being employed. Which I'm told parallels the pedagogy in our schools. No wonder the Millennials are struggling with work concepts, no wonder many of our brightest students are failing or frustrated, and none of them seem to be able to have the knowledge that was asked of us 10 or 20 years ago. The system used is more like a group counseling session than imparting critical knowledge, and rather than focusing on one idea everything is build around a project, so if a student has an issue in one part of the project it affects their entire learning ability! No long does the professor give demonstration and students explore it, the group sits around and gets asked what the _students_ think, and how they feel that sounds. A few students with opinion or outside knowledge speak up, everyone else listens. If no-one knows then the idea is bounced around for several minutes until the CEO (professors) explains it, then asks if others understood. No wonder they need handholding when they get out. Even worse is an idea that "works for now" is acceptable - and they'll just change the rules later. "Information" is facts and details about an experiment or observation...... until the next course where "Data" is facts and details about an experiment or observation, and information is putting it into context - no wonder our more technical minded people are being driven from study. And its bums on seats for funding, pass rate is set by the curve, not by achievement of necessary grade.

Is our government Lupus or Aids? Why is it acting directly against the needs of New Zealand and businesses/economic progress??

#1. Universites. Already a glut.of those in the world.

#4 - The anti-austerity parties are on the rise in Europe and there are elections comming up.
The elite maybe getting scared and throwing a few bob at the people to make it all look like economies are comming good.
keep those ani-austerity people from getting into power.

Harmoney being looked at by the Commerce Commission......

http://www.stuff.co.nz/business/70912502/harmoney-fees-scrutinised-by-co...

T'was here on Wednesday - http://www.interest.co.nz/business/76899/commerce-commission-forming-precedent-setting-view-whether-p2p-lenders-fees-are

So are we going to hear from Fonterra at 4.59pm?

I see the banks pulled the plug on this Fielding dairy farmer (from the NBR): Elhena Farm, which has more than 600 mixed age dairy cows, was tipped into liquidation by its owner owing at least $130,000.

Pocket money. All the equity partners in this dairy schamozzle will have to front up with more cash to cover losses. Talking vets accountants lawyers etc etc. Last season a local big outfit equity partnership broke up. They couldnt continue with the losses. This was soon after the $8 payout. This is monumental. It will affect a lot of so called 'professionals'

#1 - The pine tree paradox - Death of an Empire:-

Pine Trees and Paper - a reminder when Fletcher Challenge went into Canada - boots'n'all

Over the last year, decisions from the Overseas Investment Commission (OIC) have chronicled the dismemberment of one of the most significant companies in New Zealand’s commercial history: Fletcher Challenge Ltd (FCL). Descended from the Fletcher empire that thrived on State housing and other public works under the first Labour government in the 1930s depression, Fletcher .....

http://www.converge.org.nz/watchdog/97/7.htm

If that is Parkers key argument it could do with a bit of work. Pines trees don't grow seven times faster here - growth rates are roughly comparable with Chile and or even Australia. Hardwoods in the tropics on the other hand can grow to six metres in six months and be producing a veneer/saw log withing six years or less. And of course Canadian and US companies just went ahead an bought NZ forests anyway.

AEP other more recent article perhaps similar to NZ commodities. Sustained high prices just mean a better idea comes along and cuts your lunch. Oil/milk - take your pick.

" The problem for the Saudis is that US shale frackers are not high-cost. They are mostly mid-cost, and as I reported from the CERAWeek energy forum in Houston, experts at IHS think shale companies may be able to shave those costs by 45pc this year - and not only by switching tactically to high-yielding wells.

Advanced pad drilling techniques allow frackers to launch five or ten wells in different directions from the same site. Smart drill-bits with computer chips can seek out cracks in the rock. New dissolvable plugs promise to save $300,000 a well. "We've driven down drilling costs by 50pc, and we can see another 30pc ahead," said John Hess, head of the Hess Corporation.

It was the same story from Scott Sheffield, head of Pioneer Natural Resources. "We have just drilled an 18,000 ft well in 16 days in the Permian Basin. Last year it took 30 days," he said.

The North American rig-count has dropped to 664 from 1,608 in October but output still rose to a 43-year high of 9.6m b/d June. It has only just begun to roll over. "The freight train of North American tight oil has kept on coming," said Rex Tillerson, head of Exxon Mobil.

He said the resilience of the sister industry of shale gas should be a cautionary warning to those reading too much into the rig-count. Gas prices have collapsed from $8 to $2.78 since 2009, and the number of gas rigs has dropped 1,200 to 209. Yet output has risen by 30pc over that period."

http://www.telegraph.co.uk/finance/oilprices/11768136/Saudi-Arabia-may-g...

#10 I suspect we will see a massive exodus of climate refugees before such time as technology can catch that one up.

"In 2008, Srgjan Kerim, president of the UN General Assembly, said it had been estimated that there would be between 50 million and 200 million environmental migrants by 2010. A UNEP web page showed a map of regions where people were likely to be displaced by the ravages of global warming."

Actual figure: 0 Thank you doom porn industry.

http://www.spiegel.de/international/world/feared-migration-hasn-t-happen...

"But now that those migration flows have failed to materialize, the UN has distanced itself from the forecasts. On the contrary, populations are growing in the regions that had been identified as environmental danger zones."

Fast growing trees aren't everything. Radial sawmill and wood energy plant going into Oz - gives the ability to utilise smaller diameter, lower quality logs and mitigates growth stress issues from juvenile wood. To cap it off better wood recovery.

" A wood scientist and former CSIRO employee, Mr McEvoy emphasised that the Yarram mill, originally developed by Andy Knorr, was the only commercial radial mill in the world.

Radial sawing basically cuts a log into wedges like a cake, which creates less waste than conventional sawing.

"This new plant will be a world first and a benchmark for new technology in milling," he said.

"It was developed in Gippsland and this is the next phase a full-scale state-of-the-art production plant.

"What we've had up until now is really a prototype plant, even though it's been in commercial production."