In government the National Party was opposed to a deposit insurance scheme, but now in opposition finance spokeswoman Amy Adams has opened the door to the concept

The National Party appears to have changed its tune over whether it thinks New Zealand should have a protection scheme for depositors.

In the terms of reference of the second phase of the Reserve Bank Act Review, deposit insurance was outlined as one of the areas that will be explored.

“The Review will consider the case for deposit protection mechanisms and possible options, including deposit insurance.”

Finance Minister Grant Robertson says deposit insurance was name-checked in the review because it had been raised a number of times by stakeholders in the first phase of the RBNZ Act Review.

New Zealand is the only OECD country without some kind of deposit insurance – a safety net for depositors that provides protection from losses caused if a bank's unable to pay its debts.

This is despite recommendations from the IMF in May last year that one should be adopted.

“To enhance its credibility and strengthen the financial safety net, the introduction of deposit insurance would be the best option,” the report said.

National, under John Key and Bill English, was opposed to the idea.

“We looked at deposit insurance and we found that wasn’t necessarily going to work from New Zealand’s perspective,” former Finance Minister Steven Joyce said in response to the IMF’s recommendations last year.

But now, Finance spokeswoman Amy Adams says it's an issue “worth looking at.”

“I’m not prepared to make a call one way or the other, but I think we do need to consider what would happen in the event of a significant wobble in the banking sector.”

She is reasonably open to the fact it’s timely to have a look at things, given what’s going on with the Royal Commission inquiry into banking in Australia.

“If you look at the Open Banking Resolution [Policy], it’s pretty clear that if it was called into play, there are a lot of questions marks over exactly how it would work and who would do which bits.

“So it’s timely those aspects be looked at and whether it’s still fit for purpose.”

National’s softening position on the issues brings it closer in line with other parties in Parliament.

The Greens have previously called for depositors to be insured up to $100,000, and NZ First had a policy for a deposit guarantee scheme for majority NZ-owned bank.

Labour does not have a policy on deposit insurance currently (but used to back it), and says it’s open to what comes out of the review. In 2013 Finance spokesperson David Parker said a Labour-led Government would ensure the first $30,000 of all bank deposits would be protected.

ACT Party Leader David Seymour represents the only party that does not support the policy, saying it's a “monumentally stupid, morally hazardous policy for idiots.”

The Reserve Bank itself has steadfastly opposed deposit insurance for years. However, this opposition appears to have softened under new Governor Adrian Orr.

"I think that [deposit insurance] is something that's going to be here in the future. We need to work our way through what it means. I think people have been talking across each other a lot," Orr told interest.co.nz in April.

"The [Reserve] Bank here has got a policy called Open Bank Resolution. And that is the idea that if a bank is too large to fail, we have to keep it open. But we have to recapitalise. So the current owners or investors who have largely done their dough, how do you recapitalise it and how do you have the door open the next day?"

"As part of that open bank resolution, we've already said there can be a de minimis around depositors money that they will have access to. We just need to speak in better English to say 'you know you are going to have some cash there, you are going to be able to get your sandwiches, meet your bills, do all of that on the Monday. Because if it didn't happen that way, then that one bank failure creates all banks to fail, there's [bank] runs everywhere'," Orr said in April.

(See all our stories on deposit insurance 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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86 Comments

If I were the govt I would instead spend the money educating people that no deposit is secure and you need to do your homework first. Surely a guarantee would cause a race to the bottom for banks, with no reason to ever be prudent.

Separate depositor banking from investment banking - Glass-Steagall anyone? Surely you would institute this before writing a blank bailout cheque. Or do we have some kind of Glass-Steagall legislation already???

Also, how much would this "deposit insurance" cover? At what point would a depositor take a 'haircut'? In the event of a bank failure, I haven't been able to get a straight answer as to where KiwiSavers stand.

Sounds like National allowed the banks to stack up the privately held debt, now National want to socialize their future losses.

We don’t have investment banks to speak off. The Aussie banks won’t fail because of their trading exposures for funky financial products, they’ll fail due to their exposure to the property market in what is a core business, mortgage lending

It is only necessary to look at this “monumentally stupid, morally hazard policy for idiots.” because macroprudential lending limits are still too weak (no DTI!), and bank capital requirements are still insufficient for depositors to be assured of financial stability.

OBR my butt. It shows they haven't thought things through. I predict depositors will demand their money back by any means necessary, legal or illegal.

I don’t think the OBR is credible. If a bank got into trouble pre OBR it would face a run from depositors who, absent a limited insurance scheme, would panic about a possible haircut on a subsequent OBR. To avoid a run on that bank and probably every other bank that wasn’t of unimpeachable credit the govt would be forced to introduce an insurance scheme. This would probably happen at 4am on a Monday morning after a weekend of crisis. Make the insured amount modest if you want. But the OBR is not to me credible, as it would not be enforced in the face of a banking crisis.

The other idiocy of the OBR is that it's not a one-off. In an environment saturated with bad debt and overleverage, Combined with crisis conditions, once you force a bank to balance its books OBR-style, it doesn't end there. Instead, the next Friday, the bank approaches the RBNZ again and says "we can't pay our creditors", and then they enact another OBR, and then another and another until all the deposits are gone. Totally bonkers strategy. Who is gonna keep saving their money in a bank that is going under? In other words, where are the new deposits going to come from to pull the bank out of a nosedive? Completely nutso!

Pretty sure you are wrong about that, can't be bothered searching atm as I have work to do, but I seem to remember it was definitely a one-off (per bank).

..Shouldn't that act as a huge incentive for the bank to not get into such a situation, then?

The OBR is a great idea. However, the policy does need to be better disseminated - even a huge amount of commentators lack a basic understanding.

The only time the OBR becomes a bad idea is when the bank gets bailed out by public funds.

but that is the point the bank will get bailed by public funds, which party in power is going to say to its voters, too bad you took the risk and we told you about OBR

If the government had a careful contingency plan, would it be possible to use a bank failure as a mechanism to nationalise the foreign banks. That way they could preserve the money of the depositors and end up getting hold of businesses that syphon about $5 billion per year out of the NZ economy? Remember the 4 Australian banks make half of the profits of the top 200 NZ companies and it all goes overseas.

Bobster,

You are absolutely right. I asked all the members of our share group what they knew about OBR and most knew little or nothing. Several expressed the view that no government would hold the line in the face of investor panic.

Yeah, I watched the little old ladies queuing up outside northern rock. Nothing quickens the political pulse like an old fashioned bank run.

Reality is that today a large bank is just another utility and like a sewerage system is required by a modern society to just be there and work 100 % of the time.

I don't want to get up in the am and worry if the transactions went through last night or if the bank is still standing.

Of course there are moral hazards with a deposit insurance scheme but as I think the only western country without one makes you think are we that much smarter than the rest of the world ?

Will immediately result in splitting deposits to multiple banks and so introducing a bit more competition - no bad thing.

On balance - I'm in favour as well as much tighter prudential controls on our banks. No ring fencing off assets to advantage foreign lenders for example.

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The fact we are even having this discussion is a disgrace. Regulatory failure by RB.

https://www.youtube.com/watch?time_continue=40&v=koY6kXhQDQo

Great link

The adults in the room have failed us ...

Yes, bank regulatory failure by the RBNZ. The bankers will always try to game the system given their financial incentives. It is the job of the bank regulator to ensure the safety of the financial system and reign in the risks to financial stability. Those ministers who didn't allow the loan to income ratios to be applied by the RBNZ should also be held responsible.

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Are National Party MP's selling properties and reverting to cash? Is this why deposit insurance is now on the agenda?

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BINGO.

Exactly! Its ironic that National brought OBR in. And another thing missing from this discussion is that It also brought covered bonds in. And now they are talking about how to backtrack.

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Comment of the month

IO - Bang on and brilliant..
They all know they have to get off the Titanic housing mess that's about to bust, but are needing to make sure that as 'First Class' citizens they get a place on a 'secure' lifeboat!

IO - Bang on and brilliant..
They all know they have to get off the Titanic housing mess that's about to bust, but are needing to make sure that as 'First Class' citizens they get a place on a 'secure' lifeboat!

Total Mind Reader - love your work :)

Perhaps I am too simple to understand this OBR policy.
Surely it would come about primarily as a result of the Bank operating and lending imprudently. In that case as shareholders have voted in Directors who have overseen the imprudent behavior, would it not be better to firstly sieze all Directors assets, looking through even to blind trusts and other devious methods of personally alienating personal assets from seizure AND making a per share cash levy requirement on shareholders to stump -up additional funds BEFORE robbing unsecured cash account holders. Perhaps that would ensure more prudence in operation.
Secondly, as it could be, that the Australian parent banks of local subsididaries may not like the implications of such legislative directives. In that case there could also be enacted a requirement that banks operating within New Zealand are required to have a majority New Zealand citizen or resident share holding? That may assuage the Aussie bank parent from undue exposure to local failures?

Companies are limited liability entities

I have no objection to share holder equity reducing to zero, but you can't levy extra investment requirements on them.

No objection to seizing director asset either, but I doubt it would be sufficient to meet the shortfall, but may be enough of an incentive to increase likely hood of responsible lending.

Perhaps extend the liability for companues that hold a banking licence. Less chance of socialising the losses in that case, both directly by requiring shareholder equity injections And indirectly through lifting prudential performance due to overhanging reality of onerous shareholder penalties?

You do realise that pretty much every kiwi with money in kiwisaver is an (indirect) shareholder in NZ banks?

the directors have insurrance paid for by the company to help out in that situation
so they are well protected, just not there customers

Directors and officers liability Insurance (often called "D&O") is liability insurance payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. Intentional illegal acts, however, are typically not covered under D&O policies.

It has become closely associated with broader management liability insurance, which covers liabilities of the corporation itself as well as the personal liabilities for the directors and officers of the corporation

The National Party appears to have changed its tune over whether it thinks New Zealand should have a protection scheme for depositors.

Didn't realize we were in that much trouble. I guess that whole "But our banks are better than the aussie ones" thing is falling through.

Should we be starting the bank run now?

I'll get it started, I'm off to the ATM to withdraw my daily limit.

One issue now though: the banks have brought in rule changes whereby you cannot break a term deposit without any notice any more. Its stuck in there for about a month.

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I think we should noncents (nice name by the way). It's always best to be at the start of the run.
There are so many alarm bells flashing that I firmly believe we can expect serious economic trouble in the next 6 to 12 months.
The housing market in NZ has turned and if anyone can show me a chart for ANY investment class, in history, that has had the steep run that housing has in New Zealand, over the last 10 years and then ended in a nice "new normal" plateu, or had a "soft landing" then I would genuinely be interested to see that chart. Asset classes that boom, bust in the end. Mean reversion is one of the most powerful forces in investing. Over the long term the fundamentals won't matter, it will revert to mean because the universe demands it. You can make up all the hindsight justifications you like.
The most dangerous thing for NZ is that for every NZ asset that is owned by a New Zealander, 1.5 NZ assets are owned by foreigners. We are hugely exposed to what happens in other countries so in the end the whole argument about whether we have a housing shortage or not (and in Auckland I do not believe we have one, we have a shortage of affordability, or an income crisis, which ever angle you prefer to view it from) becomes redundant. Larger forces are at work.
This is why the lack of a deposit guarantee is so, so unfair. We have a huge amount of highly leveraged people "investing" huge amounts of money in non-productive assets. When all of the over leveraged Aussie banks get into trouble (Australia is well overdue a recession and things aren't going well there) the few, responsible savers left will be bailed in against their will and in spite of the fact they did not take part in the housing bubble lunacy. It happened in the US in the 30s (when Gold was seized by the Fed), it happened in Cypruss in 2012-2013 and it is happening in Germany now as they bail out Italy through the back door (via target2 https://www.capitalandconflict.com/end-of-europe/italys-backdoor-bailout...). It is utterly and completely, morally bankrupt, that savers are not being protected. Savers have been abused and vilified in the name of short-termist thinking and leveraged gains for the last 30 years. Is it unsurprising we live in a world where everyone expects instant gratification at the same time as we have effectively turned saving into a thing that only fools do. Saving being almost the antithesis of instant gratification.
We have the tallest building being built in Auckland. A touch of the tall building curse anyone? We have one of the largest mergers in history being announced with the Time Warner / AT-T deal being cleared by judges in the US. Time Warner itself being the result of a mega merger that lost billions in shareholder value. And meg-mergers having a terrible record of creating value for anyone other than the banks that underwrite them. RBS / APN Ambo anyone?
And Italy. Too big to fail. Too big to bail out. And an already failing Deutsche Bank, heavily exposed to it. Deutshce bank has 1.48 trillion in liabilities. And 1.48 trillion in Assets. And what are bank assets? This is much worse than Lehman. And that is only what they are declaring on their balance sheet. What's hidden?
I know the market can stay irrational longer than I can stay solvent. But I'm piling into gold, there are just way to many alarm bells flashing. And I don't think they are't going to get a deposit insurance scheme running in time for the calamity that is coming. This feels very much like when Countrywide canary began singing in the US in 2008. Except the canaries here are more like Haast eagles. Much bigger and scarier and more dangerous. But the general feeling is the same. Some people are shouting about it. But shut up and keep dancing plebs. That's what our "leaders" say. And our economist friends, all with their phenomenal track record of useful predictions.
With inequity being at it's worst in most countries in the world, for a very long term, the potential for societal chaos as a result o f this is very real. Massive social inequity always ends with bloodshed. Don't be fooled by our civilized veneer. Just read the comments page of any website and you quickly see that you don't need to scratch very deep to expose the raging animals just under the veneer.
I also need to get my vegie garden going.
Stay safe everyone.

Yes the alarm bells are more like industrial klaxons sounding 24/7. It's a wonder there are still people blindly unaware.

What to move the money too though? You need to stay liquid to pay the "bills", as it is not realistic to be completely self-sufficient in this day and age while remaining somewhat "Civilized"

Most investments these days exist for completely non-practical reasons. Gold - a hang up from the days of liking shiny sparkly things. What "real" worth does it have to your average citizen. A friend in Argentina during one of their bigger crashes noted that Pencils/paper, etc... were one of the more valuable "assets" that you could hold.

Based on Venezuela - Fuel, Non-perishable food, and clean water appear to be streets ahead of Gold, Silver, and even USD in terms of trade-able value.

If cynical, you could say that the "Foreign" majority investing in this country understand that perfectly. They are not lining up to buy resources, factories, and consumer items. They are looking at Land, food production, and water.

I would definitely get the vege garden up and running - doesn't hurt to own a few chickens either. Even solar (which I am still not sold on as a long term source of energy generation) has it's value when the grid shuts down.

Agreed except on the Gold comments.
Some liquidity is required for paying the bills correct. If you are at the point where bills still need paying, things probably haven't got too bad. If bills don't matter anymore than neither does some liquidity for paying them and probably all bets are off. But we are talking about savings here. Where is a safe place for those savings?
Gold. And physical if possible.
Gold has a great history as money. It's been around longer then any currency and has a proven track record.
It is durable, does not tarnish or rust. And it is rare. There is a fixed amount of gold and that will never change. you can't print it and you can't politicise it. It just sits there doing nothing. That's not very sexy nowadays, especially in our "now, now, I have to be occupied every second of every day" culture but it's a great way of retaining value.
Food water and non perishable goods are great for helping you survive but you wouldn't really trade them as you need them, in a complete system failure.
As sure as I am that a giant correction (a great reset as Mr Maudlin calls it) is the only logical conclusion to this mess, and as concerned as I am about the fact that these massive changes usually involve bloodshed, I firmly believe there will be something afterwards. Ultimately I have hope, as miserable as I may sound, and when the new order comes I believe gold will have value just like it has after every other reset. It has that history on its side.
But chickens are also good. I need to close of my yard properly.

You guys have been watching far to many episodes of Doomsday Preppers on Nat Geo.

I blame whoever thinks it is a good idea to keep publishing Maudlin on this website. A lot of people here are very susceptible to the doomporn.

I don't have a problem with that, because there are people like you Dr Smith, who will be shouting "everything is OK", until their fibre connection gets cut. Then all of a sudden "Oh no, it's the end of the world."

No one sees these things coming.
Look at Afghanistan now. It was nothing like that in the late 70's. It was progressive wealthy, women were educated and more or less equal.
There is an interesting book (sorry the name fails me) based on the diaries of a senior French diplomat at the beginning of the second world war. They (the French, but the English to, based on Neville Chamberlins appeasement failures) were utterly astounded when Hitler invaded Poland. Shocked. And even as the Panzers were rolling towards France they still 100% believed that they could contain Hitler through political means. Yet it's so obvious now right? But it is never obvious at the time.
The fact is that the predictable happens all the time. But the unpredictable happens just as often. Do you think anyone who has ever ended up as a refuge, or a victim of war or pogram or famine or plague, do you think any of those people saw it coming?! I mean really? So why did they end up there?
This is hardly conspiratorial, this is what has happened hundreds of times through history. Why would it not happen again? What has changed about human nature? Nothing I would posit.
Inequality always, ALWAYS leads to social unrest. It may not go as far as genocide or complete societal breakdown, but civil wars and revolutions are actually very, very common.
"He who does not learn from history is doomed to repeat it's mistakes"
Hope for the best and prepare for the worst. It is the only logical thing to do.

'The only thing we learn from History is that no one ever learns anything from History'...

Do I need to start digging a bunker? If I do, It will probably just end up an underground pool, with our lovely climate.

As long as you fence it, you should be fine.

I think Council inspectors are like cockroaches, they will still be around causing chaos even after the end of the world.

.. and I thought I was pessimistic. I agree though. Here are two scary words related to the OBR - "game theory"!

It is hard to eat gold. It also doesn't keep you very warm.

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It's hard to really take national seriously when they change their tune depending on whether they are in government or not. Key's quintessential "we have a housing crisis" speech in the house in 2007 is a perfect example. You would find me hard pressed to vote for them again.

Out of curiosity, do any commentators here support a 100% reserve requirement?

no

Why not? What's more preferable about the credit creation that we have now?

as a shareholder in all four major banks no
BUT i would be more than happy if the RBNZ brought in a DTI as the banks themselves have a culture of sell sell sell and the assets are mostly all lodged against property which is illiquid

Am I safe to assume that's because our current system is much more beneficial to the banks bottom line and therefore yours?

yes, but i accept the risk of the shares and will sell in a blink of an eye if GF 2 ever comes, not as easy if you have deposits in the bank

Deposit insurance will only work if it's accompanied by aggressive regulation of balance sheets/capital ratios etc.

Otherwise it will be just be seen as a green light by bank executives to open the spigot of reckless lending - with predictable consequences.

Agreed, and I’m fine with that. If the state is residual risk holder then it needs to manage that risk.

1) Good policy from National - they are opening up differences from Labour

2) People can insure houses, cars, health & life - bank deposits should be no different

3) An alternative is to make government debt term deposits readily available to the public as near 100% secure deposits. The banks, or at least kiwibank could be required to retail them and take a small % of the interest rate as admin fee.

4) If we are going down this path, why not go further and:
a) Ban recourse mortgages - why should banks have the ability to effectively have a fully secured loan they can forever chase a person to recover ?
b) This would even up the risk balance between business and residential lending
c) The capital ratios required to be held by the banks can be increased to offset the net increase in the lending risks.

1) *shrug* Crapola vs Krapola.

2) So long as those that benefit from teh insurance bear the full cost of providing the insurance. ie. 0.xx% per month multiplied by your average monthly balance gets taken from your account.

3) Is that worth it when interest less RWT is going to be less than inflation?

4a) I've always been in favour of it. It actually makes sense, so long as we can convince the bank managers and shareholders that there will be no bailouts.. otherwise it doesn't change much.

Did everyone forget about the insurance companies going bust last time there was an quake?

was it only AMI and did the government not step in?
i know tower are struggling but baring anymore major events they will trade there way out of it

http://www.stuff.co.nz/dominion-post/news/4858410/Government-announces-5...
South Canterbury bailout bill: $405 each
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=106...

this is why most of us dont believe the OBR will work as to many votes lost for the party in power if enforced fully so they will step in
so why not make the banks insure some of the deposits

Compulsory government backed deposit insurance makes banks more risky as it removes the ability to compete on the basis they are safer.This means interest rates and service levels are the key tools to use. Higher interest rates require the bank taking on a higher level of risk. Look what happened with SCF. That was basically a deposit deposit insurance scheme. That worked out so well. Depositors no longer need to assess the risk as they know they will get their money back. It turned a risky investment into a safe one. I can't imagine anyone wanting any more of those as a tax payer but as someone looking for a place to deposit, I'm in.

The idea that the average depositor can undertake meaningful due diligence on a bank is laughable, regardless of whatever “dashboards” are provided for this purpose. It is as laughable as expecting the average household to DD the ability of is electricity supplier to keep the lights on. The purpose of the RBs dashboard is the “we told you so” value it gives to govt and the RB. Depositors and taxpayers is are entitled to expect that the govt regulates banks in order to ensure that the systemically important banks are of unimpeachable credit. That’s govts job, not despositors. If that makes banking a really boring industry, so be it. God forbid that we should stifle all that “innovation”, which has led to the current state of the housing market (or more correctly, casino) and household debt of 170% of income (most of which has been been tipped into the housing market)

That is correct. The average person can't assess bank risk accurately, but they can choose the best rate. Higher rates tend to mean higher risk. The government should not be providing the insurance. Some third party should be. There are not enough banks in NZ to spread the risk. It would be like being a life insurance company with 10 customers.Insurers are supposed to make money. How much did the government make out of the last scheme they ran?

So not having deposit ins makes us smarter than all the other sophisticated countries that do have it?. NOT.
Its just another tool of a financially responsible country to use so people can conduct business under a modicum of security. The banks themselves are so disgustingly greedy it is just a hedge against that fact for the average person saving a bit of money. There is nothing sinister about it. Its a protection for the consumer who has very few options to put their money in a semi-safe environment.
Banks don't have any incentive to fail, they make too much money, and deposit Ins has never caused a bank to operate any more irresponsibly just because of deposit ins., to say so is unfounded and ignorant. Its just another Ins tool like house or car ins. which leaders of other responsible countries insist you have in order to try and keep the financial system on a sound footing.
Its finance 101.
The fact that the national party has changed its tune is only a sidebar of convenience. It shouldn't be in the political equation, just sound financial policy.

If you have mortgages with a bank while at the same time have substantial deposits are your deposits safe? It would seem kind of unfair to lose your money while still owing the same amount of money to the bank.

Not to mention that would cause house prices to drop at the same time.. triple whammy

While that would probably occur to some extent, what if the rental properties income were covering their expenses as well as returning a profit? This is the situation I would find myself in. I would consider my lost deposits as having been used to pay off some mortgage and essentially would have lost nothing while the rental properties would become even more positive.

This is why property is considered to be such a powerful investment.

Yeah, hence during the gfc (globally), we didn't hear such confidence....

Sounds like a fairytale story until reality hits

In Zachary's deepest of downturns, rents are always paid on time and never reduce. Only Zachary with a zero cash buffer would imply this. Having an infantile approach to this ponzi will prove self defeating as the bank is your Landlord.

these guys claim to be proficient in property investments, but their statements prove otherwise

it's easy to confuse investment skill with a raging bull market (using lots of debt and leverage, makes people look even more astute for a period of time). Expert investors who are really proficient are those who are well positioned for a downturn, and don't go bankrupt in a down cycle.

I remember all those sharemarket investors who thought they were brilliant investors during the internet bubble, then subsequently got wiped out or lost significant sums ... Or those investors who were brilliant leading up to 2007, then the GFC hit. There were so many expert property investors in 2006 in Ireland, and the US, who then lost it all subsequently ...

The real test is in a market where the price falls. As the old saying goes, it's only when the tide goes out that you find out who is swimming naked ...

.......Or who have the ability to fight the downward momentum

A taxi driver who recently immigrated expressing to me how successful he was to own two rentals. He didn't consider Uber serious competition. As a telling warning sign for all, there's no shortage of these so called "highly successful" individuals out there just like him spreading their path to riches stories.

Well done Mr. Taxi Driver. You're already ahead of so many DGMs ^^LOLdgz^^

Can you drive?

Can you squat?

DGZ, you remind me of a high, 30 something who bailed me and several others up at a recent family gathering. He recommended, buying as many rentals as possible as there will soon be no money left in the kitty to pay super! I was left dumbstruck, juggling images of a future far worse than Greece, where property values having already fallen 45% and where they still pay a super! Final conclusion, I'd been confronted by a clown with an infantile approach to an over-ripe investment strategy. Was it you by chance?

You over-estimated me RP. I'm currently resided in Shanghai, enjoying what Spring has to offer in this beautiful part of the world ^^LOLdgz^^
https://youtu.be/FpWTUSMwgJA?list=RDFpWTUSMwgJA

DGZ, true? have you fled the country and is this your idea of a successful investment strategy and flee your obligations? It seems to fit.

Fled?? You're too naive RP. I'm merely home for an extended holiday ^^LOLdgz^^

The highly successful taxi driver I spoke of took several return trips to India too. Like you, he was also in debt up to his eyeballs, LOLdgz.

I am not an Indian, RP. There's no need to single out a particular race to make you look more superior. Also it doesn't matter if he is a taxi or Uber driver coz it is irrelevant ^^LOLdgz^^

OMG, now LOLdgz is trying to draw me into a racism row. Like you, he also had two negative geared rentals while funding several return trips to his homeland. He also joked about the immediate threat on the horizon. In his case, the then threat was Uber! Now, the immediate threat is well documented in the crash series. Safe travels.

DG...Personally I think many have been Shanghaied. in their career.

Tell the truth is it Aussie, you are at...or is it the Towering Inferno.

Is that you Jack..John, or just a derivative...at play...whilst Double Dipping.. and manipulating the system.

Till the Banking job you have always banked on ..works out.

...Why get Shanghaied..again..?

But then again we must not use racist terms for talking up Property issues.

Which by the way is the same in lots of Countries. We are not alone,

I always thought print and be damned a strange way to fix any issue.

A confidence trick requiring all to be on the same page.

They do not like us to talk about problems, yes real, Real problems.

This is the Land of Milked and Honey.

But I assure you, I have many an answer to cover the situation up so we will never ever lose our position in the World, ever, ever again..

Please forward all free money you have currently, to me, I have nothing to lose and you have everything to gain....I will put it all on the House of your Dreams and You "may" win it...

I have the perfect spot Hawaii, rather warm at this time of year and the lava lava skirts are such a delight.

Cough Cough...I think it was named after the intoxicating Drink..Kahlua...Please proof read, if any doubts...

I do not wish to miss lead you. cough cough, but uptick, if ye want to participate.

I have been on this site for many a Year.....since I found it so rewarding.

I had to top up my glass...many times...Tis half full now...

Sad to say, I can only manage this new Invest-meant scheme in if I bring in overseas investors to help, as we have most of our our 3 million workers fully engaged. ..on the Tread Mill.

Bar a 1000 or 500k...or so, traveling and Lording it about elsewhere on the Public Ticket.

Plus their kids and offspring and School Chums are doing Paper Rounds too.(Whilst investing in an IPAD)...to take their mind off the rigors of life...and find a better well paid job for life.and a totally "Free" pension.

I think the going rate for Hawaii, is cheap, you give me 30 pieces of silver each and I will see how many plots are interested..World Wide.

Anyone who wants to double or triple up, please apply to 'HP" Wellington for a ketchup. Sauce we have a plenty.

You might get elected, but it is a shaky position, may only last a few years...at best, when truth be told.

I will run this by you each year, till we have enough Houses for what its worth.....Depends on how many Billions I can start with.

Please do not be mean.

You Taxpayers let me know...I used to keep an eye on things in the Caymans, rather over done now.

I will be asking for overseas Interest and Hedge Fund Money too...the views are exquisite, deep ending on where I can use my Block Chain Powers in a flash environment

. I am technically savvy you know.

I must hedge the plots first, so :Building" may be delayed a little....It is Labour that is the problem. I am not denying we have issues..This is merely in the entire National Interest, ..for years to come...you know.

Please Note..I am not a builder....highly over rated here in many way.

But I shall keep on trucking, ...those Field Days are so full filling...Tax deductible yes...Thirsty Yes, Accountable....no.

By the way...I missed Friday....I..You will have to put up with my Friday Funnies for a long time yet...any day now.......

Truth be told....

...and Cash only please...I do not want to wash it...depends on you....all....if you come clean.

No meth substitutes...no need to clean up after you....pretty please.

I do not think I have 9 years left...we old farts, never know where the stink will come next.

Though I do have enuff.......to paper the cracks, for many a year...every Little Helps...

This was all a joke....do not read to much into it.......GZ.

When you say he was 'high' ...

That could explain a lot.

Oh it did, it really did. He made an absolute dick of himself the whole time he was there!

many of DGZ's comments prove he's always HIGH..lolz

I think I was asking a pretty reasonable question about what would happen if the bank grabbed your bank deposit while you still had mortgages with them. Instead just risible nonsense about how we are not "proficient' in property investing.

Look I am mortgage free on my own house, have other investments and have positively geared rental properties that can withstand a 50% drop in prices. What's not "proficient" about that?

I wasn't a taxi driver though just a humble typewriter mechanic. I have often thought that a lot of the resentment comes because humble people have made a bit of dough and some people think that's not right.

Zachary, on the face of it your financial situation certainly sounds more solid than some key commentators here, who only leveraged up within the last few years.

As you already know, I think our next slump (post another Global shock) is likely to last way longer and be far deeper. In such a scenario, I would liken the prospect of paying thousands in mortgage interest on a deflating investment portfolio like being stuck in financial quicksand. It's a hard one to escape from. If you're comfortable living within such a scenario, I'll assume you'd have to have zero appreciation of the economic seriousness of it and believe there is zero chance of it happening.