Here are my Top 10 links from around the Internet at 10 past 2 pm, brought to you in association with New Zealand Mint for your reading pleasure.
I welcome your additions and comments below, or please send suggestions for Tuesday's Top 10 at 10 via email to bernard.hickey@interest.co.nz.
I'll pop any surplus suggestions I get into the comment stream.
1. Really? - The NZX's Mark Weldon and Cameron and Partners' Rob Cameron, both of whom were on the Capital Markets Taskforce, have launched an extraordinary attack on the legislation proposed for the new Financial Markets Authority, which is designed to create a super regulator for investors.
Weldon and Cameron say the bill as it stands would force exchanges overseas and over-regulates a market that isn't broken, the Sunday Star Times Rob O'Neill and Rob Stock report.
Mark Weldon goes so far as to say there had been "no regulatory failure in our public markets"
There may be a debate about that.
Strategic Finance, Dominion Finance, Lombard Finance, South Canterbury Finance and Feltex were all members of the NZX's stock or debt markets.
Access Brokerage collapsed on the NZX's watch and the Securities Commission was very critical of the NZX's role.
Our capital markets are widely seen as too thin and to have lost the confidence of Mum and Dad investors.
Something is broken.
Investors may not describe their collapses as "no regulatory failure in our public markets." Worth a good debate at least.
Mark Weldon, the boss of the NZX, is warning the legislation is "deeply and fundamentally flawed, poorly designed and dangerous". Indeed, he said, unless the Financial Markets Bill now before parliament is massively altered, the NZX would have to move overseas to survive. In a submission to government, Weldon said the proposed laws would create confusion for listed companies and add cost to running registered stock exchanges domiciled in New Zealand.
Weldon, who called for a complete overhaul of the proposals, said he was also concerned the bill proposes giving regulators powers over NZX rules and decision-making, as well as an ability to make levies to pay for their work. If such powers were brought in, emergency capital raisings by firms last year would have been much, much harder, he said.
He also damned the "extraordinary" proposal for the Financial Markets Authority to be able to co-opt and use NZX's own systems, which Weldon said were finely calibrated, as well as being private property.
"The folly of the bill is shown by the fact that NZX would face a lower cost structure, with a higher ability to provide a stable and certain regulatory platform, if it relocated offshore, and provided services into New Zealand as an overseas exchange."
2. Can we really blame the Aussie banks for everything? - Brian Gaynor writes at the NZHerald that the Aussie banks are increasingly dominant in our economy and responsible for a shrivelling of business lending.
Their dominance is also worsening a fragile and thin investment climate, he suggests.
He writes:
The Australian owned banks are far more dominant in New Zealand than they are at home, mainly because the superannuation and fund management industries are much larger across the Tasman.
At the end of June, the banks had 58 per cent of Australian financial sector assets compared with 79 per cent in New Zealand. Superannuation funds and investment managers held 26 per cent of Australian financial sector assets compared with 13 per cent here.
Bank domination is an unhealthy development as far as the New Zealand economy is concerned particularly as the latest figures probably understate the banks' strong position.
The problem with bank domination is that they take a cautious approach to lending, and the number of non-bank institutions that can fund riskier projects is limited. So who will back property developments, start-up companies and other high risk projects? The banks could be tempted to lend to these high risk projects, but this could create huge risks for them and the New Zealand economy.
Essentially the Australian banks, in New Zealand and at home, are asset, rather than cash flow, lenders. They lend against residential property and farms, and this has served them well during the current economic crisis. But it doesn't create a great environment for business, particularly in New Zealand. We are dominated by the banks, and we don't have sufficient non-bank lending institutions, superannuation or managed funds to counter balance the reluctance of banks to lend to business.
But is this all the banks' fault? - Finance companies imploded because they wrote dumb loans for 'investments' in speculative property developments. Our superannuation sector is puny because New Zealanders don't save and we don't have a compulsory savings system.
It's true our banks have fueled the property madness by lending against land.
But the cash flow lenders for businesses are still there. UDC, Marac and others are still lending. The banks were never in this space.
Maybe we all need to get used to investing with equity.
I agree with Gaynor that we need to fix our savings system. But I don't think the banks can be blamed for that.
3. NZF Money's woes - Rob Stock at the Sunday Star Times reports that a borrower of NZF Money's has complained to the Securities Commission that NZF was in breach of its trust deed because of a NZ$10 million loan he had taken out from NZF>.
The Securities Commission is investigating, it seems. Covenant Trustee's Graham Miller Miller says he hasn't seen anything untoward....no worries then...
The complaint is from property developer Bernie Shaw, who claims he borrowed more than $10 million from NZF Money between 2008 and 2010, a sum so large he believed it breached the loan concentration rules in NZF Money's debenture trust deed which limit the firm to lending a total of no more than 10% of total tangible assets to one borrower. NZF director Mark Thornton denied the accusation. "It may have been close, but it never exceeded the 10%."
Trustee Graham Miller from Covenant dismissed suggestions of a breach, referring the Sunday Star-Times to NZF Money. "There's simply no reason to believe there's been a breach at all as far as we are aware," he said.
4. Here's an idea - British Tory MP Douglas Carswell has proposed banning banks from using consumers' term deposits to finance risky lending. He's calling for the partial end of fractional reserve banking. Heresy in a previous day and age.
It's radical, but not all that unusual it seems in the world after the Global Financial Crisis.
Here's his speech to the UK parliament below.
BBC's Robert Peston points out what Carswell is proposing and how he's not the only one.
The Bank of England's Mervyn King says we need to look at highly radical reforms of the banking industry - each of which will probably strike terror into the hearts of those who run our biggest banks. First, there are two complimentary proposals:
1) That retail banking deposits must never be used to finance risky loans, that the all-important payment system should be divorced from providing finance to businesses and even to households.
These ideas have at various times been advocated by the economists Milton Friedman, James Tobin and John Kay - and have a champion in Parliament in the form of the Tory MP Douglas Carswell.
2) That loans to businesses and households should always be repackaged into pooled investments held by mutual funds, so that - in effect - there are no longer short-term liabilities funding long-term assets, there is no longer a mismatch between a demand deposit and a longer-term loan, there are simply investors prepared to take some risk in financing the economy.
This model is associated with Professor Kotlikoff. If banking were reconstructed along these lines, there would in theory no longer be any need for taxpayer guarantees for banks - because bank depositors would not be takings risk or placing bets on the solvency of corporate and household borrowers.
5. Now even the International Energy Agency is saying peak oil was in 2006 - Yikes. This is a worry.
The IEA quietly released a report last week including the chart below showing that peak oil appeared to hit in 2006 and future oil demand growth will have to met from yet-to-be found fields, yet-to-be-developed fields, natural gas liquids and unconventional oil. Early Warning has the early warning.
Truly and profoundly worrying. Here's the full chart pack from the IEA.
Can the world's economies keep growing when oil is constrained like this? Click on the chart to see a bigger version.
6. Even the Saudis are getting worried - Emirates24/7 reports a former head of Saudi Aramco's exploration and production operations as saying oil reserves globally are being depleted at twice the rate of their replacement. HT Andyh
Sadad Ibrahim Al-Husseini, former executive vice president for exploration and production at the government-owned Saudi Aramco, said conventional oil reserves worldwide are depleting at twice the rate of their replacement and this would lead to a supply shortage which could be offset by unconventional oil.
He also rebuffed forecasts that Gulf oil producers would pump as much as 30.9 million bpd in 2035, saying their output would not exceed 26 million bpd. Addressing an oil event in Abu Dhabi on Tuesday, he cited estimates by the US Energy Information Administration (EIA) showing conventional oil demand will rise from around 81.4 million bpd in 2010 to 97.05 million bpd in 2035.
The report by EIA of the US Department of Energy also showed the Gulf region’s production would rise from 23.2 million bpd in 2010 to 30.94 million bpd in 2035 while OPEC’s supplies would grow from 33.9 million bpd to 44.6 million bpd. “Inherent to this forecast is the assumption that it is in the common interest of producers and consumers alike to increase oil supplies according to consumer demand and to sustain such a growth policy for the indefinite future,” he said.
“However, there are several reasons for questioning these assumptions, including the following: conventional oil reserves are being depleted throughout the world at twice the rate of their replacement, historically slow annual capacity declines from major oil fields are being replaced by rapid declines from significantly smaller new developments, and finally marginal new reserves such as arctic and deep water oil accumulations require inordinate new technology advancements and massive funding in order to be brought on-stream in adequate volumes as affordable costs.”
Husseini said that because of these “caveats”, a more realistic forecast of global crude oil supplies based on proven reserves, field maturities, new technologies and sanctioned projects yields what he described as a production plateau that levels off at around 87 million bpd from 2013 through 2019 and declines thereafter to nearly 83 million bpd by 2030.
7. The magic number - How much money will governments have to borrow next year? The WSJ reports the number is US$10.2 trillion or about two thirds of US GDP.
Now much of this is debt that is being rolled over, but gee whiz that's a lot of pressure on interest rates (or printing presses).
I don't think interest rates can stay low next year with this much debt being rolled. Or central banks have to monetise (print) an awful lot to make that go away.
That creates the motherlode of all inflation tinder to be sparked to life at some stage.
Here's the WSJ:
As the debts of advanced countries rise to levels not seen since the aftermath of World War II, it’s hard to know how much is too much. But it’s easy to see that the risk of serious financial trouble is growing.
Next year, fifteen major developed-country governments, including the U.S., Japan, the U.K., Spain and Greece, will have to raise some $10.2 trillion to repay maturing bonds and finance their budget deficits, according to estimates from the International Monetary Fund. That’s up 7% from this year, and equals 27% of their combined annual economic output.
Aside from Japan, which has a huge debt hangover from decades of anemic growth, the U.S. is the most extreme case. Next year, the U.S. government will have to find $4.2 trillion. That’s 27.8% of its annual economic output, up from 26.5% this year. By comparison, crisis-addled Greece needs $69 billion, or 23.8% of its annual GDP.
8. Higher interest rates ? - Alan Greespan, now the world's least respected central bank governor (aside from Gideon Gono), is still watched closely in the United States.
Reuters reports the old codger is saying there is a risk of a bond market collapse and higher interest rates as the bond markets work out the US budget position is unsustainable and investors demand higher returns to justify the risks.
Although the big risk for anyone who believes in a remotely free market is that the Federal Reserve under Bernanke will simply stand in the market to buy the bonds, force down interest rates and monetise the debt. Parity here we come...
"We've got to resolve this issue before it gets forced upon us," Greenspan said of the ballooning U.S. debt levels.
"The only question is, is it before or after a bond market crisis? Because there's no alternative," he said. He said the deficit, which hit $1.3 trillion this year, may begin to frighten the bond market, which could undermine the recovery and push the economy back into recession.
"The big, serious problem is whether or not the outlook for the longer-term deficit spooks the bond market to a point where long-term interest and mortgage rates move up very sharply," said Greenspan. "If that happens, that will cause the double dip."
9. Totally hilarious explanation of Quantitative Easing by the robot video guys - Well worth a watch. HT Steps and Johanna.
"Is this a episode of the Twilight Zone," the bunny asks?
"No. I don't think so," the other bunny replies.
10. Totally relevant if somewhat painful video - A rap about the currency wars.
I doubt this will win many fans in rap land, but it's sort of of funny in a car crashy sort of way.
52 Comments
Weldon has a point and it's one that national exchanges in Europe have been making wrt regulation over there. The other side of that coin is that all incumbents have had the last 10 years to prepare for greater competition and most have not really done so as they know their core business model has been based on a legislative monopoly and the shareholders have been milking the cash cow while it can still moo.
That said Weldon and Co have stepped into the last space of monopoly in the NZ market, that of the settlement agent, as they know they can't compete with the offshore low cost hi tech agencies like liquidnet and chi-x on cost of nimbleness of techbase and they are hoping to whether their storm and that chi-x have stretched themselves too far in the down trough of the markets.
IMHO the NZX needs a technology strategy from hell to break out of its backwater status - and quite possibly that is the universal low cost registry and settlement agent where trading venue becomes a commodity service.
You are not wrong. If NZX concentrated on actually increasing the number of listed companies instead of merely increasing its share price - and thereby lining our dear friend Mr Weldons wallet, I am sure it would cope just fine with the FMA Bill.
NZX should never have to go offshore, its there to provide a market place for buyers and sellers of shares in New Zealand and therefore help capital raise the expansion of businesses. Any suggestion that it should go offshore proves NZX's priorities lie elsewhere and a long way from the best interests of the NZ Business community.
What an interesting idea...separate deposits from risky loans...might as well split banks into savings deposit holders and finance companies....the deposits could go to fund the cpi indexed govt bonds...remove all govt guarantees from finance companies...they become NBDTs and have to fight it out in the market. Those wanting mortgages would be restricted to 50% of the reg value on any property and would have to borrow from the RB.
I think the big banks would love this idea...wouldn't they!
Oh dear...Greenspan has been let out by the blokes in white coats...how funny because his comments come at the same time as suggestions in the market that the US equities and all commodities are about to spew their guts again...now that wouldn't have anything to do with the potential for the GOP to cook up an austerity cake would it....such plans are afoot and they are not kind for business profits...down she goes into a second great dive....anyone going long in the market...anyone.....helloooo.......
Europe stumbles blindly towards its 1931 moment
These are the guys who are paying me my great lamb prices, it's scarring the hell out of me.
DrJonathanwilson
Ambrose
You have made the economics of the failure of EMU clear for a very long time - your justification is at hand - although I am sure that you would have rather been found wrong than be a witness to the second part of this hubris fueled tragedy.
And that second part of this tragedy is the social consequences of years of political lies building false expectations - when the emerging reality is severe economic hardship for the many who believed and voted for this transnational and uniquely European deception.
Denninger at his best
These cuts and much more have to happen, incidentally.
And herein lies the purpose of this post - to destroy some of the claims made by both sides.
In no particular order, all annualized, so as to stop the games of claiming 10-year "savings" or "costs" where the real number that matters is this year's (or next year's) number.
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The military (or "un-paid for wars" if you prefer) is responsible for most of the deficit. This is a blatant lie. The Defense Department consumes approximately $750 billion a year. (And don't start prattling about "off-balance sheet" nonsense either - the actual deficit numbers in borrowing track pretty closely with the as-claimed DOD numbers.) Note that the deficit is closer to $1.6 trillion at present. If we were to presume that half of the DOD budget could be eliminated, we would save $325 billion. This is likely entirely unrealistic - and is in fact double the claimed amount of the war costs.
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We can close the budget gap without cutting Medicare, Medicaid, related programs, Welfare or Social Security. No we can't. 75% of the budget, or three trillion dollars, is comprised of Social Security, Defense, Unemployment/Welfare/etc, Medicare and Medicaid. If you cut defense by half and eliminate all discretionary programs including Education, Agriculture, Justice (yes, the FBI, CIA, BATFE, etc), Homeland Security, etc - you'd still be well in the hole. Welcome to reality.
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We can eliminate off-budget discretionary spending and thus fix the problem (e.g. earmarks, etc.) Wrong again. Off-budget discretionary spending is less than 3% of the budget. Yes, it's a lot - $120 billion - and some of the war spending is in there. But it's not enough to make the difference.
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Eliminating The Bush tax cuts for the rich will fix it. No it won't. That's $700 billion over 10 years, or $70 billion a year in additional revenue, assuming zero avoidance is undertaken. Of course there will be some avoidance, but let's be realistic - out of $1.6 trillion in deficits ($1600 billion) $70 billion is a mere 4% of the deficit. Every bit matters, but don't tell me "tax cuts for the rich" are about deficit reduction - they're not. They're about social disapproval of people making a lot of money. Maybe legitimate, maybe not, but don't lie about the impact on the deficit.
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Raising taxes can fix it. No it won't. There are roughly 239 million Americans of working age today (BLS data.) Of that, about 140 million have a positive AGI on their tax return. The deficit is $1.6 trillion. Closing the gap with tax increases would mean increasing taxes by $6,700 on every single working-age American, including those who have negative AGIs! To do it on the back of only those employed (or those with positive AGIs) the damage would be over $11,400 - per employed person. The problem with trying to do it with the top 1% of taxpayers (and leaving everyone else alone) is that you'd have to raise taxes by $670,000 per person on that top 1%. Unfortunately this exceeds their taxable income; the top 1% has an AGI (as of 2008) of approximately $380,000 - so confiscating their entire income would only get you about halfway there. If you were to impose a 100% surcharge on the top 5% you'd do worse - 58% of $1.0 trillion is ~$580 billion, and thus doubling the tax on the top 5% of Americans would result in about 35% of the deficit being covered. Nowhere near enough - and that would double income tax on anyone making more than $160,000 a year. You can't solve the problem with tax increases.
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It's going to get better. No, it's going to get much worse. While Social Security can be "fixed" with things like raising the retirement age the other "fixes" do serious damage - like changing the COLA formula. Everyone who believes there has been no inflation in food and energy over the last two years raise your hand. Ok, if there has been, why has there been no COLA increase in Social Security? Obviously, the government numbers in this regard are lies. Never mind the health care problem - I've yet to not get a double-digit increase in my health insurance premiums over the last decade.
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We can have Medicare as we know it and solve the problem. No we can't. Medical costs are growing at more than 10% a year. This means they will double every seven years - if we're lucky. Medicare and Medicaid are currently 21% of the budget, or about $840 billion. In seven years if we keep with the 10% increases (and that's low, if you're paying premiums today, as you know full well!) assuming there are no boomers to swell the ranks of those entitled to the benefit we will spend $1.6 trillion. In another ten years we will spend more than the entire current Federal Budget on these two programs alone. There is no possible way for Medicare and Medicaid to survive for the next 20 years as currently constituted. This is arithmetic; social policy and the desire of those who want it to be this or that is immaterial to this reality. It is for this reason I devoted an entire category on The Ticker to this topic; you'd do well to read it. Specifically, you can read backward from here..
- We can fix things with a gold standard. No we can't. This idiocy showed up again in the NY Times this weekend. The problem with such a standard is that it puts your monetary policy at the mercy of international raids. The problem is credit creation, not monetary emission. Note that a gold standard would not have stopped the Federal Government from running a $1.6 trillion deficit - yet that sort of "response" to excessive debt is exactly why we're in the mess now. There are in fact lots of people who want a gold standard and most of them are big banking interests! It's a trap - the issue is credit issuance, not monetary linkage.
I wish there were simple solutions. But there aren't. We live in a global world. Attempting to raise taxes on corporations will simply force more operations overseas, and cause more capital flight. We can ill afford that.
We must face that the Ponzi Scheme of increasing both debt and government spending by 100% during a time when output rose 40% must be unwound.
This weekend's talk shows all claim that we "want an answer" but they also say "we must not hurt our recovery." They're liars - there has been no actual recovery - all there has been is more government spending to cover up the Depression that is still underway!
Funny how most other countries can afford healthcare and social services without running a deficit (e.g. we were able to do it for all of the years labour were in power).
And funny that Clinton could afford to run the US without a deficit.
Are you sure that it isn't tax cuts that cause these problems?
Yes very true...Clinton is an excellent case point.
NZ, UK, Canada have a public health service that is about 8% of GDP, in the US its 16%+ and doesnt cover 25%?
So you could raise taxes by 6% of GDP.........
The costs of the pork barrel politics seems insane as is paying for 2 wars....the military is simply huge and the profits immense.....
Certainly I can believe that the tax cuts have not done a thing to boost the economy, if anything it seems it worse....
regards
Ireland was fighting for its political and economic independence last night as secret negotiations began in Brussels over an international bailout of up to £77billion.
Ireland fights to stave off £77 billion bail-outMish is on a a roll, Debt Aussie house prices and Portugal.
Posted by Nathan A.Martin on the economic edge:
Currency wars are a sideshow:
http://economicedge.blogspot.com/2010/11/currency-wars-are-sideshow-its-banks.html
"What's most important is, WHO controls the production of money! Banks do not own this power, the PEOPLE do - it's time to take the power back!"
FYI from Brendan from Ireland
I have a selection of headlines on the Irish Budget crisis from an Irish Perspective which
may be useful to share with the readers of the list as a single item.
The headlines on the frount page were generaly that the country is
going to be bust in a few weeks. It appears that fear is ruling the
markets and the papers, regardless of the fact that the government is
going to cut €6 billion Decembers budget.
From the Tribune
Ireland on brink of bailout as bond markets cease lending
http://www.tribune.ie/news/article/2010/nov/07/ireland-on-brink-of-bailout-as-bond-markets-cease-/
From the Sunday business post
Are we heading into the abyss?
http://www.thepost.ie/newsfeatures/are-we-heading-into-the-abyss-52693.html
From the Irish Times
Germany 'pressing Ireland' to access European aid fund
http://www.irishtimes.com/newspaper/breaking/2010/1114/breaking25.html
And from the Irish Daily Mail
Ask us for €60 billion bailout now, EU banks urge Ireland
http://www.dailymail.co.uk/news/article-1329572/EU-banks-urge-Ireland-Ask-60-billion-bailout-now.html
The Irish Independent
Cowen fury at BBC 'when not whether' bailout claim
http://www.independent.ie/national-news/cowen-fury-at-bbc-when-not-whether-bailout-claim-2419458.html
The Prime Minister denys talks about a bailout.
Brendan
FYI Ireland's young are fleeting again. HT Hugh
http://www.guardian.co.uk/world/2010/nov/14/ireland-economic-crisis
cheers
Bernard
FYI HT Tristan...
A Chinese submarine stalked a U.S. aircraft carrier battle group in the Pacific last month and surfaced within firing range of its torpedoes and missiles before being detected, The Washington Times has learned.
http://www.washingtontimes.com/news/2006/nov/13/20061113-121539-3317r/
FYI from the SMH on Sydney's Mortgage Stress. HT Hugh
SYDNEY is the unrivalled capital of mortgage pressure in Australia and rising interest rates will tip thousands more across the line, economic modelling conducted exclusively for the Herald has found.
The modelling by the National Centre for Social and Economic Modelling found more than a third of Sydney households with mortgages, or 35.5 per cent, were experiencing ''mortgage pressure'', where repayments took more than 30 per cent of disposable income - the highest of any capital city and above the national average of 27.7 per cent. The figures take into account the Reserve Bank's latest rate rise, but not the banks' double slug, meaning pressure is even higher.
The principal research fellow at the centre, Ben Phillips, said the ''tipping point'' for households was much lower than in the past. ''In the late 1980s interest rates were up to 17 per cent but this was a different world where debt levels were more contained.''
Today it would take only another 1 percentage point rise to stretch mortgage holders back to their peak stress levels just before the Reserve slashed interest rates to counter the global financial crisis.
http://www.smh.com.au/business/tense-nervous-mortgaged-20101112-17r3j.h…
"The IEA quietly released a report last week including the chart below showing that peak oil appeared to hit in 2006 and future oil demand growth will have to met from yet-to-be found fields, yet-to-be-developed fields, natural gas liquids and unconventional oil."
meanwhile peak oil for NZ from existing oil fields hit this year
So lets get this straight ... to power our transport (read economy) here in NZ we are going to have to increasingly rely on a global supply from yet to be found or developed oil fields, natural gas liquids - (the vast majority of our cars cannot run on natural gas), and unconventional oil like the tar sands which are grossly more expensive than crude oil.
seems like a recipe for the next oil shock and recurrent Global and NZ recessions to me ...
well goodness me .. a NZ Parliamentary Report last month is predicting exactly that ...
Q? why are mainstream media, political parties and economists silent on this ?
Coz the free market will look after it, innit?
Short of writing it in letters ten foot tall on the nearest billboard, if you are not factoring it in to your financial planning for the future you truly are an idiot.
I sense even Bernard is starting to appreciate the danger - and some of us have been banging on about it to him since the inception of this site.
Thanks for that link to the NZ Parliamentary report, a good read.
Its a question I ask myself constantly, why is peak oil not bigger news? It's going to engender a fundamental change to every persons life. Maybe its just too hard for a politician as it really demands a new politics, where the vast majority of policy becomes irrelevant. It also uncovers the 'exponential growth' lie. Frustrating because time is close to being out.
This country has its head in the sand to an amazing degree, regarding peak oil - or at least the inevitably of constraints & price increases in the price of oil. We have:
- One of the cheapest petrol prices in the OECD
- Absolutely no incentives through our registration system to buy smaller cars (SUVs pay the same rego as an 800 cc Suzuki)
- No legal protections for cyclists (witness the mayhem over the weekend)
- Incredibly cycle-unfriendly cities & countryside (ask anyone from Europe)
- Few pedestrian-friendly central cities (again ask any European)
- Lousy public transport (ditto)
We have chosen to go down the same path as the Americans & Australians, in wedding our future totally to cars & petrol. If you look at the above list, a change would largely improve our national position anyway - less oil imports would improve our chronically stinking current account deficits.
However, we are amazingly conservative regarding this. When people talk of reform, I hear comments like "greenies have a lot to answer for". Even supposedly responsible citizens, when they hear of cyclist deaths, say "Well, they chose to cycle didn't they? No one made them."
We deserve all we are going to get.
Cheers to all on a lovely morning, I look forward to cycling off to work.
It raises a question about one Alan Bollard. Sure, he might be a nice, well-meaning bloke, but he is a Public Servant. We pay him.
He either has read that report - in which case his call for folk to borrow is disingenuous at best, fraudulent at worst, or he hasn't read that report, in which case you have to ask the competency question.
Next interview, Bernard, don't you dare duck the question.
Keeping your cred in financial circles is pointless if they don't have the truth of it.
Ask Bollard straight out whether he thinks economic activity (and/or growth) can be had ex-energy. If he says yes, he should go.
If he says no, ask him whether waiting for yet-to-be=proven sources of energy, whilst borrowing against that uncertainty, is not a fraud vis-a-vis our children.
As we were discussing on another thread it is distressing that 'greeness' is associated with the peakoil question since the NZ Green Party really does not seem to understand peakoil anyway (I believe because the implications of peakoil shatter the socialist wannabee underpinnings of todays Green Party). You most certainly do not need to be of the left or a 'greenie' to understand peakoil - indeed several of the appropriate actions which NZ needs to undertake now to prepare (such as effectively winding down its immigration policy and making defence spending more of a priority in a world which will become ever more dangerous) are from the right wing canon of politics.
Indeed - I find it amusing when I get grouped there too.
I advocate no aid to the teeming throngs of Haiti, Rwanda, Bangladesh, Pakistan. I advocate compulsory tube-tying and snipping as soon as either have been responsible for two offspring (I'd just advocate the tubes, but would be accused of sexism! - a rather niggly issue considering where we are headed) and note that that regime should really be set at one.
And rather than more wages for workers, I see a need to re-evaluate 'work' completely, drastically reduce same, and measure it against sustainability.
It's to do with overshoot/overpopulation/collapse, biosphere impact, physics and chemistry.
All those, but left-wing?
Forgive them, for they're too stupid to know what they do........
Perhaps that snip should be on an IQ basis.
It was, I posted it last week BTW.
Start from some fundimental[ist]s...
1) The American way of life is non-negoitiable....
2) The reports are apparantly written so the Americans dont get upset (see 1 above).
3) They are writen based on limited data, data hidden by those (Saudi etc) whose well being /livelyhood is dependant on us buying their oil no matter its price.
4) No one mentions growing an economy has a 1 to 1 relationship to growing oil supply...
5) We have been told by successive generations of Pollies (who want to remain in charge) that we will all get rich as the economy grows....its never happened of course....and never will.
6) There is no viable alternative energy sources like fossil derived oil, the alternatives that there are have huge scaling, time, cost and AGW implications.....(see 1 above).......
7) Once countries with resources in the ground realise that what they have are essential to the well being of their/our nation the shutters will come down on exporting.....(see note 1 above). I think this is why countries like the US are looking for FTA's, with a FTA we as a nation cannot stop the selling of our resources to another nation at the "market" price. Consider who earns more? a NZer or an American? ie who can afford to eat NZ produce based purely on price? and who will be left with the scraps? (see note 1 above)....
In terms of that report, I recall this year Jerry Brownlee drooling over the prospect of the south basin oil riches......that's changed, now he's talking about us having the easiest to get hydrates........(ignoring the horrendious impact on AGW that hydrates will have) no one in their right minds considers going to those extremes if oil wasnt harder still......that about sums up our energy future.
So even that stupid seems to now be getting it.....and what are they doing about it? diddly.....why? because there is no other game....so they will do as 50 years of Pollies have done in the past, push it out to the next election, and the next.....
Consider, if you (ie the Govn) accepts peak oil today what does that do to the budget deficit? It tanks it....so what happens then? taxes have to rise and/or budget cuts on a scale that will jaw drop ppl....something like the state of California is going through....
regards
"The Governors summary and text of the Inflation report in hindsight implies that high inflation during 2010 was obvious, however that is NOT what the Bank of England has been stating for virtually the whole year when the exact OPPOSITE was implied, which confirms my long-standing view that the Bank of England Inflation reports are nothing more than propaganda so as to enable the Bank of England to better manage the populations inflation and growth expectations by using the non existant Deflation Threat and therefore make the Banks job easier."
http://www.marketoracle.co.uk/Article24284.html
Are we in Noddyland also being lied to about inflation...for the same reason?
Anyone out there who doubts China will emerge soon as the richest economy on the planet should see the tv item on the 380 superfast train development Beijing to somewhere 170 miles away....'gob smacked' does not do it justice....then at the end to be told by the bloke in charge that they plan on 500 to 600 such trains......that's when the penny drops and you realise the USA is a backward looking economy in terminal decline.
The marketoracle one?
Misses the point.
As per usual, it forgets about this:
http://anz.theoildrum.com/node/7114#more
This is about the limits to growth now. China won't get to 500 super-trains, the lead-time isn't there. Actually, that's not quite right, the lead-time is there, but only if consumption in the West collapses..
Musical chairs from here on. Wally.
I'm off out to let the chooks out (they'll have laid by now), shift the goat, and plant a few hazelnuts. No fallow deer here dear fellow.
I don't have TV. Nat Radio and a land-line. And books.
http://www.gwagner.com/research/energy_trade/Energy_Trade.pdf
and links.
Go well (although you won't be able to go shell soon).
Then go here PDK http://en.wikipedia.org/wiki/High-speed_rail_in_China
"Merkel Backpedals
Thirteen straight daily drops in Irish bond prices forced Merkel to backpedal. She signed up to a five-country declaration on Nov. 12 that exempts bonds now on the market from a restructuring that could be imposed under a permanent rescue mechanism to be created by 2013.
What about new bonds?........would you buy any.....not friggin likely....give the can another kick!
This seems un-believable.......
Lets see if I have this straight....
At the moment the "old" bailout fund is voter (tax) backed....effectively its limitless....so the hedge funds etc really carry little risk but have hefty premiums......nice for them....bad for us....
So with the new bailout fund the hedge funds buy into it, its hedge fund money and not voter(tax) money they profit? but also stand to lose). So the hedge funds would carry the risk of a severe haircut in the probable event of a failure.....and Im sure the Govn's of the Eu would ensure it all held together long enough for the new bailout fund to come into being and for te hedge funds to take the loss on the chin...
Q, what nakes the Pollies think the hedge funds are stupid enough to do this?
Mind boggling to be honest....
regards
saw this on foxtel the other night--honda.s clarity fuel cell car--this has lot,s of potential although it has a few hurdle,s in front of it as in price--cheaper hydrogen production+ dispensing infrastructure
saw this on foxtel the other night--honda.s clarity fuel cell car--this has lot,s of potential although it has a few hurdle,s in front of it as in price--cheaper hydrogen production+ dispensing infrastructure
Get used to the fact that private, personal transport ie the car by 2020 wil probably be a thing of the past that only 10% of NZers will "enjoy".....the rest of us will be walking, on push bikes or using public transport.
Hydrogen cars will be for the top 2% or so, 8% will be on battery cars....the rest wont be able to afford the purchase price or the upkeep.
regards
A USER'S GUIDE TO THE CRISIS OF CIVILIZATION: And how to save it
A Review of Nafeez Mosaddeq Ahmed's latest book
http://www.theoildrum.com/node/7110
Have not read the book, but seems to be worthwhile to employ the grey matter in our head.
Their are reports that a balistic missile was fired from a Korean Submarine in International waters off the West coast of America.CNN.on checking found that no base was doing tests at this time.It was observed that F16 jets were scrambled...Apparently US.Naval presence in disputed Chinese waters have upset the Chinese,and a precision test firing, of a missile rammed it home to the North Koreans that the ruling clique in North Korea were not safe in their homes as the Americans could take out the ruling elite in one swipe...After the Test it reported that the North Korean leaders flew to Beijing for a conference with their allies.Seems a lot of stuff is going on under the surface..
Long time reader, first time poster. Fantastic little video on QE2! Absolutely hilarious and scary and the same time. If only the masses woke up and paid a bit of attention, this sort of communication is priceless nonetheless.
Nice to see the IEA acknowledging peak oil, now the ties just need to be made from this to the end of worldwide economic growth (pretty scary for the Keynesian people to swallow) and the world can get on with really fixing things instead of pretending it's business as usual and we can borrow/inflate our way out of trouble.
"such as effectively winding down its immigration policy and making defence spending more of a priority in a world which will become ever more dangerous) are from the right wing canon of politics."
But when the Govt had the chance to acknowledge peak oil as a major strategic threat in its defence white paper it whimped out. It did not even rate a mention. Unlike the US and German military who both have produced reports warning of the serious geo-political and security threats of a depleting oil supply. Same in its Energy Strategy. The threat of peak oil to our economy is not worthy of even a mention.
and both National and Labour have been silent on the NZ Parliament Report which predicts an oil shock as early as 2012.
pretending its not happening is negligence on a grand scale
I have to laugh at the results of your reader poll.......you must have every importer and his dog voting their fingers off........Heaven help us if the idiot politicians see it as a valid demographic.......
You would wonder how many dire situations would be addressed by a DO NOTHING POLICY.....and see if it corrects itself......maybe they are better suited to the IT industry.
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