Financial Armageddon!!

[Davo36]

This looks pretty bubbly to me: http://www.stuff.co.nz/life-style/ho...ys-to-buy-home

A 29 year old aged care worker queues/camps for 3 days to buy a section for $AUS515,000, so he can build a house - because he can't buy one.

How the f**k does a 29 year old aged care worker (usually minimum wage) afford a half million dollar section and then build on it?

[Maccachic]

This looks pretty bubbly to me: http://www.stuff.co.nz/life-style/ho...ys-to-buy-home

A 29 year old aged care worker queues/camps for 3 days to buy a section for $AUS515,000, so he can build a house - because he can't buy one.

How the f**k does a 29 year old aged care worker (usually minimum wage) afford a half million dollar section and then build on it?

If you were the developer would you not question your pricing with that many people queuing?

[Davo36]

If you were the developer would you not question your pricing with that many people queuing?

True. Maybe they were putting up the prices while they were queueing!

[eri]

http://www.stuff.co.nz/world/europe/61127837/Scottish-independence-poll-spooks-British-markets

breakup of the uk

probably not good for europe

[muppet]

Fonterra issues profit warning

RICHARD MEADOWS Last updated 17:23 09/09/2014

Fonterra says a sharp fall in dairy prices means its 2014 operating profit will come in at the lower end of the forecast range.
In an update posted to the NZX this afternoon, the dairy giant reconfirmed its guidance of $500 million to $600m of earnings before interest and tax.
However, Fonterra expected the final figure to come in at the ''lower end'' of the range, reflecting the major fall in dairy prices.
The GlobalDairyTrade price index has dropped 45 per cent from its high in February this year, due to increased supply and muted global demand.
Fonterra said imports into the Chinese market from all parts of the world continued to grow on a year-on-year basis, up nine per cent in July.
However, that was still the smallest year-on-year increase in 12 months.
The pricing woes have forced Fonterra to cut its farm-gate milk price forecast from $7 per kilogram of milk solids to $6, implying an almost $4 billion drop in farmer income compared with last season's $8.40.

Read more at

http://www.stuff.co.nz/business/farming/dairy/10477635/Fonterra-issues-profit-warning

[eri]

That is why a basic principle of good tax policy has long been to charge a low rate over a broad base.

It is a target which many countries miss, and the gap is growing. Income taxes—one of the main sources of tax revenue across the rich world—are increasingly paid by a small minority of the most affluent.

In Britain, employment has risen by 1.3m in the past five years, but the number of taxpayers has fallen by 2.2m.

More than 40% of American households pay no income tax.

In contrast, the most highly paid 1% of workers in Britain pay 28% of all income tax, while in America it is 46%.

In 1979 those shares were 11% and 18% respectively.

...
Governments across the rich world, but particularly in America, should aggressively prune deductions.

And they should work together to reach international agreement on how firms should book their profits.

http://www.economist.com/news/leader...ow-too-reliant

[eri]

timely

Nonetheless, the growing wedge between a skilled elite and ordinary workers is worrying.

Angry voters whose wages are stagnant will seek scapegoats: witness the rise of xenophobia and protectionism in the rich world.

In poor countries dashed expectations and armies of underemployed people are a recipe for extremism and unrest.

Governments across the globe therefore have a huge interest in helping remove the obstacles that keep workers from wealth.

http://www.economist.com/news/leader...-rich-and-poor

The answer is not regulation or a larger state. High minimum wages will simply accelerate the replacement of workers by machines.

Punitive tax rates will deter entrepreneurship and scare off the skilled on whom prosperity in the digital era depends.

The best thing governments can do is to raise the productivity and employability of less-skilled workers.

That means getting rid of daft rules that discourage hiring, like protections which make it difficult to sack poor performers.

It means better housing policy and more investment in transport, to help people work in productive cities such as London and Mumbai.

It means revamping education.

[PC]

Politicians aren't seeking solutions.
Only re-election.

[eri]

According to the ICMB report, the developed world (that still includes NZ)

has a choice between

"prolonged low growth or another crisis".

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11339267

[Perry]

Which is the frying pan;
and which is the fire?

[Davo36]

Perry, it's like boiling a frog slowly, they don't realise and just sit there and stew.

It's frying pan, or a slow simmer... those are the choices.

[eri]

seems to me these have always been the only 2 options

for those with eyes to see

the debt bubble needs to be handled very, very carefully

as we don't fully understand the human psychology of panic selling

how many ebola outbreaks would it take to trip world finance into another crash?

we are way, way over our ability to settle all our debts and walk away

imho debt creation and the banks

need to be on a very short leash as they seem intentionally blind to the long term affects of people treating housing as pokie machines

today? anz workers are striking

the easiest thing for the company is to give the workers more money

and then extract from customers who want more debt

good for the anz workers

good for the bank

bad for the long term health of the economy

...............

and prolonged low growth

could be very, very close

to japanese stagflation

[eri]

According to Bloomberg, equities worldwide have lost about US$4.4 trillion ($5.6 trillion) in value since reaching a record last month.

"Six years after the global financial crisis there is now more debt in the financial system than there was in 2008, so a lot of structural issues that needed to be addressed after GFC have not been dealt with,"

There was now low growth in Europe at a time of rising indebtedness and economic growth in Europe's economic powerhouse - Germany - looked to have stalled.

In addition, risks were emerging in China, with real estate prices starting to retreat.

http://www.nzherald.co.nz/business/n...ectid=11341835

[eri]

something to keep an eye out for in the news

chinese property developers starting to go tits-up

may trigger huge churn in world markets

http://asia.nikkei.com/Viewpoints/Perspectives/Ana-Swanson-Watch-out-for-Chinese-property-developers-hidden-debt

[Davo36]

Yeah but they've talking about those guys going tits up for years eri.