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They'll do anything for their country, except live in it.
M
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I always surmised that the only reason anyone lived in Auckland might be because it was easier to get a job there?...
Actually, it might just be who I've ended up making friends with lots of Aucklanders seem more into leisure than my Wellington friends.... without the need for layers of gore-tex and polypropylene. (Being from Cook Strait I never complain about a bit of muggyness).
I suppose my analysis never included the idea that some people might like Auckland - I simply thought it was a place full of economic refugees. I would be genuinely surprised if anyone actually liked the place.
I like it. I do miss aspects of Wellington. It is beautiful and unbeatable on a good day, but there's just too few of them.
Like most Aucklanders (am I one? dunno) I live not in a big city (CBD) but in a suburb. My kids walk to school up the road and have mates for sleepovers, play netball with the neighbours and classmates... we have people over for coffee etc... it's not all rat race.
In New York City, that wonderful, energised, humming, electric place (you get I liked it, right?) I stayed in an apartment on the Upper East side, and had to sleep with ear plugs every night because of the sirens and street noise. (Great place, though. Absolutely loved it.)
In my view, whether or not people will keep migrating to Auckland long-term is questionable, although this could simply reflect my tastes...
I remember hearing before we moved here some ridiculous number of people were moving into Auckland each week. (That may have slowed. Dunno.) At the same time also heard that it was so much more expensive to live in Auckland that the police had to pay staff they wanted to transfer there an extra allowance.
Future growth? Manukau City Council was predicting 70,000 (I think) people just in Flat Bush ... and by golly, it looks like they could be right.
No reception on my crystal ball, but judging by results so far...
While I enjoy a parochial argument around the barbecue as much as anyone, I know that most of the time we're just ragging. These things are matters of taste, as you say PM. Beauty, among other things, is in the eye of the beholder. (I certainly don't support the 'invest only in Akl' line.)
Donna and Marc, come on up. See what you think. (Or save time and go straight to Tauranga, eh, Lisa?)
Your home as a piggy bank? Not anymore
Sunday, August 26, 2007 3:46 AM
By David Leonhardt and Vikas Bajaj
THE NEW YORK TIMES
The median price of American homes -- the level at which half of all homes are more expensive and half are less -- is expected to fall this year for the first time since federal housing agencies began keeping statistics in 1950.
Economists say the decline, which might start to take shape in a government price index to be reported this week, probably will be modest -- from 1 percent to 2 percent -- but could continue in 2008 and 2009. Rather than being limited to the once-booming Northeast and California, price declines also are occurring in such cities as Chicago, Minneapolis and Houston, where the increases of the last decade were modest by comparison.
The reversal is striking because many government officials and housing-industry executives had said that a nationwide decline would never happen, even though prices had fallen in some coastal areas as recently as the early 1990s.
According to the National Association of Realtors, the median home price is now about $220,000.
While the housing slump has already rattled financial markets, it has so far had only a modest effect on consumer spending. But forecasters now say its impact will lead to a slowdown over the next year or two.
"For most people, this is not a disaster," said Nigel Gault, an economist with Global Insight, a research firm in Waltham, Mass. "But it's enough to cause them to pull back."
In recent years, many families used their homes as a piggy bank, borrowing against equity and increasing spending faster than their income was rising. A research paper co-written by the vice chairman of the Federal Reserve said that the rise in home prices was the primary reason consumer borrowing has soared since 2001.
Now, however, that financial cushion is disappearing for many families. "We are having to start from scratch and rebuild for a down payment," said Kenneth Schauf, who expects to lose money on a condominium in Chicago that he and his wife bought in 2004 and have been trying to sell since the summer of 2006. "We figured that a home is the place to build your wealth, and now it's going on three years and we are back to square one."
On an inflation-adjusted basis, the national median price is not likely to return to its 2007 peak for at least 10 years, according to Moody's Economy.com, a research firm.
Unless the real-estate downturn is much worse than economists are expecting, the declines will not erase the increases of the last decade. And for many families who do not plan to move, the year-to-year value of their house matters little. The drop is, of course, good news for home buyers.
It does, however, contradict the widely held notion that there is no such thing as a nationwide housing slump. A 2004 report jointly written by the top economists at five organizations -- the industry groups for real-estate agents, home builders and community bankers, as well as Fannie Mae and Freddie Mac, the government-sponsored backers of home mortgages -- was typical. It said that "there is little possibility of a widespread national decline since there is no national housing market."
In 2005, Ben Bernanke, then an adviser to President Bush and now the Fed chairman, said "strong fundamentals" were driving prices higher. "We've never had a decline in housing prices on a nationwide basis," he added.
But Global Insight estimates that the home-price index to be released Thursday by the Office of Federal Housing Enterprise Oversight, a regulatory agency, will show a decline of about 1 percent between the first and second quarter of this year.
In all, Global Insight expects a decline of 4 percent, or roughly 10 percent in inflation-adjusted terms, between the peak this year and the projected low point in 2009. In California, prices are expected to decline about 20 percent after taking inflation into account.
The government's index, which compares the sales price of individual homes over time, is intended to describe the actual value of a typical house.
I always find it amusing that companies can lose billions of dollars in value in a single day, private investors can get totally ripped off (eg,Feltex) and can lose their entire investment. Share prices can collapse in a second, and frequently do. Major companies can be here today, gone tomorrow.
However, if property values dip marginally, or volumes decrease, or days to sell increase, then immediately it's all doom and gloom in the papers. Even house price growth easing from 12% to 9% pa will have a negative flavour in the news. In the media, why is all sense of perspective lost?!
And this isn't in response to the above article, just a general observation/perception.
This week, Larry Kudlow and others strongly chastised Bernanke for his failure to read the writing on the wall and urged the Fed Chairman to quickly slash the Fed Funds rate. For years, Kudlow, who practically coined the term “Goldilocks economy,” has dismissed with scorn suggestions that the American economy was anything less than ragingly healthy. If our economy is really so strong, why does he call so loudly for the artificial stimulus of a significant rate cut?
In truth, the writing has always been clearly on the wall all along. A credit bubble has been steadily inflating for at least the last six years, which in its final frenzy produced some of the most absurd mortgage funding products the world has ever seen. To anyone not dependent on the hysteria, a no-doc, no money down, negative amortization, interest only, adjustable rate jumbo mortgage was a just as clear a sign of pending catastrophe as $200 for a share of Pets.com, or 5,000 Dutch guilders for a single tulip bulb.
The one thing all bubbles have in common is that they eventually pop, and ours just did. Unlike the popping of the last bubble in 2000-2001, this one will fall directly to our economy’s bottom line. And this time the Fed can not step up to the plate with unlimited liquidity injections.
A record percentage of our GDP is comprised of consumer spending. The source of this spending was the housing bubble. Would our savings rate really be negative were it not for housing related “wealth?” Could consumers really have spent as much as they did without the benefits of temporarily low teaser rates and the ability to extract equity from their homes? How many service sector jobs are directly related to that extra spending? When the low mortgage payments and home equity disappear, so too will the spending and jobs they engendered.
With the ugly truth laid bare, many now prod Bernanke and Bush for solutions. Unfortunately there are none. Based on absurd assumptions about real estate, we simply borrowed more money than we can ever hope to pay back. There is no magic elixir we can swallow to cure what ails us.
Prudent lending standards will return, guaranteeing that real estate prices collapse. This is an important connection that very few have made. There is no way the average American can afford to buy the average house at today’s prices with a mortgage he can afford. Assuming that the lax standards of 2005-2006 do not return, the only way this can happen is if real estate prices collapse, which is exactly what is happening.
In the final analysis, though it was Wall Street that served the punch, it was the Greenspan Fed that spiked it in the first place. Just as Fed policy enabled Wall Street to flood the world with worthless dot.com stocks it enabled an encore performance with subprime mortgage-backed securities. My guess is the Fed’s bubble blowing days are over. Once the inebriates sober up this time, the hangover will be so severe that no one will drink a drop of Wall Street’s punch again, meaning any more inflation the Fed creates will go strait into consumer prices.
Find The Trend Whose Premise Is False - Then Bet Against It
(Quoting Peter Schiff) Based on absurd assumptions
about real estate, we simply borrowed more money
than we can ever hope to pay back. There is no magic
elixir we can swallow to cure what ails us.
Individuals doing just like the USA economy as a whole
has done. I hope we don't choke in the dust cloud as
they each hit ground zero.
Just when you thought it was safe to venture into the finance industry again.
The finance company carnage continued today with Nelson-based LDC Finance Ltd being placed in receivership by its trustee, owing 1000 investors almost $20 million.
Perpetual Trust said it had appointed Malcolm Hollis and John Fisk of PricewaterhouseCoopers as receivers on the request of the company's directors.
It is the eighth finance company to go bust since National Finance 2000 in May last year.
LDC's directors said the receivership was not the result of asset quality issues, but "because of serious concerns as to the state of the debenture and funding markets and the ability of the Company to obtain new funds and retain existing investments".
"Given the issues confronting the finance company sector at this time, the Board of Directors of the Company reluctantly concluded the Company was unable to operate in this market. The Directors and Trustee have taken this step as a measure to protect all investors and to ensure all investors are treated fairly," Perpetual Trust said.
LDC owes $11.1 million to 408 debenture investors, $7.9 million in on call unsecured deposits to 576 customers and $300,000 in unsecured term deposits to 11 customers.
LDC's directors said they expected all debenture holders and depositors would be repaid in full.
According to information on interest.co.nz, LDC Finance invests mostly in property development and real estate, financial sector assets, and rural assets.
Ratings agency Standard & Poor's has placed
Geneva Finance and its sister company Quest
Insurance Group on credit watch with negative
implications because of "increasing pressure
on Geneva's liquidity and funding position."
It believes Geneva may not be able to manage
future liquidity needs, although it does note
support from bankers and debenture renewals
may be sufficient for it to survive.
Geneva, Standard & Poor's say, is increasingly
relying on a $50 million facility provided by
Australian lender, BOS International.
The subprime mortgage mess continues to spread
across the pond: British lender Victoria Mortgages
announced Monday that is has gone into administration
and will no longer originate new loans.
It is the latest lender to succumb to a lack of liquidity
in the market and a tightening of international
lending standards.
Victoria was founded two years ago and is backed
by U.S. venture capital group Venturion Capital.
It is one of the smaller lenders in what is know in
the United Kingdom as the "adverse credit" market.
The lender did not release its market share or loan
book figures yesterday.
Subprime loans made up close to 8% of all British
lending in 2006, far less than the 20% slice the
USA market made.
Government-chartered housing company Freddie Mac said
in a bankruptcy filing yesterday that thousands of
homeowners left out in the cold when lender American
Home Mortgage Investment Corp. went bankrupt could be
in "imminent risk" of losing their homes.
Freddie Mac told the U.S. Bankruptcy Court in Wilmington,
Del., that it does not have the loan files it needs to service
more than 4,500 loans from the defunct lender, leaving them
open to unpaid property tax bills and possible tax
foreclosure sales.
"There is the imminent risk that borrowers' insurance
policies may lapse for nonpayment, subjecting the borrowers
to a risk of loss of their mortgaged properties," Freddie Mac
said in the filing.
At its peak, American Home Mortgage was one of the
nation's largest lenders, servicing more than $50 billion in
mortgages.
The Freddie Mac filing said that when the company sent
representatives to the lender's servicing office to retrieve the
files days before it formally declared bankruptcy, American
Home "had its security personnel escort the Freddie Mac
representatives out."
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