Financial Armageddon!!

[Leftette]

One of the Whale Army, PC?

[speights boy]

“Net interest on Council debt at 20% of annual rate revenues”.

Needs to increase as I want to buy another council bond.

[PC]

Cameron Slater's blog can be interesting.
Not exactly a favourite for lefties.

20% - not bankrupt yet.
Plenty left for trains, gay parades and working wages for all.

[Davo36]

That's what I was thinking PC, they'll look at 20% and go "Oh 80% to go then, wahoo!" and "Yeah but that's only at today's rates, and we can always increase those!"

[muppet]

Scientists warn on Arctic ‘economic time bomb’

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Published: Wednesday, 24 Jul 2013 | 10:03 PM ET
By: Pilita Clark

Getty Images

The rapidly melting Arctic is an "economic time bomb" likely to cost the world at least $60 trillion, say researchers who have started to calculate the financial consequences of one of the world's fastest changing climates.

A record decline in Arctic sea ice has been widely seen as economically beneficial until now, as it opens up more shipping and drilling in a region thought to contain 30 percent of the world's undiscovered gas and 13 percent of its undiscovered oil.
However, the Arctic's pivotal role in regulating the oceans and climate means that as it melts it is likely to cause climatic changes that will damage crops, flood properties and wreck infrastructure around the world, according to research by academics at the UK's University of Cambridge and Erasmus University Rotterdam in the Netherlands.
More at
http://www.cnbc.com/id/100912062

[Perry]

Damn! They've run out of money to lend to poeple
to buy their sweat-shop factory products from.

[eri]

it is hard to tell how the debt crisis will end - inflate, stagnate or default have been the three options.
Governments could still inflate their way out of the debt eventually but QE has not yet resulted in the inflation many would have expected; broad money supply growth in the UK is just 4.7% on the latest numbers. In the euro zone, bank lending to the private sector was down 0.9% in June, its biggest annaul fall. To the extent that central banks have turned on the taps, commercial banks have pulled out the plug.

It all looks a bit Japanese to me. Yes, European growth numbers have looked a bit better recently. But a long-term stagnation forecast does not mean one cannot have short-term periods of growth; Japan has had several episodes. It just means such periods tend to peter out; the trend growth rate is very sluggish. In such circumstances, and even though many people will believe that government bonds are massively overvalued, bond yields can stay low, as Japan has illustrated.

http://www.economist.com/blogs/butto...-and-investing

[Austrokiwi]

its actually getting to the point that defaulting seems the lesser evil and bankruptcy may be better than "eternal" debt. In History, as much as the pain can be, defaulting seems to clear the air better and for longer. Unless we can do equivalent to what the the Spanish did ie: found a mountain of Silver(Potosi)

[eri]

It is not just Detroit. American cities and states must promise less or face disaster

.......................................
Many other state and city governments across America have made impossible-to-keep promises to do with pensions and health care. Detroit shows what can happen when leaders put off reforming the public sector for too long.
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Governors and mayors have long offered fat pensions to public servants, thus buying votes today and sending the bill to future taxpayers. They have also allowed some startling abuses. Some bureaucrats are promoted just before retirement or allowed to rack up lots of overtime, raising their final-salary pension for the rest of their lives. Or their unions win annual cost-of-living adjustments far above inflation. A watchdog in Rhode Island calculated that a retired local fire chief would be pulling in $800,000 a year if he lived to 100, for example. More than 20,000 retired public servants in California receive pensions of over $100,000.
.................................................. ..
Public employees should retire later. States should accelerate the shift to defined-contribution pension schemes, where what you get out depends on what you put in.
.................................................. ..
Uncle Sam offers an array of “entitlements” that there is no real plan to pay for.

http://www.economist.com/news/leader...-face-disaster

[Davo36]

Yep spend up now, get re-elected and stuff the future!

Both local and national governments do this. We're borrowing $300m a week for precisely this reason!

[Austrokiwi]

It is not just Detroit. American cities and states must promise less or face disaster


.................................................. ..
Public employees should retire later. States should accelerate the shift to defined-contribution pension schemes, where what you get out depends on what you put in.
.................................................. ..
Uncle Sam offers an array of “entitlements” that there is no real plan to pay for.

http://www.economist.com/news/leader...-face-disaster

Well it took me a while to catch that false, or at the very least poorly researched assumption. If GVt employees stay in jobs longer the actual costs to the pension schemes go up, people end up retiring at a higher grade and salary level than they would have otherwise. I recall one work looking at the costs noted it was about US$100,000 (From memory thats for one year for all US gvt employees combined so the actual costs are miniscule) more expensive over a 20 year period to have people retire later. Actually if they were serious about dealing with the problem of retirement costs they would be lowering the retirement age to 55 its around that age that the savings become worth while..yes they will be paying pensions for longer but they will also be paying less to each retiree to the point they actually save money. I think the economist on this one hasn't fully tested its assumptions.

[Austrokiwi]

the doom and gloom merchants are at it again: http://www.cnbc.com/id/100976848

[exnzpat]

I saw an interesting article a few months ago. It was something I was not looking for but when I found it, I realized that I’d seen something much like it before.

http://www.stuff.co.nz/business/indu...-Hutt-KFC-site

I read and reread this story a number of times, trying to grasp what it really meant. And then I remembered. Winter in Ft Myers, Florida 2008! I remember reading a newspaper article in which one of the largest homebuilder/contractors (I don’t remember their name) in the USA, was selling off all its assets, not just in Florida but in other States and in other cities across the USA, as well. Seven months later the economy crashed, especially hard hit, real-estate in the State of Florida.

Were they guessing, or did they have a crystal ball? Or was it just sound, economic good-sense and due diligence to a very obvious housing bubble?

The lesson here is that big companies, with vast exposure to whichever market in which they operate, don’t lose. So, is KFC (Restaurant Brands), stupid, or did they just get a great deal on the land they own by selling it off to suckers and then renting it back? My guess: they got a great deal. Their expectation then, is that real-estate values in NZ will fall. It's the only explanation, despite the dummy quoted, who said, "We are starting to see a firming of the market for quality assets,". Because, this doesn't mean anything!

Of course, you know "economic disaster ahead" has been my mantra all along. And slowly the pundits are catching up with me, citing things like income to home price parity, rising NZ dollar or any of the host of other things I’ve suggested here on this board over the years. But no one listens. They hear only what they want to hear--and that's fine. I've come to grips with it.

Finally, I’ve got hard evidence the fact. And so, despite what you may think, here it comes…. So hold on to your hats. The money train is about to grind to a lumbering halt in New Zealand (something it should have done in 2008 or 2009, in my opinion), so it’s long overdue.

I expect a mass exodus of the population to find work. I expect to see mass default on mortgages and a crash in the New Zealand dollar. Also, I expect interest rates fall (which will be good for those of us who have hung-in there all this time). Dogs will bark in empty streets and babies will cry. Tumbleweeds will tumble, testament to the terrible times ahead...

[Leftette]

Even a stopped clock is correct twice a day.

[Perry]

The money train is about to grind to a lumbering halt in New Zealand (something it should have
done in 2008 or 2009, in my opinion), so it’s long overdue. I expect to see mass default on
mortgages and a crash in the New Zealand dollar. Also, I expect interest rates to fall (which
will be good for those of us who have hung-in there all this time).

Do go and have a bo-peep at the Interest rates thread, then come back with a date.