Financial Armageddon!!

[Badger]

Sorry Essence. How about this version: -

There are a lot of people in a lot of trouble right now. I really want to help them out, and I think we all should. Lets get those properties off their backs so they can stop stressing about the market. Unfortunately we can only pay market value on the day, - which may be significantly below what they paid/their expectation. Possibly reduced 50% for mortgagee sales. We really need to get in and help these people in trouble so lets all pitch in.

In other words they were ripped off to begin with by property dealers and bankers and now those same people who make sure there line of credit or hidden capital is avaliable can buy it back for cents on the dollar!

Dont forget hedge funds and soveriegn wealth funds thought that too about getting in to bargains about 6 months ago, they have just been punished big time. Too early in the fray!

Get the govt involved and you have a bail out! Sound familiar? It should!

Thats not capitalism, thats just shafting uninformed individuals not much different than blue chip type scenario!

Capitalism means having capital not a line of credit of photons at the bank! Its debt call it what it really is!

[tanmedia]

Sorry Essence. How about this version: -

There are a lot of people in a lot of trouble right now. I really want to help them out, and I think we all should. Lets get those properties off their backs so they can stop stressing about the market. Unfortunately we can only pay market value on the day, - which may be significantly below what they paid/their expectation. Possibly reduced 50% for mortgagee sales. We really need to get in and help these people in trouble so lets all pitch in.

How about equities? Are you up for those as well?

[eri]

as another japan resident, hi tan, this mess does look to be heading more and more towards the japanese lost decade from 1990-2000, not that japan every really picked much after 2000....

from today's herald story "outlook bleak, warns bernaker"

"His more gloomy assessment appeared to open the door wider to an interest rate cut on or before Oct. 28-29, the central bank's next meeting, to brace the wobbly economy. The Fed's key interest rate now stands at 2 per cent."

if usa interest rates are now at 2% and their current models suggest they need to dramatically cut interest rates to kickstart a recovery they may just find that after a couple more cuts they have no where else to go and can study the japanese deflation experiance at their lesure, over the next 10 years or so

interest rates in japan have been around 0% for a long time now but everyone was so burned by the bursting of the bubble economy in 1990 that confidence never came back. land around where i live has been dropping every year for 18 years!

not long ago we bought 2 holiday cabins near a lake, the equal of anything in the south island, for less than a bit of bare land at the head of wanaka but they have still dropped in value since we bought them

in 1987, when nz similarly had a stock market bubble burst nz'ers were put off the stock market for life

if the same happens with real estate it could be very quiet for the next 10 years with everyone hoarding their money in term deposits returning 0.5%, as everything just keeps getting cheaper and cheaper in a deflationary spiral

[tanmedia]

as another japan resident, hi tan, this mess does look to be heading more and more towards the japanese lost decade from 1990-2000, not that japan every really picked much after 2000....

from today's herald story "outlook bleak, warns bernaker"

"His more gloomy assessment appeared to open the door wider to an interest rate cut on or before Oct. 28-29, the central bank's next meeting, to brace the wobbly economy. The Fed's key interest rate now stands at 2 per cent."

if usa interest rates are now at 2% and their current models suggest they need to dramatically cut interest rates to kickstart a recovery they may just find that after a couple more cuts they have no where else to go and can study the japanese deflation experiance at their lesure, over the next 10 years or so

interest rates in japan have been around 0% for a long time now but everyone was so burned by the bursting of the bubble economy in 1990 that confidence never came back. land around where i live has been dropping every year for 18 years!

not long ago we bought 2 holiday cabins near a lake, the equal of anything in the south island, for less than a bit of bare land at the head of wanaka but they have still dropped in value since we bought them

in 1987, when nz similarly had a stock market bubble burst nz'ers were put off the stock market for life

if the same happens with real estate it could be very quiet for the next 10 years with everyone hoarding their money in term deposits returning 0.5%, as everything just keeps getting cheaper and cheaper in a deflationary spiral

If there's a positive spin out of Japan, it has to be the following:

-- The largest pool of private savings in the world
-- Cash-rich corporations
-- The most energy efficient nation in the world
-- Massive competitive advantage in technology and related IP
-- Low-wage, low-cost economy
-- Great skiing and remarkable natural environment

I wonder if NZ will get to the point where the govt auctions off homes tor recover taxes. They've got to be the best property bargains I've seen ever.

[Badger]

At least most Japanese had good savings

The current crop of bankers though fear deflation - its inflate or die for them

Hence dropping interest rates to encourage yet more debt on suckers.

The "system" isnt geared for a deflationary enviroment it would wipe many out in the western world with negative equity especially in housing...ala the great depresion in the US however the Wiemar German inflation dosnt look to merry either...

Things may get ugly as true realities begin to hit joe and jane sixpack!

Ah didnt catch your post tan but yep I agree with your under lining asumptions about Japan will have problems but has some handy bonuses

[tanmedia]

At least most Japanese had good savings

The current crop of bankers though fear deflation - its inflate or die for them

Hence dropping interest rates to encourage yet more debt on suckers.

The "system" isnt geared for a deflationary enviroment it would wipe many out in the western world with negative equity especially in housing...ala the great depresion in the US however the Wiemar German inflation dosnt look to merry either...

Things may get ugly as true realities begin to hit joe and jane sixpack!

Ah didnt catch your post tan but yep I agree with your under lining asumptions about Japan will have problems but has some handy bonuses

Badge, I'm sitting on JPY at the moment. Even though it pays 0.01% interest, I'm not parting with it just yet.

[Badger]

yep JPY has been strengthening! Lot of Yen heading back to mainland Japan as carry trades begin unravelling...

[tanmedia]

yep JPY has been strengthening! Lot of Yen heading back to mainland Japan as carry trades begin unravelling...

Did you know that the Japanese post office sits on the largest pool of private savings in the world? The concept of a rental property is way off the richter for these people.

[tpr2]

A client just rang me and told me their private banker at BNZ asked them to shift their $8m of lending to UDC last week. They have moved the loan, settling next week. Interesting...

I wonder if he picked up a tidy little comm on that.... just kidding!!! Thats the mortgage broker in me coming out.

[Badger]

Did you know that the Japanese post office sits on the largest pool of private savings in the world? The concept of a rental property is way off the richter for these people.

No but I had an educated guess thats what its like in Japan! Mr Puplava has taught me the difference between saving investing and speculation. Japans not hard to work out. Its not rocket science

I wonder if he picked up a tidy little comm on that.... just kidding!!! Thats the mortgage broker in me coming out.

That must be that knowledge economy tpr2 ? You know "shuffle some paper here and then over there"

[Matt Gilligan]

How about equities? Are you up for those as well?

Sorry I don't understand equities. Too many clever accountants and complicated financial reporting standards to wade through. Too much inter-entity exposure. Too much lying and cheating going on.

Bricks and mortar is something I can understand. You get a tenant, they pay you rent. Over time the property goes up in value. Try to buy it heavily discounted. Try to get high cash yields. Nice and simple.

I'll leave the equities to clever people.

[tpr2]

ho ho..... come on Matt, take that tongue out of that cheek.

And tan the question wasn't for me but as far as equities go I am up for them, at least in the ozzie market anyway.

[Badger]

whats hard to understand about

water,oil,gold,silver,copper,coal,uranium,energy,w heat,corn,pharma,sugar,coffe, Railways, infrastructure etc etc

most of us mere mortals use it every day....

[Tucker]

You forgot housing

[sudafrikan]

I would never buy gold, you can spend half your life helping the big corporations dig for gold helping the country, then you get rewarded by them hiring someone cheaper because you are too qualified because you are too experienced and do your job too well. Why do it? why work hard if this is reward you get, gold only makes the corporations rich, why help them to get rich they do nothing for you, it is best to help yourself not others. All mining just exploits the hard workers and rewards the lazy greedy ones, the hard workers are always the first to be exploited and the last to be rewarded. The lazy greedy ones want everything for nothing but they have not learnt that you need disipline that is why the economy is bad. If their parents had given them disipline as children the economy would be in good shapes but the greed is to blame because they are too lazy and want everything for nothing well they will find out it will not work that way that they like and they have only them to blame for it all. If they worked harder and not so greedy then gold could be extracted in a better manner with more experienced workers to earn a decent money for what they do, they rewarded for their hard work and this is only fair not the the lazy greedy ones rewarded for doing nothing! The rooster is coming home so now they will know they are wrong and the workers are right, I will not laugh at them for their wrong doings but even to say I told them it would happen they only have to look at their own faults and greed. The bible says the meek shall inherient the earth but maybe the meek will not stand for this nonsense any more and as I said the rooster is coming home for those that did not listen.