Bernard Hickey: "Methinks they dost protest too much"

[Dunning]

About NZ$800 million of those losses are directly related to rental property investments, the IRD estimates

New Zealand's landlords need to understand that their drive to reduce their personal tax bills and target tax-free capital gains has distorted both the economy and the government's finances.

For the tax year 2008-2009 the IRD reported $49 Billion collected. $800 million worth of losses is 1.6%. That is less than half the inflation of 3.8% year on year March 2009. The maximum possible distortion is insignificant to the governments finances. Bernard still has useful information now and then but he's hiding it behind hype and sensationalism.

[PC]

What are the figures for other business endeavors?

Mum & Dad landlords are just soft targets.
How about giving us the figures for the big boys?
Say those Aussie owned banks for example.

[Avalon]

And what about Bernards observation, that his misprediction of a 30 percent drop was caused by his misunderstanding of how very stubborn people were.

Isnt this the main problem with all "economic theory"? That it relies on money working in a vacuum, but completely ignores that fact that people are involved and handle money emotionally.

We are "supposed" to behave a certain way - but we don't.

If only we would do as we were told

[McDuck]

A bit off topic but Yes.
The "too big to fail" problem skews the curve.

But then again...the Govt did prop up the down side of the curve ...but is now coming back to kick some serious a** to make up for it.

Will we have our correction in the end?

Back to the infotainment side of the story...it's all about ego.
Bernard prides himself on being able to predict the future of housing...not a happy camper at the moment.

Andrew prides himself on making money in Housing...also not a happy camper at the moment.

Andrew will just have to be happy making less money, and Bernard will just have to accept that no one can predict the future.

Mcduck will have to stop being such a know it all , because no one likes a smart A**.

[Perry]

Mcduck will have to stop being such a know it all,
because no one likes a smart A**.

Now there's a prediction that could be true.
.

[eri]

What are the figures for other business endeavors?

Mum & Dad landlords are just soft targets.
How about giving us the figures for the big boys?
Say those Aussie owned banks for example.

i think you'll find they've been hit rather hard recently...

[McDuck]

Mum and dad landlords.

wow! now that is a clever joining of two concepts.

Mom and dad ...awwwwww kind old folks. + Landlords...boooooo mean old misers.

join the two and you throw the kind feelings people have for the act of parenting over the hard feelings people have for landlords.

What a tricky bit of word smith ing.

But to the topic.
(The Banks part in all this)

America, the heart of most of our trends, cultural as well as financial, are doing exactly that, looking at the (Mom and dad) bankers.
Talk is of breaking them up into smaller sections to make sure they won't cause the same problem again.

China, the financail furnace the world is warming itself by, is also taking measures against the (Little fluffy animals with large eyes) banking structures...but using the idea of increasing the reserve to be held.

SO to answer the question "Will the banks get theirs?" yes, as much as any structure that powerfull can be held to account (that is).

[PC]

Yet another big foreign owned business getting tax breaks:

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10621942

Why aren't local "Mum & Dad" landlords getting these handouts?

[roseneath_rat]

Foreign owned business? Most of the $300M of the movie development was spent on Peter Jackson's enterprises like Weta Digital etc. Spending $45M in tax incentives to bring an extra $300M cash into NZ seems like a good investment to me.

As with any change in the tax system, the smart ones are those that change & adapt to the new rules & continue to make money. But thats easy for me to say ... as I probably stand to gain from the likely changes- my wife and I both have above average wages, save as well as spend and own two businesses, and no longer own any rental property. Ch-ching!

[PeterEmpowerEd]

I find this interesting ...

I wouldn't mind if the media did genuinely report as an opinion piece. At least you'd know where you stood with them then. Now we have media hyping things up purely to suit their own promotional interests and if people aren't alternatively informed about the issue in question, they have no idea what is really going on. News has become entertainment.

Dave,
I'm enjoying this 'media blur' aspect of the discussion so much, I've continued it over here on my blog, http://www.thepaepae.com/dave/1891/ ... rather than interrupting the flow of the mum & dad/taxbase/foreign owned business conversation here.

(Hope that doesn't hurt anyone's feelings.)

Cheers,

[PeterEmpowerEd]

In theory there is no difference between theory and practice. In practice there is.

Isnt this the main problem with all "economic theory"? That it relies on money working in a vacuum, but completely ignores that fact that people are involved and handle money emotionally.
We are "supposed" to behave a certain way - but we don't.
If only we would do as we were told

Great comment, Helen!

Yes, as Yogi Berra is credited with saying (read this page for more):

In theory there is no difference between theory and practice. In practice there is.

Wish I had it to hand when I wrote the intro to How to Survive and Prosper in Falling Property Market.