Predictions for 2015

[Perry]

If SB's expressed sentiments are anything to go by, anyone
who decries the RBNZ's fatuous fiddling while Auckland burns
is no more than a whining, moaning candidate for lynching.

[speights boy]

Hence the current chorus for action – any action – against the current bogeymen: Immigrants (meaning Asian immigrants) and Property Speculators (meaning investors/landlords). These groups can be safely pilloried with little fear of any public backlash. "

Auckland landlords have called for Government action against overseas property buyers, saying information was needed on their numbers.

Andrew Bruce, president of the Auckland Property Investors' Association, said there should be closer scrutiny and better understanding of overseas-based property buyers to address the stress they are creating on the Auckland housing market.

The Government has to date ruled out taking any action, either in measuring numbers or in ushering in taxes or measures to deter foreigners' influence.

But Bruce said that wasn't good enough.

"It has to be a two-step process starting with a better understanding of exactly how many foreign buyers there are and to what extent they impact our housing market as well as the economy as whole.

"Are they investors who provide accommodation services and feed into the local economy? Are they absentee speculators who leave the houses empty and grossly inflate our prices?" says the Association's President, Andrew Bruce.
"To me, there can be no credibility to any level of debate on this matter until we fully understand what we are dealing with."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11440480

[Wayne]

Do you really believe that?

Yes I do actually.
Wheeler isn't an idiot - he knows he isn't going to drop the Ak house prices with his change.
He has said that the solution in Ak is supply.
Protecting the banking system is the only senario that fits the facts.

[watchful]

So why bother? To make the RBNZ's shareholder look good?

Maybe to ensure PIs can lose 30% equity in the event of a 'significant event' and not bankrupt the banks?

I remember one well regarded investor advising others to make a run on the banks during GFC in 2008 on this forum. No one knew how exposed NZ banks were to the US. How quickly perceptions change.

NZ banks have a lot riding on our property market, make no mistake about that.

[khoed792]

sorry can someone tell me what is the definition of a speculator ?

[Wayne]

sorry can someone tell me what is the definition of a speculator ?

You could Google that - I'll do it for you.
1st option
A speculator is a trader who approaches the
financial markets with the intention to make a profit by buying low and
selling high (or higher), not necessarily in that order. The speculator is distinguished from the investor, who approaches the financial markets with the intention of making a return on his capital.

2nd option (wiki)
Speculation is the practice of engaging in risky financial transactions in an attempt to profit from fluctuations in the market value of a tradable good such as a financial instrument,
rather than attempting to profit from the underlying financial
attributes embodied in the instrument such as capital gains, interest,
or dividends. Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements.
Speculation can in principle involve any tradable good or financial
instrument. Speculators are particularly common in the markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives.

Here's one I didn't know
speculator

(ˈspɛkjʊˌleɪtə) n1. a person who speculates
2. (Rugby) rugby NZ an undirected kick of the ball

[flyernzl]

Speculator - from the NZ Media handbook:

Anybody (except an owner-occupier) who buys or sells property.

[Wayne]

Too true that.
Probably includes those who even think about it.

[eri]

if a first home buyer

buys a 2 bed keith hay starter home

with the intention selling it for gain when a baby comes along

and then buy a 3bed

does that make them a speculator?

[Wayne]

if a first home buyer

buys a 2 bed keith hay starter home

with the intention selling it for gain when a baby comes along

and then buy a 3bed

does that make them a speculator?

That is the tricky bit isn't it.
No one in reality buys their 1st house with the intention of living in it forever.

[cube]

if a first home buyer

buys a 2 bed keith hay starter home

with the intention selling it for gain when a baby comes along

and then buy a 3bed

does that make them a speculator?

Yes, but if they left out the 'for a gain' bit, No.

[Perry]

Follow The Money?

Do you really believe that?

Yes I do actually.
Wheeler isn't an idiot - he knows he isn't going to drop the Ak house prices with his change.
He has said that the solution in Ak is supply.
Protecting the banking system is the only senario that fits the facts.

You're right in that he's not an idiot. However, I don't
think there's only one story that can 'fit the facts.'

Blenglish and the gummint are the main shareholders
of the RBNZ, which pays large annual dividends to
the gummint. In reality - a stealth tax. Who appoints
the RBNZ Directors? Blenglish as the representative
of the total shareholding gummint.

Blenglish has made it clear the gummint expects even
bigger payout / dividend in the future, from any entity
that currently pays it a stealth tax dividend or the like.

I have no idea if this recent discrimination against PI
in Auckland will have any impact of RBNZ dividends
to the gummint. I just don't accept that there is just
one story that might be behind the move.

[Wayne]

How does the RBNZ 'earn' money to pay a dividend?

[Perry]

They call it some odd name like Seigniorage.
You can read about it in their annual reports.
It was hundreds of millions, some years.

EDIT
There you were, Wayne.

[jaxy]

Reserve bank is not worried about its shareholder. Its the bank depositors who will be screwed if a bank falls over. The depositors will have their deposits used to cover any shortfall of the fallen bank.

If the low dairy prices continue & hit farm prices & the Ak property market contracts some banks will be in real strife. Their depositors won't know what hit them when their deposits disappear overnight & the bank retreats back to Australia or China Or where ever.

I am waiting to see when the Reserve Bank starts reducing staff as there is no longer any threat to public finance through bank failures. No need for so many staff.

Its about time banks were forced to produce prospectuses so depositors or their advisers can assess the quality of the bank's loan book. After all depositors money is at risk here. Same as any finance company.