Hard News: Going Underground
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I think a lot of bollox is talked about banks. Sure, they make a lot of profit, but so do (equally foreign owned) supermarkets, telcos and breweries.
If you look at returns, bank profits aren't out of line with other businesses. Assuming that one accepts capitalism in general, why should banks be singled out?
If we don't accept capitalism, we should get essentials like food and housing under community or cooperative ownership as well as banking, IMHO.
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Apropos the Media7 discussion - I hope someone asks why bank economists are always so prominently featured (along with the real estate shills) when house prices come up. I hardly think Tony Alexander, for example, is a disinterested party. At the very least, it would be nice to have someone less consistently bullish and predictable.
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"bank profits aren't out of line with other businesses."
Yes they are. In recent years they have had a return on equity that other businesses dream of, despite the low-risk nature of their business and the large barriers to entry by competitors.
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Many people are uncomfortable driving in tunnels. Some call it the Princess Diana syndrome, but many people suffer from genuine claustrophobia in such environments.
I'm sure that's an issue for some people, but he makes it sound like the motorway is the only possible way for these people to get from A to B. Presumably the whole Auckland roading system isn't going underground.
Apropos the Media7 discussion - I hope someone asks why bank economists are always so prominently featured (along with the real estate shills) when house prices come up.
I hate those TV3 news live cuts to an ASB economist who runs through the important share prices and whatnot at about 6.30. This is an advert! If economic news is important enough to be on the news, can the damn TV stations hire a reporter to do the job?
Given the significance of the economy on all of us these days, I find it bizarre that the news employs umpteen sports reporters who recycle sports news tripe (which is fine, I don't care, it's sports), but can't front up with someone who isn't part of the screwed up economic system to report on it.
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I can't think of other business sectors that get to use the exact same capital over and over again, legally. Being able to lend one dollar to twenty different people at once is pretty lucrative, though we tend to get suckered into looking at the interest charge to only one of those people.
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Many of us enjoy walking. Surely, however, most of the pleasure lies in our enjoyment of the passing landscape. Will anyone enjoy walking any distance through a long tunnel beneath the harbour?
I hope someone pointed out to him that YOU CAN'T WALK ON THE MOTORWAY IN NEW ZEALAND! Whether it's above or below ground. Duh.
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Ok, here are some numbers:
(ANZ, 2006 - AUD3.6bln profits on AUD49bln market value = 7.3%
Woolworths, 2006 - AUD1.0bln profits on AUD22bln market value = 4.5%
Apple, 2007 - USD3.5bln profits on USD105bln market value = 3.3%)ANZ made about 50% more than Woolworths - but the stock price tanked (supermarkets are pretty recession proof).
Apple made only half as much, but they've got much more growth potential.
I don't believe buying bank shares is the route to riches.
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If a drunk driver crashes into a random lamppost above ground, killing passengers not wearing seatbelts, can that be called the Princess Diana syndrome??
I’d have thought the tunnel aspect was a sideshow.
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The Colbert Report is also blocked from the Comedy Central website leading me to jump to the conclusion that it is SKY TV who made the request. SKY TV acquiring the rights is the only thing that has changed since last week. C4 has been happy to let Comedy Central stream it thus far.
It is an outrage!
My new Hulu.com work-around is doing the trick but one shouldn't be forced to take to the high seas...
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Being able to lend one dollar to twenty different people at once is pretty lucrative, though we tend to get suckered into looking at the interest charge to only one of those people.
You misunderstand fractional reserve banking, like a lot of people.
The bank has to pay interest on *all* those dollars. Banks make their money on the margin between the rate they can lend at and the rate they have to pay on deposits.
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With regard to the powershop...has this link been referenced to here yet?
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Rich: profit:shareprice is a bizarre measure. Sorry.
Profitability is about return on assets employed, not about the ratio of profit to share price. The stock price is irrelevant to any discussion of profitability.
Aussie banks have had return on equity in the high teen % for years now.
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I hate those TV3 news live cuts to an ASB economist who runs through the important share prices and whatnot at about 6.30. This is an advert! If economic news is important enough to be on the news, can the damn TV stations hire a reporter to do the job?
While I agree in principle, the poor bastards they make stay behind to read out the economic data have provided our household with hours (or five minutes a night, anyway) of entertainment. Ears, Eyebrows, Teleprompter Guy, and Terrified Guy may be advertising, but in a generally dull and uninspiring hour of news, their various quirks give me something to look forward to. I would miss them greatly if they went.
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Ears, Eyebrows, Teleprompter Guy, and Terrified Guy
Yes, they sure are entertaining on fast forward.
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You misunderstand fractional reserve banking
Accepted.
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the poor bastards they make stay behind to read out the economic data have provided our household with hours (or five minutes a night, anyway) of entertainment
I so agree. Not that I'm mocking them: if I had to report to the nation for five minutes on 'what I did in the holidays' I'd be dead in the water.
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Yes, they sure are entertaining on fast forward
Never tried that, but I have a feeling Eyebrows in particular would be spectacular.
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Many of them clearly aren't comfortable with the idea of a bloody great big motorway splitting their suburb.
I wouldn't at all be surprised if the costs of paying off the residents for an above-ground Waterview route approach or exceed that of a tunnel.
And would Owen McShane say what he'd usually say if it cut through Remuera or Epsom?
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Having staggered my way through the Wellington bus tunnel out of necessity a few times in my youth, I can understand McShane's chthonic fear of tunnels.
But the big argument is still the price tag. Like the poor bastards in the vicinity of St Lukes living on borrowed time, the SH20 route has been around for yonks. A tunnel would just socialise the losses that were built into the privately affected property prices.
Not saying there's no pain. Rita Angus mourned the parting of Thorndon that was lost in the motorway extensions in the 1970's. But to imagine Wellington's entrance as only the Old Hutt Road funneling through Aotea Quay today? Utter chaos.
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profit:shareprice is a bizarre measure. Sorry.
You're welcome to think that. It's the one I prefer (it equates to the P/E ratio, just the other way up). The market capitalisation is the best indication of what the whole business is worth - what people are willing to pay for it. It directly translates into ability to pay a dividend.
If I buy some shares, then I'm interested in what dividend they pay and in the chances of growth or decline in the value of the business. Banks have a limited upside, big downside and a fairly high return. Apple has a big upside, limited downside and a fairly poor return.
Your 20% figure (return on ordinary equity) ignores the goodwill in the business. Anyone buying shares has to pay for that goodwill, so it's included in the return.
Imagine I buy a (leased) pub for $80k. The stock and fixtures are worth $30k, and I put $20k in the bank as working capital. The pub thus has tangible assets of $50k. It makes $5k a year. Am I making 10% (return on assets) or 5% (return on my $100k investment)?
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imagine Wellington's entrance as only the Old Hutt Road funneling through Aotea Quay today?
I'd prefer a big car park up by the Cake Tin and a $10 charge if you want to advance further by car.
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With "Tunnel or Nothing" signs starting to sprout all along the proposed SH20 route, it's clear that the eventual nature of the road -- under the neighbourhood or through it -- will be an issue for the folk of Mt Albert in their by-election.
With every party trying to improve their "profile" in this by- election , I wonder who is going to be first to cater for the residents wishes ?
This government only seems capable of objecting to anything the Labour government did - of new and better ideas they have zilch. Here they go again trying to dismantle the tunnel. Heaven help them. I certainly wont .
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Good old Owen McShane.
Sustainability is a popular word with politicians and pressure groups because “Sustainability” means whatever the speaker, or the listener, wants it to mean. Ask most people what they mean by “sustainable” and the replies will be more garbled than most lay attempts to explain quantum mechanics. So when someone promises to deliver “a sustainable future” everyone nods their heads because they all have their own idea of what “sustainability” means to them.
However, the evidence from life itself, from bacteria to human beings, is that the key to long term survival in the face of changing environments, (if that is what we mean by sustainable) is long term adaptability.
Humans are the most successful species on the planet in terms of habitat coverage because we are the most adaptable species on the planet. When it got cold during the little ice age the Europeans invented knitting and the Polynesians had the good sense to stop sailing towards New Zealand.
If we wish to build a sustainable road network we need to build a network which can adapt to changes in the size, nature, and direction of demand.
Magnificent.
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But the big argument is still the price tag. Like the poor bastards in the vicinity of St Lukes living on borrowed time, the SH20 route has been around for yonks. A tunnel would just socialise the losses that were built into the privately affected property prices.
Much of SH20 route is indeed going through land set aside for the purpose, but the Waterview section is a real problem -- to the construction cost, you need to add 400 houses lost, and many more property owners needing to be compensated. The Waterview primary school would potentially have to be scrapped and rebuilt elsewhere.
Cam Pitches on the Campaign for Better Transport blog said yesterday:
It is worth repeating that the difference between the full tunnel option and the next best partly above ground option is small in the context of the size of the project - $200m. This has to be the tunnel or nothing.
Even the "overground" options call for cut-and-cover underground sections. If you ignore Joyce's fiddly maths and take out the SH16 upgrade, the tunnel isn't that much more expensive than other reasonable options. There is no cheap way of doing this.
BTW, the Waterview Connection has its own Wikipedia article.
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Also, charming "entertainments" at the same site...
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