Hard News: Through the Looking Glass
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Many years ago, the Development Finance Corporation was NZ's main startup financier. Its basic model was sound, but later went down with Black Monday after drinking too much Muller Thurgau and straying outside of its core competency, by speculating on 'glamour' companies such as the ill-fated Chase Corp and Equiticorp. DFC's demise left a major vacuum for local investment and increased NZ's vulnerability to 'branch office' economics.
In a similar vein, South Australia became the poor cousin of the Aussie states after its State Bank went under.
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Stewart - the implicit suggestion that I'm NOT a kiwi in the street is going to make my walk home difficult =>
I'm not a poll-watcher like many on here but given the huge swings we've seen in recent ones, and the significant percentages of undecided/not-voting people that get removed from those polls, I can't see how the result can be as solid as you suggest?
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Um, yes... but anyone who thinks the Cullen Fund wasn't a "political plaything" from it's inception is being a wee bit naive.
Anyone who thinks every government policy as a "political plaything" is being cynical in the extreme. That sort of cynicism belongs to the Herald's pork-o-meter...
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No matter what your opinion of the TVNZ charter, it is a perfect example of the mess you cause by giving one organisation two not-necessarily-compatible goals. The Cullen Fund exists to fund the national super liability in the future, not to prop up our capital market. It can help our stock market, but as a result of its main purpose.
Adam Smith:
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
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"I'm not a poll-watcher like many on here but given the huge swings we've seen in recent ones."
the polls are out again with each other which is interesting because the science is pretty straightforward
There's large deviations between companies testing the same peolpe.
what we need to know from pollsters is who are they confident of being in their initial sampling population and by definition who may have a very little chance of being polled and is there a profile there.
It's maths, it's fun , let us all join in the data reading.
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Regardless of the pork involved in directing public money towards public infastructure, John Key is dead right when he suggests that something needs to be done to address the alarming current account deficit--the result of borrowed money funding a mindless property boom. Isn't the crux of the issue here?
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" It can help our stock market, but as a result of its main purpose."
I think you've nailed it there,it's purpose at the moment is slow solid growth by backing "warren buffett like" solid investing.
It takes the super out of the super fund and puts it into a more liberal investment fund which carries more risk but may finally fund your jetpack shop .
Why can't we have both again?
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John Key is dead right when he suggests that something needs to be done to address the alarming current account deficit--the result of borrowed money funding a mindless property boom.
But I bet that doesn't include tightening up on LAQCs...
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Craig Ranapia
Is that a pubic partnership? -
Sorry, that LAQC comment was a bit flippant.
What I mean is that Key will hue and cry and then do... bugger all.
We've got an open economy, we've got parallel imports, we're a profligate bunch... it's all very well to complain about the deficit, but what to do?
I thought the point of the Cullen fund was to provide precisely the kind of investment alternative intended to slow demand for housing. The alternative, since Key's going to play around with it, is to remove the tax incentives that make housing so appealing... How does the PAS crowd feel about that?
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John Key is dead right when he suggests that something needs to be done to address the alarming current account deficit--the result of borrowed money funding a mindless property boom.
Then why doesn't he do that? The Cullen Fund generates foreign income through its investments overseas. Reduce investments overseas, reduce inward revenues. Key is proposing tax cuts in the hope we can spend our way out of the recession, spending on what? Imports, mostly. He says these things but his policies will promote the opposite.
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The alternative, since Key's going to play around with it, is to remove the tax incentives that make housing so appealing... How does the PAS crowd feel about that?
Do it. I'm all for simple, level tax fields...
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In due respect, where was Micheal Cullen warning NZers to tighten their belts when it was blindingly obvious that this was all coming to a head? Anyone with a passing interest in global capital flows could see this as far back as 2003-2004. With all the wrong-headed infatuation with the govt balancing its books, private debt is now so out of hand that whoever's in power has no choice but to stimulate domestic demand by any means possible.
And what's the bleeding alternative? Friggin U.S. treasury bonds?
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Are we going to see changes every election time - in three years will we see the next leader of the opposition saying "Only 20% in NZ" - how then does the fund exit gracefully without distorting the market again?
I would presume that they'll be sensible enough to give the fund reasonable time to invest/divest if it had to meet a certain percentage. If the Cullen fund had to go up to 40% NZ tomorrow, they prices would go through the roof in anticipation. If it was done over 3 years or something, quietly buying chunks here and there, the impact would be much less.
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Re: "distortion in the sharemarket"
This would be very good for people who own shares ATM. They get a bubble, and someone else to hold the bag when it pops. Just like 1987.
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The alternative, since Key's going to play around with it, is to remove the tax incentives that make housing so appealing... How does the PAS crowd feel about that?
A capital gains tax on property speculators? Bring it on!
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In due respect, where was Micheal Cullen warning NZers to tighten their belts when it was blindingly obvious that this was all coming to a head?
Really? I remember him commenting it on it a number of times, plus that whole setup the Cullen Fund, Kiwisaver and run big surpluses schtick he had going on.
And frankly I don't want my Minister of Finance telling me how to spend my money. -
A capital gains tax on property speculators? Bring it on!
Do you mean an equally applied capital gains tax across all investment asset classes?
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Gareth - no slight, implicit or otherwise, was intended. (My slights are usually explicit enough to leave the recipient in no doubt.)
To my mind, the polls tell us bugger-all except that of a 'selected' portion of the electorate certain proportions favour one side against another. I can't have made myself clear as I wasn't trying to suggest that the result is in any way solid. I suspect that a portion of the electorate are poll-followers (the ones who end up voting for who they think will win because they want to have backed a winner) and that there will be a percentage who are influenced by the polls rather than by any particular policy.
The recent swing back towards Labour (from an electoral thrashing to merely a spanking) isn't likely to be enough to convince the block of voters I mentioned earlier to return Labour to power.
I like the fact that the only poll that matters is the one on Nov 8th - all the rest are frippery.
Have a good walk home.
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Nah mate, no slight taken, I'm just failing at le jokes...
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That'd be les jokes
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@Kyle
If it was done over 3 years or something
That was part of my point (although probably not stated very well) - in 3 years there will be someone else legislating another change, so that the Fund Managers never really get to implement their long-term strategy, which goes against the principle of independence from the pollies.
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I was presuming jokes is feminine in Italian, at which point it is le jokes... =>
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"Really? I remember him commenting it on it a number of times, plus that whole setup the Cullen Fund, Kiwisaver and run big surpluses schtick he had going on.
And frankly I don't want my Minister of Finance telling me how to spend my money."It's not about being "told how to spend your money", it's being honest with your constituents that debt relative to GDP cannot improve when people continue to live beyond their means with funds borrowed offshore. Kiwisaver has been born far too late to make any significant difference (and is as obtrusive as being "told how to spend your money" when you have a fixed selection of government approved funds) and govt surpluses are somewhat irrelevant when you're up to the eyeballs as NZers are.
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Labour needs to axe it's 1/3 buy in to first home buyers. That is for the 3 people who qualify for it.
It's just proping up the over inflated property market.
Property prices have sky rocketed and now they're going to level out a bit, not crash. This false market that Labour has brought in, raises the property price by 1/3 over the real market price.
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Apologies then, Gareth, I mistook it for French.
As you can see from my "Posts:" count I am a fresh-faced newbie here at PAS and not yet adept at reading the sub-text.
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