Posts by Jim Cathcart
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Drank with Bourdain in the stand-up bar, working-class district of Nishinari, Osaka where various animal parts and offal are grilled and served on the streets. He mentioned about the authenticity of culture is always found in these places, despite the bemusement of his local Japanese support team about wanting to go there instead of a rigid kaiseki establishment. Remarkable man.
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Hard News: The Unitec project: Something…, in reply to Kumara Republic,
Public housing is also supplied by local bodies, as is the case with the Arlington redevelopments in Wellington.
Successful public and social housing infrastructure is driven by the public sector, like in S'pore and Japan. The premise is that it gives everyone the opportunity to participate in the economy, regardless of SEC. NZ is different. We consume more than we produce and there is no vision for the economy to be anything but. Poster children for the Anglosphere monetarist paradigm.
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Hard News: The Unitec project: Something…, in reply to Matthew Hooton,
According to the government’s announcement, the cheap ones (which will only be 30-40% of them) will be $500,000 to $600,000 and the rest more. If it’s 4000 dwellings in total (1000 more than its zoned for), the population density will be 6x Hobsonville, but with a height limit of 27 metres. This just doesn’t add up. The announcement is total bullshit in the best traditions of Nick Smith.
H;hold debt in NZ relative to GDP even dwarfs Japan during its epic pis up. Everyone's putting on a brave face, even if they're aware of the scale of it or not.
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Hard News: Harkanwal Singh: What really…, in reply to David Hood,
OK, I think I got it. Where I got confused is when you seemed to be saying that there is a disconnect between mortgage borrowing and the total value of housing stock, but that's not what you're saying at all.
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Hard News: Harkanwal Singh: What really…, in reply to David Hood,
Care to reference your methodology and data sources? I'm not really sure what you're claiming here. All mortgage lending is not "balanced" against house price values. Furthermore, we know that a mortgage comprises a deposit and a mortgage loan. The former is "saved into existence", while the latter is "lent into existence." The former is likely to be a product of one's labor, while the latter represents an asset to the bank by the creation of a contractual obligation (there is no corresponding deposit).
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Hard News: Harkanwal Singh: What really…, in reply to Kumara Republic,
Local rentiers are a known problem – they’re likely the same fellas who suffered from irrational exuberance in 1987 – but their “share” of the nation’s GDP has reached too-big-to-fail proportions. And as I’ve mentioned prior, property owners and speculators are powerful enough to be a de facto upper house.
The problem is much bigger that what you describe as asset price bubbles have a strong correlation with consumer spending, commonly known as the "wealth effect." This is probably the reason why new car sales are booming in NZ at present. When bubbles burst, you can expect people to spend less on goods and services, which creates a vicious circle (look at the deflationary effects in Japan as people hold on to their cash for a rainy day). Consumer spending comprises approx 60% of NZ's GDP.
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Hard News: Harkanwal Singh: What really…, in reply to James Ting-Edwards,
Is all the magic money offshore capital? We just don’t know. There is a lack of evidence of it coming from other parts inside the New Zealand economy, and given the hundreds of billions of dollars, a local source would be somewhat obvious. We also know that in other countries, with more internal housing markets, household debt does not just match the pattern of house value, the amounts add up to the same in gains. In New Zealand there is a 300 billion shortfall.
Well first of all, NZ banks are owned by Australian banks who use wholesale funding (basically money from outside NZ and Australia as a component of their mortgage lending base). Secondly, aggregate debt does not and should not equal house values. Plenty of people own their home outright and are at various stages of mortgage repayment. Thirdly, the start of the divergence between h’hold debt and house values in your graph coincides with the build up of debt through low interest rates promoted by the Fed Reserve post-tech bubble. The divergence is an indicator of the likelihood of the “bubble construct”.
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Legal Beagle: Election 2017: the Special…, in reply to ,
Just working up some magic words ideas. Housing crisis – housing market- realestate bubble- um, snakes and ladders?
Bubble economics. Very few NZers are aware of it, including politicians from all parties.
View from across the ditch:
"Assuming National earn a fourth term, watch on as housing, infrastructure and living standards continue to get crush-loaded."
https://www.macrobusiness.com.au/2017/09/nz-votes-yes-housing-ponzi/
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Legal Beagle: Election 2017: the Special…, in reply to Carl Anderson,
Yes, poor choice of word on my part. What I was trying to point out is that I don't think it is prudent to predict directional trends from these kind of data sets, unless there is a strong argument to do so.
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Probably a bit deceptive to to base predictive "modelling" on something as crude as past movements across one sample set, unless there is a good assumption to support why.