Kiwibank sees its credit rating plummeting from 2014

NZ Post sees losses from postal services by 2016/17, or earlier, without changes to Post deed to cut deliveries to 3 times a week

Not housing unaffordability

Is it reasonable to expect to buy a home after one year working?

This is pure unadulterated expectations above ones station. 

An interesting side point is whether it is everybody's absolute right to have children to the (current) point of society bearing the cost of allowing that right to all.

Break Fees and Lawyers

Of course the one set of parties that has remained (incriminatingly) silent on most of this debate is the law society and the lawyers;

They could at least have helped clear up the confusion around the legal obligations of the banks preventing them doing what most are currently accusing them of;

However perhaps it is because ultimately it was their responsibility to their client to properly explain those clauses in the contract they were collecting their fees for?

The Break Fee Debate

ITs good to see the banks are hanging tough on break fees - although I'm disappointed in Bill English's proposed pressure on KiwiBank to potentially lower these.

Lets be clear here as there has been a huge amount of morons commenting on this subject when they have no actual concept:

The banks are not making money out of this - there is no margin in the break fee, it is genuine costs relating to the fact that people are wanting to intentionally breach contracts.

In fact the CCCFA (Credit Contracts and Consumer Finance Act 2003) both means it is illegal for them to make money on the break fee - and (to put another misinformation to bed) sets out how they should calculate the fee.  

There is ambiguity in the law as to which rate the lender should use as their relending rate - If your original contract was for 5 years fixed rate, you are now 2 years in the lender may be relending at the variable, the 5 year or the 3 year rate? However while this is unclear in the law which must be used, it is stipulated in the contract.

Which in the end is much of the point here - how are people legitimately thinking they should be able to walk out of a legally binding contract without paying the other parties costs?  These pillocks are effectively arguing that when the rates were rising the banks should have been able to give the homeowner (EG) $4000 and then say "sorry, but you're back on the variable (3% higher) variable rate now".  Because the fix works both ways.

In the end the risk is 2 ways - if the rates had spiked rather than dropped would you still be complaining about being on a fixed rate?  Furtermore is it the bank that has dropped the OCR? (or raised it initially)?

The only way around it is to either align the term of the fixed rate to the term of the mortgage or go completely variable rate - but I don't see these plonkers actually going for either of these options.  Unfortunatly the nanny state seems to haev won in its efforts to create a nation of whiners that not only thinks they can have their cake and eat it too - but actually have someone else bake it for free in the first place.

 

Revisting Kiwibank (to be done...)

It will be interesting to revisit the question of banks and adequecy given the apparent meltdown in the global financial markets over the past period of time - not least to contrast the movements of this "pillar" in the NZ market versus the exposed international banks; but also versus my pet favorite TSB.  Not least to see whether the inclusion of KiwiBank by the media in the "major banks" categorisation is warranted, as versus the exclusion of both TSB and HSBC from this reporting...

KiwiBank - the safest haven. Tui Ad in the making

I have been intrigued by the rumors being floated recently - mainly seeming to originate from the political left about how Kiwibank is the one safe bank at the moment; especially in this time of sub prime debt.

However putting aside the point that the only registered bank to have previously become bankrupt in New Zealand was the BNZ while it was a Labour Government controlled SOE, I decided to do a bit more digging.

And find that according to the Reserve Banks own data Kiwibank actually has the worst without exception level of capital reserves. Kiwibank only hold 7.2% of Tier 1 assets and 9.5% of Tier 2; in comparison to 14.94% and 15.58% for RaboBank and a huge 17.66% for both Tier 1 and 2 held by the TSB.

Going even further Kiwibank doesn't even have a provision for impaired assets - so despite the current marketing downturn they are providing for no losses due to -ve equity. This is comparison to the smallest provision by any other bank being the ASB at over 3% of profit; with most banks allowing for between 5 - 8%. Personally the bank I would see as most susceptible to housing loan shocks would be the one making absolutely no allowance nor financial planning for it whatsoever...

Also of curiosity has to be the 5.3% of Kiwibanks credit exposure that is across only 13 people?

So really one has to question how the least profitable, lowest profit on assets, lowest capital reserves, no provisions bank is the safe one? But when it comes to political left and KiwiBank it seems logic isn't really necessary - hence why we have the white elephant in the first place.

Vote early and Vote Now

An interesting little meme going on at the moment at Jimungo;
Sign up now at http://pulse.jimungo.com/ and vote in the New Zealand Virtual Election.
Should be a little bit more interesting than the rest of the polls about to swamp us heading into the election; although I doubt any more accurate :D

Connected or No?

At a press conference in Auckland, he has told media that the stories published this week about undeclared donations are "unsubstantiated rubbish" and his party has acted legally at all times.

But if we connect the dots between this funding scandal and the parliamentary funding scandal then his party has only acted legally in a retrospective manner...

Again if we start to look at the chain of behavior it becomes even harder to believe Peters version of events...

"Rich Prick" Prime Minister?

The NZ Herald today reports on John Keys inclusion in the NBR Rich list at a net worth of $50 million. Certainly makes one wonder if the "Rich Prick" can survive this story and the inevitable political scrutiny this will entail - especially in New Zealand's infamous tall poppy environment.

For mime; I certainly hope so. For those that cling to the envious politics of the left - I really have to ask; who is better qualified to show us the way to prosperity - an economics teacher with less reported assets than me? Or the guy going from State House to $50 million with no lotto ticket in sight?

To compare the PM role; the guy who for all intensive purposes has retired and can do this because he wants to for the betterment of others, or the shrew who has had no other career and must desperately cling to power to earn the only living she has ever known?

Which I will admit highlights my main enduring distaste for the politicians of the left (I have different issues with the politics...); is the wonder how those whose endeavors have been confined to the ivory towers of academia and politics can ever relate and actually understand those of us without?

Will Labour still take responsibility for pay rate changes?

(Hattip: NZHerald)

"A new survey of pay rates shows a dramatic deterioration for those at the bottom of the heap, while rates for skilled workers are outpacing rampant inflation."

Historically as New Zealand was undergoing the best ever commodity prices we have experienced, the dairy boom and unprecedented growth Labour was quick to take responsibility for every survey showing an increase in wage rates - especially where this was in the lower income bands.

Why am I not surprised there is deafening silence from them regarding the fact that the predicted issues with their stewardship are being exposed now that the bubble has popped?

Mallard admits Labour is completely incompetent

Hattip: NZ Herald

Some experts have said that total remuneration is fair. However, Mr Mallard said the Government didn't expect to see differences in take-home pay.

So Labour didn't even look across as far as Australia when designing KiwiSaver?
I guess we have seen this before when they have made bold statements that they think they are doing a good job - but sorry this is the height of incompetence and ignorance to which Mallard is admitting.

Also I hope he doesn't believe his line that the Government is reimbursing employers fully for the contribution? I know I predicted that would be the Government line when they put in the phased approach such that before the election the employer contribution had only reached 1% and the tax kickback would match that. But unfortunately despite what Labour thinks of employers we actually do plan to retain our employees for as long as possible and so we do have to think of the 2% next year, the 3% the following year et al.

Just because Labour is too stupid to look ahead and read consequences doesn't mean everyone else is.

So was the truckers protest in violation of the EFA?

Just out of contrariness this morning I'd like to know whether the truckers were in contravention of the EFA? Especially given the number of explicitly anti-Annette King banners that were hanging off various rigs et al; and the number of references from the various spokespeople towards the upcoming election; one would find it hard not to draw the conclusion that they were attempting to influence general opinion against the kinds of party that would tax without warning...

And I certainly didn't see any references to authorised financial agents - but I'll bet running that many trucks about wasn't especially cheap in terms of spending thresholds either? (By definition given what the protest was about).


However on the point of the object of the protest itself: Even worse than Labour's willingness to arbitrarily raise the Road User Charges without warning - has to have been their absolute lack of comprehension as to why they were being challenged over it. Their blustering on about it needing to be done etc shows a complete disconnect from what people were saying - especially about the lack of warning. And of course Annette Kings attempts to obfuscate by asking whether people wanted less roads and maintenance: sorry honey you can leave the road user charges where they are and still give us the same amount of roads and maintenance. But that's not a point that any Labour minister seems to get now is it?

And as an (unfortunate) answer to her rhetorical question she should look at the results from the transit survey in Auckland regarding bringing forward the Western ring road through tolls; the answer to that was (again unfortunately) a resounding NO - and that was when people were feeling a whole lot more secure in their jobs and interest and inflation hadn't yet started to bite. But again - since when does what the public want actually matter to Labour?

How disconnected can you get?

I felt a sense of bewilderment and amazement this morning as I read through the headlines related to the Government, its actions and the populaces reactions.

How can you be that disconnected that while you are hiking road user charges to the point the Truckies revolt ala France (http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10519878)
and creating legislation to hike petrol prices yet again (by city councils) (http://www.nzherald.co.nz/section/story.cfm?c_id=280&objectid=10519903)

you can still have the level of cognitive dissonance to turn around and say the Reserve Bank is failing to contain inflation pressures and needs new tools (without coming up with any suggestions mind you)... (http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10519838)

How long does it take this Government to realize that the only tool the Reserve Bank needs is a finance minister with more clues than a history teacher? One that can draw the conclusion hiking petrol and transport costs = higher inflation. On this point the history teacher even seems to be failing his own subject - it's not even predictions that are needed for that conclusion.

So there's still no energy crisis - right?

hattip: NZ Herald

"Lake Hawea, near Wanaka, could reach its minimum 338m level within days, prompting a warning by residents about the environmental cost if more water is taken.

Contact Energy operates the dams and can take another 2m of water, to 336m, if the tight power supply situation continues."

Cool - so in 2 metres time one of our major Hydro stations stops operating. And to be specific 2 meters without rain is a couple of days production.

But don't worry guys; there's no possibility of a crisis - because Labour says so.

And if the weather does decide to grace us with some water and save us (even though the storms so far keep missing...) - don't confuse being saved by chance with actually making the right call. The banks made huge profits off low doc loans until the end...

Labour's economic management success

This past week we are starting to see the successes of Labour's economic management in helping the lower and middle class of New Zealand get ahead:

Other data collected by property experts shows mortgagee sales nationally rising almost 20 per cent in the past week as banks foreclose on families and property investors hit by crippling interest rates and the rising cost of living.

Labour - creating equality through bankruptcy

Why not do what is effective?

Further to my pervious post on the Auckland City Council's removal of its own obligations one must really wonder why bureaucracies insist on doing those things that sound good but are pointless in practice.

First case in point would be the:
declaration of an area of approximately 1 hectare on the northern side of Waiatarua reserve to be an area in which dogs are to be leashed at all times.

This is due to the perceived danger to the wildlife in the reconstructed wetlands in this area.
Now I wouldn't have much of an issue for this except that the area they are talking about is directly bounded by residential properties; and is otherwise an off leash dog exercise area. The problem you may ask? There is no restrictions on cats in the residential properties. If you can't figure out the problem from there, maybe you should stand for the next council election...

Auckland Dog Owners Take Heed

Auckland City Council as taken it upon themselves to change their policy and hence bylaws; and as is their want they have undertaken this in a somewhat duplicitous manner.

Please note they state that:
Clause 7 of the dogs policy stated that the council would review the size and availability of off-leash dog exercise areas every three years and as part of the council's strategic growth management process.
And that these changes are merely in response to this;
The proposed dogs policy is in response to this undertaking.

So why is the 5th "minor change" to reflect the "requirements of the Dog Control Act 1996 and the needs of the community" to:

remove the obligation to review the off-leash exercise areas every three years?


If nothing else oppose this duplicitous undertaking of the council to remove one of the few remaining rights as a dog owner we hold!

Of course they are probably just trying to hide their own astounding levels of incompetence. Given that the "Designated dog exercise areas" map they have sent out to support their changes show no sign of Flatrock reserve (our local dog exercise area), and still prominantly shows Fisher Park on Carbine Road. I'm sure Coca-Cola Amatil would be more than happy to open their gates to a horde of dog owners given that the council sold the park to them nearly 3 years ago (Councils own press release here) - and they have subsequently built a warehouse on it...
(PS online coucil link to dog exercise areas).

Anyone still slightly worried by this?

Hattip: Nz Herald

A new dawn of internet competition has arrived - [...]

Orcon this week unveiled the first of New Zealand's truly "unbundled" products - where a customer can get a phone line and fast broadband without going near Telecom.

It comes after the Government ordered Telecom in 2006 to open up its exchanges and allow rivals such as Orcon to install its own equipment in them.

While finally starting to get some access to dark fiber and unbundling would seem like a good thing it would please me alot more if it wasn't Orcon that seemed to get the inside running on all these things - simply because it seems poor form for the Government owned ISP to be the one profiting first from the Government mandated unbundling... Any one else feel a few shivers everytime an SOE seems to profit from a new regulation from the Government?

Lest we forget

Thanks to the hive for reminding us of this in a critically important year:

Clark's not on solid ground when it comes to hidden agendas. As deputy Prime Minister and Labour's key strategist at the 1990 election she helped perpetrate the big lie of that campaign.

In 1990, New Zealand was teetering towards economic recession. But the Labour Cabinet kept claiming right up to election day that the Government's accounts were in surplus.

National Prime Minister Jim Bolger's plans for a decent society were scuppered when he was confronted by officials just one day after the election with news of a serious fiscal crisis that they had kept secret under Labour's orders.

The Bank of New Zealand was about to go belly-up, something senior Labour ministers had known about for weeks, and the Treasury was forecasting a $3.7 billion deficit for the 1991/92 year which would blow out to a $5.2 billion deficit by 1993/94 unless drastic actions were taken.
Bolger's Cabinet had to cut costs to avert a major credit rating downgrade for New Zealand.
These are the conditions that led to the mother of all budgets.

But beneficiaries were not the only ones to feel pain.

New Zealand businesses folded as the recession bit and many Kiwis lost their jobs and were forced into major reductions in their living standards. It was a horrible time because the country was broke.

I'm sure we would rather have been prepared for the hard times ahead by a truthful Government instead of being conned by the snow-job perpetrated by Clark and her senior colleagues at the 1990 election.


Perhaps our Finance Minister trained as he is in economic history will reminisce of these times in the election year ahead?

What should be the basis for identifying which breeds should be included in Schedule 4?

Only those breeds able to be statistically shown to be more likely to attack than any other attributable factor (EG: Neutered / Chained / Owned by Beneficiary) should be included on Schedule 4.

Furthermore breed specific bans should only be implemented where a breed can be shown to be more likely to cause major harm or death than the highest risk racial group. Otherwise that racial group should have the same restrictions applied to them first.

I would also refer to the message by Associate Professor Kevin Stafford (Institute of Veterinary Animal and Biomedical Sciences) which states that:
In the late 1980s a list of breeds involved in 40 serious dogs attacks on children in Adelaide included German shepherd dogs (10), German shepherd crossbreds (5), rottweilers (7), pitbull terrier-type dogs (4), Siberian huskies (3) and one akita, doberman pinscher, labrador retriever, chow chow and Australian shepherd. Pitbull terrier-type dogs have been involved in many of the recently reported dog attacks and are the target for those promoting breed control legislation. But dog aggression was a public problem in New Zealand before this type of terrier became common and some of the breeds listed above may come under scrutiny in the near future. In a 1995 study of veterinary opinion in New Zealand, rottweilers were considered much more aggressive in the veterinary clinic than any other breed of dog. Intact male dogs are also much more likely to be involved in dog attacks than females or desexed animals.

This makes it critically important that dog breeds are assessed on evidence; not popular opinion. It is the focus on "bad breeds" which leads to the number of attacks by Labrodors and Jack Russels; both rarely focused on in "bad dog breed" lists - but frequently in the news stories of dog attacks.