Ralston on a tough start
November 30th, 2008 at 10:24 am by David FarrarBill Ralston writes:
Message to John Key and his new Government: No pressure.
Well, just a global financial market collapse, a deepening recession, a growing deficit, a crisis meeting with many of the world’s top leaders, shrinking commodity prices and a body blow to our other big export earner – the tourist industry – from the British departure tax.
Throw in a major terror attack overseas to further destabilise the planet and the crash of the Air New Zealand airbus in Europe and you get the toughest start any Government here has had.
The recession especially is of grave concern. Previous recessions have been for less than a year, while this recession may last two or even more years.
Tags: Bill Ralston, recession
November 30th, 2008 at 11:01 am
Correct me if I’m wrong, but wasn’t Bill recommending a middle of the road leisurely pace a few weeks ago? Maybe the penny’s dropped. Finally.
Vote:November 30th, 2008 at 2:29 pm
Bill “life long Labour voter” Ralston should be phased out if the Herald wish to remain liquid. Like the management at Newstalk ZB, the Herald seem to think that the masses share some interest in the ranting of washed up public tit sucking socialists. (Susan Wood and Mike Hosking for example)
This guy-
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10545701
is one of the few journalists in New Zealand with a modicum of intellgence and not infected with leftist brain rot. More of him, less of bores like Ralston.
Vote:November 30th, 2008 at 4:23 pm
The pock marked asshole only voted National for the first time this election and now he is trying to tell them what to do. Sheesh what a wanker!
Vote:November 30th, 2008 at 4:37 pm
I think Ralston has forgotten the last National government’s start. Whilst what Key has inherited from nine wasted years is not flash at all at least National had some idea of what was coming. In 1990 it was ‘congrats on the win, btw we forgot to mention that we bankrupted the country why no-one is looking and you’d better take a look at the BNZ business. Have fun.’ Seems Labour has a habit of leaving a mess for National to clean up.
Vote:November 30th, 2008 at 5:33 pm
Yeah, given that its been 12-18 mnths since the ‘credit crunch’ publically began and now its hitting the real economy like a tonne of bricks 2 years + is not out of the question
Vote:November 30th, 2008 at 7:03 pm
David old Friend
You are showing your age – or lack of it perhaps.
1974-77
1980-85
1989-92
It used to be easy to get out of a recession, just blast in a bit of inflation (Canada hit 25% mortgages in 1983) and price increases will make GDP look like it is growing, even when in real terms it isn’t. Forget the economist’s definition, look instead at the unemployment rate and ‘average income in real terms’ bounces; when these are back where they were, the true recession is over. (Oh, in average income you have to measurethe actual weekly family income, including welfare payments of all kinds, not just the income of those in work!
History is full of lessons – it’s just a shame that brain starts to forget them when those who experienced it start to age
.
Vote:November 30th, 2008 at 7:12 pm
Hulloooooo, is there a Govt. out there?
I think they’ve all gone on holiday. Has anyone seen one of them on the telly or anything?
Do we still have a Prime Minister? Is he still over at the Motherland courting the Queen or are they all in the back rooms plotting some dastardly deeds? uuuh yeah, plotting against the liarbours and socialists maybe?
Not much communication going on! Must have fired all the spin merchants, but no doubt they will be replaced with more.
So much for the action men. The economy is falling A over K and Govt. has gone to sleep.
Only person who has led NZ this week is Rob Fyfe from Airnz. What a great CEO. Leadership extraordinaire.
Vote:December 1st, 2008 at 2:21 am
To be fair, New Zealanders voted for a long recession back in 2005 when they party voted Labour. So why are those same voters complaining about getting exactly what they wanted now?
Vote:December 1st, 2008 at 6:10 am
OECD – I thought when I voted Labour in 2005 I waas voting for a fairer New Zealand, how come now I have a pile of poo to show for my vote?
Vote:December 1st, 2008 at 6:30 am
And I didnt vote for Labour in 2005.
Vote:December 1st, 2008 at 6:38 am
Voting for a fair anything should have been a giveaway. Life isn’t fair, you can’t vote for it. Best you can do is vote for a government that will follow it’s own rules more than 75% of the time. That’s relative stability – best option NZ gets.
Vote:December 1st, 2008 at 6:44 am
Look, what Ralston and everyone in the mainstream is omitting from their list of crises, is NZ’s own homegrown monetary crisis.
It has worked exactly the same way as in the USA; Japanese investment to the tune of many tens of billions of NZ dollars worth has come into our economy over the last 9 years, and thanks to the regime of Hulun and Mikhael, ALL we have to show for it is a doubling of house prices, matched by household debt.
This is referred to by people in the know, as “the Uridashi Timebomb”.
If that investment money had gone into activities that had improved NZ’s productivity, our economy would be romping along in growth mode today. But because there was every incentive to speculate in housing, and no incentive whatsoever to invest in any new productive business or capitalisation of existing business, thanks to Hulun and Mikhael’s politics of anti-business spite; whatever economic activity we SEEM to have had is consumer spending based on taking on of debt.
Heaven knows what will happen when the Japanese investors decide to put their money somewhere other than NZ. All the shock stuff Peter Schiff is saying about the US economy (watch the Youtube video “Peter Schiff Was Right”, everybody, if you haven’t already) applies to the NZ one too, in spades.
There is NOTHING that ANY government will be able to do in the face of this when it happens.
We are all in this little psychological frame of mind, that BIIIIIIIIG, comforting Nanny State hovering up there above us, will be able to “bail us out”.
Think again.
No government has ever been able to even THINK of bailing out people in their sharemarket losses, even if it was considered necessary. The reason is simple. The sharemarket losses in a typical crash are around ten times as much money as a typical government collects in annual tax revenue.
Guess what? Mortgages in total, are around 3 times as big as the total sharemarket. The “bailout” in the USA, 1 trillion dollars, right, that is in the face of mortgage equity losses SO FAR of 5 trillion. The US government’s total budget is about 5 trillion, their debt is already about 7 trillion and they just put that up to 8 trillion.
When there is a bubble in the share market and it pops, values can drop 50% in hours. The housing market is just a lot slower. But the mighty US government is pissing into the wind if they think they can stop it.
The same situation applies to NZ.
Much of the western world is about to suffer a painful new economic phenomenon, courtesy of its politicians pulling the trick of making us feel well off and feel like we’ve got economic activity, based on endless accumulation of overseas debt instead of the age-old honest approach of fiscal policy that gives all the right incentives for work, saving, and growth in productivity through capital accumulation.
The other factor that has led to this is “Green” ideology that imposes urban boundaries and makes land the subject of lucrative speculation.
But almost no-one is listening. By the time people might actually elect a Ron Paul administration in the USA, or a Roger Douglas administration in NZ, i.e., ones that know what they’re doing and might actually get us out of this with short term pain rather than long term death; it will be far too late.
Vote:December 1st, 2008 at 7:14 am
“The Housing Bubble”, By Christopher Mayer……………. In August 2003……!
http://www.mises.org/freemarket_detail.aspx?control=450&sortorder=authorlast
“………The housing boom has drawn off capital from other ventures and uses…..The true cost of this indulgence can only be guessed at. We have no way of knowing what ELSE such capital might have contributed to human well-being……..
“…….Real enduring prosperity is achieved only when public savings have reached a level that can support the boom……
“…..even when the bubble bursts, many will not see properly that the root of the problem lies in the monetary order of the nation and in its interventionalist political culture….”
Vote:December 1st, 2008 at 7:38 am
Governments are always doing their best to prolong the bust part of the business cycle they create. Currently they’re pumping in cheap credit, the cause of the whole issue. So it will take even longer for corrections to work. Let’s hope it’s only two years.
Vote:December 1st, 2008 at 10:25 am
Berend:
“……So it will take even longer for corrections to work. Let’s hope it’s only two years……”
You are an optimist, Berend. You are quite right that pumping in cheap credit is only keeping going with taking the poison that is the trouble in the first place, not the antidote. But where ever do you get the idea that things might correct themselves in 2 years in spite of continued government mismanagement?
Vote:December 1st, 2008 at 11:30 am
“..Maybe the penny’s dropped. Finally…”
speaking of pennys dropping..finally’..
have you finally ‘got it..?..dpf..?
..what i have been trying to tell you about/presenting evidence on..
..for ..what..?..2+ years now..?
..that is actually one aspect of all this that has puzzled me..dpf..
..how someone as ‘information-based’ as yourself..
..chose to studiously ignore all that ‘information’/evidence..
..i placed in front of you..
..so..’lasting even two years’..?..now..?..y’reckon..?’
..i mean..you aren’t exhibiting the wild-eyed-optimism/wholesale-denial..of..say..treasury..?
..even at two years..you re dreaming..
..btw..
..isn’t it interesting how key will be forced to follow the lead of obama-brown..?
..and introduce the same ‘socialist policies they will/plan..?
..cos’..if he dosen’t..key will be just a one-term-p.m…eh..?
..and we both know that he is modelling himself on clark..
..and that re-election is top of his personal agenda..
..and we also know..
..that if key does not follow that obama-brown agenda..
..that in three years time..goff will..
…and it’ll be toodle-oo!..to key..
..eh..?
..i watch/await with a high degree of interest..
..as to how all this will unfold..
..eh..?
phil(whoar.co.nz)
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