Editorials 3 June 2010

The Herald wants an FTA with given priority:

Last year, New Zealand exports to Russia were worth $187 million, a modest sum even if well up on the $51 million of a decade earlier. As Russia has a population of 142 million, those figures hint at the potential of a free-trade pact.

But more telling still is the fact that not so long ago, New Zealand enjoyed thriving commercial arrangements with the former Soviet Union despite an often strained diplomatic relationship, not least over the invasion of Afghanistan.

But Keith Locke supported that invasion, so maybe we should make Keith the free trade negotiator for Russia 🙂

The Press supports the creation of a new bank:

The proposal to merge three finance organisations to create a new locally owned bank is a timely one.

For the finance institutions themselves, it is an opportunity, driven by necessity, to turn themselves into stronger, more robust entities, particularly after the turmoil of the last three years or so.

For investors, looking to diversify their investments away from the great Kiwi stand-by, domestic real estate, it could provide a worthwhile and productive place to put their money.

And for borrowers, particularly small-business owners who have complained of being cold-shouldered by unsympathetic banks during the financial crisis, it could provide a friendlier, more knowledgeable lender to local business. …

The three entities involved – Pyne Gould Corporation’s finance arm Marac Finance, the Canterbury Building Society and the Southern Cross Building Society – are established names in finance.

They have not been unscathed by the upheavals of the financial crisis, but they have survived it with credit ratings still at very respectable levels for non-bank institutions.

Two have BB+ ratings and the other a BB rating, which is at the high end for entities that are not banks.

But still not great. The acceptable grades are:

  • AAA : the best quality borrowers, reliable and stable (many of them governments)
  • AA : quality borrowers, a bit higher risk than AAA
  • A : economic situation can affect finance
  • BBB : medium class borrowers, which are satisfactory at the moment
  • BB : more prone to changes in the economy
  • B : financial situation varies noticeably

Once you start to get into CCC and below, institutions are officially vulnerable.

The Dom Post talks :

But for recent events in the Gulf of Mexico, the Government would be making more of a fuss of Brazilian oil giant Petrobras’ decision to explore for oil and gas off the East Coast of the North Island.

The world’s fourth-biggest energy company, a world leader in offshore drilling, this week won the right to explore about half of the Raukumara Basin, which extends north and east of East Cape. The company will spend up to US$118 million (NZ$174m) over the next five years gathering seismic data and drilling an exploratory well.

The project will create jobs and draw international attention to New Zealand as a potential source of petroleum.

But the big gains will come if Petrobras makes a commercial find. Already the petroleum sector generates about $3 billion a year in export revenue. Energy Minister Gerry Brownlee has estimated that figure could rise to $30b by 2025 if preliminary estimates of New Zealand’s petroleum resources prove to be correct.

Which would make a huge difference to our standard of living, and ability to fund health and education services.

However, celebrations this week have been muted by the ongoing disaster in the Gulf of Mexico. Six weeks after an explosion on BP’s Deepwater Horizon rig killed 11 workers, the well 1.6 kilometres beneath the sea is continuing to spew between 1.9b and 3b litres of oil a day into the gulf, polluting the fragile Louisiana coastline, threatening fisheries and destroying the livelihoods of fishermen and tourist operators.

For that reason it is essential that the promised overhaul of New Zealand’s health, safety and environmental arrangements for offshore petroleum operations is completed well before any deepwater drilling begins.


The ODT looks at and :

Facebook, once a small, “free” social networking site for university undergraduates to share personal information, has become a vast subdivision on the information super highway.

It is expected soon to reach a landmark figure of 500 million registered users.

This would make it the third largest country on Earth, bigger than all but India and China.

On Monday this week – “Quit Facebook Day” – Canadian campaigners urged people worldwide to remove themselves from the site.

They, and many others, were riled about the way in which they felt their privacy was being purloined for profit.

Quite why they should have been so surprised is another matter: you do not pay upfront to belong to Facebook, but the company must make ends meet – and a tidy profit – somehow.

That “somehow” is no great secret.

The site sells advertising to companies tailored to the defined demographics of its users.

The “footprint” they create in their Facebook activities is like gold to advertisers and marketers who will pay accordingly.

I was talking last night to someone about Facebook, with the idea being that if a user is aged under 18 then their privacy settings are set by default to not share data with anyone but friends.

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