Archive for the ‘Uncategorized’ Category

General Debate 28 March 2014

March 28th, 2014 at 8:00 am by Kokila Patel
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General Debate 27 March 2014

March 27th, 2014 at 8:00 am by Kokila Patel
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General Debate 26 March 2014

March 26th, 2014 at 8:00 am by Kokila Patel
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MH370 confirmed crashed

March 25th, 2014 at 9:00 am by David Farrar

Stuff reports:

The devastated relatives of passengers on board missing Malaysia Airlines flight MH370 must assume the plane is “lost” and the flight crashed in the Indian Ocean, the Malaysian PM says.

The families were called to meetings this morning to be told the fate of flight 370, which vanished on March 8 with 239 people, including two New Zealanders, aboard while en route from Kuala Lumpur, Malaysia, to Beijing.

Those who could not attend received a text message or phone call from the airline confirming the terrible news.

New satellite analysis showed MH370 flew along the southern corridor and its last position was in the middle of the Indian Ocean west of Perth, representatives of the UK Air Investigation Branch had told Malaysian Prime Minister Datuk Seri Najib Tun Razak.

“This is a remote location, far from any possible landing sights,” Najib said today.

“It is, therefore, with deep sadness and regret that I must inform you that according to this new data flight MH370 ended in the southern Indian Ocean.”

I think this almost rules out terrorism.

Either it was a freak accident that overwhelmed the pilots, or it was one of the pilots.

I’m unconvinced that something like a fire on board would kill the pilots, yet allow the plane to keep flying for seven hours.

Also there is the mystery of the fact that the deviations from  the flight path appear to have been programmed into the computer in advance.

At least the families of those on dead have some certainty now, but questions will remain until at least the black box is found. Even then it may say little as it only has the last two hours of cockpit conversation, in the bizarre interests of pilot privacy protection. Anything short of a clear motive for or confession from a pilot will mean it remains a mystery.

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General Debate 25 March 2014

March 25th, 2014 at 8:00 am by Kokila Patel
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General Debate 24 March 2014

March 24th, 2014 at 8:00 am by Kokila Patel
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General Debate 23 March 2014

March 23rd, 2014 at 8:00 am by Kokila Patel
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General Debate 22 March 2014

March 22nd, 2014 at 8:00 am by Kokila Patel
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D is for debt

March 21st, 2014 at 4:30 pm by David Farrar

This week’s letter from the NZ Initiative:

In Shakespeare’s Hamlet, Polonius’s sage advice to his son about friendship was:

“Neither a borrower nor a lender be
For loan oft loses both itself and friend.

In contrast, borrowing and lending between complete strangers makes the world a better place. 

People can deposit savings with institutions that on-lend the funds to people who need to borrow to buy a house or expand their business. Globally, banks and other such intermediaries shift savings from countries that have a surplus of savings over investment opportunities, such as China in recent decades, to deficit countries. 

People with surpluses are better off than if their opportunities to invest were narrower and people with deficits are better off than if their opportunities to borrow were fewer.

These transfers of savings may take the form of debt or equity. This article is about debt. 

Unlike equity, debt involves no ownership control of the borrower’s enterprise. Instead the borrower typically agrees to pay the lender interest and principal according to a pre-determined schedule, as for term deposits or payments on government bonds.

The lender is risking that the borrower will default, and needs to take care as a result. Higher interest rates can compensate for greater risk, but not if the borrower defaults.

Conversely, borrowers who borrow too much can inflict severe future distress on themselves and their associates.

Borrowers have less incentive to be prudent when they are merely the agent of the person who is really liable. For example, when large companies or governments are borrowing, they are putting their shareholders and taxpayers at risk respectively, rather than the managers, politicians or officials who are signing the borrowing contracts.

Unless such agents are well-controlled, they may borrow imprudently.

Similarly, lenders have less incentive to be prudent when they are merely someone’s agent, or when they can assume that someone else, such as the government, is assuming the risk. Government-backed lenders, Fannie Mae and Freddie Mac, were major underwriters of the last US housing bubble.

Misplaced confidence in financial soundness is a dangerous thing, particularly for taxpayers. Unsurprisingly, research has found evidence that government guarantees for bank deposits increase the risk of bank failure.

Peace-time debt crises of national significance commonly reflect government mismanagement of fiscal, exchange rate, monetary, industry and/or prudential policies. But they can also have climatic and international causes. The costs in unemployment and lost output can be very serious.

Not sure what next week’s E is!

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General Debate 21 March 2014

March 21st, 2014 at 8:00 am by Kokila Patel
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General Debate 20 March 2014

March 20th, 2014 at 8:00 am by Kokila Patel
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Who dun it?

March 19th, 2014 at 12:57 pm by David Farrar

Well I think it was either the pilot or co-pilot. I can’t imagine the plane could have been diverted without any distress signal, without at least one of them involved.

How awful for the families of those on board, and how intriguing for the rest of us as we all wonder how did it happen.

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General Debate 19 March 2014

March 19th, 2014 at 8:00 am by Kokila Patel
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General Debate 18 March 2014

March 18th, 2014 at 8:00 am by Kokila Patel
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General Debate 17 March 2014

March 17th, 2014 at 8:00 am by Kokila Patel
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General Debate 16 March 2014

March 16th, 2014 at 8:00 am by Kokila Patel
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General Debate 15 March 2014

March 15th, 2014 at 8:00 am by Kokila Patel
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C is for competition

March 14th, 2014 at 3:00 pm by David Farrar

The NZ Initiative does C is for Competition:

To understand competition, you should visit a tropical rainforest. To most visitors, rainforests, with their impressive fauna and flora, may look like places of abundance. The truth is quite different: the quality of the soil is often poor, and hardly any sunlight reaches the floor – scarcely the best conditions for opulent vegetation.

The reason why rainforests are nevertheless impressive ecosystems is the competition that they promote. The trees only grow so tall because they are competing for precious sunshine. Thousands of highly specialised plants, birds and insects compete for nutrients. The result is a thriving place of biodiversity.

In many ways, markets are just like rainforests. They bring together scarce resources and virtually unlimited wants. It is through competition between these different wants, and competition between different ways of satisfying them, that markets create prosperity out of scarcity.

In economic thinking, competition has two main functions. First, it spurs companies to try harder and be better than their rivals. They do so, of course, in order to make a bigger profit for themselves. As a most welcome by-product for society, products get better, new ones get invented and prices fall thanks to competition for the customers’ business.

The second function of competition is its disciplining effect. In a competitive world, you can never be too sure of your position. If a rival has a better idea or a better product, your days as a market leader are numbered. Competition is the best antidote to complacency, arrogance and laziness.

Competition is always both a discovery procedure and a tool of disempowerment. Both these functions are crucial for a market economy – but not only there.

Competition is equally desirable in many other places. Where cities compete for residents and their taxes, people will get better public services. Where teachers compete for promotion based on performance, their students will get a better education.

Unfortunately, many economists have trouble distinguishing between the results of competition and competition itself. However, the distinction should be quite easy: competition is always the rivalrous behaviour of competitors, not the number of competitors nor the prices they charge.

To promote competition, the most important things regulators can do is to just let it evolve. Competition does not need encouragement, nor does it need to be mandated. It is just what happens naturally when scarce resources meet unlimited demands. Rainforests do not need gardeners, either.

Rainforests do not need gardeners – I love it!

Next week is D for debt.

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Muller declares for Bay of Plenty

March 14th, 2014 at 9:44 am by David Farrar

Todd Muller has announced:

Muller to run for National Party BOP candidacy

Todd Muller, one of the Bay of Plenty’s most seasoned agribusiness leaders, today confirmed he is putting his name forward to contest the selection to be the next Bay of Plenty candidate for the New Zealand National Party.  Todd is currently a senior executive at Fonterra Co-operative Group.

“I am keen to return home to the Bay where I grew up, worked, married, had our family and my parents have lived for more than forty years.  With the support of local party members I know we can make a difference for all those living in the Bay of Plenty and continue the extraordinary contribution of Tony Ryall ” he says.

The Bay of Plenty offers so much, our rich natural resources, together with the talents of the people backed by the National Government’s investment in local infrastructure makes us a successful regional growth story”.

“But like all growth regions, the Bay of Plenty needs a strong and assured voice at the decision making table to meet its ongoing economic and social needs.”

Todd has a long history in the Bay of Plenty having completed his schooling there, held senior executive roles at ZESPRI and as CEO of Apata.  In the last three years, he has worked at Fonterra, most recently as Group Director, Co-operative Affairs, reporting to the Chief Executive.

Todd has been active in the National Party for over 25 years and has held positions at branch, regional and national level as well as working for Prime Minister Jim Bolger during the National Government of the 1990s.

Todd is 45, married to Michelle, and they have three children.

I’ve known Todd for around 20 years, from when he was President of the Waikato Students Union, and in the Young Nationals.

At the risk of cursing Todd, many have thought he will be Prime Minister one day. He has a great record of achievement.

In his early days, he would often get to introduce the party leader at regional conferences, and Todd would almost get a bigger standing ovation than the leader! Despite this one leader hired him, and Jim Bolger was a huge fan of Todd’s. Todd would often make the mistake of admitting he had no plans on for a particular weekend, and Mr Bolger would drag him up to the King Country for the weekend to drive around the electorate with him. Todd also had the rare ability to survive extended whisky sessions, yet still be up at 6 am!

Todd’s career post Parliament has been no less stellar.  He became a senior manager at Zespri in his early 30s and then Chief Executive of Apata, which provides post-harvest services to growers. Apata is a medium sized business with turnover around $30 million.

After Apata he went to Fonterra, and has shot up the ranks to the executive leadership team, being promoted after just 18 months to report directly to the CEO. It’s fair to say he’d be taking a massive pay drop if he becomes an MP.

Obviously Todd is not the only candidate for the Bay of Plenty nomination, but I’ll be amazed if he doesn’t win – especially as he grew up in the Bay of Plenty,got married there, and spent much of his working life there. If National can get people like Todd into their caucus, their rejuvenation while in Government programme will be very successful.

 

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Friday Photo: 14 March

March 14th, 2014 at 8:53 am by Chthoniid

As summer retreats the songs of the local cicada population is ebbing.  This is of the distinctive green cicada kihikihi wawa  (or Amphipsalta zealandica) here. The wings are blurred as the insect is in mid-song.

They are also eaten by one of the local cats, who doesn’t seem to mind the crunchy sound they make.

Click for larger, higher res image

I’m going off the grid for the next couple of weeks also, as I’m going to back in China on Sunday. It’s another elephant conservation project.

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General Debate 14 March 2014

March 14th, 2014 at 8:00 am by Kokila Patel
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General Debate 13 March 2014

March 13th, 2014 at 8:00 am by Kokila Patel
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Terrorism less likely

March 12th, 2014 at 2:00 pm by David Farrar

The Herald reports:

Interpol has identified the two men travelling on stolen passports on a missing Malaysia Airlines jetliner.

Both were Iranians who boarded the plane at the same time.

Interpol secretary general Ronald Noble said last night the two men travelled to Malaysia on their Iranian passports, then apparently switched to the stolen Austrian and Italian documents.

He named them as Pouria Nour Mohammad Mehrdad, 19, and Delavar Syed Mohammad Reza, 29, and said information discovered about them made terrorism a less likely cause of the plane’s disappearance.

The terrorism theory weakened after Malaysian authorities determined that one of the two men was an Iranian asylum seeker.

Malaysian police chief Khalid Tan Sri told reporters the 19-year-old Iranian man was believed to be planning to enter Germany to seek asylum. He said the man was not believed to be a member of a terrorist group.

He said the young man’s mother was waiting for him in Frankfurt and had been in contact with the police. He said she contacted Malaysian authorities to inform them of her concern when her son didn’t get in touch with her.

Still not sure why the stolen passports were needed, especially as they managed to leave Iran on their Iranian passports. The mystery continues, but sort of reassuring that terrorism is less likely.  Hopefully the plane wreckage will be located in the near future.

Stuff reports:

Malaysia’s military believes it tracked a missing jetliner by radar, flying low over the Strait of Malacca, far from where it last made contact with civilian air traffic control off the country’s east coast, a military source says.

In one of the most baffling mysteries in recent aviation history, a massive search operation for the Malaysia Airlines Boeing 777-200ER, now in its fourth day, has so far found no trace of the aircraft or the 239 passengers and crew.

“It changed course after Kota Bharu and took a lower altitude. It made it into the Malacca Strait,” the military official, who has been briefed on investigations, said.

The Strait of Malacca, one of the world’s busiest shipping channels, runs along Malaysia’s west coast. The airline said on Saturday (local time) that radio and radar contact with Flight MH370 was lost off the east coast Malaysian town of Kota Bharu.

The development injects more mystery into the investigation of the disappearance of Saturday’s flight, and raises questions about why the aircraft was not transmitting signals detectable by civilian radar.

The mystery deepens.

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General Debate 12 March 2014

March 12th, 2014 at 8:00 am by Kokila Patel
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General Debate 11 March 2014

March 11th, 2014 at 8:00 am by Kokila Patel
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