General Debate 10 January 2009

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jafapete

Hell, John Key must have been only too glad to get to Hawaii after botching up December so badly. Having debates on bills in Parliament while people are getting to see them for the first time. Not a good look. Amateur hour in Lima. And now the mess over how to respond to the situation in Gaza.

Can’t wait for everyone to get back to work! It’s mMuch more fun being in opposition.

[DPF: Yeah getting your promises you campaigned on passed into law is so awful.]
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January 10, 2009 10:41am
adamsmith1922

JP

Provocative are we not!
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January 10, 2009 11:30am
PhilBest

The Wall Street Crisis has fallen off the screen just lately. THIS in the Wall Street Journal a few days ago, was a goodie; I thought it worth pointing out here:

“Mad Men”, by Holman W. Jenkins

http://online.wsj.com/article/business_world.html#printMode

“……here is the most interesting question. Mr. Madoff gained access to billions through the feeder funds, allowing two possibilities: A pile of money exists somewhere, and Mr. Madoff knows where, as do others. His spontaneous confession to his sons, and their prompt move to inform authorities, along with the pretense that Mr. Madoff acted alone, may have been one giant theatrical confection.

Or — the other, more likely, possibility — the many billions raised by feeder funds were paid out as fat profits to investors, such that hundreds of Madoff clients lived very well off the Madoff scam for decades.

Under the law, you can enter a Ponzi scheme through lack of diligence, but you can’t exit through proper diligence. If you leave because you smell a rat, you are complicit. Mr. Madoff may have gone on for 40 years, and one suspects a certain folk knowledge existed among many participants that something was not quite right (which is not the same as deciding not to participate).

Indeed, a continuum of complicity will likely be found, extending from the truly duped to the not-so-duped. A place to start applying the screws would be Frank Avellino and Michael Bienes, the two accountants hauled before the SEC in 1992 for illegally raising $440 million for Mr. Madoff. In the most eye-popping of its missed opportunities, the agency never ventured to look directly at Mr. Madoff’s books after he somehow coughed up cash to pay back Messrs. Avellino and Bienes’s clients.

That said, Mr. Madoff was not running a public company or a Fidelity mutual fund or an FDIC-insured bank. His rarefied customers chose not to afford themselves the checks and balances of institutionalized finance that, while no guarantee against loss or fraud, engage and incentivize many watchful eyes.

Journalism follows its own well-trod folkways, of course, and some now insist on trying to make Mr. Madoff symbolic of all that’s wrong with our financial system. Yes, the SEC could have done a better job, but policing side deals that rich investors make with money managers arguably is not central to its mission of ensuring fair and orderly markets. And the law is already well-equipped to clean up after fraud. Bankruptcy judges are versed in the peculiar justice of “fraudulent conveyance” that allows them to claw back Ponzi profits from some clients for the benefit of others. And tort lawyers and prosecutors will likely find it shooting fish in a barrel to hold various “advisers” liable for steering clients into the Madoff scam.

In no book of wise investing, however, is it written: “Entrust all your money to a magical figure who claims to produce uncannily consistent profits by means he refuses to explain.”

Nor is it written: “Pay princely commissions to any perfumed popinjay who can open the door to this mystical kingdom.”

Barney Frank didn’t help by fibrillating on Monday that investors everywhere would be afraid to invest after Mr. Madoff. Mr. Frank would have done better to emphasize the many ways a recognized mutual fund, and even most hedge funds, are different from a Madoff scam, beginning with an independent custodian of the underlying assets.

Better yet, Washington might spend its time profitably examining its own role in the recent housing blowout, which has destroyed more wealth than a hundred Madoffs, and about which Mr. Frank himself is an expert……”
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January 10, 2009 11:44am
chfr

Jaffa I am glad you like it in opposition because I think you may be there for a looooooong time.

From what I am hearing from the reef fish they are getting what they expected from a National government. When will you people understand that most Kiwi’s have finally realised they have subsidised too may for too long.
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January 10, 2009 11:44am
PhilBest

And then there is THIS:

“President Bush Tried to Rein In Fan and Fred”; by Karl Rove

http://online.wsj.com/article/SB123137220550562585.html?mod=djemEditorialPage#printMode

“…….Rather than a failure of capitalism, the housing meltdown shows what’s likely to happen when government grants special privileges to favored private entities that facilitate bad actors and lousy practices.

Fannie and Freddie are “government-sponsored enterprises” (GSEs), chartered by Congress. As such, they had an implicit promise of taxpayer backing and could borrow money at rates well below competitors.

Because of this, the Bush administration warned in the budget it issued in April 2001 that Fannie and Freddie were too large and overleveraged. Their failure “could cause strong repercussions in financial markets, affecting federally insured entities and economic activity” well beyond housing.

Mr. Bush wanted to limit systemic risk by raising the GSEs’ capital requirements, compelling preapproval of new activities, and limiting the size of their portfolios. Why should government regulate banks, credit unions and savings and loans, but not GSEs? Mr. Bush wanted the GSEs to be treated just like their private-sector competitors.

But the GSEs fought back. They didn’t want to see the Bush reforms enacted, because that would level the playing field for their competitors. Congress finally did pass the Bush reforms, but in 2008, after Fannie and Freddie collapsed.

The largely unreported story is that to fend off regulation, the GSEs engaged in a lobbying frenzy. They hired high-profile Democrats and Republicans and spent $170 million on lobbying over the past decade. They also constructed an elaborate network of state and local lobbyists to pressure members of Congress.

When Republican Richard Shelby of Alabama, then chairman of the Senate Banking Committee, pushed for comprehensive GSE reform in 2005, Democrat Sen. Chris Dodd of Connecticut successfully threatened a filibuster. Later, after Fannie and Freddie collapsed, Mr. Dodd asked, “Why weren’t we doing more?” He then voted for the Bush reforms that he once called “ill-advised.”

But Mr. Dodd wasn’t the only Democrat to heap abuse on the Bush reforms. Rep. Barney Frank of Massachusetts defended Fannie and Freddie as “fundamentally sound” and labeled the president’s proposals as “inane.” He later voted for the reforms. Sen. Charles Schumer of New York dismissed Mr. Bush’s “safety and soundness concerns” as “a straw man.” “If it ain’t broke, don’t fix it,” was the helpful advice of both Sen. Thomas Carper of Delaware and Rep. Maxine Waters of California. Rep. Gregory Meeks of New York berated a Bush official at a hearing, saying, “I am just pissed off” at the administration for raising the issue…..”

Do follow the link and read the whole thing…….
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January 10, 2009 11:48am
Inventory2

Fair suck of the sav JP – National legislated for tax cuts even faster than Labour legislated for tax increases! It took Cullen almost nine years to give us taxpayers a break, so get off your high horse, and get used to the fact that the unions and the left-leaning pollies and lobby groups are no longer steering the ship of state.
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January 10, 2009 12:22pm
reid

“President Bush Tried to Rein In Fan and Fred”

Too bad Bush took a dim view of Spitzer’s proposal to look into predatory sub-prime lending practices in NY in 04/05, wasn’t it…
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January 10, 2009 12:32pm
jafapete

“DPF: Yeah getting your promises you campaigned on passed into law is so awful”

I’m not arguing that they shouldn’t have moved on their election promises, just that they shouldn’t have trashed democratic processes in doing so, to a point that made the passage of the EFA look good by contrast.

I2, ” …get used to the fact that the unions and the left-leaning pollies and lobby groups are no longer steering the ship of state”

I have. Show me anything that I’ve written that suggests otherwise.

As for the dittohead trying to retail Karl Rove’s peculiar take on the world that he helped create, the latest jobless figures just came out here in the US. 2.6m jobs lost in 2008! Now, it must be admitted that this cannot all be laid at W’s feet, as he had some help from crappy management at the Big3 auto makers, avaricious financial market operators who had no idea what they were doing, etc. But, as Sudeep Reddy put it: “The current President Bush, once taking account how long he’s been in office, shows the worst track record for job creation since the government began keeping records.” (Which was in Truman’s time BTW.)
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January 10, 2009 12:47pm
Patrick Starr

Reid, you seem to have this preoccupation of blaming those that could have stopped the ‘crime’ being committed, than those that are actually committing the crime.

Now whilst I agree with Edmund Burkes sentiments you cant continue to ignore the greater of the two evils
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January 10, 2009 12:54pm
Simon

Sea Ice Ends Year at Same Level as 1979

http://www.dailytech.com/Article.aspx?newsid=13834

The science is not settled. Don’t let the collectivists lie to you.
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January 10, 2009 12:56pm
reid

“Reid, you seem to have this preoccupation of blaming those that could have stopped the ‘crime’ being committed, than those that are actually committing the crime.”

Not at all Patrick, it’s just an interesting episode, that’s all. Hope everyone knows the circumstances.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
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January 10, 2009 1:01pm
PhilBest

Reid, if you read the reports of DEMOCRATS blocking what the BUSH administration wanted to do, it is clear that the comment you have posted above is disgracefully unjust.

“Predatory lending practices” is one factor. The fact that those institutions doing the “predatory lending” could unload those mortgages onto Fannie and Freddie, was THE crucial factor. And it was the Clinton administration that changed the constraints so that Fannie and Freddie were not so fussy, and it was Democrat Senators and Congressmen, with the aid of the liberal media, who prevented the Bush administration from doing anything.

In fact, the issue at the time was painted as one of mean-spiritedness; the Democrats were proud of the fact that they had enabled such an increase in home ownership especially for the disadvantaged, and the Republicans were so painted as mean-spirited for wanting to tighten up on that, that they backed off.

The biggest failure all round, was the assumption that all those mortgages were safe anyway because of expected appreciation in the values of the houses. As I have said again and again, you will get a bubble in house prices when the prices go up so much faster than incomes, that first home buyers would be wasting their time actually trying to save up first; they just need to buy the house by hook or by crook. As soon as first home buyers cannot afford a home even with the most rash financing schemes, your bubble is going to burst.

There was no “failure of regulation”; nobody got “scammed”, everyone went into this with their eyes open. An awful lot of people were just plain wrong. First home buyers should have been demanding measures from government to restrain the price of houses, not measures to get finance as cheaply and as subsidised as possible. The same went for NZ, and the UK, and Ireland, and Spain, and most of Europe; and still does. Bruce Shepard was right about the Hanover Finance shareholders, they are a bunch of dumbnuts thinking that Hanover will turn around “when the NZ housing market rebounds”. The NZ housing market has a long way to adjust downwards yet, to restore the more normal relationships between house prices, and our incomes and what first home buyers can afford.

The people who were right, were scoffed at and ignored, and they still are being scoffed at and ignored. International investors are crying “scam”, because of the “Collateralised Debt Obligations” they were sold that were based on mortgages in the USA; yet, those investors believed that those mortgages were safe regardless of the ability of mortgagees to service the debt, simply because of the old assumption about house prices. Yet in the face of the reality regarding THOSE investments now, that everyone is now quite certain were not safe investments after all, there is still widespread denial about house prices. You simply can’t have it both ways. Either it must be accepted that house prices do have to fall once they have got far enough out of kilter with incomes, or we are just criticising Wall Street unfairly. And either way, no-one has any basis to criticise Wall Street seeing their faulty beliefs were identical with the faulty beliefs of the people who sold them the investments. The whole thing took place with full knowledge of all parties, and good faith.
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January 10, 2009 3:05pm
Glutaemus Maximus

So reid, where is the park of choice?

Strange how easily you were provoked really.

Perhaps it would be good for me/us to wait until you go on holiday and sneak up on you when you are relaxing.

Favourite trick of the Terrorists.

Back next month, be happy to drop the gloves then.

Take it that there are no rules, and that anything goes?
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January 10, 2009 3:07pm
reid

Of course Gluteamus, knives, guns, fists, possibly one of those 20mm gatlings as well. Winner is the one who doesn’t die.
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January 10, 2009 3:18pm
reid

Reid, if you read the reports of DEMOCRATS blocking what the BUSH administration wanted to do, it is clear that the comment you have posted above is disgracefully unjust.

So what you’re saying Gluteamus, is that if Bush had had even more opportunity to do even more of whatever it was he did, that the world would be an even better place than it is now?

I see.
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January 10, 2009 3:21pm
Banana Llama

Here you go PhillBest

Peter Schiff on Obama and the American economy http://www.youtube.com/watch?v=9h2x7R8pxUs&feature=channel_page

Speaking common sense as usual.
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January 10, 2009 3:23pm
Glutaemus Maximus

Be happy to rocket (indiscriminately and repeatedly) your place just to set the scene.

And call on my friends to attack you, wherever you are.
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January 10, 2009 3:30pm
reid

Yes, apparently you also want to do this:

“reid, I would cheerfully poke your eyes out and skull fuck you.”

to which my previous reply stands.

“Golly.”

Banana, thanks for the link. Schiff mirrors many commentators I personally follow who are also talking about an upcoming dollar collapse. We ain’t seen nothing yet.
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January 10, 2009 3:35pm
billyborker

We have a new government, and it would be good to see it take some strong action to protect people from the spivs, shills and charlatans that prey upon the unwary and the gullible.

We need the Commerce Commission to be given greater powers to prosecute fraudulent claims in business. Every “health food” shop, every chiropractor and homeopath should be put on notice that unless they can provide evidence to back up their claims they are in breach of the law and will be prosecuted.

We need a new Commission with similar powers to investigate and regulate the practices of religion. If they make claims, let them provide proof, or force them to retract. Did Joseph Smith really meet Moroni? Does Jesus answer prayers? Could Mohammed move a mountain, or was that just PR?

And we need the media, the press in particular, to stop leaping on the latest fads and fantasies and report only that which is verfied or verifiable.
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January 10, 2009 4:05pm
reid

Well we sure as hell could have used and do need some decent regulation in the investment advisory declaration-of-interest regime, and where the hell was Liarbore then? The need was friggin obvious for years before last year when the horse bolted, yet it was never even on Liarbore’s radar. What are’ya? Stooopid?
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January 10, 2009 4:14pm
Patrick Starr

WoooHoo BillyBarking – at last we agree on something…

“it would be good to see it take some strong action to protect people from the spivs, shills and charlatans that prey upon the unwary and the gullible”.
“And we need the media, the press in particular, to stop leaping on the latest fads and fantasies and report only that which is verfied or verifiable”

ARREST JOHN MINTO
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January 10, 2009 4:23pm
LUCY

Thanks Banana good link.

And yes Billy Borker. We need someone to protect us from socialist governments! Lets hope it is a cold day in hell before we get them back.

America is about to find out what having a socialist government is all about and heaven help them.
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January 10, 2009 4:27pm
grumpyoldhori

billyborker, damn and they say I am cynical about those who fall to their knees when some strange bugger called god is mentioned.
But good to see that god in the shape of Clapton is still going strong.
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January 10, 2009 4:32pm
billyborker

LUCY (45) Vote: 3 0 Says:

January 10th, 2009 at 4:27 pm
Thanks Banana good link.

And yes Billy Borker. We need someone to protect us from socialist governments! Lets hope it is a cold day in hell before we get them back.

>>>>>>>>>>>>>
Then I take it you are not a fan of democracy? A dictatorship would serve you better? Why is The Right so afraid of the marketplace of ideas?
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January 10, 2009 5:10pm
Ross Miller

Nice to see jafapete back again all refreshed from holiday. Best of luck old son with the job hunting. Can’t be too much call for all those Beehive Labour spin doctors now redundant and having to seek work for a living.
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January 10, 2009 7:46pm
Banana Llama

billyborker (151) Vote: Add rating 0 Subtract rating 0 Says:
January 10th, 2009 at 5:10 pm

Then I take it you are not a fan of democracy? A dictatorship would serve you better? Why is The Right so afraid of the marketplace of ideas?

Actually the left is all for removing freedoms of the individual, as a free society we are well within our rights to demand protection from such dangerous political organizations, or would you prefer to dictate who is allowed to do this.
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January 11, 2009 12:14am
billyborker

Banana, I have no idea what you want protection from. Or who you think should provide this protection.

One of the greatest examples of a free people making a free decision to protect their democracy was in Australia in 1951 when first the High Court overturned the Communist Party Dissolution Bill and later that year the Australian voters rejected an amendment to the Constitution to give the government power to ban the communist party.

Sadly, since then, Australians have begun to jump at their own, and America’s shadows, and are happy to see various political groups proscibed as terrorists.

The best way to defend to liberty is to extend it to all.
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January 11, 2009 9:26am
Banana Llama

billyborker (159) Vote: Add rating 0 Subtract rating 2 Says:
January 11th, 2009 at 9:26 am

It was a piss take, but i would like to note that it is the public’s right to decide the laws by which they are governed as you have shown here.

“One of the greatest examples of a free people making a free decision to protect their democracy was in Australia in 1951 when first the High Court overturned the Communist Party Dissolution Bill and later that year the Australian voters rejected an amendment to the Constitution to give the government power to ban the communist party”

If free people make the free choice to ban a political party who are you to say otherwise, so long as the people have the right to undo what has been done, sadly we both know what politicians think about giving us more than one vote every three years.
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January 11, 2009 4:01pm

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