Economic credibility – mote and beam

20 comments on “Economic credibility – mote and beam ”

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1. Gosman 1

   8 November 2011 at 8:09 am

   “Gordon Campbell’s piece should be required reading for every so-called political and economic commentator in the country,”

   Ummmm… why? He is a left wing political commentator. His opinion over Asset sales is no more or less valid than any othe left wing political commentator. He certainly doesn’t make any earth shattering points.

   What he fails to deal with is the fact that if the price of the SOE stake is lower it is likely the return over the next few years will be as well because that is the main driver in determining the price of the assets.

   Also when did Capital expenditure become part of daily running costs? Gordon Campbell is an economic illiterate based on this piece.
   • Colonial Viper 1.1

     8 November 2011 at 8:19 am

     I think people should read the Gordon Campbell piece and decide for themselves if the rationale and analysis he puts forward is worthy. I believe it to be.

     Gosman you make a Key mistake here – by implying that National should accept a lower price on the electricity company sell off because a lower price must mean that the returns from the companies will be lower (for a few years).

     Here its obvious that you are actually the real moron.

     By believing that selling the assets off for cheap, a cheaper deal for ShonKey’s investor mates must then mean that they will drop power prices and that New Zealanders will buy less power.

     Really sorta stupid. Power use is going up, not down. ShonKeys investor mates want our strategic power assets cheap, and then they will maximise power prices to us in order to maximise their returns and the flow of NZ money going overseas.

     That’s capitalism, don’t you understand that? And it’ll hurt NZ.
     • Gosman 1.1.1

       8 November 2011 at 8:51 am

       Ah Colonial Viper :).

       I notice you haven’t addressed the question I posed you yesterday about the wisdom of purchasing foreign equities with borrowed overseas funds when the World economy is about to go into a global meltdown.

       Perhaps you would like to address this issue of the Labour Party mortgaging our future to place bets in the Global Capitalist Casino economy?
       • marsman 1.1.1.1

         8 November 2011 at 10:05 am

         Ah Gosman, yawn.
       • Draco T Bastard 1.1.1.2

         8 November 2011 at 12:18 pm

         Really, all that comes down to is a future government being bold enough to default on the borrowings. Same as with the massive borrowings that NAct have caused and will cause in the future if they get back in.
       • Kevin Welsh 1.1.1.3

         8 November 2011 at 12:34 pm

         If the world economy is going into meltdown, then why the hell would you sell strategic assets?
       • Colonial Viper 1.1.1.4

         8 November 2011 at 1:21 pm

         Gosman, speaking of mortgaging our future, you know National has added a $37B mortgage to the country’s future in less than 3 years, don’t you?

         Perhaps you would like to address this issue of the Labour Party mortgaging our future to place bets in the Global Capitalist Casino economy?

         I agree with you here and believe that we should distance ourselves from the Global Capitalist Casion economy.

         The best way to do that is to invest in NZ (not sell it off), reform the RBA, and take back control of the NZ banking system
         • Gosman 1.1.1.4.1

           8 November 2011 at 2:41 pm

           Ummmm…. Colonial Viper the NZ Super Fund has over half it’s assets invested outside of New Zealand.

           Labour is not promising to either reform the NZ Banking system or the RBA.

           So given the demise of the Global financial system that you believe is imminent, is it really wise that Labour is going to borrow billions of dollars which will be invested offshore?

           You could perhaps take DTB’s view. That we should default on the borrowing at some stage in the future. You gotta love Left wing economic thinking sometimes.
           • Draco T Bastard 1.1.1.4.1.1

             8 November 2011 at 3:33 pm

             When you loan someone nothing money, you’re taking the risk that you’re not going to get it back.

             It’s not left wing economics but standard free-market doctrine.
           • McFlock 1.1.1.4.1.2

             8 November 2011 at 4:20 pm

             it’s okay – it’s short-selling them like Goldman Sachs 🙂
   • Ed 1.2

     8 November 2011 at 10:35 am

     I need your help here Gosman. I can see that political bias could be something we need to be aware of, but are you saying that any left wing or right wing political commentator automatically has no opinions more of less valid than any other? Or could you give me a list of authorised independent commentators who have more valid views?
     Gordon Campbell may have missed a recent policy announcement – interviewed on radio yesterday, Ann Tolley said that the proceeds would be used for school buildings for spending that was not already budgeted for – in particular ‘leaky home” problems that otherwise may have to be done over a much longer period. That may affect their planned goverment finances, but are you saying that we should not take any account of Tolley as she is right wing?
     Labour’s numbers show that even allowing for some borrowing to provide the money that would otherwise come from asset sales, we would be $2.6 billion better off by the time we get debt paid off – as well as still having the assets. National haven’t shown any numbers to dispute this. Perhaps you could explain why it is a good idea to sell an asset that is providing a good return to invest in investments with a lower return. I would really appreciate your help on this; I have never quite understood why National want to borrow to spend money on the Orewa highway that has a lower investment return than the cost of the borrowing – how does that work, Gosman?
      
   • mik e 1.3

     8 November 2011 at 4:09 pm

     Gooseman you lie like PinoKeyo. The energy companies have increased returns every year since I can remember and thats a long time .
     Energy companies are one of the few better performing assets any where in the world and they are our best performing companies right across the NZ company sector other than the foreign owned banks
     More spin coming from the right even though now National may not be able to sell Assets at fire sale prices even
     these are cash flow companies as well which makes them more valuable than ordinary companies
2. In Vino Veritas 2

   8 November 2011 at 1:06 pm

   Why should this be required reading? It looks to me like a personal opinion piece with a rudimentary analysis (if it could even be called that) on asset sales. There are a dozen posters to this blog that could have written this.

   Just as a matter of interest, he says that 90% of NZ’rs don’t invest in the sharemarket. But 1.6 million are in kiwisaver. And doesnt Mr Campbell think that their Kiwisaver schemes will invest in these assets, making a great proportion of NZ’rs indirect investors?

   Mr Campbell in the article also refers to Rod Oram, who opines that it would be unwise for an investor to invest in more than one, let alone three. Best they have a look at say, Infratil, a NZ listed company that specialises in infrastructure.
   • Colonial Viper 2.1

     8 November 2011 at 1:23 pm

     Just as a matter of interest, he says that 90% of NZ’rs don’t invest in the sharemarket. But 1.6 million are in kiwisaver. And doesnt Mr Campbell think that their Kiwisaver schemes will invest in these assets, making a great proportion of NZ’rs indirect investors?

     Tiny indirect investments in ACC and the Cullen Fund don’t count the same as personal portfolios the wealthy have.

     Although in general terms I am extremely dubious about large retirement funds – many have been getting stolen and wiped out by the Financial Terrorists, of late.
     • Gosman 2.1.1

       8 November 2011 at 2:44 pm

       “Although in general terms I am extremely dubious about large retirement funds – many have been getting stolen and wiped out by the Financial Terrorists, of late.”

       Do you happen to have examples of the many that have been stolen and wiped out?
       • mik e 2.1.1.1

         8 November 2011 at 4:11 pm

         Brashes Huljich wealth management.
         • Colonial Viper 2.1.1.1.1

           9 November 2011 at 12:49 am

           lol

           Also note the charges laid against Bank of New York Mellon, accusing it of clipping the ticket on every pension fund currency transaction made for the last several decades, effectively stealing billions from retirees.

           What BNYM did was look back over each trading day, and assign the pension funds with the WORST prices of the day while the bank kept the BEST prices of the day for itself.
     • In Vino Veritas 2.1.2

       9 November 2011 at 11:35 am

       “Tiny indirect investments in ACC and the Cullen Fund don’t count the same as personal portfolios the wealthy have”.

       Colonial, this is not a rebuttal of my argument though. A good proportion of NZ’rs will in fact have an indirect shareholding in these assets via their Kiwisaver schemes. And Kiwisaver schemes will undoubtably invest in these assets. Therefore, the assertion made by the writer is incorrect.
3. seeker 3

   8 November 2011 at 5:54 pm

   “So the Nats’ so called “competent economic management” was already pretty much a myth.”

   Is this why?

   “The claims that the ultra-rich 1% make for themselves – that they are possessed of unique intelligence or creativity or drive – are examples of the self-attribution fallacy. This means crediting yourself with outcomes for which you weren’t responsible. Many of those who are rich today got there because they were able to capture certain jobs. This capture owes less to talent and intelligence than to a combination of the ruthless exploitation of others and accidents of birth, as such jobs are taken disproportionately by people born in certain places and into certain classes.

   The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves. He discovered that their apparent success is a cognitive illusion. For example, he studied the results achieved by 25 wealth advisers across eight years. He found that the consistency of their performance was zero. “The results resembled what you would expect from a dice-rolling contest, not a game of skill.” Those who received the biggest bonuses had simply got lucky.

   Such results have been widely replicated. They show that traders and fund managers throughout Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin. When Kahneman tried to point this out, they blanked him. “The illusion of skill … is deeply ingrained in their culture.” George Monbiot U.K. Guardian 7-11-11

   http://www.guardian.co.uk/commentisfree/2011/nov/07/one-per-cent-wealth-destroyers

   Now who is “in denial” and “not focussed on reality” Mr.ChimpKey and your National party followers? (quotes by j. hartevelt this pm on stuff)

   I certainly don’t think it is Phil Goff and the many thoroughly ‘focussed on reality’ commenters on this site.
4. anne 4

   10 November 2011 at 3:33 pm

   The article should be sent to the media for printing in papers,however its very difficult to get the media to print or screen anything that critisizes key and their corrupted,negligent practices with
   tax payers money,the media in nz should not be biased,but they could have had a handout like sky tv or fonterra,meat industry,media works,yachting,bmw’s fiasco,scf etc

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