Nat stalking-horse’s attack on Cullen Fund falls flat

23 comments on “Nat stalking-horse’s attack on Cullen Fund falls flat ”

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1. Lanthanide 1

   10 May 2010 at 9:44 am

   “Tip: never let this guy help with your home finances.”
   I dunno, that’s probably the problem. He’s treating the country as if it were a household, whose primary objective should be to reduce debt when possible. But countries don’t work that way.
2. ghostwhowalksnz 2

   10 May 2010 at 10:27 am

   They should pay the ‘windfall’ from the banks finally have to pay all their taxes into The Fund.
   It was from previous years revenue anyway ( while labour were in)
3. Loco 3

   10 May 2010 at 11:33 am

   @Lanthanide
   Exactly right, I hate when people use the disingenous comparison to households. Littlewood says

   “It’s the same as a household asking its bank for a loan and putting that all into, say, international shares.”

   No its not, not even close and even worse, he knows its not, but he puts it in to add emtional content to his argument.This sort of work should be held up for what it really is; propoganda.
   • ghostwhowalksnz 3.1

     10 May 2010 at 12:24 pm

     Apparently his analysis was published in a peer reviewed journal, I dont if this was its entirety or its been “readers digested’ for the Herald readers
4. SPC 4

   10 May 2010 at 1:29 pm

   He is not alone in his view Mr Farrar of Kiwiblog has opined similarly.

   He wants the want the money dispersed into Kiwi Saver accounts and the accounts made compulsory – the reason is to allow tax cuts. The burden to save placed on the individual and end the tax burden of the Super Fund.

   English in deferring payments into the Fund has effectively partook of this strategy, without openly declaring this – it’s part of the softening up.
5. randal 5

   10 May 2010 at 1:32 pm

   he just another greedy pig who wants the money.
   give him nothing tell him nothing and take him nowhere.
6. ghostwhowalksnz 6

   10 May 2010 at 1:54 pm

   Littlewoods analysis seems to be based on suburban accountant thinking.
   Households would normally pay down debt because the taxation imbalance between income from savings and that spent on repaying principal. The government of course doesn’t charge itself tax.( except GST)
   However all saving for retirement is based on the compound interest effect over a long period.

   As I see it the policy reason for the Cullen Fund is to shift some of the retirement funding from future taxpayers to the current taxpayers ( who will be the ones spending the retirement money).
   This is because of the baby boomer bulge in population makes an imbalance in the age profiles.

   This is also the reason for governments ( and companies ) borrowing for capital works even when they dont need it. The cost is spread over those who will use the roads bridges hospitals, which would be for the economic life of say 50 years.
7. Irascible 7

   10 May 2010 at 2:32 pm

   More evidence of corruption in NZ politics- this time in the accountancy of the NACT policy process. This is an example of policy kite flying as the NACTers soften up the media for a campaign to destroy the Cullen fund.
8. Ed 8

   10 May 2010 at 4:17 pm

   Littlewood is a lawyer who pretends expertise in accounting, finance and economics. It is all part of the National propaganda that there isn’t enough money for anything except tax cuts for the wealthy – after all they need the incentive.
9. Fisiani 9

   10 May 2010 at 4:42 pm

   By not borrowing more money to gamble on the stock market, we have not realised a paper potential profit in a time of rising markets. If by this time next week the world stock markets take a major dive then I take it the Standard writers will be lauding the Finance Minister’s caution. Don’t hold your breath. Standard contributors always right. National always wrong.
   Only problem is 55% of people don’t agree. Probably 60% by 2011.
   • ghostwhowalksnz 9.1

     10 May 2010 at 5:40 pm

     You should read more blogs, they are usually highly partisan. ooops you all ready know that, but hey you have no arguements and T S is sooooo unfair
   • Bright Red 9.2

     10 May 2010 at 5:55 pm

     So, Fisiani. Are you denying the Cullen Fund gained $2.9 billion since Littlewood wanted to wind it up?

     Of course, there will always be ups and downs, but the Cullen Fund has beaten the market consistantly.
   • Draco T Bastard 9.3

     10 May 2010 at 7:28 pm

     And yet I’m sure you laud JonKeys becoming such a “paper” millionaire.
   • SPC 9.4

     10 May 2010 at 10:17 pm

     So Fisiani – let’s look at the reality of the marketplace concerned. The western economy baby boomer demographic is saving for retirement. They need a place to store their saving – a growing option is funding the sovereign debt – if this happens, then the cost of debt falls and thus the returns. If money is split between funding this debt and stocks, then stocks increase in value. It’s inherent that stocks will rise in value because of saver demand, the issue is whether when the baby boomers retire there will be new buyers for the shares. At this stage the booming developing economies with increasing national savings, appear to be gathering the economic resources to buy up the shares. Thus realising increasing/growing paper retrurns appears to be no problem (but this will involve higher levels of foreign ownership and invisibles deficits for the western nations concerned – little change for us as that has already happned here).
10. Fisiani 10

    10 May 2010 at 9:41 pm

    The Cullen Fund could drop $20 million in the next week. It only has proven value when capitalised.
    JK knows the difference between cashed up and paper profits. He knows that you have to borrow money at market rates and that this exceeds investment returns in the long term.
    Leftist thinking or rather non thinking is what made NZ enter recession a year before the rest of the world
    • Galeandra 10.1

      10 May 2010 at 10:03 pm

      ‘Leftist thinking or rather non thinking is what NZ enter recession a year before the rest of the world.’ A big assertion, entirely emotive,which I am sure you can adduce with some hard data? You sound a bit more partisan ansd a bit less logical. “He knows that you have to borrow money at market rates and that this exceeds investment returns in the long term.” By which you cleverly explain why no one profits from borrowing to invest?
      Perhaps you need a few more grey hairs on your head, and to have passed on a little from Year 13 economics.
    • Draco T Bastard 10.2

      10 May 2010 at 10:04 pm

      Actually, it was the drought.
      • Pascal's bookie 10.2.1

        11 May 2010 at 12:31 am

        And the Reserve Bank Act. The US economy was kept afloat for at least a year by the fed running extraordinarily loose monetary policy.
    • SPC 10.3

      10 May 2010 at 10:09 pm

      Perhaps you could explain what proven value is for cashed up investments – is that in gold or what currency exactly?
11. Nancy 11

    10 May 2010 at 10:40 pm

    The concept of “saving money” is easier said than done for most people. I understand that it is ‘easy and logical’ for some people, but I also understand it can be a difficult habit to break for others.

    If you’re looking to save money or change your lifestyle, my advice is to take it in “baby-steps” because it won’t happen overnight. Here are some tips that helped me out.

    1. Always pay more than the minimum on any credit card payments – if you don’t believe me you can calculate it for yourself (http://www.csgnetwork.com/creditcardmincalc.html)
    2. Use coupons when grocery shopping
    3. Try online shopping – it’s saves on gas & they have bigger markdowns (http://www.shoptivity.com)
    4. Read a book – it’s cheaper than going to a movie (http://onlinebooks.library.upenn.edu/)
    5. Know your budget! (https://www.dl.ed.gov/borrower/BudgetCalculator.do)

    Good luck and happy savings!
    • Draco T Bastard 11.1

      10 May 2010 at 11:08 pm

      As an addendum to point 4.
      Project Gutenberg
12. infused 12

    11 May 2010 at 6:39 am

    Borrowing to throw in the stock market is retarded. You’re retarded for pushing such an argument. Yeah, we could have made 40odd million, but we could have lost that amount too. With the approaching euro crisis, I wouldn’t be putting money anywhere. This is bigger than what the media are making out.

    Recession #2, here we come.
    • SPC 12.1

      11 May 2010 at 1:20 pm

      infused, the problem in Europe is the Euro – it allows Germany to have an export surplus per head greater than that of China and place the impact of that on the rest of Europe (rising Euro). Once the banking crisis hit that ended the borrowing binge that sustained the rest of Europe despite the rising Euro. Thus now there is recession. But the crisis in the Euro is resulting in a depreciating Euro, which offers the possibility of European recovery – via foreign investment in Europe attracted by the cheaper assets.

      As evidenced by the ME buy out of Harrods (declining pound).

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