Open mike 31/03/2021

100 comments on “Open mike 31/03/2021 ”

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1. KJT 1

   31 March 2021 at 6:56 am

   For landlords. If your business is too highly geared it is your fault, not the customers. You are using your customers to buy the house for you. You wouldn't get loans for a normal business, if the outgoings were so close to the costs. It is only the banks expectations that you will, in fact, make a large profit in the end from capital gains, that they base their lending on.

   That so many can borrow beyond the rentals earnings, as a going concern, is a consequence of steeply rising prices. Especially if they already have other houses as collateral. And a prime cause of the whole merry go round.

   The same thing has happened with farms, where banks will lend on the land, at levels way in excess of any possible earnings from a going concern farm, in the expectations of the land making huge gains on sale.

   No one who simply wants a home, or to farm can keep up.
   • Tiger Mountain 1.1

     31 March 2021 at 8:00 am

     Exactly. Landlords, whether one or multiple property owners, are hardly the entrepreneurial geniuses ‘housing the nation’ that their spokespeople try to portray.

     If interest rates rise, Accomodation Supplements are canned or reduced, or a CGT instituted, it will be tears at bedtime and w-w-wailing for bailouts.

     After so many years, untaxed or lightly taxed profits from property are a no-go area for the main Parliamentary parties apart from Māori and Greens perhaps.

     But the answer is there–supply–start a Govt. Dept., fully publicly owned, to plonk modular houses and apartments from one end of the country to other until everyone is housed satisfactorily. And institute rent control right now to send “a signal” while plans are actioned.
     • Anker 1.1.1

       31 March 2021 at 8:37 am

       "hardly the entrepreneurial geniuses housing the nation"……….lol. Couldn't of put it better. As I commented in my time being a landlord it was money for jam……..easiest "work" I have every done!
       • RedLogix 1.1.1.1

         31 March 2021 at 9:30 am

         easiest "work" I have every done!

         That's because as a person who has only 'worked' to earn a living you don't really grasp what it is to put a price on 'risk'. And the very basic bit of landlording you did didn't involve much risk and with maybe only a handful of tenants involved you never struck a bad one.

         But ask yourself this – why do you think the banks won't lend to just anyone and everyone who wants a home? If they would do that then there would be no need for anyone to ever rent.
         • Anker 1.1.1.1.1

           31 March 2021 at 10:19 am

           Red Logix. Often appreciate your point of view, so don't want to get into a battle with you. I am sorry if the new housing regulations are proving stressful for you, really I am.

           I have run my own business since 2006. So I have an idea about risk. Before that I was a paid employee, and have done a wide range of jobs.
           • RedLogix 1.1.1.1.1.1

             31 March 2021 at 10:56 am

             Most of us live very conservative, safe lives, we avoid real risk like the plague. We default to the idea of labour being the only 'real' measure of money (I still have this hard-wired into me) – but a few among us escape this trap.

             One day I got a 40 min helicopter ride sitting next to Phillipe Pascal, the man who had raised U$7.5b for this project. This is real risk, and getting to success was incredibly hard work for everyone involved. I worked most of 2019 on this site, it was an amazing experience and I watched this with some pride.

             It's transformed the economy of a whole country. Of course the anti-capitalists here will line up to take pot-shots, and to be fair as with anything human there are flaws and failings that can be rightly criticised. But how many among us here at The Standard – can say that we've achieved something like this?

             https://www.youtube.com/watch?v=RrCOR0QAdv0
             • Brigid …

               31 March 2021 at 11:22 am

               Well what were the flaws and failings that can be rightly criticised for this project?
               • RedLogix …

                 31 March 2021 at 11:47 am

                 Is that all that's important to you? Something to attack? It's odd how you've expressed no interest in how it's transformed the lives of the local communities. People getting out of poverty and all that.

                 But yes there was considerable labour conflict on site for a period. On my first rotation I arrived completely unaware of a major riot that had occurred in another location (it's a huge site, it takes an hour to drive from the coast where I was working to the mine entrance). There were multiple unions active on site, but one of them was determined to gain leverage and literally shut the place down for weeks. Gangs of men in trucks patrolled around the site, throwing rocks, confronting anyone they met, stopping supplies, cutting communications, wrecking offices and camps. It was really very violent and dangerous and I was totally cut off from the outside world along with a small team of Australians (just the six of us) in one of the smaller camps on the coast for four weeks.

                 In the end it was us, a couple of managers, some cooks and a dozen heavily armed security guards, hunkered down keeping a very low profile. We got through it OK, and we actually got a lot of work done without anyone else breathing down our neck. But it was more of an adventure than advertised.

                 The union did have something of a valid complaint in that while there were many thousands of skilled ex-pat workers onsite who were there legitimately and authorised by the govt labour dept, there was also a large Chinese labour contractor who was blatantly breaking the rules and undercutting the local labour. It's not necessarily and easy or quick thing to solve, sure you can ditch the problematic contractor, but that leaves you with a big gap in resource. Eventually the govt and First Quantum found a way around it all – but as with anything in Latin America it took way longer than you or I would think reasonable.

                 So there is something for you to be outraged over.
                 • Gabby …

                   31 March 2021 at 4:54 pm

                   'Something of a valid complaint' sounds a tad grudging.
                 • Brigid …

                   31 March 2021 at 6:44 pm

                   It is you, it seems, who is outraged that I should ask for an explanation of something you outlined.
                   • Brigid …

                     31 March 2021 at 6:46 pm

                     But thanks anyway.

                     Interesting
             • AB …

               31 March 2021 at 11:36 am

               RL – I'm not sure that there has been a lot of risk in residential property investment over the last two decades? As you yourself said yesterday, "And the simple answer is that for several generations now the only reliable investment in this country has been property."

               I absolutely don't blame people or think they are evil for acting in a financially rational manner – we all want our families to eat. I might however raise an eyebrow (Judith style) when people try to glamourise that rationality as some sort of virtue – such as providing homes for people, or wealth creation, or risk taking.

               In terms of the linked video, although some business enterprises do involve remarkable people with vision and a bravery in the face of risk, it's not really the norm. Most businesses are risk averse. Innovation and new product development is hard – it is much easier to turn a profit by cutting labour costs, outsourcing to low-wage economies, monopoly/cartel behaviour, ticket-clipping, externalising costs (environmental, social) onto the taxpayer, etc..

               Disclaimer: In an earlier life before the venture capitalists decided that two Indians and half a German could do my job for less money – I had the financial resources to invest in residential property. I decided not to – partly because although it was low-risk it was also a lot of hassle, plus I had vague thoughts that maybe it wasn't particularly socially responsible. I claim no virtue in this decision, it is just how things work out.
               • RedLogix …

                 31 March 2021 at 12:56 pm

                 For most landlords with just the one unit (usually an ex-family home) – it's not very risky at all. But then the returns are pretty modest as well. It's only when you start leveraging up a stack of 10 or more that it becomes substantially more difficult. But relatively few get there, Pareto’s law applies to landlording too.

                 it is much easier to turn a profit by cutting labour costs, outsourcing to low-wage economies, monopoly/cartel behaviour, ticket-clipping, externalising costs (environmental, social) onto the taxpayer, etc..

                 Each one of those is worth several posts and many threads, but in general yes there are many commercial activities that fall somewhere on a very broad spectrum between pure labour and pure entrepreneur. And I agree that not all of them have equal social merit.

                 And yes there are plenty of unpleasant, ego-driven, status-seeking people in the business world doing things we find ethically deplorable. The transformation of the human heart lies in our future. But for the time being at least capitalism gives these people something to do other than actual war, rape and pillage.

                 Unlike the promoters of marxist utopia's, I don't defend capitalism because I think it's any kind of ideal. It's not even very ideological, it's really just a handful of economic tools and ideas that have evolved into something incredibly complex and pervasive. And as such I expect it will continue to evolve into new forms as our social horizons and moral vision expand.
       • alwyn 1.1.1.2

         31 March 2021 at 2:01 pm

         Tiger Mountain gave the bit of that statement "housing the nation" as a direct quote coming from landlord's spokespeople.

         Who are these spokespeople? Where and when did they say it?
   • Pat 1.2

     31 March 2021 at 8:16 am

     Consider the howls if the RBNZ takes ‘interest only ‘ finance off the table….
     • KSaysHi 1.2.1

       31 March 2021 at 8:29 am

       Yeah, that would be something to see. We should have followed immediately after Australia removed them.

       In Australia the percentage of IO loans for residential was quite high..from memory 30 or 40%. Not sure how many are IO in NZ but probably similar as it’s been encouraged.
       • Pat 1.2.1.1

         31 March 2021 at 8:47 am

         Im stirring….I dont think they will (immediately) especially without waiting to see how the package plays out, but the option is there.

         “Nearly 40% of bank lending to residential property investors is on interest-only arrangements – RBNZ tight-lipped on whether this is too high, but raises concerns over leverage”

         https://www.interest.co.nz/news/109356/nearly-40-bank-lending-residential-property-investors-are-interest-only-arrangements
         • Incognito 1.2.1.1.1

           31 March 2021 at 8:54 am

           Who cares about people struggling to pay the mortgage; they’re ‘creaming it’ \sarc

           https://www.stuff.co.nz/business/124699937/covid19-mortgage-holiday-scheme-ends-with-3700-mortgages-still-in-repayment-deferral
           • Pat 1.2.1.1.1.1

             31 March 2021 at 9:06 am

             Just goes to show how flawed the whole model is eh?
             • Incognito …

               31 March 2021 at 9:10 am

               Yeah, everybody else was prepared for the pandemic and could see it coming as soon as that bat fled that cave except for those who find themselves financially struggling. Clearly, they made bad personal choices and should suffer the consequences.

               Is this comment too much ‘lefty resentment’ or too ‘RWNJ’? What do you think?
               • Pat …

                 31 March 2021 at 9:20 am

                 I think that covid has simply highlighted that which was already there….and that is neither left nor right wing.
               • arkie …

                 31 March 2021 at 10:00 am

                 ‘K’ shaped recovery.

                 The already rich are on the line heading upwards – getting richer because of a range of Government policies aimed at responding to Covid-19. Meanwhile, renters, beneficiaries and the working poor are getting poorer because their rents are rising, their incomes are falling and they have received barely any more direct help than they got before the pandemic.

                 https://www.newsroom.co.nz/nzs-k-shaped-covid-19-recovery

                 

                 https://thespinoff.co.nz/society/the-side-eye/25-03-2021/the-side-eyes-two-new-zealands-the-k-shape/

                 This isn’t a binary issue, and continuing to frame it as such is unhelpful. Personally I feel for anyone who is struggling to pay their bills regardless of what they are, one would argue these people are on the lower leg of the ‘K recovery’ like the working poor and renters etc.

                 We are all closer to becoming destitute than becoming a billionaire.
                 • RedLogix …

                   31 March 2021 at 10:24 am

                   Yup – now ask yourself, how do we want to fix this?

                   With more people riding the up elevator or more on the down one?
                   • arkie …

                     31 March 2021 at 10:26 am

                     Redistribution.
                   • gsays []

                     31 March 2021 at 12:33 pm

                     I am sure redistribution in the form of Accomodation Supplement is OK.
                   • RedLogix …

                     31 March 2021 at 11:02 am

                     Just as we can only tolerate a certain amount of inequality, there is also probably a limit on how much redistribution is tolerable as well.

                     In my view your answer really amounts to taking everyone off the up and putting them on the down. Very marxist.

                     A much better trick would be to find a way to make all elevators go up.
                   • arkie …

                     31 March 2021 at 11:19 am

                     In my view your answer really amounts to taking everyone off the up and putting them on the down. Very marxist.

                     You have constantly demonstrated you don't understand Marxism so your opinion on the ideology that motivated what I said is not appreciated.

                     A much better trick would be to find a way to make all elevators go up.

                     Ah yes, I too try to imagine as many as six impossible things before breakfast.

                     Apologies to Alice.
                   • Drowsy M. Kram …

                     31 March 2021 at 11:43 am

                     How many riding the 'up elevator' really want all elevators to go up?

                     It would be a great 'trick' to pull off – in the meantime we can beef up redistribution so that the 'down escalator' travels more slowly.

                     Really don't understand how a bit more redistribution could put everyone on the down escalator – can you talk me through it? Lets say the Government instituted a wealth tax or some other policy that resulted in the transfer of 2% of your wealth to those on the 'down escalator.' How might that transfer put you on the ‘down escalator‘?

                     I'm curious as to why you think the financial security of everyone on the up escalator is so marginal – seems to me that the opposite is true. I write as someone on the 'up escalator.' Sure, my position is towards the bottom of that escalator, but it feels secure to me – a 2% wealth tax would barely affect me.
                   • RedLogix …

                     31 March 2021 at 12:01 pm

                     How many riding the 'up elevator' really want all elevators to go up?

                     Have you ever met anyone who thought poverty was a good thing?

                     People vary a lot in what they think the causes of it are, and what the best solutions may be – but hardly anyone is for poverty.
                   • Drowsy M. Kram …

                     31 March 2021 at 12:08 pm

                     In my view your answer [Redistribution] really amounts to taking everyone off the up and putting them on the down. Very marxist. – RL @11:02 am

                     RL, please can you talk/walk me through how ‘a bit more‘ redistribution could put everyone on the ‘down escalator‘? Note that I’m definitely not seeking some sort of Marxist utopia – that wouldn’t suit me at all. But a bit more redistribution sure could go a long way to slowing that ‘down escalator‘, and there but for the grace of God…

                     “I believe that with great wealth comes great responsibility, a responsibility to give back to society and a responsibility to see that those resources are put to work in the best possible way to help those most in need.” – Gates
                   • Drowsy M. Kram …

                     31 March 2021 at 12:45 pm

                     Have you ever met anyone who thought poverty was a good thing?

                     RL, I've never met anyone who personally sought out poverty, which is a pity really because I'm sure their worldview would be interesting.

                     https://stjosemaria.org/the-virtue-of-poverty/

                     And, while I've never met anyone who told me that they thought poverty was/is a good thing, I believe that some on the 'up escalator' have become overly reliant on relative poverty – for example, those that can't cope when the tap of cheap labour is turned off.
                   • RedLogix …

                     31 March 2021 at 1:00 pm

                     Historically the only place where poverty could operate as a virtue was within the very specific settings of some form of monastic lifestyle. In particular it only works where sex and having family is prohibited.
                   • Drowsy M. Kram …

                     31 March 2021 at 1:42 pm

                     Makes historical sense.

                     I'm curious as to why you think the financial security of everyone on the up escalator is so marginal – seems to me that the opposite is true. @11:43 am

                     RL, please can you talk/walk me through how ‘a bit more‘ redistribution could put everyone on the ‘down escalator‘? @12:08 pm

                     Probably my misinterpretation, in which case apologies.
                   • Macro …

                     31 March 2021 at 1:52 pm

                     RL, I've never met anyone who personally sought out poverty, which is a pity really because I'm sure their worldview would be interesting.

                     Well I have been in the fortunate position to have met some one like that. He sleeps "rough" here in Thames and I get to meet him on a regular basis. I've often discussed with him the possibility of moving in to better accommodation than behind his favourite building. But his chosen site is where he prefers. He is his own person and while he would like to have someplace he could have a shower on occasions and a place to heat up some food, the lifestyle he chooses is his own, and at the moment suits him. Although tangata whenua, he claims no river and no mountain, he claims no one. He is a very spiritual person, preferring his own company.

                     Of the 20 or so rough sleepers in our town I have written on their behalf to the 4 ministers and associate ministers responsible for housing and homeless persons, suggesting that they consider working with a local ngos towards the establishment of a Hub where these people could have shelter, a shower, meet, and share food. Funding would be directed to the employment of staff for the supervision of the centre. I have not received any response.
                   • RedLogix …

                     31 March 2021 at 2:02 pm

                     A decent answer is well beyond the scope of a short comment. But in brief the answer I would offer is that we already do a great deal of redistribution (especially around education, health and security) to ensure everyone gets a reasonable equal opportunity.

                     But it's much harder and far more problematic to ensure equal outcomes. Some element of competitive innovation or 'doing better' has to be built in otherwise most people simply stop bothering. The Soviet Union was the great example — "they pretend to pay us, we pretend to work".

                     Perhaps we could make more progress if we worried less about the material measures of wealth inequality, and started to ask more questions around what defines true wealth and what are the best uses it can be put to? And in this I keep coming back to the concept of a social and economic life based on ideas of duty and service.

                     Sorry – that does fall short of answering your question.
                   • Drowsy M. Kram …

                     31 March 2021 at 2:09 pm

                     @Macro (1:52 pm) – thanks for that. Your vision of a 'homeless(ness) Hub' is very valuable and positive. I hope that you continue your lobbying and are (eventually) successful.
                   • RedLogix …

                     31 March 2021 at 2:09 pm

                     @Macro

                     My brother lives in Thames now, and we know the place well. It's likely you'll bump into him one day.

                     Your rough sleeper is essentially what we used to call a 'hermit'. Single men who have stepped outside of society have always existed in our history. It's just that our climate and DoC don't really let them live on mountain tops these days.

                     And respect for you willingness to reach out to him and advocate for those in a similar position. It's not an easy task helping people and I sincerely look up to those who are good at it.
                   • Drowsy M. Kram …

                     31 March 2021 at 2:15 pm

                     @RL (2:02 pm) – that's helpful. Tbh I reckon many of those on the 'down escalator' couldn't give a toss about ensuring "equal outcomes" – they just need a bit more help. As to how to fund it, well, there's no getting around the fact that NZ is (on the whole) a wealthy country.

                     And I think your observation that some seem overly concerned about material wealth is on the money – focusing on the inequality of material wealth is so punitive.
           • Anker 1.2.1.1.1.2

             31 March 2021 at 10:26 am

             Wow my 'creaming it" comment has really struck a nerve. Maybe I should be more careful with my language.

             The people I object to are the ones who own property, rent it out, will push the rents up no matter the impact on the tenants, because they have over leveraged and scream and howl that its not fair, not owning that most likely they are in a far better position than their tenants, the consequences for which could mean eviction, trying to find another place to live in an over priced under supplied market, may forgo back necessities to keep a roof over their head by paying the rent increase, have no hope of ever buying their own digs. Their situation is always in the fore front of my mind. As was young first home buyers being out bid by investors, some of who turn out to be unhappy because now they will have to hold on to the property longer and gradually no longer be able to claim interest as a tax deduction.

             But yes I will be more careful with my language in future. I am not here to inflame things
       • KSaysHi 1.2.1.2

         31 March 2021 at 9:08 am

         Checked the Australian figure. Three years ago 25% of all residential property loans were interest only so not as bad as I thought. Still that's a huge number.
         • Pat 1.2.1.2.1

           31 March 2021 at 10:02 am

           Your 40% figure for Oz was correct.

           "Interest-only home loans used to rival their principal and interest (P&I) repayment counterparts, accounting for around 40% of all outstanding mortgage balances in the mid-2010s. But that was before regulatory bodies introduced measures to slow down this form of lending. The Australian Prudential Regulation Authority (APRA) imposed a 30% restriction on the number of home loans issued by banks that could be interest-only in 2017."

           https://www.savings.com.au/home-loans/interest-only-home-loans
           • iwantapony 1.2.1.2.1.1

             31 March 2021 at 11:26 am

             As a mortgage underwriter in Australia, we are seeing a rise of interest only owner occupied loan applications, scraping through in terms of serviceability. LVR's ranging wildly, but not exceeding 80%.

             This is quite eye opening coming back to underwriting from my secondment with the COVID19 hardship response team, as there was a push for borrowers who reached maximum assistance (6-10 months moratorium) to go interest only. I wouldn't really like to consider what % our portfolio is on IO repayments, treading water.
             • Pat …

               31 March 2021 at 11:34 am

               " I wouldn't really like to consider what % our portfolio is on IO repayments, treading water."

               I wouldnt either….fortunately (or perhaps not) that sort of data is closely held.
               • iwantapony …

                 31 March 2021 at 11:43 am

                 Absolutely. Big non-believer in interest only repayments, would love to see their death.
                 • RedLogix …

                   31 March 2021 at 11:53 am

                   Yup. We were never tempted to go interest only either. Only speculators or the very marginal go down that path. Long term investors want to get the mortgage paid off eventually and IO doesn't get you there.
             • RedBaronCV …

               31 March 2021 at 12:12 pm

               For owner occupiers (not investors) is interest only still cheaper than rents? It gives people time to recover without losing a deposit or being subjected to the renting merry go around.
   • Anker 1.3

     31 March 2021 at 8:35 am

     Yesterday I commented that landlords were creaming it and I got howls of protests about overgeneralizing and most landlords aren't like that and what do you think being a land lord is……a social service.

     KJT you are spot on. If their business is too geared it is their fault/responsibility. They took a risk with an investment and it didn't work out…….maybe, they made a poor business decision.

     The govt actually had to take very significant action on this. Just like they did with Covid.

     I also commented that I was a landlord once when I had to move city and thought it possible I would move back home and wanted to hold onto my home. This was a few years back now. Being a landlord is money for jam. Its like a hobby really. You have a property manager, your accountant sets things up vey nicely for you. Occasionally you have to make decisions about ………actually I am struggling to think of what decisions I had to make. Oh thats right, if the tenants request things, which I was always happy to go along with as I had a small mortgage and I was happy to use the low rent I was charging to make improvements for them.
     • Jimmy 1.3.1

       31 March 2021 at 9:43 am

       It would be interesting to know how many landlords are highly geared. If interest rates went back up to 5% or 6% if they could cope with that. Hopefully they have been smart enough to realise that the current interest rates are as low as they have ever been and at some point may increase and have budgeted for that. I do feel for any landlord that has recently purchased a rental and have only say 80% equity, as this will be a game changer for them now that the interest non deductibility is phased in. Like I say, the non deductibility is like them receiving an interest rate rise, so hopefully they have budgeted for the possible increase.
       • RedLogix 1.3.1.1

         31 March 2021 at 10:20 am

         My guess is that many long-term 'buy and hold' landlords who have been in the business for more than say 15 yrs will have a total LVR under 60%. The reason why is that the price inflation we have been seeing means that any new property you purchase is going to be negative cash flow for many years, and there is a real limit to how often you can do that.

         But what is also happening is that while interest rates are low for the moment, but at the same time other fixed costs like rates and insurance have increased dramatically. We have one unit where the latest insurance bill now consumes 22% of the rent.

         Interestingly here in Australia one of the internal rules the banks are using to check the serviceability of new lending is to assess what would happen with an interest rate of 6.45%. So they understand that the current low rates are not likely to last forever. Indeed as the current generation of boomers retire over the next few years, and transition from the greatest investors of all time, to the greatest consumers of capital there is a real argument that rates could easily go over 10% again.
         • Craig Hall 1.3.1.1.1

           31 March 2021 at 12:07 pm

           NZ banks vary as it is seen as a commercial decision around risk tolerance, but are usually in the range of 5-7%.
           • RedLogix 1.3.1.1.1.1

             31 March 2021 at 12:19 pm

             That 5-7% aligns with our experience here in Australia.

             Where interest rates will go in future depends a lot on how long govts around the world can keep printing money to keep them where they are now. If they fail in this, then all bets are off, I don't think anyone knows how that will play out.
       • Ad 1.3.1.2

         31 March 2021 at 11:34 am

         We have very little debt now. Our one property that still has a mortgage has that mortgage paid for by the rent. Doesn't cover anything else.

         I know two larger professional landowners with LVR's hovering uncomfortably around 50%.

         One is selling one property to bring that down.

         The other is holding fire at the moment.
   • RedLogix 1.4

     31 March 2021 at 10:05 am

     That so many can borrow beyond the rentals earnings, as a going concern, is a consequence of steeply rising prices.

     80% of landlords never go beyond the one unit – because it's not as easy as you portray. If you're negatively geared (as we were for a long period – at 9% interest rates that was inevitable even when we never went over 60% LVR), the bank isn't going to lend more to you just because you queue up and smile sweetly.

     Banks don't look at just the increased equity, they look at your serviceability and past a certain age your exit strategy as well. The idea that you can borrow without limit is just wrong. The relatively few people who do manage to get to more than 10 units have negotiated a tricky balance of cash flow, costs, lots of leg work – plus a bit of luck – to get there. Most people don't want to do that because the risk goes up substantially and it becomes close to a full time job to manage. No-one is portraying landlords as 'entrepreneurial geniuses' – in normal times it was always considered a relatively modest strategy that took decades to pay off. People don't want to play casino with their life savings.

     Well as I've said elsewhere, established owners with little or no borrowing will be very happy – this govt has just eliminated virtually any new competition in the rental market.
   • bwaghorn 1.5

     31 March 2021 at 11:34 am

     One of the reasons banks can lend so much on houses is die to the rental market being propped by government subsidies,
   • Chris 1.6

     31 March 2021 at 12:10 pm

     "It is only the banks expectations that you will, in fact, make a large profit in the end from capital gains, that they base their lending on."

     Isn't more the ease of claiming the security for the loan than the expected capital gain? That's of course buoyed by record capital gains that're occurring at the moment, but are banks really lending against what they think a future sale price might reach?
     • Pat 1.6.1

       31 March 2021 at 12:15 pm

       Its both…the banks want the income stream and are happy to extend the credit in a rising market because should you default they have an asset of increased value that they can dispose (or preferably releverage) with a reduced fear of loss…..and the fees theyll add.
       • greywarshark 1.6.1.1

         31 March 2021 at 12:49 pm

         I thought that this personal anecdote would fit into the housing discussion. He is the real person that all the commenters here have in their minds.

         https://www.stuff.co.nz/national/300049683/new-zealands-twotiered-social-housing-system–a-massive-inequity
         • Pat 1.6.1.1.1

           31 March 2021 at 2:02 pm

           That would appear a strange anomaly….and the fact his unit still has quake damage is appalling….though I wonder if the units are earmarked to be replaced so upgrades are avoided.
       • Chris 1.6.1.2

         31 March 2021 at 1:09 pm

         I don't know the answer to this, but are you saying that banks are lending against a projected value of the asset, rather than its actual value at the time of the lending?
         • Pat 1.6.1.2.1

           31 March 2021 at 1:46 pm

           Im saying their desire to extend credit is enhanced in a rising market….and gave the reason why.
   • mikesh 1.7

     31 March 2021 at 2:38 pm

     Taking out a mortgage only pushes up the prices of whatever product you are selling. The ideal situation is where an investor is sufficiently cashed up that he can invest without borrowing. Alternatively, he might be able to get an interest free loan. Long live Social Credit!
2. gsays 2

   31 March 2021 at 7:40 am

   Someone dial 111, Judith Collins is involved in another train wreck on the radio.

   From the thoroughly fake sounding surprise greeting (akin to real estate agent photos in the paper), to the assertions that rent controls never work anywhere, to the antagonistic tone taken when challenged on her assertions.

   Can anyone be harmed by excessive schadenfreude? I may need medical attention.

   Edit, A link should be up on RNZ site soon.
   • gsays 2.1

     31 March 2021 at 8:32 am

     Here 'tis:

     https://www.rnz.co.nz/national/programmes/morningreport/audio/2018789770/shane-reti-s-decision-not-to-get-vaccinated-with-government-his-to-explain-judith-collins
   • Chris 2.2

     31 March 2021 at 12:12 pm

     When it comes to Collins it can only be a wholesome schadenfreude.
3. Pat 3

   31 March 2021 at 7:43 am

   “Behold,” he could have said, “the reality of global trade. Behold the tankers full of the oil that warms the climate and keeps the vile House of Saud in power. Behold the trillion tonnes of cheap consumer goods, from the factories of Asia to the landfills of Europe. Just look at it all. It cannot be sustainable. And how easily we could wean ourselves off it. Ladies and gentlemen, it is not too late.”

   https://www.stuff.co.nz/opinion/300265195/the-bloke-who-blocked-the-suez-canal

   Gotta love Joe Bennet
   • RedLogix 3.1

     31 March 2021 at 9:39 am

     It's incredibly lazy for people like Bennett to write snarky pieces like this, in complete ignorance of how the world works. Virtually everything about his modern comfortable life has been enabled by just this 'global trade' that he sneers at. He just doesn't know it.

     People like him would stand by cheering when the house burned down because they didn't like the decor in the upstairs bathroom.

     Well I guess he got paid for churning out his silly bit of click-bait – which is about the sum total of it's merit.
     • Pat 3.1.1

       31 March 2021 at 9:50 am

       I guess you didnt 'like' it then.

       I suspect Mr Bennet knows pretty well what provides for his lifestyle and I also suspect he isnt a big consumer of frippery…sadly nuance is becoming in increasingly short supply as is humour.
       • arkie 3.1.1.1

         31 March 2021 at 10:09 am

         There seems to be a cold war-ish Manichaean worldview, and the arguments are a false dilemma. No nuance allowed.
         • Pat 3.1.1.1.1

           31 March 2021 at 10:13 am

           Indeed….grey is not bleak
     • gsays 3.1.2

       31 March 2021 at 3:26 pm

       "..It's incredibly lazy for people like Bennett to write snarky pieces like this, in complete ignorance of how the world works."

       I offer this as a defence of Bennett:

       https://www.goodreads.com/book/show/3322867-where-underpants-come-from
       • RedLogix 3.1.2.1

         31 March 2021 at 3:52 pm

         Well I'll give Bennett credit for having the curiosity and energy to ask the question and chase down some answers. How well he succeeded might be gauged by some of the review comments.

         But the question is certainly worth asking – and the answer lies very much buried within CCP policy and their basic purpose for money. In the West we view money as a tool to enable economically worthwhile productivity, market pricing being a tool to manage this. The CCP uses money as a tool to maximise employment and maintain social stability, price being of relatively lesser importance – if any in the case of the underpants.
     • Gabby 3.1.3

       31 March 2021 at 5:16 pm

       That's a very negative spin you've put on it. Could you maybe be more constructive?
4. francesca 4

   31 March 2021 at 7:58 am

   How is it that NZ prisoners are not allowed access to the internet while Putin's most feared opposition incarcerated in the most punishing gulag Russia has , can operate an Instagram account ?

   People we manage in our prisons do not have access to computers with internet connection so cannot use email.

   https://www.corrections.govt.nz/working_with_offenders/prison_sentences/being_in_prison/internet_and_mail

   Navalny said in a post on Instagram that he had been given six reprimands over two weeks, and that two reprimands would be technically enough for a prison tribunal send a prisoner to a punishment cell.

   https://www.dw.com/en/alexei-navalny-says-he-could-face-solitary-confinement/a-57039910
   • Adrian Thornton 4.1

     31 March 2021 at 8:57 am

     Ask Kim Hill to ask that question next she does a piece on this, or any news/current events show on RNZ for that matter, I am sure they will be only too willing to shift from the established narrative.
   • joe90 4.2

     31 March 2021 at 10:37 am

     , can operate an Instagram account ?

     In case you hadn't heard, shocking, I know, but inmates across the world find ways to do shit they're not allowed to do.

     /

     https://www.tvnz.co.nz/one-news/new-zealand/exclusive-secret-gang-fight-club-at-mt-eden-prison-revealed-q01845
     • Brigid 4.2.1

       31 March 2021 at 11:34 am

       Last time I looked one didn't need an internet connection to run a fight club.
       • joe90 4.2.1.1

         31 March 2021 at 12:32 pm

         Smuggling smart phones in and out of boob doesn't require an internet connection either, genius.

         /
         • francesca 4.2.1.1.1

           31 March 2021 at 3:09 pm

           Apparently not possible for Julian Assange however

           British prisons must be run more stringently than Russian ones

           And I'm trying to remember when any NZ prisoner ran a social media account and posted regularly, as Navalny does

           You're the expert here Joe, let us know
           • joe90 4.2.1.1.1.1

             31 March 2021 at 4:43 pm

             Apparently not possible for Julian Assange however

             He's in separates so it's hardly surprising he's unable to.

             https://www.theguardian.com/society/2018/jul/09/tweeting-jailbirds-social-media-use-by-prisoners-triples

             when any NZ prisoner ran a social media account

             With meth deals and gangsta beats from inside, why not?

             posted regularly, as Navalny does

             Because Navalny's supporters would never post anything on behalf of Navalny, right.

             /
5. Adrian Thornton 5

   31 March 2021 at 8:46 am

   Quite a good wee clip…

   Defending Glenn Greenwald and Critiquing the Post-Left

   https://www.youtube.com/watch?v=JQ-lxwBTXUw
   • Incognito 5.1

     31 March 2021 at 8:49 am

     Over 21 min long; that’s not a “wee clip”. Why is it “quite good”, in your opinion?
6. Sanctuary 6

   31 March 2021 at 10:01 am

   If you didn't hear Judith Collins on RNZ morning report this morning I suggest you do. It was a complete train wreck.

   You should to it because it was the sort of interview that triggers leadership challenges.
   • Anker 6.1

     31 March 2021 at 10:31 am

     Yes thanks Sanctuary and Gsays…….started to listen but found it too excruiating. Who will be up to taking the poison challice?
   • Anne 6.2

     31 March 2021 at 10:45 am

     She was doing a Winston Peters.

     When Peters couldn't answer a question or didn't want to answer a question, he would turn it into a he said/she said argument so that the question was never answered. Only he was better at doing it than Judith.
     • alwyn 6.2.1

       31 March 2021 at 2:27 pm

       Try listening to the interview with a renter's advocate Ashok Jacob a little later in the program.

       https://www.rnz.co.nz/national/programmes/morningreport/audio/2018789782/tenants-advocacy-group-backs-rent-caps

       His statements seemed to me to be at least as general as were those of Judith Collins. However not a single one was questioned in any way and no evidence was requested for any of them. And people still think that Radio NZ is "impartial"?
       • Anne 6.2.1.1

         31 March 2021 at 4:54 pm

         The renter advocate's statements may have been general alwyn but they were much clearer and far less equivocal than Judith Collins. I almost had the feeling she was being deliberately ambiguous for the sake of it.

         Having said that, I agree with you that some RNZ radio hosts are not always impartial. There are one or two of them who enjoy arguing for the sake of it which doesn't achieve much imo.
       • Gabby 6.2.1.2

         31 March 2021 at 5:18 pm

         Was he also lying?
7. Chris 7

   31 March 2021 at 11:32 am

   Councils and council staff remind me of teachers – a large number of them aren't the sharpest knives in the drawer.

   https://www.stuff.co.nz/national/politics/local-democracy-reporting/300264251/caravanners-fear-regional-bylaw-the-end-of-freedom-camping-as-we-know-it
   • Stephen D 7.1

     31 March 2021 at 12:41 pm

     I don't usually descend to personal abuse.

     You really are a wanker aren't you.
     • greywarshark 7.1.1

       31 March 2021 at 4:43 pm

       Stephen D and others

       Please when you address a particular commenter put the name or pseudo. I want to know what about and to whom you are talking, Some people certainly cry out to be called w…s and I want to see if you have picked the right one in my opinion.
   • Stuart Munro 7.2

     31 March 2021 at 7:32 pm

     There is a certain mindset that turns ugly when embiggened by secondhand authority.
     • greywarshark 7.2.1

       31 March 2021 at 7:42 pm

       You mean mine Stuart? It probably does need a wipe with white vinegar (that is the recommended Green cleansing method).
       • Stuart Munro 7.2.1.1

         31 March 2021 at 8:15 pm

         By no means – some people handle the powers of petty bureaucracy generously, others become martinets.

         Freedom campers, once merely known as campers, are losing the local version of allemansrätten to a failure of local government imagination.

         Not so keen on extending the generalization to teachers however – most do their best within the constraints of a system that gives them relatively little freedom of action.
8. RedBaronCV 8

   31 March 2021 at 12:33 pm

   Is it just me or do others feel like these calls for, in this case tech entrepreneurs, everyone to move to a new silicon valley (NZ) more than a bit arrogant and condescending? Have they not noticed that a lot of people live here already and that they may have a different view about others deciding to "invade" their country? Maybe we actually don't want them? It's not like Silicon Valley has made life wonderful for all the people who live or used to live in the area. Some studies have shown that incomers in places like Seattle and Portland have just pretty much displaced existing populations.
   And aren’t a bunch of them just selfish opportunists leeching off the work of others?

   Even worse are the US Republicans that go "I'll move to NZ" as if they have some absolute right to turn up here and enjoy living that results from policy that is pretty much everything that they have always worked against.

   https://www.stuff.co.nz/business/124699041/nasa-chief-scientist-says-nz-should-become-a-worldwide-silicon-valley
9. Chris 9

   31 March 2021 at 12:34 pm

   https://www.stuff.co.nz/national/health/300266100/women-struggle-for-treatment-as-acc-changes-policy-on-perineal-tears

   ACC is just plain wrong here. There's nothing in the Act that requires instruments to be used in order for an injury to be regarded as a treatment injury. It's ACC hunting for ways to shaft the claimant yet again.

   Sepuloni is being weak here. As minister she has more power than what people are led to believe. In this case she just needs to tell ACC to pull its head in.

   A major problem, amongst many, with ACC is that they're assumed to have more power than they in fact have. ACC has become so arrogant in its drive to find ways of refusing cover and kicking people off compensation that it now actively challenges cases in the courts where someone's appealed a decision based on legislation the government has introduced for a specific purpose. In other words, ACC sees no problem setting out to (mis)use the judicial process to thwart clear legislative intent.

   Sepuloni needs to start looking at the real problems at ACC instead of believing what those nasty pricks at ACC head office so deceivingly tell her is the case. ACC operates in a very dark place. It's a great opportunity for Sepuloni to create a lasting legacy by successfully taking them on. The only problem is that I don't think she's got the guts or the smarts to do it. A pity.
   • Ad 9.1

     31 March 2021 at 2:11 pm

     What power does Sepuloni have to change ACC operational policy?
     • Chris 9.1.1

       31 March 2021 at 2:59 pm

       In cases where ACC gets the law so blatantly wrong she can tell them to sort their shit out.
       • Ad 9.1.1.1

         31 March 2021 at 4:53 pm

         I have mercifully limited history with ACCand I sure ain't defending them, I just haven't seen a responsible Minister step in like that – or rarely.
10. greywarshark 10

    31 March 2021 at 4:38 pm

    NZ – one wonders just where our systems of control went – now it seems anything goes.

    A woman was crashed into by a Lime Scooter in 2019. The Court has to decide whether it is a vehicle! You get injured first, and then that prompts someone who has authority to decide whether it is safe, should be used etc.

    https://www.rnz.co.nz/news/national/439566/man-found-guilty-of-careless-use-of-lime-scooter
    The 65-year-old woman, Debra Christensen, received a concussion, facial cuts and bruises as well as bruises to her hip, chest-wall, cheek, chin and hand.
    She bit through her tongue and could have lasting nerve damage.

    Christensen credited the two scarves she had been wearing to combat the cold with saving her life.

    McIntyre has been on trial before Judge Christopher Field, who had to consider whether a Lime Scooter was a vehicle under the Land Transport Act.
    Because Christensen had one foot on the bus, he also had to consider whether she was a passenger or a pedestrian…

    McIntyre was sentenced to pay $4000 reparations to her.

    How long can the perp string the payments out and what happens if nothing is paid? Do our Courts serve the little person? Well as Flanders and Swann chirruped, it all makes work for the working man [Judge] to do; virtually making law on the hoof, said in the kindest way of course.
    • gsays 10.1

      31 March 2021 at 5:38 pm

      In an ideal world, the lawyers for both parties would be paid either out of or after reparations are paid.

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