Posts by Matthew Poole
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I don't think that'll work, so there won't be any below-BB rated firms around. Maybe the higher rated ones will stick around, but like I say they'll be essentially banks.
Which is why including finance companies is a bad idea in the first place. If they're as safe as a bank, they should be a bank. And that means they won't have the room to lend to projects that have a good chance of success but are distinctly marginal in terms of meeting "investment grade" lending criteria. That means a reduction in available capital to fringe borrowers, and potentially damages the economy.
There's a place for low-grade lenders. Shunting them out of the way isn't desirable. What's needed is for the returns paid, and the ratings given, to be an honest reflection of the level of risk. If I want to risk my money on a third-ranking mortgage, but get 18% for it, then so be it. But that 18% is a good reflection of just how risky the investment is. If I'm only getting 11%, I'm being sold up the river but quite possibly won't realise that it's a very risky investment.
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But the rates they actually offered to investors were not that much higher than the banks... many of them maybe 1-2 % higher from recollection... So having heard that return reflect risk, you might assume that a return "close" to a banks would also be a risk close to a banks.... which as history has shown, was a poor conclusion to draw.
Yes, that's true. Hence my point about not letting S&P et al just rubber-stamp an "investment grade" rating onto these cowboys. The best solution would be to make the ratings agencies subject to hefty penalties if an "investment grade"-rated outfit turns out to be doing dodgy deals. As things are at the moment there's no risk to them for being overly optimistic in their ratings.
And if people then want to invest in an outfit with a BB grade, for a return of 10%, there's a saying about fools and money.
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On the deposit insurance scheme, I don't see why finance companies should be covered at all. The whole point of their higher rates of interest is that it's meant to reflect the higher risk associated with where their investments lie. Banks pay lower interest, but they're meant to be lower-risk. If banks go under, it shouldn't be because the managers have been dishing out dollars like candy to anyone with a shonky development plan.
If the finance companies have to be secured, make the bastards pay through the nose for it. And make sure that their ratings from S&P and the other usual suspects actually reflect the reality of the investment plans and trust deeds, not some notional degree of risk. Some of the first wave of finance companies that went tits-up here were given ratings that would've allowed them to enrol in the insurance scheme.
Some of Bernard Hickey's analysis is a little hysterical for my tastes, but he's dead right when he asserts that it's a total no-brainer to invest in finance companies for a 10% return (vis the sub-8% return offered by banks), if that investment is just as secure as that low-return bank deposit. That's bad business. It's especially bad for the stock market, since you're in for the very long haul right now if you want a 10% return on a share investment, not to mention praying that the company will still be around in 18-months' time.
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You'd expect (assuming some return to normality) that the NZX total market cap would have increased substantially by 2025, so the Cullen Fund money would be less of a proportion of this?
Yes, one hopes the NZX will grow in the next 17 years. However, it's distinctly undesirable for any investment fund to be holding anything vaguely close to even 50% of the market, never mind something that looks more like 100%. The NZX-50 would need to grow by 100% and Fonterra would need to list before the Cullen fund's projected 40% was less than half the market value of the top listings. That's not going to happen, unless some kind of economic miracle takes place over the next five Parliamentary terms. And if you believe that's going to happen, I've got two bridges and a tunnel going cheap. Right now we're staring down the barrel of a National government that's more concerned about stoking the fires of consumer spending than about encouraging businesses to develop valuable, exportable products. So that's at least one term wasted, probably two, though hopefully not three. Short version? We're fucked, with a capital rogering!
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Re Lincoln: At least it wasn't AUT University - which I always think of as the Auckland University of Tautology.
Or, as we call it here at U.Auckland, "that other university". After all, it is just across the road. Clearly English is not a subject in which they offer degrees, or if it is I would strongly advise against enrolling!
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Yes, but if the record business imploded, radio stations and the like would still play music.
Which would be fine in theory, but they'd have to find the music, get a decent copy of it, negotiate with each band to ensure they had permission, and compensate directly?
If the big labels went away, the minors might have a chance of getting the collection societies, such as APRA, to negotiate directly. So the radio stations would just keep on doing what they're doing as far as licencing goes, which is paying the collection societies.
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A capital gains tax on property speculators? Bring it on!
You mean like sCB6 of the Income Tax Act 2007, which says:
Income
(1) An amount that a person derives from disposing of land is income of the person if they acquired the land—
(a) for 1 or more purposes that included the purpose of disposing of it:
(b) with 1 or more intentions that included the intention of disposing of it.It's already possible for the IRD to tax gains on property speculation, but it's a section that's not really enforced. If the IRD started walking around with that particular stick, and remember that it's the taxpayer's duty to prove that they didn't buy with the intention or purpose of resale, property'd become a far-less-attractive "investment".
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I'm no international financial guru so feel free to call me an idiot but did we have the rather large currency fluctuations that we have these days back in 1975?
No, we didn't, but that's nothing to do with market stability. Rather it's due to the fact that we didn't have a market currency until Labour came along in the 80's and floated it. Most of the world had regulated currencies in the 70's, so we were hardly alone in that regard.
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when under other circumstances they would of at least considered paying for it
And this is where your argument falls apart. You're assuming that downloaders don't buy, and that in the absence of downloading they might actually have done so. Can you present any evidence to support that position? Or are you trying the tenuous "logical" link that runs completely counter to sales figures from the US that tracked increased music sales in line with the rise of Napster, followed by a decrease once RIAA got their way and Napster died.
Put it this way: I'm loathe to spend $30 on an album that, on much past experience, will contain two tracks, maybe three, that are actually worth paying for, with the remainder being crap. So if I can download the music and establish that the album's actually worth buying, I will buy it. If not, in the absence of downloading I wasn't going to buy it anyway because the cost of the gamble is too high. The industry has only itself to blame for this attitude, where the price of the product is too high for it to be a disposable purchase if the customer dislikes what they've bought.
As for the theft argument, you're being deprived of nothing except a very notional income stream. The product is still there to be bought by someone else. So if you haven't been deprived of the product for sale, and I wasn't going to buy the work, how is it theft? You have lost nothing. I know it's pointless trying to get you to stop using pejorative language in this fashion, but at least do try and understand why people like me get hacked off with you twisting English in such a fashion. You're using a possibly, maybe, might-have-been purchase that may or may not have eventuated in the absence of a download to justify calling downloaders thieves. Which ignores the evidence that those who download more also tend to spend more on buying music. Plenty of empirical evidence to back that up, too.
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Actually Matthew there is a parrallel here, I am certain that Telecom would be responsive to complaints of obscene phone calls and the cellphone operators are moving to curtail schoolyard bullying.
Obscene phone calls are a crime. Police, courts, prosecution, fines, etc. I suspect a good case could be made that bullying texts are in the same league. Copyright infringement in the form of downloading is not a crime. Completely different things. If a telco fails to act against instances of misuse of a telephone, it's complicit in a criminal act. The telco can also look at records and see that calls/texts were made/received. An ISP has little more than a record of bytes transferred. Certainly they don't record the contents of every packet, which is what's required to establish that someone might have been downloading something they shouldn't. Though they could have been downloading something entirely legit through P2P, which these days is quite common.
I'm not going to be convinced that notice-and-notice is unworkable. Sorry, but it's not going to happen. The copyright holders are making the ISPs do their dirty work, and then leaving the ISPs to be the fall guys if they've got it wrong. That's bullshit, to put it bluntly. By all means require the ISPs to pass on take-down notices, and comply with court orders to supply details, but don't make the ISPs extra-judicial enforcers.