YOU IS DA MAN

It is lovely to see that John and Barack get on.. Super!

Barry has a lovely wife, smart kids and a cute dog. But he is in charge of a country that's falling to bits.

Sorry everyone - but if you think that the world economy is on the repair - think again - its the dead dog bounce. Shit will happen in the next few months.

Yip, we need to sell stuff to to the USA, they are an important market and we need to be nice to them, but not in awe of them, so there is no need to do the sucky - sucky bum licky thing.
It looks sad.

You see John, you are making decisions that are a bit different than everyone else - and the world is watching with interest.


It should be Barack calling you - Mr Prime Minister.

STEPHEN JENNINGS

Tonight we are off to the Business Round Table gig where we are listening to Stephen Jennings as part of the Sir Ronald Trotter Lecture series.

Jennings started the Renaissance Group in Russia which is still regarded as one of the strongest financial institutions in Eastern Europe. He is a Kiwi.

He has some strong views on what it will take to make New Zealand and indeed the worlds financial markets hum again.

We have written a few blogs on him and they are still some of the most searched posts we have written.

He preaches what we call kick arse economics

Should be a great night.

JOB LOSSES IN US ANALYSED

The Wall Street Journal has a bloody good article analysing the depth and impact of job losses and comparing them to previous recessions.

For those who are keeping an eye on the global situation its worth a look

RUDD FINANCIAL TICKLER

ATO letter_1

Publish at Scribd or explore others: Research tax australia

BIG DAY FOR FONTERRA

We wonder just what will be revealed today - as Fonterra does its half yearly results thing.

We think whatever they have to say it will be dressed up to look like a Sunday lamb roast when in reality it will be smelly old tough hunk of mutton.

NBR has been keeping a very close eye on what big issues are for Fonterra

It makes for very interesting reading.

We will keep you posted

NZ WELL PLACED TO WEATHER GLOBAL FINANCIAL TURMOIL

The IMF reckons that NZ is well placed to pull through the global downturn compared to other nations.

It has to do with the fact we dont have toxic bank debts, we have a range of exports and the stimulus applied so far has had an impact.

So it seems that Keys upbeat address last week on the State of the Nation was pretty much on the button.

There will still be some tought times to come but we will come out of it quicker than other nations.

CREDIT WHERE CREDIT DUE

A wee birdy tells us that Mark Solomon raised the possibility that the banks are getting a bit touchy at the moment over the public controversy surrounding the tribes leadership ( or lack of it)at the Hui at Rehua Marae yesterday and at Kaikoura.

Ngai Tahu reputedly has a $200 million dollar credit facility ( note: credit)

Apparently Solomon suggested that all the raruraru ( arguing ) in the media was making the banks nervous.

Well for starters many companies are on notice from the banks - Credit is tight - full stop.
Secondly if they were worried it would not be because of what's in the papers or on the radio or TV or heaven forbid the Blogs. No, if they are in fact worried - it will be because they dont think that the current leadership is stable or horror of horrors maybe there some issues with financial performance or governance. We can only speculate.

But for Solomon to raise it as a big bogey is scaremongering at its worst and at best a limp attempt to make those who are opposing him feel guilty.

If the situation has got so bad that the financiers are reducing support for the tribe then, again we say that points to weak leadership.

Again we say that Solomon , for the sake of the tribe needs to step down.

And it is time for the Tau boys, Tahu Potiki and some of the other young Ngai Tahu businessmen and women to have a korero and develop a leadership plan to take Ngai Tahu into the future. It is time for them to put aside their egos ( and they all have them in spades) but put their wisdom and expertise forward.

The fate of the tribe is in their hands.

JOHN KEY GETS MORE INTERNATIONAL PLAUDITS

The Australian has a great column on the business nous of three world leaders - John Key, Kevin Rudd and Obama. She reckons Key has got it sorted. she even thinks that he should have a place at the hallowed table of G20.

She has picked up on the factthat Key is the only one who understands commercial realities because he is the only one of the three who has any real business experience.

Heres an excerpt from Jane Albrechtsen.

Key, on the other hand, understands what is needed to make businesses hum: lower taxes, smarter regulation and a flexible labour market. He has recognised that a one-off sugar hit - or cash splash - won’t help business employ people for any longer than it takes to spend the cash. Permanent tax cuts help business employ more staff - permanently.

He told The Wall Street Journal’s Mary Kissel a few weeks back that he is determined to stop the slide that has seen NZ fall to the bottom half on the Organisation for Economic Co-operation and Development’s per-capita gross domestic product rankings. “We have been on a slippery slope ... so we need to lift those per capita wages, and the only way to really do that is through productivity growth driving efficiency in the country.” Key is cutting taxes, reforming regulations that inhibited foreign capital and tackling environmental legislation that has been misused by green groups to stop private sector investment. Oh, and he is undertaking a line-by-line review of every government department as part of his Government’s commitment to capping spending.

No wonder Key is the odd man out. And it is a shame that NZ will not be attending the G20 meeting in London next month, the latest effort by world leaders to confront the global financial crisis. Spend big and all will be in order is Obama’s resounding theme. It’s all stimulus this and stimulus that. Is it too much to hope that G stands for growth, not group-think?

We agree - they only problem is that its going to take a year or two to see who was right. Key, Rudd or Obama. Our money is still on Key.

A BLOODY GOOD IDEA - FROM THE BANKS

A mortage holiday of up to a year if you are made redundant. Thats what theCommonwealth Bank in Aussie is planning - the bank is headed by Ralph Norris.

With CBA itself predicting last month that the jobless rate could blow out from its current level of 5.2 per cent to a peak of 7 per cent late next year, Mr Norris said that it was not in the bank's interest to see people "get into trouble".

"In the case of those unfortunate to be unemployed, we will provide repayment holidays for six months, and in some circumstances up to 12 months, with interest being capitalised," he said. Mortgage holders will ultimately have to pay the deferred payments, plus interest.

Mr Norris added that he could not rule out job losses at CBA because of deteriorating economic conditions.

The rest of the story in the Australian here

We think its time for the banks on this side of the Tasman to step up with someone similar.

FOLLOW KEY NOT OBAMA

Yip the most popular PM in decades John Key has made an impact on the World stage.

First in the Wall St Journal and now his thinking and plan for economic stability are lauded in Australia. in the Australian

WE NEED TRUTH AND STEEL BALLS

This post is from a grumpy old woman rankling over corporate incompetence and corruption, enabled by executive greed and cowardice. The very first of the pearls of corruption seeded in ‘93. The young Lambcut was a Fortex shareholder/supplier. At the same time, on the other side of the world, Enron’s criminal executives were lying to their corrupt and incompetent Board. At the end, what was left of the Enron executive collapsed into self serving chaos, and the traders took over, picking clean the chewed bones of shareholder and employee money. That’s who really paid. So, we had a big re-jig of the governance and reporting rules. Did it work? Like fuck it did.

Meanwhile, back at the ranch, regular folks responsible for the vast bulk of New Zealand’s foreign currency returns, suffered death by a thousand cuts from over regulation at the hands of the Clark government. The noble and necessary convention of free and frank advice, steel balls stuff, got lost in the ensuing genteel over feminised ether. Executive and bureaucratic cowardice increased. So here we all are watching the financial Zeppelin go down. And, ohhh the humanity. Who pays now? You and me, amigo, that’s who, along with millions of even less fortunate sods elsewhere.

It’s not that the corporates don’t deserve a piano wire noose of regulation to tighten viciously around their selfish little necks. It’s just that, if that was the reaction, you and me, amigo be rest assured we would pay for it yet again.

And we could all smell the stink of well paid executive and bureaucratic cowardice that still hung heavy in corridors of public and private power. If an executive or bureaucrat was not happy with governance and reporting lines, they could easily move from one lucrative job to another leaving the unpalatable wiff of fetid financials behind. No family or personal commitments were jeopardised by a sideways move in a buoyant market.It was roses all roses.

Notwithstanding this, there is shadowy, and not so shadowy evidence of shonky governance and reporting generated in happier times, now surfacing all through the current financial Armageddon. Overseas, breathtaking executive salaries are still being paid in the face of the corporate collapses, books overcooked to crispy, and the trading floor still is a headless chookery.

We are not much better in the antipodes, just smaller, so the sums are a bit less breathtaking.

Our severely contracted job market is unlikely to inspire executive courage in all but a few with titanium testicles, but, if there was ever a time for scrupulous and stalwart reporting, its now. Gird your loins ladies and gentlemen. Show some courage. Don’t let your Chief bullshit the Board. Don’t allow your name to appear on dishonest or manipulative board papers. Now is the time for financial integrity. In the land of shiny arses and in the land of shiny cars.

USA CRISIS - " ECONOMIC PEARL HARBOUR"

US Billionaire Warren Buffet has coined what is arguably the best descriptor for the American economic meltdown.

He sees hope and fortune some interesting places. But he doesn't see things coming right for about 5 years.

Story here in the Australian

KEY CHARMS WALL STREET JOURNAL

Now while our new contributor Lamb Cut has been having a bit of a fun with the Wall Street Journal for having a bit of fun over NZ trying to tame the arse breath of our livestock, it appears that John Key has charmed the August journal.

Here's a sample

Mr. Key's coalition government, which includes parties to the right and left of the Nationals, has moved fast to implement a program of tax cuts, regulatory reform and government retooling. He won't label it supply-side economics and smiles when I ask if he's a Milton Friedman or Friedrich Hayek acolyte. "I'm not deeply ideologically driven," he says. "I believe in good center right politics."

Yip we confess we were a bit worried about Key and what he was doing and the speed of prgress on the economic front ( privately and sometimes publicly ) but that was more to do with the lack of a narrative than a lack of trust. Now we get it.

And now we are starting to see it - the unwinding the malodorous barriers to doing business, untangling the red tape ( we will be posting on that soon) but not loading up the nation with too much debt.

So now the Wall Street Journal has cottoned on to what the boy down south is doing and it approves. High praise indeed.

SUMMIT OF SUMMITS

While all eyes here have been on the recent economic summit in NZ, another arguably more important summit has been held on the other side of the world. The heads of government from the EU's 27 member countries met but instead of the focus being on the points of agreement it was a summit that gave clarity to the growing divide between rich and poor and probably east and west. The UK guardian calls it the European Faultline.

This is what the Guardian says the summit exposed.

• Protectionism versus free-traders: French-led campaign to save French and European industries and jobs opposed by Britain, Germany, central Europe, and the European commission.
• East versus west: fears of financial collapse in parts of central Europe could trigger bigger banks meltdown in Austria, Italy or Sweden.
• Euro currency countries versus the rest: non-single currency countries worried that crisis rescue policies are being skewed towards helping the eurozone.

At a time when the politicians of the EU nations should be working together, they are instead protecting their own countries which some commentators fear could lead to the breakdown of the union.

It is a good thing that John Key is talking to Kevin Rudd. We need to draw strength from our nearest nation and while the EU may break apart our future may well rest with solidarity with our closest neighbour.

SUPER SHEEP

Its Lamb Chops birthday today... Heres to ya sis.

Cartoon can be found here This guy is a great cartoonist.

GOOD ECONOMICS OR NOT?

Here is an interesting idea from Aussie. They are spending $13.8 million to deploy videoconferencing at 20 government sites. The motivation has come from the Aussie Govt's staggering $280mil air travel bill ( domestic only) Considering that it will be at discount rates its a big bill.

We think that the best gains out of this idea are in productivity. You waste about an hour give or take to get to and from the airport ( much more in Auckland ) and the same onthe way home and its about an hour to fly to most destinations - Conservatively thats three hours of lost time. In the case of Aucklanders way more.

So is this an idea that needs to be considered alonside the expansion of broadband ?

We have been involved in video conferencing and for many meetings its great. There are still times when you need face to face meetings but it does have a place.

So all you geeks and techies and economists - how does it rate as an idea and what are the up and down sides?

THE federal Government will deploy Cisco videoconferencing systems across 20 government sites in an effort to drastically reduce its $280 million domestic airfare bill.

The contract, which will run for four years at a cost of $13.8 million, will be managed by Telstra and will run on its Next IP network.

Mr Tanner said the deployment will help the Government reduce the cost of travel, improve productivity and lower the impact of carbon emissions.

It is unclear how much the Government will save with the Cisco TelePresence system but Finance Minister Lindsay Tanner has in the past indicated that he wants to slash at least $15 million from the bill.

“From a finance minister point of view the most important issue is saving money. We currently spend about $280 million a year on domestic airfares across government,” Mr Tanner said.

“The savings we make on airfares alone will pay for this system.”

Mr Tanner is also hoping the roll-out will help retain staff.

“I’m conscience that a lot of people tend to move away from very senior positions both in the public and private sector because of the burden of travel. This will enable us to get better value from people and achieve a better work life balance.”

Mr Tanner said there were robust security measures to make sure sensitive government meetings would not be breached.

“We have a secure phone system that we currently use and TelePresence is at least as secure as that,” he said.

GORDON BACKS A LOSER

WE hope that the Key administration doesnt head down the same path as the silly socialist Gordon Brown. . According to the UK Guardian It appears the UK central stimulus plank is about to go tits up. This sort of knee jerk stuff does not show a good understanding of business or what it really takes to create jobs.

INFORMATION SUPERHIGHWAY OR ROAD TO NOWHERE

Part of the US stimulus package is the seemingly laudable goal of funding broadband across the USA.

This article from the NY Times sounds a warning that needs to be heeded by our policy makers.

DR KEY TAKES FINANCIAL PULSE

Banks are central to the economic buffeting we are taking so it makes serious sense to be talking to them. We hope these meetings will be relatively regular.

GOOD ON YA ARCHIE

Now more that ever we need Maori to work together.

Archie has always been one of our favourite Maori leaders, he is a quiet but steely man and very gracious.
It ia times like these we need leadership..

Press Release by Te Ohu Kaimoana - The Maori Fisheries Trust at 10:02 am, 30 Jan 2009

Te Ohu Kaimoana has now transferred more than $440 million worth of Fisheries Settlement assets to iwi - a resource that could play a key role in helping Maori come through the current global economic crisis, the organisation's Chairman Archie Taiaroa told Maori leaders today.

Speaking at Te Ohu Kaimoana's annual meeting which was opened by Fisheries Minister Phil Heatley in Wellington, Mr Taiaroa, said wise use of the Settlement resources by iwi, particularly in the regions, can help keep Maori employed.

"We must look at ways of assisting our people through these tough times - and by doing so look after our country - through putting our economic resources back into the regions to allow our people to manage their own economic base.

"Maori and iwi are significant players in fisheries, and we should all be looking at how we can utilise Settlement resources to support our people at this difficult time," Mr Taiaroa said.

He told delegates that 48 of the nation's 57 iwi now had Mandated Iwi Organisations (MIOs) to which assets could be allocated and, crucially, 25 iwi now had full or partial coastline agreements.

Under the Maori Fisheries Act, the Fisheries Settlement is allocated to MIOs on the basis of an iwi's size and the agreed length of its coastline.

"Te Ohu Kaimoana is putting a tremendous amount of work into assisting neighbouring iwi reach coastline agreements, and a lot has been achieved in the last year," Mr Taiaroa told delegates, including Fisheries Minister Phil Heatley.

Mr Taiaroa said Taranaki had been a particular success story with the first big group of six adjoining MIOs - Ngati Mutunga, Te Atiawa, Taranaki, Nga Ruahine, Ngati Ruanui and Nga Rauru - having "come to the very wise conclusion that co-operation was in their mutual best interests".

He said after many years, Ngati Kahungunu and Rangitane on the North Island's east coast have come to agreement, and Ngapuhi have settled all their coastline through a number of agreements with other iwi.

"I can't emphasise enough that our future success is all about how we co-operate as iwi," he said.