Wednesday, March 19, 2008

Time for OCR intervention by Dr Cullen

http://www.rightblueeye.com/blog/wp-content/uploads/2007/08/a450ee0e-34cc-4191-bd03-9131f7b31fa0.jpg
The New Zealand Government is happy to intervene where its citizens don't want them
but when it comes to the precipitous economy in relation to lowering interest rates,
Michael Cullen gets blisters on his hands from sitting on them.



I'm not an interventionist by any stretch of the imagination but our monetary system, for better or worse, is, and so is the present regime that presides over the country's books, the New Zealand Labour party.

The interventionist approach in regard to the Reserve Bank and through the official cash rate(OCR) has led NZ INC, courtesy of drunken overspending and overtaxing by the aforementioned regime, to the highest interest rates in the "developed" world.

The Mike and Helen show has put the country in a very precarious position, given the uncertainty over the global economy and the "credit crunch"(2 days in a row, sorry) has slowed the wheels of commerce globally.

This dastardly duo seem quite pleased that an excuse like the global credit crunch has come around because they are now on a PR offensive to blame any current or future New Zealand downturn on it and not themselves, where the bony finger should be pointing.

The sensible among us know that high interest rate were here 3-4 years ago and then we though a credit crunch was a new chocolate bar bought on time payment.

Like Al Gore's science fiction movie "The Inconvenient Truth", we also know, like that movie, the M and K show lacks consistency and truth. When it comes to the economy we can all remember the Labour Party taking the accolades for the nearly 4% growth we had for a nano second, but they now blame the downturn and any possible downturns on other circumstances.

You cant have it both ways.

Now this government's profligate taxes and spending(they go hand in hand) has put its citizens in such debt that we even outrank those nasty Americans for our debt levels. This debt is primarily in real estate and servicing the high interest debt that bought it.

Higher house prices meant more borrowing on the increased equity, because taxes are so high we had to borrow to survive.

So guess what, now things are in reverse, because of that debt we are in potentially a worse condition than America.

They at least borrowed to buy other sorts of assets beside houses, while we sunk most of ours into houses and plasma TVs.

While we haven't had the extreme reckless lending like America's Sub Prime loans, we have got many thousands of kiwis who have borrowed more than they will be able to service when the shit hitith the fan.

Its hitting now.

NZ$40 billion of mortgages will be refinanced this year alone at close to 10% and others will be higher, the time for intervention is now.

The OCR should have been cut at least a year ago but now there is urgent need for it. An emergency cut to bring it into line with other nations suffering from the sub prime fallout would be a key move in the right direction.

There is no use sitting on your hands waiting "to see what happens" according to Alan Bollard, the Reserve Bank Governor. Decisive action needs to be taken because inflation is the least of his/our worries now.

Like I have said before the OCR is a poor way to maintain an economic system, it doesn't serve its purpose well, but it is all we have at present.

A progressive cut over this year, down to below 6%, starting with a .75 point basis cut will send a good message to the market and business, that lending rates will be somewhat dampened and business will be stimulated when it needs it.

Our socialist government are intervening in every other part of our lives, including the private business world but for the life of me , when we really do need intervention, Micheal Cullen just sits on his calloused hands and blames others for our countries current mis- fortunes.

Get off your arse and do something history boy.


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c Share Investor 2008

Tuesday, March 18, 2008

STUFF.co.nz: Sky City under review

http://www.discovernewzealand.com/adx/aspx/adxGetMedia.aspx?DocID=682,10,1,Documents&MediaID=1125&Filename=Sky-City-ext-large.jpg
Sky City Entertainment has been busy in the first few weeks
of Nigel Morrison's time at the top. Business units are all
under review.


By GARETH VAUGHAN - The Dominion Post | Tuesday, 18 March 2008

News out About Sky City today

SkyCity CEO sees cinema sale within 3 months - Stuff.co.nz
Sky City reviews Adelaide plan - Bloomberg


SkyCity Entertainment Group's(SKC) new boss wants to double to $3 billion the annual value of bets placed by high-rolling Asian gamblers as he strives to turn around the casino operator's recent disappointing performance.

Nigel Morrison, who took SkyCity's helm as chief executive on March 3, says this is the best way to combat the volatile impact on SkyCity's earnings from wealthy overseas gamblers.

The house did well against SkyCity's primarily Asian overseas customers in the December half-year, with $12.6 million in operating earnings from them. This helped push up group net profit, before the $60 million write-down in the carrying value of SkyCity Cinemas, by 36 per cent to $61.3 million.

However, a winning streak by high rollers in the first half of last year led to a $2.9 million loss, helping slash group net profit 23 per cent to $45 million.

Mr Morrison said high-roller volatility stemmed from the fact that the $1.5 billion worth of total annual bets placed by international gamblers at SkyCity's casinos was not enough. SkyCity expects to win about 1.3 per cent of the $1.5 billion.

The challenge for SkyCity, therefore, was to double at least the value of annual high-roller bets: "We need to think outside the square about how we might do that," he said.

Mr Morrison, a 48-year-old Australian, quit a role as chief financial officer of Hong Kong and Macau Casino group Galaxy Entertainment to move to Auckland. He replaced Evan Davies, SkyCity's founding chief executive, who departed abruptly after 11 years with a $2 million payout last June. SkyCity director Elmar Toime held the fort as executive director in the interim.

Including the write-down on SkyCity Cinemas, SkyCity last month posted interim net profit of just $1.3 million. Mr Morrison said SkyCity was talking with two potential buyers of the cinema business and he hoped to have the protracted sale wrapped up within three months. SkyCity Cinemas produced operating earnings of just $2 million in the six months to December.

SkyCity, which owns casinos in Auckland, Hamilton, Darwin, Adelaide, 41 per cent of Christchurch Casino and 55 per cent of one of Queenstown's two casinos, would then be free to focus on improving the performance of those businesses.

Mr Morrison said his mandate from shareholders for the next 18 months was to get SkyCity's casinos "buzzing". The recent $40 million refurbishment of the flagship Auckland Casino's main gaming floor was a step toward this.

Auckland produced $107.7 million of $161.4 million group operating earnings in the December half, but this rose just 0.4 per cent as margins contracted. SkyCity would work on getting the lighting, music, food and service right at Auckland, now that the hard work on the "physical asset" was completed.

"I would hope that in six months we would have made a big impact into all those things."


Disclosure: I own SKC shares


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c Links Share Investor 2008

Monday, March 17, 2008

The Global Economy looks bad now? But wait there's more

JPMorgan scoops up troubled Bear 4:56am: The deal values Bear Stearns at just $2 a share. Regulators hope purchase will stave off wider chaos in financial markets. more

The Bear Stearns fire sale reveals the iceberg underneath the tip of current disclosed sub-prime losses.

Everyone is talking about it and I have written about it frequently for more than a year. The contagion from the reckless lending of the last 10 years still has time to play out its course.

Emergency rate cuts on Sunday(US time) in the United States and talk of another one on Monday 17, of perhaps 100 basis points, will do little to restore the faith in credit markets, housing, business, the stockmarket and every other sort of financial instrument that is traded, with the possible exceptions of some commodities and minerals.

In New Zealand a story out today shows the high exposure our banks have to our ever decreasing housing market and along with higher government spending promised by the Labour government and a whole host of other price increases, interest rates are clearly going to skyrocket.

Things are looking grim here but in the United States, where it all began, they are suffering worse than anyone else. High house foreclosures, defaults on loans and increasing unemployment are front page stories. One doesn't have to be Warren Buffett to figure out that America is already in recession. The official confirmation of two consecutive quarters of GDP stagnation will only be a matter of course when it is announced.

The real question is, how bad is it going to get in the US and how much is it going to affect us in New Zealand and other parts of the world?

I'm not an expert in global economics but do have a keen economic grounding and I think things in the US are going to get alot worse. We still haven't seen the full extent of losses that banks and other financial institutions have been hit with, and those losses will have to be accounted for somewhere in the US economy.

The selling of Bear Sterns to JP Morgan Chase for $2 a share is a good indicator of more financial institutions sitting on bigger than disclosed losses. The balance sheet of BS, who incidentally survived the Great Depression, must be grim indeed.

The impact on other countries is going to be felt more than it is now because these things take time to filter down. Of course immediate impacts on currency values, world sharemarkets etc are felt quickly but longer term impacts, like even higher interest rates oil prices and goods and services.

Some economists talk of a "disconnect" of Asian economies from the still dominant US beast but that really isn't probable to me because countries like China, India and Japan still rely on a strong United States to survive. Economic self sufficiency in Asia is still a decade or so away.

A key sign of a loss of faith in the global economy will be seen when the US stockmarket opens in a few hours time.

If another interest rate cut is announced by the Fed and it is a big one, one should expect a rise in the DOW. Having said that, the fact that such a large cut is being proposed will probably mean the market will rightly look at this scenario as a good reason to dump their shares.

The uncertainty will have investors hitting the sell button.

The feeling I have in this part of the world is that investors have already started to panic. The New Zealand market was down by 2% and Australia followed with a 2.5% drop. Asian markets, as usual in times of turmoil, were hit harder. Over a broad range of markets in Asia they were down around 4% on average.

Whatever happens to the global economy in the coming days, weeks, and months, you can be sure it will be volatile, fraught with emotional writing from people like me and bad for the back pocket.

It will however, be very interesting.


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c Share Investor 2008 & 2009

Sunday, March 16, 2008

Clark's push for Neo Muldoonism deja vu all over again

News out last week that a so-called "anti-obesity" bill put forward by the dangerous, corrupt, carbon footprint waving, anti-free speech, private property/business hating, and tofu munching socialists, the New Zealand Labour party has this correspondent jumping for joy, in a cynical sarcastic, toxic sort of way.

A Labour supporter at last Sunday's Electoral Finance Act protest will have too keep his mouth shut if he is a "junk food"
eater. Labour wants to tax it.


The bill seems to be at the peak of Labour's desires to control the New Zealand populous, as it will restrict, at a whim, by the PC Director of Health or Cabinet, to prescribe what we should be eating.

That means supermarkets could be asked to put the Moro bars under lock and key, the chips behind plate glass and the ice cream in a room where only thin people can buy it with a license and photo ID.

I have joked about this for years, but here is the unfunny part, it looks set to actually happen.

No "junk" food for those of us, like me, who love it.

I mean, give me a motherfucking break, who do these vermin think they are?

Like Micheal Cullen's attack on private owners of Auckland International Airport last week, why the hell don't you just buy the Airport or open state run supermarkets yourself oh great leader?

While you are at it why don't you follow Cullen's lead, as Mugabe followed his lead last week, and nationise all private companies.

We could get around high prices buy opening state run gas stations, real estate agencies, banks, gyms, brothels, travel agencies and corner dairies. They could all be as successful as our hospitals, education system, police force and parliament.

Hang on a second perhaps that is not such a good idea.

Imagine the shortages, red tape, long queues and jobs for the boys.

Get the point people!

The state, let alone the stooges at the head of the Labour party couldn't run a bath, let alone the additional government departments the great leader obviously wants us to have.

Why not have everyone working for the government, at least then we can go back to a simpler gentler time, when everyone was happy and we all held hands and sung kombaya around a spluttering State funded fire.

Helen Clark's wish to follow a Neo Muldonism, and reconstruct New Zealand the way it was in Robert Muldoon's time is a scary thought, but that is where we are heading.

Muldoon knew in 1983-84 that he was going to find the 1984 election a tough one and he plundered every resource at his disposal to enable him to control almost every aspect of New Zealand life.

He nationalised everything he could, controlled the economy with an iron fist and spent so much money in his tenure at the top and buying that election that NZ INC was broke when the new Labour government of the day came into office and looked at the books.

One Roger Douglas was the architect in that Labour governments resurrection of the country and economy as he embarked on a radical plan that transformed our country and economy almost overnight.

It seems to be deja vu all over again in 2008. Helen Clark has the platinum taxpayer credit card in her hand and she is going to go well over the limit to buy your vote with your money.

In a time warp back to, 1984 Sir Roger Douglas is going to take a position in the Act Party, his first foray into politics in over 20 years and this time he is on the opposite side to her former party mates Clark and Cullen et al.

It seems to be a case of a perfect storm of politics crashing against a crumbling economy and an out of control bunch of power drunk socialists who will say, do and spend anything to retain their naked lust for power.

The addition this year of a recession and a possible deep recession at that makes the likelihood of a repeat of the class of 1984 almost a certainty.

Bugger.


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c Political animal 2008

The Warehouse set for a turbulent 2008

http://shopping.t5.co.nz/images/the-warehouse.jpg
The Warehouse Group Ltd
(WHS.NZ: Quote, Profile, Research)

NZX 2008 Interim Result - NZX
HY Profit up 7% - Reuters
Warehouse profit rises 7% on warranties - Bloomberg




The Court of Appeal will hear on April 29, the Commerce Commission case in seeking to overturn a High Court ruling allowing Woolworths Australia [WOW.ASX] and Foodstuffs supermarket companies to bid for The Warehouse Group [WHS.NZ]

In the wake of flat profits reported on Friday14 (NZ Time) the outcome of this case will come under closer scrutiny by investors in a New Zealand sharemarket racked with uncertainties.

Unfavourable global market conditions, a dismal forward look at the New Zealand economy, a drop in profit forecast by The Warehouse itself, and local and foreign investors disgruntled over recent Government intervention in Auckland International Airport [AIA.NZ] and their assault on private property rights, makes the case for a quick decision by the court even more compelling.

Investors have voted overwhelmingly to sell their shares in Auckland International Airport on Thursday last week and the same will be the case when and if the 3 parties to The Warehouse saga are given the go ahead to make a deal.

As mentioned before in this column I have every belief that the deal will happen, even if it has to go the way of the Supreme Court sometime at the end of 2008.

The only drawback to a Supreme Court ruling though is that the bench is stacked with politically appointed Labour Party Judges, so a verdict there could be in question.

The motivation for the buyers in this process to acquire, I think, will be higher than before the current credit squeeze. Clearly if credit gets horrendously expensive, the weaker player in terms of finance capabilities, Foodstuffs, may find it difficult to offer a competitive price for The Warehouse and therefore have to drop out.

Woolworths still have the upper hand in terms of available financing so the fortune favours the Aussies and the credit mess we are facing may in actual fact go in their favour . They have large cash reserves and future cash revenue to boot.

We await with keenness for a decision from the High Court, but uncertainty over the decision, given current political overtones and issues over perceived "kiwi assets falling to filthy foreign control", with a decision to also be made by the overseas investment office, may leave investors in The Warehouse disappointed, in an election year filled with emotional baggage left over from the distant 1980s and a Socialist government bent on Neo Muldonism.


Disclosure: I own WHS shares



The Warehouse Group @ Share Investor

Long vs Short: The Warehouse Group
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The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
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MARKETWATCH: The Warehouse
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History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Share Investor Forum-Discuss this topic


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c Share Investor 2008 & 2009

Friday, March 14, 2008

STUFF.co.nz: Auckland Airport all go for sale

http://d.yimg.com/us.yimg.com/p/afp/20070906/capt.sge.rko57.060907032036.photo00.photo.default-512x344.jpg


LATEST: Shareholders have voted in favour of the $1.8 billion partial takeover of Auckland International Airport by a Canadian state pension fund.

By the close of the offer at 5pm yesterday, shareholders holding 79.7 percent of the company had voted on the bid, with 57.7 percent of those voting approving the offer, the airport said today.

A majority of shareholders voting needed to back the offer for it to go ahead.

Share acceptances had reached 62.4 per cent by 5pm yesterday when the bid closed. On Wednesday they had been at 37.8 per cent.

Six per cent shareholder Guardians of the New Zealand Superannuation Fund was among those accepting.

As shareholders swung in behind the bid, the focus has switched to whether the Government will approve the deal, after the Canadian Pension Plan Investment Board's concession over its $3.60a-share offer for a 40 per cent stake in the airport company.

It is a swift turnaround for a bid that looked dead in the water only a week ago after the Government closed a tax loophole and tightened foreign investment rules.

A turning point came on Tuesday when 3.3 per cent shareholder and utilities investor Infratil, seen as a barometer of sentiment, said it would sell.

Shares in the airport, a top-10 company that controls 70 per cent of New Zealand's international air traffic, jumped 35 cents yesterday to end at $2.54.

In addition to gaining 40 per cent of shares, the Canadian fund needed to gain approval from a majority of voting shareholders.

The harshest blow to the bid came on March 4, when Auckland Airport shares plunged 20 per cent after the Government said it would tighten rules to prevent overseas investors gaining control of so-called sensitive assets.

That followed a February 26 move preventing companies from offering tax-deductible payments.

This had formed a key part of a capital restructuring proposal by the pension fund if its partial bid succeeds.

However, this week the Canadian pension fund said it would voluntarily restrict its voting rights to 24.9 per cent in a bid to calm Government worries about foreign ownership of key assets.

The Government's move was seen by many as politically motivated.

One analyst said: "The Government doesn't give a damn about the economic ramifications, this is all about getting votes."

The Overseas Investment Office said it would refer the bid to Land Information Minister David Parker and Associate Finance Minister Clayton Cosgrove.

- with REUTERS

Share Investor AIA merger coverage to date

Auckland Airport Update
Latest AIA developments
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?


Disclosure: I own AIA shares

c Share Investor 2008


Wednesday, March 12, 2008

Auckland Airport merger update


The Battle for the Airport



The ongoing debate over ownership of Auckland
International Airport, the gateway to New Zealand. More
Auckland City Council vote against AIA sale - Sydney Morning Herald
Canadians near bid for AIA - Stuff.co.nz
Infratil: Morrison played no part in AIA share decision-NBR
Infratil says yes to Canadians - Stuff.co.nz
Fran O'Sullivan: Canadians losing their bite - NZ Herald


http://upload.wikimedia.org/wikipedia/commons/thumb/3/3d/Auckland_Airport_Carparks_Main.jpg/800px-Auckland_Airport_Carparks_Main.jpg
The CPPIB will get the 40% of acceptances by 5.00pm Thursday(NZ time) But the
Labour government look set to stop the deal anyway.



There have been further developments in the Auckland International Airport(AIA) merger saga today.

Since the last report here though, Infratil, a 3% holder has decided to approve the merger and as of today, after market closing at 5.00pm, The Canadian Pension Plan Investment Board has 38.7% acceptances and its a gnats whisker away from the required 39.53% needed by tomorrow.

Although largely immaterial, given the overwhelming acceptances already, Auckland City Council has voted just 30 mins ago(8.20pm NZ time) not to sell their 12.7% stake and vote against the merger going ahead.

Clearly the move last week by Micheal Cullen to retrospectively stop the deal by changing a law has backfired on him and CPPIB will pass the acceptance mark with flying colours.

Cullen will likely stop the deal anyway he can because he thinks there are votes to be had, so the positive outcome for the Canadians is going to end ultimately end in tears for them.


Share Investor AIA merger coverage to date


Latest AIA developments

Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Disc: I own AIA shares



c Share Investor 2008




Tuesday, March 11, 2008

McDonalds Playing Chicken with KFC

McDonald's is going to take on KFC at their own game and the head of Restaurant Brands Ltd [RBD.NZX] replies to the war cry of MD of McDonald's Mark Hawthorne:

Chief operating officer Rod de Vries said sales had increased 9 per cent in the past year - an outstanding result in a highly competitive market. "It is therefore no great surprise that our competitors will try for the same success in our market and challenge our menu offering.

"However, we are confident that KFC will continue to hold the recipe for success in our industry and that consumers will continue to love the secret blend of 11 herbs & spices that Colonel Sanders perfected in 1939.



A very logical and understandable reply from the head of Restaurant Brands, in reply to news out today that McDonald's New Zealand is going head to head with KFC to try and knock the Colonel of his lonely perch.

http://gaming.unlv.edu/v_museum/neon_survey/surv_photos/McDonalds(37750)_4.jpg
KFC have to respond to the superior marketing and
service levels of McDonald's to keep their chicken market
share.


As Warren Buffett says, he looks for companies with a "moat", that is, a unique product or company that has high barriers to entry and therefore stable and sustainable cash flows. KFC is certainly that. Nobody else has ever managed to get the 11 secret herbs and spices down pat and nor are they likely to and that is the main advantage that KFC has.

The uniqueness of their taste is their secret to their 69 year old history.

Unfortunately for KFC in New Zealand we have heard this all before from Restaurant Brands, "we will take competition seriously" blah, blah. Witness the Pizza Hut meltdown after competition has decimated that brand. I still think RBD management underestimate their rivals and over rely on the strength of the KFC product when going head to head.

McDonald's Vs RBD, I will pick Maccas every time, because management there are smart and know all about service, imagine what they would do at KFC.

http://sunboar.files.wordpress.com/2007/02/kfc-logo-comparison.jpg

KFC's chicken dominance is going to be severely tested by the McDonald's
competition but KFC have a unique product that loyal customers love.



McDonald's are going for an all out assault on KFC's dominance and are going for quality and range in their chicken offerings. Breast meat and real chicken will be the order of the day. They will take market share off KFC, that is clear. How much market share is up to how RBD management react to the competition.

RBD have a great product but where Maccas will beat them is at service and marketing and that is half the battle.

In the USA and Australia this battle has been fought and lost by KFC and the Big Mac has intentions to be no1 here within 3 years, so history could be repeated here.

The McDonald's saturation advertising has already started. It will be interesting to see what the RBD response will be.

Keep up to date with this development at the Share Investor Blog .


Restaurant Brands @ Share Investor

RBD - 2011 Half Year Result
RBD - 2010 Quarter one sales
RBD - 2010 Quarter two sales


Restaurant Brands share price looking overcooked

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Finger Lick'n Good Management
Chart of the Week: Restaurant Brands Ltd
Long Term View: Restaurant Brands Ltd
Stock of Week: Restaurant Brands Ltd
Restaurant Brands: Buy or Sell ?
Pizza Hut sell-off provide opportunities all-round
Danny Diab & Restaurant Brands
2008-2009 KFC sales figures mislead investors
KFC Finally Flying
Starbuck's New Zealand Cup doesn't runneth over
RBD gives KFC a push
McDonald's playing chicken with KFC
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
RBD saga continues: CEO leaves
The secret recipe is out
2007 FY profit analysis
Delivering increased profit in October 2007
No reason for optimism in latest sales figures

Discuss RBD @ Share Investor Forum
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c Share Investor 2008














Monday, March 10, 2008

Unstoppable Global Warming

Something not reported in the mainstream media but it is another form of evidence that refutes man made global warming.


Unstoppable Climate Change

In this issue, NZCPR Weekly reports on implications from a New York conference on Climate Change (printer-friendly version>>>), Guest Commentator Czech President Václav Klaus explains that the global warming scaremongering is really an attack on freedom, the weekly poll asks NZCPR readers whether they agree or disagree with the government's proposed emissions trading scheme, and the NOTICEBOARD has details on how to win a copy of the New York Times bestseller "Unstoppable Global Warming: Every 1,500 years".

I have just returned from an historic meeting of more than 500 people from around the world who gathered in New York to address the question of whether man-made global warming is really threatening the future existence of our planet. In attendance were some 200 scientists, economists and climate authorities, highly respected experts who are standing up to defend science against the tide of political opportunism, media dramatisation, and crowd hysteria that is propelling the global warming debate. In doing so these scientists and economists are putting their livelihoods at risk - their research grants, tenure, and ability to get published have all been threatened. Some have even faced death threats for speaking out against the global warming alarmism that is sweeping the world.

As a New Zealander concerned that our country is on the brink of passing new laws to counter global warming that will have a devastating effect on our standard of living, I wanted some answers. In particular, I wanted to know whether there is any scientific evidence that human-induced catastrophic global warming is occurring, since that is the sole justification for the economically damaging policies that Labour intends to push onto the country. I would like to share with you what I found.

Scientists have shown that in the earth’s geological past, concentrations of carbon dioxide have been up to 20 times higher than they are at present and temperatures have been considerably warmer. The two most recent warming periods occurred during Roman Times from 200BC to 600 AD and Medieval Times from 900AD to 1300AD, when Greenland was green and grapes grew in England. The Little Ice Age followed.

Current temperature trends show a warm period between 1920 and 1940, followed by a cooling phase. There was a sudden warming surge from 1976 to 1978 and another in 1998. Since then the weather has been cooler. The year 1934 has emerged as the warmest of the 20th century. This, along with the evidence of those historical warm periods, confirms that man-made greenhouse gas emissions cannot possibly be the cause of the earth’s warming.

The very latest scientific research shows that the climate operates on a 1,500-year cycle and is driven by a complex interaction of solar activity including sunspots and cosmic rays, winds, deep ocean currents, as well as cloud and precipitation cycles. It is a “chaotic” system which is very hard to predict. That is why it is almost impossible to forecast weather more than ten days in advance. For the United Nations Intergovernmental Panel on Climate Change to pretend that their predictions of the earth’s climate in a hundred years time are accurate is fanciful, and for politicians to regulate their economies on the basis of such fantasy is grossly irresponsible.

The UN’s climate change panel – the IPCC – was set up in 1988 to assess the impact of human-induced climate change. This is a governmental body that was established to show firstly, that humans are causing global warming and secondly, to present the case for regulation.

In their latest report, released in 2007, the IPCC concludes that “most of the observed increase in global average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations”. However, in the two years since the cut-off date for that report (May 2006), scientists have discredited that conclusion by showing that the IPCC used corrupted data, that proper forecasting principles were not followed, and that their statistical analysis was flawed.

A key problem that scientists have discovered is that the computer model outputs produced by the IPCC are at odds with observable results: in particular a central feature of the IPCC’s case for catastrophic global warming is a forecasted build-up of warmer air above the tropics, yet temperature records show that this is not occurring. Some of the excessive temperatures used in the IPCC’s models, which are presented as evidence of catastrophic warming have been traced to urban encroachment - temperature stations that were once located in the countryside are now surrounded by car parks, roads and other heat absorbing structures.

Scientists at the conference refuted emotive claims that polar bears are dying out due to a loss of habitat (claims which featured in Al Gore’s drama, “An Inconvenient Truth” that is now screening in schools). They showed that Alaska’s polar bear population is stable, and Canada’s has increased by 25 percent over the last decade.

Claims that the melting snow of Mt Kilimanjaro is caused by global warming were shown to be wrong. In fact, the snow has been known to be melting since 1880 - deforestation at its base has reduced cloud cover increasing exposure to the sun.

Predictions of dramatic sea level rises were categorically discredited. The sea has been rising by a constant 18cm a century (1.8mm a year) and is thought to be driven by the melting of the West Antarctic Ice Sheet. The fact that this started an estimated 18,000 years ago and is expected to continue for another 7,000 years, shows that humans are not to blame!

The President of the Czech Republic, Hon Václav Klaus, gave a keynote address at the conference and received a standing ovation. He is very happy that his speech is being featured as this week’s NZCPR’s guest commentary.

President Klaus, who spent most of his life under a communist regime, believes that global warming alarmism is essentially an attack on freedom. In his speech he explained: “Future dangers will not come from the same source. The ideology will be different. Its essence will, nevertheless, be identical – the attractive, pathetic, at first sight noble idea that transcends the individual in the name of the common good, and the enormous self-confidence on the side of its proponents about their right to sacrifice the man and his freedom in order to make this idea reality. What I had in mind was of course, environmentalism and its currently strongest version, climate alarmism”.

President Klaus went on to state that there are only three ways to reduce emissions of carbon dioxide: “we either have to stop economic growth and thus block further rise in the standard of living, or stop population growth, or make miracles with the emissions intensity”. He explained that the only realistic option is to stop economic growth and cut living standards, which is why he is so vocal in his opposition to the objectives of the IPCC.

Those New Zealand politicians who have jumped on the global warming bandwagon have been less than honest with us over the implications to this country. They have failed to spell out clearly enough that the main cost of joining up to the Kyoto Protocol (which, in spite of a 22 percent increase in our population, requires greenhouse gas emissions over the next four years to be reduced to 1990 levels) will be a dramatic cut in living standards.

Once the Emissions Trading Bill and the Electricity Amendment Bill are passed into law, a price for carbon dioxide emissions will be imposed on the New Zealand economy which will in effect tax growth and spread the costs across the economy. The lion’s share of that burden will fall on households.

Based on the government’s own predictions of $50 a tonne for carbon dioxide, petrol prices will rise by 12.2 cents a litre, and electricity by 20 percent. Once agriculture is brought into the scheme, farmers will be effectively taxed on the methane produced by their livestock with devastating costs – a 12 percent reduction in the payout for dairy, a 21 percent reduction for beef, a 39 percent reduction for sheep, and a 43 percent reduction for venison. The overall effect of this madness will be a stalling of growth and a decline in living standards.

So will our emissions trading scheme work? The experience of the European Union says not. The scheme has forced carbon-intensive industries to relocate to non-Kyoto countries, it has caused businesses to fail, and others to reduce their hours of operation. It has done nothing to reduce carbon emissions, but a lot to reduce economic growth. And all for nothing – there is no logical scientific reason to reduce greenhouse gas emissions. The only reason is a political one.

As acclaimed journalist George Will wrote in Newsweek last year, if nations go ahead and impose anti-global warming policies, “the damage to global economic growth could cause in this century more preventable death and suffering than was caused in the last century by Hitler, Stalin, Mao and Pol Pot combined.”

In a nutshell, the overwhelming conclusion from the Climate Change Conference in New York is that climate change is caused by natural forces not human activity. It is an unstoppable process and any attempts that are made to try to control it are futile, political and expensive.


Related Political Animal reading

Global Warning: Tax Iceberg Ahead
Kyoto critic comes to town - Sunday Star Times
Carbon Credit trading puts Global markets at exteme risk
Of Tulip Bulbs and Tooth Fairies

Ponder the Maunder - 15 Yr old Kristin Byrne explodes the GW myth

Links c Political Animal 2008



Latest Auckland International Airport developments

There have been further developments today over the Auckland International Airport(AIA) sale to the Canadian Pension Plan Investment Board(CPPIB).

CPPIB have decided to lower their voting rights on a merged board.

I have added my acceptance votes for a merger.

Full NZX release here

Related media on today's developments

Stuff.co.nz
NZ Herald

Herald's Auckland Airport merger coverage to date

The Battle for the Airport

Share Investor merger coverage to date

Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Disclosure: I own AIA shares

Links c Share Investor 2008

Alan Bollard's indecision over OCR a worry to NZ INC

The case for Alan Bollard, New Zealand's Reserve Bank governor, to lower interest rates is strong and the time to do it is clearly now.


His rationale and excuses for raising them over the last few years has been to keep inflation in check but he really is swimming up the creek without even a boat when he has had to contend with out of control government spending and more to come, record oil prices, an exchange rate that is at post float highs and a crises of credit flow and lack of faith in business and the global economy.

He had raised the rate, with one explicit goal in mind and after every rate rise he told us that kiwis really needed to "end their love affair" with real estate. Almost double figure mortgage rates have finally put paid to our love affair and some sellers are finding their divorce from excess rental investments becoming more hateful by the day.

Yes, the housing market is dropping like a cheap hookers knickers but it took more than two years lag for Bollard's aim to take effect.

That is my point. The effect of his rate manipulations, up or down, take time to infiltrate their way through the market. A rate cut one Thursday morning could take more than a year to have a consequence.

The time to cut our interest rates from the current official cash rate of 8.25% is now. A couple of .75 cuts in succession are needed immediately, and then 2 more .50 cuts after that, then smaller ones if needed.

The fact that Alan Bollard is sitting on his hands over this, just shows those who know a little about economics that he really doesn't know what to do. Like a possum in the headlights he is going to move when he has to, that is, when the shite hits the fan.

His upwards movement of the official cash rate has not only affected the housing market negatively it has also put business lending out of reach of many struggling and promising new growth businesses. With high CAPEX costs our economy is simply going to fold up and go somewhere else if the status quo continues.

While Bollard's high cash rate has clearly pushed up our currency against our big trading partners, as Mr and Mrs Uridashi take advantage and invest their Yen here, it has also squeezed margins for our exporters.

While this is a risk that New Zealand exporters need to manage and only a smaller consequence in my opinion, it really shouldn't be happening if the cash rate was managed properly.

In fact, a wise move would be to abandon the official cash rate and keep the machinations of hopeless bureaucrats like Bollard out of things he doesn't understand. Let the market decide its own cash rate, it would be more efficient, more predictable for those it has a direct affect on and allow flexibility and competition for our banking institutions.

Finally, moving the cash rate too low isn't enough to rescue our economy from the current downturn. Japan tried that in the 1990s and it failed miserably. We must also have large personal and business tax cuts. These would have the dual effect of stimulating our economy while also putting the brakes on wasteful government spending, when we most need it.
The headlights are getting closer Mr Bollard, lets hope you move before our economy is run over.


Related Share Investor reading

Time for OCR intervention by Dr Cullen



Related Amazon reading

The Movement of Interest Rates, Bond Yields And Stock Prices in the United States Since 1856

The Movement of Interest Rates, Bond Yields And Stock Prices in the United States Since 1856 by Frederick R. Macaulay
Buy new: $80.00
Usually ships in 24 hours


c Share Investor 2008



Sunday, March 9, 2008

Clark passes the buck on parenting


PHIL DOYLE/Sunday Star Times

It seems it is never too early in election year for the great
leader to be kissing babies.



If the photograph isn't scary enough, the fact that Clark is whispering around the traps that she may extend the pointless maternity leave to 13 months should put the fear of Allah into employers around the country.

It is hard enough for employers at present, given the extra expense laden on them by this welfare scheme.

They are seriously expected to keep a job open for 13 months? There is also talk of it applying after no minimum time at the applicant's job.

Not a good incentive to employ women dear Helen.


c Political Animal 2008

Auckland Electoral Finance Act protest 2008


Bob Clarke, WW2 Hero.


I shook this mans hand, Colonel Bob Clarke, a Veteran of WW2. He had large calloused old hands but it was a reasonably firm shake.

I thanked Bob for his efforts more than 60 years ago, to fight and possibly die for my right to freedom of speech. I was truly humbled in his presence.

He was too frail to march down
Queen Street, but he was there at Britomart to listen to John Boscawen and others fight against the anti democratic and anti free speech Electoral Finance Act.


Part of the 500 strong protest down Auckland's Queen St today in protest
over the anti free speech Electoral Finance Act.



Well, there was a small group of around 500 protesters who silently marched up the main Street of Auckland to protest this act.

I only heard about it myself on Thursday so it was a bit of a push for me to get there myself but myself and my good wife did.

No politicians were invited, but Jackie Blue, a Minister from the National party opposition was there at the front. Big balls Jackie! Shame your leader was too gutless to come down.

The march took about 20 mins to finish and there were speeches at Britomart when the crowd assembled with their placards and tape across their mouths, symbolising the right to free speech that the Electoral Finance act has now taken away.




Your's truly strangely quiet for a change. My
wife loved it!



Once again John Boscawen should be given much thanks for his efforts. He is organising more protests in the coming weeks all around the country.

The next march will be in Winston "Baubles" Peter's former seat, the sunny seaside
village of Tauranga. I will keep you all informed here about times and details.


Related Political Animal reading

Electoral Finance Act March Mar 9, 2008
Electoral Finance Bill Vote
NZ losses democratic freedom
Mike Moore turns the knife
List of MPs who voted for Act
Cartoon and comment
Auckland Protest against EFB
The purpose of the Bill is clear



Images & Content c Political Animal 2008