Shes Gone, only the devil can replace her

Thursday Mar 26, 2009

By Rod Emmerson

With Helen Clark's imminent appointment to 3rd banana at the UN I am reminded of an incident that happened at the UN building a few years ago.

After having a 5 star dinner at the UN Council buildings in New York, UN delegates from unpronouncable countries in Africa and Eastern Europe ate off the best china, used fine linen and shoveled it all down with the finest in silver cutlery.

The only problem was that 10s of thousands of dollars of those utensils were pinched by those same delegates.

Lets not even mention Serbia, Iraq, Darfur and Zimbawe.

Clark will be in the company of like minds and I am being very generous when I say that.

We all know what she has been up to over the last 9 years.

Related Amazon Reading

The UN Gang: A Memoir of Incompetence, Corruption, Espionage, Anti-Semitism and Islamic Extremism at the UN Secretariat by Pedro Sanjuan  Buy used from: $2.44

      

      

Good Intentions Corrupted: The Oil for Food Scandal And the Threat to the U.N. by Paul Volcker  Buy new: $15.95 / Used from: $0.01 Usually ships in 24 hours

c Political Animal 2009

North Shore Council Lawyers pay a Visit

Further to email correspondence from Andrew Williams yesterday it appear that he is wasting yet more council money in asking lawyers to have a look at the article written below (it includes said email) to presumably try and take some action to shut me up.

The Law firm, Burton & Co, don't come cheap so there goes another grand or two of ratepayer money:

New Zealand
mis.burtonco.co.nz (203.97.83.106) [Label IP Address]
darrenrickard.blogspot.com/2009/03/my-correspondance-with-andrew-williams.html
darrenrickard.blogspot.com/2009/03/my-correspondance-with-andrew-williams.html
www.whaleoil.co.nz/?q=content/mad-mayor-jussht-keepsh-digging

Well, it isn't his money so I guess it is OK?

mmm.

Related Amazon Reading

Syndromes of Corruption: Wealth, Power, and Democracy byMichael Johnston  Buy new: $32.39 / Used from: $17.00 Usually ships in 10 to 13 days

c Political Animal 2009

My Correspondence with Andrew Williams

I will give Andrew Williams, the Mayor of the North Shore of Auckland this, he does reply to his correspondence and you cant say that about many politicians.

He really needs some anger management though, as you will see at the end of this post.

I initially emailed him on Monday about a piece I wrote on Political Animal about his shenanigans with ratepayer money, principally his use of NZ$1342 to buy wine for his political allies to popularise his opposition to John Banks and his great idea for one Auckland, one mayor.

My initial email:

-----Original Message-----

From: Darren Rickard

Sent: Monday, 23 March 2009 9:05 p.m.

To: mayor@northshorecity.govt.nz

Subject: Article in Political Animal on Andrew Williams

Dear Mr Andrews,

please see the article below that was published on Monday 23 March. I attach

it as a courtesy to you and hope you take it on board...

Regards,  Darren Rickard.

The Mayor's reply:

date Tue, Mar 24, 2009 at 1:21 AM

subject RE: Article in Political Animal on Andrew Williams

mailed-bynorthshorecity.govt.nz

Hi Darren

Thanks for emailing me this info. Much appreciated. The media love to sensationalise trivia but ignore all the positive work I am doing, and the results of my council.

Regards 

Andrew Williams Mayor Andrew Williams

He thought I was supporting him which would have been bizarre because the content of Monday's Political Animal post wasn't exactly complimentary. It is clear that both the emailer(me) and the writer were the same.

I tried once again with a similar reply.

I then emailed this last night to finally get my point across:

-----Original Message-----

From: Darren Rickard

Sent: Tuesday, 24 March 2009 10:43 p.m.

To: Mayor Andrew Williams

Subject: Re: Article in Political Animal on Andrew Williams

Hi Andrew,

I do NOT support you. Your arrogant, money wasting, rude and sometimes

downright nutty antics as Mayor led me to write this.

Regards, Darren Rickard.

To be sure the content of this email might seem a little strong and my article was even stronger but they are facts as I see them and they are shared my a large majority of people who live on the North Shore of Auckland and the Mayor has been, well , nutty.

Here is Andrew's unedited reply, 

from Mayor Andrew Williams

to Darren Rickard

date Wed, Mar 25, 2009 at 8:51 AM

subject RE: Article in Political Animal on Andrew Williams

mailed-bynorthshorecity.govt.nz

You selfish, selfish, selfish nasty person. How dare you email me in such a mannerwith total ignorance of the facts.

I work long hours day, night and at weekends helping people and groups all over the Shore. Every day people ask me for help with issues and I assist them. And I also have taken leadership with my council to sort out big problems such as PAK n SAVE, Birkenhead Library, TAKAPUNAkiosk, Albany high school, Long Bay Great Park, Whenuapai airport., Chelsea heritage park. And the list goes on.

I have revised budgets and expenditure to reduce rate increases from 8.4% to 5.9%. Efficiencies have been found across council spending.

And yes 15 yr old filthy shabby couches have been replaced. As they should be for important VIP guests to NZ's 4th latgest city. And for 20 years and before that there has been a civic events budget, including wine. This council has had the lowest wine use I am told. We didn't even have wine at our swearing in function.

The bridge at Campbells Bay has been a 10 year community project. To provide safe access across an all too often sizeable tide of water. To provide safe access to the toilets and playground. Council officers have however over engineered it, OSH rules have added cost. We will deliver this community project at lower cost.

So, don't email me with uninformed slaggings. You should be grateful that this Mayor is a hands-on Mayor who gets on with the business, takes a 'can do' attitude, and is leading this city strongly...to get the best outcomes for our city.

What have you ever done for anyone else but yourself?. And what have you done for our city? ANYTHING APART FROM MOAN AND SLAG OFF AT THE MAYOR???

Andrew Wiliams

Mayor

My only conclusion is that Andrew thinks it is OK to waste ratepayers money on expensive bottles of wine for political reasons and that his record rate rise because of his wasteful spending is hunky dory as well.

Interesting the kind of people that we vote to represent ourselves huh?

Related Amazon Reading

The Almanac of Political Corruption, Scandals and Dirty Politics byKim Long  Buy new: $11.90 / Used from: $3.35 Usually ships in 24 hours

c Political Animal 2009

Dead Cats and Vicious Bears

If you are a short termer in the stockmarket of late you would have done well over the last week or so depending on the stock that you purchased.

I am thinking you might want to cut and run soon.

Stocks like Fletcher Building [FBU.NZ] are up more than 20% on recent lows, Mainfreight [MFT.NZ] up by nearly 20%, Sky City Entertainment [SKC.NZ], Goodman Fielder [GFF.NZ], Briscoe Group [BGR.NZ], Hallenstein Glasson [HLG.NZ] and Ryman Healthcare [RYM.NZ] all up over 10%.

The NZX is up nearly 200 points, 43 of them today.

Markets around the world are up dizzying amounts over the last week and a half, the DOW alone leaping around 1000 points off 13 year lows. It gained nearly 500 points today in the third highest ever percentage gain in the indexes history.

Dizzying stats huh?

What does all this upwards activity really mean though?

In my not so humble opinion it means very little at all.

The impetus for all this upwards frenzy is Barack Obama and his manufacturing money supply in the trillions, just over the last few weeks alone to "ease the credit crises". Apparently it is a positive move.

People investing back into the stockmarket now think this is all over so they send the DOW 500 points higher?

Have we all forgotten the reality that the world is in a deep recession?

I believe moves made by Obama over the last few days mean caution flags should be raised in investors minds. His moves will make things worse in the long term.

The market should have gone down.

Once the detail of this is digested, the market will wake up to reality and continue to fall.

It is a sucker Dead Cat rally and it ain't the kind of pussycat one wants to take home.

Disclosure: I own all the shares mentioned in this article.


Recent Share Investor Reading

• Long VS Short: Freightways Ltd
• Briscoe's cash worth looking at
• "Sin" stocks saintly for the Wallet
• Bonds: "Investment Grade" Bonds
• Attractive looking Stock Prices
• Warren Buffett Week

Related Amazon Reading


Bear Market Investing Strategies (Wiley Trading) by Harry D. Schultz
Buy new: $58.93 / Used from: $16.99
Usually ships in 24 hours

c Share Investor 2009

"Crunchy the Clown" Andrew William's drunken joke

"I represent the people of North Shore and the best interests of my citizens". Andrew Williams, North Shore Mayor.

I voted for Andrew Williams, the Loony Mayor of Auckland's North Shore, because he promised to focus on cutting costs to ratepayers and bringing an open an honest way of operating the council.

Not only are we going to get a another massive hike in rates this year but Andrew and his mates have been busy spending millions on buying beach front houses to "make parks", putting in swing bridges in Castor Bay at the bottom of his street at the cost of half a million, spending up large on food and alcohol for himself and councilors and allowing private contractors to increase their bills on Council works projects when quotes were given at a set price.

The latest money wasting exercise is William's use of over $1300 of ratepayer money (see video below) to buy private label wine at 18 bucks a bottle to give to political allies and friends.

The wine is labeled "Stop Banks" and is a reference to John Banks and his advocacy for a "Super City" for Auckland, which Williams is against because he wouldn't stand a shit show of getting anywhere near being elected, because the guy is barking.

William's priorities are wrong, he has broken most of his pre-election policies and this latest scandal should surely mean he falls on his highly paddled arsehole and give the Mayoral chains to someone who has respect for the office of Mayor and the ratepayers who have paid for his grand schemes and this latest little tawdry muck fest.

William's Mayoral term thus far has been mired in controversy, arrogance, paranoid rantings, stupidity and downright nuttiness at times.

I am truly ashamed that I voted for this mad prick. I wish I could take my vote back.

Tell Crunchy what you think of his disrespectful ways at mayor@northshorecity.govt.nz  Dont be nasty just state your opinion forcefully.

More Mad Mayoral Musings

"Crunchy the Clown" article

Breakfast TV pokes fun at Mr Williams

William's goes ballistic at North Shore Events Centre

Andrewwilliamsismad.blogspot.com

Related Amazon Reading

Political Corruption: Concepts and Contexts  Buy new: $35.27 / Used from: $33.22 Usually ships in 24 hour

c Political Animal 2009

Freedom of choice at centre of new Holiday Law

The opposition to a move by National to allow a week of employees holidays to be "sold" to employers is perplexing to say the least. 

It will mean that those employees will now have a choice to sell and or work that week and get in effect double the pay.

Unions and the Labour Party are bleating that this will effect "workers rights" but it is clear that the former setup rather than the new one impinges on those workers rights.

The new law will allow workers more freedom of choice, something the left hates.

It cannot be left to those Unionists within and outside the Labour Party (very hard to tell which is which now that Andrew Little is inside Labour) to tell vulnerable workers what to do, and how long they should take for a holiday. It is nobody else's business but the employees and employers.

Unions and their bully boy tactics are best assigned to the past, where they well and truly belong.

The only problem with the National's plan is that it will only come in April 1 2010 and it will only be for 1 week of the 4 week entitlement.

The whole 4 weeks should be up for negotiation.

Related Amazon Reading

Mobsters, Unions, and Feds: The Mafia and the American Labor Movement by James Jacobs  Buy new: $20.00 / Used from: $13.26 Usually ships in 24 hours

c Political Animal 2009

 

Bashing Obama for joke retarded

I'm not the worlds greatest Barack Obama supporter, in fact I think he is an evil greedy little socialist control freak, but be that as it may he certainly doesn't deserve the borax thrown at him by his own sensitive PC freak supporters for having a joke at his expense.

In an appearance Thursday night on "The Tonight Show With Jay Leno," President Barack Obama made a joke about his lackluster bowling skills by saying: "It was like Special Olympics or something." Kanzas City.com

But the comment caused an immediate stir in Washington and around the nation.

For Christ sake he is a well know supporter of the special Olympics and for people from all political sides to critique him for this is nothing short of brain dead moronity.

When is saying what is on your mind some sort of crime! do we want the prominent people to sanitise what they say and not say what they really mean?

Hell no!

With politicians we get enough of the flim flam, bullshit and political speak, this is the first time Obama has looked human in his political life!

No well written empty of content speeches to hide his true self and agenda.

Give him a break and let him become the man he really is.

Related Amazon Reading

The Audacity of Hope: Thoughts on R the American Dream byBarack Obama  Buy new: $13.59 / Used from: $10.50 Usually ships in 24 hours

c Political Animal 2009

Leftist Economic shell games: A letter to the Editor

The Rant:

The following is from the Mesquite Local News in Nevada, in the letters to the editor page and written by one Richard N. Suter an 80 year old plus retired pilot.

It is well worth a read because it explains the blame for the current global financial mess so well and so fully.

Politicians mostly from the left in American caused this and Wall Street naturally climbed on board.

He rightly fears for his America in the hands of the insane socialists now in power and one wonders how we might expect things to get better because they are now doing what was done to get us in this mess in the first place but to the power of 10.

What is different to Bernie Madoff's shell game and Obamas?

Obama's is much bigger and the mess will be felt for generations.

The Letter:

Defending The Rich

(Letter to the Editor) 03-20-2009

I very much enjoy the Mesquite Local News.

But I have to question your tirade against the rich.

Sam Walton took an idea and built a phenomenal empire.

Bill Gates did the same.

Prior to my retirement in this lovely town, I worked as a corporate pilot for twenty five years.

I rubbed elbows with Warren Buffett in the hangar in Omaha as he deplaned, carried his own bags to a several year old Lincoln and drove to a fairly modest home.

I flew Tom Watson (IBM blue) to Eagle, Colorado.

These folks, and the multi-millionaire that employed me provided quite a few jobs, sir.

I also have carried Senator John McCain, Senator Chuck Hagle and others I can't remember as my personal responsibility.

As a retired USAF fighter pilot, I respect Senator McCain's service.

Several squadron mates and friends were privileged to serve with him in those "difficult times."

But in the course of this discussion, neither of them, nor many others in government have created a real job.

Sure, they have guaranteed pay raises, the very best health care, a short work week/month/year, and very seldom retire in poverty.

Now, if I were to pick on a gang to pillory, I would look to Foggy Bottom.

Let's start with Jimmy "Malaise" Carter, signatory to the CR(a)P, (may have mis-spelled that; could have been the CAP), lowering lending standards, coercing risky loans.

Who aided and abetted this foolishness?

Why, non other than B.J. Clinton.

Fast forward to Barney Frank, who assured us less knowledgeable that Fannie and Freddie were in great shape.

And then came the Mad Marxist with his litany of change.

And Biden.

And Pelosi.

This is the best we can do?

Well, change we got.

Hubris, banality, venality, mendacity and plain damn lies.

Almost daily I see the 21st century version of Joseph Goebbels stuttering, er, and, ah, but, stumbling his way through a "press conference."

Now I have my version of penalties for the gang.

You are far too cruel.

Bernie Madoff is going to reside in a 7.5x 8 foot Manhattan government subsidized condominium.

Please take my share of the "bailout" money, construct about 150 more of these, provide free orange jumpsuits for the criminal class in Congress, and I will die a happy old man, devoid of most of my investments, 30 or 40 percent of the value of the home I will pay for every month, and the extra money me and the missus have after groceries, gas, health care and gambling.

On second thought, let's get out the guillotine.

I am sick to death of these pissants.

My very best wishes that you may become wealthy in your endeavors.

I can only be glad, that now well into my 80th decade, I will not be around to see this great country fail.

-Richard N. Suter

Mesquite, Nevada

Related Amazon Reading

"The program for better jobs and income": welfare reform, liberalism, and the failed presidency of Jimmy Carter.: An article from: International Social Science Review by Jeff Bloodworth
Buy new: $9.95
Available for download now

Economic Policy in the Carter Administration: (Contributions in Economics and Economic History) by Anthony S. Campagna
Buy used from: $74.90

Kindle 2: Amazon's New Wireless Reading Device (Latest Generation)

c Political Animal 2009

Long VS Short: Freightways Ltd

In this sixth installment of the Long vs Short series I am once again going to take look at the chart comparisons for a stock from the Share Investor Portfolio and compare the 10 year return (above chart) to the turmoil of the last year with a 1 year return chart (large chart at bottom of post).

In this series I want to show the merits of investing, using charts, for the long-term vs short term gains or losses. I will use the longest available data to me for the long-term view (10 years )and will make a comparison against the NZX50.

In this segment of Long vs Short I will take a look at Freightways Ltd [FRE.NZ]

I currently hold 8200 Freightway's shares after buying them in July 2006 (see small chart below for detail)

The company has been a good performer over its history and has lifted profit slightly over the last year.

Symbol	Price	Value	Earned
FRE.NZ	$2.85	$23370	$164
You own 8200 [FRE.NZ] shares purchased at $2.83 [$23206]

In my 3 years of owning this share my return has been a meagre NZ$164. (see small chart on left)This includes dividends and tax credits. Still I have to say this isn't bad considering the market rorting we have been having.

If I had bought this share just a year ago (see large chart at bottom) my return would have been minus 30%, proving once again short term investing can be very volatile.

Now for the real point of this comparison lets look at the

return for Freightway's shareholders who have held the stock for 10 years. (see large chart above)

From a high of a 570% return in 2007 a 10 year return is still around 220%.

I am looking for a long term loser after six installments of long VS short but Freightways ain't one of them.




Freightways @ Share Investor

Freightway's keeps delivering
Why did you but that stock: Freightways Ltd
Freightway's delivers
Freightway's packages up a good result

Long vs Short Series

Pumpkin Patch Ltd
Fisher & Paykel Healthcare
Mainfreight Ltd
The Warehouse Group
Sky City Entertainment

Related Reading

Freightways Financial Data

• Summary
• Charts
• Dividends
• News
• Announcements
• Price History
• Related Securities

Related Amazon Reading


The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy by Robert G. Hagstrom
Buy new: $13.57 / Used from: $5.97
Usually ships in 24 hours


c Share Investor 2009

Jon Stewart VS Jim Cramer: Full Interview Video & Commentary

The following is the full (unedited) interview of Jim Cramer by Jon Stewart on his Daily Show originally broadcast on 12 March 2009.

It is in three parts, part one is below, then part two & part three.

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

If you have been following the stoush between CNBC's Jim Cramer and Comedy Central's Jon Stewart you will know it culminated in a rather bizarre interrogation of Cramer by Stewart on his Daily Show last week.

Stewart really gave it to him with both barrels.

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 2

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Jon is a loony lefty but the interview is a cracker nonetheless.

The argument that Stewart put was basically that CNBC and business channels like it have been easy on the financial sector, don't ask the hard questions and do so because it is in the broadcaster's best interest to soft peddle their guests because it means more advertising from the likes of the very people that they are cosy with.

This has of course been exacerbated by the financial calamity we have had over the last few years and the fact that Jim Cramer and his ilk never asked the hard questions over the various banking collapses and financial skulduggery that has enveloped American business of late. Even when interviewees have knowingly lied to him he never thought to question them over their untruths.

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Stewart also asked whether channels like CNBC were more a self interested group for business leaders to get their point across rather than there to inform the basic Joe on the street that they really should be there to inform the public, making a point that if CNBC were such financial experts then why didn't they inform the public of an impending financial collapse rather than continue to just spruik listed company managers and their companies to an unsuspecting sucker public.

Stewart put these questions to Cramer but was unable to get any more out of him than, "I will try harder..."

Watch the interview, it is priceless.

In New Zealand rather than ignorance our financial media suffer from incompetence, I'm not sure which is worse.


Recent Share Investor Reading

• Briscoe's cash worth looking at
• "Sin" stocks saintly for the Wallet
• Bonds: "Investment Grade" Bonds
• Attractive looking Stock Prices
• Warren Buffett Week
• Warehouse 2009 Interim Profit a key economic indicator

Related Amazon Viewing

60 Minutes - Jon Stewart (October 24, 2004) Buy new: $17.95 / Used from: $39.32 Usually ships in 24 hours

c Share Investor 2009

Briscoe's cash worth looking at

Rod Duke, majority owner of the Briscoe Group [BGR.NZ] is a stingy bastard. He would make Scrooge McDuck look like the free spending Donald Trump.

This is meant to be a compliment.

I knew Duke and his company was sitting on a pile of cash, around NZ$ 40 million, with NO DEBT, but it turns out that over the last year this pile has increased to some $63 million, up from the previous years $49 million.

We know he has been busy with his own money building up a stake in kids clothing retailer Pumpkin Patch Ltd [PPL.NZ] but Briscoe's penny pinching ways over the last year have worked a treat:

"We've been very frugal. It's been very fruitful our efforts to save and minimise costs," Briscoe managing director and majority shareholder Rod Duke said.

He said there had been no consideration given to paying out some of the extra money as a special dividend.

He has also hinted at acquisitions:

There might also be acquisition opportunities. "That hasn't passed me by either. It would have to be pretty good to coax some money out of me right now, but look... when things look as though they are going to be good, Rod's going to be there with a pocketful of money.

May I suggest Pumpkin Patch or Postie Plus? [PPG.NZ]

Full Year Profit to 25 Jan 2009 was down 48% in a depressed retail market.

Meanwhile back to that cash.

Briscoe's $63 million cash hoard means there is almost 30c for every share and at today's closing of 62c that makes Briscoe one of the better companies on the NZX in terms of financial robustness.

I am seriously looking at adding more and kicking myself for not noticing this earlier.

Related Share Investor Reading

Why did you buy that stock? [Briscoe Group]

Recent Share Investor Reading

• "Sin" stocks saintly for the Wallet
• Bonds: "Investment Grade" Bonds
• Attractive looking Stock Prices
• Warren Buffett Week
• Warehouse 2009 Interim Profit a key economic indic...
• What is a Depression?

Recommended Amazon Reading

Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions) by Benjamin Graham Buy new: $41.51 / Used from: $29.98 Usually ships in 24 hours

c Share Investor 2009

"Sin" stocks saintly for the Wallet

My largest holding, Sky City Entertainment [SKC.NZ] is doing well at the moment.

For the six months ending 31 December 2008 profit was tracking last years' half and I have been telling anyone who would listen at every opportunity that it is a good buy at current share price levels .

With the interim report out today comes the news that gaming revenue at Auckland Casino is up by 4% while Adelaide and Darwin are up by around 14%.

Great news considering the economic downturn.

Lion Nathan [LNN.NZ] the Australasian brewer, majority owned by Japan's Kirin is keeping its head above the foam well with drinkers of their product reaching for a cold one more often and when they do its one of those fancy "premium" beers that poofters and women drink-it works for them though.

Profit was up 4% for the 2008 full ear.

Unfortunately Lion Nathan's share price reflects their strong position in the current economy and is near its highs.

Another stock that has done well share price wise during this current downturn is Restaurant Brands [RBD.NZ] Believe it or not its stock has gone up over the overall market downturn-its big drop ironically came before the recession.

The operator of Pizza Hut, KFC and Starbucks in New Zealand has been selling its product better than it does normally-a temporary thing methinks-because of the recession so says its usually media shy CEO. Diners are apparently "trading down", every chicken has its day I guess.

These are the only 3 "sin" stocks listed on the NZX (Restaurant Brands is considered one by the food Nazis so I respectfully put it there) and they will do well in any downturn.

People like to gamble, drink, smoke, have sex and eat "junk" food and they especially like to do these things during a recession.

If you are reading this from another market consider tobacco, oil and sex related stocks if you have them listed on your local bourse.

They well might give you a lift.

Recent Share Investor Reading

• Bonds: "Investment Grade" Bonds
• Attractive looking Stock Prices
• Warren Buffett Week
• Warehouse 2009 Interim Profit a key economic indic...
• What is a Depression?

Related Amazon Reading


Stocking Up on Sin: How to Crush the Market with Vice-Based Investing by Caroline Waxler
Buy new: $21.24 / Used from: $4.20
Usually ships in 24 hours

c Share Investor 2009

Matt McCarten tells a Whopper

We all know the left of the political sphere will do just about anything at all to make a point and Matt McCarten in the Sunday Herald is no exception:

"Warren Buffett...has claimed that capitalism as we know it is over". NZ Herald 15 March 2009

Those of us that know a little about Warren Buffett, and I know a reasonable amount about the great investor, will know that he said nothing of the sort.

In Buffett's 2008 Letter to Berkshire Hathaway Shareholders out two weeks ago he actually endorsed the American capitalist system more strongly than he ever has: 

"America has had no shortage of challenges.

Without fail, however, we’ve overcome them. In the face of those obstacles – and many others – the real standard of living for Americans improved nearly seven-fold during the 1900s, while the Dow Jones Industrials rose from 66 to 11,497. Compare the record of this period with the dozens of centuries during which humans secured only tiny gains, if any, in how they lived. Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so. America’s best days lie ahead". Page 2, 2008 Berkshire Hathaway Letter.

Buffett is talking about capitalism here, no doubt about it and while acknowledging its drawbacks he also re-enforces his faith that it will bring us out of the mainly Government induced economic mess we now find ourselves in.

What McCarten has said is at best stretching the truth to breaking point and at worst an outright lie.

I lean towards the latter in describing what McCarten has written.

He uses the rest of the article to rant about his usual socialist ideals of Government control and state interference. The rest is misfired commentary on things he knows little about; economics, business, finance and probably life in general.

Steer clear.

Related Links

Everything Warren Buffett

Related Amazon Reading

The Essays of Warren Buffett: Lessons for Corporate America, Second Edition by Warren E. Buffett
Buy new: $23.40 / Used from: $21.61
Usually ships in 24 hours

c Political Animal 2009

Bonds: "Investment Grade" Bonds

Contact Energy's [CEN.NZ] NZ$550 million retail bond issue-with the scope to accept "unlimited subscriptions- is being issued principally to pay off existing debt on company books but to also use for day to day business and capital investment.

It already has very high debt levels.

The company is finding it hard to borrow money elsewhere so is going to kiwi mum and dads with their hands out.

In that respect they are not alone. Fontera, NZ Post, Auckland International Airport [AIA.NZ] and others have or will offer bonds to the public to bolster ailing balance sheets.

The only problem is that interest rates being offered do not always reflect the risk investors will be taking.

While Contact Energy is a stable near monopoly and isn't about to go bust any time soon it faces some uncertainty in regards to regulation, raw power production, customer demand and clearly their ability to fund even higher debt levels will be hampered.

Their unsecured, unsubordinated bonds, which will be issued for a term of five years have been assigned a credit rating of BBB by Standard & Poor's and that is in the lower to medium level in the S & P investment grade rankings.

While 8% is a great rate in these low return economic times, that interest rate simply doesn't reflect the risk being taken by investors.

Investors interested in taking a punt on Contact Energy would be best to buy shares in the company rather than these unsecured bonds. They are at attractive prices and make a good investment in uncertain times.

Contact Energy shares were up 7c today to $5.67 on positive wider market sentiment.

Recent Share Investor Reading

• Attractive looking Stock Prices
• Warren Buffett Week
• Warehouse 2009 Interim Profit a key economic indicator
• What is a Depression?
• Mainfreight vs KiwiRail: The sequel
• Reporting Season Wrap for Share Investor Portfolio

Related Links

Contact Financials

• Summary
• Charts
• Dividends
• News
• Announcements
• Price History
• Related Securities

Related Amazon Reading



Managing Credit Risk in Corporate Bond Portfolios: A Practitioner's Guide by Srichander Ramaswamy
Buy new: $56.67 / Used from: $44.74
Usually ships in 24 hours


c Share Investor 2009