Banker warns of financial bubble risks

Since recovering from the Global Financial Crisis in 2008 and the impact of the Christchurch earthquakes the economy has been humming along nicely in New Zealand for the last couple of years, allowing for political promises of increased spending. Some caution may be prudent.

However the world economic risks have risen – President Donald Trump claims to have lifted the US stock market and business confidence, but a world banker claims there is a bubble that is at risk of bursting.

NZH – Breaking point: World financial system as stretched as before 2008 crash, says banker

The world financial system is as dangerously stretched today as it was at the peak of the last bubble but this time the authorities are caught in a “policy trap” with few defences left, a veteran central banker has warned.

Nine years of emergency money has had a string of perverse effects and lured emerging markets into debt dependency, without addressing the structural causes of the global disorder.

“All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten,” said William White, the Swiss-based head of the OECD’s review board and ex-chief economist for the Bank for International Settlements.

Prof White said disturbing evidence of credit degradation is emerging almost daily.

Prof White said there was an intoxicating optimism at the top of every unstable boom when people convince themselves that risk is fading, but that is when the worst mistakes are made. Stress indicators were equally depres-sed in 2007 just before the storm broke.

This time central banks are holding a particularly ferocious tiger by the tail. Global debt ratios have surged by a further 51 percentage points of GDP since the Lehman crisis, reaching a record 327 per cent (IIF data).

“Central banks have been pouring more fuel on the fire,” he told The Daily Telegraph, speaking before the World Economic Forum in Davos.

The US Federal Reserve is already reversing bond purchases – ignoring warnings by former Fed chair Ben Bernanke – and will ratchet up the pace to US$50b a month this year. It will lead to a surge in supply of US Treasury bonds just as the Trump Administration’s tax and spending blitz pushes the US budget deficit toward US$1 trillion, and China and Japan trim Treasury holdings.

It has the makings of a perfect storm. At best, the implication is that yields on 10-year Treasuries – the world’s benchmark price of money – will spike enough to send tremors through credit markets.

The world economy is always at risk of catastrophe. There are always people predicting imminent financial collapse.

The edifice of inflated equity and asset markets is built on the premise that interest rates will remain pinned to the floor. The latest stability report by the US Treasury’s Office of Financial Research warned that a 100 basis point rate rise would slash US$1.2 trillion of value from the Barclays US Aggregate Bond Index, with further losses once junk bonds, fixed-rate mortgages, and derivatives are included.

The global fall-out could be violent.

If that happens it will impact on New Zealand. If interest rates rise or property prices fall it will create difficulties many property owners. If interest rates rise and property prices fall the damage will be greater.

While higher inflation is needed in one sense to right the global ship – since it lifts nominal GDP faster, and whittles down debt – the danger is that the shock of higher rates will hit first.

Central banks are now caught in a “debt trap”. They cannot hold rates near zero as inflation pressures build, but they cannot easily raise rates either because it risks blowing up the system. “It is frankly scary,” said Prof White.

The authorities may not yet have reached the end of the road but this strategy is clearly pregnant with danger. Global finance has become so sensitive to monetary policy that central banks risk triggering a downturn long before they have built up the safety buffer of 400 to 500 basis points in interest rate cuts needed to fight recessions.

“We are running out of ammunition. I am afraid that at some point this is going to be resolved with a lot of debt defaults. And what did we do with the demographic dividend? We wasted it,” he said.

Financial hiccups are inevitable, it’s just a matter of when and how drastic.

The New Zealand Government has committed to ‘fiscal responsibility’ – it may be wise for them to stick to that aim.

NZ night lights

NASA has released composite images of the world as lit up at night. Here is New Zealand:


And the rest of the world (with us omitted):


Our lights would hardly show up on that scale.

No wonder at Arctic is melting with all that energy being burned in the northern hemisphere.

NASA: Earth at night

Temperature record for third straight year

Reports keep coming out of record world temperatures.

NY Times: Earth Sets a Temperature Record for the Third Straight Year

Marking another milestone for a changing planet, scientists reported on Wednesday that the Earth reached its highest temperature on record in 2016 — trouncing a record set only a year earlier, which beat one set in 2014. It is the first time in the modern era of global warming data that temperatures have blown past the previous record three years in a row.

The Earth is heating up, a point long beyond serious scientific dispute, but one becoming more evident as the records keep falling. Temperatures are heading toward levels that many experts believe will pose a profound threat to both the natural world and to human civilization.

In 2015 and 2016, the planetary warming was intensified by the weather pattern known as El Niño, in which the Pacific Ocean released a huge burst of energy and water vapor into the atmosphere.

But the bigger factor in setting the records was the long-term trend of rising temperature, which scientists say is being driven by increasing levels of carbon dioxide and other greenhouse gases.

“A single warm year is something of a curiosity,” said Deke Arndt, chief of global climate monitoring for the National Oceanic and Atmospheric Administration. “It’s really the trend, and the fact that we’re punching at the ceiling every year now, that is the real indicator that we’re undergoing big changes.”

I doubt that every year will set a new record, but the trend is upwards.

Scientists expect that the early months of 2017 will continue to show levels of warming beyond the norm, but likely not at the level of 2016 because a strong El Niño weather pattern is now subsiding.


Are there any other scientific temperature records that show anything different?

End of world this October

We don’t have time ot worry about climate change, Donald Trump or Muslim terrorists, according to a David Meade the world will end this October – the world being Earth, smashed by Planet Nibiru. Apparently as indicated in the Bible.

NZ Herald: Conspiracy theorist claims mysterious planet Nibiru will smash into Earth and the world will end in October 2017

David Meade, author of the book Planet X – The 2017 Arrival, believes a star, which he calls ‘”a binary twin of our sun”, is coming “at us towards the south pole”, Daily Mail reports.

He says the star will bring with it “seven orbiting bodies”, including Nibiru, a large, blue planet that he also refers to as Planet X hurtling towards our planet.

David Meade believes the planet is set to hit into our planet in October this year, after being driven here by the gravitational pull from a ‘binary star’ twinned with the sun – of which there is no evidence.

He says the star is difficult to spot because of the angle it is approaching Earth.

“This system is, of course, not aligned with our solar system’s ecliptic, but is coming to us from an oblique angle and toward our South Pole.

“This makes observations difficult, unless you’re flying at a high altitude over South America with an excellent camera.”

Tuis can fly at oblique angles too, but perhaps not high enough to spot planets and suns coming our way.

In his book, he claims to put forward scientific evidence, but readers commenting on the book say the argument quickly develops into a religious argument.

One reviewer says: “on his website he focus on facts and science, astronomical ‘evidence’ to lure some readers into his material, but after a dozen pages it starts to get all religious for almost 40 pages, more than a 1/3 of the book, mentioning visions and dreams.”

He continues, the “author mentions several times how certain things are ‘facts’ just because “God said so on the Bible”, and then goes on and on over the rapture.”

Another truth teller?

Nibiru was widely predicted to hit our planet in December 2015, and before that in September.

It was also predicted to smash into our planet to coincide with the Mayan apocalypse that did not occur in 2012.

Even before that it was predicted Nibiru would destroy the world in 2003.

Maybe it was even harder to spot in 2003, 2012 and 2015.


“Nibiru and other stories about wayward planets are an internet hoax,” Nasa has said.

‘Obviously, it does not exist.”

Who can trust what NASA says, what with climate change and moon landings and stuff like that?

‘Most important problems’

Roy Morgan have polled on what people think are the most important problems.

“Firstly, what do you think is the most important problem facing the World today?


  • Wars & Conflicts/ Unrest 14% (up from 7)
  • Terrorism 9% (down from 16)
  • Refugee/ Migrant Crisis 3% (no change)
  • Religion/ Religious Conflict 2% (no change)

What do you think is the most important problem facing New Zealand today?”


Not surprising to see housing jump over economic issues.

  • Poverty/inequality is near it’s lowest over last year and this year on 16%.
  • Immigration/ Refugees is barely changed over the last year, on 4% .
  • Climate Change/ Global Warming 1%
  • Environmental Pollution/ Water Pollution
  • Homeless/ Homelessness/ Housing shortage 10% (3% until July 2016)

These findings come from a special New Zealand Roy Morgan survey conducted with New Zealanders aged 14+ asked what are the most important issues facing New Zealand and the World today.

In New Zealand, a cross-section of 1,001 men and women aged 14 or over were interviewed by telephone in October 2016. The research conducted was both qualitative (in that people were asked to use their own words) and quantitative (in that the ‘open-ended’ responses were analysed and ‘coded’ so that the results could be counted and reported as percentages).

World University Rankings

NZ Herald reports on the latest QS World University Rankings in New Zealand universities confirmed as world-class.

The QS (Quacquarelli Symonds) rankings assess universities across four areas: research, resourcing, graduate employability and internationalisation.

The QS Rankings considers 3800 institutions worldwide and ranks the top 916.

  • University of Auckland 81
  • University of Otago 169 (up 4)
  • Canterbury University 214
  • Victoria University 228
  • Waikato University 324 (up 77)
  • Lincoln University 343 (up 68)
  • Auckland University of Technology 450 (up 60)

Chris Whelan, the executive director of Universities New Zealand, said the rankings are an extraordinary result and “something that New Zealanders should be proud of”.

“We are the only country in the world to have all our universities ranked within the top 500. If you are a young New Zealander thinking about where to do a degree, you can be confident of getting a world-class education at any of our universities.”

Whelan said an increased focus on funding high quality research contributed to the success of New Zealand rankings.

New Zealand “the last resort” in a hell-hole of a world

Winston Peters appears to be making things up to try and score political hits, again. This time he is making unsubstantiated claims about the motives of New Zealanders returning from Australia.

peters also describes New Zealand as the last resort in a hell hole of a world.

Mr Grumpy has a dark view of things here and everywhere. It’s sad to see him running our country down so much in order to apparently pander to the ‘pox on them all’ pessimists.

In Kiwis second-class in Australia – Peters at Newshub Peters attacks Australia for the way it treats New Zealanders living there.

“Over there, New Zealanders can’t access ACC, health, welfare and other benefits,” he said.

“They have less rights than immigrants to Australia from Iraq, the UK, Bangladesh, Europe or Indonesia and all other countries as a result of the 2001 arrangement when Australia put its foot down on immigrants using New Zealand as a back door to Australia.”

That’s valid criticism. But he cites this as the reason why “most Kiwis are coming home”:

The NZ First leader says most of the Kiwis coming home are returning because they’re being treated as second-class citizens in Australia.

That sounds like made up bull. I don’t expect that Peters can substantiate that – he probably won’t try. He has a long record of making up claims.

My guess is that most Kiwis who leave Australia do so because of the economic downturn in Australia and the lack of available jobs. In the main it was jobs that attracted them to Australia as a place to live in the first place.

Mr Peters thinks it’s more to do with the way they’re treated by Australian governments, and he doesn’t believe those who come here from other countries are expressing a vote of confidence in New Zealand, as Mr Key has said.

More bollocks. To many people New Zealand is a very attractive part of the world to live in. That’s one reason why we have strong immigration numbers, something Peters is critical of.

“Wrong. Much of the world is a hell hole from which many are trying to escape,” he said.

“We are the last choice for many after first being rejected by the UK, Canada and Australia, and the US – New Zealand is the last resort.”

It’s sad to see a prominent Member of the New Zealand Parliament describing New Zealand as the last resort in a hell-hole of a world.

See the real reasons for the movement of Kiwis to and from Australia: Aus effect on NZ immigration numbers

Different perspectives

If aliens arrived at Earth how would they see us? It depends on what direction they come from and orientation they have.

This photo taken from Apollo 17 shows Antarctic at the top.


Original file

While world maps have a commonly have north up and south down they can be drawn any way you like.


Via from Buzzfeed (with more interesting maps)

How some New Zealanders think some other New Zealanders see New Zealand:


How some other New Zealanders think some other New Zealanders see New Zealand:


New Zealand could just as easily be seen like this:


I try to see New Zealand from different perspectives and encourage others to do likewise, that’s one of the aims of Your NZ.

What’s north? What’s south? What’s right? What’s left? It depends on where you’re looking from.



Two T20 triumphs

Both New Zealand teams won their final World t20 pool matches overnight and both have topped their pools in impressive style.

The New Zealand women’s team restricted South Africa to 99. Devine and Kasperek each took 3 wickets.

They then easily reached 100 in 14 and a half overs with the loss of only 3 wickets. Bates (29), Priest (28) and Devine (27 not out) all contributed.

Their semi final opponent won’t be decided until other pool matches are played.

And the Black Caps outplayed Bangladesh to complete a clean sweep of their pool. They batted well on a slow pitch to reach 145 for the loss of 8, with Williamson top scoring with 42. Munro also adapted to the conditions well to score 35.

They then restricted Bangladesh to a record low score of 70. Elliot and Sodhi each took three wickets.

England have just beaten Sri Lanki in the other men’s pool to secure second slot so will be the Black Cap’s opponent in the semi finals. South Africa have missed the cut with a game yet to play.

West Indies won Group 1. They will play the winner of India versus Australia.


T20: first India, now Australia

Any thoughts that the Black Caps might struggle after Brendan McCullum’s retirement have been dispelled (for the meantime) after their second win at the World T20 tournament in India.

Batsmen have struggled for runs but both times the Black cap bowlers have prevented their opposition from overtaking modest targets. This time Mtchell McClenaghan helped the spinners, getting 3 wickets for 17.

  • New Zealand: 142 for 8
  • Australia: 134 for 9

Two from two with Pakistan and Bangladesh to go in pool play, a perfect and smart start.

The top two teams from each pool progress to the semifinals.

In the other overnight game England chased down a massive South African total of 229 for 4.

Cricinfo scoreboard