Hard News: Make you crazy like datura
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Can't they just get on with it and die?
Well, it would save us from Winston Peters.
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waking to this was a wee bit of a shock.
Sorry, might have warned you ... I just found the posts interesting, and I didn't want to lead with a rant about the Herald.
Without going into detail, Damian told me a fall-from-grace P story last night that just staggered me.
Mekong Nuea was one of the little places I meant...god I miss the raw prawns, so much so that we've been trying to replicate them.
Oh god, can't resist it ... don't come the raw prawn with me, mate.
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You want a recipe for raw prawns?
Not really raw but cooked in the lemon juice they've been sitting in. And smothered in chopped chilli and....well...
But we've managed to approximate, so all is well
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Simon, I'm also my worst critic. I didn't make it clear that I got that you were saying "Auckland and NZ is actually mostly cool, the residents just don't seem to appreciate it".
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Oh god, can't resist it
I could. But it was tempting.
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Without going into detail, Damian told me a fall-from-grace P story last night that just staggered me.
Yeah, I heard a pretty bad shocker a few weeks ago. My excuse for opting out is that I never mix uppers and downers. It's actually bloody annoying that I even need an excuse, but P-heads looove company.
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3410,
I find it hard to see banks as villains. I would not have a property if it was not for them.
Nonsense. That only applies if borrowing is unavailable to you, but available to everyone else. Without banks housing price inflation would not have been artificially stoked by those who have the most to gain. The banks decide how much they will lend and, in a market of limited supply, that determines the cost of housing.
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Simon, I'm also my worst critic. I didn't make it clear that I got that you were saying "Auckland and NZ is actually mostly cool, the residents just don't seem to appreciate it".
And I didn't make that clear either but anyone who knows me knows how I feel about my hometown.
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Nonsense. That only applies if borrowing is unavailable to you, but available to everyone else.
No, it applies if you are trying to buy something really expensive, and can't afford it any other way.
I agree that lending is inflationary, and easy lending is particularly inflationary. It can't be any other way. But I don't think that makes it villainous. Every loan that every bank has ever given on a property has enabled someone to own a property. It was a 2-way deal. Only in the cases where the borrower clearly can't afford it could it be considered usurious. And in NZ in those cases it is almost always the case that the banks also lose. If they are villains, they are incredibly foolish ones.
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A S,
Nonsense. That only applies if borrowing is unavailable to you, but available to everyone else. Without banks housing price inflation would not have been artificially stoked by those who have the most to gain. The banks decide how much they will lend and, in a market of limited supply, that determines the cost of housing.
And there I was thinking that laws of supply and demand generally had a greater impact on price... Just because the banks offer something, doesn't mean people have to take it.
When we bought last year, the banks were falling over themselves to lend money. In fact we could have bought a bigger plance in one of the better 'burbs (or even commissioned a ghastly McMansion with all the mod cons), but actually engaged our brains and thought about the quality of life we wanted and then opted for a much cheaper place in a much less desirable suburb (with payments that were realistic).
At the end of the day, if you can't afford something, and you buy it anyway, then you really don't have much of a leg to stand on if things go pear shaped. Caveat emptor and all that...
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... But like a lot of ex-pat comments it seems to betray a rose-tinted view of where they are, and a sort of cultural cringe towards their homeland that leads them to complain about it isn't, rather than loving what it is.
That's an interesting observation. I certainly had a rose-tinted view of Sydney for a long time and there's much to like about Sydney but I miss NZ intensely. I particularly miss being in NZ when significant events occur; like when Sir Ed died or when Cambo won the US Open (no equivalence intended, just events that occurred to me). I miss feijoa juice and Pohutukawa trees. I miss Maori and Polynesian faces and sounds. I lament the lack of good coffee. I suffer no cultural cringe, quite the opposite. I think NZ has a great deal to be rightly proud of and get well and truly pissed off when NZ is talked down. I work in government and, in my experience at least, NZ government is superior to Australian government. It is leaner and more focused. I'll not say anything about race relations today because I believe Australia is now on a track to make real progress.
I spent three or four weeks in Auckland over December/January, I had a great time revisiting old haunts and discovering some new places - my 2 and a half year old loved Muriwai beach, loved being able to paddle in Kohimarama and loved being able to play with a hose (can't do that in Sydney). My only gripe is the serious lack of good playgrounds.
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The editorial rages that such absence "makes it plain that the Government does not possess the courage to tackle the tax distortions which, more than anything, have created the affordability problem. Instead, it has gone for easier options."
Sigh. By all means tax 2nd home owners if it makes folks feel better and raises revenues for schools and hospitals. But as a means of resolving the so called "housing crisis" I this is a complete red herring.
Still, if the Herald is now campaigning for *more* taxation, all power to them. Talk about swallowing rats.
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Caveat emptor and all that...
"There Ain't No Such Thing As A Free Lunch" is worth keeping in mind to. But I guess teenagers aren't the only folks who have a charming, but utterly misguided, delusion that bad shit only happens to other people. How do you get through that kind of magical thinking? Optimism and self-confidence are wonderful qualities; but like most virtues, they shade into vices remarkably easily.
And sorry for being a Negative Nettie, but I've got to wonder what the long-term economic and social effects are of a debut culture rather than one where 'thrift' (to get really retro) is not only valued but encouraged.
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"In fact, I can't see any villians in housing affordability."
Really? I would have said that lax enforcement of our vague tax laws has created the conditions that blew more air into a speculative bubble.
But judging by today's news, that bubble's already deflating.
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This summer I had a nostalgia inversion. I wandered around Herne Bay, where I lived for about 15 years, and realized it had actually got a lot better. Not that it was bad in the first place. One of my favorite childhood playgrounds was Wallace St beach. Now known (ironically to me) as Home Bay, I remember it clearly as a kid, wandering on the mud flats covered in broken bottles, and assorted junk, all alone. But last week when I went down there I was pleasantly surprised to find it transformed. The junk is all gone, a pleasant seating area has been built, the path down to it is no longer a broken neck waiting to happen, the pohutakawas have doubled in size, and there's a lot more sand. And most importantly I counted 80 people using it, sitting around in the sun, swimming, picnicking etc. All ages and demographics mingled unselfconsciously. I caught up with an old friend I hadn't seen for over a decade, while my son played with his grandparents and experimented with standing up. Life seemed good that day, a strange mix of past and future. You'd have missed that scene if you were touring the CBD wondering where all the culture was.
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Re: banks and such.
Easier loans (amongst other thing) drive house prices up. Higher house prices result in more borrowing, fairly logical given the easier loans.
More borrowing, even say an extra $20k on a 15 year mortgage, at current rates adds about $60k to total repayments (the extra being in effect the last part you pay off, few people realise how much a little more mortgage ultimately costs them, on a 25 year mortgage it's $135k extra).
This rise in house prices causes people to borrow more still, thinking they'll pay their mortgage with capital gains. The banks loan more, as the law says it's secured by the (newly inflated) house price.
Of course, the capital gains in such times are really just the next person's inflated mortgage, each ultimately paid for with ever larger debts on someone's part, until the system collapses.
Folk that get out of debt before the collapse get to keep all the real money in the system, everyone else gets left with the debt.
But it's not the bank's fault, it's government. They set the rules around debt creation, and our government choose to use a set of rules that can't control debt powered inflation of capital value. -
Has there been any serious scholarly investigations into what has driven the housing price rise in NZ this last few years? Is it immigration/easier access to credit/unreal expectations/good marketing/reduction in housing stock/growth in population/investment property owners or all of the above?
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a debut culture
This is my favourite typo of the week so far. I have a vision of all of us in white frocks and gloves, entering the season/marriage market...
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Stephen, it's possible to have a disaster without villains.
I think a speculative bubble certainly has happened, but I also think the speculators are responsible and they are being punished. People who bought a house with the intention of living in it will not be affected.
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. My excuse for opting out is that I never mix uppers and downers. It's actually bloody annoying that I even need an excuse, but P-heads looove company.
As an alternative you could say somethimg like "no , the gaping' weeping,scabby holes in your face are not much of an incentive. "
Not that I feel anyone should need an excuse.I lived in Oz for 11 years. When I returned, I found it took a year or so to readjust. I think age has alot to do with it. I now try to understand the big picture and , having travelled, think we have a fantastic country.
Went all over the place to buy a house and once I moved to a bank loan,found the 8% cheap.I also think a plan is good and without one,stupid. Noone has to keep up with the Jones. -
As an alternative you could say somethimg like "no , the gaping' weeping,scabby holes in your face are not much of an incentive. "
I'm far too polite for that. My real solution is just to stop associating with them.
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Has there been any serious scholarly investigations into what has driven the housing price rise in NZ this last few years?
The Reserve Bank's done some work: it should be on their web site. Arthur Grimes did some work for Motu last year as well.
There isn't a single reason, of course. And its important to remember Australia has had an even bigger housing market boom but they've got some quite different tax laws (including a proper capital gains tax).
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A S,
But it's not the bank's fault, it's government. They set the rules around debt creation, and our government choose to use a set of rules that can't control debt powered inflation of capital value.
This might sound quaint, but the bursting housing bubble is neither the fault of banks, or of government. The fault lies with those who buy and sell houses, and in particular those who commit themselves to precarious levels of debt in the expectation of capital gain, thus driving a speculative bubble.
If as an individual I make a reckless/high risk investment decision, financially over-commit and then come a cropper, I do not (and nor should I) have anyone to blame but myself, and nor should I complain about the unfairness of it all. After all, I certainly wouldn't be comlaining about it if I'd made 80% capital gains would I?
Any speculatory chickens coming home to roost should be left where they belong and speculators that have gone under shouldn't be bailed out regardless of how loud they squeal.
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Who is making all these highly precarious, speculative purchases?
Perhaps there's a lot of people who could afford the mortgage at 7% but not at 10%?
Perhaps there's a lot of people who could afford the mortgage when both partners worked, but now one isn't?
Perhaps there were a lot of people who were pressured into buying precisely because they heard and read about the rapid escalation and thought "it's now or never"?
Perhaps there were a lot of people sick of paying some landlord's mortgage for them?
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... and the swarming crowd of hideous real estate agents, who have a vested interest in pushing up house prices...as well as all the climb-the-ladder reality TV programmes and the bloody Living Channel (which I refer to as 'Real Estate Porn')
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