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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: arun gera who wrote (74179)	11/28/2010 1:03:13 AM
From: Maurice Winn	1 Recommendation Respond to of 74559

It's surprising New Zealand hasn't keeled over already: <maybe even New Zealand. > But as they say, markets can stay irrational longer than somebody [taking the opposite bet] can stay solvent. For a couple of years, there have been increasing numbers of buildings for lease and for sale as retrenchment bites. But the decline has been gradual. The NZ$ is way up against US$ and pound. House prices have had only about 10% decline. Unemployment isn't up a lot. Farming prices have been good as food demand internationally booms, which has helped even as tourism has declined a little. The reason to fault individuals is that individuals choose to buy houses with borrowed money instead of renting something cheaper. They go on debt-funded overseas holidays and buy debt-funded new cars instead of used bicycles. Mostly, people choose their destiny. Qualcomm didn't, neither did Microsoft. <Large companies and banks were tossed around in the financial hurricane that hit in 2008. Merrill Lynch was thrown into Bank of America's arms. Goldman Sachs was willing to sell to Citigroup. Lehman keeled over. Arms of GE and GM got bank status. Banks sought refuge in their national governments. > Barclays Capital did okay - nabbing Lehman assets. It wasn't an accident which companies were in big trouble. Their shareholders and managers made decisions which were either good or bad. Alan Greenspan KBE had assumed that shareholders would choose to and act to look after their capital and not lose their shirts. He realized that idea was wrong part way into the mess. People have latched onto that comment by him and expanded it cosmically and comically as though he had admitted that Ayn Rand had bung philosophy and Marxism is in fact the way to go. They need remedial reading training. They similarly didn't read or understand his irrational exuberance comments from last century. Now they are maniacally loading up on gold, silver and oil. I have been betting on NZ$ and housing taking a dive and NZ going down the gurgler as the debt chickens come home to roost. It is taking years!! Frustrating. But Japan has so much money that they could continue to send it here for decades and not run short [there are so many of them with so much money and so few NZers]. Hopefully they wake up at some stage. Mqurice