Monday, March 31, 2008

'The only really safe bank is Kiwibank'

As a person who receives the state pension, a private pension and a weekly wage, I have money to invest. Since December 2005, I have been putting my money, in sums of $20,000, into six-month term deposits at the ANZ Bank. My original aim was to have six such deposits, so that I would receive a payment of interest every month of the year. These payments would then augment my retirement income from the two pensions.

Although this scheme was basically sound, I now have doubts about the wisdom of putting all my money into the ANZ - one of the Australian-owned banks that are, in the opinion of some analysts, most likely to be caught in the looming credit squeeze. In these uncertain times, says Oliver Saint of the Shareholders' Association, "the only really safe bank is the [New Zealand-owned] Kiwibank".

Bruce Sheppard, chairman of the Shareholders Association, warns that "we have four converging events which tends to indicate to me that whatever is going to happen over the next 18 months is going to be way uglier than anything we have ever experienced in our lifetimes. And it's already happening."

The four events, he says, are a balloon in credit, a balloon in property, household spending exceeding income, and a commodity-oil shock.

"So you [will] have inflation taking off, unemployment taking off, double deficit, collapsing dollar, and a big, ugly, road-kill-through-the-windscreen-type hard landing.

"Then at that point New Zealanders will be forced to live within their means because there will be a credit crunch here with capital flying out of New Zealand at the rate of knots."

Mr Sheppard predicts that banks caught in the credit squeeze will pressure people to repay loans - particularly those who are over-extended.

"You will get forced property realizations, and the property market will sink further."

Economist and fund manager Gareth Morgan agrees, and points out that New Zealand and the United States are similar in that both run on other people's money.

Sunday, March 30, 2008

Growth higher than expected in NZ

New Zealand's economy grew by a greater-than-expected 1 percent in the December quarter, gross domestic product figures from Statistics New Zealand showed at the weekend.

The quarterly figure took the annual growth rate to 3.1 percent - the fastest in two and a half years and up from 2.7 percent in the previous quarter.

The New Zealand dollar jumped a quarter of a cent on the news to US80.48c, as analysts said they expected interest rates to stay high for longer.

Their expectation was bolstered by Reserve Bank governor Alan Bollard, who said in a speech in Sydney on Friday that "monetary policy in New Zealand has been relatively tight for some time, and we think the current setting of 8.25 percent with a flat outlook remains appropriate".

Thursday, March 27, 2008

Cash-flow crisis bites in New Zealand

The cash-flow crisis will force many small businesses in New Zealand to close during the next 12 months, a Christchurch credit manager warned today.

Speaking in the Dominion Post, Dean Thomson of Link Receivables, a Christchurch credit management company, said fewer companies were paying their bills on time, leaving businesses along the supply chain struggling to pay their bills.

"The cash-flow crisis is the No 1 problem facing small and medium enterprises."

Mr Thomson said he had 385 clients, compared with 64 last year and 38 the year before that, when he started the business after working as a credit manager at Telecom and Meridian Energy.

He expected his clients to total 500 by the end of the year, and said he would have to increase his staff from nine to 15 by Christmas.

Honey, I shrunk the web

Have you ever wanted a thumbnail of your website, but not known how to get one? If your answer is "yes", head to You will be able to create thumbnails like the one above within a matter of seconds. And no, I don't receive any credit for running this little ad. (shown above) is the nerve center of my internet empire. It has a list of all my domains, and links to sites where some of my work has been published.

Wednesday, March 26, 2008

I shop, therefore I am

If the above proposition is true, consumers face a challenge to their sense of existence.

Today's top business news in New Zealand is a Westpac Bank survey that shows consumer confidence slumped in the March quarter to its lowest level in a decade.

"Rising food and petrol prices, drought and high mortgage interest rates are knocking the stuffing out of shoppers, promising a tough time for retailers," is the Dominion Post's comment on the survey in the lead story of its Business Day section.

The Westpac McDermott Miller consumer confidence index fell to 96.5 from 110 in December. A figure under 100 indicates that pessimists outnumber optimists.

This is the first fall into negative territory in seven years.

Tuesday, March 25, 2008

NZ banking system sound, says Brash

Former Reserve Bank governor Don Brash had some reassuring words today about the New Zealand banking system.

"I would think the New Zealand banking system is as sound as any banking system in the world and, I would argue, probably sounder than most."

He added that New Zealand banks had been "pretty cautious" in their lending practices.

Dr Brash, who was governor of the Reserve Bank from 1988 to 2002, was speaking as the bailout of United States investment bank Bear Stearns continued to cause concern.

Asked if New Zealand trading banks were at risk as a result of the US housing crisis, he replied, "Categorically, they are not . . . [they] have absolutely minimal exposure to sub-prime".

The US credit crisis would, however, affect all households in New Zealand, through even higher interest rates that would reflect the higher cost of borrowing overseas. At present, New Zealand banks fund about a third of their lending from overseas sources.

Saturday, March 22, 2008

Drought hits NZ farmers hard

Two trees in the garden have died during the past few months. Though the cause of the deaths is a matter for conjecture, the drought must be a prime suspect. There has been little rain since last (southern-hemisphere) spring, and no rain is likely, in some areas, until May.

For me, the dry conditions are a mere inconvenience. I will have to cut the trees up for firewood. Is my saw equal to the task? Am I equal to the task, at age 67? The last time I cut up a tree, the exertion made me dizzy. "Don't die!" my wife pleaded, seeing my suddenly white face. She needn't have worried. I was fine after about 10 minutes.

The drought will not be so kind to the country's farmers, who face a drop in income, in some cases, of more than $100,000. Altogether, the drought is expected to cost about $1.24 billion - a lot of money in New Zealand. Sheep and beef farmers will suffer most, as they have already been hit by two years of poor profitability.

Dairy farmers are in a better position to withstand the effects of the drought, because of the much higher payout for dairy milksolids this year.

Thursday, March 20, 2008

More pain ahead for mortgage holders

Happy is he who can say, "I don't have a mortgage". As the global credit crisis deepens, homeowners in New Zealand who are customers of the big four Australian-owned banks - the BNZ, Westpac, ASB and ANZ National - could find themselves being hit by higher rates.

BNZ chief economist Tony Alexander said today that fixed two-year rates, which are now about 9.7 percent, could be pushed over 10 percent.

Wednesday, March 19, 2008

Memories of the gold rush days

Chinese miner's cottage, Arrowtown

They used to put it into teeth. They still use it to make jewelry. But today, an awful lot of the stuff sits in bank vaults in the form of ingots. It's gold, and it's looking more attractive with the passing of every day.

In my curio cabinet, I have some artefacts from the days of the 1860s gold rush in Central Otago, in the South Island of New Zealand. One is a ceramic flask with Chinese characters on it that indicate it originally held some kind of liquor. Another is a tiny medicine bottle that bears the words "Miracle baby" , again in Chinese characters. Yet another - one of my most prized possessions - is a tiny opium bottle.

Many such items were brought to New Zealand by the Chinese gold prospectors who responded to the finding of gold at Gabriel's Gully in 1861. They were not the only ones who rushed to the area: prospectors also came from Australia and California.

And now, once again, we are seeing a surge of interest in the precious metal, as currencies enter a period of volatility. This has pushed its price to more than $US1000 ($NZ1268) an ounce, and prompted Heritage Gold to "look at further development" of the Talisman gold mine near Waihi. The Talisman mine comprises the Maria, Crown/Welcome and Mystery veins.

The latter, a new vein, has shown "significant gold intersections" during sampling operations, the company says. Maybe we should all go panning during our next holidays.

Tuesday, March 18, 2008

New Zealand sharemarket takes a tumble

The NZX 50, which measures the movement in the top 50 stocks in New Zealand, plummeted 2.1 percent to 3429.43 yesterday, in the wake of the weekend's bargain-basement sale of America's fifth-largest investment bank, Bear Stearns, and news of a further interest rate cut by the Federal Reserve.

This means the NZX 50 has fallen by nearly 21 percent since peaking last October, or by $11.4 billion in dollar terms.

The volatility in financial markets yesterday saw the kiwi dollar initially trade at more than US82c, and then plunge US2c to US80.55c.

Monday, March 17, 2008

Lotto is for losers

I live close to one of the poorer parts of town - an area where, one can safely assume, a large proportion of the population relies on the unemployment benefit, the sickness benefit, the invalid's benefit, or one of the other benefits that collectively comprise the social welfare "safety net" in New Zealand. It is an area where the one row of small shops, when I last checked it, included a liquor shop, a Lotto shop, a secondhand clothing shop and a "dairy". (A dairy, in New Zealand, is what people in other English-speaking countries would probably call a corner store. In other words, it's a place where you can pick up your milk, your bread, your smokes, and the greasy meat pies that will eventually kill you - if the smokes don't get you first.)

Needless to say, I almost never head in that direction. It's always sad, when one passes the Lotto shop, to see it doing brisk business, as those who are already desperately poor become even poorer by buying $5 tickets for the next $6-million draw, or by feverishly applying themselves to the Instant Kiwi scratchcards. Of course, they might be lucky. But then they might be struck by lightning when they step outside the store. The odds against either event happening are probably about the same.

All this is a preamble to today's top infotech story in New Zealand: that NZ Lotteries may begin selling Lotto tickets online as early as next month. This news has raised fears of a drop in income among Lotto franchisees, who earned $51.5 million last year from a 7-percent commission on ticket sales. One franchisee, in central Wellington, says Lotto tickets currently account for 60 percent of his sales and bring him about $20,000 gross a week. Seems everyone is making money except the poor punter.

Sunday, March 16, 2008

Thank God for

You have just set up a website. It's a euphoric moment. But if the site isn't a blog, you are probably looking at a blank index page - and wondering what to put on it.

If you are like me, you probably realize, after several attempts at website design, that your skills leave a little to be desired. And at that stage, you probably go looking for a template.

That's when the second problem arises. Downloading a template, in my experience, is a bit like bringing home a kitset wall unit, and then trying to assemble all the components. I have done it, but I can't say that I enjoy doing it.

If your website is a personal one, you may also find that most of the templates on offer are too commercial in appearance. Or you may find, if you are looking for a free template, that they are unacceptably crude.

It was at this juncture that I said to myself: There must be a simple, satisfactory solution to these problems somewhere on the internet. And after searching for about 10 minutes on Google, I am happy to report that there is - at

I copied and pasted several of the html templates at, and was so pleased with the results that I invited their designer, Doyle Dawkins, to make a contribution to this blog. The following is what he wrote:

"My name is Doyle Dawkins. I am the webmaster / web page template designer for Mohr Multi-Media Inc. It is a 2-person company that started out promoting the songwriting talent of the company's founder, Jim Mohr. Jim writes Folk / Americana melodies that reflect his upbringing in northern Indiana rural USA. A few of Jim's songs can be found at

"Jim hired me (as a volunteer!) in 2003 when Mohr Multi-Media Inc. was founded. I designed a website for Jim and we set out on a journey that has had many twists and turns. The songs made the website fun, but Jim also was a funny, creative person. The website became more popular for the other content, and we finally dropped the original songs altogether and concentrated on free content related to gaming and web design. So Jim's original website, , is a free computer gaming website. It gets about 1000 hits a day and, at this writing, it was #1 in a Google search for "Free Computer Games". We also have 5 other gaming sites.

"I then convinced Jim that we could just give stuff away and make websites self-supporting by incorporating a bit of advertising. Our greatest achievement to this point is It is designed for beginners, and allows the visitors to just copy and paste the code straight from the page and have an instant website. With a little practice, anyone can edit the templates and personalize the pages. The templates are completely free, and contain NO advertising or spyware. The website is supported by donations from the many satisfied users who have found other free template sites too difficult to use.

"So what started out as a songwriter website has turned into a small corporation with 15 websites and 2 employees. Unfortunately, Jim and I still both have to have regular day jobs. Jim drives a dump truck for the county highway department, and I do freelance web design and website optimization for companies and individuals in the Indiana / Ohio / Michigan area."

Saturday, March 15, 2008

Storm clouds gather over New Zealand

The news today that the fifth-largest investment bank in the United States, Bear Stearns, has been given emergency funding, to save it from collapse, only added to the jitters in New Zealand, where the Bank of New Zealand today said it was "increasingly convinced that the . . . economy is heading for recession".

The bank's warning came as the price of oil soared to yet another record ($US111 a barrel), as gold passed $1000 an ounce for the first time, and as the New Zealand sharemarket fell more than 2 percent.

BNZ economist Stephen Toplis said New Zealand businesses and consumers were being pummelled by the effects of the global credit crisis, falling house prices, record fuel costs, a strong kiwi dollar, high interest rates and the effects of the drought.

Mr Toplis warned that indicators such as the rapidly slowing housing market were just "precursors", and that the impact of the credit crisis was only beginning to be felt by the wider economy.

Households were struggling under the weight of higher mortgage repayments and businesses were faced with the prospect of rising debt-servicing costs as banks paid more to borrow money overseas, he said.

"Household disposable incomes will be further substantially eroded by the rising costs of food, electricity and rates."

Meanwhile, transport companies and supermarkets said the record fuel costs would have to be passed on to consumers.

"The fact of the matter is that the New Zealand economy is now very poorly, and may well stay that way for some time to come," Mr Toplis said. joins BlogRush has been recognized by BlogRush as a blog that contains "unique, quality content that provides opinions, insights, and/or recommended resources that provide value to readers of the blog".

And what is BlogRush? At BlogRushCentral, it describes itself as a "cooperative syndication network for bloggers", and continues: "The BlogRush widget (see the sidebar on this page) consists of headlines from participating bloggers within your niche.

"Bloggers earn credits for the number of times the BlogRush widget is displayed on their blogs. These credits are then automatically spent to promote their blogs across other blogs in the network. The more traffic you have, the more you get in return."

Of course, there is a little more to it than that. There are, for instance, rewards for referrals - "all the way up to 10 generations". BlogRush thus has "the ability to generate massive, exponential traffic for your blog".

Does it deliver on its promise? Or, more accurately, does it fulfil the expectations of those who sign up and place its widgets on their sites?

After I signed up, I did what I always do at such times: I went to Google, searched for "BlogRush", and read some of the reviews and comments that came up. Unfortunately, they were all from late 2007. (BlogRush was launched on September 14, 2007.) But the consensus was that it was “worth a try” (

Interestingly, some of the "criticisms" were not really criticisms, but yelps of anguish from those who had failed BlogRush's "quality control audit" and had their accounts closed.

  • BlogRush closed in October 2008, after issuing the following statement:

    "BlogRush didn’t grow without its fair share of problems — from security issues to abusive users trying to ‘game’ the system to much lower click-rates than expected. We also had some problems with trying to fairly control the quality of the network, and in the process made many mistakes in deciding what blogs should stay or go. All of these issues, ultimately, limited the service’s full potential.

    "Our team worked very hard to try and build a service that would truly help bloggers of all sizes get free traffic to their blogs. This was our primary focus. Not once did we ever try to monetize the service with ads or anything else. BlogRush never made a single penny in revenue. We wanted to be able to help our users FIRST and then worry about monetizing the service later. Unfortunately, the service didn’t work out like we had hoped. (It happens.)"

  • Friday, March 14, 2008

    Kiwi dollar at two-week high versus US dollar

    The kiwi dollar rose to a two-week high against the greenback yesterday. It closed at US80.65c, after peaking overnight near $US80.90c.

    In other news today:

    * Statistics New Zealand figures show that food prices rose 5.2 percent in the year to February. In the past month alone, the price of milk has gone up by 4 percent and the price of bread by 3.4 percent.

    * The manufacturing sector suffered its fourth consecutive drop in growth in February. The seasonally adjusted Bank of New Zealand-Business New Zealand performance of manufacturing index (PMI) was 52.2, one point down from January. The PMI average is 54.5 since it began in 2002. A PMI reading above 50 indicates that manufacturing is generally expanding. A reading below 50 shows that it is declining. The exchange rate remains "a great obstacle" for manufacturers, says Business New Zealand chief executive Phil O'Reilly.

    Thursday, March 13, 2008

    House prices fall again in New Zealand

    New Zealand house prices fell again in February, for the third month in succession, to an average of $337,500, the Real Estate Institute reported yesterday.

    (On March 2, in Housing Slump Looms in New Zealand, we reported that the median house price fell to $340,000 in January.)

    Commenting on yesterday's institute report, Deutsche Bank chief economist Darren Gibbs said falling house prices could become a significant drag on the economy.

    In other news today:

    * ING New Zealand has suspended withdrawals from its diversified yield fund and the regular income fund after 400 investors applied this month to take their money out, Roeland van den Bergh reports in The Dominion Post today. "[The] investors feared falling victim to the global credit crisis to which the two funds are exposed. More than 8000 investors have $521 million in the funds."

    * The kiwi dollar rose from a three-and-a-half-week low of US78.80c on Tuesday morning to US80.35c by 5pm yesterday. The rise followed the announcement by the United States Federal Reserve of a financial injection of up to $200 billion to boost banking system liquidity and alleviate credit concerns.

    Wednesday, March 12, 2008

    More good news for depositors in New Zealand

    New Zealand bank interest rates for term deposits have risen again. Yesterday, the Bank of New Zealand introduced a 9.09-percent rate for at least $10,000 invested for two years. It thus topped Kiwibank's 9 percent for a one-year term for a similar deposit.

    Tuesday, March 11, 2008

    New Zealand gas reserves grow

    "The [New Zealand gas] supply outlook looks better than it has for more than a decade," McDouall Stuart researcher John Kidd told the Petroleum Conference in Auckland yesterday.

    Between 2003 and 2007, total reserves increased from 1500 petajoules to more than 2100 petajoules, Mr Kidd said. That gave the country 14.5 years of supply, compared with an average of 11 years for Organisation for Economic Cooperation and Development countries. Furthermore, reserves were increasing at a compound annual rate of almost 10 percent, equal to about 170 petajoules a year.

    In other news today:

    * The Raukumara basin, off the North Island's east coast, is likely to be the next area opened up to oil explorers, says Associate Energy Minister Harry Duynhoven. There were positive signs that oil would be found in the basin, he told the Petroleum Conference.

    * In the latest survey of readers of the Bank of New Zealand's Weekly Overview, 62.3 percent of respondents said they expected economic conditions to deteriorate. The survey findings, published yesterday, were the worst since February 2006.

    Monday, March 10, 2008

    An oil bonanza for New Zealand?

    About 2 billion barrels of oil have been discovered in the offshore Taranaki Tui oilfield, which is currently producing about 45,000 barrels a day. And that's not all. As the New Zealand Petroleum conference begins in Auckland, GNS exploration geophysicist Chris Uruski says many more billions of barrels could be found off New Zealand's coast, possibly in water as deep as 2000 metres. All this, he says, could make New Zealand "the southern hemisphere's answer to North Sea oil".

    New Zealand most vulnerable, says Weldon

    New Zealand would be hurt more by a housing market collapse than any other country in the world, says NZX chief executive Mark Weldon. Speaking in The Dominion Post today, he said that was because homeowners had borrowed heavily, and because so much of their wealth was tied up in housing.

    Mr Weldon said he hoped house prices would not fall more than 5-10 percent, but added that he was "not at all confident" they wouldn't fall more.

    The risk of a housing market collapse was one of the factors that prompted Mr Weldon to call today for a cut in official interest rates as soon as the middle of the year. (The Reserve Bank held the official cash rate at 8.25 percent last week.) The other factor was the prospect of a rise in business failures, as a result of the high interest rates, the high kiwi dollar (about US80c), and a shortage of labour.

    Sunday, March 9, 2008

    Support ticket system breaking down?

    This site has been inaccessible for more than a day. That is because I decided to switch to a custom domain, and to publish under rather than under (At present, redirects to If I published under, this process would be reversed.)

    To make the change, I went to's publishing settings and opted for "custom domain". (It was that move that made my site inaccessible.) Then I went to, where is registered, opened a support ticket, and asked them to make the necessary changes in the domain's DNS settings. And then I waited, and waited, and waited...

    All too often these days, support tickets are treated in the same way as emails are treated: they are ignored. Two weeks ago, I had the same problem with, which had charged me for some software I am no longer using. But in that case, I was able to go to the PCTools forum and complain - with immediate results.

    So for the time being, things are back to how they were before. The support ticket at RegistryDomains remains open, but goodness knows when it will be attended to.

    Friday, March 7, 2008

    Reserve Bank of NZ slashes growth forecast

    Three months ago, the Reserve Bank of New Zealand forecast economic growth of 2.6 percent for the next two years, to March 2009 and 2010. Yesterday, that forecast was cut back to 1.9 percent.

    The bank blamed the worsening outlook on weaker prospects for world growth, a rise in interest rates because banks were having to pay more to borrow overseas, a sharper-than-expected slowdown in the housing market and recent drought.

    It said it expected house prices to fall about 5 percent this year. It is thus more optimistic about prospects for property than those economists have said they expect a drop of up to 10 percent.

    "It is quite some time since we have seen house prices come off like this," RB governor Allan Bollard said.

    The Reserve Bank believes house prices remain overvalued by as much as 30 percent.

    Thursday, March 6, 2008

    New Zealand dollar rebounds

    The New Zealand dollar rose today, after Reserve Bank governor Alan Bollard left the Official Cash Rate at 8.25 percent in the bank's quarterly Monetary Policy Statement. By 5pm, the kiwi was at US80.26c, compared with yesterday's local close of US79.84c.

    In other news today:

    * Auckland house prices fell 4 percent in February, which saw just over 600 sales. The average house price has fallen to $517,613 since January in what has become a buyers' market, says Barfoot and Thompson managing director Peter Thompson.

    * Broadband subscribers rose 14.4 percent to 829,300 in the six months to September 2007, Statistics New Zealand said today. Subscribers with dial-up connections fell 8.6 percent to 675,800 in the same six-month period.

    Wednesday, March 5, 2008

    New Zealand dollar steady

    The New Zealand dollar held steady today, ahead of the Reserve Bank's quarterly monetary policy statement due tomorrow morning.

    At 5pm, the kiwi was buying US79.84c, compared with US80.45c at 5pm yesterday. Against the aussie, the New Zealand dollar was on A86.08c (A86.17c yesterday).

    All private-sector economists expect Reserve Bank governor Alan Bollard to leave the cash rate unchanged on 8.25 percent. As usual, the interest will be in the commentary and its tone.

    Although the Reserve Bank of Australia decided yesterday to lift the cash rate across the Tasman 25 basis points to 7.25 percent, its accompanying statement was not as hawkish as expected.

    Tuesday, March 4, 2008

    KiwiSaver to create millionaires?

    New Zealanders are such notoriously poor savers, I can't imagine more than a few of them becoming millionaires. Yet Mary Holm (, writing in The Dominion Post today, predicts a rich retirement for young people who join KiwiSaver. Under a headline that reads Join KiwiSaver Now or Forever Hold Your Pence, she says an 18-year-old earning $50,000 a year who joins it in 2010 will accumulate "about $1.27 million" by age 65.

    (For the information of those outside New Zealand, KiwiSaver is "a voluntary, long-term savings initiative" whose members' contributions are administered by Inland Revenue through the PAYE system. Workers who enter one of the KiwiSaver schemes receive a Government "kick-start" in the form of a tax-free contribution of $1000. Other incentives include "a member tax credit", paid into the member's account each year if he or she is 18 or over, and a fee subsidy.)

    "But if [our 18-year-old] joins [KiwiSaver] now," Holm continues, "he'll get two more years of growth on that big total - as well as two more years of contributions from himself, his boss and the Government. That brings him to more than $1.43 million. It's powerful stuff."

    Holm's calculation is based on 4-percent contributions to KiwiSaver from the worker's pay, which rises by 3 percent a year, and earnings by his KiwiSaver fund of 5 percent a year after fees and taxes.

    Monday, March 3, 2008

    Forex AutoPilot reviewed

    If, like me, you are a member of some get-paid-to-click programs, or of some manual traffic exchanges, you have probably become aware of Forex AutoPilot (, a bot that basically imitates the actions of a forex trader, and works automatically to identify optimal entry and exit points. It picks up its own signals without any action from the user.

    "If you read the Forex Autopilot system author’s disclaimer, you will understand that even with the help of this automated bot, your trading activities will still involve some form of risks. But once you understand that you are only taking calculated risks, you should expect a realistic 5- to 10-percent returns with this system every month," says Cool Gadget & Tech Reviews at has posted another favorable comment:

    "As a site we have never recommended a forex robot system before. However, this amazing piece of software smashes all the rules of forex trading. Forex AutoPilot was developed by some of the most successful forex traders and most advanced mathematicians in the world. The result is a ground-breaking piece of software that allows anyone to make serious profits in forex trading on auto pilot.

    "The problem with forex trading is that it all comes down to predicting trends at precise moments, and acting upon them with exact timing. To put it simply, a human is [incapable] of accurately executing successful trade after trade. You need some form of automated system if you are serious about making money in forex in 2008.

    "The Forex AutoPilot System takes all the guesswork out of forex trading, with in-built tips and a complete set of blueprints to ensure you never make a wrong trade. Human error is eliminated, and risks are drastically reduced."

    Sunday, March 2, 2008

    Housing slump looms in New Zealand

    Experts are predicting that house prices in New Zealand will fall as much as 10 percent this year, in what could be the start of a five-year decline, Esther Harward writes in the Sunday Star Times of March 2.

    "Auctioneers say just 30 percent of homes are selling at auction now - half the rate of a year ago - as interest rate hikes, easing migration and global credit conditions cool the once over-heated market," Harward reports.

    One of the "experts" she questioned about the housing situation in New Zealand was ANZ National Bank chief economist Cameron Bagrie, who said the market was 25-30 percent overvalued. This meant it would take about five years to correct.

    Mr Bagrie added that this year's expected tax cuts would not make a dent in mortgage repayments. "I don't think $20-$30 a week in people's pockets is going to do much to support property prices," Harward quotes him as saying.

    With New Zealand households spending $1.14 for every $1 they earned, they would need an "astronomical" tax cut to feel comfortable about rising mortgage rates and increases in living costs.

    ASB Bank and ANZ National Bank lifted their mortgage rates last week, and others, including Kiwibank, indicated they would follow suit. A two-year fixed mortgage is now 9.7 percent at ANZ National, and 9.5 percent at ASB. The floating rate at ASB is 10.75 percent.

    Harward says that, "with vendors putting houses or investment properties up for sale to ease their financial strain, the extra supply will also drive down prices".

    Among the "worrying signals" of a slump, she says, are the following statistics:

    * Home ownership in New Zealand is down to its lowest level in 50 years. Sixty-seven percent of households owned a home in 2006, compared with almost 74 percent 20 years ago.

    * In January, the median house price fell to $340,000 after reaching $352,000 in November - double what it was six years ago.

    Saturday, March 1, 2008

    Lifting my income in retirement

    What's your dream? For most of us, it is having enough money to do whatever we want to do - within reason, of course. To my mind, there are few things worse than constantly having to stop and ask oneself, "Can I afford to paint the house?" or "Can I afford to call the plumber to fix the bathroom taps?" or "Can I afford to see the doctor and/or medical specialist?" I found myself in that position in late 2005, when I retired.

    The income from the $NZ350,000 in my retirement scheme with the National Provident Fund, plus the fortnightly payments of about $400 from National Superannuation, would see me right, I thought. But when the dust had settled, I found that I would be making only $600 a week - enough to live on, but not enough for a life without worry. I probably wouldn't be able to upgrade my computer. I would probably have to forget about anything more adventurous than a day trip to Wellington. And overseas travel would clearly be out of the question.

    Fortunately, I was able to go back to work on a casual basis, and to start saving again. It was great to find that, instead of making only $600 a week, I was now making as much as $1200 a week. In less than two years, I had stashed away another $70,000 in long-term bank deposits that matured in the middle of successive months. The interest I received from these deposits effectively lifted my weekly income (minus my salary) to about $670.

    From time to time, my income was also boosted by sales of old books through Trade Me. One book was Must Australia Fight? (1939) by Ion L. Idriess , which I bought for $1 and sold at auction for $201. Other books, which I had bought for between 20c and $1, were sold for sums that ranged from $50 to $150.