Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.


View this topic in a long page with up to 500 replies per page Create new topic
1 | 2 | 3 

gzt

10310 posts

Uber Geek
+1 received by user: 1582


  Reply # 1144586 30-Sep-2014 23:11
Send private message

ckc:
gzt:
ckc: Well, that depends on a scheme being implemented because of a global financial crisis. That doesn't, say, cover for a badly or fraudulently run business that just goes broke overnight because the scheme doesn't exist.

That is correct. Can you make the case why it should be different?


Because you're not given any other choice about where to keep your money, save buying gold and burying it in the garden. Because you have no choice about being in Kiwisaver after you've signed up, and you have no choice but to put your Kiwisaver in a state approved scheme.

Customers don't know if a bank is bad or good behind the scenes. They're not transparent and they're poorly regulated, like I said up there.

If the state gives you no choice and no alternative places to put your money, if the state fosters that system and encourages its growth and independence, and if you have no choice about offshoring your Kiwisaver to a country where your deposit is guaranteed, then the state has to front up and owe savers a duty of care other than, "Damn, you made a bad decision banking with them, bro!"

But most importantly, we're the anomaly. We're just about the only country that doesn't protect people's savings, and that's for some weird, nebulous reason about 'the market'. Which is strange, because the US has the FDIC and they're all about the market. Yet they protect people's savings.

I wonder why we're special. Or is it just that underwriting the savings of people who often have no choice about it being taken from them might affect that balance sheet and put them on the wrong side of the wafer thin surplus they're chasing.


Current state of play -

- Key against
- Reserve Bank against it
- Labour wants guarantee to 30K
- (Norman) Greens to 100K

Reserve Bank argument is that a guarantee will increase overall banking cost due to a banking levy to pay for it. Reserve Bank has implemented something called OBR which incorporates a mechanism to quickly freeze banking assets while making retail accounts and funds available to depositors.

I doubt either case would apply to a company like SFC.

ckc

321 posts

Ultimate Geek
+1 received by user: 107
Inactive user


  Reply # 1144969 1-Oct-2014 17:35
Send private message

Seeing as some of them made close to $1bn last year, I think they can cope with a levy to insure their own risky behaviour. It's what everyone else does. If they weren't so poorly regulated then there might be something to stop them passing costs like that on to customers. But they are, so.

OBR doesn't guarantee anything. Not all banks are part of it. It just makes people unsecured creditors to the bank, who, like all unsecured creditors, might get nothing. Everything is still underwritten by government guarantee. The difference is what you may be able to withdraw is decided by the state, which is nice for them because they don't to prepare for the possibility. It could be enough, or it could be pitifully small. The bigger the bank and the more depositors, the more likely you are to get less because the government won't have to, or prepare for the worst.

This is a bank, of course. Low rates of interest and all that. If you put your money with an investment company then you really need to be reading the part about the value might go down and well as up before you ask the rest of the country to bail your poor investment out.

 
 
 
 


659 posts

Ultimate Geek
+1 received by user: 144
Inactive user


  Reply # 1145473 2-Oct-2014 11:18
Send private message

So glad im not tied into Kiwisaver

 

I'm on the Fonterra super scheme (unlocked) which means I get my money as soon as I leave \ change jobs, and believe me that money is going straight onto the mortgage..no hoarding of Fiat currency for me...when the US$$$ goes belly up and our economy \ dollar follows you don't want to be holding funny money, or even worse just numbers in the banking system.

I'm also quite surprised that the government doesn't allow people to put their Kiwisaver contributions towards things like precious metals (ie gold and silver), just imagine in 30 years instead of having $80,000 in a kiwisaver account you held 1000 ounces of silver @ $500 an ounce, or 60 ounces of gold at $8000 an ounce....at least you could visit the NZ Mint and touch \ handle your retirement stash. 

1301 posts

Uber Geek
+1 received by user: 270


  Reply # 1145932 2-Oct-2014 19:18
Send private message

heylinb4nz: So glad im not tied into Kiwisaver I'm on the Fonterra super scheme (unlocked) which means I get my money as soon as I leave \ change jobs, and believe me that money is going straight onto the mortgage..no hoarding of Fiat currency for me...when the US$$$ goes belly up and our economy \ dollar follows you don't want to be holding funny money, or even worse just numbers in the banking system.


That's wise. Getting out of mortgage debt as fast as possible makes a whole lot of sense. OTOH, thinking of a house as an investment doesn't make sense to me. Probably, because I'm being burned. My place is on the market but won't return anything close to what it's cost me. I won't be reinvesting in real estate. 

gzt

10310 posts

Uber Geek
+1 received by user: 1582


  Reply # 1145969 2-Oct-2014 19:52
One person supports this post
Send private message

heylinb4nz: I'm also quite surprised that the government doesn't allow people to put their Kiwisaver contributions towards things like precious metals (ie gold and silver), just imagine in 30 years instead of having $80,000 in a kiwisaver account you held 1000 ounces of silver @ $500 an ounce, or 60 ounces of gold at $8000 an ounce....at least you could visit the NZ Mint and touch \ handle your retirement stash.

There is some requirement for diversification, but no reason you could not choose a scheme that provides some of this if that is what you believe and there are enough of you.

656 posts

Ultimate Geek
+1 received by user: 127


  Reply # 1146007 2-Oct-2014 20:23
Send private message

heylinb4nz: So glad im not tied into Kiwisaver
I'm on the Fonterra super scheme (unlocked) at least you could visit the NZ Mint and touch \ handle your retirement stash. 

Can you handle your Fonterra super money?
A more interesting question would be where Fonterra will be in ten years.

659 posts

Ultimate Geek
+1 received by user: 144
Inactive user


  Reply # 1146287 3-Oct-2014 09:13
Send private message

mudguard:
heylinb4nz: So glad im not tied into Kiwisaver
I'm on the Fonterra super scheme (unlocked) at least you could visit the NZ Mint and touch \ handle your retirement stash. 

Can you handle your Fonterra super money?
A more interesting question would be where Fonterra will be in ten years.


True that, the dairy share this year is shocking, I hope to be out of my current job in 3-4 years and into another. Shoud have about $20k stashed in my Fonterra account by then.

 

Agree on the "handling" aspect, if you cant touch it you dont own it, which worries me even more for government run schemes where you cant get access for many many years.

659 posts

Ultimate Geek
+1 received by user: 144
Inactive user


  Reply # 1146298 3-Oct-2014 09:21
Send private message

gzt:
heylinb4nz: I'm also quite surprised that the government doesn't allow people to put their Kiwisaver contributions towards things like precious metals (ie gold and silver), just imagine in 30 years instead of having $80,000 in a kiwisaver account you held 1000 ounces of silver @ $500 an ounce, or 60 ounces of gold at $8000 an ounce....at least you could visit the NZ Mint and touch \ handle your retirement stash.

There is some requirement for diversification, but no reason you could not choose a scheme that provides some of this if that is what you believe and there are enough of you.


Ultimately Id like to scrap my contributions altogether so I can invest in physical PMs (mainly silver), but my employer matches my contributions at rate of 1.5X so effectively I put in about $2000 per year, I get further $3000, + about 6% on the total from Fonterra on a balanced portfolio.

 

Mabey I could negotiate with my employer to make the contribution regardless based on me running my own retirement scheme based around PMs ?, should be no different to them ?

13893 posts

Uber Geek
+1 received by user: 2522

Trusted

  Reply # 1146307 3-Oct-2014 09:35
Send private message

Geektastic:
newbellies: Thanks for posting Bernard Hickey's response. Really interesting.

He's obviously a very smart man. However, this quote gave me the chills.

>>
In short, New Zealand's housing market is too big to fail, and New Zealand's shock absorbers and buffers would quickly kick in to soften the blow of a fall in house prices.
>>

Too big to fail. Hmm .....




He's correct - it is.

Why? Because so many people have mortgages and if the house prices crash, they will owe more than their houses are worth.

This would have a very serious impact and I would imagine that the RBNZ and the government would work very hard to avoid that.


True. But, if house prices crashed, the homeowner can react as he does now if prices rise. Do nothing, pay mortgage. The banks are the ones with the problem, exposed. So they hope and pray that homeowners stay in the home. pay mortgage, and over time it stabilises. Interest rates would rise as banks S+P rating will fall. Its a matter of riding it out. Banks wont call oin loans, causing everyone to be forced to sell, now that would be chaos. The Goct would look to encourage home ownership, to create demand, to help get prices back to normal

7591 posts

Uber Geek
+1 received by user: 4005


  Reply # 1146440 3-Oct-2014 11:15
Send private message

tdgeek:
Geektastic:
newbellies: Thanks for posting Bernard Hickey's response. Really interesting.

He's obviously a very smart man. However, this quote gave me the chills.

>>
In short, New Zealand's housing market is too big to fail, and New Zealand's shock absorbers and buffers would quickly kick in to soften the blow of a fall in house prices.
>>

Too big to fail. Hmm .....




He's correct - it is.

Why? Because so many people have mortgages and if the house prices crash, they will owe more than their houses are worth.

This would have a very serious impact and I would imagine that the RBNZ and the government would work very hard to avoid that.


True. But, if house prices crashed, the homeowner can react as he does now if prices rise. Do nothing, pay mortgage. The banks are the ones with the problem, exposed. So they hope and pray that homeowners stay in the home. pay mortgage, and over time it stabilises. Interest rates would rise as banks S+P rating will fall. Its a matter of riding it out. Banks wont call oin loans, causing everyone to be forced to sell, now that would be chaos. The Goct would look to encourage home ownership, to create demand, to help get prices back to normal


Different scenario here than in the US and their GFC/housing crash, where home-owners with "negative equity" could walk away - abandoning the mortgage while keeping other unrelated assets / investments.  Here, the mortgage follows you, so bankruptcy is the eventual result of negative equity/insolvency.  They will take the shirt off your back.
However, it would take more than a "correction" to place more than just a few exposed homeowners in a negative equity situation.  At the end of the day, you need somewhere to live which underpins demand - the "damage" from a correction won't be a direct financial hit to all but the most heavily geared homeowners, but from a secondary hit to confidence based on loss of "perceived wealth".  
One way or another - it's going to happen - just as it has done before.

Mad Scientist
19330 posts

Uber Geek
+1 received by user: 2531

Trusted
Lifetime subscriber

  Reply # 1146458 3-Oct-2014 11:35
Send private message

tdgeek:
Geektastic:
newbellies: Thanks for posting Bernard Hickey's response. Really interesting.

He's obviously a very smart man. However, this quote gave me the chills.

>>
In short, New Zealand's housing market is too big to fail, and New Zealand's shock absorbers and buffers would quickly kick in to soften the blow of a fall in house prices.
>>

Too big to fail. Hmm .....




He's correct - it is.

Why? Because so many people have mortgages and if the house prices crash, they will owe more than their houses are worth.

This would have a very serious impact and I would imagine that the RBNZ and the government would work very hard to avoid that.


True. But, if house prices crashed, the homeowner can react as he does now if prices rise. Do nothing, pay mortgage. The banks are the ones with the problem, exposed. So they hope and pray that homeowners stay in the home. pay mortgage, and over time it stabilises. Interest rates would rise as banks S+P rating will fall. Its a matter of riding it out. Banks wont call oin loans, causing everyone to be forced to sell, now that would be chaos. The Goct would look to encourage home ownership, to create demand, to help get prices back to normal


not if the owners can't afford the mortgage and NEEDS to sell. if that happens that owner won't be the only one, everyone will NEED to sell ... if it happens I am hoping to have cash in hand and buy them :D [bcoz unless people emigrate they will need to live aka rent somewhere]




Swype on iOS is detrimental to accurate typing. Apologies in advance.


13893 posts

Uber Geek
+1 received by user: 2522

Trusted

  Reply # 1146463 3-Oct-2014 11:44
Send private message

joker97:
tdgeek:
Geektastic:
newbellies: Thanks for posting Bernard Hickey's response. Really interesting.

He's obviously a very smart man. However, this quote gave me the chills.

>>
In short, New Zealand's housing market is too big to fail, and New Zealand's shock absorbers and buffers would quickly kick in to soften the blow of a fall in house prices.
>>

Too big to fail. Hmm .....




He's correct - it is.

Why? Because so many people have mortgages and if the house prices crash, they will owe more than their houses are worth.

This would have a very serious impact and I would imagine that the RBNZ and the government would work very hard to avoid that.


True. But, if house prices crashed, the homeowner can react as he does now if prices rise. Do nothing, pay mortgage. The banks are the ones with the problem, exposed. So they hope and pray that homeowners stay in the home. pay mortgage, and over time it stabilises. Interest rates would rise as banks S+P rating will fall. Its a matter of riding it out. Banks wont call oin loans, causing everyone to be forced to sell, now that would be chaos. The Goct would look to encourage home ownership, to create demand, to help get prices back to normal


not if the owners can't afford the mortgage and NEEDS to sell. if that happens that owner won't be the only one, everyone will NEED to sell ... if it happens I am hoping to have cash in hand and buy them :D [bcoz unless people emigrate they will need to live aka rent somewhere]


My scenario was the assumption that life is going on, maybe wages take a hit, maybe jobs take a hit, but many will do what they do when house prices rise, work, pay bills, pay mortgage, see the paper equity rise. So, house prices plummet, keep working, pay mortgage, watch equity go into red, but like having positive equity, its not realised until the house is sold.

If most of us lost jobs, could not afford the mortgage, and need to sell thats another issue, a depression like the 1930's. The house equity would then become only one of many problems we would all face.

Id be ok, mowing Joker97's lawns from all the ghouses he bought from us poor people


Mad Scientist
19330 posts

Uber Geek
+1 received by user: 2531

Trusted
Lifetime subscriber

  Reply # 1146594 3-Oct-2014 13:31
Send private message

lol ... someone's got to buy them! but at the moment i can't afford an iphone 6




Swype on iOS is detrimental to accurate typing. Apologies in advance.


13893 posts

Uber Geek
+1 received by user: 2522

Trusted

  Reply # 1146619 3-Oct-2014 14:01
Send private message

joker97: lol ... someone's got to buy them! but at the moment i can't afford an iphone 6


No prob. Swap iPhone 6 for house. Where do you want the house delivered to? Will you pay track and trace?

1 | 2 | 3 
View this topic in a long page with up to 500 replies per page Create new topic



Twitter »

Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:



Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Geekzone Live »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.