Thursday, November 20, 2014

Free(er) trade in India–quote of the week

From the Economist “India has never been able to manage a free trade policy – even with itself”.  There possibly is hope if they can get states and the centre to stop warring amongst the unproductive over spending the spoils of taxes which belong to the productive. The proposed GST could do that… courage please.

Thursday, November 6, 2014

Latest Stats NZ jobs and wages

The latest jobs and wages data from Stats NZ finds:

  • Employment up 72,000 in last year, being 66,000 full-time and 6,000 part-time
  • Unemployment down 14,000 in last year
  • Labour force up by 57,000
  • Unemployment rate down to 5.4%, from 6.1% a year ago
  • NZ 9th lowest unemployment rate in OECD of 34 countries.
  • Unemployment rate now 0.7% lower than Australia and US, 0.9% lower than UK and 1.5% lower than Canada
  • The NEET (Not in employment, education or training) rate for under 20s down to 7.2% from 8.1% a year ago
  • Average weekly earnings up (over year) 1.8%, being 2.2% in private sector and 1.4% in public sector
  • Average hourly earnings up 2.4%, being 3.0% in private sector and 1.0% in public sector
  • Male hourly earnings up 2.0% and female hourly earnings up 2.7%
    Thanks to David Farrar, Kiwiblog for this summary

Thursday, October 30, 2014

Losses Don't Save Lives

We know that “framing” – how issues are presented - has an indelible impact on how they are perceived and often on subsequent behaviour. If they are framed in a misleading manner misleading conclusions may be drawn and resulting behaviour perverse.
This morning Radio NZ reports “Port profits up but at a cost” and sets out the numbers associated with the shocking accident record at NZ ports in the last year.
The high rate is unacceptably high, absolute tragedy for those affected and has unnecessarily brutal results.
It is not however a necessary result of profit or  a “high cost” of profit.
The implication that it would somehow be lower and all would be well without such high profits is mischievous sensationalism which is likely to stand in the way of fixing problems.
Running at a profit is never an excuse for a poor safety record or an inevitable cost. Numerous companies including ports make profits and have a better safety record than the NZ effort last year.
Companies running at a loss or unacceptable profit do not have better safety records than profitable ones. Quite the reverse. Lives cannot be saved by simply running at a loss.
Running at a profit offers the resources to address safety issues and for pressure to be placed on managements and boards to address poor safety records. Losses give them the ideal excuse to do nothing.
Success including earning a healthy profit demands safe sustainably healthy conditions. Unsafe practices and a poor record threatens profit.
A less sensational report would have highlighted the problem areas, asked what is being done and how quickly and might well have scolded companies for moving too slowly or too narrowly.
Only the sloppiest of journalism coupled with slow brain editing grabs pointless unsupportable sensation resulting in predictably illogical conclusions which inhibit improvements rather than help. 

Wednesday, October 15, 2014

Hardly a lesson learned… a $1m plus education fail

Another day another failed prosecution. Hardly news. Hardly surprising…. but hardly anything learned either.

Media analysis of the SFC debacle is busy writing lazy headlines full of melodrama while the major lessons are being lost.

Just so we are clear…. the Janet and John here is:

  1. no “guru” is infallible. Having an old Volkswagen, a folksy “way”, and being a “good joker” is not enough and never was.
  2. this applies to Buffett as much as anyone else. Buffett’s greatest attribute is probably the fact that he is the world’s least deluded investor. He does not kid himself – ever.
  3. If you do not use your brain and do some homework you will lose your shirt or (regrettably) lose the taxpayers shirt. And you deserve to – big time.
  4. There is always risk – every time. If you can’t see it that just means you are blind to it. It’s there. Look for it till you find it. If you can’t find it invest elsewhere.
  5. don’t whinge, moan and blame the government – bond holders did it with Equiticorp, investors were “saved” with SCF (which the judgment now says there is little evidence did anything wrong (so can I have my tax money back then?). Its poor logic and pathetically dim.
  6. As the promoter of the awful Deposit Insurance Scheme himself (the beaming RH Cullen) said  “You lost, eat that”.

As for governments:

  1. The rat always smells the cheese. If governments say “come to Santa” the kids will flock. Deposit guarantee schemes always produce “too big to fail / not pay / hand out”. Come to Santa policies are just silly – that’s all. Do stop – its my money you are wasting.
  2. Less is more. It is pointless – utterly pointless passing laws you can’t, won’t or don’t have the bottle and competence to enforce. The Serious Fraud here is that taxpayers spent over a million on a failed prosecution which helped no one (legal fraternity aside).
  3. Do not, ever, try to save investors from risk. You can’t, you look silly, you delude them in a cruel hoax – and you still lose everyone’s shirt. Also – note – it doesn’t even get you votes for heavens sake.

So use your brain, face risk, get educated… it needs to be part of our culture.

I have long argued that if the average Kiwi knew as much about investing as he and she know about power tools, DIY, various “Idles”, and My Kitchen Rulez then we wouldn’t have a retirement problem.

DIY being in our genes does plenty for Placemakers, Mitre 10 and Bunnings and close to nothing for our kids and your retirement.

Thursday, October 9, 2014

What Academics Are Really Saying

 

All walks of life have their codes. Academics no less than other gangsters. Below some glimpses of the argot:image

Hat tip to Conrad Hackett

Faulty Logic…

Please note – the fact that “we”, or NIWA or even the PM have discovered a fault which we hadn't noticed makes not one whit of difference to the probability of an earthquake event. It was there all along.

So much – one would think – is obvious…. but