LoCarb

Just watched this video on RT, The Keiser Report.

Quote:

"..........the New Zealand banking system is also very very exposed"

[KR883] Keiser Report: Global Housing Bubbles | Max Keiser

jmh

Yeah, saw that yesterday.

If I had a lump sum I would spread it around to avoid the risk of a 'hair cut'.

Very concerning. We may catch a cold from the Aussies (not that our own economy is that great, just not as exposed).

LoCarb

Just found out that IRD are proposing to tax gains on gold, so closing that down as an alternative.

IRD issues an exposure draft on whether the proceeds from the sale of gold are income, and finds it hard to identify reasons why they are not | interest.co.nz

Charismatic

I'd take what RT publishes with a pinch or several of salt.

New Zealand banks' exposure to dairy farming will put their asset quality under pressure as milk prices fail to recover but farms are only ~8 to 15% of their lending book. A few bank argi-managers will be giving leveraged clients a quick tap on the shoulder to make clear that it's time to raise the top line or get out of farming. Debt has actually been increasing as farmers draw down available facilities but they can't keep subsiding production forever.

The exposure to home loans is much larger so a rapid change in employment, income or house prices would have much deeper repercussions. The exits for highly leveraged owners could get very crowded, very quickly if the unemployment rate increases. We managed to avoid this through the financial crisis.

scot47

Many serious economists predict another crash................soon. Have a look at recent doomwarnings from Stiglitz