British Expats

British Expats (https://britishexpats.com/forum/)
-   New Zealand (https://britishexpats.com/forum/new-zealand-83/)
-   -   Recession? (https://britishexpats.com/forum/new-zealand-83/recession-522615/)

Am Loolah Mar 18th 2008 10:22 am

Recession?
 
Apologies, don't know if it's one "c" or 2?:blink:

Latest news in NZ after the Inland Revenue mis-accounting $600 million?

Stock market collapse.

Housing market slowing.

USA & Oz in trouble.

Petrol prices sky high.

Do you predict a recession or not? What do you think the implications may be?

Bo-Jangles Mar 18th 2008 10:55 am

Re: Recession?
 
I read that story about the missing 'six hundred million dollars' (yes $600 million) at lunchtime and could not stop laughing. :rofl: It was 'a simple mistake' said the report - hmmn like nobody checks these things out before the are published. Don't thes numbers look a bit odd? Do you think we should check this out and see if we made a mistake? Nah, ***** it, she'll be right, nobody will ever notice. :rofl:

Anyone who doesn't believe a recession or depression is on the way is living in cloud cuckoo land I'm afraid. I fail to see how we can avoid it. Just have to see what is going on in the rest of the world to know this has to have an effect (not like it hasn't already) and little old NZ, which is already in worse economic situation than some of those at the start, will continue to bury it's head, denying all knowledge and thinking it is bulletproof.

Nerine Mar 18th 2008 10:56 am

Re: Recession?
 
I don't think it's a case of predicting a recession, it's more a case of how far things are going to fall.

Am Loolah Mar 18th 2008 11:23 am

Re: Recession?
 

Originally Posted by Nerine (Post 6078377)
I don't think it's a case of predicting a recession, it's more a case of how far things are going to fall.

In fairness they weren't burying their heads in the sand, they were admitting there could be one coming ... for 6 months or so?:blink: I never heard of a recession lasting 6 months - it seems very brief?

I'm no economist, as you all may have gathered, but methinks there's serious adjustments ahead.

And like you say, how can you misplace $600 million?:confused::blink::blink: I wish I could ...

southerner Mar 18th 2008 8:58 pm

Re: Recession?
 
But they found their $600m again, so thats good.

People need to realise that recessions (although potentially painful at the time) are an important part of the economic lifecycle. If there was no chance of the bad times, then people's exuberance in the good times would be even more exaggerated than is now. I would argue that the world has gone too long without some sort of shake up (mainly because the US has done everything in its powers to cushion the impacts of various shocks such as the dotcom crash, 9/11, asian crisis and now sub-prime.)

For those less familiar with economic terms, a recession is defined as two quarters where GDP growth is negative. GDP is notoriously difficult to measure, and it usually is only 2 months after a quarter is finished that the economists/statisticians can agree what GDP grew or fell by. Thats why there is lots of current speculation whether the US is in recession now, and when or if NZ will meet the criteria of a recession.

Most economists who I have read predict NZ may or may not have a technical recession, but that the negative numbers will only be mildly negative. In effect NZ growth is stalled, with international sub-prime effects and local credit tightening weighing down, while some NZ factors are still generally positive (commodity prices, strong labour market, Govt surpluses leading to election spendup, etc).

There are those who would have us believe that financial doomsday is approaching, but I don't subscribe to that.

Just take care of your own finances, spend what you can afford, don't borrow more than you can service, and save/invest what you can in diversified assets that meet your own risk profile.

dreamfish Mar 18th 2008 9:13 pm

Re: Recession?
 

Originally Posted by Am Loolah (Post 6078289)
:blink:

Latest news in NZ after the Inland Revenue mis-accounting $600 million?

ahhh reminds me of good ole Bernie Ebbers; he was convicted of a $11 billion accounting fraud at WorldCom, where dribble and I worked. Rumours at the time were that the accounting irregularitues came about because someone forgot to carry the '1' and thats how they ended up in this mess. :sneaky:

of course as a result of one mans greed, around 17 thousand people lost their jobs when WorldCom filed for Chapter 11.

Mind you had we not been made redundant we quite possibly wouldnt be in NZ now, so perhaps i should be thanking Bernie, and wishing him lots of lady boy lovin'.


1000 pointless posts!

southerner Mar 18th 2008 9:33 pm

Re: Recession?
 

Originally Posted by dreamfish (Post 6081067)
Mind you had we not been made redundant we quite possibly wouldnt be in NZ now, so perhaps i should be thanking Bernie, and wishing him lots of lady boy lovin'.


I'm sure he's getting all the loving he needs right now.

NZBee Mar 18th 2008 10:20 pm

Re: Recession?
 
I would really say that if not here the recession is heading NZ way...what with people spending less, mortgage rates going into double figures, house sale slump, etc etc plus the dependency on the NZ banks on funding from American banks it is probably going to happen.
As in the previous post, it is the lifecycle of economics, and it has been far too long since a global recession.
On a personal (selfish :o) note, I earn well above the average wage in Auckland, and to be honest, I would find it tricky getting on the housing ladder as thing stand with house prices....how people can afford housing here is phenomenal. So at least a recession would correct this aspect of things.

Nerine Mar 18th 2008 11:00 pm

Re: Recession?
 

Originally Posted by southerner (Post 6080991)
But they found their $600m again, so thats good.

People need to realise that recessions (although potentially painful at the time) are an important part of the economic lifecycle. If there was no chance of the bad times, then people's exuberance in the good times would be even more exaggerated than is now. I would argue that the world has gone too long without some sort of shake up (mainly because the US has done everything in its powers to cushion the impacts of various shocks such as the dotcom crash, 9/11, asian crisis and now sub-prime.)

For those less familiar with economic terms, a recession is defined as two quarters where GDP growth is negative. GDP is notoriously difficult to measure, and it usually is only 2 months after a quarter is finished that the economists/statisticians can agree what GDP grew or fell by. Thats why there is lots of current speculation whether the US is in recession now, and when or if NZ will meet the criteria of a recession.

Most economists who I have read predict NZ may or may not have a technical recession, but that the negative numbers will only be mildly negative. In effect NZ growth is stalled, with international sub-prime effects and local credit tightening weighing down, while some NZ factors are still generally positive (commodity prices, strong labour market, Govt surpluses leading to election spendup, etc).

There are those who would have us believe that financial doomsday is approaching, but I don't subscribe to that.

Just take care of your own finances, spend what you can afford, don't borrow more than you can service, and save/invest what you can in diversified assets that meet your own risk profile.

And keep your job.

Campbells Mar 18th 2008 11:32 pm

Re: Recession?
 
When the banks realize ( perhaps wake up !) that they have a very large amount of collateral in overpriced housing ( well actually the land) that could possibly fall as much as 30% (which in my opinion is more a realistic pricing for the NZ houses) there is certainly some shaking going to happen.

So if a bank gave money to someone to buy a house and they can’t afford that house any longer the bank takes the house back ( if it can’t sell). The house is not worth the price the bank lent the money for so who carries the can?

More important what happens to housing prices when lots of repo mortgages are happening and / or lots of people want to batten down their hatches, cut their risk and put their house on the market, just like the many others. What happens then is that it is a buyers market and the price squeeze is on. Those that have to sell their houses will take lower offers and so it goes pushing the pricing down.

Taking the bunker approach and just let me batten down my hatches, spend less, eat less etc and hope I don’t get hit is a possibility but generally a recession does not select optimists or pessimists, for example if the mortgage rates go up all those with house re-payments get affected.

Although many folk can say that they don’t care about matters like these and it doesn’t affect them, it does and it will.

Ultimately it is all about business and the $.

If the company you are working for gets hit by the recession you may lose your job or not get that salary increase. So although in your private capacity you can believe you are okay, what about your employer?

Most companies in recession times are looking for ways to reduce operating costs and the bean counter approach is usually let’s thin down rather than grow our markets.

Perhaps New Zealand will be forced to release that there is land that is available for development and attract growth (rather than create a drip-feed overpriced scarcity) and get an investment injection in to the country that way rather than trying to screw folk for tiny sections of land.

It is not the houses that are crazy overpriced in New Zealand – it is the land :thumbdown::thumbdown::thumbdown:

NZBee Mar 18th 2008 11:52 pm

Re: Recession?
 
Heard an economist talk on the radio before...basically advising in NZ if you have a job, keep it best you can in the current climate! Now there is positive thinking for you!
They are expecting most of agriculture to be affected, aside from milk apparently, and then most of our exports.

Hope I win the (UK) lottery this week!

Campbells Mar 18th 2008 11:57 pm

Re: Recession?
 

Originally Posted by NZBee (Post 6081730)
Heard an economist talk on the radio before...basically advising in NZ if you have a job, keep it best you can in the current climate! Now there is positive thinking for you!
They are expecting most of agriculture to be affected, aside from milk apparently, and then most of our exports.

Hope I win the (UK) lottery this week!

Now there’s a question I have been wanting to ask.

Playing the UK LOTTO online ….

don’t you have to be a resident of the country to claim if you win ?

Nerine Mar 19th 2008 12:12 am

Re: Recession?
 

Originally Posted by Campbells (Post 6081644)
When the banks realize ( perhaps wake up !) that they have a very large amount of collateral in overpriced housing ( well actually the land) that could possibly fall as much as 30% (which in my opinion is more a realistic pricing for the NZ houses) there is certainly some shaking going to happen.

So if a bank gave money to someone to buy a house and they can’t afford that house any longer the bank takes the house back ( if it can’t sell). The house is not worth the price the bank lent the money for so who carries the can?

More important what happens to housing prices when lots of repo mortgages are happening and / or lots of people want to batten down their hatches, cut their risk and put their house on the market, just like the many others. What happens then is that it is a buyers market and the price squeeze is on. Those that have to sell their houses will take lower offers and so it goes pushing the pricing down.

Taking the bunker approach and just let me batten down my hatches, spend less, eat less etc and hope I don’t get hit is a possibility but generally a recession does not select optimists or pessimists, for example if the mortgage rates go up all those with house re-payments get affected.

Although many folk can say that they don’t care about matters like these and it doesn’t affect them, it does and it will.

Ultimately it is all about business and the $.

If the company you are working for gets hit by the recession you may lose your job or not get that salary increase. So although in your private capacity you can believe you are okay, what about your employer?

Most companies in recession times are looking for ways to reduce operating costs and the bean counter approach is usually let’s thin down rather than grow our markets.

Perhaps New Zealand will be forced to release that there is land that is available for development and attract growth (rather than create a drip-feed overpriced scarcity) and get an investment injection in to the country that way rather than trying to screw folk for tiny sections of land.

It is not the houses that are crazy overpriced in New Zealand – it is the land :thumbdown::thumbdown::thumbdown:

Brilliant post there Campbells. There was an article in the Herald a little while ago saying that Auckland is already a buyers market.

Over here things like the QLD drought breaking in such a dramatic fashion combined with cut backs in public spending by the Rudd government means that contract workers in Local Authorities have seen their work axed and have been told their contracts will not be renewed. 'Hidden' unemployment is already on the rise here.

A long while back reports were saying that government spending in NZ, most of it on social welfare, was fuelling inflation in the country. Will Helen also put the big squeeze on or spend more in the run-up to the general election? If she's booted out John Key will be picking up the pieces.

Knightm Mar 19th 2008 1:45 am

Re: Recession?
 
the only prob is that the more economists and politicians talk about recession the more probably and faster a recession takes place. Self fulfilling prophecy as consumer confidence decrease even more.

Biggest prob however for the NZ economy is if the Asian markets and OZ had to face a blow.

In the meantime let us enjoy the Easter bunny:thumbsup:

Campbells Mar 19th 2008 2:28 am

Re: Recession?
 

Originally Posted by Knightm (Post 6082116)
the only prob is that the more economists and politicians talk about recession the more probably and faster a recession takes place. Self fulfilling prophecy as consumer confidence decrease even more.

Biggest prob however for the NZ economy is if the Asian markets and OZ had to face a blow.

In the meantime let us enjoy the Easter bunny:thumbsup:

Probably the other way around

They are politicians and for most of them it is like a game of chess, they are thinking (don’t quote me on that one) 8 – 12 moves ahead.

Taking into account what has and is happening in the UK & US economy will certainly ripple through to NZ. You don’t need an economist to see that.

Ultimately the acid test is how YOU ride the storm.


All times are GMT. The time now is 10:55 am.

Powered by vBulletin: ©2000 - 2019, Jelsoft Enterprises Ltd.
Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.