The Dim-Post

November 27, 2008

Then Lancalot, Galahad and I jump out of the rabbit . . .

Filed under: Politics — danylmc @ 8:50 am

National have announced that they have a brilliant plan:

Mr English said the Government would be putting a heavy emphasis on the economy and expected the public to start paying more attention to it.

“A 4 percent fiscal impulse emphasis shows we are taking it seriously, now that I stress is a Treasury estimate, but it is still significant.”

Details of how the package would be presented and whether it coincided with Treasury’s update of the economic and fiscal forecasts were still to be decided, but it would not be a mini-budget.

Parliament resumes on December 8 and the package is expected to be announced within a fortnight of that taking place.

It’s good to have a plan, I suppose, but it would be nice to know what it is. I’m not sure I see the point of announcing that they’re going to do stuff, the public needs to pay attention to it, but they can’t quite tell us what it is they’ll be doing or what we’ll be paying attention to.

I was also interested in this statement of English’s:

The essential difference between New Zealand and countries such as the United States was the “extreme volatility” in their financial systems.

“They have to deal with that in the best way they can, whereas our financial sector has been relatively stable and our focus has been more on the real economy.”

We did just see the majority of the nation’s finance companies collapse, wiping out the retirement savings for much of the middle class. On the other hand, the collapse of the US financial system has been so spectacular I guess you can argue that we’ve been ‘relatively stable’.

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4 Comments »

  1. I’m looking forward to seeing the Companies Office charge all those Finance Company Directors with reckless trading and trading whilst insolvent.
    I mean seriuosly, lending money long term when you knew you had to pay back the people who lent it to you before the money was due back is just stupid.
    Talk about a fuck up cash flow wise. What were they thinking?
    Yeah I know, not much at all.

    Comment by David — November 27, 2008 @ 10:27 am

  2. On the other hand, the collapse of the US financial system has been so spectacular I guess you can argue that we’ve been ‘relatively stable’.

    You can, and he is. “Relatively” is such a useful word!

    Comment by Psycho Milt — November 27, 2008 @ 10:29 am

  3. Unfortunately David, that’s what all lending institutions do. Your bank doesn’t take 25 year deposits from its investors to finance mortgages. Pretty much any financial institution will collapse if all its on call investors want their money back on the same day.

    Comment by twr — November 27, 2008 @ 2:20 pm

  4. “Pretty much any financial institution will collapse if all its on call investors want their money back on the same day.”

    You’re right – they’re all essentially bankrupt. If any banks were solvent, wanted the business of other banks and were not just insolvent branches of the central bank, they’d call for all the cash to be presented for every cheque written against funds in other banks. The other banks would fail.

    Alas, the central bank would just step in and help out.

    Comment by Andrew B (London Libz) — November 28, 2008 @ 7:54 am


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