The Dim-Post

August 25, 2015

Market crash

Filed under: Uncategorized — danylmc @ 7:03 am

Lots of left-wingers in my twitter feed are semi-gloating over the share market meltdown, seeing it as a continuation of the global financial crisis or another ‘crisis of capitalism’. Maybe it will be, I don’t know – but gigantic panic-driven market crashes are just a routine feature of capitalism. They happen fairly frequently.

What this might show us here in New Zealand is the extent to which the Auckland housing market is (a) a bubble and (b) fuelled by foreign Chinese investors. The Shanghai bubble was driven by bank debt, and if thousand of Chinese investors all suddenly simultaneously decide to sell their properties in Sydney and Vancouver and Auckland to pay back their banks then there could be a very sharp correction in the market.

54 Comments »

  1. All aboard the gloat express. First stop Auckland!

    Comment by Richard Williams — August 25, 2015 @ 7:23 am

  2. Alternatively, cashed up foreign investors will compare gains and decide that property in Auckland is the safer bet after all, leading to an influx of capital.

    Comment by simonpnz — August 25, 2015 @ 7:36 am

  3. Quiite right. This isn’t exactly a feature of capitalism, but it’s a known bug with very well-established workarounds. And sadly the fallout from these market crashes is not limited to capitalists.

    Comment by kalvarnsen — August 25, 2015 @ 7:37 am

  4. Plus a critical view informed by the Austrians – just read NotPC’s blog, Hayek, Mises, et al – speaks to this being a crisis of big state, centrally banked, fiat monied command, crony Western economies, nothing to do with capitalism (our brand of crony capitalism is to laissez faire capitalism as sea horses are to horses).

    Nearly all Western states have a government spend over 45% of total GDP, with the taxation and regulation to achieve that. No capitalism here; the system of market coordination, and liquidation of malinvestment was destroyed by big brother state interventionalism long ago.

    Comment by Mark Hubbard (@MarkHubbard33) — August 25, 2015 @ 8:24 am

  5. They’re gloating because they detect Rahm Emanuel’s dictum coming into play: “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”

    ….leading to an influx of capital.

    I’ve theorised for a couple of years that the massive outflow of Chinese money to places around the globe had less to do with investment (let alone taking control of the likes of NZ and Vancouver), than with wealthy Chinese keeping a close eye on history and desiring a bolthole that can be reached in 12 hours or less – before the midnight knock on the door that marks the search for “wreckers” and “profiteers”.

    Comment by tom hunter — August 25, 2015 @ 8:25 am

  6. Alternatively, cashed up foreign investors will compare gains and decide that property in Auckland is the safer bet after all, leading to an influx of capital.

    As long as no-one in Auckland’s shafting them like this guy you may be right.

    Comment by Joe W — August 25, 2015 @ 8:29 am

  7. But just imagine how boring it would be if we lived in a financially stable world ala the Bretton Woods era. We’d have to hear more about One Direction breaking up and the Kardashians. Stock market crashes are exciting AND important!

    Comment by Seb Rattansen — August 25, 2015 @ 8:40 am

  8. The biggest enigma in what is going on in China. No one seems to really know. How much is the Chinese government hiding? You suspect that all the low hanging, high return mega-infrastructure projects have for the meantime been built, and only marginal stuff remains – sort of like Chinese mega-RONS. And you wonder how much more (generally) low quality consumer goods the world can absorb. Also, as tom hunter points out, for all it’s new found economic power China is still fundamentally a centralised dictatorship governed by factions who only have a casual relationship to the rule of law – something which Niall Ferguson as far back as his Reith lectures in 2012 argued matters. So when a bunch of first generation ex-peasants (polite version: immature market investors) who don’t believe a word anyone in authority tells them start to panic on the Shanghai stock market, it more than just a market problem – it is symptom of a country that has developed into a economic superpower whilst trying to retain the political model of a totalitarian state.

    The EU is easier to understand. it’s been permanently damaged with 19th century economic orthodoxy and austerity, and with the exception of Germany, which is sucking the life out of the rest of the EU with an enormously successful program of economic imperialism, appears to be in decline both relatively and absolutely.

    Russia under Putin is just… fucked. Utterly,totally fucked. It is a lawless gangster state reliant on weak neighbours to bully and an aging nuclear arsenal to make itself look important.

    All this means the reports of the end of American power have been grossly exaggerated, and we all have to hope the US economy continues to grow.

    As for Auckland, I think the end of the bubble can’t be far off. My view is Auckland seems to have a property cycle – ten or so years of boom, followed by ten or so years of stagnant prices until inflation and wages reduce the real price by 30+% the off it goes again. The inflow of massive amounts of foreign capital into Auckland means this pattern has been disrupted, so when the bubble pops we are going to see absolute declines in house values.

    Comment by Sanctuary — August 25, 2015 @ 8:48 am

  9. All this means the reports of the end of American power have been grossly exaggerated, ….

    For several years now I’ve been pointing that out to idiots espousing the line that the 21st Century is the Chinese century and that America is finished.

    I heard all the same crap during the 80’s: Japan, Cold War impoverishment, etc. Paul Kennedy’s tome, The Rise and Fall of the Great Powers being the ultimate example of hysterical, shallow thinking clothed in intellectual bullshit.

    Comment by tom hunter — August 25, 2015 @ 9:01 am

  10. The Shanghai bubble was driven by bank debt, and if thousand of Chinese investors all suddenly simultaneously decide to sell their properties in Sydney and Vancouver and Auckland to pay back their banks then there could be a very sharp correction in the market.

    …which will make housing more affordable. Sucks of course if you’ve just bought a house at bubble prices, but if you’re planning to actually live in it (rather than flick it on like a speculator) then thats not actually a problem, so bring it on.

    Comment by idiotsavant23 — August 25, 2015 @ 9:14 am

  11. … so bring it on.
    It’s what should have happened in the US in 2009, but the Federal Reserve could not bear weight of more homeowners going underwater and drying up all that precious consumer spending.

    Which raises the question for the USA (with flow-on effects for us): when you’ve already had interest rates at zero for several years, you’ve created several trillion in credit and the government you’re a part of has jumped it’s debt from $11 trillion to $18 trillion – where do you go with both fiscal and monetary policy when the next recession hits?

    Comment by tom hunter — August 25, 2015 @ 9:29 am

  12. Only 15% of Chinese household investments are bound up in the stockmarket according to The Economist. So even if it does crater (which itself seems unlikely given the ability of the government to intervene) it seems unlikely that that would cause Chinese investors to pull their money out of Auckland.

    Comment by Seb Rattansen — August 25, 2015 @ 9:35 am

  13. “My view is Auckland seems to have a property cycle – ten or so years of boom, followed by ten or so years of stagnant prices until inflation and wages reduce the real price by 30+% the off it goes again”

    Wow, Sanctuary, that’s the most sensible, empirically based (and accurate) comment I think I have ever read by you. Are you outsourcing your work to the teenager in the household?

    Comment by Tinakori — August 25, 2015 @ 9:46 am

  14. @tom hunter: While there have been false alarms, it seems naive to think American hegemony will survive forever.

    Comment by kalvarnsen — August 25, 2015 @ 9:56 am

  15. And China is going through just the same process of industrialisation and change that the US and Europe want through in the last 200 years. It was pretty smooth and painless for those countries, with just a few bumps on the way.

    Like the Depression. And the Second World War.

    Comment by richdrich — August 25, 2015 @ 10:00 am

  16. …which will make housing more affordable.

    No. It will make only house ownership more affordable to hardworking middle NZ. A property crash will make housing less affordable.

    Auckland Council policy has restricted supply of new houses causing upward pressure on rents. A crash in property prices now will destroy demand for new houses, further restricting supply new and thus pushing future rents up even faster.

    Of course hardworking middle NZ won’t care and there will be less poor people living in their neighbourhoods. All will be well.

    Comment by unaha-closp — August 25, 2015 @ 10:25 am

  17. So Sanctuary, are you a renter or a house owner?
    Judging by your stance on political matters, a renter, if so this will be big chance to join the house owner rate paying class and be able to pay for your retirement

    Comment by rayinnz — August 25, 2015 @ 10:48 am

  18. “…A crash in property prices now will destroy demand for new houses…” Only if George Forbes’s reincarnation remains as minister of finance. The Logical approach in such a situation would be a government housing program to both house people and stimulate the economy, and option that Bill English would rather die in a ditch than countenance.

    Comment by Sanctuary — August 25, 2015 @ 10:53 am

  19. “…Judging by your stance on political matters, a renter…”

    Ladies and gentlemen, I give you a Tory nob in all it’s assumptive glory.

    Comment by Sanctuary — August 25, 2015 @ 10:55 am

  20. “but if you’re planning to actually live in it (rather than flick it on like a speculator) then thats not actually a problem”

    Possibly not long term even though it cuts into things like life savings, but if you end up with negative equity (or near it) then it’s sort of a serious problem. Especially if you’re one of these people who’s saved for ages, bought a single house to live in it, and has then effectively become collateral damage of the actions of investors and speculators.

    Comment by MikeM — August 25, 2015 @ 11:07 am

  21. The Logical approach in such a situation would be a government housing program to both house people and stimulate the economy, and option that Bill English would rather die in a ditch than countenance.

    Bill English has been trying for the past 3 years to get new housing areas into Auckland and has been blocked a every single turn by Len Brown / Penny Hulse and their NIMBY friends. We have high demand, high prices and should logically be having a building boom. Auckland Council stopped that, until this mob are expunged from Auckland the rents will continue to soar.

    Comment by unaha-closp — August 25, 2015 @ 11:22 am

  22. Really, Unaha @21? From outside of Auckland it seems that a lot of the NIMBYism has come from the residents of Epsom and similar areas, as voiced by Bernard Orsman in the Herald. Anything that threatens to increase density in the lush inner-city suburbs has been shouted down. The unitary plan that Len and co put forward to make it easier to increase density was slammed by the right wing of the council.

    IDK what the solution is, but I’m not sure that Len Brown is the problem (happy to be persuaded otherwise though)

    Comment by simonpnz — August 25, 2015 @ 11:29 am

  23. “My view is Auckland seems to have a property cycle – ten or so years of boom, followed by ten or so years of stagnant prices until inflation and wages reduce the real price by 30+% the off it goes again”

    Wow, Sanctuary, that’s the most sensible, empirically based (and accurate) comment I think I have ever read by you. Are you outsourcing your work to the teenager in the household?

    Comment by Tinakori — August 25, 2015 @ 9:46 am

    You big meanie.

    Comment by Richard Williams — August 25, 2015 @ 11:41 am

  24. The unitary plan that Len and co put forward to make it easier to increase density was slammed by the right wing of the council.

    The right wing of the council is in opposition and the job of the opposition is to oppose. When they get into power I’ll start blaming them again.

    Comment by unaha-closp — August 25, 2015 @ 12:06 pm

  25. Anything that threatens to increase density in the lush inner-city suburbs has been shouted down.
    Not in my burb. Despite all the supposed restrictions in this area there are a number of two-for-one house replacements happening, with more on the way. Virtually no lawn with three other houses glowering in on three sides within a couple of metres. A game of softball or rugby with a bunch of kids in the backyard? Fat chance.

    Not New Zealand in other words. Better still, one gets to live this “inner-city” London/New York house-style with one third the income. Yes, that’s the environment for raising kids that I wanted to come back to.

    Comment by tom hunter — August 25, 2015 @ 12:17 pm

  26. Our dairy exports rather obscures one key aspect of the impact of a Chinese economic slowdown. I don’t know the numbers, but I’d guess Australia and New Zealand are unique in the OECD for if not running trade surpluses with China, being almost on parity. Almost every other country on the planet runs gigantic trade deficits with China, importing their manufactured goods while the Chineese preferred MO is to steal the intellectual property of whoever owns what they want and copy it at home. So in other words, China’s economy is quite (deliberately) autarkic – something that would limit the impact of a decline in China’s economy on other industrialised economies.

    Comment by Sanctuary — August 25, 2015 @ 12:17 pm

  27. Auckland housing problems are simple. You’ve got a central government beholden to a particular ideologically driven vision of how the housing crisis should be solved – a “free market” solution of automobile dependent greenfield sprawl that’ll also happily enough enrich some of their important supporters vs. an Auckland super city council that (largely supported by Auckland residents) want planned development with a mix of upwards intensification, outward expansion and an emphasis on integrating that with public transport nodes. Overlaid on that is the terror of the Wellington based political establishment at ceding any power they are used to abrogating to themselves in our wildly over-centralised democracy meaning they reflexively want to keep at jackboot on Auckland’s financial windpipe and the result is achingly slow development.

    Eventually though someone is going to win the fight, and I rather fancy a tenner on it being the super city.

    Comment by Sanctuary — August 25, 2015 @ 12:26 pm

  28. “Overlaid on that is the terror of the Wellington based political establishment at ceding any power they are used to abrogating to themselves in our wildly over-centralised democracy meaning they reflexively want to keep at jackboot on Auckland’s financial windpipe”

    I’m digressing but given that parliament is composed of a large number of Auckland-based MPs and Ministers, and that the government was generally endorsed by a majority of Aucklanders at election time, at least as much as anywhere else in NZ, does this really need to be framed as a Wellington versus Auckland thing?

    Comment by MikeM — August 25, 2015 @ 12:36 pm

  29. “The Shanghai bubble was driven by bank debt, and if thousand of Chinese investors all suddenly simultaneously decide to sell their properties in Sydney and Vancouver and Auckland to pay back their banks then there could be a very sharp correction in the market.”

    In which case New Zealand buyers would benefit from the lower prices, previous New Zealand vendors will have benefited from the inflated prices and it will be those eeeevvillll foreigners who will have to wear the losses. As somebody said it might be a bit rough for New Zealanders who bought at bubble prices – but provided they bought it for consumption purposes to be lived in and repaid over 30 years then that’s no disaster. On the other hand, if they bought it as an investment then they’ll just have to bear the risk as any other investor does.

    Investment returns are the reward one receives for assuming risk (which means no investment is ever risk free). I wish the economic xenophobes could grasp that.

    Comment by Liam H — August 25, 2015 @ 12:36 pm

  30. From outside of Auckland it seems that a lot of the NIMBYism has come from the residents of Epsom and similar areas,…

    Neighbouring the CBD to the east is Parnell which is intensifying, southeast is Newmarket which is intensifying, south is Eden Terrace which is intensifying, southwest is Newton which is being intensified and west is Ponsonby which isn’t. Ponsonby is traditionally much more left wing than the others, giving a clear indication of who is being protected.

    Comment by unaha-closp — August 25, 2015 @ 12:43 pm

  31. “… does this really need to be framed as a Wellington versus Auckland thing..?”

    To be fair, it is more a National party vs. Super City thing. Auckland’s tragedy is that a significant chunk of it’s National MPs identify with that segment of Auckland’s business class that basically self serving, corrupt and nepotistic rentier/speculators who think insider trading and sharp practice is their inherited right. They represent a significant faction in the government that opposes the super city largely because the unitary plan prevents them making massive windfall profits from insider trading on land earmarked for urban sprawl – the traditional route to wealth in Auckland. The rest of National’s MPs either fail to understand the difference between solutions that work in Timaru and solutions that work in an actual city, or are just happy to hobbling the plans of the great northern beast, especially if that hobbling helps out their donors.

    Comment by Sanctuary — August 25, 2015 @ 12:51 pm

  32. 27.Auckland housing problems are simple.

    Heh. Auckland housing problems aren’t simple.

    Comment by unaha-closp — August 25, 2015 @ 1:14 pm

  33. Auckland’s tragedy is that a significant chunk of it’s National MPs identify with that segment of Auckland’s business class that basically self serving, corrupt and nepotistic rentier/speculators who think insider trading and sharp practice is their inherited right.

    The rentier/speculators of Auckland are making a killing today as the price of land has soared under the unitary plan. Our Mayor is a good friend of SkyCity casino, with its property portfolio boosted. And we have a car dependent rural sprawl stretching massive distances from the CBD that caters to 27% of all new population growth.

    Comment by unaha-closp — August 25, 2015 @ 1:36 pm

  34. I take it the gloating lefties don’t have superannuation or KiwiSaver.

    Or if they do they have no idea how that works.

    Comment by NeilM — August 25, 2015 @ 2:05 pm

  35. “Auckland Council policy has restricted supply of new houses” …

    “Bill English has been trying for the past 3 years to get new housing areas into Auckland and has been blocked a every single turn by Len Brown / Penny Hulse and their NIMBY friends.”

    Keep slurping that government-issued supply-side kool-aid.

    “Neighbouring the CBD to the east is Parnell which is intensifying, southeast is Newmarket which is intensifying, south is Eden Terrace which is intensifying, southwest is Newton which is being intensified and west is Ponsonby which isn’t. Ponsonby is traditionally much more left wing than the others, giving a clear indication of who is being protected.”

    Way more of Ponsonby qualifies for the pre-1944 heritage protection. It has nothing to do with who happens to live there (not that many can afford to buy into the area any more).

    Comment by Sacha — August 25, 2015 @ 2:21 pm

  36. “… does this really need to be framed as a Wellington versus Auckland thing..?”

    It’s the price you pay for being a capital city. Ask Washington or Canberra.

    Comment by Sacha — August 25, 2015 @ 2:22 pm

  37. True, but I don’t think it’s a clear comparison with what’s happening. For Washington, and to a lesser extent Canberra, there’s some logic with citizens complaining that politicians who live elsewhere are making decisions which affect them. But where Auckland’s concerned, it doesn’t apply so easily. A large portion of those Ministers and MPs involved at the political level were chosen by Aucklanders, and are living in the middle of it. The public service? Sure. That’s quite concentrated in Wellington. But Sanc seemed to be referring to the political establishment. Anyway it’s a digression.🙂

    Comment by MikeM — August 25, 2015 @ 3:28 pm

  38. @30. Immediately west is Freemans bay, already pretty intense. POnsonby, I’ll agree, is much unchanged over the years but has always been full of tightly packed small houses. Large parts of Grey Lynn are intensifying. It is the large, inland suburbs (like Epsom) that are relatively low density and staying that way.

    Comment by David — August 25, 2015 @ 3:33 pm

  39. A dramatic decline now in demand in Auckland would most likely lead to the collapse of a number of developers.

    Leading to some fire sales of apartments currently under construction that would be snapped up by investors.

    Meanwhile construction would take another big hit just like in the early 00s with a lot of builders under-employed.

    So setting the seeds for another price boom in another 10 yrs.

    And meanwhile small scale property investors just in it for their retirement will take a hit.

    So all in all maybe not something to celebrate.

    Comment by NeilM — August 25, 2015 @ 3:38 pm

  40. Way more of Ponsonby qualifies for the pre-1944 heritage protection. It has nothing to do with who happens to live there…

    I knew there was a name for the favouritism to Ponsonby’s NIMBYs – heritage.

    Comment by unaha-closp — August 25, 2015 @ 3:44 pm

  41. And if you look at polling station data, Ponsonby is very right wing these days. The left-wing tradition is long overturned. Grey Lynn (which is intensifying to a large extent) continues to be left-wing.

    Comment by David — August 25, 2015 @ 4:15 pm

  42. Bill English has been trying for the past 3 years to get new housing areas into Auckland and has been blocked a every single turn by Len Brown / Penny Hulse and their NIMBY friends.

    No.

    You have been told before that this is wrong. The left of the council has been in favour of intensification, which increases supply and lowers costs. The right has been against. The council is not a parliament and each vote needs to command a majority. The right has been able to win the votes. Imagine if they controlled the entire council or the mayoralty – you would have even less development north of Papakura.

    “Neighbouring the CBD to the east is Parnell which is intensifying, southeast is Newmarket which is intensifying, south is Eden Terrace which is intensifying, southwest is Newton which is being intensified and west is Ponsonby which isn’t. Ponsonby is traditionally much more left wing than the others, giving a clear indication of who is being protected.”

    For the most part you are wrong about this too; both the intensification of non-industrial/commercial inner suburbs (very limited) and the voting patterns of Ponsonbyans.

    Comment by Moses — August 25, 2015 @ 4:38 pm

  43. “Auckland housing problems are simple”

    Isn’t everything simple in your view, Sanc?

    Anyway I find it deeply ironic that the main response to a potential global economic depression has been “how will this affect the Auckland property market?”.

    Comment by kalvarnsen — August 25, 2015 @ 4:48 pm

  44. Having spent a fair bit of time there recently I have been reminded how crappy the housing stock in both Ponsonby and Grey Lynn remains. By NZ standards of course it is already intensely developed with very small lot sizes and most of the lots devoted to the dwelling, but really the place would be improved if at least a third of the existing houses were demolished and replaced by modern townhouse developments in decent materials designed for the sites and the climate.

    Comment by Tinakori — August 25, 2015 @ 5:06 pm

  45. There is a reason that New Zealanders over 40 years are utterly suspicious of the stockmarket, and pour their excess capital into housing. The 1987 crash, which saw many people’s life savings destroyed in days. People are rightly suspicious of stock, whose value is created through the expectations of other people and which can lose value in an instant.

    Why should the Chinese think differently?

    Comment by Moses — August 25, 2015 @ 5:08 pm

  46. I don’t think it makes a lot of sense to point the finger of blame in any direction for Auckland’s housing problem. And it’s only a problem for some.

    It now has a big city dynamic that’s a positive feedback loop. And that want the result of any one decision.

    I can’t think of anywhere where anyone has managed to reverse such a trend.

    It makes some people lucky and others unlucky.

    One commonplace with investing is to be able to ride out the down swings. Some people just strike it lucky having bought in a hitherto down and out area. But if you’re making a conscious decision to invest then you have to figure in the inevitable cycles. If you have to sell on the down side then you’re stuck.

    Like vine planting etc information takes time to arrive, time to process and is incomplete. Chances are if you’ve thought of it others have to but there’s that delay leading to a cyclical pattern that would be there under any economic system that allowed change.

    And then there’s the investment advice of if they’re pulling the vines out that’s the time to start planting.

    Comment by NeilM — August 25, 2015 @ 5:29 pm

  47. “The 1987 crash, which saw many people’s life savings destroyed in days.”

    Well, only if they were unwise enough to put them all there or those life savings had been created by the share boom in the few years leading up to the crash. This was an era when many people’s real savings were in a defined benefit pension fund and their life savings were over and above that, so not quite the scale of catastrophe it might otherwise have been.

    Comment by Tinakori — August 25, 2015 @ 5:49 pm

  48. This was an era when many people’s real savings were in a defined benefit pension fund and their life savings were over and above that, so not quite the scale of catastrophe it might otherwise have been.

    My recollection is that the recession of the early 90s was at least as devastating. From the mid-80s on a lot of people found themselves with redundancy payoutss after being “let go” from the newly privatised SOEs. In keeping with the mood of that decade they were encouraged to buy franchises or start small businesses that they were ill-equipped to run.

    Comment by Joe W — August 25, 2015 @ 7:21 pm

  49. Capitalism has always had inherent contradictions (the so called boom bust cycles being obvious symptoms).
    Because capitaiism is fundamentally based on greed (not necessarily a bad thing) other survival instincts can be blind sided by neo libertarian prejudices.
    The current international economic debacle is brought about by governments, internationally, refusing to address the issues raised by income inequality and bowing to powerful industry lobby groups.

    The ideological nonsense that the share holder/ owner rules needs to be re examined.

    Non share holders, non owners also share this planet and economy.

    Even that arch lefty Henry Ford recognised that if he paid his employees enough they could afford to buy his cars.

    Something that appears to have escaped all those Ph.Ds and Hons grads in Treasury and assorted Cabinets post 1984.

    Comment by peterlepaysan — August 25, 2015 @ 11:50 pm

  50. @ Tinakori: “Well, only if they were unwise enough to put them all there or those life savings had been created by the share boom in the few years leading up to the crash. This was an era when many people’s real savings were in a defined benefit pension fund and their life savings were over and above that, so not quite the scale of catastrophe it might otherwise have been.”

    Bit of victim-blaming there? Don’t be so quick to judgement. The reality for many people we knew then was that the share market – and investment in property – was their only hope of building up a retirement fund. Pension schemes worth anything much were largely the preserve of the public service: much of what was on offer in the private sector was barely worth the effort of putting money in, being poorly managed and with excessive management fees. The 1987 crash wiped out many people’s portfolios, and in Auckland at least, that was followed by a property price slump, as developers went bust. On top of that, the Rogernomics bulldozer rolled over the job market, leaving thousands of older people jobless. A miserable time, made worse for so many by their inability to get back on the employment ladder.

    Those of us who’ve been long-term investors in the sharemarket well know its ups and downs. What else can we do with our spare money? NZ needs more property speculation like it needs toothache, I’d have thought. The best we can hope for is that the market’ll be on the up when we need to cash our shares in at retirement.

    Comment by D'Esterre — August 25, 2015 @ 11:57 pm

  51. Last time I checked, NIMBYs like Denise Krum, David Seymour, Dick Quax, Chris Diack, and Cameron Brewer didn’t sound like socialist eco-Luddites. Even though they’re not ruling the AKL council right now, they still have the backing of the moneyed elites who don’t want their housing portfolios facing any competition.

    A housing bubble burst is going to hurt a *lot* of people, but things have gotten to the point where it’s one of the few things that’s going to jolt certain people back to reality.

    Comment by Kumara Republic — August 26, 2015 @ 1:31 am

  52. PS. I’ve said it before, but if the NZ bubble does actually burst, the Icelandic solution is probably the least worst of the lot.

    Comment by Kumara Republic — August 26, 2015 @ 1:34 am

  53. I think sending sanctuary to Iceland would be a bit harsh…

    Comment by Lee Clark — August 27, 2015 @ 8:26 am

  54. You’re right, Lee. Iceland has been through enough.

    Comment by Phil — August 27, 2015 @ 9:17 am


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