trading – Page 4

Government Action on Housing Crisis Missing-In-Action

by MARTIN GRONBACH

I stare wide eyed at my phone and let loose a snort of equal parts disgust and derision.

The listing on TradeMe for my neighbour’s house has revealed their asking price.

$540,000.

This probably won’t be terribly offensive to those of you battling to buy your own home considering the average house price in New Zealand reached an eye watering $645,250 as of last year, but let me put my outrage in context.

This is the asking price for a reasonable 3-bedroom house in Carterton, Wairarapa.

Over half a million for a house in Cartervegas, with me as a neighbour? Get the fuck outta here.

If this what politicians put forward as the “affordable provinces” then any young person aspiring to one day own their own home is pretty damn screwed. Trust fund babies need not consider themselves applicable.

Last year I decided to ask the three local councils as to what actions they were taking to address the housing crisis and housing affordability.

The responses ranged from “We can’t do anything”, “It’s not our problem to solve”, “Define affordable” to “We are waiting on direction and leadership on the issue from central government”.

Local governments are not interested in taking a leading role in solving the housing crisis. Maybe this is due to the nearly non-existent representation of young people in local body politics, but that’s a topic for another time.

If not local government, surely our transformative coalition government could surely be trusted to be kicking arse for the long-suffering Kiwi first home buyer?

Brace yourself for crushing disappointment as the salvation of Generation Rent won’t be found with this current government – at least not this term.

Kiwibuild has been flogged by Labour as the band-aid to fix the housing crisis booboo as far back as 2012. However once in a position to actually implement the policy in 2017, it was quickly revealed just how little thought had gone into it.

The reality was that Labour’s fix for the housing crisis was over-hyped and under-cooked, inaccessible for anyone earning the average wage, that had school age children, or any number of the realities New Zealanders face. With the additional restrictions on selling the property within three years, designed to stop property speculation, people considering Kiwibuild are better off not using the scheme if possible, as buying on the open market doesn’t have any such restrictions and, in the end, any difference in the final price paid was negligible.

It’s a sad state of affairs that even with the supposed singleness of purpose and financial backing of the tax payer, Kiwibuild has completely failed to deliver for the majority of people that voted for it.

With numerous New Zealand based kit-set home manufacturers, even houses built by robots in Wellington, building houses isn’t the bottleneck. Land supply, and the price of ticking the boxes before building, however, is.

Reforming the Resource Management Act to allow for faster development of land should be one of the more obvious issues to deal with if the Government was actually serious about tackling the housing crisis. Likewise, opening up the building materials market to some international competition by way of reforming the New Zealand Building Code could potentially topple the monopoly enjoyed by a select few manufacturers price gouging the currently captive New Zealand market and further decrease building costs.

Another touted solution in the build up to the election was the so-called foreign ownership ban. Put forward by both Labour and New Zealand First, this would stop overseas investment in our domestic housing market. However, this did not mean ALL foreign ownership as Australians, who make up a third of all foreign owners of New Zealand property alone, as well as Singaporean nationals in the pursuit of a YET ANOTHER free-trade agreement, are still able to buy New Zealand property.

Again, this was found to be a relative non-issue as measly three percent of all property sold was to foreign buyers and that three percent was mostly made up of large-scale farms and stations, life-style blocks and shares in new-build apartment blocks. While I don’t agree with any foreign ownership of New Zealand land, in the context of the housing crisis, this is, and continues to be, an outlying issue, if not entirely separate from the housing crisis.

Generation Rent isn’t, and never was, in the market for a thousand acres of pristine South Island sheep country, so the foreign ownership ban had little real impact in this regard.

The main influencers of the housing crisis are two issues. The first was, and continues to be, New Zealand’s high levels of immigration. That contentious issue both Labour AND New Zealand First made a huge deal about during the opposition years and during the 2017 election, which our coalition government now seems reluctant to firmly act on, apart from putting the boot into low hanging fruit like the dodgy export education industry.

Ironically the fallout following the banning of Huawei from supplying equipment for the upcoming 5G rollout, the responsive drop in tourists and wealthy international students from China may end up having more of a tangible impact on addressing housing affordability that anything the Government has intentionally done to date.

The second genuine influencer is the rife accumulation, hoarding and speculation of housing by fellow, and now extremely wealthy, New Zealanders. The final word on cause of the housing crisis is that it is a mess of our own making. Kiwis ripping off Kiwis. Ever heard of a cap or outright ban on the number of investment properties? Me neither, and so long as we keep voting for the same four political parties, you never will.

With Generation Rent’s patience starting to wear thin and half their term over already, the coalition government can’t afford to continue to wear the kiddie gloves for fear of threatening the entitlement culture of wealthy New Zealand nor the construction sector lobbyists whilst avoiding the real causes of our housing crisis. 2019 will either make or break this government and younger people’s trust in it.

At the end of the day I don’t want or need 20 rental properties. No reasonable New Zealander does.

I just want the safety and security of providing a home for my wife and children that won’t be put up for sale as soon as the market conditions are favourable.

But not for over half a million in bloody Carterton, thanks.

Martin Gronbach is an unashamed nationalist, self-aware 30-year-old boomer, active political shitposter, father, husband, engineering student and full member of Generation Rent who lives in the Wairarapa.

What Would the Average Hourly Wage Be in New Zealand If Wages Had Kept Up With House Prices?

New Zealand is torn by inter-generational tension right now. The young have no hope of finding houses they can afford and the old simply blame them for being too lazy to work hard enough to afford one. However, the numbers show that workers today get a much worse deal than they did 30 years ago. This article looks at what the average wage in New Zealand would be if it had kept pace with the price of houses since the late 1980s.

This graph from the Trading Economics website tracks the increase in the New Zealand Average Hourly Wage over the past 30 years. We can see that the average hourly wage in New Zealand, as of the beginning of 2018, is $31.03. The Reserve Bank of New Zealand website contains many interesting statistics and graphs, many of which can be downloaded from this link. This article will combine both sources.

In March of 2001, the House Price Index (from the RBNZ link above) stood at 700.2. At this time, the average hourly wage was $17.70. So if a person wished to purchase a $300,000 house, suitable for a growing family, they would have to have capital equal to 16,949 hours of work at the average wage.

According to this article by Human Resources Director, Kiwis work an average of 1,762 hours a year (this figure was for 2014, but for cultural reasons this figure does not change much over time). This means that, in March of 2001, buying a house suitable for raising a family in required capital equal to 9.62 years of full-time work at the average wage.

How does that compare to today?

After seventeen years of red-hot growth, the House Price Index now stands at 2480.8. This represents an increase of 254% over those seventeen years, and it means that a $300,000 house in March 2001 now costs $1,062,000 (all growth factors assumed equal). As mentioned above, the average hourly wage in New Zealand has increased from $17.70 in that time to $31.03, which represents an increase of 75%.

In other words, in January of 2018, buying a $1,062,000 house, suitable for raising a family in, requires capital equal to 34,224 hours of working at the average hourly wage. This is equivalent to 19.42 years of work at the average hourly wage.

We can see, then, that when measured in terms of a person’s ability to purchase a house suitable for raising a family in, the average New Zealander is less than half as wealthy as they were only 17 years ago. To have the same house buying power that it had in 2001, an average wage in New Zealand would now have to be $62.65 per hour.

People working in 1989 – when the majority of Baby Boomers would have been in the workforce – had it even better still. In December of 1989 the House Price Index stood at 453.5; the average hourly wage stood at $13.07 in the first quarter of that year.

So our standard family home that cost $300,000 in 2001 cost a mere 64.8% of that price in 1989, whereas the average wage in 1989 was 73.8% of what it was in 2001. Put another way, the average house suitable for raising a family in cost $194,400 in 1989, which represented capital equal to 14,873 hours of labour at the average wage. This was equivalent to a mere 8.44 years of saved labour.

The average house price has gone up 447% over the past 30 years in New Zealand; the average hourly wage has gone up 137% in that time. So to have the same house-buying power as the average New Zealand worker in 1989, a Kiwi in 2018 would have to get paid $71.50 an hour. This would allow them to buy a decent house after saving around 14,000 hours of the average wage, which is the standard of living that the average worker had in 1989.

In summary, the average New Zealand worker has lost almost 60% of the house-buying power of their wage over the past 30 years.

Buying a decent house in 2018 costs savings equal to 19.42 years of work at the average wage; 30 years ago buying an equivalent quality of housing cost savings equal to 8.44 years of work. So if a Kiwi left home at age 18 in 1970 and saved half of their income on the average wage they could own a house by age 35; a Kiwi who left home at age 18 in the year 2000 and saved half of their income on the average wage can’t expect to own one before they turn 57.

Despite tiny relative savings on consumer electronics, it’s obvious that the standard of living for young people is much lower nowadays than it was 30 years ago. The fact that wages haven’t come close to keeping up with housing costs is the main culprit.

Dan McGlashan is the man with his finger on the statistical pulse of New Zealand. His magnum opus, Understanding New Zealand, is the complete demographic analysis of the Kiwi people. Available on TradeMe for $35.60.

Who Owns The New Zealand Media?

In more sophisticated countries, informed citizens go to considerable lengths to detect any biases among the people reporting the news. This is necessary to make sure that one develops a balanced, nuanced and independent opinion. Kiwis don’t generally bother with such things, preferring instead to believe everything we’re told like the good little lambs we are – except for this article.

It’s often remarked upon, by foreign visitors, that New Zealanders blindly believe everything they hear in the news. Conditioned into obedience by a brutal state education system that encourages bullying, social and emotional abuse, Kiwis are too afraid to question anything even vaguely resembling an authority, such as a television.

Given that we don’t question what the media is trying to tell us, it’s worthwhile figuring out who owns our media, because these same people effectively own our beliefs and opinions. In other words, let’s find out who own our minds.

We can find a ranked list of the major players in New Zealand cyberspace from Alexa. The two major internet portals in New Zealand are the New Zealand Herald and Stuff. You could confidently argue that the New Zealand online mediascape was an effective duopoly, with NZH and Stuff the only real players.

New Zealand Media and Entertainment (NZME) controls the New Zealand Herald brand, ranked by Alexa as the 9th biggest website in New Zealand. NZME is a large media conglomerate (by NZ standards, anyway), as can be seen from the list of newspapers they own at the bottom of their company page.

Finding out who owns NZME is not straightforward, because they are a publicly traded company on both the New Zealand and Australian stock exchanges. Helpfully, their own investor relations page lists their top 20 shareholders, but this doesn’t lead very far. All of the major shareholders are banks or holding companies for banks.

Number one on the list is Citicorp Nominees Pty Ltd, which is based in Sydney. According to Bloomberg, this company is a subsidiary of Citicorp Pty Ltd, which has been incorporated since 1954 and “provides a range of banking and financial products and services to retail, small business, corporate, and institutional clients primarily in Australia.”

One would think that this would surely be the end of the trail, but no. Citicorp Pty Ltd is itself a subsidiary, this time of Citigroup Holding (Singapore) Private Limited. This too, is a subsidiary: of Citigroup Asia Pacific Holding LLC, itself a subsidiary of Citi International Investments Bahamas Limited, itself a subsidiary of Citi Overseas Holdings Bahamas Limited, a child entity of Citigroup Inc.

Citigroup is a gigantic American bank, one large enough to be considered “too big to fail”, with its origins in the City Bank of New York, chartered in 1812. The closest Citigroup has to an owner, at 7.06% of the shareholding, is Vanguard Inc., “One of the world’s largest investment management companies” (as per their company page). In second place, at 4.76% of the shareholding, is State Street Corporation, another investment management bank. Third, with 4.51%, is BlackRock Inc., yet another global investment management corporation.

So that line of investigation doesn’t lead to any specific names, but neither is it any easier trying to figure out who is behind any of the other of New Zealand Media and Entertainment’s major shareholders.

J P Morgan Nominees Australia Ltd is at third place on the NZME shareholder’s list, with 12.69%. Finding out out who owns JP Morgan Nominees Australia Ltd is no easy task, as the article linked here demonstrates. One passage from the linked article reads “Unfortunately, it is practically impossible to track down the identities of those underlying shareholders through the various financial structures that hold shares for each other and on behalf of each other.”

If it’s practically impossible to find out who owns NZME, what about finding out who owns Stuff, the 3rd largest website in New Zealand?

Investigating this is just a shorter path to the same place. The Stuff brand is owned by Fairfax New Zealand Limited, a subsidiary of Fairfax Media Ltd., which is also publicly traded on the ASX. As it turns out, the second-largest shareholder of Fairfax Media Ltd. is none other than Vanguard Inc.

They only own 2.26% of the shares, however, so can only give us a clue as to the ownership of Fairfax Media Ltd. Looking down the list of funds and institutions that own shares in Fairfax, there’s little more than a pile of asset management companies, wealth funds and banks. As with Vanguard, BlackRock also appears on the list of major owners of both Citigroup and Fairfax Media Ltd.

The story with television media is little different to the story just described with print and online media. The New Zealand television market is, like the print and online media markets, an effective duopoly between Television New Zealand (TVNZ) and MediaWorks New Zealand.

TVNZ is Government-owned, but is almost entirely funded by commercials and is therefore little different to any other commercial broadcaster. MediaWorks New Zealand, for its part, is entirely owned by Oaktree Capital Management, which is (you guessed it) another global investment and wealth management fund.

In summary, no-one has any fucking idea who owns the New Zealand media, apart from the small niche carved out by TVNZ and the independents. Trying to pin it down to any one person is like trying to catch shadows in a jar. The best one can say is that the New Zealand media is ultimately controlled by global wealth management funds and corporations and their nominated representatives.

Being owned by such institutions tells us that the New Zealand media is run for profit and probably has little agenda other than commercial. In other words, there is little in the way of direct political propaganda or slanted editorial content, but one can expect the quality of the journalism to degrade to that which appeals to the lowest common denominator in society. Indeed, it has.

The astute reader will have drawn a connection between all of this bank ownership and the never-ending series of “I became a homeowner at age 21”-style stories. The reason for this is the banks benefit directly from a shallow, consumerist, disposable culture in which it’s considered normal for people move away from their parents and get a massive mortgage so that they can pay hundreds of thousands of dollars of interest to a gigantic, parasitic investment corporation.

In other words, the owners of the New Zealand media directly make money from consumerist culture, in particular from people taking out loans to buy shit that they don’t need. This is why all manner of wasteful, extravagant and unnecessary consumer purchases are advertised, and normalised, by the New Zealand media.

If you enjoyed reading this essay, you can get a compilation of the Best VJMP Essays and Articles of 2017 from Amazon for Kindle or Amazon for CreateSpace (for international readers), or TradeMe (for Kiwis).

Why Immigration Is a Weapon Of The Parasitic Rich

The parasitic class has many different strategies for destroying the mutual trust among the people – and opening the borders achieves several of them at once

Many were surprised, and many were not, by the news that the New Zealand Bus Drivers Union was opposing the request of Ritchies to import 110 indentured servants in the form of “migrant bus drivers”. Those who were surprised were those who thought that the union, being comprised ostensibly of leftists, ought to support bringing third-world people in to compete with the indigenous working class, because leftists are supposed to be all about solidarity for poor brown people.

Those who were not surprised were those who understand how reality works. The reality is that Ritchies put in such a low bid for the bus drivers’ contract that they couldn’t fill the positions with Kiwi staff, because the supply of people willing to work at wages that they can’t live off is almost nil. There is now an established precedent, however, for Kiwi employers who can’t find enough local suckers to subsidise their parasitic lifestyles: immigration.

Much like American employers with illegal Mexicans, Kiwi employers have cottoned on to the fact that maximising profitability is a function of minimising wages, and that minimising wages is a function of the leverage the employer has in the negotiation, and that this leverage is vastly increased if the worker is illegally in the country or wholly dependent on the whims of the employer for future work.

Not only does immigration give the local ruling class great power by populating the land with people dependent on them, but it also strengthens their economic position by destroying the leverage that local workers have in employment negotiations. This destruction of leverage is achieved by destroying the amount of trust that people have for each other, because solidarity is necessary to resist the depredations of the parasitic class and solidarity is primarily a matter of trust.

Game theory* tells us about the factors necessary for the evolution of trust.

The first is repeated interaction. People rarely trust others if they believe that they will never meet that other again, and for good reason: it makes sense from a game theory perspective to be more likely to exploit a person who you will never see again, for the reason that they will not be able to take revenge.

The greater the flow of people, the less repeated interaction there is. At one extreme end, there is very little solidarity in an airport terminal, for the reason that the vast majority of interactions here will not be repeated. At the other extreme, there is immense solidarity among members of a pioneer family deep in the Canadian wilderness, for the reason that virtually all interactions will be repeated.

The second important factor is the capacity for social interactions to be non-zero-sum games. In other words, trust only develops when social interactions result in clear mutual benefit. If either side feels like they lost out from the exchange, trust will dissipate.

Many people will make the claim here that immigration grows the overall size of the pie, for the reason that each new immigrant, even if they take up a job, creates at least one job’s worth of demand for other goods and services. This argument is often touted as a counter to the “Lump of Labour Fallacy” and, to that end, it has merit. But this argument ignores the impact of social status on a person’s well-being.

Social status is a zero-sum game in the sense that the higher one person is up the dominance hierarchy, the lower someone else must be. Low social status is extremely stressful – perhaps it wouldn’t have to be experienced as such in an ideal world, but we don’t live in one. In our world, a native person having to accept a lower social status than an immigrant is regularly experienced as a humiliation, for the reason that the native feels pushed out, as if by a cuckoo hatchling.

In a social environment where immigration means that the natives have to accept lower positions (such as an unemployment benefit in lieu of a living wage, as in the case of the indigenous bus drivers in the opening paragraph), there will naturally and understandably be resistance from those natives. This means that forcing it on those natives, against their will, will inevitably have the effect of causing those natives to hate the immigrants instead of trusting them.

The third important factor for the development of trust is to have low levels of miscommunication. As everyone who has spent any time on the Internet knows, clarity and precision are the cornerstones of communication, and when you have hordes of jabbering retards you end up having arguments and fights.

The greater the diversity, the greater the levels of miscommunication. This is because you have more languages and dialects to contend with, and any given person has an upper limit as to how many of these various forms of communication they can master. Exceeding this limit – which is guaranteed to happen if diversity keeps increasing – will cause miscommunication to happen.

Increasing the rates of immigration has the effect of bringing a diverse range of different forms of communication into everyday life, which increases the likelihood of someone misunderstanding someone else. So the greater the levels of immigration, the greater the levels of miscommunication and therefore the lower the levels of trust.

Who benefits from all this destruction of trust? The cheaters. The very same parasite class who entreats the Government to let them import indentured servants instead of paying a fair wage to local workers who are looking for employment. They benefit immensely from the destruction of trust, because an environment of distrust makes the people less able to organise to resist the hoarding of wealth, and this shifts the balance of power in favour of the wealthy.

The greatest trick the rich ever pulled on the poor was to convince them to open the net of solidarity so wide that no-one in it has anything in common with each other any more. The circle of trust has been cast so wide that it has fallen apart, and the traditional ways of re-forming bonds of trust have been destroyed or are severely discouraged.

This makes about as much sense as opening your pantry for the neighbourhood rats and mice to come and take their fill, on the grounds that rodents are disadvantaged compared to humans and therefore solidarity with other humans is a form of supremacism.

* For an outstandingly brilliant demonstration of the basic principles of game theory as it pertains to trust, see http://ncase.me/trust/