Cycles, Stats and Set Ups

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Creative Commons License photo credit: Gustty

Renegade Economists Podcast 83

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As broadcast on April Fools Day, 2009 via the almighty www.3CR.org.au

Show Notes
Cycles, Stats and Set ups – Louis Christopher from SQM Research provides background on the state of the housing market. G20 standoffs, shareholder activism and some thought provoking music as always. Anything in italics below is our commentary

Download Louis Christopher interview (10mins, 9MB)
G20 – London sets up barricades (more fear-mongering PR)

Medvedev Talks Up Super Currency
“The globo” + ** Wayne Swan pulls into Japan to sell our Govt bonds

Retail sales slide:
Retail sales dipped 2%, seasonally adjusted, in February, the largest monthly drop since July 2000. Economists expected a 0.5% fall.

Landlords do deals as sales slide:
…an unconfirmed story of a Westfield tenant who’s been offered a 15% reduction after the tenant gave notice that they didn’t want to renew the lease. Yes, Westfield – a mob with a fearsome reputation for being prepared to ruthlessly suck tenants dry

Banks Walk Away from Foreclosures
With over 19 million, yes 19 million vacant homes in the US, many suburbs are looking even more like a war zone than usual.

Shareholder Activism:
Wild Lands In US
– Tim DeChristopher, a 27-year-old college student buys shares to save wild lands.

BrisConn – A Tangled Tale

Steven and Violet Csutoros – bought $600 of shares, now owe $200,000, about to lose house. Dodgy deals!

BrisConn solvency questions
LEGAL action by BrisConnections to have major shareholder Australian Style Investments wound up and two planned meetings of unit holders canceled, may have backfired because the builder of Brisbane’s $4.8 billion Airport Link project now faces the prospect of proving its own solvency.

… Australian Style and its 26-year-old owner, Nicholas Bolton.

‘‘Why is BrisConnections avoiding telling them what the net present value of their units is? It’s highly likely the units have a negative value, so we submit that an independent party should look into what the debts, claims and liabilities of the plaintiff (BrisConnections) are. These unit holders just want to know ‘what is my unit worth’ ahead of any meeting.’’

According to Mr Armstrong, BrisConnections has inflated its assets on its balance sheet by counting $780 million of yet to be collected instalment payments on its units and a further $200 million from a deferred capital raising that will not be collected for another six years. If these sums were not counted, Mr Armstrong states, ‘‘equity goes into deficiency to the extent of $31 million’’.

Belly Up for UpMarket Bars
Cornerstone spent 65m in 2007 buying pubs, including the Punters Club (now Bimbo Deluxe)
The Tote: bought 07 for 3.2 m, passed in for 1m recently – defines how property divides and conquers culture.

FHOG – Will they extend or won’t they?
According to data from the Office of the Minister for Housing, in October 2008 there were 121 recipients of the first home owners grant. No. I didn’t leave out a digit, just 121. In January 2009, this figure has swelled to 12,853.

Study: Land trusts lead to lower foreclosure rates By VICTORIA GUAY
A recent survey conducted by the National Community Land Trust Network and the Lincoln Institute of Land Policy, based in Cambridge, Mass., revealed that foreclosure rates are lower among community land trust homeowners than the average owner of market-rate houses.

According to the survey, at the end of last year homeowners in community land trusts had a foreclosure rate of 0.52 compared to the overall national rate of 1.08.

HALF the Typical Land Owners rate!!!!

More recently, the Mortgage Bankers Association announced that the national rate was at 3.3 percent in January.

Music

Cheers to all the artists out there donating beautiful music to the Global Commons, the creative commons. Wish we could slap some coin your way, but hey this knowledge could reduce your rent!
Hermitude – Alter Ego
Grant Leuchtner – HG Wells
Los Codos – Fractal
Ambient Anarchist – Am I Jedy

Material We Wish To Have Covered

America the Tarnished
Indeed, these days America is looking like the Bernie Madoff of economies: for many years it was held in respect, even awe, but it turns out to have been a fraud all along.

$2 BILLION WILL BOOST HOUSING STOCKS TO REDUCE RENT PRESSURE
Figures published today in the December Quarter 2008 Rental Report show annual increases of 10.9 per cent for metropolitan areas and 7.4 per cent in regional areas in the year to December 2008.

$2bn = 6666 homes at $300K = just 14000 people housed

Banned MP Galloway Speaks to Canadians by moonwolf
Though the US Department of Homeland Security and the Israeli Government do not consider Galloway a terrorist or threat, …. Canada’s Immigration Minister Jason Kenney does!

Kenney turned an insignificant speaking tour by one British peace activist into a global spectacle, one which will stand as a monumental embarrassment to Canada for the foreseeable future.

Mr.Galloway, was to speak to a few hundred Canadians in four venues.

But after Kenney’s public relations blunder the direct live internet broadcast alone reached thousands of Canadians in a greatly expanded number of venues across the country.

….the video had been watched by 42 thousand Canadians since last night alone.
Rabble TV had only 43 thousand views total in the last month….

Who owns Colorado’s rainwater? By Nicholas Riccardi
But according to the state of Colorado, the rain ….should be allowed to fall to the ground and flow unimpeded into surrounding creeks and streams, the law states, – to become the property of farmers, ranchers, developers and water agencies that have bought the rights to those waterways.

What Holstrom does is called rainwater harvesting. The only risk involved is losing it to evaporation. Or running afoul of Western states’ water laws.

Those laws, some of them more than a century old, have governed the development of the region since pioneer days.

“Every drop of water that comes down keeps the ground wet and helps the flow of the river,” Jaeger said. He scoffs at arguments that harvesters like Holstrom only take a few drops from rivers. “Everything always starts with one little bite at a time.”

Increasingly, however, states are trying to make the practice more welcome. Bills in Colorado and Utah, two states that have limited harvesting over the years, would adjust their laws to allow it in certain scenarios, over the protest of people like Jaeger.

Organic farmers and urban dreamers aren’t the only people pushing to legalize water harvesting.

Developer Harold Smethills wants to build more than 10,000 homes southwest of Denver that would be supplied by giant cisterns that capture the rain that falls on the 3,200-acre subdivision. He supports the change in Colorado law.

“We believe there is something to rainwater harvesting,” Smethills said. “We believe it makes economic sense.”

State Sen. Chris Romer “Welcome to water politics in Colorado – You don’t touch my gun, you don’t touch my whiskey, and you don’t touch my water.”

Lose your property for growing food? By Chelsea Schilling
Some small farms and organic food growers could be placed under direct supervision of the federal government under new legislation making its way through Congress.

…..the Food Safety Modernization Act of 2009, was introduced by Rosa DeLauro, D-Conn., in February.
– DeLauro’s husband, Stanley Greenburg, conducts research for Monsanto

DeLauro’s act calls for the creation of a Food Safety Administration to allow the government to regulate food production at all levels – and even mandates property seizure, fines of up to $1 million per offense and criminal prosecution for producers, manufacturers and distributors who fail to comply with regulations.

Michael Olson, host of the Food Chain radio show
“We need somebody to watch over us when we’re eating food that comes from thousands and thousands of miles away. We need some help there,” he said. “But when food comes from our neighbors or from farmers who we know, we don’t need all of those rules. If your neighbor sells you something that is bad and you get sick, you are going to get your hands on that farmer, and that will be the end of it. It regulates itself.”

Aussie women making money buying up NZ property
A bus load of 30 Australian women travel the country looking for property bargains.

They call themselves Property Women Australia, and they have around 15,000 members
– their first stop is perhaps not where you would expect – the streets of South Auckland.

State houses, larger sections, motorway access and a secret weapon – the traditional Kiwi sleepout. That equals more rent income, so the girls want a closer look.

So why come all the way to New Zealand to buy property?
– no property taxes!!! minimal council rates, both major parties reject even capital gains tax = basket case tax system

The price for a three bedroom house in Huntly can be $119,000 or lower.

So why choose this part of the country? The group says there are gains to be made in the area, and its commuting distance to Auckland and Hamilton.

The brainchild of Property Women Australia is Judith Taylor. She spreads her advice to other women in the group.

“I left work in 2004 all because of our property investment portfolio,” she says.

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