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ive just been reading page one of this thread and i watched the 60 minutes piece House of Cards and thought I'd share a bit of what I have read and interpreted about the sub prime crisis. There are obviously multiple factors at play, but this is as i understand it.
Predatory Lending, an illegal practice in the states, was used to effectively con people into accepting loans they could not afford. The good percentage of those taking these subprime loans were poor; poor credit history, poor financial situation, poor financial education.
all these dodgy loans were then packaged up and sold as 'gold' investments that we now know have turned to mud. companies worldwide that invested in them, have lost big.
In itself this is bad enough, for greedy financial institutions to suck the life out of people not equipped to understand their position. Sure, they should have known better, but they didnt. They got loans at IR of 1% for a few years not realising that when this term expired they would move onto considerably greater rates (in the 60mins vid it was 14%)
But, here comes the interesting bit: some people out there recognised the problem. Those people happened to be Attorney Generals. Led by NY governor Eliot Spitzer, the 50 state AG's took action against the companies handing out the loans, reaching settlements and then introducing laws to stop it happening again.
The Bush administration didnt want this to happen. they went against the AG's, instead siding with the finance sector and invoking its own regulatory body to stop the AG's individual states from protecting their citizens through these new laws. Spitzer, already an anti corruption crusader intensely dislkied by Wall St (nicknamed 'the sheriff of wall st) launched a NY AG investigation but was sued by the Bush govt on the grounds that curbing pred lending stopped consumers access to credit.
This of course made Spitzer Public Enemy No 1 in the eyes of the Bush admin. After all, CountryWide, one of the biggest sub prime lenders, is also one of the main contributors to the Bush Republican Party, as are many of the others.
On Valentines Eve 2008 Spitzer penned an article in the Washington Post detailing the misdeeds of the financial companies and the Govt http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html .
Foolishly, while in Washington writing the article, Spitzer ordered a prostitute to his room, all unknowingly while being wiretapped by the FBI. His article was published however not long after whispers emerged of a high profile politician being busted in a prostitution ring scandal. Three weeks after the article was published, Spitzer was forced to resign and it came to light that he had two previous liasons with hookers. After his challenge to the Administration article though he needed to be silenced and the resulting media circus failed to focus on his ongoing investigations but on the call girl herself.On the day he resigned the Govt announced its multi billion bailout of BearSterns and other lenders….
None of this starngely has made the major outlets worldwide, possibly because most of those corporate controlled conglomerations are also major backers of the Bush Admin and benefit from their policies. Greg Palast at gregpalast.com did though if anyone is interested in further reading.
So I figure thats where the mess we are heading into is partially coming from.
just on the oil debate, and it is a complex one with plenty of factors to consider
but i agree with scamp. oil isnt exactly in short supply, there's plenty of it.
the US hasnt even exhausted its domestic supply while Venezuela and Canada supply the US with as much if not more than the arab states- and they have plenty of reserves albeit in harder to extract tar sands.
the US, contrary to popular myth, didnt go into Iraq to get cheap oil to flood the market (which however was the neocon plan ie, to smash OPEC)- they went in their to control the oil. big difference. the influence of Big Oil in the US Admin is huge- most of the major players still around are Oilers not neocons. so control the output and drive prices up and your million barrels at 20 per barrel (end of clinton admin) is now worth 100+ per barrell, so you have 5x the profit without doing much.
and iraq was the designated minor player in opec, having a production limit well below the other opec members and only using5 of their 75 oil fields (will have to check ths fact). sanctions dictated iraq couldnt sell their oil- except to Halliburton to the tune of 20 odd billion to rebuild their damaged refineries.
on top of this, the US needs to finance its invasion without a war tax, an expensive task. hence the saudi's lend them the money on the pretence it all filters back to them via increased petrol prices.
probably a bit off topic, but the speculation of the public that there isnt any oil left, drives up the price…imho
gday
i lived in nz for 3 years and kept an investment property in sydney
good news is you can claim your Oz property in both countries.
You get tax credits in Australia (assuming you are neg gearing), and payments on Oz prop bring your NZ taxable income down.
There is a witholding tax though but in my limited experience and knowledge i think it works out pretty good.
but talk to an accountant experienced in this and get it from the horses mouth
i dont know too much about the market but i lived in nz for the past 3 years and recently moved overseas
i sold my house in there in october of last year, in a suburb called Kohimarama.
ive since moved overseas.
i really thought id sold it too cheaply in the mid 600's, however a mate of mine sent me this not long ago
http://www.nzherald.co.nz/section/story.cfm?c_id=516&objectid=10516401
before i left there were plenty of stories of people having to sell their investment units in the city way under the purchase price.
it will though depend on where you buy
exchange rate and no cgt is great but interest rates are quite high there
cheers
