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Thread: Black Monday

  1. #13841
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    Quote Originally Posted by nztx View Post
    Heaps of Crashings & Smashings going on

    https://www.nzherald.co.nz/business/...K2ODM3RBM642Q/

    Four Wellington bars insolvent: ACC, IRD, dozens of employees and businesses claiming funds


    Added to the growing list of similar sector, building & construction firms falling over in recent times

    cant be good for the economy, suppliers, and any number of NZX firms servicing these sectors..

    and then the toll on employees who may or may not have mortgaged homes, in times of
    rising inflation, costs and interest on borrowings..
    More happening than hits the news too. This reminds me of Finance Companies who started crashing before the 2008 GFC.

    Property Developer Du Val Capital Partners suspended cash distributions on the Fund and is proposing instead to convert cash distributions into units in the fund, pending a potential public listing.
    https://www.scoop.co.nz/stories/BU2303/S00159/fma-warns-du-val-capital-partners-limited-over-misleading-or-deceptive-statements-to-investors-in-du-val-mortgage-fund.htm

    One disgruntled elderly investor who said he relied on the interest payments through his now locked $800,000 investment in the mortgage fund was reminded he was not allowed to breach confidentiality by going to the media (Business Desk).
    Last edited by moka; 21-03-2023 at 01:02 PM.

  2. #13842
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    Quote Originally Posted by SailorRob View Post
    They are not trading their time for money for gods sake.

    How hard is this??

    They are trading their time for other people's time and swapping it for other goods and services in the economy.

    Most people live week to week! They hold the cash for 7 days before swapping it all for goods and services.

    This has to be a wind up, impossible not to understand this.
    What about if you save a portion of your wages to save for a house deposit. Aren't you trading your time for cash, and you are trading your time for cash as a store of value until you can buy a house or invest it.

    A lot of people do live week to week but some also put money in the bank for future consumption. Not that hard to understand, keep trying.

  3. #13843
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    Quote Originally Posted by Aaron View Post
    What about if you save a portion of your wages to save for a house deposit. Aren't you trading your time for cash, and you are trading your time for cash as a store of value until you can buy a house or invest it.

    A lot of people do live week to week but some also put money in the bank for future consumption. Not that hard to understand, keep trying.
    Nobody with half a brain stores money for future consumption in a demand deposit.

    Saving for a house takes most people a long time.

    A quick look at the two fat controllers in charge of your plastic adorned with queer native birds and Queens and you'll soon realise it ain't wise.

  4. #13844
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    Quote Originally Posted by SailorRob View Post
    Nobody with half a brain stores money for future consumption in a demand deposit.

    Saving for a house takes most people a long time.
    A timely article on how people are trading their time for money and eventually goods and services.

    https://www.msn.com/en-nz/news/other...0a6eb817&ei=12

    Not just demand deposits, I would argue any term deposit or bond yielding below the inflation rate is a dumb idea but how many investing opportunities are there over 7% that don't carry huge risk.
    Last edited by Aaron; 21-03-2023 at 01:42 PM.

  5. #13845
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    Winners and losers – the usual rules changed dramatically with Credit Suisse bank failure. Depositors are protected, AT1 bond holders lose everything, and shareholders lose lots.

    https://www.cityam.com/explainer-whats-an-at1-bond-and-why-are-credit-suisses-now-worthless/

    UBS’ rescue deal of Credit Suisse, has come with a surprise for holders of Credit Suisse’s AT1 bonds. These risky bonds – which had a nominal value of $17bn – are now precisely worthless.

    An AT1 bond is essentially a bond with insurance – with it being converted into equity if a bank falls below a certain, pre-decided strength or capital limit. They’re a creation of post-financial crisis reforms and help a bank to meet capital requirements.

    AT1s are also known as Contingent Convertibles – hence the nickname CoCo – and were designed in part to make it less likely that in the case of a bank failure, the taxpayer would have to step in with a bailout.

    AT1 bondholders, like all creditors, are higher in the ‘food chain’ than shareholders if a bank goes pop. In theory at least, AT1 bondholders should have expected to be compensated or take equity in Credit Suisse – therefore giving them part of the payout from UBS.

    However, Swiss regulators appear to have decided that it was possible to use their extraordinary powers to effectively wipe out AT1 bondholders, with UBS paying shareholders and the bondholders left with thin air. It’s not necessarily the write down of AT1 bondholders that’s at issue – it’s the fact shareholders have jumped the traditional queue.

  6. #13846
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    Quote Originally Posted by moka View Post
    Winners and losers – the usual rules changed dramatically with Credit Suisse bank failure. Depositors are protected, AT1 bond holders lose everything, and shareholders lose lots.

    https://www.cityam.com/explainer-whats-an-at1-bond-and-why-are-credit-suisses-now-worthless/

    UBS’ rescue deal of Credit Suisse, has come with a surprise for holders of Credit Suisse’s AT1 bonds. These risky bonds – which had a nominal value of $17bn – are now precisely worthless.

    An AT1 bond is essentially a bond with insurance – with it being converted into equity if a bank falls below a certain, pre-decided strength or capital limit. They’re a creation of post-financial crisis reforms and help a bank to meet capital requirements.

    AT1s are also known as Contingent Convertibles – hence the nickname CoCo – and were designed in part to make it less likely that in the case of a bank failure, the taxpayer would have to step in with a bailout.

    AT1 bondholders, like all creditors, are higher in the ‘food chain’ than shareholders if a bank goes pop. In theory at least, AT1 bondholders should have expected to be compensated or take equity in Credit Suisse – therefore giving them part of the payout from UBS.

    However, Swiss regulators appear to have decided that it was possible to use their extraordinary powers to effectively wipe out AT1 bondholders, with UBS paying shareholders and the bondholders left with thin air. It’s not necessarily the write down of AT1 bondholders that’s at issue – it’s the fact shareholders have jumped the traditional queue.
    B!OODY Europeans, they were always dodgy, thats why the go to war every few years, over populated, inbred and hatred of each other is their hall mark !!

  7. #13847
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    Quote Originally Posted by Aaron View Post
    A timely article on how people are trading their time for money and eventually goods and services.

    https://www.msn.com/en-nz/news/other...0a6eb817&ei=12

    Not just demand deposits, I would argue any term deposit or bond yielding below the inflation rate is a dumb idea but how many investing opportunities are there over 7% that don't carry huge risk.
    Currently there are hundreds of opportunities that virtually guarantee over 7% with zero risk.

    Unless you consider volatility risk.

  8. #13848
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    Quote Originally Posted by SailorRob View Post
    Currently there are hundreds of opportunities that virtually guarantee over 7% with zero risk.

    Unless you consider volatility risk.
    What are your top 10 opportunities with zero risk and a return of 7% (I assume that is for a year)?

    Actually I want a return greater than 7% as I want to maintain purchasing power and be rewarded for providing capital but 7% is a good start.

    No need for hundreds as I don't need to diversify that much.
    Last edited by Aaron; 21-03-2023 at 03:39 PM.

  9. #13849
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    Quote Originally Posted by Aaron View Post
    What are your top 10 opportunities with zero risk and a return of 7% (I assume that is for a year)?

    Actually I want a return greater than 7% as I want to maintain purchasing power and be rewarded for providing capital but 7% is a good start.

    No need for hundreds as I don't need to diversify that much.

    If you're talking about wanting to convert into cash in a year then that's not my area of expertise, I'm talking about equity investments that will compound at greater than 7% per year averaged over the long term, being at least 5 years and preferably 10 plus. Forward returns from here are as good as they have been for 25 years outside of the GFC low and perhaps Covid low.

    If you wanted 7% plus with very low risk and liquidity in a year without currency risk then I'd look to the NZ corporate bond market.

    One example is Channel Infrastructure who are one of the most awfully managed companies every known to exist, however they have ample near term liquidity and insolvency is totally out of the question as they would lose the pipeline to Auckland to creditors and ExxonMobil and other owners would never let that happen and would inject equity if they needed to, very very safe over the time frame of 12 Months and you can buy bonds maturing in 12 Months for around 8%.

    I would consider OCA bonds as extremely safe as well.

  10. #13850
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    Also worth commenting that I think buying Gold with the need or intention of selling in a year would be madness.

    You'd be paying nearly a 5% spread to buy and sell alone and nobody has any idea what you could sell it for in 12 Months time.

    Over the very long term you would be able to swap it for a similar amount of goods and services as now, but what people forget is that goods and services become FAR cheaper over time in terms of what you can obtain with a weeks work (living standards essentially).

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