Black Monday

[Sgt Pepper]

Wen I bought my first home most lending was done through solicitor's nominee companies. By law they could only lend 66% on first mortgage.
it was sometimes possible to get a second or third mortgage, but they were expensive.
it wasn't easy back then and it's not easy now.

I bought my first house in Opoho Dunedin for the princely sum of $27000. I was 23 years old, employed, good credit history. I had saved a deposit of $10000, thus needed to borrow $17000. I made an appointment with the Otago Savings Bank, the Manager considered my application and informed me that I would increase my chances of a positive response if I transferred my $4000 from the Canterbury Building Society to the OSB. I foolishly closed my account with CBS and transferred my millions to OSB. A week later I was informed that my application had been declined, he blamed it on Rob Muldoon restricting lending unexpectedly. "But I have cut off my only other source of finance!" I protested. It was to no avail, I was curtly dismissed.
I did buy the house, but had to resort to finance from a Solicitor at 14%.

Different times indeed. To get a loan now all you need is a pulse and a payslip.

[fungus pudding]

I bought my first house in Opoho Dunedin for the princely sum of $27000. I was 23 years old, employed, good credit history. I had saved a deposit of $10000, thus needed to borrow $17000. I made an appointment with the Otago Savings Bank, the Manager considered my application and informed me that I would increase my chances of a positive response if I transferred my $4000 from the Canterbury Building Society to the OSB. I foolishly closed my account with CBS and transferred my millions to OSB. A week later I was informed that my application had been declined, he blamed it on Rob Muldoon restricting lending unexpectedly. "But I have cut off my only other source of finance!" I protested. It was to no avail, I was curtly dismissed.
I did buy the house, but had to resort to finance from a Solicitor at 14%.

Different times indeed. To get a loan now all you need is a pulse and a payslip.

Holyoake was PM when I bought my first house. Jack Marshall soon followed. It was hard going, but I managed to buy a few. The trick in those days was to find a property where the vendor would leave heaps in on second mortgage. Fortunately (for me) it wasn't long before Labour came to power under Norman Kirk. Wallace Rowling was minister of finance. Completely clueless. He got all wound up because house prices were rising, so introduced the infamous spec tax. The market dried up and prices sky-rocketed; achieving the exact opposite of what he intended. I've been forever grateful to Rowling and his stupidity.

[Sgt Pepper]

Holyoake was PM when I bought my first house. Jack Marshall soon followed. It was hard going, but I managed to buy a few. The trick in those days was to find a property where the vendor would leave heaps in on second mortgage. Fortunately (for me) it wasn't long before Labour came to power under Norman Kirk. Wallace Rowling was minister of finance. Completely clueless. He got all wound up because house prices were rising, so introduced the infamous spec tax. The market dried up and prices sky-rocketed; achieving the exact opposite of what he intended. I've been forever grateful to Rowling and his stupidity.

I am interested in how you would reconcile Muldoons views on the 1973 Property Speculation Tax and the fact he did not bother to remove it until 1979, 4 years after winning the 1975 election. Mind you, if I recall correctly there were an awful lot of dancing Cossacks to hunt down. But I guess you and I are showing our age, if we talk about Muldoon, Rowling Marshall, and Holyoake to youngsters we may as well be talking about Darius the Great

[fungus pudding]

I am interested in how you would reconcile Muldoons views on the 1973 Property Speculation Tax and the fact he did not bother to remove it until 1979, 4 years after winning the 1975 election. Mind you, if I recall correctly there were an awful lot of dancing Cossacks to hunt down. But I guess you and I are showing our age, if we talk about Muldoon, Rowling Marshall, and Holyoake to youngsters we may as well be talking about Darius the Great

Muldoon was an economic clown. Ring-fencing losses to a maximum of $10,,000 per property, claw-back taxes, Rent freezes. All of course achieving the opposite of what was intended. (A poorly designed capital gains tax would do the same) Still Rowling that I thank though. Fascinating thing about Muldoon's claw-back tax: on selling a property the vendor could choose to pay tax on interest claimed or capital gained - whichever was the lesser amount. So you completed a form showing both calculations and submitted it to the IRD for approval before submitting payment. I know many who did this, but never ever heard back from IRD, so simply paid nothing.
P.S. From memory I think the speculation tax was treated much the same after the first couple of years. If you voluntarily paid it - that was fine, but if you 'forgot to' - nothing happened.

[Bjauck]

Interesting to hear about the Muldoonist era. He does sound to have been the King Cnut of economics with his rent freezes and price freezes. Back to the present day and I see average Auckland house prices have now surpassed those of Sydney. If only incomes had done the same! Even JK is threatening a land tax on overseas owners. Too little too late?
http://www.nzherald.co.nz/business/n...ectid=11628459

Investors are buying 80% of cheaper properties in Auckland! First home buyers being pushed aside?
http://www.nzherald.co.nz/business/n...ectid=11628399

[Leftfield]

A bullish view of the S&P 500??? Interesting times indeed.

http://www.bloomberg.com/news/articl...all-time-highs

[skid]

Correct, percy. FN Arena made this comment in their latest weekly roundup:

"The Big Elephant in the room of global equity markets is, of course, the usual seasonal pattern that has firmly characterised five out of six calendar years post 2009.
With the exception of 2014, in all other years global indices enjoyed one last hurray leading into late April/early May only to subsequently take a dive to lower levels."

A bit strange, really, considering that the old "sell in May and go away" is said to date from the days of well-heeled London brokers taking the summer off for social reasons - Wimbledon, Lords, etc! Or at least, that's what I was told when I worked briefly in London in the 80's.

''Sell in may''--Dont forget,in most of the world we are coming up on the summer break.

[bull....]

sell in may lol is just like santa rally doesn't always happen

[PointyHat]

''Sell in may''--Dont forget, in most of the world we are coming up on the summer break.

Sell in May and go away
Come again on derby day

Whens that? I cant rememeber
As you say its all to c ock down here
But the last 3 or 4 years have been magic.

I have reduced over the last month, and only have HBL, anyone else sold up?
Getting 1.6% on half, and 3.0% on other half at heartland - sad return but safe.

Last time I sold up was August 1996 and bought a new car.

Feeling very pessimistic at the moment ....

[couta1]

Selling stocks like IFT in May is plain dumb with the upcoming results and increasing divvy.