The Perfect Rip Off

More on the LIBOR scandal.

This article from Matt Taiibi is concise.  Basically the public get shafted, then have to pay a fine for being shafted.  Perfect rip off scenario for the banks.

Another Domino Falls in the LIBOR Banking Scam: Royal Bank of Scotland

POSTED: June 29, 7:06 AM ET

The Royal Bank of Scotland
The Royal Bank of Scotland
Peter Macdiarmid/Getty Images

Another one bites the dust. The Royal Bank of Scotland is about to be fined $233 million (£150 million pounds) for its role in the Libor-rigging scandal. It joins Barclays as the first banks to walk the plank in what should be, but so far is not, the most sensational financial corruption story since the crash of 2008.

Many of the banks implicated in the Libor mess have also been targeted in the various municipal bond bid-rigging investigations, and RBS is no different – its subsidiary Natwest is also a defendant in the major civil lawsuit in the bid-rigging case. The cases aren’t related, except in the sense that they both involve manipulation and anticompetitive cooperation. It’s going to be harder and harder to make the case that the major banks do not routinely cooperate at the expense of the public when it serves their purposes to do so.

The news that RBS is involved comes with a perverse twist. This is from the Times UK:

The bank, which is 82 per cent owned by the taxpayer, is preparing for a political firestorm over the affair because it believes that it has no power to claw back bonuses from the traders responsible. Instead, the expected fines would be borne by the shareholders — largely the Government.

Libor manipulation is a crime that already robs the public to create bonuses for bankers. By artificially lowering interest rates, the banks caused cities, towns, countries, and other public entities to receive smaller returns on their variable-rate investment holdings. If it turns out that taxpayers end up paying the fine for RBS’s crime of robbing taxpayers, how perfect would that be?

Building Consent Numbers

These numbers usually make very little sense to me.  Look at this article from the NBR:

Home building consents fall 7.1% in May, led by apartments

Hannah Lynch | Friday June 29, 2012

BUSINESSDESK: Home building consents declined in May, led by a drop in approvals for apartments, even as earthquake-related consents reached their second-highest monthly total since the Canterbury quakes began in September 2010.

Building consents including apartments fell a seasonally adjusted 7.1% to 1304 in May from a month earlier, according to Statistics New Zealand. Excluding apartments, there was a 0.4% fall to 1372.

Earthquake-related building consents in Canterbury totalled $47 million in May, up from $28 million in April. Of the $47 million, some $30 million was for non-residential work and $17 million was for residential work, including 47 new houses.

Since the first earthquake on September 4 there have been close to 2000 Canterbury earthquake-related consents, totalling $428 million. That included 335 new dwellings, of which 149 were relocatable units.

Compared to the same month of 2011, Auckland had the largest regional increase in new houses, up 125, including 37 apartments.

That was closely followed by Canterbury which added 100 new houses. The majority of new consents were for houses located outside the city.

On an annual basis, consents rose 20%, including apartments.


Now contrast the first line “Home building consents fall 7.1% in May, led by apartments” with the last line “On an annual basis, consents rose 20%, including apartments.”

And what does a seasonally adjusted number of consents mean? From Wikipedia:

Seasonal adjustment is a statistical method for removing the seasonal component of a time series that is used when analyzing non-seasonal trends. It is normal to report seasonally adjusted data for unemployment rates to reveal the underlying trends in labor markets.[1] Many economic phenomena have seasonal cycles, such as agricultural production and consumer consumption, e.g. greater consumption leading up to Christmas. It is necessary to adjust for this component in order to understand what underlying trends are in the economy and so official statistics are often adjusted to remove seasonal components. [2]

But do we have a house building season?  If so, I assume more would be built in Spring and Summer and less in Autumn and Winter?  However I would have thought the difference would be pretty minimal wouldn’t it?

Anyway, the headline says consents are down, but they’re actually up!


Auckland Council Rates Team Hopeless

I blogged a couple of days ago about how it apparently takes 5 working days to speak to someone in the council’s rating team.

Well the 5 working days have been and gone and still no call from them.  So I rang again today.  Only to be given the run around again.

You get passed from person to person, (whom you have to describe your query to each) time.  And then they person who can perhaps answer your question is away today…  And can they take a message?

So I’ve made a complaint.  via the website.  When you submit the complaint/enquiry form, it says: Thank you for contacting the Auckland Council. Your request has been submitted. You will receive a response from us within three working days.




Update: I rang the council again and asked to speak to the person who was supposed to be calling me back.  I got hold of her!  And she was quite helpful!  I mostly have the answer to my question and she will send more info via email.

So after a week of trying, I’m nearly there!


Update 14th July 2012: Well after 2 weeks of trying I haven’t received a response from the council.  I’ve emailed and rung (and left a message, I swear not one council staff member doesn’t have their phone on permanent voicemail) but no use.

So 2 weeks have gone by (3 in total) to get answers to 2 very simple questions.


Update 17th July: Still no response.


Update 18th July: I got a call from someone at the rates team in the Auckland CBD.  They were able to answer my questions.  So it would seem the legislative change made by the government does only apply to council, so they can’t increase rates during the year in Auckland.  I’ve asked for this in writing and am yet to receive that.

But also they were able to give me various mulitpliers etc. which I can use to calculate what the rates might go to should I unit title.  And they look fine, so this is all good.

Don’t know what happened with the complaint I made, heard no more about that.

Those Bank Bastards are so Dishonest

This story has been unfolding for some time.  From the Telegraph:


Interest rate was rigged by Barclays

Mortgage holders, credit card users and small businesses may have been charged too much for their loans after one of Britain’s biggest banks admitted systematically rigging financial markets.

Interest rate was rigged by Barclays

Bob Diamond, the Barclays chief executive, said he will give up his multi-million-pound bonus over the scandal but faced calls to resign Photo: REUTERS

10:00PM BST 27 Jun 2012

Barclays was fined a record £290 million for repeatedly distorting basic financial data which are used to set interest rates on millions of loans and other transactions around the world.

Bob Diamond, the Barclays chief executive, said he will give up his multi-million-pound bonus over the scandal but faced calls to resign amid claims that his bank’s actions posed a threat to the global market system.

As MPs suggested that a criminal inquiry should be held, financial regulators warned that other major British banks may also have been involved in attempts to manipulate data about interest rates. Up to 40 global banks face being named and shamed as part of the investigation.

The scandal relates to the London Interbank Offered Rate (Libor), the interest rate that banks pay on money they borrow from one another.

The Libor rate is one of the basic pieces of information on which trillions of pounds of financial transactions are based. It helps determine the interest rate that is applied to loans, including some mortgages, credit cards and business loans.


So your every man and woman is paying more for their mortgages, credit cards etc. because these guys wanted to make more money.

And now the boss won’t even resign!  Surely him and a bunch of others should be in jail shouldn’t they?  Surely this is some kind of fraud or theft?

One rule for the masses, another for those at the very top it would seem.

5 Working Days to Speak to Someone in the Rating Department

I rang last Friday to speak to someone about the rates on my property.  I have a query I’d like answered.

The lady who answered the phone (would have a title like Customer Services Officer or something) said she could help me.  I knew she couldn’t be they are made to go through the motions and try and help as many people themselves as they can.

So I told her about the property (you have to give the address, your name etc., they won’t answer anything about a property anonymously) and she gave me an answer which indicated she didn’t understand the question.

So I patiently (for me) told her what I was wanting to do and she conceded she didn’t know the answer.  So I asked if there was someone else I could speak to.  So she logged a call with the rates team and said someone would call me back.  That was last Friday morning.

At about 3 on Friday, when I hadn’t heard back, I called again only to be told it would take up to 5 working days for someone to ring me back.  Which was pretty astounding.

So it’s Wednesday avo and still no call.  I guess they have 2 more working days…

Such a pain.  I need an answer to this question immediately and they’re holding me up.

And what crap service, 5 working days to speak to someone about rates????

Only the Best for Council Staff

Auckland Council look like they’re going to move into new digs, from the Herald:

Auckland Council eyes CBD shift to ASB tower

By Anne Gibson

The ASB Bank Centre in Albert St provides 33,443sq m. Photo / Natalie Slade

The ASB Bank Centre in Albert St provides 33,443sq m. Photo / Natalie Slade

Hundreds of Super City staff could soon shift to new Auckland premises held by a private Australian institutional fund.

Auckland Council appears ready to shift its headquarters to the 31-level ASB Bank Centre at 135 Albert St.

A spokeswoman said a decision was about to be made about moving staff from the 19-level Civic Building beside Aotea Square to another site.

“Auckland Council has been working through options to identify how best to secure a large, good-quality CBD office building into which it can relocate the majority of its city-based employees over the next year or two,” she said. “We hope to be able to give more detail on our preferred option in the next fortnight.”

The ASB building was tipped late last year as the most likely block, to be vacated next year by bank staff and OnePath, who are moving to the Wynyard Quarter on the waterfront and the ANZ Centre Tower on Albert St respectively.

One of the reasons for the shift is asbestos issues in the Civic Building but another is the amalgamation of staff from about nine separate sites into one hub.

Brookfield Funds Management owns the 33,443sq m tower, held in the unlisted Multiplex New Zealand Property Fund.

Not for them the crappy old 60s office block by Aotea square i.e. the Civic Buildging.  No no, when serving themselves, oops, I mean the public of Auckland they need to do it in comfort.

If this goes ahead, I wonder what will happen to the old building? Do you reckon it’ll get filled up with more bureaucrats?

My Kingdom for a Commercial Property Investment!

Well it’s just so hard to buy a normal everyday, sub $2million commercial or industrial property investment just now.

Each week TradeMe emails me the latest listings for commercial/industrial properties. Which is quite handy.  You can set up a search in TradeMe and then click a box to get the results of that search sent to you each day or each week etc.

Now most of the properties listed don’t have prices of course, with everything being sold ‘by negotiation’, and lots don’t have tenants either, but some do.  And they are outrageously priced.

This one is a good example:

Bunch of average shops, zero car parking, in Panmure which is an average sort of a suburb, and they are asking a 5.9% return minimum i.e. calling for offers at a lower yield, i.e. higher price than that.

Here’s another one with a slightly higher return of 6.5%:  But is only 69 sqm big.  And $395k.  Has quite high rent of $376 per sqm.

Man, slim pickings out there…

This must reflect the that people just don’t really want to sell their properties. What would they do with their money? Put in the bank and get 3% after tax?  Buy gold and get no return?  Take their chances with the sharemarket sharks?

Inflation is also a concern of course with money in the bank possibly going to be inflated away as the world’s reserve banks try and print their way out of recession.

The Benefit of Council Plans (To Consultants)

There’s a good article on the Workboot Councillor trying to explain why rates are so high.

This bit stands out:

Needless to say for a project originally put to the ratepayers as about $400,000, Council has now spent in the vicinity of $5 million so far with more to come. The budget for next year (part of what your massive rates increase is for) is $512,000.

And so did this bit:

And what does the book essentially say? Pay consultants lots of money every time you want to do something on your private property, and if you’re lucky you might get permission – but no guarantees. There might be some merit in investing in a plan that enabled economic growth and increased our rating base – but this document is so restrictive and subjective as to create the level of uncertainty and cost to ensure inactivity and the resultant economic stagnation. As ratepayers you are paying $6 million to have your property rights eroded.

Man ratepayers are getting royally screwed up and down the country by planners appointing consultants to prepare these plans.  The plans give the consultants jobs for life…

Always Get a Quote for EVERYTHING

I sympathise with the home owners in this article:

Builders feel pinch from ‘won’t pay’ customers

By Kieran Campbell

Builders' groups say they are being held to ransom by customers refusing to pay their final accounts. Photo / Thinkstock

Builders’ groups say they are being held to ransom by customers refusing to pay their final accounts. Photo / Thinkstock

A growing number of homeowners are refusing to pay builders as they hold out for negotiated prices or as a reaction to work dragging on or final costs that are higher than the quote.

Builders’ groups say they are being held to ransom by customers refusing to pay their final accounts, often in an attempt to negotiate a lower price.

I’ve been taken to the cleaners by builders and other trades people before:

  • 3 Years ago we put a rumpus room under hour pole house in Titirangi.  We got kind of a quote, but kind of an estimate from the builder and it doubled from $80k to $160k.
  • On my development in Papakura I started off too lax and didn’t get upfront quotes from ‘the experts’ i.e. the architects, engineers etc.  Got overcharged by the architects, structural engineers, fire engineer, noise engineer etc.

So now I get quotes for absolutely everything.  Right now I’m having the building in Papakura valued, so I’m getting quotes on the valuation.  Which range from $650 to $1800 plus GST so far.  So only a threefold difference…