21st March 2009. World of Warcraft.
Since the beginning of 2009, I have been playing WOW. Nephew Tom
(about 25) is the only other player in the immediate family, although
arguable that Ben (age 8) is also a player. WOW is a recession
proof business, in fact it could be a major beneficiary. It is
cheap (about $AU25/month) and a major time eater. I dont think it
is a public company, and my guess is it will not go IPO until it starts
to lose market share.
TOXIC ASSETS IN AUSTRALIA.
Our politicians are blaming overseas players for the creation of the
toxic assets that
have severely damaged the world banking system. As mentioned last
month, a solution is to divorce the monetary system from the credit
system. Giving people credit is a risk. Handling their
financial (M0, M1) transactions is a risk free transport
business. If players want to take risks, then it's their (or
their investor's) money. They should not have their hand in the
till. Barak's 100% taxation of the obscene bonuses being paid to
executives of failed banks is a good start. Those bankers
complaints that "all the talent will leave the banking industry" is an
empty threat. Who would want to hire failed executives?
Their only success was that they obtained a government bailout for
their company (which Lehmann executives did not.)
Which brings about mention of Rudd's opinion that the US is the country
which originated all the toxic assets. What about Ireland?
Our real estate market is (like that in the USA was) at extreme high
value in terms of wages. The only reason that our bank's real
estate mortgages are not classed as "Toxic" is that the market (at
least the bottom end of the market) has been supported by the $21,000
"gift" given to new home buyers. That gift expires in July.
predict a major adjustment (my guess would be about 8% - 16% downwards)
at the bottom end of the real estate market by next August-October.
Our toxic assets arose because Paul Keating created our national
superannuation scheme. A bunch of MBA's whose only qualification
is a university degree from a bunch of economics professors (those that
can't do, teach) now controls about one trillion dollars of assets,
some of which was used to support our local mortgage market, some of
which has purchased about one third of the Australian equities market,
most of the rest was invested overseas before the Australian Dollar
dropped to below US$0.60.
What do you think that the ownership of so many toxic assets might do
to the value of our
local banking and superannuation corporations?
THE GREAT LAND GRAB.
Recent newspaper reports are that hedge funds are buying up Australian
farmland in North Australia. Looks as though they might be
reading this blog. For instance, in March
2005 I predicted:
In Australia there might be some
benefit, some harm from global
warming. (That is of
course a big "might", because
various geographical features such as mountains rarely run north-south
to provide a linear transform). People like Janet Holmes A'Court,
stretches of near desert in Northern Australia) might benefit from an
expanded monsoon season, and farms in east Australia might benefit as
the trade winds move south and formerly quasi-desert grazing country
becomes rich cropland. The southwestern tip of Australia (South
of Perth and around Adelaide)
might turn to desert as the northern limit of the prevailing westerly
"Freemantle doctor") moves south. The areas
new desert in the south would hopefully be exceeded several times by
the areas in the
north and east of Australia that
would benefit from the south-moving monsoon & trade
winds. Tasmania will warm up.
Of course I am most likely flattering myself. Undoubtedly other
technical people were also able to predict the likely outcome of global
warming on our weather patterns. Although not very many of them
found their way into print.