Forbes -New Zealand Denies Super Housing #Bubble

It's Not A Bubble 

Does it mean tulips are overpriced?

Until It's Officially Denied, New Zealand Edition

Jesse Colombo Contributor

I'm an economic analyst who is warning of dangerous post-2009 bubbles

What an Easter weekend it’s been. On Thursday, I published a piece called “12 Reasons Why New Zealand’s Economic Bubble Will End In Disaster” in which I summarized my research on the Pacific island’s growing property and credit bubble. In just a few days, this article went viral and received over 85,000 views and nearly 8,000 shares on social media. This bubble warning created a media firestorm, making numerous news headlines, landed me a prime timeappearance on TVNZ, and made the cover story of The Herald on Sunday:

My bubble warning also led to something that I’ve become quite familiar with lately: an official denialfrom Economic Development Minister Steven Joyce. This makes the fourth official bubble denial I’ve experienced in the past several months, with the first three coming from officials in Malaysia, the Philippines, and Singapore.

Experieneced Banksters??

After having experienced official bubble denials before, I have stopped taking them seriously because I now realize that they are simply standard responses that add little intellectual substance to the discussion. While I bring facts and statistics to the table, the official bubble deniers typically attempt to attack my credibility and write me off as a “doom and gloomer.” In response to my warnings about credit and property prices doubling or tripling in just a decade, I receive pat answers such as “our banks have prudent lending standards” and “property prices are rising because of a shortage” (after all, it’s always a “shortage” – never a bubble). It doesn’t matter what country I’m warning about, the official bubble denials are essentially the same.

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Any thoughts from George Soros and friends

Sallie Krawcheck: BANKING DOOMED OR BORING?

State of Banking: Not Awful, Not Great, Just 'Meh'

By Sallie Krawcheck

The outlook for my (former) industry, banking, is ... "meh."

Now, that is a word that one rarely hears about this industry. Instead the results are typically described as either “awful!” or “great!” And that’s because the Wall Street firms and big banks are volatile: their results are driven in good part by the markets, which are themselves volatile, and because the banks’ continuing financial leverage amplifies that volatility. So, at any point in time, the industry appears to be in great shape or in poor shape, depending on the external environment. For years and years, industry commentators (and participants) have confused the impact of market movements with the outlook for underlying growth and bank safety.

Looking beyond the cycle, then, how to grow? Many firms turned to cost cutting during their leaner years, but, by its nature, this has limits.

Then, as the cycle has turned, many have cited innovation as a future driver of growth. This is despite the fact that most of what was hailed as product innovation in the past was, in hindsight, simply increases in product risk, wrapped in complexity. Recall CDO-squareds; it and its brethren were hailed as innovations in their day. But what these “innovations” earned in good times was lost, plus much, much more, in down markets.

And if true innovation was really tough for the industry to achieve before, it becomes much more difficult with the layering of internal and regulatory “processes and procedures” at the banks in the aftermath of the crisis. Processes and bureaucracy are the arch enemies of innovation.

So is the future of the industry simply to ride out the cycles?

Perhaps. But the optimist in me believes there is another way forward for the banks. And that is to turn their (and capitalism’s) historic “shareholder first” orientation into “customer first.”

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