Word of the day


Eleemosynary – of, relating to, supporting or dependent on charity; of or pertaining to alms, charity, or charitable donations; contributed as an act of charity; gratuitous.

Word pictures


The expression word pictures isn’t usually meant to be taken literally – but these really are word pictures, and very clever ones too:

From Word As Image

Rural round-up


Profit-rich foresters might quit ETS:

Forest owners who have made a tidy profit by selling carbon high and buying low are now looking to quit the Emissions Trading Scheme, Carbon News reports today.

In 2008, the forestry sector became the first to enter the scheme.

The idea was that giving the owners of post-1989 forests tradable credits for the carbon stored in their trees would encourage planting.

And, at first, it worked. Influential forestry companies such as PF Olsen and Ernslaw One entered the market, and carbon forestry projects sprang up. . .

US folly and China foster NZ farmers – Jon Morgan:

Thanks to fracking, the United States is moving closer to energy self-sufficiency. Industry experts are talking about reaching this nirvana-like state in 2035-40.

But this hasn’t meant the Americans have eased up on their blinkered policy of growing ever more biofuel. Under federal regulations 13 billion gallons (49 billion litres) have to be produced this year.

This would have to be one of the crazier political policies of modern history. . .

Fonterra sees record haul in Sri Lanka – Andrea Fox:

Fonterra’s Sri Lanka business collected 22 per cent more local milk last year as its suppliers continue to cash in on the New Zealand dairy giant’s farmer development programme.

An extra 1.5 million litres was supplied by Fonterra’s 4000 farmer-suppliers, taking last year’s Sri Lanka collection to a record 8.2 million litres.

Fonterra and its pre-2001 legacy entity have been collecting fresh milk in Sri Lanka for more than 15 years and the New Zealand dairy industry has been supplying Sri Lanka with products for more than 35 years. . .

Normal summer for meat industry – Alan Williams:

Dry conditions in some parts of New Zealand are pushing lambs into processing plants and store sheep sales.

In other words, it is a pretty normal year for farmers and the meat industry.

There is some novelty in this, notably on the east coast of the North Island and eastern areas of Canterbury and Marlborough, only because the past couple of summers were quite damp, encouraging farmers to hold on to stock longer to build their weight.

This season is building to a peak, as per the usual pattern. . .

Record milk production continues in current season despite recent weather hiccups –  David Chaston:

 The latest data for the dairy milk production in shows the 2012-13 season maintaining its record volume output pace.

DCANZ is reporting that November 2012 milk production was 2,848,000 tonnes, a rise of 7.7% over the 1,067,000 tonnes produced in November 2011.

For the full calendar year to November 2012, 20,354,000 tonnes of milk were produced, and that was 9.3% ahead of the 18,627,000 tonnes in the previous equivalent year. . .

Country99TV proudly presents a brand new series –NZ Dairy Farmer

Country99TV, New Zealand’s only television channel dedicated to the rural community presents a brand new lifestyle show about the business of Dairy farming – NZ Dairy Farmer, proudly brought to you by Hansen Products.

A prime-time weekly series, NZ Dairy Farmer focuses on New Zealand Dairy farms and the people who run them. The series will provide a unique view of the lives, lifestyles and livelihoods of those at the forefront of our country’s biggest export industry. . . 

Northland Field Days take place on February 21st and 22nd.

Hands off printing presses


New Zealand’s leading investment managers are in full agreement that New Zealand should not follow a number of other international economies and print more money:

Russell Investment’s latest survey of New Zealand’s leading investment fund managers sought their expectations for the markets for 2013. It also asked whether the Reserve Bank or Government should look at bringing down the value of the New Zealand dollar through measures such as quantitative easing – printing more money.

The answer from the fund managers was a resounding “no”.

“With the New Zealand dollar sitting at 84 cents last week the perception is that our currency is strong, but the reality is that it more likely reflects weakness of the US dollar,” said Russell’s New Zealand Head of Consulting, Daniel Mussett.

“The investment managers we survey every quarter agree the current high exchange rate is hurting our manufacturing base and our exporters. In the short term, that generates a drag on economic growth, with rising unemployment and deterioration in our external accounts.

“However, a number of those managers also consider that it would be dangerous, if not impossible, to manage our currency through direct intervention. Fortunately, good companies and those with a competitive advantage will continue to do well despite the current position of the dollar.

“Since weak currencies typically characterise poor countries, the sentiment from managers is that it is doubtful you can become rich by making yourself poor.”

Investment managers could have a vested interest in this as high inflation which is the inevitable consequence of printing money would be a disincentive to savings and investment.

But that doesn’t make their view wrong.

It would be dangerous if not impossible to manage our currency through direct intervention.

Good companies and those with competitive advantage are managing in spite of the relatively high value of our dollar.

Weak currencies do characterise poor countries and no country can become rich by making itself poor.

In spite of calls from some opposition parties for the government to play with the exchange rate, it is quite rightly keeping its hands off the printing presses.

Is this the best use for public money?


The Annual Portfolio Report from Treasury’s Crown Ownership Monitoring Unit (COMU) says:

. . . To create value for the Crown, commercial priority companies must, over time, make a return that covers the Crown’s cost of borrowing, plus a margin that reflects their business risk. . .

The investments should also be the best use of public money.

Table 8 (p 37) provides several figures, including dividend yield which is one measure of an investment’s worth:

Kordia   0.8%

QV   0.0%

Airways   4.1%

TVNZ   4.4%

MetService   1.2%

Transpower   6.7%

Mighty River Power   3.2%

Landcorp  1.9%

Meridian  2.2%

Genesis   0.0%

NZ Post   1.2%

AsureQuality  7.7%

ACP  23.6%

Public Trust  0.0%

Air New Zealand   3.9%

Learning Media  3.4%

Portfolio excl. KiwiRail & SE   2.6%

KiwiRail  0.0%

Portfolio excl. SE 2.7%

Solid Energy (SE) 1.1%

All Commercial Priority  2.5%

ACP’s 23.6% looks impressive but it’s the smallest company and the dividend it paid was only $1.4m.

Few of the others have a very impressive dividend yield.

A more important measure of value is return on equity.

Table 5 (page 24) gives that for the last five years:

2008: 3.1%; 2009: 2.4%; 2010: 2.7%; 2011: 2.7% 2012: (7.5%) with KiwiRail and New Zealand Post and without those two: 5.3% in 2008;  2.4% in 2009;  3.8% in 2010;  5.3% in 2011 and 2.6% in 2012.

You could argue that dividends and return on equity aren’t the only justification for public ownership of businesses.

But those dividend yields and returns on equity make it difficult to argue that these investments are the best use of public money.

Sunday soapbox


This soapbox is yours to use as you will – within the bounds of decency and absence of defamation.

You’re welcome to look back or forward, discuss issues of the moment, to pontificate, ponder or point us to something of interest, to educate, elucidate or entertain, to muse or amuse.

January 20 in history


250 – Emperor Decius began a widespread persecution of Christians in Rome. Pope Fabian was martyred.

1265 In Westminster, the first English parliament conducted its first meeting held by Simon de Montfort in the Palace of Westminster.

1356 Edward Balliol abdicated as King of Scotland.

1523 Christian II was forced to abdicate as King of Denmark and Norway.

1649 Charles I of England went on trial for treason and other “high crimes”.

1788 The third and main part of First Fleet arrived at Botany Bay. Arthur Phillip decided that Botany Bay was unsuitable for location of a penal colony, and decided to move to Port Jackson.

1840 Dumont D’Urville discovered Adélie Land, Antarctica.

1840 – Willem II became King of the Netherlands.

1841  Hong Kong Island was occupied by the British.

1885 L.A. Thompson patented the roller coaster.

1887  The United States Senate allowed the Navy to lease Pearl Harbor as a naval base.

1892  At the YMCA in Springfield, Massachusetts, the first official basketball game was played.

1896  George Burns, American actor, comedian, was born (d. 1996).

1899  Clarice Cliff, English ceramic, was born (d. 1972).

1910 Joy Adamson, Austrian naturalist and writer, was born (d. 1980).

1921 The first Constitution of Turkey was adopted, making fundamental changes in the source and exercise of sovereignty by consecrating the principle of national sovereignty.

1926 Patricia Neal, American actress, was born (d. 2010).

1929  In Old Arizona, the first full-length talking motion picture filmed outdoors, was released.

1930  Buzz Aldrin, American astronaut, was born.

1934  Tom Baker, British actor, was born.

1936  Edward VIII became King of the United Kingdom.

1937 Franklin Roosevelt was inaugurated for a second term as President of the United States. This was the first inauguration scheduled on January 20, following adoption of the 20th Amendment. Previous inaugurations were scheduled on March 4.

1950  Liza Goddard, British actress, was born.

1952 Paul Stanley, American musician (Kiss), was born.

1957 Scott Base opened in Antarctica.

Scott Base opened in Antarctica

1959 The first flight of the Vickers Vanguard.

1960 Hendrik Verwoerd announced a plebiscite on whether South Africa should become a Republic.

1961  John F. Kennedy was inaugurated as the youngest man, and first-ever Roman Catholic, to become elected President of the United States.

1965   Sophie, The Countess of Wessex, was born.

1981 Irann released 52 American hostages twenty minutes after Ronald Reagan was inaugurated as U.S. President, the oldest man to be inaugurated at 69.

1987  Church of England envoy Terry Waite was kidnapped in Lebanon.

1990  Black January – crackdown of Azerbaijani pro-independence demonstrations by Soviet army in Baku.

Soviet tanks in Baku during Black January.

1991 Sudan‘s government imposed Islamic law nationwide, worsening the civil war between the country’s Muslim north and Christian south.

2001  Philippine president Joseph Estrada was ousted in a nonviolent 4-day revolution, and was succeeded by Gloria Macapagal-Arroyo.

2009 Barack Obama was inaugurated as the 44th President of the United States of America – the United States’ first African-American president.

Sourced from NZ History Online & Wikipedia.

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