Efforts to improve China’s environment are having far too little effect
Aug 5th 2010 | TAI LAKE | From The Economist print edition
AN OILY green algal film slops on the shore of Tai Lake, China’s third-largest freshwater body. Its foul odour drifts over nearby villages. By the water’s edge it is hard not to retch. Fishermen complain of dizziness. A clean-up campaign launched by the government three years ago has made little progress.
A similar outbreak in the torrid summer heat of 2007 became a national scandal. Drinking-water supplies for hundreds of thousands of people nearby were suspended for several days while the authorities tried to scoop up the gloop. Shamed by damage to a renowned beauty spot, the government spent hundreds of millions of dollars on sewage works and other measures. Hundreds of nearby factories were closed in an effort to reduce the effluent that causes algae to grow.
This year’s problem smells rather like that of 2007, but comparisons are tricky. The lake is vast and few data are available, so independent monitors rely on anecdotal evidence. Some fishermen on the northern shore say the outbreak this year is just as bad. Others see an improvement. If so, it is hard to say what has helped: anti-pollution measures, algae barriers in the click here to see more…
This article has been written and researched by Judi Galpin from DecisionMakers in Palmerston North.
The May budget outlined a number of tax changes to come into effect on 1 October this year.
There have been complaints that the tax changes will not ‘give me anything extra’. In many cases this may be the case, but the intention of the changes was not to give hand-outs. It was to stimulate the economy, improve productivity and reward those who add to New Zealand’s long-term well-being.
Keeping tax neutrality for the most vulnerable sectors was important, however. Following the recent global credit crisis where the people of some nations have had to accept decreased incomes, a neutral tax package must be seen as a bonus.
Moving New Zealand to a more productive economy in the long-term is definitely to everyone’s advantage, allaying the common fear of our welfare system becoming overwhelmed by the lack of genuine wealth in the community. If the tax changes can start us on this road to wealth, eventually, we will all benefit.
Comments like the ‘rich will get richer’ are not helpful as we look to these earners to employ more, invest more and produce more. Having lost any encouragement to do so previously, we now look to these individuals to own businesses and employ others.
There has been much comment on how the new taxes will affect different sectors of the community. Now that emotional comment has quietened, DecisionMakers has completed calculations to determine the facts. In all cases we have assumed the worst scenario whereby all income is spent on expenses which have GST included. Read More
Do we need to care?
The team from AMP Capital make an argument that asset allocation is not everything, but almost everything.
Everything comes in cycles, and one of the big swings in investment management relates to the perceived importance of asset allocation, i.e. the exposure an individual or fund has to individual asset classes, eg, global shares, Asian shares, New Zealand shares, global bonds, listed/unlisted property, cash, etc.
Through the 1990s and into the last decade the investment management industry increasingly moved away from worrying about asset allocation to focusing on manager selection at the asset class level. This partly refl ected the experience of the 1980s and 1990s – where most asset classes did well so asset allocation was seen as less important and many thought it was too hard anyway.
This is all changing with the global financial crisis and continuing gyrations in investment markets. Coming on the back of a decade of poor returns from traditional global shares, it provides a reminder of just how important asset allocation is.
This was supplied directly from Liontamer:
Our latest research paper outlines some of the important characteristics of gold as an investment asset.
Called ‘The Investment Case for Gold’ it looks at the history of gold as well as the current and future drivers of the gold price and its unique investment properties. It also examines gold’s volatility and considers how the precious metal might fit into a diversified portfolio.
Investors have long used an exposure to gold to help control risk in a diversified portfolio as it has a low, sometimes negative, correlation to equities and bonds and tends to be less volatile than many other assets. Gold has a number of important investment characteristics that make it particularly attractive during periods of economic uncertainty, periods of high inflation and when there is concern about currency devaluation, as the price of gold tends to hold its purchasing power relative to other traditional asset classes.
There is fundamental support for the gold price at current levels due to the strong supply and demand forces currently operating in markets. Global gold production has been falling every year since 2001 and some historic gold producers are now believed to be near exhausting their reserves. The slack has been taken up through recycled gold and the establishment of new mining projects, but new gold facilities are often both expensive to establish and take a long time to become operational. Meanwhile, demand is coming from three key sources; the jewellery industry, for industrial use and from investors. It is important to note that as these critical supply and demand forces currently serve to underpin the gold price, any major change in these factors could have a significant impact on the gold price, either negatively or positively.
Increasing worldwide demand for gold for investment purposes during the global financial crisis has certainly helped to push the gold price up; however, in inflation-adjusted terms, gold still has some way to go to reach the highs of 1980. Much of this current demand has come about due to the emergence of new investment vehicles, like exchange traded funds, through which investors can access gold. With gold now a more accessible investment option, investors have been able to build their exposure to the precious metal in order to help protect their portfolios during times of market and economic uncertainty.
If you are interested in any of the above please contact your DecisionMakers adviser.
This post is Brian Gaynor’s response to this dilemma…
It is difficult to write about Allan Hubbard and the Government’s decision to place him, his wife, Aorangi Securities and seven charitable trusts into statutory management.
This is because Hubbard is a very likeable person as well as being one of the country’s most highly regarded individuals due to his business acumen, generosity and humility.
Consequently he enjoys enormous support, particularly in the South Island.
There is widespread belief that the Government’s move is unjustified because investors haven’t lost any money. Ironically, the same people have also argued that our regulators should have moved earlier with the failed finance companies, before investors suffered losses.
The response to Hubbard’s statutory management clearly demonstrates that investors need to sort out two important issues:
* Do they want regulators to move on poorly managed companies before investors lose money or do they want the regulators to wait until losses have occurred?
* Should individuals who are generous – and make large donations to charity – be exempt from securities regulations and best practice business standards?
The issues regarding Hubbard are quite simple; should Aorangi Securities have issued a prospectus, were its funds lent without adequate security and should any of this money have gone to Hubbard and his wife Margaret?