|
As always we tend to
follow rather than lead, a tax cut
is going to help the Americans, why
cant we do it ? that would lead
to more money flowing into the
economy.
look at Singapore they have
companies entering their country
they dont have to pay tax for
the first five years , why cant we
do the same ( this would
help our economy , we must remember if
a company employs a thousand
people ( creates new jobs
) they are paying tax!!
Look at Ireland 10%
company tax rate their economy is
booming!!.
We dont need to
follow everyone else if we lead
they will come here
what are the powers
at be afraid of , maybe
they just dont have the foresite, even
if they cant come up with
any new ideas why dont
they just copy the best
economies ??.
very frustrating
Mike G
----- Original Message -----
Sent: Sunday, July 01, 2001 7:52 AM
Subject: [sharechat] Update on the
'heroic' US consumer
A few weeks ago I related US
consumer's 'heroic' efforts in stopping the US from sliding into
recession.
The Fed gave them a pat on the
back the other day by lowering interest rates only 25bps - the Fed obviously
thought that these 'heroic' US consumers were winning the battle.
Are they? Read this bit of
startling research from MGIC Capital Markets Group
"American homeowners are in the process of rewriting the traditional
rules of refinancing: rather than getting a new mortgage at a lower interest
rate, they are taking out larger loans at rates slightly higher than what they
were paying before. After a statistical analysis of recent refinance
transactions in a 14 million-loan national database, mortgage market
researchers report that the average borrowers in the current refinancing boom
took out loans $41,000 larger and at an interest rate 0.6 of a percentage
point higher than they had prior to the refinance. Why would people do that?
Because they have credit card debt and other debts that at even higher rates!
And it's getting harder and harder to pay them"
Only time will tell whether the 'heroic efforts' of the US consumer will
win the war over recession.
We in NZ should follow this battle closely. If the 'heroic' consumers lose
the war we are in trouble.
A recent paper from WestpacTrust says that any slowdown in the US is likely
to exert a significant negative impact on NZ's growth prospects. One piece of
data form the report was that a 1.5 percentage point drop in US activity would
reduce NZ GDP growth by 0.9 percentage points - from the effect on trade
alone.
After yesterdays announcement of nil GDP growth in the March quarter we
don't have much to play with - do we?
Come on you 'heroic' US consumers - keep spending and avoid this poor
(literally) country of ours down here in the South Pacific getting
poorer. You need to save us because we have already made our 'heroic'
efforts over many decades to spend our way out if trouble - and it
didn't work. You need to save us because the policies of our current coalition
government have failed to deliver growth - but we still live in hope.
Cheers
Peter
.
.
| 
See IRG research reports
