Friday 23rd June 2000
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The government has failed to ignite support with its Budget, which amounted to rearranging deckchairs on the Titanic.
The state in New Zealand is now identified globally with nationalisation without compensation, the sort of thing desperate third world countries like Zimbabwe get up to.
Robert Mugabe wants farms and mines. Helen Clark has gone after ACC and forests. Like President Mugabe, she is keen to confiscate assets and abolish rights of white people.
We can kiss goodbye to foreign investor support until at least after the next general election. New Zealand is the first country of the new millennium to join the third world.
The sharemarket will suffer for the foreseeable future as a consequence of the government's tactical blunder of attacking negative commentary by David Roche of London-based Independent Strategy. Until Treasurer Michael Cullen kicked up about Mr Roche's commentary most people would not have known or cared about it.
Dr Cullen ensured Mr Roche was simply handed an opportunity to reiterate and elaborate on his analysis in publications such as The National Business Review and the Wall Street Journal. The Leninist doctrine that, "Those who are not for us are against us," appears to be the dictum our Marxist/feminist/Maorificationist government lives by. Consequently the government will see enemies everywhere consistent with its Aotearoan bolshevism, which will continue to undermine sharemarket confidence.
The prime mistake of the Labour-Alliance government has been to interpret the electorate's desire to be rid of haggard National and the atrocious Jenny Shipley as a ringing endorsement of the left. Not so. New Zealanders have historically voted governments out of office, rather than in. The left won by default, which is hardly a mandate to undertake negation of everything identified with National.
Asian news is ambiguous. A trade deal with Singapore aligns us with a neo-authoritarian country that, like the dictatorships of Iraq, Syria and North Korea, thinks the top political job is the monopoly of the de facto royal family. Rapprochement of the two Koreas could lead to costly reunification at the expense of our market in South Korea, the world's 11th-largest economy, although loss of our forestry listings would diminish the impact on the sharemarket anyway.
Overseas, the Dow Jones industrial average is tracing out a pattern that chartists call a "coil," suggesting a major trend change to come. The Nasdaq trend is remarkably flat. Wait and see is the evident attitude, but the British sharemarket is tracking up bullishly. Our own sharemarket is limp thanks to Telecom's weakness (see chart), although it is evident from the graph that our biggest listing has been floundering since 1997.
The loss of Fernz (Nufarm), Brierley Investments, Fletcher Challenge and Lion Nathan, with probable departures of Telecom and Carter Holt Harvey, means the NZSE is doomed as a capital market unless a charitable rescuer comes along. In any event, the collapse of the kiwi, coupled with an ever-widening current account deficit, guarantees high interest rates. Sharebrokers will be scanning the situations vacant columns.
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