Another Mining Fatality

It's been a bad year for mining in New Zealand. Another mine worker has been killed, this time in a Southland gold mine.

http://www.stuff.co.nz/business/industries/73751507/Mining-operations-suspended-following-Waikaia-Gold-death

He was killed in the workshop - very dangerous places. 

Deaths are preventable, read my post concerning the death of Murray Taylor earlier this year http://kenhorlor.blogspot.com/2015/06/quarry-operators-new-zealand.html

Where to now for Richie McCaw?

Richie McCaw has just captained New Zealand's All Blacks to their third Rugby World Cup, the first back-to-back championship since the event started in 1987 ( which NZ won). The All Blacks are now poised for a 'three-peat'. Heck at this rate they'll go four years unbeaten (hope so). New Zealand are getting so good at Rugby they're making everyone else look pedestrian. Maybe in future the World Cup will decide who gets to meet the Kiwis in a World Series?

But heh, let's not get too carried away.

Many have noticed McCaw has not retired as was expected. What's up? He wasn't named in the Crusaders squad that was recently announced and he'll have to be playing Super Rugby if he's to qualify for NZ and the chance to earn that 150th test cap (he's on 148).

Tempting to speculate, so let's do that...

* Maybe he's going to the Highlanders? He's from Otago and went to Otago Boys High School. The Press in Christchurch claimed him as a Canterbury son on their front page Saturday - well he isn't actually, so there.

* Maybe he's going up to Auckland to player/coach them?

* How about he's going straight in on the All Blacks coaching staff and then replacing (Sir) Steve Hansen when his contract expires.

* Then there's that Japanese Super Rugby franchise, maybe he's negotiating to player/coach them?

* He may have been recruited for the National Party list at the next election. It's no secret National have lusted after having him on their ticket (don't do it (Sir) Richie).

What do you think?

Concrete To Revolutionize Heating

Interesting stuff from the Swiss, Ettringite concrete, reported below from DW TV. Concrete blocks are made which heat when exposed to water. Copper pipes are threaded through the blocks, which act as a heat exchanger. The hot water then circulates through the house, heating it. 

DW TV Video

It would take only a few blocks to heat an average size home all winter. Would these blocks last? It appears they will, at least as long as the home will, which has got to be something worth considering. Are they expensive to produce? Simple answer - I don't know, but the process looks a little complicated, the blocks heat up when made, can they explode if you get the recipe wrong?

One of the guys featured in the video can be found here...

Frank Winnefeld of Empa - the Swiss Federal Laboratories for Materials Science and Technology

A Reminder - GM - Where Did The Money Go?

Found the following article which explains clearly what happened as a result of the General Motors bankruptcy back in 2009.

http://www.dailywealth.com/2125/gm-americas-biggest-bankruptcy

Put simply, the union got the money and the bondholders were screwed. Don't worry about the company not being able to make a decent car, or the chance to have capitalism go to work and make the GM assets available to new entrepreneurs, No, Obama had to win Michigan and the US taxpayer forked out. 

TPP Snowball Effect

The Trans-Pacific Partnership has been agreed, the actual value of which is now to be debated. What struck me is how something so small at the start can grow very fast, now covering 40% of the world's economy.

A rough timeline...

2001 - the process starts when New Zealand and Singapore conclude a free trade deal.
2002 - a year later Chile is on board, now called the Pacific Three Closer Economic Relations
2005 - now Brunei joins and we have the P4; the term Trans-Pacific Partnership begins
2008 - joined by USA, Australia, Vietnam and Peru, now this thing is big
2010 - Malaysia join
2012 - Canada and Mexico are now in
2013 - Japan join the party.

Caterpillar Lacklustre

Caterpillar have announced another rejig, this time letting 10,000 staff go in its quest to lower costs and get back on track. Caterpillar look to set a new low in 2016; setting the milestone of four years of lagging sales, unprecedented in its history  >>Link<<

Study the graph to get the picture...

Right now, with the slide ongoing, I'd say Caterpillar are a good buy. Hell, their market cap is under $40 billion.

Caterpillar have challenges ahead for sure, but my bet is they'll handle it. Those challenges include making headway in China. Right now that isn't the case, buyers there, like many other buyers in the emerging market countries, look at price and make their equipment procurement decisions on price alone. In North America, Japan and Western Europe, the whole of life cost is paramount and on that basis Caterpillar win hands down. They're by far the best machine in most categories; but particularly their medium to large Wheel Loaders and Dozers.

Caterpillar have never made a good excavator though and that must be addressed. Hitachi are the standard there and they link up with Deere, so on that front Cat has a real fight on its hands. Caterpillar had better knuckle down and develop strong excavators. Either that or buy someone out who does. They've acquired technology in the past, Perkins comes to mind, so this should not be a problem.

Caterpillar has a strong financing arm, but at the dealer level they need to be more engaged with the end-user. I've stopped counting the number of times contractors in the USA have told me they prefer John Deere due to the local Cat dealer being rude to them. Many Cat dealers in the USA have an attitude of you are privileged to be dealing with them and that has to stop. Consider 60% of Cat sales are in the USA and you can see they have a problem.

Good management can solve any of the challenges I've highlighted. Have the senior managers looked in the mirror and asked themselves if they're up to the task?

(Note: These opinions are information only and do not constitute investment advice. If you need investment advice on these stocks or anything else for that matter, talk to your recognised and professional investment adviser. Better still, do your own research and act on it confident in your own ability.)

Japan Rugby Christchurch Connection

The media are not reporting a Christchurch connection with the Japan team that has upset South Africa 34-32 at this year's Rugby World Cup.

In the team is Kosei Ono, who grew up in Christchurch from the age of three, learned to play Rugby here and played for the Christchurch Boys' High School first XV. He now lives in Japan and plays there professionally. His father is still local to Christchurch, he owns a sports massage business called Ono Seitai Sports Clinic.

Journalists have likely flicked through the roster of this ground-breaking team and tried to spot the foreign names, and in the process missed a local lad doing well.

Kosei Ono at RWC 2015 

[ edit to add - Kosei Ono is now covered on Stuff...The Press got around to doing their job ]

Warren Buffett Nightmare

Those who have seen the Motley Fool internet advertisement about what makes Warren Buffett lose sleep at night will be wondering what it is. I can tell you they're talking about driverless cars and the impact that may have on the auto insurance industry. The argument goes that the Berkshire Hathaway owned Geico insurance will be impacted by these cars which are predicted to be commonplace within five years.

Motley Fool then recommend a computer chip maker that makes the type of chip for driverless cars.

A word of caution; while the insurance landscape may well change due to these cars, who is to say the business will be less profitable? Accidents will be fewer, meaning less claims and thus cost to the insurer, but car owners will still need to insure for those accidents that are unavoidable. 

Which chip maker will win in the race ahead is anyone's guess, invest carefully and only when you're confident, and the first thing to ignore I'd say, would be scaremongering of the Motley kind.

New Rifle For NZ Army

Looks like the new rifle for the NZ military will be from the Lewis Machine and Tool Co., of Marion, Illinois. It isn't clear what actual weapon has been chosen, but the below firearms blog has some information...

>> New Zealand Army Selects LMT To Replace Steyr AUG <<

Is this company any good? It would be handy to know, please comment. The weapon the army has been trying looks like one in the embedded image.

A few other upgrades are in the process, including upgrades to NZ's two (yes you read that right) frigates. Why don't they just buy new Frigates? Four would do.

More Cool Stuff

How about this airfield which appears to have been on the market for some time. It used to be a WW2 Spitfire base with some of the infrastructure still in place from that era.

Perranporth Airfield is used for general aviation and covers around 332 acres. It has buildings, tarmac runways, and can be had for the ballpark of £1.5 million. Has this been sold? If not, why not. I would have thought all those warbird guys out there would be champing at the bit to get their hands on this place.

>> Sale Brochure Here <<

And for the boaties, the same region, a port built in 1792. It has a cleverly engineered design and was used for the export of local clay. These days it's a film set and a place to park your very own square rigged vessel.

>> Charlestown <<

>> Real Estate Listing <<

No idea what they'll take but my guess you'd be talking seriously starting at the same price as the airfield above.

Here is a pic, it comes with the lock, some buildings, beaches etc

Stuff That's Kind Of Cool

From the strange but true file, I found this Soviet era submarine on the internet. It sits on a river in England, may be for sale, can it actually submerge? Note the interior is nothing like the movie The Hunt For Red October.

>>Check The Foxtrot Sub Out<<

>>Daily Mail Story<<

YouTube...




Then how about owning your very own T-34 Tank from the Second World War. They're pulling them out of the mud these days, and they start right up with little fiddling around to get them to go. The one in the below video shows German markings, it was captured and used by the Germans, then when they retreated and having no spares for it, they drove it into the lake, to be pulled out much later in the year 2000...

To the American - My Answers

I have reproduced the American woman's rant below and now come to the conclusion that she isn't genuine. Either the post was from someone who visited Kiwiland and didn't like the experience or she's simply repeating things told to her by someone she knows.

I'll deal with her comments as close as I can to the order in which they arise...

American Living In NZ - She's Trapped

I found the below at this link. What do you think, is she to be believed?

First off, they're living in Christchurch, why can't her American civil engineer husband find a job in the earthquake ravaged city? It doesn't stack up. Same with her nursing qualifications which would be easily recognised. There is a ring of truth to some of it though, here it is...

“Hi there,

I have been following this thread for a few days whilst I was on Holiday at Lake Tekapo. I guess it is my turn to chime in.

More About What Is Going On

Standard & Poor's today announced the downgrading of the big four banks in NZ. Confirmation about what I said earlier then,  the banks are becoming overheated...

>>LINK<<

Is Coal Dead?

Graphs for you to digest in answer to the question, is coal dead?

Change in Energy Consumption 2000-2012

Coal Consumption 1965-2011

Coal Production 1980-2010

Does this look like a dead resource to you? Far from it, coal underpins all industry and as the world advances coal production increases. The recent announcement putting Solid Energy under administration and the sale of the Vale coal mine on New South Wales for $1 are not a reflection of the industry's prospects.

The world's biggest producer, China, plans to increase its output, accounting for 60% of all coal output by 2019, that's only four years away...>>Link<< 

Why the drop in the coal price then? Two factors, a slight drop in demand from Europe and America, combined with an increase in supply from new mines in much cheaper areas. Mines in NZ, North America and Australia find it hard to compete, that's all. To keep up they'll have to employ new technology.

Solid Energy Enters Administration

A sad day for New Zealand as the state owned coal miner has hit the wall and appointed administrators.

What is the plan now? The first thing will be to have a meeting of creditors with a vote about whether they agree with the proposal to sell down the assets of the company over time. If they don't agree then I imagine the result will be liquidation.

>>Intelligent Article Here<<

Coal mining is viable and profitable. Imagine the industrialised world without coal. It's hard to imagine as it isn't possible. We need uninterrupted electricity, steel, cement, you name it.

A lot of the business units within Solid Energy are very good operations with high quality coal, and without government interference they'll do well, so selling them off to private operators is the best bet IMO. Stumbling along as they are now isn't an option.

Lada a Great Car

Saw two Lada cars today, the first was a classic sedan based on the Fiat 124. A lot of these were sold in NZ and they seem to have held up well. The second was a Niva, in very good condition >>Like This<<. These cars are very rugged and have aged very well, especially the Niva. I believe many Niva's have been repowered with Japanese diesels, but don't quote me on it.

On this subject and Russia in general, found the following....

http://vilnews.com/2011-06-my-1978-lada-in-new-zealand

A nice story about owning a Lada in NZ.

Then the following from a history buff and the T-34...

http://historygeek.co.nz/2012/05/13/from-russia-with-love-the-t-34/#more-81

But heh the article is only partly correct, the Soviets won the Second World War by having superior logistics, a numerical advantage, an effective chain of command and better tactics as well as more suitable equipment. Mention is made of the AK47 and US soldiers preferring it in Vietnam? I've seen news footage with Americans using that weapon in Iraq!

NZ Flag Debate Revisited

The Top 40 has been announced and I don't like any of them so won't be voting to change the flag. The modern version of the Hundertwasser just looks like a corporate logo, it lacks the artistic touch of the original, compare...

The new Hundertwasser which is in the top 40...

The original from the great man himself....

The original is much better, it has the black border to the left, a nicer green which is more like NZ, and the fern frond unfurls beautifully.

The flag designed by James Gray of Auckland with the laser vision Kiwi is better than the top 40 chosen.

New Zealand, What I Think Is Going On

Two things making the news right now, ever increasing house prices, especially in Auckland, and the plunging milk price paid to dairy farmers. 

Is it Chinese buyers bidding up house prices? Well I think, only partly, in a broader sense it's everyone buying houses, not just the one ethnic group of immigrants and investors.

What I think is going on is monetary inflation, or something akin to that, with money brought in by the banks, not just investors. If you look around the world most developed economies offer very low returns, while others such as Greece are actually bust. In NZ returns are much higher, so the banks look to shift their funds from low interest countries to places like NZ, and the result is funds available for lending to everyone. That means more money available chasing the same number of houses, equalling a general rise in house prices.

We are all recipients of this, particularly when we sell our houses at inflated values. The safety valve of sorts is that a large proportion of those sale proceeds heads to Australia, particularly the Gold Coast.

There is no easy fix here. If NZers are stopped from house trading then the result for the NZ economy will be dire. The house price inflation is just about all that is holding things up. To a certain extent NZ is like a drug addict, hooked on the banks supply.

A possible solution would be controls on the inflows and outflows of foreign exchange. A return to the seventies. It may have to happen.

Then we have the milk export price farmers receive. Something not pointed out but I think is relevant; what happened to world population, did they suddenly stop eating? Hmm? No they didn't, so the drop in NZ milk export price must mean global supply has increased. 

What did you think New Zealand, did you think the rest of the world would be prepared to sit there paying for your milk rather than make it themselves and much cheaper? The big buyers, like China, aren't sitting round twiddling their thumbs, they're setting up farms at much lower cost than in NZ and producing milk at home and in South America, Africa, Asia, even the USA. 

Further complicating this is the ban by Russia on imports from the EU. Dairy makes up a large proportion of that volume and now the EU are dumping their output anywhere they can find a buyer, directly competing with good old NZ.

Here yet again, is another lesson NZ fails to heed. Don't put all your eggs in one basket. NZ gets carried away on the latest big thing, and forgets we need a balanced, diversified and developed economy, making products with real value, middle and high tech, the lot. If we fail to develop, then we're going to see more boom and bust.

SETI Alien Discovery Getting Closer

The below link outlines the new Wow signal and the hint that, possibly, maybe, aliens do exist...
http://www.abovetopsecret.com/forum/thread1000282/pg1

We are all familiar by now with 1977's Wow signal, the problem being of course, it has never been detected again.

Now this new Wow signal comes along to tease us.