The toxic European infection.

About every two weeks the snark arrives, the hairs grow on my hands, and like Alte, I try to imitate Ferd’s prose, crossed with Tyler West. My big worry at the moment is not which poor sucker is going to lead the Labour party, but Europe.

I live in New Zealand. This means that we have some shelter from the worst ravages of the global economic turmoil. New Zealand can easily feed itself — instead the issue for most of us is portion control, not food quality.

However, our banks are exposed to toxic debt from Europe and the Americas. Despite this, S&P are downgrading our banks.

The historic downgrade by international ratings agency Standard & Poor’s largely stems from its new criteria for risk measurement. The biggest impact is that it will increases funding costs for the banks.

S&P cut the long-term ratings on Commonwealth Bank of Australia (which owns ASB), Westpac Banking Corp, National Australia Bank (which owns BNZ) and Australia and New Zealand Banking Group (ANZ) from ‘AA’ to ‘AA-’. The outlook remains stable.

Those banks have taken pride in their strong ratings, which helped shield the Australian and New Zealand economies from the worst of the global financial crisis.

Despite the harsher outlook from S&P, the Australian banks remain among the highest ranked banks in the world.

Compared with the rest of the world, Australia and New Zealand are both rich and small. Our small population means that there is a lack of critical mass (there are more Germans than ANZACs). And housing — much of our banks portfolios is mortgages on residential property — is unstable.

The risk of NZ becoming involved in baling out the European is limited to our contribution to the special drawing rights and the New Arrangements to Borrow. This could add up to 1.8 billion — when we are running a deficit. In short, we would have to spend what credit worthiness we have to throw good money after bad.

Finance Minister Bill English on Tuesday said the New Zealand government expected to be part of any discussions regarding any IMF intervention in Europe.

“We do all have a common interest in Europe finding its way through its problems. The IMF has played a growing but still constrained role in that,” English said.

“We have some say. We’re a contributor, we’re effectively a shareholder. I think there would be a collective sense that if the IMF can reinforce European efforts, then there may be a role there. But it is absolutely vital that Europe takes responsibility for the costs and consequences for its own actions. You wouldn’t want to see the IMF moving in to replace that responsibility,” he said.

I disagree with Bill: he is not bloody-minded enough. I think we should get out of any agreement with the IMF as soon as possible, and let the banks who have bad loans fail.

This will hurt, but letting the situation continue will remove what trust remains in the financial system, reducing us to the equivalent of a cash-only economy. This would be painful for NZ, but letting the toxic practices of Europe in would be far worse.

 

Do good. Hate evil.

 

Transparancy International Corruption Index.

This morning there was a report of a family who had to run to a beach to avoid a small fire — that turned into an interno, engulfed their house, and destroyed a helicopter sent to rescue them. Apparently the fire was deliberately lit.

The paper is full of bad news. An eight year old girl. Ane Leaso, has was found dead after being beaten with pipes by her mother: the case is before a Cairns Court. It has been blamed on post natal depression

Three deaths. Avoidable. Simply evil. And people make excuses. And this is in New Zealand and Australia, which have about as little corruption as anywhere in the world.

Amos 5:10-15

10They hate the one who reproves in the gate, and they abhor the one who speaks the truth. 11Therefore because you trample on the poor and take from them levies of grain, you have built houses of hewn stone, but you shall not live in them; you have planted pleasant vineyards, but you shall not drink their wine. 12For I know how many are your transgressions, and how great are your sins — you who afflict the righteous, who take a bribe, and push aside the needy in the gate.

13Therefore the prudent will keep silent in such a time; for it is an evil time.

14Seek good and not evil, that you may live; and so the LORD, the God of hosts, will be with you, just as you have said. 15Hate evil and love good, and establish justice in the gate; it may be that the LORD, the God of hosts, will be gracious to the remnant of Joseph.

Matthew 22:1-14

1Once more Jesus spoke to them in parables, saying: 2“The kingdom of heaven may be compared to a king who gave a wedding banquet for his son. 3He sent his slaves to call those who had been invited to the wedding banquet, but they would not come. 4Again he sent other slaves, saying, ‘Tell those who have been invited: Look, I have prepared my dinner, my oxen and my fat calves have been slaughtered, and everything is ready; come to the wedding banquet.’ 5But they made light of it and went away, one to his farm, another to his business, 6while the rest seized his slaves, mistreated them, and killed them. 7The king was enraged. He sent his troops, destroyed those murderers, and burned their city. 8Then he said to his slaves, ‘The wedding is ready, but those invited were not worthy. 9Go therefore into the main streets, and invite everyone you find to the wedding banquet.’ 10Those slaves went out into the streets and gathered all whom they found, both good and bad; so the wedding hall was filled with guests.

11“But when the king came in to see the guests, he noticed a man there who was not wearing a wedding robe, 12and he said to him, ‘Friend, how did you get in here without a wedding robe?’ And he was speechless. 13Then the king said to the attendants, ‘Bind him hand and foot, and throw him into the outer darkness, where there will be weeping and gnashing of teeth.’ 14For many are called, but few are chosen.

There is an image, an allegory if you will, of the church — the slaves of the king — going out and preaching everywhere from the gutters to the palace, by way of every pub and brothel. All people are loved by God. But not all will come to the feast, and you will need to wear the clothes for the feast.

This is where both the Catholic and Reformed ideas of salvation apparently conflict. The Catholics talk about works.. of faith, of penitence. They see the need to be clothed, and that need exists. The reformed see the slaves going to the brothel to preach. They emphasize that we are completely unworthy, and that is also right. But we miss one of the teachings here. We are to hate evil (and yes, I am aware that the Philokalia teaches this).

There is a place for preaching the law and hellfire in this world. We need to make people aware of what are the consequences of their acts, and then let them happen.  We can only rescue with an expectation of change. We know this about alcohol and what we foolishly call the addictions. We know not to let a thief life among us.

But we have to invite those who are doing evil to the feast of God. For they are made in the Image of Christ, and Christ as sent out the invitation. We are doing what he tells us to do. And we also do evil: we are all equally guilty.

But God demands we all wear his garment, of his righteousness, purchased by his sacrifice, and freely given. There is no room for evil, and there is no room for pride. And that is why few are chosen — we are not prepared to humble ourselves and allow for purification (which frequently comes through hardship).