My Blog Post of 24.06.2008

NZ Herald reported a GDP shrinkage as part of the economic rebalancing act. The R word is beginning to be touted now and two quarters of under 1% growth will not come as a surprise. Clearly a lot of stress within the consumer or household sector somewhat counterbalanced by the smaller and relatively robust rural sector on the back of high commodity prices. Is this the only rebalancing act NZ can proffer? What about the corporate sector? ANZ's Privately Owned Business Barometer suggests larger firms will use stepping stones rather than giant leaps towards growth, Asian footprints and passing the baton to the next generation despite strong balance sheets. And the Government sector? Government debt has being reduced significantly despite the AA long term rating. Liquidity resulting from leverage is a very effective tool in generating growth in the Corporate and Government sectors; however do these two economic rebalancing levers have the required risk appetite?

copy paste this link to go to the blog post: http://brotko.com/blog/2008/06/24/the-r-word/