In this section
Offers for readers
Follow the news from interest
The comment stream
Recent comments
- 1 of 20775
- ››
Editors choice
- 1 of 295
- ››
Finance sector jobs
Reporting to the Senior Manager Operational Risk Effectiveness and Assurance, the key focu...more
New Zealand
Reporting to the Head of Finance - Retail and Business Bank the key focus of this role is ...more
New Zealand
This role in consultation with the Financial Controller provides financial, strategic and ...more
New Zealand
If you are motivated by the prospect of seeing the big picture, developing your team and m...more
New Zealand
The news stream
Latest news
Most commented
- BNZ cuts most fixed mortgage rates 48
- 90 seconds at 9 am 43
- English wants more house builds 30
- Fonterra cuts payout forecast 30
- Budget tax moves to target high income NZers 29
- Wednesday's Top 10 with NZ Mint 24
- Amanda's Take Five for Wednesday 23
- Thursday's Top 10 with NZ Mint 22
- 90 seconds at 9 am 20
- NZ to borrow more if crisis worsens-Key 19
Most viewed
RBNZ survey of business managers finds 2 year ahead inflation expectations drop to 2.6% from 2.8%
The Reserve Bank of New Zealand's September quarter survey of business managers' expectations has found their two year-ahead expectation for Consumer Price Inflation was 2.6%, which is down from the 2.8% reported in the June quarter.
This will be welcomed by the Reserve Bank, which is focused on keeping inflation between 1 and 3% over the medium term and watches the inflationary expectations of price and wage setters in business very closely.
Any signs that the coming surge in inflation because of the planned GST hike on October 1, an increase in Emissions Trading Scheme costs and higher ACC levies was filtering through into higher expectations of inflation in the longer term would have worried the Reserve Bank.
Governor Alan Bollard warned last week that any signs the one-off increases in prices were being embedded into wage and price setting behaviour would force the bank to take a tougher Monetary Policy stance.
Expectations for inflation one year ahead rose to 3.9% from 2.9% in the June quarter as businesses looked ahead to the coming inflation surge.
See the full detail on the latest RBNZ Survey of Expectations here.
8 Comments
Richard Russell - The Stock
Richard Russell - The Stock Market Is Crumbling
The Godfather of newsletter writers, Richard Russell, summed up our situation as follows, “crumbling.” Again I will repeat what I have always liked about Russell is that he likes to focus on the big picture. What is the big picture? Here are a few snippets from his latest commentary
August 21, 2010
Richard Russell:
On to the markets. The stock market is crumbling -- actually crumbling before our very eyes.
...I'm saying that half the issues in the Dow, the NYSE, S&P and NASDAQ have now sunk below their important 200-day moving averages. And the same is true of the big stock averages.
From Eric King's blog
It was Russel who convinced
It was Russel who convinced me about 6 years ago that the outcome would be deflationary. Back then like most I believed the printing press made that impossible.
Russel referred to the time in the 1930's when he was a kid and how a dollar was a very rare sight. He pointed out people today wouldn't believe how rare cash became.
His argument surrounds what he terms a huge synthetic short of the dollar. Too many individuals shorting the currency for years in favor of assets. It is the collapse of this synthetic short on the dollar that is behind the deflation.
Contrary to what many of the
Contrary to what many of the bullshit artists say, many now believe that housing will never recover in the U.S. Think about what effect that will have on global demand.
There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”
Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment.
Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up.
With minor swings in sentiment, the latest results reflect what new buyers always seem to feel. At the boom’s peak in 2005, they said prices would go up. When the market was sliding in 2008, they still said prices would go up.
“People think it’s a law of nature,” said Mr. Shiller, who teaches at Yale.
For the first half of the 20th century, he said, expectations followed the opposite path. Houses were seen the way cars are now: as a consumer durable that the buyer eventually used up.
http://www.cnbc.com/id/38811394
Not surprising. In the UK
Not surprising. In the UK they are spruiking prices to regain the 2007 peak by 2015 — seems like a guess to me.
http://www.telegraph...-Economics.html
2015 !! Ha!! It'll be all
2015 !! Ha!! It'll be all over Red Rover by then.
With minor swings in
With minor swings in sentiment, the latest results reflect what new buyers always seem to feel. At the boom’s peak in 2005, they said prices would go up. When the market was sliding in 2008, they still said prices would go up.
“People think it’s a law of nature,” said Mr. Shiller, who teaches at Yale.
Sounds like something Olly Newlands!
Yes Bolly knows what no other
Yes Bolly knows what no other bugger knows...we don't know how he knows but we think he knows...he does know doesn't he?...oh shit....he's guessing...just like the rest of us.
The likelyhood of coming
The likelyhood of coming inflation can't be measured by NZ economic metrics. The driver, as always, will be the cost of borrowing from the leeches of Wall Street. Will the US have to inflate its debt out of existence or face bankruptcy? Yes. Now that any TARP related bailouts have run down the plugholes into US Executives pockets, we can hear an ever nearer roar of a tidal wave of inflation. It doesn't matter if you buy houses, shares or collectors cards - buy some kind of property, or the cash in your bank account will only be enough to buy a loaf of bread at tommorrows prices.
I love it when everyone is agreed about what is going to happen in the future, its an opportunity to make a fortune banking on the opposite (in this case, everyones low inflation expectations). Don't rely on others opinions of what may happen, however elevated they may be (Dr Bollard, et Al.), look at the facts.