Here's my summary of the key events from over the weekend that affect New Zealand, with news we are slipping in the world of innovation.
Firstly in the US, house building starts dropped for the third month in a row in May and are -2.4% lower than the same month a year earlier. And that is despite housing completions being +14.6% higher on the same basis. The worry in that builders are starting fewer housing units in response to softer demand signals. Building permits issued are also down a bit less than -1%.
Political uncertainty may be behind the hesitation. The latest survey of consumer sentiment shows a fall, but the surveyers note that even though it was a modest -2.6 pt drop, that is masking a steeper fall as the month on June wore on and they put it down to the unsettling and partisan events in Washington having a flow-on effect on consumer spending plans. A hesitant American consumer can have ripple effects on the world economy.
Last week's US Federal Reserve rate hike actually came with one dissenter. It is not the first time he has dissented and he wrote about his reasons over the weekend and they essentially hinge around the inflation track and a belief the Phillips Curve signals are not being reflected in the actual data - something Janet Yellen was at pains to point out are 'noisy'.
And staying in the US and around the theme of innovation, we should note that tech powerhouse Amazon has acquired a leading supermarket chain there, Whole Foods. Amazon is embarking on a new way to sell groceries and this deal seriously jump-starts the process. The new way involves checkout-less buying and if it works (most Amazon initiatives seem to work amazingly well), the future supermarket will be one where you walk in, place items in your shopping cart, and walk out, with no checkout line at all. You pay via your Amazon account. The developments after that then get more futuristic.
The annual Global Innovation Index report was released late last week. And New Zealand has slipped four places to 21st in the world. A small consolation is that we are ahead of Australia who are 23rd. In Asia we rank 5th ahead of China and Australia, but behind Singapore (#7 worldwide), Korea (#11), Japan (#14) and Hong Kong (#16). We do rank #1 in the sub-groups of "Political stability", "Ease of Starting a Business "Ease of Getting Credit" and "Protecting Minority Shareholders". But we are let down in the areas of "Graduates in Science and Engineering" (#66), "Gross Capital Formation" (#53), "GDP per unit of Energy Use" (#75), "FDI Inflows" (#156") and "GDP per Capita" (#59). We score #4 for "Government Effectiveness", and #3 for "Regulatory Quality". Embarrassingly, our public sector scores hold us up, our private sector scores let us down.
In France, it looks like centerist President Macron is headed for majority support in their parliamentary elections. Both the hard left and the hard right, including the National Front, will almost be wiped out.
In New York, the UST 10yr yield is still at 2.15%.
The price of oil will start the week up just marginally from this time Friday at just under US$45 a barrel, while the Brent benchmark is now just under US$47.50.
And the price of gold will start unchanged at US$1,254/oz. Gold bulls are still out there, however.
The Kiwi dollar is a little stronger today. Against the greenback it is at 72.5 USc. On the cross rates we are at 95.2 AU¢, and 64.8 euro cents. The TWI-5 index is now at 76.7 and a fifteen week high.
If you want to catch up with all the changes on Friday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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Thinking exactly the same thing the other day
"NZ Police spend millions on 'dead duck' intelligence software tool by failed developer Wynyard Group"
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=118…
Were Wynyard one of the businesses complaining to Government about inability to obtain skilled staff
What an awesome business con.
Jade originally developed the Wynyard software. Spun it of into a separate company, IPO Wynyard so they could extract value out of it. Ran Wynyard into the ground, so it's no longer liable for any business debts or contractual obligation, pickup the pieces and change full rate to fix.
You're not surprised though, are you?
Just look at past history of poor government purchases
- military equipment
- infrastructure
- software
A couple of years ago I was privy to some MOJ dealings where a new software package was being developed and the project ran over budget by around $250k (nearly double of quoted budget).
In the private sector, this would be career ending. In the public sector, this happens all the time - in my experience, due to incompetence on the buyer side and extreme exploitation on the seller side.
Just the other day Steve Maharey wrote in an article on this web site, These should be good times for New Zealand. We live in a nation blessed with natural resources, talented people, a diverse culture and stable government. and I wondered why "diverse culture" is automatically assumed to be economically beneficial. It's repeated like a mantra against most of the evidence we observe around the world where diversity is very costly. The safest thing we could perhaps state is that diversity is neutral or largely irrelevant in a modern Western country.
I agree. Robert Putnam's research into multiculturalism hardly paints a good picture of it in the West.
In recent years, Putnam has been engaged in a comprehensive study of the relationship between trust within communities and their ethnic diversity. His conclusion based on over 40 cases and 30,000 people within the United States is that, other things being equal, more diversity in a community is associated with less trust both between and within ethnic groups. Although limited to American data, it puts into question both the contact hypothesis and conflict theory in inter-ethnic relations. According to conflict theory, distrust between the ethnic groups will rise with diversity, but not within a group. In contrast, contact theory proposes that distrust will decline as members of different ethnic groups get to know and interact with each other. Putnam describes people of all races, sex, socioeconomic statuses, and ages as "hunkering down," avoiding engagement with their local community—both among different ethnic groups and within their own ethnic group. Even when controlling for income inequality and crime rates, two factors which conflict theory states should be the prime causal factors in declining inter-ethnic group trust, more diversity is still associated with less communal trust.
Clearly that is hate speech written by a white privileged cis gendered male. All problems with diversity come from the oppression of white males. All nations and races have been oppressed by whites, and it has now been discovered that even the original inhabitants of Europe had coloured skin, before they were wiped out by whites. Whites have invented nothing, but stole their inventions from other races, and used oppression to claim them as their own. The only solution is to use diversity to outnumber and outbreed whites, wherever they are. Forced sensitivity training is no longer enough to stop the oppression and anyone who disagrees is a racist nazi.
I wondered why "diverse culture" is automatically assumed to be economically beneficial. It's repeated like a mantra against most of the evidence we observe around the world where diversity is very costly.
You "observe evidence" do you? Are you an ethnographer? How do you set your benchmarks and align them with your observations?
One of the key discoveries over the last decade is that diversity of ethnicity, gender and sexual orientation significantly improves creativity, work ethic and overall competitiveness within all organizations.
https://www.accredited-times.com/2016/09/16/how-diversity-promotes-econ…
Try another angle. This country's origins are predominantly white European, classed society. thus there is an in built element of xenophobia, and sense of superiority. Thanks to Maori political awareness this is being battered into submission somewhat, but is still there.
Cultural diversity while on one level could be argued to add to a nation's economic opportunities and performance, on another it is just seen as being achieved through immigration and is thus more competition for locals to face when trying to scale the ladder of economic opportunity. Employers take the easy way out, importing skills and experience rather than training and up-skilling locals to achieve the level of performance and achievement they need.
IMHO it is about business ignoring their role in society. Believing that they are somehow separate and above it, as opposed to being an intrinsic part of. Thus we have organisations thinking that it is somehow moral and ethical not to pay tax in countries they do business, buying off politicians to put in place laws that enable this, or using existing laws to achieve it. Thus people get forced on to lower wages, higher demands for time and results in the chase for evermore dollars for shareholders. Because we have a nice society compared to some, there are always people willing to come here to work, often at rates locals would not accept, because it gets them in the door.
Thus diversity can be argued to improve competitiveness, but this is not about for the country, it is for the company. Innovation is about how to make more money, not making more people successful. This is another underlying reason for Trump, BREXIT and Macron.
I agree.
Immigration is excellent, but there needs to be a coherency between incumbent and new cultures - something that isn't emphasized here.
Ideally, the country should be shaped into a society that integrates the best elements of it's influences.
This isn't the case with New Zealand as it is plain to see that we are fast becoming a very segregated society because we've done the opposite; we're now increasing in corruption, exploitation and inefficiency.
If you say you haven't bore witness to this, you are evidently part of the problem.
To quote (or paraphrase) a simple man, "The countries sending their people, aren't sending their best".
I think "segregated" is a very good way of putting it. You get Indians, Chinese, Pakistanis etc coming into NZ yet don't learn and speak proper English, refuse to be a part of "Kiwi" society, shut themselves off from the dominant culture (white NZ European) and form their own little communes and groups and exclude all outsiders.
People all over the world are suffering in their own countries due to white privilege and the legacy of white supremacy. Therefore, white countries owe them a shot at a better life in the west, so they can enjoy the fruits of a first world nation, while teaching ignorant whites about diversity and their culture.
It’s time for whites to shut up and accept that they no longer have any power in the world or control over any country, because the only thing that matters is numbers, and minorities outnumber whites and have higher birth rates. Whites didn’t build anything, and there’s nothing great about Europeans. Minorities are going to teach whites a thing or two about hard work and ethics, and whites need to learn to accept this and slowly fade away. This is what progressives want, and this is what we will continue to work for, because without whites, the world will be a more compassionate, fairer, safer and more prosperous place than we can possibly imagine.
https://www.accredited-times.com/2017/02/18/progressives-celebrate-amer…
Haha.
Go setup an antifa/blm/other trendy liberal club.
Like all poorly informed/read liberals, you are no less racist than the people you seek to persecute.
http://www.businessinsider.com/students-demand-firing-of-evergreen-stat…
Anyone who has studied Critical Race Theory knows that all white males are inherently racist and oppressive because of their privilege. White males are the apex of oppression in Critical Race Theory – that is an unbreakable rule, and the foundation of this entire branch of science. It is impossible for any oppressed minority race (no matter how long ago the oppression) to ever be racist because it is only fair for them to speak out against the oppression.
You say "science"... Isn't the foundation of science regimented and rigorous unbiased hypothesis testing?
Because that has never happened with CRT - it's pretty much just a whole lot of anecdotes and hypothetical stories construed to support a rhetoric.
Sure, you can make up whatever nonsense you want, but at the end of the day you need to categorically prove it.
If your genuine belief is that it is impossible for any minority race to ever be racist, you are blinded by your own stupidity.
"the only thing that matters is numbers.."
Nope. The only thing that matters is access & control over the energy sources. This is a great observation
"if a nation doesn’t possess sufficient indigenous energy resources to satisfy the aspirations of its inhabitants, then that nation must beg borrow or steal them from somewhere else, or collapse back to a level of natural sustainability. (The driving force of all expansionism and warfare)
This of course is unacceptable, people refuse to slide backwards..."
Diversity is lovely in times of plenty ... not so much when resources get scarce.
... his one year old political party has garnered 75 % of the popular vote ...
I have a feeling that the next year or three in Gallic politics are gonna be a French farce ... scandals , resignations , and party rifts will be de rigueur ... as it all unravels around him ...
Or maybe not,
"Let’s start with the most striking fact. If we calculate the average labour productivity by dividing the GDP (the Gross Domestic Product, that is the total value of goods and services produced in a country in one year) by the total number of hours worked (by both salaried and non-salaried employees), we then find that France is at practically the same level as the United States and Germany, with an average productivity of approximately 55 Euros per hour worked in 2015,"
http://piketty.blog.lemonde.fr/2017/01/09/of-productivity-in-france-and…
and then some other bits,
https://krugman.blogs.nytimes.com/2017/04/12/the-french-ourselves/
https://www.bloomberg.com/news/videos/2016-05-13/u-s-vs-europe-more-pro…
ie there isnt much of a case to suggest France is lagging much in terms of productivity.
Especially when inequality is considered,
https://www.theatlantic.com/business/archive/2013/08/why-is-inequality-…
Innovation is mostly about recognising Opportunity. For instance:
Warner Cable, wanted to buy outright the "PopClips" copyright to be expanded into an all-music video channel, but after Mike Nesmith (ex Monkees and innovator of PopClips) declined the offer, Warner Cable started work on what would become MTV.
Re: Yellen,
Inflation has stubbornly stayed lower than the Federal Reserve has desired for the past eight years, and it has been falling in the last few months. In a move that could well define her chairmanship of the central bank, Janet Yellen is betting that falling prices are a temporary blip that will soon be forgotten. Read more
Moreover,
The PCE Deflator has been at 2% just once in the last sixty months, and it had absolutely nothing to do with the Federal Reserve. Janet Yellen, however, refuses to bend. She has attached herself steadfast to the word “transitory”, even though by any reasonable definition the word lost meaning two years ago in the summer of 2015 when it failed to properly characterize the situation just the first time. Read more
In New York, the UST 10yr yield is still at 2.15%.
Hmmm.....
.At some point after so many years, “we” believe recovery just has to kick in if for no other reason than luck, and therefore amplify whatever small positive indication into the convincing proof it never was. Belief in authorities certainly plays a role, but as the history of all these curves really shows, that belief isn’t permanent. The longer it goes without recovery, the lower curves drop in each cycle, meaning the more jaded (for every good reason) these markets become. It is not so much despair vs. reflation or hope, rather it’s making peace with reality.
To today’s policymakers, the yield curve as well as eurodollar futures are some kind of mystery. They aren’t. They simply prove that these people who claimed to have studied all the necessary facets of the Great Depression didn’t actually do that. How else could 2008 have happened, let alone the aftermath? They surely didn’t listen to Friedman.
"As an empirical matter, low interest rates are a sign that monetary policy has been tight, in the sense that the quantity of money has grown slowly; high interest rates are a sign that monetary policy has been easy in the sense that the quantity of money has grown rapidly. The broadest facts of experience run in precisely the opposite direction from that which the financial community and academic economists have all generally taken for granted". Read more
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