Here's my Top 10 items from around the Internet over the last week or so. As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
See all previous Top 10s here.
My must reads are #1 on China's economy and #4 on money printing.
1. Just how much trouble is there behind the wall of opaqueness clouding China's economy? - This New York Times piece has a good look in the wake of last week's surprise devaluation/depreciation.
The anecdotes at least are slightly alarming.
The gravity of the situation can at least be hinted at by the actions taken last week. Remember, just a few months ago, China's economy minister Li Keiqiang was telling the FT in April that China would not devalue.
It's worth repeating his quote from Mr Li just to show how much of change there was between then and now:
“We don’t want to see further devaluation of the Chinese currency because we can’t rely on devaluing our currency to boost exports,” he says.
“We don’t want to see a scenario in which major economies trip over each other to devalue their currencies. That would lead to a currency war. And if China feels compelled to devalue the renminbi in this process we don’t think this will be something good for the international financial system.”
2. Detail on the ground - Keith Bradsher and Michael Forsythe have good detail from inside China. They're only anecdotes, but they don't paint as rosy a picture as the official figures.
Zhang Wei, a carpenter at a construction materials market in Guangzhou, says customers’ orders are plunging. Hu Sheng, a seller of metal siding, had to cut prices to the bone, and even then his sales dropped by a third.
At a covered market in Guangzhou, Zhang Xiaojun sat dejectedly behind a counter where half a dozen gutted, plucked chicken carcasses lay.
“I was selling 30 to 40 chickens a day last year,” he said. “Now at best I sell only 10 chickens in a day, and I can’t make a living.”
3. Reduced dairy access? - The fallout from the failed TPP negotiations in Hawaii is starting to flutter down to New Zealand and I can see why New Zealand didn't sign it.
Tim Groser lets slip in this Nikkei interview that New Zealand was offered a reduction (yes a reduction) in access for dairy in the offers on the table in Hawaii. It seems Japanese politicians have been saying that New Zealand scuppered the negotiations. The bolding is mine.
The reality is that we were never given even minimal offers on things that are of interest to New Zealand that we could accept. We have compromised enormously from the idea of eliminating all tariffs, in the case not just of Japan but of the U.S. and Canada.
The relationships I have with all the key ministers are extremely positive, including with Amari. But let me assure you that the numbers that are being put on the table in certain key areas of trade do not even come up to our current levels of exports.
Dairy is to New Zealand what automotive products are for Japan. Japan would never conclude a deal that did not take account of its major exports in autos. And for New Zealand, with one-third of our exports being in dairy, we are in exactly the same situation. So, these statements the Japanese people are being told are not truthful. They are vastly exaggerated.
4. Money printing for the people - Paul Mason over at the Guardian has put last week's Chinese devaluation/depreciation in the context of the calls from British Labour Party leadership candidate Jeremy Corbyn's call for a 'people's quantitative easing' proposal.
Corbyn has, of course, been accused of being a 'funny money nutter', as Russel Norman. But I'm sorry, that argument just has no power any more after what the US Federal Reserve, Bank of Japan and Bank of England did to rescue banks and stock markets.
Mason points also to the inevitable conclusion. The only losers are the ones who don't print.
The question Corbyn raised by proposing “people’s QE” is legitimate – whether you agree with the answer or not. It is, in essence, “what do you do if QE stops being effective?” It is the same question that haunted former US treasury secretary Larry Summers when he warned in 2013 of “secular stagnation” – arising from the fact that QE can’t respond to a new crisis as effectively as the old, traditional methods of interest rate cuts can.
Done traditionally – by buying government bonds on the secondary market – QE is slow and “sticky”. It works by forcing investors to move their money to riskier areas – construction, the stock market, property – and revives growth through first reviving the net worth of people who own wealth. If it ceases to function – because somewhere else in the world one of your trade partners is doing their utmost to steal your growth – then you have to start thinking unconventionally. You could, as Corbyn suggests, print money and use it to finance infrastructure spending; you could – as former Federal Reserve chairman Ben Bernanke once suggested – drop it from a helicopter for people to spend. Or you could use the printed money to write off existing government debt.
It is all possible (so long as you have your own currency) – but once you do it, you have obliterated the carefully crafted boundaries between monetary and fiscal policy; and you are engaged in an overt currency policy.
5. Cult or company? - The New York Times Exposay of Amazon's work culture has been the talk of the Internet this week. It documented the bullying, backstabbing and general sociopathic behaviour of America's technology work culture.
Jeff Bezos' response in a memo to staff was to ask for workers to dobb in the bullies. He said he had zero tolerance for a lack of empathy. Hmmm. Someone demonstrates their empathy by saying they have zero tolerance...
The first response was for some workers to leak the email...
I hope Bezos can cope with Jeremy Clarkson. And vice versa.
6. I'm cheering them on - This Bloomberg profile of Mondo CEO Tom Blomfield, 29, is an interesting look at the future of banking. He's trying to set up a mobile phone bank.
It seems to me there is a massive opportunity to compete away super profits, at least in Britain. Our banks are more efficient and customer service oriented, but there's still room for those big margins to be competed down.
Blomfield wants to make Mondo the Google or Facebook of banking with accounts that are as easy to use as e-mail. “We are targeting a demographic that values being able to do everything over a mobile phone in five seconds,” he says.
If Blomfield and Kingsmill get their way, Mondo won’t be just another snazzy app using the license of an existing bank. That’s been done in the U.S. by Simple.com, which piggybacks onto Bancorp Bank, and in Germany by Number26, which is bolted to Wirecard Bank. Unlike most other startups, Mondo has built proprietary software.
If Mondo gets a license from the BOE’s Prudential Regulation Authority, it could—as early as next year—begin taking deposits and lending money.
7. What a weak Renminbi might mean for us - This detail in the New York Times piece on the yuan devaluation struck me as important for New Zealand's tourism and education exporters.
The commerce ministry has long lobbied for a weak renminbi to help the country’s exporters. But Mr. Zhou can’t let the currency drop too much, lest he antagonize the Chinese companies investing abroad and the Chinese families sending students overseas.
“You see it as more than 100 million Chinese travel abroad, and there are more than 800,000 Chinese students studying overseas,” said Yu Yongding, a former member of the central bank’s monetary policy committee. “They want a strong renminbi.”
8. All about sodium cyanide - This Quartz piece explaining the qualities of sodium cyanide is an eye opener. Over 700 tonnes were discovered at the Tianjin warehouse that blew up this week. No wonder the Chinese authorities have been shutting down websites all over China to contain the...er...fallout.
The term cyanide is clearly understood in the public consciousness to be almost synonymous with poison itself. This is largely because of its use as lethal suicide pill (L-pill) in World War 2, most notably with the suicide of Nazi army officer Erwin Rommel. The cyanide used in the L-pill was potassium cyanide but the properties of sodium cyanide are nearly identical.
An inorganic and very innocent looking white solid with deadly properties, sodium cyanide (NaCN) can be fatal at amounts as little as5% of a teaspoon. It is produced from the equally dangerous gas hydrogen cyanide (HCN) in a simple process with sodium hydroxide.
9. John Oliver on New Zealand's flag debate. - This is fun. For the record my favourite is "Fire the Lazar!" and mostly because of the description by its creator James Gray.
The laser beam projects a powerful image of New Zealand. I believe my design is so powerful it does not need to be discussed.
And here's Oliver's longer piece on American televangelists. Hilarious. And enraging.
10. Totally Clarke and Dawe understanding Grexit. It's all clear to us now...
60 Comments
I find it interesting that only a few short years ago the right writers / business people / talking heads were crowing how china was our saviour and there were great opportunities to be taken the most of there. It seems there is a short term memory on such things as teh reality starts to come out.
Link is: http://www.radionz.co.nz/news/political/281780/govt's-asian-bank-move-s…
Also new wording of NZFirst policy as comment underneath.
#4.... "Peoples quantitative easing".... What a joke...The ONLY possible way that any kind of money printing benefits the "people" , is if it is given directly to them.
Why can't everyone see that money printing IS NOT a free lunch.... It is a transfer of wealth... and accelerates the division of wealth.
the label of..."funny money nutter" still applies..... AND it applies to most central Banks.....
I'm not saying that there should never be QEing.... In my view Bernanke should have done his "Helicopter drop".. in the form of giving new money to every citizen.... thereby stimulating the economy at a grass roots level.... rather than pouring it into the banking system...
At least that would be equitable.
PS.... I suppose Tim Groser believes TPP is .... "for the People"...????
As I'm sure you are way smarter than the likes of Bernanke or Janet Yellen, and better educated.
Give money to everyone can create nothing more than a short-term inflation boom, then bust, especially during periods of economic hardship. Most of the money will simply go to the basics (food, petrol, etc) - does that create jobs where jobs should be created - doubt it?Does it help the poor? Not 1 bit - the price will instantly shoot up, and then slam down as the cash got spent. Is there a mechanism for it to go to the productive sector as against the dead sectors? No.
This is just another version of the anti-establishment anarchism.
hmmm PattyZ.....with respect to Janet Yellen being smart - actually when she was made aware of the US housing debt problems back in 2005, she said it was of little concern and would merely be a "bump" on the road ahead. It didn't turn out to be a bump, it turned out to be the GFC.
She may be well educated, but she is an idiot when it comes to practical economics. QE has never worked once in history. And after 9 trillion dollars of debt post 2007 at ZIRP, it appears to have created very little real growth.
Both views are valid. The problem with QE as it was applied is that it bailed out the fools who created the mess in the first place. In other words it protected the wealth of the wealthy while leaving the ordinary people to fend for themselves and in most cases lose their life savings and retirement. Giving the money to the people (or preserving their wealth) while letting the banks fail, and putting in place effective regulation to limit the inflationary effects would have been a more effective measure that also sent a message to the big banks about their sense of self importance. Also, if the ordinary peoples savings were protected, at the expense of the banks, why would that be inflationary as the money was there before the banks squandered it? A failing of the current system is that any depositor's fund held by a bank are actually considered the banks property and depositors are unsecured creditors. This needs to change.
damn right! But relates to the article on bullying. The problem with a lot of bullies, particularly in government organisations, are that they are the bosses. It's a bit hard to accuse your boss of bullying while trying to keep your job and negotiate for a better pay package. so they get away with it. Then try and get a good reference once you've left. The DHs that dreamt up the banks schemes that led to the GFC, and ultimately QE no doubt played the personality politics game very well at the cost of less political but likely more able, and higher integrity others.
I think we can see that qe didd little for main street, in fact it's done some damage. So just maybe a debt jubilee in the form of a one off tax debate may have indeed achieved more. Just maybe govn spending on infrastructure would have done a better job but such a course of action was not politically possible
The best way in a downturn is for a given to step in and spend where private industry has not. Giving everyone money is exactly the idea, it's a temporary boost to keep the economy going and where it's a one off does not create inflation. Does it create jobs? Well the idea is more to reduce job losses especially amongst the lower paid so yes it can benefit them. Such a short term inflation spike as you suggest does not occur in practice as long as the money is seen as a one off action.
Quantitative easing needs a transmission mechanism into the productive economy, such as producing hundreds of thousands of affordable homes for working people. As discussed by Professor Craft in his historical analysis of how Britain escaped the Great Depression.
"Obviously, for the cheap-money policy to work it needed to stimulate demand – a transmission mechanism into the real economy was needed. One specific aspect of this is worth exploring, namely, the impact that cheap money had on house-building. The number of houses built by the private sector rose from 133,000 in 1931/2 to 293,000 in 1934/5 and 279,000 in 1935/6 – many of these dwellings being the famous 1930s semi-detached houses which proliferated around London and more generally across southern England."
http://www.voxeu.org/article/escaping-liquidity-traps-lessons-uk-s-1930…
Brendon... when u say "transmission mechanism".... what comes first.???
The horse or the cart..... the producer or the consumer.... the supply of the demand.
Everything I've read , suggests that the best transmission mechanism for QE, in regards to an indebted economy that is deleveraging, is to put that QE money into consumers hands..... and let the consumer decide how it is too be spent.
With a command economy style dictate on using QE for productive investment.... it is so easy to end up "building bridges to nowhere"... ( metaphor).
Roelof. "Transmission mechanism" is based on a quote from Professor Craft. The benefits of using cheap finance to fund affordable housing (through improved town planning) is that workers can then afford to be bigger consumers for the rest of their lives. So it affects both supply -the construction of the actual houses and demand -by effectively improving disposable income. This improves the real productive economy as opposed to increasing asset prices for the top 1% which doesn't seem to be working.
I agree the very idea of qe is to me a fundamental failure but one that is done because congress would allow no other. Looking at the polls right now Hillary Clinton is I think on 47% and Donald trump 42% so nothing will change much if hc gets in and it will be very bad if dt gets in doesn't bode well at all.
#6 - 8 years late and a dollar short, BH
M-Pesa https://en.wikipedia.org/wiki/M-Pesa
Even the Economist noticed, 3 years ago: http://www.economist.com/node/21553510
Or perhaps the message is that the start-up, noticing the impoverished state of citoyen in the UK and Eurozone, has decided that the Somali Solution's time has come?
Does this government truly expect to have any influence with Japan regarding dairy and the TPP?
We have a Comprehensive Strategic Partnership with China. I've said this before, but it deserves repeating - this Agreement goes as far as committing our two nations to defence engagement.
Perhaps John Key and his government thought no-one was looking. Perhaps they thought it wouldn't mean too much to us or to anyone else, but would be a good way of sweet-talking China.
And now we expect Japan to look kindly on our dairy industry? Really? It might be worth someone in Groser's office googling relations between China and Japan. Foreign relations are somewhat larger than our dairy industry.
USA only uses Japan (Taiwan, other Southeast Asian countries) as a regional counter-force to limit/slow down the growth of China, and a barging chip to force China to buy its treasury bonds.
The only 5 countries can be trusted to work together militarily are the ones from Five Country Conference. Yep -- all Anglo-Saxon countries. But, with demographic changes happening in each of them, that may change one day.
U reckon USA trusts Japan? Not after Perl Harbour and knowing what they have done in WII in China -- Nanjing Mascara was an obvious one, and Unit 731, have you heard of it?
So with demographic changes some of these 5 counties which have in common Democracy, free speech, lack of corruption and the rule of law, which make these countries so attractive to new migrants, may stop valuing these qualities, and throw in their lot with China? Can’t say I’m happy with that.
did you miss this , fair bet nz will fall with yuan http://www.bloomberg.com/news/articles/2015-08-17/auckland-home-prices-… Auckland home prices are up more than 20 percent in the past year. If you’re a buyer from China or the U.S., they’re not.
The slump in New Zealand’s currency has made properties in the country’s largest city a bargain for foreigners, creating a headache for central bank Governor Graeme Wheeler, who has been trying to put a lid on the country’s overheated property market.
“Five years ago I would have estimated two or three percent of Auckland properties were bought from overseas,” said Peter Thompson, managing director of Barfoot & Thompson, which says it sells one-in-three homes in the so-called City of Sails. “These days it’s 10 or 12 percent.”
Wheeler has lowered interest rates to offset faltering economic growth and weaken the currency, but the cuts are stoking Auckland’s housing prices, which are already the second highest relative to income among developed economies. Worse still, with foreign buyers tripling their participation in the city of 1.5 million people, the price surge is starting to spread to cheaper neighboring regions.
Local residents are becoming frustrated that the influx of Chinese, American and Australian money is pushing them out of the market in some districts. In the North Shore suburb of Pinehill, where one in five residents is already Chinese, realtor Kathy Westmoreland is selling a four-bedroom home for NZ$819,000 ($537,000), 30 percent more than the current owners paid in 2010. She’s had inquiries from Chinese, Indian and European buyers.
“It’s a very desirable area for the Chinese,” she said, citing the community and a highly regarded school.
Xenophobic Politics?
The main opposition Labour Party last month claimed that 40 percent of Auckland house sales between February and April were purchased by people with Chinese-sounding names, and criticized the government for soaring prices.
While the claim drew accusations of xenophobic politics, a subsequent poll of 1,000 voters showed 61 percent wanted the government to ban non-resident foreigners from buying houses.
Foreigners should build their own homes rather than compete with local residents for existing properties, Labour leader Andrew Little told Radio New Zealand Tuesday. It is “widely accepted” that the biggest non-resident purchasers of New Zealand houses are Chinese, he said.
Prices Surge
Auckland’s median house price gained 21 percent in July from a year earlier to NZ$735,000, according to Real Estate Institute data. The Kiwi dollar dropped 22 percent against the U.S. currency and Chinese yuan over the same period, which means in those currencies prices are cheaper. Even after China’s devaluation last week, the New Zealand currency is down 20 percent against the yuan.
Barfoot & Thompson had its best July ever for sales in Auckland and in the first week of August they were 25 percent ahead of a year ago, said Thompson, who employs Chinese speakers to handle inquiries.
“We can’t say it’s slowing,” he said. “There’s a lot of inquiry out there. We just don’t have the stock.”
The exchange-rate plunge is also encouraging New Zealand expatriates to invest in housing back home using their foreign-currency earnings.
“Our inquiry levels have increased significantly since about March,” said Alan Henderson, a director of Erskine & Owen, an Auckland-based firm that acts as a buyer’s agent, mostly for expats. “We get lots of Kiwi expats sitting there umming and aahing about whether they bring their money across now rather than later, but now the dollar has weakened it just eases that consideration.”
Regulatory Changes
In the face of surging prices, the central bank this year announced a raft of measures to curb lending for Auckland home buyers. The government followed with its own rule tightening, saying it would enforce a capital gains tax on any property sold within two years of purchase.
“Lower interest rates risk exacerbating the already extensive housing pressures in Auckland by stimulating housing demand,” Wheeler said July 29. The RBNZ “continues to be concerned about the financial stability risks and risks to the broader economy that would be associated with a major correction in Auckland house prices.”
From Oct. 1, the RBNZ will require a property investor in Auckland to have at least a 30 percent deposit for any purchase, up from 20 percent in most cases.
‘Going Crazy’
The regulatory changes will encourage a shift in buying away from Auckland as the central bank eases restrictions on those who borrow to buy elsewhere, economists say.
“Money is no longer chasing the Auckland market,” said Craig Ebert, senior economist at Bank of New Zealand Ltd. in Wellington.
The number of Auckland residents buying in Tauranga, a coastal city three hours’ drive south-east, has surged 80 percent this year, according to research commissioned by Westpac Banking Corp. They’re buying houses for an average NZ$533,000 -- or NZ$237,000 less than they sell for in Auckland, the bank said.
“Tauranga is going crazy,” said realtor Westmoreland. “A lot of people are moving down there and for the first time in their life getting a brand new car and have money in the bank.”
The RBNZ rule isn’t going to overly impact the Auckland market, said Erskine’s Henderson. For a lot of his clients “it’s a matter of finding the extra 10 percent from somewhere, which for most is not a big struggle,” he said, referring to the requirement for a larger deposit.
Erskine competes with Asian investors when bidding for Auckland properties. Many are buying apartments or homes as bases for their children when they study, Henderson said.
“It’s just life,” he said. “Kiwis are a bit naive to think we can shut the doors and close it down.”
Farmed fish overtakes the wild version.
"For the first time, the world is eating more fish from farms than from the open sea, spurring billions of dollars of takeovers as one of the largest food companies seeks to capitalize on rising demand."
http://www.bloomberg.com/news/articles/2015-08-17/hungry-fish-farms-lur…
This is not a good thing.
Fish farms are very polluting and have a detrimental effect on nearby environment.
Unfortunately.
Farmed fish is also not as healthy as wild fish, and salmon, for example, gets given coloured additives to make it look pink, because farmed it looks a dull, grey colour....
.
https://en.wikipedia.org/wiki/Fish_farming#Issues
Read up on polyculture. Buy your fish from Open Blue.
http://www.nationalgeographic.com/foodfeatures/aquaculture/
http://grist.org/food/everything-you-always-wanted-to-know-about-fish-f…
Now the world is at close to zero interest rates, and if another financial crisis occurs (which seems likely) then printing money for direct distribution to the people seems a very logical step for the world to take. The UK, US, Japan, China, Switzerland, and even the Euro zone have been doing it but pretending not to for the last 7 years, and the losers have been all the countries that have not done so.
To be equitable internationally, the G20 then filtering down, could agree a target of x% of GDP to be printed per country and either used to pay off government debt, spend on infrastructure, or fund tax cuts at the base level, and so benefitting all tax payers.
On the TPP, given NZ was one of the initiators of the whole process, I am intrigued that dairy tripped up the process at the 11th hour. Had we not made it clear from day one that a dairy deal was a precondition of us signing, and that if any country wanted to join the talks, they should have got comfortable with that before joining? How on earth was it a final stumbling block?
Because Grosser and National are stupid and greedy. The trade negotiations began as a small do-able agreement between a limited number of countries that likely could have achieved agreement on expanded dairy trade before now. But Grosser's eyes were bigger than his stomach and he bite off more than he could chew.....
"Historically, the TPP is an expansion of the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4) which was signed by Brunei, Chile, Singapore, and New Zealand in 2006. Beginning in 2008, additional countries joined for a broader agreement: Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States, and Vietnam, bringing the total number of participating countries to twelve." https://en.wikipedia.org/wiki/Trans-Pacific_Partnership
Grant you say my comment was cynical and that I have an agenda. Well yes I do have some left wing liberal ideas. It is not exactly supported by anybody else so I am not sure how effective my 'agenda' is going.
But unlike you I also provided some evidence to back up my criticism. There was a change in negotiating tactics, from focusing on trade agreements with a limited number of participants to one -TPP with a large number of participants. Obviously the more participants, the longer the process and the higher the chances that any one participant -especially a small one will not achieve their desired outcomes.
This change of negotiating tactics has not worked out well for NZ.
Grosser and National need to take responsibility for their actions. Something they seem to have great difficulty doing.
Brendon what frustrate me is people who are not privy to the negotiations (i.e. damn near all of us) who seem to think they're experts on the negotiations, what the exact details are, the overall full picture for NZ, the personalities and tactics involved etc. Not saying its you, but there plenty of them out there - the bulk of us trust who we elected to do a job, to actually do the job and get the best result. Trusting maybe, but youre not going to get a better result by any other method.
Grant I respect that you have a different viewpoint and a right to express it.
My viewpoint coming from a left wing liberal place is that voters should keep a close eye on government as the benefits and costs of their actions may not be fairly distributed. This is particularly relevant to agreements such as the TPPA between nations that might permanently give away some sovereignty and impose a long-term costs on some parts of the community.
Fair comment Brendon, but unless at least 45% of the population are happy with the results then whoever negotiates it is history - that's where the democracy part comes in. It doesn't have to be TPPA, a Govt could be deemed guilty of that across numerous areas, but come the end of the day, even if it was Labour negotiating the TTPA, I would be trusting them to do the right thing for the bulk of the population, knowing full well that some will always be disadvantaged for the greater good.
That's the problem with your point of view Grant.
More than 45% of the population can be furious with the result. But unless there's another reason to trust the other guys more, they can still get in. Lots of people were angry with Nats last round but Labour were showing themselves to be so incompetent that there just wasn't enough support to remove Nat from office.
Likewise many well informed people who have contacts in various places in the world, and who are electronically connected, pick up signals on the strands of the web and through the corridors of many organisations so when we hear that deals like TPPA are not going to be good or not kosher we know we can't trust those media faces who have lots of reward to lie to us.
We are the ones that warned dairy farmers and Fonterra about dangers of corporate funds, of Chinese tricks, of Trading Amongst Farmers effects, and Chinese demand wasn't as advertised.
These are the same channels pass on rumours that certain Swiss folk are angry that the Euro seems to be milking them. (is "Jews" as bad as talking about "Chinese").
They're the same channels that say "what warehouses full of iron"?
And things like why are dry foods being counted in the USSR?
Or why aren't certain parties travelling to meetings about Greece?
It's like the music in a movie.... you don't need to wait for the experts to tell you what happened in the critics paper the next day.... certain pitches and tempo's that are part of the system play a tune - whether it's in weather patterns being calm before a storm, or politicians in meetings/not in meetings.
Yes cowboy lots of people have threads of bits of it, that's always is the case, but no one external has the full picture which is my point, and therefore can't comment from any position of any real knowledge. So it comes back to the main point, you will never have negotiations which are transparent because you simply will never reach a deal, its hard enough without literally millions of biases being involved. You trust them to do the job and if they don't, throw them out - and if you don't do that because the opposition is incompetent, then start looking at yourselves.
Grant A ... maybe u are the one to ask... Why can't there be transparency..?? Why does this have to be so secret... especially if it is a deal that can't be revisited..
I'm being philosophical here... transparency = democratic freedom/health....
secrecy/behind closed doors = deminishment of democratic/health/freedom.
Do u really think the bulk of us trust who we elected to do a job and get the best result...??? (especially when they do it in secret).. I don't even know Groser.... Making mistakes seems to be a pretty normal human thing...
Reolof - if nothing else, the other countries don't want it transparent, and they never have in trade negotiations as I understand it whether we're involved or not - it doesn't matter what fantastic argument for transparency that anyone has in NZ, its wasted breath, it ain't going to happen - fortunately the people doing the negotiations, whether its National with this one, or Labour with the equally behind closed doors Chinese FTA, are pragmatists and just get on with it.
But just think about it, trade negotiations are extremely difficult processes negotiated by a relatively small group of people, - add to that group the populations of all the countries involved, with all the economic and political biases amongst all of them, there would be no such things as a trade agreement, and we'd all be the poorer for it. The theory's fine, but only pragmatism actually gets results.
Grant,
My initial question which started this thread was not particularly intended to be critical of the Nats or Groser. I rather suspect that when push came to shove, the dairying lobbies in a bunch of countries including Canada, Japan, and the US, were successful in scuppering the deal, and or thought NZ would fall over. I actually give some credit to Groser for not conceding at the last stage- no doubt some pressure was applied to accept a very bad deal. Nevertheless how years of negotiations could have been apparently wasted with what should have been an obvious precondition not accepted at the end seems extraordinarily inefficient. Did we not make it crystal clear, or did they just ignore us, is the question?
At least we keep getting cheaper pharmaceuticals? Or have we given up on those in any case?
I hear that Stephen, but the point is we don't know whether we tried to make it a precondition for instance, and weren't successful, and instead choose the route of trying to get there in the end instead - we just don't know and can speculate it to death but probably will still never get to know. The speculation is as wasted as marching in the street, it makes some people feel better but its the one things we can say for sure is the wasted effort.
Yes. Good he didn't fold - although definitely get the feeling that feeling that dairy wasn't the only bad taste that they were pushing at him. And I wouldn't have been surprised that if the dairy payout was still high, that Fonterra would have broken free of NZ should TPPA have gone through. With the low payout, they have their wings clipped with debt, and they would have really been if trouble.
actually...not so hard.
Just much of the hurdles are created by the politicians and systems themselves...who are all, oddly enough, not paid though the solving of those problems (being paid from public tax/levy/ownership).
The classic highlight of the problem is shown by what the US negotiators had to try to do to get the US to enter into negotiation..... they had to first get the Senate and system off their back so they could actually speak or negotiate. As minor functionaries, everything they stated or heard had to go back to committee....and if that reached agreement, then it would go to the next step in ratification...who then make their piss-mark on it to show how important they are, and it gets handed back to the negotiators to fight over. When it finally gets agreement it still has to wait many months to make it to the top of the queue to get the Heads of State to rubber-stamp it (since it's multi-national treaty it needs official senior government approval (who won't even sign a school year book without his own advisors running their eyes over it for political nuance/speech purposes).
Remember we have businesses and computer systems that have trickier rules, more languages, more customs, more hardware, less funding and have smaller teams doing far better deals for far more users. Try to be aware of the new world.
Exactly. If they were just doing basic trade negotiations for levels of import and simple-short-term regulations (eg this is our standard for this, your standard for that is lower, we require IP protection for this duration, we want to market this product range will this cause adverse effects to your people, what is required to set up customs certification for these products) then confidentiality is fine.
when the US and others want to use "trade talks" to push their policies, laws, court jurisdiction and agendas then it's time to say "No thank you", close your folder and leave the room.
Talk to people who want to do the real trade another day.
Fed-boy admits QE did not boost the US economy:
http://www.cnbc.com/2015/08/18/st-louis-fed-official-no-evidence-qe-boo…
''Specifically, he believes the zero interest rates in place since 2008 that were designed to spark good inflation actually have resulted in just the opposite. And he believes the "forward guidance" the Fed has used to communicate its intentions has instead been a muddle of broken vows that has served only to confuse investors. Finally, he asserts that quantitative easing, or the monthly debt purchases that swelled the central bank's balance sheet past the $4.5 trillion mark, have at best a tenuous link to actual economic improvements. ''
The logic was clearly "Let's make the wealthy wealthier by boosting asset prices to bubble levels, and maybe they will spend a bit more of their wealth, in the meantime keeping interest rates down such that hopefully people would invest in productive endeavours." At best this was a very circuitous approach to boosting economic activity, and you suspect driven not so much by stupid people, as by people who would benefit the most from the process.
Helicopter money could have been much more limited in total, as it would mostly have been spent on consumption, while actually interest rates could have been kept at moderate levels such that savers would not have been disenfranchised, and asset bubbles would not have been blown.
The only counter argument apparently is that the solution is so obvious, that once governments got used to the drug, they would take some weaning off it. In a time of crisis that seems a poor excuse.
very few countries have done well, most governments have spent like drunken sailors running up huge piles of debt with no hope of paying it back.
the can has been kicked down the road but we are headed for a hill so its getting harder to kick
http://data.worldbank.org/indicator/GC.DOD.TOTL.GD.ZS?page=1
What a load of rubbish he is spouting. The thing is being in a zero bound trap says getting out will be hard. It is interesting how because we didn't get inflation or good inflation it was the wrong thing to have done? Simple maybe printing would have indeed have been more effective, but no qe? No hum seems some have not learned a thing from the 1930s or since.
The historians can advise here but was #4 just what Micky Savage did in 1936 by using the Reseve Bank to finance the recovery of NZ from rabid right wing cuts that left the country dead in the water.
If so, why not get infrastructure spending to create jobs?
As a benefit the devaluation of the currency may just send some of the preying rabble home with their devalued cash.
That should bring out the Key and English co-conspirators and monetary disaster theorists.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.