Mr Bean gets it, so there may be hope for RNBZ yet:

Central banks may face further tasks, says BoE's Bean

http://www.bbc.co.uk/news/business-11123774

"Later this year, the coalition government will unveil details of new powers for the Bank to try and head off any future crisis.

And Mr Bean used his speech to set out examples how these could underpin "macro-prudential policy" under the Financial Regulations Bill.

These included forcing banks to build up reserves in good times to help them weather downturns, and imposing restrictions on how much money mortgage lenders would provide.

"With an additional objective of managing credit growth and asset prices in order to avoid financial instability, one really wants another instrument that acts more directly on the source of the problem," he said.

"That is what macro-prudential policy is all about."

There is no need to hike the OCR, the recent hikes were a mistake, appropriate tightening can be achieved with more effective and robust use of macro-prudential tools.

Les.

Roger, you are lacking a connection with your congregation. 

If you were to spend more time listening to real New Zealand (your congregation), you would realise NZ is well on its way to purgatory.

Please spend less time listening to false prophets - economists, central bankers etc.  They shall lie'eth unto thee. 

I am praying for you.

"Poppycock"....call it for what is Roger....Bullshit!

"If the NZ economy is stalling right now, how come nearly all the listed companies’ reported profits last week were above forecast and expectations. The economy does not just revolve around residential property and retail stores, our big export industries are doing very well now"

Roger, you are completely out of touch with reality.

Companies have been making profits because they have cut costs (staff) or discounted prices to offload current stock and raise cash.  It is hardly evidence of a strong recovery.  In fact higher company profits may be a sign that the economy is heading downhill, because we know the profits haven't (in general) come from sales growth, hence once the effects of cost cutting and discounting wash through the balance sheets, expect company results to disappoint next year.

In regards your GDP to Commodities Index correlation, that is entirely misleading. Why?

1. Most of the swing 2008 to 2010 is due to oil prices which we are obviously a net importer of - not a producer.

2. Commodities going from -30% 2008 to 09 to +50% 2009 to 10 is about the same as 0% change 2008 to 10.  Nothing to suggest a positive for our GDP.  Perhaps wishful thinking that volatility in commodity prices will translate to volatility in GDP?

3. GDP annual change was much stronger than commodity price annual change in 1993-1996 and 2000-2005 and much weaker in 1991-1993, 1997-1999 and 2009-??? - do those dates correspond to anything?? (Housing booms and busts respectively if you don't catch my drift).

To be perfectly frank, I can't understand why anyone pays Roger for his research, nearly every predicition he's made in the past 2 years has been either after the fact (and patently obvious) or just totally off base.  I recall when the exchange rate returned to US65c about 12 months ago he described it as overvalued and set to fall, I argued it was more likely to settle somewhere above US70c than fall, I'm glad I haven't listened to Rog.

Roger, Fraid I dont agree with you....Forget NZ.....what matters is the rest of the World and its melting down....NZ is just a time-delay behind it....

I do tend to agree that the neutral OCR is <5%.....things have changed, we are loking at many years of insipid growth and thats on the good days.

Check out peak oil and maybe comment on it...I'd like to see some recognition on what it means ie the risk and impact to NZ....

Ive yet to see you comment on that yet you are in risk management.

regards

Oh Crikey Roger...............do it all again.

Two Points

1) "Bernanke does not foresee a double-dip recession in the US economy," ......well he is never going to admit it is he!!!! Of course he is still going to say growth is just around the corner.

2) " The RBNZ’s mandate and remit absolutely requires them to base monetary policy settings today on their projection of GDP growth and inflation in 12 to 18 months time"......These are the same bunch of economists and they like that never saw the recession coming and are still looking at their outdated economic forecasting models.

True is No one know whats going to happen, after all Ben phrase of "unusual uncertainty" sums that up nicely!!

And No one know how to fix it, once again Ben's reassuring words of " will do whatever it takes" bascially means I haven't got a clue, willing to try anything till see some take of improvement. Sooner or later something must work, or otherwise we are all stuffed!!!

Interesting that moderates like Roger Kerr have become the new target for vitriolic reactions, replacing the boringly repetitive abuse campaign against PIs which mercifully seems to have died down. At least until Bernard re stokes the fire.

Kerr proposes,quite reasonably, that we need to make a distinction between the export and non tradable sectors when reaching conclusions about how well NZ inc is travelling. But the apocalypse set will have none of it.  Every sector of the economy is screwed, we are doomed,  no more debate needed.

Chris J proposes that cost cutting is the driver of the stronger than anticipated corporate results. Yes, true up until six months ago and you'd expect to see stagnation by now if that was the last trick in the hand. But interestingly net (adjusted for a bulge last July ) productive capital investment remained positive last month and two way cargo movements through ports such as Tauranga and Lyttelton grew. Aussie corporates ponder what to do with the mounting cash piles generated from sharply improved profits and debt retirement. Worries about growth generated inflation are occupying many minds over there.

With 70% of economists believing we WONT have a double dip, you bunker guys might need to review the number of cans of C Rations you have tucked away in your end of times bolt holes. 

Listen to the bullshit from Bernake now and THEN.

http://www.huffingtonpost.com/2010/07/21/bernanke-to-congress-the_n_6546...

Justice

How on earth does a simple suggestion to consider a proposal from Kerr that is at least a reasoned one, immediately position me as a Bernake or Greenspan acolyte?.  You have an amazing facility for quantum leap linkages. Sadly incorrect but entertainingly bizzare nonetheless.   

For the record I was in 2006 moving strongly towards cash, by 2007 completely there. So, I trust you won't be too crushed to learn you were not alone in spotting that we were  heading for trouble. 

The only residential property I owned then,  and now,  is my own house. Nice try to position me as one of your despised PI's but  wrong guess, again. 

Currency trading - nope, not as such. I build my overseas equities at times of currency weakness but sorry, I don't fit that public enemy grouping either.

Disappointing when a person doesn't fit a stereotype isn't it ?. 

Tell you what I do though and that is run a large business which requires me to take a balanced stance on business and economic trends. I listen carefully to the opinions of people like Kerr even if I disagree with them. I've found over a lifetime in business they can often provide little bits of information that give you ideas and an edge on the opposition.

It's called being open minded !

Steven Keen lays out how the next decade might go...

http://www.debtdeflation.com/blogs/2010/08/29/what-bernanke-doesn%E2%80%...

Its not pretty and its probably right...

OCR to 5% or higher? na, I dont think so, or not for long anyway.....a tough decade is ahead of us.

regards

Low ocr is punishing savers. Speculators who took loans from bank and bought a property with little equity were handsomely rewarded. Many are able to hold their unreasonable house value and hold to their capital gains due to lower interest rates. 5% ocr is a must to encourage saving & do corrections to the housing market.

Because New Zealand is an  export based economy that is enough reson to have higher Interest rates. If you see who are the largest traders in the NZ dollar you will find that exporters hedging against currency swings are the number one users. Speculators are  few and they do not account for much of the movements in the currency  they carry very little weight  if any at all. Australia has one big problem with their super profit miners, these firms pour so much money into the Australian economy that no matter how high the OCR goes they are flooded with money/inflation/china.  When it gets that high the only solution is to TAX those incomes in order to shield the consummer from both inflation and high OCR. I think that Mr Rudd was right when he proposed the Super Proffits Tax and no matter who ends up running that country the first thing that is going to be back on the table is goint to be the Super PT or the alternative will be a sky high OCR putting at serious risk the Housing Market wich is already flaging alert signals. If Australia can not reverse the present Housing trend there will be big trouble for the banks and lenders. The hung Parliament is a bad thing for miners and the Aussie because  the Super Tax is coming once the political dust settles, But it is good news for the average Australian mate. Maybe in the near future the New Zealand government will have to consider taxing the food exporters super proffits to prevent and shield the consummer from an "abnormal" OCR. Those commodities are bound to go much higher and demand is not shrinking.

Les: That the NZD is traded at 43% GDP tells you of the size of the Forex market wich is a shade under three trillion dolars a day... so that you get an idea of how small the NZD is relative to the market it is the one major currency where the SSI or Speculative Sentiment Index has no relevance because statisticaly it has not enough volume as to deliver reliable readings. Take care.

Les: But then we start talking about Bloomberg. That is a market driven show but people tend to think that it is the market, I am sure that it has driven more people to ruin than to success. Don't read to much into the big teethy laydies

That is probably right on an intraday base.