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Thursday's Top 10 with NZ Mint: Matching workers with jobs; efficient public service?; RBNZ currency dealing; China's pension risk; Lana Turner; Dilbert, and more

Thursday's Top 10 with NZ Mint: Matching workers with jobs; efficient public service?; RBNZ currency dealing; China's pension risk; Lana Turner; Dilbert, and more

Here's my Top 10 links from around the Internet at 10:00 am today in association with NZ Mint.

Bernard is on his summer break and will be back in late January 2013, probably from Wellington.

As always, we welcome your additions in the comments below or via email to david.chaston@interest.co.nz.

See all previous Top 10s here.

1. Matching workers with jobs 
Since the trough of the 2008/09 recession, the NZ unemployment rate has remained high. However, some other indicators suggest that there might be less downward pressure on wage and price inflation than the unemployment rate alone implies.

Three RBNZ analysts explore this apparent discrepancy by looking at the relationship between vacancies and the number of people unemployed and by estimating a measure of the effectiveness of the labour market at matching unemployed workers with vacancies.

They suggest that both the Canterbury earthquakes and international migration flows are probably contributing to a decline in the matching efficiency in our labour markets.

In this paper, we use some analytical techniques to try to shed some light on what has been going on in the New Zealand labour market over the past few years. The unemployment rate suggests a lot of excess capacity in the labour market (and there are certainly a lot of people unemployed, looking for work), but some other indicators suggest that the labour market is tighter, and less disinflationary than the unemployment rate alone might suggest. We report estimates of a modeling exercise suggesting that the labour market has become less efficient in matching the skills required by employers and those of job seekers.

The Canterbury earthquakes, and the big structural changes in the patterns of economic activity in Christchurch, appear to have caused a significant regional decline in matching efficiency. The net outflow from New Zealand of prime age workers over the past couple of years, even as demand for skilled labour has been increasing, may also have contributed to the apparent decline in matching efficiency across the entire country.

Around the world, educational achievement is rising. But a disturbing trend is accelerating - in the arms race between 'rich' and 'poor', high-end education is streaking ahead, extending the "achievement gap". And in high-productivity economies, ones where job growth is low, it is no longer a benefit to have rising educational achievement. You apparently need to be in the in the top quartile. A new inequality is growing.

2. Your resolution?

3. "Effective and efficient"
Yesterday we got a media release from the Auditor General. Apparently their work now includes asking the public service how well they are doing, and publishing those stories. "We have not audited the organisations' initiatives to check the facts, although each organisation has confirmed that their story is fairly represented," they say.

In an environment of fiscal constraint, New Zealand's public sector is looking for more effective and efficient ways to deliver public services. So how are they coping? The Office of the Auditor-General was interested in finding out, and has today published Effective and efficient: Stories from the public sector, which shares the ideas and experiences of 48 public sector agencies - from their own perspectives. Contributions come from city, district and regional councils, public service departments, and Crown entities of all sizes and locations. You can read them here: http://www.oag.govt.nz/2012/efficiency-stories Most of the stories have common elements: collaboration and sharing services, capable and engaged staff, and fostering an organisational focus on effectiveness and efficiency. There are also stories about improving corporate or back-office functions, and directly improving services. All highlight the common aim of delivering better services to the public.

We would be interested in feedback on any of these stories.

4. Today's raw market data ...
A quick holiday update:

as at 11:10am Today
9:00 am
Yesterday Four
weeks ago
One
year ago
         
NZ$1 = US$ 0.8339 0.8414 0.8066 0.7559
NZ$1 = AU$ 0.7959 0.7991 0.7740 0.7633
TWI 74.38 74.96 72.85 67.99
         
Gold, US$/oz 1,665 1,694 1,615 1,613
Dow 13,220 13,318 12,836 12,169
Copper, US$/tonne 7,946 8,005 7,433 7,275
Volatility Index 15.57 16.34 13.45 24.29

5. A toe in the water?
The RBNZ sold a net $NZ64 million on NZ dollars in November, the largest amount since 2008. In a First Impressions note Westpac said the central bank is acting on its mandate to manage its currency reserves by selling while the dollar is high, buying when it is low and making a return in the long run. They say although the amount was not large the fact that the sell-off occurred is meaningful.

Senior economist Michael Gordon says the last time the Reserve Bank undertook this sort of currency trading was in 2007 and 2008, when it made hundreds of millions of dollars of [unrealised?] profits.

6. About as corrupt as America in 1928
The WSJ reports on a new study showing corruption in China is around the level it was in America in 1928 and there's a life cycle in corruption as richer consumers and voters demand less corruption.

When both countries were at a $2,800 per-capita income level - 1996 in China, early 1870s in the US - newspaper-reported corruption was 7 to 9 times worse in the US. By the time, the two countries reached US$7,500 per-capita income – 2009 in China; 1928 in the US - the reported corruption was roughly similar in both countries. The significance, Mr. Ramirez, concludes, is that “while corruption in China is an issue that merits attention, it is not at alarmingly high levels, compared to the US historical experience.”

7. Smart money bets
We all know that Ben Bernanke said before the US presidential election that we did not wish to be re-appointed. So when he goes at the end of his term (January 31, 2014), who will replace him? Some people think it could well be Timothy Geithner. (I had thought that Geithner once worked for Goldman Sachs, but apparently that isn't true. Geithner has never worked on Wall Street.)

8. The meaning of marketing
As usual, Dilbert nails it.

9. We're not the only ones
Reuters reports even China looks like it will have a pensions shortfall by 2050, citing a new book, with one of the snappiest titles seen for some time ;).

China is likely to accumulate a massive funding shortfall in its urban pension system by 2050 unless it raises its retirement ages and taps more state assets, according to a book published this month that takes an in-depth look at China's finances.

The book titled "Research into China's state balance sheet" is co-authored by Deutsche Bank chief China economist Ma Jun and Xiao Mingzhi, a researcher at Accenture, one of the world's leading management consulting, technology and outsourcing companies.

10. Today's quote
A successful man is one who makes more money than his wife can spend. A successful woman is one who can find such a man. Lana Turner

No chart with that title exists.

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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.

18 Comments

re#5 - mpressions note Westpac said the central bank is acting on its mandate to manage its currency reserves by selling while the dollar is high, buying when it is low and making a return in the long run. They say although the amount was not large the fact that the sell-off occurred is meaningful.

 

Is that so? - as far as I can ascertain an amount sold (~NZD1.437bn) at earlier highs remains outstanding and is still bearing a loss as the NZD/USD pair reached new recent highs?

 

Is this a case of doubling down? - what's more the  RBNZ catergorically refuses to comment about the released data.

 

A recent comment made by a Fed Watcher elicited a response:

 

In a CNBC interview Wednesday evening, the Wall Street Journal’s Jon Hilsenrath called Dr. Bernanke a “gunslinger.”  Our Fed chairman is highly intelligent, thoughtful, polite, soft-spoken, seemingly earnest and a huge, huge gambler.  And he’s not about to fold a bad hand.  Almost four years ago, I wrote that Fed reflationary measures were essentially “betting the ranch.”  This week they again doubled down.  Read article

 

I do not wish Mr Wheeler, the RBNZ Governor,  to be "betting the branch" or 'doubling down' without citizen oversight. - he just isn't good enough. 

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Good post Stephen H.....Wheeler betting the ranch..?hmmmm, I think the RBNZ would be taking advice on that from the go to guy..... the stonewalling is no more than  the spreading contempt eminating from the beehive.

Accountablity in the public interest or public right to information has become noticabley  of less importance to the current administration and their puppet extensions.

I had noticed China's little grab at a slice of the  Intl Reserve currency , and think they may just walk right in on a stacked deck.

In this case a careful what you wish for scenario.

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What brilliant work by The Office of the Auditor-General....don't you agree Tweak...you and Fiddle ought to ensure those at The Office of the Auditor-General all receive a fat bonus in the new year, especially the bosses for coming up with the brilliant idea.

Let's all hear it for The Office of the Auditor-General...got your chair handy...throw the bloody thing as hard as you can!

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Nanny knows best

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#1.  Employability and education.  A feature of third world countries these days is large numbers of University Graduates - who are unemployed.

Starting to sound familiar here.  Is New Zealand becoming third world.  Or there already.

As for 'matching'   - how come you can't get a plumber.  At the same time they don't train them any more.

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Tradies are not part of the "knowledge economy (tm)" and tend to resent their money being taken to support initiatives as savy as the office of the auditor generals.

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Thats what I did, though Im trying to push our eldest to be a doctor. Preferably via the army. Doing it for zero debt, being able to shoot straight and repair afterwards strikes me as great job security in the years ahead.

;]

Trades seem to be coming back into favour actually....I think some kids at least are waking up to reality....

regards

 

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See for reference the fictional works of Chuck Palahniuk, or worse, much much scarier and in the non-fiction section Derrick Jensen.

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um......LOL, I consider my wife my peer/equal.  Since she has a MA and I only have a B. Eng Hons I guess im on dodgy ground. 

;]

I do hear what you say and I think thats true on some women Ive met more trhan a few. Personally I married mine because she is a feisty NZer who stands up for what she think is right.  In terms of "do not want that job", yes but that also I think can apply to any/many, you just have to get on with it IMHO.

regards

 

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#9

David, you would not have put this in if you did not believe it - Amazing

 

No one can tell us how the fiscal cliff will be resolved next month - But we Know what will happen in 2050

 

No one can tell us what will happen in Europe in 2013  - But we know what will happen in 2050

 

No one can tell us if the global economy will come right in 2013 - But we know what will happen in 2050

 

Blah, Blah, Blah

 

David, why is the standard of financial journalism going down the gurgler?

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I'ld quote Tyler Durden over on Zerohedge on how financial journalists need to spend less time reading press releases and more time playing with Excel as a plausible answer.

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Of course we know what will happen by 2050: the global temperature will have risen by at least 4 degees C. and we'll be ********.

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Giggles.

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#1 - we're seeing two inter-related trends here.

 

BTW, a rather better discussion of the Mass. survey is over at The Atlantic.

 

Trend#1 can be observed just by lifting the bonnet of your car.  20 years ago your average mechanic could have gotten by with no SC, and pure work experience.  A lot of mechanics were 'bush mechanics' who worked by feel, sound and instinct.  (One was a doctor in Otautau back in the day, but that's Another story).  No more...without diagnostic tools up the wazoo and the correct up-to-date manuals, so you can RTFM, and access to the correct sources of spares, it's just about impossible to work on a current model. 

Trend#2 is that same car.  It runs for 300K+ km without the engine ever being dismantled. 15-20K between services.  It has ABS braking, active suspension, and airbags.  All absent 20 years ago.  This analogy is repeated in almost all products. 

 

But not all services. 

 

Yet. 

 

Another Atlantic article notes this transition.  And makes the point that more clever stuff/less employment needed to make/service it means that unemployment is now structural:  nothing here is gonna change anytime soon. 

 

And as software such as workflows gets wider usage, services are succumbing to the same productivity creep: it's now quite feasible for your Purchase Order to me, to be planted into My Xero as an Accounts Payable doc, without human intervention.  Blooey goes a fraction of an AP clerical job.  Rinse, wash, repeat.

 

So this cycle - the opera-singer economy (one singer, one understudy, a small chorus and a whole lotta wanna-bes) is ruthlessly concentrating the great jobs into a smaller section of the pool.  And the education/credentialism bubble is simultaneously devaluing average-to-good degrees as they get handed out for less and less content, while making really useful degrees like engineering worth a lot more. 

 

Winner takes all, each spin of these wheels.

 

And dismantling the wheels isn't feasible, because innate ability cannot be shared around - it's inherent in individuals - and no business is gonna turn down lower overheads/better sales combinations.

 

So here we sit.

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Yep Waymad and people like Assimov saw a world where people would compete to do a couple of hours work which was just to awkward to design a robot to do 60 or more years ago. They competed more for a sense of being productive than renumeration.

Otautau, damn I'm from just over the hill, Orepuki.

I would add that a major problem in our public education system is those with large amounts of inate talent are not identified and catered to. Things seem to be improving somewhat from when I was at school but the focus of spending in 'special education' still seems to be on those who are truly damaged, remedial reading etc and high school mathmatics and english taught at university, which still counts towards a degree, not to mention all those bloody publically funded 'life skills' courses for drop outs.

Those children and young adults that could excel are generally left to wallow in a pool of mediocrity where they quickily become bored and disengage unless there parents can and will take action.

Fluffy feel good cardonary liberalism in action.

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The problem could be that the designers of these reliable wonders of modern technolgy don't have another field of endeavour to switch their efforts to. What I have said before is that a lot of technology and invention was geared towards the energy resources that had been discovered. Now we are trying to invent the next energy source, a different ballgame. 

 

Thankfully my daughter is nearly done with her Chemical Engineering degree, plus a cojoined BSc. 

 

By the way it isn't that hard to service a modern car, at the end of the day the electronic side is the equivalent of plug and play when building a computer. There is no fixing things, just swap out the faulty part. I recently did a 150K service on a Lexus and that was no problem apart from the fact that I don't have small hands:-) Mind you I had to dismantle half the motor to change the spark plugs, thankfully they will do another 150K.

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The Finance Minister of Ashtraylia has swanned by to admit to an adoring public that PM Jewelia lied to them ... ... again ...

 

....... sorry cobberdiggermate , but we ain't goanna achieve a budget surplus after all , this financial  year .......

 

'Cos the economy is ( as most economists have said all along ) stalling , our revenues [ the tax we pinch off you dumbos who vote for us ! ] have collapsed by $A 5 billion ........

 

....... and we're still spending 'like drunken sailors on all manner of projects and middleclass welfare bribes ...... 'cos there's an election in 2013 ... ... and we know we can rely upon your support ....... Mate !

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De-mock-arsy in action GBH, the pale shadow of a noble ideal.

Even in ye oldy times Greece they had major problems with it.

Athens ended up having to pay old men to come along to make a quorum so they could have a vote about whether to sacrifice a lamb or a bull.

Tax and bribe, old mate, and tax some more for Ron.

 

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