Here's our summary of key economic events over the weekend that affect New Zealand with news the struggle against inflation is now a worldwide one, but there is more posturing than action so far.
But we should note up front that Auckland and the top half of the North Island of New Zealand is on holiday today - Anniversary Weekend. The rest of the country is working, open for business (although there may be a few in Wellington government departments taking it quite easy today).
In China, the cleanup of the Evergrande mess has taken a somewhat surprising turn. The defacto Beijing liquidators have turned over control of a sprawling building project near Shanghai to an American distressed debt manager, Oaktree. It was one of Evergrande's most prized assets.
Meanwhile, a growing number of Chinese construction and decoration companies are writing off assets or issuing profit warnings as debt woes at Evergrande and other property developers debilitate their suppliers. Caterpillar have downgraded their China prospects even as they reported stronger global prospects.
The minor December improvement in their official factory PMI reversed in January, taking it back to a stall, neither expanding nor contracting. Similarly, the official services PMI slipped back too, but at least it is still expanding. But folks in Beijing will be quite worried about this services PMI - it is their lowest ever after the first pandemic retreat, and that one very low August reading in 2021. Of course the locals are now all on holiday with the start of Chinese New Year. (新年快乐)
Singapore's producer price index came in at +22% higher in December that the same month a year ago, but as high as that may seem, it is less than their September level of +26%. But even if you take out oil, and their PPI was still up +13%.
Hong Kong reported its advance Q4 GDP result which was up +4.8% for the year which is less than the Q3 result. Most of that was from earlier in the year, helped by a weak base, and the final quarter ended on a weakish note.
In the US, December data confirmed personal consumption expenditure rose +5.8% and a 40 year high and core PCE was up +4.9%. Those inflation measures will weigh on the Fed. But for the month of December, disposable personal income increased almost +US$40 bln while personal consumption expenditures fell -$95 bln. Consumers are changing their spending habits to prepare for inflation. For the year, personal disposable incomes rose +7.3% but over that same year personal consumption expenditures rose more than +12%. The need to tame inflation is now urgent but that weaker December consumer spending does add a dilemma for the Fed.
So it is no surprise that consumer sentiment is retreating.
And this is despite American employers paying much more to employ their workforces, up their most in 20 years.
From all these inflation pressures economists at Bank of America have shifted to a decidedly hawkish expectation, saying seven rate rises from the central bank are likely in 2022. Seven! That would take their 0.25% policy rate to 2.00% by the end of 2022, a very fast change. And a voting Fed member says a +50 bps jump is on the table for March.
Germany also reported its Q4 GDP result and it wasn't flash. Their economy retreated in the quarter, but although a retreat was expected the actual result was worse. For the full year, it was only up a tepid +1.4%.
So it won't be a surprise to learn that the EU confidence measures are sinking in January for both industry and consumers.
Last week, container shipping costs dipped, ending a string of six consecutive weekly recent rises. But to be fair, the slip is minor. Bulk cargo rates slipped again too.
Prices for the icon commodities of the day, tin, lithium, cobalt, and nickel, all marked time last week, but all remained near or at record highs.
In Australia, inflation's march is stronger in their business sector. They posted a December producer price rise of +3.7%, up considerably from the September +2.9% and a 13 year high.
And there is something of a rush in Australia for home owners to fix their mortgages. This has long been a market where the traditional variable mortgage ruled. But with rate hikes on the horizon, homeowners are getting more 'kiwi' with their loans and are going with fixed rate contracts. The shift is large enough for some analysts to suggest the RBA might be worried that their rate-hike firepower will be undermined by the shift, taking much of the impact out of the market.
All eyes now turn to the RBA and their policy announcements late tomorrow afternoon.
And we should also note that higher interest rates will come as taxpayer support is being withdrawn, creating a double-effect. That is something on display in New Zealand as well.
And SOE Kiwi Group Holdings has hired Goldman Sachs to sell Kiwi Wealth. And Goldman are pitching it to Australian buyers. It does seem odd that a New Zealand Labour government would sell off a part of our financial industry to Australians given the very high ownership levels they already have of both our banking and insurance sectors.
In NSW, there were 13,528 new community cases reported yesterday, similar to the prior day, now with 150,978 active locally-acquired cases, but there were a record 52 daily deaths yesterday. There are now 2,663 in hospital there. In Victoria they reported 10,589 more new infections yesterday. There are now 78,294 active cases in that state - and there were 20 more deaths there. Queensland is reporting 8,580 new cases and 13 more deaths. In South Australia, new cases have slipped to 1633 yesterday with 2 more deaths. The ACT has 584 new cases and no deaths, and Tasmania 594 new cases. Overall in Australia, 36,373 new cases were reported yesterday and the all-time death total now exceeds 3700 with 87 yesterday.
The UST 10yr yield opens today at 1.78%. The UST 2-10 rate curve starts today unchanged at +61 bps. Their 1-5 curve is marginally flatter at +87 bps, while their 3m-10 year curve is also marginally flatter at +173 bps. The Australian Govt ten year benchmark rate is little-changed at 1.92%. The China Govt ten year bond is -1 bp lower at 2.72%. The New Zealand Govt ten year is unchanged at 2.61%.
The price of gold starts today at US$1792/oz and up +US$7 from this time Saturday.
And oil prices start today little-changed from Saturday at just under US$87/bbl in the US, while the international Brent price is now just under US$89/bbl. The number of US oil rigs in production is going up quicker now.
The Kiwi dollar will open today lower at 65.4 USc on the recent greenback surge. Against the Australian dollar we are little-changed at 93.7 AUc. Against the euro we are unchanged at 58.7 euro cents. That means our TWI-5 starts today down at 70.6 and a new 14 month low.
The bitcoin price is up +2.5% since this time yesterday and now at US$37,868. Volatility over the past 24 hours has been modest at +/- 1.6%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
154 Comments
Another news to hit headline, from thousand of such tragic stories, which are lost :
https://www.nzherald.co.nz/nz/auckland-man-watches-his-mother-die-in-ir…
Have we as a nation lost the plot. Entire world has moved ahead and we are still where we were at start of pandemic.
CAN ANYONE NAME ANY OTHER COUNTRY IN THE ENTIRE WORLD WHERE ITS CITIZEN ARE NOT ALLOWED TO RETURN BACK HOME TO FAMILY, SPECIALLY IN THIS TROUBLING TIMES.
https://www.nzherald.co.nz/nz/pregnant-kiwi-journalist-charlotte-bellis…
Sorry should not use the word stories as are real life incidents, suffering of Kiwis.
If this headlines which makes it to media are favoured, will request media to highlight as many as possible, as politician only fear bad publicity that may cause them lose power.
God the hysteria.
I’ve read the story and fail to have any sympathy.
I’m guessing your outrage to this is inversely related to your approval of the current government.
I'm guessing your lack of sympathy to this is directly related to you being a heartless prick.
No. I believe there are certainly many others worthy of my sympathy who didn’t choose to work overseas during a pandemic.
And then expect priority treatment when they get pregnant.
I don't have any sympathy either for people stuck overseas who can't be bothered to learn to DJ. How hard can it be?
https://www.stuff.co.nz/national/300488326/covid19-dj-dimension-on-thir…
You guys are forgetting the whole point of MIQ. We need to keep omicron out of the community so MIQ is necessary. Can’t you see that.
If the government had built 1000-2000 MIQ apartments somewhere in South Auckland (away from noisy airport flight paths), then we'd be in a much better position to cope by now, plus once covid is 'over' they could have been converted into emergency housing in the geographic area of Auckland where it is most needed.
Wouldn't have been able to subsidise the hotels this way
Now is not the time to be rational
It’s the flu mate. Good to see the UK nudge unit is under investigation for incurring mass hysteria over covid
Nice victim-blaming attitude you've got there.
Most people didn’t go overseas to become victims of the inevitable during a pandemic.
Some things though simply don’t reconcile though do they. For instance the NZ cricket team flees a bomb threat in Pakistan and instantly secures MIQ positions. What’s that 20 to 30 individuals? How come? The PM soothingly explained there are always vacancies for these situations. Who decides the winners there. Personally I would suggest an entire cricket tour party as being of greater risk and potential strain on MIQ than a journalist or any other individual that is making a living overseas. Then on the other hand the family who disembarked at Auckland en route to Fiji and stayed put. Go to the MIQ facility and it was a third empty. Same situation revealed in Wellington by another traveller recently. Shutting citizens out of their own country initially had some justification as information and trends were still developing. But two years on. No justification at all and this is why the government is so frightened of the court challenge and exactly why when “pro bono” cases have been taken to court, MIQ positions are granted to the plaintiff before any hearing can actually begin.
Probably the worst one was the mysterious UN person we took in from Fiji. Not a NZ citizen or resident but got a place.
The emergency placement MIQ system is basically a scam. The rich, powerful and famous get preference over your ordinary Joe Shmoe
Agreed and it’s damn close to being made redundant by omicron itself. The government has painted themselves into a corner & the paint ain’t going to dry in a hurry. If they keep Ms Bellis out they are exposed as being heartless, internationally condemned. If they let her in they are selective, ready to buckle as if their image, might be fouled up. They will buckle but boy oh boy the spin they put on it will be something else again.
Have you seen the medical system in Fiji? There is a reason many from the pacific islands need NZ for life saving dialysis treatment (without which yes early preventable death is very likely). Even our poor medical system with its pitiful amount of ICU beds is still critical for those pacific nations to access to keep citizens alive. It is just unfortunate it is limited to those who can afford the travel costs or can get them subsidised. No one is travelling to Fiji for medical services and that in itself should be a clue as to how necessary NZ frail medical system needs upgrading not just for our growing population but that of countries that also use our services when seen as a medical emergency.
There is here, is there not, the consideration that there is an unborn child at risk. Alive and a New Zealander. The government has a first line duty to protect those of its people that are defenceless. You Tb, obviously don’t think so, and obviously this government here doesn’t either.
ps. having read the utterances by Minister Hipkins reported in the Herald it is obvious the government is totally devoid of any feeling, let alone sympathy in this regard. Quite honestly that is the most crass, subjective and ghastly piece of opinion I can recall by any government minister since Muldoon’s election announcement in 1984, and at least he wasn’t sober. This is an utterly appalling display by this government and they are shaming each and every one of us on the world stage.
Define at risk because the country she is in currently offers better medical services and has them more accessible and better staffed than NZ. Technically her unborn child would be more at risk in MIQ (due to higher chance of covid infection) and more at risk due to the poor services and poor medical service staffing in NZ. We have had more birth medical failures and treatment injuries than the country she is in so she is better off staying put or travelling to literally anywhere in the EU over NZ if she cared for the health of her unborn child.
Yes the suffering to be able to afford world wide travel during a pandemic, the suffering to be able to chose family planning but decide against it and blame others for her mistakes. Who is clueless enough to not know about birth control in this day and age and to not have the slightest inkling that having children while you are gadding it about overseas during a worldwide pandemic might not be the smartest move. The suffering to be so selfish and ignorant to claim you have more of a right to priority entrance than those who are likely to die without it. Last time I checked recently midwife services and medical care in many EU countries far exceeds NZ in quality and support. Perhaps use a condom next time. She is not a medical emergency (aka likely to die without entry to NZ) and in retrospect she would put her unborn child at more risk to return to NZ. She is not suffering but those whose space she and others like her would take are certainly suffering because of her. Those who are not able to travel for necessary medical treatment without which they would die are suffering but that is because NZs medical system pales in comparison to the EU. She traveled not for necessity and she equally did not need to have a child. She wanted to on both occasions but does not want to take responsibility for the consequences of her choices.
You get what you voted for New Zealand, perhaps you need to think about that in 2023.
Agree but politicians of all parties...Maybe democracy in it's present form needs some change.
To start with in ballot paper, one option should be none of the above.
The main slogan was GET NZ MOVING.
The problem is that the govt has done the opposite.
It was "Let's keep moving". A lot of thick Labour voters didn't realise she meant they would be renters for life.
"**** you, Got mine" has a nice ring to it for 2023. Maybe a bit too honest?
Labour has overtaken National with such news
https://www.nzherald.co.nz/nz/homeless-house-buyer-man-lived-10-months-…
https://www.nzherald.co.nz/rotorua-daily-post/news/rotorua-food-charity…
Interesting snapshots of the time.
What bothers me is I think inflation will rapidly evaporate this year, and the govt (that is what I call the politicians, RBNZ and there banking mates) will say "Look, we fixed inflation - all good now we can push interest rates lower to stimulate everyone and help the collapsing construction industry". In the aftermath ordinary workers will end up settling into another drop in standard of living (since incomes haven't kept up) and increased welfare dependence, and of course asset bubbles continue to keep the rich happy at everyone else's expense, like the guy living in his car.
If instead we get sustained stagflation, at least the pressure will still be on the govt to allow rates to rise, but I think the odds are against it.
Inflationary pressures are only going to increase this year. A wage/price spiral is looming.
Nothing like a recession to kill that spiral.
That's right and the carnage re the financial impacts from Labour's polices should be in full flight come next election day.
Hang on.
This economy has been an immigration based speculative cot-case for decades.
Yep agree.
But Labour made it worse with it's changes to the Reserve Bank Act.
Have never voted Labour but might this time just to spite all the whingers and sore losers
The citizens court case against MIQ/Govt is still proceeding (although the govt is delaying as much as possible). You could join the case or contribute to the costs.
https://www.rnz.co.nz/news/national/459807/miq-system-high-court-challe…
Cannot find the comment now, it was a linked in, but read there that the government is seeking to legislate so that MIQ etc is removed from being subject to any judicial process? Anybody else seen/heard that?
As the saying goes absolute power corrupts absolutely, in democracy absolute majority is harmful for the same reason and require measures to prevent it from been turned into Authoritarian rule as can be witnessed today.
Sad state of affairs when the Taliban is a better refuge for a stateless pregnant woman than the NZ Government.
trouble with all these sob stories,they dont disclose all the facts and are unbalanced,why couldnt she stay in belgium,are they heartless too?plenty of kiwis are happy to be tax resident in other countries but not happy to risk going to their hospitals.
Mortgagebelt - the judical review of MIQ will go however Labour wants it to go. Events have shown the judicial review of the vaccine mandates should be reversed. The aviation industry workers were denied their basic human rights by chosen government experts who got it dead wrong on vaccines transmission. Highlighting why basic human rights should come first over 'experts' and politicians.
"The measure is only justified if it provides a wider public benefit. And in the end that comes down to a single issue — whether the vaccine contributes to suppressing the transmission of the Delta variant of COVID-19."
"More COVID cases confirmed in Israel in January than all of 2021, data shows"
https://www.timesofisrael.com/more-covid-cases-confirmed-in-israel-in-j…
Journalist decides to travel to unstable nation during world wide pandemic which often forces border restrictions. Journalist fails to take birth control to ensure long term medical health and ideal family planning to when in stable environment. Journalist blames country for not giving them priority over those 1. Likely to die without reentry to NZ and 2. likely to have those in close proximity die without reentry. Journalist cannot manage a birthing plan. Journalist goes to social media to whine about how they should be given preference above other people being able to live.
Yawn... Where are the protests, the petitions, the "citizens court cases", against the most damning impingement on our humans rights and freedom? The cost of shelter?
Well if they cannot afford shelter they cannot afford the more expensive legal costs to challenge the govt. Even worse legal aid would still be denied to them even if they are homeless because access to sufficient legal aid and the equal rights to housing challenge success through the UN is extremely limited. At best it would be a over 10 year case with no realizable outcomes except perhaps prompting an "inquiry". You would be better off burning money for heating.
Yes these times make it hard not to be cynical Pacifica, however in these times, pictures in the media of church organised peaceful protests and Iwi lead Hui’s on the housing disaster at hand, promoting the will of these groups to not vote for parties that do not promise to lower house prices might get noticed?? “We don’t want handouts!! We want houses we can afford to buy and own someday!! We don’t want to be slaves to the banks for ever!!” How much do people value their freedom?? What is family without a place to call home?
It has never been easier than NOW to mobilise numbers.
Interestingly, kiwis can enter Australia and stay there indefinitely since last November without quarantine and there’s no signs of that door being closed. So maybe many diaspora may setup shop in Australia as an interim measure while NZ stays barricaded from their 1 million citizens.
The quickest solution to NZ opening up might be to get Omicron spread as quick as possible to 60% of the population. Unfortunately even that may not move this cautious govt and they simply lock us down tighter with a Purple Light.
That's not entirely correct. A kiwi citizen can currently only enter Australia if they have spent the last 14 days in New Zealand or are normally resident in Australia.
Oh yes, true. So NZ is still the barrier.
Totally agree.
Nor a country that has borrowed so much to achieve so little.
What do you mean? We achieved massive windfall capital gains and our businesses are rolling in it!
That's EXACTLY what Labour set out to achieve with their disastrous economic and fiscal response. Screw the poor, it's socialism for the rich!
If you still support MIQ at this point in the game, you're on the wrong side of history - the debate is over. And no, I'm not stuck outside of NZ waiting to come home, nor do I have any friends or family waiting either.
It was justifiable in the early days of Covid, and up until the point where we achieved one of the highest vaccination rates. Omicron is now here (and the bigger issue will be people not getting tested because of the excessive isolation requirements), the booster program has already rolled out to the most vulnerable - what's the need to continue to deprive Kiwis of the right to come home?
100% correct on the face of it but your forgetting one key reason why they are trying to spread out the infection rate and that is we have one of the lowest number of ICU beds around. We have now had years to sort that problem but Labour was not interested. So no we cannot handle a whole lot of Kiwi's coming home with Covid all at once.
Fair enough, I will concede that is a risk.
But let's face it, that problem is unlikely to ever be solved (at least not in the foreseeable future). If we have to wait until there is more ICU capacity to let Kiwis back home, then we may as well close the borders forever. If that's the case, then Jacinda & co need to have the decency to actually come out and say it.
Anyone coming home is going to be vaccinated - or else they cannot get on a plane - so is unlikely to wind up in ICU ... and it's not like every returnee has Covid.
In relation to your last line:
There has been a 10-fold increase in positive Covid-19 cases at the border compared to last month - with a seven day rolling average now up to 33.
https://www.rnz.co.nz/news/national/459786/government-postpones-next-mi…
rolling average of 33 when we are expecting in excess of 3333 cases and possibly 33333 a day ? double vaccinated - test for departure -- not even a drop in teh proverbial ocean -- the time to end the misery is NOW
I'm willing to wager that we'll have 1000 cases a day by valentines. Today is probably going to be 200ish.
Prag .
Betcha its closer to 4000 reported cases.....maybe 20k not reported......no kissing
Gone down again - under 100. Lost your bet already.
Many I'm talking to seem to be realising they don't want to get it, vaccinated or not. Plus public backlash if you're identified as a spreader.
Have you seen the testing numbers? Very low ... probably because the easiest way to avoid the public backlash of being a spreader is to not get tested at all.
You can't test positive for Covid if you never get tested ;)
Exactly.
Yes. I am not 'scared' of catching omicron but I would rather not get it if I can avoid it.
I have already significantly reduced my visits to cafes and retail. Will still go out for dinner for my daughter's birthday this weekend, though.
You managed to read it, pity about the comprehension. Still 14 days to go by my count
I guess I underestimated how few tests would happen with 1/3rd the country on a long weekend.
Carlos .
With Delta you may not have had enuff icu beds , omicron at peak 50-60 beds needed , going on QLD numbers .
You guys will peak in earlie March......in 10 days time it will be more Dangerous to enter NZ....
Our family of four recently relocated from Wellington, New Zealand to Barcelona, Spain.
Not once during this pandemic did Spain prevent it’s citizens from returning home!
The sense of liberation and personal freedom here is truly breathtaking; especially when compared to the sinister antics of our NZ Government.
I speak purely for myself here but NZ will face significantly more challenges ahead if our elected leaders don’t start to treat all it’s citizens as equals!
Omicron is significantly less lethal that previous strains. An immensely greater body of medical knowledge, expertise, treatment modalities and hands-on experience exists in supporting infected patients. Aside from societal ostracism of the unvaccinated minority, it’s been mandated such than 90% of our population are now “immunised”! If the NZ Government after this period of time are using the excuse that our hospitals cannot cope with the risk, then rhetorically I’d question how long will it take for the MoH to feel comfortable? 3 years? 5 years? 10 years? Or until the next election cycle? Could this understaffing actually be a failure of management?
Carinaz, you are right to challenge the normality of a country turning it’s back on it’s citizens! It’s abnormal and heartless. Interest appears to be the last platform in NZ with democratic debate on these issues.
Viva Espana!
Spain sounds great if you're a foreigner with heaps of cash. Less so if you're a Spanish worker.
Also 100,000 Spaniards got to die while the others could enjoy their freedoms. So the refreshingly joyous laid back easygoing living you're enjoying carries a cost.
Ariba ariba
Ariba ariba
Mexico != Spain
Except tens of thousands did die from Covid in Spain, very close to 100,000, all of those deaths were completely avoidable. Many of those that died were in critical essential positions such as medical staff. Leading to a massive downturn, and knock on preventable deaths due to medical service incapacity, far greater than any country that implemented adequate border quarantine.
Some interesting and emotive feedback!
As I said clearly, and re-iterate, my contribution was to honestly present Omicron from a perspective of a Kiwi now very happy in Spain.
At this point it's juvenile to bandy around ignorant emotive personal degradations or horror stats such as the death toll from Delta. Now, the issue is Omicron, and the situation has evolved.
I stand firmly by my stance that this Government have been heartless.
If our precious leaders had used the time from first successful elimination to prepare our health system and competently manage the MIQ, I'd be singing praises.
However, I worry more about the irrationality from so many kiwis that they support these incompetent outcomes by the state.
In my many many discussions with locals here, of all age groups, I'm always asking for impartial views on the facts about NZ and it's border policy. Without exception people are disgusted. As one old timer told me: "we have seen fascism under Franco. To seperate families is a crime. However well intended.""
It's such a treat to now live somewhere where adults can have open discussions and respectfully agree to disagree, if needed.
Our family has just recovered from Omicron. For us, it was a cold.
Ariba ariba NZ.
How is the raw numbers emotive. Oh because you were triggered by someone calling you on the misinformation and ignorance of science.
Most of the world has travel restrictions still and there's several dozen countries that have totally closed borders.
Maybe instead of spending the time writing in caps research the question.
Can you name few countries, where it's citizens are not allowed to enter.
Will be interesting to see countries with whom NZ is competing as far as border restriction goes for its citizen.
New Zealanders can return to NZ, just not all at once, when they want to.
https://en.wikipedia.org/wiki/Travel_during_the_COVID-19_pandemic
Do you actually believe what you just wrote?
You can't even get an MIQ spot any more, so you can't return at all (short of securing one of these mythical emergency ones).
There are actually heaps of emergency ones and those for vital positions. Being a pregnant journalist is not a medical emergency and it is not a vital position but her social media crowd will cry they depend on her. Unfortunately though due to the high risk of infection the other MIQ spaces are limited as they are a higher risk than staying in NZ or staying in the current country.
Still waiting for the answer :)
Wow you are in the pacific and you cannot think of a single pacific nation with border controls and quarantine except perhaps nearly all of them. Lets go further, try the Asia Pacific region... if you are completely clueless still of which countries had border controls and quarantines you don't deserve that primary school education and cheap google maps guide.
Journalist decides to travel to unstable nation during world wide pandemic which often forces border restrictions. Journalist fails to take birth control to ensure long term medical health and ideal family planning to when in stable environment. Journalist blames country for not giving them priority over those 1. Likely to die without reentry to NZ and 2. likely to have those in close proximity die without reentry. Journalist cannot manage a birthing plan. Journalist goes to social media to whine about how they should be given preference above other people being able to live. Journalist whines and whines continually about how they could not plan to have a child and why they wanted to travel to unstable foreign nations during a pandemic. Journalist expects props for their exceptional lack of responsibility and selfishness in comparison to those literally with their lives at risk.
"All eyes now turn to the RBA and their policy announcements late tomorrow afternoon."
This will be very interesting indeed, especially as our banking system is linked.
“Somethings gonna give” as interest rates hike, inflation hikes, wages static, by mid-year somethings going to give. Meanwhile a global shock may mess up the best laid plans of central bankers.
Luzon rating moving up and Jacinda falling
https://thekaka.substack.com/p/dawn-chorus-is-luxon-more-approved?token…
Think it is not because of Luzon doing but for Jacinda undoing. Luzon happens to be at the right place at right time as Jacinda downfall has started and will need real efforts on her part to reverse the process.
New Zealanders needs clarity and certaninity.
For me, Luxon is uninspiring.
Over the past 2 years, Labour have waged a campaign of fear. Once that fear fades, as it always does, the alternative to fear starts to look a lot more attractive.
Those who were afraid might find themselves jumping from the frying pan and into the fire.
I don't rate him, just another shiny figurehead (literally) chosen for his ability to eloquently fake sincerity while the machine behind the curtain does what it does best, manages the herd for greatest gain.
Last election in pandemic times was always going to get the poison chalice, whatever colours they purport to wave.
The National Party caucus retreat had planned to have David Cameron speak, but due the the former PM having COVID now have George Osborne. Must be in the session 'seeking inspiration from horrid people'
Haha.
Did Tony Blair present at Labour's retreat, in the session 'Lying, phoney leftists'?
All those upvotes for that spelling and grammar abomination? One of the benefits of having so many user accounts I guess.
'Certaninity' has a ring to it though. I like it.
It is because its a stupid calculation where Luxons large number of "don't know" votes means his approval rating is artificially elevated
@David Chaston
Contrary to popular belief on this platform, vast vast majority of public servants are 1) in Wellington so your idea that they take it easy because the small percentage that are in Auckland have the day off is just inaccurate 2) turn up everyday to do good with great intentions. There’s always room for efficiency and improvement but your sleight against these people as lazy that work to try and create a better NZ (within the limited at times political environment) is quite unfair.
Maybe it was more a reference to the PM isolating as a close case of Omicron, and all her contacts which might include half the beehive, her staff and the 30 spindoctors etc. Which gives NZers a case study in what will happen to our workforce when people in their office are deemed a contact or a case - 14 days and/or 10 days etc. So workplaces will be decimated
Yep, lockdown by stealth.
At least now all the eggheads in Wellington will start to have some idea of what Auckland has been through. When I was down there seeing family over new year's they all seemed to think lockdown had just been one lovely holiday for Aucklanders....
Actually, you are right and I am not.
The world is not that black and white. I think you both have a point.
I had contact for many years with Wellington 'policy advisors' et al.
It produced nothing much.
But the people within that hopeless environment worked hard, had moments of stress etc.
The solution would be to relocate those good people somewhere that was useful.
Yes often I feel it would be more fitting to place blame at the feet of elected ministers who more often than not drag public sector workers in directions they may have advised against and do so with much haste and not a huge amount of care.
People get the government they deserve. Ours is actually the pick of the crop. If you want bold policy start rewarding people that propose change. The public service underperforms but it’s gets whacked every 9 years when the national party get a turn. Instead of the national party giving the public service a hiding every nine years and labour having too few expectations, how about we try and balance things throughout.
All this is very nice - but good intentions get you absolutely nowhere without being able to make things happen. We have borrowed so much for so little it is incredible.
What really shines through to me is the lack of accountability throughout the entire government process - everybody ass covering with good intentions and producing no output. This is the majority of peoples problem with tax and spending, most of it is wasted. There needs to be serious (if it is serious it will likely be painful for them) reviews of why there has been a consistent failure to deliver. Fix processes and cull dead wood.
https://www.stuff.co.nz/opinion/127627615/transmission-gully-shows-we-n…
The Good Intentions Paving Company (2017).....ht Saul Bellow
Inflation up globally with interest rates following. Consumer sentiment down.. Stagflation?
The Kiwi is really crashing, isn't it? Makes you wonder if the Reserve Bank of New Zealand need shock treatments to control inflation, a 25bps rise might not have much impact.
It's a blunt stick balanced against home ownership and employment. What's your poison? Exports or interest rates?
Employment numbers look solid to me and houses look "fully valued".*
*Full disclosure: I've substantially reduced my property exposure very recently so I am bias.
Yep the solidity of those employment and housing numbers give them room to lift the OCR that's for sure.
But by how much?
I suspect by April, at the latest, we will start to see a significant deterioration of the economy, as the impacts of higher interest rates, cost pressures, and CCCFA start to do their damage (note - I am not opposed to CCCFA, just noting its impact)
Are you saying that there is little room for upward valuation?
Yes. Reserve Banks and Governments wanted to create inflation, now they have.
More than that though many of the factors that held inflation very low for decades are gradually reversing.
double post
That soil moisture deficit is fast getting worse.
For us it's the worst January production in the last four years. Quite odd because we've been drier with streams dying completely while this year's the streams are still running. Worst is the ten day forecast is not promising much at all.
You need a ground swell march to Wellington to protest its too dry and the Government should make it rain and Utes are too expensive.
Will I get banned for a vomiting emoji?
Our grazing paddocks are parched, and the cropping paddocks are cracking open. Fortunately we're well stocked with hay, and squash doesn't need much water. We got just under 10mm last week but it's getting depressing watching Metservice's "90% probability of rain" forecasts drop away to nothing as the days get closer. Next Sunday sits at 80%, let's see what happens...
AndrewJ used to do some nice farm updates on here every so often (he got banned for something else though), which were well received by the rest of the commentariat generally. Good for us townies to hear what's going on in the paddocks...
Breakfast briefing; The struggle against inflation still at skirmish stage
100% Agree and the reason is that reserve banks are not having the same approach that they showed at start of pandemic that is ACT FAST AND ACT HARD.
Now they know that are forced to act so crawling instead of acting fast and hard.
If FED is sincere first OCR should be 0.5% - shock (though will not be out of the blue) but will reflect the intent of the FED, same applies to RBNZ.
I'm from the government/NGO and I'm here to help file -
Sri Lanka to pay $200m compensation for failed organic farm drive
A million farmers whose crops failed under a botched scheme to establish the world’s first 100-percent organic farming nation will be compensated.
https://www.aljazeera.com/news/2022/1/26/sri-lanka-200-million-compensa…
"Despite the end of the chemical ban, importers say they have been unable to replenish stocks because commercial banks lack foreign exchange to pay for new supplies."
Maybe China can help - they seem to know how to produce vast amounts of food for their population and look after their soil?
China is the largest exporters of phosphate by a factor of 2:1. Well, used to be - they're freezing exports to maintain food security.
So the answer is artificial fertiliser. Organic production relies on external inputs of organic waste. Those inputs don't always have to be organic. As you can't get something from nothing, that nitrogen and phosphorus has to come from somewhere. So organic farmers using external inputs (because without doing so the soil is depleted) are actually maintaining their (lower) productivity by stripping other land's productivity.
PDK gets this principle.
Where does everyone see the NZ v US dollar going? Especially If the Fed raises by 50+bps in March (and if the RBNZ maintains a path of +25bps rises?
May need to change the show some lower NZ$ values on the Y-Axis of the US dollar graph above..
60 +/- 5%
Within 12 months......NZD = 62cents US.....US$100 oil.......mortgage 6% + ....that should do it
Do what - screw the domestic economy?
HM...
Correct.....dont think it will take much now & maybe not all 3
US dollar strength will mean $NZ weakness. $US strength will be due to higher US interest rates and a risk off sentiment as US growth subsides in the first half of this year. I think that Jay Powell will stay the course as long as he can so the scene is set for an up down, up down movement of the $NZ with the general direction downwards.
I wouldn't be surprised to see 0.56 at some stage.
A reversal of this policy along with a fall in the oil price will be needed to stop a deepening of recession and I imagine this will happen in the second half of this year. So an upwards trend in the $NZ in the second half of the year. I'd agree 0.62 isn't a bad guess for the end of the year.
I am calling it - Labour need to seriously look at tax cuts. Preferably removing GST from foods and moving the tax bands upwards. That is pretty much the only thing that's going to help and avoid cost of living protests/riots that are going to be unleashed on them if they don't do something quickly.
NZ is really turning into a basket case, with handing hundreds of billions to the already wealthy and trying to screw the poor and middle class out of existence. All at times when our tax take is skyrocketing.
It's an obvious policy platform for the Nats, and you can see the narrative building a mile away - costs soaring, economy in strife, unemployment rising...
Cutting taxes would be inflationary though, would it not? (I'm not disagreeing with the concept, just questioning one of the potential outcomes)
Indeed, you're supposed to raise taxes to control inflation... otherwise it's adding fuel to the fire.
I expect our economy will be a mess by early 2023, and inflation will have subsided quite a bit. The perfect platform for the Nats to promote changes to the income tax bands as part of their push at the next election.
Perhaps a return to the money printer in the form of UBI. An accommodation supplement for all.
Being profligate with the printing press is what got us into this mess. I doubt we'll print out way out.
You can’t taper a ponzi.
In other countries I've written and maintained code to handle GST exemptions. Leave that well alone. You can argue for higher or lower GST and I'll not comment but exemptions are an expensive pain loved by only accountants and lawyers and unemployed computer programmers. The only good that ever came from GST exemptions was the mini-skirt (when school clothes were exempt in the UK!).
There are other better ways a govt can reduce the price of food.
Yeah, I figure it might be a bit hard. Then they need to make an even greater move with income tax rates, potentially reducing the 14-48k rate down to 10.5% as well as removing income tax for the first 14k.
no brainer.
And they should bring in a new higher rate somewhere around the 100K salary mark.
I'd say more like
- 0-20k: 10.5%
- 20-60k: 17.5%
- 60-100k: 28%
- 100-180k: 33%
- 180k+: 39%
That 30% bracket should be set at PIE level to reduce distortion.
Possibly 39% at 150k?
The top bracket is to capture those high fliers and is new, whereas the existing brackets are really old (2010, when 180k today was worth 148k in 2016 dollars). By having such a high top tax bracket, high earners that haven't hit that threshold have less incentive to look for ways to reduce their tax. Putting it at 150k would change the calculus and likely result in a lower tax rate as people start shifting things around.
Why not just gut the ETS and give it to the fuel user?
It could be run just like AirNZ on the eftpos system "Do you want to give ~$15 from the cost of this tank fill to offshore land owners to plant pine trees or use it as you see best?
Yep I notice the price of milk went up again just the other day. I guess most people just tap their card and don't even look at the price.
Carlos.
Serious question.....why is Milk & other Dairy products 30% + cheaper here in OZ?
Coz the duopoly there screw the producers and sell as a loss leader...
In the context of rising cost of living, it was interesting to see a couple of articles this morning on stuff bemoaning the lack of progress on Transmission Gully and other infrastructure.
So cut taxes to ease the burden on household budgets, or catch up on infrastructure spending? Tricky.
As a country we still have a reasonable capacity to borrow.
Personally I favour changes in the income tax band up to 100K, and also a new higher income tax kicking in at around 100K to offset some of the revenue loss.
Would it affect me - yeah. But I'm looking at the overall country's interests.
But I'm looking at the overall country's interests.
By further taxing hard and smart workers?
Perhaps a window tax then, rather than a progressive tax system?
Increase income tax for what exactly? Punish talent for the Government's failures?
Changes to the tax bands below 100k would at least partly offset a new higher income tax at 100k, especially if your income was no more than 110k.
But sure, it would be a downside to it, but every policy decision has its plus and minuses right?
All those benefits and costs must be collectively assessed.
Ideally I would favour a land tax to make up for the revenue loss, plus act as a disincentive for land banking etc.
But it doesn't really seem to be on the radar.
Agree on the land tax.
But increasing income tax from $100K would further annoy talented non property owning workers.
How about smaller Government instead?
What do you mean by 'smaller government'?
If you mean cutting the ridiculously bloated Wellington bureaucracy by 50%, then yes I agree.
But I don't want to see funding for public services like education and healthcare cut. Rather, they need to be substantially bolstered.
Jeez!, just vote TOP in. UBI, land/capital tax, income tax relief is all in their package...
"By further taxing hard and smart workers?"
Is somebody suggesting extra taxes on nurses, police, teachers? Like a windfall tax to the government coffers for all the extra stress and hours lumped on them during COVID.
Russia turning increasingly bullish on Bitcoin mining lately…maybe they see a way to sidestep Swift sanctions?
https://twitter.com/bitcoinmagazine/status/1487772642325278722?s=21
Yes, would not be surprised if the prospects of being kicked out of Swift is modifying their thinking.
But a Europe desperate for gas this winter will find some way to pay them, Swift ban or not.
Doubt it - - more motivation to stop using it altogether. You cannot use the worldwide payments system as a weapon and expect to keep your currency as the world reserve.
Some call it the "nuclear option." It doesn't involve weapons though.
As U.S. President Joe Biden's administration considers economic threats to thwart what it fears is a new Kremlin plan to invade Ukraine, there is one option that is reportedly on the short list: cutting Russia off from the global electronic-payment-messaging system known as SWIFT.
It would be an unprecedented move against one of the world's major economies.
The White House has not confirmed it is threatening to disconnect Russian banks from SWIFT, which stands for Society for Worldwide Interbank Financial Telecommunication.
However, Biden himself added grist to the rumor mill on December 8 by warning that should Russian President Vladimir Putin decide to attack Ukraine, the United States and allies would slap his country with sanctions "like none he'd ever seen."
Gee, seeing unleaded 91 at about $2.75 in Auckland now.
Filled up in Wellsford yesterday at Gull for $2.45!!!!
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