Here's our summary of key economic events overnight that affect New Zealand, with economic stress rising relentlessly in China, the US, and Europe.
First however we should note that it is the long Thanksgiving holiday weekend ahead in the US, so agencies are releasing data ahead of that shutdown. All eyes will be on their Friday retail numbers, and expectations aren't that great, it has to be said.
Some of the data released today was modestly positive however.
Their durable goods order data for October was strong, and much stronger than expected. They were up +1.0% from September, the second best gain in nine months, and that puts them more than +10% ahead of year-ago levels. Orders for capital goods were up +16% on that same basis.
Not so positive, the Markit factory PMI fell into a contraction in November from a minor expansion in October. This was well below forecasts of a steady-state. It is their first contraction in factory activity since the pandemic hit in mid-2020. There was a renewed fall in output and a sharper decline in new orders as demand conditions were stymied by inflation and economic uncertainty. On the other hand, firms signaled the first improvement in supplier performance since October 2019.
This Markit PMI had already recorded the giant US services sector in contraction in October, and that continued into November, they report.
US jobless claims inched up to 248,000 last week, a higher level than we have had in a long time, but still relatively low. There are now 1.34 mln people on these benefits. It seems likely that jobless claims are entering a new rising phase as the fight against inflation bites, but in the US case we should remember that the insured unemployment rate is still only 0.9% of their workforce, unusually low.
Breaking the recent down-trend, mortgage applications actually rose last week although they remain sharply lower than year-ago levels. They were helped by a small shift lower in mortgage interest rates.
American new home sales are ambling along at a modest pace, up in October from September, but softer than year-ago levels.
The expected fall in consumer sentiment as recorded by the University of Michigan survey update happened, but it wasn't anywhere near as fierce as was expected. Most of this fall is from the current 'mood'; ahead, the expectations are little-changed.
It is very noticeable how little data China releases, given its size. But late yesterday, their State TV channel indicated that more "support" is coming from their central bank, probably a sharp cut in the reserve requirement. Analysts are expecting a -25 or -50 bps cut from 11.25% and it may come as early as today or tomorrow.
Pressure is on in other areas as well. Foxconn factories are being hit by protests that started after employees learned bonus payments they expected to get would be delayed. Police moved in.
Taiwanese industrial production data was weak again in October and their retail sales weren't anything to write home about either in the same month.
Singapore reported that its economic activity expanded at over +4% in Q3-2022 but that they see 2023's activity slowing to a crawl, perhaps as low at +0.5%. They also said inflation was running at 6.7% in October, but that is a down-shift from the 7.5% they reported in September.
In Europe, their economic contraction eased in November as price pressures cooled, as measured by their factory and services PMIs. Germany is doing it the 'hardest', but it is joined by France now. To be fair, 'hardest' is relative, and the pressures, while unusual because they relate to the Ukraine war, are nothing like the 2020 pandemic pressures
In Australia, they report a still-expanding factory sector. But their services sector is now contracting.
The UST 10yr yield starts today at 3.74% and down another -3 bps from yesterday. The UST 2-10 rate curve is little-changed at -76 bps. And their 1-5 curve is still inverted at -84 bps. And their 30 day-10yr curve is marginally more inverted at -11 bps. The Australian ten year bond is up +5 bps at 3.62%. The China Govt ten year bond is little-changed at 2.84%. And the New Zealand Govt ten year will start today up +6 bps at 4.26%.
Wall Street has started its Wednesday session up a mere +0.1% on the S&P500. Overnight, European markets all ended +0.4% higher. Yesterday Tokyo ended its Wednesday session up +0.6%, Hong Kong also ended up +0.6% and Shanghai ended up +0.3% The ASX200 rose +0.7%, but the NZX50 posted a -0.9% retreat and hurt by the RBNZ hawkishness.
The price of gold will open today unchanged at US$1742/oz.
And oil prices start today down -US$4.50/bbl from this time yesterday at just on US$77.50/bbl in the US while the international Brent price is just on US$84.50/bbl.
The Kiwi dollar will open today at 62.3 USc, up almost a full +/-1c and back to where we were in mid August. Against the Australian dollar we are a tad higher again at 92.8 AUc and another new high since April. Against the euro we are up at 60.1 euro cents. That all means our TWI-5 starts today at 71.1 and up another +40 bps.
The bitcoin price is now at US$16,374 and up +1.2% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.9%.
There will be no video version today, or podcast due to Covid.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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172 Comments
It’s Now Clear That QE Was a Colossal Policy Mistake
There’s no convincing evidence that central banks’ purchases of trillions of dollars of bonds and other financial assets helped any economy.
To begin with, how can QE be "quantitative" if you have to do it dozens of time. Even if you're charitable, there's at least 11 QEs in Japan. And no correlation whatsoever with either Japan's economy or consumer prices. Nothing. Doesn't do jack. Irrelevant https://youtube.com/watch?v=136Scp
QE allows governments and the financial sector to live above their means. The central banking system needs to go. The true Mainstreet economy (that actually produces something), get robbed with inflation and impossible housing prices.
Let banks fail, as they will without QE, as they are now "Too big to Bail". The party is over, pull the punch. Mainstreet will be just fine.
It reminds me of season 2, episode 6 of Yes Minister
Sir Humphrey: Didn't you read the Financial Times this morning?
Sir Desmond Glazebrook: Never do.
Sir Humphrey: Well, you're a banker. Surely you read the Financial Times?
Sir Desmond: Can't understand it. Full of economic theory.
Sir Humphrey: Why do you buy it?
Sir Desmond: Oh, you know, it's part of the uniform. It took me thirty years to understand Keynes' economics. Then when I'd just cottoned on, everyone started getting hooked on these new monetarist ideas, you know, 'I Want To Be Free' by Milton Shulman.
Sir Humphrey: Milton Friedman.
Sir Desmond: Why are they all called Milton? Anyway, I've only got as far as Milton Keynes.
Sir Humphrey: Maynard Keynes.
Sir Desmond: I'm sure there's a Milton Keynes.
Sir Humphrey: Yes, there is, but it's... [Humphrey gives up]
And oil prices start today down -US$4.50/bbl from this time yesterday at just on US$77.50/bbl in the US while the international Brent price is just on US$84.50/bbl.
Hows all that oil money going for you Vlad?
And with the NZD strengthening we should be rewarded at the pump.
Rewarded with cheap planet destroying fossils?
Hard to understand why we need a fuel subsidy, international oil prices are back to 2019 levels. Possibly the only thing that hasn't gone up since 2019 is the one thing they subsidise!
... we're getting a fuel subsidy ... when ?
Whenever you go to the pump. Call it a road building subsidy if you prefer.
They whinge about potholes, whinge about fuel price, don't want to pay road tax and then drive to work on their own.
... I'm not getting a " subsidy" at the fuel pump ... no one is ... paying a heap of tax to the government on every litre ... how'd you manage to get a " subsidy " ? ...
Because the "heap of tax" is not enough to pay for the roads you drive on. Even before the fuel excise decrease it was not enough.
NZ built & maintained roads for horse & cart & built railways too, long before motor vehicles even landed here. Transport is a fact of life, a basic necessity to growth, supply and freedom and like it or not, governments are elected & expected by the people to provide for that accordingly. To say that enabling people to go about their normal and essential life is subsidising them is plain silly.
Agree that governments should provide transport. But roads and cars is only one system. The most expensive, least efficient, most carbon intensive and most unhealthy. So when people talk about subsidies what is meant is Government support for the worse type of transport system. In that sense it is a subsidy over other types of transport system.
"To say that enabling people to go about their normal and essential life is subsidising them is plain silly." - should governments provide food, houses, electricity etc at below cost price, or just transport?
That’s being even more silly.
That's what we get when we let Govts. use pork barrel politics to decide how the money is spent.
We don't pay enough to cover our roading costs but are happy enough to allow house prices to be at least 50% higher than they need to be to make a certain % of the population wealthier, or poorer depending on your perspective.
Incidentally how much tax are EV owners paying?
Well, since EV owners are all "rich pricks" according to most, probably a lot more than their fair share considering the lower income brackets are net tax consumers...
Fossils do not destroy the planet. Fossils have made the planet safer, cleaner, increased life expectancy, given us unlimited 'reliable' energy, increased GDP per person, advances future generations, improved sanitation, helps feed the world, great for transportation, the list is endless. Fossils as you like to call them have made the world a better place. NZ would be best to find our own 'Fossils', so as Uncle Donny likes to say, "Drill baby Drill".
Unlimited you say? I think a lot of that would have occurred without fossil fuel, we would have found other ways.
No, fossil fuels are uniquely energy dense.
I assume this is troll parody account??
And I suppose you're right, fossil fuels do not destroy the planet, they only destroy life on earth, so in the big scheme of things, OK I guess.
Price is back to where it was at the start of the year, only he has alienated his main customers so is likely selling less. Certainly will be selling less gas.
Remember a few years ago when people thought he was a tactical genius?
In breaking news, the US THI (turkey happiness index) has just printed a record low. Analysts are stunned, terming this 'unexpected' and 'very concerning', as the index had been steadily rising all year.
Must be closely related to the lot in our government then, who seem to have gone unusually quiet all of a sudden. At least, love him or hate him, Paul Keating had the backbone and brass, and come out with - this is the recession that Australia had to have.
'A bunch of you are poked, but you won't know if it's you for a while' is a good election slogan!
... the 2023 recession will be the recession we have to have to rip this government out by the roots & chuck them into the compost heap where they belong ....
When Chris Trotter turns on them as he did a few weeks ago , you know 100 % they've lost the plot ...
Early election. Let the people decide if this government are as good as they have been saying they are, for the last five years, from amidst the shambles they have created.
Turkeys never vote for an early Thanksgiving ...
Well then the Prime Minister should reintroduce the pulpit of truth just like she fronted daily during a previous crisis. Oh, I see, the pathos jar is empty & she doesn’t do finance.
So we can vote in another with exactly the same stupidity running rife?
Well it’s scheduled to occur in 2023 regardless, so let’s get it over and done with.
That just brings the next round forward to 2025 instead of 2026 then.
Interesting point. Had to look it up. Muldoon’s snap was 14 July 1984 say 6 months early. Next was 15 Aug 1987. Then it sort of crept out to the point in 1990 it was 27 October. Guess there is parliamentary criteria covering this. Academic though isn’t it. This government is going to hang on to the bitter end come hell or high water. Which in turn raises the point that the Labour government of those two terms were looking pretty wretched too by that final year and played for as much time as they could? History repeating with this two term Labour government perhaps?
... think of it like underpants ... if you've been wearing them a while , its nice to change to a fresh pair , even if the current ones dont have more than the usual number of racing stripes & urine stains ....
No, so the electorate can vote on all of the things that Labour seems to think it has a mandate for. Ardern and co will be burned at the electoral stake for 5 waters and the other ideological messes they support. Bring it on.
5 Waters now.?, ..well at least someone has been doing their research on the topic?
I would have thought you had blogged on the expansion to five waters by now?
Well it has been raining overnight..
Winston peters said it is actually 6 Waters. The feeling of warm running water on your back, is them pissing on you.
5 waters is such a non-issue in the big scheme of challenges facing New Zealand. I think it's interesting people are focusing on this, I guess it's because the opposition parties do not have answers to the real issues we're facing either. So they try to get people all worked up about something most people don't understand with the message that something is being taken away from them. It's pathetic and distracts from debate on more important issues.
It is really odd isn't it! The same people that complain about their council rates going up so much also complain when the government try to take a massive cost away from the councils.
That might be in the marketing brochure, but I'm not convinced that's a real reason the government is pushing ahead with this.
You make it sound like we're going to somehow get 3 waters cheaper under their centralized model?
My understanding is that the councils, and therefore ratepayers, will still be financially responsible for the maintenance?
That massive cost is still going to be with the ratepayers. Not only that it will be borrowed money to accelerate inflation yet again.
Well, if that actual expenditure is not being relieved, how then does the government’s proposition remove the potential for relative rate increases as PM Ardern has repeatedly threatened?
No, they are not.
The issue is that there are far better financial structures to solve this than what they are doing, and the big Taniwha in the room is that it is handing over ratepayer assets, and control to others based on race.
What do you mean handing over ratepayer assets? It's changing hands from local government agency to regional government agency. They are no more or less ours.
No-one is suggesting privatising them, hang-on there is an idea for National right there. Save 5 waters from Maori by selling it to private corporate interests just like the energy companies.
The proposal to date has already usurped the point, value and authority of ownership, by intent to replace that status and function under entirely seperate control .
Which is paradoxically why it's such an issue.
As in why are the government pouring so much time into this, when there are more pressing issues?
As you probably know, the real 3/5 Waters issue is the Govt deliberately & without mandate conflating the backdoor handover of property ownership rights based on race.
You'd probably find that the legislative mandate for that has been building steadily for many years, under both red and blue governments.
These big shifts actually happen very slowly.
"Legislative mandate"
Collins Dictionary
VERB [usually passive]
When someone is mandated to carry out a particular policy or task, they are given the official authority to do it. [...]
[formal]
There's no electoral mandate given to the unelected chattering classes in academia, public service & politics.
E.g. the Treaty of Waitangi, and all the various legislative changes over the last few decades to enshrine the principles of the treaty into many other bits of legislation.
And someone was saying on here the other day about how the National party signed us up to some international treaty for indigenous rights.
I don't follow this stuff closely, but even within my professional sphere there have been lots of changes in recent decades to align everything closer to the Treaty. Societal shifts can happen very slowly. And this shift has been happening under both red and blue governments.
There are no "Principles" or "Partnership" in the ToW. The Crown could not enter into a partnership with its subjects.
UNDRIP is a non binding agreement & does not override NZ Parliamentary legislation as was clearly stated by National at the time.
The last few decades of self serving academic & political revisionism notwithstanding, Sir Apirana Ngata's century old perspective is still worth reading.
https://nzetc.victoria.ac.nz/tm/scholarly/tei-NgaTrea-t1-g1-t1.html
His views on these matters need to be read in conjunction with his view that the land confiscations were justified as ‘payment’ His glossing over of the matters of raupatu leads me to be skeptical of his judgement and motivations with regard to the treaty. Certainly being a trained lawyer and being influenced by Ngati Porou with Wahawaha as an ancestor explains his pro government stance.
E whakaatu ana to korero i te kore matauranga o aotearoa
I'd rather that than the party of bootcamps and beating school kids with wooden bed legs.
Obviously. Yet it is altogether counterproductive to justify an aggravating action by pointing to something worse, especially when entirely unrelated. Bit like saying my apple is better than yours because it is less rotten. Still, go ahead and enjoy it.
National would just sell them to the highest bidder.
It's ridiculous that the party that advocates for privatising public services whenever possible claims to be concerned about the public losing control over public assets. Hypocrisy of the highest order.
On a totally unrelated note, Apple 14 main Chinese manufacturer has refused to pay their workers their promised bonuses, and has imposed draconian security and anti-Covid measures on their live in factory.
Coincidentally, they are quadrupling the staff at their Indian factory. This will be the story of Chinese industry over the next few years.
My pick is that eventually, after a number of these relocations, a whole lot of US bound products will end up being made in US again! What a laugh.
That manufacturer would be Foxconn ... they have 200 000 workers ... staff get beaten if they protest anything ... there's teams of security goons all over the factory ... apparently the workers are getting pissed off ... Xi has internal foment brewing ...
No relation!
" More labour would be better ... it's a handbrake on the economy " : Adrian Orr on Radio Hosk minutes ago ... admitting that the government have their immigration settings all wrong ... the massive shortage of workers is driving up wages , it's keeping inflation fueled ...
... if the unemployment rate was higher he wouldnt have had to hike the OCR so hard yesterday ...
the government have their immigration settings all wrong
It's almost like there was an extenuating phenomenon preventing them from coming for an extended period.
What does he expect people to do when their mortgage payments go through the roof? Ask for less money?
The OCR increasing is inflationary and it's time we accepted it's a huge flaw in monetary policy. The model only works if people accept (even more of ) a decline in their standard of living and disposable income, or they lose their jobs altogether. He's not hiking interest rates, he's hiking misery.
And frankly, the bloke on $800K a year for five years lecturing people about 'spending less' at a time when many don't have anything left to spend after covering the basics is appalling. The reality of 'spending less' for many now is eating less and moving closer to the poverty line if they aren't already under it.
yep makes you sick listening to him preaching from his alter.
Ultimately the RBNZ or any central bank isn't the economy, and don't have mastery over all the activity within it. They do however give the public pointers as to how to behave in order to avoid stuff getting worser.
I believe 1-2 years ago, there was messaging around "be wary of taking on too much debt/don't go silly on housing" - anyone ignoring that is currently looking at brown trousers.
Yesterday, it's "stop buying crap you don't need", which again, is telling people to a) show as much fiscal restraint as possible for their own fiscal wellbeing, and b) to help curb inflation to mitigate even more serious action down the line.
We can get angry at the dude as much as well want, still doesn't change reality.
Be wary of taking on too much debt... but watch us spike house prices by revoking LVRs and flooding the market with credit.
Stop buying crap you don't need... even if it means buying less of the things you need anyway, because that's all that many people can afford after we delayed the tightening cycle more than we should have and now we have to go higher for longer.
He doesn't have the moral high ground to be speaking to the populace like school kids in the principal's office, we're just trying to navigate the mess he presided over and has been rewarded for.
The RBNZ don't force the population to load up on debt or buy heaps of crap. Since about March 2020, the economic outlook from international events should have been a fairly clear signal to everyone, expecting the governor to save us from ourselves is a tad ambitious.
The Governor is the problem. If it was so obvious then there was no reason to revoke LVRs and sit on their hands while prices went even further out of control. You can't have that one both ways.
You are expecting individuals to endlessly cover and mitigate the mistakes of huge influential institutions that have failed at their core duty instead of demanding the most basic levels of accountability. That ends in one of two ways: Peaceful change, or violent change.
If it was so super obvious, people would be super well prepared for a recession that takes 3 years to arrive.
- Lock in that cheap money as long as possible
- Tighten that belt as much as possible
- Hoard a surplus
That ends in one of two ways: Peaceful change, or violent change.
It can end in many ways. Usually, its business as usual...
I'd go further than that; this has been a long, long time coming given our housing prices relative to income. But then you could have sat on the sidelines and paid rent for seven years and now be looking at paying 50% more for a house if you'd waited for a correction, that, based on RBNZ/GR/JA's comments and actions, was not going to be allowed to happen under any circumstances.
Well, you're now conflating a couple of market elements.
I felt in 2019 that things were in need of a cooloff. Happens, but fairly cylical.
Post covid though, people went batshit crazy. We love housing on interest.co.nz, but people went nuts across the board. It was the most bananas economic environment I've seen in NZ. The price of a 30 year old Landcruiser shot up but hundreds of percent. You couldn't buy a boat or caravan. At no point did the RBNZ say "go nuts and buy toys kids", people did that on their own, but also en masse. Perhaps there's a psychological phenomenon that can be pinned down to, but whatever it was, was well outside of what a central bank would normally contemplate being possible. In those sorts of times, you really should be battening down the hatches.
Median House prices to income ratios above 3 to 4 always indicate a dysfunctional more restrictive housing market, so yes it has been a long, long well known time coming.
It was just a matter of how long the system could be propped up, before the inevitable. And in the meantime, people have to get on with their lives.
And it was the Govt. that said literally 'spend it on anything you like,' when they gave money during the pandemic, in fact, the message was spent it, don't save it.
Which, for a growing proportion of the population, was more a reality of we don't have enough to save anyway once we have covered basic living costs.
And that was us. Now at the point the only reason we're still here is to complete my wife's professional registration.
Once that's done, we're gone.
Have you considered moving to Australia GV27?
The general mood feels so much more positive over here.
Too many Australians.
It sounds like you are right where you belong then. Chin up!
Have you considered commenting exclusively on Australian websites? To borrow from Muldoon it would raise the standard of discourse on both sides of the Tasman.
He'd need to get disenchanted with it first.
Australia doesn't have such a rich tradition of petty tyrants wrecking it.
Look at the state he had to get himself into to be able to bear the place.
I am not sure borrowing from Piggy is a high IQ move. But you do what you do.
Australia doesn't have such a rich tradition of petty tyrants wrecking it.
The former governance of NSW says hi.
The rum rebellion? The citizenry had the wherewithal to depose the tyrant before he wrecked the place!
The quote I was referring to Brock was a spectacular off the cuff retort.
Whether you liked or loathed his politics, and I tended towards the latter, there is no denying Sir Robert was a clever man.
Nah. You were just expressing your small man syndrome. Such a cliche.
If you are old enough to have loathed his politics, then you should have had ample time to grow up by now.
Brock you do yourself a disservice with such a lacklustre comment. I expect, in future, that you will put more effort in but we’ll done for trying.
Where abouts do you hang out? I'm loving it over here in Aus and am actively encouraging any and all of my mates to move over here. Everything is better, and you don't have to care about the politics 😂
Hard to rationalise that when it appeared the purpose of crash diving the OCR was to encourage business & folk to borrow to spend to save the economy! Pre pandemic the OCR had already been well lowered and any stimulus that provided already spent. In other words those in a sound position and with good purpose has already done so by then.
it appeared the purpose of crash diving the OCR was to encourage business & folk to borrow to spend to save the economy
Thats a fair assumption to make in 2022, but not in 2020. Their anticipation would have been that their OCR moves and money printing may have at best kept things balanced. Pretty clearly, things got overcooked, but few at the time, including some of the best financial minds on the planet, could have called that. Way too many variables at play outside of just basic economics.
The fact we can see inflation running rampant globally irrespective of nations' fiscal policy should evidence the rather large ramifications of interupting so much supply and manufacturing. Still can't get gib reliably.
It was a fair assumption in 2021 when inflation took off and we kept getting told it was transitory. There were plenty of people screaming then.
As for the best financial minds on the planet, have a listen to the monetary policy academic on The Panel yesterday basically lashing RBNZ for getting it wrong at literally every point. RBNZ make a point of excluding academics from decision making committees, but are happy to have people who have central or institutional banking experience at all as a box ticking exercise. Should we be surprised the quality of their decisions has been sub-par?
As for the best financial minds on the planet, have a listen to the monetary policy academic on The Panel yesterday basically lashing RBNZ for getting it wrong at literally every point.
I'm talking about at the time, not with the benefit of hindsight. I remember at the time (so early 2020) trying to get a read on things, listening to some of the best international business people, economists and investors, and the best most of them could muster was "don't know how it's going to play out, best advice is to act sensible and hang on".
Pretty broad advice, but it's now making me feel a lot smarter than I am for following it pretty rigidly.
It may be politically convenient for some to decide this is hindsight now but the reality is there were plenty of people at the time, on this website, in policy circles and commentators, who were appalled RBNZ towed the Fed line WRT inflation instead of doing their actual jobs.
Go back and read the reactions here to the revoking of LVRs for investors. I would say most commentators here were shocked. No hindsight needed.
I wasn't around here then, although I imagine the comments section was almost as much full of people losing their shit about housing as it is now.
It's been that way forever. I remember a lot of people were talking about the imminent housing crash when I bought my first home in 2018. I'm glad I didn't listen.
It wouldn't of mattered if Orr had seen he'd overcooked it early. To a certain extent he's beholden to the Fed and they were not shifting. I believe NZ was one of the first to raise rates.
Add to that, quite some time ago, the unprecedented motion by previous RB governors public criticism of the incumbent. Totally unheralded and indicative of greatly qualified and experienced concerns being held.
Inflation is running rampant globally because western world governments overspent under the disguise of fighting Covid. Even Putin understands that. Supply was not the issue, it was excessive demand created by money printing and government deficit spending, allowing the monopolistic corporates to take control.
Business lending got no easier. Even the much touted govt guaranteed scheme was nigh on impossible to get.
Pretty much all that stimulus got poured down the throats of out beloved mortgage holders.
Are you conveniently forgetting his comments on the wealth effect and need for spending.
I seem to remember the RBNZ having a big boner for economic continuity. That'd involve people spending money, for sure.
Well said Pa1nter. There have been warnings from within NZ which were dismissed as DGM, there were also warnings from IMF, OECD, and a whole bunch of other international bodies which were dismissed as not understand that NZ is diffrunt. People chose to hear what they wanted to hear and now they are scrambling around to try to blame anyone they can think of for their own decisions.
Sounds like a plausible outcome!
altar
Didn't get past the word Hosk..
... we can't help you if you refuse to be educated : Hosk101 ...
Mike Hosking: It's time the focus was put back on over 50s
Why is Newstalk ZB the biggest most successful station in the country? Because it skews 50 plus, it deals with an audience that is involved in news and ideas, and an audience that has money time and comfort.
I sit here at 55 and I look at my circumstances compared to when I was 25. It could not be starker.
I am an advertisers or marketers dream. Not for everything, obviously; I’m not into gaming or drinking coke. But the people who have the money, buy the cars and the trips and the investments and the insurance and the houses - what part of that has been a mystery to the advertising industry?
Fill your boots Gummy...LOL
All true Baywatch, I am in a similar boat but ZB is my echo-chamber, it's no different than National Radio for the left-leaners amongst us, we can all have our nicely curated news and opinion feeds and be happy.
Agree, .sometimes I tune into Fox News just for a bit of crazy to keep the boat level.
I dabble with a bit of Guardian to take my weekly dip in woke outrage, it's a healthy practice but I can't do National Radio that's the wild-lands.
Yesterday that had one of the panel pundits trying to suggest that a montary policy academic's critiques of RBNZ was driven by hindsight - i.e. the crap Robertson has tried to put up as a front condoning poor performance at the leadership level. It was quite something hearing political talking points being repudiated by the person who actually knew what they were talking about.
GBH just make sure you do your bit and not spend over the xmas period please, like Adrian asked yesterday. Of course he does'nt have too as he is on 800k a year, but all those other peasants need too, so his job is easier going forward, as it is the peasants fault we are in this mess, not his or the governments, and just to ram it home they want at least 30-40k of peasants to loose their jobs next year as well.
... oops , my super big advent calendar box of beer ( thankyou Beer Jerks ! ) is on it's way... too late to cancel Christmas ...
Remind me , but ... wasn't it just a year or 2 ago that Adrian & Robbo were pleading us to go out & spend , to borrow up & buy a house ...
... what changed their tune all of a sudden ?
By my beer advent calendar Xmas is Friday week?
Interesting on a stuff article, leading economists are now bickering over "How Hard this landing is going to be".
5.5 OCR is a 7-8% 2 year rate. IMHO from these levels , as housing loans turn bad and mortgagee sales occur in the investor fleet the write downs are going to be massive, especially with the interest rates at these levels as the sales go through. FHBers will not be able to afford them even at 70% of peak, and people with a lot of equity will be looking for a 50-60% haircut to get yields back towards 6% with no interest rate deductions etc.
Labour are going to get slaughtered in a recession and totally loose the middle ground.
They must be wrong TTP guaranteed a soft landing.
That dialogue, that sudden public criticism of contemporaries , reminds me of my grandmother’s - when thieves fall out etc, but in this case no one at all will benefit will they. Oh hang on, you would obviously be an exception, if you have just inked a new contract for five years of highly renumerated employment.
"Remunerated". Renumerated is when he gets a pay rise.
tks. out flanked once again by auto suggest . but haven’t edited. he may well have got a pay rise too?
Tragically, probably.
It'd be pretty hilarious if the Governor got payrises in line with inflation.
Are these magical immigrants he wants flooding the place?
Magical immigrants that put no pressure on the demand side?
More demand secures the asset base demand for houses. The banks are happy, so he is happy.
It is not his problem if you can't see an ED doctor in under ten hours or that wages will be pushed down at the same time as housing is pushed up.
As long as you spend less or lose your job, his is easier.
The magic would be if we had two brain cells to rub together and addressed the ACTUAL immigration needs, nurses, teachers, Dr's and some primary industry workers. But hey, let's have some more restaurant managers and "students" and see if that does not work again.
NZ is not all that attractive to nurses, teachers and doctor's. The pay is poor in relation to cost of living, in particular housing costs. Need to bring house prices down a hell of a lot more before it becomes attractive.
Yes good points, perhaps we could also pay them what they are worth. If only we could treat these hard working, well trained individuals as we do our non-working presumably untrained individuals.
1-Jul-21 to 1-Apr-22 Amount of increase in Benefits
JOBSEEKER SUPPORT
Single 18-19 years old - at home 16%
Single 18-19 years old - away from home 14%
Single 20-24 years old 14%
Single 25 years and over 13%
Couple, without children, 18%
Couple with partner on benefit, with children, 18%
Sole Parent 8%
I read somewhere recently that benefits are only now finally back to where they were in 1991 before the National government cut them drastically.
Now do it for Super benefits.
Had this exact conversation with my wife last night. She's an early-career teacher, and the pay completely sucks.
Our income is massively skewed - and there's nothing she can do about it, because her pay is set externally. The only way she could earn more would be to switch careers.
Niece is solo with two kids , a early childhood educator. We gave her a hand lately cause her wage is so s$&t. Owns her own house but after school care amongst other things is a absolute killer.
Note. Has been pointed out a benefit would be better for her.
Nicely edited and replayed immediately after said interview with the sentence re immigration not being a panacea and creating other problems conveniently chopped
The open-door migration favoured by all political parties are only beneficial to low-value sectors, often at the expense of productive enterprises.
The sustained productivity stagnation problem is showing several symptoms such as high living costs, falling living standards, capacity issues, systemic inefficiencies, market duopolies and so on.
Importing a bunch of workers would make the unemployment rate lower, not higher. Surely we'd have to import a bunch of non-workers who wanted to work in order to raise the unemployment rate?
It's obscene that macroeconomists, politicians and academics on many $100,000s pa only answer to an inflationary cost of living crisis is to put more people out of work.
"Some of you may die but that's a price I'm willing to pay"
There is a 6 to 9 month lag in changes to the OCR actually showing up in the economy ...
... Adrian has thrown Ardern's government under the bus ... the bite on the economy will be hitting us aroundabout election time next year ...
Robbo will be up the creek without an Orr ...
Here's hoping...I did say earlier this year that the real Sh** hitting the fan will be around election time, but they have one trick up their sleeve which they will roll out next year...and that will be tax cuts and moving the tax bracket...watch this space.
Poetic justice, considering Robbo was all too happy to reappoint him.
Robbo : how could you did this to us ? ... I gave you 5 more years ...
Adrian : thanks for that ... and you have 1 more year , Grant ... and when that's up , I'll still have 4 more years .... 4 more years , mate !
Actually GBH, Orr will be up the creek without a Robbo, because Orr still has 5 years to go...
Orr will still be getting $ 850 000 per year ...
... Robbo will be getting ? ... a gig on " Dancing with Stars " ...
That was already guaranteed months ago anyway Gummy, many on here have predicted that 2023 will be a shit storm, Housemouse was about the first and stated that like a year ago. Labour have been useless but how many will continue to vote for them its like cutting off your nose despite your face. I think Labour will have the worst defeat in history.
A blue waves Carlos? ...
Will be interesting to see what National offers the serfs next year..
Christopher Luxon walks away from tax cuts plan as inflation and interest rates soar
Aye that tax plan was naff alright and he has scuttled away from it at first opportunity. Way back Simon Bridges committed to rectifying bracket creep. Don’t know what happened to that, but it would be a good start.
If they poured their efforts into this and then left (or even bumped that top tax rate to kick in at $200K or so) then it would be an election winner.
Ditching the top rate was never going to be an election winner. The less you do at the top, the more you can in the middle and bottom.
Labour will just match them on that commitment, they have offered nothing better than Labour at this stage.
Unlikely. Robertson has suggested any tax changes would be inflationary, even though his government is going to spend that money. So it would be a hell of a climb-down for him to now suggest actually getting to spend your own money is suddenly not going to be inflationary, as it would be a tacit admission he's been using the inflation component of tax earnings to feather his own nest.
He'll do it if it polls well. People have no idea about policy and drivers of inflation. They know things are going up and that's about as deep as their understanding goes.
Re-adjusting the tax bands is needed ... particularly at the lower levels ...
... but their idea to scrap the 39 % band for income over $ 180 thou was just loony ... if you're earning that much you don't require tax relief ...
$670k @ 39% = $261,300.
$670k @ 33% - $221,000.
Some consolation re Mr Orr's salary.
.
I read on Facebook someone commenting that their very good friend, a doctor, is moving to Australia due to Labour's introduction of the 39% top tax band. They didn't have much to say when I pointed out their equivalent tax rate is 45%.
.. yes .. and , Oz have 0 % tax on the first $A 18 000 ...
I emailed our Gnats to look at tax relief at the lower end only , and to forget their obsession with the 39 % band ; never heard back from them : dozy buggers ...
I'm not surprised you didn't hear back, that would go against their principles of supporting the wealthy at the expense of the less well off.
Happy for the Aussies keep the doctor who can't make sound judgements in his own life.
Here is another sound decision https://www.nzherald.co.nz/nz/physically-sick-family-paid-500000-for-mo… doctors are making in diagnosing house building.
Making them physically sick - 'Physician cure thy self.'
There is not a great correlation between being a good doctor and making great financial decisions. After all, why would there be, I don't think finance is covered in a medical degree.
I see ACT getting more votes than Labour, the economy is going to be that bad before the next election. I don't think people realise the level of pain coming next year.
No chance in Hell of ACT getting more votes than Labour, Labour has a hardcore cadre of voters that will never vote any other way (as does National), you may as well come out and say TOP is going to outright win the next election, both are complete nonsense.
Although I will likely be voting ACT late next year I agree with you. If Labour get in again times will be very tough, their key measures, housing, child poverty, mental health etc etc have all moved in the wrong direction, another 3 years of that and we will be in very, very deep waters.
Easy. He will legislate inflation adjusted tax brackets. Robertson will try to get away with a one off. Then National will point out where the worst PM and Government in living memory had been spending money for the last 5 years. $1,000,000,000 more per week than when they were given power in 2017.
Maybe Robbo will dish out more " cost of living " payments ... and when it all goes pear shaped like it did last time , blame the IRD again ... the IRD who told him it was a stupid idea from the get go ... as Treasury did too ...
Crown expenses 2017: 94.9 billion
Crown expenses 2022: 113 billion
Source: NZ Treasury
Your amazing memory seems corrupted by false facts.
Worst recall in living memory.
Biggest ZB fan in living memory though.
Mike Hosking can say no wrong.
And why the pain will be worse than it needs to be
Robbo still has policies in place that encourage spending - go buy a new EV everyone here's $8k for you
and actually worse for businesses as they are still handing out money as fast as it can be spent
Luxon looks ill since becoming national's top dog. Going to do a Todd muller?
He arrived too early for sure. A case of whatever it takes, going back to Bridges was not viable. Ironically Bridges now comes across more convincingly these days. Initial leaders of ousted governments never last long. He should have just let Joyce run with that, and bided his time.
Baywatch's BFF , Mike Hosking , was ranting daily that Orr was overcooking the economy ... as was Prof Robert McCulloch ... many could see that we had a supply side problem with Covid19 , not a demand side ... pretty much all the central bankers around the world got it 100 % wrong ...
... having overcooked the economies , they're now plunging them into an ice bath ...
David Parker talk currently underway at CA Tax Conference is quite interesting - Int.co you might be interested in reporting on it (no I'm not a political stooge)
I saw him speak at the Infrastructure NZ conference on Tuesday. It was about the 4th or 5th time I'd heard pretty much the same speech from him so I doubt there's anything new to report on.
no doubt.
When we open the floodgates to foreign Nurses, Doctors & Teachers : what happens to the countries of origin?
People die - its really stupid that we think its Ok to import foreign skills when we cannot get organised to train our own
Maybe just start with a new Minister of Health who knows what he is doing as Little clearly doesnt
https://www.newshub.co.nz/home/politics/2022/06/auckland-s-medical-scho…
The University of Auckland admits 257 domestic students a year. Otago admits 282.
"Every year we turn down many people who would make more than adequate doctors, there's no shortage of applicants, I promise you," Dr Warwick Bagg told Newshub.
"[There are] hundreds who do not get it who would make good doctors."
Dr Bagg said it's a costly exercise to train doctors - $62,000 per year. Around $16,000 of that is covered by student fees and the rest is footed by the taxpayer.
He said they've asked the Government for more funding but it hasn't been forthcoming.
"We have the capacity, we have the expertise, we are ready and it is cost-effective."
But the Government said capacity at medical schools isn't the issue, rather the ability of DHBs to cope with new graduates who need supervision.
In a statement, Minister Little said he agreed that increasing the intake of existing medical schools is a sensible approach but said we have to look at the whole process from entry to medical school to professional training years and make sure there is capacity at every step.
He said he will ask the new board of Health New Zealand to prioritise medical training.
Well if Minister Little is on it we can all rest a little easy... that it will most certainly not come to pass
... it creates a wonderful opportunity in those countries for more people to be trained up in those skillsets : Win/Win ...
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