A review of things you need to know before you sign off on Friday; BNZ raises TD rates; Fitch affirms big bank ratings, TSB has breach, swaps hold high, NZD moves lower, & more

It is certainly true that if the Bank had begun to raise the OCR a little earlier in 2021, it would not have made that much difference to inflation (core or headline) now. 25 basis points in each of May and July 2021 might together have lowered headline inflation by September 2022 by half a percent at most. But in this framing – also in their recent Review – there are two elements that are little better than dishonest. Purely with the benefit of hindsight (their own criterion) it is now clear that monetary policy should not have been eased at all in 2020, and that monetary policy should have been run much tighter over the period since then. Had that been done, core inflation would have stayed inside the target range. Now that might be an impossible standard, but that is simply to point out what I noted in my post on the Review was the major weakness: there was just no sign the Bank or MPC had devoted any serious thought or research to trying to understand what they (and everyone else) missed in 2020 and 2021. But they were responsible.

And then there is the continual effort to blame food and energy price shocks, in a way that simply flies in the face of the data. Headline inflation is the year to September was 7.2 per cent. Excluding food and energy, it was 6.2 per cent. 6.2 per cent is a long long way above the top of the Bank’s target rage – more than 4 percentage points above the target midpoint the Minister of Finace requires them to focus on.

And as I pointed out in a post debunking the “war is to blame” claim, core inflation was very high, the labour market well overheated, before the war. Link

What property investors in NZ don’t realise that a DTI is actually an effective tool at putting a support at the bottom end of the market. You prevent the blow out at the top and that creates stability. I’ve been asking for it for 10+ years now, but ‘investors’ know better. Where to from here? Property will not be a sound investment as it’s over speculated. This will take a generation to sort out unless we get someone savvy (and unpopular), approved to run the country 

Yep, no hobbies but buying and selling houses, and making comments about it online. 

Don't worry, the Nats are going to reinstate the interest deduction on rentals.   The whole stupid thing with reignite.  The house price fiasco has been New Zealands greatest social disaster and we are going to continue it.

Why do people buy into this arbitrary price/income metric.?

Why? Because as a broad metric, it's a good indicator of 'real world' affordability. Definitely not perfect by any means. 

How long do you think, before someone here reprints that old hackneyed Muldoon quip about that?

You rock around in a white hood brock, or do you just keep your white supremacy on the down low?

I was in Sydney recently, welcomed to country when I landed and welcome to country at the local ikea when it opened as well. you must find that triggering 

Well Brock over fifty years ago I listened often to the Wizard in Christchurch’s Cathedral Square sally forth exactly that same sort of argument. Regrettably I am undoubtedly a vile  colonialist because I enjoyed the great humour, sardonic & cynical, and style and amongst all of it was a good vein of basic commonsense. Today though, that Wizard would be vilified and condemned as both a racist and perpetrator of hate speech.Only my opinion,  but I submit that I much preferred let’s say,  the then less modern society to the PC claptrap spouted by all and sundry these days. We were free then to make up our own minds as to what was acceptable rather than being told what we must think. Yes, yes that’s done it, now I’m  a target, let fly all you do gooders out there.

What makes these letters such a point of national controversy is that they contain information which will undoubtedly shed light upon the active role of the Queen herself in carrying out an act which essentially amounted to a modern coup d’état of November 11, 1975. During this sad period, Kerr made history by not only sacking the elected Prime Minister Gough Whitlam, but also revealed the scope and nature of the British Monarchy’s very real powers in our modern age. Link

The Oz "British heritage" is of being murderously settled by the dregs of both ends of the English class system.

Well I hope you are not moving to Melbourne

If our banks where listed directly and only on the NZ stock exchange , anyone, anywhere could own the shares?   And they would and our kiwi savers would only own a % as they want diversification, so they own them on the ASX......

I do not get this BS about the profits leaving, nothing, in any country is only owned by the people of that country anymore unless its nationalised.

What ownership structure do you suggest?

German regional banks invested much into Eastern Europe for development of community infrastructure. Completely different thinking to the rapacious Angosphere banking model.