Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
Westpac has announced a +25 bps rise to its floating rate taking it to 8.64%. It raised its one year fixed rate by +20 bps to 6.99% and cut its two year fixed rate by -14 bps to 6.45%. It made other changes too.
TERM DEPOSIT/SAVINGS RATE CHANGES
Westpac has raised its key savings rates by +25 bps. Their Bonus Saver is now at 4.50%. They also raised their six and nine month TD rates by +20 bps but left their 8 month special at 5.70%.
STING IN THE TAIL
Fonterra has made a late, late cut to its milk price forecast for the current season. With just days to go to the end of the current season, the dairy giant has downgraded its milk price forecast to an implied $8.20, while its first forecast price for the new 2023/24 season implies a price of $8/kgMS. However it is promising a 'strong' dividend when it reports the current year results. The dairy payout history is here.
FAST SPREADING RISKS CAUSE INSURER TROUBLE
Insurer Tower has extended its risk-based pricing to landslide and coastal hazards. It has just posted a half-year loss and it won't pay interim dividend. It does say it has strong reinsurance cover. Today NIWA released some coastal inundation maps to help industry and homeowners plan for what is coming with sea level rise and land subsidence over the next few decades. Remember, you can't get a mortgage without insurance, and you may not be able to keep a mortgage without insurance.
THANK GOODNESS FOR FHBs
Reserve Bank figures show the near-moribund mortgage market is being propped up by first-timers as April lending figures continue to reflect the sagging house prices
VALUABLE UPDATE
Sorted has released an updated mortgage calculator with some quite useful features. It uses access to our live mortgage rates database, making assessment of potential savings from switching banks much easier.
MORE BONDS, HIGHER RATES. IT'S GOING TO GET COSTLY
Following the Budget 2023, Treasury is going to have to borrow more over the next few years. Today's bond tender results show that this is going to be at higher interest rates. There were three maturities tendered today totalling $400 mln. There was no issue with demand for this paper because $1.27 bln was offered in 115 bids. Most missed out. But investors wanted +25 bps more in the interest rate. The $200 mln May 2028 issue went for 4.30%, up from 4.06% just two weeks ago. The $150 mln April 2033 issue went for 4.39% and up from 4.14% just two weeks ago. The $50 mln May 2051 tranche went for 4.51% and up from 4.39% two weeks ago. These are risk-free returns albeit for long durations. But 4.3% yield is a significant leap from the 3.15% a bit over a year ago, and 1.5% two years ago.
BIG SAVINGS FROM SHOPPING AROUND
The Commerce Commission is monitoring the petrol retailing market. They point out it is competitive and there are significant benefits for those who shop around. Their Quarterly Fuel Monitoring Report shows a big spread of prices at the pump – with Regular 91 in Auckland varying by 38 cents. The difference in prices between the most and least expensive sites, on the same day, within the same city, increased in each of the five largest cities in between the September 2022 quarter and the quarter ending December 2022.
SWAP RATES TURN UP AGAIN
Wholesale swap rates are likely clawing back some of yesterday's sharpish move lower. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is down a huge -18 bps at 5.69% and now just 19 bps above the OCR after yesterday's rise. The sharp correct is not unexpected. The Australian 10 year bond yield is now at 3.69% and up +6 bps from this time yesterday. The China 10 year bond rate is unchanged at 2.72%. And the NZ Government 10 year bond rate is now at 4.44% which up +8 bps, and above the earlier RBNZ fix at 4.40% which is down -6 bps from yesterday. The rising international background has kept the local changes very limited. The UST 10 year yield is now at 3.75% and up +6 bps from this time yesterday. The debt negotiation standoff is costing everyone real money.
EQUITIES ALL LOWER - EXCEPT HERE & TOKYO
In New York, the S&P500 ended its day down -0.7% on Wall Street as markets are still waiting on progress from the politicians on the debt limit. Credit rating agencies are starting to suggest the US might lose its AAA rating over the mess. Tokyo has opened its Thursday session back up +0.5. But Hong Kong is down another sharp -1.8% in their early Thursday trade and that makes a -3.4% fall or far this week. Shanghai is down another -0.5% in early trade today, compounding the week's fall so far to just under -3%. The ASX200 is down another -0.8% in afternoon trade today. The NZX50 is unchanged in late trade today and holding on to yesterday's against-the-trend rise..
GOLD SINKS
In early Asian trade, gold is down to US$1957/oz and down -US$17 from this time yesterday. Earlier the gold price closed at US$1958/oz in New York, and earlier still at US$1970/oz in London.
NZD RETREATS FURTHER
The Kiwi dollar has dropped almost another -1c from this time yesterday to 60.9 USc. Against the Aussie we are down -½c at 93.3 AUc. And against the euro we are down almost -¾c at 56.7 euro cents. That means the TWI-5 is down -50 bps at 69.9.
BITCOIN LOWER
The bitcoin price is lower today, now at US$26,099 and down -3.9% from this time yesterday. At one point it had sunk to US$25,889. Volatility over the past 24 hours has been moderate at just under +/- 2.5%.
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143 Comments
Well at least we don't have Brexit pushing up inflation..........
''British households have paid £7bn since Brexit to cover the extra cost of trade barriers on food imports from the EU, according to researchers at the London School of Economics (LSE).
The university’s latest report estimating the impact of leaving the bloc on UK food prices found that trade barriers were consistently hampering imports, pushing up bills by an average £250.
The cost of food in the UK had rocketed by 25% since 2019, the researchers calculated, but if the post-Brexit trade restrictions were not in place then this increase would be only 17% – nearly a third lower.''
https://www.theguardian.com/politics/2023/may/24/brexit-food-trade-barr…
Those UK numbers don't make sense. Inflation in food was over 3 years and four months. So while 25% looks a lot it's less than NZs. (Not that ours is low)
Then they claim UK has the highest food inflation in the world. So ??
Then the 250 - 210 Pound thing is written to be scary, it's just four or five pounds a week. Maybe. You can't tell. So ???
Well maybe, because they don't tag it in any useful way to compare apples with apples 🍎🍎
Basic deduction dictated that when interest rates got below 3%:
- lock that in as long as possible
- supply of goods will go out the window over the covid period, prices will rise
- emergency interest rates will invert (i.e. go up) for a while
- reserve banks to drop rates to spur broken economy
- the survivors buy the fallen's assets at a discount
Some people are going to make an absolute slaughtering in the 2020s. It's going to suck for the rest of everyone.
The final OCR drops were crazy.
Crazy me watched assets climb far too fast and with only hot air talk to support them.
Crazy me sold some assets $$ happy.
Crazy me recently bought new assets at seriously reduced prices $$ happy.
Crazy me is sad because the bulk of our population has been screwed over.
Yvil ive been watching this closely too.
Tim52, it is a reflection of direction not absolute rate. The last time we had this type of inversion was 2007ish and we all know what soon followed. The bond market is betting rates will head lower in 6 months or less. All the signs are there for a large slow down. Bond inversions are a very reliable indicator of recession and when recession comes it almost always completely destroys inflation with it. Oil price spikes the the USD are also nice to watch.
No it's the wholesale markets collective expected break even rate with a small premium. They are most likely have trouble pricing this and it's the spit between lower or higher than current rate. If the banks knew for sure it would be near 0 in two years then 2y would be half the 1y or something of the like.
I think markets are pricing in short term panic and a rush to US safe havens.... not sure after that rush what will happen, I suspect deflation, hence the lower rates prediction, I do not think anyone can print their way out of this now.... I like gold as a store of value outside the banking system, to a clear pathway to a new stable financial system, it could be a long time
Are you sure that is what it means? I note from the fixed mortgage rate charts available on this site that the 2Y fix was higher than the 1Y fix for the last 7 or so years prior to interest rates rising. If that relationship held, that rate curve would imply that interest rates would be rising over that period - yet they consistently fell.
The US 2/10 is still deeply inverted. If that starts to normalise (positive yield curve) then get ready for fireworks.
My only concern this time is that the massive stimulus has already happened just prior to the recession (i.e. within 2 years) - so I'm not sure if this is going to be a normal recession or not because we haven't even got close to getting through what would be consider anything like a full business cycle. This to me could be a double recession as what was meant to happen in 2020 (after rates inverted in 2019) has now been pushed to 2023 - and that after doing everything to avoid recession for 10+ years following the GFC including multiple rounds of QE.
Dropping rates and money printing this year may just create even more inflation - meaning that it is possible that rates don't drop by much at all as most of us expect. Stagflation anyone?
It is this chart that worries me the most:
https://pbs.twimg.com/media/Fw2hdjUXoAYNrGn?format=jpg&name=medium
An Inverted Curve doesn't mean that rates will be lower in 2024.
We could still have an Inverted Curve and the whole lot could be 10% higher. It basically means that traders have clustered around the short end 'expecting' that rates will fall. But if they don't, then all hell will break loose as those that need funds scramble to get whatever they can, for as long as they can.
What will happens to everybody's Curves if there is no decision in the USA? Or worse. Nobody expects that of course, and therein lies the risk.
(NB: At some stage the Cost of Carry, borrowing short, higher %, to lend long, lower %, waiting for % rates to fall gets expensive. It's a matter of 'how long' can that be tolerated before normality resumes)
Yes agreed but these big inversions are very accurate at predicting recession and recession always kills inflation, at least in the short term.
Yes this time could be different but every single time the curve inverts people say "this time is different" and it never is. Recession follows. After going through 2008 and 2009 i have learnt to pay close attention to the yield curve
Had to agree with Kerre on the radio this morning "what is Luxon smoking" re wanting to stop the Auckland City intensification multi-storey dwellings and returning to greenfields sprawl. You really have to wonder is there time for National to change their leader before the election?. As well as wanting tax cuts in the budget when we have 10% food inflation, they are really looking like a very conservative backward 90s National party. Go and stand on the top of One Tree hill, single storey houses as far as the eye can see, in a city built on a narrow isthmus. Really National, give us a better alternative.
I had a good discussion about this with some business associates this morning over an increasingly-expensive-by-the-week breakfast. Most are right-of-centre, as you'd expect, and many are traditionally "two ticks blue".
However, a quick show of hands of the half dozen of us around the table indicated that ACT/Seymour will be getting those formerly National votes, primarily because National seems so listless at present.
National, and particularly Luxon, don't seem to stand for anything any more (jokes about worshipping landlords aside) Everything is so reactionary - they drop a policy, or a response to a Labour policy, and then backtrack if there is any hint of criticism. Wanting to roll back the development changes that you voted for is just a more extreme example of this. I personally think that Luxon's corporate background is a contributing factor here, as corporates are the foundries of meaningless platitudes and focus group-shaped opinions.
We all agreed that at least with David Seymour and ACT you typically know where they stand. Seymour doesn't spend much time pandering to those who will never consider voting for him, nor does he apologise when they don't like what he has to say. He's a scrapper, and therefore in with a puncher's chance as it were.
A vision is set out - you might love it, or hate it, that's not the point - and you can vote accordingly. I can respect that and I think many others can too.
It almost feels that National is so concerned about losing their base - but also concerned about trying to win the middle that is somewhat at odds with the base and donors - that the party and leader are stuck in this kind of "No Man's Land" of endless backtracks, u-turns, mis-speakings and apologies.
Hipkins doesn't play for the landlords, or the business community, as they won't vote go to Labour. Team Red is smart enough to know that their core base will never abandon them (because "my father voted Labour, and his father voted Labour, and his father's father" and all that jazz). Hell will freeze over before places like Hornby or Otara stray from Labour ... and if some of the more socialist voters feel disappointed they can always vote Green or TPM.
If National took the same approach, they could formulate policies better for the middle because how likely is it that their traditional base (not the floating middle) is going to jump sides to Labour? Are the wealthy inhabitants of Fendalton or Remuera, for example, suddenly going to decide that Labour is a better bet just because National hasn't given them everything they want? If anything, they'd just go to ACT.
Instead, National seems to want to be everything to everyone and in doing so is now nothing to nobody. The last two weeks have truly reinforced that.
> National, and particularly Luxon, don't seem to stand for anything any more (jokes about worshipping landlords aside)
I think this is actually at the core of National's issues.
National is traditionally the centre-right mirror to the Labour centre-left and they battle it out to be the dominant coalition partner by adjusting their policies to cater to the NZ median voter. But the NZ median voter has now moved away from priortising the needs to landlords/land owners as much simply because the issues around housing and land use in this country are so glaring that it has become impossible to ignore. So the median voter position has shifted but National doesn't seem to have accepted this whereas Labour has.
Labour and the more far-left parties have given National so much potential firepower to win this election BUT Labour are taking long overdue steps to address problems around funding of core services, infrastructure investments, increases in defence spending, etc that are broadly popular. Where Labour are really vulnerable is co-governance, the outright open racism towards pakeha exhibited by the Greens/The Maori Party, and law and order. But because National won't accept that Labour occupies the centre on the housing issues/land use issue they are unable to capitalise on Labour weaknesses and so are in effect offering exactly what Labour is except worse because they try and differentiate themselves by taking random oppositional stances on stuff like the $5 chemist surcharge.
So as you point out they are bleeding votes to ACT who are willing to just go with what they believe but can't offer anything to poach the independent centre votes from Labour that broadly like their economic policies but don't like their handling of co-governance/race/etc.
Yea, pretty stunning to see. National's main problem is that they are still a party built around the John Key consensus which is much weaker now and without his charismatic leadership. They need new ideas and to adapt to the changed times but they don't have any real ideas and you really get the feeling the behind closed doors they just wished it was 2009 again.
What National should really be doing imo is to basically adopt core tenets of Labour policy around the economy/housing (while bringing back commonsense pro-business and pro-employee legisilation like the 90day trial period for businesses) and combine it with ACT rhetoric around co-governance/Law&Order/trimming govt departments of DEI-adjacent baloney. Then make some commitments to invest much needed monies into core areas of NZ infrastructure/services that require it and I think they would have a very solid policy platform to scope up votes in the centre.
National is catering far too much to parts of their party that will never leave them in the first place. They need to be winning the median voter but don't seem to realise this (or Luxon is incapable of realising it).
I agree. I’m increasingly concerned about who to vote for.
Don’t mind Chris Hipkins but am very concerned about policies of the labours coalition partners …… oh yes and I nearly forgot they totally messed up with their covid fiscal policies.
I feel the same about National as others they offer nothing and seem to cater to a tiny group.
I like David Seymour, but have serious worries about the calibre of the other ACT members, the few I have heard have scared me. Hopefully the waters will clear in the next few months.
I'm seriously concerned about some of their policies full-stop. Particularly around cutting R&D tax credits, scrapping Callaghan Innovation, removing all film subsidies, and selling the rest of the power company assets so we no longer have any control over them. It's ideology-driven, it doesn't matter if these expenditures bring in more revenue and economic activity than it costs if it goes against their dogma.
Then there is there "two-rate" tax system that effectively raises taxes on everyone earning under $58k which is rough to say the least.
I get why people want to vote for them and maybe they agree with some of the above proposals but I feel like most people really haven't focused on how damaging some of their policy could be. I actually don't mind David Seymour he is clearly a very smart guy but the whole ACT policy platform would potentially do a massive amount of unintended damage for very little gain.
Yep, I agree. But ACT is gaining so much goodwill by being the ONLY party that is willing to just say no on co-governance and take a principled and open stance against it.
I really can't understand why National won't just come out on this issue, the vast majority of the voting base are with them on it. There has not been as unanimously as unpopular a policy as co-governance in NZ in years but they are just ceding all this ground to ACT on the issue.
Luxon is hopeless. He is either too dim to see this, too much of a coward to act on this, or simply too self-serving and worried about what saying no on this would do to his post-political career options.
It's been quite obvious over recent weeks that the MSM have significantly restricted/banned the words co governance/government in the expectation that the sheeple will soon be distracted by all the other noise & forget that democracy is the only foundation of a truly fair & just civilisation.
“Democracy is the worst form of Government except for all those other forms that have been tried from time to time”
Then there is National's solution to every possible under the sun - more immigration.
Their party leaders have moronically lobbied for dumping more people for low-wage businesses and landlords to exploit at the expense of the young and working classes.
If anyone thinks the numbers look too high under Labour, wait until Nat-ACT remove all wage thresholds and bring the quality of migrants down by several notches.
Yes, and think about what will happen to that quality and quantity of incoming migrants when you scrap the wage thresholds are removed.
You needed a job offer from an NZ employer and be under a certain age to qualify for work and residence visas under the previous Nat govt. Labour's decision to add more qualifiers may not have reduced the flow but at least Maccas can no longer sponsor workers like they did pre-2017.
Yep, honestly I am not sure who the hell we are supposed to vote for if we want more sustainable levels of immigration. ACT somehow manages to be even worse than Labour with this gem of a policy below.
ACT's immigration spokesperson James McDowall said the employer levy would likely be set at $1350
$1350 to "pay for infrastructure". Would be lucky to get a bike rack for that, let alone pay for transport, healthcare, services, etc.
Then the greens want to make love and cuddles our formal immigration policy, letting anybody in from anywhere basically, and of course, letting migrant's elderly family members move as it is unfair that only higher income people can afford for their relatives to move over, despite our health system barely coping with our own elderly as it is.
https://www.greens.org.nz/immigration_policy
Why are they all so awful.
$1350 to "pay for infrastructure". Would be lucky to get a bike rack for that, let alone pay for transport, healthcare, services, etc.
That's only in addition to though.
Hopefully a worker is about to generate 2-4x their income in sales. So you're also up for 15% GST there, and the employees' income tax.
The system is setup to be funded mostly as pay as you go, by the working age population.
Can you honestly not see how a levy that low wouldn't be ripe for abuse? If a worker is genuinely needed to fill a skill gap the employer will generally be able to pay much more than that. ACT's policy will be abused by unscrupulous employers to suppress local wages.
Think about the immediate impact on infrastructure from immigrants as well, that's one more house/apartment that will need to be rented/bought/made. We have a housing and rental shortage as is and more people makes that significantly worse.
Then it's one more car on the road. One more person waiting in the doctors waiting room. I am aware that we still need some immigration but it needs to be at a sustaianble level, not blindly accelerated with little concern for negative externalities.
And increased immigration at the rate it has been in the last few years clearly hasn't helped ease pressure on our infrastructure. Adding more people isn't necessarily going to alleviate the issues with our pay-as-you-go system, and could potentially make them worse if those workers aren't targeted at actual skill gaps and just taking up low wage jobs that aren't really contributing to our wider economy.
Migration is filling the gap by a population shortfall. So we are always up for the increased infrastructure spend. From a pure bottom line perspective, it's cheaper adding a 25-40 year old worker from overseas than breeding and raising a new worker locally - takes decades and costs hundreds of thousands of dollars.
If a worker is genuinely needed to fill a skill gap the employer will generally be able to pay much more than that.
If there is a gap then the employer is going to be paying a higher wage to begin with - and increased PAYE is generated. You can have a higher fee but ultimately a large chunk of the fee increase is just going to be passed on via price inflation.
The current infrastructure would likely be coping a lot better if our population wasn't increasing as fast as it has been.
So basically we need more migration in order to cope with the pressure of migration. I am fully aware of the demographic issues we are facing but I do not agree that indiscriminately importing more people with little regard for what they are doing is the best option.
by Pa1nter | 3rd May 23, 8:08pm
The free market is as about as real a concept as democracy.
You seem to pick and choose when the free market applies. A lot of immigrants that would come in with ACT's policy would not be high-income workers. Why would a liquor store pay $25+ for a local when they can pay one week's wages and get someone who will come over and work for a minimum wage? Repeat that across the rest of our industries and we have a recipe for keeping wages low and living costs high.
Now look at our GDP growth rates comparing gross and per capita
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=NZ
https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?locations=NZ
Our per capita GDP growth rate has consistently been behind our GDP growth. Are our current immigration settings really benefitting the average New Zealander or are we chasing growth for the sake of growth without considering the other negative externalities that come from population increasing at such a high rate?
The pressure isn't just from migration though. It'd be a different story if all our woes were caused by migration, in which case you'd just stop it. Like many positions here, there's a few pet boogeymen that are deemed the prime mover for issues, when the reality is far from it. The theory (or maybe reality) is migration results in a lower overall burden on existing workers, or increased overall economic output. Ideally both.
You seem to pick and choose when the free market applies.
I'm not picking and choosing anything, just observing.
Our per capita GDP growth is decreasing because we have more people but less workers (or less hours being worked per worker).
The pressure isn't just from migration though. It'd be a different story if all our woes were caused by migration, in which case you'd just stop it. Like many positions here, there's a few pet boogeymen that are deemed the prime mover for issues, when the reality is far from it.
My god man. This is your go-to for everything. "Things are so nuanced and complicated and nobody understands except for me".
The issues most people talk about do have real-world effects that are worth discussing. Most people understand there are other contributing factors. But they're not going to go over every possible contributing factor in a short online comment and rather focus on more specific things that have the largest impact.
Explain to me how increased immigration won't put upwards pressure on rents. Or increased pressure on medical services. Or increased pressure on transport networks, etc. And New Zealander's have been working harder, the issue is our productivity hasn't been keeping up.
There are definitely countless positives that come from migration but the argument isn't to stop it altogether, but instead try to have a discussion about a better and more sustainable rate of immigration that has fewer negative externalities putting pressure on working kiwis.
My god man. This is your go-to for everything.
Its a fairly common theme for most of the discussion I involve myself with; seeing past the knee-jerk obvious reaction we can all fall victim to. There's a fairly simplistic argument that goes "migrants lower wages and over-burden housing and infrastructure", which ignores a whole bunch of things, including (but not limited to):
- NZ is always poor at infrastructure. Much of what we have built over the decades is often outmoded by the time it's delivered. That's a planning, funding and delivery issue that needs addressing irrespective of migration.
- The health system's largest drain is over 65s, which are increasing at an alarming pace. Working age migrants aren't even a blip here. Their taxes though, are necessary to pay for the oldies. Or you can pay for it.
- Rents are problematic due to the changing nature of NZ households and internal migration. Fix housing.
The above are all issues that require longer term approaches but we have a more immediate issue with labour supply.
NZIER's report concluded back in 2020:
New Zealand's migration policies might be contributing to the current poor state of national productivity
the area of greatest concern was the extent of relatively cheap imported labour available to undertake low-wage, low-capital intensity jobs in the hospitality, tourism and agricultural sectors
by Pa1nter | 3rd May 23, 7:23pm
There aren't many places with labour shortages that are great places for the average person to live.
It's gotta be some ideological thing. I remember when he made the above statement, it makes no sense at all. I would 100 percent rather live in a country with a labour shortage than a massive labour surplus.
A teeny-tiny shortage vs a massive surplus?
If we look at countries with a deficit of workers, it's because they either aren't making enough workers, or they can't attract outside workers. That usually is accompanied by economic decline and increased burden on the remaining workers.
It's not really an ideological thing at all. My personal desire is for less people (or smaller groups of people), but thats more in the realm of fanciful, and not what we have to deal with today. You see migration as employers driving down wages, I see a lack of workers as economic activity not happening at all (or just less of it). For me, it's the lesser evil.
Could you give some examples of countries that faced declines?
Ideally, we do more work with the same amount of people, that's really the only way out of this mess in the long run. Importing more and more people isn't always going to be possible.
I agree we need some migration for our current economic model to work, but what is a sustainable level of migration? Nobody on a government level seems to be asking this and they are the only ones who can control it. The current rate seems to be more than we can really handle.
Funny that Pa1nter says economic decline in countries unable to attract foreign workers or grow their working age population.
Our real GDP per person employed has flattened since 2012 despite importing 600k more workers since then. Yet we've performed the same in that metric as Italy and Japan, both of which have witnessed their number of working age people decline for years.
https://data.worldbank.org/indicator/SL.GDP.PCAP.EM.KD?locations=OE-NZ-…
Italy, Greece, Germany looks to be on the cusp also. Can you show me some countries with shrinking labour pools that are a good place for the average worker to live?
As for the sustainable level, hard to say, because we can't control the outflow of people either. Someone with better chart reading and maths skills than me can probably do a number crunch on the taxation shortfall vs increased dependency burden.
None of those places are really that awful places to live in the grand scheme of things.
I think in the long run every country is going to face this issue at some point as global birth rates decline. It's something countries are going to need to learn to deal with and we might actually be better off dealing with these demographic issues now rather than delaying and trying to deal with it when even more countries are facing the same issues. The elderly are the wealthiest elderly generation we are likely to see for a long time. They are well-positioned to supply capital to help face upcoming issues. With fewer workers, we may actually be encouraged to invest in a way to increase our productivity. We probably don't actually need more hospitality and tourism businesses.
Increased immigration at the current level could delay these issues but we are going to have to face them at some point and delaying might not be the winning strategy.
Yeah, you're right it's a lot easier to point out problems than propose any solutions.
Our rate of immigration puts more pressure on our poorly thought infrastructure, it doesn't solve it and can in fact exacerbate the issues we already have.
Yes, we have more people aging into the 65+ age group. I am well aware of it. One potential option is to shift how we gather revenue to take the burden off of incomes, e.g. land value tax, capital gains, just some way of shifting the tax burden off of incomes so we aren't as dependent on increasing the supply of workers. Not a silver bullet but neither is immigration, which just shifts the demographic problem to later. And the current retiring generation is immensely wealthier than the people following them.
Fix housing.
Why hasn't anyone else thought of that?
So everything requires long-term approaches except for the labour supply issues that we must fix now with little regard for any issues that may be caused by the supposed solution.
Pa1nter said with a straight face in one discussion India was the wealthiest country in the world in the 1600s.
He clearly doesn't understand the difference between per capita wealth and overall GDP. It's Dunning-Kruger in action. Not that per capita is the be-all end-all either but surely it is easy enough to grasp if thinking clearly and making a good faith attempt at comprehension.
And I agree with you that migration is generally good but there are clearly downsides from too much too quickly and these tend to compound rather rapidly.
And they all glossed over that India represented between 1/4 and 1/3 of the total global economy for a dozen or so centuries following the birth of Christ?
Of all the factoids we've back and forwarded, you could've picked one more contestable to invoke Dunning-Kruger.
So let's make sure we have our dates correct.
Birth of Christ: 0AD
A dozen or so centuries after this date: 1200AD
The date we are talking about: 1600AD
Can't easily link books but even from a cursory google:
https://www.sciencedirect.com/science/article/abs/pii/S0014498314000187
> Whereas in 1600, Indian per capita GDP was over 60% of the British level, by 1871 it had fallen to less than 15%. These estimates place the origins of the Great Divergence firmly in the early modern period, but also suggest a relatively prosperous India at the height of the Mughal Empire.
If you had said "From 0 to 1200 AD India was richer than Europe" I would have agreed. I do agree with that. Hell, most of the world was much richer than Europe at that time. China and the Arab world were as well. But from that point on Europe grew far more rapidly and other areas fell relatively (and in some cases absolutely) behind quite considerably for a number of different reasons.
Real slapdash stuff, Pa1nter. Little tip for the future: if you're going to discuss history, dates are a pretty important part of that discussion.
You generally provide the source when putting a quote. I gave mine, where's yours?
EDIT: And you still seem deeply confused about GDP per capita vs GDP. A big population will always have a big number as the total GDP but it doesn't tell you anything about comparative wealth of societies.
https://en.wikipedia.org/wiki/Economic_history_of_India
Looks like he got it from there since he's in the habit of chucking stuff up without supplying a link to where he got it from.
I'm not really knowledgeable on this topic but It seems a little biased though.
At the same time, the Britain's share of the world economy rose from 2.9% in 1700 up to 9% in 1870 alone, due to looting in india.
I feel like there was more going on for Britain than other than looting India.
What am I looking at here? This confirms what I was saying and what the article I linked was saying.
https://books.google.co.nz/books/content?id=rHJGz3HiJbcC&pg=PA262&img=1…
World GDP Per Capita
UK 1600: 974
India 1600: 550
550/974 = 0.5646 x 100 = Indian GDP per capita in 1600 was 60% (more or less) the rate of in Britain.
That link is saying the exact opposite of what you seem to be implying with the "India was 25% of total gdp in 1600" figure. India had a high population which means total GDP was high but was a relatively poorer society than anywhere in Europe at that time so living standards etc were lower.
Pa1nter if you stuck to saying "The colonisation of countries by the British had some harshly negative impacts on those societies" I would agree with you 100%. Colonisation certainly was no unalloyed good and I would never claim (and have never claimed) that it was. I think it was definitely a varied experience (as anything on that scale would be) and in terms of what the current obligations this process has for descendants of those peoples it is a complex discussion but it is a point I could broadly agree with.
But there is a lot more to a country being wealthy than total GDP. Pakistan is 161/192 on the HDI (Human development index) NZ is 13/192. This matters immensely for any common-sense understanding of what is meant by calling a place rich or poor.
I'm genuinely curious, if you were talking to a Rwandan would you honestly say to them "you must be proud that your country is wealthier than Monaco!". What reaction would you expect to this exactly?
I'd disagree with that. Wealthiest can be interpreted in many ways, I think when people are talking about "wealthiest" they generally mean per capita when it comes to comparisons since comparing GDP on it's own doesn't really tell you anything other than how big a country is.
E.g Lists of "wealthiest" countries in Europe would usually include Luxembourg or Switzerland.
"wealthiest" would have the most.
"Wealthiest country" would be the country with the most money.
"Wealthiest people" would be the population with the most wealth per person.
In the context with thoughtsandtorts, our earlier conversation was pretty clearly about the whole country of India, and I'm guessing he had no idea of India's actual total wealth for most of the post classical period.
EDIT: And you still seem deeply confused about GDP per capita vs GDP. A big population will always have a big number as the total GDP but it doesn't tell you anything about comparative wealth of societies.
I'm not confused at all.
Total GDP tells you everything about the comparative wealth of societies. A society is a total population.
GDP per capital tells you what that his per person. People are individuals within a society.
I'm stunned at this comment.
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
So admittedly these are wikipedia figures I haven't checked but are you saying that Nigeria with a GDP of $500bn is a wealthier country than Denmark with a GDP of $400bn?
Do you not see why this type of analysis is highly misleading for any discussion of what a country being "wealthy" actually means?
And I can see you're getting confused about what planet you're living on and how adults discuss issues and think about the world.
Anyway thank you for this conversation, it has let me know it should be the last one I have with you (you'll be pleased as well I'm sure).
See you round buddy.
And I can see you're getting confused about what planet you're living on and how adults discuss issues and think about the world.
It's a lot harder when people don't know what words mean.
Anyway thank you for this conversation, it has let me know it should be the last one I have with you (you'll be pleased as well I'm sure).
LOL, so come in all hot, guns blazing, only to devolve into "oh, you know what I mean".
Till the next time you're "done talking with me".
Our per capita GDP growth is decreasing because we have more people but less workers
That is incorrect. The working population, employed persons and hours worked have all been rising quite steadily in NZ for years.
We've added ~600k workers just in the last decade and the average hours worked per week has gone up by 1 over the same period.
Commenting on this site is really on its way down where people just make facts up now.
https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=NZ
You're on the complete wrong track. Our GDP per person employed in inflation-adjusted terms was a flat line from 2012 to 2021.
https://data.worldbank.org/indicator/SL.GDP.PCAP.EM.KD?locations=OE-NZ
https://www.rand.org/content/dam/rand/pubs/working_papers/WR1000/WR1063-1/RAND_WR1063-1.pdf
You haven't linked your source so I'm assuming you got that from the above?
We use predicted variation in the rate of population aging across U.S. states over the period 1980-2010 to estimate the economic impact of aging on state output per capita.
I'm not an expert on these things but I'm not sure if the findings can be applied to the entire world if the focus was on the United States. Especially considering how easy migration is between different states in the US, and how some states massivly outperform others when it comes to GDP.
This one? It's got the same authors as the Rand one and the same abstract so I am going to assume it;s the same as I can't actually open your source since it's behind a paywall but my point still stands.
I don't know if the IMF does concur. I think the issue is much more nuanced than you would like to acknowledge.
https://www.imf.org/external/pubs/ft/fandd/2017/03/lee.htm
As populations age and grow more slowly, GDP and national income growth will most certainly slow down, but the effect on individuals—as measured by per capita income and consumption—may be quite different. A graying population will mean more old-age dependency, to the extent that these people do not support themselves by relying on assets or their own labor. But it may also bring more capital per worker and rising productivity and wages, particularly if government debt does not crowd out investment in capital (Lee 2016). Whether population aging is good or bad for the economy defies simple answers. The extent of the problem will depend on the severity of population aging and how well public policy adjusts to new demographic realities.
The actual data shows that our output per employee has flatlined as Advisor has linked, so clearly, our current strategy of high-rate immigration isn't having the mitigating effect that we would hope. Reducing it to a more sustainable level might not be the death knell you seem to think it would be.
It's having an effect of retaining or increasing overall GDP and tax revenue.
It's not necessarily increasing GDP per capita, which is desirable, but less critical.
It won't be the death-knell, but it's also wishful thinking to assume the market will automatically produce higher paying jobs in the vacuum of lower paying jobs that become defunct because they can't attract enough workers.
We pretend we are not a poor country, but we certainly are.
The Nats need to cut out our ridiculous list of 'nice to haves' sothat money goes back to the pockets of the people.
Move the non productives into productive roles. (Wellington, yes you). Communication consultant becomes drain layer etc.
Move to nil government advertising et al.
Could be a vote catcher if the squeals of those on the gravy train don't drown out the message.
I agree on that but am wary of the low-wage migration gravy train that Nat-ACT is trying to sell by removing wage thresholds.
For all you know they might even restart the whole PTE migration scam that Key ran for half decade.
The dodgy man wanted us to believe those foreign students were here only for the global appeal of business lectures delivered in an apartment on Queen Street.
And contrary to what The Curve is supposed to be telling us, the smart move could just as equally be - Borrowing Long (lower comparative % rate) and Lending Short - a higher rate, that is cashflow positive from day one. And if rates do 'take off' - for whatever unexpected reason, then Long Term funding is locked in, and it can either keep being rolled short, or lent out long at a higher rate.
But we'll all know soon enough.
Seems we are not alone with health system issues:
https://www.news.com.au/entertainment/tv/morning-shows/karl-stefanovic-…
https://www.theage.com.au/politics/victoria/ambulance-victoria-orders-t…
We have almost free milk, we have great cheese makers, but Fonterra has gone out of their way to FU^K over anyone small artisan, but why Font will never make artisan cheese. Actually Font has gone out of there way to try to F7%k over anyone making cheese why limit it to those who are good at it. They are the Wilson Parking of international diary.
Balut ( also spelled as balot) is a fertilized developing egg embryo that is boiled or steamed and eaten from the shell. It is commonly sold as street food in South China and Southeast Asian countries,
Low interest rates aren't stimulus; that's a modern myth invented by desperate officials who lost control over money many decades ago. Right now, low rates w/mkts that are absolutely certain they're going lower still is depression economics. Not inflation. https://buff.ly/3IGqrqy Link
https://www.gaspy.nz/ often shows me prices that are better then the weak discounts of the day.
Not always, but often.
Have been reading a few threads on twitter around the US debt ceiling. The commentary is that if the debt limit is lifted, around $1 Trillion USD of Treasuries will be bought to market, sucking liquidity out of the financial system.
It could the catalyst for other markets to head further south.
Anyone with expertise in this area care to comment?
Tony Alexander reckons that his database contains 28,000 subscribers who fall under the following classifications: REAs, mortgage advisers, Portfolio investors, Residential property investors and Consumers. It's a big claim and I noticed his research doesn't state sample sizes, etc. Caveat emptor I guess. Noticed that Easy Crypto now is an advertiser on his weekly "view."
I have discovered a promising new cryptocurrency that is up 25% today.
It is called NVIDIA
You're being oblique Wolfie. NVIDIA is a company, not a cryptocurrency. But I'm getting similar texts from other dragon slayers. Don't know what they or you are trying to say.
HouseMouse - seeing a lot more builders selling all tools - off to aussie https://www.trademe.co.nz/a/marketplace/building-renovation/tools/power…
I got a brand new welder 50% off, massive load of makita skins recently... almost got my drop swa... yeah its a great time to be buying tools, i will get a digger in the next 6 months knock down... near new ford ranger etc by the end of the year!!! best deals off trademe people wanting cash... CARNAGE is coming.... This is the time you can set up a business at cost with no goodwill.... i love recessions
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