A review of things you need to know before you sign off on Tuesday; Kiwibank adjusts rates, households gloomy, rental yields unattractive, ComCom to probe banks, swaps steepen, NZD dips, & more

Haha

third edition coming in 2024 - ‘this is how we try and revive a sick economy’

And the prequel "How we tried to spur Inflation and failed - 2009" so even more Unconventional Measures had to be applied. (What's that nasty cough you have there? You'd better stay home, and we'll look after the pay-packet for you.)

I think it is pretty clear now that the inflation of 2021 was the direct result of an oil price shock and supply chain bottlenecks (COVID) quickly followed by a grain and natural gas price shock (Putin), which fed through to food price shocks (fertiliser costs etc). Most countries had a bit of profiteering along the way too - ours was in late 2020 to 2021 when wholesale and retail profits added about 1 percentage point to CPI.

I am pretty convinced that our CPI would have followed pretty much the same track if RBNZ had simply left rates alone through the last 3 years.

Good comment UV.  There's also the small matter of the wealthy being better at managing their money than the poor.  A bit like fit people are better at exercising and eating than "non-fit" people.  But hey, we live in country where personal responsibility is discouraged, everyone's problems should be solved by the government.

"Instead of interest rates CB should be concerned with money supply"

https://pbs.twimg.com/media/FyugswNWIAI9gRt?format=png&name=4096x4096

https://pbs.twimg.com/media/Fy8uIQ6aMAEjKV4?format=jpg&name=900x900

We are already in deflation if we focus on monetary supply. But then again, we've just spent the last 10 years experiencing 5-10% inflation, meaning interest rates should have been much much higher to reduce the quantity of debt/money being created. 

The last two serious bouts of 'inflation' have been caused by a sustained spike in the price of oil / gas, which is a key input cost to other goods and services. If you look at inflation across the world in 2021 to 2022, it has been higher in countries that are more reliant on imported fossil fuels. In NZ, we get one-third of our energy from renewable electricity and two-thirds from fossil fuels (fuel for transport mainly). We are also heavily reliant on fertilisers and plastics (which both track gas and oil prices respectively)

When key input costs stay high  for months, other prices start to go up, and this creates contagion through the economy, with prices pushing on each other. Eventually, workers start to push hard for higher wages because they can't afford stuff and this gives the inflationary episode legs. Monetary policy is hopeless at tackling cost-push inflation - hiking interest rates (eventually) reduces demand in the economy by making people poorer, but it also prolongs inflation because credit is an input cost for many firms.

A much smarter response to external price shocks is for the Govt to use its balance sheet (or strategic reserves of key commodities) to shield the economy from the shock (France, Spain, Germany have all done this to some degree). Basically you stop the shock before it cascades through your economy driving other prices up. Alternatively, you reduce your reliance on commodities that are prone to major fluctuations. 

Unlike in NZ, greed in America stretches well-beyond a single asset class. At least someone learnt from the 2008 financial crisis and spread their cheap borrowings into multiple bubbles instead of one.

What, a job in Oz?

Maybe plan for snow planet, once it liquidates all concessiosn with iwi are null and void, there is no time for a new operator to redo these this season, its a next season proposition, IMHO its the end of Ruapehu as NZers realise how good the south island skiing is, thus it will never ever breakeven again. Gd for Wanaka and Qtown Mt hutt tho, Methan wins turangi and ohakune not so much

Unclear at this stage if they will open this winter or not. 

Sure  - it will be sorted next week - Mbie seems to have a vested interest in a particular outcome which makes me believe that a few iwi bigwigs have been pressuring the Govt

Why else would the Crown be agreeing to become a 25% shareholder.   

Even though the court will likely direct a liquidator appointment tomorrow this is likely to only result in a few days delay  - so the Crown will get what it wants despite the very large objection vote from the majority of attendees

What's the view of life pass members? Feeling ripped off cause the life passes aren't going to be honoured?

main house looks leaky imho, I assume vendor may be offshore due to agent selection