Stats NZ figures show retail card spending fell for the third consecutive month on a seasonally adjusted basis

NZ's not much different. I'll need to get my guillotine serviced if nothing is done soon.

it is working exactly as it was intended to and yes they can just switch it all back on. Behavioural economics indicates people dont always make the wisest decisions when it comes to money. We are inclined to take the easiest solution and the one that creates the most oxytocin in our brains (pleasure hormone). When the economy starts to tank, interest rates will be cut and the average family will immediately take those home loan savings of a couple hundred a month and go out and spend it on meals and microwaves and clothes and clutter. 

Common sense says they should continue to keep their repayments high and pay down their debt - but myself and RBNZ are 100% confident only a tiny portion will do that.

Now as everybody races out to spend that "disposable income" it will lead to more jobs, new businesses popping up, a renewed housing market and all will be right in the world.

then in 5-7 years time the cycle will turn again and we will rinse and repeat - with not one single lesson learnt. Monetary policy is crude and imperfect but it works - hence why no substitute has yet to be invented.

Whether they can reopen those wallets depends entirely on the severity of the crash and how mashed up people get in the process. Wallets won’t open again in a hurry if the downturn (which has been orchestrated and is well publicised as such remember) leaves scars in people’s minds and shifts their perception of risk to a point where they feel the need to ‘insure’ themselves. In other countries where they don’t trust the economic management of their leadership the population save before they spend. If NZ takes this turn - then there’s little chance that consumption will reignite the economy even if the RBNZ wants it too. It would be a big shift - but it’s possible. 

I agree with your general sentiment, based on feedback I'm hearing from clients and businesses I talk to. Some are doing ok, but a widespread feeling of malaise and declining demand. 

Something like cosmetic surgery I'm not surprised by, as I imagine outside of the 'reconstructive' work (that is probably funded through the likes of ACC, insurance etc) there would be a fair bit of new money - i.e. over-leveraged money - that would have been paying for purely cosmetic procedures that will instead be put off. Potentially grim times for the plastic surgery + his and hers Range Rover sport set. 

I disagree with your last sentence though - marketing is the first thing to go (sometimes not bad as lots of it is wasted, but also potentially self-defeating as your loss of market share may decline faster than the overall market) along with other nice-to-have services. My accountant was complaining of this fact, e.g. clients of theirs pulling back on all non-essential services. 

Once that's done though, say goodbye to the jobs!

Heineken? It’s double brown these days 

But, kiwis have seen enough - they're leaving in droves (1,000 per week net!)

For April it was closer to 2,000... per day... according to MBIE data.

Speaking of both the willingness of new arrivals to work for slave wages and cram themselves into crappy houses and The Warehouse, I was there the other night buying some cheap coffee beans (apparently their home brand is the reject Havana stuff, it's pretty good - well worth the saving). 

The coffee beans were near the seasonal heater display, and there were about 5 tradies in hi-vis, all clearly from one particular origin huddled around a boxed $20 bar heater.

A whip round took place, and these very cold and weary-looking men had just enough cash between them to buy the heater.

The "ringleader" then got on the phone, put it on speakerphone, and in fairly clear English I could hear him asking what I presume was their landlord if they would be allowed to have a heater in their room, and how much they have to pay per week each for extra power.

It was as clear as mud from that conversation these 5 guys were all dossing down in one room in a shared house. That's 5 grown men, haggling with their slumlord (sorry I mean hard working mum & dad investor) over few dollars a week of extra electricity to power a $20 bar heater.

With no disrespect to the work ethic or desire for betterment of these particular individuals, how is importing this "scenario" any good for the country? 

When I saw the 50k PA leaving figure - I immediately recalled John Keys speech which included the line 'something like Eden Park emigrating to Aus every year'.

It was a few years ago now - almost seems like a lifetime - but sure as eggs, here we are again - another Labour govt has cooked it completely and scaring anyone with the means and energy to clear off to Australia.



I have a job interview with an Australian firm coming up shortly...

"Quite remarkable really."

Masterful understatement. 

"The downturn is starting to make 2008 look like a blip."

Yup! ... (If USA catches a cold ... 'Nuf said.)

"Surprise 25pts OCR reduction"

Possibly. But not a surprise. But 50pts or 75pts would be. 

Yes, its becoming very apparent they rose too late and are now lowering too slow.  All of us that have seen how incompetent they are however picked this about 3 years ago when they were talking about "transitory inflation".

My wife hit Wellington for a couple of days today. When she rang me to say hi she said the shops and hotel were very quiet. We certainly have a big problem economy wise. If you have a job and hate it don’t leave unless you have another one  as getting a new job might not be easy to achieve. 

Exactly. Interest on private debt is around $40bn per year, which is a quarter of total wages and salaries. But, sure, tax cuts.