Here's our summary of key economic events overnight that affect New Zealand, with news it is all about the fast-rising benchmark interest rates and steeper curves today. And higher rates may be here to stay. We should remember that in the decade prior to the GFC, which ushered in 'lower for longer', the benchmark UST 10yr rate averaged 4.52%. We could well be a 'higher for longer' period now.
The US Fed kicked off the shift in rates with its 'hawkish hold' yesterday and strong signal that it will raise rates again before the end of the year. But overnight there were many other central banks with policy decisions. The Philippines and Indonesia kept their rates unchanged as expected. So did the Swedes. Switzerland was expected to raise its rate by +25 bps, but in the end it didn't, leaving it at 1.75%. But the Norwegians did, taking their rate up +25 bps to 4.25%. The Taiwanese left theirs at 1.875% unchanged, as did Hong Kong. And the English (5.25%) and South Africans (8.25%) both held. For the English it was a close-run thing, a 5-4 vote to not raise. And Turkey raised their rate by another eye-watering +500 bps to 30%. Now that's a 'real' move up.
The US Fed's hawkishness was bolstered by more strong signals from their labour market. Initial US jobless claims stayed very low at +176,000 last week and an eight month low with only 1.65 mln people on these benefits, also unusually low.
The Philly Fed factory survey turned negative in September for current conditions, but also turned more positive for future conditions. They are in a temporary flat patch, it seems, and the surveyed firms are increasing their investment in capital projects.
American existing-home sales fell -0.7% in August to an annual sales rate of 4.04 mln. Sales dropped -15.3% from one year ago. However, the median price climbed +3.9% from one year ago to US$407,100 (NZ$685,000) and the third consecutive month the median sales price surpassed US$400,000. Their inventory of unsold homes dipped to just 14 weeks supply at the current monthly sales pace.
In China, their 10 year benchmark government bond yield is remarkably stable. But this needs to be seen in the light of other official rate cuts, so the gap is widening. More starkly, one and two year yields are actually rising there. What we have is tightening capital supply undermining the central bank's efforts to boost the economy by stimulating demand. China's attempt to escape the international pressure of rising interest rates is now coming out in other distortions.
Also not so positive is EU consumer sentiment in September, although the slip was relatively minor. But it is a second month to dip after a longish series of improvements.
New Zealand featured in a Canadian ranking of "economic freedom", topped by Singapore who beat Hong Kong at the head of this listing, while Switzerland, New Zealand and the US rounded out the rest of the top five spots. Australia was #8.
There was another chunky -5.2% fall last week in global container freight rates, and again led by rates from China to Europe. However, rates for bulk cargoes took off higher last week, back to the top of the range over the past year. It was quite the shift up.
The UST 10yr yield starts today up a sharp +13 bps at 4.48%. It was last at this level in October 2007 (on the way down from 5.48%). Their key 2-10 yield curve is sharply less inverted at -67 bps. And their 1-5 curve is now at -85 bps and also much less inverted. Their 3 mth-10yr curve inversion is sharply lower too at -91 bps. The Australian 10 year bond yield is now at 4.35% and up +14 bps from yesterday. However, the China 10 year bond rate is down slightly to 2.69%. But the NZ Government 10 year bond rate is now at 5.22% and up another +8 bps.
Markets now have a full +25 bps priced in for an RBNZ rate rise in early 2024.
Wall Street is now down -1.0% on the S&P500 in its Thursday session. Overnight, European markets were all lower; London was down -0.7%, Frankfurt down -1.3% and Paris down -1.7%. Yesterday, Tokyo fell -1.4%. Hong Kong ended its Thursday session down -1.3% and Shanghai was down -0.8%. The ASX200 ended down -1.4% but the NZX50 distinguished itself being little-changed at the end of its trading.
The price of gold will start today at just on US$1920/oz and down a sharpish -US$23 from yesterday.
And oil prices are little-changed from yesterday at still just over US$89.50/bbl in the US. The international Brent price is still just over US$92.50/bbl.
The Kiwi dollar starts today still in its recent yo-yo range and down -10 bps from this time yesterday at 59.4 USc. Against the Aussie we are +½c higher at 92.4 AUc. Against the euro we are unchanged at 55.7 euro cents. That all means our TWI-5 is unchanged at 69.
The bitcoin price has retreated from this time yesterday, and is now at US$26,677, a fall of -2.0%. Volatility over the past 24 hours has been modest at just over +/-1.7%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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136 Comments
As we see a rise in strike action here and abroad, and an increasing volumes of discontent voices...
Remember an integral part of capitalism is a steady supply of willing labour, and some level of job scarcity.
So maybe the "higher" is unemployment, and "longer" is the duration of time people are going to be on the breadline, to the point they're falling over themselves to be good little workers again.
Be careful what you wish for kids
Working isn't supposed to be a chore, it's to help your fellow man.
It's definitely a chore, that's why they have to increasingly add benefits to it.
40hr week
Public holidays
Maternity leave
KiwiSaver
Etc etc. Helping your fellow man should just be a general approach to life. Although it's also reasonable business practice, unless you're a monopoly or something.
Well my philosophy has always been, look after the customer and your boss will look after you. But I’m just a working grunt and probably always will be.
surely the way companies work, is the CEO looks after the managers, who look after the workers, who look after the customers. That way the money flows smoothly in reverse. Managers and bosses get paid more because they look after more people below them in the ‘business tree’
Maybe the reason we have such ridiculous CEO profits is we’ve forgotten that model, or forgotten to be ‘social’ (we do live in a society after all) and everyone is just out for themselves now. CEO’s suck up as much money as they can and everyone below them looks up the tree instead of down. That isn’t sustainable as a business practise and as a society.
Those "benefits" have nothing to do with work being a chore.
We've always had public holidays throughout the history of civilisation. Celebrations of existence, Nature and holy days.
40 hour weeks. Research a little more and understand why this was implemented and then question why it no longer applies for everyone.
Maternity leave. It wasn't that long ago family's could afford to have one parent at home raising their children, when family's were valued. There's a wealth of knowledge proving that positive bonding and attachment for young children helps develop healthy secure humans.
KiwiSaver. It used to be that people were happy with the basic necessities and lived within their means. With the invention of "retirement" many pensions were implemented as part of employment. Many of these were eliminated in the 80's and 90's creating a gap. The rapid progress of consumerism and debt products, lack of education, and people no longer have a savings mindset. Turning homes into retirement funds certainly hasn't helped.
"benefits" have nothing to do with work being a chore.
We've always had public holidays throughout the history of civilisation. Celebrations of existence, Nature and holy days.
Work as we know it has only been a common thing for 200 years, barely. All of these carrots are introductions to make that work more bearable. Most of our public holidays are celebrating things we made up in recent times, very few have much depth.
Most of human existence (unless you were a slave) is an average of 20hrs a week effort. This is why we have an education system designed around getting people used to attendance and compliance.
I do wonder if there’s more to it than that. As boomers move on from the workforce the demand has stayed level but the actual working age population is shrinking which is maybe contributing to the unusual resilience that we are seeing.
We just taught the workforce that not going to work is consequence free. Absenteeism has been floated to be around 25%, and everyone surely has picked up on how lackadaisical many customer-staff interactions are.
Likely, it's a combination of forces including the retirement of boomers and lack of replacement workers for their roles.
End result of hard work no longer being correlated with higher incomes. The disassociation of effort and reward makes society as a whole more fragile. Why put in extra effort when that effort gives you little in return, the basic stuff like housing and food increases faster than your wages, and any chance to get ahead is becoming immeasurably harder whilst those who are already wealthy are creaming it.
That's definitely a problem: reserve banks and governments shovelling wealth toward assets and away from work, penalising productive work. Working hours have increased while rewards have decreased.
People who are productive (i.e. paid for output) are generally doing pretty good. This is often because rates are set at the volume and quality of work that a cannon fodder employee produces.
Less so if your job function is as a worker on highly involved or expensive capital.
I think the bigger issue than "people don't want to work anymore" is rent-seekers sucking the blood out of the productive workforce.
That's the actual class of people who don't want to do any work, owning a bit of land and renting it out for an extortionate rate is the road to stagnation as it raises the cost of everything without generating any actual value itself.
Most people are inherently lazy, it's why retirement gets dangled as a carrot.
I don't fully disagree with you but I think you have you're blaming the wrong people for being lazy. If you earn an income generally with very few exceptions you are working reasonably hard for it.
And I mean working. Not worked, working. Actively contributing. Modern economies cannot sustain themselves entirely upon "worked" which is what the whole speculation mess we are in seems to be built off. That people would like to put a bit of work in and then reap the rewards without having to contribute much in the way of effort themselves. This does not work on a wider societal level and the tax system shouldn't be rewarding it, yet the tax system heavily rewards this behaviour compared to actually working for a living.
What should be criticized and taxed more equitably is the truly "wealthy". those who don't actively work and contribute but instead depend on rent-seeking behavior to fund their lifestyles. The tax system barely touches these people in comparison to income earners and if we want our current setup (Health, superannuation, etc) to be sustainable this will have to change, otherwise, the system will continue to degrade even further.
Agree, I think the era of ‘have your money work for you’ will be over for a fair while.
I don't fully disagree with you but I think you have you're blaming the wrong people for being lazy. If you earn an income generally with very few exceptions you are working reasonably hard for it.
I'm not blaming anyone for anything. A lot of what we are seeing is a phenomenon that's been observed for centuries.
But from a central bankers perspective, they want job destruction as a means to tame inflation, partially for the reasons I have outlined.
Maybe we should change our tax balance so that hard work is not punished so severely while 'lazy' income is relatively untouched.
We have devalued labour and inflated the value of assets well beyond what would be sustainable, that's the real problem, big cohorts of people bringing in cash without actually contributing anything themselves. All this talk of workers needing to learn their place misses the point completely, if effort is no longer rewarded or incentivised, what exactly do we expect the outcome to be? "Show me the incentive and I'll show you the outcome".
We need to stop incentivising non-productive activity and start rewarding work.
Both correct. So we should be taxing the things that aren't productive and reducing tax on things that are. That's why residential land taxes are so good, yet another reason for LVTs. And only one party is offering this, vote appropriately.
LVTs are lucky to get to 5% of total tax take wherever they're implemented.
You'd have to ask yourself if that minor tax savings would deliver any more incentive to productivity than the incredibly low lending environment for businesses over the past 15 years or so.
But we love them golden goodies. So close, yet you get it, and need another soon after.
LVTs are lucky to get to 5% of total tax take wherever they're implemented.
If I propose an LVT of 10%, would that avoid falling fowl of your reason above and justify implementing it? Offset with a higher tax-free threshold of course.
It's usually kept lower to avoid abandonment.
Why not make it 99%, we can just all sit home, chill, and live off the proceeds?
It's almost too easy.
Abandonment! Free homes for FHB's provided they can pay the ongoing upkeep and LVT - current rent would go a long way towards that.
99% may actually be fine, land values would fall to allow for whatever the rate is set at. However, the absolute amount of LVT collected only needs to match the income tax currently collected that is to no longer be collected.
Yes, even 5% would be plenty to offset income/consumption tax rates to have a significant impact on behaviour. This is what governments do (or are supposed to), change behaviour through taxation.
Look at the sugar tax in the UK for a good example. A small tax, but significantly changes behaviour.
But cheap debt is an up front motivator, and tax is a retrospective one for a business - i.e. if you're starting a business, your primary concern is solvency, how you divvy up declared profits less important.
At best, tax influences behaviour, but you cannot guarantee outcomes.
At best, tax influences behaviour, but you cannot guarantee outcomes.
You pretty much can guarantee outcomes with an LVT. Like rates, if don't pay then the land will eventually be taken off you.
If your outcome is just revenue generation, sure. All the other problems it's being promoted to solve are still going to be there.
Yes, just one of the reasons Milton Friedman noted for why it's the least bad tax.
I think Government tax revenue in 2022 was $110 billion. NZ Land mass = 268,000 km2. If you levied every m2 of land in NZ you'd end up with roughly $0.50 per m2 to cover the $110b tax.
Sure, it's not that simple, some land is govt owned, some is not usable. But even if you were to factor of 10 that, $5 per m2 = $5k per 1/4 acre section. Min wage = $7k per year in PAYE. Then you'd need to scale it, otherwise a farmer with 158 hectares would have a bill of $7.9m.
Also it's a complete strawman from Pa1nter as nobody is currently proposing to replace all taxes with a LVT, just to shift some of the tax burden off of incomes.
I'd suggest we've actually devalued humans and life. Capitalism and by proxy society, values capital and 'money'. It values destruction, exploitation, scarcity, and fear. People and planet are merely expendable resources. The higher you are up the list apparently the more value one has, owner, investor, producer, consumer, taxpayer, worker...
If we truly valued people and Nature, if we valued each other's needs as equally important as our own, if we valued the health of our environment, we mightn't have the imbalances and extremes we see today. Reducing Life to purely monetary and economic numbers, economic outputs is severely limiting our ability to create a healthier, more harmonious society. Of course that would actually need to be a vision given more value than more debt and 'asset' creation.
E46, I very much doubt you have ever owned a rental, because you clearly don't understand the amount of work involved in looking after a rental, on top of having a normal job, which one must have in order to have a decent income, which a rental does not provide for many years.
Mine was managed as I was in a different country, and my involvement required a few e-mails a year saying 'yes go ahead' when some money needed spending.
And securing said money to go ahead with.
With some reasonable overpayment of the mortgage, the excess rent pretty well covered all maintenance and fees, insurance etc, when averaged over the years.
This ignores one of the largers distortions in the housing market though, as many investors rather than relying on income utilise the equity from their initial properties to purchase investment properties, existing house that were originally secured when housing prices were far more reasonable. This strategy enables them to acquire additional properties without relying on their own income.
The key issue arises from the fact that this utilization of equity remains untaxed, providing a substantial advantage to investors over income earners who must pay taxes on their hard-earned income, which they would potentially use to purchase property.
I think you misunderstand me a bit here Yvil.
I understand where you're coming from, and I can understand the challenges of managing rental properties, especially when you have a regular job to maintain your income.
But when I refer to rent-seeking that essentially means people trying to make money without really creating anything of value in return. It often happens in the world of rental properties when landlords increase rents without making meaningful improvements to the place. This can lead to problems for the broader economy for a few reasons.
- - Lack of Value Addition: Rent-seeking landlords or property owners may benefit from rising property values or rent increases without making significant improvements or contributions to the property or community.
- - Redistribution of Wealth: Rent-seeking can exacerbate income inequality, as it allows some individuals or entities to accumulate wealth by extracting income from renters without contributing substantially to the economy's productivity.
- - Market Distortion: It can lead to distorted markets, where prices may be driven up artificially, making it difficult for individuals and families to afford housing.
- - Resource Misallocation: Rent-seeking behavior can divert resources and talent away from more productive sectors of the economy into activities that primarily generate profits for a select few.
While owning rental properties and earning rental income is an important part of the housing market, it becomes concerning when rent-seeking practices prioritize profit extraction over providing quality housing or contributing to economic growth. The entire thing is cooked anyway as rental yields have been generally terrible lately and the main incentive to invest in housing has come from capital gains which isn't sustainable.
And this isn't the natural state of things as landlords aren't always extracting the economic rent from tenants in other countries. The issue in NZ is that our tax structure and zoning regulations tilt things way in the favour of landlords over tenants which is actively harming our productivity as capital is getting misallocated towards property investment where most of the value has come from land rather than the housing itself.
you clearly don't understand the amount of work involved in looking after a rental
Yes, it is truly staggering how much effort some people will put into displacing others from owning their own home by buying up more than they personally need to live in.
There's actually an inverse relationship between national wealth and home ownership (i.e. home ownership is higher in poorer countries and lower in wealthier ones).
On that basis someone needs to own rental properties, and the government can't afford to.
That, or the higher house prices go the less people can afford them.
You might have a correlation, but do you also have causation?
My guess is that in poorer countries, property is handed down and not traded.
So in your mind those cleaning toilets, manning the production lines, the essential service workers etc aren't being productive. Maybe they should all stop work and we'd see how valuable they really are.
Limiting our perspective of productivity to purely 'economic' outputs is very narrow minded. Productivity comes in many forms and most of it can't be measured in economic terms. Someone taking care of their physical, emotional, mental and spiritual health and wellbeing is being productive. If you want good little productive workers then creating an environment and conditions that empower and support health might go a long way to improving our economies.
Our current economic output model is obviously creating many adverse conditions that won't be solved by more productive output.
I’ve just returned from a holiday in Japan and holy smokes. It is night and day in terms of customer service and professionalism in the hospitality sector.
Obedient workforce and low wages will do that.
Low wages are fine if housing is affordable.
What do you mean by obedient? Do you think this is a good quality for staff to have?
The Japanese culture involves things like respect and face. Our culture prioritises the individual.
If you want to have staff, generally it's better they follow instruction, sure.
I do wonder if some of the really rank jobs will become very difficult to fill. Who is going to install insulation, gib stop, do night shifts, be an undertaker, etc when there are so many better jobs. I wonder how many young people are taking on those roles.
when there are so many better jobs
Possibly an important distinction for "better", is whether it's better pay or conditions.
If an office job pays you $100k a year, and an interior plasterer can make $30k a month, the relative ease comes at a price.
So we are likely heading towards a point of a rather large disparity of labour allocation. Good time to be blue collar anyway.
Agree JJ,with the paradigm shift in the way a lot of people work post covid,it is getting harder to get people to do the jobs that require you to be physically at work and require commuting.Most are looking for hybrid as a minimum or fully working from home,just losing the commute could be the equivalent of a $200 p/w pay rise ...possibly hundreds more as I have seen with people who can avoid child care costs.No wonder absenteeism is rising when a lot of the managers complaining about work ethics are working from home 3 days a week and connecting with staff via a zoom call.A bit the same with school kids,they see mum & dad at home all day,whether that be a benificiaries kids or mum & dad sitting with their laptop by the pool working from home...the divide between the blue collar /white collar professional classes is becoming a chasm.
That's another factor also in productivity; most people don't accomplish as much working from home.
most people don't accomplish as much working from home
Lol you're pulling out many facts today.
How do you factor productivity into the digital world, content creation, online course creation etc. Can economists actually fit this into their models? They're all working from home and they're doing it because they don't want to do those jobs mentioned above.
I think it's just basic human nature, genuinely self motivated people are pretty rare, and there's lots of distractions at home.
It's been a while since I've existed somewhere with Human Resources, but based on the people I know who do, and what I've read, the general consensus is that while a few people are more productive, working at home yields less performance.
Probably almost every person working at home though, is going to say they get heaps more done.
In my workplace, most have a choice. Hardly anyone is there on a Friday and my emails, mostly internal, are 10% of the other 4 working days. It's a rort, staff are taking the piss. When I wfh, I'm probably more productive when I'm in my 'office' but the couch is also quite close by, so are other distractions. Its also not productive if you have a quick question, and need an interactive response. In my opinion we are no better off with it.
The concensus seems to be that hybrid home/office outperforms either.
In office, for drudgery with minimal breaks.
In my personal experience, more is done when at home, more is shared when in the office. Hybrid flexibility is key.
Be careful what you wish for kids
Are they allowed to wish for owning their own home and having a couple of children in NZ during their lifetime? Or would that interfere with them being "good little workers" and suppling your business a "steady supply of willing labour"?
Oh well, there's always immigration where the largest cost is born by society (issuing of residence visas) to come to the rescue. I see the agents are taking on the banks with credit creation now too.
the agency was aware of many cases where Vietnamese nationals had paid large sums of money, mainly borrowed, to agents for visas to enter New Zealand
They can wish for whatever they'd like.
Accomplishing it might be another story. We have sold our culture an unsustainable birth right.
We have sold our culture an unsustainable birth right.
If you're talking about untaxed capital gains on land, then I agree.
If you're talking about having a family and owning a home, then that's easily remedied via changes to the tax system. It's the reason I'll be voting for TOP - yes it might be 'wasted', but it's the least I can do when a politician/party is prepared to be brave for the sake of the country over their personal election prospects.
Home ownership was an ideal pushed in post war years, partially to reward returning soldiers, and also due to benefits like heightened sense of community, etc.
It's shown to be problematic the world over, taxes or no.
Obviously there's benefits from having a home and being in community. Humankind wouldn't have survived otherwise.
The problematic ideal could well in fact be the ownership model we've been conditioned to.
So nobody owned homes prior to the wars? How does that account for all the land sold to settlers when NZ was colonised? Different story if we go back to feudalism when only a few owned everything.
Hmm it would well and truly appear that for all our economic progress nothing's really changed. The middle class and below still just fighting over the scraps, only this time around there's more bread and circus' to keep them in line.
IT GUY this sold for one third more than 2021 CV. 5500 per sq metre. land values are increasing in the burbs
Location location location , what do you expect
I reckon they deliberately keep the CVs low in those suburbs to keep their rates down so they don't complain so much. Was that really worth only $3 mil in 2021?
Any actual evidence for your potentially libellous "reckons"?
QV provide local authorities valuations.
Which can be challenged?
I've challenged a couple over the years - to increase them. QVs reassessment process was robust & required fair & extensive justification. Definitely not a rubber stamp for the homeowners reckons.
Why anyone would think that reducing the value of their house by 10s/100s of thousands to save a few hundreds at best a thousand or 2 so is beyond me. It would be very difficult to then try th o argue the value back up if you came to sell it.
CVs absolutely are too low on many new builds, as in the capital cost is 20-30% below the actual build cost. Most homeowners in new subdivisions don't challenge the values because they're planning to live in their new homes for a long time and are happy to have lower rates. The only values being challenged are for houses to be sold, or people wanting to refinance.
"CVs absolutely are too low on many new builds, as in the capital cost is 20-30% below the actual build cost"
A property's valuation is not directly related to it's building cost. It also includes land value.
And...location location location...
Which is why I specifically said that the capital cost is below the build cost.
The location, location, location part goes into the land value - which is generally correct for new builds. It's the capital values that are underestimated.
Capital value is the sum of Land value plus Improvement value.
ie the total value. No mention anywhere of capital cost in CVs.
If I had evidence I wouldn't have used the word reckon. My reckons are based on anecdotal observations of purchases in those areas, not just now but even back around the time those CVs came out, some of them have been well off.
Probable some make efforts to decrease their values and that just confirms that in their own right local body rates form a wealth tax. The amount is set as a charge for services delivered but is calculated mostly on improved value. That is, the higher the property value, expect it to pay more rates. Then central government takes 15% on top of that. If a wealth tax was to be introduced then that situation would need to be addressed beforehand otherwise a double dip would effectively be in place.
Some of them have been well off in the opposite direction. My Wgtn CV was done in 2021 at the market peak enabled by Orrsome's record low interest rates - $1.3M
Current QV market valuation less than $1M
Hmmm....sale of a intensifable development site in one of NZs premier locations does not a market make. Especially in a market where buyers pay cash. But keep em coming.
I mentioned it to IT GUY for his commentary on central suburb land values. Most here know he "won lotto" on the spread he sold for 5k per sqm
Has Gareth Kiernan been smoking the green shoots on inflation?
https://i.stuff.co.nz/business/money/300975495/economy-in-2024-next-six…
He sees higher interest rates and higher unemployment, yet rising house prices?
My reckons is the small house price bounce we are currently witnessing is based solely on hype fueled feelz. But feelz can turn very quickly.
David C, a correction - the Swedes hiked. My brother is whingeing about it this morning.
Those magificent men in their flying machines.....
The debate last night was another shitshow. The greens and TPM acting like children, Winston clearly not as sharp as he used to be. The only one who came across as a serious person was David Seymour.
Was a bit more of a 'scrap' than the main leaders debate, but overall another insult to the intelligence of the voting public.
Winston was definitely showing his age, reminded me of the grandpa from The Simpsons just rambling about whatever. I'll probably still vote for him, but his faculties are in serious decline (makes me wonder if that interview with Peter Williams where he seemed as sharp as ever had a few takes).
Greens and TPM co-leaders were like silly high school debaters. Shameful performance (unless you're into that kind of thing) and all it's done is reinforce my view I don't want them anywhere near the levers of power. Marama is such a liability for The Greens, she's like a walking, talking Reddit post.
Seymour, whatever you think of the policies, at least tried to put forward his arguments and came across maturely. He's a clear cut above the rest of them on the debating stage.
The Working Group debates have been so much better than these main media ones.
Just wait for National to walk back the back pocket back to the backwards days tax policy in order to form 61 seats. Alternatively we’ll see some unsavoury policy making its way into government.
“into that kind of thing.” Indeed. Suggests they should audition for two of the relative role(s) in MacBeth. But if you vote for WP/NZF then you vote for the potential of instability NZ can ill afford. Firstly a National/ACT/NZF coalition will neither settle nor last. Secondly much, much worse alongside Labour & any of the other two. Yes, yes WP & Hipkins have ruled one another out but both change direction like the wind and if it means power, they will.
Instability? Yep, that's why NZF will get my vote if the worst government in waiting looks like filling enough seats. What NZ can't afford is 3 years of NACT trashing the country at will.
I thought David Seymour was unsettled by the three woman. Rebecca kept talking over him, and his general politeness hindered him. There was unfortunately and unwillingness of the woman to actually debate. When David bought up Kate Sheppard and the great line 'inhuman' the two woman Green and TPM faces expressively ugly, despite the plaudits of eyebrows in the following assessment and then the two's comments were just plain divisive. That is what I for one do not want in our New Zealand.
For me this beginning set the tone and from then it just went downhill.
Rebecca kept talking over him
Yes, that was annoying. She could just ask a follow up question if what she had to say was so important.
They said it was a pub debate haha standing awkwardly and looking geekish with lecterns
Marama, "white cis men" is one of the worst bigots around, spouting inbuilt racism is a turnoff.
I didn’t see it but am firmly of the view that we are being held back by MMP and the minor parties. The fact that 12 to 15% of this nation would vote for the greens tells me our decline is baked in Move your assets offshore.
In what way specifically is MMP holding us back? Do you think we would be better off under FPTP? MMP isn't ideal that's true but it is a hell of a lot better than the systems they're running in the US and UK. The only one I think would be better would be STV which would be far more representative than what we currently have with a stupidly high threshold that prevents any new blood from getting into parliament.
I used to think that way but as I get older I realise MMP is deeply flawed. I'd rather have two very strong parties with an ability to deliver their election manifesto without having to compromise. Consensus politics just leaves us getting nowhere, also 3 years is too short a cycle.
or like the UK two weak and awful political parties.
Yes, much better to have 6 sh$t parties than 2 eh...
Having parties to the left and right of the Big Two at least keeps them honest - in the UK Labour and the Tories can take much of their vote for granted as there is no real alternative other than jumping to the other side.
The Royal Commission saw no need to increase the number of mps. That increase in numbers coupled with a lessening of calibre has decreased the effectiveness of MMP and add to that, NZ has neither the electorate size nor maturity to do it full justice anyway. The advent of the list has promoted the advent of the political careerist. Would suggest if the mp numbers had remained around 90 those opportunities would have been reduced and the calibre enhanced.
All that really does is shift the infighting from being between coalition partners to inner-party factions. We might have ended up with David Seymour in National and Marama Davidson in Labour or something like that. More extremist elements to the majors and the same level of infighting and consensus politics we see in other FPTP systems.
Can you really look at the UK, which has the system we used to have, and think that is working better for them than what we currently have which is imperfect but still better than the outcomes you get from having poor representation in parliament?
I do agree with you that 3 years is too short of a cycle. My main issue with our system is that the threshold is far too high and should be down around 3% and the terms are far too short to achieve anything. 4 years would be a lot better and save us a fortune on elections. Incorporating STV into the electorate votes and party vote would also make voting far more representative than what we have got.
Agreed it needs tuning. I'd prefer moving towards more democracy and away from representational democracy so maybe more frequent not less frequent elections? Much prefer NZ where my vote counts rather than the UK where for decades my vote had zero effect. Fewer list candidates suits me - say no more than five per party or no more than 25% of parliament being list.
MMP is the worst form of government except for all those other ones that have been tried from time to time.
the greens are really socialist's in drag - Mirama didnt once raise climate change or the environment as important policy just poverty and the great solution of a capital gains tax - because 310 people apparently have waay to much money and should share more
Exactly!
You mean wealth tax
Of course. If there was a genuine climate emergency we would be closing our airports and borders tomorrow, you have to be pretty dopey to fall for it, honestly.
Very true and certainly not building a new wide bodied international airport in Central Otago about which the Green Party, so called environmentalists, say absolutely nothing. The Labour Government & Christchurch City Council goth loudly and piously declare a climate emergency and then set about building that. Sheer hypocrisy. How much is every NZr to be stung in carbon taxes to compensate for that.
Why would the question whether there is a climate emergency have anything to do with NZ unilaterally closing its airports and borders?
Even if we take a global perspective, there's no guarantee that the world's most powerful countries will do anything about a climate emergency, assuming there is one -which our best science tells us there is.
People on Easter Island didn't have a hard time seeing the environmental catastrophe coming their way. That didn't stop some dude from chopping down the last tree.
Most Kiwis are socialists in some sort of drag. For the Nats, it's welfarism for the older and wealthier and property/business owners. Own two feet only for the younger and poorer.
Old folks who enjoyed free education and affordable housing thanks to their forebears' taxes and now enjoy a universal benefit thanks to younger folks taxes, and want a taxpayer bailouts anytime there's a flood, drought or other risk occuring - those folk tut-tutting at the young and ranting about communism or socialism are deeply ridiculous, making themselves look a joke.
At least the interviewer asked some hard questions about voters number one concern (Cost of living still number one issue for Kiwis, law and order now number two | Newshub) and its largest component - housing/rental affordability.
So the 10yUST is on the verge of touching 4.5% ... local interest rates rises are going to going to go up when the pundits have been saying the opposite.. all those rolling over will be in for a big shock...
We can all see storm coming, what will be hit the worst here,has to be house market investors left this market long ago you would be crazy to buy a rental these days I expect many who did invest over last 5 years are looking for the exits as refinancing boom hits them. I expect many will be selling flooding the market and with not many buyers the next leg down is coming.
It’s actually very significant. It looks to me like we are heading for a bond rout and the only way to deal with that is higher short term rates. More QE now would be the end of currency’s as we know them.
Isn't the higher yields a result of the bond rout?
Its not a rout yet, it will be a rout when you wake up and the US 10y is up 50bp overnight, stock markets are off 5% and our 1 year swap is at 6.50%.
Agree, I used the word 'rout' loosely... but bonds are selling off quite a bit, pushing up yields...
From the Kobeissi Letter:
It has been 60 hours since the US debt crossed $33T and it is already up another $50b. This is $833m PER HOUR!
Each households portion of the US debt comes out at $252,000.
And the US is paying more than $2,000,000,000 per day in Interest alone.
The US is in a debt spiral and there is literally no escaping it. They are running a budget deficit while their interest costs are increasing https://jameslavish.substack.com/p/-whats-a-debt-spiral-and-is-the-us
Rising bond prices will continue until a bond auction fails and then government forces the Fed to remove interest on REPO and cash reserves, while increasing the amounts banks have to hold.
Essential reading! https://cryptohayes.substack.com/p/kite-or-board (you can skip the first part if you know how things work)
Lower for longer being replaced by higher for longer. Do the math.
How long is transitory? How short is permanent?
Good Morning from #Germany, where deleveraging while sleeping via #inflation no longer works for the govt. The 10y Real Bund Yield (10y nominal yield - 10y inflation expectations) has risen to 0.33%, the highest level since 2014. Link
Mass Production of Money: road to widespread repo. Explore how the introduction of the repo market evolved through the Euro$ system, transforming quaint financial concepts into mass-scale money and reshaping global finance in this video here. https://youtu.be/VsqaHKh5O2w Link
Longer for higher!
I wonder what The Prophet is doing today....
Probably trying to figure out how to circumvent Interest's ban to create yet another account after 2022, XXII, Future, The Prophet etc...
Long live the buzz words.. Higher for Longer
Swaps rising sharply, yet most central banks holding their rates... interesting
And "threats" of more rises. If it's really necessary they'd do it now.
But they're not, because theyre pretty close to destruction.
Long term rates influenced by markets reacting to the likelyhood of central rates staying higher. The "risk" is that rates do not fall and returns are locked in and going backwards. So the higher long term rates are reacting to those risks.
You've been talking about the curve on here before, it just adjusted sharply like a whip crack on debt.
Matter of time.
Yvil did you let your subscription lapse.
Two interesting things:
- NZ swaps are vertical ∴ retail rates to rise
- US treasuries yield curve is flattening (and quickly). The 10Y is rising significantly (and the 1/2Y is not lowering). There was some debate as to whether the shorter term bond yields would lower to "correct" the curve or if the longer term bond yields would rise. Looks like it's going to be the longer term bond yields rising. Once the curve is no longer inverted, what do we think will happen.....? history says: bad things!
Using the US treasuries 2/10 spread as a guide, this normally goes negative prior to a recession. The recession hits when the spread goes positive again which is usually due to long term rates rising faster than the short term (rather than short term rates decreasing). So far the spread has shrunk from -1.09% to -0.65%. A little way to go yet but, with the biggest negative spread since 1981, we may be in for a shock.
A negative 10-2 yield spread has historically been viewed as a precursor to a recessionary period. A negative 10-2 spread has predicted every recession from 1955 to 2018, but has occurred 6-24 months before the recession occurring, and is thus seen as a far-leading indicator.
It feels like something is going to break. Finally it seems to be understood the Fed isn't going to pivot unless something does break or their inflation comes down to around 2% for a while.
I've looked into Kiwibonds, but the whole system seems a bit loose, emailing your details, all very manual, nothing online, no one answers the phone. Has anyone on here put their funds there recently? What's the experience like once you've deposited your funds?
I'm also looking at KBs for a large capital deposit early next year, same concerns although sole agent Computershare responded quickly to email.
Im thinking of depositing the minimum, initially, to see how it works, then if I'm happy, will increase the amount.
two observations as a business owner
its now expensive out there in retail land - and business seems to be slowing fast especially in the smaller towns and village
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