Here's our summary of key economic events overnight that affect New Zealand with news markets are starting to worry about the 'bust' that will come after the initial sugar-hit Trump boom for the elite billionaires inside the Trump circle. Equities are falling on that concern, and benchmark interest rates are rising on it too. The new Administration is inheriting a well-functioning economy but navigating the upcoming inevitable distortions is going to be tricky.
In the US, it seems the Fed is in no hurry to cut interest rates. “The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said yesterday in Dallas. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.” And NY Fed boss Williams said essentially the same thing.
Retail sales in the US rose +4.6% (actual) in October from year-ago levels, following a +0.2% rise in September. Reported seasonally adjusted levels were less that these. Rising car sales (+6.6% actual) were ar large part of this gain.
But US industrial production actually decreased -0.3% in the same year to October. This is a volume-based survey. The Boeing strike got most of the blame for this, but was expected in the data.
In the New York region, the Empire State factory survey surprised analysts with strong new order flows, and rising optimism, far greater than expected. Factory activity rose sharply too.
In Canada they also released factory data but it was for September and the Boeing strike squished its data too. But Canadian car sales rose +2.6% in volume and +5.7% in value in the same period
The Canadian loan officer survey for Q4-2024 sees things in rough balance between expansion and contraction.
In an economy that faces slowly rising central bank interest rates, Japan reported Q3-2024 GDP growth of +0.9% and down from a +2.2% annualised rate in the previous quarter, which was itself revised down from the previous +2.9%.
On average, Chinese house prices for new homes fell -5.9% in the year to October. That's this official data's largest drop in nine years. But for the first time in a while there were a few cities where they actually rose. For used house sale transactions the October price change was -18.8% from a year ago. Construction of housing is still deeply negative, even if marginally less so in October.
China reported slightly lower industrial production growth for October, but it was still good at +5.3% even if it was less than the expected improvement from September. Electricity production only rose +2.1% in October from a year ago, undercutting the veracity of the industrial production data. They reported better than expected retail sales growth at +4.8% from a year ago, and suggesting some of their stimulus moves are working. But much of this is the previously noted rise in car sales (which involved incentives).
Aluminium prices surged on Friday after China said it would cancel export tax rebates on this and other commodities, raising the prospect that their heavy flow of subsidised export shipments abroad may quickly fade.
The UST 10yr yield is now at just on 4.45% and up +5 bps from yesterday, up +15 bps for the week. The key 2-10 yield curve is still positive by +13 bps. Their 1-5 curve inversion is now inverted by only -4 bps. And their 3 mth-10yr curve inversion is also little-changed, still by -15 bps. The Australian 10 year bond yield starts today at 4.66% and down -6 bps. The China 10 year bond rate is unchanged at 2.10%. The NZ Government 10 year bond rate is down -1 bp from yesterday at 4.78%. A week ago it was at 4.67% so an +11 bps rise since then
Wall Street has started its Friday with the S&P500 down -1.5% heading for a -2.5% weekly drop. Overnight European markets were all lower with London down -0.1% and Paris down -0.6% to bookend these markets. Yesterday Tokyo ended its Friday session up +0.3% to limit the weekly drop to -2.0%. Hong Kong was little-changed on the day but wended its week down -4.1%. Shanghai fell another -1.5% for a -3.0% weekly retreat. Singapore was however up +0.2%. The ASX200 ended its Friday session up +0.7% to end the week down a mere -0.1%. And the NZX50 fell a minor -0.1% for a -0.7% weekly fall.
The Fear & Greed Index ends the week having moved back to the 'neutral' zone which also reflects the rising uncertainty of the new US Administration.
The price of gold will start today at US$2566/oz and down another -US$8 from this time yesterday. But that is down -US$119 or -4.4% from a week ago.
Oil prices are -US$1 lower at US$67.50/bbl in the US while the international Brent price is now just under US$71.50/bbl. These levels are about -US$2 lower than week-ago levels.
The Kiwi dollar starts today at 58.7 USc and down -10 bps from yesterday. A week ago it was at 59.7 USc so a full -1c drop since then. Against the Aussie we are +10 bps firmer at 90.8 AUc. Against the euro we unchanged at 55.6 euro cents. That all means our TWI-5 starts today at just under 68.5, and little-changed from yesterday, but down -30 bps in a week.
The bitcoin price starts today at US$89,631 and up +0.9% from this time yesterday. A week ago it was at US$76,099, so a sharp +18% rise since then. Volatility over the past 24 hours has been moderate at +/- 2.3%.
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99 Comments
It’s funny to see people on the Nz Property Investors page gloating that we are still net positive for immigration. There is still demand for rental properties and new buyers coming into the market to buy that shitty 3 bedroom townhouse they claim. This new report shows only 1.38% of recent resident visas have been issued for skilled workers. 1.38%?!
https://www.newstalkzb.co.nz/on-air/mike-hosking-breakfast/audio/lucy-m…
They should call the other category “the NZ superannuation Ponzi scheme” because that’s the real reason they are here, to keep our average age down. All so we can keep the super age at 65. Winston is able to work at 79 but insists people cant work past 65.
keep our average age down
The median age in NZ is 37.5 years.
Migrants who flocked into NZ in recent years aren't superannuation age but aren't "young" either. The largest age cohorts were in the 30-39 year range. Some bring young children along, so yes there is a somewhat net downward effect on median age from the large influx.
The bigger migration play is to keep consumption up, wages down and taxes coming in. Without migration, the government will have had to come up with hard policy reforms to grow GDP, which is looking inevitable by the day now that the migration goose has stopped laying golden eggs.
The non replacement native birthrate (1.52) and resultant rapidly declining population/workforce is staring them in the face. 2:1 worker dependency ratio doesn't work. 4:1 barely works now. No politician wants to be the one left holding the no baby.
Rephrase that:
Politicians are attempting to prolong a past - a very temporary past, in hindsight - which the mass populace has already moved on from.
Everything is temporary, but in the context of human procreation, effective pharmaceutical contraceptives are fairly new.
Oil does the heavy lifting, not manpower. There are so many jobs that are only required because someone in another job ran out of useful things to do and decided to make things more complicated than they needed to be to keep themselves occupied.
While I agree that more people might prolong the 'status quo' level of retirement entitlement. What then though, more people again?
No one is talking about 'no babies', plenty of people could work but are locked out by our 'well-intentioned' rules and expectations about pay and hours. The downs syndrome workers for air NZ weren't the ones asking to be paid the same as everyone else. Indeed, the one asked said they were just happy to have a job.
The bigger migration play is to keep consumption up, wages down and taxes coming in. Without migration, the government will have had to come up with hard policy reforms to grow GDP
Debt is one of only few ways they'll be able to do that.
More likely, an aging out population spells economic decline.
which is looking inevitable by the day now that the migration goose has stopped laying golden eggs.
So NZ won't continue importing people for decades to come?
The back is against the wall. We'll only be "saved" from further immigration by a populist xenophobic leader.
Just saying importing people in droves has failed to deliver any positive effects on GDP in recent years despite being fired up at record levels.
And this is by no means a unique problem for NZ, much of the West (Canada, Aus, UK, Northern Europe, etc) have witnessed very high levels of migration-led population growth in the last decade or so with seemingly no tangible benefits to their broader economies.
Our issue though is we started further behind than most of those countries I mentioned on economic productivity and prosperity.
Just saying importing people in droves has failed to deliver any positive effects on GDP in recent years despite being fired up at record levels.
What we don't have though, is a clear scenario of having much less, or negative population growth over the same period.
If we cast our eyes to aging nations that haven't managed the same level of immigration, the results look mostly worse.
We have a higher GDP per capita than Japan! Surely it’s not just from selling a bit of milk.
South Korea is the only exception I can think of bucking the aging population economic decline, but some of that can be explained by starting their economic miracle after Japan.
They also have a GDP per capita way less than ours. Think what they produce compared to us! We make our money from an immigration ponzi, they are stupid enough to try building stuff.
We've had economic continuity and development for far longer.
They seem to produce a lot, but we still produce 40% more per worker hour. There's a complex tale behind that. If the difference was just down to immigration, then you've just made a case for immigration.
Austria, Denmark, Finland - slower population growth, wealthier.
Thank you for sharing this stat on there being virtually no skilled migrants! I'm surprised this hasn't been picked up by mainstream media or the politicians talking about improving this.
It used to be you had to be a skilled migrant to get into NZ so how have we got into this situation?
Come on NZ, lets back ourselves, act like winners and attract the skills we need
Virtually every developed nation is screaming out for skilled migrants. And highly skilled, successful types are the least motivated to migrate.
Lots of anglers for a very small pool.
It's like a macro level reflection of companies seeking talented staff. There is no shortage of applicants for most positions, however it would seem that genuinely well trained and competent people are as rare and difficult to attract as ever.
"It used to be you had to be a skilled migrant to get into NZ so how have we got into this situation? "
Did it?....my paternal grandfather was 16 when he arrived here...doubt he had many skills when he arrived.
We used to take in convicts even.
The specific nature of immigrants is kind of a weird argument, the average migrant is better educated and better behaved than the average indigenous Kiwi.
And if we only bought in super skilled migrants of the absolute highest standing, wouldn't us locals just end up being their house keepers?
We used to take in convicts even
I was under the understanding that we still do!
The specific nature of immigrants is kind of a weird argument, the average migrant is better educated and better behaved than the average indigenous Kiwi.
No, it's not weird at all. We have to 'deal' with those born here and yes, they can be 'harder work' due to the fact they already have the right to live here. However, it is completely optional to allow others non-citizens to come here and we may be selective. The question really should be do we want to grow our population or not. Skills etc may all be acquired without giving away permanent residence.
And if we only bought in super skilled migrants of the absolute highest standing, wouldn't us locals just end up being their house keepers?
Do you honestly believe that sentence? Maybe it's just a veiled attempt to justify our poor-quality immigration policies that worked for you and not society in general. I think it would make more sense to aim for a society in which housekeeping isn't looked down on as a lessor job by making the wages better relative to rents and house prices.
However, it is completely optional to allow others non-citizens to come here and we may be selective.
They're the New Zealanders we didn't breed, in order to sustain our way of life.
Maybe it's just a veiled attempt to justify our poor-quality immigration policies that worked for you and not society in general.
I'd rather we had natural population increase, but in it's absence I can't see any other realistic way to support our labour market and tax base.
I think it would make more sense to aim for a society in which housekeeping isn't looked down on as a lessor job by making the wages better relative to rents and house prices.
Who's looking down on house cleaners? It's just a fact that the nature of relatively lower skilled vocations with lower barriers to entry pays less.
It's just that if you were choosing, you'd rather locals filled the higher skilled, higher paying jobs, than migrants.
We don't really have a problem with people being paid next to nothing to elevate our quality of life, unless we're having to compete with them.
They're the New Zealanders we didn't breed, in order to sustain our way of life.
No, they're not New Zealanders, they're citizens of wherever they were born. Where is this doctrine that states we must replace or grow NZ's population or it that inherent in that we have decided to take on debt the current generation doesn't want to pay? Does it also include a paragraph defining 'our way of life' because immigration certainly has affected (changed) the way of life in the various places I've lived (as opposed to sustaining it). I see nothing sustainable about having an ever-smaller percentage of NZ to myself. We could also talk about, horrible measure that is it, declining GDP per capita.
I'd rather we had natural population increase, but in it's absence I can't see any other realistic way to support our labour market and tax base.
If there is one person available to work (I understand we have 100'000's) then that is the labour market, it needs no support via immigration. It doesn't need more people unless those doing the hiring want lower wages or more skills for the same price. If you're worried about the tax base, then consider climbing aboard the land value tax bus with me and you'll soon find a solution to collecting taxes via something other than taxes on income [and a whole heap of other benefits besides]!
Who's looking down on house cleaners? It's just a fact that the nature of relatively lower skilled vocations with lower barriers to entry pays less.
You were, I'll let readers decide from themselves. Fact accepted, but irrelevant to the question.
It's just that if you were choosing, you'd rather locals filled the higher skilled, higher paying jobs, than migrants.
Since you're now giving a choice instead of a lame justification for immigration, then I would choose locals to do both types of jobs. Then we have less people in total living in NZ as a result. I'd also have policies (such as a LVT) making sure whatever those lower wages were, housing was affordable. If there is a skill shortage/knowledge gap then we train/learn and that may involve temporary workers from overseas.
We don't really have a problem with people being paid next to nothing to elevate our quality of life, unless we're having to compete with them
It's not about the amount they're paid ('next to nothing' is relative, presumably to wages here). If it raises their quality of life where they live, then no, I don't have a problem with the amount they're paid, nor do I want slaves making my goods. Where I have a problem is when I have to compete with them for housing, health, space in general and jobs on an unfair playing field. Unfair means I don't get permanent residence (already have it), said to be worth 100'000's of dollars, for doing the same job for a few years. One example being the pathway to residence for bus drivers, no compensation to NZ citizens that drove the same buses doing the same. Just the wages, without the residence bonus after a few years.
Shall we talk about how employers don't want to compete with other employers for NZ born workers now, or was that the topic we were trying to avoid all along?
Where is this doctrine that states we must replace or grow NZ's population
There's no official doctrine. Just fiscal realities of having a pay-as-you-go tax and expenditure setup for the state, and an economy that likes to see a steady or increasing stream of customers and workers. Neither are overly compatible with an aging, shrinking population, and no one has successfully deployed a model incorporating that.
The alternative is higher taxes, lesser services than the already mediocre ones we have, and worse commercial performance.
If there is one person available to work (I understand we have 100'000's) then that is the labour market, it needs no support via immigration
There were over 10 workers to every dependent in the mid 1900s. Today there's just over 4. By 2040 that's looking to be around 2. While the costs of those dependents is increasing (our elderly are living longer than ever, requiring continual and increasingly expensive care) Even if we had zero unemployment, which I don't think has happened anywhere, ever, it's still not enough.
then consider climbing aboard the land value tax bus with me and you'll soon find a solution to collecting taxes via something other than taxes on income [and a whole heap of other benefits besides]!
Perhaps you have some examples where this has been a rousing success at offsetting aging populations you can share with me.
You were, I'll let readers decide from themselves.
I don't look down on any vocation. Well, maybe real estate agents, human resources, and marketing. I've done some low tier, low pay, dirty jobs myself, and tip my hat to anyone doing the same.
If it raises their quality of life where they live, then no, I don't have a problem with the amount they're paid, nor do I want slaves making my goods.
Primarily you're paying them a lot less because you don't want to pay significantly more for the person next door to make the same goods for you. And give them sick pay, holiday pay, maternity leave, and a whole host of rights and protections you'd want for yourself. Unfortunately slaves (or at least indentured servants) are also in the mix.
Unfair means I don't get permanent residence (already have it), said to be worth 100'000's of dollars
If you're born here, then you received citizenship, arguably worth more, for absolutely no effort on your behalf at all. How's it fair that by the nature of the womb you exited, you get a life of prosperity and abundance most other humans ever can't even get close to, or uplift their entire lives to try and obtain?
Shall we talk about how employers don't want to compete with other employers for NZ born workers now, or was that the topic we were trying to avoid all along?
Most economic agents in the economy (so a business, or worker, or even central bodies) generally wants their costs to be as low as possible, and the inverse for their income. Having a limited pool of labour, indigenous or otherwise, runs counter to that.
There's no official doctrine. Just fiscal realities of having a pay-as-you-go tax and expenditure setup for the state, and an economy that likes to see a steady or increasing stream of customers and workers. Neither are overly compatible with an aging, shrinking population, and no one has successfully deployed a model incorporating that.
The alternative is higher taxes, lesser services than the already mediocre ones we have, and worse commercial performance.
Fiscal realities can change and I've already given examples of how with the LVT. I don't think an economy is worth having if it doesn't work for society, sure your grow for growth's sake might make the GDP look better but there is no cause and effect with societal wellbeing. Sometimes more is worse than a less when it comes to life.
There were over 10 workers to every dependent in the mid 1900s. Today there's just over 4. By 2040 that's looking to be around 2. While the costs of those dependents is increasing (our elderly are living longer than ever, requiring continual and increasingly expensive care) Even if we had zero unemployment, which I don't think has happened anywhere, ever, it's still not enough.
You state many facts that I'm sure are true, but then you also throw in nonsense that the elderly require expensive care without question. We've done the same thing for our children, throwing them into day care because for the most part people are too busy out working to pay off mortgages (& rent) that have been jacked up by private banks being allowed to lend money into existence for land. It will never be enough for someone wanting to grow to infinity...so I'm advocating for goal change.
If you're born here, then you received citizenship, arguably worth more, for absolutely no effort on your behalf at all. How's it fair that by the nature of the womb you exited, you get a life of prosperity and abundance most other humans ever can't even get close to, or uplift their entire lives to try and obtain?
Good one, trying to guilt me into unrestricted immigration. Unfortunately, I don't feel guilty for being born and I think it's absurd to suggest someone should. Your measure of prosperity and abundance aren't necessarily applicable to me or others either. In short, life's not fair, but I'll do my bit to make it fair in my own back yard (NZ).
Most economic agents in the economy (so a business, or worker, or even central bodies) generally wants their costs to be as low as possible, and the inverse for their income. Having a limited pool of labour, indigenous or otherwise, runs counter to that.
First sentence is true. Then the bias shows, a limited pool of labour means higher income for workers (not counter at all). Yes, higher costs for items they buy, but labour is rarely the whole price of the item now is it. Maybe having to pay more for labour would encourage productivity and efficiency, thus allowing some people to spend time looking after the elderly instead of relying on rest homes to cover their time deficit.
I think we need to get real about what standard of living we can afford. Then face the fact immigration is nothing more than a can kicking exercise and not a solution.
How far are you going back here?
1908...assisted migrant.
" I'm UNsurprised this hasn't been picked up by mainstream media or the politicians talking about improving this."
Come on NZ, lets back ourselves, act like winners and attract the skills we need
Come on NZ, lets back ourselves, act like winners and do the work ourselves?
I think this statistic (1.38%) is suspect. Hosking says there were 892,000 visa applications, visa applications will include those applying for visitor and student visas. He stated 12,000 applications were from skilled migrants so for the 1.38% to be correct you would need to know how many work visa applications were approved not the overall number of all types of visa applications approved. The article is about the process for applying for a visa not about the number of skilled migrants approved. Happy to be corrected.
This is going to get very tricky for NZ if we have to cut much faster than the Fed.
Orr needed to start cutting at the start of this year; the economy wouldn’t be in such a bad state and we would have a much lower OCR already. He doesn’t seem to learn that he needs to react quicker, he’s always tackling the last problem he caused and not looking at the future. For someone who ran the super fund so well, he’s made a mess of the reserve bank.
Indeed, but most of the main banks are already offering a 5.69% 2 year fix, that's a great rate. And very very low historically for NZ.
Most businesses in NZ have been built on rates like this, house prices however are a different story and are very vulnerable, there are simply not enough buyers for all the multi million dollar listings, some will get lucky, most will need to drop there price to attract the few buyers.
Unless you already own one most houses are out of your financial reach, and the next step on the ladder is financially ruinous.
I think he cuts 50bps but the banks will not move there rates by that amount, then all bets are off .
The problem is we aren’t getting any stability from the RBNZ who are tasked with stability. One minute they tell us to borrow up large because 0.25% OCR is here to stay, nek minnit the OCR is 5.5%. And who knows where it is going from here; certainly not Adrian Orr. I agree we may not see much lower interest rates than 5.5%, that will be a disaster for the NZ economy and for the building industry. The OCR affects much more than just house prices.
The RBNZ is doing a very good job of providing the public with over-reactive short term misguidance based on about a third of the information it should be considering.
Its efforts to achieve stability in our time, have come at the expense of monetary policy wandering like a drunken sailor, so much to that it's now so stuffed it sporadically aligns with and then opposes fiscal policy.
While monetary policy should of course be independent these wild swings are anathema to stability in a small export oriented economy like us.
It's really just Covid and the aftermath. Economists will look back in horror at the sheer insanity of monetary and fiscal policy through this period.
listen to Leighton Smith's latest podcast, there could be secondary issues.
https://www.newstalkzb.co.nz/podcasts/the-leighton-smith-podcast/
"It's really just Covid and the aftermath." No "just" about it, there have been other global financial shocks in say the last half century eg 1987, 1998, 2008...we pay the RBNZ governor $800k pa to know what he's doing.
"Economists will look back in horror at the sheer insanity of monetary and fiscal policy through this period." Absolutely, as did many / most people on this website irrespective of their political alignment.
How analagous is 1987, 1998, and 2008 to 2020?
I actually think the problem is our models are based on those experiences, but the current conditions are close to nothing like them.
Well said.
This is where the chanters - JJ, KKNZ - get it wrong. Exponential growth is the reason; it seems there are many wired not to 'get it'.
We're into injury-time, but the commentators are still assuming there's another half...
I think 2008 and 2020/2024 are pretty close.
2008 should have been the realisation point that the books weren't square, we've had our heads under the sand since.
I think 2008 and 2020/2024 are pretty close
How so? Ones risky lending imploding, and the other is a global event that turned global production and distribution upside down.
I disagree entirely, 2007/8 was a good old fashioned credit bubble - all be it with new products. Rates were cut, but nothing like 2020 which not only had ZIRP, but for Australia and NZ also had QE for the first time. Add to that forward guidance as well. Then add in the fiscal stimulus which was unprecedented. At one point the Govt was paying 50% of the workforces wages.
In the GFC fiscal stimulus was more about bailing out systemically important institutions.
People don't seem to realize how expensive it is to have most of your workforce at home getting paid to produce nothing.
Somebody's got to pay.
And hey, looks like that's us!
You mean the same people that sat at home producing nothing..sounds like a merry go round?
I agree regarding the covid response, but I still think that we've been pushing on a string since 2008 i.e. the credit bubble is still in play today just as much as it was then and that was the reason for the 'crazy' response.
Possibly unfair on Painter to add in the /2024 with his specific 2020. To me while those things you guys mentioned are true enough, they're also just 'noise' made keeping the SS DEBTGROWTH afloat.
2024 with his specific 2020
If we didn't have a global event in 2020 you wouldn't have the economic climate of 2024.
European economies in the late 1940s were dictated by an event that kicked off in 1939.
That's my point though (I think we would), 2020 might have bought it to the fore sooner, but it was going to happen anyway since the debt was still there and growing. The RBNZ was already cutting in 2019...as the trend has been for decades now.
So you are saying that we have not worn increased economic burden due to COVID, and would be in this exact place regardless?
No supply induced inflation and central bank over compensation?
So you are saying that we have not worn increased economic burden due to COVID, and would be in this exact place regardless?
No, I just said the opposite, but that the elephant was in the room pre-covid (it didn't arrive with or because of covid).
No supply induced inflation and central bank over compensation?
Didn't say that at all. However, those 'covid' related things likely had a part to play in bringing forward the current economic state of affairs.
Most businesses can fund and survive at an OCR of 5%, the problem is that consumers have been using their houses as ATMs for Surtees, Jet skis, ranger rangers, etc etc, so the business is correctly funded but the punters have run out of spending runway.
IMHO this is massive, Cam Baggrie called this the spending multiplier on the way up, now its like a spending de-multiplier, and base life costs like insurance costs are going up.
My Brother in law is back from the Med, super yacht skipper, keeps showing me how cheap Europe is, food wine and housing, its been eye opening.
NZ is simply too expensive now.
Don’t get Jimbo started….he reckons we aren’t more unaffordable than elsewhere
I don’t recall saying that! I did say that our food prices are about 15% higher than elsewhere because we have GST on food and most other countries don’t. My small set of price checks found the duopoly were pretty competitive with AU and UK otherwise.
We will always be expensive as we are a small island in the middle of nowhere.
Our houses are expensive but many comparable countries are catching up or overtaking us.
Unless somewhere has subsidies, taxes, or tarrifs, the cost of groceries is largely consistent everywhere, after factoring in costs like wages, transport, local growing conditions, etc.
Or most consumables for mass consumption. Global market.
Wouldn’t touch jet skis or Rangers however the Surtees is definitely near the top of the list of basic requirements.
My Brother in law is back from the Med, super yacht skipper, keeps showing me how cheap Europe is, food wine and housing, its been eye opening.
I was in the Med this year.
Groceries: the same except for deli items, piss and ciggies (the latter two have much less tax on them)
Restaurants: the same, leaning to more expensive
Houses: more expensive - unless you want to live in a dying town
And wages were lower in most of those places. "Everything's gotten so expensive and the kids can't afford houses" was the most common complaint of most locals.
The model is global, so the effect will be the same wherever....with local variations, of course. The monetary expansion is supported by asset values....which would be fine if incomes were also expanding at the same rate....unfortunately the proportion of that monetary expansion that is going to workers continues to decline.....cost of living crisis, and ultimately unsustainable.
It will be a toss up which brings it all down in a screaming heap first....inequality or resource depletion.
The screaming heap might be a bit of mumbling fall. Aging populations are far less likely to have decent uprisings.
Inequality will rise part and parcel with higher resource costs due to depletion.
That the two are linked is not disputed, though they dont have to be....indeed the best outcome would be to recognise both and act to address with great speed, and Id suggest that inequality is easier to address in the short term.
Of course before either event we may descend into war, which has historical precedent.
We know highly unequal societies can have a very long life.
And resources won't turn off like a tap, they'll just be subject to creeping cost increases, as more cheaply extracted resources dry up.
So yeah I'd probably put more money on some sort of hostile disintegration first.
"We know highly unequal societies can have a very long life."
True enough especially when mobility/communication is difficult, but I would suggest that these 2 factors will work to shorten that lifespan....there is no historical precedent of instant communication and ease of travel we 'enjoy' today. Look to the migration crisis developing around the world and consider the likely 'solutions'.
There's also no historic precedent of so many aged populations. You need a decent proportion of your population to be young males for a decent uprising.
That and there's still a fairly long way for inequality to go from here.
On that we differ.
Life can be way worse, and there's some fairly robust studies linking social unrest and revolution to the age of a population.
If we look at Western social unrest in recent years, they've been for cultural and political reasons, George Floyd, Vaccine Mandates, supposed stabbing by a Muslim in the UK, Israel and Gaza.
There's very little unified activism about inequality. Either the good people have managed to have their attention focused on the wrong things, or inequality isn't enough of a concern to garnish significant support.
We will need to see starvation outstrip obesity as a leasing cause of death first.
"If we look at Western social unrest in recent years, they've been for cultural and political reasons, George Floyd, Vaccine Mandates, supposed stabbing by a Muslim in the UK, Israel and Gaza."
All symptoms....have a look at the increasing support for populists. And yes, people may get their attention focused elsewhere but that tactic dosnt prevent the end result.
Social unrest is one bad decision/ act away from revolution....as the Soviets (among others) discovered.
Again, have a think about how rare those instances are.
Again.... have a think about the difference between stability and instability.
https://worldpopulationreview.com/country-rankings/failed-states
NZ is considered the 4th least fragile state and is classed as 'very sustainable'....think about that in a globally connected context.
I'm unsure now what country or area we are talking about.
Have just added a comment....but if we are considered the 4th least fragile state then the world is in deep shit....and we need the rest of the world.
but if we are considered the 4th least fragile state then the world is in deep shit
We're pretty stable as far as a civilisation goes, despite all the complaining have a high level of civil obedience. So not sure how you'd draw that conclusion.
and we need the rest of the world
We aren't self sufficient for many things, although we can also argue whether or not the sort of globalisation we've partaken in over the past 30-40 years has been of a net positive for us.
Inequality will rise part and parcel with higher resource costs due to depletion.
Under current setting sure, but those settings are a stroke of a pen away - hello land value tax and more affordable shelter for the house keepers!
It depends where in Europe Pa1nter. Some countries are very cheap eg Greece, some are very expensive eg Switzerland. It always bothers me when people see Europe as one homogenous place, it's not, Europe is made of multiple, very different countries.
Orr put his foot hard down on the accelerator when Covid hit. He was not looking at the road ahead, made the economy run way too fast, and then decided to jam his foot down on the brake. Then he forgot to take his foot off the brake, and slowed the economy down too far. But now Donald Trump has siphoned his gas so he can’t accelerate again. He drives like my mum.
That’s just like my mother in law works her heat pump. Don’t quote me though.
Of note is that global bond yields are back on the rise (not falling) - it would appear they are signalling that this central bank rate cutting period is over and that further hikes could be on the cards, not cuts.
US 10 year is approaching a 100bps rise after the last Fed cut! The market isn’t buying into the Fed narrative of further rate cuts.
I never believed we’d get stagflation (not for a long period at least) because I was confident rates would come down after the economy cooled. But it’s not looking too good all of a sudden; we have a very cool economy yet it may be hard for the RBNZ to drop rates if the Fed don’t.
Why would anyone invest in the NZ economy / NZ dollar when we have low interest rates, austerity, and a recession, while the US has higher rates and a government spending up large?
Our ability to cut rates is going to be severely constrained by both the US and Australia. Our external position simply cannot support a large negative interest rate differential. If we try to do so, our long end rates will rise significantly.
This does make that big infrastructure build funding cost higher then probably initially thought.
It still needs to be done to stimulate us, but the RBNZ is going to be praying it can hold 2.99% inflation.
I think he needs to do 50 this month, but I am really unsure about any more next year now.
RBNZ can also, like the FED hold down the short end, but little funding will get done if the 2/5/10 year is way steeper.
Also the market was probably thinking that rates where going to fall, I suspect that the 10y in US has gone up so much so fast is unwind and people caught wrong side of the trade.
Then we'd best start creating more of what we need here then
For me the closure of the refinery was a very bad move re balance of payments, and energy security.
I am personally starting to do numbers on solar with a small battery to cope with essentials like freezers and pumps etc. I seriously believe we are going to have a power crunch some point in the next decade with blackouts necessary. We where only days away this year, and it rained.
Big F.O. back up gennie. Petrol/diesel cheap as chips these days.
Really depends if someone wants redundancy for essentials or the whole house.
But yeah if someone wanted some backup for an infrequent amount of short blackouts it's more cost effective for a dino juice burner.
If we do get blackouts it should only be during peak demand (morning and evening) for a few days a year. You should survive!
We are being actively South Africanised.
Lucky we have a government doing big counter-cyclical infrastructure investment
Oops…..
Aye - not back to the future, more like forwards to the past.
Willis has been pinning all her hopes for an economic recovery on RBNZ slashing OCR from day-1 on the job.
I am all for backoffice cuts to public services but choking out critical infrastructure spending in these dire economic times is beyond foolish.
Would you upgrade your car if you just lost half your work hours.
Exactly
Worst possible timing for a tax cut. Imagine an extra $3 billion in infrastructure a year; ferries one year, a couple of hospitals the next, light rail after that, etc. maybe even build some houses.
Not long to go now ...
Russia Faces a Wave of Bankruptcies as Borrowing Costs Skyrocket
Russia’s Central Bank Signals ‘Very Likely’ December Rate Hike
Their central bank rate is currently 21%.
Methinks when the spoils are being fought over - first dibs will go to China ... although western monies could flow through places like Turkey and a few other places.
Edit:
Is Russia’s Wartime Wage Boom Coming to an End?
Yup. A perfect storm brewing ... Poor Russians.
‘I have to survive’: Struggling businesses blame new road layout for drop in sales
We see a lot of such articles. All with similar headlines. And yes, we feel their pain.
But let's spare a thought for all those businesses that can't incorrectly(?) blame Local government for their woes. Or put another way, perhaps "it's the economy, dummy"?
Maybe it's got little to do with the new road layout and has everything to do with the fact RBNZ is contracting spending while the government has embarked on austerity? I mean, lots of other businesses have seen sales drop by a 3rd and nobody's touched their roads ....
And before you attack Stuff for this unbalanced reporting - take a look at all media. Same unbalance everywhere.
Hear this all the time. Because council controls some parking it's their fault shit business fail. Easy to blame others than take responsibility.
"shit" is probably not the best descriptor. "Marginal" is possibly closer.
If you are blaming council parking policies for your business failure you are shit at running a business. End of story.
If your business requires parking to survive get a business that has it's own parking, don't expect ratepayers to provide it for you. If you opened a restaurant but didn't buy seats, chairs, cookers, etc...could you also blame council?
Some businesses have a revenue model tied heavily to either foot traffic, or access. That can be heavily impacted by external changes, you could even be paying for a carpark that gets it's access cut off or restricted, again by an external party.
Businesses generally don't get enshrined rights of continuity for access, so it can definitely be an exposure you have little control over. Councils won't care much if their actions hamper one or two businesses, but they also risk losing revenue if their actions detract business activity.
Maybe it's got little to do with the new road layout and has everything to do with the fact RBNZ is contracting spending while the government has embarked on austerity? I mean, lots of other businesses have seen sales drop by a 3rd and nobody's touched their roads ....
That's really just like blaming roadworks but in another form. If your business can't survive a year or so of reduced income, it's not a very resilient (or profitable) business.
Although there's extra sadface points for businesses that'd already spent a couple years of adverse trade due to COVID.
Story here pitched as huge interest for Wellington Church for $1M.
https://www.stuff.co.nz/nz-news/360482052/churches-sale-attracting-ever…
The real story is that in May 2024 they were asking for $1.6M and that was already shaving $1M of price.
So price fall from $2.6M to asking price of $1M in record time.
What crash?
https://www.oneroof.co.nz/news/own-part-of-wellingtons-history-historic…
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