ANZ chief economist Sharon Zollner predicts an OCR of just 0.25% by May next year, arguing it's 'pretty much one-way traffic out there'

ANZ chief economist Sharon Zollner predicts an OCR of just 0.25% by May next year, arguing it's 'pretty much one-way traffic out there'

ANZ chief economist Sharon Zollner says the bank's economists are now predicting the Official Cash Rate (OCR) to be at just 0.25% by next May because, with the growth and inflation outlook continuing to deteriorate, "it’s not an exaggeration to say that it is pretty much one-way traffic out there."

Zollner says she expects the Reserve Bank to cut the OCR, which was reduced by 50 basis points to just 1% on August 7, by another 25 basis points in each of November, February and May. Until today (Friday), ANZ's economists have been picking just one more OCR cut in this cycle, with a 25 basis points cut in November to 0.75%.

"We would not rule out another cut as soon as September, but it is not our central view. The forecast 25 basis points May cut is a placeholder for the impact of the RBNZ’s bank capital proposals, the details of which are as yet unknown. Global and domestic economic signals continue to deteriorate," Zollner says.

She says there are seven reasons why ANZ's economists think the RBNZ will conclude "it’s pedal to the metal time," with New Zealand "experiencing a growth stall."

The seven reasons Zollner cites are:

1. Near-term domestic growth indicators are deteriorating.
2. Inflation expectations are slipping.
3) ANZ's Australian economists now expect the Reserve Bank of Australia to cut the cash rate in October, February and May, taking it to 0.25%.
4. The global environment continues to deteriorate.
5. The labour market outlook is deteriorating.
6. The RBNZ proposes to lift bank capital requirements significantly.
7. The outlook for the dairy sector is troubling.

'Right at the limit of where we estimate conventional monetary policy effectiveness ends'

Should the OCR be cut as low as 0.25%, Zollner suggests this is right at the limit of where conventional monetary policy is effective. The Reserve Bank last year detailed five options available to it should future economic conditions require the OCR be cut to zero. Meanwhile Zollner says things are largely just heading one way.

"It’s not an exaggeration to say that it is pretty much one-way traffic out there. The only easily identifiable upward risk at present is that the housing market could take off again in response to the record-low mortgage, and term deposit, rates. However, the RBNZ is responsible for financial stability as well, and what the low OCR giveth, the LVR [loan-to-value ratio] restrictions taketh away. And any housing flurry might also get rudely interrupted if the labour market tightness dissipates as rapidly as the indicators are suggesting it might," says Zollner.

"New Zealand is experiencing a growth stall. It is important to note that as things stand here and now, there is no fundamental reason for the economy to go into recession, and the Reserve Bank is doing everything it can to make sure it doesn’t." 

"But given the deteriorating global environment, and the context of the current downward trajectory in the domestic data, the prospect of the economy accelerating to above-trend growth – which is what the RBNZ needs to be able to credibly forecast in order to forecast delivering on its inflation target over the medium term – looks a long way off. Too far off," Zollner adds.

"The RBNZ will conclude it can’t afford to wait and see. Each successive cut from here is likely to be less stimulatory than the last, but they’ll throw what they’ve got at it. Our new forecast endpoint for the OCR is right at the limit of where we estimate conventional monetary policy effectiveness ends. Down the track, there’s scope to get creative with unconventional policy, though we stress that the pros and cons would have to be very carefully weighed, with the global track record hardly a ringing endorsement. But conventional OCR cuts are a logical start."

The full ANZ report is here.  

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I looks like ANZ will need a bail out if the OCR goes to 0.25%.

Why ?

He thinks the lower rates go the bigger the train crash i guess.

Beyond that. Internally ANZ are aware that they can't compete and are falling behind. Of course I would be more interested to see the volume of questionable or borderline defaulting mortgages on their books.

The big OCR cut looks like it's there to counter the increase in default rates, and ANZ wanting lower rates will stop their mortgage book from looking terrible. The whinging about increased capital requirements is because it will restrict their lending activities and seriously cut into their profits. All property investors should be aware of the benefits of leverage, and RBNZ wants the big banks to delever their positions.

"ANZ are aware that they can't compete and are falling behind" That's not true, ANZ is posting record profit year after year
"the increase in default rates" mortgage default rates are extremely low

I suppose these is your personal opinion, they are not real facts

Sorry Yvil, but dictator is abit more forward thinking than you.

ANZ's problem is it has lost trust with its customers, with people now seeing Jonkey for what he is. They are losing market share as we speak, as deposit holders go elsewhere in search of a bank that is more capitalised.

By accident, through ANZ purchasing National Bank some years ago, my kids had bank accounts with them. No longer, as they dont have enough skin in the game. Their return on capital of 18% is another reason, which has been aid and abated by past politicians. I now bank with a locally owned bank, where at least the profits continue to circulate locally; instead of the local money supply having to be replenished with more overseas borrowings.

Maybe you were schooled by Roger Douglas? No one talks about him being a failed pig farmer!

Thanks for confirming your post is not factual but just speculation

I'd say it is definitely a fact Good Samaritans kids have changed banks, wouldn't you ?

Yes, ANZ will definitely need a bailout, especially as their $2 Billion profit per year is in jeopardy.

But lucky they have the right man in the Board Chair position, an ex NZ Prime Minister, sure to know who to contact to organise this protection.

We can't have a Foreign Owned Bank in NZ earning less than the entire NZ trade surplus can we ?

That would be ridiculous.

Just another overpaid economist, working for vested interests.

If there was any truth to ANZ's comments, they'd be offering 2.0% mortgage rates now.

We can all ignore reasons 1-5 and 7 cited by Zollner; the release is yet another attempt to dissuade RBNZ out of its intention to raise bank capital limits.

They're coming. I recommend fix for 1 year at most as interest rates like OCR are only headed down.

I recently fixed 50/50 1 year & 2 year, and will fix 2 year on each renewal. While interest rates are trending downwards, I like the idea of having a slight buffer in the unlikely event things go the other way.

Sound money management right there.

Question: what rate can I get from the big banks today. say for $1 mill fixed 1 or 2 yrs? Interested how much below their listed rates they prepared to drop.

Borrowing I take it.
All depends on your LVR, service ability.
The safe way is to cash up as fast as possible.
Private peer to peer could see a big increase soon.

If you have equity of minimum 20% and decent cashflow, 3.49% is the best. All major banks will match the 3.55% by Kiwibank's, getting to 3.49% requires a bit more savvy work from the borrower

GS, you say; "If there was any truth to ANZ's comments, they'd be offering 2.0% mortgage rates now."

I don't think you understand how bank lending rates are being set

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The title should really be "ANZ tells RBNZ please OCR at 0.25% so we can maximise profit margins!".

Have the interest rate margins they are making ever been higher ?

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Or "Please save us from our silly lending decisions so our debt slaves can afford the money we lent them and not have a mortgagee sale...."

Tongue firmly in cheek.

or have the margins on term deposits ever been lower (i.e. more negative?)

Strange they put dairy at 7.
I would have thought that was their number 1.

As far as the bank goes, I’m sure the danger of a continued Auckland (and then the rest of NZ) housing market slide is really number 1, but it’s not even on the list! Funny that.

... meebee the ANZ are so in awe of Megan Woods reset of Kiwi Build that they feel the housing market is in a safe pair of hands ....

Ah haaaa deee harrrrrrrr

I thought that wasn't a bad assessment for a bank economist.

"And any housing flurry might also get rudely interrupted if the labour market tightness dissipates as rapidly as the indicators are suggesting it might"
I'm asking our local spruikers: Is she a DGM? I wonder why suddenly more and more people are becoming pessimistic about the housing market.

Large numberd of people with no work or taking a hit in income ='s
Can not pay your mortgage, car payments, etc a lot more houses / cars go on the market. Not many people out there who can borrow to buy and those who can are risk adverse in troubled times.
House prices fall. If your LVR is looking shakey and hard times are hitting you get an email from the bank stating they want to limit their exposure, hand over some bucks or sell. From there it really gets out of hand and ugly really fast.
Some will call BS, it's not going to happen. Others have been getting their affairs in order for a couple of years or so.
Who's right is the Billion dollar question. I'm sticking with the old saying 'money is hard to make but easy to loose'.

I've read a few comments on here over the past couple of years along the lines of "if you keep paying your mortgage you'll be fine because the bank doesn't want to lose a customer even in a negative equity scenario".

If we end up in a scenario where house prices drop across the board, and the banks risk falling outside of their capital adequacy ratios where's the first place they're going to seek recapitalization? The most exposed borrowers of course, i doubt they're going to go "oh well keep paying your mortgage you'll be fine the shareholders will front up with the extra capital until house prices recover".

Thay's my take as well. Naturally they will want to have a controled fall BUT... Wholesale forclosures happened in the States not long ago.
12 years ago I got my first house. Two years later the bank valuation was $30k above what we owes. I was crapping myself.. Sold it for a hundred K more than we get it for, with less than half the amount of land three years ago.

Why would falling house prices affect bank capital adequacy on their existing book? Under RBNZ rules, I believe capital adequacy is based on valuation at credit event (like new loan, top up etc). Unless I am mistaken?

Of course falling prices could cause slowdown in lending, and job losses via a recession would lead to delinquencies.. but that wasnt what you were saying.

Actually you're right my bad! Capital adequacy doesn't fall into this scenario. However, the rest of my comment stands on a bank's stance to falling asset values.

NzDan @ 4:08 pm - Well the shareholders fronted up with $4mill in extra capital for Hisco's house...

CJ, that's a perfect example of the dishonesty of your comments. The paragraph you quote actually says:
"The only easily identifiable upward risk at present is that the housing market could take off again in response to the record-low mortgage, and term deposit, rate"
But you omit that part and you quote only the part that fits your bias

Dishonesty? How can asking a question be dishonest?
Also, I literally copy-pasted the whole sentence. Should I have copied the whole article?
You just wanted to argue with me. If you wanted to react to my comment, why didn't you answer the questions?

ANZ chief economist Sharon Zollner says the bank's economists are now predicting the Official Cash Rate (OCR) to be at just 0.25% by next May because, with the growth and inflation outlook continuing to deteriorate, "it’s not an exaggeration to say that it is pretty much one-way traffic out there."

Except it's the wrong way

That should put the price of petrol up, and then some. Expect outrage from normal people, and "No one saw it coming", from Those What Know Best in our Gubernatorial classes.

Will a new political party emerge to, you know, represent really quite normal people? Will it be yellow vests or black t-shirts? I know, whatabout black vests and black jeans?

Yeah, you know, a party that has it's heart on the interests of the middle 40%, rather than the bottom 30% (Labour) or top 30% (Nats)

60% tax for both the bottom 30% (including beneficiaries) and top 30%, tax free for the middle 40%. This might encourage those at the bottom to strive for more, and those at the top to take less.

Whose going to drive the buses...robots?

Black vests and Black jeans? aka Ranui formal dress for summer months?

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I'm a committed centrist and find myself wildly out of fashion of late. If you are not waffling some kind of extreme view these days, you just aren't cool.

I used to call myself centrist but now I don't know what I am. I think I'm a political chameleon, but probably still have a left wing slant.
But I've lost faith in our left wing government.

But I've lost faith in our left wing government political parties.

I have no problem admitting to be a centrist and saying that the left/right spectrum is silly and outdated.

Most countries have thrived most when government policy is in Goldilocks mode and free from ideology.

I guess it's the human tendency to want to pigeon hole.
A year or two back I would have considered myself a 'centrist', but I now believe too strongly in market failure and the need for government intervention to correct it to be labelled centrist anymore.

I wouldn't call it market failure - I would call it failure of the human race

Yeah

How does a centrist position deal with the housing crisis? I struggle to see how it can, meaningfully. Effectively both Labour and Nationsl have been centrist on housing, and it has failed.

Most countries have thrived most when government policy is in Goldilocks mode and free from ideology.

Which way does cause and effect flow in this scenario? Does the thriving economy cause the govt to leave the key levers alone and go make pretty but inconsequential policy, or vice versa?

Outrage (ironically from the people that have brought us to this mad junction) is the new normal, if you can call it that. The majority are now all socialists of varying shades, so any new political party that comes along that represents the right wing conservative class will get nowhere. The only way this will play out is a crash and burn of govt and society in general. One can only hope that something better emerges from the ashes, rather than another dark age of our civilisation going backwards (although it’s easy to argue that we are already on this path).

Edit of duplication

edit

Are you including the 44% who say they will vote National?
All these terrible socialists have not done a v good job securing greater % of national product for the working classes have they? Since 1976.
It is precisely because the State prefers to work on behalf of capital and finance, that we are in this mess.
State used to give semblance of working for "society" or a balance of interests.
But for last 40 years we have been sold pup of "what is good for the rich is good for economy and that economy means same as society"
It does not. Society is all our interactions. An economy covers productive activity (which of course is NOT what GDP measures!)
Governments have to return to representing the balance of all societal interests and stop sucking up to finance.
If ALL governments did s, then the standard excuse that capital will run off somewhere else where government DOES suck up, would not be possible.
Before the clever dicks removed all exchange controls in the 80s, this lottery of daily exchange exceeding world GDP daily was not possible.

Governments have to return to representing the balance of all societal interests and stop sucking up to finance.

Easier said than done. Credit-fuelled bubbles have been the backbone of the Anglosphere economies for quite some time.

Soon, we will have to pay your favourite bank money to have the privilege of keeping our hard earned money!

Hence the gold price climbing fast this year.

cheaper credit, more debt; more debt, lower rates; this is a downward spiral game not gonna end well.

it's time for UBI.

I dont think we need any more incentive to avoid working

How does a UBI disincentivise working?

How does it not? Its money for doing nothing at all?

The disincentive for working comes from deductions to marginal earnings.
A UBI is just unconditional money - It doesn't effect your marginal earnings potential, so why would people receiving it work less?

Well then what is going to fund the UBI? Tax dollars? If people are working less, that remaining income has to be taxed more to support the UBI does it not?

Why do people need to be taxed more?
The motivation would be that it could be funded by the productivity increases it stimulates.

To compensate for the extra funds dished and for the reduction in overall production?

You're still assuming that people would work less.

Pretty rational assumption I thought - the same income for less hours worked?

“The criticism levelled at basic income that it would disincentivise work is not supported by [the Finnish] data,” says Painter.

Sounds like an area that is being experimented with and measured.
https://www.newscientist.com/article/2193136-universal-income-study-find...

"For the last two years the Finnish government has been giving 2000 unemployed people a guaranteed, no-strings-attached payment each month".
"employment status and general wellbeing of those who received the UBI with a control group of 5000 who carried on receiving benefits".

Maybe it wasn't supported because both the groups were unemployed anyway?

You don't know what controlled randomised experiments are, do you...

No I don't. Im no intellectual or scholar. It was stated that a UBI would have no effect on incentive to continue to work. So concluding that there was no discernable change in hours worked by the people would be, in my opinion, a totally bogus conclusion on the basis that these people are unemployed, therefore they cant possibly work any less hours if they don't have a job.

Okay. I'll explain it.
The policy researchers would have made sure that there was no statistical difference between the randomly assigned control, treatment and overall population.
This ensures biases such as selecting only unemployed persons would not be an issue.

Given that the UBI represents an, effective, increase in marginal wages, the incentive is to work more.

Ok I understand the bias part.
So if marginal wages increase, this would then cause inflation to increase and require the remaining working population to get a wage increase or additional job to compensate? or is the UBI adjusted accordingly to compensate?

So is the incentive to work more is because they have to, not because they necessarily choose to?

A UBI means everyone receives it...
Sure, there will be price (Inflation) pressure, but the effect will never be unitary - goods and services are not perfectly inelastic.

"Given that the UBI represents an, effective, increase in marginal wages, the incentive is to work more"

Surely you mean incentive to work less

Yvil.
Do you prefer to consume more, or less?
If you are saying that increases in wages disincentivise working, you are one of the few people who believes that people prefer not to maximise their consumption.

Getting money for not doing anything is a disincentive to work, quite simple really

Except apparently not rental income from doing nothing? See below.

Anyone who receives a pay rise, a tax cut, pension, working for families tax credit or a return on a rental property just up and quits their job?

Heh, I was just about to make the point that Yvil supposedly does very well out of his rentals, yet still " If I get free money, why should I gets up early, braves the traffic, pays for my petrol and works" as an Architect. I guess even though he could no doubt afford to lie on the couch of an average house, drive a perfectly acceptable car and eat chips and play playstation all day he wants more from life?

Maybe there's more to working than "nominal" dollars per hour? Anyone who would quit their job when an UBI is rolled out was probably not in it for the right reasons.

Pragmatist, you're completely wrong, I've had my Architectural business for 18 years but I'm not practising anymore, indeed I prefer to spend more time enjoying my life. Also I do not brave any traffic at all, I walk to my office at my house, sometimes I even get back to bed after breakfast and work on my laptop from bed. So stop making assumptions, I do indeed do what I preach above

So you do continue to work, even though you get passive income, but you think this proves Pragmatist wrong? What?

Yes Pragmatist says I work as an Architect and I brave the traffic, both of which are wrong, therefore he's wrong. It's simple english

I thought your point was that you wouldn't work if you got money without working? The bit about the traffic and being an architect is completely irrelevant.

You thought wrong

So your point is that the UBI will get people to set up home offices? Fascinating.

That is actually one of the anticipated benefits. People having more freedom (via a safety net that pays basic living costs) to start a business.

YD&B, you need to change the middle part of your name, you're one of the smartest (most common sense) commenters here. Of course UBI or any type of free money is a disincentive to work, it's laughable that some people don't understand that someone needs to pay for the free money given, namely the people who are working.,

Why free money is a disincentive to work 101
1) If I get free money, why should I get up early, brave the traffic, pay for my petrol and work?
2) - John gets up at 7am, spends 45 min in traffic to go to work, works all day, spends another 45 min in traffic and gets home at 6pm
- Pete sleeps in till 10am, then watches TV and plays video games for most of the day
- When John comes home from work he gives half his income to Pete via taxes and UBI

I mean economics was my favourite subject at school and i understand the theories and how they all work. But the one thing that economics will never be able to measure is the human element of real world economics. Each and every person has different motivations and opinions that drive their decisions. The most overlooked but perhaps the most important factor

Is that perhaps why Finland did a study?
A study which contradicts your opinion..

"I mean economics was my favourite subject at school and i understand the theories and how they all work."
Just not this one, right?

As my opinion states, they are just that theory - not proven until practiced successfully.
If your Finnish study had included a sample of all demographics of people that would be affected by a UBI (everyone), then I would have no choice but to agree with the outcome.

Fair in some respects, I guess.
But these people were already receiving an unemployment benefit, so what motivated them to work more?

But you need a sample from every demographic to represent the entire population do you not?
Unless everyone in Finland is unemployed, how is that a robust representation?

Sorry. I edited my comment - misread yours, initially.

Or alternatively, if he actually would drop his working hours by 20% when he gets a 20% payrise, (Stay at a constant income level while inflation eats away his purchasing power) he'll eventually need to change his moniker to OldDumbandDestitute.

How can you not get it??? It's so simple, if you Pragmatist have to give half your income when you come home from work to someone who does not work:
1) you are NOT incentivised to work more
2) the person not working and getting your money is NOT either incentivised to work more

"1) you are NOT incentivised to work more"

But if you work more the same you'll have more money to spend on Booze and Hookers, or attending tiddlywinks competitions or whatever it is that floats your boat. If you work less then you won't.

"2) the person not working and getting your money is NOT either incentivised to work more"

And when the UBI goes to someone who is already working and gaining substantial personal satisfaction from being employed and in useful work? I reckon they just have more money to spend.. so they go out to restaurants, or buy some new clothes, or upgrade their car. All that spend feeds into the economy, resulting in what is generally referred to as "Economic Growth" (ignore PDKs predictable interjections here)

UBI is a form of communism, you take from the productive people and give to everyone so we all have some and we are all happy. It's a beautiful ides (no sarcasm) but it does not work in real life, because it dis-incentivises work, maybe not all people but it dis-incetivises most people to work. If you do not understand that, you do not understand human nature

" If you do not understand that, you do not understand human nature"

At exactly what level of income does the disincentivising happen, because the world is full of people that make far more than they can ever actually spend, who still get up and go out to make more money. One look at the fortune 500 or any similar list and you will see that almost none of them retired before 60. One fine example would be the founder of Ikea. Ingvar Kamprad. Despite being worth hundreds of Millions of Euros, he didn't retire until he was 86, and his health wasn't great by then either. It seems to me there is a bit more to it than simply money.

Perhaps it is you who doesn't understand human nature.

"At exactly what level of income does the disincentivising happen" that question shows you just don't understand, it's not a matter of a $ figure it's about human behaviour. Of course many who love their work will work no matter what but most won't. If most people worked out of pleasure rather than the need to earn an income, communism would be by far the most successful way to live and Russia would be the greatest economy in the world but we all know that Communism ultimately failed

...What point is their ignoring people actually experimenting and measuring the concepts and blindly repeating a mantra?

Actually, my pay is inflation adjusted honey, so no change of losing purchasing power ;). Plus i live well within my means

So your pay goes up and you don't drop your working hours?? .. well, isn't that amazeballs.

Nominal wage goes up, real wage doesnt. Amazeballs right??

Why not just work 1 hour a week and put yourself in the lowest tax bracket? Nominal wages are real cool duuuude.

Assuming you do/have worked for wages.. did you drop your working hours when you got a pay rise? Why not?
I certainly didn't with any of my pay rises, it just resulted in more income, meaning either more money to spend or invest. Some definitely went to spending.

also:
"Hey boss, i'm only going to work 30 hours a week now that we get the UBI" "Like hell, we work a 40hour week here, we have orders to fill, take your pick between 40hrs or zero hours"

I'd drop my hours if the government paid me a UBI. I have three long-term contracts, and I decline some work from all of them regularly already. I'd just do enough hours to keep my professional registration intact which would take a two day work week.

When you get a 10% pay rise at work, do you immediately reduce your hours by 10%?

Depends what your contract stipulates?

Would you, if you could, is really what I'm asking.

Yes i'd work less. If i got a 10% payrise, id be penalised by going to next tax bracket. Also, time is something that cannot be taxed, so i'd rather that. I work to live, not live to work

I get the feeling you don't understand tax brackets.

The more you earn, the more you are taxed - law of diminishing returns? so by working 10% less after getting a 10% payrise, you are effectively improving marginal returns on the time spent working as your per hr rate or whatever is increased

That's not how the tax brackets work.

I might well be younger than you, so I'm going to skip the financial advice. I'll just leave it at go learn how income tax works.

before rise - 68% take home
after rise - 66% take home

Did the money you make go up or down? Given the obvious answer to that, what exactly was the "penalty"?

I have to ask, are you factoring in student loan there? Cos if not, the amount of tax you're paying suggests you are right to reduce your hours. That's a nice salary bro.

Excellent salary.
Infinite, even..

Shit actually no I am better off overall even though my pir would increase. Oh yea the old student loan sucks out a fair bit.
Point taken

As I keep repeating, people do less than 1% of all work done.

They lever off the other 99%, and presume to purchase it's production with their 'earnings'. Those are just a societally-agreed representations of their right to tap into the energy/resource flow - and it is faltering. So we will see the elite (which includes banks/bankers) maneuvering to put themselves in an advantageous position. Problem is everyone is playing a proxy board-game, elite included

"As I keep repeating, people do less than 1% of all work done."

Sorry, people as opposed to what? Robots? Horses? Maybe you should stop repeating statements that don't even seem to make grammatical sense.

Nymad. More tax because the Greens and Labour in.

I like your points, nymad. Sadly very few folks really understand marginal tax rates and the disincentive they are.

Super is cut from the top 20% who don't need it ...hey presto UBI covered.

Um won't they get a UBI?

Would depend on the implementation.. some would have the UBI replace super, and all the discussions I've read about UBI would set UBI at a level far under what super is. UBI wouldn't be a replacement for a 40hr working week.

Lower rates, inflation target, it's all abt debt- fixed debt... asset prices go up and down, debts are fixed -- this is a structural problem. UBI won't stop people from working because you won't get 100K payout UBI, but it can reduce debt, hence push up consumption, hence the inflation of CPI -- not inflation of asset.

Exactly.

'The outlook for the dairy sector is troubling'
Big understatement.

Perhaps what could have been said. 'The outlook for all types of farming under this government is very concerning'

The outlook for all types of farming under this government is very concerning as they try and sort out the mess brought on by the wilful ignorance of the previous government which encouraged farmers to venture and expand where they shouldn't accompanied by the nod and wink that a blind eye would be given to environmental damage which led to prices that are now looking a bit silly.

I don't think it mattered what government was managing this mess. A succession of past governments have pampered to vested interests; most of them fair weather sailors.

The rush into dairy not only allowed Westland, but also Silver Fern Farms assets to overseas predators. SFF were left with stranded assets, for sheep that no longer existed. Predominantly aid and abated by banksters working for overseas interest, who were the only winners out of this jack up. Does Jonkey ring a bell with you?

The sheep and beef farmers remaining aren't doing too bad with the declining exchange rate, which explains the high meat prices in the supermarket. May be time to organise some home kill.

Infrastructure projects in the pipeline would have been a smart idea. Too late now for anything major.
Mining espically gold would help. No chance with the Greens though.
Stepping up and addressing future issues and calming fears before now, would have helped.
A history of delivering stated objectives, would have a lot more people relaxed.
No Gov't could have stopped what was coming but a hell of a lot of things could have been done to ease the pain in the future.

All types of anything except services to help this disadvantaged... Low income from primary sectors, tourisium, building, industry ='s no money to help the disadvantaged.

Or the outlook for anyone in employment under this government is very concerning

If you work in retail, real estate or Christchurch i guess?

No one official wants to put it straight do they:

Interest rate cuts are because RBNZ is more active than other Central banks but primarily because people (other than FHB) are not borrowing enough. So, money supply growth is falling (the rate, not the total) and this, as Steve keen repeatedly illustrates, causes recessions (or as ANZ put it "growth stall.")

RBNZ and other banks cutting deposit rates might like to consider the potential for this to stymy efforts to persuade FHB into the water of debt, since parental income is a factor in stumping up deposits for their kids. If parental deposit income is falling and they feel less secure, THEY will be less eager to jump in and help or be prompting offspring to hold on a bit, til prices start falling more. I am hearing that on doorsteps.

Interest rates (or "monetary policy" ) are supposed to be about inflation and the broader economy.
They are being cut because the central bank cannot produce 2% inflation. Deflation is coming - which bankers are terrified of because it means debts do not get inflated down. Also, deflation means consumers less inclined to spend. This deflationary mindset is what is infecting house buyers over 35 years old, with more nous and longer memories.

well said. mikekirk29. you are on the money.

right now we have a lot of kiwibuild houses that aren't selling , and the developers frankly don't care. the State essentially picks up the tab. 190 odd houses in Wanaka, and I know personally of one developer in Auckland with upwards of 100 kiwibuild houses that he can't sell. Again laughing all the way to the bank.

We havd a market that could flop quite hard and Jacinda wants to pump more houses onto the market. House prices are going to correct themselves soon. Jacimda will claim this as a win and she'll be laughed oit of the room and she still won't get it.

Are we to presume that there is also a bank view on the NZD trading at 0.55/8 and 10 year governments at zero yield ? If so their loan book doesn't look so rosy.

unfortunately my prediction for JA and the COL has largely been proven accurate. WP decision to chose JA over BE who had presided over a strong, and growing economy for 9 years, whist steering NZ through the proverbial, has to go down in NZ political history as one of the worst decisions ever made. Australia is now taking off. NZ is in the doldrums. This has 2007/2008 written all over it, which was the last time that Labour put NZ into a recession. And prior to the GFC, which in itself was some feat.

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...over BE who had presided over a strong, and growing economy for 9 years

Huh.

Fiction.

versus going backwards at a great rate of knots. nice one RickStrauss. Genius.

Can you back that comment up with any facts Kane? I'm personally not going backwards are you?

I'm good. Not so sure about NZ as a whole. Most business associates I speak too state the economy is in bad shape. Open the newspaper and read the business headlines, and they are invariably negative. And when I read that our largest bank states things are looking dire, I take notice. Others on this forum may see things differently depending on what industry they are in however .

I think people tend to overstate how much influence politicians have over the economy, infact it merely serves as partisan ammunition (on both sides). Fanboy politics, blame the opposition if things don't pan out precisely how you'd like it. E.g. Fonterra is Labour's fault.

"Two wrongs make a right!"

Nice one, kane02. Genuis.

Total economic illiteracy

BE is the brother of CE.
Nuff said.

unfortunately my prediction for JA and the COL has largely been proven accurate. WP decision to chose JA over BE who had presided over a strong, and growing economy for 9 years, whist steering NZ through the proverbial, has to go down in NZ political history as one of the worst decisions ever made. Australia is now taking off. NZ is in the doldrums. This has 2007/2008 written all over it, which was the last time that Labour put NZ into a recession. And prior to the GFC, which in itself was some feat.

You're channeling the Hosk. This is why plonkers like Trump can mesmerise the masses.

Exactly, it borders on semi-delusional and it's depressing to hear people who are so partisan to a political party that they warp their perceptions so much. Has it not ever occurred to him that the 'strong economy' National led was nothing more then a giant credit bubble (property), immigration, and riding on Australia / China's coat-tails. Both our major parties are dire at the moment.

Whatever it was (Nats 2008 to 2017), this labour led government is diabolical, and I doubt very much things would be so dire if Bill English was in charge right now.

They might have kept kicking the can for longer but things will still end the same way.

ANZ has any credibility left ? Go away...