Spierings rumoured to be leaving Fonterra; Yellen indicates rate hike is on its way but won't be pinned to June; US Q1 GDP slows; More signs of slowing growth in China; UST 10yr yield 1.85%; oil and gold down; NZ$1 = 66.9 US¢, TWI-5 = 71.2

Apples with Apples. Renting in Germany is very different from New Zealand.

The gap between rich and poor is closer in Germany and in Japan too. Interesting as they were the key Axis powers. They also both make a lot of quality machinery.
One theory was that the Allies looted a lot of the industrial machines so the losers had to replace it. The replacement machinery naturally was more advanced and gave them an advantage. Funny how things work out.

That is a really interesting read. Such a different approach to housing. Would be great to see some body in leadership putting fwd some of these ideas in a modified form for our sitn. I think the idea that renting can be a very good option would be a revelation to most. The fact that many advanced economies are making this work well through government policy settings makes our our feeble attempts conspicuous.

Wishful thinking
In the sub-atomic world of Quantum Theory, the very act of watching, the observer impacts the observed

best she buses them straight out of auckland in the dead of the night then,

If it stops jobs being exported to China then probably yes. Michael Pettis explains why, it's a bit long but utterly brilliant:
http://blog.mpettis.com/2016/05/the-titillating-and-terrifying-collapse…

Basically, he is saying that investment flows (capital account) usually cause trade flows (current account), NOT the other way around as is commonly assumed. The surplus in one must cause an equal and opposite deficit in the other, but the cause can be in either.

But what about the extremely low savings rates in the US. Don’t they prove, as Yale University’s Stephen Roach has often pointed out, that the US is savings-deficient and relies on Chinese and European savings to fund US investment, or at least the US fiscal deficit, because the US consumes beyond its means?

"What the candidates won’t tell the American people is that the trade deficit and the pressures it places on hard-pressed middle-class workers stem from problems made at home. In fact, the real reason the US has such a massive multilateral trade deficit is that Americans don’t save." [says Roach]

This is one of the most fundamental errors that arise from a failure to understand the balance of payments mechanisms. As I explained four years ago in an article for Foreign Policy, “it may be correct to say that the role of the dollar allows Americans to consume beyond their means, but it is just as correct, and probably more so, to say that foreign accumulations of dollars force Americans to consume beyond their means.” As counter-intuitive as it may seem at first, the US does not need foreign capital because the US savings rate is low. The US savings rate is low because it must counterbalance foreign capital inflows, and this is true out of arithmetical necessity, as I showed in a May, 2014 blog entry.

It must happen because, to repeat what I have said earlier, if foreign exports of capital to the US increase, by definition so must the excess of US investment over US savings. Because there are no productive investments in the US that investors want to make but cannot because of the unavailability of capital, increased net capital exports to the US do not cause investment to rise. In that case they must cause savings to fall, and they do so either because of the wealth effect or because of the increase in the current account deficit driven by the increase in the capital account surplus (often as capital inflows drive up the value of the currency).

Thus in New Zealand, we have a current account deficit because we allow a capital account surplus. To put it plainly, the money flowing into NZ to buy Auckland houses causes the NZD to rise so exports decline by the same amount. It must balance, that's why it's called a balance of payments.

Not really. It is purely a cosmetic move to try and convince the world is hunky dory. If things were going well we should see interest rates at 4 or 5%. Imagine the mess we would have if that happened!

This "seems" to be entirely due to the current NZherald crusade

The news-media have become so timid since when .. but .. you can believe it must be serious .. and right in your face if the Herald is prepared to lift its skirt and sally forth on the matter

A trawl through the archives of NBR would reveal an un-natural silence

We can sleep easy knowing the IRD will have taken a cutting of the article to pursue its tax cut

Positivelywallstreet- Well worth the read; thanks for that!

Got to love Dr Yangs counter...

"Dr JIAN YANG (National): As a Chinese person, I have to say I was simply astonished by the author of the bill. Obviously, he still believes his Chinese-sounding names approach is more scientific than the data collected by Land Information New Zealand. From that initial data, published by Land Information New Zealand, only 3 percent of New Zealand’s property transactions were made by people from overseas—by non-resident buyers. But Mr Twyford believes that this is not scientific enough—that his Chinese-sounding names approach is more scientific and that, according to that approach, about 40 percent of Auckland properties were bought by people from China. That is astonishing. So we have this data. Although it is initial data, still we believe it is more scientific and more reliable than what he believes.

So this is Labour’s problem: either it is unable to see the real causes of various issues or it is basically too lazy to find the real causes of various issues. In the housing area, it believes that the Chinese-sounding name approach would be the solution and, largely, this is because of its intention to play some political game. Of course it failed. This bill is just a continuation of this Chinese-sounding name approach. There is no need for it, based on what we have received from Land Information New Zealand. It is the wrong approach, basically.

We believe that the real issue here is housing supply, so increasing supply and reducing the cost of construction is the way to go forward. How do we do that? Actually, this housing issue has been an issue for many years. Under Labour it was an issue, but because the issue was too great and too hard to resolve, Labour basically left it alone.

The National Government has been trying to address the issue head-on. We have initiated a wide range of programmes trying to increase the supply and to reduce the cost. One programme is to try to free up more land faster. For that reason we have established 202 special housing areas. In these areas, central government and local government work together to fast track housing development. Talking to developers in these areas you will find that they are full of praise for this kind of programme, although more work needs to be done.

Also, interestingly, that member recently proposed that we should abolish the super-city boundary. That is an interesting change of mind, and we believe that this is more rational than the Chinese-sounding name approach. We believe that this is the right direction, so we would like to work with Labour in trying to move forward the reforms of the Resource Management Act (RMA). So this second-phase RMA reform will be, hopefully, moving forward. In this second phase we would like to prioritise housing affordability, so we look forward to Labour’s support for the second phase of the RMA reforms. Also, much of the building costs have to do with paperwork and efficient council work, so it is important for us to make sure that RMA reforms will increase efficiency of council work.

Finally, I would say that the National Government has been working very hard to make sure that our New Zealand families are able to afford houses, because homeownership is important to our families, to our communities, and also to each New Zealander. So we have been working very hard, and I have to say that this Government has been achieving a lot in providing housing supply and also in reducing the cost. Thank you."