Air cargo growth fades; Canada building permits fall; China hits more US goods with tariffs; most emerging markets struggling; UST 10yr at 2.97%; oil drops, gold rises; NZ$1 = 67.6 USc; TWI-5 = 71.1

Interesting changes (and good IMO)
- leading towards higher qualification
- not reducing the number of students studying and being able to subsequently apply for residency
- favouring the rest of NZ over Auckland (or penalising Auckland), that's an interesting one...

It was another sign of our success and a good problem to have no doubt.

The opposition stands by its commitment towards "export" education. The Nat leadership and its claims on this topic are contradictory.
On the one hand, they claim that international students come to NZ for high-quality education and we allow them to stay back so as to use their skills for the benefit of NZ.
On the other, they believe if we restrict post-study working rights on the basis of the skill shortages and qualification levels, about 44,000 fewer foreigners will turn up to NZ for study.

Which one is it?
Funny how the Nat party lacks initiative on such crucial issues but their supporters bend over backwards to defend their indecisiveness.

Yes, the direction is good. I was surprised on the Auckland one as well - but I do think Auckland needs a break. It's full - as a commentator here (Chris_J was his username, I think) used to say. He was a really, really interesting contributor, an experienced and entreprenurial property investor/developer from Christchurch. One with common sense, practical experience and morals/ethics.

Baffled it took a year to get this policy change but they had so many lesser achievements to boast about in their first 100 days.
The increase in work rights after study from 2 to 3 years is likely to see an increase in immigrants eventually qualifying for permanent residency but they ought to be a higher standard.
A step towards tackling worker exploitation but not sufficient to eliminate it. A stain on NZ's reputation.

And now we've gone into bed with them for almost 25% of our exports. Superb work from Uncle John who was also there with a grin when Fonterra and Theo signed up to lose Fonterra shareholders half a billion dollars in a partnership on baby products. Hope they both had some really nice meals out with their hosts!

Xi Jinping poking the bear? The Pooh Bear?

Hey David, any thoughts on the yield curve inversion in Canada (swap rat at 23bp) - seems to be more severe than on US bonds.

The fact remains David that no one has any real idea how the Chinese economy is doing. All their figures are fabricated by bureaucrats and central planners. To just assume China is going to be the next global super power because the communist party claims another year of 8.888% growth rate is just as wishful a thought as predicting a collapse.

Thanks David

David please don't fall into the 'label-then-denigrate' trap. Doomsters - and optimism re business surveys - are totally misplaced in what is a factual problem.

The physical planet cannot support unlimited growth, and beyond the top of the Gaussian curve, physical growth cannae' be had. We are at - and in some ways well past - the top of the Gaussian. We have clearly avoided counting the real planet in GDP - Climate Change, ultimate depletion and oceanic plastic soups don't show up, which is why we haven't adequately addressed them. Tells us that GDP is an inadequate measure in human-survival terms.

But every dollar spun into existence, is an expectation that something will be done in the future. More dollars spun, more expected done. The currently-held combined expectation - from mortgages to pension funds to share 'investments' - is not underwriteable in any meaningful manner (meaning, without Zimbabwe/Weimar Germany-type inflation).

So I posit that the next one will be the last. I suggest that the building stress is why Trump chose to be there, why he was voted-for, and why he is making moves that show what some of us already figured - that globalism and global trade growth have peaked. Had to happen, and some of us did done tell....

Those log prices are already out of date. The market has moved and there is some pain out there.

And an interesting counter-point!

Cheap labor is very much an issue, especially when the work shifts to a country that is unencumbered by the additional costs of complying with environmental laws for some of the potentially polluting industries. There are many jobs in the US that have had rather severe wage reductions due to offshoring of work, as well as the usage of H1B visas to bring in much cheaper somewhat indentured labor. If it was the quality of available workers that was at issue, then the wages for the capable workers would have skyrocketed. This hasn't been the case.

BTW, I very much agree with your assessment of Buchanon.

There has been a polarization in education,as well as partisan shifts. Urban and higher level education has seriously shifted left, and rural education (and flyover country) has seriously shifted right. I'm very much less than pleased with either choice. The sad incursion of religious aspects into education has been a fact in the US for many decades. A couple of decades ago, there was a Gallup poll in the US that showed almost half of the population believed that the world was created ~6k years ago. The challenges of separation of church and state in the US have been an issue for a very long time. Some people have never accepted the result of the Skopes trial...

Hi David

History tells us that no hegemonic power has grown great without access to an abundance of cheap labour All the way back to Rome. Be they slaves or brainwashed disciples of a regime the advantage of 'cheap labour and lots of it' have always created power shifts when the ruling (educated) elite have had the opportunity to harness their toil. It's why we are now seeing the decline of the West.. Our choices? To import cheap labour and try and compete (except our populations don't really like that idea) or getting very good at creating new markets. (which we've not been very good at thus far). Hence cheap labour will win out every time and we've masked its effects thus far by kidding ourselves that our assets make us rich whilst we borrow against them.

I would argue the contrary position cheap labour is and has always been the issue and always provided comparative advantage to those that can access it all the way back to 2000 years before Adam Smith.

Excellent rebuttal.

Hi David, factory jobs generally have not required much in the way of education, and a barely high school education is often or even more than sufficient as all training is given by the factory. So my question is is the loss of those factories and jobs because of education or economics? I challenge you put aside any prejudice against the messenger and consider the facts presented and the possible causes?

There may be a flow on of course for "high tech" industries, but at the base level those factories will have filled a vital base for an economy, and even people with a minimal education can come to learn of their own capability in such an environment and go on to further their education.

Problem is, education has been turned from an investment in the young of the nation (with the expectation of economic returns for the nation) to a for-profit exploitation of young people via massive socialised debt that they cannot discharge (unlike business debt).

Counterproductive to the need to compete, as a nation.

The problem might also be that China had workers unencumbered by debt.

Selfish. Anyone who practices tax minimisation is to my mind selfish - anyone who practices tax avoidance is criminal. It seems to me that if a tax is not so punitive as to put you out of business, or in the case of an individual, out on the streets - then it is morally appropriate to pay it.