Here's our summary of key economic events overnight that affect New Zealand with news the gloomsters are going to have to wait even longer for a US slowdown and 'recession'. Markets are reducing the chance of a Fed rate cut in mid-September.
First up in the US, initial jobless claims came in less than last week, a surprise because an increase was expected. But to be fair the actual shift wasn't large.
But markets took more notice of the surprisingly strong +1% rise in retail sales in July, far more than expected. Americans are still spending big - on cars, appliances and furniture - in a surprise burst of activity that’s propelling their economy and helping shake off fears of an impending downturn. This was the largest jump in more than two years. Car sales were particularly strong. But there were gains across the board at restaurants and bars, as well in groceries, electronics, furniture and health goods. Year on year, American retail sales were up +4.0%, delivering real, inflation-adjusted gains.
Helping was that business inventory growth was minimal, so their inventory-to-sales ratio stayed quite healthy.
But spoiling the party somewhat was a small drop in industrial production in July and one that was more than expected from June but only easing -0.2% from a year ago.
However, the New York State factory survey improved more than expected, although the Philly Fed's similar survey turned lower. Both are positive about the future however.
In Canada, despite central bank rate cuts there, home sales fell in July. A looming rail strike there may not help future sales.
In Japan, they released their Q2-2024 GDP result late yesterday and it expanded a very strong +3.1%, way more than the +2.1% expected, and far better than the -2.3% fall in Q1-2024.
In India, their July passenger vehicle sales fell almost -2% in July from the same month a year ago. This was not expected, but to be fair these are settling into a higher level than has been seen in over the past 20 years, just not as high as you might expect given their booming economy. But two-wheeler growth was a very strong +12.5%.
In China, the data out yesterday reinforced their tough economic conditions are extending there. Retail sales were up just +2.7% from a year ago, industrial production rose less than expected at +5.1% but electricity production (a better metric?) rose only +2.5%, and prices for new houses dropped -4.9% and the most since 2015. For secondhand houses, who knows? No cities reported year-on-year gains, the first time that has happened.
In Australia, their July labour force rose with now 14.47 mln employed (+58,000). Their participation rate rose again (to 67.1%), and their jobless rate ticked up to 4.2%, or by +23,900 to 637,000. Full-time adult average weekly total earnings were up +4.6% to AU$1994 (NZ$2200).
And staying in Australia, consumer inflation expectations are high and not easing. They rose to 4.5% in August from 4.3% in July, the highest level since April and similar to what they were in April 2023. The RBA will be unhappy about the stickiness.
And we should probably note that UBS said it will sell-off the US$2 bln real estate fund it acquired when it bought Credit Suisse. It joins many other professional investors selling out of troubled commercial property markets, especially office buildings.
Global container freight rates eased ever-so-slightly again last week but they are still +280% higher than year-ago levels. The core pressures are unchanged. Bulk cargo rates are little-changed this week, but are still more than +50% higher than year-ago levels.
And we should probably note that iron ore prices have slipped below US$100/tonne now in a move down that started at the end of 2023, now back to levels first seen a decade ago. The 2021 peaks are long gone and the general trend will stay negative until China recovers. Even India can't arrest this slip.
The UST 10yr yield is now at just on 3.93% and up +10 bps from yesterday in reaction to the strong US retail sales data. The key 2-10 yield curve inversion is slightly deeper at -16 bps. Their 1-5 curve inversion is shallower at -72 bps. And their 3 mth-10yr curve inversion is now at -139 bps and much shallower. The Australian 10 year bond yield starts today at 4.01% and recovering +9 bps. The China 10 year bond rate is back up +4 bps at 2.20%. The NZ Government 10 year bond rate is now just on 4.17% and down -4 bps from yesterday.
Wall Street has put its August retreat behind it with the S&P500 up +1.6% in Thursday trade, and back to where it was at the end of July and just -2.2% below it all-time record high reached in mid July. Overnight European markets were all up about +1.5% as well, except London only managed +0.8%. Tokyo was also up another +0.8% yesterday and also extending the prior big jump. But Hong Kong was unchanged although Shanghai managed a good +0.9% rise. Singapore was also up +0.9%. The ASX200 ended its Thursday trade up just +0.2% but the NZX50 was up strongly again, by another +1.1% in an extended reaction to the OCR cut.
The price of gold will start today up +US$13 from yesterday at US$2454/oz.
Oil prices are +50 USc firmer at just under US$77.50/bbl in the US while the international Brent price is up +US$1, now just on US$80.50/bbl.
The Kiwi dollar starts today little-changed from this time yesterday, still just on 60 USc. A week ago (pre the OCR cut) it was at exactly the same level. Against the Aussie we are down -30 bps from yesterday at 90.6 AUc. Against the euro we are up +10 bps at 54.6 euro cents. That all means our TWI-5 starts today at 68.5 and unchanged.
The bitcoin price starts today at US$59,326 and up a mere +0.3% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.8%.
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117 Comments
If we research, we can keep emotions out of the discussion (DGM, etc.)
Here's your weekend research, DC.
https://www.thegreatsimplification.com/episode/136-corey-bradshaw
Stunning portrayal - can I ask those of you who are economics-trained, to bother watching that, and to read the referenced papers? Then ask what it is you are(n't) measuring?
Great graphic of that here
https://ourworldindata.org/images/published/Future-as-triangles-of-an-hour-glass-01_1350.png
I watched that conversation last night and his 'almost guaranteed' 10 + billion by 2100 was something of a surprise...especially in light of other projections of major population declines outside Africa.... and his dismissal(?) of the scale of impact of conflict, disease or food production/distribution.
And a simultaneous 2-4 degC average global temp increase by 2100....all very 'counterintuitive'.
You might find Tom Murphys series on population interesting. He takes the UN population predictions apart. He thinks we might hit peak population very soon
Have seen a precis of that but will look further, thanks. I think however that Bradshaw (et al) have developed their own models from which he draws his conclusions.
The problem as always in these debates(?) is how much time can be devoted to checking/understanding/verifying the myriad of information/data out there.
It appears difficult to estimate current population (nevermind future projections) if the 100 million error in Chinese population is to be believed.
Bradshaw essentially dismissed the impact of wars etc upon trajectory for the next 80 years due to the psychology (bloody psychology again, maybe he's a central banker in disguise)....all while predicting an elevated average global temp and the associated impacts.
Go figure
Now that we have low earth orbit sats constantly taking hi res photos of earths surface (military had before but now commercial) And AI, its now way way easier to get a feel for population / energy usage and crop production etc. Accurate population info for some may well be a military sensitive piece of data.
Its getting increasingly difficult to hide data from prying eyes, but that data has high commercial value so is not freely available.
One behaviour that hasn't changed is once you go below replacement it is very difficult to come back. Things changing quite rapidly and are already baked in to current birth rates. Billions have been spent trying to get populations above replacement to no avail.
"No nation that has had its TFR drop below 2.0 has ever seen it rise back above 2.0.
So, within not too many hundreds of years, and depending on the TFR, there are likely to be less than one billion people alive, and possibly only one-tenth of that, lower than it was 10 000 years ago."
I've never understood why it's hard to go back? Surely it's as easy for birth rate to fall as it is to rise? I get that there's allot of inertia, if you've had 50 years of declining birth rates, it compounds through the generations such that the size of reproduction age women is low, so you're not going to suddenly get back to where you are, but if people were to start reproducing at greater than replacement rate, then in another 50 years you'd get population growth.
We've never had global population actually dropping. We might find once that starts happening, once there is plenty of space and housing around, that the reproductive rate goes back up.
The governments who have spent billions trying to get it back up has never understood it either. Population isn't dropping because we live longer.
"Births peaked in 1990 with an echo of that peak 24 years later. The UN now predicts that there will never again be as many children born in a year as were born in 1990. Globally, births in 2022 were 8.5 million fewer than in 1990, despite there being far more potential parents alive today.
...One abiding myth is that extra people will inevitably add to carbon pollution. It is a myth sold like snake oil to the mathematically illiterate. “Everyone has a carbon footprint,” the tale begins. Thus, any increase in people must increase carbon pollution. The same could be said for shoes. The myth would be that if there are more people in the world, inevitably there will be more shoes. But most of us do not behave like Imelda Marcos when it comes to shoes. In 2021, 22bn pairs of shoes were produced worldwide, 9% fewer than in 2019. "
https://www.theguardian.com/commentisfree/2022/nov/20/dont-panic-about-…
Birth rate is pointless. I'm certain that the increase in education for women, and invention, adoption and prevalence of the contraceptive pill has caused this. Women used to have miniscule opportunities to work, or even have choices in life outside of relying on marriage for safety and security, and having multiple children. Today women have so much opportunity, ever increasing which is great, and surprise surprise, many choose to work, earn, travel, experience, before they have children, or outright choose not to have them at all. This level of choice in and of itself is an incredulous achievement across only 60 or so years, versus the entirety of human history. The issue is not the birth rate, it is that the systems we have built are reliant on the assumption of humans increasing in number at an exponential rate, and that there are the resources available for this to continue forever which we know isn't true. So do we plan for ourselves and our meagre lifespans, or do we plan for our great great great grandchildren?
The assumption that "humans increasing in number at an exponential rate" has been blown away by all those factors you list as to why women are not having children any more. What great grandchilden? Going by South Korea 0.7 fertility rate, for every 100 potential great parents there are only going to be 4 great grandchildren to help out in the rest homes be fire fighters. The resource scarcity will young humans, not oil and water, unless someone can figure out how to raise birth rates.
Well in modern history i meant.
Nice graph over at wikipedia, show population leves, and also shows the rate of growth in population peaked in about 1960.
I know we only had two kids due to overpopulation. Had population levels already dropped below 2 billion, we might have made a different choice.
https://en.wikipedia.org/wiki/Projections_of_population_growth#/media/F…
Heads up, the spruiker factory will start going into overdrive over the next few months. Be careful out there. Remember who is talking and what they are selling (things like it might drop 2% (this seems to be the new property only rises narrative as we are in mid-crash with prices dropping over 20%). These scumbags sucked in all the FHBers that have lost everything after the bought at the peak and had to sell.
When you’re comfortable at that level, make the decision, be confident because you’re not there to buy and sell in a 12-month real estate cycle. Yeah, it might drop from where we are today by 2%, but ultimately you would’ve gained more from the money you’ve saved from not paying rent or the pride you take in your property
https://www.nzherald.co.nz/business/real-estate-ceo-lloyd-budd-im-not-g…
To be fair I think the DGMs have cost FHBs much more money over the decades!
I don’t have any real reason to say this (I don’t really have anything to gain), but I do feel this is probably a good time for FHBs to buy or at least start looking. That is based on the assumption that the OCR keeps falling, which may not actually eventuate.
Ferarris or Lamborghinis?
https://www.nzherald.co.nz/business/lamborghini-driving-fraud-accused-c…
Your posits are flawed from the get-go. They start from an incorrectly-appraised base-line.
Do me a favour; make the time to watch that link (above) over the weekend.
Then come back Monday, saying that it didn't make you think differently. Seriously, please bother to make the effort. I'm interested...
I'll try to check out michaux's actual paper later but this doesn't paint it in a good light.
Have you ever thought differently? Like, managed to turn off the rolling narrative you (and the rest of us) have in our heads? About gain and loss, perils that may lie ahead. Sorrow for something that's not even in the room with you?
I'll watch your link but I fear it's just another story about how screwed we apparently are.
I used to think differently but once you've seen behind the curtain, you can't un-see the wizard. And once you've seen it, if you care about life on earth, your offspring, your fellow humans, appreciate how beautiful the living world is and how precious our little planet is, it's pretty hard to just shut up and listen to selfish, small minded little pricks continue to tear it down.
I know that was probably directed at PDK rather than me but I assume he just saw behind the curtain a long time ago.
I used to think differently but once you've seen behind the curtain, you can't un-see the wizard.
How far behind the curtain? To where it's apparent the thoughts you think you're having is just some aimless series of brain farts that pop in there (saying this about all of us)?
Pretty obvious what's on the packet, isn't in the box.
The list of shit that's wrong is endless. The list of things that's right, can be much longer.
If your headspace (displayed often by what people are saying) lives almost permanently in search of (and sharing) things to have despair about, you're using your time unwisely.
Not despair, anger.
I work in behaviour change.
It's important to challenge myths and undermine bogus narratives. Unfortunately people are often likely to act out of anger, so I find it helpful to try to get people angry about some topics they may never have thought about.
Also, thank you for your concern about my headspace, I do sometimes get a bit despondent but my comments on here don't reflect my day to day life. I wouldn't work in the area I do if I wasn't a optimist about changing the status quo and trying to nudge us into a more sustainable future.
Despair, anger, whichever.
If you try to get someone angry about the topics you're speaking about, then you are just as likely to have them polarise in their existing position.
Behaviour change is interesting. Works, and shows how pavlovian we still are. Did we really change our thinking, or just the subject matter.
I've argued this before, but the big picture is about the number of people on the planet, as all this is about. But taking a biblical perspective, I have also suggested that the Garden of Eden story is both the beginning and the end. That doesn't mean we cannot live as technologically advanced, but in doing so and achieving it must be done without destroying the environment. Taking out the religious BS, the challenge for us is learning sufficiently about it all to achieve that outcome. In the big picture everything is connected and every choice has consequences. We must understand that.
As human beings we have a resistance to change. We don't have hereditary memories, only survival instincts, but they are individual mostly. As a species politics is the group response. So some will respond with anger and fear over what needs to happen.
One of the questions asked in this stream is "If you were the Prime Minister, what would you do?" I've already suggested political targets in the past, setting a population goal that is less than what we have now. Building an economy to ensure everyone has a decent standard of living, while building national resilience and so on. There will be resistance, internal and external. But it's got to be done. But for now, we are both politically and economically weak, and need external support and protection from the damaging politics of the world.
I have also suggested that the Garden of Eden story is both the beginning and the end. That doesn't mean we cannot live as technologically advanced, but in doing so and achieving it must be done without destroying the environment. Taking out the religious BS, the challenge for us is learning sufficiently about it all to achieve that outcome. In the big picture everything is connected and every choice has consequences. We must understand that.
Too true.
Our biggest issue is, even after going to the moon, splitting the atom, etc, we have not really moved the needle on psychological technology much at all, for thousands of years.
Unless that can be properly addressed, then we are just repeating the same behaviour evidenced for millennia. Just with fancier toys.
Politics is not the answer.
Murray - Im sure you are aware that our current (historically) VERY high standard of living is all courtesy of millions of energy slaves. ie Burning fossil fuels. Tons of it.
Which is made possible by Debt.
Which is made possible by growth.
Which is made possible by extraction of every nook and crany of the environment for more.
So unfortunately your promises of decent standards of living just cant add up.
You will collapse Debt and unwind back down the chain if you abandon growth.
The only alternative is to sit back and let physics do the unwinding for us.
Did you not get the point that I argued for all things to be in balance?
What promises? I didn't make any. I just suggested that whatever we achieve has to be entirely in mid with the environment. what is achievable and what is not will be determined by how we can achieve balance.
""You will collapse Debt and unwind back down the chain if you abandon growth." Debt is a human construct, but are you arguing for perpetual growth? If you are it makes your Nom De Plume to be BS, as that argument is utter nonsense. You cannot achieve perpetual growth in a finite universe. Besides i would suggest that physics has already started the wind back
"Building an economy to ensure everyone has a decent standard of living"
Sounds like a promise.
Murray - you dont appear to comprehend fully what fiat Debt represents. Fiat Debt doesn't do balance, its does growth.
And if you are thinking we can go back to "balanced debt" you are effectively talking barter = non fiat, then you cant possibly promise a high tech, standard of living.
Fiat is the only reason standards of living have grown to the point they have. And they will fall as fiat eventually fails.
If you dont believe me, close your access to Debt/money now and beat the rush.
Look its a confronting reality, but it is a reality.
Money is simply a trading medium.
Explain why there must be debt?
I keep asking why there has to be inflation, but few if any can provide a sensible answer.
what you are saying is technology cannot and will not be maintained in an economy focused on balance. Why? Explain every one of the assumptions wrapped in your explanation. You have to do that otherwise you're arguing that the human species is doomed to extinction through the systems it has created.
Look for an alternative where the species survives at a level better than cavemen, but in harmony with their environment. I believe it can happen. You clearly do not.
Money IS Debt!!
Its a call on future energy. The $$ in your bank account are a promise that you can trade them for an energy product in the future.
It allows us to pull consumption forward through time easily across borders. It allows us to store consumption for later, to make promises about building a house to be paid off over years etc.
The reason we need inflation is because of interest. All debt incurs interest so over time the money supply grows.
If it didnt incur interest, it wouldnt have any value. If you can borrow a million at 0% interest, why not 20 million?
Inflation allows us to continually devalue the currency so that the ever increasing Debts dont over whelm us.... (too late?)
And its not a simple trading mechanism. It allows the complexity of globally connected supply chains - which is why barter to "get" a iphone wont work ... theres a hundred inter-connected trades across the globe which makes it possible to produce an i phone ...
We could live in harmony with the environment (ex fossil fuels), if we have a population well less than a billion
> If it didnt incur interest, it wouldnt have any value. If you can borrow a million at 0% interest, why not 20 million?
If you are lending someone money, and you want to actually get the money back, you need to consider their ability to pay it back. If they are on 100K/year they are unlikely to pay back 20 million. Interest is irelevant.
Lending someone money, aka saving money, has value in and of itself, regardless of any interest you might make. It allows you to defer consumption, just as borrowing allows you to bring it forward.
Not sure if you will get to see this but here goes anyway. The first assumption you have made is around what money is. In and of itself it is not debt, but an established through consensus trading medium. The 'debt' label you have applied is how modern economics and the banks have distorted it. Money provides nothing more than a common medium for people to barter for goods. Take away money and what is left? People put time and effort into creating goods, be they food, clothing, tools or whatever. The value of those things depends on an agreement between traders. One person may trade a sack of potatoes for a horse by mutual agreement. How different is that if you put 'money' into the equation? That sack of potatoes is not a debt but a product of labour or another trade. If money were inserted into the equation it may not be debt if it was earned and not borrowed.
All the structures around money are manipulations put in place to corrupt and influence the economy to the benefit of certain interests, either banks or governments. I suggest you did not understand your own assumptions and therefore could not see through the cloud of BS put up by economists banks and politicians.
Agree - if we can visualise a standard of consumption, then its natural to aspire to have it ourselves ... and even normalise it as a God given right
500 years ago that aspiration was to eat like the King till you were full ... a big serve of cooked meat with veges - wow. And dessert!
Hard to climb back down the wish ladder
Too true, Murray - this is the one thing that I agree on with that dreadful robber baron, J P Morgan - "Money is gold, nothing else."
Also, at least to my knowledge, there exists no sensible or valid argument as to why there "has to be inflation".
The sad truth is that it is a contrived by-product of neoliberal eCONomic mysticism. In effect, inflation is contrived tool and theft from the real economy and savers - it directs wealth directly into the pockets of the parasitic banking kleptocracy.
The most blatant form of this theft is this completely farcical notion that interest rate hikes are an effective tool to control inflation - nothing could be further from the truth - doubling interest rates is just as immediately inflationary as doubling energy costs - the only difference is that the loot goes directly into the pockets of the golbal banksters rather than to government and oil companies.
The natural trend in an economy which enjoys increases in productivity due to improvements in technology, should always yield lower prices, not inflation.
Because every tool we use to measure inflation is a complete crock, the entire exercise becomes even more confusing.
If we measure stuff we buy today compared to the year 2000 in dollars, then we get a different result from making the comparison using the value of gold as a benchmark - gold is now roughly 10x the value it was then in dollar terms.
This is in spite of the fact that the gold price is heavily manipulated downwards for political purposes, in order to decimate the middle and working classes, and to obfuscate the real crash in the purchasing power of fiat currencies.
Gold is the only asset I know of that has retained a very similar value for thousands of years, in terms of the real goods and services it can buy.
This deliberately generated confusion also serves to hide the theft in long-dated treasury bonds which are little more than a certificate of governmental wealth confiscation.
If the true CPI (AKA the Comsumer Price Lie) and inflation figures were widely known, along with the effects of compounding negative yields - IOW the coupon value less true inflation, no one would touch these long-term bonds with a barge pole.
If the Western fiat economies can't sell their debt, then very soon the entire global Ponzi scheme based on fiat currencies will be exposed for precisely what it is.
The talk of the relative 'strength' (sic) of these fiat currencies is tragic too - it is one filthy shirt being compared with another. The day that the BRICS+ bloc declares a buy gold price on the Moscow and Shanghai metal exchanges, will constitute a global gold revaluation, market discovery of the true value, and the end of the paper manipulation - that will be the day that this global Ponzi scheme begins to unravel spectacularly.
My intuition screams at me that this will happen before the U$ election charade takes place in November.
Cheers and regards
Colin
Apologies, it's a useful term because time-frames are super relevant to it. When I say 'more sustainable' I'm talking about moving the drop dead collapse point further away, this provides breathing room so future generations more enlightened that us may be able to use what we didn't use and create even more sustainable futures.
Ideally the best option, better than sustainability, is regeneration and regenerative practice. Making sure what we do now makes the future better than what it is and was.
What would have been your advice for an aspiring FHB 10 years ago? Don't buy because of peak energy? Don't buy because the planet is doomed? Was that good advice?
I potentially agree with a lot of what you have to say over the long term (although I think humans will adapt when fossil fuels become depleted), but you also need to live some of your life in the now. If you don't think people should buy property now, doesn't it also mean that you should sell yours?
10 years ago? Get a big acreage, far from the madding crowd, in partnership with others. Write a founding docco - those which do, sometimes survive, those which don't, don't.
Build (don't buy) on your plot. Think laterally; it is still possible to build cheaply (despite slanging from vested interests). Think in energy terms; every saving is forever, and represents a dollar saving, when you trace it back.
The need to displace fossil energy is now creating multiple and concurrent demands on above-ground acreage, though. Happen when you're part of an overshot species...
We are going to run out of people long before we run out of water or energy.
"Assuming the continuation of the current trajectory of our fertility and mortality (and even with some variation), the exponential population growth of the mid-20th century (doubling time of 37 years) is about to flip to an asymptotic decline, with the population halving every about 40 years."
"People underestimate how quickly this effect will be felt. South Korea currently has a total fertility rate of 0.81. For every 100 South Korean great-grandparents, there will be 6.6 great-grandkids. At the 0.7 fertility rate predicted in South Korea by 2024, that amounts to 4.3 great-grandkids.
https://insightplus.mja.com.au/2024/8/health-care-in-for-a-roller-coast…
https://www.scmp.com/news/china/science/article/3150699/chinas-populati…
If you want to live your life in the now buying a house in New Zealand is probably the worse thing you should do. Go explore the world don't become a debt slave on the assumption you'll be better off in 10-20 years (highly questionable assumption at this point in time)
I know right. So many people complaining about the reserve bank making their life difficult, nobody stops to think maybe they put themselves in a poor position. So focused on collecting capital gains never stopped to think if you should (Jurassic park)
this forum used to be about how to look after yourself financially, not how to make bank at the expense of the economy.
Correct Jimbo the DGM's that have been banging on for 15 years on here telling everyone its never a good time to buy have cost some people big time. So glad I bought a house long before I discovered interest.co.nz. Just imagine this fun fact, bought a 4 bedroom 200sqm house on the North Shore for $350K in 2003.
The is currently a very simple test to see whether anyone involved in selling real estate is either a) telling the truth, or b) ignorant.
If they don't reference recent central and/or local government changes to housing densities (zoning rules), and its effect on future supply, they are either a) engaging in dishonest selling and/or b) are so ignorant of the effects of the changes, everything they say is likely to be of extremely dubious merit.
At what point do the media start looking at inflation, gdp and unemployment rates in other countries, and asking a few simple questions...
Why is inflation moderating here at the same rate as it is on other advanced economies that are not enthusiastically growing their dole queues? How come countries that have not crushed consumer demand are seeing similar (or better) inflation paths?
Asking for the 50,000 people (and counting) that are now out of work and being chased around by WINZ.
We're all works in progress.
Changing locations isn't really what I'm talking about. You can envisage yourself in a new place, being a new you. Windswept and interesting. Successful, and popular. But you get there, and it's still the same old you, unless you really approach things differently.
We smell shit everywhere eventually. If we're lucky we'll work out it's on our shoes.
Cheap money pumped into the global economy after Covid created massive demand that led to bottlenecks in supply. This was compounded by supply chains that were still constrained from Covid restrictions or disruption. These demand and supply issues appear to have resolved globally meaning our imported inflation has drastically reduced.
Our RBNZ engineered economic recession(s) might have contributed somewhat to reducing inflation (?) but I don’t see it as the primary factor. More so it has caused financial, social and economic hardship to many New Zealanders for marginal (at best) benefit as you highlight.
We no longer need politicians as their role has become a role more akin to an actor trying to keep their popularity to get roles in movies. We need pragmatists and realists now. Raw, transparent, accountable, and experienced in different relevant areas to the portfolios they hold so to have genuine insight into the relevant sectors. Hopefully come next election people will, for once, look at actions instead of just listen to the words, and think about the future instead of voting predominantly based on the past.
No chance of anything changing. None.
The role that politicians are auditioning for isn't about 'who can steer society in the best direction', but to prove that a stint in the political machine demonstrates that they can toe the line of compliance to that machine, and so the apres political career options expand.
What better than having Former Prime Minister of New Zealand or son of a sitting US VP on your CV for a jog down the road to enhance your personal prosperity?
(PS: Get elected and try to do as you suggest, and see your future aspirations are immediately cut short, and your apres political career options? They've evaporated...)
I don't think all politicians are motivated purely by personal ambition. It's a fairly shitty job all in all.
I do however think that the politicians from parties that are more aligned to big business (oil, tobacco, road transport, greenfield development) are more likely to be motivated by personal wealth and ambition. The evidence points to these types of businesses being bad for the well-being of the country, so unless the politicians that align themselves with these types of party are stupid, they must be motivated by something other than the good of the country.
" (not) all politicians are motivated purely by personal ambition"
Undoubtedly. But politics is the epitome of 'toe the Party line' or else. And it's that characteristic that is then viewed as the primary qualification if the after-politics career. Don't do it, and you'll find yourself 'promoted' to some obscure place, and then quietly pushed into harmless anonymity.
" Meaning - toe the line : accept the authority, policies, or principles of a particular group, especially unwillingly. "he knew that he had to toe the official line because he couldn't afford to be put on the dole"
So sad isn't it. Look at the likes of Guarav Sharma who tried to speak up on the reality of what went on within the party and parliament. The great hoarde ousted him, albeit he didn't put up any solid defence by pulling a no-show to his reprimand, however I don't blame him given the insipid cancel culture that washed through govt with the last lot. He stood no chance.
Perhaps the next world war, or some form of great tragedy will again, as it always has through human history, reset our perspectives back to the collective instead of the individual, and we will do things or others more so than ourselves.
"The evidence points to these types of businesses being bad for the well-being of the country",
Does it though? A very simplistic view for someone who works in behavioural change and especially given that big business is everywhere and often on opposite sides of the table and often really good for the well being of the country.
Its also a real stretch to say that one group is more motivated by personal wealth and ambition -you can find examples everywhere - Jacinda, Robbo a couple of recent examples
If you can find examples of where Big Oil, Big Tobacco, Road Transport Lobby were good for the long-term wellbeing of the country, let me know.
My partner's sister works in a charity that tries to leverage businesses to help with community projects. The projects are good but they have to serve the business bottom line either through tax advantages or reputational benefits that translate into profit. You can argue that this is the win win sweet point and it's a strong argument but I would say if the projects (sometimes they provide crucial welfare) are reliant on a private firm making money from them in order to survive then they are not truly sustainable. You'd be better off using the tax the company saves to bring those services back under public democratic oversight and accountability.
Why is inflation moderating here at the same rate as it is on other advanced economies that are not enthusiastically growing their dole queues? How come countries that have not crushed consumer demand are seeing similar (or better) inflation paths?
As you have pointed out on numerous occasions, the primary inflation driver in Aotearoa has been debt servicing. The trade-off for not suppressing the price of money "as much" is unemployment.
Compared to our other Anglosphere mates, I would think that the fiscal response is not as great. But that's one big reckon and I don't have enough time to research a comparative frame.
What I'm interested to know is considering our GDP growth is the lowest in the world and our capital markets comparatively dead, how will restarting the Ponzi help?
But markets took more notice of the surprisingly strong +1% rise in retail sales in July, far more than expected. Americans are still spending big - on cars, appliances and furniture
Back to the big picture, this is the biggest MoM rise since Jan 2023 - so to hell with your soft landing narrative, right...
BUT... and it's another big but...
...for the eighth month in the last year, the previous month's data was revised lower..
In India, their July passenger vehicle sales fell almost -2% in July from the same month a year ago. This was not expected, but to be fair these are settling into a higher level than has been seen in over the past 20 years, just not as high as you might expect given their booming economy. But two-wheeler growth was a very strong +12.5%.
Ebike market (including cargo bikes) in India is massive and growing fast. Fast, cheap and clean. Not surprised cars are struggling.
Love my eBike (well my second one, first one got pinched by some scrote as I had it parked up outside a business meeting). Chch is a great place to live for eBiking.
I can keep the gas guzzler V8 4x4 and juvenile sports car parked up in the garage, hardly being used, while I get anywhere in the main town area faster than you can in a car.
Or have really weak knees/legs. Or don't want to break a sweat. Or want to load up your panniers, or are just plain old.
One of the biggest challenges to getting decent cycling outcomes is actually fit and healthy men who already cycle opposing infrastructure that would benefit the other 60% of people who would cycle but do not feel safe sharing with traffic.
"Th' Dudes"..'Walking in light' I see things through a different doorway, Felt uncommitted, ain't that a crime?
A thousand things to be Every time, every time.
Interesting 'behind the curtain comment' In the past week I've come across a single listing that about sums up all the aspects of our housing market and it left me in no doubt that the masses are too easily blinded by the hype .... I cannot say anymore for tearing the listing to shreds would invite an exceptionally large lawsuit. It leaves me in no doubt however that the industry does not care about family values or ensuring everyone has the possibility of owning a warm and dry home. I will leave it at that.
.."the industry does not care about family values or ensuring everyone ..."
If you were in it for purely family/roof over a head reasons you would legislate along the lines of
- only NZ citizen adults can own a house
- max 1 house. If you want a bach/rental its under the missus name.
Get rid of all the nonsense housing rent subsidies and stuffing people into boxes as businesses.
Some landlords may even have to get a job
And check out the affordability of houses ...
All too late to unwind the Ponzinomics now though
Supply constraints push antimony prices to record high
An extreme supply shortage since April has led to the sharpest price rally ever recorded in the antimony market since Fastmarkets started pricing the metal back in the early 1980s.
Fastmarkets’ (formerly Metal Bulletin) record of covering antimony prices goes back to January 1980. Its price assessment for antimony max 100 ppm Bi, in-warehouse Rotterdam was at $3,200-3,260 per tonne on 4 January 1980.
Fastmarket-assessed antimony metal prices in Rotterdam increased at their fastest rate in more than 40 years in the week to 17 May 2024 due to a severe supply squeeze after a month of continued extreme shortage of raw materials from China, Russia, and Southeast Asia.
LOL Economics is NOT science, though! Our money is 100% made up. Not only does it have zero value, it actually rewards people who create value with poverty & rewards thieves with wealth. Money is like the complete reverse of both value & science. Economics is pure voodoo!
If you exclude bank economists from the mix (they're really sales people for their bank) and un-accountable public ones (RBNZ & Treasury), you'd be amazed at how often economists get it right.
Can you name any? Most likely not. But if you can name some, do you follow them continuously? (And just an FYI - the very best are bound to keep a very low profile.)
I would really like it, if Interest made a clear differentiation between "House sales" = the number of houses sold, and "House prices". The top headline reads "Canada house prices fall" but the linked article states "The MLS® Home Price Index (HPI) edged up 0.2% month-over-month". The paragraph with the link correctly states "In Canada, despite central bank rate cuts there, home sales fell".
Please make a clear differentiation between house sales (= numbers sold) and house prices. They are NOT the same.
You're just splitting hairs Dr Y to promote what you want to see. You could read the article and come away with the conclusion that house prices are down approx 20% from their peak in 2022 and there is no indication that sales activity has not stopped the fall or its momentum.
Headline - THE US ECONOMY HOLDING UP WELL
Only if you swallow eCONomics, the CPI (Consumer Price Lie), and completely fictitious unemployment figures.
FACTS - as opposed to eCONomics...
#1 The U$ CPI doesn't measure the deterioration of the purchasing power of the U$ dollar - it is a completely contrived figure that tries to hide the truth of the true yield on U$-denominated deposits and bonds.
(i) The figure excludes fuel costs.
(ii) It excludes food costs.
(iii) It excludes tax - the largest expense of most working households in the U$.
The average North American household loses a massive 43% of their yearly income to tax - this is the massive cost of government. The fact that the CPI doesn't include tax is utterly farcical.
#2 Honest commentators like Rick Rule calculate that the purchasing power of the U$ dollar is declining by a compounding rate of 7.5% per year - 3x the ludicrous CPI figure the eCONomists parrot. This means that the 'yield' on 10-year treasuries at 4.3% is not positive at 1.7% (4.3 minus 2.6%), but negative and compounding at minus 3.2% per year.
Surely this must reveal that the natural progression of interest rates should be hiking rather than easing.
#3 During the 2008 GFC the situation was arguably salvageable from the perspective that U$ Govt debt was around 25% of GDP - it now is around 500% higher.
#4 The situation is even more serious when you look at the net present value off-balance sheet unfunded liabilities (entitlements, Medicare, Medicaid, Federal pensions, military pensions, etc, etc) - this amounts to at the very least $100 trillion.
#5 The U$ tries to service $35 trillion of balance sheet liabilities and $100 trillion off balance sheet with an economy that runs a trade deficit of $2.5 trillion per year.
#6 The Fed doesn't see their allegiance or their customer as the U$ citizen - their customer is the U$ Congress, an institution that is outrageously fiscally irresponsible - somewhere around 30% of the U$ population now mistrust the Federal Govt so much that they think that states like Texas should secede from the Union.
For close to a century there was only one state (North Dakota) that looked seriously at meaningful financial reform, sound money theory, and banking run as a public utility - there are now 35 states venturing down this road.
#6 Surely in a sustainable economy, savers deserve a bonus yield on top of the 7.5% compounding deterioration in the purchasing power of their currency. Add a reasonable yield, say 2.5%, to 7.5% and you are at 10% - this is where rates could well be if they were left to their own market devices and the Fed got the hell out of the way, ceased their oligarchy serving habit, and left the real and productive economy to develop.
Clearly, with the massive level of debt, the economy cannot function even at mid-fives - higher rates would destroy the economy anyway. There are no tools left in the toolbox to manage their way out of the hole they dug for themselves.
Manipulation of interest rates only serves the already wealthy and facilitates the theft of wealth from workers and savers. It is the wealthy in the hard times that have access to credit and liquidity - not the productive economy. For 40 years this has been a huge subsidy for the wealthy who didn't need it and a corresponding burden on those that did. This is blatant theft from savers that subsidised spenders and investors.
#7 Capital markets have come to rely so much on interest rate manipulation, that from a readjustment of a system relying on fraud to one relying on real information, would be an extremely difficult transition.
#8 At some point in time the compounding debasement of the currency at 7.5% will need to be dealt with because the US is already insolvent - total liabilities are already well over 600% of GDP - the U$ is technically insolvent just like NZ - we are over 600% too, it's just that our eCONomists never mention this uncomfortable fact - they prefer to steer the conversation to the 1200% lower public debt figure, so they can quietly assist the economy in digging an even bigger hole for itself.
BTW - the US, NZ, and most Western economies all have worse total debt:GDP ratios than Greece, which is widely regarded as the global archetypical financial cot case of the entire planet.
In the decade of the 1970s, the US debased their currency by ~80% - an incredible piece of fraud/theft that they got away with almost Scot-free. Using this sleight of hand, $100 trillion of debt becomes a 'mere' $20 trillion - odds on they will try this trick yet again.
#8 The demographic picture is appalling too, when you consider the affordability of entitlements. In FDR's day the pension kicked in at 65 and the average life expectancy for men was only 66 and for women, 68. The maths for funding entitlements is now totally different.
These numbers are now 82 and 85 with the qualifying age lower too. People who expect these benefits are in for a rude shock - without drastically adjusting all of the parameters there will be no funds to pay these benefits.
#8 Worse still is the junk bond market and the tens of millions of yield junkies that buy them without having a clue regarding the risks involved. There are trillions of dollars tied up in these and they are traded each day in the billions. The ETFs are extremely liquid and when Ma and Pa investors finally wake up and decide to make a dash for the elevators, and with the EFF managers having to sell the assets to redeem the ETFs, the meaning of "Owl Bonds" will come back home to roost - TO WHO, TO WHO, said the owl.
In essence, it is the age-old fopar of borrowing short and investing long - only this time it will be on steroids because of the everything asset bubbles that have been blown from decades of totally irresponsible monetary policy, including ZIRP and even NIRP - when I studied economics in the early 70s this scenario could never have been imagined let alone predicted to come to pass.
A combination looms of the unwinding of the junk bond market, with a coinciding run on banks, when the FDIC only insures a tiny fraction of these deposits - this is a Mad Max nightmare waiting to happen.
#9 And I didn't even mention the truly monumental notional value of global derivatives, AKA casino bets, which many reliable commentators estimate at between $2.5 and $3.7 quadrillion. (1 quadrillion is 1000x 1 trillion) - $3.7 quadrillion is ~37 times the global annual GDP. The Lehman debacle was at least partly caused by derivatives that were a tiny fraction of what they are today.
#10 Pam Martens of WSOP describes the current U$ model as a "move fast and break things business model for federally-insured banking that is now gobbling up the U.S. financial system one disaster at a time".
"The venture capitalists who bring these untested fintechs to public markets as Initial Public Offerings become billionaires or super rich; the investment banks that underwrite these offerings get fat underwriting fees; and lawyers, like those at Sullivan & Cromwell, are able to bill more than $200 million when a fraudster fintech like FTX goes into bankruptcy, despite its legal work for FTX’s Sam Bankman-Fried when he was the golden boy of crypto."
https://wallstreetonparade.com/2024/08/these-fdic-insured-banks-have-lo…
I just listed 10 reasons why the headline, "US Economy Holding Up Well" is a look over here crock - I could list 50.
Colin Maxwell
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