It appears anything is possible in our banana republic these days. And to think we pay him $800k pa for the privilege of his wisdom.
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All by design >> sadly ... certainly a LOT of very pissed off kiwis with are present administration ... I wouldn't think mr Orr could walk the streets without getting heckled rotten eggs thrown at him .. the whole we will keep rates low till least 2024 to help businesses/households from COVID affects ... to wow we got inflation lets jack rates 100% less than a year and now add another 100% in the ST ... that will help out suffering kiwis ...
It would appear inflation was already out of the bag ahead of the Russian invasion …..
https://www.stuff.co.nz/business/opi...eserve-bank-is
Just another article suggesting Adrian may not have done a good job with his path of least regrets approach.
https://www.nzherald.co.nz/business/...NAZ25VPA2S5TU/
To quote from the article.
as early as October 2020, the likes of former Reserve Bank chairman Arthur Grimes was ringing the alarm bells over house price inflation, and how very loose monetary policy was "destabilising asset prices".
Nonetheless, by November 2020, the Reserve Bank announced it would launch its second money printing programme, through which it would lend banks money cheaply to help them keep mortgage and term deposit rates low.
By this point, the Reserve Bank knew the REINZ's house price index had gone up by 6.2 per cent in the three months to September, and 11.1 per cent in the year to September.
It had already cut the Official Cash Rate (OCR) by 75 points to a record low of 0.25 per cent and printed $40b to buy bonds via its Large-Scale Asset Purchase (LSAP) programme.
By February 2021, Grimes said the Reserve Bank should start tightening monetary policy. By July 2021, he claimed the Government and Reserve Bank had engineered a "wellbeing disaster".
When quizzed about the housing market, Governor Adrian Orr has tended to argue it isn't the Reserve Bank's job to target house prices.
He also said the RBNZ only plays a "bit" part in the value of housing in NZ and he has mentioned the wealth effect he was trying to create, so the message he gives appears inconsistent or wrong.
I think the real reason he got it so wrong is that since 2008/09 central banks have gone crazy but they only seemed to inflate asset prices without affecting CPI. Adrian probably thought he could carry that on with few regrets, especially as he earns $800k a year and no doubt was comfortable with his house prices rising.
Not surprised Labour does not want an enquiry into the well being disaster they helped to create. It might start with the profits the banks are making.
Ganesh Nana from the Productivity Commission might be onto something.
https://www.interest.co.nz/public-po...nd-needs-major
Lets not just rely on more people to pump GDP but discuss the idea of holding a referendum on the population size we want.
I think we've got an opportunity to set our own path, and our own trajectory in terms of population, in terms of migration and population growth. Let's do that openly and explicitly rather than stumble into the rather large population growth we had pre-Covid."
Amazing how quickly that turns into a labour shortage. Either the wrong people are coming in or the RBNZ overstimulated the economy or maybe a bit of both.
Supply Chains all sorted yet we still have inflation.
https://www.zerohedge.com/markets/la...est-month-2009
Maybe not supply chains causing inflation then? Must be Putin or maybe there is a lag in inflation now supply chains are fixed.
Mind you the article does not say supply chains are all fixed but the LA port featured a lot in articles about the problem. Maybe Chinese lockdowns have slowed things down. Maybe a recession is on the cards.
With people spending and consuming less we get a reduction in GDP and a recession, yet no celebrations from the climate change townies?
Not sure what they think is the cause of climate change but based on their response to date not more people consuming more stuff obviously. More likely the farmers and the miners making the raw materials for the stuff are the problem so they should pay the price to battle climate change.
Not sure how climate change problems will reduce with central banks able to banish recessions with the printing press and low interest rates. It is almost like the politicians and greenies are saying one thing, yet doing another. I assume it is stupidity rather than deceit because they all seem very genuine and concerned.
Jeez, guru analyst Mark praising our Adrian and the RBNZ
https://www.nzherald.co.nz/bay-of-pl...3PFZ5OCBUAMXM/
His argument is that the RBNZ was less retarded than other world central banks, although on housing valuation metrics I understand NZ did exceptionally well despite Adrian being less of a loose cannon than other central bankers.
I like his conclusion that if Labour had let immigration keep up with the money printing, wage inflation would not be as bad.
Obviously Mark is a deep thinker, or perhaps his industry has been one of the biggest beneficiaries of central bank stupidity so he is more inclined to support the RBNZ's actions. Do you really need to do any research if the central banks will provide sufficient "liquidity" to keep asset prices elevated.
Interesting to hear the level of research done by some sophisticated investors and money managers investing in the FTX exchange. Real hard working visionaries by the sound of it. Probably just needs some more central bank "liquidity." Mind you FTX is crypto related so they should just invent a new crypto currency to provide their own liquidity.
In other central bank related news my margin lending rate will go up 1% at the end of the month from 6.95% to 7.95%. I thought Adrian was only going to do a .75 rise this week.
https://www.nzherald.co.nz/business/...AVKEE4ECDUZBY/
Yields on shares and fixed interest aren't rising as fast borrowing rates are they?
I am sure Mark Lister will not be as forgiving if Adrian tightens too much, I imagine money managers prefer loosening to tightening re monetary policy.
croak croak
dude loves to lay into our RBNZ and makes some very convincing arguments
http://croakingcassandra.com/2022/11...s-for-the-mpc/
When facing a recession a government should:
- Cut interest rates
- Cut taxes
- Increase its spending
We are facing recession and:
- Interest rates are rising
- Taxes are increasing
- Spending is being cut
But do we actually have a recession
yet?
Not sure what the first line of this article means.
https://www.rnz.co.nz/news/business/...of-loss-makers
S&P Global Ratings warns global debt is more highly leveraged than before the 2008 Global Financial Crisis as interest rates rise and economies slow.
Debt is leveraged??? I thought these words had the same meaning so debt on debt??
Still don't fully understand the UK pension problem with gilts
https://www.reuters.com/markets/euro...ts-2022-09-28/
To avoid being exposed to market volatility, the schemes typically hedge their positions through gilt derivatives managed by so-called liability-driven investment (LDI) funds.
The LDI derivatives appeared to make matters worse when there was volatility in the gilt market. I guess they were protecting against volatility in other markets.
Bring on the recession I say, it will be painful for many but probably in the long run it might be better than what we have now.
+0.75 TO 4.25 % Orrsome