Daily review 11/05/2022

43 comments on “Daily review 11/05/2022 ”

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1. Ad 1

   11 May 2022 at 5:38 pm

   With every bank now saying a recession is more likely this next 6 months, is there an economist who can say how we get to recession from 3.3% headline unemployed over a year, booming construction and public service and agriculture and tech sectors, a slightly deflated real estate market, and tour operators ready to book up from July?

   It's a weird way to start a recession.
   • pat 1.1

     11 May 2022 at 6:13 pm

     Rising interest rates and record debt
   • Sabine 1.2

     11 May 2022 at 6:34 pm

     This document might give an understanding why we are not in a boom economy and that our unemployment stats are maybe not quite as straight forward as it seems.

     https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/statistics/benefit/2022/benefit-fact-sheets-snapshot-march-2022.pdf

     Jobseeker benefit:

     bottom of the page, left hand.

     177,642 working-age people receiving Jobseeker Support at the end of March 2022

     and this

     5.6 percent of the working-age population receiving Jobseeker Support at the end of March 2022

     I would assume that a lot of the jobs that count people as unemployed are casual, temp, or on call basis agreements but it puts these people out of the official unemployment into the next category of what ever benefit the Winz drone is comfortable handing out.

     Next you have rising cost of living, interest rates, personal debt, one income families or one / half were there used to be two, etc. Not a winning mixture to make for a good economy.
     • SPC 1.2.1

       11 May 2022 at 6:45 pm

       Anyone in casual, temp, on-call, part-time is not counted as unemployed, though they may still be eligible for benefits.
       • Sabine 1.2.1.1

         11 May 2022 at 7:06 pm

         Yes, that is what i am thinking. IF those on a few hours a week day were counted as unemployed the number would be hire. I think the underemployed is hovering around 10%. And then we have those that work in their businesses but have taken pay cuts, many people on covid sick leave and 'sick leave aide', businesses closed on day they are too short on staff – this cuts into hours of people who could work were the shop open etc. The money is just not there in the pocket after tax and fixed costs to 'boost' the economy.
         • arkie 1.2.1.1.1

           11 May 2022 at 8:07 pm

           Another issue that may further confuse the numbers is that the government also considers 30 hours a week as 'full-time' employment and this may be another factor contributing to the oncoming recession
           • Sabine 1.2.1.1.1.1

             11 May 2022 at 8:39 pm

             Yes, did not think of that.
         • Visubversa 1.2.1.1.2

           12 May 2022 at 9:16 am

           One of my refugee friends is complaining bitterly about how all her friends have got jobs and don't come to visit her as much as they used to when they were unemployed or under employed. My friend is older and had a stroke a few years ago – she gets out and about OK, but she used to have a lot of visitors but most of them now have full time jobs. One of them left part time work in a Rest Home to do full time agricultural work and several others work in a local restaurant group. They really value full time work – when I moved from part time to full time some years ago several of them rang me to congratulate me on getting a "full time job"!
           • Sabine 1.2.1.1.2.1

             12 May 2022 at 2:19 pm

             yep, full time is the way to go.
   • Poission 1.3

     11 May 2022 at 6:49 pm

     The banks are also trying to protect their positions,getting whacked on both share losses and bonds (they are also substantive investors) and as interest rates move higher their housing risks increase,which means they have to invest in lower yield sovereign bonds etc.

     Whilst there is too higher debt overall (private and government) a property depreciation of 20% will only take values back 12-14 months.This in turn will reduce inflation and limit interest growth,( a lot of the housing sector inflation is also from local body rate increases)

     If immigration is unleashed again rental pricing will be sustained at high levels as well.

     The other problem is with our balance of payments which is the highest in absolute terms,and with the NZ $ depreciation of 11% ytd,import prices will be substantive and not from supply side shocks (which is additive).

     Our interest rates already show the risk side (without additional debt to gdp) being the highest in the developed world (g10 – EU ZONE)

     Greece (GR) has three time as much debt as Australia (AU), but the yield on its 10-year gov't bonds is the same as Australia. Italy (IT) has four times as much debt as Norway (NO), but the same 10-year yield. The ONLY reason Italian and Greek yields are so low is ECB QE… pic.twitter.com/TsyoiheWmd

     — Robin Brooks (@RobinBrooksIIF) May 6, 2022
     • SPC 1.3.1

       11 May 2022 at 6:57 pm

       Our rising interest rates will ensure the dollars decline does not continue.
       • Poission 1.3.1.1

         11 May 2022 at 7:04 pm

         The dollar had already depreciated 11% with increasing OCR,we are also competing with a bearish Federal reserve that is hiking .5 per review.
       • pat 1.3.1.2

         11 May 2022 at 7:05 pm

         No guarantee there….sentiment will drive it and net negative trade balance works against us.
   • SPC 1.4

     11 May 2022 at 6:51 pm

     It's based on an expectation of impact on spending of higher mortgage payments.

     Whether they are right depends on numbers leaving (with border freedom of movement) relative to migrant worker inflow helping businesses impacted by labour shortages and foreign student/tourism recovery. If the latter is the greater factor then this might negate economist forecasts.

     Given it’s all pre budget and supports greater government assistance to those struggling with higher costs … .
     • pat 1.4.1

       11 May 2022 at 7:06 pm

       Contrary to popular belief, its not all about housing, important as that is.
   • Nic the NZer 1.5

     11 May 2022 at 11:20 pm

     Michael Reddell seems to discuss this question here,

     https://croakingcassandra.com/2022/05/09/what-if/

     The suggestion of a recession is just basically a way of saying monetary policy will have an effect and so GDP must fall from a present peak. The question is how much effect is necessary before the reserve bank stops wanting to use monetary policy to reduce inflation.

     To me the important question is actually are we in a demand led inflationary period, because the way monetary policy is supposed to work is to reduce employment->reduce income and wages->reduce demand->reduce prices or at least slow price increases. This appears to be the prognosis according to Reddell who is claiming the economy is presently employing above its capacity (or NAIRU) rate resulting in domestic inflation, supposedly this happened due to a combination of monetary and fiscal measures which were not correctly calibrated. Technically he only refers to the Neutral rate of monetary policy however this is supposed to select the resulting rate of employment in the economy.

     To me it seems what has actually happened is that the government had to shut down large parts of the economy while maintaining every-ones wages, but we have actually lost some amount of domestic production due to the pandemic. There have also been a number of external cost increases around the pandemic impacts overseas and also the impacts of the conflict with Russia, and direct impacts of the war in Ukraine. None of these factors will actually be improved by businesses facing higher interest costs (though such costs may well be passed on). The main difference between these two being a question of have many received real wage increases or real wage cuts at this stage.

     So unfortunately if my story is correct and we are going to fix it by whacking into domestic demand, then NZ will implement a recession which doesn't actually target any causes of inflation at least until that recession causes a serious enough economic contraction to get prices to slow. As should be obvious from the lockdown policy, if the country wants to it can always have a recession, that is a choice, and it can do that with or without a wage subsidy to maintain incomes (e.g GDP) across that period. This is likely to have the worst economic impacts first on those with the least responsibility for any domestic inflation situation and those who have only received real wage cuts so far.
     • Ad 1.5.1

       12 May 2022 at 5:59 am

       good link.

       Helpful and terrifying if interest rate and inflation predictions both come to pass so fast.

       Almost sorry to add a political note to it, but it would make a late 2023 election a total left cataclysm.
2. Anne 2

   11 May 2022 at 5:49 pm

   Three cheers for Kelvin Davis for having the courage to describe his own whanau's experiences and so eloquently too:

   https://www.nzherald.co.nz/nz/labours-kelvin-davis-accuses-opposition-of-privilege-based-on-misery-of-his-own-family/3HH6NU6OMPDE4QLF6KUREBGLCU/
   • Patricia Bremner 2.1

     11 May 2022 at 6:59 pm

     Thanks Anne. That is a great speech.

     [Please check and correct your user name in the next comment, thanks]
     • Incognito 2.1.1

       11 May 2022 at 7:10 pm

       Mod note
       • Patricia Bremner 2.1.1.1

         11 May 2022 at 10:53 pm

         Sorry. Missed that. Will watch in future.
   • Ad 2.2

     12 May 2022 at 6:04 am

     If only it had been made in the service of an actual government initiative.

     Imagine Mahuta doing that for 3 Waters, or Davis going the same for the Maori part of the health reforms, or indeed any of the Maori caucus at all doing it in crime and Policing.

     Horse has bolted on Treaty issues now sorry.
3. SPC 3

   11 May 2022 at 6:23 pm

   A history of misinformation.
4. SPC 4

   11 May 2022 at 6:41 pm

   Inclusion and unequal outcomes.

   Transgender athletes: What do the scientists say?

   https://www.bbc.com/sport/58732146

   'Transgender inclusion, fairness and safety often cannot co-exist' says major review

   https://www.bbc.com/sport/58732146
5. joe90 5

   11 May 2022 at 7:18 pm

   Sadistic thuggery has it's privileges.

   /

   Mann said it only took one punch by Shaun Burr to floor the large teenager the men were so afraid of.

   But, the Burrs didn’t stop there and kept punching.

   Then, William Burr introduced the piece of wood as a weapon, which was not defensive behaviour, she said.

   When the boy did put both his hands on his head and let go of the knife, neither William Burr or Shaun Burr stopped or grabbed it – they just kept hitting him.

   The teenager made no sound when they cut off his finger, Mann said.

   https://www.stuff.co.nz/national/300585344/hugs-and-tears-as-father-and-son-who-cut-finger-off-teen-burglar-found-not-guilty
   • Populuxe1 5.1

     11 May 2022 at 7:29 pm

     Distasteful as it is, and condemning the violence and torture, I'm not really that surprised at the verdict. Home invasion and burglary press juries' buttons. It's less about privilege than fear and, for those who have been burgled or had their homes invaded, retribution. They just don't focus on the violence.
   • McFlock 5.2

     11 May 2022 at 7:40 pm

     I don't have too much problem with the wood, or even beating the shit out of him more than strictly necessary – easy enough to chalk up to panic in a legitimate self defense moment.

     But arguing "self defense" to amputate a finger of a guy? How is that anything other than calculated maiming?

     The only words that come to mind are "jury nullification".

     Maybe they truly got a jury of their peers.
     • pat 5.2.1

       11 May 2022 at 7:45 pm

       Not a rational action that is indefensible….as is this.."The teenager had stolen three other cars from William Burr and broke bail to come back with his girlfriend for a fourth attempt."….sounds like a lot of history.
       • McFlock 5.2.1.1

         11 May 2022 at 8:04 pm

         "a lot of history" is not grounds for self defense, according to the Crimes Act.

         But I guess with the right history, with the right jury, and the right victims…. anything is defensible.
         • pat 5.2.1.1.1

           11 May 2022 at 8:11 pm

           A lot of history may well be grounds for self defence…cutting the finger off an already subdued individual however may not be.
           • McFlock 5.2.1.1.1.1

             11 May 2022 at 8:17 pm

             Dunno what you're trying to slide through all those equivocations, and I'm not sure I care.
             • pat …

               11 May 2022 at 8:20 pm

               snap
               • McFlock …

                 11 May 2022 at 8:48 pm

                 My point was that everything they did could at least be argued self defense up until choosing to chop part of someone's finger off when one has them on the ground at gunpoint (and thoroughly beaten).

                 Surely that's obvious?
                 • pat …

                   11 May 2022 at 8:52 pm

                   Thought you didnt care?
                   • McFlock …

                     11 May 2022 at 9:33 pm

                     I obviously care about juries apparently allowing torture if they think the victims deserve it – that's why I commented.

                     As to why you commented, I do not know and am still unsure as to whether I care. You certainly don't seem to care if anyone else understands your point.

                     Although I'm becoming mildly curious as to whether, if left long enough, you'll spontaneously generate the fifth folio.
     • Jester 5.2.2

       11 May 2022 at 11:12 pm

       NZ herald have changed the wording considerably regarding the finger. There was no amputation of the finger, now they say "after chopping off the tip of the boy's little finger."

       Piopio home invasion: Farming father and son not guilty on all charges – NZ Herald
       • McFlock 5.2.2.1

         12 May 2022 at 12:07 am

         They could have made one swipe with a dermatome. Still would have been torture rather than self defense, and the jury still fucked up.
         • Jester 5.2.2.1.1

           12 May 2022 at 6:33 am

           Imagine what would have happened to the intruders if they had been in one of the southern USA states!
           • McFlock 5.2.2.1.1.1

             12 May 2022 at 2:05 pm

             why? They're here.
   • Jimmy 5.3

     12 May 2022 at 9:01 am

     Perhaps the jury (NZ public) are sending a message to the judges and government.

     “Since you’re not protecting us, we’ll we protect those who protect themselves”
     • joe90 5.3.1

       12 May 2022 at 9:29 am

       The only message they're sending is that they think it's okay for racist provincial thugs to mutilate black people.

       He also had a large laceration down his leg. “It was quite a long one, and was a very straight cut, which surprised me at the time,” Murray said.

       His finger had been hanging on by a piece of skin, but was no longer bleeding.

       “It was a clean cut right across.

       […]

       Murray said William Burr told the boy, “that will teach you. Everyone is going to know that you are a thief”.

       “He was indicating he cut the finger as proof that the patient was a thief, to let everyone know. Implying that’s what they do overseas,” she said.

       […]

       She said William Burr said “We were being too PC [politically correct] and we were dealing with black people and should be dealing with him.”

       […]

       William Burr was sitting at the dining table behind her and said “That’s how you do it. You won’t be f…… doing that again” to the boy.

       Then, he stood up and stomped on the boy’s lower back. The boy did not react or make a sound.

       […]

       Not long after, William Burr walked towards the teenager and stood over him with a wide stance, arms crossed, and smirking.

       He took photos of the boy on the floor.

       Constable Matthew Kay tried to intervene and escort William Burr away, but was told “to get a real job”.

       Kay reported William Burr saying “you could not have done this, I did this. You wouldn’t have the guts to do this” four times.

       https://www.stuff.co.nz/national/300580588/everyone-is-going-to-know-that-you-are-a-thief-accused-told-teen-burglar
6. Poission 6

   11 May 2022 at 9:33 pm

   Alogrithmic stablecoin shows instability due to interconnected complex derivatives.

   JUST IN: Algorithmic stablecoin TerraUSD plunges as crypto markets await a rescue led by primary backer Do Kwon https://t.co/uVZQ57XRPJ pic.twitter.com/GObjSIUlFK

   — Bloomberg Markets (@markets) May 11, 2022

   https://coinmarketcap.com/currencies/terra-luna/

   Narrow doors when everyone runs to the exit.
   • Poission 6.1

     11 May 2022 at 11:05 pm

     Luna the primary backer has fallen from $33.95 to $2.79 in 24 hours.

     OUCH! Controversial stablecoin UST — which is meant to be pegged to the dollar — plummets below 40 cents Sister token luna dived more than 80% to $5. Other cryptocurrencies tumbled alongside them, with #bitcoin sinking 5% and ether down 4%. https://t.co/RlVC6W1xFK pic.twitter.com/VU33r7NbtS

     — Holger Zschaepitz (@Schuldensuehner) May 11, 2022

     Millennial mechanics and the wipeout of meme stock values promoted by influencers,creative destruction continues.

     Fooled by Randomness needs no revision.
     "Day Traders Lose ALL the Money Made in Meme-Stock Era".https://t.co/A0KXZntPro

     — Nassim Nicholas Taleb (@nntaleb) May 9, 2022

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