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  1. #76
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    I don't like this latest rate cut either, Aaron. I'd much prefer that the ammo was kept for when it might be needed rather than firing off some now and risking having to resort to such desperate measures as negative rates if things fall apart. It must be said though that the RB rate committee is in a rather tricky hole - the directive is to target inflation within a band, ie there is required to be some inflation. The reason is of course to avoid deflation and the misery that would follow that. I don't envy them.

  2. #77
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    Quote Originally Posted by macduffy View Post
    I don't like this latest rate cut either, Aaron. I'd much prefer that the ammo was kept for when it might be needed rather than firing off some now and risking having to resort to such desperate measures as negative rates if things fall apart. It must be said though that the RB rate committee is in a rather tricky hole - the directive is to target inflation within a band, ie there is required to be some inflation. The reason is of course to avoid deflation and the misery that would follow that. I don't envy them.
    I think our reasons for not liking the latest rate cut are a bit different. Yours is a disagreement over the timing of the cut. Mine is fury that I am still stuck on the wrong side of this and they are cutting even though their targets have been met. My upset might also be because I lost at tennis last night as well. But guaranteeing house prices keep rising faster than wages is effectively denying the younger generation the same chance of social mobility that previous generations have enjoyed.

    Although not specifically how the financialisation of the economy and reserve bank policy is stacking the deck against young peoples futures being on a par with previous generations Bernard Hickey's article highlighted a few other reasons why things won't change. Not at least until it becomes glaringly obvious. More likely life isn't too bad for a majority of NZers so we won't get change.
    https://www.stuff.co.nz/business/pro...are-sooo-toast

    I see in the paper today immigration is back near its peak before labour came into power. I would guess central bank policy and immigration are just two issues that need addressing before housing affordability for young NZers could be considered to be seriously attempted by government.

    My term deposits come off in 5 months and I will be buying either real estate or a portfolio of shares with a small amount of debt. Too bad if my timing is terrible. Extend and pretend can go on for a long time. At a minimum Janet Yellen's lifetime.

  3. #78
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    Quote Originally Posted by macduffy View Post
    I don't like this latest rate cut either, Aaron. I'd much prefer that the ammo was kept for when it might be needed rather than firing off some now and risking having to resort to such desperate measures as negative rates if things fall apart. It must be said though that the RB rate committee is in a rather tricky hole - the directive is to target inflation within a band, ie there is required to be some inflation. The reason is of course to avoid deflation and the misery that would follow that. I don't envy them.
    thats the consensus a friend (head of research at one of the major NZ investment banks) and i had when discussing it on wednesday, it seemed kinda pointless - I mean, dropping the OCr to stimulate the economy now? - why, why now? and Adrian Orr is a bit of a numpty.

  4. #79
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    Quote Originally Posted by alistar_mid View Post
    thats the consensus a friend (head of research at one of the major NZ investment banks) and i had when discussing it on wednesday, it seemed kinda pointless - I mean, dropping the OCr to stimulate the economy now? - why, why now? and Adrian Orr is a bit of a numpty.
    Pro-growth if it does work when economy not doing too badly in first place (their own forecasts average 0.8% quarterly growth) only leads to super hot economy and inevitable rate hikes
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  5. #80
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    Quote Originally Posted by winner69 View Post
    rate hikes
    Yeah Right.......

  6. #81
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    RB Governors always seem to act oddly when there’s a Labour Government

    What happened to the RBNZ pro-growth experiment in the early 2000’s .....ended up in tears and a recession (and then we were hit with the GFC the following year)
    Last edited by winner69; 11-05-2019 at 04:48 PM.
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  7. #82
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    Quote Originally Posted by winner69 View Post
    RB Governors always seem to act oddly when there’s a Labour Government

    What happened to the RBNZ pro-growth experiment in the early 2000’s .....ended up in tears and a recession (and then the following year the GFC)
    But this time its different !

  8. #83
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    Quote Originally Posted by winner69 View Post
    RB Governors always seem to act oddly when there’s a Labour Government

    What happened to the RBNZ pro-growth experiment in the early 2000’s .....ended up in tears and a recession (and then the following year the GFC)
    I often wondered who or what caused the Global Financial Crisis.


  9. #84
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    John Roughan in the herald this morning discussed the committee, which highlighted how little I know about the reserve bank. It sounds like he also can't understand why the cut when targets are being met.

    https://www.rbnz.govt.nz/news/2019/0...onomy-and-jobs

    https://www.nzherald.co.nz/business/...ectid=12230142

    For those with premium access. Sorry I know how frustrated I used to get with links to the NBR.

  10. #85
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    I can't crack the Herald's paywall but the need for an interest rate cut eludes a lot of us! It's got to be an attempt to boost that stubbornly low inflation rate - and risk the Auckland housing market recovering it's strength.

  11. #86
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    Quote Originally Posted by macduffy View Post
    I often wondered who or what caused the Global Financial Crisis.

    i think most commentators put it down to the securitization of sub prime mortgage lending.

    I blamed Adrian for wanting to make his mark and that may still possibly be a factor but we are not really able to fully apportion blame on him due to the committee decision
    Quite a few articles now in the NZHerald Premium questioning this decision. Seems very right to question it to me.
    I believe the way to crack the paywall is to pay a measly $10 for the first eight weeks.
    For clarity, nothing I say is advice....

  12. #87
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    Criticism from a former RBNZ official of the bank's capital adequacy proposals.

    http://www.sharechat.co.nz/article/7...-official.html

  13. #88
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    Quote Originally Posted by macduffy View Post
    Criticism from a former RBNZ official of the bank's capital adequacy proposals.

    http://www.sharechat.co.nz/article/7...-official.html
    Orr is a danger


    “Bank risk analysts are appalled at what they are seeing. The bank may not particularly care, because they are playing to a different audience: politicians, the general public and the media who don’t understand the subject area,” Harrison says.
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  14. #89
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    A critic of the RBNZ has his submission blocked as spam ...funny eh

    https://croakingcassandra.com/2019/0...sals/#comments
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  15. #90
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    Quote Originally Posted by winner69 View Post
    A critic of the RBNZ has his submission blocked as spam ...funny eh

    https://croakingcassandra.com/2019/0...sals/#comments
    A very interesting submission.

    The anti-Australianism alleged in the submission became more pronounced after the turbulence of the 1980's which saw a succession of takeovers: the BNZ purchased/bailed out by the NAB, Trustbank bought by Westpac and, more recently ASB by the Commonwealth Bank and eventually NBNZ, previously British-owned, by ANZ. Prior to the 80's, the Australian influence was balanced by local and British interests but this is now no longer the case and it seems that the RBNZ feels that it is being directed by outside agencies.

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