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  1. #31
    An Awesome Cool Cat winner69's Avatar
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    Good to see NBR telling Orr just to do his job .....and I’m not Shoeshine

    We don’t need no rockstar Reserve Banker

    https://www.nbr.co.nz/analysis/we-do...0554d-49461157
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  2. #32
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    What does an interest rate say about an economy. You lower it to increase growth and increase it to decrease growth.
    https://www.rbnz.govt.nz/monetary-po...rate-decisions
    Definitely pro growth with another cut expected.
    8.25% in June 2008. Hard to believe in this day and age.

  3. #33
    Senior Member Toulouse - Luzern's Avatar
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    I was interested in NBR article cited but it is behind a paywall.
    I found this article by Dr Bryce Wilkinson online
    https://nzinitiative.org.nz/reports-...bank-deposits/

  4. #34
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    Quote Originally Posted by Toulouse - Luzern View Post
    I was interested in NBR article cited but it is behind a paywall.
    I found this article by Dr Bryce Wilkinson online
    https://nzinitiative.org.nz/reports-...bank-deposits/
    I'm confused when did the open bank resolution include a government guarantee. I see it mentioned in the graphic here
    https://www.rbnz.govt.nz/regulation-...ank-resolution

    but if you click on Q& As you get this
    https://www.rbnz.govt.nz/faqs/open-b...on-policy-faqs

    Not a big fan of the NZ Initiative, a think tank unable to work out why GST is regressive. Sounds more like they have an ideological bent they want to push. If the free market is the best option they should first go for the abolition of interest rate controls by the central bank and an end to monetary instability in the form of targeted inflation rates.

    Although I agree taxpayers shouldn't be guaranteeing any industry and a taxpayer guarantee won't encourage bankers to act more responsibly. Although who pays for the deposit insurance most countries have? The depositors? I like the idea you won't be completely wiped out in a bank failure.

  5. #35
    FEAR n GREED JBmurc's Avatar
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    Quote Originally Posted by Aaron View Post
    What does an interest rate say about an economy. You lower it to increase growth and increase it to decrease growth.
    https://www.rbnz.govt.nz/monetary-po...rate-decisions
    Definitely pro growth with another cut expected.
    8.25% in June 2008. Hard to believe in this day and age.
    RBNZ policy like many central banks goal is forced by short term thinking Govt(that in turn do the Banks bidding) is to make sure the property market does not fall in value, in turn, pressuring the finance consumer model the banks need to survive

    As unlike the US the local banks hold the risk on properties decreasing in value i.e I don't think NZ/Aus banks have shifted the risk off the balance sheet like what we have seen in the likes of the US market with CDO's to retirement funds (which then blew-up crashing the funds value)
    People don't have ideas, ideas have people

  6. #36
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    Quote Originally Posted by Aaron View Post
    I'm confused when did the open bank resolution include a government guarantee. I see it mentioned in the graphic here
    https://www.rbnz.govt.nz/regulation-...ank-resolution

    but if you click on Q& As you get this
    https://www.rbnz.govt.nz/faqs/open-b...on-policy-faqs
    THey clarify that with:

    All funds that are not frozen will be subject to a government guarantee to ensure that all participants in the financial system are able to engage with the re-opened bank with confidence that any transactions will be honoured.

    And of course they dont quantify the frozen amount, it might be bigger than you think!

    For clarity, nothing I say is advice....

  7. #37
    An Awesome Cool Cat winner69's Avatar
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    Aaron - you might enjoy this

    http://www.davidmcwilliams.ie/2018-articles/
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  8. #38
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    Quote Originally Posted by peat View Post
    THey clarify that with:

    All funds that are not frozen will be subject to a government guarantee to ensure that all participants in the financial system are able to engage with the re-opened bank with confidence that any transactions will be honoured.

    And of course they dont quantify the frozen amount, it might be bigger than you think!

    I guess the NZ Initiative may be getting concerned about nothing. I guess the "government guarantee" scared them into action

  9. #39
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    Quote Originally Posted by winner69 View Post
    Dare I say that that it sounded reasonable to me. Googling him indicates he is not a total crackpot although he is an economist(arts students shouldn't be running the world). I think it may have been him who wrote an interesting article regarding Ireland and the GFC whereby he pointed out the only reason they had a debt problem was that the Irish were buying houses from each other at higher and higher prices in a virtuous cycle of higher valuation more equity more debt available to pay more for the next house. It sounds like the makings of a good joke about Irish stupidity like the ones I used to hear as a kid, but it also sounds a lot like NZ and Australia currently, although US, European and Chinese funny money may also help as some of the Central Bank bond buying must eventual flow to our shores.

    Although I go on about the greedy generation, I think their rip off of younger generations is only a small part of the problem. Extreme disparity in wealth(and power) might be the main problem and it is being exacerbated by Central Banks and QE and low interest rates ensuring high asset price inflation.

    From what I read I suspect a majority of boomers main store of wealth is their house and possibly a small portfolio of shares so they continue to support a system that tries to look after this to the detriment of the young and the poor not necessarily out of greed but possibly out of fear. There might be a better way, I am unsure what it is but a start might be getting rid of targeted inflation and stopping the deceptive use of inflation to get rid of debt over time.
    I have heard the term honest money being used, currently it is being used to deceive as the wealth effect is currently real but won't be if wages and the price of everything else catches up to asset prices.

    I think the problem might be that QE and interest rates and wealth disparity might be getting more extreme each time QE happens or interest rates fall in the face of rising asset prices. Also the constant growth model may be running up against the environment and the limits of the planet. Who knows personally I think the younger generation shut out of the housing market can be more idealistic in their views as they have nothing to lose.
    Last edited by Aaron; 17-02-2019 at 09:44 AM.

  10. #40
    An Awesome Cool Cat winner69's Avatar
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    Good post Aaron

    I’ve always enjoyed reading David McWilliams over the years and once was lucky to see him in action in a Kilkenomics session (where economics and comedy come together).

    Maybe it’s more his style of writing than economics that attracts me but his subject matter is always interesting

    Best piece was this from 2007
    http://www.davidmcwilliams.ie/the-generation-game/
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  11. #41
    An Awesome Cool Cat winner69's Avatar
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    RB under Orr getting even weirder

    https://www.nzherald.co.nz/business/...ectid=12206354

    In a speech the other day a RB guy said ‘It’s like putting the roof on while the sun shines’ ...goodness gracious me
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  12. #42
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    Cometh the the caring govt , cometh the Gov to match. Times are are changing for the better, we adapt too. Great stuff. Adapt or be irrelevant.

  13. #43
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    “ Let’s leave Tane Mahuta in the forest. He has no place on The Terrace“

    https://www.interest.co.nz/opinion/9...cricket-umpire
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  14. #44
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    Thanks for highlighting the last line, it shows the writer has got some unhealthy agenda against the governor and his idea of yet more authorities and regulatory bodies is just supporting his network of talking heads all , justifying their jobs with spin and hubris and butt covering.

    Transparent indeed, adapting ,no.

  15. #45
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    Quote Originally Posted by Joshuatree View Post
    Thanks for highlighting the last line, it shows the writer has got some unhealthy agenda against the governor and his idea of yet more authorities and regulatory bodies is just supporting his network of talking heads all , justifying their jobs with spin and hubris and butt covering.

    Transparent indeed, adapting ,no.
    Unhealthy agenda? I thought it was a well structured opinion piece from a very knowledgeable writer. Orr needs to deflate his ego before someone else does it for him. We don't need rockstar RB governors and economists. We need sound policy and a functioning regulatory regime. Going and sitting with Te Roroa to get permission to talk of Tane Mahuta is PC BS. We've already got a flaky feel good PM, we don't need it spreading further.

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