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  1. #71
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    You're on to it, Aaron! Call it a capital outflow or a run on the banks - it's the same thing.


  2. #72
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    Quote Originally Posted by macduffy View Post
    You're on to it, Aaron! Call it a capital outflow or a run on the banks - it's the same thing.

    I've said it before call in the loans wipe out the borrowers first, then the shareholders, then the bondholders and if there is anything left afterwards give it to the depositors.

    Also not that I like him I see Don Brash is pointing out the blatantly obvious.
    https://www.msn.com/en-nz/news/natio...NT9?li=BBqdg4K

    The Reserve Bank itself suggests this will reignite housing inflation to about 5 percent per annum," he told The AM Show.
    What the Reserve Bank is saying is that houses will continue to rise faster than incomes."

    This is seriously f**ked up in my view, that no one seems to give a s**t is hard to believe. I would guess it is because most intelligent people already have a least one house and don't see it as a problem as long as they can help their own kids up onto the property ladder. This leaves a large chunk of the population and young people without parental assistance getting reamed by the reserve bank. I would have thought a left leaning government might comment even though the reserve bank is independent. Any efforts to improve housing or housing affordability in the current financial system is a joke if they are not going to address the root cause of the problem.


    His second concern is about what the Reserve Bank could do if a recession occurs, with the rate at the lowest it's ever been there isn't much room to go any lower.

    The reserve bank is meeting its inflation targets and unemployment isn't a problem yet they are cutting. I am assuming as long as they are not the evil b**tards I think they are then they might see what I see for the future but they need to extend and pretend rather than allow a correction.
    Last edited by Aaron; 09-05-2019 at 12:53 PM.

  3. #73
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    Quote Originally Posted by Aaron View Post
    Any efforts to improve housing or housing affordability in the current financial system is a joke if they are not going to address the root cause of the problem.
    His second concern is about what the Reserve Bank could do if a recession occurs, with the rate at the lowest it's ever been there isn't much room to go any lower.
    The reserve bank is meeting its inflation targets and unemployment isn't a problem yet they are cutting.
    These are exactly my thought when I saw it was cut. I mean sure, I've never worked for the RBNZ, but the above seems to make common sense to me.

  4. #74
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    Quote Originally Posted by Aaron View Post
    I've said it before call in the loans wipe out the borrowers first, then the shareholders, then the bondholders and if there is anything left afterwards give it to the depositors.

    Also not that I like him I see Don Brash is pointing out the blatantly obvious.
    https://www.msn.com/en-nz/news/natio...NT9?li=BBqdg4K

    The Reserve Bank itself suggests this will reignite housing inflation to about 5 percent per annum," he told The AM Show.
    What the Reserve Bank is saying is that houses will continue to rise faster than incomes."

    This is seriously f**ked up in my view, that no one seems to give a s**t is hard to believe. I would guess it is because most intelligent people already have a least one house and don't see it as a problem as long as they can help their own kids up onto the property ladder. This leaves a large chunk of the population and young people without parental assistance getting reamed by the reserve bank. I would have thought a left leaning government might comment even though the reserve bank is independent. Any efforts to improve housing or housing affordability in the current financial system is a joke if they are not going to address the root cause of the problem.


    His second concern is about what the Reserve Bank could do if a recession occurs, with the rate at the lowest it's ever been there isn't much room to go any lower.

    The reserve bank is meeting its inflation targets and unemployment isn't a problem yet they are cutting. I am assuming as long as they are not the evil b**tards I think they are then they might see what I see for the future but they need to extend and pretend rather than allow a correction.
    I agree with you that they are not evil b*****ds but they sure are f*****g up the economy with this pro-growth stance / experiment.

    Seems rather odd a pro-growth cut is needed when their own GDP forecasts have quarterly growth rates averaging 0.8 per cent for the next couple of years. That looks pretty healthy to me.

    Never mind Aaron its all going to be OK but Id buy that land pretty quick before it gets too expensive.

    That
    When investors are euphoric, they are incapable of recognizing euphoria itself.

  5. #75
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    Quote Originally Posted by winner69 View Post
    Never mind Aaron its all going to be OK but Id buy that land pretty quick before it gets too expensive.
    Too late for that already too expensive it is just a question how far they can take it for how long and maybe "this time is different" we are certainly in a new era. Although I would be interested to compare current central bank policy with that of John Law.
    It worked out alright in the end back then with the age of enlightenment but there was a period of adjustment that was unpleasant. Particularly for the French monarchy.

  6. #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.

  7. #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.

  8. #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.

  9. #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
    When investors are euphoric, they are incapable of recognizing euphoria itself.

  10. #80
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    Quote Originally Posted by winner69 View Post
    rate hikes
    Yeah Right.......

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