Ask Me Anything about the week to March 24
Paying subscribers can ask Bernard Hickey about the week’s news, including the US & Swiss banking crises, the softening outlook for interest rates, the latest poverty & housing stats, & #auxit
It’s that time of the week for an ‘Ask Me Anything’ session for paying subscribers about the week that was for the next hour, including:
The runs on Silicon Valley Bank and First Republic Bank on the west coast of the United States that forced the US Treasury, FDIC and Federal Reserve to intervene to promise full payouts to depositors, over and above the US$250,000 deposit guarantees legislated for, and lend tens of billions to banks to keep them liquid;
The orchestrated rescue and takeover of Credit Suisse last weekend by Swiss authorities working together in a frantic effort with UBS to stop the Swiss banking system from collapsing;
Rate hikes in the United States, Britain, Switzerland and Norway, but a softening of market interest rate expectations because of the banking crises;
Statistics showing little improvement in child poverty and a worsening of the stress on renters, even more so than the stress on mortgage servicers;
the Reserve Bank’s fresh warning to firms and workers not to push for higher real wages and profits in anticipation of higher inflation;
Auckland Mayor Wayne Brown’s casting vote for Auckland Council to pull out of LGNZ; and,
TOP’s launch of a Teal Card and plan to stay out of ministerial roles and not agree to both supply and confidence for either of the main parties.
That’s it. Fill yer’ boots. I’m here for the full hour. Jump into the comments to ask questions.
Cheers
Bernard
Hi Bernard thanks for doing this. I've been thinking alot like you about the housing affordability situation. While the house prices have fallen from their peaks I see this as a temporary pause on their upward climb which will resume again when interest rates fall. Anyway let's be optimistic. Suppose you met a time traveller from 2043 and he told you that New Zealand in 2043 had the same ratio of house prices to incomes we had in 2003 (and you knew for certain he was a genuine time traveller and telling the truth) and you were to get $1m from telling him how we achieved a return to 2003 house prices relative to incomes in just 20 years what would your answer be?
With potential softening of interest rates from RBs to reduce systematic pressure, how do you think the central banks are thinking about inflation targetting now - in a period of high inflation what do they do now? At what point does system stability from a wonky banking system outweigh instability caused by high inflation?