Biggest bank jumps first after hotter-than-expected CPI data; hikes fixed mortgage rates by around 45 basis points and deposit rates by around 30 basis points
Except when monopolies / oligopolies are involved.
Take the power generators who have created a supply shortage so that prices can be kept high and forced higher. Do you see them building new generation even though they have the consents to do so?
The post-pandemic supply chain disarray coupled with Putin's war and energy- and climate-driven shocks to food production are picture perfect cover for the endgame prescription of disaster capitalism. The mantra is Never Let a Crisis Go To Waste and we are watching the textbook case study unfold in real time.
Decades of light-touch neoliberal deregulation, cosy revolving-door relationships between governments and globalised fnance, and aggressive climate denial and obstruction are going to make the world unlivable before most people even realise what happened.
Yes I ageee. Already have for many and ultimately as we see it’s the central banks we own here plus our Governments enabling them and working for the private offshore banks that have and are causing serious damage to the people and country. Of course they all still make plenty with fees, levy’s and taxes we pay for to take the piss really and make no progress whatsoever. In fact they attack the peoples lives, children and resources as though we have no laws and no rights and Government have no obligations and duties to the public good or responsibility to do their jobs adequately and lawfully while in power either.
Working in industries where we have had to lift salaries substantially, pay increased transport and shipping costs, get weekly price increases from suppliers and have difficulties operating due to labour shortages impacting our ability to make basic products, I do not understand why everybody is so 'surprised' about ongoing inflation.
Since the failed 'transitory inflation' claims were soundly debunked, central banks and economists have been so far removed from reality, one has to question whether they actually have any understanding of the current market dynamics.
Expecting government to help was also proven to be farcical over the past 2 years, they were no help in the Auckland Port issue, shipping crisis and costs, and actually increased bureaucracy at the same time.
Thanks for highlighting the impact excess profiteering has on inflation. I do wonder what can be done about it though? Having the reserve bank being able to levy some sort of windfall tax on profits to combat inflation in addition to interest rates maybe? But man that is a minefield.
One thing is certain though it is clearly not fair for workers to pay both in higher prices and in lower pay just so many companies can continue to make mega profits during times of high inflation.
Wages have stagnated for decades, how will we ever restore those lost living standards if the whole system keeps workers pay artificially low to support itself?
Yip windfall taxes. Navigating Minefields is meant to be what they get paid heaps to do. So unless they’re corrupted by influence from those interests profiteering then that’s leaderships job. Not make cowardly or deceptive statements against evidence and fact (lying). If they have they need to stand down before the next election in all good conscience given the country is now 90 billion dollars poorer. That’s not a “wee glitch” and they’re still increasing interest and prices further into recession with unrecoverable harm done to citizens they’re meant to serve. Never never underestimate just how depraved and sadistic our “representatives” and institutions really are and what they will ignore and silence dissent to benefit themselves, save face and privilege the rich, already privileged classes and corporations. Simple oppression and illegal abuse.
Agreed! The quote below is plenty evidence of that. When you consider the job responsibilities, related salary, and power given to the person making this statement, it makes my blood boil!
"But they do have significant profits and we would expect them to bear that in mind and bear in mind the situation of the consumers." Grant Robertson on RNZ’s Morning Report
I think we (the world) collectively have been under-pricing things and this is a bit of a catch up to the reality that everything we do and consume has a cost. For too long there has been a constant capital injection (usually coming from money printing somewhere) to subsidize the costs. It reads just like our housing market where residential tenancies have been a very poor investment decision based on the fundamentals but people still piled on in because of the capital benefits.
This may be the case with something like a TV or a car (although, not in raw production, but rather in actually accounting for ESG considerations).... But I find it hard to believe it is true for banks who, in the past few decades, have closed a majority of their branches, laid of a majority of their staff, eliminated a huge chunk of printing/postage/admin/logistics costs, consolidated into massive multi-national economies-of-scale, and still have grown both their share of our GDP and posted new-record profits nearly every quarter.
Looking at the finance sector, I'd be more inclined to say it is 'neo-liberalism' that has finally caught up with us.
I agree with what you’re saying, Tim, however I’d add that the banks are making a lot of this profit on housing which has much of the risk component removed as successive governments have effectively guaranteed the loans. If the banks had to lend at a rate truly representative of the costs that might have dampened demand.
Yep, absolutely. Our entire ideology around housing is f*cked (the banks are just enthusiastic players in a stupid game).... But also (and this is not to disagree with you, but rather just me leaning into my general disgust at the big banks), our housing situation has nothing to do with the money they make from excessive credit card merchant fees, Kiwisaver fee structures, deposit interest margins, OD penalties, under-funded call centres etc... Haha, I'm just bitter and twisted old man - ignore me! ;-)
You have touched on this before Bernard, the RBNZ Funding for Lending program is certainly increasing bank NIM! Term Deposits are at lower rates as the banks don't need to attract the capital. The RBNZ gives it to them cheaply. It should have been stopped ages a go!
Not much change from $2K to get to Syd and back this week, crazy dollars vs 'the good old days' but possibly reflective of what it should be given the carbon footprint etc.?
On the note of social investment, it is interesting to have this conversation again. The social investment approach is a valuable one, but I see limitations in how National want to use it to drive all decisions. Nicola Willis talked about the 'ramping up' of initiatives when they look to be successful. However, this makes assumptions that a successful intervention, as demonstrated through data, would produce the same, or similar results, in other contexts. It also doesn't account for multiplier effects of waiting to introduce an intervention into the wider population, when the issue may have actually gotten far worse as a result of delaying the intervention to the wider population.
A good approach would be to make sure we also lean on our researchers and evaluators when making decisions on interventions, along with the social investment approach. These professionals can talk to people, and understand their contexts, to help understand the nuances of an intervention, and whether it could be scaled up.
Also, sometimes we don't need to wait to see the data. For example, I'm sure most could agree lunches for children in schools was bound to produce better outcomes for society.
Pretty worried about Nicola Willis' latest proposal to make public-services more privately-profitable... I get the sense that there'll be plenty more Libertarian nonsense drooling out of National between now and the election.
Hi Felix
Except when monopolies / oligopolies are involved.
Take the power generators who have created a supply shortage so that prices can be kept high and forced higher. Do you see them building new generation even though they have the consents to do so?
The post-pandemic supply chain disarray coupled with Putin's war and energy- and climate-driven shocks to food production are picture perfect cover for the endgame prescription of disaster capitalism. The mantra is Never Let a Crisis Go To Waste and we are watching the textbook case study unfold in real time.
Decades of light-touch neoliberal deregulation, cosy revolving-door relationships between governments and globalised fnance, and aggressive climate denial and obstruction are going to make the world unlivable before most people even realise what happened.
Yes I ageee. Already have for many and ultimately as we see it’s the central banks we own here plus our Governments enabling them and working for the private offshore banks that have and are causing serious damage to the people and country. Of course they all still make plenty with fees, levy’s and taxes we pay for to take the piss really and make no progress whatsoever. In fact they attack the peoples lives, children and resources as though we have no laws and no rights and Government have no obligations and duties to the public good or responsibility to do their jobs adequately and lawfully while in power either.
Working in industries where we have had to lift salaries substantially, pay increased transport and shipping costs, get weekly price increases from suppliers and have difficulties operating due to labour shortages impacting our ability to make basic products, I do not understand why everybody is so 'surprised' about ongoing inflation.
Since the failed 'transitory inflation' claims were soundly debunked, central banks and economists have been so far removed from reality, one has to question whether they actually have any understanding of the current market dynamics.
Expecting government to help was also proven to be farcical over the past 2 years, they were no help in the Auckland Port issue, shipping crisis and costs, and actually increased bureaucracy at the same time.
Thanks for highlighting the impact excess profiteering has on inflation. I do wonder what can be done about it though? Having the reserve bank being able to levy some sort of windfall tax on profits to combat inflation in addition to interest rates maybe? But man that is a minefield.
One thing is certain though it is clearly not fair for workers to pay both in higher prices and in lower pay just so many companies can continue to make mega profits during times of high inflation.
Wages have stagnated for decades, how will we ever restore those lost living standards if the whole system keeps workers pay artificially low to support itself?
Yip windfall taxes. Navigating Minefields is meant to be what they get paid heaps to do. So unless they’re corrupted by influence from those interests profiteering then that’s leaderships job. Not make cowardly or deceptive statements against evidence and fact (lying). If they have they need to stand down before the next election in all good conscience given the country is now 90 billion dollars poorer. That’s not a “wee glitch” and they’re still increasing interest and prices further into recession with unrecoverable harm done to citizens they’re meant to serve. Never never underestimate just how depraved and sadistic our “representatives” and institutions really are and what they will ignore and silence dissent to benefit themselves, save face and privilege the rich, already privileged classes and corporations. Simple oppression and illegal abuse.
Agreed! The quote below is plenty evidence of that. When you consider the job responsibilities, related salary, and power given to the person making this statement, it makes my blood boil!
"But they do have significant profits and we would expect them to bear that in mind and bear in mind the situation of the consumers." Grant Robertson on RNZ’s Morning Report
I think we (the world) collectively have been under-pricing things and this is a bit of a catch up to the reality that everything we do and consume has a cost. For too long there has been a constant capital injection (usually coming from money printing somewhere) to subsidize the costs. It reads just like our housing market where residential tenancies have been a very poor investment decision based on the fundamentals but people still piled on in because of the capital benefits.
The externalities have finally caught up to us.
This may be the case with something like a TV or a car (although, not in raw production, but rather in actually accounting for ESG considerations).... But I find it hard to believe it is true for banks who, in the past few decades, have closed a majority of their branches, laid of a majority of their staff, eliminated a huge chunk of printing/postage/admin/logistics costs, consolidated into massive multi-national economies-of-scale, and still have grown both their share of our GDP and posted new-record profits nearly every quarter.
Looking at the finance sector, I'd be more inclined to say it is 'neo-liberalism' that has finally caught up with us.
I agree with what you’re saying, Tim, however I’d add that the banks are making a lot of this profit on housing which has much of the risk component removed as successive governments have effectively guaranteed the loans. If the banks had to lend at a rate truly representative of the costs that might have dampened demand.
Yep, absolutely. Our entire ideology around housing is f*cked (the banks are just enthusiastic players in a stupid game).... But also (and this is not to disagree with you, but rather just me leaning into my general disgust at the big banks), our housing situation has nothing to do with the money they make from excessive credit card merchant fees, Kiwisaver fee structures, deposit interest margins, OD penalties, under-funded call centres etc... Haha, I'm just bitter and twisted old man - ignore me! ;-)
You have touched on this before Bernard, the RBNZ Funding for Lending program is certainly increasing bank NIM! Term Deposits are at lower rates as the banks don't need to attract the capital. The RBNZ gives it to them cheaply. It should have been stopped ages a go!
Not much change from $2K to get to Syd and back this week, crazy dollars vs 'the good old days' but possibly reflective of what it should be given the carbon footprint etc.?
On the note of social investment, it is interesting to have this conversation again. The social investment approach is a valuable one, but I see limitations in how National want to use it to drive all decisions. Nicola Willis talked about the 'ramping up' of initiatives when they look to be successful. However, this makes assumptions that a successful intervention, as demonstrated through data, would produce the same, or similar results, in other contexts. It also doesn't account for multiplier effects of waiting to introduce an intervention into the wider population, when the issue may have actually gotten far worse as a result of delaying the intervention to the wider population.
A good approach would be to make sure we also lean on our researchers and evaluators when making decisions on interventions, along with the social investment approach. These professionals can talk to people, and understand their contexts, to help understand the nuances of an intervention, and whether it could be scaled up.
Also, sometimes we don't need to wait to see the data. For example, I'm sure most could agree lunches for children in schools was bound to produce better outcomes for society.
Pretty worried about Nicola Willis' latest proposal to make public-services more privately-profitable... I get the sense that there'll be plenty more Libertarian nonsense drooling out of National between now and the election.
Thanks Bernard,
Can we open up today’s post to the public please?
Bernard are you still ‘team transitory??
Wayne Brown's comment absolutely baffles me.
ITV News at 10 presented by Tom Bradby on Wednesday 19th October 2022
https://www.youtube.com/watch?v=e-AgqBHjhA8
TLDR News - Liz Truss' Collapse: A Timeline of Chaos
https://www.youtube.com/watch?v=0CswZ8Fbl80
I have to ask the question because of Trump, but how is Truss connected to Putin?
What happens if the OCR hikes will not bring down inflation? What will they do then after creating unemployment and ruining people's lives?