TLDR: This week PM Jacinda Ardern pushed back at talk Aotearoa-NZ has joined the ‘west’ too strongly in a new cold war between the United States and China, British PM Boris Johnson (finally) resigned (sort of) and former Japanese PM Shinzo Abe was shot and killed.
Closer to home, two-year mortgage rates were cut 30-40 basis points to around 5.45%, commodity prices fell again as global recession fears mount, and consumer confidence here slumped despite record-low unemployment and household income growth actually being more than than the CPI inflation rate.
Also:
the Infrastructure Commission told the Government and Wellington’s Councils that their choice of $7.4b of tunnels for ‘Lets Get Wellington Moving’ was not the best option for reducing carbon emissions, although the Councils approved it anyway; and,
the Government announced plans to appoint a single Grocery Commissioner inside the Commerce Commission in the hope of doing a ‘2 Degrees’ on the groceries duopoly of Foodstuffs (Pak’n’Save/New World/Four Square) and Woolworths (Countdown).
In Friday evening’s live hoon webinar for paid subscribers, which is in recorded form above for all subscribers, I took a lap around these issues and more in geopolitics and the global economy with co-host Peter Bale and special guests Professor Robert Patman from the University of Otago and ANZ economist Finn Robinson.
We talked about:
British PM Boris Johnson’s demise (finally);
PM Jacinda Ardern's two big foreign policy speeches at Chatham House in London and the Lowy Institute in Sydney, which struck different tones on China, Russia and our independent foreign policy;
Shinzo Abe’s assassination;
the unprecedented joint warning in public from the bosses of MI5 and FBI to business leaders in a speech in London warning of China's corporate espionage; and,
a preview of next week’s Pacific Islands Forum, where China’s recent attempt to pull various Island nations into its sphere of influence will be at the top of the agenda, along with how Australia, Aotearoa-NZ and the United States can do more on climate change and elsewhere to push back.
Also, I talked with Finn Robinson about the curiously weak noises coming from consumers, despite unemployment being at 3.2% and household incomes actually outpacing inflation in consumer prices. Finn wrote this excellent note this week on the issue.
Here’s the charts we refer to in the podcast. Firstly, this one showing how divergent confidence is from unemployment.
And then this one showing how spending isn’t quite as depressed as confidence. At least yet.
Peter and I also discussed:
the big four banks cutting their two year mortgage rates by around 30-40 basis points to around 5.45% after two year wholesale ‘swaps’ rates fell 80 basis points from their June 16 peak of 4.56% in response to cooling global economic growth and inflation expectations in recent weeks; and,
the fall in commodity prices to pre-war levels as fears grow that the ‘demand destruction’ from inflation’s post-war spike and much-higher interest rates are doing the central banks’ work for them.
There’s more on those interest rate moves here from me earlier in the week.
Earlier in the week, I looked in depth at the move to create a new Groceries Commissioner inside the Commerce Commission.
I also covered another survey showing the depth of hopelessness among young renters.
This is my weekly summary and sampler of the big news of the week we’ve covered on The Kākā for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. Join our community by subscribing in full.
A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation.
The hoon around the week to July 9