Oct 1 • 1HR 4M

The week that was to Oct 2

Including the weekly 'hoon' podcast with Bernard Hickey, co-host Peter Bale & guest Robert Patman, looking at the Baltic gas explosions, the UK's financial implosion, and the RNZ/TVNZ merger

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Bernard Hickey
Bernard Hickey's discussions about the political economy in Aotearoa-NZ and in geo-politics, including issues around housing affordability, climate change inaction and child poverty reduction.
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TLDR: This week the financial and geo-political outlooks darkened in Britain and northern Europe after Britain’s plans for unfunded tax cuts were trashed by financial markets and sabotage of gas pipelines in the Baltic Sea aggravated tensions between NATO and Russia.

The financial and geo-political outlooks continue to darken in Britain and northern Europe Photo: Kate Green/Getty Images

Closer to home, National’s leaders Christopher Luxon and Nicola Willis were forced to deny their tax cuts were similar to Britain’s disastrous plans and postal voting in council elections got off to a slow start, prompting suggestions they should be run in future by the Electoral Commission in similar ways to the General Election.

In the podcast above of Friday evening’s ‘hoon’ webinar for paying subscribers, co-host Peter Bale and myself talked about the news of the week in geo-politics and Aotearoa-NZ’s political economy with the University of Otago’s Robert Patman, including:

  • The Bank of England’s intervention to promise to print at least £65b to stop Britain’s £1.5t pension sector from collapsing under the weight of billions of pounds of margin calls from the use of a new derivative tool called Liability Driven Instruments (LDIs);

  • the LDIs were triggered by the fastest ever rise in British bond yields because new PM Liz Truss and new Chancellor of the Exchequer Kwasi Kwarteng promised £45b of unfunded tax cuts, most of which will go to the richest taxpayers;

  • the turmoil on global financial markets saw the NZ dollar fall to a 14 year low of 56 USc, complicating the inflation-fighting job of the Reserve Bank, which is expected to hike the Official Cash Rate again next Wednesday at 2pm by 50 basis points to 3.5%;

  • the mysterious explosions under the Baltic Sea that destroyed the Nordstream 1 and 2 gas pipelines from Russia to Europe, which Danish authorities have said was caused by sabotage with 500kg of TNT;

  • without formally accusing Russia of the sabotage, NATO pledged to defend Europe’s infrastructure with concerted military action;

  • Russia’s deputy head of security said he thought Russia would be able to get away with nuking Ukraine because NATO was afraid of retaliation;

  • surveys of the confidence of consumers, employees and businesses in Aotearoa-NZ found improvements in the September quarter as mask restrictions were lifted and tourists and working holiday makers began returning; and,

  • a political opinion poll showed National-ACT in a position to govern alone (just) if the election was held now, with another survey showing the net approval ratings of Christopher Luxon and Jacinda Ardern were neck and neck.

Here’s Peter Bale’s weekly email on world affairs as a primer.

An update from the podcast: Robert Patman talked on Friday night about the potential fall of the key city of Lyman in the Donetsk province of Ukraine. Since then, Russia’s troops have indeed pulled out of the strategic city.

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