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Musical Chairs
@musicalchairs.bsky.social
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Musical Chairs@musicalchairs.bsky.social |
72 followers 9 following 77 posts
Ugly graphs, insights and outbursts. NZ.
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Musical Chairs
@musicalchairs.bsky.social
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Musical Chairs
@musicalchairs.bsky.social
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Migrants filled the jobs that employers couldn't recruit to in a few months between December 22 and March 23. Now what?
1 replies 0 reposts 2 likes
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Musical Chairs
@musicalchairs.bsky.social
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Saturday morning reading the coalition agreements. What an absolute tidal wave of social harm we have coming.
#nzpol
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Musical Chairs
@musicalchairs.bsky.social
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Fair challenge. Sadly, we seem to have an absolute dominance of Chicago school medieval monetarists in NZ.
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Musical Chairs
@musicalchairs.bsky.social
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Sure, Danish central bank didn't hike rates until CPI inflation was over 8% and they look done with rates at 3.6%. Mortgage structure quite different in Denmark (and loans are generally much smaller).
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Musical Chairs
@musicalchairs.bsky.social
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Musical Chairs
@musicalchairs.bsky.social
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Viking warrior inflation fighting in Denmark. Danes did the things the economists hate - temporary rent controls, subsidies for rural shops, grants for people to replace gas boilers, monitoring of grocery prices / profits. Denmark CPI is 0.1%, unemployment is 2.5% and mortgage rates are around 4%.
3 replies 25 reposts 49 likes
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Musical Chairs
@musicalchairs.bsky.social
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Hi Renter! Landlord here.
You keeping the windows open and the mould wiped?
Excellent.
Now then... I hear we've had a pay rise?
Top work mate! Now, hand it the fk over or get out of my house.
#nzpol
0 replies 1 reposts 7 likes
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Musical Chairs
@musicalchairs.bsky.social
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Yes, but they have no fking clue what they're doing and they're going to get found out fast. Not saying the last lot were any better ofc.
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Musical Chairs
@musicalchairs.bsky.social
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Bbbbut, Govt spending baddie bad, inflation etc. Govt spending more into an economy does not have to be inflationary at all. If 'space' needs to be made, it's not hard to work out who could afford to spend a bit less so that we can leave our kids a country they want to live in. [End]
1 replies 1 reposts 5 likes
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Musical Chairs
@musicalchairs.bsky.social
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Christchurch in 2010/11 (sadly) shows us the right way to prevent a downturn lasting years. Build stuff... invest in the hard *and* soft infrastructure we need for the 21st century. Lord knows we are going to need it [5/n]
0 replies 4 reposts 9 likes
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Musical Chairs
@musicalchairs.bsky.social
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The UK provides the textbook example of what *NOT* to do when a downturn hits - cut Govt spending, slash public services, get into bed with private equity, elect self-serving tossers etc. Sound familiar? [4/n]
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Musical Chairs
@musicalchairs.bsky.social
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As more people give their money to banks & lose work, less money is earned / spent, and businesses start cutting back on staff - generating momentum for the downturn. Tax revenues fall as spending, company turnover and profits drop. It's started... [3/n]
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Musical Chairs
@musicalchairs.bsky.social
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The main driver of the downturn is the big increase in debt servicing costs - $30bn interest paid by households and businesses to bank shareholders and savers over the last 12 months. Interest payments are now *$3bn per month* - that's a quarter of TOTAL NZ WAGES (ffs) [2/n]
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Musical Chairs
@musicalchairs.bsky.social
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Surreal watching NZ striding into a self-inflicted recession while the media focuses on whether one tosser has spoken to another tosser yet. Meanwhile the poor and precariously employed are losing work quickly - the hours are evaporating. It's all a bit 2008 - can we not do that again? [1/n]
#nzpol
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Musical Chairs
@musicalchairs.bsky.social
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The data is here (nice to be able to post links again): www.rbnz.govt.nz/statistics/s...
#nzpol
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Musical Chairs
@musicalchairs.bsky.social
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Lots of excitement yesterday about the explosion of first home buyers - vested interests trying to get the commission flowing. The statistic they focused on was the % of new mortgages going to first home buyers, which is basically the inverse of landlord / investor demand for housing.
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Musical Chairs
@musicalchairs.bsky.social
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🫡
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Musical Chairs
@musicalchairs.bsky.social
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Bill posited that when import price shocks subside, wages and prices will quickly moderate. This is happening across the world but is slower in NZ because high interest rates have massively increased costs for businesses.
Bills's 1958 paper is here: onlinelibrary.wiley.com/doi/full/10....
#nzpol
0 replies 2 reposts 7 likes
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Musical Chairs
@musicalchairs.bsky.social
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The medieval monetarist economists at RBNZ (and in our media / commentariat) believe that if interest rates and unemployment are high enough then inflation can be quickly dealt with - you just need to be 'tough enough' on families and workers. Bill would have thought them ridiculous [Ends]
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Musical Chairs
@musicalchairs.bsky.social
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Bill's rough estimate of the impact of an import price shock on retail prices (and then wages) is remarkably accurate - see how closely it tracks CPI (note that Govt increased GST in 2011!) [3/n]
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Musical Chairs
@musicalchairs.bsky.social
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Bill would recognise our inflation as being the result of an import price shock. NZ imports make up about a quarter of NZ Gross National Income (and Final Expenditure), so when import prices rise a lot, we see higher prices. Bill described this situation very clearly in his 1958 paper. [2/n]
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Musical Chairs
@musicalchairs.bsky.social
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Bill Phillips was a kiwi economist. Sadly, his work was bastardised by economists who used his 1958 paper on wages, prices, and unemployment to justify crushing workers and using unemployment to 'control inflation' (the 'Phillips Curve'). What would Bill have made of inflation in NZ today?🧵
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Musical Chairs
@musicalchairs.bsky.social
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Tens of thousands of students returning home from Otago for Xmas! Nice.
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Musical Chairs
@musicalchairs.bsky.social
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Relentless reinforcement of TINA from media, all parties, and even the more progressive economics/ political commentators?
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Musical Chairs
@musicalchairs.bsky.social
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and ... the savings of rich people are protected ... workers become desperate enough to take crap, precarious jobs for crap money ... and capital can maximise a fat return
1 replies 3 reposts 8 likes
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Musical Chairs
@musicalchairs.bsky.social
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Hi NZ media! Please stop accepting that we have to throw tens of thousands of kiwis on the dole to 'tackle inflation'. It's bollocks.
Lots of countries have reduced inflation *and* reduced unemployment. We are an outlier - a case study in how to fk things up. Ask some questions! #nzpol
4 replies 13 reposts 69 likes
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Musical Chairs
@musicalchairs.bsky.social
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Fair play to RBNZ and Treasury - their forecast for how many more people would be unemployed in 2023 Q3 was almost spot on. I still think that Treasury's 'no recession' forecast is highly questionable though. #nzpol
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Musical Chairs
@musicalchairs.bsky.social
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Yes, assumption X reckon X guess X no. of people
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Musical Chairs
@musicalchairs.bsky.social
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Musical Chairs
@musicalchairs.bsky.social
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So, new money enters the economy and increases our bank balances when (a) banks make loans, and (b) Govts spend. Bank balances reduce when (c) loans are paid back, and (d) we pay taxes. Govt bonds are just very big bank notes that pay interest (but that's another story) [Ends]
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Musical Chairs
@musicalchairs.bsky.social
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Total bank balances can be reduced in three ways: 1. NZ Govt bonds are sold into the private (secondary) market (see below). 2. Govt taxes more than it spends (runs a 'surplus') 3. Loan repayments are greater than new loans. [4/n]
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Musical Chairs
@musicalchairs.bsky.social
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You might have spotted in 2020 bank deposits went up *without* outstanding loans going up. That's because the secondary source of new money is Government. When Govt spend more than they tax (deficit spends), bank balances go up. Govt creates brand new money just like banks [3/n]
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Musical Chairs
@musicalchairs.bsky.social
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Primary source of 'new money' is banks like ANZ, BNZ etc. When a bank lends you money, they create *brand new* money and add it to your bank account. Banks will always create money for credit worthy (profitable) customers. So, bank balances grow with outstanding loans... [2/n]
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Musical Chairs
@musicalchairs.bsky.social
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A quick refresher on where money comes from... In the last ≈7 years, NZ bank balances have increase by nearly $150 billion. How? New money is added onto bank balances from *two sources*... [🧵1/n]
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Musical Chairs
@musicalchairs.bsky.social
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Ah man, these guys are something else. Stack up a pile of assumptions, give each assumption a dollar value, add them up and... voila, activity X saves Y dollars.
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Musical Chairs
@musicalchairs.bsky.social
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Still getting the hang of this blue thing #nzpol
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Musical Chairs
@musicalchairs.bsky.social
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Pressure from my partner! I'm not happy about it.
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Musical Chairs
@musicalchairs.bsky.social
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Oops sorry, this one: www.rbnz.govt.nz/statistics/s...
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Musical Chairs
@musicalchairs.bsky.social
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Yep, here... www.stats.govt.nz/indicators/n...
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Musical Chairs
@musicalchairs.bsky.social
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Overall economic activity is also stalling, despite the bump from inward migration. The last 12 months was basically flat (lowest increase in the year to September since Stats started collecting this data back in 2004). Unemployment data tomorrow might be a shocker. [Ends]
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Musical Chairs
@musicalchairs.bsky.social
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We hear a lot about booming consumer demand and how our reckless spending is 'causing inflation'. The boffins at Stats NZ have crunched the numbers and they say 'nah'. Spending is coming down quickly - back below 2018 levels in real terms. [3/n]
0 replies 1 reposts 7 likes
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Musical Chairs
@musicalchairs.bsky.social
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Unsurprisingly, jobseeker numbers are ticking up again, see also accommodation supplement etc. Young people, Māori, and people with health conditions and disabilities are joining the dole queue at a faster rate than others. [2/n]
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Musical Chairs
@musicalchairs.bsky.social
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Lots of warning signals in recent econ data. First up, net bank lending has basically stopped and is going backwards in real terms; in fact, it looks a lot like 2009. Net bank lending is a critical source of economic stimulus. No stimulus = slump = unemployment up = more slumping etc. [🧵1/n]
7 replies 5 reposts 17 likes
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Musical Chairs
@musicalchairs.bsky.social
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I didn't know this existed - nor that Stats NZ will include disability data in their labour market stats from June 2024... www.stats.govt.nz/information-...
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Musical Chairs
@musicalchairs.bsky.social
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Here's the FTE (full-time equivalent) employees data for context...
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Musical Chairs
@musicalchairs.bsky.social
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Lowest public sector share of total wages since 2001. We might set a new lowest ever record in the next few months. #nzpol
1 replies 7 reposts 9 likes
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Musical Chairs
@musicalchairs.bsky.social
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Treasury think RBNZ efforts to increase unemployment will work. Treasury also forecasting no recession, which makes zero sense given that a big increase in unemployment and recession are inseparable. At least we have an incoming Govt that truly cares about (stigmatising) people on benefits. #nzpol
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Musical Chairs
@musicalchairs.bsky.social
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Been a while since I celebrated NZ bank profitability. Here's a quick handy guide to how great they are - figures are daily.
How did that Nickelback song go - something something million bucks an hour...? #nzpol
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Musical Chairs
@musicalchairs.bsky.social
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By not paying interest on the minimum level of reserves required... www.ecb.europa.eu/press/pr/dat...
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