Getting interesting. Pink line shows annual change in total NZ bank deposits. The main drivers of changes to total deposits are: (i) new loans add $ (ii) loan repayments reduce $ (iii) interest paid by banks adds $ (iv) Govt spending adds $ (v) taxation and govt bond sales reduce $ [🧵 1/n]

Fks sake. If Govt makes money from the private sector (that's us), that's basically a tax. Seymour is arguing for more taxes. www.1news.co.nz/2025/01/24/s...

Another answer to 'why is everything so shit, really?' For 30+ years, the real price of imports (NZD) fell gradually. The party ended in 2015 and the imbalance began to drain demand from our economy (and constrain our precious GDP) Money spent abroad is not spent at home. (🧵 1/n)

What I just want to say about this great replacement adjacent talking point is the crude fertility rate fell below 2 in 1982, and would likely have happened earlier but for a wave of English kids travel free migration scheme decades before. But that mass immigration doesn't count, they were white.

Few DMs on GDP. Meh. It's a stupid consumption measure & the revisions are doing my head in. I am also much more interested in the real story: the chronic jobs shortage and the 400,000 kiwis wanting work / more work. There's stuff that needs doing ffs! What a waste! But, OK... jobs *&* GDP [🧵 1/n]

I read this as 'Trumps erupt in my rectum'! Mind you, at least that's a defensible position.

Random taxpayer rant: This is how the reckonomists want you to view Govt... scrounging around for tax revenue, or begging rich people to lend them a few billion dollars to build a 4-lane road or pay Ed Sheeran to play at Eden Park every Saturday for the next 5 years. It's bollox... [🧵 1/n]

Partial monthly CPI data is out - it's a pretty picture at least. Global food prices are feeding through to domestic prices with the usual 9-month lag. Rents are barely contributing to measured CPI inflation (thanks to the ongoing slumpy slump). [1/3]

Lol. Govt effectively creates new financial liabilities (bonds) and swaps them for offshore shares to add to the Super Fund. Govt pays around 3% (avg) on bonds while Super makes much larger returns (10%). So why not quadruple Govt contribution, or times it by 100?

This is neoliberal drivel written by someone who is either a brainwashed idiot or a paid shill for the small state, hunger games is my vision of the future ghouls. Let's have a look... (1/4)

I think about this graph a little too much... how kiwis had to spend more and more time working so that families could afford to buy a house (aka keep the ponzi scheme pumping). Subsidise that ECE, sanction those bludgers, subsidise those rents etc. We're slaves to the rhythm.

Don't get excited - let's say 2025 is the new 2010. See how aneamic job growth was until the Chch rebuild kicked-in (thanks global reinsurers 🙏)?

Wellington City benefit claims are still going up year-on-year, but can be very confident that the turning to crap is slowing in the capital - we look set for a net zero increase (in benefit claims obvs) around New Year... in time for a round of lanyard downsizing(?) Now, about Auckland... [🧵1/n]

That divergence between the pink and white lines in late 2024 lost me a bet on house prices rising in early 2025. My guess is lots of houses on market + sudden slowdown in pop'n growth. Perhaps it will take the yellow line (OCR) dropping closer to 2 to get things 'moving'.

Benefit data day - quick preview... Working age people on main benefits is still sailing above Treasury/MSD forecasts from a few months ago, and we are a full 30,000 souls above last year's forecasts. (1/n)

Translation: The glorious free market delivers nearly enough housing for the very first time *ever* thanks to mass exodus of residents and prolonged recession. But... hang on in there, normal service will be resumed next year.

Damn, I hope the faint glimmer of optimism in my recent posts doesn't turn out to be hopium. We're back to tracking sideways. That's not good, it means that... (🧵 1/n)

Obviously, nothing increases investor confidence like the thought of reducing energy prices. Wtaf.

Business financial data day. I love this dataset. Here's the operating profit margin for all NZ businesses in aggregate. You might think that big plummet was the 2023-2025 recession... but, nope, it was the 2021 surge in import prices & inflation eating into profits after the 2020 highs. (🧵 1/n)

October 2023 clueless reckons on a soft landing based on pure vibes (image 1). September 2025 revisionist bollox... of course the heady heights of 2022 would have to be paid for with a massive recession (image 2). These people get paid for this.

Another media article (RNZ) spouting the tired old tripe... 'we ran the economy too hot during cvid and now we all need to be mercilessly punished'. This time the usual (... ly wrong) reckonomics commentariat are having reckons based on GDP per capita. Let's have a look... (1/n)

Great question. Why do Govt have $25bn in the Crown Settlement Account? Why don't they spend it? The answer is complicated and illuminating. Firstly, Govt votes on what to spend - that's how budgets are decided. Hell, they even call budgets 'votes'. But, they *could* vote to spend more, sure. (1/n)

Some major shifts in credit flows into the NZ economy in July 2025. The centrepiece was a remarkable uptick in business lending for things *other than property*. Yes, we can invest in other things! Looks like impact of recent tax changes to me. Now, this is important... I'll try and explain. [🧵 1/n]

Weekly jobs update. Still sliding sideways but no sign of another slump. In fact, if you dose up a bit on hopium, you can conjure up a 'marginally less shit' narrative. Let's have a quick explore... [1/n]

Tip of the iceberg - add in infra deficit, weather events, a functional modern health system, etc. Govt needs to recogniae (a) this is a *real resources* challenge - people, materials, machinery etc and (b) we need to accept some planning of the economy for a while. www.stuff.co.nz/politics/360...

Zach Polanski (new greens UK leader) speaking truth on the BBC: Govt spending creates Govt debt and private sector financial assets in equal measure. Taxation reverses that position. Bond sales swap one form of debt (bank reserves) for another (bonds). That's just the reality of it. Understand it.

Everyone beating on RBNZ lately. My beef with our central bank is not about who said what to which playground bully and when - it's that RBNZ do not have the tools needed to fulfil the primary role they have been given (and are paid handsomely for) . Let's have a look... (🧵 1/n)

Same as always - bull in a China shop, medieval monetarism, etc.

Behold, the great moderation. We freed enterprise, deregulated, privatised, shrunk the cumbersome state and we got juicy growth! The genius move here was focusing the public on govt debt while we paid for growth on the private sector credit card (aided and abetted by the housing ponzi).

Made the mistake of talking house prices with centrist Bish-boys on the other place. Anyway, this was the chart I used to illustrate that house prices once adjusted for wages and mortgage costs will be back in the zone in a few months time. Easy and ever-cheaper credit drives asset price inflation.

A quick explainer 🧵 on the 'loan demand' charts in my last thread. When banks lend you money they simply add brand new $ to your bank account (your asset) and add the same amount to your loan account (your liability). New bank loans increase the total amount of $ (and debt) in the economy. [1/n]

This is my new favourite chart. Austerity meets reality. The illusion of choice crashing on the rocks of broken dogma. The vassal state collapsing in on itself as it's prime source of wealth (private debt expansion via the housing ponzi) stalls.

Delighted to announce that I am the shortlist for RBNZ Governor! My policy of 2.26785% interest rates forever was a big hit with the interfew panel, and my new buddy Nicola Willis liked my 1 FTE staffing model. Fingers crossed whānau.

So, looks like the July geek data confirms big fiscal is back. You might have missed it. Let's have a look what's going on... Govt has pumped $26bn of cash into the economy over the last 12 months - but a third of that ($8.5bn) was in the last two months. Big moves. [🧵1/n]

Weekly jobs data continues the winter slide to the side story. I think the slumpiest phase is over for now. The speed of the doom loop is slowing and... (🧵 1/n)

Weekly jobs update. Bleurgh. Bobbing along the bottom. There is a tiny scrap of hope though... (1/2)

Quick 🧵 on the retail sales data and the flicker of hope. Firstly, look at the yellow line... The slump we have experienced is very similar to the 2009 crash (post-GFC). Now compare where we are now to the 'woohoo' back in 2010. That sideways slide lasted *two years*. [1/n]

Luxon knows what this chart means.

This whole two-speed thing needs unpacking. Benefit numbers in Christchurch are up 5% on last year compared to around 8% in Auckland. Southland benefits have stabilised now... at a bit over their Covid peak. Is that 'doing well' or just a bit 'less shit'?

My go to graph when I'm cynical. Basically, the 1980s reforms freed up bank credit. We have suckled on that credit to give us four cycles of 'growth' (three shown in graph). This was made possible by racheting down interest rates and an available asset bubble (shares in 80s then houses). Now what?

For the avoidance of doubt, any politician trying to answer the 'how much interest is govt paying on its debt' gotcha question should simply answer 'gross or net?' They should then ask who receives the interest Govt pays, and, for good measure, point to the real issue (blue and pink lines below).

Govt net spending picked up strongly at the end of the financial year. We won't get the annual accounts for a while, but it will be interesting to see what's going on here.

Damn, the banks are getting absolutely buried by the recession.... Just kidding, another all time high 🫡

But, er, did buttflation bring down Helen and Bill?

The two graphs that should be in all of these late to the party 'why aren't lower rates working?' articles. 1. Mortgage frenzy of 2021 increased total loans so interest charged still very high (and lags are looong). 2. Repayments are way higher than new loans - this is *contractionary*.

Another week of job slide data. I think we will probably track sideways from here, but if the slump continues we will be in big trouble. (1/n)

Lots of reckons in here, some nonsense (Aus fiscal expansion was about same as NZ and Aus debt expansion was larger), and some insight (rate hikes bite harder in NZ cos of huge shortfix debt) Simple answer to the question is 'RBNZ went super macho to impress the ghouls and they wrecked the country'.

A few highlights from today's monetary policy forecasts... Whoops, looks like the estimates of how much rent we need to pay our offshore overlords were undercooked. Let's rewind that hopium. As you were. This is material by the way. Sucking demand out of our economy. [🧵 1/n]

Oh good grief. Liam is on one with the folksy reckonomics 'at large' again. Firstly, the article contains no answer to the question 'how much NZ owes the world'. Presumably the headline is clickbait? But, the article does offer the usual misleading (stoopid) view of how our debt / $ works. [1/n]

Random thought. Australia has had almost exactly the same inflation track as NZ but they opted to hike rates less aggressively over the ditch - peaking at 4.35%. Obviously, history will judge our response as being way too aggressive but it is worth noting that... [1/3]