Correlation just gets stronger... Real house prices vs the employment rate. You see, it takes two wage slaves to tango in the NZ housing market. The little yellow skulls are changes in Government, which is what happens when swing voters aren't pacified by those sweet capital gains.

You'd think Damien could read a balance sheet given his profession, right?

Quick update of an old favourite. You see, NZ Govt has more financial assets than it has debts, and those financial assets are liabilities of the private sector. Govt gets a return. Kerching.

Rental properties now make-up a record proportion of our housing stock - a full 27% by value. Great work everyone. So, does that mean landlords are drowning in debt? [1/3]

Latest quarterly national accounts are out. Always a highlight. What's going on? Firstly, Govt is continuing to run involuntary deficits. They have to. Why? Because the *country's* books have to balance. It's relatively simple, let me explain... [🧵 1/n]

Hmmm. Change in total household bank balances per capita dipping into the negative. Does this happen often? Should we be concerned? [🧵 1/n]

One of my first "Aha!" insights about the NZ economy after I arrived in 1993 was the weakness of the regulatory system which was built on the astonishingly naive belief that markets would solve any pricing issues. It's a total institutional and political failure to have not tackled this issue

Seymour / Mooney both cooing over Norway / Finland on the other place. If only we had their small, well-formed Governments etc. Firstly, they couldn't have chosen many places where the Govt makes up more of the economy. Secondly, Govt spending is part of GDP (if one cares about such measures).

Profit margin for NZ businesses vs NZ interest rates (OCR). Two things: (1) Ridiculous that profit margins are so dependent on RBNZ rate hikes and cuts, and (2) Even the most drastic of rate hikes are batted aside by the market power of NZ Inc. Whatever we earn, NZ Inc will take.

Pick-up in job growth - cautious optimism! The pink line has to hit 1% before I'd say we were in recovery (given population growth) but it's a start. The second graph shows 2026 creeping above 2025. The lines for 2022 and 2023 are typical of growth years. Why are things a bit less shit? [🧵 1/n]

Auckland slump has been particularly dramatic. Grim.

Blows my mind that Govt issue debt (current avg cost of 3%) to buy foreign shares to pile into the super fund. It's cheat mode investing. So, why not treble the contribution instead of reducing people's disposable income? Cos the share market might crash? Errm, won't that kill kiwisaver funds too?

Weird that RNZ didn't include updated budget forecasts in this target chart today. I've helped them out. I am guessing that this is because Govt have only just released the March 2026 quarterly update. Will we get a quarterly update for June 2026 before the election? www.rnz.co.nz/news/politic...

Greens appear to have worked out that if Government wants to tax back more of the money they spend, they have to go after the hungry hippos that grab it all.

We celebrated 'growth' - but it was all private debt. When the party stopped - we dropped interest rates to keep it going. We popped the last pill. Next?

Hi RNZ, appreciate you trying to cheer us up, but good grief!

The big GDP day... is nothing to get excited about. Why? Lots of reasons. First, that little pick-up might be exciting for some, but we have just had three years of economic sabotage. A permanently scarring event. Also it is *really* important to know what is happening under the headlines. [🧵 1/n]

Annual changes in rents by district. This chart is basically showing you which areas are getting smashed by the recession, which areas are seeing population growth (people moving back home?), and which areas aren't doing too bad.

Partial CPI data out for May. Going great guns. We are starting to see higher fuel costs propagating through into other prices now - nothing that RBNZ can do, but that won't stop them going into job crushing mode over the coming months.

Updating an old favourite. There are some data issues with card spending - but they don't explain away the slumpy-slump.

How to create an $18bn fiscal hole - tank the economy with your ridiculous cut to grow strategy.

How strong? Well households with mortgages had a bit more to spend so business profits went up. But businesses aren't investing in expansion. So we get a little bump in quarterly gdp and we forget that we have almost uniquely opted for a sustained recession. So... Let's do that again RBNZ!

Simple question that unlocks a lot. All else equal, if Government increases spending by $10bn next year will there be: (a) $10bn more in the economy to pay taxes / buy bonds (b) $10bn less in the economy to pay taxes / buy bonds (c) no difference to the amount of money The answer is absolutely (a).

Looks like we are on for another stunted recovery - this one might be the shortest ever. Why? We are still expanding our private debt (only for mortgages) and RBNZ are going to increase interest rates back to what they call 'neutral'. [1/2]

It's weird watching people trying to work where we are going to 'find the money' to invest in getting our country back on track. Why don't they start here - the $30bn sat in the Govt's settlement account? The only thing stopping this money being spent is votes in parliament. What? [🧵 1/n]

Budget 2026 benefits forecasts didn't survive a month. The actual data was 'only' 1,000 souls over forecast but the pattern of Treasury providing false assurance to Govt continues. Bad advice has real world consequences.

Right, a proper look at that May 2026 benefit data. People claiming a working-age benefit increased by 8,040 people over the year to May 2026. That's pretty much bang on 2% - double population growth. So, yeah, it's shit. Here's the areas that have had it grimmer... Auckland wtf. [🧵1/n]

Annual change in total benefit recipients from May 25 to May 26. Remember the two-speed recovery is 'meh' and 'not actually recovering at all'.

Hi Chris, mate, I have some bad news. Are you sat down?

Weekly jobs data is out. The week 19 bump from 2024 and 2025 returns. But, looks like we are going to carry on tracking the 2025 line. Standstill once we allow for population change. Graph 2 shows annual change in nominal terms (some hope there?) [1/2]

99% of policy debates are ruined cos people don't appreciate that Govt votes on how much new money to spend, and *then* relies on taxation to get some or all of that new money back. Free public transport? Sure. Spend the money. Now, who ends up with the cash spent, and how can we get it back?

Couple of DMs so quick explainer on my post this morning. National stats folk conceptualise businesses like this... non-staff operating costs flow out, operating income flows in. Difference between costs and income is called the 'surplus'. The surplus is shared between profits and wages. OK? [🧵 1/n]

A favourite dataset released today - business financial data. Quick explainer with bonus reckons: Here's NZ construction figures - inflation adjusted. The blue is $ spent on supplies etc, white line is sales income, pink & yellow show how the difference was spent - wages & profits. [🧵 1/n]

Latest loan data out so I will focus on that (rather than the red lot self-destructing). Here's the shit show that is our debt landscape. Whenever the economy is 'ok', we borrow more money to bid up the price of weatherboard shacks. Debt too high? No worries, we can drop interest rates. [🧵 1/n]

Come on Vernon, look at the whole balance sheet! If Govt issue $1bn of debt to buy shares to add to the super fund, Govt debt goes up by $1bn and *so do assets*. Now, if Govt pay around 4% interest on debt and Super returns 9%- 10%, what happens to the balance sheet? Yep, Govt invest on cheat mode!

Quick look at core crown revenue / expenditure per capita (adjusted for inflation). Blue line is the $ Govt spent into the economy. The yellow line is the $ Govt took back. Note that the determinant of the balance (surplus / deficit) is typically changes in *revenue*. Few reckons... [🧵 1/n]

Still one of my favourite charts.

So, apparently in a couple of years, Govt will still be spending the same as now in real terms, but revenue will go up like it does when the economy is all rock star and that. That means Govt is going to destroy money (net). It won't happen.

Awful truth, unknown to 99% of the population... NZ Govt adopted an economic management model in the 1980s that MAKES SURE: 1. We always have tens of thousands of kiwis on the dole. 2. People with work / little work live in abject poverty that keeps them desperate for crap jobs. Why? [🧵 1/n]

Govt pulling away when things slowdown vs leaning in.

The deficit we don't talk about any more. Not sure why. It's pretty simple to explain. In the year to March 2025 we made $128bn from the rest of the world - we sold timber, milk powder, gold, hols etc, and we earned dividends on our big pile of foreign shares. But, we spent $146bn! So what? [🧵 1/n]

Good news for banks: RBNZ are expecting to raise interest rates (OCR) over the winter of malcontent. The Crown will then be obliged to pay the new higher rate on all bank reserves. Since RBNZ introduced this policy, to stop commercial bank rates falling below OCR, banks have 'earned' a cool $7.8bn 🏧

Private debt growth is a strong leading indicator of NZ economic / jobs growth. It makes sense - when we take on more debt, banks pump new money into the economy, that money gets spent on, enabling jobs, profits, confidence etc. Now, early-2026... image 2 close-up. Is this cause for concern? [🧵 1/n]

Jeez, this framing. There is insufficient demand in the UK (and NZ) economy, so the people less able to get jobs don't get them - that includes young people, people with disabilities, people with a criminal record etc.

Yes, they are dangerously wrong. You have to wonder whether this is part of a wider project - the old school libertarian wreckeconomics guys seizing the chance to discipline Govt - blinded by their belief in 'crowding out' and other such nonsense.

We sat chatting about whether we had enough unemployed people to suppress workers' wages. A few of us thought more misery would be good, but the new boss made the line call... current levels of misery would be OK for a another month or so. It was a great discussion. The vibes were good.

Ghouls getting in a frenzy about Govt spending $ on the arts. Govt spends $180bn / year - enough to pay the wages of everyone in NZ. The private sector relies on that spending - nurses pay landlords, artists buy stuff, road crew eat pies.... and Govt collects taxes back on wages and transactions.

Regular reminder that NZ Govt gets to run a budget surplus when there has been a decent burst of private debt expansion. When Treasury predict a surplus they are betting on the private sector going big on debt, and / or imports collapsing in price. Yesterday's forecasts are pure hopium. [1/2]

Oh shit, I looked at the updated benefit forecasts. Look at this cascading misery. Wave after wave of hopium crushed by reality. Seriously, this motley collection of ghouls and fools are actually briefing decision-makers. Yes, Minister, our models say we should say most excellent growth. [🧵 1/n]

Well, budget data is a proper mix-up! A highlights 🧵 What a magical presentation! Govt have the press gallery focused on the feted return to surplus, but the data presented excludes borrowing for capital. Include that, and the 2027 borrowing requirement is higher than the average over covid! 🤣 [1/n]