I wonder where Mr Soros has been putting his billions!

Well, as long as Mr. Soros never feels inclined to to do to the New Zealand dollar what he did to the pound, I can't much care.

Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion.…

But my point…

My analogy with the environment wasn't a perfect analogy – but then you almost never get a perfect analogy.

What I was getting at was it's all kind of small scale, low key stuff, that people can do.

Ben, as your comment about saving not necessarily being good…

So with the economy: save a little bit more, if and when you can.

Um, that's good advice on a personal level but I'm not sure the economy benefits, per se. Not saying it doesn't, just not convinced either way. What Kyle said.

I personally don't feel any responsibility to…

And, personally, I think both the main parties are nudging into irresponsible territory on this.

Craig wrote:

Rob, I'd say you're erring on the side of generosity on this one.

A bit, maybe. I've been immersed in reading on NZ's recent economic history recently (because that's the kind…

And, personally, I think both the main parties are nudging into irresponsible territory on this.

Rob, I'd say you're erring on the side of generosity on this one. It looks like both major parties are going to be offering personal tax cuts, and I'm all for it. But I do…

PS: to clarify, I don't think you've been unwise, I think you've been unlucky

Yeah I don't think I've been unwise either but I don't think 'unlucky' covers it. I hate to come across as a Japanese institutional investor, but it seems all my investments are dogs and I'm pissed.
And…

When did the financial management mob take over the world (and this blog)???

I'm betting it wasn't long after counting was invented.

Kingfisher and Barramundi are both less than 2 years old – hardly enough time to assess a long-term return.

If you look at the 10 year return for the NZX50 it's done quite…

Consequently the type of people trading there now are possibly those for whom fundamentals and longer term cycles are…

I do wonder though: as long as the Reserve Bank believes personal tax cuts are inflationary, we can expect it to do its best to hoover the "extra money" out of the economy quick smart?

Unfortunately that's bang on. The Reserve Bank are tasked solely with keeping inflation between 1-3%…

In Oz this is common – many financial advisors will rebate any kickback they get for investments. The guy I use is reasonably priced, charges by the hour…

As it happens, the dispute was over industrial policy…

All I'm thinking is that it looks like some of us (ie me) are going to have to eat cat food when our fixed mortgage…

If you don't mind a bit of homespun philosophy, I have found the best ways of saving to be as follows. Here's my four-step investment plan.

First, invest in infrastructure.…

We had high interest rates even when the dairy price was low.

The main reason they're so high is we're a more risky bet. We've still got a relatively narrowly-based economy, but, much more importantly, we've got a large overseas debt, and have had since the early 1970s.

And…

Personally I do get aggrieved at the way we're made to all feel personally responsible for inflation

Although the big good news story – dairy – will probably come back a bit it still puts us in a good position for the next couple of years.

I thought all those…

Bizarre man.

Also, as someone not generally economically minded, I'm unclear as to why personal tax cuts would be more inflationary than the alternative, which is (I assume?) greater government spending.

Presumably a decent proportion of tax cuts would be spent on things like debt repayment (credit cards, mortgages, student loans, etc.)…

In reality, the crisis is both a credit crunch and the bursting of the housing bubble. Wall Street is in terrible shape and Main Street is about to be in terrible shape. And there's not a whole lot that…

And frankly I think he's just using the chance to drop in his usual "cut company tax" line – although there is an argument that company tax cuts would see greater investment in the…

IMMIGRATION

Virtually all employment sectors are feeling the squeeze. The medium-term viability of all our companies depends on a ready supply of skilled people.

My sense of it, and that of some others, is that many employers, in many sectors, care a lot less…

I stand by my points of course: Krugman – great economist, good columnist.

Fair enough, Terrence. I stand by mine, that Krugman is a lousy columnist, and it's not particularly relevant how many prizes he has on his CV.

Anyway, what do folks think of Cullen's op-ed in today's Herald? On…

I get the feeling that Krugman's commentary at the moment is being skewed by his links with the Clintons. He seems unduly cranky.

You'd be cranky to if someone was saying you had non-existent children working for the Clinton campaign.

I think its more that Obama has been poking one…

I agree – now would be a good time to agree to disagree seeing is everyone else on this thread is discussing weightier things than the merits of Paul Krugman.

I stand by my points of course: Krugman – great economist, good columnist.

Why should it? The people borrowing the money can afford to pay off their mortgages, car loans, credit cards, etc. (for…

is there any chance you can get an advocate to help you all out. Rather than you as parents having to fight against the system?

I think having to advocate for yourself is what a lot of people find when they have family members with various special needs in health…

is there any chance you can get an advocate to help you all out. Rather than you as parents having to fight against the system?

and dude, from everyone, if you need some hustling, you holler ok.
and holler loud

OK, so you've shifted the goal posts to "a great technical economist" – grounds on which I've said twice I'm not really competent to pass judgment. Could you point me to any place where Krugman has been equally complimentary about Friedman's extensive writings on matter of public policy?

Sorry,…

The second worst thing would be to reduce interest rates.

The third worst thing that could happen would be…

When the recovery happens NZ markets won't rise as much as the offshore markets.

NZ markets are not large enough and lack…

For what it's worth Krugman is a Bates prize winner and a highly acclaimed economist. He was also right about George Bush. Right from the start. And a long time before almost anyone else in the punditocracy.

Craig,

I agree with you. Paul Krugman has been confidently predicting an imminent…

Oh no. The last guy who made me that offer ended up standing over me in a car park wearing a zebra-skin hat screaming 'Don't make me go upside your head'.

Sounds like a story worth hearing. Last guy who made me that offer was from AMP. I gave them…

I don't dispute the fact that Friedman was a great technical economist; nor does Krugman.

Friedman's work on consumption behavior would, in itself, have made his academic reputation. An even bigger triumph, however, came from his application of Economic Man theorizing to inflation...By predicting the phenomenon of stagflation in…

Craig: It’s not argument from authority it’s just good evidence that he is a very good economist.

OK, Terence, Milton Friedman was awarded the 1961 The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Sounds awfully impressive, but whether that's particularly sound evidence that he…

The hard part is measuring people's intent. In houses, especially, the IRD hasn't really done much to enforce this rule.

Hmm. Not quite. One of the issues is where does the burden of proof lie in proving intent: the IRD or the taxpayer? The few cases are a bit sketchy…

I don't have anything like the discipline required to accumulate 5k in the bank. I'm impressed and a little frightened by people who can exercise such self-control – who knows what else they're capable of?

I thought that, then I tried it, and it's surprisingly easy. Set up an A/P…

Oh no. The last guy who made me that offer ended up standing over me in a car park wearing a zebra-skin hat screaming 'Don't make me go upside your head'.

I'm not making…

Self-invested funds are a dumb idea. People would either spend the money on a house, fuelling house price inflation, or throw it into some fraudulent scheme.

Rich: I think the Aussies are a little more rigorous than that in defining what you can do – you certainly can't claim that…

On the Kiwisaver front, I thought all the funds on offer were crap value. Right now, I'd…

In that case Gareth, I'd like the same tax treatment for my individual share portfolio.

Yup, agreed – but the PIE change took us closer to consistency in some ways...

There are a lot of funds which operate on a contribution basis. Lots and lots and lots. I personally like my way because when it comes time for my contribution, I could pick any fund, or indeed any investment at all. So if the US…

Under the old regime, index funds did not pay tax on capital gains, because they were not trading for income. (NZ doesn't have capital gains tax, remember; just tax on income). Managed funds did pay tax on capital gains, because they were deemed to be trading for income.
...
But…

But also, have a look at NZX's SmartShares products, which are effectively index funds. The initial contribution is $1500, but you can put in a monthly contribution of as little as $50 without brokerage once you have bought in. They only cover NZX and ASX…

I get the feeling that Krugman's commentary at the moment is being skewed by his links with the Clintons. He seems unduly cranky.

I was unaware – what links are those?

Way back in LBB* Krugman made a name for himself by strongly criticising (Bill) Clinton’s economic team for caving…

$49.50 USD sounds pretty pricey for one online trade.

I'd like to start investing a reasonably small sum (~$25/week) into an index fund. My bank has an online trading facility and it looks like they'll charge me $49.50 US for every…

For what it's worth Krugman is a Bates prize winner and a highly acclaimed economist. He was also right about George Bush. Right from the start. And a long time before almost anyone else in the punditocracy.

Terence:

I haven't read any of his academic work, and wouldn't be competent…

Exactly. I fully intend to sell my house for a profit eventually. If I chose shares which don't pay dividends, the same would be true. But the IRD needs rules so they do the best they can.

I agree that index fund generally…

For what it's worth Krugman is a Bates prize winner and a highly acclaimed economist. He was also right about George Bush. Right from the start. And a long time before almost anyone else in the punditocracy.

I agree with you on Brooks's merit vis a vis…

On the other hand (well it is economics, after all) here's Paul Krugman criticising Obama in favour of HRC and JE.

Oh, I thought it was more the general worthlessness of the New York Times op-ed colmnists. Hell, if they're trying to cut costs replacing that lot of dead weight…

It really doesn't matter what the problem of the day is, the Bush solution is tax cuts for the rich.

I'm starting to think there's some truth in Klein's 'shock doctrine'. The more severe the problem, the more BushCo seem to push for their traditional solutions. Nice feedback loop, since…

On the other hand (well it is economics, after all) here's Paul Krugman criticising Obama in favour of HRC and JE.

It really doesn't matter what the problem of the…

"Does anyone else find the economic policy responses of not only the incumbent, but all the US presidential hopefuls unconvincing to the point of being delusional?"

Nope.

Much as I admire Obama's style, his "give everyone $250" policy is daft. It seems…

Much as I admire Obama's style, his "give everyone $250" policy is daft. It seems that everyone's solution involves cranking up the federal deficit some more, and worrying about inflation some other time.

Indeed. I'd pledge my vote to the first candidate on either side of the aisle who had…

Note that by "managed fund" I mean one that does not merely follow the index, but actively selects stocks.

Under the old regime, index funds did not pay tax on capital gains, because they were not trading for income. (NZ doesn't have capital gains tax, remember;…

Imagine you are in business with a chap called Mr Market. Every day, he offers you a price to buy your share or sell his share of the business. Some days he is in a marvellous mood, and quotes you…

'Delusional' might be a bit harsh, Russell, then again there might be one or two of us who think politicians have economic Messiah complexes and delusions of influence with monotonous regularity.

Much as I admire Obama's style, his "give everyone $250" policy is daft. It seems that everyone's solution involves…

Does anyone else find the economic policy responses of not only the incumbent, but all the US presidential hopefuls unconvincing to the point of being delusional?

'Delusional' might be a bit harsh, Russell, then again there might be one or two of us who think politicians have economic Messiah complexes…

Where are the breaks for index funds which research shows to consistently outperform managed funds?

Do they need breaks? If they're outperforming consistently, they should sell themselves.

An index fund is the only kind I'd want, personally. But paying off debt is by far the best option in NZ at…

To my mind the big story about Kiwisaver and the whole PIE regime is how Cullen has given an enormous boost to the fat, happy fund…

Partly there's the public service element (case workers seem wildly varying in quality, in our much shorter experience than yours: some are worse than useless, other I'd want to put up for sainthood).

But it also sends a message: don't mess with us.

Eh, yeah. We've had three SES workers…

Yeah, I think you're at least partially right about NZ firms.

By and large they've been very cautious users of credit over the past few years. In fact, the Reserve Bank has pointed out they're net savers.

As far as pension funds go....well, I've got a bit of money…

Like I said, after a quick look at the candidates' economic policies, I wonder if they're capable of sensible policy shifts.

Watching American politics I often wonder if the candidates have anything to do with policy.

Russell, can you get another case worker?

I guess so.

I know for a fact that not everyone from Special Education shares her beliefs about mainstreaming, as you tell it.

The understanding and support for AS conditions is quite patchy. GSE in Wellington seems quite good, and you're probably completely…

Give it a couple of years. One year to go and GWB will be forced to hand over to someone more sensible.

Like I said, after a quick look at the candidates' economic policies, I wonder if they're capable of sensible policy shifts.

If you're not retiring in the next…

Very happy to hear of the older boy's achievements, though. The mind is mysterious and wonderful.

But I fear that my pension fund puts me in basically the same boat as them

Really? Did your pension fund invest heavily in the US finance sector (or fur-bearing trout farms)?

After the 87 crash the Dow had regained its position in two years. Ditto after the 9/11 dip.…

(I would not like to be a middle-aged American right now, that's for sure.)

But I fear that my pension fund puts me in basically the same boat as them ...

Most New Zealand companies still have real earnings and real assets and pay honking great tax-imputed dividends. Many of the biggies (which therefore weight the index) are utilities in areas where people will not economise much. The best of them are not dependent on bank credit…