The NZ Economy

[HAWKDOG]

lol this won't end well.  I will agree to disagree and move on.

[BlackPeter]

Nasdaq up more than 6% in the last week. US market indicies have all completed a full V shaped recovery since the war began and the VIX is under 19 yet the war isn't over yet, go figure ?

Just wondered, how stockmarket behaved during the roaring 20ies (well, this was the 1920íes):

Interesting AI summary about the 1920íes:

Key Trends and Dynamics of the 1920s Market
Unprecedented Growth: The Dow Jones Industrial Average (DJIA) rose from around 63 in August 1921 to a peak of roughly 381 in September 1929 - only to drop afterwards to nearly 41 (July 1932).
Retail Participation and Speculation: For the first time, large numbers of ordinary Americans invested in the stock market, often driven by the desire for quick wealth.
Buying on Margin (Leverage): The boom was heavily fueled by credit. Investors could purchase stocks by paying as little as 10% of the value in cash and borrowing the remaining 90%.
"New Era" Mentality: Investors widely believed that technological advances had created a "new era" of endless prosperity, leading them to disregard traditional valuation metrics.
Industrial Drivers: Companies in new sectors like automobiles (GM) and radio (RCA) saw massive growth in stock price and, in many cases, revenue.

Some of these things sound quite similar today.

retail participation:
 - Many new investors and many new index funds providing money without really assessing the companies.

the new era mentality:
 - plenty of worth less but highly rated crypto securities
 - many economies so highly leveraged that any decent rise in interest will bankrupt them

industrial drivers:
 - AI being the new technology which will fix everything

Not sure I expect the next really black Friday this or next week (though, never trust Donald), but otherwise - we probably shouldn't be too surprised if it happens over the next couple of years. Markets clearly have no clue about the future ... and if they rise, this just means there is more space for them to drop back ...

[Basil]

https://www.nzherald.co.nz/nz/auckland-mayor-tells-truckies-to-drive-at-night-to-save-on-fuel/CZ6DCK25Q5HYVEJI4HU532OBMM/

[HAWKDOG]

https://www.currentmarketvaluation.com/models/buffett-indicator.php

[HAWKDOG]

https://www.currentmarketvaluation.com/models/buffett-indicator.php

As of mid-April 2026, the Warren Buffett Indicator (total market cap to GDP) is at an all-time high, exceeding 220% and signalling extreme overvaluation. This level is roughly 77% above its long-term trend line and indicates a high risk of significant market correction, with historical precedents such as the 2000 dot-com bubble and 2021 peak being lower than current levels.

[Basil]

Latest 1News Verian poll says National would be out and Labour in with 66 seats. National have read the room incorrectly on fuel price support and haven't done enough.

Kiwi's care about the extraordinary cost of living now and would be quite happy to see fuel excise and road user charges halved for a while. Funding for roads can be fixed later when fuel costs normalize.

You'd think something this simple would be readily apparent to National party leadership. Go figure ?

The last thing I want is a coalition of the lunatic left but that's looking increasingly likely.

[777]

Reducing exercise tax on fuel would be easy but since RUC's are paid in advance how would you reduce those in such a way that cash in the pocket is now and not in the future?

[HAWKDOG]

Another option that would help city folk is reducing the cost of public transit:

"The New Zealand government has significantly reduced public transport subsidies, leading to a rise in fares for many, effective 1 May 2024, reversing previous temporary reductions. While blanket half-price fares for the general public ended earlier, the current government has ended the specific "Community Connect" subsidies for youth and children, causing fares for these groups to rise, while maintaining targeted support for specific groups.

Key Changes and Current Status (As of May 2024 - April 2026):
End of Youth/Child Subsidies: The nationwide free fares for children under 13 and half-price fares for people aged 24 and under ended on 1 May 2024.

Fare Increases: Consequently, many commuters, particularly those aged 13-24, are experiencing higher costs, with some reports showing fares doubling in areas like Auckland and Wellington.

Targeted Concessions: The "Community Connect" program continues to offer half-price fares for Community Services Card holders and Total Mobility cardholders.

Regional Variations: Some local councils have chosen to continue funding cheaper fares for certain groups, such as free weekend travel for children in some areas.

Current Fare Reviews (2026): Public transport fares continue to see upward pressure. For instance, Auckland Transport increased fares by an average of 5.1% in February 2026.

Contextual Information:

Background: The government implemented half-price fares in April 2022 to combat high fuel prices, which were later extended and refined into the Community Connect program before being scaled back.

Ongoing Advocacy: There are ongoing calls from groups like the Green Party and local leaders, particularly amid a 2026 fuel crisis, for the government to re-introduce free or cheaper public transport to reduce the cost of living and reduce transport emissions."

[Basil]

Reducing exercise tax on fuel would be easy but since RUC's are paid in advance how would you reduce those in such a way that cash in the pocket is now and not in the future?

Good question 777.  My wife buys RUC for her diesel vehicle 10,000 km at a time but that's quite possibly not especially typical and some consumers may be buying it in one or two thousand kilometer increments. There's no perfect solution but doing something is better than doing nothing don't you agree ?

[Dolcile]

Latest 1News Verian poll says National would be out and Labour in with 66 seats. National have read the room incorrectly on fuel price support and haven't done enough.

Kiwi's care about the extraordinary cost of living now and would be quite happy to see fuel excise and road user charges halved for a while. Funding for roads can be fixed later when fuel costs normalize.

You'd think something this simple would be readily apparent to National party leadership. Go figure ?

The last thing I want is a coalition of the lunatic left but that's looking increasingly likely.

I lean the same way Basil, however, unfortunately Luxon doesn't seem to have a clue.

[Basil]

https://www.interest.co.nz/economy/138140/keith-woodford-says-stagflation-reality-hard-decisions-needed-now

[winner (n)]

https://www.interest.co.nz/economy/138140/keith-woodford-says-stagflation-reality-hard-decisions-needed-now

agree with Woodford that OCR should be 3% NOW and 4.5% later in year

But tax cuts now so punters can have more spend is a dumb idea. Punters must learn to live within their means .... too much wasteful spending goes on

We must get that MISERY INDEX up