a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://2.bp.blogspot.com/_7ZckZ-8naz0/Ss4gP1iqayI/AAAAAAAAC38/NikeELuPZUg/s1600-h/NZX+EWA.JPG"img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 320px; height: 123px;" src="http://2.bp.blogspot.com/_7ZckZ-8naz0/Ss4gP1iqayI/AAAAAAAAC38/NikeELuPZUg/s320/NZX+EWA.JPG" alt="" id="BLOGGER_PHOTO_ID_5390281260451654434" border="0" //aAs a follow on to this morning one reader noted that iShares Australia can be a proxy for New Zealand.br /br /I would disagree. The chart posted in one year but if you play around with other time periods I believe you will see what I see which is that EWA, which several clients own, is quite a bit more volatile than the NZ 50 which is the benchmark index for New Zealand.br /br /Despite the two often being lumped together the economies are quite different. New Zealand doesn't really have much in the ground that it mines and then exports to other countries. It is more centered on farming, animals and animal byproducts (like milk exports to China). Australia has a fair bit of wheat but ...

In response to a report that stated 15 American infant formula milk powder products contain perchlorate, Abbot, one of the three major milk powder producers from the United States, declared that all their products sold on Chinese market are all made with milk from New Zealand, Ireland or the Netherlands, so they aren't contaminated with [...]

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Here’s some free advice to Prime Minister John Key. I’m being a bit cheeky here, but it’s advice that’s well meant and genuine.

I’ve met Key a couple of times and was always impressed with how much he “got” New Zealand and wanted to do the right thing for the country in the long term. Sometimes I’ve worried that Key is too tactical and reactive to issues, rather than proactive and strategic. But I’ve also been impressed at how sometimes he has taken a bold decision that surprises everyone. Let’s hope he surprises us again with a strategic message that is realistic and encourages us all (including the government) to do the right thing: to spend less, to save more and to invest more.

Dear John,

Please tell us the truth about the economy and what it means for our standards of living. Tell us what we need to do as a nation

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To be fair to the good burghers of Dunedin (though I’m not feeling very charitable at this moment), they are not the only people in the world doing stupid things right now with other people’s money.

Sports stadiums seem to hypnotise local politicians. All around the world they lose their senses whenever a much-loved sports team asks for subsidies or grants for a fancy concrete and glass monument. In America the pressure is even greater because sports franchises there are mobile and threaten to jump to other cities if they don’t get their big toy. It happens too in Australia (the Telstra Dome in Melbourne and the ANZ Stadium in Sydney are both bankrupt) and Britain (Google “Wembley Stadium” and “delay” to find 44,800 links in 0.33 seconds for a laugh).

Dunedin City Council doesn’t even have the imminent threat of the Highlanders departing as an excuse. The Highlanders are unlikely to

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It appears everyone and their dogs are Keynesians now. They believe the only hope for turning around the global economy is lots of government spending and quick. Spend, spend, and borrow even more, they say.

There’s a frenzy of calls for governments to give handouts to taxpayers and to spend up large to support consumption in slowing or recessed economies. The biggest poster boys for this approach are UK Prime Minister Gordon Brown, US President Barack Obama and Australian Prime Minister Kevin Rudd.

The US Congress is expected to sign off on a pared-down US$780 billion plan this week. It doesn’t have everything Obama wanted, but most of it. Last week Rudd announced a A$42 billion package of spending, including a A$950 cheque for most adults by March.

Then last week our Prime Minister John Key appeared to announce a damp squib of a package aimed at small business. It was “only” costing

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There is no doubt that the recent aggressive interest rate cuts by the Reserve Bank of New Zealand (RBNZ) are positive. However, they carry less punch if banks keep some of the lower cost of funding for themselves, without passing the full benefit on to customers.

Banks in this country have a key role to play if New Zealand is to recover from the current recession but they don’t appear to be “playing ball” when it comes to the margins they are currently enjoying.

The table below shows the extent of the mortgage margin for the major banks over current bank bill rates. The average floating mortgage rate margin over bank bills for New Zealand banks is currently 3.40%. It used to be a rule of thumb that the major banks had a margin of about 1.5% over bank bills for floating rate mortgages.

Of course these are very unusual times but does

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At first glance, Telecom’s decision today to “offshore” 250 help desk jobs to Manila looks like a cynical and pointless attempt to go for the lowest common denominator – lower wages regardless of where people work.

But I want to stand up for Telecom on this and say this a price worth paying for free trade and a globalised workforce.

Obviously the 250 people who lost their jobs will feel the pain directly and I don’t want to disregard the disruption and financial losses they may feel. I’m sure Telecom will be making redundancy payouts and many will find other (potentially more satisfying and rewarding) work elsewhere, but being let go is no fun. It would be tempting to say this is a bad idea and we should protect our own. It wouldn’t be hard to mount an argument that New Zealanders would look after New Zealand customers better than Philippine

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Prime Minister John Key is considering how much to increase the legislated minimum wage and is weighing up the impact on jobs. This suggests he may be looking to restrict the size of the increase to less than the inflation rate to avoid increasing employers’ costs and causing job losses.

Opposition leader Phil Goff has called on Key to increase the minimum wage by 25% to $15/hour. This is ludicrous and should be dismissed out of hand.

But Key should stop mucking around and increase the minimum wage by the consumer price inflation rate. People on the minimum wage are struggling and spend a higher proportion of their disposable incomes than those on higher wages. If the logic of encouraging consumers to spend to defeat the “Paradox of Thrift” is correct, then increasing the wages of

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