All this talk about US mortgages being repriced higher…taken a look at the 2, 5 and 10 year US swaps lately? They got in a mess by lending cheap money….gee look, now they can do it again!

As for the rest , CPW is on the money.

But in a nutshell, the chain of events we have to fear is long and complex: US recession -> World recession -> NZ recession. Probability is low.

NZ is buffered by high commodity prices, big fiscal stimulus on the way, and the labour market is pretty tight. Even in a growth slowdown I wouldn’t expect unemployment to rise much. And I don’t expect recessions to last long anywhere with modern monetary policy.

Biggest threat to NZ is housing market collapse. Likely trigger for that is mass emigration (not currently a problem) or big increase in mortgage rates. Global recession, with its likely impact of lower world bond rates and lower tradable inflation, makes me less fearful of mortgage rate increases.

So I’m not losing sleep.

Contrary to popular opinion I am not a Real Business Cycle zealot 🙂

However, I guess I am less concerned about recessions than your average person. Maybe I am less loss averse than other people?

“One word answer: no. :-)”

I completely agree with you. However I have to ask, why?

I thought you never worried about business cycles.