Blind faith in other economists – I’m an idealist 😀

A touch longer than the BOE 8 quarter long term 😀

Same stance as June – however, they believe that lending costs will not fall as much as the OCR, as you state here:

“Will the major banks lower their mortgage rates, in Australia the banks have been somewhat reluctant to bring the rates down by the extent of RBA cuts.”

I doubt all the cuts will appear in mortgage rates – the one to watch will be the floating rate, that will tell us how much the Bank’s are currently able to pass on.

“Just what jawboning has been going on behind closed doors between Cullen and Bollard.”

“The decision definitely appears political. A sad day for NZ if this is indeed the case.”

I severely doubt it. I think it has more to do with the fact that Dr Bollards mandate is fuzzy, so he places a fairly high weight on short-term growth – to the determinant of the economy in the long-run.

There forecasts are a bit negative as well – three years of falling employment levels! What the hell. Of course, they said all this stuff last time so its not as surprising (although still weird):

http://tvhe.wordpress.com/2008/06/05/june-08-ocr-review-and-mps/

I’m sticking by “Impeach Alan Bollard, Impeach Him Now.”

On the plus side, I got to lecture on Monday about political business cycles; gave them the nice example from the Nixon tapes of Nixon pushing Burns to keep interest rates down in the leadup to the election. Looking more and more like we’ve got a domestic case going on right now.

Will the major banks lower their mortgage rates, in Australia the banks have been somewhat reluctant to bring the rates down by the extent of RBA cuts.

One assumes that Kiwibank will lower it’s rates in line with the wishes of the regime.

Just what jawboning has been going on behind closed doors between Cullen and Bollard.

This close to an election this is very good for Labour, in the short term, longer term not so sure.