jetpack domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131updraftplus domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131avia_framework domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131
Seriously, lets all go and read Scott Sumner. He discusses how monetary policy can still be effective even when the cash rate hits zero, and I find it difficult to fault his reasoning.
I would suggest reading all the posts, but there are a few that touched me:
Read more
The RBNZ stated today that long-term interest rates have risen too quickly. There forecast recovery was premised on a low dollar and a relatively flat yield curve – however, it seemed a bit disingenious to suggest that we would have a foreseeable strong recovery and a flat yield curve 🙂 . However, this logic was based on a special assumption – a slumping terms of trade.
As a result, the bank is likely to slash rates by at least 50bp at the next meeting. This was already more likely than during the meeting given the exchange rate – as we’ve discussed. This is a big announcement on their part – effectively we may well be pushing towards the lower bound of the OCR. In this case, we need to think more carefully about our monetary policy …
There will be a post at 11am that points out some good suggestions on this issue.
Note that the general market also feels this way – hence:
Source NBNZ
Apparently Red Hat, a vendor of a commercial linux distribution, has been doing well during the recession. This makes sense intuitively, people are looking for ways to cut costs due to the economic climate, and giving Microsoft less money seams to be a good way to go about it.
This reminds me of a classic interview question people get asked by investment banks, “Can you think of an asset with a negative beta?”
So next time someone gets asked that question they can say something besides “funeral homes” (stocks brokers jump out windows during recessions etc.. the most common answer or so I’m told!) . They can say that open source software vendors might also:)