Michael Gordon

@kellyenz Who could possibly have foreseen?

Looks rather like there was no agreement yesterday and it’s all falling apart now. We are not getting significant oil out of there anytime soon. Looking forward to seeing Citrini captaining a gas tanker through his open strait.

@kellyenz Maybe give a couple of states back to Mexico too

@MG_econ You are not wrong. Surprised that Barron doesn’t have to marry the ayatollah’s daughter also. Thats how these things would have been sorted out in the past.

Here are the list of demands the Iranians have. Should be a crunchy couple of weeks of negotiations.

@jasonfurman Is there any evidence on how much of the tax credit was folded back into the sticker price of EVs?

The EV tax credit that was terminated by the One Big Beautiful Bill Act was $7,500. The gas price increase--if sustained--is about $500 (per car per year).

@MatthewWithy The fact that there was more than one contender probably tells you something about these guys.

@MG_econ The SoH one.

I just assumed the Citrini thing was straight up satire. Now I see people taking it kinda serious. Strange world.

@dave_heatley Any economist can tell you that lockdowns are worse than letting Covid rip. At least people have the option to go to stores, and will do so if they judge their risk to be sufficiently low. They have no corresponding option if nothing's open. Voters may feel differently though.

Any economist can tell you that shortages are worse than high prices. At least people have the option to buy at the high price, and will do so if their purpose is sufficiently valuable to them. They have no corresponding option if nothing’s for sale. bit.ly/4dUyznQ

@kellyenz Nature finds a way

@MG_econ Thank goodness - problem solved then!

For those of you who think that markets will allocate the remaining fuel efficiently then consider the below study. It amounts to the Remuera tractors having unimpeded access to Pauanui while that airport cleaner walks to work.

@kellyenz Rates traders think that we’re in March 2021. I worry that we’re in March 2020.

I need to show this to my rates traders on Monday.

@kellyenz Yeah it sucks for the people who didn’t panic buy

@MG_econ Reduces the flexibility to prioritise supplies in the future though doesn’t it.

Our fuel stocks declined in the last week. Perhaps this indicates increased demand of late. Although it could also reflect the timing of when new fuel stocks are received. There are a couple of boats due in the next few days.

@Charteddaily Might actually drop back for a few weeks if the dealers don't have enough in stock.

Will be interesting to see how high EV registrations will go over the next few weeks.

@dan_brunskill Yeah but I think that temptation is there even under a single (loosely defined) inflation mandate, in an organisation run by humans

@dan_brunskill I was mildly in favour of the employment mandate, as I thought it would force the RBNZ to pay more attention to the labour market as a real-time gauge of the economy. In that minor respect it was (and continues to be) successful.

@Charteddaily Huh, wasn't aware that this data was available at a higher frequency. Nice work.

Presumably it's no coincidence that battery electric vehicle registrations over the past fortnight were the highest in New Zealand since the clean car discount ended in December 2023.

@dan_brunskill Just curious, which are the "previous mistakes" that you have in mind?

@MHReddell @_warrenhogan It’s a bushfire

@_warrenhogan Off the substance of your point but I’m always taken aback when I see the term “fireside chat” for an event held in an Australian summer

Governor Bullocks fireside chat at University of Melbourne suggests RBA in fine tuning mode. Although caught by surprise by the private sector recovery of the last six months and the speed with which inflation has jumped back above their band, she is doesn’t appear concerned that inflation will get away from them. They can afford to be patient is my sense of her position. I disagree. Moreover, the case to get rates back to where they were in early 2024 (4.35%) is compelling. In my view, only once rates are at this level is there any room for patience. Not sure she ruled out a March hike, that remains a market assessment. But it does beg the question: “If the RBA board do not hike in March after yesterday’s inflation result, and the previous week’s unemployment result, is there any point to meeting every six weeks?” They might as well just have 4 meetings a year and save the time and money. The key outcome in yesterday’s inflation report was strong housing inflation, which is inconsistent, according to their own analysis, with the idea that this inflation increase is temporary. And it is housing inflation that is strongly correlated with core inflation. I put a March hike at 50% probability, compared to the market pricing of 15%, given that the governor is unlikely to have been informed of this particular detail on the CPI result when she spoke in the house of doves at Melbourne University last night.

@Charteddaily @kellyenz Westpac, ANZ and Kiwibank all report that their own card spending figures are running higher than ECT and more in line with the retail trade survey. One of these things is not like the others, one of these things is not quite the same...

@kellyenz Any ideas what’s driving the difference?

ECT seems to have consistently underestimated retail trade over 2025. Today's result of 1.5% real increase for the quarter was above our forecast of 0.6%.

@Charteddaily And because it takes so long to publish GDP, all of the “IT’S SO OVER” commentary was happening in Q4, when we were already so back.

In summary, Q3 was a "WE'RE SO BACK" quarter, after a "IT'S SO OVER" Q2.🙂