The Hoon The hoon for the week that was to March 19
TLDR: This week’s news in geopolitics and the political economy covered on The Kākā included:
* PM Chris Hipkins’ announcement of the rest of a policy bonfire to save a combined $1.7 billion, but which blew up the Emissions Trading Scheme (Thursday’s email), upset the Greens and was overshadowed somewhat by Stuart Nash’s resignation as Police Minister, but not as Economic Development, Forestry and Oceans Minister (Tuesday’s email);
* the failure of Silicon Valley Bank and the collapse in the share price of Credit Suisse has renewed nerves about the Global Financial System, and shows the fast rate hikes of the last year may not be sustainable if they endanger bank stability Monday’s email;
* a new report showed the new RMA could generate new carbon liabilities of up to $16 billion because of consenting delays (Friday’s email); and,
* Auckland Mayor Wayne Brown’s budget cuts came under fire, justifiably, from those arguing the so-called ‘fiscal hole’ and debt crisis is not a hole or a crisis (Wednesday’s email).
What we talked about on the ‘hoon’
In this week’s podcast above of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night, I talked with co-host Peter Bale and special guests TOP Party Leader Raf Manji, National Finance Spokesperson and Deputy Leader Nicola Willis and Green MP Chloe Swarbrick about:
* PM Chris Hipkins’ bonfire of the policies on Monday, which blew up the ETS;
* the bank crises that broke out in the United States and Europe this week;
* Labour’s rejection of a select committee inquiry into bank competition; and,
* the Better Budget Auckland challenge to Auckland Mayor Wayne Brown’s austerity approach.
Peter and I also talked about Chinese President Xi Jinping’s ‘great wall of steel’ speech, former Australian PM Paul Keating’s tour-de-force rejection of AUKUS’ submarine deal and the latest drama in the Black Sea when Russian jets ‘collided’ with an American drone.
Other places I appeared this week
Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.
I produced my weekly When the Facts Change podcast for The Spinoff on Why Auckland Council should just use its balance sheet and borrow to deal with lower revenues because of the covid and flood crises. I spoke to BetterBudgetAuckland’s India Logan-Riley about how Mayor Wayne Brown’s spending cuts were hurting Auckland’s most vulnerable, and what the alternatives should be.
Charts of the week
What the Fed’s latest rescue of rich savers looks like
There’s more detail on that US Federal Reserve action here in this Bloomberg article.
All told, the emergency loans reversed around half of the balance-sheet shrinkage that the Fed has achieved since it began so-called quantitative tightening — allowing its portfolio of assets to run down — in June last year. And the central bank’s reserve balances jumped by some $440 billion in a week — which “basically reversed all the Fed’s QT efforts,” according to Capital Economics.
Analysts at JPMorgan Chase & Co. estimated $2 trillion as an upper level for how much liquidity the new backstop could ultimately provide, although they also developed a smaller calculation of around $460 billion based on the amount of uninsured deposits at six US banks that have the highest ratio of uninsured deposits over total deposits. Bloomberg article
Quotes of the week
A loose goose calls a rail project a duck
“Light rail is a dead duck mate, let’s be real.” Auckland Mayor Wayne Brown telling NewstalkZB he didn’t want the Auckland Council to have to pay half of the new $5.493b cost for the City Rail Link, after its cost estimate rose by $1.074b to $5.493b this week.
Wayne Brown plans to ‘leverage’ the Crown to pay > 50% of CRL
“I’m a trader and I’m in there to trade. I’ve got $1b to pay for the weather. I’ve got a budget blowout bequest to me by the new High Commissioner to England.”
Brown also said he wanted to hand a “whole bunch of things back to the Government”, including the Citizen’s Advice Bureau, which he might try to leverage his way out of.
“I don’t see why ratepayers should be fixing people’s marriages, that’s something that should go back to the Government.” Wayne Brown via NewstalkZB
Cartoons of the week
Profundities, spookies, curiousities and feel-goods
Longer reads and listens for the weekend
Here’s a few useful longer reads, scoops and podcasts for paying subscribers for the weekend.