The Hoon

TLDR: This week in the podcast of our weekly hoon webinar for paying subscribers, Peter Bale and myself talked with Auckland Central MP Chloe Swarbrick and Auckland City Councillor for the Albert-Eden-Puketāpapa ward, Julie Fairey, about Auckland’s floods, climate change and what might (and should) happen next.This week’s five big thingsThe climate changed - Auckland’s heaviest ever downpour after Aotearoa’s hottest ever year unleashed floods that killed four people, made hundreds (more) homeless and will be our most expensive natural disaster ever, outside of the Christchurch earthquakes. Insurers face claims of over $500 million and are already putting up premiums and pulling insurance from some of the one in seven properties on flood plains, under (and over) cliffs and within expected reach of rising seas. The politicians didn’t - The Labour Government announced an extra $719 million in spending to extend fuel tax cuts for another three months to the end of June, increasing the bill for encouraging more emissions from petrol and diesel vehicles to $2.1 billion and making it even more unlikely they will be unwound before the election on October 14. Mortgage rates fell - ANZ cut its longer-term mortgage rates to match cuts by others as global markets are now dragging down longer-term wholesale rates in anticipation of cuts in official rates. That’s because inflation is rapidly coming off the boil in the big Northern Hemisphere economies, which just experienced mild winters that kept gas prices down and where wage growth is now slowing, avoiding wage-price spirals.Goldilocks economies - The world’s largest economy reported much-stronger-than-expected jobs growth last night, but also wage growth fell, creating the tantalising potential for the United States to have a soft landing where the US Federal Reserve doesn’t have to raise interest rates too much. A recession that was seen as inevitable as recently as in January, could be avoided. The Eurozone also avoided a recession over its winter, partly due to a warmer winter and continued jobs growth. The one time climate change was a good thing.From the dog house to the honeymoon suite - Two opinion poll results published this week showed support for Labour bounced strongly in new PM Chris Hipkins’ first week in charge. Labour’s support rose just above National’s in both the 1News/Kantar and Newshub/Reid Research polls. Interestingly, Hipkins net approval and net trust ratings were significantly above that of National leader Christopher Luxon. It’s game on again for the election on October 14, with the prospects growing that Te Pāti Māori, TOP and/or NZ First become the makers of King Chris or King Christopher.Chart Pack of the weekOff-the-charts amount of rain in a dayFuel tax cuts extended despite prices at pre-war levelsLabour bounces back in the pollsUS wage inflation rolling over tooIMF points out NZ has the most punitive GST in the worldSubstack of the weekKa kite anoBernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TLDR: Chris Hipkins signalled in his first week as PM he was open to loosening migration settings and would ‘rein in’ unnecessary Government spending to focus on ‘bread and butter’ cost-of-living issues once he picks his full Cabinet next week.Also in our political economy, the global economy and geo-politics this week:* December quarter inflation was softer than the Reserve Bank (Te Pūtea Matua) expected so some economists and most traders dialled down their expectations for the bank’s next rate hike on February 22 to just 50 basis points from 75 basis points;* Signs of a soft landing with slower inflation emerged in the European and US economies, leading traders to lower wholesale interest rates in the hope the US Federal Reserve and the European Central Bank ease back on their inflation-fighting rate hikes;* Germany agreed to release its own and other European nations’ Leopard II tanks for Ukrainians to fight Russian troops with, as long as America sent some of its own Abrams tanks;* The scientists running the Doomsday clock moved its hands 10 seconds down to be 90 seconds from the ‘midnight’ of a global nuclear, climate and/or pandemic catastrophe, which was the closest to the end time since it was created in 1947; and,* MetService reported this morning Auckland had its wettest day ever yesterday, with Auckland Airport flooding and being closed until midday today after 249mm fell in a single day, which was 54% more than fell in the previous wettest day of 161.8mm on Feb 16, 1985. More rain fell on the Airport in an hour than would normally fall in a month. January will be Auckland’s wettest month ever after Aotearoa recorded its hottest year ever. Mayor Wayne Brown eventually declared an emergency. We hope all our subscribers are safe and well.In the podcast above of our weekly ‘hoon’ webinar for paying subscribers last night at 5pm, co-hosts Bernard Hickey and Peter Bale talk to special guests Foreign Affairs Professor Robert Patman from the University of Otago, ANZ economist Finn Robinson and University of Auckland Associate Professor Susan St John about:* Chris Hipkins’ first week as PM;* Grant Robertson’s decision to go list-only; * Germany’s decision to release its Leopard II tanks for Ukraine to use;* Softer-than-forecast domestic inflation data and what it means for the Official Cash Rate decision due on Feb 22;* the likely slowdown in the US Federal Reserve’s rate hike this coming Thursday;* the Government’s long-stalled Working For Families review; and, * how the various welfare payment settings punish those with young families for earning extra money much more than pensioners are punished for earning more.The Chart Pack of the WeekLower - Global shipping container costs fell to pre-pandemic levels. Visual CapitalistSlower - Quarterly NZ non-tradable inflation fell to 1.5% in the December quarter from 2% in the September quarter. Stats NZSofter - US GDP growth slowed to an annual rate of 2.9% in the December quarter from 3.2% in the September quarter, which was better than expected. US Bureau of Economic Analysis data.Better - Business pricing intentions as measured in ANZ’s monthly business confidence survey bounced in January, but are off their highs.Data Points of the WeekUS$25.461 trillion - US GDP in nominal terms in 2022, up 21% from 2020 and up 8.2% from 2021. Real US GDP rose just 1.0% in 2022 from 2021. US BEA29.3% - The rise in New Zealand’s domestic air travel prices in the December quarter from the same quarter a year ago. International air travel prices rose 11.6% in the quarter from a year ago. Stats NZ.Some wild thingsKa kite anoBernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TLDR: Jacinda Ardern shocked almost everyone by returning from a summer break this week and resigning as Prime Minister because she said had “nothing left in the tank.” Perhaps even more surprising, Deputy PM and Finance Minister Grant Robertson said he did not want the top job, having tried and failed twice to become Labour Leader in 2011 and 2014.Within 48 hours, the Labour Caucus settled on Chris Hipkins as the sole candidate to be Ardern’s replacement as Prime Minister. The caucus is expected to confirm him as the new Labour Leader and next Prime Minister shortly after 1pm. He is then expected to give his first news conference in the Beehive Theatrette at 3pm and confirm expectations his deputy will be current Social Development Minister Carmel Sepuloni. I’ll be there to ask questions and welcome suggestions in the comments below. The podcast above for all subscribers is a recording of the weekly live ‘hoon’ webinar for paying subscribers we had on Friday evening at 5pm. This week’s edition is the first for 2023. I co-hosted the webinar from a car at the Queen Elizabeth Park on the Kapiti Coast, while fellow co-host Peter Bale was north of Auckland overlooking Kawau Island. University of Otago International Relations Professor Robert Patman was in Dunedin and former Labour MP and current Community Law Centres of Aotearoa CEO Sue Moroney was in Auckland. The recorded version reproduced here is shorter than the original live version because we had some technical problems and I’ve cut out the boring bits. Many thanks to 100 or so paying subscribers on the webinar for your patience. We spoke almost exclusively about the resignation of Jacinda Ardern and its meaning for Aotearoa, the Labour Party and future policy.Briefly elsewhere in the news in our political economy, the global economy and geo-politics this week:* The US Government hit its US$31.4 trillion debt ceiling and was forced to start cash preservation measures that will extend its runway to avoid a financially catastrophic default until June, with the hope the Republicans who control the House of Representatives will allow a debt ceiling increase before then;* The Bank of Japan surprised markets by sticking with its loose monetary policy of bond buying to hold down its long-term interest rates below 0.5%, but most expect it to relent some time after a new Governor is appointed in April;* China reported GDP growth in 2022 of less than half the 5.5% it had been targeting because of a slump in its apartment development market and repeated lockdowns until its December opening up; and,* China also reported its population fell in 2022, which was its first fall in almost 60 years and an indicator of the beginning of a longer-term decline that may have already seen China surpassed as the world’s most populous nation.Ka kit anoBernardPS: Peter Bale now has his own substack and I’d recommend you all sign up. It’s over here Media News You Need - Curated by Peter Bale This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TLDR: This year the long effects of covid and Russia’s invasion of Ukraine generated global labour and energy supply shocks that fired up already-hot demand-led inflation from 2020 and 2021. That forced central banks to slam on the interest rate brakes, which is forecast to create recessions next year, just as inflation comes off the boil. In Aotearoa, the Labour Government’s popularity cratered and house prices slumped at the same time as covid finally raced through a mostly-vaccinated population in a couple of waves. Covid, vaccination mandates and winter flu outbreaks stressed an under-invested and under-staffed health system to near breaking point and tore holes in our already-weak social cohesion, especially during protests at Parliament in February and March. The National/ACT Opposition is now in pole position to win the general election late next year just as unemployment starts rising and most homeowners with mortgages re-fix at rates closer to 7% than 3%.The podcast above includes the final hoon of the year with co-hosts Bernard Hickey and Peter Bale, along with special guests Robert Patman, Josie Pagani and Rod Oram on 2022’s big events in the geo-political economy. A deeper dive into the big events of 2022 and beyondIt has been a bigger year than most so I thought it would be worth looking at both the context into which it fell, and what that might mean for the future.In the longer term, Aotearoa-NZ’s political economy of our ‘housing market with bits tacked on’ remains stuck in a rut of two fiscal rules that both major parties believe median voters want because they protect their tax-free gains in land values. Labour believes and National is reinforcing the fiscal framework that taxes should be not much more than 30% of GDP and net Government debt should never go over 30% of GDP. Those rules are stopping the Government from repairing a $100 billion infrastructure deficit built up over 30 years. They also stop the creation of the productive capacity for more high population growth that both parties want, but won’t talk about, plan for, or fund for.In my view, we remain in an age of magical thinking where most politicians, politicians and voters believe we can still have low taxes and low investment with high population growth and high wages. Until we break out of this ‘unholy trinity’ or ‘impossible trilemma’ of low taxes and low investment, high migration-led population and nominal GDP growth and free movements of people, capital and goods and services, our society and economy will be stuck with:* low productivity and real wage growth from an economy based on that housing market and extractive export industries such as dairying, pine forestry, tourism and international education;* tax and investment settings that only make sense for land owners able to capture the leveraged, unearned and untaxed gains from residential land value inflation for themselves and their families; and,* the growing risk of an exodus to Australia from the half of our young people who were born and/or grew up in Aotearoa, but are from renting families and see little real future for themselves to build their own families here because our housing costs, both to rent and buy, are still the highest in the world relative to incomes. Essentially, we cannot have it all without ending up ‘chasing our tails’ trying to fill the country with new migrant workers faster than our renting residents leave. In this scenario, we keep our low-tax and low investment settings and end up with the mulitple home-owning voters constantly lobbying for ever-looser migration settings, lower taxes, lower public investment and lower Government debt to keep generating the tax-free capital gains on land values that support their own financial futures.That would leave us with a hollowed, brittle deeply uneven and unfair society, prone to destabilising exoduses of people and capital, along with the ongoing destruction of our water, soil, climate and overall wellbeing. In 2023, I’d like to spend more time profiling and examining the various policy options for reform that might be possible in the current version of our political economy, especially in the leadup to elections. I welcome the guidance of paying subscribers in the poll below on how to focus my time working through The Kākā in the year ahead.The three things that mattered most in 2022In my view, the three events that changed our political economy and spotlighted the problems we have around housing, climate and child poverty were:* the Parliamentary protests in February and March that demonstrated how vulnerable our social cohesion and national security was to disinformation and disruption sourced from overseas, largely because of the widening gaps over the last 30 years between our rich and poor, the governed and governing, and between the big cities and provinces;* the Russian invasion of Ukraine in late February accelerated a drift away from globalisation that began in earnest after the Global Financial Crisis, along with forcing a panicked shift to both use more coal instead of gas globally in the short term, and ramp up moves to shift from fossil fuels to renewable energy in the long run; and,* the concerted and rapid tightening of monetary policy by developed world central banks, including our own, which hammered asset prices and may be a panicked over-reaction to the ongoing inflationary effects of supply shocks to labour, energy and food supplies from the long-term effects of covid and the Ukraine war.Three things to watch for in 2023 As direct and indirect consequences of those events, these are the three big things I’ll watching most closely for in 2023:* Australia’s increasing willingness to grant full residency and fast pathways to citizenship for New Zealanders from Anzac Day 2023, given Australia’s labour shortages are massively larger than ours and new Labor PM Anthony Albanese is keen to suck Kiwis over the Tasman to fill those gaps, using the promise of easy and fast ‘first class’ residency as bait on top of the usual 30-40% pay increases after housing costs;* A likely outright National/ACT victory in general elections due in September, October or November, which would lead to an immediate bounce in the housing market in anticipation of looser migration settings, a freeze in housing and transport investment needed to increase housing supply, along with Government spending cuts to engineer a faster return to surplus, less public debt and lower interest rates (which would also accelerate the housing bounce); and,* A likely pivot lower in official, wholesale and fixed mortgage interest rates by the final quarter of next year because of a sagging in global economic growth and inflationary pressures through early 2023 that force central banks to drag their expected rate tracks lower.In short, I expect home-owning voters to be wealthier and happier by the end of 2023, but with young renters eyeing their exit options to Australia and employers pushing a new National/ACT Government even harder to loosen migration settings to fill the gaps. By the end of 2023, the big city rail and housing projects started by Labour will be frozen and councils will suspend their transport mode shift and medium density housing drives. Floating the idea of The Kākā Project for 2023However, through 2023 I’d like to build and stress-test a cohesive and politically possible set of policy ideas to help voters understand the issues and options through an election year. I’d like to call this The Kākā Project and run it from late January until the election. It would culminate in a full document (a book?) and/or set of publicly shareable presentations, podcasts and articles to stimulate and inform debate. It would be based around:* the idea of a new annual broad-based and low-rate land value tax being paid by the owners of all occupied and unoccupied residential-zoned land;* that those land taxes pay for hundreds of billions of new housing, transport and water infrastructure investments over the next 50 years;* that those investments dramatically improve housing affordability, eliminate climate emissions, eliminate child poverty, keep net public debt below 60% of GDP and reverse $1 trillion worth of intergenerational wealth transfers that were engineered accidentally on purpose by most land-owning voters, politicians and policy-makers over the last 30 years; * how these types of policies might be politically viable in the current climate; and, * how they’d be designed around an agreed population plan for 15 million residents of a rich, stable, vastly-more-equal and growing carbon-zero economy by 2100.I’d welcome your feedback below. It is conditional on the clear backing and support of paying subscribers, given it is likely to see me do less of the pure news summarising I have often done in the Dawn Choruses. I’d love paying subscribers to vote and/or comment below to give me more direction.Tell me what you’d like me to work on next yearKa kite anoBernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TLDR: This week in geo-politics, the global economy and Aotearoa’s political economy, we learned:* the Government’s RMA replacement will take 10 years and keep distracting us all from the magical thinking of the last 30 years that low taxes and investment co-exist with high population growth; Thursday’s Deep Dive* a new report showed the big electricity gentailers paid out $3.7b in excess dividendss in the last eight years, starving investment in renewable generation and delaying our emissions reduction; Tuesday’s Deep Dive* three opinion polls showed National’s lead over Labour narrowing and Christopher Luxon’s personal popularity continuing to plateau as Labour targets him personally; * TOP proposed an alternative to Three Waters for planning and funding water infrastructure that uses existing structures and avoids balance sheet separation and centralised co-governance; Friday’s Dawn Chorus and,* China distanced itself from Russia’s invasion of Ukraine by signing up to a G20 communique denouncing an era of war and declaring the use of nuclear weapons inadmissible.What was in this week’s HoonWe talked with Dominion Post columnist Josie Pagani about polls showing Labour and the Greens reducing their deficit to National and ACT, along with the plateauing of Christopher Luxon’s personal popularity. We talked with University of Otago Foreign Relations Professor Robert Patman about the Russian-built missiles fired by Ukraine that strayed over the border into Poland, and President Xi Jinping’s hopeful appearance at the G20 and APEC summits. Our apologies, but the promoted appearance of Adam Jasser was a bit too ambitious. We hope to get him back another week.Peter and I also talked about Elon Musk’s week of chaos at Twitter, the implosion of Sam Bankman-Fried’s FTX and look ahead to the final interest rate decision of the year by the Reserve Bank this coming Wednesday.Some longer reads and listens for the weekendProfundities, spookies, feel-goods and curiositiesHave a great SundayMā te wāBernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TLDR: This week in geo-politics, the global economy and Aotearoa’s political economy, we learned:* Te Putea Matua (The Reserve Bank) found in its review of its own performance over the last five years it complied with its own act couldn’t have done much different to stop inflation jumping to 7% or house prices surging 45% in 18 months;* The Opposition was “shocked and appalled” at the reappointment of Adrian Orr as Reserve Bank Governor for another five years, saying it would launch an independent inquiry into the central bank’s actions over covid if it was elected next year;* PM Jacinda Ardern criticised bank profits as too high for them to keep their social licenses, but did not support a windfall profits tax or a markets study;* Energy Minister Megan Woods delayed forcing fuel companies to mix in biodiesel to reduce emissions by a year to avoid increasing diesel costs by as much as 10c/litre; and,* US inflation was slower-than-expected in October, amplifying hopes global interest rates won’t have to rise so much to control inflation, which unleashed stock and bond market rallies, which makes mortgage rate hikes here less likely for now.What was in this week’s hoonWe talked with Oil Change International’s Global Campaigns Manager David Tong from Sharm-el-sheikh about progress at COP27 and McClatchy investigative journalist David Wieder from Miami about better-than-expected results for Democrats in mid-term elections and worse-than-expected results for candidates backed by Donald Trump.We also talked about:* Adrian Orr’s contested reappointment;* The collapse of crypto-currency exchange FTX after its founder Sam Bankman-Fried failed to repay depositors with the token he created and then borrowed off them; and,* Elon Musk’s tumultuous week in charge of Twitter, including warnings of bankruptcy and suggestions he would take it behind a paywall.Other places I appeared this weekI was on RNZ’s Morning Report on Friday to talk about the Reserve Bank’s review.I was on 1News talking about bank profits and a windfall tax on Tuesday.Ka kite anoBernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TLDR: This week in geo-politics, the global economy and Aotearoa’s political economy, we learned:* PM Jacinda Ardern didn’t take the Three Waters offramp offered to her by the new mayors of Auckland and Christchurch;* Aotearoa kept growing jobs and real incomes at faster-than-expected rates in the September quarter;* Reserve Bank stress tests found banks were so profitable and well stocked with spare capital they could handle a 47% fall in house prices;* the US Federal Reserve and the Bank of England both hiked their key interest rates by 75 basis points, setting the scene for the Reserve Bank to do the same on Nov 23; and,* Elon Musk bought Twitter, retweeted a crazy conspiracy theory, deleted the retweet, and then sacked the social network’s moderation and ethics team, while Substack launched a chat function on its iOs app for subscribers forming around writers and podcasters (including me).What was in this week’s hoonWe talked with special guest University of Canterbury political scientist and IPCC climate change report co-author Bronwyn Hayward about this weekend’s COP27 conference in Egypt, including the geo-political challenges for emissions reduction and how well (or not) Aotearoa is responding. Later, we talked about:* the mid-term elections in the United States this coming Wednesday (NZ Time);* the future of Twitter under Musk and the alternatives growing on Substack;* the return of Binyamin Netanyahu in Israel;* China’s Orwellian attempt (still) to eliminate covid ; and* how rising real incomes and rudely healthy household balance sheets contrast with the gloomy rhetoric of opposition politicians calling for the biggest tax cuts for the wealthiest. What was on The Kākā this week;For examples of how I covered these issues for paying subscribers this week, here’s my deeper dive analyses of:* rising real weekly incomes and the resilience of home-owners’ finances to rising interest rates and falling house prices in Thursday’s email;* the Government’s decision to drive past a Three Waters offramp offered by Wayne Brown and Phil Mauger in Tuesday’s email;* a Green call for a windfall profits tax in Monday’s email;* whether this week’s big rate hikes in the United States and Britain were too big and fast for the global economy to handle in Friday’s email; and,* how National’s tax cuts would deliver more than half of their $11.1b in lost tax revenues to the top 10% of income earners and landlords in Wednesday’s email.Other places I spread my journalism this weekI talked on TV3’s The Project about rising real incomes and low debtI podcasted about broken relations between councils and the CrownI appeared on TVNZ’s Breakfast to talk about Three WatersCharts of the weekUseful longer elsewhere for the weekendProfundities, curiosities, spookies and feel-goodsCartoons of the weekThe Craic of the weekMā te wā e hoaBernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TLDR: This week in geo-politics, the global economy and Aotearoa’s political economy, we learned:* China is retreating further into itself under a now completely dominant Xi Jinping;* global investors think central banks are about to do a ‘dovish pivot’ on interest rates;* but Adrian Orr isn’t ready to pivot yet and wants unemployment to rise first;* our Employment Court ruled Uber drivers are employees and the Fair Pay Act passed;* ANZ reported record profits and its economists forecast a 27% fall in real house prices; and,* The UN forecast current climate policies would warm the planet by 2.8 degrees celcius by 2100.What was in this week’s ‘Hoon’In this week’s ‘Hoon’ live webinar for paying subscribers on Friday at 5pm that is in recorded podcast form above, co-host Peter Bale and myself talked with special guests Robert Patman from the University of Otago and Jason Young from Victoria University of Wellington about:* Vladimir Putin’s unproven allegations Ukraine is planning to set off a dirty bomb and the latest signs his henchman in Russia are unhappy and organising against him;* America and NATO’s continued solidarity behind Ukraine despite the occasional waverings of both some Republicans and Democrats ahead of key mid-term elections on Nov 8;* President (for life) Xi Jinping’s clean-out of the rest of his rivals and any remaining ‘opening up and reforming’ influencers from China’s top leadership groups at last weekend’s five-yearly Party Congress, which further spooked international investors who should have known better; and,* Why US moves to block exports of computer chip technology to China are so important.Separately, Peter and I talked about: * the unfairness of the Reserve Bank’s aggressive rate-hikes on covid’s losers, and how the Government itself could help to reduce inflation by cutting GST and other fees and levies;* the Future of Local Government Review’s draft proposals to change council finances and governance, including ideas to lower the voting age, create four-year terms and create a co-investment fund; and,* What Elon Musk’s takeover of Twitter might means and why Facebook’s valuation crash shows markets sometimes do better work than regulators.What was on The Kākā this weekFor examples of how I covered these issues for paying subscribers this week, here’s my deeper dive analyses of:* the fairness of the Reserve Bank’s fast rate hikes in Friday’s email and podcast;* the early signs of easing inflation pressures in Thursday’s email and podcast; and,* how global investors and traders are positioning for a ‘dovish pivot’ by central banks later this year in Tuesday’s email and podcast.Other places I spread my journalism this weekA discussion about the economy on TV3’s The Nation on SaturdayScoops this week elsewhereUseful longer reads, listens & watches elsewhereCharts of the weekRight back to where we started from?ANZ’s economists this week increased their forecast fall in house prices from the peak in November to a trough next year to 18% in nominal terms from 15% previously. It also forecast a wage-inflation adjusted 27% fall in real house prices back to pre-covid levels.A good year for the bankersANZ reported its profit in the six months to September 30 rose 9.6% to $920m from the previous six months because of rising net interest profit margins as the Reserve Bank hiked interest rates and because it grew mortgage lending sharply in 2020 and 2021.We’re doing nowhere near enoughThe UN Environment Programme reported this week that that planet was on track to warm by a disastrous 2.8 degrees by 2100 with current policies.Profundities, curiosities, spookies and feel-goods this weekMā te wāBernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TLDR: This week in geo-politics, the global economy and our local political economy, our inflation was hotter than expected as profit margins rose, Xi Jinping doubled down on China’s zero Covid strategy, the Government loosened migration settings without a population plan or enough infrastructure, and Liz Truss resigned.The podcast above is a recording of our weekly ‘hoon’ (plural for Kaka) webinar for paying subscribers, which co-host Peter Bale and myself regularly do on Fridays for an hour at 5pm. This week’s edition includes special guests Robert Patman, a Professor in International Relations at the University of Otago, and Kelvin Davidson, the Chief Property Economist at CoreLogic. We talked about:* the chances of a Russian nuclear strike in Kherson this weekend;* whether Russia might have cut undersea cables to Britain;* why Iran sending drones to Russia is disturbing;* how the faster-than-expected CPI inflation figures here on Tuesday led to mortgage rate increases and may cool a reheating housing market; and,* what Christopher Luxon should learn from Liz Truss’ demise.Here’s what I focused on this weekReady fire aim - PM Jacinda Ardern denied the Government was flying blind on migration and hadn’t built enough infrastructure before removing its residency planning range and loosening visa settings (see my full analysis here from Tuesday);It was the lettuce wot won it - UK PM Liz Truss resigned after 44 days in the job because global investors rejected her plans for unfunded tax cuts for the rich and an anti-climate approach, which offers lessons for Christopher Luxon here in my full analysis yesterday;A profit-price spiral - Data on Tuesday showing CPI inflation in the September quarter of 7.2% from a year ago was higher than the 6.5% consensus forecast from economists, which I argued on Thursday is partly due to companies globally and here widening their profit margins because they have greater market power.Some longer weekend readsGeorge Magnus is right on this. The Chip Choke is a very big deal.Very worried Germans - Jeremy Stern’s piece in The Tablet this week about Germany’s fears about Russia and the winter is more than sobering. A chilling sample here:“As many Germans see it, Ukraine’s dazzling advances do not leave Putin with the binary choice of accepting his own death and defeat or else embarking on Armageddon. He may instead be left with the potentially attractive option of deploying a tactical nuclear bomb to achieve a limited military objective in Ukraine, or of causing an “accident” at the Russian-occupied Zaporizhzhia nuclear plant and attempting to blame it on the Ukrainians. This would almost certainly trigger some sort of NATO attack on Russia—to which Germany would never, under any circumstances, ever agree. Berlin would instead lead a small dissenting bloc within NATO, including Hungary, refusing any use of its funds, communications, weapons, or territory. In other words, Germany would violate its treaty obligations—as Putin has likely judged.”“NATO would thus officially break along the lines Putin knows it is already broken. The EU’s commitment to Ukraine would also fracture. The U.S.-German alliance would be no more. Even a small nuclear explosion would send markets crashing, and the German economy would grind to a halt. All of Europe would enter a depression more severe than anything Russia has experienced to date. It would no longer make sense to speak of “the West.” This, as much as reclaiming lost territories, would be Putin’s life’s work.” Jeremy Stern in The TabletUseful longer watchesProfundities, soberings and feel-goodsThe CraicHave a great weekendKa kite anoBernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TLDR: This week on the weekly ‘hoon’ webinar for paying subscribers on Friday at 5pm for an hour, myself and co-host Peter Bale, along with economist Rodney Jones and University of Canterbury-based and Ukrainian-born political communications scientist Natalia Chaban discussed the news of the week in geo-politics, the global economy and Aotearoa’s political economy, including:* the anti-Labour backlash in local elections last weekend that saw older pro-car and anti-densification candidates win most of the mayoralties (except Wellington) … see my analysis earlier in the week here;* the Government’s proposal for a world-first methane and nitrous oxide levy on farmers to slash climate emissions, which beef and sheep farmers said would gut their sector because the scheme would not allow offsets from mass tree planting on farms and the levy would be set by the Government, rather than farmers (see my analysis here from Wednesday);* the Government’s announcement of the reopening of the Skilled Migrant and Parent residency visa programmes, along with the removal of the decades-long residency planning range (see my analysis here out today);* the Bank of England’s desperate attempts to avert a financial crisis in Britain after a disastrous mini Budget by new PM Liz Truss and new Chancellor of the Exchequer Kwasi Kwarteng proposed £45b of unfunded tax cuts for the rich (we talked about this with Rodney Jones last night before this morning’s news that Liz Truss had sacked Kwarteng and done a U-turn on a planned corporate tax cut);* hotter-than-expected inflation figures in the United States that is driving up expectations for US interest rates, driving up the US dollar to record highs and threatening financial market mayhem (we talked about this with Rodney Jones);* this weekend’s Communist Party Congress is set to confirm President Xi Jinping for a third term and unveil a new lineup of China’s leaders (we talked about this with long-time analyst of China’s politics and economy Rodney Jones); and,* Vladimir Putin lashed back at Ukraine with dozens of missile strikes on civilian targets in cities across the country after his signature bridge to Crimea was blown up (we talked with Natalia Chaban about how the strikes only hardened Ukraine and West’s resolve to push Russia out of Ukraine completely).My longer deep-dive listening for the weekendThis weekly podcast from New York-based British political and economic historian Adam Tooze on Europe’s energy crisis is an eye-opener in explaining just how important Germany’s reliance on Russian gas was and how broken it is now.This is a weekly podcast from Irish economist David McWilliams is one I try to listen to. He is a hoot and this week’s piece on how central bankers want more unemployment is a cracker. It explores the ultimate class war behind inflation targeting.This week’s episode of The Spinoff’s ‘Gone By Lunchtime’ is an excellent and comprehensive debriefing of last week’s local council election results. Useful longer reads elsewhereThere’s so much news around this week, but this shouldn’t be ignored. The US is really, really cracking down on US high tech exports or sharing with China.Paul Krugman makes some great points about this week’s hot US inflation number. It’s mostly about rents, and the CPI numbers that looked hot are lagging indicators of rents that are now falling.This is another big story among many this week I haven’t had a chance to tackle properly.This is a sweeping and fascinating piece from Ben Hunt.Scoops of the week elsewhereCharts of the weekCartoons of the weekThe CraicI’m a big fan of Gillian Tett from the FT.Profundities and feel-goodsKa kite anoBernardHave a great weekend. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe