No Minister

Moby Dick

with 3 comments

It seems appropriate to thus start this little Wednesday morning collection of tasty graph and cartoon bites with something published two years ago that has turned out to be very accurate.

Call him Ishmael.

You can see why the MSM misses Trump. Now they have to put their double standards on full display.

In other predictions of the future this one for 2020, written in 1988 is awesome (RPG stands for Role Player Game).

When forecasting the future though it’s usually good to look at the past as well, as this graph of disease pandemics in Sweden does.

Here’s a graph about vaccine passports and mandates, since we seem to be moving on from lockdown mandates and mask mandates, which show similar failures. Here’s the detailed article from which the graph is taken, An inconvenient truth – vaccine passports don’t work:

Sometimes the future is entirely predictable, as with German power prices, courtesy of almost twenty years and €500 billion spent on the fabulous Energiewende (“Energy Transition”) project to get all that juicy renewable power from the wind and the sun. In such latitudes it’s more the wind but it makes no difference anyway. If your question in response to this is, “But the wind is free, why is power so expensive now?”, then you should SFTU on this subject for the rest of time. Also see this as New Zealand circa 2035 if we keep pushing the same stuff. Of course we could go nuclear?

Finally I’ll leave you with this graph, courtesy of Michael Reddell’s latest updated analysis of housing costs in New Zealand, especially in relation to incomes, Price/income ratios, with the key insight:

At best, it takes 33 years for price/income ratios to get back to three – the sort of ratio seen in large chunks of the US, in cities large and small. At best, it would take almost a quarter of a century to get back to a price/income ratio of four.

Basically the only way my kids are going to be able to buy a house is if we leverage the hell out of our existing one, and even then it may mean not living in Auckland. As Bob Jones has pointed out, now linking to BNZ economist Tony Alexander, they may not be living in NZ at all once the Chinese Xi Snot controls are gone and they get the chance at higher incomes, lower costs and not being locked up.

You should check out Reddell’s earlier posts on the housing problem, which I’ve quoted a few times here.

Frankly I can no longer see this being resolved, given that, as he points out, both the leaders of the National and Labour Parties said the other day that significant price drops – say 25% – would not be acceptable. Why? It would simply put us back two years. Although buyers in the last two years would be looking at negative equity, that’s a temporary situation that can be worked out of and has been in the past.

If you’re not willing to unwind a clearly screwed-up marketplace by even a small amount because some recent entrants will feel some (book-value) pain then you’re basically admitting that the current situation of relentless and ever larger price increases will continue, which will lock out a lot more potential entrants, particularly the young. The graph above is a “best-case” scenario if price drops are not permitted – and it shows an awful situation for people wanting to enter the housing market.

In a sense our housing market has become rather like any welfare system or drug addiction: the more people who are hooked on it the less chance there is of changing it. The only difference is that with housing it’s the newest entrants who have the most to lose.

Which means that what we have here is a Ponzi scheme, and they never end well. But they do end, irrespective of the authorities.

Written by Tom Hunter

December 15, 2021 at 11:04 am

3 Responses

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  1. Lucia Maria

    December 15, 2021 at 11:43 am

    • That cartoon is awesome. It’s the sort of bite I used to laugh when Tom Scott was talking swipes at Muldoon and Lange.

      Tom Hunter

      December 15, 2021 at 11:50 am

    • I especially love the torch of Bloomfield’s head! 😛

      Lucia Maria

      December 15, 2021 at 11:54 am


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