Matt Nolan

Wine and competition in New Zealand

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In the following story on Stuff, we are told that a New Zealand wine maker has sold a whole bunch of wine for $3.50 a litre – an incredibly low price for the premium brand.

The reason for these “firesales” of wine we are told is:

these big sales come on the back of a bumper harvest this season, resulting in surplus stock

So winemakers have had a bumper season – and as a result they are having to sell some of their wine excessively cheaply. Doesn’t this seem weird.

Well it makes complete sense when we think either:

  1. There is competition in the wine industry or,
  2. The wine company is able to price discriminate between markets

Discuss 🙂

Matt Nolan

Has the dip in petrol prices taken care of inflation?

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I was a bit confused when I heard a claim from Roger J Kerr that September quarter consumer price growth was only going to come in at 0.4%, leaving annual growth in the CPI at around 4%.

His justification for the weakening outlook for growth in the CPI was a softening in petrol prices – something that has indeed happened over the past four weeks. Although many of the point he raises are extremely relevant I feel that his conclusion (which implies that inflationary pressures are on the decline, that the RBNZ should feel more comfortable about cutting interest rates, and that the price increases in September will be that weak) appears to be well off the mark. Let me discuss why I think this:

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Matt Nolan

Benefit policy: Another value judgment

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Following our discussion of one possible value judgment associated with benefit policy I’ve decided to have a crack at another one. Now note that what I say here is not necessarily my opinion – a fact that should be obvious given that it is completely different from my last post.

This post will be based on an article by Nigel Pinkerton in the Dom post on Saturday (link here). Furthermore, we will start off by discussing the same line as we did last time from the press article:

It is widely accepted now that long-term dependency on welfare benefits should be avoided where possible

Lets see what we come up with:

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Matt Nolan

Keep the banks in mind

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I’m feeling sick today, so I won’t be able to write much.  As a result, I’m going to link to a good article over at the Rate’s Blog by Bernard Hickey.

I agree with his conclusion that the NZ banking system is in good hands – however, it is important to remember that it was trouble in the banking system that lead to the great depression.  As a result, the outlook for our banks will be incredibly important over the coming year – a factor that the RBNZ is definitely keeping an eye on.

Who knows, the real reason why the RBNZ is cutting rates and the RBA is on the verge of cutting may be issues in the banking sector (definitely something they would know and we wouldn’t).

goonix

$onny Bill Williams and the salary cap

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The recent Sonny Bill Williams saga has brought into light the issue of salary caps in competitive sport. After fleeing the Australian NRL for French Rugby Union, SBW made the claim, among many other bizarre excuses, that the NRL’s salary cap was anti-competitive, in that it prevented players from earning their full-potential.

Does SBW have a valid point?

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Matt Nolan

Is National’s energy policy “ideological spite”

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Every day I look at the blog and don’t think I will have anything to write about – then I read some of the things that are sold on the political blogs and I find myself writing posts.

Frog blog discusses the issues they have with Nationals energy policy (something I gave some early impressions on here). Now they do have some fair points (I can understand concerns surrounding the RMA – given that we don’t know what the changes will be). However, the language they use in several parts of their discussion betrays a unreasonable focus on governments ability to improve the industry.

Fundamentally, I take issue with the way they use the following two of their claims:

  1. consumers will be left entirely to the whims of the … market,
  2. businesses, which are inherently inefficient

Lets discuss these below:

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