Giving "shock therapy" a try

<p>Kia ora,</p><p>Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news it seems to be the season for some "shock therapy" - from OpenAI to Argentina.</p><p>Byt first in the US, this is the lead-up week to their long Thanksgiving holiday weekend, a four-day Thursday-to-Sunday work-break - for many. Wednesday is usually a travel crush day. Thursday (Friday NZT) a quiet family day, and then followed by an all-out retail shopping frenzy, shopping for Christmas gifts traditionally. Economic eyes will be on the retail impulse. Financial market activity is already thinning out in the run-up to the holiday.</p><p>On Wall Street, all eyes are on the ructions at the ChatGPT firm OpenAI. Overnight, Microsoft hired its fired CEO and 500 staff said they were ready to join him. These are <a href="https://www.bloomberg.com/news/articles/2023-11-20/sam-altman-openai-latest-inside-his-shock-firing-by-the-board" target="_blank"><strong>juicy headlines</strong></a> in a newly high-profile business segment, but not likely to have much lasting economic impact. The motivation for the OpenAI board, one ultimately controlled by core AI scientists, seems to be that the company’s expansion was out of control, maybe even dangerous.</p><p>In China, their central bank kept its <a href="http://www.pbc.gov.cn/rmyh/108976/index.html#LPR" target="_blank"><strong>key lending benchmarks unchanged</strong></a> in their November review - despite the obvious need for stimulus. It won't come from lower lending rates because this would expand downward pressure on the yuan and risk increasing capital and portfolio outflows. Those outflows hit -US$100 bln in both September and October. However as long as the interest rate spread to the USD remains heavily against the Chinese yuan, these outflows will likely persist. All they can do at the moment is not make matters worse which