Here's our summary of key economic events overnight that affect New Zealand, with news the US central bank still sees American inflation 'elevated' above where it needs to be.
At its latest review, the US Fed has delivered the result markets expected, and one well signaled by the recent Fed speakers - a hawkish hold. They kept the federal funds rate at a 22-year high of 5.5% for the second consecutive time. Inflation is easing back and they seem aware of avoiding an overshoot in monetary tightening. But with the American economy defying repeated expectations of a slowdown, market expectations that the Fed is 'done' raising rates may be premature, and the Fed is clearly keeping its options open on that.
Staying in the US, the level of mortgage applications fell -2.1% last week from the prior week. This in itself is not surprising, because it extends a long run of weakness. But it does take their current levels down to those last seen in 1995, a 28 year low. Mortgage interest rates slipped slightly in the latest week, down to 7.86% plus points for the benchmark 30 year mortgage, still close to a 23 year high.
With the American working age population growing at least +70,000 per month, it is 'positive' that payrolls rose +113,000 in October from September in the pre-cursor ADP Employment Report on private sector payrolls, and well above the +89,000 gain in September. But the rise was much less than the expected +150,000. This Saturday (NZT), non-farm payrolls are expected to grow +150,000 when they are reported for October. The ADP report noted that annual pay rose +5.7%, so there is still significant strength in US labour markets - a key factor why the UAW won its dispute with carmakers.
In a 'positive' surprise, job openings in September rose by 56,000 from August to 9.55 mln, the highest level in four months and exceeding the market consensus of 9.25 mln. But they are down sharply from the 10.9 mln in September a year ago. Hires were lower too on a year-on-year basis, but 'separations' fell.
In the nation's factories, the internationally-benchmarked Markit PMI was revised up slightly to neither expanding nor contracting in October, a small improvement from their 'flash' report. But the widely-watched local ISM factory PMI told a different story, contracting slightly, and slightly faster in October than September. Weak new order levels were a feature of the ISM report, contrasting with rising new order levels in the Markit survey. Take your pick.
In Japan, Toyota has signaled record high profits, justifying its market strategies and position. It is an interesting contrast to the recent Tesla result which is suffering from the price-slashing carnage in the EV market, especially in China.
Mirroring the official version, the private Caixin PMI for China's factory sector slipped lower into contraction in October. It just reinforces earlier data that they are in a funk, one that will be hard to escape from - at least in the way they were running pre-pandemic. This Caixin report drop wasn't expected.
And for the first time on record, bank lending for commercial property actually fell in September according to central bank monitoring (item 6). They claim it has stabilised. Debt growth to companies was high overall, up +10.9% from a year ago, but it seems to have 'culminated' in the commercial real estate sector.
In India, their jobless rate jumped to 10.1% in October from 7.1% in September, the highest level since May 2021. The issue is especially sharp in rural India where the weakest monsoon rains in five years is weighing on farm production, especially for rice.
In Australia, building consents dropped -21% in September from a year ago. They fell -4.6% from August. These were sharper retreats than expected because a rise was expected from August.
And staying in Australia, mortgage stress seems to be rising. Surveys by Roy Morgan show that as at the end of September, 1,573,000 or more than 30% of mortgage holders were 'at risk' of mortgage stress, up an eye-watering +760,000 from a year ago when only 15.7% were under stress threat. Roy Morgan's potential 'at risk' threshold is a variable scale of between 25% and 45% of mortgage payments to after-tax household income, depending on income and spending levels.
The IMF is about to release an update of its review of Australia. It will be critical of policy approaches especially around 'wasteful' infrastructure spending which they say will be inflationary and require the RBA to raise official rates further. The visiting IMF economists concluded the economy was running above capacity, with low unemployment, “sticky” inflation and rising house prices.
In international shipping, we should note that the drought affecting the Panama Canal is crimping international trade and the effects are likely to worsen with El Nino.
The UST 10yr yield is down -5 bps from this time yesterday, now at 4.81%. Their key 2-10 yield curve is slightly less inverted today, now by -20 bps. Their 1-5 curve is inverted by -67 bps and that is a bit more. Their 3 mth-10yr curve inversion is marginally more too at -57 bps. The Australian 10 year bond yield is now at 4.86% and down -8 bps from yesterday. The China 10 year bond rate is little-changed but soft at 2.71%. The NZ Government 10 year bond rate is -5 bps lower at 5.59%.
Wall Street is in its Wednesday trading with the S&P500 up +0.5% and taking the Fed review in its stride. Overnight, European markets were all up by another +0.7%, except London which rose only +0.3%. Yesterday Tokyo ended its Wednesday session up a very impressive +2.4%. But Hong Kong ended down a mere -0.1%. Shanghai rose a minor +0.1%. The ASX200 ended its Wednesday session up +0.8%, while the NZX50 ended up +1.0% and a rare gain, one that accelerated during the day.
The price of gold will start today at US$1976/oz and down another -US$15/oz from this time yesterday.
Oil prices have held at their recent lower level, still at just on US$81.50/bbl in the US. The international Brent price has risen +50 USc to be now just under US$86/bbl.
The Kiwi dollar starts today at 58.3 USc and back up +¼c from yesterday. Against the Aussie we are softish at 91.6 AUc. Against the euro we are also +¼c firmer 55.3 euro cents. That all means our TWI-5 starts today fractionally higher at just on at 68.4.
The bitcoin price starts today at US$34,464 and another tiny -US$31 or -0.1% lower from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.6%.
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94 Comments
White Island
From the judges comments it seems apparent that the missing defendant not even charged for nonfeasance / dereliction of duty in a public office is Worksafe. How else to explain years of audits that never raised substantial concerns or followup.
Worksafe were clearly too busy shoveling ordure into the fan to cover themselves to consider looking in the mirror.
That said: people decided to trek onto a live volcano – what could possibly go wrong?
Yes. A few months ago I read a report that compared to the US NZ's work H&S stats are pretty poor and I wondered why. After doing some research I came to the conclusion that our systems are the problem. In NZ we have ACC and a system which disallows companies being sued for harm and this is where the problem lies, in my opinion. In the US if you are even slightly slack in your H&S in the work place, individually and organisationally you can be sued for so much money that you'll never ever see the light of day ever again unless you win one of their billion dollar lotteries. Insurance is required and any claims will put your premiums through the roof which can be significant. So there is lots and lots of motivation to get it right. In NZ not so much.
That cultural mindset is supported by our system. There is a strong attitude in NZ to supprress reporting of workplace incidents recently Talleys has been exposed as a big culprit.
I perhaps would have expected this attitude in the US but it doesn't seem to be the case. Could be wrong. Don't know why. I'd be interested to hear from anyone who had some insights?
In the US, management's bonuses and KPIs are based on H&S - it's a big deal. Laws are prescriptive, not wish lists - everyone knows EXACTLY what the H&S laws are and they have to be followed. If not, citations are issued which cost the company money, prestige, higher liability insurance premiums, but more importantly, anyone not following the law, is fired.
Agree, however there is a definite downside as well to an overly litigious society. I notice when I am living in them, there is a tendency to fake injuries and for companies to destroy records to avoid massive losses from being sued. Or even worse, in the case of some hospitals when they detect one of their staff is killing patients through incompetence or otherwise, they let the staff member go without investigation. See: https://en.wikipedia.org/wiki/Capturing_the_Killer_Nurse
Surely if we make fines big enough (like let them run into the 10's of millions) and strengthen the H&S investigators power, it will have a better effect that going down the litigious society route?
That's a pretty good middle ground I think. The only thing I would add is where it is proven that a company has been neglectful then a very much bigger portion of the fine goes to the victim (like millions). But individuals also should not be able avoid responsibility also; employers should be able to hold them to account if they fail to comply with H&S policies as well.
I would argue the opposite prevails in NZ. There is a lack of common sense and self preservation because 'nanny state' will take care of everything. There is no need for individual responsibility, the government or one of it's many offshoots will take care of you, no matter what you do or don't do.
Brought home to me the other night as four (4) traffic management vehicles with flashing lights indicated one road working vehicle ahead. After returning from Europe where the ratio of workers to safety staff is the complete opposite.
The director of Fulton Hogan wrote an article recently on health & safety and how more controls are not resulting in better outcomes. https://contractormag.co.nz/contractor/contractor-comment/fulton-hogan-…
More importantly, while Fulton Hogan’s broader safety statistics continue to incrementally improve year-on-year, injuries to our employees working in the road corridor and exposed to public traffic are not reducing.
This is despite the increasing controls now employed. This can only lead one to question other factors in play such as driver behaviour, lack of traffic enforcement and the severity of consequences, increasing worker exposure to traffic on the road and the narrow carriageways we have in most rural parts of New Zealand in which to work, noticeably different from Australia.
It's because in New Zealand, as a society we accept a much higher level of risk on our roads than any other area of society. Car drivers and the car lobby have infiltrated the transportation system to such an extent that it is also impossible to create changes that benefit road safety and encourage system change.
National are going to double down on loosening the safety regulations.
Driver attitudes and arrogance have a huge part to play. Just spend a little time on the Motorway Community Facebook page (or any traffic updates page) and you'll see a bunch of whiney manbabies getting pretty irate about slow drivers, going so far to suggest slow drivers are at fault for our road toll.
There's this Geoff Upson "road safety campaigner" with "KEEPIT100" on his ute who is 10 demerit points away from losing his license. Lost his license on the spot for speeding, got pinged twice driving 110km/h while towing a trailer (all in videos he's posted onto Facebook).
She’ll be right. Too many tourist mishaps going on fatalities in NZ. Was staggering that, let’s say, a local was on TV just a few days after the White Island incident, saying got to get it going again as soon as possible. All that interested him was money, nothing else at all. There it is.
In Japan, Toyota has signaled record high profits, justifying its market strategies and position.?
A weaker yen generally helps overseas earnings for Japanese manufacturers. Each one-yen of weakening in the dollar-yen rate, for example, boosts Toyota's operating income by about 45 billion yen.
Citing financial crime is just "whataboutism" by Te Kooti because it's an uncomfortable topic given the predominant race of financial criminals vs gang members.
Financial crime can be fixed overnight through compensation if adequate mechanisms are in place. Try fixing someone's brain injury from being king hit by a Mongrel Mob member.
https://www.stuff.co.nz/national/crime/124123236/promising-young-rugby-…
Depending on the severity of the beating, you may end up losing your life savings through the expense of rehabilitatation. Even worse if it renders you no longer able to work.
But here's a tip. Don't put your life savings into risky investments and they won't get stolen.
Gangs strike fear into this middle-class-brung-up aging whitey too, Yvil - but that doesn't stop me asking: Why?
Nor does it stop me comparing, comparatively.
They exist because they have been disenfranchised. We have polarised income (rentier vs renter, indicitavely) and they have grouped together for cultural reasons (as we all do).
And I wear my Yacht Club jacket with pride; the difference is?
Dr Seuss did several takes on this....
The Palestinians in Gaza are just annoying. The whole place exists on humanitarian aid and they are still breeding like rabbits. All the smart ones have obviously already left the place and the only thing the remaining ones can do is chuck stones and dig tunnels. Its time to fill in a few rabbit holes.
But obviously everyone still there supports them. What's disgusting is jumping the fence and slaughtering 1400 unarmed civilians. Its payback time. Just imagine you were on holiday there at the time just walking along minding your own business and got shot. I had some relatives that were there not even 6 months ago from the UK on holiday.
Amen. Non victims need to chat with victims, worrying about the background and probable hard times of offenders is a waste of time. They are not the only ones to have gone through hard times and others that have did not resort to offending.
The laws of common decency seem to get a hard time these days of right on virtue signalling.
While it is important to understand the origins and "why", with considerable experience of working with many of these people the entire point of the gang patches is to intimidate, to exude the potential of and for violence. Some gangs even actively look for violence.
Yvil is completely correct.
That is EXACTLY the same as blaming Hamas, rather than Balfour/Sykes/Picot.
Failure to scope.
I've put this up before, but it may go some way to explaining the way folk think - the majority too short-term/shallow:
https://dothemath.ucsd.edu/2015/04/programmed-to-ignore/
Why gangs? and Why Hamas? are the same question. Funny how so many people baulk before getting there...
Not thought this through at all have you?
I believe that in the late 1990's there was some discussion happening as to whether there was an on-going need for NATO, but the resultant chaos in Russia after the collapse of the Soviet union and where that was heading made the European countries somewhat uncomfortable. And the Putin bubbled to the surface and proved the necessity for NATO.
Personally I believe you have to have your head firmly planted in the sand if you believe NATO caused Russia to invade Ukraine. You'd have then argue that NATO also caused Russia to invade Georgia and annex Crimea.
Yes one of PDK's favourite saws are a couple of rogue US diplomats in Ukraine, but just like Trump they too, passed. And with them gone what do you think the odds are that Ukraine will ever go towards Russia are?
Indeed Grattaway - now you're getting it.
Try reading Arthur Ransome (not the kid's books, though they reward still) and about what he encountered, where and when. Try reading Hersh's Dark Side of Camelot (re the removal of missiles from Turkey, as part of Kennedy/Bay of Pigs agreement). Try reading While America Sleeps (Kagan/Kagan). I can loan you my copies... Then google Victoria Nuland....
At the base of everything, is competition for resources. Otherising is almost endemic in that process, and almost always a diversion. Try this brief example of de-otherising: https://youtu.be/1wo2TLlMhiw?si=Tndni_fqbQTP-BkA
Mobs have been around since before recorded time. Murderous ones too. Gangs appear to me to be something like mobs, full time. For instance a colloquialism for the mafia is the mob. The reality is NZ is not ever going to see gangs disappear any more than say the Hells Angels in California. Resultantly society in NZ will need to adjust defensively. The fast rising industry in home security is due testament to that fact. There will be places and times where prudent citizens do not venture. For instance in Miami, Hispanic localities where only Hispanics go. Sad to see but can’t see anything else but the inevitability of increasing separation and divide along such lines.
PDK: "And I wear my Yacht Club jacket with pride; the difference is? "
I assume your yacht club does not sell drugs to kids and get them hooked on meths and a life of misery.
I assume your yacht club does not shut down a whole town for a funeral
I assume your yacht club does not do drive-by shooting
I assume your yacht club is not at war with other yacht clubs
I assume your yacht club does not actively seek to intimidate other citizens
I could go on. Do you now understand the difference PDK ?
The folk who make up my whanau, made the rules.
To suit themselves. As have all 'winners' forever.
Those rules disenfranchise all who follow - including, ironically, the offspring of those who made the rules. In other words, those who wear 'my' patch, are stealing from every future generation; a theft of such magnitude and depth, that it renders what gangs have done to date in NZ, as mere noise.
I apologised to my offspring, decades ago.
Just sayin'...
Does your yacht club beat up members of the public at McDonalds for wearing another yacht club polo shirt?
https://www.stuff.co.nz/national/129868090/man-left-with-serious-injuri…
There is a direct meth link to 90% of all defendants that appear before our courts and the gangs control 95% of all meth distribution. They are a scourge on society and should be eradicated. Tell your "disenfranchised, blah, blah, cultural, blah, blah" to the whanau of Ruthless Empire and other vulnerable woman and kids being abused and neglected in gang infested communities up and down the country.
"What is the point of banning gang patches in public? It doesn't make the gang problem go away"
Kids are easily influenced, just like many kids can be influenced and inspired by seeing the All Blacks, some kids can be influenced and led to believe that a gathering of patched mobsters is cool and that is what they want to become.
I'm not an advocate of gangs at all, but getting rid of patches isn't going to get rid of meth. Australia has a bigger problem than we do and they ban patches.
NZ has one of the most skewed wealth distributions on the planet, principally due to no capital gains tax on property.
How about we honour Te Tiriti and bring in a 40% tax on investment property and gangs give up their patches in return, would you take it?
Te Tiriti is a transliteration from English "The Treaty". One example is buying a coffee, rather than just use the existing word Cappucino some cafes have a transliterated version Kaputino. It's about growing the Maori language.
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motorcar = motukaa
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flour = parroa
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table = tepu
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pen = pene
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money = moni
Yep lets ban what alters kids perceptions the most, and leads them down a path of using the drug that affects society in the worst way.
Ban alcohol advertising immediately. That would have a huge positive effect on crime, health and productivity in the long term.
You were right about the All Blacks by the way, the pushers definitely know how to hook the kids in.
Oh, but we can't all feel good while pointing our finger at a minority. Nevermind then... Lets try to outlaw certain peoples appearance instead.
Does anyone know if Telsa are profitable at making cars yet?
They made $1.8B from selling carbon credits in 2022, a few years back they were making a loss on each vehicle sold, but would occasionally turn a profit based on carbon credit sales - is that still the case?
Maybe the end user should get the carbon credits?
Only $10.8bn
Tesla's net profit came in at $12.6 billion in fiscal 4Q 2022 on a TTM basis after accounting for sales of regulatory credits. Without regulatory credits revenue, Tesla's net profit would have come to only $10.8 billion on a TTM basis in the same quarter
I guess high immigration is being managed by running 25 people per house.
Still 10% price increase still beats inflation - https://www.trademe.co.nz/c/property-industry/news/May-Rental-Price-Ind…
The IMF is about to release an update of its review of Australia. It will be critical of policy approaches especially around 'wasteful' infrastructure spending which they say will be inflationary and require the RBA to raise official rates further.
Immigration to Australia is exploding, no matter what they build in 5 or 10 years it will be fully utilised if not overrun. This is the reality of immigration it takes a lot of money up front to build houses, roads, schools, hospitals etc. and you get it back in taxes over the next 30 years.
Unemployment woes: Auckland business owner Tim Allen can’t find Kiwi workers to fill vacancies: https://www.nzherald.co.nz/nz/unemployment-woes-auckland-business-owner…
"These guys [construction workers] earn really good money. They come to us, they do get paid well and they also learn so much on the job. It’s a fantastic opportunity. Some of these guys could be earning between $75k to $100k plus." - min wage is almost $50k these days, so $75k isn't exactly "really good money", particularly in Auckland where costs are higher.
I've seen screenshots of Solo Mum's Winz accounts (when I was a lurker in the WINZ Advice Facebook page). Many were taking home $800 - $900 per week (after tax). Sure, they would have had rent for a whole house come out of that, but they were still frequently making $60k+ per year.
Sole parent support base rate is $472 per week. Family tax credit for 4 kids is another $471 per week, so that alone is $943 per week. Then you have winter energy payment, accommodation supplement. The best start family credit for under 3's is $69 per week per child.
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