Here's our summary of key economic events overnight that affect New Zealand, with news of widening variation between countries as the pressure to reopen intensifies.
In the US, their National Bureau of Economic Research said that the economy hit its peak in February and had since fallen into a downturn, as pandemic-related shutdowns tanked activity and brought an end to a record-long expansion - one that had lasted 128 months. The US is now officially in recession.
But despite that, we may be seeing some signs of a turnaround. American consumers felt slightly more optimistic about their finances and job security in May as businesses began to reopen and rehire workers. But the change is only marginal.
There has been a surprising piece of data out in Canada - their housing starts jumped unexpectedly, and driven by single family homes. In fact, these starts were higher in May 2020 than in the same month in 2019.
In China, new data shows steel production near all time record levels, and passenger car sales are growing again. (Tesla is starring.) There are other signs of a China rebound as well.
All of this is adding legs to the unusual run for the iron ore price. That is helping propel Aussie exports past the AU$100 bln annual rate.
But things aren't so happy on the residential sales front in Australia. Industry watchers think they are witnessing a worrying downturn in sales and especially auction sales.
The latest compilation of Covid-19 data is here. The global tally is now 7,065,600 which is up +210,000 in a day, and a faster rising pace. Brazil has decided not to release official data regularly. Global deaths are now over 404,000. India seems to have thrown in the towel in trying to contain the virus spread. It is allowing reopenings of shopping centres and restaurants in a major rollback. That is almost certainly going to explode the infection rate there.
Just under 28% of all cases globally are in the US, which is up +24,000 since this time yesterday to 1,951,100. This is also a faster rate of increase. US deaths are now exceed 111,000.
In Australia, there have been 7265 cases (+5 since yesterday), 102 deaths (unchanged) and a recovery rate of just over 92% (unchanged). 19 people are in hospital there (+1) with 3 in ICU (unchanged). There are now 457 active cases in Australia (+2).
There were zero cases again yesterday in New Zealand, and no-one left who is COVID-19 positive. We are now at Level 1 with virtually no restrictions, except our border remains closed.
Wall Street is moving higher with the S&P500 up +0.7% in Monday trading there. Overnight, European markets fell about -0.5%. Yesterday Asian markets were mixed with flat results in Hong Kong and Shanghai, but a very strong gain in Tokyo.
The UST 10yr yield is down -1 bp at 0.88%. Their 2-10 curve has flattened off a bit to +65 bps. Their 1-5 curve is also flatter at +25 bps, and their 3m-10yr curve is back at +63 bps. The Aussie Govt 10yr yield is down -4 bps to 1.10%. The China Govt 10yr is down too, by -2 bps to 2.86%. But the NZ Govt 10 yr yield is firmer, up another +3 bps to 1.02%.
The gold price has turned back up today, rising by +US$17 to US$1,698/oz.
Oil prices are lower today, ending a recent run of gains. They are down by more than -US$1 to just over US$38/bbl in the US. The Brent price is down to just under US$41/bbl. BP has announced plans to cut 10,000 jobs or 15% of its workforce following the global slump in demand. Very long life car batteries entering the market won't help either.
And the Kiwi dollar has risen even further. We are now just on 65.5 USc. On the cross rates we are to 93.5 AUc and still a one month high. Against the euro we have are up to 58 euro cents. That means our TWI-5 has been pushed up to 70.1.
Bitcoin has turned higher as well, up +2.2% to US$9,717. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
138 Comments
Both Kiwi Dollar and the stock market looking very strong. Is it thanks to Ardern policy and a success with Covid?
Stocks look strong globally, and the Aussie dollar is looking just as good. So it's probably beyond our Covid success.
Strong stocks, or good old fashioned inflation thanks to rapidly expanding money supply being allocated to stocks?
Yep, not arguing that at all. Just meant "strong" as in high.
The most worrying points I am seeing discussed with my contacts in the US are
1. Strong stockmarket does not equal strong economy.
2. FED has printed trillions of dollars which is finding it’s way through the banks and hedge funds etc into the stockmarket which is why stocks are going up.... it’s not because those businesses are performing well.
3. Money not finding it’s way to Main Street businesses that really need it so many small and medium sized businesses will fail.
4.FED want to own it all - they are going well beyond their mandate which JPowell admitted in the last few days.
5. What happens when the money printing stops? How do those who have loaded up on more debt manage when their income streams slow or dry up completely.
6. The world needs debt we need to borrow to buy our home and to buy and expand our businesses. Unfortunately, many have borrowed so much that they cannot survive for a couple of weeks or a month with financial support. This is also what happens when central bankers decided to not allow recessions that are a critical part of the money cycle. Struggling? Here have some more debt it will see you through.... still struggling have a bit more. I fear many will not survive once the knock on effects of the virus/lockdown/debt ponzie are realised over the next few months. The world was in a debt mess before CV19, we now have to deal with the effects of that. There will be winners and losers.... how do you ensure you are on the winning side?
QE not finding its way to main street !!!
Repeat, repeat, repeat, Echo, Echo, Echo
The Fed / Central banks need an insurrection by the masses who are beginning to see through their constant money printing and corporate bailouts that only benefits the few - they’re the real looters.
Just me - or does it look like central banks have done too much too soon and are now thinking...shit, now what? We've saved the financial markets (for now), but they don't at all reflect the economy.
You really think the Bankers are that intelligent and self-aware?
I think Orr and Powell are but realise the ship has sailed so far now, so far from the nearest shore that there is no turning back.
Money printers go brrrrrrr.....
@Newbie ...........utter nonsense............ the stock market rally is a worldwide phenomenon , totally disconnected to Covid , and more as a result of money printing , FOMO, speculation and greed
Jacinda has had some success with Covid , but the economy is going to bite her on the backside as soon as she turns around .
Its started already with the Warehouse axing another 1000 jobs yesterday , along with ALL our biggest companies like Fletcher Group , et al
China supposedly now has only 65 active CV19s on board. Does this mean NZ is in a positioned to rub shoulders and steal a march on the rest of the world, getting business going clicketty , click? Hope not!
65 = 650000 in China
Yeah , China is notorious for messing with statistics .............you can likely add 6 Zeros to the 65 , and with nearly two thousand million people its still a drop in the bucket
Boatman,
Actual population of China around 1.40bn, but hey, what's a difference of 600 million between friends.
If they say 1.4bn it's more like 3.4bn.
A travel bubble with China would be a lifeline for many tourism operators and struggling retailers. Time for us all to say "ni hao" to our Chinese brethren and hide our xenophobes from sight.
A travel bubble with China would destroy everything the lockdown has achieved, and likely result in hundreds of people hospitalised.
Not if handed properly
What's your long term strategy? Seal our borders until a vaccine comes along which may be years, decades or never.
For the Australians they probably think they need a life line for their property market too which is slowly sinking due to covid-19. Most are predicting a -20% to -30% drop in prices. Sky New Australia: Australia’s property market is ‘slowly sinking’. https://www.youtube.com/watch?v=0uTC4gNOCdU
What's tourism got to do with property? FBB still applies so don't know why you're conflating the two?
Tourism is a large part of the employment market or haven't you noticed. When people's jobs are lost so is their ability to apply for a mortgage to purchase a home.
All the more reason to get tourism workers back to work so they can buy a home or pay their existing mortgage. What's your problem with people who work in the tourism industry? Or do you just want a market crash even if that requires that NZ has high unemployment for years and also takes no action to mitigate the effect of Covid 19.
So what you are saying is, that you only really want your brethren here so you can make money off them?
Yep, they have a great time and our economy, especially the hospitality industry which has been hit hard by Covid 19, make some money. What's the problem with that?
Good luck with that HG, just read all the racist comments from the scared people on here
Could you please point out some of those racist comments? I can't seem to find any.
Folk can't seem to find racism in the USA but can find it everywhere in Interest comments. Weird.
HeavyG people that are tired of communist dictators doing things like sickening the entire world are not xenophobes. Try something more original. I'm an ardent capitalist but peoples greed is nauseating.
Well what's your plan to replace the money the tourism industry has lost due to the closing of our borders? Kiwis paying kiwis to pull out pine trees? Newsflash, taxpayers will be losing money on that "business".
The borders were closed due to the plague inflicted on the world by your CCP friends. Sometimes you need to have a little self respect.
Happy enough to sell milk and other produce to the CCP... once you've touched your toes its too late to cross your legs.
Info from China about prevalence of wuflu was and is totally unreliable. PRC media is a propaganda tool that publishes what they want people to hear, and that is only occasionally the truth.
Enjoy the ride up while you can - don’t be fooled by bear market rallies.
This is 2020, anything can happen. I've got a feeling that govts can keep printing money longer than anyone thought it was possible. Gotta bail out all those billionaires you know... "No billionaires left behind!" could be the next campaign slogan in the US.
The printers may be able to keep rolling but only until the 99% see through it and act. I don't see the people swallowing it this time arround.
CJ
. . . and also gotta keep printing to bail out those businesses who employ people . . . and keep printing for all those job subsidies.
I can hear you slurping at the trough! :)
Where did that assumption come from? Are you sure you aren't the one making the slurping sound?
The company where I work has been doing really well during the lockdown. We could all work from home, our clients are all in healthcare and our operating costs are low. No subsidies needed.
My local dairy / 4 Square took in $5000 on a typical day before lock down. Durring lock down it went up to $20k to $25k days. Some people doing all of their shopping there.
CJ
It came from the same place as your sweeping and selective assumption.
Cheers
If you disagree with something I say, you should argue against it. Making random assumptions about me personally will make it look like you have nothing intelligent to say.
https://medium.com/insurge-intelligence/white-supremacism-and-the-earth…
"the unsustainable nature of a system that can no longer keep going in its current form without sparking further crisis. The ultimate hidden driver is a way of living and being premised on self-maximization through plunder of the ‘Other’: whether Others are different humans, different species, or the planet itself".
Could be like the landlords and 'get ahead of 'others'. As I asked yesterday, how many people can 'get ahead' of other people, before that philosophy implodes?
30% ownership, 20% ownership?
Looking at stats from the EU, I noticed that there's an apparent correlation between the wealth of the country and the home ownership rate. The 'richer' the country, the lower its home ownership rate.
https://www.statista.com/statistics/246355/home-ownership-rate-in-europ…
Mind you, the lowest is Germany with 51.5%, which is roughly the same as NZ. Is that good? No. Will the young and poor riot? No. Will we vote for anyone who promises a solution to this problem? Hell yeah! Even if they fail to deliver...
At this stage I'll vote for anyone who throws a few ideas out about a self-sustaining productive economy that isn't based on housing ponzi, and selling our soul to China. Idea categories for innovation: farming, forestry, bio-tech for endemic flora/fauna, online technology, cryptocurrency, anything the Callahan institute is involved in, space tech, beer and spirits, cannabis, medical, robotics, to name a few. If we're chucking huge amounts of fake money around, the government needs to empower small businesses to take risks. And totally agree - even if they fail.
We really need to move forward with cannabis.
Sure, there are benefits and costs on both the pro and anti sides, but overall I think the pro side is more compelling, but with checks and controls as per the campaign out there at the moment.
It would certainly be a boost for govt tax revenue.
I’ll light up and think about that :)
Who is going to pay for the health costs? A recent study has proven that there is significant physical harm, on a similar level to tobacco, from smoking cannabis. we are still waiting for the results of studies into mental health from cannabis usage.
It has often been said that if we could start again, we wouldn't legalise tobacco and alcohol. Why then, with what we know and can reasonably assume, would we want to legalise cannabis?
We are already paying for the health costs. The point is prohibition doesn't work. The justice system spends far too much time and money on minor drugs charges and locking people up is not the answer: it just creates more hardened criminals. Imagine if we were able to divert a fraction of the money spent criminalising marijuana on public health campaigns educating people of the negative effects. NZ already has some of the highest rates of marijuana use, we need education not criminalisation.
You don't need to smoke cannabis, edibles, vaping are all less harmful than smoking. Furthermore, no one needs to smoke a packet of cannabis cigarettes a day.
The tobacco and alcohol argument merely points out the hypocrisy of a society that chooses which drugs it makes legal, even where legal drugs are without a doubt far more harmful than other illegal drugs. That hypocrisy and illogical approach undermines the legitimacy of the prohibition so that all is left is tyranny i.e. I tell you what you can consume and if you don't like it I will exert force over you and your property.
What about the tyranny of a minority who believe that they can do anything they want but society will pick up the costs when it goes bad (this is currently happening with alcohol and tobacco smoking amongst other things)?
At the moment i am against legalising it because of the downstream costs. Give me a structure that guarantees there will be no cost on me and mine as a consequence and i might agree. I don't believe tax will be sufficient as the pollies will divert it to their own pet projects as they do now.
I am not against the medicinal use though. I do believe the authorities have missed the boat here due to a blinkered attitude towards cannabis. Actually this attitude doesn't make sense as heroin is an opioid and the use of heroin as an illicit drug has not hindered research into opioids for medicinal application - go figure?
I'm going to have to read this on a PC and not on a phone! Very interesting tho - intersects my own research - and immensely relevant to Aotearoa-New Zealand!
Thanks for posting that, PDK. A long but worthwhile read.
Ten years ago on this forum I did predict cities would devolve into civil unrest, & along racial lines. Most folks think they know better though, or don't want to know at all. The virus isn't a symptom either & once that passes we'll get back to "normal". Yeah right.
The EV battery life is interesting, but they don't give any indication of what range they'll have, the way I see it once you can get 600km between charges there is no need for a ICE vehicle for pretty much anyone.
There's two bits to it, really. One is the battery size - we know that 24kwh Nissan Leafs aren't effective 'sole car' options for households. The other bit, and probably more important bit, is recharge rate. If you can charge a battery quick enough without damaging it, then battery size becomes less of an issue. Smaller batteries = cheaper EVs. I don't really care whether I have a 400km EV or a 600km one - if I can plug in and charge an EV in ten minutes while I take a leak (i.e. it can be charged with existing driver use patterns etc), then it's effectively the same range for two thirds of the battery cost.
Standardized battery swap would fix all these issues, and make cars lighter and cheaper. Tesla demoed it a few years back - switching a battery in minute or two. Unfortunately manufacturers walked away from it, perhaps because batteries are getting really cheap, some manufacturers (CATL) now doing cells for USD$60/kWh which will add only $10k to a 5-600km range car. That's the death knell for fossil fuel road transport - and as their market share falls their cost will rise.
The problem with a battery swap is you don't know the health of the battery you're getting back from the customer. Quite different from a $60 gas bottle for example, where the energy storage is consumed and just the container remains which has few moving parts and can be visually assessed relatively easily.
Super simple to record battery use behaviour voltage, current draw and temperature. Batteries should be a rental item for swap rather than a purchase. Eg $30 per battery swap and $1 a day. End of life swap batteries could go for grid or home storage. All so much more efficient, faster, cheaper and lest wasteful, and removes need for huge community build-out of charging infrastructure. But won't happen without regulation and standards pushing it.
It also increases the cost of the vehicle and battery, having to build batteries that can withstand swapping in and out, and the car that can handle those swaps as well.
Cost is already a big barrier for EV adoption.
Read the piece I linked.
EV's are an answer to a question, but not to the question we have to ask. Why did you divert?
why did I divert from what?
powerdownkiwi incorrectly believes that you replied to them. But you didn't. So just ignore them.
Incorrect :)
In theory yes but a fair bit of water to run under that bridge; purchase price, resale value, required change in consumer sentiment from ICE to EV etc.
"there is no need for a ICE vehicle for pretty much anyone"
2 problems
1) where are you going to drive to if you dont have a job?
2) whats cheaper? My existing ICE or a new EV
I do have a job ham, a job which i intend to keep as long as i need to keep working, which hopefully isn't too long if all goes well.
The range thing was more an observation as I see it than anything.
Also, what makes you think your ICE vehicle (or my two ICE vehicles) will be cheaper in the future?
For me, personally speaking here (just in case you take it the wrong way), if I could have an EV with a rage of 500-600km, or like GV says above, charge in 10 mins and I can have that on a similar cost to an ICE vehicle then there is no way I'll be paying my savings over to a petrol company.
As soon as EV's have significant take-up the govt maxim of 'if it moves, tax it' will kick in and they will be paying road user taxes too.
Most interesting feature of EV car uptake is Osbourne effect, wherein soon people will stop buying IC cars knowing they are nearing obsolescence and delay purchase until EV's improve. That will lead to a large drop in car sales for a couple of years, with flow on effects on 2nd hand market.
i was just referring to people in general ... point being
- it ALWAYS comes down to $$ at the end of the day
- and a persons current vehicle is ALWAYS cheaper than a change to a new one. If $$ are tight (which they will be..), new vehciles are the last thing on anyones mind
EV batteries will sooner or later, present a huge environmental problem. Hydrogen is the best way to go and the interest here is starting to surge.
Can Tiwai's power supply be diverted to produce Hydrogen economically, then ship it around NZ?
Hydrogen is an extra step in the process. You're using electricity that could just be put into a battery, to create a fuel that goes into a motor with moving parts. Why retain the complexities of internal combustion? Batteries as we have them now are not going to be the way we always use them in cars. Hydrogen makes sense for trains but there is basically no reason to persist with internal combustion.
No, hydrogen is only effective for heavy vehicles where battery energy density and refuelling times are impractical.
Watch this, and skip to 11:16 if you want to see in a single image why EVs will always outcompete hydrogen for commuter transportation: https://www.youtube.com/watch?v=f7MzFfuNOtY
To all my responders, what is the solution for end of life EV batteries?
Grid storage - hence the focus on the million-mile/two-million km work from Tesla and CATL. The Nissan Leaf supported this but its batteries were rubbish. New EVs batteries are being designed specifically with this in mind. This is technology that is ready to be produced commercially now.
I find this "EV BATTERIES BAD" environmentalism all pretty convenient. No one cares about cellphone batteries or laptops or all the other battery powered devices we've thrown away over the years. But suddenly because EVs are using them, they're a major issue we have to resolve right now super urgently?
Second paragraph GV is a little OTT. The problem with batteries is the current levels are such that some recycling plan has not really been economically viable but always recognised as a problem. The increased issue of LI batteries through the ramp up of EVs is bringing this to a head very quickly, and as far as i am aware there is no current, effective method for recycling them. This is a little surprising as Lithium on its own is quite valuable in a lot of applications. While there are technological issues with hydrogen, there are not the same level of environmental issues. Plus it has recently been identified that hydrogen offers longer ranges than batteries in some applications.
It's still hugely inefficient to take the energy from one, usable form and waste some of it to make it into another. That's the bit hydrogen is always going to have to overcome. Then there's the 'can I fill it up in my garage?' question - the answer is no, not really. So you need a filling station, the supply chain that goes with it, someone needs to transport it, etc. So maybe, by the time hydrogen has found a way to overcome all these things, lithium leaching may have improved past the 90% or whatever effectiveness it is now.
You know that hydrogen cars have the same Li-ion batteries too, (albeit smaller)? Plus a fuel cell which has zero chance of making it to a million miles, a fuel tank which will get brittle over time and need to be replaced and a huge refuelling infrastructure (equivalent of $2m per pump!). Yet it is the battery that will last 107 years under average use in a car/house that you worry about.
Also, to make hydrogen, you are going to need 3 times the energy compared to just running on electric. There is a bigger environmental cost to build 3 times the energy infrastructure to support it.
What about hydrogen fuelled ICEs? Not fuel cells. And make hydrogen from renewable energy sources only. Yes there are many issues to resolve, but ultimately they are less damaging than the battery issues.
Those kids in the DRC who dug out the cobalt for the battery will recycle it for you.
https://www.amnesty.org/en/latest/campaigns/2016/06/drc-cobalt-child-la…
Yep, so again, this is going to be less of an issue as the market responds to high cobalt prices and labour concerns:
https://cleantechnica.com/2020/05/21/svolt-announces-cobalt-free-batter…
Lads will have to find another talking point, I'm afraid.
Good news - nothing like scarcity to drive innovation.
"Natural History Museum Head of Earth Sciences Prof Richard Herrington and fellow expert members of SoS MinErals (an interdisciplinary programme of NERC-EPSRC-Newton-FAPESP funded research) has today been delivered to the Committee on Climate Change
The letter explains that to meet UK electric car targets for 2050 we would need to produce just under two times the current total annual world cobalt production, nearly the entire world production of neodymium, three quarters the world’s lithium production and at least half of the world’s copper production.
A 20% increase in UK-generated electricity would be required to charge the current 252.5 billion miles to be driven by UK cars."
https://www.nhm.ac.uk/press-office/press-releases/leading-scientists-se…
Cobalt-free batteries already exist and coming to a car near you soon
https://www.reuters.com/article/us-tesla-china-electric-exclusive/exclu…
So you're concerned about end of life EV batteries, but not the fact that hydrogen, in a best-case scenario, is only about 40% as efficient as batteries at producing momentum in a vehicle?
It is because a big old battery is sitting right there and can't be ignored, but all of the energy losses that go into hydrogen fuel cells are mostly invisible and can therefore be easily ignored and therefore you just blithely say that hydrogen is more environmentally friendly because there's no battery that needs to be dealt with?
I am starting to see what PDK means after reading a lot of these posts.
Most electricity (Globally) comes from Fossil Fuels (Coal, Diesel, Gas). If you reduce the FF use in cars, but up the FF use in electricity generation what have you actually achieved?
The fundamentals aren't there.
Nuclear, while emission free is simply not viable long term in many parts of the world (Risk - major incident every 20 years on average, and Waste - currently sitting in a hole in the desert somewhere)
Solar and wind are periodical at best, they cannot provide a sustained base load 24/7, 365 days a year.
Hydro is now deemed to environmentally destructive
Simply changing the type of car will not fix anything. So what do you do?
If you reduce the FF use in cars, but up the FF use in electricity generation what have you actually achieved?
ICE max out at around something like 45% efficiency for power produced from fuel burned. Stationary combined cycle gas plants have efficency levels somewhere around 90%.
Also cars run on petrol or diesel, rather than gas, which has less emissions. You can also put in carbon capture technologies onto a gas power station which you can't realistically do on an ICE vehicle.
Now you need to factor in the battery and efficiency of converting electricity into momentum in the vehicle, but there is a LOT of stuff that favours battery powered vehicles over ICE on the face of it, without even delving into the full lifecycle maths.
Also nuclear waste is really not a big logistical problem at all. Merely a political one.
EV batteries are a high-value recylable (to make EV batteries) and will be >99% recycled. Hydrogen is a terrible, dangerous, bulky, expensive 30% efficient battery. 90%+ efficient EV batteries have them beaten in every way except for 3 possible applications: Earth moving, Aviation and Shipping, which will likely go to Hydrogen in long term. Desert countries can now produce PV electricity for as little as $0.0135/kWh (Abu Dhabi latest) liquid hydrogen from PV at about $80/barrel energy equivalent, but really more like $50-60/barrel given fuel cell efficiency. Fossil fuels will die.
Hydrogen is already a dead end except for high-value activities where EVs can't currently compete - planes, long haul trucking, shipping. With the pace of battery development, these cases will rapidly disappear with electric versions being cheaper to run and more reliable.
For each car powered by green hydrogen (22% well-to-wheel efficient), you can power 3 electric cars (73% efficient) https://insideevs.com/news/332584/efficiency-compared-battery-electric-…
EVs can already do over 600km - the latest Tesla Model S is rated at 400 mile (640km) range. Price is still an issue but this is coming down too as battery costs reduce. Used prices dropping well too. With million mile batteries, a cheap used car that outlasts you will be around in the next 5-10 years.
“When there is no incentive to invest in real-world productive assets and every incentive to skim profits by front-running the Federal Reserve, capitalism is dead.”
Marx saw that finance-capital would inevitably incentivize over-capacity, stripping industrial capital of pricing power and profits. Once there's more goods and services than labour can afford to buy with earnings, financialization arises to provide credit to labour to buy capital's surplus production and engineer financial gains with leveraged speculation and asset bubbles.
But since labour's earnings are stagnant or declining, there's an end-game to financialization. Capital can no longer generate any gain at all except by Central Banks agreeing to buy capital's absurdly over-valued assets. Though the players tell themselves this arrangement is temporary, the dynamics Marx described are fundamental and inexorable. The insanity of Central Banks creating currency out of thin air to buy over-priced assets is the final crisis of late-stage capitalism because there is no other escape from collapse.
Having stripped labour of earnings and political power and extracted every last scrap of profit from over-capacity (i.e. globalization) and financialization, capital is now completely dependent on money-creating central banks buying their phantom capital with newly printed currency, a dynamic that will eventually trigger a collapse.
(CH Smith)
tks bw. And all the ostriches remain stolidly fixed with their arses in the air. In the old days of course a good old continental war or two would clean out the status quo, cull the hoi polloi, turn over a new page, and start again, sort of. Bleak outlook for the younger generations isn’t it.
They can just buy a few more rentals so that they can 'get ahead' and everything will be sweet as....yeah nah.
War is not off the cards yet.
China is currently facing down India in the Himalayas, Indonesia and Malaysia are concerned over their actions in the South China Sea as is the Philippines, and the Yanks are sending components of their pacific fleet into the area to challenge them too. War is a long way from being off the cards
"Bleak outlook for the younger generations isn’t it.". Indeed, especially when one considers that they are gonna haveta pay back, inflate away, drag under the edge of a Very Large Carpet, or simply Default On, a debt mountain gleefully being piled up before our very eyes, this very second.
Until the Election, of course, when all bets are off....
Rate of change in machine learning - and impacts that will have on all industry, replacing humans and disrupting economies over next 1-2 decades make any economic predictions more than 10 years out moot.
Rebuilding after such a conflict is going to get progressively harder over time due to a diminishing resource base. I don't think a war at this stage in the game is going to lead to the 'return of prosperity' people seek.
It's mildly amusing that there's a good chance we'll look back at this supposedly turbulent time period as the 'good old days' in another 10-20 years time.
Great post - this aligns with Dalio's view around the end of the long debt cycle (where buyers use leverage to speculate on capital values, which causes asset prices to rise - but when you reach zero rates and the productive economy can't support any more debt - then what?)
Our sharemarket is doing well because of all the handouts gratefully received, and because future prospects are looking real good because of projects going to be done with the money she and Grant borrowed. Not so keen on the Spanish contractor making a fortune botching up Transmission Gully and now trying to run away.
Did you watch the news last night? The projection showed was for rising unemployment through until the end of 2021 before the cycle reverses.
So I wouldn't say our future prospects are looking real good - I'd just say that central banks have massively over cooked their interference in markets - with significant moral hazard, while the real economy and support for the current model, is dubious at best.
Income inequality, high taxes, elite privilege, lack of democracy and lack of press freedom are all rallying cries by the masses.
Actually the press has a fair bit of freedom, especially public broadcasting.
Their trouble is that the whole social narrative is false. Which has been known for some time:
https://en.wikipedia.org/wiki/Wealth,_Virtual_Wealth_and_Debt
But even our best, this morning, didn't challenge Zollner. So it goes....
Didn't we just buy $50m of press freedom the other day?
how long before NZ gets involved in the infighting between the aussie states, there is now talk of a bubble with states with no cases as long as they keep the borders closed to the other states
There is a long list of 'exempt persons' crossing the state borders who do not have to quarantine so the state bubbles are more for show than anything. Opening up to so called 'virus free states' are too risky.
Alert Level 1. Systems check Scotty.
There is a bunch of systems maybe 3, that we all are assuming in place and A ok. And looking for MoH to shine.
https://i.stuff.co.nz/travel/travel-troubles/300029129/coronavirus-isol…
The guest, a professional sanitation expert, said he was one of about 120 people who recently arrived from the Philippines, but claims his concerns were dismissed at the Crown Plaza hotel in Auckland.
https://amp.rnz.co.nz/article/14cab8d9-b1ae-465c-b909-97b6b63cdfde
Half of the country's district health boards are not using the government's national contact tracing system for Covid-19 and experts are warning this could make it harder to control a future outbreak of the virus.
https://i.stuff.co.nz/national/health/coronavirus/121756580/coronavirus…
Businesses will no longer be required to provide a manual sign-in for customers under Alert Level 1.
However, they are being urged to continue to display QR code posters at the entry of premises, so people can scan in and can keep a record for themselves.
The other 2 systems, buying, storing and distributing PPE. And Flu vaccine. These were train wrecks.
It's not often we see something fail and fail hard before our eyes.
Contact tracing could be abandoned by the masses at level 1 - it's too hard
https://i.stuff.co.nz/national/health/coronavirus/121752775/contact-tra…
Remember we have borrowed/printed hard and are island isolated until a vaccine comes.
Forget what it says about technology competency. We needed it to work.
"We're relying on manual tracing systems, in a pretty low-quality app in most people's view.
https://www.rnz.co.nz/news/national/418582/manual-contact-tracing-syste…
"The gaps are; wearing masks at the border and on incoming aircrafts and at airports and also with our contact tracing - it is still far from state of the art," he told Morning Report.
New Zealand's contact tracing system is way behind places like Taiwan and South Korea, he said.
"We're relying on manual tracing systems, in a pretty low-quality app in most people's view.
"That's just completely unacceptable."
and if you want to know how out of touch the government is with the real world, look at stuff. Cindy is angry the warehouse are axing jobs after they got the wage subsidy. Hundreds of companies are going or are about to do the same. Did they honestly think giving out the wage subsidy would stop companies restructuring and making 10's of thousands redundant. This is just the start, wake up government.
Makes Todd Muller's genius idea of $10k cash per new employee look even more stupid. Surely that wouldn't be abused...
At this point unless Labour drops a nuke on Auckland*, they'll win the elections, possibly without Winston.
Labour is the same as 3 years ago: good intentions, delivery is a hit or miss (mostly miss). National is... well, what the hell is National at the moment?
*dropping a nuke on Auckland might earn them some swing-voters from other parts of the country
National is paying the price for two things. Firstly the last half of their last term when they were exposed as the corporate blue party, complacent, conceited and careless, big business was everything, the people no more consideration than minority shareholders. Secondly under MMP they consume and destroy coalition partners. Unless Shane Jones can win Northland NZ will have a Labour/Greens government alone, and even if he should win, NZF may not be needed anyway.
Jacinda has previously said that if they're in a position to form a government after the election, that it is her intention to carry on the current governing arrangement.
Which means even if Labour + Greens are large enough themselves, they would still invite NZ First into government, assuming they made it into Parliament. There's two obvious strategic reasons for this - it allows Labour to blame policy failures on NZ First, and helps shore up the chances of a 3rd and potentially 4th term government.
Does Labour really have good intentions? I'd believe this if we had seen a string of resignations for the failure of Lightrail, Kiwibuild, CGT, EV subsidies, obfuscation of transport policies (#Releasetheletter etc) but there hasn't been - not to mention the whole public sector staying on 100% throughout lockdown regardless of whether they're working or not as the private sector burns.
They've simply fumbled in between national disasters and made excuses for achieving very little while they wait for something to explode or to infect someone so Ardern can look like a school principal at prize-giving, all the while feathering their nests and trying to buy their coalition partners a seat.
I am more of a Labour voter than a Nat voter, although I have voted for the latter once or twice in my life.
I agree.
I don't know if they really deserve the praise they are getting for covid-19.
But putting that to one side, the big question now is how well will they manage the economic recovery? I'm not confident in their ability to do it well.
How would National manage it?
- Dial up mass immigration
- Subsidies for home buyers
- Sell as much of NZ to Beijing as possible
FCM - read the link I posted above. All of it. Dispassionately.
Don't blame this Govt, they are part of an unsustainable system beginning to come apart.
So of us a re contemplating the replacement.... :)
No, you've mischaracterised the source of her anger. I listened to the RNZ interview.
She was angry at the Warehouse making people redundant because they made a $70M profit last year and claim to be a community-minded company that looks after their employees. Her point is that small businesses have been doing everything they can, using up all their reserves, to ensure that they keep their employees on. Yet The Warehouse clearly has a lot more financial resources and resilience and are making a lot of people redundant.
She also said that it appears The Warehouse were beginning a restructure process before COVID even happened, in which case they shouldn't be using COVID as an excuse.
I would personally note however that the government's own muck up around whether The Warehouse could remain open under level 4 or not (TWH honestly believed they met the definition of an essential business) is at least partially responsible for this situation. The Warehouse would have lost a lot of money on their easter egg sales - they actually marked them all down to 1c each no matter the size about 10 days into level 2 lockdown.
A few thoughts about the US from Jonathan Haidt. I went to his talk at Takapuna last year, very interesting guy. Some great books including 'The coddling of the American mind' if anyone is into that type of thing.
https://www.theatlantic.com/ideas/archive/2020/05/jonathan-haidt-pandem…
All comes down to the vaccine option now - that's clearer as the India's and Brazils give up the pretence of alternatives.
I supported our approach, on the basis we couldnt overwhelm the health system, rather than it being the ultimate answer. It was politically untenable to to take any other approach - the moral high ground was in rarefied air - especially given the size of the older demographic it affects worst.
Now comes the hard grind. If the vaccine is going to take a while it's going to be a very different world for a while.
Said to my wife again last night as she considered home furnishing purchases. We cant count on my job security.
Gradually and then suddenly
https://www.hussmanfunds.com/comment/mc200608/
After years of overborrowing to finance stock repurchases (partly to offset dilution from stock-based compensation), many corporations were overleveraged coming into this crisis. Indeed, debt securities and loan obligations of U.S. nonfinancial business hit the 97% of corporate revenues in 2019 – the highest level in history – making the debt-servicing capacity of these companies more vulnerable to profit-margin setbacks than ever before.
Max to shut 17 stores
https://i.stuff.co.nz/business/121765629/coronavirus-max-devastated-it-…
After max and the warehouse who’s next? I think it is only the start.
That is going to be a long winter!
As discussed in Section II, many models of consumption suggest that consumers will accelerate repayment of existing debt balances as their expectations of the future sour.
And now Americans have reduced their revolving credit by the most on record – shattering all prior records by a factor of nearly four. For March 2020, the level of change (seasonally-adjusted) was a revised -$21.5 billion followed in April when the total monthly decline was apparently more than $58 billion. For the record, that works out to an annual rate of -65%. Link
Herald Headline ..........Jacinda "angry " at 1000 job losses at the Warehouse .
WTF does she expect ?
She knew the consequences of the lockdown would be dire , she was warned by everyone, and she should have allowed the Warehouse to stay open ...........along with butchers and green grocers.
Retailers are now in survival mode , and marginal stores will have to close .
She should expect a lot more of this in the retail sector in the coming months
I have some sympathy for both sides of this argument.
On the one hand, yes The Warehouse is a business, but on the other she is right, they do massively talk up their community mindset.
But, they aren't a charity, and one would think they haven't made the decision of these job cuts lightly.
Does Ardern really want people comparing what she has 'talked up' and what she has actually done? It may not be in her best interests to have that discussion.
I heard an interview with The Warehouse CEO, who said the changes they are making have been in the pipeline for 18 months, and part of the business evolving to keep up with customers changing needs.
There's been quite a few winners from lockdown - anyone with a good online platform for a start.
Chief executive Nick Grayston said the company was working to get "fit and healthy" in a "rapidly changing world", and the restructure would have happened regardless of Covid-19.
Relax Boatman, they'd have done it anyway. Take a few minutes to think through how you'll spin your next attack.
@plutocracy ..........Well then maybe Jacinda should not be "angry"
Unlike her cohorts in her cabinet , most of whom have never had a proper job , and where the wages arrive without a second thought , the real world has to trade and make money to pay for stock , wages , rent , transport costs , tax , interest, electricity, insurance , ACC levies etc, and reward shareholders who have provided capital
And the Government would do well to recognize this ......no point in being "angry"
Then both the Govt, and the opposition's devotees, shoulf ask the bigger question?
https://thedig.nz/apocaloptimism/the-other-crisis/
What say you to that, Boatman?
"most of whom have never had a proper job" says a comment on a site with commenters devoted to unearned income - property speculation, letting houses, playing the markets. Which of these is a "proper job"?
And Mr Boatman, you are about to lose your prompt payment discount on your power bill. That is because those that do not pay their bills on time don’t get it and that is considered to be unjust. So we are all to be dragged down to the level of those that renege on their every day dutiful responsibilities. Wonderful! Good old Labour cloth cap reasoning.
From corporatised and partly privatised power companies? Gee, the leftist influence is insidious!
Suggestion to impliment BLT as government for lack of political will never go after CGT
Why not have a form which every seller has to fill and declare if they own any house/property in their name either independently or jointly or even in a company or in trust just like buyers have to sign a form for money laundering.
JUST LIKE BUYERS WHO HAVE TO FILL A DECLARATION FOR MONEY LAUNDERING WHEN BUYING WHY CAN'T SELLERS TOO FILL A FORM DECLARING ANY OWNERSHIP OF HOUSES BESIDES THE ONE THAT THEY ARE SELLING.
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