Here's my summary of the key news overnight in 90 seconds at 9 am, including news our currency strengthened across the board overnight.
This follows a restart in the rise of the Chinese yuan, which yesterday reached an all-time high against the US dollar. For more than three months, Chinese authorities had halted its gradual rise as uncertainty grew about the state of the Chinese economy. But now the gloom has seemed to lift, the appreciating trend has restarted.
Our currency rose overnight too, and is ending the week up 100 bps on the TWI, following last week's rise of 200 bps. We are even rising against the Aussie - almost back to 88 AUc - and the Yuan - almost back to 5.0.
Yesterday's MPS which indicated inflation is expected to rise resulting in OCR increases next year underpinned the currency direction. The generally rosy economic data is driving expectations that New Zealand will be among the first developed nations to raise interest rates since the global financial crisis.
In the US, initial claims for unemployment benefits dropped - but only for technical reasons, so markets are ignoring the data. And the number of mortgage foreclosures fell sharply.
In Europe, they have brought about 130 of their biggest banks directly under the supervision of the ECB, and brought the ECB under the European Parliament oversight; these changes have taken a long time to be made, and they sideline national banking regulators.
Australian unemployment rose to 5.8% in August, near the 5.9% post-financial-crisis peak, underscoring the challenge for the incoming Abbott government as their economy continues to slow.
Gold has fallen another US$35 and is now at US$1,325/oz, oil is up, and US Treasury 10yr bond yields have fallen today, and are now down to 2.88%. The Dow is unchanged so far today.
The NZ dollar is ending the week at 81.4 USc, 87.9 AUc, and the TWI is at 76.5.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
No chart with that title exists.
52 Comments
The generally rosy economic data is driving expectations that New Zealand will be among the first developed nations to raise interest rates since the global financial crisis.
The standard of rosiness is being called into question in some quarters.
With everyone focused on the 5th anniversary of the Lehman failure, we are taking a quick look at how the world's developed (G7) nations have fared since 2008, and just what the cost to restore "stability" has been. In a nutshell: the G7 have added around $18tn of consolidated debt to a record $140 trillion, relative to only $1tn of nominal GDP activity and nearly $5tn of G7 central bank balance sheet expansion (Fed+BoJ+BoE+ECB). In other words, over the past five years in the developed world, it took $18 dollars of debt (of which 28% was provided by central banks) to generate $1 of growth. For all talk of "deleveraging" G7 consolidated debt has been at a record high 440% for the past four years. So in the G7, which is a good proxy for the developed world, debt continues to increase whilst nominal growth remains extremely low thus ensuring that the deleveraging process has yet to start. As Deutsche Bank states, "at best we’re stabilising the ratio at or around record highs." Read more
Twitter (US) has announced that they're preparing their IPO ....
... Team NZ has smashed those cheating so & so Oracle yachties in two big Cat races this morning ...
US medical researchers have announced that our brains can rejuvenate as we age , and that the barriers between the left & right hemispheres appear to melt away , allowing us to think more holistically ...
... all & all , a splendid start to Friday the 13'th !
I think it is already a private company
Just well disguised:
In 2008 the Labour government committed about $36 million for an attempt to win the cup back, which it lost 5-0 to Swiss syndicate Alinghi in 2003, and failed to win back in Valencia in 2008.
Key hinted that a defence of the cup was likely to cost more.
"You've got to imagine these things don't tend to get cheaper," Key said, adding later that it was a "fair assumption" that the cost could be considerably more because of the infrastructure costs". Read more
On the other hand both boats are substantially NZ pieces of work. NZ has pretty much dominated sailing for a good few years. Each one is 10million plus and a team can spend $100million (5~8 teams?). Plus all the ppl coming here to watch, plus NZ has a huge marketing opportunity in this event to show case produce and capability.
Considering we wasted $30million on rio tinto I wouldnt bat an eyelid on that again and more....
regards
Yeah well, that was a load of over hyped doodoo, lots of votes in that though.
Of course there are the so called in-cirect gains you dont see. I know a boatbuilder, his opinion is because of the cup and our cheaper labour he's had some good boom years.....thats jobs...
regards
I know a boatbuilder, his opinion is because of the cup and our cheaper labour he's had some good boom years.....thats jobs...
Peter Jackson and his US movie studio backers had the same view - are the net retained levels of PAYE taxation rising significantly ? Doubt it. Did Jackson buy or lease a new transpacific jet?
Very good point.....
Depends on "significantly" of course...given our economy is billions seeing a raising of our PAYE is in millions, easy to miss. Note however that graphics designers get to stay here in Wellington, not badly paid...PJ runs a big rendering farm that employes IT ppl....actors, importers brining in the server and network kit....etc etc. Or the extra tourists who come here aiming to see hobbitville. All the novies made since....At the end of the day it only has to have been somewhat positive to have been worthwhile....
regards
The Reserve Bank governor, Allan Bollard, predicts that hosting the cup will bring $700 million to the New Zealand economy - there's already been the big spend on infrastructure upgrades, up to 80,000 international visitors are heading this way, and the positive spin-off from the event will continue for many years. Read more
I feel poorer just thinking about the costs incurred by ratepayers upgrading stadium infrastructure, never mind the fact central banks and their leaders are notoriously poor at forecasting any economic variables.
... I wonder if the current guv'nor of the Reverse Banks feels the same as old Bolly did ..
I also wonder if the yachting & boat building industry in Auckland is such a rip roaring success , why they don't fund the America's Cup challenge themselves , instead of picking the taxpayers' pockets ....
The trouble with benefit estimates like the $700 million is that people can argue till they are blue in the face defending numbers like it with hand waving "flow on benifits". We can get an estimate of the accuracy by noting that it was based on "80,000" international vistors heading this way, while NZ short term visitors only saw a 20000 bump.
https://www.dropbox.com/s/m2gl7ucm43icatz/Shorttermvistors.png
Now, if you divide the projected benefit by 4 (in terms of how much the visitor numbers were wrong by) and subtract the costs, that's not looking such a brilliant plan in retrospect.
I am sure the RBNZ governor is not worried by the inflationary effects of hosting the America's Cup, given the history of the RWC.
Not only the RWCbut also the Lions tour which was hyped as the years 2nd largest sporting event.
None of these had a financial benifit to the majority of Kiwi's.
The only people to benifit are the booze barns and the makers of red cones and hi viz clothing.
The same will apply to the next Americas cup should NZwin it.
Given the Labour government made the commitment, it is perhaps understandable that Key has tried to play it down. It will be interesting to see if he looks to claim credit for what now looks a likely win. Although I personally see some merit in the Tiwai PT deal (even though Tresaury don't it seems), the America's Cup looks a much better use of $30 million plus.
Amy Adams seems to now understand the marketing benefits, which I would have thought could be immeasurable, as the linked article notes.
I don't believe that John Key is going to San Francisco. So if Team NZ do go on and win it, at least we'll be spared another three-way handshake like this one - http://www.youtube.com/watch?v=rWjuiAPkEAw
Gummy,
Maybe the punters who responded to the latest Roy Morgan survey showing Labour Greens up on their foils and sailing away from John Key and the Nats, aren’t aware that Cunny’s leading the race.
Stephen : Who do you think will better challenge Jolly Kid & the Gnats .... Cunliffe , Jones , or Robertson ?
... to me ( having lived through the Gillard/Rudd debacle in Australia ) , Cunliffe is just too much alike Kevin Rudd in personality for me to ever vote for him ...
Forget the porno mess , Shane Jones relates directly to people ... he connects with us plebs , the great unwashed ....
Gummy,
In seriousness, I don't know, and actually understand the comparison you make, although I like to think it's not entirely accurate. K Rudd was certainly bright, and seemed to appeal to the punters, (although I preferred Gillard by some margin), and he had not only a significant ego, but a clear belief in his own intellectual superiority (that one expert suggests was deeply narcisistic). On this latter point Cunny looks to me to differ. I do believe to compete as a leader of one of the main parties you need to be pretty bright including on economic matters (ruling out the Jones Boy), and you need to have enough self confidence to stick to key points and messages even against a thousand people suggesting other options (ruling out Robertson- he's bright enough for example to know that a rent freeze is not the answer to any question, but someone got him to put the idea forward).
Cunny's bright and self confident. Is he the narcissist? I don't actually think so. Is he deeply left wing? I also don't think so- I actually see the move to Herne Bay positively.
How will Winston and Russel get on with him; as they are a big part of the picture? Time will tell.
There is always an unspoken town and country element to NZ politics- and especially a very annoying to me anti Jafa element that may come into play. Key spans that I accept, by living here, but clearly having his roots elsewhere.
But then Key just may well have lost the trust of the people. Can he get that back?
Interesting times.
I could not agree more Stephen L...of the three , for me a no brainer, yes Cunny..Kun Li has lost some of his spontaneity, some of his glib if you like, but that's what getting mauled in a caucus leader struggle will do to you .
His tendency to look woody now GBH , is more a case of being careful no to tread on toes he knows he's going to need supporting his stand not firmly planted up his posterior.
I've been following your apraisal of Jones for a wee while now GBH....and for the life of me don't see what you see..I find him ambitious without experience, very individualistic in his approach to the point of self centeredness.....a strong tendency to talk first (fairy well on occassion) but think later causing him to dilute rather than recant.
In fact I think he could become outright devisive in the the challenging the Nats for power...if your going to be an individual with the ability to polarize , you really have to have the cult of personality on a Muldoon scale to pull it of, but even Rob went once too often off the cuff.
If I may ask you a Question ...GBH...which of the two Cunliffe or Jones would you see being the easier to corrupt...?
Think on it , I respect your opinion...so there is no wrong answer , just possibly highlighting what I see as their essential character difference.
I given Roberson no consideration for reasons I have stated previously, he had a playing hand in guiding Shearer...why on earth he thinks the same strategy would work is beyond me, or he set Shearer up knowing it would provide his opportunity...either way, if not for cacus he would be a goner.
To start with the thought of you voting Labour is too funny for words. So vote Jones? yeah right...so pick the most useless one so JK the love of your life has a clear run more like it.
Really if you dripped any more sincerity someone would drown in it.
Porno mess, well ask a few women (hint they get to vote too), they see him as a major sleeze bag. He's a vote loser through and through....
regards
Bluff: Brilliant idea.
The Invercargill council put up hundreds of thousands to have an Auckland to Bluff race. But the ratepayers have been saved because nobody wanted to come.
With John Key millions maybe it could be made to work. And all that spare electricity could be used to heat up the harbour.
Mind you with the Labour Government, they could just pass a law that all those nice tubs now at Westhaven will have to be moored at Tiwai point. Especially if owned by landlords.
Yeah, nah, KH. Ya needs to think more expansively. Especially if'n yer of the Tax'n'Spend breed. This cries out for a Seven point Plan (ya needs 7 to get Green support, because it's a Magic Number)
1. Require by fiat/regulation that the entire Awkland yacht squadron is moved as aforesaid. Them rich folks can take it and will be in no doubt Who's in Charge 'ere. Check.
2. Ferry 'em all down to Bluff Harbour. Marine Employment. Check.
3. Drop off a couple at Otago on the way down, for PDK to play with. Internal Dissent duly bought off. Check.
4. Charge swingeing mooring fees. Revenue. Check.
5 . Require all journeys south to use yer yacht, to be on a State-owned transport service. Employment. Revenue. Check. Check.
6. Invent a new Certificate 'Bluff Harbour Manouevres' and require all yacht masters and crew to enroll and pass it. Eductaion employment. Check.
7. Require all transits to and from Bluff on a State-Regulated Yacht to have an Entry and Exit Visa. Employment. Check. Revenue. Check.
See, with enough Thinking like this, we could Save Godzone!
Tee hee.
Why stop there, why not a 24 point plan.
8 Boat Building Permits required for all repairs and renovations, from the local council. To ensure weather tightness and suitability for purpose.
9 Resource Consent for all new builds.
10 All boats to have solar panel charging systems
11 All fuel to be biodegradeable
....
Your time frame is too tight - RioTinto will be gone once the $30million Key inspired government subsidy is spent.
Rio Tinto made a $US 1.7 billion profit in the last 6 months ... the company has a market capitalisation of $ 117 billion ...
... the RIO directors probably only needed that extra $NZ 30 million for drinkies , to celebrate having just got our government over a barrel because of the Meridian IPO .....
Should Emirates Team New Zealand be sucessful in their challenge they will become the "Holder Of Record" and thus able to dictate the defence and the class of vessels used
They should specify Waka Taua Maori War Canoes with giant outriggers with carbon fibre dagger blades and foils - get them foiling up the waitemata at 50 kph (40 knots)
Here's the Christchurch City Council statement on CEO Tony Marryatt:
Joint statement from Christchurch City Council and Tony Marryatt13 September 2013
The Christchurch City Council has today accepted the resignation of its CEO Tony Marryatt, effective from 30 November this year.
Mr Marryatt has been on special leave pending the results of an independent investigation into any actions or omissions by him that may have led to the revocation of the Council's accreditation as a Building Control Authority.
Council employed Mr Peter Winder of McGredy Winder and Co to carry out the investigation. The McGredy Winder report identified a number of key issues that led to the loss of accreditation, but in mitigation also noted the pressures on the organisation and the CEO as a direct result of the disastrous series of earthquakes that hit the City beginning in September 2010.
The report was of the view that in normal times a Chief Executive would have been expected to be aware of the issues relating to accreditation, but found that Mr Marryatt was not aware of this situation until shortly before he informed the Council. The report stated that "The Chief Executive has been very focused on pursuing specific Council objectives, including the signature projects and cost sharing agreement with Government. Christchurch City Council is not in a business as usual situation".
Mr Marryatt accepts that, despite the presence of mitigating factors, the final responsibility for the loss of accreditation must rest with him as the Council's CEO.
Taking this into account, and with local government elections due in October, Mr Marryatt feels this would be a suitable time to resign. The parties see this as enabling the new Council to appoint a new Chief Executive to work with them in continuing the rebuild of Christchurch.
It has been agreed that Mr Marryatt's last day of employment CCC will be 30 November 2013. Mr Marryatt will be on full pay until that date. On 30 November 2013, at the conclusion of his employment the Council will pay Mr Marryatt $269,264.00 gross which consists of his notice period of three months paid in lieu, and a severance payment equal to three months' remuneration.
It has been agreed that between now and 30 November Mr Marryatt will not be required to perform the Chief Executive role but rather he will be available as required to assist with handover matters and in the transition to a new Council and Chief Executive.
Mr Marryatt wishes to thank Council staff for their ongoing support, work ethic and focus on making a difference during extremely stressful and trying times. He says he is proud of what the organisation has achieved for the City in extremely trying times.
There will be no further comment from the Mayor, Mr Marryatt or the Council on this matter.
The McGredy, Winder & Co. report will be made available on the Christchurch City Council website by 6pm today.
Happy Sunday.
Yes Lees Valley is a lovely spot. I have live there for the last 25 years. This particular property has had five different owners in the last 10 years. Before then the nucleus of this property was owned by an Australian who did a wonderful job developing the property and directly employed six NZ families. After the Australian sale it it went though further development however there was very little real improvements. Over the last last five years it has been horrifying to watch the properties go backwards due to management, low staffing numbers and under stocking (weeds and pest have had a ball) and perhaps other reasons.
I hope that the new owners have enough capital to get the property to where it should be which I think is upward of 70000 stock units (hopefully not dairy cows...) and hopefully they don't flood it with water.
We believe that one of the owners intend on living in Lees valley and we wish them all the best to help rebuild the property, community and the place that I love
Heartiest congratulations to David Cunliffe , upon winning the contest for leadership of the NZ Labour Party ....
.. not alot of support from within the Labour caucus actually , but an overwhelming mandate from the union affiliate , and from the Labour membership .... His caucus gave 16 votes to Robbo , 11 to himself , and 7 to Jonesy ... 11 out of 34 suggests room for improvement , David .... or take to wearing a knife-proof vest backwards, just in case Clayton is lurking in the parliamentary corridors with ill-intent ....
Roll on 2014 , and we'll have all the problems of the Kiwi economy solved by introduction of a " living wage " for all civil servants , minimum wage hiked across the board , a CGT , and probably a bump up in the WFF package ....
... yes , happy days are just a year away ... Can't wait !
NZ leaders have been a dissapointment in my life, so the odds are Cunliffe will disappoint too.
But if I have learnt anything from you Gummy it is look on the positive side.
So until proven otherwise I'll believe that Cunlifffe will bring prosperity to our fair land by inflicting competition on our protected monopolies/oligopolies in energy, communcations, finance, construction materials and land development.
The kiwi tribe will be more important than the identity tribes.
Infrastructure for our young will be just as important as healthcare and social welfare spending for the elderly.
Finally he will build a lovely fishing and boating town on the banks of the Waimak river strategically located near a new bridge...
Or Cunny will invite us all to live in that working man's suburb of Auckland where he is .... Herne Bay ?
.. .... I'll bring the caravan , the dogs , a few crates of DB , and me collection of Skellerup gummy-boots ... she'll be beauty , mate !
Just a thought , any idea how he's gonna fund all those promises to spend munny on our behalf ? .... bugger it , that didn't stop them last time , max out the governmental credit card , if it all goes pear-shaped , the Gnats can clean up the mess next time they get a turn in the political wendy house ...
Yes GBH step 1 completed....he will need a knife proof vest and anti rogering cork to make it through to next Nov....not the kind of deputy you'd say get in behind to...butt and this is the big butt....he may well have to make concessions to Robertson from the get go and believe me that is no way to start.
This week will indicate whether Cunliffe has a long game in his bag....the greasy part of politics.
If he had his way I'm sure he'd clean em out.... bum biting back stabbing uphill gardeners the lot of them, but that would only serve up a carrion feast for the wank media to highlight division within the caucus.....
So what if there is division ...? the party as a collective resoundingly installed Cunliffe, why should the bitchy self serving caucus seek to reverse that decision.
The Jones boy finished about where he should have....trust me..! you could not trust him with your wallet...just no self control to the man.
I don’t really understand what that jab was at??
It was sold to Australia in about 1995(Labour). A New Zealand family bought it again, was traded a couple of times and then in the financial crisis it was sold to a Swiss banker(under Labour). Then it was bought again by a New Zealander (under National) and now it has been sold to an American for around $35 million I believe (under National). It was farmed better by the Australian than it has been consistently since.
No doubt like most things in the world money and banking had something to do with it. It has been unofficially on the market for three years and probably advertised for 18 months I think
... forgive him ... some people are just bitter & twisted , no matter who runs the country , or how well they do at it ...
There's not alot of fuss is there , about this sale .... you wonder if the buyers had been Chinese , there'd be some fur flying ?
... xingwang's the guy to answer that one for us ...
Magic spot though , you're mighty lucky to live in the valley . Been there once , many years ago , awesome day ..
Cheers Gummy, moved in there at 2, Correspondence School and an bringing up on hills, wind, some rain and self entertainment,
No offence, the china people to smart for that.
But I see dairy support on one report, 2 feet of snow after 14 days gives me a bad feeling, but good luck, maybe they love the stuff???
im with Winston on this deal. most off shore sales are because it too expensive or uneconomic for loacal farmers. I am always looking for whats going on underneath, i no longer trust media or politicians. i would like to write more but ive broken some rips and on some super cool pills and bed rest.
The 'Local' market was tested.
Bayleys Canterbury agent Ben Turner said the domestic market was tested before the owners accepted the overseas offer.
I take it the Kiwi farmers who should know it value better than anyonw were not up to someones expoecdtations, Im thinking banks so it was off loaded offshore with Government approval.
According to the decision from the Overseas Investment Office (OIO), consent has been granted for a freehold interest in 13,156 hectares of the land, and a leasehold interest in 14,087 hectares.
The sum remained confidential. The OIO said the land would be converted from a sheep, cattle and deer station to dairy support. and the applicant was to commit "significant funds to the development/improvement of the land".
Company Office records show it is the New Zealand-registered subsidiary of Pillango Investments, which is based in Connecticut and whose directors are three lawyers.
Just plain wrong. Unless you want to live in the land where the filipinoes do all the work on foreign owned land while the rest of the workforce wonder what the hell happened to their promised land, like morons.
Google searched the buyers and all I got was this
That's what I would argue. There's no way these guys can have dairy cattle in a place where winters are 100 days long, theres snow on the ground for 25 of them and the road is usually closed on and off in June/Jul/Aug. What happens when these cows begin to calf?
Therefore I think they will not succeedd and perhaps the land vaule may fall back to what it is worth as a sheep/deer/beef property. What I have heard is it was sold within 5% of what it was bought at, 4 years ago by a New Zealander.. but maybe just rumours
I hope you're feeling well and that oxy is all good
Go TNZ
went into a corner too fast on my mountain bike, way too fast and over a bank.Anyway, biked 4 miles home and went to emergency medical center, where my doctor recovering from a mountain bike accident of his own, which blew his knee, gave me 3 to 4 hours of his time. hE took 8 x-rays and gave me a packet of narcotics and told me to take it easy all for $320. found a few old injuries along the way. 5th rib is broken and displaced like a Z. AC joint looks like the otherside, which i can live with.
Ive only got 2o pills left
thanks for the good thoughts Aj
Gummy,
Not sure if you were following it at the time, but Labour paid off the credit card from when the Nats had last maxed it out; and now the Nats have spent away happily on it for five years. There may or may not be good reasons, but there is a habit forming that says the Nats don't really know how to grow a productive economy. (or it's not in their constituents' interests to really try).
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.