Here's my summary of the key news overnight in 90 seconds at 9 am, including news of a changing landscape.
Welcome to the last morning video update for 2013 - and the world is a little different today following the Fed's start to tapering.
Firstly, our exchange rate with the US dollar is sharply lower this morning, meaning many of our exports will be worth more. It has fallen 70 bps overnight, and more than 140 bps in a little over a week.
Secondly, interest rates are starting to rise. Not only have UST 10 yr benchmark bonds risen to 2.94% today, local swap rates are up 10 bps in the past week, half of that yesterday.
Thirdly, equities are surging higher. The Dow and the S&P500 are up in record territory holding on to big gains yesterday despite some disappointing US jobless data out overnight.
Also out overnight, American existing home sales volumes fell although median prices rose, in a very similar pattern to what happened in New Zealand in November.
The price of oil is up sharply, but the price of gold has fallen and is now down below US$1,200/oz.
Yesterday's strong economic growth may be the first of many such reports in 2014 - and the consequence may be higher inflation and capacity constraints. More economists are now picking a steady stream of OCR hikes in 2014, starting in March. By the end of 2014, we may well have much higher interest rates - good news for savers, and a tighter situation for borrowers.
The NZ dollar starts today at 81.6 USc, 92.2 AUc, and the TWI is unchanged at 77.3.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
If today is your last day at work for the year, best wishes from the whole crew here at interest.co.nz. Enjoy your holiday break. Check in with us when you can - we will be running every day except the public holidays and keeping you up with the latest financial news that affects New Zealand.
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24 Comments
Yesterday's strong economic growth may be the first of many such reports in 2014
Hmmmm - Rebounding dairy production drove a 1.4 percent increase in gross domestic product (GDP) for the September 2013 Read more
How much found a buyer?
Indeed, so much milk poured into Fonterra in the peak season between September and November that the co-op could not process it all and has dumped large quantities in smelly buttermilk lakes or at sea. Read more
As Stats NZ noted;
Goods imports increasing by more than goods exports also drove the increase in New Zealand's annual current account deficit. The deficit increased from $8.2 billion (3.9 percent of GDP) in the June 2013 year to $8.8 billion (4.1 percent of GDP) in the September 2013 year. Read more
From this article;
http://www.stuff.co.nz/business/industries/9536155/China-now-NZs-top-ex…
For the November year, exports to China jumped more than 41 per cent to $9.4b.
Over the same period, exports to Australia fell 8 per cent to $9.2b.
Imports from China also dominate New Zealand, worth $8.2b in the past November year, almost $2b more than New Zealand bought from Australia.
Seems hard to believe that we exported $9.4 billion to China, a country with a population of 7 billion, and during the same period our tiny 4 million folks managed to import $8.2 billion dollars from them in return.
Surely not? If so, we are stuffed.
Ooops - that was the world at 7b - thanks for the correction!
Okay, China with it's 1,300,000,000 billion to us with our 4,000,000 million.
Must admit I was so taken aback wondering what in the world (well actually in China) we had spent all that dosh with them on - I got a bit carried away!
business solutions .... theres gold in them thar hills
An IBM sales executive on a salary of $295,000 is suing the company because it paid her a bonus of $543,000 – half a million dollars less than she believes is owed to her.
Fiona White is an account manager in IBM's business solutions area who, according to a statement of claim filed in the Federal Court, is suing the company for loss and damage.
Lawyers for Ms White said in her statement of claim that she was paid an annual salary of $295,000, and that she was entitled to earn commissions "depending on her exertions and work levels".
Having been set a target of $US900,000 ($A1 million) in sales, Ms White said she had achieved recognisable revenue of $US9.1 million.
http://www.smh.com.au/it-pro/business-it/highachieving-employee-sues-ib…
Coupled with breath-taking incompetence;
http://www.scoop.co.nz/stories/BU1312/S00768/breath-taking-incompetence…
Stephen, thanks for the link, I needed a laugh.
I used to work in "Change Management" many moons ago and watched as management wasted more on consultants, but never consulted the staff, as they 'The Management" knew best.
I would change that idea-oligy in a flash.
Miss management costs far more than this country can bear.
As for advising on a poodle to relieve stress at 340K per Consultant, gob smacked.
Though I had a laugh, it is actually very serious.
I particularly liked this simple solution in the link, hence my comments above.
Never ask the Management, that is why the world is in a mess..no bleedin idea.
"The simplest way to improve services – and run them more efficiently – is to ask staff about how things could be done better, and involve them fully in the process of change. The PSA is already scoring major successes by helping run this kind of process in hospitals".
I suppose it is a start.
Personally I would start at the top and work my way down.
Firing them that needs it and not paying huge payouts for stupidity, would end most of our problems.
Importing silly ideas and promoting them was the first problem.
Pretty simple really - NZD gets driven lower = less purchasing power = inflation.
Higher NZD = more purchasing power = deflation.
Well the Pollies have done everything in NZ to try and alleviate deflation by increasing debt, Increasing GST etc and now they'll have less NZD to pay back with.
Who gets to make the most money out of interest rate increases? Overnight settlement with absolutely no limits.......and we pay the Government a dividend.....
Re Isreali inflation vs NZ Inflation
The two are probably measured differently
Isreal will include the increasing costs associated with housing inflation in the CPI
In New Zealand our CPI basket is a standing Joke , we DO NOT include the costs of housing , but we have package tours to Fiji in the CPI Index
Merry Xmas to everyone have a fantastic holiday season.
And don't put a blind fold on when choosing the Turkey.
http://www.youtube.com/embed/Lp2XV22FO4c
Maybe that is why they turned flightless, until recently, they were all imprisoned here, after escaping there.
Even the Brits sent their convicts there first.
Before discovering Godszone.
Now we import our own. And build PPP prisons to house em all.
I do like to stir the melting pot.
Merry Christmas from one of the Santas little helpers.
PS.
And a Happy New Year to all you "Dear Leaders"
Too expensive by half, so half of you have to go.
(I wish.!!)
It would be the most economic thing to do.
That would be my true Christmas...present.
That and to make Hugh happy.
HA ha, de ha.
Artnoon David resplendent in red hat wit ermine trim , I would like to wish you a Merry Christmas and a prosperous New Year.... my best also to Gareth, David, Alex( if he's around the pooter in Blighty) Bruce the whole team there.....never forgetting Bernard the big H , hoping for his sake Boomers and Gen XY can whilte flag their differences for the festive frollicks.
Anyhoo.....as it is Christmas, a shoppers story amid the mad season....!
A couple were Christmas shopping. The shopping center was packed , and as the wife walked through one of the malls she was surprised when she looked around to find that her husband was nowhere to be seen.. She was quite upset because they had a lot to do and hence, she became so worried that she called him on her mobile phone to ask him where he was. In a quiet voice he said, "Do you remember the jewelers we went into about five years ago where you fell in love with that diamond necklace that we couldn't afford, and I told you that I would get it for you one day?" The wife choked up and started to cry and said, "Yes, I do remember that shop." He replied, "Well, I'm in the pub next door." My very best to you all , I shall pop over to Big B's thread for one least Friday Yay...!
My felicitations to all concerned, mostly absent friends. Some gone for good.
(Some, I wish they had).
This is the last effort of the day.
Primarily aimed at my wife, however, it may tickle your fancy...too.
How to make a woman happy this Christmas, in fact, anytime..
It's not difficult to make a woman happy. A man only needs to be: 1. a friend 2. a companion 3. a lover 4. a brother 5. a father 6. a master 7. a chef 8. an electrician 9. a carpenter 10. a plumber 11. a mechanic 12. a decorator 13. a stylist 14. a sexologist 15. a gynaecologist 16. a psychologist 17. a pest exterminator 18. a psychiatrist 19. a healer 20. a good listener 21. an organizer 22. a good father 23. very clean 24. sympathetic 25. athletic 26. warm 27. attentive 28. gallant 29. intelligent 30. funny 31. creative 32. tender 33. strong 34. understanding 35. tolerant 36. prudent 37. ambitious 38. capable 39. courageous 40. determined 41. true 42. dependable 43. passionate 44. compassionate WITHOUT FORGETTING TO: 45. give her compliments regularly 46. love that shopping 47. be honest, does my butt look big in this. No dear. (If ya wanna keep living). 48. be very rich 49. not stress her out 50. not look at other girls AND AT THE SAME TIME, YOU MUST ALSO: 51. give her lots of attention, but expect little yourself 52. give her lots of time, especially time for herself 53. give her lots of space, never worrying about where she goes IT IS VERY IMPORTANT: 54. Never to forget: Those special occaisions, *Christmas * birthdays * anniversaries * arrangements she makes 55...last but not least Never forget presents...Gold, Diamonds, clothes, bath the kids, put up with her Ma visiting. In fact the list is endless. HOW TO MAKE A MAN HAPPY THIS CHRISTMAS EVE....(Me) 1. Show up naked and willing with mistletoe.. 2. Also bring drink and nibbles. Cannot wait for Tuesday. I have waited all year....weep.
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