Here's my summary of the key events overnight that affect New Zealand, with news of data out of the US painting contrasting pictures.
American retail sales fell unexpectedly in March as consumers cut back on buying cars and eating out. Few observers picked the stumble, which will restrain first quarter growth and be considered by Fed officials ahead of their next meeting on April 28.
Meanwhile the Fed's regional reviews show the US economy has continued its expansion from late February to early April, with low unemployment spurring an uptick in wage growth. According to the Fed's Beige Book report, pay increased in all but one of its 12 regional districts.
The Fed has ordered all eight of its too-big-to-fail banks – Bank of America, Bank of New York Mellon, JP Morgan Chase, State Street, Wells Fargo, Morgan Stanley, Citigroup and Goldman Sachs – to make significant improvements to their plans for if they should face bankruptcy. They'll need to implement the policy known as the 'living will' by October, or face sanctions.
China has surprised markets, reporting growth in its exports for the first time in nine months. Exports rose 19% in yuan terms from March last year to March this year, while imports fell nearly 2%. But don’t get too excited, China’s first quarter GDP data out on Friday is expected to show the economy growing at its slowest pace since the financial crisis.
The world’s largest privately-owned coal miner has gone bust. Peabody Energy has filed for bankruptcy protection in the US, but all its mines and offices will continue to operate. The firm isn’t the first and won’t be the last miner drowned in debt due to rock-bottom coal prices, tougher environmental regulations and a shift to natural gas.
In New York the benchmark UST 10yr yield is up slightly today to 1.78%.
The US crude oil price has eased back to just below US$42/barrel, while Brent is at US$44/barrel. The fall comes as OPEC’s cut its forecast for global oil demand growth for the year, citing concerns about lower demand from China and Latin American contributing to an even larger supply surplus this year.
The gold price has dropped to US$1,246/oz.
The New Zealand dollar has strengthened off the back of China's trade data. It's at 69.3 US¢, 90.4 AU¢, and 61.4 euro cents. The TWI-5 index is now at 72.3.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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30 Comments
'Peabody Energy has filed for bankruptcy protection in the US, but all its mines and offices will continue to operate'
Continued use of coal (and oil) versus planetary meltdown: an 'interesting' predicament which has only one ultimate outcome.
409ppm, and not yet at the seasonal peak:
https://scripps.ucsd.edu/programs/keelingcurve/wp-content/plugins/sio-b…
The accelerating increase in atmospheric CO2 witnessed recently (well over 3ppm per annum) indicates the 'upper safe limit' of 450ppm will be surpassed by 2028, perhaps as early as 2024. .
In the meantime, higher faster implies complete loss of coral reefs and other sources of natural wealth over the coming few years.
http://www.nature.com/news/coral-crisis-great-barrier-reef-bleaching-is…
(The satellite-based Arctic ice monitoring system has broken down, so we are in the dark on that aspect until alternative arrangements are made.)
I'd suggest it would be very boring. About as boring as shale gas innovation and the laws of supply and demand. Ironically the frackers have achieved what breathless doomsters couldn't.
http://www.aei.org/wp-content/uploads/2016/04/energycons.png
Still flogging the almost dead horse of shale, I see.
'The so-called US shale oil revolution got stuck in 2015'..
http://crudeoilpeak.info/us-shale-oil-peak-in-2015
After the peak comes the decline.
Ironically the frackers have achieved what breathless doomsters couldn't?
Are you talking about bankruptcy?
I was alluding to the US cutting its CO2 emission by around 6% as it economy grew by a quarter. Bought to you by frackers. What have the green mob achieved? Biofuels, wind mills, diesel cars and a $1.5 trillion/annum gravy train. If only that money had been spent on sanitation, vaccination, medical research etc. But I guess doomsters never are big on opportunity cost.
"Interest in climate change is becoming an increasingly powerful economic driver, so much so that some see it as an industry in itself whose growth is driven in large part by policymaking.
The $1.5 trillion global “climate change industry” grew at between 17 and 24 percent annually from 2005-2008, slowing to between 4 and 6 percent following the recession with the exception of 2011’s inexplicable 15 percent growth, according to Climate Change Business Journal."
http://www.insurancejournal.com/news/national/2015/07/30/377086.htm
http://www.usnews.com/cmsmedia/bd/56/f1e10bf64a1aadaa63db61455692/16040…
http://cdn.spectator.org/styles/large/s3/image001_4.png?itok=2Fpw5JsY
profile, since you like to quote Insurance Journal, presumably you have faith in what they say:
'Sea Level Rise Will Be Worse and Come Sooner
Think sea level rise will be moderate and something we can all plan for? Think again.
Sea levels could rise by much more than originally anticipated, and much faster, according to new data being collected by scientists studying the melting West Antarctic ice sheet – a massive sheet the size of Mexico........
Davidson said recent data that has been collected but has yet to be made official indicates sea levels could rise by roughly 3 meters or 9 feet by 2050-2060, far higher and quicker than current projections. Until now most projections have warned of seal level rise of up to 4 feet by 2100.'
I suppose Insurance Journal doesn't count anymore, now that it is basically confirming what I have been saying.
http://www.insurancejournal.com/news/national/2016/04/12/405089.htm
Maybe you can find a report from the 1990s that indicates all is well and there's absolutely nothing to worry about or plan for. .
"Projections" how cute. A weasel word so one can't be accused of making a prediction. An insurance journal bigging up future climate change - even you must be able to see the conflict of interest? CO2 took off post WW2 so 1990 is a bit of an odd year to pick if you are looking for a correlation.
We have plenty of good data is Australasia. I thought you liked data? But fret about insurance industry projections if you like. Buffet profits off guys like you.
"The Australasian region has four very long, continuous tide gauge records, at Fremantle (1897), Auckland (1903), Fort Denison (1914), and Newcastle (1925), which are invaluable for considering whether there is evidence that the rise in mean sea level is accelerating over the longer term at these locations in line with various global average sea level time-series reconstructions. These long records have been converted to relative 20-year moving average water level time series and fitted to second-order polynomial functions to consider trends of acceleration in mean sea level over time. The analysis reveals a consistent trend of weak deceleration at each of these gauge sites throughout Australasia over the period from 1940 to 2000. Short period trends of acceleration in mean sea level after 1990 are evident at each site, although these are not abnormal or higher than other short-term rates measured throughout the historical record."
"I love apocalyptic predictions" on climate change, Buffett told CNBC on Monday, because they probably do affect rates.
But right now, he said, "The rates have come down very significantly, so we're not writing much, if anything, in the U.S."
"The public has the impression that because there's been so much talk about climate that events of the last 10 years from an insured standpoint and climate have been unusual," he continued. "The answer is they haven't."
http://www.cnbc.com/2014/03/03/no-climate-change-impact-on-insurance-bi…
http://www.jcronline.org/doi/abs/10.2112/JCOASTRES-D-10-00141.1?journal…
Don't worry about your broken satellite Truthie there is plenty of other data out there. Practically record global grain production, for the third year in a row, for instance. Not a bad effort given it's an El Nino. Though not great if you are a grass fed dairy farmer.
"Early indications suggest a generally comfortable balance between global supply and demand of cereals in the new marketing season (2016/17). FAO puts its first forecast for world cereal production in 2016 at around 2 521million tonnes, which although falling short of last year’s level by 0.2 percent (4 million tonnes) would still represent the third highest performance on record."
http://www.fao.org/fileadmin/templates/worldfood/images/home_graph_3.jpg
Increasing food production by chopping down old-growth forests and jungles and then planting seeds does not take much intelligence or effort, especially when you're using chainsaws and tractors.
The hard part will be building the 8-metre-high wall needed to keep everything currently near sea level from being inundated when the ice on Greenland melts.
'Summer-Like Temperatures Smash Ice Melt Records For Greenland'
http://thinkprogress.org/climate/2016/04/13/3768915/greenland-ice-melt-…
Better make it a 100-metre-high wall to cope with the collapse of the Antarctic ice shelves which is now underway.
You should really read up on modern agriculture, get off the crack pot doomster blogs and get out and about.
"The past 50 years have already witnessed important peaks for environment and resources.
The rate of increase of world population peaked around 1970 and has slowed considerably since then. Peaks of forest destruction also have passed with a transition from less to more forests in many countries and regions. By the 1980s wooded areas in all major temperate and boreal forests were expanding. After 1990, growing stock expanded in many forested countries (Kauppi et al. 2006), and during 1990–2010 the density of forests grew in all world regions, albeit unevenly (rautiainen et al. 2011). Like farms and their crops, the productivity of forests providing wood products has risen.
...Over the next 50 years, the prospect is that humanity is likely to release at least 146mHa, one and a half times the size of egypt, two and a half times that of France, or ten Iowas, and possibly mul-
tiples of this amount. Notwithstanding the biofuels case, the trends of the past 15 years largely
resemble those for the past 50 and 150.
We see no evidence of exhaustion of the factors that allow the peaking of cropland and the subsequent restoration of nature."
http://www.tradingeconomics.com/world/arable-land-percent-of-land-area-…
https://imgur.com/nRy4q15
http://phe.rockefeller.edu/docs/PDR.SUPP%20Final%20Paper.pdf
As always fact free Rastus - have you ever thought of writing for The Onion? Must suck when FAO and World Bank data doesn't match your world view and all you have is some Koch bros drivel.
“As an institution of higher learning, we recognize that it’s inevitable that certain contentious topics will come up from time to time, and when they do, we want to create an atmosphere where both students and faculty feel comfortable voicing a single homogeneous opinion,” said Abrams, adding that no matter the subject, anyone on campus is always welcome to add their support to the accepted consensus. “Whether it’s a discussion of a national political issue or a concern here on campus, an open forum in which one argument is uniformly reinforced is crucial for maintaining the exceptional learning environment we have cultivated here.” Abrams told reporters that counseling resources were available for any student made uncomfortable by the viewpoint."
http://www.theonion.com/article/college-encourages-lively-exchange-of-i…
.....heaven forbid. If you think the facts on the likes of climate change are so simple they can be debated by the likes of us on a public blog you are stupider than I thought.
Now do is a favour and toddle off to one of those nut bar denial websites where you can wallow in your delusions.
Ha ha. Yes so simple. If only the models would match reality. The histogram sums up it up well.
https://curryja.files.wordpress.com/2016/04/slide14.png
https://landshape.files.wordpress.com/2015/06/climate_sensitivity5.png
Yep,, Peabody taking a dump.
But will they recover, like never before...like the price of bone headed China.
http://www.telegraph.co.uk/business/2016/04/13/chinas-leaders-are-blowi…
If ya drop China, it might break. If you believe China will never break, you will believe just about anything.
If you think it will melt before your very eyes, you ain't seen nothing yet.
If it is broke, patch it up, start all over again. But will it hold...water.?
A mine of information, beats all debt into a pulp. I think it is called Paper Mache.
Covers over the cracks....It used to be called money, now it is a figment of someones...imagination...and computer derived.
https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=10&cad=…
'Today’s Pudong district does look spectacular—–presumably a 21st century rendition of the glory of the Qing, the Ming, the Soong, the Tang and the Han.
But to conclude that would be to be deceived.The apparent prosperity is not that of a sustainable economic miracle; its the front street of the greatest Potemkin Village in world history.'
http://www.zerohedge.com/news/2016-04-12/new-middle-kingdom-concrete-an…
Foreign invasion of New Zealand sharemarket threatens boom
http://www.smh.com.au/business/markets/foreign-invasion-of-new-zealand-…
It's worse in NZ government stock - hard to get out of positions because the size market makers wait to clip the ticket.on hugely wide spreads. A bit of a shock to those used to 0 bps spreads in the UST markets. Just a matter of time before it's all gone to maintain a borrowed lifestyle- all that will remain is the debt and dividend servicing demand notices.
As fund manager Mark Williams deliberated from his London office where next to invest, the most remote stock market for him was just too good to pass up. That's worrying locals, 17,700 kilometres away in New Zealand.
LOL - he must be on the metro desk at the edge of the dealing room - I left my NZ stockbroking job in 1982 to try my luck with the US banks in London because it was just too small for more than a few insiders to make real money out of it.
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