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A review of things you need to know before you go home on Wednesday; no rate changes again, lower farm sales, fines & scams, NZ classed as risky, satisfaction with IRD lower, swaps soft, NZD unchanged

A review of things you need to know before you go home on Wednesday; no rate changes again, lower farm sales, fines & scams, NZ classed as risky, satisfaction with IRD lower, swaps soft, NZD unchanged

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
None here either.

LOW SALES, LOWER PRICES
It's been a quiet spring so far for the rural property market, according to the latest farm sales figures from the Real Estate Institute of NZ. These show that the number of farms sold in September was down -8.2% compared to the same period of last year, while in the year to September -12.4% fewer farms were sold than in the previous 12 months. Nationally, there were only three sales of dairy farms in September our of total sales of 78 properties. (In 2016 there were 126 sold in September.). The other thing to note is that in Canterbury, average price/ha for dairy farm sales has fallen to just $24,100, the second-lowest ever in our tracking. Sales of lifestyle blocks were also lower, down -9% year-on-year on the same basis.

RECORD FTA FINE
Steel & Tube Holdings has been fined a record $1.9 mln for breaching the Fair Trading Act by making false and misleading representations about its steel mesh products which are used in construction to provide strength and stability in the event of an earthquake. This is the highest fine to date under the Fair Trading Act for a single company. The action was brought by the Commerce Commission. The Commission has carried out a series of investigations into steel mesh following a complaint in August 2015. Following its investigations: Fletcher Steel Limited was issued with a warning, United Steel Limited and Pacific Steel (NZ) Limited were issued with compliance advice, Timber King and NZ Steel Distributor were sentenced and fined $400,950 after pleading guilty to seven charges, Steel and Tube Holdings pleaded guilty to 24 charges and the sentencing decision is the one announced today, and 59 charges against Euro Corporation are before the Courts.

NEW SCAM INVOLVING NZ PMS
The FMA is warning that promotions involving bitcoin 'investments' using articles posted on social media about The New Zealand Treasury and/or current or former prime ministers investing in bitcoin are false.

FINAL DAYS
From 5 November 2018, travelers leaving New Zealand will no longer need to complete a passenger departure card.

RISKY
New Zealand is ranked as the second riskiest country in the world in a major international study released by Lloyd’s of London. The report looks at non-life under-insurance and insurance penetration data for 43 countries. It’s the second report of its kind, the first of which was published in 2012. Based on this, the insurance industry wants you to take our more comprehensive cover.

CGT BATTLELINES
With the loss of a key parliamentary seat in Australia, the battle for the next general election (probably in May 2019) has started there and with the opposition Labor Party likely to for the next government, the real estate industry is marshaling its campaign energy to get them to back off 'negative gearing' reform and a rise in the capital gains tax. A new study by Cadence Economics, found that if Labor’s policies were implemented there would be up to 42,000 fewer new dwellings being built across the country and up to 32,000 fewer full-time jobs. It said this translated in up to -AU$11.8 bln less building and up to AU$210 mln in less renovation building activity per year. The study was commissioned by the Australian Master Builders Association. The Housing Industry Association has also come out swinging.

LOWER STANDARDS
Overall satisfaction with Inland Revenue interactions among Chartered Accountants has fallen -6% on last year and now sits at its lowest since 2011, the latest satisfaction with IR survey released today reveals. The accountants say this falloff in satisfaction is a worrying trend because the IRD is planning to do more direct interaction with individual taxpayers in 2019.

KEY RISK
In Australia, their new Treasury secretary has said tighter credit conditions represent a "key risk" to the economy, alongside the drought, but he played down the impact of falling house prices, suggesting a "moderation" in Sydney and Melbourne had been needed. He said the tightening of credit conditions could constrain consumption and investment growth. This tightening is a direct result of the Hayne inquiry.

SWAP RATES SOFT
Swap rates are down -1 bp across the curve today, giving up yesterday's minor gains. The UST 10yr yield is lower at 3.16%. The UST 2-10 curve is now just on +27 bps, another slip. Benchmark bond rates are slipping faster. The Aussie Govt 10yr is at 2.67% (down -3 bps), the China Govt 10yr is at 3.61% (down -4 bps), while the NZ Govt 10 yr is at 2.67%, and down -2 bps. The 90 day bank bill rate is unchanged at 1.90%.

BITCOIN UNCHANGED
The bitcoin price is now at US$6,441, and virtually the same as this time yesterday.

NZD LITTLE CHANGED
The NZD is identical to where it was yesterday at 65.5 USc. On the cross rates we marginally softer at 92.5 AUc, and 57.1 euro cents. That puts the TWI-5 at just over 69.8.

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29 Comments

Nic, it's already 4:17 you missed the first comment...

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Here you go Yvil

New Zealand's unsold housing stock (realestate.co.nz) continued its rapid climb today to 35,961 from 35,713 yesterday,..a rise of 0.7% in 24 hours. Could the removal of the marginal buyer be slowing the pace of sales? Will we see inventories sky rocket as sellers hit 'denial; and the reality strikes that that dubious 3% injection of cash to the housing market actually goes a long way as it flows through the system to help out dozens of subsequent transactions.
Auckland unsold housing stock (real estate,co,nz) has risen to 13,497 from 13,440 yesterday - a rise of 0.4% in 24 hours.

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What happened last year? Is some of this seasonal?

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Hi mfd.

The reality is that there weren't very many people/ if any actually questioning the Real estate industry/bank industry bollocks last year, everyone was still blindly walking into the bubble...now we've got a few more people asking sensible questions.. Asking questions rather than being told 'It always goes up' is an essential part of balanced decision making - otherwise we're just being spoon fed data to support bank profits and speculation
Here's DFA's submission to the Royal Commission in Australia... (NB Westpac and ANZ shares sitting at 2 year lows this week)

https://www.youtube.com/watch?v=eE2XQ4BSsLk

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I disagree, there was still a debate on here whether prices were heading up or down. What we have now is a much more shrill debate characterised by cherry picked data, or data completely lacking context, on both sides.

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The national numbers (regardless of makeup) currently 36,025 cf 35,097 15th Oct and cf 33,734 30th Sept.

No idea of historical performance comparisons – are these numbers telling us something or is it simply BAU for this time of year?

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Hi Custard

Barfoot and Thompson are now introducing a new team song for morning meetings and to run during the Auctions

https://www.youtube.com/watch?v=eE2XQ4BSsLk

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And a busy night at realestate.co.nz to be sure – Auckland listings (again, regardless of makeup) now at 13,556 – you might indeed have a shot at that life changing $10 winner takes all bet recently thrown down.

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Hi Custard

I reckon 'Hardly' will be shitting himself already..... I'll take it off him in beer at the 'interest.co.nz doomers and gloomers Christmas Party'... Where are we going this year? things could be tight so maybe we should downgrade a bit this year?

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Do you have a reason for trolling?

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I think he was missing me and is now resorting to pre-emptive trolling? Still waiting to have something worth reading from him though!

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Something else to keep you busy

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…

Auckland is not all that great.. mainly because of the damn HOUSE price

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Better off cranking up the diesel genset today? We are getting more third world by the day.

https://www.electricityinfo.co.nz/prices

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Probably be a few flick customers cooking tea on the bbq tonight .

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Yeah, @ $10 per kWh they’re better off spending that $30 it’s going to cost to cook dinner on Dominos.

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To eat in the dark after their cold shower.

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Stop mocking them.

They can't afford to charge their phone/laptop to come on here and defend themselves.

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It's interesting how a country smaller than ours in land area and similar in population size is attracting foreign investment in specialized automotive manufacturing.

https://www.cnbc.com/2018/10/23/dyson-picks-singapore-for-its-new-elect…

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Low taxes. Something that New Zealanders will never vote for.

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Ideally, drop company (and personal) income tax to a significantly lower level (especially company tax) and increase land tax (the least bad tax). But yes, unfortunately New Zealanders aren't generally going to vote for that even if it would result in increased productivity and wealth, ultimately.

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Even if taxes weren’t an issue, access to skilled workers in NZ is a nightmare.
And why wouldn’t it be? The starting salary for a pre-school teachers, software engineer and bus driver are nearly the same in Auckland. Leave it on us to take the incentive out of higher education.

https://www.newshub.co.nz/home/new-zealand/2018/04/what-do-bus-drivers-…
https://www.payscale.com/research/NZ/Job=Graduate_Software_Engineer/Sal…
https://www.payscale.com/research/NZ/Job=Preschool_Teacher%2c_(but_not_…

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Singapore is pretty unique though and it has a significant locational advantage. Interesting choice all the same. James Dyson already has 1000 + staff there apparently.
https://www.telegraph.co.uk/business/2018/10/23/dyson-confirms-electric…

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“From 5 November 2018, travelers leaving New Zealand will no longer need to complete a passenger departure card.”

Quite happy to see the demise of that anachronism – as I am sure many others will be judging by the amount of flapping around normally going on just before entering Auckland Airport’s departure area.

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This Stock Market Is “Gradually” Rotting Under the Covers
https://wolfstreet.com/2018/10/23/stock-market-rotting-under-covers-rus…

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The FAANGS may well become the 'iron pyrite' of the next stock market crash.

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I hope so, and if you could just have them fall over in the next fortnight my short positions will be rather lucrative.

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Let me see what I can do! To be fair I've got to buy a couple of them back at some point, but not in any hurry.

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You may not need to do much.. Amazon, Google, Intel, Microsoft, Tesla, Boeing all have Earning reports this week. A few too many missed targets and things will get nasty.

Amazon, Intel and Google all report after the closing bell on Thursday, if they all miss earnings it'll be a bloodbath at the opening bell Friday.

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