Here's our summary of key economic events overnight with news Russia has a new brutal ploy in their invasion of Ukraine. It says civilians can flee, but only toward Russia, otherwise they will be bombed. Virtually no-one is taking up the 'offer'. The rush west is continuing despite the risks and threats.
Commodity prices keep on rising. Hard commodities like nickel and tin who no signs of topping out. Iron ore is on the move up again. Wheat is the same. Your guess about where consumer prices and inflation are headed are about as good (or bad) as what professional analysts can muster. The speed of change, and the pervasiveness of it, is together unprecedented. Some analysts are saying this is the time for central banks to step up and do their job by pushing back much more aggressively now.
There is certainly going to be much higher inflation. But it is hard to see any economic expansion in the near future. The result will likely be a long period of stagflation, at best (if we can avoid recession).
Yesterday we pointed out the sharply higher prices for food. Today we should highlight the sharply higher costs of fertiliser. They were on the rise before the Ukrainian invasion due to higher oil costs which are key inputs for manufacturing nitrogen-based fertilisers. But because Russia and Belarus are critical sources for much of those imports, the cost of fertiliser for the world's farmers are soaring to another level. Food crops will become very much more expensive no matter how farmers respond - if they keep adding fertiliser to maintain production, consumers will have to pay for those costs. If they reduce or eliminate fertilisers, the sharply lower supply will raise prices too. (H/T CA.) "Going to bed hungry" will sweep over the world's populations much quicker now.
Appreciate this coverage? Support us and go ad-free. Find out how.
(We are not supported by the Public Interest Journalism Fund, nor Google, nor Facebook's similar programs.)
Late yesterday, China reported quite strong export sales for the first two months of 2022 (they don't do those two months individually). Exports were up +16.3% and imports were up +15.5% from the same period a year ago, although to be fair, the year-ago base was softer than usual. Chinese coal and oil imports fell sharply in the period, helping swell the overall balance. But it is hard to see these trends continuing, especially if they decide they need significant new stimulus.
Impressively, their trade surplus swelled to +US$116 mln in the period, up from +US$97 bln for the same 2021 period. Trade with the booming US economy helped a lot (+US$60 bln and up +US$10 bln from a year ago). With Australia they ran a -US$10 bln deficit in the two months (down from -US$11 bln), with New Zealand a -US$1.8 bln deficit (up from -US$1.25 bln).
But we need to keep the trade with the US in perspective. As good as it might be for China, the +US$10 bln surplus rise represents just over 4 hours of annual American economic activity and unnoticeable by them.
Meanwhile, China's foreign exchange reserves slipped slightly, a surprise because they were expected to rise slightly. This was a small shift as well, -$8 bln in a US$3.2 tln holding. It also represents the equivalent of about 4 hours of annual Chinese economic activity, also unnoticeable by them. Chinese 'huge' foreign reserves represent about 70 days of economic activity. Five years ago there were holding 89 days worth in these reserves, so they are slowly being eroded.
Events have overtaken the mood in Germany, but we should note that in January, German retail sales were on the mend in an impressive way, up more than +10% from the same month a year ago. However, subsequent gains may be more to do with 'panic buying' in the face of the security concerns, rather than a healing economic outlook.
Updated Aussie data released yesterday were quite positive. Their services PMI rose to a level that indicates a sharp expansion in that sector. That is a nine month high, and a strong expansion in any country. Their job ad levels rose as well, and to a 14 year high. Despite this good data, investors are retreating in financial markets.
The UST 10yr yield opens today at 1.73% and up +1 bp from this time yesterday. The UST 2-10 rate curve starts today a little flatter at +23 bps. Their 1-5 curve is a little steeper at +64 bps and their 30 day-10yr curve is also steeper at +158 bps. The Australian ten year bond is up +5 bps at 2.16%. The China Govt ten year bond is unchanged at 2.85%. And the New Zealand Govt ten year is down -5 bps at 2.74%.
In New York, the S&P500 is down -2.1% and retreating in Monday afternoon trade on Wall Street. Stagflation fears are driving this market down. Overnight European markets were down that much in some, less in others. Yesterday, Tokyo ended -2.9% lower. Hon Kong was -3.9% lower. Shanghai was -3.2% lower as consequences bit them all hard. The ASX200 ended its Monday session down -1.0%. The NZX50 ended down -1.9%.
The price of gold starts today at US$1979/oz and up another +US$6/oz from this time yesterday. But it has been quite volatile in between, topping US$2000 briefly and then retracing.
And oil prices are higher today and by +US$3/bbl level. No retracing here. In the US they are now just under US$113.50/bbl. The international price is just on US$121/bbl. All this will flow through to pump prices so working from home if you can will be a strong incentive. Airfares are going to be trouble too.
The Kiwi dollar will open today -¼c lower at 68.3 USc. Against the Australian dollar we are at 93.2 AUc and firmer. Against the euro we at 62.8 euro cents and unchanged at this much higher level although it got a lot higher temporarily in between. That all means our TWI-5 starts today at just on 73.6 and little net change from this time yesterday.
The bitcoin price is again lower today, down -2.0% from this time yesterday to US$37,985. Volatility over the past 24 hours has been moderate at +/- 2.6%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
Daily exchange rates
Select chart tabs
115 Comments
That soil moisture map is getting a bit bright.
No rain for two weeks here. Production is currently fantastic but with no rain in our ten day forecast it's looking pretty dodgy. Still better than Ruskies jackbooting past our front door.
We've had no rain for a couple of weeks either, but humidity has been much higher than normal and we've had morning fog, so the grass has been booming and the stock are looking mighty, um, beefy. Never been so green this time of year. Even considered letting some stock onto the back yard to keep on top of the lawns since the mower is sliding sideways on the slopes due to the moisture.
Weeds in the cropping paddocks are also loving it, of course, and we're seeing less wasps but a lot more flies.
I enjoy the rural comments. Thanks.
Another day of sky high oil price. OPEC+ is not increasing oil production. Is Saudi an ally or a partner with Russia, who knows what goes on in high places.
It's in their favour to rally and then crash the oil market to prevent financiers from developing shale capacity. OPEC are now pro-cyclical.
But are they not creating an environment where the development of alternatives to their fossil fuels is accelerating? You could say they are sort of helping their own demise? It may be true that the higher the cost the more economic it is to extract the harder to get reserves, but that at best will only be a temporary reprieve?
There aren't really "alternatives to fossil fuels" in any great availability. there are more efficient and less direct ways to use fossil fuels, but as PDK points out if you are manufacturing stuff, there is ultimately a fossil fuel/extractive input buried in the background somewhere. We can't support the current population in our current lifestyles for much longer. Until there is a scientific breakthrough.. but what? cold fusion has been 10 years away for my entire life? low energy input PV panels, or ???
Pretty much agree. Population is not a popular discussion. A big problem is religion - all the religious books essentially say in the beginning; "Go forth and multiply" But none of them indicate that there are constraints, limits that should not be breached. I guess, if you believe in a higher power, there was an expectation that if and when we got to this stage that most of religion, what ever flavour, is just political BS and we would have evolved to live within environmental limitations. I don't see any sign of that happening much. Indeed some of the deeper entrenched versions are just digging in in ignorance (but a different kind)
SciFi authors like to dream of a human diaspora into the stars where our baser human instinct (multiplying) can continue without limit, but we have to get over ourselves enough to develop the technology to allow that first. Current events suggest that might be a little too hard.
"religious books essentially say in the beginning; "Go forth and multiply", When those religious texts were written, god still thought the world was flat.
And they had a better view than we do!
The rallying cry of microflora and cancer.
I would actually push back a bit on the idea that all we do is breed.
The sustainable number of births per woman is 2.1 (could even bring it down to 2.05 if you really wanted to be picky)
Fertility Rate - Our World in Data
Basically all of the developed world is actually below 2 and decreasing, South Korea is the worse at 1.08!
With increased education, work opportunities for woman and coupled with increased costs of living and childcare (along with the lost income) more popel are choosing not to have kids.
Even in NZ the average births per woman has dropped significantly, especially in NZ European and Asian ethnicities. Also notable is regions of general lower socioeconomic development tend to have more kids:
New Zealand’s birth rate lowest on record, deaths drop in 2020 | Stats NZ
The problem comes when each of those people has a higher quality of living which means the consumption of more resources per person on an energy basis.
Developed countries are going to run into a lot of issues in the coming decades and will rely on immigration to sustain themselves. Especially since the pension is a giant Ponzi scheme that relies on the tax take from the current working population to fund the pension for the growing wave of boomer retirees. And then in NZ's case, a large number of our young people emigrate for better work opportunities.
Agree, world population is not all that far from peaking and going into decline.
A number of projections have this happening in the next 50 years. Hardly exponential growth...
" sustainable rate" - the rate required to sustain the current population. Not the reproductive rate to save the planet and species. And that will need to be connected to consumption! But less is more!
The Lower Gulf countries desperately need to bolster their oil revenues by tens of billions to fund planned infrastructure projects that should help them diversify away from energy exports.
Saudi's Neom city development alone is estimated to cost around US$500 billion over its lifetime. Fun fact: the city is to be totally powered by renewables!
The majority don't realise that you need money and lots of it to be Green
The UN Security Council held an emergency meeting on ending the crisis on the very first day of the invasion. As expected, India and China abstained from the vote, but so did UAE.
So yes, it appears that Putin is in cahoots with other oil-rich autocracies. For all you know, they could even be discussing tactics on ongoing conflicts with neighbouring states.
Saudi Arabia has little to no spare capacity. They've recently been drawing down inventory to supplement their production and they're going to be exposed by this crisis.
The impacts of the Russian invasion will reverberate for some time. I fear a lot longer than they could have due to the EU and US effectively throwing Ukraine under a bus. The fear of an all out war has not avoided one, just delayed the inevitable. Putin put his nukes on the table, but so far has not shown any sign that we hear of other than bluster, to be willing to use them.
Over the years I have regularly heard criminals and bullies blame others for their actions ("Look what you made me do! This is your fault!") Putin is doing exactly that. The best and most effective response is to get in their face early and hard. The EU and the US have strongly avoided that. the consequences will be a lot worse and more expensive than they could have been.
I enjoyed him calling supplying small arms "acts of war" and warning the west about a No-Fly Zone.
Not only did Russia supply jets in Korea and Vietnam but they supplied the Russian pilots to fly them in combat. If NATO supplied jets and pilots to the Ukraine to enforce a no-fly zone they'd only be following Russian historic precedent.
They love this "direct conflicy leads to nuclear war" narrative when it suits them.
What would you consider as a sign that Putin is willing to use nukes?
Loading them to his launchers, deploying the mobile launchers.
What do you suggest they do?
Hit Russia hard. NATO/EU forces in large forces obliterate the Russian forces in Ukraine on it's border and in Belarus with overwhelming force. At the same time stand its nuclear force up with the aircraft and other tactical options set up and tell Putin that he personally is the target, that they will take out the upper echelons of the Russian armed forces and the Russian Government if there is any indication of a nuclear response from anywhere. Tell him that if he doesn't back off they will leave his Russia a wasteland with him buried in the middle of it. Go hard.
Anything else will just see Putin pushing harder and further. He doesn't care about his people, he doesn't care about morals or values. He only cares about his vision of 'Russia' whatever that his and his own view of himself as the saviour. Go hard, hit him where it hurts and send a message to him and every other tin pot tyrant with similar aspirations. So far the message is the opposite - the world will sit by and do bugger all while you take and do whatever you want! China is watching with great interest.
This is the same sort of jingoistic nonsense that the American right are known for, e.g. calling for the middle east to be turned into a "glass crater". Disappointing to see we have some people in this country with an equally poor handle on their emotions.
What would you do?
Insane. You need to seek help murray86.
What would you do?
If I was in a position of influence at NATO headquarters, I would supply arms of a nature to suit anti Russian guerilla warfare, and let the Ukrainians fight it out with the Russians in that manner. I am pretty sure enough Ukrainians would take up the offer. They are not a particularly nice bunch, as WW2 involvement, and their overthrowing of the democratically elected Russian leaning president showed. The Russian sapping guerilla war, which could last for years, would suit a lot of Western Industrial Military Complex people, and their politician Cronies.
Exactly, I'd say from a Western 'masters of war' perspective everything is going exactly according to plan. Perhaps even a bit better. Germany is rearming and Russia will be slowly bled dry. It's ruthless I know. I don't agree with it. I thought Ukraine should just let the lost territory go and promise to never join NATO.
Bit hard when Putin invaded from the North as well - you know, the other end of the country to the 'disputed territory'. And then when he didn't get a lightning result, it's become 'stop any chance of war originating from Ukraine against Russia'.
He was always going to invade no matter what Ukraine did. Or should they have just tried to look really really surprised when he took Kyiv anyway?
Not sure what you are going on about to be honest.
From our history you could also say we were not very nice people too. You're judging current Ukrainian generations on something none of them were alive for.
But having said that - that is an option that appears to be being done, arming the populace.
I have a family member, and a close friend who have both travelled through the Ukraine in the last ten years. Ukraine is not a nice, friendly, visitor welcoming bunch of people. They both felt on edge and insecure the whole time they were there. It could be living on a flat fertile plane, in between Moscow and Berlin for thousands of years does that to one's collective psyche!
But my point was that the equivalent of the previous Russo-Afghan excursion would suit more than a few people. With the extra benefit and profit of fiddling with world grain prices thrown in.
Interesting. Why do you think that is? Current generations would still have memories of the Soviet Union, and of their paranoia about the west.In addition to that they, since the collapse of the Soviet union their governments have been notably corrupt. Zelensky offered a pretty good hope for the country. Curiously he is turning out to be a pretty good national leader, but again only one man in an institution that is better known for its corruption (Russian influence?).
So less than a generation with a functioning liberal democracy. Will this invasion help or hinder Ukraine's liberation? I think hinder. I think Russia has set Ukraine back decades unless the EU steps up big time.
"Ukraine is not a nice, friendly, visitor welcoming bunch of people" I guess that happens to people when they've been under authoritarian tyranny for decades? Only close contacts are trusted. A wrong word to a stranger could have repercussions, such as an extended holiday in a salt mine. Ukraine was trying to lift itself out from under the control of the gangster regime over the border. A legacy of bitterness has been reinvigorated by friend Putin, just as Stalin's genocide in the country disappeared from living memory. https://en.wikipedia.org/wiki/Holodomor
There is a reason why Ukraine #122 is only a few places above Russia #126 on the Corruption Index (1 = least corrupt, 200 = most corrupt).
Remain in secret communication with Russia. Ultimately do what is in my best interests. Russia not being stopped by military force in Ukraine does not mean Putin will go on to conquer more of Europe. It appears that Ukraine is giving Russia a bloody nose and the war will bring great trouble domestically. It is likely to do the opposite of encouraging him.
I'd say everything is going according to plan from a Western perspective. There is no intention and never has been of engaging in direct military intervention in Ukraine. It' is quite unnecessary from a strategic point of view. There have been scores of wars going on all around the world and military intervention has not been seriously contemplated. This is no different.
You're talking appeasement. How did that work in 1939? Ukrainian resistance will and is only intensify his resolve and increase the amount of atrocities he is committing. Do you think that is acceptable at any level?
Putin has already demonstrated he will not stop.
Nothing wrong with appeasement in the right circumstances. So tired of this "it's appeasement!" nonsense.
Sucks when people call out your argument for what it is, which is proven ineffective policy against hostile neighbouring countries.
Why would you risk nuclear war when you are winning the long game?
It's not by any means a "proven ineffective policy" rather a policy used since the beginning of time.
Do you feel like you are winning the long game? Yes we have better economy and technologies, but we also have much to lose, and this is the reason we are trying to avoid conflict as much as we can, on another side, they are less developed and has less to lose, but they are brutal and opportunistic. When they see weakness, they will seize the opportunities by force to gain more power no matter what cost it is. So do you still think we are winning the long game?
Yes we are winning. It's the evolution of human consciousness. It's unstoppable...unless there is nuclear war.
As I've said, we have much to lose, they have less to lose. While we are avoiding nuclear war, they might want a nuclear war, hence Putin just threatened us with nuclear war. A dictator is megalomaniac, don't follow rules, has less to lose also has nuclear power, what do you think will happen? If it's not dealt with now, it has to be dealt in future. If we continue to follow appeasement policy and feed him resources through trade. We might lose our advantages in future.
Putin is seventy. He won't live forever.
who was that dude (i think he was German or Swiss) who flew his passenger jet into a mountain?
German Wings pilot. Actually co-pilot. He locked the captain out of the cockpit when he went to the toilet. Nutter!
Egyptians, Romans, Mayans.....all probably thought the same at their peak.
Tribalism is always closer than we think and its the opposite of the evolution of human consciousness - yet all around me I see people moving towards tribal type thinking.
It's just a temporary glitch.
Why would a limited nuclear war destroy the human consciousness? The total success of someone like Putin, to ultimately rule the world, is more likely to constrain that?
I'm thinking more of nuclear winter, a scenario as depicted in the movie Threads where even language breaks down. The expansion of human consciousness is reliant on advancing human technology and culture, primarily through the Internet. Things like more information leading to greater awareness. Like being aware of the 'lived experiences' of others and acting appropriately. We have only recently become 'awake' to this.
The people of Russia and China won't tolerate returning to a more barbaric consciousness or rather a lack of consciousness which is what evil really is.
Looking on the bright side, Threads also depicted population decline and the winter had a cooling effect on the planet. The earth wins, but people lose? Wolves excel.
Good thread - the viability of liberal democracy v totalitarian regimes. The problem I see here is human psychology. People with or in power seek to preserve, protect and entrench that power. Totalitarian regimes demonstrate that daily. In liberal democracies that is restrained to some degree, but we always see the politicians argue to entrench their terms. How can we achieve a benevolent autocracy? One that protects the rights and freedoms of the populace, while restricting the greed of the power hungry? Which pathway would be more fruitful for human enlightenment and evolution?
I have in the back of my mind as well that most major technological advancements have occurred in time of war or as a result of military spending. Good from bad?
Dr Strangelove was about a mad general and a president who kept his cool but failed in the end. In the real world though, Putin’s military have come up the hard way, on the battlefield. Afghanistan, Chechnya, Syria. They may be hardened against human casualties and mass destruction but they have nonetheless witnessed it. Most will have family of their own. Putin was a relatively modestly ranked KGB officer. He too will have witnessed misery but of the subversive application. Easy to imagine front line military today have as little regard for those sorts, than their WW2 counterparts had for commissars that were spread through the arms of the military. If Putin wants to push a nuclear button he might find his military are not seeing the same necessity and are a hell of a lot more conscious of the devastating consequences. My suggestion is that Mr Putin would be gone before he could get anywhere near a button.
I hope you are right, but it looks like they will sit tight as long as he, and they, profit from his posturing.
Russia is in a good place if nuclear war breaks out. The nice thing about having the largest country in the world (and sparely populated) is that even if you're hit, there's plenty of space left unaffected by radiation. Not so for many others, e.g. Europe, Asia.
No - if nukes are detonated in Europe the prevailing winds will blow the fallout west. West of Ukraine is Russia and China and a few of the 'Stan states. Virtually doing the proverbial in your own bed!
West?
Oops East - they're westerly winds!
Detail - east and south towards the equator. So the mid east would be impacted too.
Then we get the 2022 version of 'On the Beach' a few months later.....what a mess.
You may well be right. But I for one have no intention of submitting myself to test the theory!
If only bad people have a stick, bad things happen. If good and bad people both have sticks, there is more chance that bad things won't happen. Appeasing bad people has never worked.
Well, whatever we write will make no difference. My prediction is that there will be no NATO military intervention however things will work out okay eventually.
Personally I would do exactly what NATO are doing. It's not a good option but it's the least worst option.
And I would be working very hard on diplomacy, reaching out to China in a big way to try and influence Russia.
It's not working. China is watching and learning and again have already demonstrated they will not intervene at any level.
As I said twiddling our thumbs, which is effectively what the EU and NATO are doing will not result in anything good.
Unfortunately there's no quick or easy solution. This requires patience. Diplomacy, sanctions.
What you have advocated for could easily fire Putin up, escalate the situation, and potentially result in WW3.
It's very sad for Ukraine, of course.
I reckon the west could push a bit harder. Sure there are risks, but there are also risks from not doing enough.
I'm no expert but I don't see Putin starting a nuclear war over a no-fly zone in Ukraine.
If NATO makes it clear they won't attack Russian homeland and Russia doesn't attack NATO bases the escalation should be able to be contained.
It could be justified on the basis of protecting civilians from air bombardment.
I agree with murray86, we need to support this war and punish putin. He has declared war on all of us, not bombs and missiles but food and resources and refugees, an economic war that we will not be immune to. We cannot live with the nuclear sword of Damocles hanging over us.
You are more or less advocating for the next world war after 2 weeks of a skirmish with unknown outcomes. Putin could yet fall internally and this would save (Ukraine and) the world entering WW3 and a nuclear crisis.
murray those that 'know' Putin (i.e US intelligence types), know that he will nuke if what you described is unleashed on Russia, so they won't. Such is the deterrent of nuclear.
Exactly right. Both sides have a stick, so neither can use them. This theory has worked since the nineteen forties so far.
Yup. Only way to stand up to a bully is to punch his face through the back of his head .
The modern world of Sanctions is awesome. Here we go putting more Sanctions on one nation who is attacking another far far from our land.
What about putting Sanctions on a country which attacked our country in late 1700's, early 1800's. Did they not do things which can be called brutal? Here we are having free trade agreements with them. I am not complaining, just telling as it is.
So in time who knows, the same people will be shaking hands again together. And their yachts and jets will be free again. Their football teams will be getting money pumped in again.
But while it all happens, poor has to pay more for the basics and will get more poor. While the rich will get richer from this chaos because it's caused by then to benefit themselves.
But the average Joe like me will post comments here and some other will critique me for saying the truth because truth is harsh and it hurts their set mindset.
Makes no sense at all. The Russian attack on Ukraine is happening now. Sanctions are an attempt (futile in my view) to get them to stop and withdraw. The European diaspora to NZ is long past from a time when knowledge and understanding, not to mention cultures were very different from today. To draw such a comparison is nonsensical.
You call this the "truth" as if you are the arbiter of fact, but really if you can discern such perhaps you would call it your 'opinion' instead?
Romans did over the Celts. Saxons did over the Romans/Britons. Normans did over the Saxons. And the Nazis would have done over the lot of them if they could. That old cold group of the British Isles is hardly unique. If you want to study a far greater playing field of upheaval try both Poland & Ukraine or the Middle East. That is history like it or lump it, being going on ever since mankind arrived on two legs.
I think responding 200 years too late would not be considered timely enough to impact on the colonisation, which has already happened. Meanwhile, today's sanctions actually prevent the Russian government from getting their hands on money which they can spend on weapons to kill Ukrainian civilians tomorrow.
Not all of the yachts and jets will be reunited with their owners. Some countries are looking at siezing in a permanent fashion, and even using the proceeds of sales to fund Ukraine's war effort or humanitarian needs.
That is called stealing.
No my dude, it's called an 'asset seizure'. We have processes around that in NZ where things are proven to be from the proceeds of crime. Or are you here to tell me that's wrong too and that meth-cooks are working class heroes?
yeah im not sure that would hold water if the shoe was on the other foot
Like the oligarchs stole the state assets of everyday Russians you mean?
Sounds like standard behaviour of the "ruling" class since forever.
True, but the indecent haste of the asset strippng by ex communist hieracy, would make the most ardent capitalist envious.
"Just telling it like it is" = I am about to make an insane argument and anyone who challenges me on the relevance of stuff that happened before NZ even existed as a country to a conflict between a sovereign nation and a nuclear-capable belligerent neighbour in 2022 is just butthurt because "the truth hurts".
Your paymasters need better talking points.
"Going to bed hungry" will sweep over the world's populations much quicker now.
Lax Reserve Bank inflation policy driving inequality, imagine that.
And oil prices are higher today and by +US$3/bbl level. No retracing here.
If we don't get some easing we'll be heading for a recession this year. These increases just aren't sustainable given how reliant we are on cheap energy.
Still, plenty of time to get your vegetable garden going and catch your rainwater first. Not all doom and gloom.
Speaking of going to bed hungry, the ComCom investigation into the supermarket duopoly is due in a few minutes.
Live stream begins at 8:30am - https://www.stuff.co.nz/business/127979707/live-day-of-truth-arrives-fo…
ComCom is also a monopoly, they should be broken up into separate entities (Com and Com.)
The UST 2-10 rate curve starts today a little flatter at +23 bps
Less rate hike-y, more bad probabilities anyway. Yield curve flattening and eurodollar inversions. Just as the FOMC votes for its first rate hike of what's almost certain to be a short "cycle." https://alhambrapartners.com/2022/03/04/houston-we-have-an-oil-and-inventory-problem/
The American Empire self-destructs.
But nobody thought that it would happen this fast.
I feel like the idea 'no one thought it would happen this fast' looks the other way on the decade-plus of can-kicking in the wake of the GFC. Much of what we might see now could be argued as deferred bloodletting, given that the US didn't really change much and just went back to the same debt-fueled bonanza they always had - leveraging the future to pay for today, but just arguing that kids today can just do the same to their kids.
Europe can't take Blinken's bullying anymore. So far today, leaders of UK, Germany & Netherlands have openly told Blinken "Nyet" apropos his move to sanction Russia's energy exports! Interestingly, Boris Johnson most forceful. Europe in revolt that US is wrecking their economies! Link
Speaking of empires self-destructing. I found this interesting -
Gold is steadily trending upwards, Kiwisaver might be going the opposite direction.
Not if you have your KiwiSaver in gold mining stocks (GDX).
poor FHB seeing their home deposits going up in smoke. Will impact what they can spend on a property.
Ghost flights.
“Because of the reduced demand in January, we even would have canceled considerably more flights. But in winter, we will have to carry out 18,000 extra, unnecessary flights, just to secure our takeoff and landing rights,”
Ghost Flights Are Polluting the Skies Thanks to Omicron (gizmodo.com)
Throw in a long overdue fuel tax which this industry has so far avoided and I'd say bye bye to the cheap flights of yester year.
You understand this is an airport requirement not an airline one right?
Yep. We have an industry that has been subsidised like no other via no fuel taxes to the extent it just burns fuel off.
As there were no airlines lining up for the vacant slots, I would say this was a problem easily solved by a rational person changing policy. Instead we got an insight into the industries real attitude on mitigating their planet frying gases, outside PR greenwash and it goes something like, here's my middle finger.
Yes this was an article run a couple of weeks ago. Nonsensical, but a lot of American airlines and a few others around the world holding on to a past that may never come back. Those airlines would have been much better off to talk to each other and all just stop flying if they didn't have passengers. The airports would have come to the table very quickly to discuss options. When the dust has settled from omicron and the war, i think congestion will not be the same.
In the long run investing in airlines has been a fool's game. Airports now, that's where the long run investments have paid off.
Interesting how everyone's gone from being housing experts to covid experts and now to war experts...
Indeed:
Here's what the team at Deutsche Bank had to say which perfectly captures my vibe:
"The war in Ukraine has – similar to the COVID-19 crisis – once again turned economic forecasting into an extremely crude scenario exercise, where forecasts are largely driven by assumptions about variables, which are clearly outside the realm of economic analysis, and where even specialists are forced to frequently revise their assessments, given the new information they are analyzing day-by-day. This time the key “known unknowns” are, of course, the development of the war and the path of energy and commodity prices. The two are strongly correlated. The large price volatility in recent days seems to be more driven by market speculation based on the news flow related to the war, rather than changes in actual demand and supply, with the complete breakdown of Russian gas and oil deliveries being a distinct possibility." Link
Only polymaths post Internet comments. it's true, because you read it on the Internet.
Just a quick additional post to say analysts are pinning a mid-April date on a Russian defaults to start:
https://www.bloomberg.com/news/articles/2022-03-07/morgan-stanley-sees-…
MOSCOW, March 7. /TASS/. The Government of the Russian Federation has approved on Monday a list of foreign states and territories that commit unfriendly actions against Russia, its companies, and citizens.
The list includes the United States and Canada, the EU states, the UK (including Jersey, Anguilla, the British Virgin Islands, Gibraltar), Ukraine, Montenegro, Switzerland, Albania, Andorra, Iceland, Liechtenstein, Monaco, Norway, San Marino, North Macedonia, and also Japan, South Korea, Australia, Micronesia, New Zealand, Singapore, and Taiwan (considered a territory of China, but ruled by its own administration since 1949). Link
It would be a lot quicker and the list a lot shorter to list countries that are friendly to Russia.
Certainly a greater number of citizens in that short list.
Citizens that would leave, if they could.
Auckland Council CVs are up on the website.
It's amazing how small things escalate.
One minute PM won't talk to protestors, Nek minute world won't talk with Russia.
Talk about cancel culture on steroids. With some virtual signaling thrown in?
My teenagers call this ghosting, the younger Gen's hate this. But not sure the protesters knew this is what the PM was doing to them, not sure Putin knows this either.
But I imagine Adern can now see the outcome of that strategy in the latest Roy Morgan political poll.
Voters ghosting Labour.
Hmmmph, a couple of "Let them eat cake" moments from the PM this past 30 days.
Not impressed with her latest statement or ostrich moment... Her "team of 5 million" are hurting and she denies their pain! (Or team of 4.75 million minus those earning $100k/yr including MPs, CEOs, consultants, journos, govt bureaucrats, etc).
For certain the ones who've earned their pay and our respect these past two years and a quarter are essential workers (police, nurses, docs, pharmacists, couriers, logistics, etc).
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.