Here's our summary of key economic events overnight that affect New Zealand, with news stress is driving protests in countries as diverse as the Netherlands and China.
But first, there was a US Treasury 3 year bond auction earlier today delivering higher yields. It was very well supported delivering a median yield of 3.04%, up from 2.87% at the prior equivalent event a month ago.
In the US we should also note that now more than 5% of new car sales are electric, which is considered a tipping point from where mass adoption of EVs will rise fast from here. (In New Zealand we are at about 3%.)
More electric demand is problematic for some states there. Demand due to summer heat alone is drawing warnings in Texas that they face blackouts again this year.
Wall Street is getting ready for their Q2 earnings reports and expectations are low for what is to come. Overall, earnings growth of +4.3% is anticipated for this upcoming set, the lowest gains since 2020. Big banks and other financial companies will dominate the early part of the scheduled releases later this week. PepsiCo will report tomorrow and Delta Air Lines on Thursday, NZT. They start a flood of releases.
In Japan, machinery order data for May was weak, but no weaker than expected for that month. They fell -5.6% in May from April, posting their first drop in three months and nearly matching forecasts for a -5.5% contraction. But they were up +7.4% from year ago levels which was better than expected. Analysts suggested that Japanese firms could be delaying spending due to rising energy and raw material prices that have been aggravated by soaring import costs due to a weakening yen.
The arguably more important Japanese machine tool order data for June came in a very strong +17% higher than a year ago, maintaining the same strong level as for May.
China is successfully pumping bank debt out the door is a rather spectacular way. In June, new yuan loans increased by ¥2.81 tln (+NZ$0.7 tln), a year-on-year increase of +24% taking their total bank debt to ¥205 tln (NZ$50 tln) or 173% of annual economic activity. For perspective, the same ratio in New Zealand is 148% and for the US is just 70%.
China isn't shaking its pandemic risks and new lockdowns seem inevitable, keeping supply chain troubles bubbling away.
Meanwhile, China has a new and explosive bank-run risk. A large crowd of angry Chinese bank depositors faced off with police on Sunday, some roughed up as they were taken away, in a case that has drawn attention because of earlier attempts to use a COVID-19 tracking app to prevent them from mobilising. Hundreds of people held up banners and chanted slogans on the steps of the branch of China's central bank in the city of Zhengzhou, Henan Province, about 620 km southwest of Beijing. Video taken by a protester shows plainclothes security teams being pelted with water bottles and other objects as they charge the crowd. The protesters are among thousands of customers who opened accounts at six rural banks in Henan and neighbouring Anhui Province that offered higher interest rates. They later found they could not withdraw their funds after media reports that the head of the banks' parent company was on the run and wanted for financial crimes. This is the type of bank run by depositors that Beijing fears.
In Holland demonstrations of a different nature where "huge protests" have swept the country triggered by the introduction of laws designed to cut nitrogen and ammonia emissions by -50% by 2030, and by -75% in protected nature reserves known as Natura 2000 areas. The latest demonstrations were sparked by a government announcement in June suggesting some farm closures were inevitable when they released a detailed map showing which areas needed reductions from -12% to -95%.
And we should also note that foot & mouth cattle disease has broken out in Indonesia, and travelers from Bali especially are at risk of bringing it back. The risk is much higher for Australia of course, but it is not trivial for us either.
The UST 10yr yield starts today back down at 2.99% and an -9 bps fall from yesterday. The UST 2-10 rate curve has stayed negative, now at -7 bps. Their 1-5 curve is lower at +7 bps. Their 30 day-10yr curve is flatter at +144 bps. The Australian ten year bond is -7 bps lower at 3.48%. The China Govt ten year bond is down -2 bps at 2.84%. However the New Zealand Govt ten year will start today also unchanged at 3.64%. A week ago we were at 3.71% so a -7 bps retreat since then.
Wall Street has opened its Monday trade with the S&P500 down -0.8%. Overnight, European markets were all lower, especially Frankfurt. London ended flat. Yesterday, Tokyo ended its Monday session up +1.1%. Hong Kong had a bad day, down -2.8% and Shanghai was down -1.3%. The ASX200 ended down -1.1% and the NZX50 was down -0.6%.
The price of gold will open today at US$1736/oz which is -US$7 lower than this time yesterday.
And oil prices have moved back down -US$1 to just under US$101.50/bbl in the US, while the international Brent price is still just over US$105/bbl.
The Kiwi dollar will open today down more than -½c from this time yesterday at 61.3 USc. Against the Australian dollar we are +½c firmer at 90.8 AUc. Against the euro we are unchanged at 60.8 euro cents. That means our TWI-5 starts today at just on 70.4 and a minor -20 bps lower.
The bitcoin price has slipped fractionally since this time yesterday and is now at US$20,595 and down +1.4%. Volatility over the past 24 hours has been moderate at +/-2.2%.
Due to staff availability, there will be no video summary today.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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143 Comments
https://www.resilience.org/stories/2022-07-11/city-of-the-dead-part-two/
'If global governments were alive to the nature of the climate, energy and water emergencies upon us, they’d be frantically busy planning how to sensibly and humanely repopulate the countryside and depopulate the cities, how to reform access to land fairly, how to give people skills in renewable horticulture, construction and forestry, and a thousand other things. Sadly they’re not.'
Yes that's right the reason humanity has urbanised is all due the to the rich elites desire to control the plebs.
（。々°）
Rome wasn’t built in a day. All roads lead to Rome. When in Rome do as the Romans. Been going on for quite a while.
They'd never been Appia
then they collapsed.
https://colosseum.info/after-the-fall/
It's why I wear t-shirts.
good read, tks. How are the mighty fallen and the weapons of war perished.
Humanity urbanized as fossil fuel consumption (energy) increased.
Western government actions are really just driven by the need to get reelected every 4 years..
Climate change will thus be seriously prioritised only when we all actually see the water start to rise to the windows of our apartment blocks and shops run out of our favorite food or tanks in our streets
Unfortunately it may then be a bit late to save the human race... we will be consigned to become another forgotton blip in the history of the universe lol.
It may not get to that - read the Silo series (Wool, Shift, Dust)
OK, if that is the reason for the Western Govts. behaviour, what is the reason for say countries like China and Russia that don't have to worry about elections every 3 to 5 years?
Just revolutions every <100 years
So the length of the election cycle has no bearing on our response to climate change then?
Humans will survive. The knowledge we have gained over the last 100k years will survive.
The current levels of Population will not.
Either we adapt, or the planet and our societal systems will force us to align with available resources.
The left never seem to acknowledge that the population size must decrease......
How quickly?
The so called right are the one's banning abortion in USA or was that just fake news.
See the water start to rise to the windows of our apartment blocks. Must be listening to Al Gore. Sea level rises are minimal and have actually been falling in Juneau, Helsinki and Stockholm. Did you ever stop to think land rises and falls and sea levels are pretty much constant. Of course maybe you are anticipating a tsunami that has no connection to the global climate system or the 'experts' that claim twenty foot sea level rises.
Did you ever stop to think land rises and falls and sea levels are pretty much constant
I heard they have these things called 'satellites' that can measure sea level changes. I am skeptical about the validity though as I cannot work out how satellites can 'orbit' the earth given it's actually a flat plane rather than an irregularly shaped ellipsoid.
Hey sorry. I just take the smart scientists most popular theory as close to a fact. I am nowhere near smart enough nor have enough free time to worry (too much fam time and surfing lol. If sea levels arent rising and climate change isnt real then all is good anyway..
Re the chinese and russian governments.. they are elitist dictatorships. If anyine survives it will be the bosses there. Besides (because they dont worry about elections and hate the west) their strategies are longer term and built around global domination (which seems to be working very well as they are choking our economies as a result of their last 10 to 20 years of hard work getting the west to rely on them for energy, food, supply chains, medicines and so on). once they finish that offthen they can simply order everyone onto bikes and tell us peasants to turn off the heaters.
Scandinavia is rising due to the immense weight of the ice on the land in the last ice age. Since the ice melt the land is rising gradually.
Don't city dwellers have a significantly lower carbon footprint than country folk? For example when I need to buy food I can walk to the local dairy or supermarket compared to driving 100km.
The food isn't grown in the shop.
Correct.
A depopulation of cities means a return to a significantly less efficient subsistence way of living. It is something that could only be achieved through direct measures of population control. Something PDK constantly argues for.
Right now. Today. We are living far beyond sustainable. We are not even close to sustainable.
We cannot maintain our current population and lifestyle experiences at scale In the long term (20 to 100 years). Not without massive structural and behaviour changes (which some political groups are actively fighting ie trump and act).
If you were being truly objective... Then:
1) from a geological perspective, we have already started a mass extinction event.
2) population control is an obvious way to limit harmful effects of our in-ballance with the planet, at least until synergy is achieved. What's wrong with 2x kids from now on?
3) once we hit our limits (soon if not there already) the forces and system constraints, physical, monetary, social etc will force us to slow or reverse population anyway. Regardless of your sense of self importance and 'human right' to reproduce at will.
Look at nzs current reproduction rates. We've already hit a wall. Who can afford kids when two jobs are needed to deal with high costs of housing.. Petrol.. Etc?
We are animals, like any other animal group when food is exhausted the population will decline.
Population control is an obvious way for people to forcibly implement their will on others. That's the only 'obvious' thing about it.
It takes a genuinely righteous, arrogant, narcissistic, and authoritarian person to believe that their will and ideology should determine the most fundamental of choices - those of reproduction and location.
I'm not saying anything about our current trajectory. I'm saying their are despicable people out there who genuinely believe that to control the natural biological outcomes of selection is the way to better it.
We should be incentivising behaviours, not enforcing them.
Fair points and recognise a historical component Nymad.
But let's discuss the current trajectory. How would you address climate change?
Good to see you have moved a little, but remember it was folk like you, who led us here.
Malthus was 100% correct, it was you-types who belittled, obfuscated, silenced.
Now you're reduced to that pathetic argument? Think you've got your post and propter a-about-f. Spent too much time in ideological hoc, methinks.
Somehow, the pieces have to be picked up. Thanks to the neoliberal morons we've had to put up with since '84 in NZ, we are decades behind where we could have been.
And some of us will write the histories......
The self anointed messiah, himself.
It wasn't types 'like me' who belittled Malthus. It was types like anyone. The unique thing about Malthuis is that he has been criticised from almost every ideological perspective. Not just the ones you don't understand.
Shoot the messenger 101. Always the sign of a weak argument.
I would never have bothered - but saw the need so I stepped into the space. End story. It always boils down to humans, who care enough, actually doing something.
As I said, you've hocked your posts and you propters.
'Shoot the Messenger', haha, that's a bit hypocritical!
You've done it above, and below.
The Warriors rugby league team wish they had supporters like Malthus does .. 200 years of losing , of utter failure ... and yet the true believers maintain the faith ... steadfastly waiting , hoping for him to be proven correct ... waiting for that ever elusive " win " ...
Even if you're a fool, you should be able to understand depletion.
... geez dude , lighten up .. this isn't Facebook ..
Whether or not you believe the population needs to reduce, it is forecast to do so dramatically. By the second half of the century countries will be fighting over immigrants rather than chasing them away.
... exactly ... only a handful of countries will have increasing populations after 2050 . . India ... Nigeria ... pretty much everyone else will have rapid depopulation ... it isn't the birthrate which is driving the current world population increase , it's the longevity factor ... we're pegging out later ...
The USA has seen declining life expectancy since 2014. Big Pharma is taking care of that.
Hardly and GBH - do you know/understand the mechanism that will drive this? I don't disagree, but am sceptical about the forecast. What will cause or drive it?
... yes Murray : the mechanism is equal rights , freedom of education for females ... wherever girls/ladies get their deserved equality with males , birth rates plummet .... easy peasy ...
Which if the idiot males in their lives should have given them in the first place (it should never have been a male prerogative to 'give'), wouldn't be an issue but some still aspire to be mothers? Still not sure I agree but hope so.
Just goes to show how harmful ideology and religion really is. Used everywhere to deny others equal rights by idiots and morons.
Haha brilliant.
Please tell us you're 'taking the piss' JJ.
Funnily enough it's quicker for me to walk to the local shops from my toy farm than it is for many hundreds of households in my local town.
Most country folk I know don't make trips into town just for one thing, they combine several visits into one so they're not wasting time and fuel.
Powerdownkiwi. I am coming round to your way of thinking, chatting to Scarfie who is staying here in a few days time.....
Its not climate change thats going to get us, it's running out of the cheap and underpriced fossil fuel impulse. Sure we are annoyed that diesel is $3 a L right now, imagine it at $10 or $20. Fair to say neither party see's whats coming.
I've been sternly talked to here and elsewhere for saying the climate change debate is complete and utter bollocks and misses the point, it's currently all about mitigation. In Reality there is no mitigation, finite planet and infinite use does not compute.
I tend to agree - but I've challenged PDK on his perspective too as he doesn't press the over population issue hard enough. Energy need/consumption is a function total population, and we can delay or defer the issue a little for a while by going 'green' to sustainable sources (but I think we may even be past that point now too), but they are nowhere near enough to produce the outcome needed. Far too many people everywhere is the problem.
Going green is not sustainable (expensive, unreliable). The fossil fuel industry is the world leader at producing cheap, plentiful, reliable energy giving us a more livable climate and greater environmental quality.
We are not running out of fossil fuels, we keep running into them.
Nuclear power fixes this.
Dick M - BULLSHIT. Prima facie bullshit.
Fossilised sunlight takes so long to cook, that it's finite on any human timescale. As is the planet containing it. So if you ramp into it, you are depleting the resource. There is no argument about that.
If you increasing that ramping exponentially, you will indeed deplete the resource faster, than if you didn't. There is no argument about that.
Exponential growth of extraction of a finite resource, gives us the Hubbert analysis - there is no argument about that.
You can force extraction-rates beyond a Hubbert-curve projection, by bringing later production forward. Obviously, the later drop-off gets steeper, the more you do that. There can be no argument about that.
And you can know whether we have scratched the surface of seriously depleted the stock - when the better options have all been burnt already and we're down to ever-energy-hungrier options like fracturing rock ....
Seems to be a morning of post/propter conflating.
'No argument about that' you seem to think your science is settled. The more an 'expert' learns the more he should realize, he knows very little.
How do you know fossil fuels are a finite resource? Could nature be producing ever more at an accelerating rate under the earth's surface. We don't know. Science is about questioning science, not 'no argument about that'.
You've just invalidated yourself. Before someone posts such a posit, they should do some reading. How fossil fuels are formed, is a goodly thing to know. When they were formed, is another.
And when you get down to facts, no, you've gotten to the end and that what you are left with. Have you any basis - any? - for such a claim re oil? You weren't camping-out on the Parliament lawn a wee while back, were you? There was a bit of that, there....
Reading or indoctrination? Get down to facts? Have you any basis that fossil fuels that are unlimited will not support our growing world population? Science is questioning science, as the campers on the parliament lawn were rightfully expressing for the benefit of NZ.
I don't need to read, I observe. And trust me the USA has plenty of fossil fuels to last them a lifetime. And more (lots more). So adapt. Fossil fuels are the future, are abundant, increase our standard of living, our longevity and a better quality of life. That is my fact!
".....giving us a more livable climate and greater environmental quality" Are you serious or taking the piss?
I agree that "Green" as currently presented is unsustainable, and even the Green's are not smart enough to realise this and present an economically viable plan of options. I see nuclear as the only possible option available through current technology.
nuclear power possibly producing hydrogen for vehicles....... ?
Nuclear power is not the solution. It cannot be ramped up to the scale required.
The only solution is to drastically reduce the amount of energy we use (for us high users it will be very very severe) and keep it at those levels.
And there we return to the point of population size. It would be virtually impossible to deny most if not all people on the planet energy. What you are essentially saying is Governments (or someone) start rationing energy. But the problem is the rich and powerful will find ways around it, and as Nymad pointed out leads to population controls on a basis that would not be tolerated by most. Ultimately though that is going to happen naturally, not by decree. no our cultures and lifestyles demand that energy remains available, and that is not going to change anytime soon unless some significant catastrophe drives it. Mssrs Putin and Xi might oblige there.
I think the nuclear power issue needs to be better debated though. Current technology levels offer a promise of a partial solution, but yes scale is an issue. Still that can be addressed.
You only need to push population control by using economic carrots and sticks, as shown by Singapore/China. While the 1 child policy existed in China, it didn't mean you could only have 1 child, what it meant was that the second child did not have the state support that the first child got, plus you get a fine (I know, my wife has 2 siblings) and some ongoing hassles but they were mainly due to the rather stupid hukou system. While it created some adverse affects (desire for male child meant lots of abortions of female fetus'), it had the desired effect of stopping lots of mouths to feed.
If you look at the stats, south Asia and Africa are the only populations that are going to have issues and could be convinced to put in similar controls. However even without government carrot/sticks, the biggest thing you can do to slow down population growth is to educate young women. That has been shown time and again to have the greatest effect at slowing down population growth. As Western countries, this is something we can help with.
Scale can't be addressed for number of reasons explained here:
https://www.thegreatsimplification.com/episode/19-simon-michaux
Just to take one reason:
"Nuclear energy must increase by more than 10% each year from 2010 to 2050 to meet all future energy demands and replace fossil fuels, but this is an unsustainable prospect. According to a new report such a large growth rate will require a major improvement in nuclear power efficiency otherwise each new power plant will simply cannibalize the energy produced by earlier nuclear power plants."
https://www.sciencedaily.com/releases/2008/03/080304100413.htm
The scale required for nuclear to be viable is staggering. We literally need to open one every week equivalent to the worlds largest starting from about 2 years ago for the next 30 years to replace fossil fuels with nuclear. However there are only 51 in the delivery pipeline for the next 5 years, though up to 300 planned for the next 20/30, it's still well short. If we can also go large with renewables we still have a significant drop in energy consumption required, so let's hope we can get some serious efficiencies going.
And if some of the sources i have read are right, it takes around 10 years to build a reactor? The new modular ones might be a bit better, but time is against us too.
Dead set serious. We don't need an option, we have it - fossil fuels. Nuclear will be awesome, bring it on.
Utterly laughable, will be opinions like this that seal humanities fate. The fossil fuel industry doesn't produce energy, it extracts stored energy that is quickly getting less and less profitable to extract (see EROI), refines it into usable energy and delivers it. And the use of it is clearly having environmental effects as reported by every reputable science based organisation studying climate in the world.
But yeah, the world is flat and all that.
The fossil fuel industry doesn't produce energy? What will seal humanities fate is not consuming fossil fuels. Environmental effects of increased fossil fuel consumption decrease, with increased fossil fuel consumption. Ya got it backwards. What will seal humanities fate is a lack of energy. Did you ever consider that the world is flat? Reputable science is questioning reputable science.
What’s the carbon footprint of childcare….seventy five car trips to drop off and seventy five trips to collect times two hundred fifty days at your typical center
Most daycares have a very local catchment, many not working will walk for pickup /drop off. Many that drive are driving to get to work, not because of daycare
huh? what logic is this? I'm going to die anyway so what's the point of staying healthy.
They want us all to live in a rabbit hutch and watch virtual reality all day. Any wonder the people are getting restless.
I can confirm we're definitely not lacking for water in the paddocks this morning. Free to pick up, BYO tanker. Please.
Waitoki is very wet, water pooled everywhere......
Holland wants to cut Nitrogen emissions? I am confused, I thought plants need nitrogen to grow. And CO2?
A few in the government want to cut emissions, with the guy in charge supposedly having a conflict on interest. The Dutch are quite enthusiastic about not doing this.
Yes they do. But excessive use leads to a build up of nitrates in the ground water. Some areas are just not suitable for intensive farming, like the Canterbury plains. Porous stony soils. Toxic water table, rivers choked with algae and didymo. Go dairy!
I believe in Holland the problem is not only nitrates in water, but NO2 and ammonia in the air.
While we're never going to keep the planet pristine while feeding 8 billion people, I think in some places environmental constraints have been far exceeded and the activity needs to be reduced or mitigated. There's funding available for the Dutch farmers to transition out, not sure if it's at realistic levels.
They're subsidised to about 19% of revenue, aren't they, if they're in line with the EU in general.
You're clearly one smart cookie, so maybe you can help me out, if plants need water to grow, then why is flooding considered a natural disaster rather than a fantastic boon for farmers???
Depends on your outlook.
- Many places on earth rely on silt from floodwaters to add nutrients to the existing soil.
- Some natural ecosystems are totally reliant on this sort of flooding (The Pantanal)
- Rice/cranberry farmers deliberately flood their paddocks.
And there are a lot of essential nutrients in beer so I guess I can drink myself super healthy.
Because water logged soils are depleted in oxygen. Unless plants are adapted to live in water, they tend to die when flooded. Root crops rot in the ground and huge amounts of top soil are washed off the paddocks and into drains and rivers. Also, cows and sheep prefer to walk rather than swim, they also struggle to graze underwater!
Sounds like it's possible to have too much of a good thing, then.
Yes, I'm not sure why the maths was difficult in this one. Even for humans, too much water is just as bad as too little. There is a Goldilocks zone.
And why are they shutting down farms now, when there's supposedly a global food shortage?
Because science .....
Two weeks to flatten the curve.
The left / greens are rarely totally honest with their agenda, if food exporting countries farm in a sustainable way and only produce enough food for themselves, the net food importers will starve... sure the planet will be a touch less hot, but billions will starve. running out of cheap fossil based fuels is going to cause the same issues. It will force sustainable.
Is it politically easier to crush a small group of the population ( farmers ) rather deal with the bigger issue of fossil fuel usage or is their just another political agenda we not seeing ?
Farmers will get crushed anyway - whether they use strategy or hubris to lessen the weight is up to them - how are those input costs going?
Input costs are massive, but will lead to less food produced so not sure they only ones to to be crushed
The Dutch are working on all aspects of their Greenhouse footprint. They have a lot to lose in a "do nothing" scenario i.e. their place on a map.
Every reliable poll of European newsrooms from Germany to the Netherlands show that climate change is a much more important topic for journalists than it is for ordinary people. It's not that average citizens don't care about climate change, but that they have the common sense to know that destroying their farm so the government's emission goals can be met in 2030 instead of 2035 will not change the planet's climate.
https://www.newsweek.com/popular-uprising-against-elites-has-gone-global-opinion-1722653
The global war on farming. I hear Sri Lanka is nice at this time of the year.
"The Netherlands is the world's second largest agricultural exporter after the United States, making the country of barely 17 million inhabitants a food superpower. Given global food shortages and rising prices, the role of Dutch farmers in the global food chain has never been more important. But if you thought the Dutch government was going to take that into account and ensure that people can put food on the table, you would be wrong; when offered the choice between food security and acting against "climate change," the Dutch government decided to pursue the latter.
What is particularly frustrating is that the government is fully aware that what it is asking farmers to do will drive many of them out of existence. In fact, the government originally planned to move at a slower pace—until a lawsuit brought by environmental groups in 2019 forced an acceleration of the timetable.
The reaction by members of the agricultural sector has been massive and ongoing since 2019, but the onset of the COVID-19 pandemic allowed the government of Prime Minister Mark Rutte to ban protests in 2020 and 2021. With the reignited demonstrations this year, the authorities have also switched to a more aggressive approach. There have been arrests and even warning shots fired by police at farmers, one almost killing a 16-year-old protestor.
Yet the sympathies of the Dutch are not with their government; they are solidly with their farmers."
https://www.newsweek.com/popular-uprising-against-elites-has-gone-globa…
"In Sri Lanka, Organic Farming Went Catastrophically Wrong
A nationwide experiment is abandoned after producing only misery."
https://foreignpolicy.com/2022/03/05/sri-lanka-organic-farming-crisis/
Sri Lanka is a great case study for what goes disastrously wrong when governmental ideology crushes science & reality ...
... not that that sort of thing ever happens here in A/NZ .... ahem , coff coff ....
It's actually a good case as well for what happens when the Haber process is no longer sustainable because the input costs of oil and energy are too high. What happens when the natural gas stops flowing?
Yes of course people and plants need nutrients, but it is more about how the nutrients are being used.
There is not as much correlation between the amount of nitrogen used and the amount of growth achieved as you would expect, ie some areas need very little if any extra nitrogen and yet do better than other areas that get a lot.
The main reason is different soils have different abilities to uptake the nitrogen they are given, so much of the nitrogen is wasted and ends up as excess in a natural system that would normally be in equilibrium and therefore end up polluting waterways etc.
There are a number of natural and biotech applications that can greatly reduce the need for nitrogen as they enable the soil microbiota and plants to more efficiently uptake what nitrogen is already there or that they are given extra if needed.
You should see how much nitrate is in the ground water around Pukekohe...
A girl I once flatted with, had a good nitrate.
Notrate is the best nitrate.
animal nitrate?
From the beast with two backs, no less.
Nitrate is nitrate from what ever source, and near Pukekohe it's from market gardening. It's a little known fact that vegetable crops have the highest nitrate discharges of any land use, some of the losses from crops like winter potatoes are mind boggling.
I lived near Pukekohe 25 years ago and even then we were told not to give our babies bore water.
An argument to use bore water to irrigate Pukekohe? Nitrates already included.
For perspective, the same ratio in New Zealand is 148% and for the US is just 70%.
Newbie question but is most of that 148% of bank debt vs GDP based on real estate valuations that are currently way over priced? I.e. if we get a property sector correction of 25-35% the ratio will fall to under 100% of GDP?
I understand the debt value will remain the same but on the banks ledger their respective asset values will fall and that it the figure that is carried over into these calcs?
No, GDP is the sum of all products and services sold in the economy.
not the value of land, buildings and plant
not all bank debt is residential real estate, think about agri debt, corporate lending and commercial etc, its just that banks do not have to hold much of their own capital agains residential lending so they make a lot more per $ lent, hence they are so keen to lend to res real estate vs business... There is also a good ability to get back bad debt... IMHO diary farms have been overvalued for a long time on a yield basis....
The debt asset on a bank's balance sheet does not get written down unless the property is foreclosed but still cannot recover the full borrowing amount. Until then, the asset value remains at borrowed sum minus repayments. In theory, such losses should be covered by the provisions set aside on bank financial statements.
If residential property values were to correct to the tune of 25-35%, NZ's GDP would take a hit as well due to lower levels of economic activity in the real estate, financial services and construction sectors and rippling outwards to retail, hospitality and so on.
Cam Baggrie used to talk at length about the wealth multiplier? as houses go up, like a feel good factor, who cares if you spend an extra 25k on a jetski if your house just went up 250k , same in reverse I guess....
The housing wealth elasticity is 0.23 for negative shocks, as compared to 0.13 in response to positive changes in housing wealth
This is from a 2019 RBNZ paper admitting that the magnitude of potential losses to the economy from "housing wealth effect" are much greater than potential winnings.
Yet those economists pumped billions into this "get-rich-quick, get-poor-quicker" scheme, tying the fortunes of millions of New Zealanders to it.
Can't be true surely. Leveraging only works one way.
Investment property is just like Margin FX only your Aunt Sally is doing it...... What is this leverage you speak of?
Trouble is the jetski isn't worth $25k on the way down as it's used and there's lots of them for sale....
I do wonder about boats / jetskis / rvs now the boarder is open. I am assuming that the ITM fishing show may have bad optics as well.......
NZ has about $540bn of loans - breakdown is housing $338bn, personal consumer $13bn, agriculture $61bn, business $128bn. Our GDP is about $360bn (540 / 360 = 148%).
Interest on those loans is around 3.5% on average - or $19bn per year.
Stats on NZ lending can be found here: https://www.rbnz.govt.nz/statistics/series/lending-and-monetary/registe…
Wow, that usd has been almost exponential against the kiwi since October 2021.
Who would have thought there was a correlation between Interest Rates and FX... printer goes brrrrrrrrrrrrrrr
Looks like even our friends at OneRoof are catching up with the state of play.
https://www.oneroof.co.nz/news/41809
✈️ ✅
Yes - better wages, cheaper houses and jacinda just did an awesome deal so professional Kiwis can all get easier voting rights and citizenship .
Last one out ... please remember the lights.
Smart lights are the way forward :)
Got a 404 error, most informative oneroof article I've read!
Two in two weeks at my work doing this. Both were renting.
I guess we can address this by opening the flood gates to China and India. No one here would vote for that especially my friends and workmates from those countries. They like NZ because it is not a satellite state of their home country.
Agree easy citizenship in NZ will accelerate skilled tax payers heading to Aussie.
The stats just out show NZ is losing more long-term migrants than citizens.
The skilled migrants from work who are left NZ in the last few months seem to have realised they were swindled into moving here by global MSM who to-date paint NZ as Cindy's little paradise.
The last half a sentence makes you sound a little unhinged. But yes, the economic reality of housing and tax policy that fleeces and filters upwards is not that great a deal when there are (even slightly) better deals elsewhere.
Thanks for your feedback. No better reflection of one's own mental health than making an anonymous personal attack on somebody else's.
As in 'Cindy's little paradise"?
Hate to point out the obvious, but it was a comment on your behaviour not your person.
However, "Cindy"...
Maybe the property spruiking morons at OneRoof will finally figure out that sh*ting in your own nest isn’t in your best interest long term.
Oh, EVs were mentioned, lets see what complete nonsense appears in the comments today. Hopefully this forum is a step above the Harold or Stuff comments where a bunch of Luddites offer forth their hot takes on a subject they clearly know nothing about.
Had a Leaf for a couple of years and it was perfect for what we needed at the time but not once we got into rural life. Absolutely hanging out for a suitable EV ute or large SUV that has 4WD and can tow 2,500kg+. The 3,500kg tow rating on most utes available here is purely academic and practically dangerous - check out John Cadogan's AutoExpert.tv Youtube channel for a mechanical engineer's perspective. Don't need 800km range, 500 would be plenty.
Naturally, being a RHD market in the butt crack of the world, we'll be last to get something like this.
Bit of a Boolean algebra problem, is E-SUVs. By the time you've got a battery enough to supply the work for enough time, you've occupied most of the hoped-for payload. Only fossil fuels were compact enough, really. And batteries are very close to optimum now. In physics/chemistry terms, there are heat-related limits (2nd Law/Carnot) to extracting work from chemical alteration, and the fact that the latest generation have a fire issue, tells us we're closing in on that limit.
I think a better way, is to keep an example of the existing fleet and make/obtain/organise yourself some biodiesel. Maybe a mid-80s Landcruiser? Agricultural enough to be work-on-able, a good basic workhorse. There will be a lot of them around, cheap, beyond $5/litre or on into rationing.
I'd love a nice old Landcruiser but sadly owners know what they have now and prices are going one way.
The cyber truck sounds like the solution for you. Or Ford’s new EV truck.
That Rivian truck looks like the duck's nuts. If you've got 150k to spend and are prepared to wait...
EVs are not solution to anything other than letting rich people continue with their high carbon lifestyles.
Hope that works for you
Yep it does thanks. Walk on.
And EVs solve to a large degree many problems with ICEs and PT.
Paying oil companies for petrol, solved.
Stopping at a petrol station for petrol - solved, still okay for the occassional coffee and toilet stop.
Annoying regular servicing of ICE cars, 90% eliminated. Tyres and Wiper blades are about all you should need to do in the first 5 years.
Waiting for a ICE engine to heat up to get warm in winter, no problem, they have heat pumps instead.
Trying to use rediculously shit Auckland Public Transport to go not far, and very slowly, solved.
India to overtake China as largest global population by 2023 according to UN estimates. China's population has likely already peaked of course. India's is still growing but it's predominantly now through aging, birthrates in India are very close to replacement rate now and falling.
Economically the fall of China is likely to be more impactful than the rise of India unfortunately.
Thinking that large population = more power is a pretty big mistake to make (the US has never been the most populous country). We are probably not far away before population = disaster.
Agreed, across OECD countries (12% of the world's population but 50% of GDP) populations are set to decline.
As per the article most population growth is in countries that are not economically developed and show little promise of industrialising within the next generation.
Petrol is still ludicrously cheap : F1 & boy racers ... QED
I think most speciality racer mix their own fuel to achieve the octane ratings required? Does F1 and the other racing classes use standard fuels? These speciality fuels are way more expensive than the pump brands.
Boy racers on the other hand burn cash at a huge rate making their smoke. Idiots.
F1 currently uses E10 and is working towards a 100% sustainable fuel. Not sure how long they expect to take to get there, of course, although Porsche is heavily involved in "sustainable fuel" research. Most motor racing classes have control fuels (and regulations such as air intake diameters) to avoid Johnny in his Formula Ford running nitromethane.
It's not so much F1 cars that use so much fuel during the season as the aircraft used to get between destinations, vehicles for support crew, and of course the huge number of vehicles used by the crowds to attend races. Then again, it was calculated some time ago that more fuel is used by the UK public going fishing each weekend that the entire F1 grid for a whole season.
Boy racers are the bane of enthusiasts' lives. Take it to a track, doofus. Quantify your awesomeness.
I believe tree planting to offset the fan travel as well as the globe-trotting F1 circus has been in place for some time now. I think it might have been one of Bernie's "Look how responsible I am, please let me keep flogging cigarettes using racing liveries" sleights of hand. Shrewd bugger.
Bitcoin miners switching off to help stabilise the grid in the Texan heatwave. Seems like a great balance of buying unwanted power when demand is low, and switching off when demand is high.
https://www.bloomberg.com/news/articles/2022-07-11/bitcoin-miners-shut-…
Dig your work Paccy
unwanted power? You mean the price of power in Texas goes negative?
What happened to the posts about C in Europe ? Did they get removed? Were they heated? (sorry I just woke up)
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