US labour markets stable, awaits non-farm payrolls report; US trade deficit narrows, Canada's trade surplus up, Australia's zooms higher; container shipping costs fall; UST 10yr 2.67%; gold up and oil down; NZ$1 = 63.1 USc; TWI-5 = 71.3

Actually I'm a little disappointed that Taiwan did not take down the missiles Chine fired across it. When North Korea did that to Japan it was denounced as a major provocation, so despite all that China is saying they are doing all the poking. Taiwan though is probably trying to keep its true capability secret as tracking would have been able to tell them the flight path, trajectory and likely destination of the missile. But what that tracking data would not tell them is whether those missiles would separate into separate warheads with independent targeting around apogee, making them harder if not impossible to defend against.

Some debate is beginning to appear to suggest that the US may not help defend Taiwan. But this ignores the fact that any invasion of Taiwan by China would be seen as a major act of aggression and a threat to Japan, South Korea and the Philippines. All of these countries would be pressuring the US to act and would very likely be part of a coalition to help. It also ignores the fact that the US is currently maintaining some strategic assets in Aussie.

Well yeah, they are literally a nation of only children, I've long felt that explains a lot of their policies.

It is a disrespectful provocation to the Chinese. Military power to do what exactly? What did the US achieve by heightening tensions and attempting to polarize Taiwan such that it isn't diplomatically annexed by China, which is likely on the cards within the next 10 years. The KMT party, which is the main opposition, is looking at reunification on favourable terms to Taiwan in the near future.

The United States is engaging all its foreign rivals at once, it is overstretched, deindustrialized (because it sold out its own people to industrialise China) and losing on the economic stage, so it is driving the remilitarization of its Rivals.

The Administrations since Bush Senior have systematically squandered the American Empire, and we should be concerned by it since our prosperity is tied to their enforcement of freedom of navigation, economic cooperation and linguistic/metric/financial standardization.

Trouble in China could be super inflationary.

But yes, maybe those transitory guys were right.

The inversion in the swaps curves says it all.  Cheaper to borrow for 10 than for 2. 

The Inflationary part happens over the last X number of years, as % rates were slashed and QE was pumped into The System?

Now, as that liquidity is drained from the system - which it currently is, % rates will rise, as those who depend on debt compete for it to get what is available, short term, (which is why the curve inverts) and those who can't access it sell whatever they can to play the bills.  ie: % rates rise and asset prices fall.

I had a chat on the weekend with a chap walking past my house who had recently retired from the oil industry. He said that there is no shortage of fuels around the world, that there was 20 years of fuels at current usage rate in storage across the world. That the current problems were just the major oil companies profiting and ripping everyone off. To be blunt I doubt his view as I'm also told fuels can only be stored for a limited amount of time, but don't know the details. Plus 20 years at current consumption rates -that's an awful lot of bulk fuel farms? But then the head of the UN took a swipe at the major oil companies in the last couple of days.

It's like monetary policy still works. There's still a retreat from globalisation with Russia and China being managed by despots, concerned solely with their own power. 

Pandemic hasn't disappeared - it's just nicely settled in now. Climate change is irrefutable to all but the sociopaths and vested interests. 

This just doesn't feel like an age of growth from the perspective of all boats rising. Demographics are creating these high employment numbers with the younger generation rejecting the deal that they need to work till they drop just for food and shelter.

Productivity is faltering, technological growth reducing. Here in NZ $2 million houses on 300sqm of land are staying unsold. 

And power prices down too.  Wholesale spot electricity has been like 0.00003 kWh for most of the week.  Even now in the morning peak it's only 2.2 cents / kWh.  Hydro storage above 90th percentile.  Should pause the relentless rise in retail power prices.

https://app.em6.co.nz/

There is a house I know about  in Grey Lynn which was sold recently. It sold at way below its current RV to facilitate a sale in a period of uncertainty. (Interest rate rises). It was bought by an investor who obviously hopes to make a killing. Put on the market again within days of purchase.

On the homesconz website it puts that sale as being in 2021. Whereas the actual sale took place in 2022. I won't provide a link. This is more a general discussion.

I wonder if this is a deliberate attempt to fool potential buyers by hiding the fact that it sold recently for a very low price.

Another thing which surprises me is that the homesconz "valuation" still has it at about a mill above its last sale price. Is there really such a lag in value drops? Or is their software just downright wrong? Or was this genuinely an outlier bargain of the century?

I see that the place has already had a price reduction and has been on the market for about months already. I am picking that the investor owners are starting to get worried.

HAHAHAHAHAHAHAHA.  Wow.  When we sold our place by Deadline in December to a FHB, we were very happy with their offer, but our selling agent still insisted on ringing them up to screw every last dollar they could out of them.  Despite me categorically saying no, we're happy with the offer. 

How about in 2021 when the headlines were screaming house prices would continue to rocket. Granny Herald & One Roof were chuckling with glee splashing on front page the mind-boggling prices defying wildest expectations achieved at auction! Not a whimper from real estate crowd crying foul that Vendors are to trying exploit poor Buyers!

We start open cast mining?

haha, English inflation at 9% and they only push rates up by 0.5%, that my friend is pushing shit up hill with a garden rake!

We are in a better position but will still need to raise by at least 0.5% this month, however I think once the OCR gets to 3.5% we should really slow things down to allow the effects of the tightening to show through. Providing the govt doesnt keep throwing cash around & muddying the waters...

If someone lends you a million at 5% per year and inflation is 9% they are losing 4% and taking the risk that you are going to pay them back, that’s mental Rates should be a lot higher. The big problem is FED printing trillions just pushing up prices and in NZ a large amount of that has just pumped up house prices to a place where most of the population would not have enough income to purchase the house they are in. This is why a crash will happen in housing market over here, this is just the start of downturn.

Funny how it is always the 'have nots' that have to pay.  

Can you list some of these constraints Grumpy?

What are the main export earners for NZ?

New Zealand's Top 10 Exports

• Dairy, eggs, honey: US$12.4 billion (28.5% of total exports)
• Meat: $6.2 billion (14.2%)
• Wood: $3.9 billion (9%)
• Fruits, nuts: $2.8 billion (6.4%)
• Beverages, spirits, vinegar: $1.6 billion (3.7%)
• Cereal/milk preparations: $1.4 billion (3.3%)