Here's our summary of key economic events overnight that affect New Zealand, with news markets remain glued to the car-crash that is happening in UK financial markets, even if the global implications are limited.
Separately, US mortgage applications fell -2.1% last week in an extended downward trend. They are a massive -40% lower than the same week a year ago. That is largely because mortgage interest rates keep on rising, topping 6.8% last week and the highest since 2006.
The American producer price index went up +0.4%in September from August, the first increase in three months. Year-on-year it is up +8.5% which is a lesser rise than for August.
The release of the US Fed minutes, always keenly awaited, has brought no ructions in financial markets today, so far at least. The document itself reveals that their policy makers have judged that the cost of too little action outweighs costs of too much - the American version of a 'least regrets' policy.
There was a tender for the US Treasury 10 year bond today which was well supported. Investors won a median yield of 3.85% pa and again there was no Fed buying. That yield is well above the 3.24% at the prior equivalent event a month ago.
Japan's machinery orders had their biggest single-month fall in six months in August, falling almost -10% from July even though they are up almost +3% from the same month in 2021. The global economic slowdown and a weaker yen both are weighing on local corporate spending now.
Japanese machine tool orders rose again in September however, up +4.3% from a year ago and up +8.2% from August. Export demand remains quite positive for this leading sector.
The Korean central bank raised its base rate by +50 bps to 3.0% yesterday, matching market estimates. High inflation and a weakening currency are burdening their economy. This was the 8th increase in borrowing costs since the Bank of Korea lifted the base rate for the first time in August 2021.
China is solely fixated on their Party Congress this week. One good thing is that air quality has improved in Beijing as steelmakers shut down to ensure blue skies for the event.
In Hong Kong, they are straining to maintain its local currency peg to the US dollar. The city’s de facto central bank has intervened dozens of times since May as the Hong Kong dollar hit the weak end of its HK$7.75 to HK$7.85 trading band on an increasingly hawkish US Fed..
In India, August industrial production data delivered an unwelcome surprise. It fell -0.8% when a +1.7% rise was expected. This is a very large miss.
Indian CPI inflation rates rose in September, according to official data, and are now running at 7.4%. It is the third month where it has risen and is back to levels they had in 2020.
In the UK, turmoil in their financial markets has intensified after the Bank of England insisted its emergency bond-buying scheme would come to an end this week. The cost of their government borrowing over 10 years briefly surged to its highest level since 2008, as investors demanded enhanced returns to lend to a country now in a bad financial and trust crisis.
The UST 10yr yield starts today at 3.90% and up +1 bp since this time yesterday. The UST 2-10 rate curve is little-changed at -39 bps. And their 1-5 curve is unchanged -15 bps. And their 30 day-10yr curve is steeper at +97 bps. The Australian ten year bond is up +2 bps at 3.99%. The China Govt ten year bond is unchanged at 2.76%. The New Zealand Govt ten year will start today at 4.52%, and marching ever higher.
Wall Street is up +0.2% on the S&P500 in their Wednesday session. Overnight, European markets fell by about -0.3% although London closed down -0.9%. Yesterday Tokyo was closed unchanged, Hong Kong closed down another -0.8%. But in contrast Shanghai ended its Wednesday session up a stellar +1.5%. The ASX200 ended essentially unchanged, but the NZX50 fell -0.8%.
The price of gold will open today at US$1671/oz. This is down -US$10 from this time yesterday.
And oil prices start today down another -US$2.50 from this time yesterday at just under US$86.50/bbl in the US while the international Brent price has fallen a bit more to be just over US$91/bbl.
The Kiwi dollar will open today at 56 USc and -½c lower than this time yesterday. Against the Australian dollar we are another +¼c higher at 89.3 AUc. Against the euro we are little-changed at 57.8 euro cents. That all means our TWI-5 starts today at 66.9 and down about -20 bps.
The bitcoin price is now at US$19,099 and only -0.4% lower than this time yesterday. Volatility over the past 24 hours has been low at just +/- 0.7%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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84 Comments
Investment assets taking a beating, passive income decimated.
But why aren’t we just seeing less Bagehot and more Draghi “Whatever it takes” bag-holding? Because the game may really have changed globally. Wars do that. Economic wars do that, especially when commodities are being touted as alternative stories of value to fiat money flowing via QE from central banks into asset prices held mostly by the top 1% of Western society. Indeed, as I have written repeatedly of late, a financialised Western economy is not one that is capable of sustaining a war or an economic war. (And neither is one prepared to keep draining its Strategic Petroleum Reserve, entirely coincidentally around mid-term elections: the snap-back is going to be a shock to markets perhaps requiring even sharper tightening of monetary policy.)
Oil down, diesel spiking.
"Diesel prices are soaring in Europe and the US, spurring a fresh bout of inflationary pressure ahead of a winter that is expected to see major supply disruption.
Europe’s benchmark diesel price neared the equivalent of $180 a barrel earlier this week. In the US, prices in California topped $190, while in New York Harbor they are close to $170.
...The latest surge in Europe has been helped by curbed supply in France, where a strike over pay at oil refineries has limited fuel supplies and forced the government to tap strategic reserves.
In the US, inventories are perilously low ahead of the winter season. It’s the same story for independent stockpiles held in Amsterdam-Rotterdam-Antwerp, northwest Europe’s oil trading hub. Consumption of heating oil -- a diesel-type fuel -- typically rises in winter.
Supply is also being hit by refineries undergoing seasonal maintenance, while some European nations are also starting to claw back the stockpiles they released to curb prices earlier in the year."
https://www.bloomberg.com/news/articles/2022-10-12/diesel-markets-are-s…
The sooner we are able to reduce our reliance on oil for our energy the better. We cannot be held hostage to this type of market volatility. Especially as energy becomes more politicised.
Going to be a while before that's going to happen for much other than moving humans short distances.
Should really be re-looking at sourcing it more internally though, for sure.
Interesting data since Marsden Point Refinery was closed.
Surprised of how much diesel they they used to produced of the current local demand.
https://www.mbie.govt.nz/assets/Data-Files/Energy/oil-data-monthly.xlsx
and CO2, Bitumin. Could be a coincidence that our roads started falling apart since we started importing bitumen, if you believe in coincidences.
Our roads are falling apart because many are past use by date. Fixing the potholes are like mending a hole in a worn-out shirt.
Just like out other infrastructure (i.e water pipes) our roads have been neglected. Massive funding required.
Just another symptom of politicians/councillors ignoring the essential over the feel-good stuff.
The disgraceful ChCh stadium a great example of this blindness.
I second Rastus! And third, fourth, and fifth it too for good measure. Take a drive through the rural roads back country anywhere in Canterbury and they are not only a neglected mess but dangerous. Compulsory stop road lines worn out for example. Hence T bone crashes of late. Wonder how these roads ever got built because now can’t even maintain them. Solution, lower speed limits to 20 kph?
Still many people on unemployment benefits. I'd propose a person with a bell, large red flag accompany those vehicles at a fast walking pace. A similar requirement was proposed about 120 odd years ago when cars started to make in roads into transport. Not to out do horse and cart of course. No doubt the horse and cart transport association had something to do with that proposal.
I totally agree. In addition a lot of CCC Roading Dept personnel are IT techs and prefer not to leave the office to inspect/reject the roading work. In many cases the seal is not thick enough and the groundwork hasn't been compacted. The contractors must love it as why do a job once when they can get paid to continually repair?
Roads don't instantly fall apart the moment you stop maintenance.
They are falling apart because Steven Joyce cut the road maintenance budget to pay for a few kilometers of great motorway.
and compounded (no pun intended) the issue with the increase in maximum permitted truck weights from 44T to 53T in 2010.
https://www.greaterauckland.org.nz/2010/04/03/heavier-trucks-approved/
Steven Joyce hasn't been in parliament since 2018.
If your roads are still run down five years into a new government's rule then that's on them.
Roads are super expensive to maintain. They are only going to get even more expensive to maintain. We can expect them to continue to fail as we move forward as we will not be able to afford the replacement/maintenance costs. Another reason to move increasingly away from road freight transport and car use in urban areas.
Our cities are essentially built around oil consumption. It is incredibly difficult to live without an automobile in this country as our cities have been built around this mode of transport. This won't change in a hurry.
Give everyone a car and let them feel freedom.
It's quite feasible to live in Christchurch with no car, I did it a few years ago and there are many more cycle paths now. If you're smart/lucky with where you live, work and play bike is easier than car - no parking stress, no traffic, we rarely get heavy rain. Couple of pannier bags carry a week or two's shopping for two, bike trailer if I ever need more.
Other cities may be a bit more backward and/or hilly.
Of course you'll occasionally need to move something big, or travel out of town to somewhere with no bus route, in which case car or van hire is pretty straight forward.
ditto in Vegawangus
I think kids throw a spanner in the works. Not just the to and fro for daycare/school, but the broken arms and unforeseen events. Then the car is bloody handy!
I'm sure that makes it more difficult, especially when they are very young. I think all of my friends with kids have a car at home, even if they bike virtually everywhere.
There's a huge range of options for takings kids by bike now, trailers, seats attached to your bike, cargo bikes with seats on the back, mechanisms to attach the kids bike to follow yours so they don't go off piste. I see them quite often now, there's a few parents near me taking two small kids with them by bike.
Same where I live - lot of electric cargo bikes or extended bikes with rear seats for kids. Even a super expensive e-bike is cheaper than a cheap car - no rego, no WOF, no insurance, cheap fuel ($6/year for my e-bike used for commuting every day), cheap servicing (or DIY).
And sport. Games rotating across different venues every weekend.
And trades. My standard work kit is a 305mm drop saw, a 305mm table saw, five ladders, three H-frames, nine scaff planks, three fish bins full of tools and clamps, four tool cases for nail guns, drills, routers, impact drivers and batteries/chargers. And I'm a rank amateur.... To move all this, with my non-E bike and fish bin trailer, is north of 30 trips. Oh, wait, that's what the diesel ute and trailer are for....
It's all about using the right tool for the job. Some jobs, you do need to use a jackhammer, but often we are using the same tool to knock in a pin nail when a small hammer would do the job just fine and much more efficiently.
That same diesel ute and trailer is totally unnecessary to pop down to the corner shop.
We need a mansion tax based on floor area for residential dwellings and a car tax based on kW, dimensions and gross vehicle mass or tare weight. No tax up to a point and then a step wise tax thereafter. Tends to concentrate peoples minds unless they are very wealthy.
Have to handle utes and Rimuera tractors some how other wise every one will switch to them if they aren't included.
Yes, I greatly look forward to the day when supermarkets chain stores, and malls are supplied, not via diesel B-trains, but by wooden cargo bikes, pedaled by vegan coolies.
I think the key word is 'reduce'. There is plenty of low hanging fruit with people taking half a ton of metal with them to pick up a bottle of milk, or just to move their own bodies to work. That's the crazy stuff that we shouldn't be burning precious fuel on.
Should we focus on the few trucks stocking a central store or the 10,000 vehicles coming to take a small amounts home?
As usual it is not a one-solution problem. Electric trucks can replace 99% of truck journeys. We should purchase less goods, especially disposable and planned-obsolescence goods. We should throw away less food. We should make shops more easily accessible and safer for non-car users etc etc
99% of truck journeys? Perhaps some reality: park in Kaikoura, observe the 'ferry pulse' of heavy vehicles - carrying everything from cars ag machinery, steel, pipes, posts, livestock, FMCG, generally in vehicle configurations of truck and trailer or A/B-train, GVW probably nudging the 50 tonne limit, and hauling over thousands of vertical meters just between Picton and Christchurch - 330 km distance. No electric truck in commercial production can do any of this.
There is a trainline paasing thru Kaikoura waymad.
That said, and as an owner of an ebike, I fully agree with you about the usefulness of my diesel with towbar. Best transportation device ever invented. And very happy to make it electric at some time.
Trains are limited in gross load dimensions due to the many tunnels. So no overwidth, overheight, or overweight loads. Heck, it's even necessary to get Kiwirail clearance to ship a hi-cube container on certain lines. Plus, the final mile conundrum: rail doesn't go to Nelson, Karamea, Queenstown, Wanaka, Hanmer Springs, Te Anau...it's a long list. So back to the road and fire up the diesel trucks.....
Hasn't this strawman taken enough of a beating? No one is arguing that we will be getting rid of all the trucks in the short term.
Except possibly PDK.
Yes, oil outperforms all other energy sources, for portability and potability :)
But it is finite, therefore unsustainable. Thus our use of it will cease - via increased contention over the dwindling remainder.
Where the like of Waymad go adrift, is in denigrating messengers to avoid the message, and in assuming supermarkets post fossil energy.
That system is also reliant on said FF, and won't be there either. Whether you describe people in derogatory fashion, or not.
Try looking at the whole powerdown (yes, I saw all this coming, longer than the 15+ years I've been commenting here) scenario. A tip - you're not replacing the oil with thorium, either.
Something like 45% of car trips are less than 5km in this country. And it is pretty freaking obvious waymad if you sit on the street for 10 minutes and watch traffic go by, that 90% of those trips are not people carrying all the stuff you talk about, which represents a very small percentage of all vehicle trips.
Normally your reasoning is sound, but using a nirvana fallacy to support your arguments is... well... pathetic and I would have thought better of you. It shows bias, instead of clear thought.
Would be interesting to note the source of these trucks. If from NI what happened to coastal shipping? Unions demanding too much for Kiwi sailors? Could always use cheap Indonesian and Philipino sailors. I think Sealord does this. Exporting our problems as usual.
"And oil prices start today down another -US$2.50 from this time yesterday..."
Saudis, unhappy with US on Yemen, appears to be aligning with Russia, on OPEC+ cuts. Democrats raising questions in Congress.
The CCP needs clean, clear blue sky. Solution, temporary shut down of steel mills for show purposes. Down in little ol’ NZ far way from anywhere, in the Antipodes. Solution, remove cow, plant tree. Said it before, say it again, we are farting at thunder.
farting at thunder
Sounds like a Metallica album title.
Goes back a bit further. A quote often by my father learnt off the US Marines he was with in the Pacific WW2. But it actually originated from the US Army in Europe. Coined by the crews of the petrol driven Sherman tanks which they called “Ronsons” because of their inescapable fate when they met a German Tiger or Panther counterpart, hence they were just etc
The Germans called the Shermans ‘Tommy Cookers’ for the same reason. But a bit of a myth as the cause of them brewing up so readily wasn’t so much igniting petrol but primarily their internally stowed ammo. A fatal design flaw replicated in most Russian tanks today, demonstrated by the spectacular ‘jack in a box’ jump effect when they cook off. The yanks later partly addressed this in Shermans by creating a wet ammo locker system.
Then the Brits got a hold of it, mounted a 3” gun, called it the Firefly. One of those did kaput to the German tank ace, Wittman. They were a pretty effectiv, combative weapon. Bit like the the P52 Mustang, not much until fitted with the Merlin engines, then became arguably the best prop fighter in the war.
aka "the Brown Album"
Kneecapping our competitive advantage and one of the few things we actually produce here for virtue signaling.
Let's hope in vain they don't re-elect Xi as leader. It would be best for China and for the world, but appears to be almost a foregone conclusion. Worst thing they have allowed happen in China for the last few decades, abolish term limits. The time of emperors in China passed, returning to it under the guise of Socialism/Communism is almost guaranteed disaster. And it also emboldens others to get in on it, I am thinking of Trump installing a political dynasty around his family if he wins the next election.
What else were they lying us about:
https://www.zerohedge.com/covid-19/pfizer-exec-admits-under-oath-we-nev…
Although by the time we got the vaccine it was proven to significantly reduce transmission of the Delta variant.
Please cite the study or studies supporting this claim.
I thought Delta was waning as Omicron out competed it?
Didn't Monkeypox take over from that one? Or has the lab released another one. Luckily the Greek alphabet only has 24 letters. It was a mistake to name that new disease after monkeys in general when using each species of monkey in turn would give the system a far longer life.
Their testing was quite rightly focused around protecting people from catching it and developing symptoms / serious illness, which they succeeded at splendidly seeing as the rate of infection & death was an order of magnitude lower in the vaccinated vs the unvaccinated against the original virus, and to a lesser extent vs delta / omicron.
Also I would point out just because they didn’t test it for transmission, doesn’t mean it doesn’t reduce transmission (which of course it does seeing as it was proven to prevent infection in the first place, preventing transmission chains from even starting)
Also: LOL at using zerohedge as a source. Such a fine outstanding site of journalistic integrity. HA HA HA.
Also: LOL at using zerohedge as a source. Such a fine outstanding site of journalistic integrity. HA HA HA.
Of greater importance in regards to the journalistic integrity is the fact that none of the fine outstanding MSM outlets cover this admission, wouldn't you say?
It's not much of an admission, is it? It's pretty obvious to those who showed a passing interest in how the vaccine trials were performed - the published papers and methodologies were easily available.
I'd have thought given the massive debates about the vaccines most people would have educated themselves earlier rather than relying on Zerohedge?
The point here is that we were all told we would be 'protecting grandparents' by getting vaccinated, which at the point of the distribution has never been tested for and was clearly... a lie.
I just read the actual paper...it didn't measure transmission. So this is not a surprising announcement.
https://www.nejm.org/doi/full/10.1056/nejmoa2034577
Subsequent studies by other researches did look at transmission. But this wasn't necessary to start using the product in the emergency setting we faced.
Mountain out of a mole hill.
It didn't measure transmission but the Pfizer crooks said it did. Is that not plain to everyone here?
Did they say that before other studies came out actually looking at transmission? The news articles posted above are just about what was done before release to market.
If they did that is very misleading. Happy to to convinced they actually said something out of place/time, if evidence exists.
"Their testing was quite rightly focused around protecting people from catching it". "catching it" = transmission. Pfizer had admitted it and even the kind NZ government knew that the experimental gene therapy didn't stop transmission. The kind government still went ahead and created two classes of citizens based on experimental gene therapy - and the lie about transmission and effectiveness.
"However, RRR should be seen against the background risk of being infected and becoming ill with COVID-19, which varies between populations and over time. Although the RRR considers only participants who could benefit from the vaccine, the absolute risk reduction (ARR), which is the difference between attack rates with and without a vaccine, considers the whole population. ARRs tend to be ignored because they give a much less impressive effect size than RRRs: 1·3% for the AstraZeneca–Oxford, 1·2% for the Moderna–NIH, 1·2% for the J&J, 0·93% for the Gamaleya, and 0·84% for the Pfizer–BioNTech vaccines."
https://www.thelancet.com/journals/lanmic/article/PIIS2666-5247(21)0006…
"Getting vaccinated means you are far less likely to get really sick and have to go to hospital if you catch COVID-19. You are also less likely to pass COVID-19 on to other people.
In the clinical trials it was found that the Pfizer vaccine gave 95% protection against the symptoms of COVID-19.
While a 2-dose course provides some protection against Omicron, a booster is likely offer greater protection by reducing the chance of more serious infection and the risk of transmitting it to others."
https://covid19.govt.nz/covid-19-vaccines/covid-19-vaccine-facts-and-ad…
Pfizer misleadingly reported relative efficacy rather than absolute efficacy (and their 95% figure was based on less than 200 of the 40,000 trial participants who became infected). In fact, the Pfizer vaccine had an absolute risk reduction of around 1% or less.
https://pubmed.ncbi.nlm.nih.gov/33652582/
I appreciate that people have a tough time with this, but governments and health authorities did actually mislead the public. To be fair, they may have done this unknowingly, based on the advice they received from the US. Unfortunately, corruption and conflicts of interest are rife in the US between pharmaceutical companies and their regulatory bodies (CDC, FDA). This regulatory capture has been widely known for years and is well documented.
This paper summarises the situation quite well:
https://insulinresistance.org/index.php/jir/article/view/71/224
I think your post is a little misleading too. Firstly, you are right that the 95% figure is based on only a couple of hundred infections, but you fail to mention the 95% confidence intervals are 90.3 to 97.6% i.e. the number of infections is plenty big enough to see there is a significant, large impact from vaccination. The chance of this being a statistical anomaly are vanishingly small.
Second, the absolute vs relative risk perspective is often interesting and illumination, but I think less so in this case. We're looking at number of infections over a couple of months. If the study were taken at a time of higher community spread, the absolute risk reduction would be higher. It is a simple fact that if only ~1% of the control group were infected during the study period, the absolute risk reduction can only ever be ~1% even for a perfect vaccine. A longer study would find an increased absolute risk reduction.
As we know, the pandemic went on for longer than the study period and has probably infected something more like 50% of the globe. If Pfizer had been able to capture all that data, the absolute risk reduction would look more like 47%.
Yeah but look at the stats of the health outcomes of vaccinated vs unvaccinated as reported in various studies. There were transmission studies too, which showed lower chances of transmission for vaccinated peeps. A good one with a lot of links to other studies is here: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8554481/
Anecdotally my wife and I now have COVID, came down with it on Saturday (wife) then Monday (me). Fully vaxxed and last boosted around 10 months ago. Am going through a variety symptoms, but absolutely nothing serious. The brain fog, general fatigue, dizziness, headaches are probably the worst symptoms. I suspect my wife would have been fine without the vaccine, she was outside shifting 100s of kg of dirt with me with it and had some fever and fatigue, but nothing serious. Mine is worse with ongoing fevers and worse fatigue/dizziness/headaches. I think without the vaccine, I may have been looking for a hospital bed. This is just intuition, but it is backed up by the efficacy studies, showing how well the vaccine protects from the most severe symptoms.
Dengue was so much worse, the two aren't even comparable. COVID for most vaccinated people appears to be a flu with weird symptoms, easy to recover from provided you aren't old and/or have underlying health conditions.
Anecdotally I didn't get vaccinated and other than the 1st night sweats/chills, I've had worse colds. No other symptoms except for the exhaustion and fatigue which kicked in about day 5 and lasted for a week or so. I have underlying burnout/stress issues which means my health wasn't optimum to start with. It's possible that my symptoms or even catching it could have been lesser. Many vaccinated I've spoken to suffered miserably with headaches, sore throats and sinus issues. Many have also said they're not getting boosters either and they were older folk.
There is no proof that you were better off with the vaccine unless you could magically remove it and catch the virus again. The problem with the data and statistics is the assumption that everybody's system is the same and will react the same.
The evidence now suggests that some were more at risk to the virus and some were more at risk to the vaccine. We definitely don't know what the long term results of these particular vaccines are.
Can all of this be simply explained by the boomer demographic? I remember being taught in geography 30 odd years ago that the boomer demographic bulge was going to cause major issues when they retire. Last decade we saw low inflation and high asset prices as they saved for their retirement. Now as they are retiring we are seeing very low unemployment causing inflation. What is going to happen once they start selling their assets to fund their retirement? It will be great for the buyers (if they have any money to buy it with) but terrible for the boomers that sell last.
Shouldn't economists be able to predict all this, at least to some extent?
Have you read ‘The 4th Turning’ yet Jimbo? This topic is covered in detail in that book.
There is no hope for meaningful reforms in education and training, so policymakers are looking at migration channels to solve the looming workforce crisis stemming from mass retirement of boomers.
The problem with the current migration system that neither major party can address is the government (INZ) has been reduced to a rubber-stamping entity when it comes to the profile of incoming migrants. The decision-making sits entirely with the employers.
Aside from a handful of good employers out there, the bulk of them are too shortsighted to look beyond using migration as a means to invest less in tech and to reduce wage and staff training costs.
That's it, in a nutshell, and why ALL asset prices are going to fall, bar one:
Cash. It's Purchasing Power is going to steadily increase.
UK financial markets suffer strange own-goal
Why only UK, is it not happening in Europe or will it not happen in USA and most important is NZ so great that will be immune.
It already happened in NZ. We've told our kids that they have to commit 40% of their income for 30 years to get a basic starter home.
It won't be as spectacular but we've nerfed discretionary spend (including funds available for investing in productive enterprise) for decades to come.
Either that or teach them compounding interest and get them to start putting a small amount away from 15.
Then teach them as many basic domestic skills as possible, cooking, cultivation, etc.
Teaching compounding interest to kids who shut down as soon as numbers bigger than the minimum wage is a lost cause.
A lot of kids can barely read or write when they come out of school. I'd rather schools focused on getting that bit right before we go down the 'real world skills' talking point rabbit-hole.
And cultivate where? The 30-yr mortgage those kids take out, provided they can save up for the deposit, should be enough to pay for a small box in a six-storey apartment block with no outdoor area in sight. Perhaps a few tiny indoor plants?
Doesn't have to be super complex. Put X away a week, by Y age, you have Z dollars.
If you're going to depend on the education system to ready your kids for the real world, prepare to be underwhelmed.
Nothing screams "your brighter future" than a third world peasant lifestyle.
Savings with compound interest requires a real interest rate above zero to work. Lol.
Rounding people into cities and making them feel like they're part of a futuristic fast paced new lifestyle seems to be making people miserable, and poor. A collection of actualised individuals, with very little actual independence.
If a kid put 30 bucks into a decent index fund every week from 15, they'd do pretty well.
This is what we started on 3 years ago. Bought a few hectares, started getting the kids into helping out around the place, watched them develop interests in engineering, woodwork, ag and hort, and paid them a wage for their efforts into an account they can't touch.
They don't have a huge amount saved at the moment but they're only in their early teens, and hopefully it'll help prepare them for the majority of troubles ahead.
Compounding interest dosen't work anymore. Central bankers killed it.
Inflation is much higher than any interest bearing investment.
Dead said the doctor, dead said the nurse. Dead said the central banker with the alligator purse.
Or people's greed killed it by chasing those 8%, 10%, 12% yields in finance companies, or the 100%+ yields in property and crypto etc.
Or did we just forget that there was a reason ursary was illegal for such a long period of human history?
Perhaps the BOE is sending the united message that the game has changed, Volcker style. Because don’t for one moment think only the UK is in this particular pickle: it isn’t. Similar funds have used similar strategies all over.
All will need to be unwound at some point.
So, the *global* message may be that markets *must* unwind trades that are going to fail anyway as rates rise and stay high, with a brief central-bank backstop.
Foreign govts and central banks (Swiss?) have been "using" (selling, lending, off-balance sheet) their UST reserves normally held in custody at FRBNY. Previous 2 weeks huge drains, near most in history. Same two weeks as fireworks all over the place, including UK. Now Swiss. Link
"In India, August industrial production data delivered an unwelcome surprise. It fell -0.8% when a +1.7% rise was expected."
From a purely environmental point of view this is the sort of drop in production that fighting climate change should be occuring.
It should be legislated to occur!
It speaks to a real tension between global growth and global destruction. Carbon intensive extractive industry is killing the climate.
The cost of their government borrowing over 10 years briefly surged to its highest level since 2008, as investors demanded enhanced returns to lend to a country now in a bad financial and trust crisis.
To be fair, the value of sovereign gilts dropped because investors expect the BoE to continue to sell billions of pounds worth of gilts directly into the secondary market (QT on steroids), whilst also increasing interest rates to 'tame inflation'. The sell-off and the interest rate hikes will put significant downwards pressure on the value of gilts. Whilst the political mess might have started this, it is the BoE that it now pouring petrol on the fire. Bailey has zero clue what he is doing.
Alex Jones, right wing InfoWars, lost badly. Sandy Hook plaintiffs awarded millions.
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