What happened Tuesday

Business / news

A review of things you need to know before you sign off on Tuesday; few retail rate changes, building consents remain high, floods & financial stability, more FLP drawdowns, swaps firm, NZD up, & more

1st Nov 22, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
ANZ has moved its term deposit offers to the top of the range for large NZ banks. More here. ICBC, Unity Money and NBS also raised TD rates today. In ICBC's case, they now offer 4.25% for six months (the highest of any bank for that term) and 4.75% for 12 months (and only bested by SBS Bank's 5% offer). TSB raised its Websaver savings rate from 4.1% to 4.6%.

HIGH BUT IMBALANCED
Building consent levels remained high in September despite the property market slowdown. A total of $33 bln worth of building work consented in the September year including 50,700 new dwellings. But the imbalances between population changes and house-building are starting to show up.

FLOODS -> PROPERTY RISK -> FINANCIAL RISK
Following investigations related to its financial stability work, the RBNZ is warning property owners that they may see a fall in values in flood zones as risk understanding improves and is priced into the housing market. They see potential for more risk to banks and property owners from river and surface water flooding than coastal flooding related to rising sea levels.

LOADING UP ON PERSONAL LOANS?
Kiwis are turning to personal loans as interest rates rise, Centrix says. Consumer debt demand has climbed back to pre-pandemic levels as the rising cost of living bites

LISTINGS GROWTH EXCEEDS SALES GROWTH
Housing market starting summer selling season with high levels of stock for sale. Since then there has been a further jump in new residential property listings in October. But there is growing doubt this will be matched by any jump in sales. Supply overhang pressures are building.

NON-RES CONSENTS HIGH, BUT CONCENTRATED
Non-housing building consents are largely related to Government buildings and warehouses. There were $833 mln of these building consents issued in September, up +36% from a year ago, and continuing the strength in consents seen throughout 2022. The biggest activity came from hospitals (+$261 mln) and "storage buildings" ($147 mln) and together accounting for half all non-housing consent issued in the month. (H/T GK)

CONTRACTION EXTENDS
The private Caixin factory PMI in China wasn't as negative as the official one, but it was already contracting in September and stayed contracting in October.

MORE FLP DRAWN
There was another $400 mln drawn by a bank in the Funding for Lending program (FLP) still on offer from the RBNZ. This window is only open for less than six more weeks. The total drawn so far is now $16.4 bln (or about 2.5% of all bank liabilities).

EYES ON DAIRY PRICES
There is another dairy auction tomorrow morning. At the last GDT auction, the WMP price averaged US$3,421/tonne and down -4.4%. Last week, the GDP Pulse result fell to US$3,280/tonne, a further -4.1% fall. The futures market today suggests this price will be US$3,294/tonne tomorrow, so a -3.7% fall from the prior full GDT auction. This will dominate the overall result. Yesterday, Fonterra reported that NZ milk flows were lower in NZ by -3.2% in September, Australia was down -5.9%. The EU by -0.8%, but the US was up +1.5%. Given China's restrained situation, it will be interesting to assess the supply/demand balance on prices in tomorrow's GDT auction.

GIVING UP FIGHTING INFLATION?
The RBA is about to release its November cash rate target review at 4:30pm today. We will update this item when it comes through. Markets are expecting a +25 bps rise to 2.85%. Any variation will be market moving. The related commentary and outlook may also move markets.

SWAP RATES FIRMER
Wholesale swap rates may possibly be firmer. NZGB yields certainly are. Our chart will record the final positions. The 90 day bank bill rate is up another +4 bps at 4.14%. The Australian 10 year bond yield is now at 3.83% and up +5 bps. The China 10 year bond rate is unchanged at its low 2.66%. The NZ Government 10 year bond rate is now at 4.31%, and up +4 bps from this time yesterday and now above RBNZ fix for the NZGB 10 year was unchanged at 4.26%. The UST 10 year is now at 4.05% and unchanged from this time yesterday.

EQUITIES MIXED
In New York, the S&P500 slipped -0.8% today. Tokyo has stopped rising, and has opened flat today. Hong Kong is sick of falling, so it up +1.4% in early trade today. But that still leaves them -5.2% lower than where they started last Thursday. Shanghai has opened up +0.4%. The ASX200 is up +0.7% in early afternoon trade. The NZX50 is flat in late trade.

GOLD SLIPS AGAIN
In early Asian trade, gold is at US$1634/oz and down -US$7 from this time yesterday.

NZD FIRMS
The Kiwi dollar is a little firmer at 58.3 USc. Against the AUD we are +½c higher at 91 AUc than this time yesterday. Against the euro we also up +½c at 58.9 euro cents. That all means our TWI-5 is at 68.8 and a +40 bps rise.

BITCOIN DIPS AGAIN
Bitcoin is little-changed today, now at US$20,480 and down another tiny -0.4% from this time yesterday. Volatility over the past 24 hours has been low at just under +/- 1.4%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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71 Comments

by JimboJones | 1st Nov 22, 4:03pm 1667271810

Bus driver shortages in Auckland. Brown wants more immigrants: "he primarily blamed the Government’s immigration settings for not allowing bus drivers to be recruited from overseas". To be fair I doubt there are many other solutions, not in the short term at least.

https://www.nzherald.co.nz/nz/mayor-wayne-brown-calls-for-emergency-foo…

As a side note I noticed the local KFC was closed today due to staff shortages when I walked past. They won't close forever, if they have to they will push wages and prices higher. It has to spiral unless something changes soon.

by HouseMouse | 1st Nov 22, 4:06pm 1667271994

What do you expect when their pay is so low and stress levels so high. Then throw in the horrendous cost of living. That’s on successive governments dating back more than 20 years. Yet so many people LOVE high and rising house prices….

I am not convinced immigration is the answer - it’s not an attractive offering is it?

by JimboJones | 1st Nov 22, 4:26pm 1667273215

So lets say they increase their pay and reduce stress levels. And then lets say people quit their current jobs and become bus drivers. What are those other employers going to do? Either go bankrupt, or increase their pay and reduce stress levels. Without immigration it almost has to spiral doesn't it?

by HouseMouse | 1st Nov 22, 4:34pm 1667273670

Immigration is not the answer, other than a very small part of the answer as a band-aid. Refer Rick’s comment.

This is the sort of thing you get with failed immigration (far too high for the most part) and housing policy, over 20 years.

The thing is, most of the sheeple have limited intelligence and certainly very limited appreciation of the bigger picture. They are very happy to see their housing paper gains appreciate, but fail to see the connect with all these wider issues.

by JimboJones | 1st Nov 22, 4:55pm 1667274950

I'm not necessarily saying immigration is the answer. But I am saying that without it we will almost certainly get some horrific inflation.

by morepork | 1st Nov 22, 4:41pm 1667274064

Employers that are only profitable with below market rate wages should be going bankrupt. That's normal in the business world. Eventually you'll reach an equilibrium of higher wages and prices as all businesses have costs other than wages.

The other option is productivity gains, but a lot of NZ firms seem to be a bit more reluctant than what I've seen overseas. Stuck in our ways I guess.

by JimboJones | 1st Nov 22, 4:46pm 1667274400

Which employers are those? Most the low wage ones are multinationals or monopolies aren't they? Are KFC, McDonalds, supermarkets, bus companies, etc going to go bankrupt? Or just pass on the costs?

by RickStrauss | 1st Nov 22, 5:18pm 1667276315

It's quite likely we have too many hospitality businesses, yes, and the costs would be higher. Back in the day it wasn't the case that everyone was eating out everywhere, or every bod would start a hospitality business.

Then again, more folk doing diverse jobs including hospitality careers, bus driving, teaching and nursing were able to afford to build a life and a family in stable housing.

by morepork | 1st Nov 22, 6:16pm 1667279777

Those are the ones that could give their employees wage increases of 10%, and increase costs by say 5% to cover it. Not all of their costs are staff.

Some of those sort of companies are in fact struggling in NZ, look at Burger King for example.

by sparrow | 1st Nov 22, 4:41pm 1667274065

I heard there's quite a few RE agents out there looking...

by singautim | 1st Nov 22, 9:46pm 1667292418

""Without immigration it almost has to spiral"". No. What about Japan for example. Every country in the world cannot keep increasing its population via immigration forever.

A simpler way of increasing the working population by 5% would be to increase the retirement age in line with other countries. Another way is to half the number of university students - preferably the half studying subjects totally irrelevant to their future employment.

by RickStrauss | 1st Nov 22, 4:09pm 1667272179

Blames a lack of migrants.

When in actual fact the problem is a dire shortage of wages relative to housing costs, affecting many industries. (Or conversely, housing costs that need to come down significantly.)

But a bias of those in power towards their own portfolio wealth will surmise that what we really need are more folk who have it so bad in other places that they'll be happy to be poorly paid, exploitable labour and tenants here.

by HouseMouse | 1st Nov 22, 4:14pm 1667272498

Well put

by JimboJones | 1st Nov 22, 4:53pm 1667274803

I am not convinced a pay rise will all of a sudden magic up new employees out of nowhere. Surely almost all will come from another job, and then that job will have to raise wages too. And with those pay rises comes price rises and inflation. You can't make everyone better off by paying them more fake money can you, doesn't the fake money just become more worthless?

I think we are so efficient with employees these days its hard to see many companies that wont bother competing, we are not like Japan employing people to open doors and such.

by RickStrauss | 1st Nov 22, 5:00pm 1667275227

You can't make everyone better off by devaluing work and inflating asset prices, either. Nor can you sustainably address labour shortages you create by doing so, by importing cheap, exploitable workers who'll accept poor living conditions. You're right that some businesses will be less viable without such cheap labour.

Things are way out of whack.

by JimboJones | 1st Nov 22, 5:01pm 1667275292

I'm not necessarily saying immigration is the answer. But I am saying that without it we will almost certainly get some horrific inflation.

by Fitzgerald | 1st Nov 22, 5:44pm 1667277852

Labour just changed the immigration rules, so that every bus driver we import can bring 6 parents with them.

Up to 6 new elderly (not working) people to sit around and consume resources and drive inflation higher. For every single immigrant.

by HouseMouse | 1st Nov 22, 5:47pm 1667278060

Yes what a debacle

by RickStrauss | 1st Nov 22, 10:31pm 1667295100

And the lack of a viable opposition willing to offer an alternative really gives Kiwis little option.

by Rex Pat | 2nd Nov 22, 6:45am 1667324744

I hope you own your vote in the last two elections. I wish I could bill you for the damage. Worst PM and Government in living memory.

by Audaxes | 1st Nov 22, 7:23pm 1667283802

But that was the plan - hence I stopped voting at the last election. Unfortunately the citizens were not presented with any party manifesto outlining such action - hence no democracy.

by lostinawoods | 2nd Nov 22, 2:14am 1667308464

Mate, you've got to take some math classes before writing such nonsense. Look at a 'normal' pre-covid year circa 2019 when:

248,907 work visas approved

~60,000 residence applications approved.

What about the number of parents that 60,000 brought to this country in 2019? Parent Resident visa was practically frozen, but ok, it was supposed to have a 1,000 visas quota.

I don't know if 1 visa is 1 person or 4 parents but let's assume we're in some universe where math and logic work differently, and every immigrant brought 4 parents here to make 4,000 total. Everyone who's done that had to earn $185,640 as of Jan 2020 (don't have data for 2019) and $202,092.80 as of 2022.

No way they'll support their parents, surely, people go from a $200k household income to living in social housing and sitting on benefits the moment they get residence. Every bus driver I know has done that!

Oh, and surely taxes paid by 248,907 people who btw pay taxes every month or get deported, are not enough to cover the living of 4,000 elderly who you assume come here broke. Yeah.

What labour did tho is increased the quota to 2,500 visas. 1 to 100 ratio in the number of work visas to parent visas is a nuance.

by positivelywallstreet | 1st Nov 22, 8:41pm 1667288505

Things have changed, we have always been a nation with limited natural resources and have added in the last generation financial drains such as ACC, Health and Safety and an Internet that assures limitless ways of accumulating debt, plus endless trips by delivery vehicles driven by immigrant labour.

But we can skate along ok as long as the balance of payments holds up and we pay attention at Jackson’s Hole

by lostinawoods | 2nd Nov 22, 3:58am 1667314691

Let’s imagine house prices went down by half. How many bus drivers would it create? Where would they come from?

There is a correlation between IQ and jobs people can perform. Surely IQ is not the only factor but most of the bus drivers do low paying jobs as, well, because they are incapable of doing high paying jobs.

by kiwikidsnz | 1st Nov 22, 4:10pm 1667272251

this might help the bust driver supply a bit: $61m to be spent on lifting bus drivers' wages, conditions | RNZ News

by HouseMouse | 1st Nov 22, 4:13pm 1667272401

Will make no difference in high cost locations like Auckland

by Grattaway | 1st Nov 22, 4:20pm 1667272853

why is a minister of the Crown organising bus drivers wages

to me it reflects part of the problem of centralized control organising everything - water will be next - oh wait!!

maybe the answer is charge customers more to be able to pay better wages - will customers pay more - many say they would if the service was improved

by positivelywallstreet | 1st Nov 22, 4:29pm 1667273340

Interesting question, my suspicion is the goverment sets driver wages by limiting funding to Waka ….

by positivelywallstreet | 1st Nov 22, 4:26pm 1667273185

Could we buy more double decker buses as well…carry more people…may flatten off the morning /evening peak need for drivers…

Aggh..no way , that’s only for London.

by Waikatohome | 1st Nov 22, 4:41pm 1667274074

The opposite is happening. So few people were using the service between Pokeno, Tuakau and Pukekohe that they changed the bus to a mini-bus.

by Uninterested | 1st Nov 22, 7:03pm 1667282611

In Takapuna-Devonport they use a standard bus. It is pretty much empty most of the time. And it rips up the roads. They have completely re-done the road. Now its being ripped up again!

Another issue which is not discussed here is how dangerous being a bus driver is nowdays in some parts of Ak. You'd be mad to be the driver on a late night bus in some suburbs.

by RickStrauss | 1st Nov 22, 4:54pm 1667274878

We have stacks of double-decker buses going in and out of central Auckland.

by JimboJones | 1st Nov 22, 5:00pm 1667275245

With the driver sitting around waiting for people to go up and down the stairs.

There are quite a few simple efficiency opportunities that will reduce the number of drivers needed, such as 24x7 bus lanes, all door boarding, bigger / smaller buses where needed, reduce number of bus stops, etc. But the likes of AT are too big for efficiency, and also it goes against the mayor's agenda.

by RickStrauss | 1st Nov 22, 5:05pm 1667275537

Oh, agree, we could do so much better on public transport. But yes, the Jurassic crew now infesting Auckland Transport and the Council chambers seem intent on using only plans that have failed before - increasing congestion by making car transport the only viable option for more Aucklanders.

by HouseMouse | 1st Nov 22, 5:47pm 1667278022

The bus driver fiasco is just symptomatic of the wider fiasco. A similar thing is at play with other key workers, such as carers, nurses, fire and police officers and teachers.

Fundamentally, the major issue is the pay relative to the cost of living.

And that is a result of fundamental failure on behalf of both major parties over the past 20 years on all policy that links in to housing.

It’s all coming home to roost and was entirely foreseeable. But our leaders have been more interested in setting the optimal conditions for property people like Yvil and HW2, than caring about the fundamental wellbeing of the country.

Luxon’s mob threaten to make it even worse, which is why I haven’t totally abandoned the idea of voting for the godawful Labour Party.

by agnostium | 1st Nov 22, 6:03pm 1667279019

This is the dilemma I find my self in too.

To paraphrase a Tory MP, voting Labour is like being asked to eat a shit sandwich, voting National is like being asked to eat a shit sandwich with extra shit.

by JimboJones | 1st Nov 22, 6:27pm 1667280463

That is so true!

by JimboJones | 1st Nov 22, 6:38pm 1667281119

Yep I have to agree house mouse. The minimum wage has gone up massively, and while some of that has been taken up by the likes of food and petrol, the biggest money sucker has been housing / rents. It started out as happy chat around the BBQ about how much money we’d made, then most people started realising how bad it was for society, but the governments kept on pumping it as long as they could.

by Audaxes | 1st Nov 22, 4:13pm 1667272381

The private Caixin factory PMI in China wasn't as negative as the official one, but it was already contracting in September and stayed contracting in October.

Move over yen, PBOC's desperate commercial-led rescue a dismal failure as yuan strikes new low. Why?

You can't understand what these currencies are doing or why their simultaneously crashing matters from the badly outdated, horribly ill-conceived mainstream Economics approach. It starts with what a reserve currency is and is supposed to do; and that isn't pricing oil. China is suffering a massive dollar problem - which means it is our problem, too.

by Jonny.Foe | 1st Nov 22, 4:19pm 1667272742

The RBA are calling it right - they are not "giving up on inflation", they are accepting that reducing demand through clumsy and crude rate hikes is no solution to price rises caused by supply constraints and things genuinely costing more to produce. In 20 years time, we will marvel at the medieval macroeconomics of the early 21st century.

by bw | 1st Nov 22, 4:37pm 1667273863

Let's be honest. The World has issued, what, 50 trillion in QE over the last 15 years, so the last thing 'they' want to do is 'control' the very thing that QE was supposed to create.

I remain to be convinced it will work. The Global Population must be twice what it was the last time this stunt 'worked' - pay off existing debt from overall money supply increase - as those who get left behind - and there are untold millions more of them today than last time, all with social apps in hand - are going to get mighty angry.

Someone dying of starvation doesn't care if they can't pay the increased prices at Countdown. They'll just take what they want anyway. Nothing to lose, and all of that.

by J.C. | 1st Nov 22, 4:39pm 1667273980

Let's be honest. The World has issue, what, 50 trillion in QE over the last 15 years, so the last thing 'they' want to do is 'control' the very thing that QE was supposed to create.

QE has largely been to support asset prices. Japan is the trailblazer in QE but their broad money growth over the past 20 years is much lower than in the U.S. and the EU. Why? Becuase the private sector has been paying down debt.

by bw | 1st Nov 22, 4:45pm 1667274331

No argument with that.

But Japan can pay down its own debt with the retained proceeds of past hard yakka. How do we, and the rest of The West, do that?

by Audaxes | 1st Nov 22, 4:47pm 1667274430

QE has largely been to support asset prices.

Europeans with the inadvertently perfect way to sum up this year today: GDP report and "inflation" at the same time. Consumer prices accelerate to new record high...but it has nothing whatsoever to do with the economy. Link

by Palmtree08 | 1st Nov 22, 6:15pm 1667279720

Here I thought QE was to support the velocity of money though consumption when the world was in danger of a deflationary spiral? Joe public just took the money and ran with it. Having peoples savings sacrificed at the same time just added to the bubble blowing frenzy.

by MLSmith1 | 1st Nov 22, 7:55pm 1667285701

Right on BW!

the world is primed for a major conflict… not just Russia / Ukraine either!

there is no way out from here other than hurting the masses.. the opportunity for politicians to spin nationalistic hatred increases…look at politics in USA now!

by JimboJones | 1st Nov 22, 4:38pm 1667273882

Using interest rates to control inflation was brought about by the supply constraints and inflation in the 1970's wasn't it? If the RBA thought it couldn't work, why not come up with something else in the last 50 years?

by Rob Reid | 1st Nov 22, 7:31pm 1667284277

Only abolishing Monetary Policy fits the bill, and that is the last thing the central banks will do.

The finance system will just have to collapse into pieces.

by Audaxes | 1st Nov 22, 4:43pm 1667274221

Inflation came from nowhere.

by RickStrauss | 1st Nov 22, 5:09pm 1667275758

They're not giving up on inflation, they're allowing it in order to protect asset values at a cost to others.

by Grattaway | 1st Nov 22, 4:24pm 1667273075

How come FLP is still happening

It's inflationary surely?

by lastlegs | 1st Nov 22, 4:43pm 1667274211

I dont think the gravy train subsidy is capped like the buses.

by EdwardD | 1st Nov 22, 5:32pm 1667277124

Exactly. According to Mr Orr, he made a commitment to the banks that they would have this cheap money until the end of the year, so he doesn't want to disappoint.

by Independent_Observer | 1st Nov 22, 4:35pm 1667273752

Chart of the day. US vs Can house price growth relative to incomes - noting that NZ’s experience is similar (perhaps worse depending upon the metric) than Canada

https://twitter.com/mpelletiercio/status/1587197696053776384?s=46&t=JG8…

by Mark Hubbard 1965 | 1st Nov 22, 4:41pm 1667274076

Orr now needs to be read the riot act.

We do 75 bps, RBA has only done 25 bps. Why does NZ from climate strangulation regulation to burying mortgage holders and business have to be the world first in destroying ourselves at the hands of our politicians and bureaucrats.

If we do anymore than 25 bps 23rd this month, then Orr should be fired. He's incompetent and causing great harm.

... put money into AUD today now getting done, also. Bloody Orr.

by bw | 1st Nov 22, 4:42pm 1667274173

What happens if CPI Inflation goes to 30%?

I know, "It won't", right. But go back even just a year ago and no one saw Inflation at 5%, let alone 7% and higher elsewhere. No one.

So 30%? Who knows. But what happens if that does happen?

by Mark Hubbard 1965 | 1st Nov 22, 5:30pm 1667277000

And burying business recovering from Covid and home mortgage holders is fine?

The rate increases already ensure inflation will come down via recession. Every basis point cut now only means a deeper recession. Jobs start going soon.

And how ethical is it for RBNZ to run stimulunacy for so long to sucker first home buyers into inflated house prices, then destroy them? The problem is when interest rates are coming off near (lunatic) zero rates, homeowners are finding their rates double, tripling and quadrupling. This hasn't happened before; it's nothing like when interest rates are on 12% with decisions made around that, then it goes up 2%.

RBA had taken the logical view the cash rate is too blunt and instrument. New Zealand leadership is negligent.

by albinodog | 1st Nov 22, 6:24pm 1667280261

Yeah im calling bs on that one, the job market is still super tight. Inflation is sticky and wont just magically go away.

A recession doesnt just come when you keep stimulating via low rates.

Cry for your property portfolio tbh.

RBA inflation will overtake NZ by 2023.

by Chaosinflesh | 1st Nov 22, 8:58pm 1667289484

You know, those FHB wouldn't have been "suckered into" paying ridiculous prices for houses on the backs of low interest rates if they hadn't been given a firm helping hand by the investors who outnumbered them 3:2 in the market, aided and abetted by profiteering banks and REAs.

The real ball was dropped 9 years ago when LVRs were introduced without DTIs, which is the moment the housing market went from a bubble to a Ponzi scheme. And prices were already disastrous then for most aspiring FHB - there's a reason bank of Mum and Dad is larger than Kiwibank...

FHBs have hovered around 19-20% of the market for the last ~10 years - so ~80% of those suckered into crazy prices (and perhaps mortgages) belong to a different group.

Crocodile tears for FHBs coming thick and fast now that specuvestor's portfolios are at risk.

Though I agree with you re: Orr - he's been an absolutely unmitigated disaster from start to finish.

by positivelywallstreet | 1st Nov 22, 5:47pm 1667278066

Many can remember 18% and nothing happens, kids grow up, buy a second hand car, get a job, life goes on.

by Mark Hubbard 1965 | 1st Nov 22, 5:59pm 1667278786

You didn't understand my point.

When rates were 18%, a 1% rise to 19% didn't make much difference.

If you are on 1%, then a 2% rise triples your interest bills.

I just heard on the radio of a person coming off a fixed rate onto current rates: there annual mortgage commitment is going from $20,000 to $70,000.

How many homeowners can survive that?

We've gone from stimulunatic monetary policy that put homes out of the reach for many, to a negligently handled tightening that could cause real structural damage to what is left of the economy, and many losing their homes.

by Zachary Smith | 1st Nov 22, 7:08pm 1667282927

Hopefully the bank did a good job on the stress testing.

All those people who squeezed out a maximum mortgage by going through a broker and pretending they would take in boarders will be wishing they hadn't done that now. Jeepers, I'm sounding like DTHR.

by Zen20 | 1st Nov 22, 7:21pm 1667283677

Well i guess we need to bring in more immigrants asap so that the loan app fudgers can fill their spare rooms

by J.C. | 1st Nov 22, 5:09pm 1667275750

If we do anymore than 25 bps 23rd this month, then Orr should be fired. He's incompetent and causing great harm.

Hmmm...not sure why. The price of money is already quite low. Kaumatua Orr is playing catch up.

Update: I see the RBA decision now so understand more why KO might be seen as an incompetent wrecking ball, depending on his decisions.

by RickStrauss | 1st Nov 22, 5:13pm 1667276016

It's not that high a rate, overall. They'd just be doing their job of targeting inflation. Rather than the current negative real rates and FLP for banks.

Allowing rampant inflation is just throwing pensioners with savings and wage earners under the bus to protect asset prices.

by J.C. | 1st Nov 22, 4:43pm 1667274204

As Japan's wages have been stagnant for 30 years, young workers may soon be better off flipping burgers in California -- where they'll be able to earn 4x times Japan's min wage. And even more even than they'd make at a prestigious megabank. And it's not just JPY's historic weakness against USD that is the problem. By international standards, Japan’s famously hard-working masses are egregiously underpaid, with average salaries that haven't budged in decades.

https://www.bloomberg.com/opinion/articles/2022-10-30/yen-weakness-high…

by JimboJones | 1st Nov 22, 6:43pm 1667281395

It just goes to show that there is more to good economies than productivity and exports. Japan should be super rich, but they are too scared to ask for a pay rise.

by J.C. | 1st Nov 22, 5:06pm 1667275606

Elon's acquisition of Twitter is about payments using internet-native payment protocols. It won't be as easy for the banking industry to stop, which it did with Paypal more than 20 yrs ago and Facebook Libra a few years ago because they're doing it legally via state money transmission licenses.

Related but unrelated, Dogecoin price currently up 53% over past 5 days.

https://fortune.com/crypto/2022/10/31/the-real-reason-elon-musk-bought-…

by AdamJay1990 | 1st Nov 22, 4:58pm 1667275126

Is this a typo? (because the current rate on their website is 2.6)

TSB raised its Websaver savings rate from 4.1% to 4.6%.

by Independent_Observer | 1st Nov 22, 6:09pm 1667279366

Worst year for US 10 year Treasury since 1788

https://twitter.com/ayeshatariq/status/1587003695329419264?s=46&t=gcgcI…

by TonyBarnett | 2nd Nov 22, 10:41am 1667338901

“There was another $400 mln drawn by a bank in the Funding for Lending program (FLP) still on offer from the RBNZ.”

So Banks borrow at 3.5% (OCR) from the Reserve Bank

Banks then lend to the government by buying Government bonds (last tender 4.4% yield)

https://debtmanagement.treasury.govt.nz/tender/nominal-bond-tender-836

Great way to clip the ticket by 0.9%

No wonder banks are making so much profit.