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
Unity Money raised its floating rate. Nelson Building Society raised its fixed rates.
TERM DEPOSIT RATE CHANGES
The Cooperative Bank has raised its 6 month TD rate to 3.85%, and its 1 year TD rate to 4.60%.
SPENDING LIKE NO OCR HIKES
Data for October for electronic card transaction activity, a close proxy for retail spending, was stronger than expected, with "spending appetites remaining resilient in the face of interest rate hikes over the past year". Retail was up +16.6% year-on-year, and services were up more than +40% on the same basis. Month-on-month the gains were up more than inflation too. The higher OCR isn't holding back consumer activity yet.
DOWN FURTHER
The latest QV figures show average dwelling values in Auckland & Wellington are down almost -$200,000 so far this year. The average value of NZ homes is down -$113,000 since the start of the year according to this Government valuation agency.
FUEL POLICY TWEAKS
The Government has announced it will give the Commerce Commission the power to step in and set 'fair' fuel prices if necessary. It is part of its revised "fuel sector strengthening" program which includes setting minimum onshore fuel-holding obligations, and a postponement of its "sustainable biofuels obligation" till 2024.
BNZ REPORTS BIG RESULT
The last of the big-four Aussie-owned banks reported its September year-end results today. BNZ said its annual profit topped $1.4 bln as income, lending and net interest margins all rose.
ASB FILLED IT BOOTS, BUT COST IS HIGH
ASB's unsecured 4 year bond offer "for at least $100 mln" has closed having raked in $650 mln. The interest rate they will pay for this is 5.93% pa. (ASB's four year TD rate offer to retail investors is 4.60%.)
BNZ JEALOUS
Today BNZ said it is about to go to the same markets for its own "unsecured unsubordinated fixed rate" bonds, for a six year term.
FONTERRA'S NEW CFO
Today Fonterra announced the appointment of Neil Beaumont to the role of Chief Financial Officer, effective early February 2023. He replaces Marc Rivers who is moving on. Beaumont was Senior Managing Director, Chief Financial and Risk Officer at Canada Pension Plan Investment Board (CPPIB), with responsibility for leading the operations, finance and risk functions for the CAD$500 bn investment fund.
SWAP RATES SLIP BACK
Wholesale swap rates may have settle back a bit today after yesterday's strong lift but most of the real action happens near the close. Our chart will record the final positions. The 90 day bank bill rate is up another +2 bps at 4.21%. The Australian 10 year bond yield is now at 3.95% and down -9 bps. The China 10 year bond rate is down -1 bp at 2.71%. The NZ Government 10 year bond rate is now at 4.66%, and down -4 bps from this time yesterday but still well above the RBNZ fix for the NZGB 10 year which was down -6 bps at 4.56%. The UST 10 year is now at 4.15% and down -7 bps from this time yesterday.
EQUITIES MIXED
In a volatile session on Wall Street, the S&P500 closed up +0.6% in its Tuesday trade. Tokyo has opened -0.3% lower. Hong Kong has opened -0.4% lower, Shanghai has opened -0.1% lower. The ASX200 is up +0.6% in afternoon trade. The NZX50 is up +0.4% in late trade.
GOLD JUMPS
In early Asian trade, gold is at US$1709/oz and up +US35 from this time yesterday, but down -US$4 from where it closed in New York.
NZD HOLDS
The Kiwi dollar is little-changed at 59.5 USc. Against the AUD we are also little-changed at 91.6 AUc. Against the euro we softish at 59.1 euro cents. That all means our TWI-5 is now at 69.6 and and unchanged from this time yesterday.
BITCOIN DUMPED
Bitcoin is sharply lower today, now at US$18,369 and down an eye-watering -10.9% from this time yesterday. Volatility over the past 24 hours has been extreme at just over +/- 9.1%. Remember, it was exactly one year ago today that bitcoin hit is record high of US$67,554. It's been ugly since. Today's disaster is because a large platform (FTX) shook near collapse, and has been "rescued" by the even larger (and arguably more dodgy) Binance (and its CEO Changpeng Zhao).
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62 Comments
Today's disaster is because a large platform (FTX) shook near collapse, and has been "rescued" by the even larger (and arguably more dodgy) Binance (and its CEO Changpeng Zhao).
"Arguably more dodgy" is all relative. Definitely no more dodgy than the collective likes of HSBC and JPM, both of which are among the largest owners of equity in the Aussie banks that power our housing bubble.
Anyway, quite unfortunate that it's all ended this way. FTX and Sam Bankman-Fried were trailblazers and to see it end up so undignified is sad. People need to be careful with the 'I told you so' point scoring as plenty of 'smart money' was following FTX / SBF. What will become of him is unclear.
And probably what's missing in all the hype and information flows is the smart young things at Alameda Research, who look to be responsible for triggering all this. The team are all hyper-smart, math-centric, young tech nerds (CEO Caroline Ellison looks like she is 12 and not suited to predatory trading strategies).
yes Caroline isn't cut out for social media, let along crypto perhaps.
She messed up hugely when she tweeted to CZ (of binance) without thinking and gave away their critical price pressure point for a token called FTT. Once it lost that price point ($22) it was over.
It was actually incredible watching all the on-chain analysis which picked up the entire story before it was public (should of traded off that really)
I looked into FTX and Alameda early in the year. I couldn't figure it out and just thought I'm not smart enough to know what they were up to. SBF also gives off weird vibes. I guess it comes back to one of those things Buffet says - if you can't understand it stay away.
Its funny because the all time high of my portfolio was much higher in say early January (when BTC was "only" around 53k). Altcoins always bounce higher in the dead-cat bounce.
Best thing was cashing out for taxes on 1 April - 7am. Lol
But I did get back in with a little bit (play money) - from around May / June (post Luna crash) Even after today I think I'm up $70k-ish which ain't that bad.
When crypto has its blue days its always mixed emotions. On one hand, I lost a bit of money today. On the other hand, most of my liquid wealth is in cash and then I remember that I started selling when BTC was 48k. Its amazing how many supposedly smart and “successful” crypto billions manage to lose it like this. Margin trading and borrowing always seem to be the toxic mix.
For the record I bought some BNB this morning (the coin of the arguably more dodgy fellow's exchange). Which still seems to be doing well and is (I think) the top crypto performer since 2017.
I guess the tax man will soon lose interest if prices continue like this!
I think the smart and “successful” are actually stupid and "lucky". They walked into a casino, put their money down on a long shot, won big, but were too stupid to leave again
Really? Let's take a look. DCA'ing monthly into BTC from ATH to now (approx P12M). ROI in USD = -6.6%. NZD/USD down 15.8% over same period. So let's say ROI for the Kiwi punter is 9-10%.
Is this stupid and lucky?
Depends what else you do with the spare time. If you're devoting plenty of hours into being a mini day trader but your net returns are treading water, then that's more of hobby, than a serious commercial venture.
For sure there's plenty of tales of riches, but consistent high performance from passively investing is a rarer beastie.
Are you whistling in the dark JC?
Let's look at it. You would have to agree that DCA'ing into BTC is not necessarily a bad play with a volatile asset class. Let's look at some returns on BTC (in NZD) DCA'ing on a monthly basis.
P12M - +9%
P2Y - +2%
P3Y - +114%
P4Y - +247%
Worse is the mixed messaging. Orr is raising the OCR but not saying anything that might alarm people. Robertson is saying we are in the best economic position in the world .
Why worry.. listening to our glorious financial leaders it all sounds like a minor blip to me. Lets have a big spend up for xmas.
That is one approach.
Another one is to stop spending on anything other than essentials like food, rates, power etc.
Because inflation is zero on things that you did not buy.
Sure money in the bank is for spending at some point. But over time I hope that TDs return to +ve (like it was until very recently), and so the value can catch up again.
My approach has been to cut back to part time hours and enjoy a lot of what life has to offer today in the extra spare time I now find myself with. With the acceptance that I'll be working past the 'retirement age' of 65 on the assumption that my hourly rate then will have roughly kept up with inflation.
Why slog it out trying to accumulate enough capital, then stress about protecting and growing it enough to finance an early or on time retirement?
Maybe a good idea would be to catch up with some people in their late 60s who have nothing behind them, see how they're finding things.
It is all indeed a balance though, time is pretty short. Me myself I prefer working long hours over the warmer periods as it's 2-3x more productive than winter, then take whole winters off, 3-4 months or so, with no obligations.
All value is related to confidence, in this instance, one is indexed against something measurable (i.e. the value of the territory issuing the fiat), and one is indexed against what anyone is prepared to pay for it. With fiat, you can at least make a rough approximation of value, with something like a digital currency, without any indexing, the value is 100% arbitrary.
Retail was up +16.6% year-on-year, and services were up more than +40% on the same basis
Some people might remember that the first week of October 2021 was a dead duck due to Covid restrictions in Auckland. If you look at consumables year-on-year (which truck on regardless) the increase was 2%.
Poor Orr is rasing the OCR to slow down the economy and Inflation and Jacinda is suggesting banks absorb some of his OCR increase for a "social contract" all the while she is pissing money all over the place.... Perhaps she ask , why Orr is increasing the OCR , is she too blind to see the "crisis" perhaps?
A 72.8% drop in Bitcoin's value over the last 12 month! wow! That makes stocks or real estate drops look like nothing!
Previous cycles are higher Dr Yvil, around -85%. FYI, Meta is down 70% in the same time period.
Dollar cost averaging monthly into ol' ratty over same time period is -6.6% (or +9% in NZD). Probably better than a Kiwi rental.
Here we go. As predicted the cocky Williams Corp laying off up to 30% of staff…
https://www.nzherald.co.nz/business/nzs-busiest-residential-developer-l…
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