Here's our summary of key economic events overnight that affect New Zealand, with news banking rescue efforts are underway in both the US and Europe.
But first up, the US labour market never stops signaling its strength. Last week's jobless claims came in way below estimates, in fact their lowest in months at +217,000. That is almost back to the low year-ago levels. There are now 1.9 mln people on these benefits
American building consents and housing starts took an unexpected jump in February, is a moderately bullish sign that few saw coming.
But the Philly Fed factory survey stayed as weak in March as it was in February, and did not get the expected improvement analysts were looking for. In fact, new order levels fell to their lowest since May 2020.
There is a private rescue underway for First Republic Bank, a regional bank based in California. Banking majors, led by JPMorgan Chase, are working to ensure it doesn't fail, separate from public regulatory oversight.
And Branson's space adventure Virgin Orbit said it will "pause operations" in an attempt to shore up its shaky finances. Almost all employees at the satellite launch company will be furloughed.
Across the Pacific, Japan's core machinery orders, which exclude those for ships and electric power companies, jumped +9.5% month-on-month in January, accelerating from a downwardly revised +0.3% rise in December and far exceeding market expectations for a +1.8% gain. Non-manufacturing orders increased by +19%, with sharpest gains in construction where orders doubled.
Japan and South Korea are making up, trying to put their fraught relationship back on a more normal basis. This is actually a big deal for the region.
In China, average new home prices in their 70 major cities dropped by -1.2% year-on-year in February, slowing from a -1.5% drop in the previous month. This was the tenth straight month of decrease in new home prices but the softest pace of decline since July 2022, as Beijing ramped up policy support for the ailing property sector. Many more cities saw small rises month-on-month for both new and existing housing units.
Separately, President Xi said global market turbulence caused by the Ukraine war has shown that agriculture is a “national security issue of extreme importance”, while making a strong call for food self-sufficiency in a newly published speech.
As widely expected and signaled, the ECB raised its policy rate +50 bps to 3.5% ignoring the stress on banks from the Credit Suisse issues and staying focused on fighting inflation. It is maintaining its tightening bias.
The crisis for Credit Suisse isn't improving. It CDS levels are ballooning (over +3100 bps) and that is despite a SwF50 bln lifeline given them by the Swiss central bank. Markets fear that just isn't enough.
In Australia, their labour market came in stronger in February than expected with +64,600 extra jobs or which +75,000 were full-time positions, and part-time roles fell more than -10,000. Their jobless rate fell to 3.5% while their participation rate was unchanged at 66.6%. (NZ is 3.4% and 71.7% respectively.)
Meanwhile inflation expectations are holding at 5%. That is similar to January and similar to February a year ago. The lack of progress shows how sticky inflation is in Australia.
Globally, freight rates for containerised cargoes slipped again last week, but by less than previously. They are now running at a third lower than their 10-year average, an average that includes the pandemic spike. Bulk cargo rates were up strongly again this week and recovering almost all of the weakness of the past six months.
The UST 10yr yield starts today at 3.57% and up +10 bps from this time yesterday. But the UST 2-10 rate curve is more inverted at -60 bps. Their 1-5 curve inversion is also more inverted at -76 bps. But their 30 day-10yr curve is less inverted again at -54 bps. The Australian ten year bond is up +12 bps to 3.39%. The China Govt ten year bond is -2 bps lower at under 2.87% and almost a 3 month low. And the New Zealand Govt ten year is starting today at 4.38%, bucking the trend and down -8 bps from this time yesterday.
On Wall Street, the S&P500 is ending its Thursday session back up +1.3%. Overnight European markets all rose about +2% except London which rose +0.9%. Yesterday Tokyo closed down -0.8%. Hong Kong fell -1.7% and Shanghai fell -1.1%. The ASX200 ended its Thursday session down -1.5% but the NZX50 closed up another +0.7%.
The price of gold will open today at US$1914/oz and back down -US$14 from this time yesterday.
And oil prices start today recovering +US$3 at just on US$67/bbl in the US. The international Brent price is now just on US$75/bbl. That's back up half of yesterday's fall.
The Kiwi dollar is little-changed against the USD, now at 61.7 USc. Against the Aussie we are softer at 92.8 AUc. Against the euro we are softer at 58.1 euro cents. That puts the TWI-5 at down to 70.1 with a -40 bps retreat.
The bitcoin price is a little firmer today, now at US$24,812 and up +2.4% from this time yesterday. And volatility over the past 24 hours has been moderate at +/-2.5%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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113 Comments
Morning
Bit off topic...
Brent crude is used as fuel price benchmark for nz fuel costs in nz.
Now that NZ imports refined fuel, is there a relevant refined fuel benchmark? And could that be reported?
Cheers
Bit off topic. NZ should not be importing energy. It is time to become energy independent in this collapsing globalization system, where NZ is losing the battle with an account deficit of $34.8 billion. Time to dig up our fossil fuels, create more hydro, get us some nuclear, gas and coal fired power plants. Wake up, cheap energy = higher, cleaner, safer standard of living. But don't tell the USA.
Lets Do This
Is New Zealand the Saudi Arabia of wind? Bruce Munro talks to those gearing up for a decarbonised economy that will be largely powered by wind.
Imagine in 10 years time you have two big batteries sitting in your driveway, solar is half the price it is now, home wind solutions are viable, and grid electricity is twice the price. I can see a real move to off grid housing in the nearish future. And if you run out you can just drive your car to the nearest charging station and then run your house off it. Obviously electric cars will need to change to be a supply as well as a draw, but that isn’t exactly impossible.
What NZ company is the best place to work to help make this happen faster? A solar provider?
Imagine....
To be fair, you raise a great concept, but reality is unlikely to match expectations.
I have a newspaper from the Moon Landing. Sure, we have advanced somewhat since then, but are still hundreds of years (if ever) away from the stuff they thought we would be doing in the 80s.
Any increase in battery technology is quickly eaten up by increasing functionality. Reference our ability to get back to the moon... The technology now uses more power than before, so essentially we are going backwards.
The secret is to just use less power.
I mean... we've advanced in ways that were unfathomable too, until it actually happened. Reference - my 486 DX10 family computer which cost a packet in 1994 or so, which as a less advanced processor than the one my cellphone uses to determine the focus length for the self-camera.
The main stumbling blocks with using EVs as battery storage is a) they haven't had the chemistry to handle that level of charge/discharge until recently, 2) there's still competing standards between Japan/Chademo and the various incarnations of Type 2, which don't support household V2G like Chademo does already. It'll happen, but cars without it now won't be able to use it. And for good measure, iii) It's not exactly in the market's interest for a bunch of paying customers to suddenly be able to not pay, so there's a degree of the fox guarding the hen-house.
Quite insane that a bog-standard 2012 Nissan Leaf can run a house with V2G but doesn't have the battery to do it, where as a Chinese-built Tesla with LFP has an ideal battery for it but can't handle the thing the car that's ten years older was designed to do.
Many sailors have moved to the deep cycle Lithium house batteries that can be charged discharged almost 100% with no harm vs AGM. But they are not cheap.
.
Lithium Iron Phosphate? LiFePO I read much lower risk of fire - very important on a boat.
Yes, re your computer, the modern ones are more sophisticated, but how has that unfathomable change actually improved your life?
Weather forecasting supercomputers make trillions more calculations per second than 50 years ago, yet forecasts are still roughly the same accuracy.
A modern five-day forecast is as accurate as a one-day forecast in 1980 Weather forecasts have radically improved - Big Think
That is a huge gain in forecasting a chaotic system.
I'll start with the huge amounts of computational power we are using now to check chemistries for new battery formats and their likely resilience and then being able to calibrate those models or improve them using x-rays to look inside batteries to check if what we thought was happening was actually happening. Lithium Ion batteries are not knew but our understanding of how they work has dramatically increased in the last fifteen years.
There is an absolutely huge great leap forward waiting in the wings with medical-grade research AI if we don't manage to cripple it with start-up culture and financial crisis spillover. The ability to collate data to fine-tune cell models for basic things like cell functions and even just combination therapy using existing medicines will make the Covid-era seem like the dark ages.
We live off grid so power consumption is something you have to know about. We average under 1kwh per day. So equivalent to a $10 power bill per month + fixed line charge. When we were on grid in town we had average size power bills.
The difference is solar (plus a woodrange in winter) for space and water heating, led lighting, and appliances that are used during darkness need to be energy efficient. Otherwise we live pretty much the same.
The big problem I have with my power bill is the grossly ridiculous fixed charges each month. They are by far the major component.
Yes all that infrastructure is not free.....
It cost me about 5k to set it all up, so that's our fixed charge.
There are electricity retailers who offer 'no daily charge' plans ... Octopus Energy and Nau Mai Ra (at least). Worth looking at if you are in their serviced area and are a very low user. Their per unit charge is a bit higher, but that is no issue if your consumption is very low.
Beanie, how do you heat your hot water in summer? Obviously not with solar electricity, perhaps a solar heat tube system?
How do you manage refrigeration? 1kW per day solar generation does not seem to cover that either? Unless you have an extremely efficient small fridge and no freezer?
Genuine questions from another off-grid household, but with a larger system that does hot water, refrigeration and home appliances with solar electric. (My system was a DIY installation for $9k).
2c - we heat water in the summer 6 months, passively (a bigger, more efficient camp-shower, enough for 30 mins - flat class-covered, insulated tray 100mm deep, total loss/lost one out fills it up for next day).
Top-loading freezer carcase, used as a fridge. It's outside the S side of the house, so hardly works at all for thew winter 6 months. Lid is in the house, body outside (bay over). 12-volt Danfoss comp, hardly runs. We run the house on 300 watts of PV, and a little micro-hydro.
I'd never do a system doing real heat from batteries (cooking, heating); too much entropic low-grade heat, too much battery-life loss per output. Solar is better gained directly.
Thanks for the info, PDK. I believe you are somewhere down near Antarctica - Otago? Refrigeration is a different proposition here in the Far North where the temperature in winter does not often go below 10C, even at night.
While the hot water cylinder is on the solar system, the heating only takes place during the middle of the day when energy is coming directly from the panels, however there are losses in the solar controller and inverter which could be avoided with direct solar heating. This is a compromise due to converting an existing mains powered residence ... so many things could be done differently (better) in a new build.
Things are also constrained by Mrs 2c who has 'non-negotiables' in terms of energy hungry home appliances. She is a real peach in every other way, so 'happy wife = happy life' is a dominating factor here :-)
Solar tube for water. I have sited it so it doesn't get afternoon sun in summer but it still boils. If I did it again I would have dedicated pv running directly to an element. Thermostat and no battery.
We have a mid sized 4.5 star fridge freezer that uses 0.6kwh per day in summer. Got it from trade depot so wasn't expensive.
Panels were under 2k, same for batteries, solar controller and inverter were just over a grand from memory. I always DIY everything but for this an electrician mate was keeping an eye on me. I have the pv panels with not much tilt so they maximize output on an overcast day.
Looking at a 4.5 grade fridge to replace a somewhat buggered 2 star one that needs replacing anyway.
At this point I'm not wanting to buy anything that is less efficient than what I've already got.
Next desktop CPU will be 3x as quick as my exist one but use half as much power to do it.
Thanks for the back ground to your systems, Beanie. Here 5kW of panels, two controllers to cope with the solar array output, modest battery bank, 5kW inverter. Scaled for reasons given in my reply to PDK. Cheers.
No it will not change our fossil fuel consumption, in the short run it will increase it. Wind turbines take fossil fuels to produce, maintain infrastructure and service. Sorry kids no tea tonight damn wind ain't blowing.
All the votes for Fossil Lower's statement show why all our energy, social, water and racial reforms have to have democracy kept well away from them. David Seymour summed it up with his statement saying that he didn't much worry about all sorts of societal changes, as long as it doesn't get in the road of a vibrant Liberal Democracy.
Sorry Sit23, dumb it down for me please. What is wrong with, or what do you disagree with what Fossil Lover said above? You may have articulated where you stand on these issues in the past but if so, I missed it.
Anyone advocating thieving from the future to satisfy their current (inadequacy-driven?) desires, is just that; thieving.
You have to pretend the planet is infinite, to justify that approach.
Which is somewhat short of the truth.....
The trouble is someone else will definitely thieve it. The military and economic advantage of fossil fuels guarantees that. Tragedy of the commons.
Without fossil fuels I doubt you would be on this planet PDK. We are not 'thieving' from the future, we are creating the next generation. To consume you are a thief? Your belief in global warming is clouding your judgement, as any religion does.
The fact that this already has 6 likes really sums up the planet’s fate.
Stupid people always make the most noise and the bonus is, there a no downside to being stupid. It's those around the impaired doing the suffering.
Where is IT GUY he is usually up and at em
We've been over this Jimbo, the planet is going to be fine, it's not going anywhere. Habitats, animals and organisms will continue to evolve and adapt or they will retreat into the past.
Just like there has been an asset grab since the GFC there will also be a resource grab in the next decade. It would be in NZ's best interests to look after itself in multiple industries. It would be a move towards self sufficiency. Hey, it might even divert some of our focus from the real estate market.
You know what happens if our planet gets a blanket of greenhouse gases that keeps too much heat in? ... We could end up as hot as Venus.
Sure do Chris. Just to let you know that Jimbo Jones has edited his post which i originally replied to so now my reply can be taken out of context. Pretty poor form Jimbo. Edit: If I'm mistaken Jimbo about this - then my bad, sorry.
Anyway, the planet will be fine - it will still exist in some shape and form - as hot as Venus in your example. Our current civilization and way of life and much of the existing habitat is in for a huge shakeup without a doubt. But we all have a sense of entitlement that will come in for a not so little attitudinal readjustment. Upgrading our perfectly fine phones or tablets is a prime example although it will be much greater than this.
But on a global stage, NZ should put its big boy pants back on and actually start to look out for itself and try to ensure that we are somewhat prepared for the resource grab that is coming this decade. Cheers.
I don’t remember doing that. What did I change?
If I'm mistaken, Sorry. I can't recall what was said that made me post straight away.
Should we evolve and adapt now or keep up our current lifestyles and expect future generations to adapt to a much bigger problem?
Surely humans would be pretty be stupid to not consider the future and just assume we will adapt to anything (and maybe humans are based on your 14+ likes).
It would be good to adapt now from an ecological pov, but I fear that you personally, or NZ as a country cannot influence the long term outcome nor other countries decisions. In the here and now, for the sake of New Zealanders future generations, we need to prepare ourselves for a conflict over resources. How we manage, use and wean off those resources is then our choice.
Yes, google petrol (MOGAS95 Petrol) and diesel (Gasoil 10ppm sulfur). You can also import prices for NZ at the (very good) MBIE website on oil imports etc: https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resourc…
Why I asked is to have fuel benchmarks relevant to the post Marsden Point era, to figure whether fuel companies are gouging or not. for the last couple of months, where I buy my diesel, in Central Hawke's Bay there has been a $0.34/lt price gap between Farmlands and Caltex and Mobil and that's before the $0.12/lt shareholder discount is applied. Farmlands won't be making a loss...
Our last diesel fill at a Truck Stop here in the Far North a few weeks ago = $1.91/litre incl GST with Farmlands card discount applied ... from memory, the BP station 500m further along was $2.31/L. As Lou says, Farmlands won't be taking a loss ...
China undoubtedly has great concerns over global food supply, it is as has been said here often enough, their achilles heel, and obviously Ukraine features largely in those concerns. In which case a word to their pals in Moscow about this, might be productive?
During the cold war the scenario considered most likely to cause the Soviets to invade Europe was a collapse of their food supplies. The US went to great lengths, while maintaining a strong military stance in Europe, to ensure the USSR was well supplied with grain and other food. I suspect many US grain farmers made fortunes selling their grain to the US government for it to be passed on and sold at a discounted rate, if not given, to the Soviets.
For China, invading a neighbour will not solve their food issues, and may exacerbate them. From that perspective they need to look further afield. Indeed when considering this, it may be the one constraining factor in their expansionist dreams?
Do they need to? They just need to be able to be the most attractive market to Western economies who will export them everything they can, often at the expense of their own population. They could invest a significant amount in their own food security, sure, but they could also spend that money stabilising their economy, lifting living standards and putting pressure on other countries through advancing environmental causes in a way market economies simply can't. Or, you know, military expansion.
So which would you do? Let someone just sell you the stuff you want, knowing they probably won't be able to sell it to the thirty other countries they'd need to negotiate and do deals with just to shift the same amount for their own BOP and use the savings to improve your own domestic situation, or spend it on an attempt at internal resilience?
De-Globalisation is underway. The once protected trade routes will become vulnerable. Importing your food from across the globe is not going to be a very secure way of feeding your peoples.
That depends on how reliant your partners are on you for the kind of trade you can soak up. The alternative is invading those food baskets by force and having to run blockades and protect the repatriation of your newly won wares to your homeland.
Trade but with increasing twisting of arms is by far and away the better solution. It also lets you pick the battles you want to fight for other reasons.
That's a valid point. More a factor of two of the world's largest nations contributing to over 36% of global economic output. Worst is those two nations spend 52% of the world's total military budget.
What partner might feed China?
You an cross of USA, Canada and Aus if things get nasty. That leaves Brazil and Argentina which bring trade route security issues into play.
A precarious position compared to the geographical and resource advantages of US/Canada and friends.
It is an interesting debate isn't it? But this will be more about understanding Xi, and his clique within the CCP psychology. What is their true long term goal. Power and preeminence can be achieved several ways. In some it is fragile and short lived, with lots of resources required to preserve it, in others it is strong and self sustaining. But politics is a fickle mistress whose loyalty waxes and wanes beyond our control, so the first option is the one commonly used. Food security the world over would not be an issue if political leaders fitted the ideal of democratic leadership, but they don't. So which way will Xi and his cabal jump, and what will Putin do if his food production falters? I cannot say what I would do as in this discussion I am neither Xi nor Putin. Nor can I claim to have a clear understanding of their psychology or what the view of the world is and what advice they receive.
Check your history. China has never cared about the global food supply. China has never cared about it's own food supply if the government has more important things to do.
But have they ever had to before? With the way things are changing around the planet climate wise, combined with politics what wasn't a problem last year may well be a big one now.
Add to climate and politics the huge ramp ramp up in calorific demand from the Chinese middle class which has grown from 40m to 700m over 20 years. Unlike self sufficient Russia, Chinas physical ability to feed itself must now be questionable.
A bit off topic of "helping you make financial decisions"
Russia is apparently sending women to the frontline, women prisoners of all things. Disgusting behaviour. Also are said to be low on war supplies.
Is the fact that they are women of any meaning? We are all equal these days aren’t we?
From WW2 accounts, they make excellent snipers.
WW2 accounts all from Soviet propaganda. Separating myth from truth during that era almost impossible. The Germans certainly took the Ukranian female sniper Pavlichenko seriously so she was obviously effective despite looking like a foxy film star plant in some photos. She's supposed to have killed 309 Fritzes compared to top Ruskie male poster boy sniper Zaitsev at 240. Whether women are better at sniping than men is a topic best approached cautiously !
You realize they don,t force the prisoners right. Poland also recently stated they believe Russia can maintain the current war setting for another two years, odd that Wagner's head also gave some hints on Russias's goal, taking the entire eastern dniepro would take two years he stated.
If I recall he said three years to get all territory entirely to the east bank of the Dnieper. Either way large problems then still exist to the north where Kiev to the west and Kharkov to the east, control what is more or less the top of the funnel thus created. That leaves Russia with either creating somehow and holding a hard border eastwards from the Dnieper or cracking on and taking and subjugating all of Ukraine.
When are those tanks gifted to Ukraine due to arrive?
Last I read, Bradley fighting vehicles arriving now, Leopard heavies very soon, Abrams early northern summer. UKR should have a brigade strength armoured force by the end of spring.
FG. WW2 and more latterly Yom Kippur demonstrated that maintaining 'hard borders' in the face of modern military technology is largely no longer feasible. With Ukraine quietly gaining JDAM stand off heavy bombing capability any fixed RU fortification line would be breachable.
Agreed, it could only be some sort of demilitarised zone and getting to that point will take until hell freezes over . Ignoring WW2, the Russians this time round,disregarded the strategic importance of Kharkov. Back then once the Russians got Kharkov back (the second time that is) they were able to push southwards mopping up as they went with the Dnieper a natural defensive line on their west flank. This time they had a half hearted crack at Kharkov and got thrown out. If they had instead concentrated and secured a salient there first they would have had forces north and south and been able to replicate those WW2 manoeuvres. Instead they are now concentrated down south and Ukraine is free to re supply & reinforce from the north because the Dnieper is now largely working for Ukraine as it did once for the Russians. Russia cannot now move westwards because of the Dnieper. Only remaining tactic now would seem from the north and somehow to involve Belarus in an attack but that would create an international political firestorm for the Belarusians, and they know it.
Yes, good summary. While the Dnipro is a formidable barrier the worlds '2nd most powerful army' ought to have the means to cross it but probably doesn't, with the funds allocated to procure bridging equipment likely diverted to buy an oligarch's mansion. The Institute for the study of war believes the Russian offensive has now likely culminated. Just as the rasputitsa mud shortly begins to dry and harden.
Appreciate it’s a well and truly different theatre now, satellite surveillance and GPS guidance etc, but still find it almost satirical that the Wehrmacht, largely horse drawn and vast vast supply lines at that, took Kharkov twice, each in a matter of weeks, and the modern Red Army from right next door could hardly even dent it.
They would easily have done so had Putin not been deceived by his incompetent military into believing a lightning strike against Hostomel airport, opening the way for mass flights of military personnel and materiel to be flown in, would open the way for the taking of Kyiv and collapse of the government. A loony plan that was doomed to fail from the outset. Just as Stalin eliminated almost all of his competent officer cadre, so too has Putin surrounded himself with Buffon lackeys.
Interesting read. I'm in no position to judge, though well aware we are largely only hearing what 'our' side want us to hear and believe. Russia, Putin or not, will never just role over...it would be a fight to the end and beyond. But we are being led to believe it would just be a doddle.
That was a bit of an eye opener.
Penned by a Ruskie. You know, the same country whose supposedly powerful airforce is presently largely cowering far from the combat zone, reduced to remotely lobbing inaccurate low yield missiles from long distance while UKR operated US HARM missiles suppress most RU air defences, restricting them to mostly hedgerow hopping tip and run missions. Or bravely running intercepts against propellor driven drones in international airspace.
What I can’t work out is who or what or how that encounter was actually filmed. Satellite, high flying spy plane or did the other Russian plane provide it?
From the drone itself, I thought?
Yes I saw that but I thought I had seen another shot taken from above the fighter doing the fuel dump. Might be me though, got into the easily confused column at school and never really came out of it.
The point middleman is this is one article by a 'Ruskie", yet we are bombarded with a US based media view. As a result, many seem to think that taking on Russia is not such a biggie.
It seems gambling that Putin won't drop a nuke if he is pushed to the brink is considered a safe bet?
This mess needs de-escalation asap. No one seems interested.
Yes, MSM output on Ukraine is dominated by western centric bias. The Ukrainians control media access with a vice like grip and feed only the angles they want known. Paradoxically the Ruskies seem to allow out media, including video, that's highly damaging to them. Putin is struggling to regulate Russias milblogger community and seems to have even less control over what the ordinary Russian soldier posts online. The internet is awash with the product of Russian government troll farms but much of their output is so crude that's is laughably easily to dismiss. Taking on Russia used to be considered almost suicidal but as with 1941 when it was vastly more militarily powerful on paper than Germany, its much vaunted military is being again being revealed as distinctly 2nd rate. Putin won't use nukes, he knows it'd be the end of his regime and of Russia and for all his grotesque personal characteristics he is a die hard nationalist and patriot.
They are getting desperate. Children next. Then the family pets.
And your source is...?
Not true. Women and men prisoners are volunteering to join the Wagner army, I think it is called. Totally different.
If China gains food independence, a lot of our exports could find themselves without a home.
Easier said than done.
It is reported that between 2000 and 2020, the country's food self-sufficiency ratio decreased from 93.6 percent to 65.8 percent. A big contributor to this is changing consumption patterns. As the Chinese economy grew sharply in the last 2 decades, higher purchasing power saw demand for imported items such as meat, dairy and fruits soar.
Ecological factors such as loss of arable land also have a role to play here. China lost about 5% of arable land between 2013 and 2019. You can't industrialise at such a phenomenal pace without destroying the environment in the process.
1.42 billion is a big food bill per day? Pass the tomato sauce please..
Would be interesting to see if food independence is achievable in China.
Maybe if the food is boiled rice.
I guess they mean staple foods. They would consider the likes of milk as a luxury, probably not what they are worried about.
Boiled rice on its own is not enough by a long way. Case in point the Japanese Imperial Army had trained their soldiers to believe that they were elite specimens, in size and strength, unmatchable. That was until they met the American marines at Guadalcanal who physically, were overwhelming. A question is staple diet of rice for the former and USA beef and other protein for the latter. It’s interesting now though watching the Japanese Brave Blossoms with Japan itself now having sizeable locks and other forwards.
Yes, astonishing really that WW2 era Japanese considered themselves so superior when there was in the population at that time obvious widespread shortsighteness, growth stunting, bowleggedness from malnutrition induced rickets etc. Myths about their supposed superhuman endurance under tropical jungle conditions quickly diminished after the Papua New Guinea campaign and were comprehensively put to rest in the disastrous Burma campaign when the imperial forces were decimated by tropical disease and disrupted supply lines. As an aside the yanks deliberately chose very tall soldiers to escort and guard Japanese officers to surrender ceremonies, to emphasise the diminutive stature of the Japanese.
They either need to drop their population 99% or they need to expand.
The former if it happens, won't be deliberate and will be catastrophic for the domestic populace. The latter when it happens, is what the rest of the world is getting antsy about.
China's population is already predicted to halve in the next 45 years.
45 years to halve - expansion it is!
Chinese industrial output, particularly cheaper value goods, will begin to struggle as fewer young people join the workforce, many of whom are growing up in upper middle-income families and won't be keen to work in factory environments.
The crisis for Credit Suisse isn't improving. It CDS levels are ballooning (over +3100 bps) and that is despite a SwF50 bln lifeline given them by the Swiss central bank. Markets fear that just isn't enough.
Fed's New BTFP Facility Is Stealth QE Injecting Up To $2 Trillion In Liquidity, JPMorgan Concludes Link
Credit Suisse is an investment bank. So why does it matter? Surely people know that any investment is not guaranteed, they should invest wisely.
Counterparty Risk isn't restricted to 'people'.
Interbank Counterparty Risk is what caused the GFC, and it's staring us in the face again today. That's why we see the farce going on in the US this morning with JPM 'generously supporting' their regional banking sector. If the recovery in those stocks last beyond today, I'll be surprised.
It matters because 'debt deflation'....and the collapse of the basis of the worlds output.
Credit Suisse Group AG qualifies as a global systemically important bank (G-SIB) and is required to disclose these G-SIB indicators on an annual basis. Link
“I’m the only one between you [the bankers visiting the White House] and the mob with the pitchforks,”
An honest politician!....in private.
Good article. Wicked problems!
One wonders if the rate hikes need to stop, but at the same time can’t fall. Steadier rate path from here at around current levels ?
Stopping rates hikes will mean pretty much the abandonment of the CPI targeting regime. Markets won't like this. Fiat will still be a means of exchange but it will no longer be considered a store of value. The implications of this in the long term could be significant.
I think there is case that rates are already high enough to quell inflation, they just need a bit more time to work through their lagging nature.
The article that Audaxes shared suggests that ongoing hikes could pose a real systemic risk.
Rate hikes need to take a pause to survey the damage they have and still will cause.
Good link. Key quote as a source of their issues...
it turned out that the real estate that they had pledged as collateral was fraudulently overvalued, “mark-to-fantasy”
Sound failure. They add in the recent stupidity of cheap debt giving buyers a false impression of affordability and you have NZ In spades.
As widely expected and signaled, the ECB raised its policy rate +50 bps to 3.5% ignoring the stress on banks from the Credit Suisse issues and staying focused on fighting inflation. It is maintaining its tightening bias.
#ECB's Lagarde said there was "no tradeoff" between price & financial stability. Lagarde referenced the separation principle that lender of last resort functions address financial-stability concerns while rate policy addresses price-stability needs. Link
Hmmmmm...
Just like USTs, European and other bonds curves have been massive inverted but are now "bad steepening", too. Because this isn't about SVB or a potential US recession. Global deflation combined w/global recession. https://youtube.com/watch?v=flW_Gn
Could be a good time to buy some Credit Suisse shares and put them in the bottom draw for later.
With the (somewhat) bursting off the tech bubble it's amazing how many SaaS/tech subscription products and platforms are now scrambling to raise prices now that they cannot rely on easy VC capital to artificially extend the runway and smooth over potentially broken business models.
A particular application that my own business uses, along with some clients, has just announced - depending on the age of your account, total usage and exact feature set - immediate price increases of anywhere from 100%-500% to "cover the cost of inflation".
Now I know that inflation has been running hot, but not that hot. The same company has also not long ago reduced its workforce by about 25% and shuttered some regional offices completely.
I suspect the new pricing is what the old pricing should have been to allow for an acceptable level of genuine profitability, or at least break even. However, for years the company has been raising capital via various seed rounds, and presumably using that to allow for an artificially depressed subscription cost (I guess the end goal being either having the company bought out, or cornering enough of the market so that you can effectively force them to pay your new going rate).
Feedback in the user community is - as you'd expect - very negative and the problem facing so many of these tech products/SaaS is that migrating away is often not that challenging, particularly for smaller users. There's always a bigger fish, and there's always a smaller one happy to eat less as well.
I think there's going to be a lot more tech company failures off the back of the fact that they cannot use investor capital to allow for "opaque pricing as strategy".
Skinny cranked up my bill 11% yesterday. Time to check around at what other mobiles are offering.
It's your civic duty to shop around for mobile, Internet and power providers on a regular basis.
Mobile costs should be reducing each year as technology gets better/faster...
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