What happened Monday

Economy / news

A review of things you need to know before you sign off on Monday; ANZ raises persona loan rate; affordability stays bad, service sector contracts, A2Milk and Synlait feud, swaps jump, NZD stable, & more

18th Sep 23, 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/LOAN RATE CHANGES
The Police Credit Union raised its 2 year fixed rate. And ANZ raised its personal loan interest rate today, taking its rate up from 12.9% to 13.9% pa. That say "There will be no impact for existing customers, who will continue to receive their existing rate. This includes if they choose to top up their current loan."

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here today.

NO RELIEF
First home buyers received little relief last month as further mortgage rate rises offset the benefit of slightly cheaper house prices. We have the August update of home loan affordability here.

NO RESPITE
The service sector is contracting now, not quite as hard as the factory sector, but at a faster pace of shrinkage. Given there is surging immigration, and August still had FIFA World Cup activity, it isn't a great result. BNZ says: " We’d surmise the impact of the high cost of living, high interest rates, and weaker export prices have dented aggregate activity. Some election uncertainty could also be at play."

NO FRIENDS
Synlait Milk’s 'delivery in full and on time performance' of its manufacturing and supply agreement with a2 Milk has fallen 'below the level required', according to a2. Synlait put its shares into a trading halt after a2 Milk moved to end its exclusive supply agreement.

MORE GREEN BOX-CHECKING
Auckland Council is seeking $300 mln of new debt funding via a "green bonds" issue. The indicative issue margin is 0.65%-0.70% pa for this five year debt. That would mean they could be paying about 5.57% pa. Other than the label, it isn't entirely clear why some of the projects being targeted are especially 'green' as opposed to regular Council activity. Perhaps they appeal to investor's box-checking.

MORE UPDATES
ACT is the only party releasing policy today. That relates to constitutional reform and the Treaty of Waitangi. You can find all policies compared by subject area here, as well as the party lists and party philosophies. Later releases by Labour on solar subsidies are here.

MORE LANGUAGE SKILLS NEEDED
It is Chinese Language Week, and there are details and commentary on the benefits of broader language skills from John McKinnon here.

SWAPS RISE
Wholesale swap rates probably pushed higher sharply today across the whole curve. More Republican threats to shut down the US Government may be behind the moves for higher yields. But the real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 5.66%. The Australian 10 year bond yield is up +5 bps to 4.21%. The China 10 year bond rate is up +3 bps at 2.70%. The NZ Government 10 year bond rate is up +8 bps at 5.08%, but still well above the earlier RBNZ fixing of 4.98% which was up +4 bps today. The UST 10 year yield is up over 4.35% which is now its highest since 2007 and a bit unusual it should move up there while the US is still in a weekend.

EQUITIES MIXED
The NZX50 is up +0.3% near today's close. The ASX200 is down -0.5% in afternoon trade. Tokyo is on holiday (Respect for the Aged Day). Hong Kong has opened its Monday trade down -0.9%, but Shanghai is unchanged so far. The S&P500 futures suggest that Wall Street will open up a modest +0.2%.

GOLD EDGES UP
In early Asian trade, gold is at US$1927/oz and up +US$3 from this morning's open.

NZD STAYS IN TIGHT RANGE
The Kiwi dollar is little-changed from this time morning at 59.1 USc. Against the Aussie we are unchanged at 91.8 AUc. Against the euro we still at 55.4 euro cents. The TWI-5 is little-changed from this morning at just over 68.5.

BITCOIN INCHES UP
The bitcoin price is higher and now at US$26,634 and up another +0.6% from where we opened this morning. Volatility over the past 24 hours has been low at just over +/- 0.6%.

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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73 Comments

by Silvi | 18th Sep 23, 5:21pm 1695014467

And as Reuters reports, Everygrande Wealth management team have been arrested.

by Rob Reid | 18th Sep 23, 5:32pm 1695015164

If they arrest everyone doing dirty deals in Chinese RE they are going to need a bigger jail.

by Foxglove. | 18th Sep 23, 5:40pm 1695015639

No they hang ‘em high & fast.

by chemistpeter@g… | 18th Sep 23, 6:18pm 1695017902

No need to hang them after organ extraction.

by Squishy | 18th Sep 23, 6:40pm 1695019217

If they arrest everyone doing dirty deals in Chinese RE they are going to need a bigger "reeducation camp."

Fixed that for you.

by Rob Reid | 18th Sep 23, 5:23pm 1695014624

The silver bullion ETF I have has been bouncing up and down in a channel for 6 months. Thinking of selling when it next hits top of channel and buying more uranium miners. Would be good if there was a bunch of uranium profit taking just before I do it.

If I decide to make this trade I'll tell everyone so you can consider doing the opposite. I'm not the world's greatest trader.

by J.C. | 18th Sep 23, 5:38pm 1695015536

I own ETPMAG on the ASX. Got in mid-2019 after dumping Fortescue. Can't sell. Too emotionally attached.

by Rob Reid | 18th Sep 23, 5:59pm 1695016783

Assuming you mean ETFMG I see the problem. Peaked latish 2021.

I bought silver partly because of chat that it was cheap compared to gold based on historic averages. Wonder if this will still rebalance.

by J.C. | 18th Sep 23, 6:11pm 1695017472

Assuming you mean ETFMG I see the problem. Peaked latish 2021.

No. ETPMAG aka Global X Physical Silver, an ASX-listed company that offers cost-efficient and secure way to access silver by providing a return equivalent to the movements in the silver spot price.

Where it peaked is kind of irrelevant to me. It's a diversification on a gold-related portfolio.

by Rob Reid | 18th Sep 23, 8:55pm 1695027301

Yeah, feels right to have PMs other than gold for some diversification.

ETPMAG aka Global X Physical Silver does not return in a Sharesies search, therefore it does not exist in the same universe as me.

by lostinawoods | 19th Sep 23, 3:35am 1695051310

If anyone is interested in buying paper gold/silver backed by physical assets, I recommend checking onegold.com you can redeem physical metal from there too.

PS I don’t use one gold much myself as I prefer to stack physical metals but I opened account in the past and found it appealing.

by Audaxes | 18th Sep 23, 5:30pm 1695015012

US Treasury curve set a record for inversion. Not only that, bets on rate cuts have ramped way up again just in time for the next #fomc meeting. Whether they pause or not, markets remain steadfast it doesn't matter in the end. Link

by J.C. | 18th Sep 23, 5:35pm 1695015306

Shandong Gold Mining is the biggest Gold producer in China. It is no longer tracking the COMEX/London Gold price and is tracking the Shanghai Gold Exchange physical Gold contract price.

It went up almost 5% on Fri. For those unaware, these kind of movements in the gold price are uncommon.

Now looking at gold stock prices this year:

Shandong up 47.6%,

Aussie's Northern Star up 29.1%,

America's Newmont up 3.9%

by IT GUY | 18th Sep 23, 7:35pm 1695022547

even zerohedge has noticed the divergence .... fun times

by blobbles | 18th Sep 23, 5:55pm 1695016509

@David - dead link in your policy updates, under the "MORE UPDATES" heading

by HouseMouse | 18th Sep 23, 5:58pm 1695016685

IMHO BNZ are the best of the bank economists, by some margin. But don’t know what they are smoking in suggesting ‘election uncertainty’ might be a factor in the weak services sector. If anything, the likely prospect of a NACT government should be a positive? (Tax cuts, an-unlikely-to-be-sustained-for-very-long ‘sense of hope’)

It’s the interest rates, stoopid. Plus cost of living. And possibly less obvious things like lower bonuses / less likelihood of bonuses with lower company earnings (I think this factor is somewhat underestimated). Most employees in companies that provide bonuses get a feel for how likely bonuses are and/or how big or small they might be.

by JimboJones | 18th Sep 23, 6:29pm 1695018557

NACT will result in public job losses and income cuts for the poor. Tax cuts for the middle will just be invested in housing (either paying off the mortgage or buying a rental). So the economy probably would go backwards.

by HouseMouse | 18th Sep 23, 6:35pm 1695018951

But it’s mid to upper income earners who are the backbone of service sector expenditure.

I am sure some bureaucrats in Wellington are worried, though.

by JimboJones | 18th Sep 23, 6:44pm 1695019490

Yeah it flows through there too. How many IT businesses have lucrative govt contracts for example. Then there are all the builders and tradies that will be out of work when they axe state house building, remember what happened to housing development last time National were elected.

Not saying the cuts aren’t needed, but I think it will cause a lot of short term pain (well hopefully short term!).

by HouseMouse | 18th Sep 23, 6:34pm 1695018852

I think it’s also the dwindling of the wealth effect kicking in. I know JC is a big proponent of this.

My old man has pulled back on his spending big time. His share values are down a bit over the past year, but not by much. Yet he openly talks about his mediocre share performance as a reason for him to pull back on his spending. Yet the dividends he receives are still pretty good.

Reverse wealth effect.

by JimboJones | 18th Sep 23, 6:38pm 1695019112

Yes that too, so many factors. You are bound to spend more when you have $1 mil of equity than when you have $500k, even if you have the exact same asset and debt.

by HouseMouse | 18th Sep 23, 6:46pm 1695019576

So you multiply that behaviour by hundreds of thousands of kiwis who have seen the value of their assets fall, potentially quite significantly in the case of property.

by J.C. | 18th Sep 23, 6:50pm 1695019816

Reverse wealth effect.

Discounters are raging globally. Japan is 10+ years ahead.

As disruptors go, Aldi and Lidl take some beating. The German-owned discounters have come from nowhere to upend British food retailing in a way that not even Amazon – the ultimate category-killer – could imagine, as new research for The Mail on Sunday reveals.

Between them they now account for more than one in every six pounds spent in British supermarkets. And their relentless rise continues as cost-conscious customers feeling the pinch shop around for bargains.

https://www.msn.com/en-gb/money/other/discounters-aldi-and-lidl-take-25…

by HouseMouse | 18th Sep 23, 7:01pm 1695020466

Uniqlo come to daddy….

by HouseMouse | 18th Sep 23, 7:19pm 1695021593

My t shirts from Uniqlo which I bought more than 4 years ago and worn a LOT are still holding together well. I think they were about $15 each

by JimboJones | 18th Sep 23, 7:20pm 1695021626

Its debatable whether cheap food is good for society. If it were the same food at reduced prices then that’s probably good (as long as we don’t just eat more), but it most likely would be worse food at reduced price. It’s like when people go to the buffet because they can get a bargain by stuffing their face with cheap food, when really they could have spent the same money in a restaurant and got a bit less but much better quality.

by Pa1nter | 18th Sep 23, 7:46pm 1695023186

Yep. You can't compare NZ cheese, with US cheese for instance, because theirs is bottom tier chesdale type stuff.

Longevity science is leaning towards fresh, sun grown produce as pivotal to health. Even much of the 'fresh' produce at the supermarket is quickly grown and pumped full of water.

by meh | 18th Sep 23, 11:14pm 1695035650

Longevity science is leaning towards fresh, sun grown produce as pivotal to health

Haven't we always known this though? That we're now relying on science to tell us this suggests a major flaw in our education and a disconnect in our understanding of how Nature sustains human existence and wellbeing.

I attended a talk many years ago where it was mentioned that due to our industrial farming practices most of the fruit and vege in the supermarket were lacking in minerals and nutrients. The suggestion being we needed to become soil farmers, we need healthier dirt if we want healthy food.

by HouseMouse | 18th Sep 23, 7:54pm 1695023649

But so many of the non-fresh food staples are plenty cheaper in many other countries. That helps free the wallet for better fresh produce.

by JimboJones | 18th Sep 23, 8:02pm 1695024168

I lived in the UK for a couple of years. Food was a lot cheaper, but when I came back I couldn’t believe the taste and freshness difference. I’m starting to think that nothing is ever cheap without a reason.

by Pa1nter | 18th Sep 23, 8:28pm 1695025714

Scale and efficiency usually come at the price of quality.

About the only time it changes if you're buying very close to the source, in a relatively lower wage economy.

There really aren't too many places where being the equivalent of a middle class worker is going to have you significantly materially better off. Maybe you can get a BMW, instead of a Honda, but you're not getting a Ferrari.

by E46 | 18th Sep 23, 9:53pm 1695030832

Way cheaper to buy a BMW in NZ than in Australia for what it's worth.

by tis i | 19th Sep 23, 6:33am 1695061983

E46. Last of the great BMWs.

by Nzdan | 19th Sep 23, 7:53am 1695066794

Had an E36 328i project car for a while. Fitted an SC14 supercharger from a Toyota Estima, was a bit of fun. Probably one of the better cars to sink your teeth into, learned a lot about cooling systems as everything in this car was plastic (water pump, thermo housing, radiator brackets, expansion bottle, bleed screw). Blew a head gasket, swapped that out but I think the head was warped (cooling system would over pressurize) so I got rid of it.

by HouseMouse | 18th Sep 23, 8:47pm 1695026854

I am talking more about non-fresh produce items.

Things like cans of tomatoes and coffee.

BTW I thought the quality of fruit was much better in Aus than here. Price perhaps similar, but better quality for the price.

by Palmtree08 | 18th Sep 23, 9:24pm 1695029046

Our best stuff is exported.

by HouseMouse | 18th Sep 23, 6:10pm 1695017433

Advertising revenue slump for TVNZ. I still don’t get how so many people seem to be failing to read the recessionary tea leaves…

https://www.nzherald.co.nz/business/tvnz-tightens-its-belt-amid-adverti…

by chemistpeter@g… | 18th Sep 23, 6:20pm 1695018040

Maybe people are sick of the adverts with mixed middle class families with a pretty white GF/wife.

by kiwikidsnz | 18th Sep 23, 6:58pm 1695020293

...& where the male is always presented as dumb or dumber

by singautim | 18th Sep 23, 6:58pm 1695020300

In NZ adverts wives are petite, attractive, smart and usually white. But men are either white, old and dumb or young, non-Caucasian, big but still dumb.

by dollar_bill | 18th Sep 23, 7:08pm 1695020910

lol - take off the veil and tell us what you really think

by jeremyr | 18th Sep 23, 9:31pm 1695029500

Many are just sick of the woke approach to everything on TV. Many people I know just don’t watch any more, and haven’t done for years. They are switching to other entertainment and news sources. Less viewers means less advertising. It’s got nothing to do with being in a tough market, they have crapped in their bed and they are paying the price. They call it going woke and going broke for a reason. If they cut the crap and put something useful on the channel they might get viewers back.

by E46 | 18th Sep 23, 9:58pm 1695031139

🆆 🅾 🅺 🅴

by Rob Reid | 18th Sep 23, 6:22pm 1695018151

Yeah, does seem to be a big bias to optimism.

Of course, I've gone the other way...

The sentiment among my mates did finally start turning a few months ago as sales dropped away and they had to roll over mortgages. They seem to be able to see the writing on the wall when the wall is at arms reach, at least.

by JimboJones | 18th Sep 23, 6:34pm 1695018866

I agree it turned probably 2 months ago. Of course we won’t see much of that in GDP for another 3 months, how ridiculous. RBNZ has seriously over cooked it as expected.

by Foxglove. | 18th Sep 23, 6:54pm 1695020062

TVNZ. Blimey. What percentage of screen time are adverts stacked on adverts. Banal, unentertaining tripe, most of those too. And even worse, still think the volume is cranked up during presentation of same. And don’t get me started on the cosy government cronies, now drifting off a bit though, wonder why.

by HouseMouse | 18th Sep 23, 7:11pm 1695021086

I never watch tv (other than Sky Sports). But a lot of people still do. Especially older people.

by Foxglove. | 18th Sep 23, 7:20pm 1695021632

Ditto, more or less. Ditched SKY beginning of the year. Miss the tennis, golf a bit but for an old senior player and a fan that would wander down to the pub at 2.00am to watch the ABs in SA in the 80s, haven’t really missed the rugby either afraid to say.

by HouseMouse | 18th Sep 23, 7:56pm 1695023786

The football (soccer) is the main thing for me to keep clinging on. It was cricket as well, but that’s moving to free to air? I am rather partial to the Aus tennis open as well.

by Rob Reid | 18th Sep 23, 8:45pm 1695026751

Name any sport and I don't watch it.

by kiwikidsnz | 18th Sep 23, 6:25pm 1695018310

I always understood that advertising placement & revenues were linked to viewing numbers (apart from Govt advertising).

No mention of viewers numbers? Could it be that the last couple of years of blatant politically partisan, woke* & vanilla/ lowest common denominator, "AI" presenting std. TVNZ offerings coupled with increasing streaming services have simply turned off their audience?

*woke: "you know it when you see it" (cf. J Ardern)

by HouseMouse | 18th Sep 23, 6:29pm 1695018550

Only partly related to viewing numbers, right? Also related to the financial solidity of companies who wish to advertise.

by dumbthoughts | 18th Sep 23, 6:32pm 1695018752

How advertising is charged is dependent on the medium/channel and the pricing model.

A great deal of digital/online advertising has a direct relationship between viewership/readership numbers and revenue because the publisher (who runs the ads) is effectively paid on a 'per impression' basis that's measured as a cost per 1000 impressions/$CPM. This is very common with programmatic-type advertising e.g. where a website, such as Interest.co.nz, will have ad slots within its template that via the magic of an ad network can display different ads based on demographic, location, browsing history etc.

As a general rule, however, less traffic = lower revenue provided your 'CPM' stays consistent.

However, with a business like TVNZ and its broadcast activities it may simply be a case of advertisers tightening their belts as I believe a lot of their more premium advertising options are somewhat on a negotiated basis (e.g. TV advertising) - or TVNZ could have the nightmare scenario of advertisers wanting to spend less AND reduced viewership which further diminishes the 'value proposition' for the advertisers.

by kiwikidsnz | 18th Sep 23, 6:37pm 1695019023

Excellent summary, thank you.

by dumbthoughts | 18th Sep 23, 7:02pm 1695020578

No problem. I've operated various digital publishing businesses (and worked as an employee in others) for years, as well as working in other roles requiring me to buy advertising from mainstream media brands, so reasonably familiar with this stuff

For TVNZ, the big issue will be getting to the bottom of whether reduced advertising revenue is owing to a reduced willingness to spend on the client end, or a reduction in audience meaning you effectively can't get away with charging so much (because you're inventory is relatively less valuable owing to fewer eyeballs/ears).

I'm guessing from the tone of the article that it's primarily the former and not the latter. Would be interesting to see how TVNZ's viewership has changed across all its various platforms.

It's also worth considering that with TV/radio/print advertising while you can somewhat tailor delivery to key demographics, e.g. you might reach an older, wealthier audience advertising during Mike Hosking's slot than during The Edge morning breakfast show, there are limitations to how precisely you can understand the audience who consumes that media so the 'ad vendor' (in this case TVNZ) wants to make that up by being able to deliver good volume, as the advertiser then hopes that their target customer is caught up in the mix. That's why maintaining and growing viewership is also critical for them as well.

One final comment is that - at least in the digital space - CPMs have had a tendency to decrease over time in terms of what publishers (e.g. Interest.co.nz) receive, while advertisers have been paying higher CPMs with the ad networks e.g. Google creaming a greater 'spread' in effect.

Two outcomes of this have been:

1. Publishers have to focus on clickbait content, at least digitally, to try and get more eyeballs to counteract declining revenues per user

2. Publishers (driven by the ad networks) keep pushing more and more intrusive ads because more ad slots on the page = more impressions = more $.

As somebody who has worked on both sides of the counter, so to speak, it's this phenomenon more than anything that has led to such a degradation in terms of journalistic quality as media outlets are forced to crank out more shite, more titillation with even more invasive ads just to try and earn a crust.

I'll stop boring you all now.

by Beanie | 18th Sep 23, 8:11pm 1695024672

Not bored here. Can you tell us at what point the publisher earns revenue: is it when the ad appears on screen, when it's clicked on, or something more?

by JimboJones | 18th Sep 23, 7:08pm 1695020880

The media companies lost it when they changed from decent content to reality TV. It was cheap to make and drew an audience, but the reality is that reality is actually boring no matter how unreal they make it. Netflix offered proper content and everyone obliged.

by dollar_bill | 18th Sep 23, 7:10pm 1695021057

who the hell watches tvnz any more - might turn on the news for a few moving pictures of information I already know, is about it for me

by Justa comment | 18th Sep 23, 7:28pm 1695022092

I only occasionally watch TV news thesedays, usually for a specific event. Stopped watching the weather about 5 years ago, get it all off the net these days. Strange shows on network TV these days, naked survival courses lol

by Squishy | 18th Sep 23, 6:38pm 1695019126

Do you know Canada is banning canned products like WD40 and Brakleen? Imagine being the world's largest producer of filthy tarsand oil, with its vast tailings dams and high emissions, yet believing that someone at home trying to stop their cupboard door squeaking with a few drops of light oil was the real problem.

by kiwikidsnz | 18th Sep 23, 6:56pm 1695020161

I'm not how I'd survive without CRC 556 Marine, I buy it in 4lt packs every couple of years.

What else can you expect from a country run by Trudeau

https://www.dailymail.co.uk/news/article-10524463/amp/Elon-Musk-compare…

by Rob Reid | 18th Sep 23, 7:07pm 1695020828

Latest thing CRC fixed for me: Portable sawmill not run for a year would not start. Removed air filter cover and air filter, choke open, CRC in the intake, reassemble, one pull, started. Thanks to my mate who was a diesel mechanic. And CRC.

by dollar_bill | 18th Sep 23, 7:12pm 1695021133

an oldie but a goodie

by kiwikidsnz | 18th Sep 23, 7:32pm 1695022379

Several decades ago as a poor teenager I had an old Chev V8 (as you do). I blew a piston going up the Wainuiomata hill (drove it home on 7 pistons, as you do).

I bought a "good" replacement motor from a wrecker, spent a weekend or 3 swapping it only to find it was seized solid. An old mechanic gave me the tip of removing the sparkplugs, squirting in a 50/50 mix of clean oil & CRC & leave it overnight. Turned over by hand in the morning, on the starter in the afternoon.

by sardines | 18th Sep 23, 10:22pm 1695032552

Imagine the environmental cost of things that will now be thrown away and replaced rather than fixed... surely keeping these products is a net positive return.

by Squishy | 18th Sep 23, 11:10pm 1695035404

I'm not sure how I'd survive without CRC 556 Marine, I buy it in 4lt packs every couple of years.

I'm sure there is a government quit line you can free phone for that problem.

by JimboJones | 18th Sep 23, 7:04pm 1695020665

It’s happening everywhere! In NZ our biggest avoidable emissions come from ICE vehicles yet we haven’t tried to fix that. The clean car discount is a soft option and even that will be wound up after the election. Everyone wants to pretend they are doing something while actually increasing emissions.

by meh | 18th Sep 23, 10:47pm 1695034036

I'm not sure how truly avoidable ICE emissions are. Problem is we've literally squandered our resources on baubles and trinkets rather than creating resilient economies. We are led to believe technology will save us yet we can't use it to adapt existing resources believing we must produce more. What's going to happen though - only the wealthy will afford EV and all our ICE vehicles will be dumped?

I'm surprised we haven't figured out how to incorporate magnets into our propulsion engineering on a larger scale. Is it a case that the oil industry just has too much power and influence?

by HouseMouse | 18th Sep 23, 9:59pm 1695031198

What do you expect from the King of Fake Virtue Signalling, PM Trudeau. He and Jacinda would make a great couple

by Jonny.Foe | 18th Sep 23, 10:17pm 1695032220

Some election uncertainty and other voodoo. Or maybe:

Current account deficit at 8% GDP meaning overseas investors are saving in NZD (record levels of bond holdings overseas)
Govt deficit spending at 4% GDP and dropping
Household net lending at 0% of GDP
Business net lending barely positive (just higher revolving credit as they struggle)
Billions of dollars a month taken from debtors and given to savers

For those struggling with the maths ... This is very, very contractionary.

by Rob Reid | 18th Sep 23, 10:53pm 1695034419

When you put it like that, kind of feels like a set up for a liquidity crisis.

by HouseMouse | 18th Sep 23, 10:24pm 1695032654

In the UK, the suggestion that high and rising interest rates are contributing to higher rents. So much for higher interest rates quelling inflation!

https://www.theguardian.com/business/live/2023/sep/18/uk-rents-soar-hig…

by meh | 18th Sep 23, 10:57pm 1695034627

When interest rates last quelled inflation what was the level of debt and how evenly spread was it over the population? How much debt was in the residential property investment market/accommodation service providers?

Economics fails to understand or even attempt to, the impact of credit creation, asset inflation and demand for ever higher yields/return on investment. This drives the price of everything.