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
No changes to report today.
TERM DEPOSIT/SAVINGS RATE CHANGES
Unity Money trimmed its 6.1% one year offer back to 6.0%.
'SLOW RECOVERY IN 2024'
QV expects a slow recovery in the housing market next year. The average value of NZ homes increased just +2.3% over the three months to the end of November.
ASB HAS A DIFFERENT VIEW
But on the other hand, ASB's latest housing confidence survey shows that for the first time in 18 months more Kiwis are expecting house prices to rise than fall; ASB economists say 'it's an important watershed'.
DRIFTING SIDEWAYS
Meanwhile our November home loan affordability assessment shows the market stalled in November for first home buyers. They were better off by just $2 a week in November as the market drifted sideways in the month.
INFLATION EXPECTATIONS DOWN BUT PRICING INTENTIONS UP
The latest ANZ Business Outlook survey shows that inflation expectations have fallen but pricing intentions have risen; the post-election rise in business confidence has continued.
IMPORTS OF CARS RETREAT FAST
Even though exports were down -5.3% in November from a year ago, imports were down much more, down -15%. That meant our November merchandise trade deficit came in at -$1.2 bln, far lower than the November 2022 deficit of -$2.2 bln - but more than the -$1.1 bln deficit in 2021. Weak exports to China were behind the move, while much softer car imports (also primarily from China) also moved the dial.
MIKE PERO REAL ESTATE SOLD TO THE AUSSIES
Australian real estate ‘super-brand’ Raine & Horne, has acquired Mike Pero Group’s real estate network in New Zealand. It was sold by dominant shareholder Liberty Financial, also an Australia brand who accept the 'Raine & Horne' brand as more well-known to them. This means that the Mike Pero Real Estate brand will be dropped in early 2024 and Liberty will focus its investment here on its core financial services capabilities through the Mike Pero Mortgages brand, which remains.
AFTERPAY JOINS LOBBY GROUP
The Financial Services Federation (FSF), the lobby group for non-bank lenders and the leasing sector, says Afterpay has joined, becoming its first buy now, pay later payment scheme member. The FSF says it's committed to responsible lending, innovation in financial services, and competition. It's satisfied Afterpay’s approach is aligned with these values.
CAR LOAN ARREARS BILLOW, NOT SO OTHER LOANS
Credit reporting firm Equifax says demand for debt is building, but so are arrears. They say as at October 2023, car loan accounts in arrears are two and a half times higher than October 2019 (i.e., the pre-pandemic equivalent). Year-over-year, the number of accounts in arrears are +35% higher than October 2022. Although still very small, total home loan arrears are currently more than a quarter above the same time last year and +10% above pre-pandemic levels (October 2019). Overall, credit card accounts in arrears are roughly on par with October 2022 (up +0.7%), but about -30% below pre-pandemic volumes (October 2019).
NEW GOVT EASES THE BURDEN - FOR THE IRD
Legislation to repeal the The Taxation Principles Reporting Act 2023 is to be actioned under urgency. The new Revenue Minister says they want the IRD to "... focus on collecting tax ..."
SWAPS HOLD
Wholesale swap rates may be marginally higher today. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is unchanged at 5.63% and now +13 bps above the OCR. The Australian 10 year bond yield is up +2 bps at 4.12%. The China 10 year bond rate is unchanged at 2.65%. And the NZ Government 10 year bond rate is up a mere +1 bp at 4.63%, while the earlier RBNZ fixing was at 4.57% which was also up +1 bps today. The UST 10 year yield is now at 3.94% and unchanged today. The UST 2yr is now at 4.46% so that key curve inversion is now back out to -52 bps.
EQUITIES UP EXCEPT IN ASIA
The NZX50 is up +0.2% near the close today. The ASX200 is up +0.6%. Tokyo has opened unchanged while Hong Kong has opened down -0.9%. Shanghai is down a minor -0.1% at its open. Singapore has opened essentially unchanged. The S&P500 ended its Monday session up +0.5%.
OIL UP
Oil prices are firmer from this time yesterday at just under US$73/bbl in the US while the international Brent price is now over US$78/bbl.
GOLD FIRMS
In early Asian trade, gold is now at US$2027/oz and and up +US$7 from this time yesterday.
NZD STILL ON HOLD
The Kiwi dollar is now at 62.2 USc and little-changed from this time yesterday. Against the Aussie we are down -¼c at 92.4 AUc. Against the euro we are still at 57 euro cents. That means the TWI-5 is little-changed at 70.3.
BITCOIN TURNS UP
The bitcoin price has moved up to US$42,647 and a sharpish gain of +3.8% from this time yesterday. That's during moderate volatility over the past 24 hours of just on +/- 2.8%.
OUR HOLIDAY SCHEDULE
Please note that we have normal weekday service this week until Thursday when we transition into holiday mode. The final 4pm Review will be tomorrow's edition. Then we publish our content at a lesser intensity, more focused on holiday reads, reviews, and catch-ups. The advertising that powers much of our sustainability is already on holiday-mode, so this is when we really appreciate the vital support of readers. If you can support us during this commercially fragile time till the end of January, the team at interest.co.nz will be very appreciative.
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48 Comments
There's probably a word for this...begins with c, 8 letters
"They put up proposed conditions. The Environment Court can't impose conditions on NZTA; it can only approve conditions NZTA themselves propose.
"So, someone at NZTA must've given authority to put that proposed condition in the resource consent application."
https://www.rnz.co.nz/news/national/505098/mt-messenger-bypass-transpor…
Support for Labour continues to sink reaching its lowest ever (21%) on the Roy Morgan polls. Given that the Greens are at 12.5%, that illustrates just how far they've fallen out of favor. Some of the Labour fan club at the water cooler still believe that the public have gotten it all wrong and Cindy's vision was misunderstood.
https://www.roymorgan.com/findings/roy-morgan-nz-election-november-2023
In the aftermath of an election, and in the brief parliamentary session before year end, a new government always tends to ride a positivity wave. Even so that sort of poll outcome would signal an endorsement from the electorate generally, what they are doing and where they are going. As to be expected, as with the stalwarts of any previous government, the Praetorian Guard on here for instance, find those two simple words “you lost” to be a pill too bitter to swallow.
In the aftermath of an election, and in a short session before year end, a new government always tends to ride a positivity wave.
For sure. And if the economy really goes to seed, the wingnuts are going to be savaged, similar to what happened to Team Cindy, whose diehard supporters will be singing the praises of Chippie and Robbo. Chloe's star will also start to shine brightly in this event.
I wouldn't be suprised if the uplift is from:
- the coalition showing clear signs of delivering some of their promises
- many people seeing through the MSMs naked & petty bias & kneejerk failure to acknowledge the will of the electorate. Supporting a robust democratic debate is not their intention, as consistently evidenced by the last 3 years propaganda .
The bitcoin price has moved up to US$42,647 and a sharpish gain of +3.8% from this time yesterday.
The jihad against ratty led by the U.S. govt and the leading banks is starting to heat up. Liz Warren's bill is reportedly now supported by 20% of the Senate. And Warren is being seen as the single biggest threat to freedom in the United States.
https://ca.investing.com/news/cryptocurrency-news/20-of-us-senate-in-su…
How is: "QV expecting a slow recovery in 2024 after homes increased +2.3% over the three months to the end of November." and "ASB's survey showing that more Kiwis are expecting house prices to rise" different views ? It seems to me they are both predicting the same, namely higher prices in 2024.
Definitely a Ponzi. As net rental yields approach or become lower than the manipulated cash rate, ROI is simply based on continued and uninterrupted capital growth - which over the long term is unsustainable. Without constant credit expansion, the Ponzi collapses.
A ponzi usually (always?) requires the investment vehicle to be illusory. Its also rare for a non-entry into a Ponzi to have you sleeping on a park bench.
So in this case, it'd be a ponzi, if the real estate didn't exist.
You could maybe make a loose case for it to be a pyramid scheme.
A ponzi usually (always?) requires the investment vehicle to be illusory. Its also rare for a non-entry into a Ponzi to have you sleeping on a park bench.
So in this case, it'd be a ponzi, if the real estate didn't exist.
Fair point. But like given that the 'price' is created by credit created out of thin air, it resembles a Ponzi. Without money supply dilution, prices would collapse.
The Bank of England claims that the property markets are responsible for 97% of money supply, loans but primarily mortgages in the Anglosphere. No fiat currency has been able to expand infinitely. They eventually collapse.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/20…
Exactly....
All created out of money loaned into existance from nowhere by the banking system. Money that ever devalues itself via creation based inflation, bailing out leverage risk as a function of design.
Is that similar to how crypto is mined from nowhere?
Different in that Crypto cannot exceed its designed munber as a function of its design, hence rising in price and highlighting the inflationary lie of bank based money. Also different in that it cannot be controlled by a small group in the way the banks are as an intrinsic function of its design.
Different in that Crypto cannot exceed its designed munber as a function of its design, hence rising in price and highlighting the inflationary lie of bank based money. Also different in that it cannot be controlled by a small group in the way the banks are as an intrinsic function of its design
I think you're referring to Bitcoin. Not crypto in general.
You might have a point. I was originally going to say you're making an incorrect comparison calling it "ponzi like", but now that I think about it:
- Existing home owners = existing investors
- New home owners = new investors
- Central Bank/Government/Retail Banks = Ponzi schemers.
Private credit creation has done a lot to keep Public debt levels much lower than they could have been when stimulus is required. Since many politicians have property, they have a vested interest in keeping the "ponzi" going. It has enriched existing home owners using the proceeds from new home owners, many who were of the belief that interest rates would stay low.
Much like a new investor into a Ponzi might have been "promised" a return of their money and 7% p.a., a new home buyer might have been told house prices double every 10 years and that interest rates might go negative. When interest rates triple, the new home buyer defaults on the mortgage and loses the lot.
For some reason though, people are "victims" when they're duped by a Ponzi scheme, but it's "personal responsibility" if young new home buyers lose their homes. Are the types of deception actually that much different at the end of the day?
Since many politicians have property, they have a vested interest in keeping the "ponzi" going.
It's not just a personal interest thing. House price inflation has done the 'savings' for the boomers. And to some extent, this has compensated for low wage inflation.
The problem is that if you let the monster has become too big and has sucked all the resources through pvte bank credit creation. The only solution that I can see is greater credit creation and money supply expansion. There's really no other option.
You can't say that house price inflation has done the savings for boomers though. It's given then an asset that's appreciated, but boomers inherently have a disproportionate amount of actual savings, for the reasons I mentioned, and others.
The boomers also got to benefit from having careers that spent a decent duration outside of post neolib wage deflation amoung developed nations, as many jobs got offshored.
Or eventually you cut the rope to the counter-weight on this property prosperity elevator we have created and let those currently on it fall with it.
No doubt it'll be the last bit of grace that has been gifted to Boomers over their lifetime. The lucky generation, whose biggest gripe is that technology today is so much better than 40 years ago.
NZ's largest bank cuts some home loan rates (1news.co.nz)
And reduced interest on three of their term deposit terms.
Strange move this close to Xmas/New Years shut downs. As expected they havent touched the 1 year. The new 6.75% 3 year is not really much of a bargain at his stage. The 5 year TD cut back to 5.2%, if you are are long term TD investor, grab that ASB 5 yr 5.55% while you can.
The Economist capitulates on the ol' rat poison being a bubble.
Why bitcoin is up by almost 150% this year
The second reason is that, with each boom-and-bust cycle, it becomes clearer crypto is not a bubble like tulip mania in the 1630s or the craze for Beanie Babies in the 1990s. Although bitcoin is a volatile asset, its price history looks more like a mountain range than a single peak, and appears closely correlated with tech stocks. Yet it is only moderately correlated with the broader market. An asset that swings up and down, and not in parallel with other things people might have in a portfolio, can be a useful diversifier.
https://www.economist.com/finance-and-economics/2023/12/18/why-bitcoin-…
Some rather huge financial news not reported here.
BP have suspended shipping through the Bab-el-mandeb straight, as have 7 out of the 10 largest shipping firms globally.
Insurance costs soaring for it due to Houthi rebel attacks and ships rerouted around the cape adding 2 weeks to journeys.
Oil and gas prices already up, with most other items likely to join given 30% of global container traffic passes through this most strategic of choke points.
The battle against inflation is by no means won by central banks. Shocks like this are going to continue to cause havoc and put pressure to raise rates and damage economic growth
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