Low US growth revised up; inflation down; personal incomes flat but spending rises; China profits fall, new stimulus actioned; grim Aussie construction data; UST 10yr yield at 1.77%; oil and gold down; NZ$1 = 64.3 USc; TWI-5 = 69.7

Low US growth revised up; inflation down; personal incomes flat but spending rises; China profits fall, new stimulus actioned; grim Aussie construction data; UST 10yr yield at 1.77%; oil and gold down; NZ$1 = 64.3 USc; TWI-5 = 69.7

Here's our summary of key events overnight that affect New Zealand, with news China is juicing up more economic stimulus to weigh against slowing growth.

But first, the third quarter American economic growth number has been revised up marginally, now at +2.1% pa and up from +1.9% in the earlier estimate. It is still low compared to US growth rates in 2017 and 2018, but it was an unexpected improvement.

The inflation rate the US Fed watches most closely, core personal consumption expenditure or PCE, slipped back a little to +1.6% (excluding food and fuel) in October reversing the rise we saw in the prior two months.

American personal income growth stalled in October and the first time that has happened in more than a year. Disposable income fell and that hasn't happened for more than four years. Consumption spending however rose but that can't happen for very long if incomes aren't growing. Having said that, the healthy American savings rate is still positive even if it did slip to near its lows for the year.

US pending home sales, the level of house sales that have been signed up but haven't formally closed yet, fell in October from September but still remain higher than the same month last year.

American durable goods orders in October have come in marginally better than expected. A small retreat was expected but a small gain was reported from September. But compared to October 2018, durable goods orders are -1% lower. The capital goods component however rose +2.3% year-on-year.

Contraction in their industrial heartland continues however and that is not a good sign.

The Americans are now into their long Thanksgiving holiday weekend and market activity will be limited there. But all eyes will now shift to retail sales levels and many retailers are nervous.

In China, officially reported industrial profits fell -9.9% in October from the same month last year. The September drop was -5.3% year-on-year. Interestingly, this is essentially a drop by large SOEs and even though mining SOEs reported higher profits. And privately owned businesses in the survey show a profit gain on the same basis. So the core SOE businesses are doing it hard with steel, chemical and paper industries faring the worst. This is a report of a decline in profitability; it isn't reporting losses.

More stimulus is on the way in China. Their Ministry of Finance announced an early allocation of 2020 special-purpose bond quotas totaling 1 trillion yuan (NZ$220 bln) to provincial governments to step up investment in infrastructure such as roads, sewers and public services.

In Australia, there was some grim construction data released today. The value of commercial building work completed in the September quarter was down -5.5% in a year, the value of residential building work was down -10.1%. The value of engineering work was down -11.4%. Strip out price increases and the real volumes will have been larger declines. The equivalent New Zealand data is due to be released on December 5.

Overnight equity market activity has posted small gains. The S&P500 is up +0.3% so far today and that follows similar rises in European markets. Yesterday Hong Kong and Tokyo rose about the same but Shanghai fell slightly. Local markets did better. The ASX200 rose +0.9% and the NZX50 rose +0.7%. Just for the record, over the past ten years the ASX200 has risen +117% and the NZX50 has risen +340%. (Update: A reader has pointed out that this is not a proper comparison and we should have compared using the NZX50 Capital Index. In that case the ten year rise is +126%.) These two compare with the S&P500 benchmark of a gain of +315%.

The UST 10yr yield is now back at 1.77% which is +3 bps higher than this time yesterday. Their 2-10 curve is narrower at +14 bps. Their 1-5 curve is narrower, now at just under +2 bps. Their 3m-10yr curve is also less positive +11 bps. The Aussie Govt 10yr is at 1.03%, another -4 bps lower since this time yesterday. The China Govt 10yr is now at 3.20% and a -2 bps dip. The NZ Govt 10 yr is now at 1.31%, also down -2 bps.

Gold is down -US$4 to US$1,455/oz.

US oil prices are lower and now just under US$58/bbl. The Brent benchmark is under US$64/bbl.

The Kiwi dollar is continuing its stable run against the greenback, up slightly at 64.3 USc. On the cross rates we are also firmer at 94.8 AUc. Against the euro we are firm at 58.4 euro cents. That puts the TWI-5 up at just over 69.7.

Bitcoin is still volatile, and now up at US$7,502 which is a jump of +6% from this time yesterday. The bitcoin rate is charted in the exchange rate set below.

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Just when you thought that the Australian housing market couldn't get any more ridiculous then it is. Apparently the Ozzy Government is about to offer a federal government’s first home loan deposit scheme. A program, which allows low- and middle-income earners to get financing without a large deposit.
Well I guess they had to do something to help their citizens with all that money laundering going on over there. Perhaps one day the Ozzy's will wake up and realize that they've been taken for a ride. But at least they've had the good sense to drop Westpac from the program of now.
Article : Westpac dumped from government home loan scheme.


What's the bet a similar and equally stupid home loan guarantee announcement awaits us next year, just in time for the electioneering season.

Need a coffee - Endless money printing programmes will cause “tremendous” and damaging changes to stock markets, Wall Street has warned new European Central Bank president Christine Lagarde. The ECB restarted quantitative easing (QE) this week to tackle the region’s slowdown, but analysts at ...

KiwiSaver first home grant is pretty different, frazz

Yes - realised I had read the comment incorrectly - off to get a coffee and wakeup.

... interest free student loans was the election bribe Labour used in 2005 to beat the Gnats ...

Taxcinda would be a shoo-in in 2020 if she offered us interest free house loans for all FHBs ...

... easy peasy ... bribe the mugs ... ka-ching , we're back in power for 3 more years ..

The funny thing is that we joke about this now.
In 6 months time, this will be a 'serious' policy 'discussion'. If not from Labour, then definitely from the opposition.

Soyman seems hellbent on taking on gangs (good) - but wants to mess with NZ bill of rights (bad).

Soyman is hellbent on appearing pertinent in the political arena.
What he has suggested with gangs, etc, is straight out of the Australian Liberal Party play book. Expect more of the same nonsense to continue (of which a government deposit scheme is exactly that) - that includes further stimulating a transfer of wealth to the landed neo gentry.

Soyman's under the delusion that a police goon squad harassing and kicking heads will solve the gang problem ... the Aussie solution .... abso-freakingly barking mad ...

From the gang perspective the Police are just patched members of another gang. Many gangs still embrace violence and it's not going to stop them. There are more sophisticated methods of taking on gangs but there are many gangs that are more sophisticated than the Police or any of our politicians.

RBA seems to be in the middle of these policy discussions. I gather they are only willing to take the Australian OCR to 0.25% and instead of cuts they would change to QE. It looks like the Australian financial system is completely broken.


Extend and Pretend. It just shows once again the lengths govt's will go to to keep the ponzi going.

well they threw a stone of the cliff but never heard it hit the bottom. Fear gripped their souls


'Excluding inflation (itself a form of tax), in Britain nearly half of everything you will ever earn over the course of your life is taken from you in taxes. The most expensive purchase you ever make is not a house, as many believe, but your government. In France the figure is an eye-watering 57%. No wonder the gilets jaunes are so unhappy.'


That's a great piece thanks, and advocates.....land tax!!!!!!


... and he shows how the rich avoid CGT ... they just dont sell their assets ... therein lies the major weakness of CGT ....

Whereas a simple land tax pings the rich each and every year .... and its unavoidable.... even if the rich wrap their assets in trusts .... the trusts must pay the annual tax ...

Agreed. The rich and powerful make everyone else pay but not themselves. It'll come back to bite them!


Like many things in life, it comes down to a value for money assessment. Healthcare and (most) infrastructure are two things that really can't be left to the free market to provide.
I'd rather have highish taxes and world class infrastructure and healthcare than low taxes and poor infrastructure and healthcare. Pity that the last two decades of govt have been a bit rubbish on spending on infrastructure to keep up with population importation and our own growth.

And yes, a land tax or at least a comprehensive CGT would be a great way to rebalance the tax system.

Yes I'd certainly agree with you there. It could be worse, you could be in the US where if you can't afford medical insurance you basically don't have the right to live. Shameful in such a wealthy country where most citizens can't even afford dental care: BBC news clip: Toothless in Virginia: Pain relief for the uninsured of America https://www.bbc.com/news/av/stories-44807411/toothless-in-virginia-pain-...

Most NZ people do not afford dental care too.

Agree, it's not taxation per se that is the problem, rather it's the forms and levels of it. However we do it I believe we need more tax revenue not less to invest back into the country.
There is a lot of wastage though. And the size of the bureaucracy in Wellington is ridiculous.

Or we could have high taxes and poor policy and infrastructure?!?! - (insert new landfill tax here)

Ok we could tax empty homes, especially in Auckland with 39,393 properties left vacant. https://www.interest.co.nz/property/101855/2018-census-shows-191646-home...

We desperately need an empty home tax. Anything else is unethical

This comment is likely closer to the current reality than the others. How the current tax dollars are spent is a pressing issue now, and needs to be sorted before looking at ways to increase the tax take.

It's a wonder then that million of people from countries that free markets don't provide their healthcare travel to Asia and Mexico to have their healthcare needs taken care of by the free market. Don't confuse Americas healthcare system to free market.

in India the market has provided cheap education

'Catering to the growing need for affordable education, budget private schools have mushroomed in low-income clusters of the national capital. These schools operate as private unaided institutions and charge fees less than INR15,000-INR20,000 a year.

However, these thriving establishments, which are making an impact at the primary-education level, are getting bogged down by a host of issues – salaries, regulation, certification – and need a hearing.'


I have some familiarity with low cost education in developing countries, from a previous career. Many, many of these low cost schools are nothing to write home about, certainly at the tertiary level. They can be particularly gifted at fleecing the student without providing much value in return, like too many of the private for-profit institutions in New Zealand and the USA.

Context is always good. Swiss are 40% Swedish 57... Swiss are a conservative more socialist country, an odd mix that breaks sound bites..

Would appear the countries with good infrastructure, standard of living pay much higher taxes, generally speaking. There are exceptions of course ,UAE. etc etc

Great link. The answer: a land tax. The issue is how to introduce it without massive disruption - too many random winners and losers. The argument seems solid but I wish I had not put all my retirement savings effectively into land.

You need revolutionary policy every few generations. The last one was Rogernomics which disproportionately affected the poor. A land tax would disproportionately affect the rich. They just need to suck it up.
I know it's not that simple. The wealthy hold the power.
But really, it should be a possibility for a Labour government, where most of its voters are low to middle income (ie. Majority of population).
Again, any politician who is smart enough knows that politics is math.

Pretty much a TOP party policy i believe. I encourage any of the younger voters out there to have a read of the TOP policy docs. TOP just need to break through that invisible barrier to get some cred and then they would be on their way.

I think you would have to stop councils taxing land. Take all roading away from councils, they are hopeless at it anyway. Make councils poll tax for expenditure like rubbish, sports grounds ,opera houses, pools etc.

Set up a govt roading division, that can have some of its own gear but lots of qualified engineers that can arrange tenders, So we have a mix of govt and private companies doing roads, definitely not the rout at present. We could call it the MOW put some brains into it. It's not expensive to lease machinery at these low interest rates, the govt should own enough big gear to do big jobs such as Transmission gully and the Manawatu Gorge.

Then govt can land tax at %1 for first couple of mill , two percent over 10 mill and %4 over 50 mill or something similar.

Get rid of PAYE tax, so incentive is to earn not invest in unproductive speculative assets

My rather ordinary Auckland house has land values at $800,000. So 1% would be $8,000pa. That's only just over double my rates. Bring your policy in I expect your farmland would reduce in value by a smidgen but I can imagine my land returning to its 2002 value of about $100,000. Even then $1,000 per year is plenty of money for a pensioner to find just to have a big garden. Maybe some policy allowing me to return some of the land to the govt in exchange for say 20 years land tax free on the remainder?

but no income tax so you should win in the end. The problem with lot of land is it is only returning 2-3% at these values, so yes it would knock values, i see that as good thing.
Lots of people I know with large land holdings are paying no tax at present, I just don't know how much of the country is like this. I think asset taxes are coming anyway, only way we can afford a large government.

My point is the presence of a land tax would alter the land value and in the case of Auckland very dramatically. My guess is even a rumour of a land tax would have a drastic effect.
Income tax is not my problem but it may be my working wife's. Any change to taxes has winners and losers - make it simpler, bring it in gradually and most fair minded people will approve. Elderly people such as myself can afford to tighten our belts by a notch or two which young families on low wages often cannot.

If my farm came down to double what I paid for it in yr 2000, I would at present be paying %1 asset tax to local councils, makes you wonder about the sustainability of local bodies.

Contraction in their industrial heartland continues however and that is not a good sign.

The signals have not been indicative of robust economic growth for a decade, no matter how much central bank "stimulus" was directed at the economy. Graphic evidence here and here. Source article

The Americans are now into their long Thanksgiving holiday weekend and market activity will be limited there. But all eyes will now shift to retail sales levels and many retailers are nervous.

Given how dull events have been over the last week, I guess main trader books have already closed for the financial year ending 31/12/19 to protect the bonus pool from prior dislocation.

I'd say things are hotting up for Trump and his impeachment. BBC article: Trump invited to attend impeachment hearing or 'stop complaining'
"Congress has invited US President Donald Trump to its first impeachment hearing on 4 December". Has nice info graphic on the impeachment process. https://www.bbc.com/news/world-us-canada-50567994

You are a fool if you think that the impeachment process will result in anything other than:
1 - Trump solidifying his support. And;
2 - The Dems achieving absolutely nothing productive for another year.

Well if they manage to expose Trump's tax returns out of this impeachment process that could really expose Trump as a fraud. Not sure if his followers will be stupid enough to continue to give him their support. From the latest polls it's really not looking good for Trump.
Article The Independent: Trump news – live: Impeachment poll reveals soaring public support for president’s removal during TV hearings, as damning Ukraine scandal details emerge

Are those the same impeachment 'polls' which have been destroying their credibility by disproportionately surveying democrats?
If so, be careful what you are quoting...

Trump is an idiot who shouldn't be in office.
However, the bigger idiot is the fool who thinks that the democrat's time is better spent pursuing a dead end impeachment process. It's a display of capitulation by the Dem party that they have no confidence in being able to beat him in the electoral college. Simple as that.

Agreed Trump is an idiot who shouldn't be in office. Though I'd like to think that Americans aren't that stupid and will vote him out, Isn't the impeachment process really to reveal his true colours to help get him out of office.

CJ. Where did you find your description of Impeachment.
Sounds like you are missing an alleged crime....

Impeachment in the United States is the process by which a legislature (usually in the form of the lower house) brings charges against a civil officer of government for crimes alleged to have been committed, analogous to the bringing of an indictment by a grand jury.

And perhaps you failed to read further

The Constitution limits grounds of impeachment to "Treason, Bribery, or other high Crimes and Misdemeanors".[2] The precise meaning of the phrase "high Crimes and Misdemeanors" is not defined in the Constitution itself.

The notion that only criminal conduct can constitute sufficient grounds for impeachment does not comport with either the views of the founders or with historical practice.[1] Alexander Hamilton, in Federalist 65, described impeachable offenses as arising from "the misconduct of public men, or in other words from the abuse or violation of some public trust."[3] Such offenses were "political, as they relate chiefly to injuries done immediately to the society itself."[3] According to this reasoning, impeachable conduct could include behavior that violates an official's duty to the country, even if such conduct is not necessarily a prosecutable offense. Indeed, in the past both houses of Congress have given the phrase "high Crimes and Misdemeanors" a broad reading, finding that impeachable offenses need not be limited to criminal conduct.[4][1]

What is the high crime or misdemeanor that the impeachment was about?
List your reason, list 3 if it helps.

Lies, lying and telling untruths every day!

...(not) Unlike every other politician.

I remember the West was promised that Iraq had WMDs, people are still looking.

Anyone, anyone got the C&HD that the impeachment is about? Please.

I think Impeachment is this word that nobody had really heard of until Trump was elected. Simpletons, particularly on Stuff Facebook comments section, have clutched onto it wishfully believing it's a process/mechanism used to remove an elected official they do not like.

"Why do you not like Trump?".
"Oh, I dunno he's just a jerk and he's a womanizer and I LIKE HILARY. Doesn't matter, Orange Man Bad will get impeached anyway so there....".

As noted in the quote it does't have to be a crime - the definition is broad. In the current case attempting to use a foreign country ( namely Ukraine ) for political gain at home. Additionally nepotism for starters.

And don't neglect the criminal proceedings to be announced early Dec, from Horowitz/Durham/Barr.....blowing the lid off the Dem's decades-old machinations....

It is not if he is impeached or not. What punters are not factoring in is that one side will be furious at the outcome. This could unleash massive civil unrest, riots, extremist behavior and so on. It only took a 4 cent fare rise in Venezuela to light the match.

He is unlikely to be impeached. It'll get through the first stage but the Republican senate won't pass it. Unless it gets to the point of being too embarrassing for them not to, but they don't seem to have that much capacity for being shamefaced even when it's completely justified.

Only if it looks like their own snouts in the trough are at stake (via the electorate) will more Republicans turn on Trump. The number or gravity of crimes Trump has been involved will have little influence on their decision.

Congress did not invite Trumpie, Jerrold Nadler did. Why did you and the BBC say it was Congress? He will not turn up. As the evidence shows more and more Obama and Biden corruption, the Dems will ease off on impeachment talk, which has already started. Early New Year they will pack it in, all the Dems in Congress will vote to censure Trumpie, and life will go on, with Obama's name still clean, Joe Biden left behind in the Ukraine, and someone else being the Dem's presidential candidate. Wait and see. Awfully entertaining.

Eugenie Sage has announced that the government fee on rubbish will rise from the current $ 10 per tonne , to $ 60 / t. over the next 4 years ! ...

... this covers all land fill types ... the tax is designed to encourage us to recycle and reuse more ...

So essentially a tax for being more inefficient?
Interesting how the government and feel good policy works, huh.

Recycle and reuse more - how is that inefficient - surely its a good thing to encourage? Or we end up like this?

China’s Largest Dump Fills Up 20 Years Ahead of Schedule: Opened in 1994, Xi'an's Jiangcungou Landfill takes in 10,000 tons of waste per day. The site has the largest storage capacity of any dump in the country, occupying an area of around 100 football fields. Trash at the site is piled 50 stories high. With the close of the dump, the city will rely on three waste incinerators opening this month

Recycle and reuse more, don't forget the third option - fly tipping. this is an increasing problem in all parts of the country, and will only get worse now.

Had to look that one up
Fly-tipping is defined as the 'illegal deposit of any waste onto land that does not have a licence to accept it'. Tipping a mattress, electrical items or a bin bag full of rubbish in the street causes a local nuisance and makes an area look ugly and run down

Its been happening in Birkdale ever since they made the inorganic collection bureaucratic. Living next to a reserve is becoming less attractive.

Is it really Fly-tipping if someone cellotapes a piece of cardboard to the item with the word "Free" written on it?

General recycling is an exceptionally inefficient process.
Don't compare New Zealand to China. It's a fools errand.

I'm all for recycling/reuse, but you cannot deny the fact that given current technology and landfill abundance it is both much more environmentally friendly (in New Zealand's case) and cheaper to bury it.

Have to disagree with you - another case of kicking the can down the road - time to pay the ferryman and do your individual bit.
"A West Coast council says it was forced to abandon the cleanup of an old landfill that spilled rubbish across 75 kilometres of coastline, after spending nearly $600,000.

The area is still strewn with rubbish after torrential rainfall and flooding in late March exposed a disused landfill at Fox River."

No Frazz you don't get it, charge you more and still dump it all in the same place as they would have dumped it anyway, its just another TAX. We have no serious recycling here in NZ and that was exposed when China stopped taking all our trash. I used to wash everything before putting it in the recycle bin but whats the point ? I'm actually just wasting water and electricity when its going in landfill.

No I do get it Carlos - we started looking at our rubbish use last year and started bulk buying - glass over plastic - shopping at market gardens and avoiding supermarkets as much as possible. We also compost all food waste. Our rubbish/recycling has decreased over 50%.
But hey keep moaning and consuming like a good citizen...

At industrial level, the likely outcome is passing the cost to consumers as the cost of changing the practices to reduce rubbish is likely to be a lot more than the additional $50 per tonne. So houses will be even more expensive to build without any meaningful reduction in the amount of rubbish thrown away.
At the residential level, I am not sure that simply increasing the cost of general rubbish will result in better kerbside recycling. Some people will put their non-recyclable items with their recyclables (you now have a very strong financial incentive to do so).
Also, while this punishes all rubbish in absolute terms, it makes really harmful stuff like plastic (that are terrible but very expensive) a lot cheaper relative to other organic materials that people may not sort out.
Finally, what people are going to do with bulkier stuff, I am tired of seeing sofas and beds left in various places. This would encourage leaving such items by tenants leaving a place on kerbside (saying that they are leaving it for someone else to "reuse").
Yes the UK government charges a lot more tax on rubbish. But It costs about the same to dispose a tonne of rubbish in NZ and in the UK. This shows that while there may be no government taxes there have to be other levies and tax like charges that are already included. This is my guess. I would love to know the opinions of someone more informed.

This Government would like to tax if it moves , goes up , down , sideways , is dead , alive , animate or inanimate ................. the only thing they have not yet tried to tax is copulation, a good old shag, ..........but who knows maybe they will try ........... and call it P.A.Y.F.

people will dump rubbish everywhere, just another indicator that politicians really do have no brains

I would add the people dumping the rubbish are abit thuck too

maybe but you are not allowed to say that kind of thing anymore, just disadvantaged.

Rubbish Tax should be included in the sale of Goods....which are mostly a load of rubbish and never needed anyway.
(Did we need em 40 years ago, certainly not)
Packaging is way beyond the size needed for the reduction in size, versus the increase in price.
Shelves needed in Supermarkets are overblown by size, you could fit most of contents in a quarter size packet.
As prices rise for product. content goes down so that suckers are sucked in. Tis why a trolley full, weighs on one's bank balance, but weighs little in reality.

Well, we could always Burn the rubbish, generate district heat and electricity, just like them Denmarkians. But the answer, quelle surprise, will be NO, because Reasons.

Will never happen Waymad, did you see the price of those plants ? you need to be a first world country to afford them and also they are mainly efficient in producing HOT WATER which is pumped all over the place for heating that offsets electricity usage on heating.

Yeah, but that price is about the size of the PGF, and includes (gasp!) a ski slope...

Having skiied down a similar slope in a Welsh quarry a few clicks south of Llandudno, I applaud the Danes' embrace of Utility and Recreation....

Problem is education. People want to recycle and be less wasteful but have no idea where to start. Government response - lets tax them for harming the environment, that'll teach them

... once again we have the ambulance at the bottom of the cliff approach .... and , another tax that will punish the " poor " ...

The constructive angle is to target the manufacturing process , and the packaging ... why are we not insisting upon biodegradability and greater recyclability at the front end ....

... rather than more if the same old draconian punishment of the end user ....

pretty much sums it up. It should begin at the start of the production chain. Punishing the end user is ridiculous when they only have the options that the market has supplied

Always the governments fault - sheeese ..heard of Google?

frazz'spoint.exe not found

50% of Auckland's waste is generated by construction - yet another negative environmental affect of rampant population growth.

David, you're comparing the NZX50 which is a gross index (dividends reinvested) with capital indexes. This is very misleading. I usually go to stuff.co.nz for that. Would you consider correcting your article with the correct comparisons using the NZ50C index. Brain Gaynor in a herald article explains this issue in detail.

Food for thought on the China stimulus piece and our local economy .......I personally dont like grey things , I like to see things in a black and white context , that I can see and understand , and follow.

I wrote my first economics exam in 1981.......... 38 years ago, my lecturer was an openly Communist advocate who told us at our first lecture where we could visit Karl Marx' grave . Subsequent lectures and Professors gave me a more balance view of the world in the heady 1970's and early 1980's.

After reading for examinations in both Macro and Micro economics , and subsequently reading for a Post Grad degree at Cardiff University in 1999, and diligently maintaining my CPD for the Professional institute I am a Fellow of , I honestly thought I could sort of understand basic economics , cause and effect , and have a handle on whats going on .

Now , I know, that right now I dont understand the dynamics at play , the world seems to have gone mad , all economic orthodoxy has been turned upside down, kicked down the road , or thrown out the window.

Wild monetary and fiscal stimulus of eye-watering proportions has been the order of things in the past decade, seemingly without any negative or undue consequence .

The recent actions of our Reserve Bank are a mystery to me , I wish they would explain whats at play, their thinking and what their fears are .

All I do know is that this uncertainty , not knowing who or what to believe, is likely to be causing this fall in both consumer and business confidence .

Its encumbent on the Reserve Bank to be open with us about this ............

Boatman, you share the same issues as Warren Buffett, this is what he said earlier this year - 'I probably could not have conceived of a world…. As recently as 10 years ago I could not have conceived of a world where you would have full employment, 5% budget deficits with actually the probability of those rising from that level, and at the same time have the long bond at 3%. I would have said that that couldn't happen. The convergence of these factors would have seemed impossible to me and generally if I feel something’s impossible, it’s going to change. Over time I don’t know in what way. I don’t think we can continue to have these variables in this relationship'.

Cheers for that input Boatman, it makes things a lot clearer for me.
You have studied this subject and don't get it there is no hope for me to get my head arround the subject as someone who has just started trying to wrap my head arround it.
I'll continue with my protect myself for an uncertain future as I have been.
Thanks again.

Death by China? See my thinking out loud below.

Boatman, first of all, your initial lecturer was an idealistic, useful idiot, who refused to do 5 minutes research into how Communism "worked". Economics is quite simple. Everything in the world is connected, cause and effect etc, etc. A lot of people make a lot of money pretending the world is not how it is. All economies will revert back to what should be happening unless things are done to prevent that happening. If this reversion is allowed to occur, most governments would be thrown out, and any candidates who say it should be allowed will never be allowed into power. So artificial, temporary, more and more extreme methods are used to prevent this natural reversion from occurring, to try and stop the inevitable. Of course the further the can is kicked down the road, the longer the walk back. But the can has been kicked further than anyone except Martin Armstrong thought!

Jeremy Corbyn reveals dossier 'proving NHS up for sale'

Labour has obtained official documents showing that the US is demanding that the NHS will be “on the table” in talks on a post-Brexit trade deal, Jeremy Corbyn has said.

The Labour leader said the uncensored papers gave the lie to Boris Johnson’s claims that the NHS would not be part of any trade talks, and revealed that the US wanted “total market access” after the UK leaves the EU.

How long until US demands same access to our DHB's in return for protection against advances from it's declared enemy - China?

Dont panic Audaxis ............ it will never happen .......... Jeremy Corbin sees a baddy - Capitalist hiding under every bed or lurking in every shadow .

The US is unlikely to get what it wants , its just American bluster , and them firing the first shot, a tactic to put you on the back foot as it were .

We know its the American way of negotiating ...... shoot or attack first and ask questions later , we have seen it with the Chinese Trade war , and Trump's bellicose manner in every 'deal " he negotiates.

Might not happen in the UK, but would or could it happen here?

I never panic Boatman - I worked for a large US bank in the UK for 17 years and noticed that the actions of a US vassal state such as the UK to push back against US demands are limited.


Marginally Interesting.
Methinks there is a price war being fought....over territorial matters. If truth be told...that is.?

An ongoing debacle: Ghost collateral' haunts loans across China's banking system

In some cases, collateral that has been pledged simply doesn't exist. In others, it disappears as borrowers in financial distress sell the assets. There are also instances in which the same collateral has been pledged to multiple lenders. One lawyer said he discovered that the same pile of steel was used to secure loans from 10 different lenders.

Pledge repo primer

The same thing happens with China's "nail houses" (I think I have the translation close to correct). Some of the nail houses are just a concrete structure to get in the way of development. However there's more to it than that as banks have been lending based on the size of a house. Getting a mortgage on a 3 storey house seems like excellent security except when it's just a 3 storey concrete structure with no walls or doors. No problem ventilating a house like that but hard to heat in the winter.

China has no central way to check if there is a mortgage or other loan using the property as collateral. So that 3 storey nail house could have 3 or 4 mortgages on it and the banks have no way of checking. It's easy to see why default rates have climbed so high.

Interesting comparison, but not adjusted for currency decline. How best to adjust for currency? Measure in a currency basket like the IMF's SDR, or a commodity basket, gold, oil, or what?
Just for the record, over the past ten years the ASX200 has risen +117% and the NZX50 has risen +340%. These two compare with the S&P500 benchmark of a gain of +315%.

Westpac news.
Boss's bonus bonus

New guy could get $4.9m bonus. + wage = $7m plus.
50x ave westpac salary

Too funny
Westpac giving the money back.
Not knowing, not concerned by the listing rules.
I wonder if the board/shareholders of Westpac are failing the OIO good character test.
Fit and proper people...
We are setting a hell of a presidence..
To run/control nz ops.


Are we past Peak China? Was the election of Xi Jinping as Paramount Leader in fact a sign of weakness? China has done well by copying the West and allowing the entrepreneurial, capitalist spirit of its people to create prosperity. Trouble is they cannot keep growing forever on the basis of stealing other people's money, in this case by stealing the wages of the working and middle classes of the Western world, aided and abetted by Wall Street finance.

They know this. Hence the decision to centralise power and increase bureaucratic oversight at all levels by an "anti corruption" purge of anyone who was not 100% behind Xi and his supporters ("tigers and flies"). The increased prosperity of the flies (ie ordinary people) cannot be allowed to threaten the power structure of the tigers. The tigers must support the Chief Tiger, the Godfather of their mafia-like power structure.

China is now stagnating and entering a period of decline, slow at first, then gathering pace. The scale of civil unrest will increase and the level of authoritarian oversight will increase in response, creating a downward spiral. In twenty years time will China resemble Japan, the USSR, North Korea, or Venezuala?

In China, officially reported industrial profits fell -9.9% in October from the same month last year. The September drop was -5.3% year-on-year. Interestingly, this is essentially a drop by large SOEs and even though mining SOEs reported higher profits. And privately owned businesses in the survey show a profit gain on the same basis. So the core SOE businesses are doing it hard with steel, chemical and paper industries faring the worst.

They're not going to stop trying to stop the decline, even if it means killing off the planet:

"China is set to add new coal-fired power plants equivalent to the European Union's entire capacity in a bid to boost its slowing economy, despite global pressure on the world's biggest energy consumer to rein in carbon emissions.

Ted Nace, head of Global Energy Monitor, said the new coal plants would have a significant impact on China's already increasing carbon emissions. "What is being built in China is single-handedly turning what would be the beginning of the decline of coal into the continued growth of coal," he said. He said China was "swamping" global progress in bringing down emissions.

The United Nations released a report on Wednesday assessing the gap between countries' fossil fuel production plans and the Paris climate agreement goals. It warns that the current pace of coal, oil and gas production will soon overshoot those international goals, finding that countries currently plan to produce about 50 percent more fossil fuels by 2030 than would be consistent with limiting global warming to 2°C.

The renewed push into coal has been driven by Chinese energy companies desperate to gain market share and by local governments who view coal plants as a source of jobs and investment. While electricity demand in China rose 8.5 percent last year, the current grid is already oversupplied and coal stations are utilized only about half the time.