Wall Street's recovery lacks conviction; Italy suspends mortgage repayments; China's return to work faltering; Aussie consumer confidence drops; NZ's business confidence 'awful'; UST 10yr yield recovers to 0.68%; oil up and gold drops; NZ$1 = 62.5 USc

Wall Street's recovery lacks conviction; Italy suspends mortgage repayments; China's return to work faltering; Aussie consumer confidence drops; NZ's business confidence 'awful'; UST 10yr yield recovers to 0.68%; oil up and gold drops; NZ$1 = 62.5 USc

Here's our summary of key economic events overnight that affect New Zealand, with news investors are wondering where they are at after the sharp falls of the past few days.

Wall Street has made a half-hearted attempt today to stage a recovery. The S&P500 opened up a strong +3.6% but then lost all that gain by midday. Since it has managed to restore +0.6% of it, in whippy trading. They followed overnight European trading which wasn't positive at all, ending down about -1.5% in most markets. Yesterday Asian markets all closed higher however, with Shanghai up +1.8%, Hong Kong up +1.4% and Tokyo returning to positive territory, up +0.9% on the day. The ASX200 was up a very positive +3.1% at the close, but the NZX50 Capital Index closed down -1.8% in a very risk-off session.

There isn't a specific trigger for the rises, but investors seemed to have pinned their hopes on policy easing by major central banks and fiscal authorities. And disappointment on these fronts might well see the negative trends return, and fiercely.

In Italy, the country battling the worst Covid-19 outbreak outside of China, their economy minister has announced, somewhat informally, that mortgage payments will be suspended for households and SMEs. It is a policy measure they have used in other crises. But interest still accrues during the 'holiday'.

The latest compilation of Covid-19 data is here. The global tally is now 116,600 of officially confirmed cases, up +25% in a week. China's cases are up only ½% in a week. Cases in South Korea, Iran and Italy are up +140% in a week, but that growth is slowing in South Korea. The number of cases in the rest of the world have quadrupled in a week. Forget South Korea, Iran and Italy - the real explosion in cases is now occurring world-wide. And the new hotspots are now Spain, France, Germany and the USA, each with more than 1000 cases, up from just a few dozen a week ago.

Data on China's struggles to get back to work just keeps on coming. Their busiest coal railway saw freight volume drop -25% for a fourth consecutive month in February on very weak demand.

But while economic activity remains very subdued in the Middle Kingdom, consumer prices, especially food prices, are still rising fast. They were up an overall +5.2% in February with food up +16% year-on-year. Pork has more than doubled in price in a year while beef is up +21% and lamb +11%. The pain only affects consumers; producer prices were flat in February, marginally lower.

In Australia, consumer confidence is waning. Well, waning may be underselling it - it has fallen rather sharply. Aussie business confidence is heading south as well. This revealed negative sentiment following their Bush fires - and has yet to factor in the coronavirus impacts.

New Zealand business confidence falls are also being recorded, and the change lower has been described as 'awful'. This New Zealand survey is catching coronavirus signals.

The UST 10yr yield is now at 0.68% and recovering all of yesterday's steep decline. The American rate curves are now all positive for the first time in a while. Their 2-10 curve is more positive at +16 bps. Their 1-5 curve is little-changed at +19 bps. and their 3m-10yr curve has turned positive, now +9 bps. The Aussie Govt 10yr is up +9 bps overnight to 0.73%. The China Govt 10yr now at 2.68% and also up +9 bps. The NZ Govt 10 yr is up +7 bps at 0.92%.

Gold is sharply lower today, down -US$15 to US$1,655/oz.

US oil prices are still very low but have bounced up off Monday's depths, up +US$1 to just under US$34/bbl and the Brent benchmark has bounced a little more to be just under US$37.50/bbl. The private oil industry and support sector is now on its knees.

The Kiwi dollar will start today reversing yesterday's gains, down -1¼c to 62.5 USc. The greenback is recovering. On the cross rates we are up to 96.6 AUc. Against the euro we little-changed at 55.3 euro cents. That means our TWI-5 is now at 67.5.

Bitcoin is firm and less volatile today and up +0.9% to US$7,861. Other cryptos have posted bigger recoveries. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Our exchange rate chart is here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Life insurance & Pandemics. Here are three possibilities for existing policies:
1. Complete cover despite a pandemic. Question: is the insurance industry strong enough to cover the scale of possible payouts?
2. No cover for Pandemic related death. Yikes.
3. Grey area. Maybe another Christchurch earthquake debacle.

What about new cover and what might that mean for new mortgages?

Thoughts please.


If you book travel after the insurance companies have stated this is a known event (I think they stated this in the last week or so) then expect no cover. Why travel when there's a known risk with no cover?

For new mortgages we have a likelihood of recession and that will drop housing prices. Taking out a 90-95% mortgage is high risk. Banks change attitude when a house has an underwater mortgage. There will be some that deny this but they have no direct experience of people being forced to sell.

Recession also means job losses and less money circulating (no matter what RBNZ does) which will have a lot of negative effects that will flow on.

With standard SCTI travel insurance it doesn't matter when you booked. A pandemic or threat of is an exclusion.

'Southern Cross Travel Insurance customers who bought their policy before 2pm on Friday, January 31 appear to be covered. However, if you purchased a policy after that date there is no cover for anything relating to coronavirus as it is no longer an "unexpected event", the insurer said on its website'.

In the policy. It's in the small print.. exclusions: pandemic or threat of. The website is a pr exercise.

AirNZ have sent an email out about medical coverage of an insurance policy for countries listed as do not travel. So there is some coverage available.

This boomer was quietly congratulating himself on buying travel insurance last December for an upcoming northern hemisphere trip but the smug self congratulation is fading fast as the covid horror show in Italy unfolds.

The average age of people who die from Wuhanvirus is 80, I don't think it's going to be a problem.

Not so convinced. What is the average age of farmers? There is a bit of debt in the dairy industry and I presume associated life insurance. First home owners might be young but I imagine some of the residential and commercial property investors are getting long in the tooth as well. And this question is not about travel insurance. Its about life insurance and mortgages.


Don't bother taking anything skudiv says at face value. its just trolling.

Actually it's generally under 70.

The chinese are claiming their data for covid fatalities is high 70's. They do have the biggest data set but as the centre of the outbreak it'd suit them to project a story of it being mainly 'an old persons thing'.

Not only that, the rhetoric is now "get back to work, its all under control". 6% growth is still required this year....
The person doing the counting of new cases has Xi looking over his shoulder and saying, yep, keep those 2, nope, don't count those 4....

Yes, the CCP central command and control system no doubt in full deceptive overdrive. But it is odd that the catastrophic death rate predicted for countries with degraded health systems and teeming metropolises where hygiene is sub optimal, don't seem to have yet eventuated. The Chinese are capable of efficiently shutting down or tightly managing information flows but there are so far no reports of plague proportion mass death from less controlled places.

I would put that down to there being no testing in those countries rather than no cases. My pick is that India with its 56 cases is more like 56000.

It is not "odd", just your bias and facts are not reconciled.

Patient one in Italy was a 38 year old marathon runner. "We have to choose who to intubate, between a 40-year-old and a 60-year-old patient who are both at risk of dying. It's atrocious and we are crying; we don't have enough artificial ventilation equipment."

Complacency will be the downfall of many.

Take the time to read through this very valid assessment of the US predicament


And then apply it to NZ to see where we stand.

A disturbing article. We have an indication of the fatality rate for symptomatic sufferers but I'm struggling to get my head around the total fatality rate from covid19 for all sufferers, including the thought to be significant ratio of asymptomatic infected who remain mostly unsurveyed and thus not included in the overall data.

Yes too little info to date to paint a really accurate picture. On the other side of that it’s possible some deaths are being attributed to other causes and also not being included. I find it hard to believe that NZ has only five cases though. I think the government are playing the risks down at present but time will tell.

'Their busiest coal railway saw freight volume drop -25% for a fourth consecutive month in February on very weak demand.'
So obviously there was weakness before coronavirus.


I'm starting to feel really sorry for this virus. It's getting the blame for every economic woe built up over the last ten years. Poor thing.

Fritz. Yet iron ore prices holding up ?


Hold your breath, 1 mile radius in NY city.. in prep to contain Covid19 - We're so lucky the ANZ/Blue/Nat team has steered NZ into one basket country policy - and RE based export to maintain our GDP stability, vote for winning team NZ, other team is just a looser. You know who to choose now.. support comrade Xi Jinping.

1 mile isnt gping to do much.


Jacinda ignores advice and goes with her feelz. The tourism sector is going to take another beating.

"The Government's decision to raise the minimum wage this year is expected to result in the creation of 6500 fewer jobs, according to the Ministry of Business, Innovation and Employment."

"But Ardern does not believe officials' advice suggesting that lifting the minimum wage will lead to unemployment."


I am a big fan of the govt's minimum wage policy but this is daft. They should defer.


I think any projection on job growth in minimum wage areas need to be thrown out in the face of coronavirus. Hospo & Toourism would be the bulk of those jobs, and no way are they not taking a massive hit over the next 6months.

No minimum wage policy just pushes the cost to business rather than benefiting people, it was cheap look good policy and a slight of hand to push it onto business at no cost to govt.
What does business do, shall I employee another person or try automate or do with what I have ?
Remove the tax burden of govt is what would really have benefited lower wages but Labour does not see a tax that could not be a benefit to itself.
Would 16% increased petrol tax benefited lower wage earners ?

Problem is, every time anyone tries to balance out taxation to have less of the load on productive labour and a bit more on land or unearned windfall income, the shrieking and screeching the ensues makes it impossible. Self-absorption prevents a more balanced approach to taxation and achieving useful incomes vs. living costs.

Rick this is just a poor policy to push the burden to business without looking at the thing that consumes the most and produces nothing which is govt.
Petrol tax added cost to every aspect of poor peoples lives, having more money in the hand beats getting money handed to you from govt and its ever increasing administrative burden.

Agree adding the regional fuel tax was a poor policy. And it was done to appease the whiners who would have otherwise faced higher rates.

Point being, we should have lower business and income taxes - but we can't while we leave unearned income and land untaxed.


Why are you a big fan Fritz? NZ raising the minimum wage in a globalised world has slowly ensured we produce And manufacture fewer goods ourselves and rely on selling assets off and selling services (and houses) to each other to maintain our standard of living. China, India and the like must be laughing every time they see min wage increases in other countries.

Try living on 17 bucks an hour...

As has been shown by many studies/reports that raising the min wage costs jobs so is the unemployment benefit preferable? Anyway, if that is your issue with it then that is more to do with the cost of living I think than actual minimum wage.

Maybe less jobs = less migrants?

Yes, people have to eat, but we know this extra money is soon capitalized into other expenses like housing so within months they are worse off, as the money given can be leveraged by housing.

If they just put in the policies that allowed housing to be more truly affordable, then we wouldn't need these wage increases, and people would have far more discretionary income.

The biggest fear to come, is the Govt. are going to waste a great recession for a reset, but instead will just enact policy to support the status quo on the basis of its a 'Black Swan'emergency, rather than an emergency of their own failed policies.

Back to the Rob Maldon days.. "tighten your belts, it is going to be tough!"

Is that a Freudian slip.... Maldoon as in Malware? ;-)

Nar bro. That is actually what Rob Maldoon the then PM said live on TV arround 40 years ago.

The sectors that are need of wage subsidy from the government in these desperate times are also where most workers on minimum wage are employed. So a significant amount of the minimum wage hike is going to come out of the taxpayers' wallets over the next few months.

That alone is a good reason to provide the subsidies. It is far cheaper to keep people in work, even if subsidised, than to have them on a benefit.


What's with everyone's sudden belief in subsidies and ditching of the free market?

RC go to Audaxes comment and link in the article on Orr's reaction to Covid19 here, and in particular this comment which provides the proof of the 'free market's' validity "We have reached a point now where every western first world country is struggling with a much higher unemployment rate and a lower standard of living than 40 years ago. Along with increased poverty has followed increased drug use, increased suicide and increased crime."

The 'free market' doesn't work! It is just for the rich getting richer. That is the top 1% - the rest suffer in varying degrees.

And how many minimum wage earners are feeling better off because of the 15% hike in minimum wage since this government took office?
I agree with you that the free market economics have absolutely failed the West but the current government is conveniently cherry-picking policies from either of the two schools of thoughts for its own benefit, not the public's.
Businesses still have significant control over our immigration system for them to do as they please and tax bracket creeps are taking bigger chunks out of the average household's income. There has been little progress in anything meaningful, just a lot of photo ops and false promises. Nobody in the West has a real, workable plan to bring us out of this downward spiral.

I don't think it's fair to say that the free market has failed - all it's ever been good for is pumpling the economy and maximising efficiency, I think it's succeeded in that. Adam Smith always noted that items such as healthcare and military etc. required government intervention/centralised control. The reality is that the the free market never has been and never will be about improved outcomes and equality for all - that's where centralised control/redistribution comes in. Too much of either will always lead to system failure eventually (the US didn't win the cold war they just lost more slowly), the question shouldn't be free market or centralised control - the answer is free market with centralised control.

With regards to how do we get out of this mess? We start cutting our cloth to match our incomes - it's hard to do because we've been on such a sugar high for the past 20 years that it's going to be hard for many people to accept things like house prices not always going up. The plans are clear it's just too politically unpalatable for the masses so they vote for populists instead...

Well said.

And just because people have been calling it a free market, does not make it one. Housing is a classic example.

Our houses are twice the median multiple they should be because of monopoly rentier regulation for the benefit of a few which makes it a very non-competitive market.

Free markets by definition must be competitive, and that where Govt. regulation, if any, comes in, ie they regulate to ensure competitive markets

Agree - lets cut all welfare payments/accommodation supplements for a few years and see who whinges more, the landlord or the tenant.

Government save the taxes to build new houses and watch prices fall. Darklords will be bitter.

"free market with centralised control" Seems like a contradiction, but i think you are right. The term 'free market' refers to being free of regulation, but we all understand that without regulation there comes manipulation, so there is a need for centralised control, hence regulation to limit the manipulation. This is what I call balance and is the true purpose of Government. Achieving it is clearly not easy however.

Coupled to democracy where the majority of people don't want houses to become more affordable (because they own one!) (and many MP's own multiple properties) -government becomes a self-licking ice cream cone with respect to housing policy. This will be until a point and I believe that point is when the majority of boomers are dribblings into their PJ's at the summerset village. Until then, its all about maximising wealth for those who already have wealth and turning the rest into serfs.

Well, I mean, you don't want to manage risk as a business owner or investor. Surely the way things work is that you get the profit and the taxpayer covers the risk and losses.

Hope they're not out there campaigning with their "She's a pretty communist" signs again next election.

No it isn't. Net welfare is never maximised through subsidising employers.
Although it is framed as 'helping the workers', it squarely benefits the employers. Most of these employees will be on casual/zero hour contract arrangements. Paying them to come to work and do nothing results in the productivity surplus accruing to the employer.

The correct solution is UBI.
Likely cheaper - Under a subsidy, which employers qualify? which don't?
Removes the moral hazard for employers to do absolutely no planning for economic shocks.
Allows productivity maximisation at the individual level, not the employer level.

I thought zero hour employment contracts were banned? A UBI would have the same effect of subsidising employers as it would result in reduced pay.

I would expect that any subsidies would need to be substantiated as opposed to just be a hand out to employers. indeed i'd rather see them go straight to the worker, but the employer would then come under some degree of scrutiny which would ensure their integrity, but may also lead to some assistance as well.

Correct. Zero hour was a bad nomer. But you get the gist.
Labour hours are very flexible in the tourism sector.

"A UBI would have the same effect of subsidising employers as it would result in reduced pay."
Potentially. But also hugely increased productivity.
Productivity growth will drive the recovery. Not the opposite which is what you argue for.

"I would expect that any subsidies would need to be substantiated as opposed to just be a hand out to employers."
Exactly. That is not a cheap exercise.

"So the Finnish government has set up something unusual: a live experiment. A test to help settle the debate, or figure if it's even worth having. A test group of 2,000 unemployed Finns receive 560 euros each month from the government. No strings attached. For unemployed researcher Sanna Leskinen, that meant being able to apply for part time jobs and plan for the future. Avery Trufelman went to Finland to see how the experiment was working."

Productivity growth cannot be unlimited, and i fail to see how we can continue to call for it without restraint. This is part of PDKs arguments. We live in a finite world with finite resources, perpetual 'growth' is not something that we can continue to expect. Thus the economic picture and debate needs to change to how we can sustain what we've got with what we've got without demanding ever more from it.

PDK's misguided logic is not applicable here.

Productivity in this case relates directly to the fact that under a wage subsidy workers are not producing optimal outputs. They are forced to undertake jobs that they are not suited for, at the request of the employer.
Under a UBI, the worker has the freedom to allocate their skills to where they maximise individual utility.

I though that after yesterday's drubbing, the Nymad character might stay quiet.

Obviously not.

Listen to his Adam Smith rhetoric.

WTF is an 'output'? If it's virtual and stays that way, fine. If it's virtual but intends to buy physical stuff, it runs into planetary limits. If it's physical, it already was. To fail to differentiate, is to fail as a discipline.

But economics doesn't recognise physical limits - instead it talks its way back up its own posterior.

I think the drubbing you got when it was pointed out to you what 'diminishing returns' implies mathematically was the real show stopper.

How can we take anything you ever say seriously when you write stuff like this:
But economics doesn't recognise physical limits
Economics is literally the study of human behavior and the allocation of scarce resources. Without finite limits, there is no scarcity.

Until you grasp this, your expertise on the subject is nothing more than that of a middle school student.

"A UBI would have the same effect of subsidising employers as it would result in reduced pay."

Not necessarily.
People won't suddenly decide to work for a lower pay packet. That would only occur if there was underutilized labour capacity (as it would under normal conditions of higher unemployment).
High value workers will still be able to demand a higher salary.
UBI is effectively creating the same situation as a tax free threshold, just without the requirement to work.

One of the undiscussed parts of this debate is why people should be taught that they need to work for a living. If everyone understood that the UBI debate would be come a simple one of basic economics.

In our societies today (and I believe this to be true all over the world, at least in parts with a strong social welfare system) parents are not good at teaching their children why they need to get a job. Having a job is not just about having money, it is much bigger.

We need to teach our children to have a work ethic, and get a job, first and foremost to earn a living, but also to develop friends and have a social life, to be able to cope with the normal mental stresses of life (which can be added to by having a job!), but also to be able to develop the wealth so you can have a good life and have the toys that we all want, to be self-sufficient and resourceful, to be confident and assured in ones self and abilities, and to be able to cope when things go bad.

I agree.
It's about defining what work is though - is it a primarily a social task or an economic one?

We're socially and historically geared up for what I would loosely term the "Protestant work ethic" - hard work and sacrifice generates rewards and virtue, and the respect of your peers.

As a society we need to determine whether the profit motive (and I mean here, the extraction of profit over and above that delivered to labour) is something we consider a "virtuous" element of work.

Agreed - the 'profit' motive has become overriding including overriding the rights and welfare of the workers who labour to produce it. One of the things that need to change.

Speaking of the profit motive - what I find really weird about the current global finance situation, is that as equities become more volatile - one would think that banks (by way of attracting TDs) would be happy to be the beneficiaries of the share market drop. But no, indeed it seems quite to the contrary. Can anyone explain that dynamic?

I'll venture one possible cause (I think there are others). The stock market turmoil is part of a larget pattern of declining economic activity, and this ability to service interest. Interest rates are dropping. This eats into the profitability of banks, they are no friend of descending interest rates squeezing their room for margin. Professor Richard Werner has a 3 min answer here. https://www.youtube.com/watch?v=KhYQ-qQutSw

Thanks in a big way, scarfie. That 3 minute answer is really helpful - it certainly makes sense. What a world we live in! And, eys, that will certainly be part of the answer.

I had wondered whether the banks worry about their own share price dropping, and hence, don't want to necessarily be a safe haven -and hence don't compete for deposits.

Yea of course. Paying $1:20 less is going to entice the 2 million would have been tourists to change their mind and come anyway..


Yeah - leave me alone, don't tell me what to do, I'm superior because I rake in more, arrgghhh bail me out I'm overextended.

Male and south of six foot tall, most of 'em.

What amazes me is the speed of the knee-jerks and on the basis of nothing really - but then society in general seems happy to prolong the myth - the lie - that GDP growth and/or 'Economic growth' are valid goals. And that pursuance of same isn't destroying the life-carrying capacity of a very small planet. I've come to the conclusion that when you base your whole societal momentum on a falsehood, the knock-on effects can get weirdly out of whack.

Thus we talk of tourism, while failing to register that decarbonising or the end of fossil fuels (one of which will happen) means no arrivals. I've yet to hear any politician, and business mouth or any journalist, ask that patently obvious question.

profile. The unemployment bit is already happening, with the youth out of work category well up.

And nothing like a hike in minimum wage to further shut them out of the workforce and pile on the misery. Everything should be done to get people on the first step in the employment ladder. The minimum wage is just a tax on unskilled workers - great feelz for Jacinda and Grant though.

I side with one Shane Jones on this with his "pseudo students" taking NZ youth jobs

the herald should show more responsibility and contain all their articles behind the paywall so we dont get infected by their feverish outbursts.


Italy is priming their banking system for collapse. I don't know how bad their mortgage defaults are but they aren't going to get any better after this.


So are British banks, all the majors announced a raft of measures last night, ranging from mortgage payments breaks, refunds on credit card cash transfer fees, business loan repayment holidays for SME's etc.

For the businesses that need the breathing room there's a limit to how long they can keep staff on with little or no revenue.

Those that cut sooner and harder tend to survive, those that hang on tend to fail. It is a hard thing to do, to get rid of lots of good people that you like, for no fault of theirs. Being an employer when things turn down is no joy. Better that the business survive with half the people than everyone lose their job. Great to phone people up when you've got a job for them again.

Banks voluntarily introducing a debt jubilee.

I'm feeling more like Alice in Wonderland each day.

Reality probably is that the banks themselves all know they too will need one shortly.

As pdk has pointed out numerous times - global debt cannot be repaid - ever.

suspension of mortgage payments isn't a new thing in italy, its been happening on and off since the GFC, as recently as 2016 at least.

The Italian banks are toast….

“A catastrophe that will cripple Italy”


...and thus the EU is toast - from 2019 "Most governments around the world owe a fortune. But the Italian debt pile would make most others blush. Italy owes $2.3 trillion (€2.06 trillion) in public debt. That's around 133% of its GDP — a massive ratio that puts it in the top five in the world.
European banks are severely exposed in the event of anything going wrong. France is in the hole for a potential €285 billion according to a study by Bloomberg, while German, Spanish, British and Belgian banks also have cause for concern."

Funny thing is though, whilst the Euro has been a disastrous defeat for France and Italy, they have more gold per capita, both at state level and privately held, than almost anyone else.

The Euro was an imperialist strategy concocted by the French enarques to control Germany and thus all of Europe. Big fail, just like the Maginot Line before it. Diplomacy is war by other means to the French enarques.

Roger, It was more of a global governance project I reckon:

The European Union always was a CIA project, as Brexiteers discover

Brexiteers should have been prepared for the shattering intervention of the US. The European Union always was an American project.
It was Washington that drove European integration in the late 1940s, and funded it covertly under the Truman, Eisenhower, Kennedy, Johnson, and Nixon administrations.

The Schuman Declaration that set the tone of Franco-German reconciliation - and would lead by stages to the European Community - was cooked up by the US Secretary of State Dean Acheson at a meeting in Foggy Bottom. "It all began in Washington," said Robert Schuman's chief of staff.
It was the Truman administration that browbeat the French to reach a modus vivendi with Germany in the early post-War years, even threatening to cut off US Marshall aid at a furious meeting with recalcitrant French leaders they resisted in September 1950.

That is heartbreaking.

Well enacting a mortgage payments holiday isn't something you'd generally do unless people are struggling to meet their payments, and not just a few bad apples either.....

In mid-afternoon trade, Wall Street has turned higher with the S&P500 up +3.3% on the day. 

Will not be surprised if it looses most of the gain and ends flat or just a little higher.

Even if it moves up in anticipation of announcement by Trump government may fall badly after the announcement - not to be surprised.

You might wish to update your curve observations as well - Bloomberg UST data

Seems a bit strange that a website that had nothing to do with stock market indices as they were flying up over the last decade is now fascinated by them when they go down.
I remember commenting last year that as a financial web site Interest was focussing mainly on houses and farming like the team had all been blighted by 87.
Heres an example of early 2019 when the market was rising. Nothing really about shares.


Stock markets cannot be called indices when they fluctuate 5% in a day. Not of reality, anyway. Maybe indices of ignorance-levels.

As for Interest.co, it's one of the last unfettered discussion-places in NZ. I joined in near a decade ago when I realised that to be long-term sustainable, the system had to eliminate interest (as other cultures in resource-depleted areas have done). In other words, I realised that exponential growth within a bounded system was (a) impossible and (b) the pursuance of it would prove fatal. Since joining, I've lost any respect I had for economics and economists (studying flows rather than stocks and avoiding physics are the main flaws), noted the need for others to believe rather than investigate (Lomborg-types are a typical go-to, fear probably the driver), and noted a shift in the conversation. Those who were congratulating themselves on becoming 'rich' through RE were more prevalent in the earlier days, those who tout/troll perhaps less so.

You have certainly educated myself and I am sure many others. The debates/post I follow with interest, but the complexity of the science/maths often leaves me behind.

Ditto you view on economists. They only have credibility because there are so many of them with so many opinions - thus enabling the media to always able to find and quote one who happened to be on the right side of the 'guess'.

Wish supplying easy and free money was solution for everything.

Easy and free money could have and did helped earlier but now any easing will not solve the problem. Being election year, current government if this situation continues will go for dole as come what may have to win election and all dole / bailout will be to support themselves to be in power.

So be sure that dole / bailout will be rolled out soon.


We live in a world where supplying money for property speculation and sharemarket bubbles is a good thing and supplying money for folk on hard times is bad. Strange times.

The GFC (IMO) triggered significant fear that has resulted in significant greed (this business cycle) - and now we can see the fear manifesting itself again - just look at the panic for things like toilet paper. Insanity.


Jason Van Schoor UK based Registrar in Anaesthesia & ICM.
From a well respected friend and intensivist/A&E consultant who is currently in northern Italy:

1/ ‘I feel the pressure to give you a quick personal update about what is happening in Italy, and also give some quick direct advice about what you should do. 2/ First, Lumbardy is the most developed region in Italy and it has a extraordinary good healthcare, I have worked in Italy, UK and Aus and don’t make the mistake to think that what is happening is happening in a 3rd world country. 3/ The current situation is difficult to imagine and numbers do not explain things at all. Our hospitals are overwhelmed by Covid-19, they are running 200% capacity
4/ We’ve stopped all routine, all ORs have been converted to ITUs and they are now diverting or not treating all other emergencies like trauma or strokes. There are hundreds of pts with severe resp failure and many of them do not have access to anything above a reservoir mask.
5/ Patients above 65 or younger with comorbidities are not even assessed by ITU, I am not saying not tubed, I’m saying not assessed and no ITU staff attends when they arrest. Staff are working as much as they can but they are starting to get sick and are emotionally overwhelmed.
6/ My friends call me in tears because they see people dying in front of them and they con only offer some oxygen. Ortho and pathologists are being given a leaflet and sent to see patients on NIV. PLEASE STOP, READ THIS AGAIN AND THINK.
/ We have seen the same pattern in different areas a week apart, and there is no reason that in a few weeks it won’t be the same everywhere, this is the pattern:
8/ 1)A few positive cases, first mild measures, people are told to avoid ED but still hang out in groups, everyone says not to panic
2)Some moderate resp failures and a few severe ones that need tube, but regular access to ED is significantly reduced so everything looks great 9/ 3)Tons of patients with moderate resp failure, that overtime deteriorate to saturate ICUs first, then NIVs, then CPAP hoods, then even O2.
4)Staff gets sick so it gets difficult to cover for shifts, mortality spikes also from all other causes that can’t be treated properly.
10/ Everything about how to treat them is online but the only things that will make a difference are: do not be afraid of massively strict measures to keep people safe, 1/ if governments won’t do this at least keep your family safe, your loved ones with history of cancer or diabetes or any transplant will not be tubed if they need it even if they are young. By safe I mean YOU do not attend them and YOU decide who does and YOU teach them how to. 2/ Another typical attitude is read and listen to people saying things like this and think “that’s bad dude” and then go out for dinner because you think you’ll be safe3/ We have seen it, you won’t be if you don’t take it seriously. I really hope it won’t be as bad as here but prepare.

On the worldmeters tracker, the mortality rate is varying wildly dependent on country. And this is the stark lesson to be taken from this Doctor in Italy. A countries capacity to respond to the seriously ill, is a huge factor in mortality rates.

China was able to add emergency hospital beds and quickly respond to urgent need. According to this tracker, their death rate is 5%. But Italy's is currently running at 39% mortality rate. What countries are going to be able to respond like China? Or indeed, have shown any attempt to respond like China? Not to mention that because China had the infection first....so when they ramped up their treatment capacity, there was little global competition for medical resources.


everyone just has to stay at home for 2 weeks or face the wrath of Wuhan.

Wonder how many weeks away we are from this????

That will depend on many factors.

Positive factors;
*Most of NZ is pretty sparsely populated so with any luck, the virus won't make its way into rural communities.
*NZ governments are more nimble than many other world governments and if they wanted to act quickly and drastically, they are more able to do so.
*NZ produces a lot of food per head of capita than most countries, in addition because of earthquake risks, Kiwi's tend to be more prepared for disasters with water butts etc
*NZ is isolated geographically

Negative factors;
*NZ has a massively underfunded and under resourced health care system that has zero experience with pandemics. This will probably be more acutely felt in densely populated areas like Auckland.
*NZ has an ageing population
*Poorly heated homes with winter approaching
*Very high obesity and related illness rates (diabetes, heart disease etc)

A lot will depend on how well we do preventing the spread of the virus and protecting vulnerable groups.

I would guess that Spain and France will go into crisis next, the UK will follow soon after, as will America, America has a very large obese and associated health issue population. It's hard to say what is going on in Iran and other Middle Eastern countries, but it could escalate quickly there. The worst hit will be people in third world densely populated slums if it reaches those places.

NZ is 3-6 weeks away maybe? It really depends on what the gov does and whether people with flu symptoms self isolate and follow protocols.

As the WHO have said. This is not a drill.

There isn't a specific trigger for the rises, but investors seemed to have pinned their hopes on policy easing by major central banks and fiscal authorities.

The Fed''s TOMO operations have ramped up giving psychological support, but not much else - graphic evidence.


Australian cases slowly but surely building momentum... will be interesting to see if this leads to a travel ban between NZ and Aus...

The current travel bans are not enforced so won't make much difference.

i wonder how many weeks behind Italy we are...

2 to 4

Winter is when we will feel it. The virus does not survive well in hot climates. Take a look at the map; China, South Korea, Iran, Italy. Germany next. We need to be preparing for winter now. I'm not sure how though? Stricter boarder controls?

"Wall Street has made a half-hearted attempt today to stage a recovery." ................. not even a dead cat bounce ?

Pretty much just some brave people "buying the dip". One could have made a good 5-7% on some tech stocks buying yesterday and selling today. Not a bad gain.

Probably the wall street banks buying up stocks with all the free money they are getting from the FED.

looking over the cliff is a bit scary


wall street up over 4% today, so not a bad effort...

Although the downside pressures havnt even scratched the surface as yet

IMO we can expect seesawing of markets and volatility for the rest of 2020 - things haven’t fully played out yet, there’s more to come.

I just booked Southern Cross travel insurance and they won't cover covid-19 impacts for policies after a week or so ago.

..the earlier polices didn't either (shouts). Pandemic or threat of excluded - always has been

Markets will not fall in linear fashion but expect Dow to be 22000 by end of March and prob 17000 by end of May. USA not ready and inadequate health system.

The virus would only be a trigger.

The debt versus the lack of central bank wriggle-room versus the inability to achieve another real (physically-underwritten) doubling-time, tells us that growth is over. That must re-set the collection of forward bets, despite algorithms stepping in to shore up numbers. Just where the 'floor' is, will be interesting to see.

"Forget South Korea, Iran and Italy - the real explosion in cases is now occurring world-wide. And the new hotspots are now Spain, France, Germany and the USA"

That tells me we are in for a real challenging year ahead

And for Yvil


Question for all:
Compare and contrast pro active and reactive public health measures

The govt. leadership need set the example. Needs be strong.
Both events should/must be taken on line, no ifs no buts.

Newshub asked Ardern if the memorial could potentially be cancelled, and she said "no".

"I've just highlighted for the director-general that we have two large events in New Zealand this week, and asked again for his advice on managing those events," the PM said.


Tip: Virus doesn't distinguish based upon character/identity. Think social distancing, rather than social justicing. Be proactive.

Tech Tip. Adding to the medic app, (that everyone should already have).
Spark/Vodafone need be mandated to connect every residential home & work place to fiber.
Or mobile broadband - could be sim card by sim card.
Next 6 months, data free or next to nothing cost.

Direct people to make social distance, and come together on line, go gaming for winter!

Italy Italy, Italy.

MOH heads firmly in sand, will only act once the bug "goes viral", then They will need to self isolate.Along with the Govt.
We are just a cough away from Italy.

Sand you say...

Where are the ads for handwashing, isolation etc?Avoiding hospitals and GPs for every cough fever etc?
Where are the community based assessment clinics, as seen in UK etc that are set up for this?
"Armed" guards at hospital gates with thermometers
We have had 2.5 months warning, done nothing, and are going to have a bad winter thanks to the useless MOH.
Need to emulate the countries that have done relatively well, and fast.
The MOH are beyond pathetic, they still think the health system can save them, rather than obvious cheap simple mass public health care and advice.

Anyone know what AIRNZ attitude is to cancelling international flights?

I’m in that position – flights booked to AUS – called AIRNZ last night.

Was a bit surprised - it seemed their response was just BAU - no refund - but reschedule for a fee etc.

Considering what’s going on currently I thought it a bit odd – no sign/offer of any goodwill gesture.

Should mention though that the tickets were purchased at a promotional price – rules are normally a little tougher.

You might have missed out by a day. We just got this email from them late today, and with respect to:

Providing international fare flexibility
We understand that your plans may need to change as a result of COVID-19. This is why we're waiving the standard change fee for customers who purchase an international ticket between 5-31 March, no matter how many changes are made.



How does the message of social distancing, and avoidance of large groups & gatherings get through?

Take a moment here.
Would Dr D, care to reconsider.... [Italy and south Korea] they also have well developed health systems.

Um Italy has No health system now.
Took about a week.


Health minister Dr David Clark said self-isoaltion was a proven method of containment and was deemed the best course of action to minimise risk.

“It recognises that while there are outbreaks in both countries [Italy and south Korea] they also have well developed health systems, and the outbreaks are largely located in specific regions.”

“We know self-isolation works. It is a longstanding and successful approach to managing infectious diseases – and has proved its worth again in recent weeks.”

Look over to Melbourne

It would be fascinating to see the meeting papers & resulting minutes, file notes from TAG and PM Depart meetings and interactions.

It is a staggering contrast to see what we were told is our most immediate danger & threat to life in January.
Climate Change.

And now, The Virus.
The Virus with other country worked examples health, closing schools and economically. The messaging here is so laid back.

CC. The shrill language and immediate danger pleadings have gone. Not even replaced, but gone. Just like that.
Now Labour wishes to work with National, COL partners The Greens and NZ Party just shadows. Just NPCs.

C4 talk to Italian Dr


Map this against the Peak Prosperity presentation.

This looks like a pivot.
Did they give blitz testing a try?
Q: anyone know the background papers/data to this decision?

New Zealand has entered a new phase of the coronavirus outbreak, with health officials focusing on slowing the spread of the virus rather than eradicating it.

Speaking at a briefing on Wednesday, Ministry of Health director-general of health Ashley Bloomfield said government would consider a range of measure to slow the virus' spread.

"Mass gathering and school closings could be employed now to maintain it [the spread] and slow it down," he said

Bloomfield said everyone needed to take steps to slow the spread of the virus.

Because eradication has failed?


Someone needs tell the PM and PM Depart, those big crowd events for the coming weekend are not looking wise.

UK health Minister Nadine Dorries just tested positive for CoronaVirus.

Ms Dorries, MP for Mid Bedfordshire, said in a statement that Public Health England had started tracing people she had had contact with, and the department and her parliamentary office were closely following its advice.

She later tweeted that it had been " pretty rubbish but I hope I'm over the worst of it now ".

But she added she was worried about her 84-year-old mother who was staying with her and began to cough on Tuesday.


Everything you say is correct, BUT NZ has a very low incidence of mortgagee and forced sales. Very low. Banks don't like them and Kiwi's hang onto their houses and do whatever it takes to make payments even if they go underwater for a while. The vast majority of mortgagee sales in NZ are unfortunately due to families using equity and taking out finance company loans to pay for overseas funerals, particularly in the islands. I know because I worked in insolvency for years and sorry to say but true, this was the main reason for NZ mortgagee sales. That and family ill-health due to the main or secondary income earners unable to work due to illness.

Better financial education and support would have prevented many of those mortgagee sellers getting to that point. That was the one bright spot of that work when we could help prevent mortgagees from going ahead.

Yep, but I am guessing that was before houses in NZ had the sky high valuations they now have of generally 7-8x income.

It might be a whole different story if 30% equity on all housing disappears in a relatively short time frame. Remember banks have to recognise non performing loans on their books and generally do something about them.

One shock to the financial system and banks here may increase interest rates by 2-5%. When people then come off their loan terms they may be forced to pay considerably more than they budgeted for. If unemployment is rising (due to supply/demand shocks from Corona), you can expect a lot of pain and banks to start acting quite differently than they did before. A lot of "if"'s in that sentence, but they seem to be lining up as we speak (Italy's banks, US banks invested in oil etc).

"BUT NZ has a very low incidence of mortgagee and forced sales."

Historically yes.

The issue now is that there is a large proportion of debt is concentrated in a small number of households. If these households face cashflow stress, then there could be sales of residential real estate. People ignored this identified vulnerability at the time the report was issued, but given recent events, this might now be given a higher priority and come into focus for many people.

From RBNZ Nov 2017 Financial Stability Report:
This debt appears to have become more concentrated. The Reserve Bank estimates that the average debt to-disposable income ratio of households with mortgages is currently around 325 percent, up from 280 percent in 2012. It is estimated that only 8 percent of households currently own investment properties but these households account for around 40 percent of housing debt. While only a small proportion of household lending is currently non-performing (see chapter 4), high debt levels imply that some borrowers are likely to have difficulty servicing their debts if interest rates rise or incomes decline


Furthermore, combine that with the large numbers of residential real estate in Auckland purchased on negative gearing, and negative cashflow, so some households are required to make top up payments from household income.

Now what happens when that household income drops? (say reduction in hours worked for wage earners, or loss of job by one household income earner?). Remember, most mortgages in Auckland are based on two household incomes.

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