Wall Street tries partial comeback on stimulus hopes; Fed ramps up liquidity support; many countries add their own support; Europe new virus epicenter; UST 10yr yield at 0.94%; oil and gold drop; NZ$1 = 60.5 USc; TWI-5 = 66.8

Wall Street tries partial comeback on stimulus hopes; Fed ramps up liquidity support; many countries add their own support; Europe new virus epicenter; UST 10yr yield at 0.94%; oil and gold drop; NZ$1 = 60.5 USc; TWI-5 = 66.8
Cape Reinga, where the seas clash

Here's our summary of key economic events overnight that affect New Zealand, with news actions, reactions and inactions are all driving confused financial markets.

Today, Wall Street is making an attempt to rally after yesterday's -9.5% firesale. Expectations of even more stimulus seems to be the driver. Germany is the latest to announce fiscal measures. In mid afternoon trade the S&P500 is up +4% since the open and if it stays like this, the net loss for the week will be -14%. They have been encouraged by Europe whose markets rose by about +1.8% overnight. They followed Asian markets which were down sharply in yesterday's end-of-week trade. Shanghai fell -5% for the week, Hong Kong was down -8% on the same basis, and Tokyo was down -16%. Closer to home, the ASX200 recorded a weekly fall of -11% and the NZX50 Capital Index was down -14%.

Update: An American declaration of emergency and pledge to step up and do something saw the S&P500 close up more than +9% on the day.

Yesterday, the New York Fed raised its support capacity by US$1½ tln to reassure markets it would provide liquidity for banks and other financial institutions as they freeze up.

And overnight, they engaged in more than US$100 bln in that support with the overnight repo activity in US Treasuries hitting US$55 bln and another US$46 bln in mortgage-backed securities. All up, that is another new all-time record and the first time ever this has been over US$100 bln in one day. It is an indicator of extreme stress in the US financial system.

American consumer sentiment surveys are now starting to show rising concern about the coronavirus and the economic risks.


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Globally, the travel industry is on its knees.

The Bank of Canada has released a range of measures, including a rate cut, to support their economy. Update: And their financial stability regulator has slashed their Domestic Stability Buffer from 2.25% to 1%, freeing up more than C$300 bln of bank lending capacity.

In China, they have added US$80 bln in liquidity support for their banking system overnight. China may be getting back to work but their new problem is a lack of customers as the rest of the world shuts down.

In Australia, their Reserve Bank is also supporting markets with much larger liquidity, reportedly suddenly rising in the past week to over AU$8.8 bln. (It is revealed officially here, but with two days delay, but that shows a sharp recent rise to levels not seen ever before.)

And in Australia lightening-rod politician and Home Affairs minister Peter Dutton has Covid-19. Separately, fiscal and monetary authorities in Australia are huddling in crisis talks, just days after their bit AU$18 bln stimulus package. More will be coming, it seems.

The latest compilation of Covid-19 data is here. The global tally is now 137,445 of officially confirmed cases, up +35% in a week. There are now 56,500 cases outside China, a rise of +10,000 in one day as the numbers keep on jumping in Italy and Iran. South Korea, like China, seems to have plateaued  In fact, in China they are now reporting two thirds of all cases have recovered. But the new hotspots are Germany France and the USA with the number of cases up 3x in a week, and Spain reporting a ten fold increase in a week. Europe seems to be the new epicenter. In the rest of the world, the number of reported cases has trebled in a week. Globally reported deaths now exceed 5000.

The UST 10yr yield is rising, which is an odd move in times of stress, but buyers are hard to find, it seems. It is now just under 0.94% which is +20 bps higher in a week. Rate curves have moved sharply positive as short term rates have fallen while long term rates have risen. Their 2-10 curve is much more positive at +47 bps. Their 1-5 curve has also turned more positive at +32 bps. and their 3m-10yr curve has blown out to +54 bps after being marginally negative this time last week. The Aussie Govt 10yr yield is also sharply higher in the week with much of the gain today, up +35 bps to 1.03%. The China Govt 10yr far more stable, up just +2 bps in the week to 2.71%. The NZ Govt 10 yr yield is also very sharply higher, now at 1.20% and a weekly gain of +25 bps.

Gold has fallen sharply again overnight, down another -US$73 overnight to US$1,517. That compounds golds stunning retreat over the past week when it has fallen -US$151/oz or -9%. This is a huge move for the yellow metal and one gold salesmen wouldn't have expected when markets are this unstable. Gold is equally unstable.

The Fear & Greed index we follow is at a record at the 'extreme fear' side of the dial. The VIX volatility index is now at 69, up from just over 48 last week and up from 17 three weeks ago and its highest since March 2009.

US oil prices are marginally firmer overnight at just on US$32/bbl with the Brent benchmark just under US$34.50. These represent almost a -25% drop in a week as demand growth prospects vanish and the Saudis and Russians square off in a power play. The US rig count is surprisingly stable at its new low level. A dive is imminent, you would think.

The Kiwi dollar is ending the week sharply lower, in fact at its lowest since May 2009, mainly on a rising greenback. It is now 60.5 USc and a -5% devaluation over the past week alone. The weekly fall is a very chunky -3c. On the cross rates however we are have firmed sharply against the Aussie dollar which is taking even more of a battering, ending the week at 98.2 AUc, a +2.4% weekly rise of more than +2c. Against the euro we are softer by -1½c for the week at 54.6 euro cents. We have slipped also slipped more against the Yen. That means our TWI-5 is now at 66.8 and a +2.3% devaluation in a week. It also represents an overall -7.3% devaluation over all of 2020 so far.

Bitcoin has been seriously dumped and is now at US$5,083 which is a loss of -US$4,007 in a week. (That is not a typo.) Yes, bitcoin is down -44% in seven days! Putting that into a longer perspective, it is down almost -30% since the start of 2020. 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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181 Comments

Btw, Gold to USD 800.

Deflation!

or a reset

Gold could be used for re-flation yes, but it could also be made illegal to posess.

And silver becomes the new gold?

Silver is not a rare metal. It is poor man's gold at best.

I dont think anyone implies that (yet). Its a precious metal, and historically with gold has stood the test of time.

Surplus to the intrinsic value weve held in it for 5,000 years , it has a heap of industrial uses. Solar panels, cellphones and medical equipments to name a few.

Given reserves will go to nil within the next decade, and with a Gold/Silver ratio now over 100 here in Australia im happy to purchase silver, with the intent of sitting on it for the long term.

And if gold is taken off the masses it could become the new gold.

Australia still has legislation re: confiscation of gold, but i dont think NZ does.

Kezza. You are in your twenties right? Good to have you here but this isn't a Bitcoin/Litecoin thing.

X's two plus plus plus and few and even more. Too old to get bitcoin or anything other than what is in my hand.
New to this trying to figure out how to secure what I've worked hard to get and it's a bloody steep learn curve.
I've got 15kg's of silver as insurance and if it disappeares in a poof not that much of a big deal but it's better in my hand than as a paper weight, do I drop it and buy USD or a house that I can do up (I'm a builder so can do on the cheap) ????
You seam to be proven more correct than most on here so far.
Enlighten me master...

Good on you for keeping an open mind and thinking different.

Hold on to the silver. I know I have been calling gold at US 800 for the mid-term but it may rebound in the long-term. And I mean long long-term.

You are in the building industry which is at risk. Hedge accordingly. If you decide to buy USD don't hold paper bills because it will be phased out due to Virus. Instead open an USD forex account with an NZ bank. This is the easiest way to keep USD.

On buying the home now, tough one. I personally would go 100% USD for now and look for bargains when the New Zealand Dollar dives.

Right that makes sense to me. Cheers for enlightening me and maybe others.
Not worried about the building aspect, my wife has a stable Govt job and works remotely. I'm a hunter gather and a background in horticulture, so tucker wouldn't be an issue if we bug out of suburbia to the bush if needed. Everything ready except for my banjo.

...so that implies US $ to the moon and pity help likely exchange rate with the Kiwi.

Golds retreat is only due to the rise in the US$ - when the US dollar starts heading south gold will head north.

A lot of gold id being sold off too to meet margin calls

Veryinterested
As well as gold, looks like lots of Bitcoin being sold off to meet margin calls.

And being dumped...

"Bitcoin has been seriously dumped and is now at US$5,083 which is a loss of -US$4,007 in a week. (That is not a typo.) Yes, bitcoin is down -44% in seven days! Putting that into a longer perspective, it is down almost -30% since the start of 2020."

Wasn't Bitcoin marketed as a hedge against inflation, as a substitute as a store of value for gold?

But Tradersam, the USD will solely head north.

I explained why, here:

https://www.interest.co.nz/news/104030/wall-street-recoils-fed-announces...

guwop, I take your point. The US has weaponised the dollar to the point that the days of it being the globes reserve currency are numbered as the dollar is dumped. We are in the throws of a new financial order which is likely to mean a new global currency (wether it be crypto or otherwise) that’s backed by gold. The fact that Russia and China have been increasing their gold reserves says something in itself. Gold has long way to go yet.

Btw, Gold to USD 800.

Meh. Gold is doing what it does. Gold could go to USD800 but I couldn't imagine the circumstances as to why. China and Russia dumping all their gold on the markets? Why?

Maybe the US dumping what they have left to keep tbe price down so a flight out of the dollar dose not occure playing into Chinese and Russian hands???
I new to this and I thought I was coming to grips with the play but as they say 'the more you learn ..... '

Rate curves much more positive, gold sharply down shares down, property up... throw away the conventional economy books

At 144000 now almost 5400 dead

423 dead reported today, that is the worst day yet

Seems you are still in denial! Enjoy your weekend while we all still pretend everything is ok.

But this sh*t is getting real and it will be a miracle if we avoid the situation Italy and co find themselves in

International travellers report in the press no testing of body temperature at AK airport.
In the NZ Herald today is a report of an education worker (and her children) with symptoms "ticking all the boxes", but despite several calls to health line, they can't get tested because they can't prove direct contact!
We are in big trouble.

Yep, I came through from Dubai last Saturday & wasn't tested. I was tested on my entry in Africa 10 days earlier.

Fingers crossed is the state of play.

Sloppy

theglc, I was clearly talking about the economy, your reply is about CV19 infections and deaths

Those numbers are still tiny. 1.35 million people die in car crashes every year and we aren’t panicking about that.

Well, actually we are - we put huge resources into reducing car accidents every year. Also the difference is car crashes are a known quantity (more or less). CV is not, we don't know where this ends - also there is a track record through history of virus killing millions. That's the reason it's a concern for everyone.

It could die out soon, and be much ado about nothing, but it might not. Better to be safe than sorry right?

Agree it could be something bad and we should try and stop it. But at the moment (especially in this country) people shouldn’t be concerned. Yet they are avoiding their local restaurants etc so they don’t get it when the drive there is actually considerably more dangerous.

Yes agreed, some people are taking it to extremes. And if I was in my twilight years I maybe more careful too. But no one really needs 300 rolls of toilet paper just yet.

However, I think the government should have panicked more, all the evidence so far suggest those countries that took drastic measures early have fared better than others.

Stocks were at all-time highs one month ago. House price data is always out of date by at least a month. What's your cutting edge, up to the minute assessment of house prices? Far too early to say what the impact will be.

For the record, I'm not saying house prices will crash by as much as share markets have - they tend to be less volatile both going up and down. Something like the GFC could be in order - down maybe 10% over a year or two and several years to recover the highs. I think it's reasonable to assume the house market will essentially shut down over autumn/winter. Nobody will want to go to an open home or an auction (if they are even still permitted).

I’m not disagreeing, but gold and treasuries also tends to be less volatile but recent events have really turned things upside down.

Here’s another take on the yellow stuff - the US government can't afford to let the metals tell the real truth about the USD, therefore they are going to continue to short the futures to keep prices down as will JP Morgan, which currently owns the largest physical amount amongst all the major players. Since the Fed has an unlimited printing press and a complicit CFTC and CME, what's to stop the “ The Powers That Be on Financial Markets" from just continuing to play this manipulation game unchecked. If so they can’t do it forever.

I read somewhere that JP Morgan was under Chinise control (at least in part) now due to some shady deal or something like that.

mfd:
I went to Ray White Ponsonbys residential auction on Wednesdays to get an idea if things were slowing down. 14 houses on offer, 2 sold prior, 9 sold at auction = 78% clearance rate. One old house at 11 Wood St started with a low bid of $2.0 M, I estimated it could sell in the high $2M, the bidding just kept going & going, it sold for an unbelievable $3.71M

Yvil
Well if one needs to self-isolate what better than the comfort of a $3m property. :)

Yep the sold stickers seem to be going up very quickly on houses near us too.

"One old house at 11 Wood St started with a low bid of $2.0 M, I estimated it could sell in the high $2M, the bidding just kept going & going, it sold for an unbelievable $3.71M"

https://homes.co.nz/address/auckland/freemans-bay/11-wood-street/xo91P
https://www.qv.co.nz/property/11-wood-street-freemans-bay-auckland-1011/...

Let's all play a game. What do readers here think the market price of this property will be in 10 years time (i.e March 2030) assuming it is substantially unchanged? (i.e not developed into townhouses, demolished and rebuilt, etc)

A) $7.42mn (i.e double in price every 10 years)
B) $4.52mn (grow at inflation rate of 2.0% per annum)
C) $3.71mn (essentially unchanged) - allow 0.5% p.a (i.e $3.71mn to $3.9mn)
D) less than $3.71mn
E) other (please specify)

To make it simple for everyone to respond (and allow you to answer with complete anonymity), the different choices are listed separately below, and people can just hit the relevant thumbs up button to answer so as to get a count.

People are free to respond under each answer to outline the reasons or rationale for their choice.

Will check back on the market value on the homes.co.nz or QV.co.nz or some other property market value estimation website in March 2030 (assuming the websites are still operational and interest.co.nz is still operational) to see which answer is the closest.

A) $7.42mn (i.e double in price every 10 years)

B) $4.52mn (grow at inflation rate of 2.0% per annum)

C) $3.71mn (essentially unchanged) - allow 0.5% p.a (i.e $3.71mn to $3.9mn)

D) less than $3.71mn

E) other (please specify)

B

A reminder of some mathematics done last year.

Many property investors are extrapolating historical property price changes into the future. Historically prices have increased 9.9% per annum since 1965. Many property investors believe that prices will continue to double every 10 years. Is this price increase sustainable?
Let's assume that there is no hyperinflation in NZ, like Germany experienced in the 1930's, Zimbabwe experienced in 2000's, and the current situation in Venezuela. For hyperinflation to occur in New Zealand, would mean for the RBNZ to abandon it's 1-3% inflation target, and focus on different macro-economic metrics - that seems like a low probability scenario given the current environment & legislation in New Zealand.
So with a low inflation economic backdrop, let's assume property prices in Auckland double every 10 years (that means house prices grow at 7.2% per annum). Let's extrapolate what house prices have done in the past 52 years, and extend that into the future - what does the future look like for Auckland house prices?
(Here are some of the other underlying assumptions - rents in Auckland grow 5% per year, household incomes in Auckland grow 3% per year)
You can pick at which point that Auckland house prices might start to seem a little ridiculous to you.

In the year 2019 (today) -
Median house price in Auckland - $0.850mn
Median gross rental yields in Auckland 3.51%
Price to rent ratio 28.5x
Median house price to median household income ratio 8.9x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 1.8x
Equity deposit of 20% required to buy: $0.17mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 41.3%
Median rent cost for renters as % of median household income 31.3%

In the year 2029 (10 years from today) -
Median house price in Auckland - $1.7mn
Median gross rental yields in Auckland 2.86%
Price to rent ratio 35.0x
Median house price to median household income ratio 13.3x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 2.7x
Equity deposit of 20% required to buy: $0.34mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 61.5%
Median rent cost for renters as % of median household income 38.0%

In the year 2039 (20 years from today) -
Median house price in Auckland - $3.4mn
Median gross rental yields in Auckland 2.33%
Price to rent ratio 43.0x
Median house price to median household income ratio 19.8x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 4.0x
Equity deposit of 20% required to buy: $0.68mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 91.5%
Median rent cost for renters as % of median household income 46.0%

In the year 2049 (30 years from today) -
Median house price in Auckland - $6.8mn
Median gross rental yields in Auckland 1.89%
Price to rent ratio 52.8x
Median house price to median household income ratio 29.4x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 5.9x
Equity deposit of 20% required to buy: $1.36mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 136.2% (i.e have to pay more than entire median household income as mortgage payment)
Median rent cost for renters as % of median household income 55.8%

In the year 2059 (40 years from today) -
Median house price in Auckland - $13.6mn
Median gross rental yields in Auckland 1.54%
Price to rent ratio 64.8x
Median house price to median household income ratio 43.8x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 8.8x
Equity deposit of 20% required to buy: $2.7mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 202.7% (i.e have to pay more than entire median household income as mortgage payment)
Median rent cost for renters as % of median household income 67.6%

In the year 2069 (50 years from today) -
Median house price in Auckland - $27.2mn
Median gross rental yields in Auckland 1.26%
Price to rent ratio 79.6x
Median house price to median household income ratio: 65.2x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 13.0x
Equity deposit of 20% required to buy: $5.4mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 301.7% (i.e have to pay more than entire median household income as mortgage payment)
Median rent cost for renters as % of median household income: 82.0%

In the year 2079 (60 years from today) -
Median house price in Auckland - $54.4mn
Median gross rental yields in Auckland 1.02%
Price to rent ratio 97.7x
Median house price to median household income ratio 97.1x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 19.4x
Equity deposit of 20% required to buy: $10.88mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 449.0% (i.e have to pay more than entire median household income as mortgage payment)
Median rent cost for renters as % of median household income 99.3%

In the year 2089 (70 years from today) -
Median house price in Auckland - $108.8mn
Median gross rental yields in Auckland 0.83%
Price to rent ratio 120.0x
Median house price to median household income ratio 144.4x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 28.9x
Equity deposit of 20% required to buy: $21.7mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 668.2% (i.e have to pay more than entire median household income as mortgage payment)
Median rent cost for renters as % of median household income 120.4% (renters have to pay more than their entire household income to rent a house as accommodation)

In the year 2099 (80 years from today) -
Median house price in Auckland - $217.6mn
Median gross rental yields in Auckland 0.68%
Price to rent ratio 147.3x
Median house price to median household income ratio 215.0x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 43.0x
Equity deposit of 20% required to buy: $43.5mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 994.5% (i.e have to pay more than entire median household income as mortgage payment)
Median rent cost for renters as % of median household income 145.9% (renters have to pay more than their entire household income to rent a house as accommodation)

In the year 2109 (90 years from today) -
Median house price in Auckland - $435.2mn
Median gross rental yields in Auckland 0.55%
Price to rent ratio 180.8x
Median house price to median household income ratio 319.9x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 64.0x
Equity deposit of 20% required to buy: $87.0mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 1479.9% (i.e have to pay more than entire median household income as mortgage payment)
Median rent cost for renters as % of median household income 176.9% (renters have to pay more than their entire household income to rent a house as accommodation)

In the year 2119 (100 years from today) -
Median house price in Auckland - $870.4mn
Median gross rental yields in Auckland 0.45%
Price to rent ratio 222.0x
Median house price to median household income ratio 476.1x (purchase cost for owner occupiers)
Equity deposit of 20% required (multiple of median annual gross household income to be saved as deposit): 95.2x
Equity deposit of 20% required to buy: $174.1mn
P&I mortgage pmt (@ 4% int rate, 30 years) as % of median household income: 2202.4% (i.e have to pay more than entire median household income as mortgage payment)
Median rent cost for renters as % of median household income 214.4% (renters have to pay more than their entire household income to rent a house as accommodation)

'Don't believe the numbers you see': Johns Hopkins professor says up to 500,000 Americans have coronavirus
https://finance.yahoo.com/news/marty-makary-on-coronavirus-in-the-us-183...

that's why they are about to declare a state of emergency.

Trump is looking even more stoopid by the day

How's Jacinda looking?

Like a stunned mullet

At least she didn't dismiss the virus as a non issue like Don did

10
up

the focus on Trump is whats stupid
hes a symptom of the times - nothing else
and yet the media & hollywood pine for the warmonging days of saint obama and ms clinton

The US is screwed. $800 for a test so no one is getting tested. Plus their heathcare is private. So you'd guess only the insured are going to be treated. Their citizens might finally realize that Bernie's healthcare for all might not be such a bad idea. It's going to get ugly over there.

Friend came back from San Fran yesterday - said she could walk down most streets without fear of getting hit by a car. No one around.

There are 472 people that has tested positive in New York State. They are only just getting started testing so I'm expecting cases in New York to skyrocket over the next two weeks.

JPMorganchase has two cases of the virus confirmed in their HQ.
https://www.cnbc.com/2020/03/13/jpmorgan-says-it-has-two-cases-of-corona...

People have been uploading videos of shelves, chillers and all meat being cleared out. In the US they've gone beyond panic buying toilet paper. It looks like it will get out of control very soon.

How dose the States control the population when they dont really seam to have it under control at present?
Just the preppers and Hill Billies alone will do what they want when they want, then there is the areas of gang land, trailer parks, Skid Row, and all the other nutters that dont seam to give a toss about bring a gun out if needed. In the New Orleans disaster there were gangs running arround doing what they wanted and that was only a localised event. Marshal Law would be the only way and still a very messy / blood letting affair.
The USD wouldn't look that appealing with 100,000 plus You Tube clips of anarchy and the army rolling in.

Agree it is much worse that the official figures. I follow Dr John Campbell who stated in his daily update this morning that you take the official figures and times by at least 10 or 20 to get anywhere near the real figure.

I hope he’s right because that would imply the death rate must only be about 0.3% or 0.15% then. So not much worse than standard flu.

Hi JJ
It just implies that we are behind the curve in seeing actual numbers as it has spread many times over before people are offically diagnosed. There is a long delay between incubation period when it is spread, and the time it is diagnosed. It is far far worse than getting the flu.

Also, if people are dying of Coronavirus but not being tested then the death won't count against the tally. So if the infection rates are incorrect then you can also assume the death rates are too.

I doubt many people are turning up to hospital with severe flu and pneumonia and not being tested, that would be pretty irresponsible.

10
up

Good quote from article on CNN today: "At this point, investors need to be more focused on the return of their money than the return on their money," McBride said.

Exactly our view at the moment

Nice quote. All the preppers reckon antibiotics, bullets and canned/freeze dried food is better. Agree the US cannot do a lock down like China did.

Here is Boris.
Just out of yesterday's COBRA Meeting

Families will lose loved ones...
https://youtu.be/QCUpmJeT4lk

Dr Campbells commentary could explain is situation.

https://i.stuff.co.nz/national/health/coronavirus/120277695/coronavirus-...

The Auckland mum that wants to be tested but not allowed.

You would think if you had a fever on the weekend you wouldn't go in to work on Monday. Surely better to err on the safe side in this sort of situation. Who doesn't want an extra day off work? Now as soon as I get a sniffle I'll be off for two weeks.

Another problem with our current way of living. Very very few stay home when sick even with easily communicable deseases.

As per Jacinda's quip.
"No Simon, my job is to keep people alive"
With the lack of testing and the state of the health system that quip is going to come back to haunt her.

She treats Patrick Gower’s obvious infection at a media meeting, as a joke. Gower passes off his sniffle as ‘hay fever’ despite it being obvious at a cringe making ambush interview a few days before with Bernie Sanders ( ‘we NZrs like you’ ... no, you presumptuous knob, many of us don’t) that he had noticeable cold symptoms. My hay fever vanishes in the cold snowy weather of the Sanders ‘interview’. Maybe that’s not so for everyone but in any case, Ardern should have chucked him out Immediately to show she is taking this seriously, even if she did believe his hay fever explanation.

This is testing.
Hey NewsHub. How do you get hayfever when no flowers are flowering and pollen nowhere?

Now if Tom Hanks can get it, so to our Paddy in the US. But what of NewsHub look at the talent lockdown in Australia following Hanks interviews.

If positive, Paddy has a case, thx NewsHub.

https://youtu.be/wMZYVwmGcsg

https://www.newshub.co.nz/home/world/2020/03/patrick-gower-meets-bernie-...

How many more times do we get to see PM make such an easy fail.

More so now that case no.6. In Auckland
From a new Dr B.

Six people in New Zealand have now tested positive for coronavirus.

The chief executive of Waitematā District Health Board Dr Dale Bramley confirmed the news on Saturday.

The person is an Auckland man in his 60s who recently travelled to the United States.

Bramley said he received confirmation of the sixth case on Friday night.

Wow what a week. See you in the dole queue Monday, but not before a wee naked swim this weekend!

Ah, now to compound things, the sceptre of war looms -
China hints at denying Americans life-saving coronavirus drugs.

Nothing like a good ol’ threat of conflagration, to stimulate the markets.

https://www.foxnews.com/world/chinese-deny-americans-coronavirus-drugs

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I think you mean "spectre" of war. A general should know that.

Good point. War fighting fingers on a tiny phone keyboard and bloody autobahn correct... I’m carrying the sceptre, with spectre of war looming.

of course the spectre of war looms
standards of living are about to plummet - this is actually an economic crisis
the world economy was that brittle a little old virus can knock it over
and print as many dollars as you like, you cant easily print hospital beds / or travellers /or tourists / or customers /or a supply chain
too much shutdown and it will be win by tko
and then the old rules need not apply

Well that’s just silly. We’ve got houses and landlords... what could possibly go wrong?

At some stage our PM will have to do the "talk to the nation"
This talk has already been done by
Australia, USA and Great Britain - Canada's PM is in isolation. - last night news is the president of Brasil is test positive.

All the thinking is go hard and go early. Here in nz there there is a possibility the PM wants to wait until after the 15 March so talk to the nation message does not overwhelm her weekend comments around gun control.
https://i.stuff.co.nz/national/christchurch-shooting/120265236/jacinda-a...

It will be tuff for her, even as this is written Trump has declared a USA state of emergency because of the virus.

The PMs delay reason, medicine is flown on passenger aircraft, was never strong, and looking thinner and thinner.

https://youtu.be/KVR4d3xK3HM
The Supertramp lyrics, best you listen for yourselves..

JA is more concerned with her image....getting the photo op from the Christchurch memorial. Incidentally odd that NZ has 5 cases while Australia’s numbers grow by the day. I guess if you don’t test for it then you don’t have a problem.

Once again..if the numbers are higher where are the deaths happening in NZ? Lots of hysteria is not helping.

Oddly enough I am thinking that too.

- The delay to the weekend for travel bans.
- The foreign press and representative due in.
- Her previous "Good press" on the issue.

I am seriously concerned she will actually bring us down for the sake of a few pics and some more emotive drivel.

Well our PM can't do any worse then Trumps bumblings. Here's a fact check from CNN, listing 28 ways Trump and his team have been dishonest about the coronavirus. https://edition.cnn.com/2020/03/11/politics/fact-check-trump-administrat...

CJ, do you believe the PMs "medicine on planes" reason for taking no action for what will be 5 days on Monday.

If "medicine on planes" is a truthful reason, do you believe the quickest path to its resolution does take 5 days.

Now look at the Medcram link posted, see the two graphs and listen to the doctor talk about being overwhelmed by patients.
Point being soon calculations will be made, that show for every 100's of infections deferred, x number of deaths avoided.
MoH should will be running these numbers as we speak.

Focus on job at hand act local.

"Here's a fact check from CNN"

/facepalm

Death, taxes, and CJ099 having a whinge about Trump.

Wasn’t exactly Fox, to be fair

I hope she can read from cue cards better than Trump...

Yeah fro cue cards are the best cards.

Focus on the comms Henry..

Good Frazz, you are almost there, but still confusing it.
Focus on job at hand, its defer the spread of infection, not defer the comms

Get outside Henry..Vit D will boost your immune system, so when it comes you will be fighting fit, I'm off sailing tally ho!.

What's the weather like in Auckland

No idea...focus Henry your comms are failing like trump

- Trump declares National Emergency - all good; needed to be done, yet
- Market up 10% ?!
One way or another, this is going to end in tears.
(NB: Someone(s) got wind of all of this yesterday in Australia with about an hour to go. A market doesn't rally 13% without knowing what's coming. Perhaps their liquidity injection jumped the gun)

All this QE ooops sorry adding liquidity through repo operations is just smoke and mirrors. The biggest magic trick of all those is the 1.5 trillion dollar spending spree buying up stocks ( assets). How long can they do this for until they are forced to reset the system. Will the central banks just decide one day not to issue more liquidity? Then the big game of Jenga will fall down like nothing we have seen before.

bw. As an investor and close market follower I repeatedly see sudden movements like this and then correlate that to ‘embargoed’ announcements the next day. Happens all the time.

BW,
It is very likely to be short covering, given the significant adverse price action of the day before.

See – Trump knows words:

“To unleash the full power of the federal government ... I am officially declaring a national emergency,” Trump said. “Two very big words.”

Big words? Trump and unleashed?

Interesting read to give perspective about NZs response. They use Alabama with 5 million people as a case. We appear to be way ahead of that.

Benchmarking.

https://whnt.com/news/alabama-second-to-last-in-us-news-ranking-of-best-...

Better benchmark Singapore.
Closer benchmark Australia.

Holy shit. Ok back outta that argument real quick.

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I think we will all come out stronger because of this. The virus will turn out to be much less lethal than they thought because huge amounts of people had it but were never tested and didn't get very sick and didn't die and so were left out of the statistics.

We will reevaluate our dependency on critical products and start making more things in our home countries.

Mindless tourism will be reevaluated as well. What a waste of resources everyone traipsing around the world all the time.

Disasters can often be stimulating for economies too. I'd like to see the US wake up and really try and become a self sufficient great power again. All of us actually. It's pathetic relying on getting your medicine and almost everything else from China and India.

most consumption is mindless
but it supports debt
which underwrites our standard of living
the kicker being that capitalism doesnt do less debt

That reset will only happen if it's allowed too. The fact the economic fall out is currently only being pinned on the virus doesn't full me with hope.

The focus now is to delay infection, spread over time, because infection all at once will smoke health system like Italy now.
Focus on job at hand.

https://youtu.be/vww1nIIoqmw
Medcram, flatten the curve.

Make Aotearoa Great Again.... but we cannae Mine, grow Cotton, drill 'oles in Gaia for O&G, or store water (perched for hydro or ag) in any practical quantity, because Reasons.....

Our exchange rate dropping, whats people thoughts if it keeps going? I think RBNZ cut is out of the picture now. Will we end up with inflation if it keeps going?

The only thing that will prevent the RBNZ from cutting is inflation. They'll happily accept a weak currency if it means keeping this charade going.

A well-used quote from 10 years ago that failed to eventuate back then. Perhaps now is its time....

"Deflation in everything you own. Inflation in everything you need"

Long-term inflation expectations (5y-5y forward inflation rate) tell the story of this week.

There's no other way to put it: crisis.

The 5y5y matters because, like '08, the market was right about the long run consequences. We're still feeling them. Link

I think i agree deflation is still very likely in general but from what i can see demand for USD is high so this pushing the USD up could mean we end up with inflation in NZ terms. (By the way im far far far from an expert) haha this is just what i think im seeing

No it won't end in inflation because demand for many products and services will be weak.

Wall Street "been encouraged by Europe whose markets rose by about +1.8% overnight"
DAX and FTSE both up by over 8% during parts of the day and DAX went negative at one stage. Both had ranges of around 9%.
Being a sailor I can't but help thinking of the analogy; the markets are experiencing very stormy conditions with very confused seas. All one can do is batten down as much as possible and hang on and ride the storm out. As to how long and how serious the storm is going to be is uncertain - it could blow itself out quite quickly or it could go for some time.

Edit: since posting when Dow was around 3% early NZ this am, Dow closed at over up 9%. So complete reverse of yesterday’s historical loss and supports the contention that one can only batten down and ride out the current confusion.

I'm heaving too...a rum will help as well.

Fellow sailors - not before shortening sails.

Storm Jib and 3 reefs then it is ..

Agreed - updated my post: 9am NZ Dow was up about 3% - by close up 9%. Complete reversal of historic loss yesterday. Anybody calling anything at the moment is relying on guessing.

Nah, bare poles and rope astern.

How exposed are insurance companies, specifically in relation to short term stuff like travel and sports cancelations. Surely they will be getting pinched at both ends with increased claims and massive loses on funds invested (I'm overriding the cynic that says they have already taken the funds as "profit").
Could they fall before banks?

Most policies offer no coverage for this.
Life is different.

Margin call. Left and right.

Via Mauldin:

Two weeks ago, I sent out a crisis memo warning that the market could soon drop to 17,500 on the Dow. I stressed that the true threat to the economy and to profits and employment was not only interruptions in the supply chain, but more importantly the first implosion of the SERVICE sector we have ever seen.

This is now just what we are seeing as movie theaters, airlines, “events” of all kinds, schools, universities—all closed down. And the Dow today is down from 29,000 to 21,000. A further drop to our predicted 17,500 could occur within a week or two.

In the current case where no one understands what the “news” really is, much less how it will impact asset prices (we will get) huge price swings of the kind we have and will experience.

Last weeks falls are just an appetiser for what’s ahead - there’s more to come. JMO

NY Fed cannot update the raft of permanent open market operations (POMOs) it conducted today due to technical difficulties.

Why has Mnuchin said they will provide unlimited capital to the market. Desperate to avoid a liquidity crisis which would cause the system to lock. So credit cards/eftpos cards won’t work, bank accounts frozen, banks stop lending to each other, businesses can’t get capital to function. The amount of money that the FED pumped into the system in 2008 is nothing compared to their actions now. There is not enough real cash to go around - hence the aussie cash ban. The RBA has started to pump more money into their repo markets too. So in reality not enough real cash and too much debt giving the illusion of liquidity. Still think all is well? The corona virus is a gift horse.

It's *only* a parade of QE's from here. Walter Bagehot described it back in 1867. No, not his dictum about central banks. Another one about bureaucracies.

"It is an inevitable defect, that bureaucrats will care more for routine than for results;" Link

Bagehot was echoing Edmund Burke "that [bureaucracies] will think the substance of business not to be much more important than the forms of it."

For central banks, that's QE. They buy assets because that's the routine, not because it works.

The Fed Can't Fix a Crisis That Justifies Its Very Existence

See: Japan.
Link

Secured Overnight Financing Rate busts above the upside limit set for Fed Funds.

All very paramaniac. Turn off the screen, the sun is shining outside. Take your wife out for a nice lunch.

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Thanks for the kind offer but she’s already made plans with me today.

Video in the link below is at a Costco store in the US this morning. Panic buying is something else.
https://i.imgur.com/hk2SRM8.mp4

Thats just scary.. but justified given how fractured the US system is, and how inevitiably shit its response to this pandemic is going to be due to the way their health system is structured, and funded. Those eternal preppers are going to have a their distrust of govt reinforced, which is probably counterproductive in the long run.

FYI, there has been some panic buying in Auckland.

https://www.youtube.com/watch?v=ia0bfWbOLjY&feature=youtu.be

the ballad of the dunny roll - genius. Best thing so far

Trump says he takes 'no responsibility' for coronavirus failures as he declares national emergency – live
https://www.theguardian.com/us-news/live/2020/mar/13/donald-trump-corona...

This transition from investing in higher productivity to pouring money into speculative bets is so gradual that few even recognize the transition until it's too late. All too quickly the economy becomes dependent not on gains in productivity--the only enduring source of wealth creation-- but on speculative gambles paying off. Once the economy becomes dependent on speculative bets paying off, central banks and governments rig the roulette wheel to ensure the big gamblers always win. This rigging of speculative markets further distorts the economy and society by destroying price discovery and exacerbating soaring wealth inequality.
As the financial elites become accustomed to "winning" the rigged games, they increase their high-risk gambling, confident that even the highest-risk bets will always pay off. In this universe of moral hazard, it makes sense to borrow as much as possible to plough into the highest-risk bets. Why not maximize one's gains at the rigged tables?
This institutionalization of financial folly created an extremely risky structure that is now breaking down. Bets placed with borrowed money are no longer paying off, and so whatever collateral remains must be liquidated to meet margin calls and pay down debt. The decline phase ...is just beginning. Much of what we've taken as permanent will melt into air, and that's far from a negative development.

(CH Smith)

Yea yea . Thought that in 2008, end game didn't eventuate, why's this going to be different?

Thought that in 2008, end game didn't eventuate, why's this going to be different?

The point is that It's not any different. In fact it's very much the same.

Here's proof, if you needed it, that politicians are morons everywhere in the world:
https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12316635

I realise I will get the wrath of most for saying that but I can't believe the fear most people have. Less than a million people have died from CV19 world wide, that's less than 0.0125% of the population, not a ratio that worries me.

The projections people have are based on the trajectory of the virus as it spreads through the human population rather than the current death rate. We know that in 12-24 months we will likely have a vaccine to roll out and we can back out a lot of this pricing.

Yvill, take some time to become familiar with exponential equations.
Log scale trips alot of good folk.

We might be better served to be more concerned with a slowdown in spending than markets trying to price that risk. Treating the causes and not symptoms so to speak. Short term measures to get money into consumers bank account right now to stave off deflation and recession should be government and the reserve banks primary focus. Initially when we went into this I thought there might be a supply side risk of inflation but I was wrong.

Cutting the OCR and fiscal spending, while important, won't have an immediate impact.

Second cancellation in 200 years

https://www.smh.com.au/national/nsw/nsw-prepares-to-hit-100-coronavirus-...

The first was during Spanish flu.

A little bit of everything in this story.
Australian's, confirmed cases, ski trip in USA.

https://www.smh.com.au/national/australians-in-colorado-refuse-test-for-...
.

Tracey Martin
In isolation
She is currently minister of Children, Senoirs, Internal Affairs and associate minister of education.

Following Peter Dutton becoming positive, flowing the USA meeting and photo opportunities.

https://en.m.wikipedia.org/wiki/Tracey_Martin

On 14 March 2020, it was reported that Martin was self-isolating and being tested for the COVID-19 virus after meeting with Australian Home Affairs Minister Peter Dutton, who had tested positive for the COVID-19 virus, during a Five Eyes ministerial meeting in Washington, D.C. the previous week.[24][25]

Martin has been back in Parliament since returning from the US.

https://i.stuff.co.nz/national/health/coronavirus/120276994/coronavirus-...

and now Martin cannot , apparently, remember whether or not she shook hands with Dutton

And thats worthy of comment why? I attended 3 meetings yesterday, I can't remember who I did and did not shake hands with, its minutiae, not substance.

So you can’t remember who you shook hands with yesterday. OK, that’s fine. I operated at senior international corporate level for years, and could easily do so. Dutton is a prominent coalition bogey man at the moment, this is a high level and infrequent meeting in Washington. Her account is to me not credible. I suspect she is fudging in an attempt to keep her cards close until her status plays out. As a minister who has likely been exposed to a virus that threatens us all, it is not minutiae if she is not being open with us.

"China may be getting back to work but their new problem is a lack of customers as the rest of the world shuts down." Spot on.

Meanwhile, other countries has been calling China to resume the export of critical medical supplies (masks, gloves etc.). I think China has realised she has to help the world for economic reasons at least.

UNICHEM pharmacy in Orewa is selling 50 ml of hand sanitizer for $15.99.
Prior to this Wuhan Flu a volume like that was probably a couple of bucks.

... and they ask us to support local neighbourhood family franchises over the big Chemical Warehouses. NO

A great example of greed. Unfortunately, their customers will remember.

.

Could be a Chinese Whisper, and we're actually Hosing our Boarders.....or Dosing our Hoarders....

Posing for Reporters

Better than nothing, moving in right direction, seems medicine on planes wasn't such a 5 day problem.

The prime minister says it is not realistic for New Zealand to only have a handful of Covid-19 cases.

However, "New Zealand has today relative to other countries a small number of cases," Ardern said.

As of midnight Sunday every person arriving will have to isolate themselves for 14 days, Ardern says. That will mean New Zealand will have the strongest restrictions in the Pacific Islands.

https://i.stuff.co.nz/national/health/coronavirus/120279430/coronavirus-...

Could be realistic, if someone had approved community testing, Korean style, you know some people....
Who was that some people.

Good move, will be key to ensure that self isolation is properly adhered to. No good if everyone stops by the supermarket on the way home.

Yes great move.
Tourism is history for a while but our chances of surviving this have improved greatly. This will have taken courage in the face of upset businesses.
Question - how do people get from the airport to their house if they normally use a taxi? Masks have to be used (available) from the airport
Question - how do people stock up after returning from a period overseas? - Presume on line shopping/ home delivery has to be stressed.

.

My KiwiSaver is down $14.5k. Good! I know what I signed up for.

From the ODT. Echoing the feelings in the south.

https://www.odt.co.nz/star-news/star-national/cruise-ships-banned-all-ov...

All cruise ships are also being asked to not come to New Zealand until June 30. It does not apply for cargo ships.

Essential air freight will still be allowed to enter the country for things like pharmaceuticals.

The PM says our pandemic which hits hard and fast must be dealt with by "flattening the curve" to have the rate of cases in the right place- either at home on in hospital if needed.

"We must go hard and fast."

Things got bad, bad real quick.

Seems yesterday round 5pm, our PM had something particular in mind. Something people were telling her, something that forced her hand. Something she keep to herself.

While taking the spot light for a heroic decision, in the shadows is a viral cruise ship. Steaming into Akaroa as she spoke.

Passengers on board the Golden Princess are not being allowed off the ship which arrived in Akaroa Harbour on Sunday morning.
Three passengers on board had been quarantined by the ship's doctor. One of the three had developed symptoms of Covid-19 and was being treated as a suspected case. That person would be tested on Sunday with results expected on Monday.

https://i.stuff.co.nz/national/health/coronavirus/120289215/coronavirus-...

When did PM depart. , when was MoH informed that the ships doctor quarantined the passengers?

This is not crisis management, this is a manager in crisis.
The lies by omission, what else is not said, not said and the instagram moment taken, stolen.

Shoutout to Labour. Labour if you have talent, bring it on. Bring on the talent, remember go hard, go early we need your best talent now.

Hard and fast

The move to self isolate for 2 weeks is just to soften us up.
Give it a few more days max 2 weeks and we will move to full shutdown the same as all other countries with a brain as we cannot handle importing too many cases before our hospitals burst at the seams.
Also all vistors must present full travel insurance on arrival as the costs could be huge if we start importing hundreds of cases.

I don't think travel insurance is covering CV19 related problems anymore..

Also I wonder what the government plans for bailouts if any.
I am against bailing businesses directly as we have just had a golden run for 10 years which means most businesses should be able to withstand 3-4 months hit on income and then hopefully a quick pickup.
What I think may work and would be fair is all taxpayers get the same helicopter money otherwise we will see certain industrys/sectors getting handouts and other areas that get nothing.
Hong Kong just gave everyone one the same which is much quicker and an instant hit rather than having to apply and wait which will take forever to flow .

Capitalism without bankruptcy is like religion without hell.

Capitalism without growth is dead.

Growth in perpetuity is impossible.

Therefore capitalism dies. The question is when? The answer is in exponential growth:

Soon.

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