Dairy prices hold; Wall Street up then down then up; US retail sales weaker; US proposes helicopter money; Australian economy waivers; UST 10yr yield at 0.86%; oil down and gold up; NZ$1 = 59.8 USc; TWI-5 = 66.6

Dairy prices hold; Wall Street up then down then up; US retail sales weaker; US proposes helicopter money; Australian economy waivers; UST 10yr yield at 0.86%; oil down and gold up; NZ$1 = 59.8 USc; TWI-5 = 66.6

Here's our summary of key economic events overnight that affect New Zealand, with news policymakers are throwing much more money into the economy rather than into the virus fight.

But first up today there was a dairy auction overnight and prices in US dollars fell -3.9%. At the same time, the US dollar rose against most others so in New Zealand dollars the overall result was a gain of +1.2%. In the circumstances, this has been a successful event with price rises for every commodity except SMP (-8.1%) and WMP (-4.2%). Volumes sold were +10% higher than at the same time last year. The automatic stabiliser of a floating exchange rate did its job today. Although prices are soft today, in local currency they are in the same broad range they have been for more than a year and it seems unlikely today's result will change any payout forecasts. Fonterra will give its update later this morning when it releases its half year results.

On Wall Street, markets are still yo-yoing, up today with the S&P500 currently up +5% and falling after being up +7% earlier. This market can't decide on a direction today, despite the American promises of more stimulus (over an above the Fed's huge promise already announced).

Earlier in Europe, equity prices rose by about +2.5% in most markets. Yesterday, Asian prices were up variable, but the ASX200 had a big bounce, up +5.8% on the US Futures indication Wall Street would rally strongly. They may re-think that today.

American retail sales for February came in weaker than analysts were expecting, decreasing -0.5% from January when a +0.4% gain was expected.

And US industrial production in February was unchanged in a year, but factory production was down -0.4% in a year. Only oil production, oddly, kept the overall level from declining too.

The White House proposes sending US$1000 to everyone (cost US$300 bln) with another US$½ tln as handouts to businesses. Socialism is alive and well in the US, so long as it's for business.

In Europe, the widely-watched ZEW survey shows economic sentiment collapsing in March in a very grim result.

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In China, there are more signs of improvement. House sales are rebounding in March after being frozen in February. And now 85% of China's confirmed coronavirus cases have officially recovered.

The latest compilation of Covid-19 data is here. The global tally is now 190,100 of officially confirmed cases, up +60% in a week. There are now 109,000 cases outside China. Four European countries account for more than half that; Italy (27,980), Spain (11.309), Germany (8604) and France (6664). Also rising very fast is the USA (5204) which is up +27% in just one day. The global official death toll now exceeds 7500.

In Australia, there are warnings there construction industry is about to buckle in the crisis. Retailers are approaching landlords en masse for rent relief. And airlines there say they will collapse within weeks without some sort of bailout. Australia seems to be heading for a very serious spread of the virus. They are already our largest threat of infection here.

The UST 10yr yield is higher today, up almost +14 bps from yesterday and now at 0.86%. Rate curves are still sharply positive as short pricing collapses. Their 2-10 curve is a little more positive at +48 bps. Their 1-5 curve has also turned more positive at +29 bps. while their 3m-10yr curve has ballooned out at +77 bps. The Aussie Govt 10yr yield is up +4 bps now at 1.06%. The China Govt 10yr is up +1 bp at 2.75%. The NZ Govt 10 yr yield is also very sharply higher, now at 1.25% and up +24 bps in a day.

Gold is yo-yoing as well, up +$27 today to US$1,530/oz.

US oil prices have dropped again today, down another -US$1/bbl to just under US$28/bbl with the Brent benchmark just on US$29. Vanishing demand as major economies shutdown can't seem to be stopped.

The Kiwi dollar starting today lower as the greenback firms sharply. It is now at 59.8 USc, down more than -1c in a day. On the cross rates however we are now at 99.6 AUc and close to its all time modern high and very near parity. Against the euro we are only marginally softer at 54.4 euro cents. That means our TWI-5 is now at 66.6.

Bitcoin, like gold, is also firmer, up to US$5,370, a rise of +7.1% since this time yesterday. 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?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.



"news policymakers are throwing much more money into the economy rather than into the virus fight." + the virus isn't the reason, it's the excuse = "Never let a good crisis go to waste!"


A few billion to core constituents of the coalition parties, and tens of millions directly for front-line health facilities?

Speaking the truth to power just doesn't work when your media is determined to run government lines without question in a bid to buddy up with the world's trendiest leader.

The media did the same thing under National.

Can't recall Nick Smith getting away with what Shane Jones and Phil Twyford seem to keep getting free passes on. Murray McCully didn't exactly get a cruisey ride. And Stephen Joyce got assaulted and it was all just a big joke.

I'm talking about the media repeating what Key, English, Collins and Bennett would say.

Stephen Joyce himself made it a joke - he said to get the clip onto John Oliver. Which John Oliver obliged him for.


Some sectors are not convinced that the generous handouts are enough. It brings me to the question: what has emboldened low-value contributors such the hospitality industry to think they get to call the shots on government policy? Taxpayers have already been subsidising their profits for decades by picking up the tab for the social infrastructure that are made available to low-wage workers and their families.
Don't forget that even in good times, many large players from this sector were actively involved in tax frauds and wage thefts.


Exactly, oldies, wastrels, and breeders, get the free money, borrowed into existence, and payed for by their children, and grandchildren.

I am undecided about the wage subsidies, not sure they will work out well either.


Exactly. Rob Stock on STUFF - "A possible doubling of defaults by households and businesses on their bank loans is being tipped as a coronavirus-created recession begins to bite"

Poor old virus getting blamed for years of bankster, political and corporate fraud.

We've got to bail out AirNZ again by the look of it. I know it's "too kiwi to fail" but when you look at the % cashflow used for dividends and share buybacks you can see that it had almost no reserves which is why it's folded in just weeks. I believe the phrase is "moral hazard".

They seem to think price discounting to get rid of competition on regional routes is good business practice. Exorbitant privilege?

I don't disagree with your assessment of their investment decisions however the depth of this crisis and impact to all aviation businesses makes cash reserves helpful but really only delays the inevitable. Even if they had say an extra $200M in cash, how long does that last in this crisis?

Will we follow in the footsteps of Trump by bailing out the shareholders in corporate NZ?


Trump created the environment for mass share buyback schemes that just returned value to the shareholders that didn't sell, the cash to do it coming from tax cuts (the people's money), and that multi-billion dollar rort was the key driver in ever climbing share values that have now dropped dramatically (a temporary bounce today, soon to be overshadowed by even greater falls in coming days in my opinion).
NZ doesn't have a chapter 11 arrangement to fall back on so companies facing the wall here don't have many options but lets not waste taxpayer money bailing out shareholders that took the risk, lets instead put our hard earned funds into systems and policies to support the taxpayer and to support the health system that we are all going to need to rely on very shortly.
The paltry $500M indicated does not seem enough, again this government goes "soft and late" when it really matters.

"policymakers are throwing much more money into the economy rather than into the virus fight"
The key in combating the incidence of the virus really depends on each of us independently taking appropriate action in not facilitating the spread of the virus. That does not take money - just individual responsibility.
Health has had some additional funding; however, the big constraints given the time factor are that just throwing money at the health sector is not going to be effective if there isn't the additional trained people available or time to provide more buildings and beds.

I wonder how many DHBs around the country have been running hiring freezes in an attempt to get on top of huge budget deficits in very recent times?

DHBs always run deficits as their MO. It’s not in their interests to run surpluses and risk more funding cuts. They can always lower thresholds for elective surgery (eg. cataracts) to ensure any funding is more than used up...there are always people waiting for surgery.

DHBs always run deficits or governments always underfund them? (And when I say underfund them, we the local tax payers send all our tax off to the government, who give some to the MoH, who deign to give some of it back to the local DHBs. Why the shortfall? :) )

I'm not talking about run of the mill budget deficits. More the huge budget deficits of late.

Exactly. At this point you are stuck with the healthcare system you have built - Every government in the world will be trying to aquire equipment and staff, so its unrealistic to think you can spend money now to ramp up capacity.

If our healthcare system is unable to cope with what is to come, you have to look at who has historically failed to fund/staff it appropriately.


Under the "go hard, go early" strategy I wonder how many tests will be done today? Or will we keep up the flying blind strategy of 20 a day?


The game was the same as USA no tests no cases keep the bubble going at all costs. New Zealand may well have lost the chance now because of not testing a amonth ago and trying to keep tourists etc coming here which was never going to happen.
Just remember China closed down for this virus and we seem to think we are smarter????
How stupid is the world when China showed as what will happen if you ignore it.


Governments should not be bailing out any businesses, none at all. They don't take my taxes for that purpose so to do so is fraud. Investors also. When you go into business or invest you take a risk, there has to be a downside to the risk or the system doesn't work anymore.

Agree, but then we all know the system doesn't work. Human nature with our increasing appetite for more 'Monetary Creativity' being the obvious culprit.

Sounds good, and there was a time I would have agreed with you, but I now think the reasoning is flawed. The issues are deep systemic ones and we don't seem to know what the systemic flaws are. There is something messed up deep in the architecture of banking and finance. Successive regulatory patches and glue seem to have identified symptoms not causes and if anything have probably made the system weaker.

The Babylonians used regular debt jubilees as a mechanism to solve these problems, and this is effectively what is taking place today. The adoption of Shetar law seems to be a major part of the problem.


I think the paradigm we've created the last few decades that 'debt is good' and the answer to all our problems is debt, with lower interest rates.

It almost as if people think they aren't responsible - that we can create debt now and someone else will pay for it later. A good step would be to live within our means.

Perhaps the game we've been playing with the OCR and Reserve Banks playing god perhaps needs to change - and perhaps the experiment with inflation targeting isn't best practice? Why 2%? And why focus everything around this? Including dropping interest rates to 0 just to make sure we can have positive growth? Its making something that is broken keep going a little longer without accepting its not working, clearing the inefficiencies and moving on.

Yes, the 2% target is a sort of continuous bailout mechanism, a method to cope with a problem without solving it. It ends up making things worse.

I suspect the problems are deeper than we want to know.

"A good step would be to live within our means"

Way way way way too late for that … Debt has allowed us to go way deep into Willy Coyote Overshoot and live like Kings of old...
All those passive income streams, free capital gains and bubbles made us all rich beyond belief …

This is the end point of leverage
And the end to incomes as we know it
Its now free handout money … until that doesn't work...

The problem is we traded jobs for debt.

As Michael Pettis explains, foreign investment into an advanced economy usually creates either more debt or more unemployment. One day the buffoons in charge will figure out that NZ is still an advanced economy, hopefully before their earnest efforts to encourage decline bear fruit.


This is a point I have argued a few time before Roger. I believe that banks and politicians have forgotten banks origins, and the banks have gotten too powerful and influential, and most politicians are just too stupid to see the light.

In very simple terms; a group of people each have $100 spare, but that $100 can't achieve much on its own. However take 10 people in the same position, gets $1000 to put to work. So originally a bank allowed people to put surplus money in a single place where working on behalf of those depositors, the bank put that money to work generating a return. the bank retained a small portion of those returns to cover it's costs and shared the remainder amongst the depositors (interest). So simple a lot of people won't believe it when they look at the banks today! With digital credit, bank loans can now be achieved in ratios of deposit levels. With $1000 on deposit, today the banks will lend from $10,000 to $30,000. While charging borrowers 3 -5% for each loan, they still only pay depositors 0 - 1.5%. By the way, don't forget that your $1000 on deposit is actually no longer yours. It became the banks once you handed it over!

The banks, lawyers and accountants have tied the management of money up in so much gobbledy gook that most cannot understand a single thing they say. More power to the banks! They have lobbied Governments to enact legislation that allows banks to control the money flows in the economy. More power to the banks!! They have lobbied Governments to enact legislation that allows the banks to control the amount of credit/money is circulating in the economy. More power to the banks!!! They complain loudly, and lobby the politicians, threatening to do stuff that will not be good for electoral prospects, when the Government acts or looks like acting to curb bank behaviour and control of the economy. Power to the banks!!!

Spot on Murray. The banks have played it smart with slow changes over time, like the proverbial frog and hot water. If change is slow enough it’s almost invisible and makes it very hard to pinpoint the actual issues. I believe Leonardo Di Vinci was credited with saying “simplicity is the ultimate form of elegance” and that should apply to our banking and politics. If the general population can’t understand it then there’s something wrong. Interest.co.nz has a lot of informed and intelligent commenters but how often are we arguing over literally how banking works? It’s ridiculous.

Well put Murray!!

The thing is, governments and reserve banks are just as complicit.

Reserve banks are supposed to ensure the integrity of the financial system and keep inflation under control. But at some point they had to start ensuring unemployment stayed low, the economy kept growing (and now, make sure the stock market is happy).

Its madness, and risks the colloapse of our whole financial system, just because the government in power doesn't want to be the one in charge during a recession.

Captialism REQUIRES recessions. When people take excessive risks and borrow too much there needs to be a penalty. Its necessary for the companies that made bad decisions to be weeded out, and let the well run businesses survive. Instead, we just rewards poor decision making and bail out those that took on too much debt.

Instead, we pretend these companies need to be kept alive, bailed out, which only encourages further riskyk behaviour and poor decision making.

It never ceases to amaze me how those companies and individuals who worship the idea of "free markets" suddenly demand bailouts when times turn bad.

This is a debt jubilee of sorts
Which is by default a WEALTH jubilee
And when it shakes out, we will see we are bankrupt

When governments are owned by banks and business that's what you get.

Viva la revolution.

No, please, no. Revolution usually leads to mass slaughter and suffering. Unless you mean in the traditional sense, a return to traditional and proven ways, "the restoration of ancient rights" as in the Glorious Revolution of 1688.


If I were in management at a major bank and had been receiving a $1mill + salary in recent times while seeing my company make very tidy profit from ordinary NZ'ers, I wouldn't be inclined to be asking for any government $$ if this turns bad in the coming months. It's the lack of personal liability that gets me for these large organisations who have such a critical role to play in society.

Perhaps our banks should no longer be private entities. Limit salaries and private interests. I'm not saying I'm a fan of socialism/communism - but I just don't get how private banking benefits society when it all (from the outside) appears to be very corrupt.


And this is why you, and I, a all others with a once of empathitic human feelings are not and never will be in such positions.

I've been trying to think how a good government would look. Lord knows far cleverer people than me have thought long and hard about it.

I'm no fan of communism - it's far more murderous and corrupt than capitalism, but ultimately any system that has people involved will end up distorted.

However, can we live in a finite world with 7+ billion people and not have some form of socialism? Maybe free market works if it's not tampered with? (USA is not free market they just announced a huge round of corporate socialism).

Ultimately, I have no answers just questions.

The fundamental problem is "Limited Liability". It is a giant get out of jail free card for any and all poor decisions.

People would act a lot more thoughtfully if they had to take the full repercussions of their decisions. Good point.

I have worked in numerous organisation where the old "We are ultimately responsible to the shareholders" line gets trotted out. The assumption being that the ultimate shareholder must be a human (with some morals and ethics)

But go look at the "Shareholders" Usually it's just another Ltd. Company, which is owned by an Ltd. Company, which is owned by a Ltd. Company, which is owned....until you get to the top which is usually some form of investment/super firm using someone else's money (Often overseas)

There are no human shareholders that ever actually get to "Vote"or influence the company's culture/morals/ethics.

Yes, I mean a peaceful revolution where the people take back the power that is ours under democracy. But I don't think that will happen for a couple of reasons...
-We'd need a decent leader to start with.
-People would have to put aside their own interests in the interest of the greater good.
-A huge number of our population are uninformed, gullible, brain dead plebs.
- we'd all have to agree on what a government for the people looked like.

I guess we'll just muddle along then, until something we don't control changes our course. See revolution over already.

It is all rather fascinating. The Western system of democracy is actually much more resilient than it looks. It looks chaotic, partly as we hang out our dirty laundry in public. Its strength is that we just keep changing the politicians and the ideas that come with them, first trying one lot and then booting them out and then trying another set of ideas. So we largely stop them digging an ever deepening pit. Unless we elect a vicous bunch who resist the transfer of power, that is, or succumb to the South American Republic Oligarchic System where the concept of the common good gets forgotten. I think the representation of the common good is why the most civilised countries are constitutional monarchies, by and large. The monarchy symbolises there is something above the day to day squabbling, even if the institution seems outdated and irrelevant, even bizarre, on the surface.

While that may be true for individual MPs. I think "Parties" are becoming insidious drains on the public. They get corrupted in the same way as any other corporate.

Remove the human element, and you remove the humanity.

We need independent politicians - who can vote freely on legislation based on own ethics/morals?

exactly - basically a jury. A bunch of individuals who need to debate among themselves to come to an agreement based on the facts presented.

At the moment they go in with the party position, and that cannot be changed.

That's a good point about monarchies. I think we all need to be reminded of our humanity from time to time, which I think they do.

Scarfie, presume you are also including farmers in this statement?

Yeah, it is about time Landcorp was sold up. What a dog. While we're at it we can get rid of the wage and investment depressing WFF scheme.

are you an employee of a business

Whats the greater cost, welfare for a couple of million people, or temporary aide to businesses to keep people employed.

A stuff article predicting a doubling of bank loan defaults here is also saying the banks can weather it without assistance. But will they do as I suggested the other day, see the increasing risk and put interest rates up? Much of the fallout from COVID19 relies very heavily on the bank response, and having largely ceded control of the economy to them, the Government is not is a good position to direct bank reactions. They can do as we have seen Robertson do so far, make a plea to the banks to be reasonable, but will the banks turn around and ask the obvious - "What's in it for us?"? (There are two answers to that question, it just depends on which horizon, near or far, you choose to use)

What's in it for the banks is a lower default rate and their banking license. If banks charged an appropriate interest rate for the risk they'd need to at least double the interest rate, but with rising defaults before the virus that would sink many mortgages. When the OCR is adjusted the banks are expected to tow the line.

I think you might have missed my point D. Short term money or long term money, careful husbanding of distressed borrowers can carry them through a crisis (as the Government is asking for), but the true nature of their business prospects must be understood. If the banks are too brutal, they could send some people to the wall unnecessarily, pulling in what ever secured the loan, but that could have consequences that are negative (this house of cards collapsing). Sitting on their hands however may result in some near term loss, but down the road full recovery of any debt.

Small grammatical point - it's "toe the line" not "tow". the analogy is stepping up to and placing your toes at a line, and not crossing it.

Finance terms, I've always found it odd that the risk free rate would be so low at present when to me, there is so much risk in the system. When this is this much debt in the world, surely risk free rate should have been rising, not falling? Is/has everything been back to front?

Risk free rate of return? Who to IO? You as a depositor or the bank? I suggest the bank will tell you there is no risk to you because the Government has enacted rules which protect your deposit. Note that there is nothing here to say that the bank is actually doing anything to protect it! Risk free rate of return for the bank however is another matter altogether as the consequences of their actions has significantly increased the risk for them!

Sometime in the past I came to that realisation that something I thought was fundamental, the connection or interest rate and risk, was simply not playing out in the real world. It led me to disbelieve and question pretty much anything economists and bankers say.

Debt has been consistently de-risked through years of credit creation
Meaning we ended up with a game where he who has most debt wins … despite the bank promos about the joys of saving and paying off debt

To me, every time the share market and housing market grew higher and the level of debt held by instituations and households also got bigger and bigger, the risk level was increasing year by year. But what way were interest rates going? They were going down, when they should have been going up to encourage saving, which in turn could have been turned into investment when needed. To me we should have been raising rates, people would have had incentives to save and now would have money to spend. But instead we find ourselves in the reverse of that situation.

They will just tighten the lending criteria

Its when their offshore funding starts charging them more to cover the increased risk that the interest rates will rise

From Murray's and others' insightful comments above about banks (the big Australian banks), together with the fact that Australia now seems to be our biggest virus threat, it would seem wise to expedite a complete lock-down on everything Australian.....with absolutely no holes in it.
I would include turning off the tap for the stream of so-called NZ prisoners that Australia continues to return to our shores. If and when a plane from Australia lands let our officers board and inspect all passengers BEFORE they disembark. Then do not let anyone, including the aforementioned prisoners, with even the least hint of having been exposed to the disease alight; let the plane return these people to Australia. We've all had enough of being bullied by Australia.


Our institutions are crumbling. Who trusts the central bank? Who's in favour of endless bailouts, of mass migration, of QE? The success of this country is based on our shared belief that the system is somewhat fair.

You can flood the markets with liquidity, but there will be consequences for the social cohesion of this nation.


Never waste a good opportunity.
Looks like we are trying to save the current system at all costs even paying to keep marginal businesses open when the best thing now is to allow market forces to choose who has a real business and who is trading on cheap/free debt and needs to reinvent or close.
I guess GFC3 will be next stop.

I think if we see another GFC style recession and public funds used to bail out private entities that have been paying executives massive wages the last 10 years post GFC - then I can see the general public move even further to the left. Why would you back a system where a small amount of people benefit greatly, then when it doesn't work for them, expect those who have been doing it tough to bail them out?

The bubbles will keep popping and the virus is winning very convenient time this virus appeared as markets at all time highs.
Think about it for a minute.


If we had a stable global financial system with financial instruments correctly priced the financial issues would be less.

Imagine a world where airlines borrowed money to buyback stocks to increase the price. Imagine a world where the buybacks were $45b USD and then the airlines turn around and ask for a $58b bailout. Well you don't have to imagine this as it's actually happened.

But dictator, if we were to price financial instruments correctly, then we'd need to have an appropriate discount rate to use. Instead central banking keep driving rates to zero, yields on government treasuries dive and discount rates applied to pricing models push asset prices like shares through the roof. If we had a valid discount rate, then financial instruments could be more reasonably applied?

I guess this is a chicken and egg situation though...

Dividing by zero is a fundamental issue for discounting. It's why the US gave up on ZIRP and started manipulating the financial markets directly and indirectly.

"markets are still yo-yoing"
Not surprising - so much uncertainity. One just needs to batten down the hatches.
Clearly in the short term business is going to contract both locally and globally but the time factor in the virus passing and life returning to normal seems to be the big uncertainty. The only positive I see is that the peak seems to have passed in China and South Korea within two or three months - but I am not banking too much on that.

For me that's the big question.

Have they passed the peak because of the lockdown measures? And if so what, happens when they remove those measures?

How long does the lock down need to be in place, is a question no one has an answer to yet.

Kokiri, Agreed
The time scale makes any prediction difficult. I noted in the simplistic graph showing GDP projections in the Government release yesterday showing GDP recovery in 12 months.
Even after the recovery, I feel that it is very likely that we will have a number of changed behaviours - both socially and economically. It is worth noting that after the 1987 share market crash many baby boomers burnt were left with a reluctance to invest in shares again and had a lack of trust in fund managers - hence their increased preference for self-managed investment property.

Note: This is not to say that I necessarily say that the property market is going to crash. While not wanting to make predictions; the property market is likely to be affected, however it is likely to prove to be less affected and more resilient than the share market. :)

And on the flip side, if the younger generation of today (including recent FHB), see house prices tumble by 50% and mass mortgage defaults, and a banking crisis, then we will have a generation who won't be greedy when it comes to property and won't be buying multiple rentals using excessive amounts off leverage/bank debt. They may see the liquidity of the share market as bliss compared to years of living in a negative equity situation in a deep recession with marginal employment opportunities.

Didn't Boomers experience 1987, 2000 and 2008 though? My father did and has always invoked these with his diversified, conservative investing (no properties, sigh). But he seems the exception, not the norm.

I think if you talk to boomers in Nz about property vs boomers from another country (Ireland, Spain, Japan, US) who have witnessed significant falls in house prices over their working life, then we might see quite contrasting opinions about the risk of property.

I have been wondering about those long term trends also. I think a quick recovery for tourism, airlines and the cruise industry might be optimistic.

Also lockdown combined with the apocalyptic climate change forecasts people may decide they can live without all the useless crap we buy? Driving down demand? Who knows? humans do strange things.

Great post reflecting rational and objective thinking rather than being clouded by emotive self-interest.
Your comments on airlines, tourism and cruise ships seem particularly sound - their success depends largely on discretionary - rather than essential - spending and it will be slower to recover. The tourism industry in particular will find it more difficult to overcome the downsides of the virus.
Pre-virus tourist arrival numbers may take many years to return to the same level compared to other sectors such as agriculture and forestry.

Thanks, enjoying the discussion.

Also, if this is a prolonged recession it may have an impact on people's spending habits as the great depression and World wars did. We may see people forgo luxuries in preference of saving for another "black swan", and paying down debt to reduce exposure.

For me I've always tried to invest in the essentials for life like agriculture, horticulture, medicine, and by invest I don't just mean financially, I also mean investment in knowledge.


The old saying that an ounce of prevention is worth a pound of cure was never more true.

Description of steps Singapore put in place.
Great background



Do you think we could get access to a version of the apps used. Works already been done.
Surely we have got govt observers in Singapore.

Who doesn't have a smartphone


Most of us now know, what we have been suspecting for a decade or more - this is all going to end in tears.
Up until 2008, we could excuse ourselves for having been blinded by the success of what we had built. But not after the GFC if we truly cared to look, and certainly not now.
The World is going to be a different place after this lot rolls through.
Anyone who sees a Dow back at 30,000; tourists 'back to normal'; job availability as it was or any asset price where it was, is likely to be disappointed.


I suspect food prices will hold up, food security is a big deal for Gov't.
It won't only be business wanting rent relief, my daughter will lose her job soon and the extortionate rent which has become normal in our cities will no longer be able to be paid. The tribute demanded by the Aussie masters will stop flowing.
Im worried that if the gov't bails or trys to bail everyone, it will become the norm, a short drive to collapse.

I don't see how we can avoid a liquidity crisis, cash will be king if you have any. Terror stalks the streets.


Also Africa and the like will remain virus hotspots so even if we beat it, the days of travelling to India without draconian isolation is over.

Our eldest came cover for dinner last night and casually asked her mother " Mum. Do we own a gun?"

A lot of people will be asking that question these days!

I really hope food prices hold up, I’ve just been made redundant so I’m thanking my lucky stars I bought into a farm and not a house in Auckland like I was trying to. I have a place to live and farm income which should enable us to still pay principal and interest on the loan and leave a little to spare. It’s made things a lot harder but not what it could have been for me personally.

is your job loss just short term due to the virus?

My position has been made redundant completely. I work in NZ for an AU based company and with the AU exchange rate through the floor that has hammered our profitability. We were 8% over budget last month but still lost money due to the effects of the virus. I think AU will be particularly hit by corona so I’m not holding out for this to blow over see if I can pick up my job again. Have to move forward.

The great advantage of farming is that many ordinary day-to-day expenses are Farm expenses for tax purposes. Examples: going fishing on the KingQuad, bowling a ewe or a beefie for the freezer, ploughing and fencing off ten meters along a fenceline for a big vege patch, going to town in the ute for groceries and RD1 farm supplies. You're in an enviable position compared to many urbanites.

we never talk about this


Why are schools still open? Why do the education minister and our pink-haired expert require evidence of community transmission to act? Every.other.country said the same thing, including Italy. By the time they had evidence of transmission it was too late.

You're supposed to be proactive, not reactive. You're supposed to learn from the lessons of others.

I am starting to wonder how accurate our tests have been.I hope it is not the pink haired lady running the show.
It has been reported the virus is very hard to get positives.

It's been reported it's very hard to get tested, more like it.


And you can't detect community transmission of you aren't testing for it. They are using the same playbook the US used early on. When they finally started testing for CT they found it was basically to late.

Restricting travel, relief packages, banning gatherings but not testing for CT - fail.

You would think if parents wished to pull their kids out of school they should be allowed to - not treated as truants.

They just need report that they are self quarantining and no one will ask anymore questions.

Because, for one thing, school lockouts pull the parents right out of work too, and many of those parents will work in the medical sector.......bit of an own goal.....

Do you have kids at school or can are you offering to babysit?


Meet the Mark Richardson, (Hosking, Hawkesby, Garner) of Australia. It's all a con apparently.
Why are these people still on the air? With the war footing we are on now these people need to be shut down.
At the same time for God's sake sort out the fuel price. Z et al are gouging. Fuel should be 20 cents cheaper than it is.

This is a deeply disturbing comment. You're so hysterical you're asking for a police state and the end of free speech. Take a breath.

You know that fuel prices have decreased by something like 25cpl in the last fortnight, right? Maybe more? Cheapest its been for probably 10+ years.

"In total, in an unmitigated epidemic, we would predict approximately 510,000 deaths in GB and 2.2 million in the US, not accounting for the potential negative effects of health systems being overwhelmed on mortality."
On behalf of the Imperial College COVID-19 Response Team
WHO Collaborating Centre for Infectious Disease Modelling
The global impact of COVID-19 has been profound, and the public health threat it represents is the most serious seen in a respiratory virus since the 1918 H1N1 influenza pandemic. Here we present the results of epidemiological modelling which has informed policymaking in the UK and other countries in recent weeks. In the absence of a COVID-19 vaccine, we assess the potential role of a number of public health measures – so-called non-pharmaceutical interventions (NPIs) – aimed at reducing contact rates in the population and thereby reducing transmission of the virus. In the results presented here, we apply a previously published microsimulation model to two countries: the UK (Great Britain specifically) and the US.

Spare a thought for the forgotten.
The forgotten emergency

Where are they now?

Just talked to my daughter in California. She said supermarkets empty, hospitals full. Partner teaches at school but all schools closed. Got stopped yesterday by police doing temperature tests. Shops closed unless selling essentials. Bizarre and frightening for her.

WHO says test, test, test.

Dr Campbell
Emotional Italian messages, as those coming from early Wuhan.

MoH forget the saving of face.
PM depart. forget the saving of face.
Follow WHO directions, test, test, test. Collect the data.
Be more like Singapore.



Focus on job at hand, less so on fiddling with depreciation rates (that can be done anytime).

Exactly. Only that which is Measured can be Managed, and our level of measurement (tests, kits, bodies to administer, field/drive-thru test sites) is abysmal. And so simple to organise - containers for the test sites, parked in supermarket carparks, robotic or low-wage/expendable bodies to administer tests (save the medicos for the real cases), maintain social distancing away from GP's, hospitals and medical centres.

But what of any of this have we seen? Zip/zilch/nada. And my own GP's advice: don't come near us in person.....

Yep it's like don't the higher ups see or hear these stories we see on the ground.

Peak Prosperity
More data on asymptomatic...
More data on younger 30 to 50 with low O2 saturation.
Suppression v Mitigation


Robotic administration of tests? You think this can be deployed quickly or cheaply?

If you're getting low-wage people to do it then they're likely to screw it up, which is probably worse than doing nothing.

My comment above borne out by actual medical person. Use medical students to test...could be done real fast. On-the-job training, no less. And we're paying 'em anyway, so no extra fiscal implication.

Its [the virus'] Achilles heel appears to be an exquisite sensitivity to rapid case contact management, even after it has established large outbreaks.

The White House proposes sending US$1000 to everyone (cost US$300 bln) with another US$½ tln as handouts to businesses. Socialism is alive and well in the US, so long as it's for business.
U.S. Fed revives commercial paper facility to boost lending

I think you can put MMT in the same camp as aid, rather than stimulus. Really there is nothing left to stimulate. All aid does is permit consuming for a while longer, but I would think at much reduced levels.

"Welcome Home! Well done getting back before we shut up shop. Now. here's your overdue Student Loan account. You'll have to pay it before we allow you head back overseas again "

More student news


Wait there is more...
The party comes after the University of Otago urged students to show "social responsibility", in an effort to contain the outbreak, and another outbreak of mumps.

All good, let's have them run all matters CC too.

Does anyone know how safe term deposits are in the current climate? I tried to open a TD with Kiwibank yesterday and the woman I spoke to said be aware there are no guarantees, you could lose your money. Wasn't exactly selling it. Someone else at Kiwibank said there is a partial govt guarantee. All sounds a bit hazy.

Read up bank bail in, on the RBNZ website.
Deposits, by name only, allow you to become an unsecured creditor.

Good luck figuring out the risk given by the Ozzie bank derivatives exposures (hint netting may not be enough).

Also think of alternatives that give you a trust account (then look at who behind), hold funds on your behalf, rather than take em & pledge em to someone else.

Hi Han, they are not 'safe' at all. You are an unsecured creditor to the bank. If Wayne and Sharlene stop paying their mortgages in significant numbers and property prices decline a little then your term deposit is gone. All your term deposit is, is another persons debt. All the increase in NZ and AU property prices in the last few years have become someones money, the debt disappears the money does too. If you want more security then buy the bonds, then you have a claim on the banks assets. Which could be nothing. If you want real REAL security then buy US Government treasury bonds. Another option would be Berkshire Hathaway shares or bonds. More financially sound than the New Zealand government.

Term Deposits with RBNZ accredited bank are as safe as the economy of New Zealand. Let's remember that the BNZ went broke 20 odd years ago ( for the 4th time!), and it's still going!
If a time ever comes that they aren't its Game Over. ( even Kiwibank, which is probably the most 'at risk' in this environment would be rescued by its ultimate parent - the Government of New Zealand.) Likewise for the subsidiaries/branches of the Aussie banks. They could not stand by and see the reputational damage done to their brand and would secure local deposits.
Yes, there's a technical interpretation of being Depositor, but if all of the forgoing fails, then as I write, it's Game Over - and it won't matter what you hold - it will be as 'worthless' as a bank Term Deposit. You won't be able to buy food with Berkshire Hathaway shares... (ie: If NZ 'goes', the USA etc will have gone as well)

More like the economy of NZ is as safe as the banks. Banks are by definition highly leveraged institutions. A small decline in the price of the assets they hold (loans and property) and deposits are wiped, happened all over the world hundreds of times over the last hundred years. Were other things rendered worthless when banks failed in the past, no. Treasury bonds are orders of magnitude safer than little banana republic banks. Remember the bank of New Zealand was bankrupt 30 years ago, hundreds of banks around the world were bankrupted in 2008. And even if your term deposit is 'safe' it's getting inflated away to the debtors and your interest rate has just been given to them too.

Ah. Like the Treasury Bond in Argentina? You may scoff at that, But Argentina was amongst the wealthiest, most prosperous countries on the planet not that long ago.
If Term Deposits aren't safe, neither are Government Bonds. For as you suggest, the banks are only as strong as the Country. And if that fails ( Argentina in this case) Bonds are as worthless as anything else.
Remember not that long ago when St. George Bank and Westbank in Aussie looked like being on the brink? Or the several State Banks before them?What happened - a forced marriage to ensure their survival and the protection of monies owed. The same would happen here. And ultimately, Nationalisation (as has happened here before)

I completely agree, no scoffing at that. Hence my suggestion of US government bonds, Berkshire stock or ultimately gold. The way I see it is that all money is backed by the goods and services that it represents, so if you own the means of production then you own the money printing mechanism. NZ has decided that money is backed by debt from borrowing more and more to pay for the same poorly constructed dwelling that has half rotted in the ground since it was built in 1975 and has since produced nothing. Maybe we will find out this is false economics. Those who own the production of all the things we use, power, steel, healthcare, aircraft, ports and airports, ships, food. They have the ultimate backing of their money.

More like the economy of NZ is as safe as the banks. Banks are by definition highly leveraged institutions. A small decline in the price of the assets they hold (loans and property) and deposits are wiped, happened all over the world hundreds of times over the last hundred years. Were other things rendered worthless when banks failed in the past, no. Treasury bonds are orders of magnitude safer than little banana republic banks. Remember the bank of New Zealand was bankrupt 30 years ago, hundreds of banks around the world were bankrupted in 2008. And even if your term deposit is 'safe' it's getting inflated away to the debtors and your interest rate has just been given to them too.

Orr was to fast in reacting he's gone and scared the horses.

Won't be seeing many Australias for a while.
Travel ban on Australians going overseas.


Is 41/50 a fair compliance,
Small sample,
Who knows how the previous thousands got on...


The Ministry of Health requested Police to conduct the visits to check on the compliance and welfare of approximately 50 individuals throughout the country. The visits, which commenced yesterday, involved Police visually sighting the individuals and asking a series of questions relating to their wellbeing while self-isolating.

Police has made contact with 41 individuals with another three people requiring a follow up today when they could not be reached. Outstanding visits are scheduled to be completed today with more visits to be conducted. It is very pleasing to see the high level of compliance with most people taking the isolation requirement seriously

Hey why not use the system in Singapore, health workers call / video and you take a picture / video pan to prove where you are. Then send the police it seems suss...

Market eventually shall see what they wanted to see, the public bail out/future tax payers burden, to be siphoned into loan/debt servicing of local RE market - Nothing we can do about it, the way it is moving forward for NZ, every political, economic levers all going to be managed in a way to avoid turbulence in the current RE binge ponzi activities. No one can predict the future, that is correct but one thing is for sure...every elite ruling echelon in NZ is deep wet into the scheme. So therefore have to use future tax payers bailout in the name of Neo-Liberalism/socialist uniform of public action, to cover the greed debt ridden capitalist at the top, the trick is to bring as many policy makers to influence of such; politicians, economist, academics, Banks, central bank, and many more - it's difficult to shake, safety in numbers already in place.

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