Another enormous rise in US jobless claims; banks brace for foreclosure surge; carmakers pull back; iron ore prices about to tank; Aussie business sentiment dives; UST 10yr yield at 0.62%; oil and gold jump; NZ$1 = 59 USc; TWI-5 = 65.8

Another enormous rise in US jobless claims; banks brace for foreclosure surge; carmakers pull back; iron ore prices about to tank; Aussie business sentiment dives; UST 10yr yield at 0.62%; oil and gold jump; NZ$1 = 59 USc; TWI-5 = 65.8

Here's our summary of key economic events overnight that affect New Zealand, with news of very bad current data coming from the giant American economy.

Firstly, there has been a stunning development in the US labour force. Last week we reported a huge jump in unemployment benefit claims there from +280,000 in the prior week to +3.34 mln. This week analysts were expecting that to rise further and their estimate was to another +3.7 mln. But they were way off. In fact, the new claims level last week was a stunning +6.648 mln. That takes the March level of new claims for jobless benefits to a massive +10.5 mln in just four weeks - nothing like this has even been seen before. In fact in those four weeks 6.9% of their employed workforce has applied for jobless relief. It is likely many more haven't yet. Tomorrow we will get the March non-farm payrolls report and it is sure to be very grim. Based on this jobless claims data you would think it will report a new unemployment level of close to 10%. But it may not given that the non-farm payrolls report is survey-based and the surveys are done mid-month. But it will be the surveys that are out-of-date.

A related job cut report also revealed a very dramatic surge in direct layoffs. But that ignores the furloughs announced which were widespread.

The American mortgage industry is bracing for as many as 15 mln mortgage holders who stop making payments on their loans, the biggest wave of delinquencies ever. Falling mortgage interest rates mean nothing in a sector grinding to a halt.

One industry hard hit is the car industry. Not all data is available yet but a substantial fall in sales is expected for March, with some early reporting brands weeing drops of more than one third. In fact, overnight the New Zealand car dealers reported a -36% fall in sales in March year-on-year.

Japanese carmakers are sharply curtailing production.

The shutting down of global trade is about to hit iron ore prices according to a major producer. They have remained resilient for longer than many would have expected. The coming hit will be hard on Australia and Brazil.

But export bans, especially of food and medical supplies, are growing as many countries move to protect themselves. And the grain trade with China this year may be less than in past years as China says it is having a bumper harvest.

In Australia, the widely-watched NAB business confidence survey for March shows confidence collapsed there. It will only get worse in April.

Global air travel has been severely impacted as we all know now. The latest data for February shows a -14% decline worldwide, but a massive -41% drop in the Asia Pacific region. These numbers will have fallen to almost -100% in March.

In New Zealand, live tracking of consumer spending by the GDPLive team reveals a very dramatic slump up to April 1, more than halving year-on-year. This will have very widespread negative impacts on jobs.

There are now 797 Covid-19 cases identified in New Zealand, with another +89 new cases yesterday and higher than the +61 increase the prior day. The number of clusters has been reduced to six. Still only one person has died here. There were 13 people in hospital with the disease yesterday.

Worldwide, the latest compilation of Covid-19 data is here. As you read this, the global tally is just going through the 1 mln mark with another global pickup in infections overnight especially in the USA where more than 23% of all cases globally are, and up +35,000 in one day to 226,000. Australia has almost 5100 cases, and 24 deaths. Global deaths now exceed 50,000 and more that 5300 deaths have occurred in the USA, 45% in New York alone. Italian deaths now exceed 14,000 and more than 10,000 have died in Spain so far. Fear is paralysing many countries.

Equity markets are drifting today, unsure of where the next policy bump might come from.

The UST 10yr yield is lower today so far by -2 bps at just under 0.62%. Their 2-10 curve is positive today at +40 bps. Their 1-5 curve is also positive at +21 bps, and their 3m-10yr curve is at +56 bps. The Aussie Govt 10yr yield is now at 0.77% which is up +6 bps. The China Govt 10yr is up +3 bps at 2.68%. The NZ Govt 10 yr yield is holding at 1.10%. There is global central bank activity in these markets keeping rates low and relatively stable, so they no longer reflect true market sentiment.

Gold is sharply higher today, up by +US$27 today, to US$1,610/oz.

US oil prices are sharply and unexpectedly higher today, at just over US$24.50/bbl, a +US$4.50 rise. The Brent benchmark is also higher at just over US$29.50/bbl. The US President has managed to get the Russians and Saudis to agree on output cuts. How this helps the average American is unclear, but it may help their domestic oil companies, the Saudis and the Russians.

The Kiwi dollar is lower by -¼c from this time yesterday at 59 USc. On the cross rates we are a little firmer at 97.7 AUc. Against the euro we are also marginally firmer at 54.4 euro cents. That means the TWI-5 is unchanged at 65.8.

And we should note that Moody's credit rating agency has just reaffirmed New Zealand's Aaa credit rating, the only one of the three to give us a top billing.

Bitcoin is now at US$6,878 and up +11% 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?

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Jacinda has got to fire David Clark, this man is out of control, he is just an embarrassment to our country.

Going on holiday during the doctor's strike was bad enough, openly flouting the rules during a national health emergency lockdown is inexcusable

To be honest I think this presents a real political opportunity for Jacinda. If she drops the blade it'll significantly add to her credibility as a decisive leader.


Why is the health minister not in Wellington during an epidemic? The doctors and nurses are working 16 hour days and the health minister is off riding his bike in Dunedin, breaking his own government's rules. It's actually unbelievable.


Why is the health minister not in Wellington during an epidemic?

Because the government is practising physical distancing and so sent all of the cabinet home to self-isolate. He doesn't live in Wellington so why do you want him physically in a city that he can't actually do much in, staying in a hotel at taxpayers expense? Video calls can be done from Dunedin - they are the gigatown after all.

The doctors and nurses are working 16 hour days

Are they? We have 13 cases in hospital, 2 in ICU. Most elective surgeries are being postponed to make way for a surge in cases that has not yet arrived. I suspect most doctors and nurses actually have less physical work at present than they usually do, aside from necessary planning etc.

is off riding his bike in Dunedin, breaking his own government's rules.

The bike trail is 2.3km from his house. To me that's pretty local. The bike trail he was riding down is rated as 'easy' and is a shared trail between walkers and riders. It is not a really difficult complex bike path he's chosen to go on.

Is this overall a good look? No, not at all. He shouldn't have done it.

Is it really an egregious unbelievable lapse in judgement like you're making it out to be? No.


He drove to the bike park. So by the PMs definition - that is not local.

2.3km too. I don't understand why he did not ride there.

Rick that is so totally the point. If the guy simply didn’t have the nous to figure that one out he must be, only in my opinion of course, of quite limited thinking capacity.

Yeah I have to agree on that point. If you want to go cycling somewhere specific and it's that close to your house already, just bike there. Hell I'm doing that myself at present.

Actually the PM hasn't given a clear and unambiguous statement as to what local is or isn't. Deliberately. No distance limits have been set.

She said that police would like it if you'd step outside your house and exercise in your neighborhood. But she didn't say you couldn't drive to a local park.


Your defense of the minister is that he's following the rules - when he's not following the rules.

Besides, he's not just any minister.

Exactly - our health minister is an idiot. This from a Doctor.

Seems to come with job. The previous guy was known as Dr Death by all the DHBs as he refused to spend any money. After Labour came to power and some difficult questions were asked he jumped ship.

@Noncents , I have today discovered he is not even a proper Doctor .

He has a PHD in bothering the Big Guy in the Sky .

That he has even been made the Health Minister shows the terrible lack of depth and ability in our non-elected "coalition of losers" Government

No, my defense of the minister is not that he's following the rules.

Note the bit where I said he shouldn't have done it. You need better reading comprehension.

Is this David Clark's burner account?

It's time we subcontracted out our government to Singapore or Taiwan. Countries that have shown how to control the virus and keep working - rather than our governments plan to hide out at home for four weeks under the covers.


Both Taiwan and Singapore got a jump on COVID19, for the simple reason they didn’t believe Beijing and WHO.
I can assure you while the CoL were slower to see the writing on the Great Wall, your National mates would have prevaricated more as their masters in the CCP continued to deny the extent of the virus.
If we hadn’t gone into lockdown, quite simply the government would have been signing the death warrant of thousands of Kiwis. One of them could be you, or one or more of your family. Look to Italy and Spain. See what’s happening across the ditch, under ScoMo.
It seems National supporters are quite happy to “subcontract” NZ to foreign governments. JK and the new leader have been doing it for over a decade now.
Here is a brilliant documentary on how Beijing is dealing with the virus... They should know, they caused this and have seen first hand the carnage it has caused.
For your viewing pleasure -

And because they both had experience and planning from SARS.

Earthquake (s)

I think the key word was "Planning"

When have we ever planned?

We react - usually poorly and late.

We're using the influenza pandemic plan that was created for H1N1 back in 2009:

Does that plan include ignoring Taiwan who was boarding Chinese planes in December? Doing a fake border closure that allowed businessmen to still enter direct from China? Playing down the virus until on the 13 March to keep the memorial going? Letting the Ruby Princess discharge and have guests visit rest homes, take wine tours on buses whose drivers also drive school buses. Only doing 20 tests a day in mid March? Letting a pipe band in from Washington State that already had 20 dead. Some plan. Though they did come up with a great "go early, go hard" slogan.

"Ministry of Health - Manatū Hauora @minhealthnz
13 Mar
With lots of public events coming up this weekend, it’s important to stay home if you feel unwell and not spread your symptoms to healthy people. If you feel well and plan to attend an event, make sure you practise good hand hygiene as often as possible. "

Everything is obvious in hindsight.

Stating you are closing a border when you are not closing a border is not hindsight. It is either incompetence or duplicity.

Proof on the fake border closing please.

There is a hang of a lot of anecdotal evidence of a total lack of any form of mitigation measures taken at the airport until it was way too late , not hindsight ............its called incompetence

Thank you for providing some facts.

You're welcome.

I usually agree with most of your sentiments but I can't agree here.

We're in a state of national emergency to prevent the spread of an infection that is ravaging the rest of the world. It's a necessary step to contain the virus (personally I would have gone further) but the flip side is it's likely to cost tens if not hundreds of thousands of people their jobs.

Not only is the health minister doing this completely tone deaf it is an egregious dereliction of leadership duties, we already have significant issues with non-compliance, the expectation of all leaders is and should be that they go further and harder than the people that they lead.

Everyone (not just the minister of health) should be asking not "how much can I get away with" they should be asking "how much can I do to ensure that this lockdown is a success" to stop people getting sick, dieing and inevitably losing their jobs - which will be so much worse if the lockdown is extended due to ongoing transmission.

Do some yoga, do some star jumps, run around your house, be a bloody leader. There are thousands of kiwis who are essential workers going to work every day with the knowledge that doing so is putting themselves and their families at risk of infection - the last thing they need is some self-entitled jerk heading out for a health kick/jolly and putting them at further risk.

I MUCH prefer him driving to the trail to ride, unlike the f##kwits I'm seeing riding on the open road!

It was stupid and he shouldn't have done it. It rises to the level of getting a ticking off in private from the leader and a public mea culpa (which I don't think he's done yet), not being sacked as some here are baying for.

@Panther ............Thank you for for pointing out that good leaders lead by example .

Clark must go , he is a liability

@Lanthnide , do even attempt to defend the indefensible

Dr David Clark , who I have since discovered is not even a proper Doctor , should be dismissed forthwith, we dont want him , he is a liability .

What was he thinking, does he even think at all ?

He is an incompetent fool , not unlike the Education Minister , the Immigration Minister , the Police Minister , the cancel Gas exploration Minister , the railways and throw money around like a drunken sailor Minister , the utterly hapless Transport Minister ( and former Kiwibuild Minister ) and the smile like a Cheshire Cat Deputy Prime Minister , to list just a few

Except I wasn't defending him, just saying that it's not an offence that should result in sacking.

Why is the health minister not in Wellington during an epidemic?

Because the Director General of Health is a far more competent person for the front-of-house job!!!!!!

I know who I'd rather have at the podium - lol. Very smart move on Jacinda's part to send him home :-).


@Panther , Clark has overseen the recent Measles epidemic , where he ensured any confidence we had in him was shattered. , and did absolutely nothing to endear himself to New Zealanders


Like the time she fired....?

Meka Whaitiri?

Yep, the cabinet manual clearly states the minimum standard for ministers is not physically assaulting their subordinates.


You shouldn't talk like that, as Jacinda has repeated many times, BE NICE.

If you look at the relevant Acts a lot of police behavior is unlawful & breaches your liberty guaranteed under the Bill of Rights Act 1990.


He is an academic, no idea of the reality of the actual world. He is not alone. Big problem for parliament, much bigger problem for all of us.

I suspect that he won't be the first or last not to follow official advice. Lockdown was only a short-term management approach. If the government try to push this beyond a month the number of people living within the guidelines will be substantially deminished. The government haven't proved capable of effectively policing the policy as it stands and it's been an extremely expensive exercise.

We can only hope that when the lockdown finishes at the end of this month we have a better strategy in place. That is New Zealands best chance.


Shit, meet fan.

Hold on team, entrees are over, time for the main course...

The US is in the hurt locker.
Goodbye reserve currency status.
Must pick up more beer today.

USD != United States

Most unlikely. They'll return to a confederation of states that will make them stronger

Im certainly no expert but i would say this wont happen for a long time yet. USD is strong because of demand. Surely it wont happen until they get massive inflation from increase in supply? Just my thoughts i could be away with the fairys tho, been in the house a bit too much lately

It would be a superb time for another big player (China most likely, potentially a China/Russia alliance) to come out with a new currency backed by something physical (likely gold) to be used as an alternative to USD for oil. It would be a massive shift of power and could bomb the USD, just when the US is unable to respond because it's having to deal with a pandemic. I wouldn't be at all surprised if something like this happens, if it did you are looking at a huge geopolitical shift and potentially a war footing for all countries involved.

have you tried running your car on gold?

The point is you need to control ENERGY sources
not shiny stuff

Silly comment. Gold would just be the backing for a currency in the scenario I suggested. You may as well have said "Have you tried running your car on cotton and black ink?" referring to USD.

Control of energy sources is more to do with borders and military might. Hence I suggest a collaboration with probably number 2 and 3 world military powers to try and dethrone number 1, just when number 1 is looking weak.

It's a very astute comment, actually.

Gold couldn't do it from 1930 onwards, so you need to do some homework before your tap away. Nixon finally sounded the death-knell 50 years ago.

Relating wealth to energy is the only practical linkage.

I agree, in terms of linking energy production to a currency, essentially an energy backed currency.

However I am saying that I just don't think that will happen - not yet. I don't think the world is ready for it, people wouldn't be able to get their heads around it. Long term an energy backed currency (some sort of mixture of oil/coal/renewables with pollution built into it) makes sense. But I don't think it would happen without broad based agreement across the world.

In the meantime countries that decide that fiat money is near worthless may go back to a gold backed standard until it falls over again. Ham n egg's comment seemed to suggest people would need to run their cars on whatever backed the fiat currency of choice. Well what currently backs the USD? Hope? Economic confidence? Military might? As more and more of it is created at the stroke of a key, it's backing becomes more and more diluted and therefore more able to be disrupted by a new player.

Oh - the reason I see it going back to gold would be that it's the only "currency of last resort" they all hold. None of the players would want to adopt one of their currencies (Rouble/Yuan/Euro) as it would just be subject to the same manipulation as USD. So a new currency, backed by something physical may be the trade off they are all willing to make.

In this movie (before pop-top tins were invented), anything that could open a tin can was gold.

Go stuff a handful of greenbacks in your fuel tank and see what happens. Currency is a medium of exchange.

People can trust China and Russia even less, though. How practical is to have a reserve currency from the likes of Putin or the CCP?

Wouldn't matter, all you would need is some suppliers to sign up (think Iran and maybe Iraq for China, Europe for Russia) and boom, you have disassociated yourself with the USD and their political sanctions etc. As long as they have confidence in each countries economies and the military might to back it, you can have yourself your own reserve currency. It's the backing that would be tricky, I suggest gold as it would not exclude the US from also transacting in the new currency, which it may inevitably lead to.

You have to ask yourself - how many people trust Trump with his smashing of trade and attempts to undermine long standing military agreements? The US political instability backed by likely skyrocketing social instability over the next coming months/year may make the CCP and Putin seem strong and stable.


The government needs to move heaven and earth to keep whatever industry it can going. Less of the letting people in and more of the keeping parts of the economy working that we can.
Food food food =income income income
Sooner or later this will get very ugly. The world needs to be fed. We have to figure out how to keep growing harvesting and selling/exporting as much as we can.
Italys rising death toll percentage of 10% is a fluorescent red flag. I wonder if this is descending into something much worse than we expected just a week ago.

Estimates are that true death toll in Italy could be 2.5-3x higher.

Here’s a link to the article (unfortunately you likely can’t read it without a subscription):

It's not just Italy. Almost no countries are recording deaths outside hospitals. So if you die in a nursing home, that is not recorded in the daily death statistic for most countries. It will take a Herculean effort after this is all over to account for the full SARS-Cov-2 death toll.

But you'll get some retired patholgist, many decades beyond and removed from the cutting edge of medical modelling to write in The Spectator to say that the death toll is tiny and insignificant and that the economy wouldn't be damaged if we just let the virus have its merry way with all of us.

You seem besotted with lockdown, which is fine, it's your opinion. I understand it too, even if I don't agree with it, favouring the approach of Sweden.
But there is another side to this,as eloquently analysed by Matt Hooton in the Herald today. Which is the intergenerational devastation that is and will continue to be dealt to young people.
Interested on your thoughts on how this can be addressed, especially if you advocate further lockdown beyond 4 weeks.
This is obviously a very challenging ethical question, as described by Hooton. Very challenging indeed.


"But the best alternative will probably entail letting those at low risk for serious disease continue to work, keep business and manufacturing operating, and “run” society, while at the same time advising higher-risk individuals to protect themselves through physical distancing and ramping up our health-care capacity as aggressively as possible. With this battle plan, we could gradually build up immunity without destroying the financial structure on which our lives are based."

Totally agree with that.


The world was mostly caught with its pants down (with few exceptions). So it's too late for woulda coulda.

I don't have particular speculations or passions about lockdown but I can certainly speculate as to your issue with lockdowns Fritz.

My position agrees with the best advise from the best and most respected scientists because they are the best we have and I am not so arrogant as to think I somehow know better. The best science currently states we needed the immediate lockdown to prevent rapid devastation of life. Because modelling on the loss of life and devastation wrought by letting the virus reach its potential, would have caused significantly worse economic realities than we will face from a lockdown.

After that, I tend to think that we need to work on antibody tests as the next strategy and a system of authorisation for those who have antibodies to get back to work immediately. Followed by accessing lower risk groups to enter into lower alert levels (3 then 2) and see what happens to infection rates and the rates of hospital admissions. Progressively reducing alert levels for more and more people within the limits of health services and infection rates.

Government lockdown cannot work longer term. Psychosocially, they will be doomed to fail as we are seeing in Italy already.

IMO If we had let the virus run rampant across the globe, my guess would be, that as millions upon millions died (you can deny the best science all you like on this but that is not my position), people would become isolationists psychologically by themselves anyway, only it would become a much more serious problem. Everyone would withdraw into a climate of mistrust and fear, people would not choose to go out, not socialise, not go to restaurants or shops even without any government sanctioned limitations on that. If people see high levels of death all around them, the amygdala will trump the frontal lobe. It does EVERY TIME. And if that psychological state were allowed to take hold, it would take years and years to recover from, it would lead to a much deeper, much more entrenched deflationary and fear based mindset, a much deeper, a much more entrenched recession. Or worse. There are much worse reactions that people can have, than isolation and withdrawal if they are highly motivated by fear. History is littered with the horrors unleashed in this scenario.

Millions and millions dying is only if you do nothing. No one is advocating doing nothing. How are Taiwan, Singapore and S Korea keeping on top of this with no lockdown? There are other options to lock down such as isolating at risk. Many business have far worse risks in their businesses than C19, already working in isolation, can go to jail for not following SOP's but are now banned from working. I agree antibody tests are a great strategy.

"With some projections showing that 50 or 60 percent of the population could become infected with the virus, Dr. Birx explained why such projections are so misleading.

"The only way that happens," Dr. Brix explained, "is if this virus remains continuously moving through populations in this cycle, in the fall cycle, and another cycle, so that's through three cycles with nothing being done."

“…Diamond Princess cruise ship - out of 3,711 people on board, 712 were infected, and eight died. ...Levitt said. For instance, the Diamond Princess data allowed him to estimate that being exposed to the new coronavirus doubles a person’s risk of dying in the next two months. Most people have an extremely low risk of death in a two-month period, so that risk remains extremely low even when doubled.

Exactly. Ginger seems to view things in a very binary manner. We have had one death, with probably well north of 1000 infected. I am not saying that to say there is 'no issue', I am saying that to bring balance. This is far from being the plague.
Ginger still hasn't addressed the costs of her favoured approach. We all know the lockdown is the ultimate approach in terms of health, but it's coming with mammoth economic and social costs.

Saving lives doesn't take precedence over the economy. We know this because we deliberately don't fund healthcare enough. We don't spend all our treasure on cancer drugs for example. We have also fought untold wars for what are essentially economic reasons.

There is a balance, almost as if saving lives and the economy are equally balanced. A bit like wars where they should not be waged for purely ideological reasons or economic reasons but a balance of the two.

The four week lockdown is good. It is enough. After that we fix bayonets masks and we go over the top.

I am not sure if you mean me Fritz. Lockdown to me before the lockdown was shutting our borders. Winnie gave everyone a warning. Get home now or you wont get home. But as per usual people have not and did not take it seriously. My thoughts are with our drs and nurses. They will die for these dickheads.
But I have much sympathy for your view. I had hoped there was less virus in NZ, so a month shutdown would work. Eliminate it. The govt were lazy, we went on lockdown but the borders didnt. We wanted to be tested but testing wasnt available. The govt did the easy bit. You do this!......but they didnt do the back up work with quarantine and testing. So now I dont know. But I know I dont want to see our health professionals die.


You're talking about rebuilding, but they've already screwed the pooch. F&P Whiteware just one example of what happened to most of our quality industries and jobs. So many missed opportunities to ensure we had good solid industry in NZ in recent years, but a quick easy buck was more important than long term wealth!


Belle, as you well know the biggest problem is debt , money borrowed against future potential capital gains.

If you want to grow business you have to be able to invest in an industry with a competitive advantage. That would mean going back to import taxes, protectionism, capital controls etc. My coffee roaster is doing well, but how many roasters do we need?

I'm still dry, my crops have struck, neighbour has been resowing all the grass he planted end of Feb. Constantly get night time lows under 10º. I've oversown 60 hectares + and it's looking good, just need rain in the next few days. Interesting thing that my neighbour was right, most of my grass has died in the record heat.
My friends in Mid-west are talking about going into beef, ethanol plants are closing and markets for soy, etc look horrible. They are having huge discussions online, but as always, easy answers are illusive. It's a gamble and winners will think it's because they are smarter ,when it's just dumb luck.


"It's a gamble and winners will think it's because they are smarter ,when it's just dumb luck"
Never a truer word has been spoken.


I tried to articulate this to my old man over the phone. We have traded actual tangible production from our assets for capital speculation, leaving us with overpriced assets and huge debtloads.

I am hearing the meat processors are struggling for staff. Its likely lamb will drop. Europe will be out of the market. Beef looking lower next week. And I heard the army is on the streets of Piopio....that might be chinese whispers but it sounded good ;-)
Anyways I am glad to hear your grass/crop is away. We still need rain here bad. Dams are empty.

my streams are not flowing, all the dams empty, she's a shocker. South of here, Wairarapa they got 100mls. Yep I think we can expect falls for stk across the board.
I've sowed multiple species straight into existing pasture,legumes/ italian etc, no glyphosate,everyone told me I was wasting my time but it's struck and looking great.

Yes we were hammered over the past week, last Saturday was torrential. Things are looking green.

We do produce a lot of Avocados :-p

Yes it is wise to keep food etc flowing but lets not just send it all to China again as they now have the power to drive the price down and down.
Also I hope any AirNZ plane flying food freight i.e Rock Lobsters Salmon etc is not being payed for by NZ tax payers.
If other countries want our premium food they need to pay the full prices otherwise sell it here to tax payers.
The reason we are in this mess is the amazing coverup of the real death toll in China and most people want to take deal with them even tho they have caused this mess here they even brought up all of Australia PPE and shipped it to China causing Australia to have very little in stock.


Yes exactly. I trust Science (one of the most respected journals in the world) over China's self reported data.

We know for a fact that there were cases of SARS-Cov-2 outside of Wuhan before they implemented their lockdown 23rd Jan. There were already cases reported in Shangai, Beijing, Thailand, USA, Phillipines etc. Since then, we have seen the outbreak everywhere else in the world because China failed to contain the virus within Hubei but somehow we are expected to believe that the virus has exploded EVERYWHERE else, but somehow, inexplicably not in any of the other region in China? Even though we know it had already escaped Wuhan by 12th Jan?

And let us also remember that on 30th Jan WHO committee said that there was no need for any travel restrictions with China and that when NZ implemented their China travel ban 2nd Feb they were accused of racism. That ban prevented 12000 students (people in this age group tend to be asymptomatic but the most prolific spreaders of the virus) and goodness knows how many Chinese tourists from importing cases.

Can you imagine the devastation NZ would be in right now if the government had not taken that step?


Yeah exactly. NZ was called racist Feb 2nd but the China does the same thing 27th March. It appears that what is good for the goose is not allowed to be good for the gander.

Yeah. Total double standards.

Good points Gingernuts, keep reminding everybody. I too wonder why the 5 million that left Woohoohan didnt seed the rest of China. It simply does not make sense.


For me, it's simple. The price of everything is going to 'halve'.
Because vendors of all products - real and imaginary - are going to have to slash prices; cut their costs to sell to people who have lost the capacity to pay the prices that existed before; their wages will have been cut ( if they still have a job - see the USA stats above) or their savings, if they have any left, will have been depleted.
Those Bangladeshi garment workers, for instance, who've just had untold billions of dollars work of work orders cancelled? What are they going to work for, to feed themselves from now one? (less than even the meagre pay they got before) and what will that do the the price of finished goods in the future? Make them less if retailer want to sell their products. Multiply that across all sectors and the outlook for the future is - 'half' what is was before.
And to rub salt into our wounds, we knew this was coming! Interest rates at 0% told us so. And if the answer is "Lower interest rates still!" then there is no hope that this will be the last if it, and 'half' might be optimistic.

I think you are correct in prices halving but for places like the USA i would expect to see massive inflation on essential items because of supply under pressure and also the govt fiscal pumping machine. I think food and essential house hold items will shoot up in price.


but they flow on is Commodity prices will halve ...
How many commodity producers are solvent at this new level? if any?

It comes back to you cant undo Leverage …. you cant undo economies to scale
We have used Debt /leverage over 40 years to keep BOTH consumers & producers viable …
Debt supplemented income to keep REAL stuff flowing
And we have now have hit the free money wall

Hi Fritz, MikeKirk, Nzdan and many others, I took a break yesterday, do you have any comments on the B&T article showing record high average & median prices for March ?

There were a few hat tips your way.


Yvil reminds me of the band leader that insisted they continue playing on the Titantic as she slipped under the sea.

Why do you find it so hard to admit "hey, well done, you got it absolutely right when most of us were doubting you?"

Kudos Y.
That's March, do you have guidance for the rest of the year?

Thanks Smalltown,
I wish I was certain enough to make a prediction for the rest of 2020 but I just don't know. Gut feeling says values will go down due to the shutdown but then I look at everything that's been thrown at it, (cutting OCR to 0.25%, $ billions in subsidy for employees and businesses, huge asset buy-backs and mortgage holiday) and I'm not so sure anymore. It's a tug-o-war between the two, and I really don't know which forces are stronger

Come on Yvil.
Prices will come down it's just a question of by how much.

As per a previous comment posted the stock market in the USA bounced around and ended up 8% down at the end of the Spanish flu which is the best comparison with the Wuhan Flu. At the end it shot up 50% which was probably related to the war ending. So in perfect markets were hardly touched.
What is happening now, is it overdone or brought on by all the crazy debt since the GFC?

Yeah like i said yesterday its been pretty easy to predict house price increases in a stable market with reducing interest rates but oh how times have suddenly changed. Not to many willing to put their balls on the chopping block now and make a prediction for next month let alone next year.

Fritz, prices may well come down, I'm not saying they won't but I wouldn't be confident enough to say they will come down by X% by X date.

I'll back this comment with by disclosing a real personal experience:
- at the end of February I decided to put my house up for sale, which shows that I thought values could well collapse
- by the time I had my house ready for sale (new deck, repaint, appliance upgrade, it went to the market the 2nd week of March, the weekend after, NZ effectively locked the borders, the weekend after that, the lockdown was announced, I was stuffed
- so I thought, yesterday, I got an offer from a purchaser who had NOT been through the house! (I think it's crazy) true story! (he saw photos and videos). The offer was low, not only did I not accept it, I did not counter it either, because, genuinely I don't believe anymore that house values will crash, they may go down, maybe 10% but I'd rather stay where I am for that dip.

So, talking of predictions, my one of last year that prices would come down by at least 10% by 2022 could well be on the money.

Absolutely, especially that you have given yourself ample room to be on the money, it could be this year or next or in 2022 and the drop could be 10% or 18% or 37%...


1) "- at the end of February I decided to put my house up for sale, which shows that I thought values could well collapse"

What made you think that values could well collapse? You've been bullish on buying houses for a long period and was very curious what made you think that house values could well collapse (and change your belief from your previous outlook).

2) "I did not counter it either, because, genuinely I don't believe anymore that house values will crash, they may go down, maybe 10% but I'd rather stay where I am for that dip."

What made you change your outlook again on house values, and that you think that now they will only go down say 10%?

When the facts change, people do change their perspectives. Just wanted to know what facts changed or did you become aware of (or see in new light) for you to change your perspective
1) from strongly positive to negative
2) from negative to slightly positive

As you know, property is a long game ...

Hi CN,

1) My view on house values became bearish when I thought there was a real chance CV would spread into NZ and the government could shut borders and enforce a lockdown like in other countries. I concluded that many kiwi businesses would hit the wall which means many layoffs, loss of income for business owners and many employees which would lead to very few buyers and many sellers as some would struggle to meet their mortgage payments.
2) My view changed again when the NZ government introduced significant employee subsidies and the RBNZ lowered the OCR to 0.25%, gave banks an 80% guarantee for new loans, provided support for businesses with mortgage holidays and pumped significant money into the the economy with bond buybacks (= quantitative easing). These interventions negated many of the downsides of point 1) in my opinion.

On balance, I think there is still downside for house prices but not a collapse, maybe 10% which to me is not reason enough to sell my house. I hope that explains my views

Thank you for explaining your thought process.

There is certainly a wide range of perspectives with respect to the future outlook of the economy

1) V shaped recovery
2) Swoosh or tick shaped recovery
3) U shaped recovery
4) L shaped recovery

Depending on which viewpoint they have on the type of economic recovery will influence their expectations of prospective returns on property.

What we are waiting for is the impact on sales and prices throughout lockdown and once the economic consequences of a slowing world economy and a global recession are seen. There are houses being listed for sale daily Through the lockdown, which could indicate possible financial hardship. Normal activity took place through most of March but I wonder how many of those sales will be completed if lockdown is extended. Interesting conversations on twitter where tenants have given notice to move to another rental. Can’t move because of lockdown so are having to pay 2 lots of rent.


Nope, this specific thread is not about the future, it's a about accountability for a prediction that was made 6 months ago with results coming in yesterday. You're simply shifting the goal posts to avoid the subject at hand

Not really bothered about the thread, that’s all in the past, but well done on your prediction. Only thing that matters now is what happens going forward across all asset prices. We are in unprecedented times and country anywhere has a plan to get us out of this. Protect yourselves as best you can before the mayday alert goes out.

Congrats on your prediction Yvil!

Any other commentators like their ego puffed up a little? Just leave your requests below.

I believe the ego buffing needs to be earned, in the form of a prediction with a specific timeframe (not "house prices are going to go down"), which then comes true at the predicted time.

- calling repeatedly for interest rates to go down for the last 4 1/2 years, at a time when most were calling for inflation to rise causing the OCR to rise
- calling that the RBNZ will cut the OCR in August by 0.5%
- following the OCR August cut, predicting that 2 year interest rates will be at 3.49% by end of September, getting the trifecta of the term, the rate and the date correct
- and yes, calling in Sept 2019 for house values to reach a new all-time high in March 2020

I missed them, thanks Pacman

Saw the article, too busy (whilst on lockdown) to read the comments. Doesn’t pass the sniff test.

Record prices on the back of exceptionally high proportion of high end sales.
Don't gloat until the HPI is released.

I get the feeling that, no matter the subject, you will struggle to ever admit someone else being right, Nymad

I get the feeling that you will never learn that Barfoot & Thompson represent only ~33% of the market and by their own press release told us why their March results were biased upwards.

So, save your gloating until we see the robust, market wide figures.

Yvil, congratulations on being smart - smart in the sense of Andrewj's comments further up :)

Thanks for the backhanded compliment, I think you refer to AJ's comment on "pure luck", I invite you to make public several specific projections (see above 10:16) and find out how "lucky" you will get

Why don't you make a few more and we'll see how "smart" you are?

No need to wait, you can "see how smart I am" (your quote), right now:

- calling repeatedly for interest rates to go down for the last 4 1/2 years, at a time when most were calling for inflation to rise causing the OCR to rise
- calling that the RBNZ will cut the OCR in August by 0.5%
- following the OCR August cut, predicting that 2 year interest rates will be at 3.49% by end of September, getting the trifecta of the term, the rate and the date correct
- and yes, calling in Sept 2019 for house values to reach a new all-time high in March 2020

As I have said before, predictions are a waste of time. There is good research out there that shows even experts in their field are wrong most of the time. Risk management is what you should be doing. What are the key risks and how can you position yourself to minimise these?

For example, my investments are setup to balance liquidity, inflation-hedging, deflation-hedging, long-term growth based on the risks and is re-balanced periodically. It is set by long-term goals so has not changed in the last few weeks - over a long period, the likelihood of market crashes and black swans approaches 100% so are factored into the thinking. I take no pleasure in guessing right, only in the getting the right outcomes.

Kiwimm, YOU ask me to make some more predictions to see "how smart I am" (your words), I then give you several examples of correct predictions I made in the past so you:

1) Be a good sport and admit my predictions were right ? Nope
2) You actually say, after asking me to make predictions: "predictions are a waste of time". You completely contradict yourself and display your lack of integrity

There were calls for beers your way.

Darn, sorry I missed it, we can all do with a nice cool beer I think

Hi Yvil, not surprising as even stock market was touching and had touched new high in February and housing market too touched a new high in March as per B&T (Housing market is not as fast as stock market in reacting so lags by a month or two as stock market is highly liquid unlike housing sector which is illiquid, specially during downturn).

So housing market in march was where stock market was in february and in future month housing market will be where stock market is today.

In today,'s siituation no one need any convincing or argument as writting is on the wall on the direction of housing market going future.

Some may not understand being ignorant or may be by the very nature of being stupid and is best to ignore both.

Nothing is surprising in hindsight Stuart, (you're quoting February stock market and housing) try making a prediction against the grain 6 months ahead of time with a specific timeline for the prediction to come true.

Hindsight for February yeah but not now with everything falling all over the world.

Economy will be down, going future for some months to come, if not year depending how soon, we all come out of this situation AND if for any reason all this lockdown extends to May or June, we are looking at deep recession and one does not have to be an expert to predict it.

As of now, anyone predecting that house market will be immune to everything tumbling around is ignorant or stupid. In 6 months time house market will be down and is not a question of when but how fast and how much it will fall.

You said a week or two ago that you are going by the HPI measure, right???
I am ready to congratulate you though. However it is all a bit irrelevant now.

Thanks Fritz, we'll find out about the HPI mid month

The next question is whether this will be as high as prices ever go.
Certainly it seems unlikely that prices will go any higher over the next 2-3 years.
How much lower they go is the question.

Nothing like a bit of Fig Jam on toast for breakfast

Hi Yvil,

was your forecast for record median prices in Auckland, or all of NZ?
Record median prices have been driven in last 4 months, by record lending due to record low interest rates.
ie credit leverage and credit bubble. As even you must realise, this is now OVER.
Prices depend on banks extending ever more credit to ever fewer buyers. This plainly is NOT sustainable, ie must end.
It just did. If you read what is happening in USA right now, about15 million foreclosures are coming down the pipe.
ALL banks will tighten credit criteria.
This is the end of a 75 year credit cycle and that will not be returning anytime soon.
By the way, my forecast was for prices to start declining in March/April 2020 and for them to fall (in Auckland) by 25% (for the median) to $670k, by end of 2021.
That forecast stands, in fact it looks optimistic.
That forecast was, try not to laugh before you read the source, on astrologer called Andre Barbault, and rests on his book called "Planetary Cycles" published in 2014 in French and in 2016 in English. He predicted that focus of planetary cycles in Jan-March 2020 especially of Saturn with Pluto and Uranus with Neptune, would bring chaos esp to EU unless it were a pandemic. He uses that precise word. I have not sourced my forecast previously because of predictable derision from folks who know nothing about astrology and it takes a long time to learn (about 35 years in fact) Barbault forecast the fall of USSR for 1989-91, in 1954. Yes, correct forecast 35 years ahead.
This is going to be a long haul.
Many world economies will collapse and credit will not return to its prev role.
We are going to have a Great Depression until at least 2025.
This aint no party, this aint no disco, this aint no falling around, as Talking Heads put it.
ANZ currently share price down 45% on 6m ago. Share price rests on equity, 60% of which is Australian housing. What do you think is going to happen to that equity?
That is enough for now. Cue mass derision

Strange post Mike,
First you state that the record March high prices are due to cheap and plentiful credit, well yes of course, yet somehow it seems I was the only one who saw that coming… hence my prediction.
Then you start talking about the future which is not the topic of this thread at all, I guess in an attempt to avoid addressing my prediction.
So was this an admission of some sorts that my prediction was correct?

Your thread was about record high in prices
I asked if you referred to Auckland or whole of NZ, no reply.
Also, as BT only covers Auckland and only 30% of market, it is a bit premature.
Did they give a median sale price for Auckland?
Was it over the $900k in March 2017?
I looked for that info but could not see it.
Also, "thread" between you and I is, as I understand it: what will happen to prices and by when.
You forecast record (where?) by March 2020.
I forecast that prices would fall by 25% PEAK to trough, by end of 2021.
That means, median price in Auckland falling 25% from $900k, not the REINZ HPI etc.
Which means falling to $675k
I stand by that

FromB&T' article:
The agency set new records for both average and median selling prices in March, with the average selling price of $993,528 coming in well above the previous record of $968,570 set in March 2017.
The median selling price was $925,000, topping the previous record of $900,000 also set in March 2017.

So yes both average and median are over March 2017 record.
Somehow I'm still not holding my breath for any kind of admission from you, that my prediction was any good

Vindication will have to wait til REINZ states that in March median was over $900k

to borrow a phrase from John McEnroe....are you serious?

In fact it is : "you cannot be serious man, the ball was clearly in, chalk flew up.."
And yes I am deadly serious

I was wondering if was the same record high the lifetime drug addict reaches right before the overdose kills him.

Hey I got a mention, thanks! Yes well done on another good guess, even if it's of a completely different metric.

Everything should have been properly frozen during the four week lockdown. This isn't the time for businesses to be reorganising and culling staff. In fact there should be harsh penalties for anyone doing this up to and including imprisonment.

At the same time all staff who cannot work should use up their leave. The leave of staff who do work should be transferred to those that cannot. Just to cover the four weeks. This would be a nice way for all workers throughout the country to help each other and to help businesses.

The lockdown should not be extended but should be vigorously enforced and people forcefully quarantined. Those that flagrantly break quarantine rules should be punished with fairly heavy fines, confiscation of vehicles or even imprisonment if they lack the ability to pay.

After the four week period everyone goes back to work and we manage it as best we can with everyone keeping their distance and wearing masks for the time being. This should be communicated to everyone. There will be no extension of the lockdown so make it work as this is your only opportunity. None of this not knowing how long it is going to go on for.


I don't even know where to start with this. How does one transfer leave from one employee to another? Why should someone who slogged their guts out for 11 months straight underwrite someone who worked 4 day weeks? Are you aware that leave has to be paid out, in some cases, at an average daily rate, which would significantly increase costs for some payrolls? When you say 'everything should have been frozen' does that include overheads? Commercial rents? How long will businesses have to spend unpicking all these ad-hoc changes once they actually get back to work? I'd rather they focused on trading and getting their employees back to 100% of their earnings where possible.

Grand, seemingly-simple ideas often are the total opposite. That's why this is causing so many issues in the first place.


Lots of little dictators with easy solutions coming out of the woodwork. Best to ignore them.

Have you not noticed Jacinda currently has you under house arrest?

My solution, while a bit fascist, is to ensure this finishes quickly with the least amount of damage possible.

Your solution is not a solution. It would require sweeping changes to payroll systems, employment laws and require significant reimbursement to people whose leave you have taken to pay someone else. Your solution would do almost as much damage as the lockdown.

All staff using up all their leave would lead to economic collapse? Also that was only a small part of my "solution".

Staff using annual leave at an average daily rate is going to be significantly more expensive for payrolls than paying 80% of their base, which is the current defacto for anyone accessing the wage subsidy.

Companies want the leave used up though as it is a cost to them on the books. But good to see a counter comment that is less emotional. However I see this as a small part of my solution. I want the lockdown to last no more than four weeks. After that we return to "normal" and manage things better.

I don't think the government have any end game plan - and that is a problem - they haven't defined what "victory" looks like. The country could get to the end of the 4 week lock-down and still be no further ahead.

I did see that - WTF - no plan B. Still vague - they are making an assumption that the measures put in place will work. At some point they may have to admit defeat. Then what.......

And to complicate things

This could take some time.

As ill-qualified for the task as our Prime Minister and senior Ministers may be, I'll certainly listen to them over you and your confidently insane ramblings.

House arrest -That's a bit harsh Zach.
Singapore defeated the 1st wave with an obedient populace. China by basically rounding everyone up and locking the door and then running a regular bring out your dead service.

Yet Kiwis are going stir crazy after a week. Swimming, surfing, long rides and that's just part of my foolish extended family and friends All minor stuff pushing against the envelope I know but trying to reinforce self isolation.
Surfing, its 5 mins of wipeout and then 30 mins on the beach comparing budget smugglers before we all head back to Blitzs dunga for shall we say some "coffees"

"slogged their guts out for 11 months straight" hyperbole much?

The gist of my comment is really, no lay offs, everyone use up leave, strict enforcement, but the most important part, certainty in the date we finish the lockdown.

No, not really hyperbole. There are plenty of places where you have limited opportunities for time off and a lot of those people take it after the end of the financial year. So I ask you, why should I be forced to transfer the leave I've accrued through working without a significant period of time off to someone who has worked less? Am I going to be compensated for this? Who by? Payroll systems generally do not let you transfer leave from one person to another. Who is going to add that capability? How do I accrue leave values if they can be transferred to different people and then paid out at different rates? Again, you haven't addressed the fact that in many cases, paying leave is more expensive than paying someone their base salary.

I wonder if they discussed leave entitlements when the Titanic was going down? "Sorry Captain, can't man the lifeboats I'm on leave today", or, "I know we have a big gash in the side of the ship but what about my leave?"

So if a business folds post- or during-lockdown, you want people to have nothing paid out to them in unused leave because you've forcefully redistributed it to someone else?

Like think about this for just a second, you are literally putting people in a position where they could face leaving an organisation with almost literally nothing as they walk out the door. Or do I get someone else's annual leave paid out to me from another company when my company folds because someone made sweeping simplistic statements without a hint of understanding about the ramifications of doing so, all the while decrying the same of the lockdown?


I dont know about anyone elses business but we had not long paid out all holiday pay over the new year. Then of course no work was done over summer break. Then there were several stats. We have reserves for this. But feb march april is a time we play catch up before the shit weather hits and production slows again.
So two things. Basically there was no holiday pay to pay out. And everyone had just had a whole lot of leave, we are production based. No work no income. That leaves businesses like ours in a delicate position in ordinary times.

It sounded good until thinking about the jobs they go back to - restaurants, tourism, renting properties and selling cars to foreign students, importing and selling items from locked down countries - I'm still reeling from thinking about the fate of those Bengali garment workers.
The Cook Islands has no cases of Covid-19 but their economy has been smashed - without NZ govt support is it back to the stone age? And if so without Australia/USA support is it back to the stone age for NZ?

Taiwan, Japan and South Korea seem to be able to do it. There should be changes in the way we do things. Separated tables at restaurants, limits of guests, temperature readings, masks and face shields worn by staff.

Why don't we go full NBC suit........

Because it is unnecessary?

But how do we know it is unnecessary. You just can't be to careful you know....

Anyone who is well prepared should have an NBC suit.

The UK government press conference today stated an intention to issue antibody certificates once the antibody tests are proven effective and rolled out. There are probably way more people worldwide, than we have captured in current data, who have already had the virus and have some immunity. Obviously, scientists are scrambling to produce data on that, but I think this will be one of the ways we can get out of the lockdowns sooner and we won't all just be waiting for a vaccine.

*test for antibodies
*issues official certificates that you are immune
*get those people to work wherever they are needed to support everyone else during the crisis

I don't trust the Chinese data at all so am not comfortable extrapolating from that. However, I am inclined to trust the German data. Germany have the greatest testing and diagnostic capacity in Europe with companies like Roche (there is no point everyone keep ranting about how not enough tests are being done and comparing other countries to Germany and South Korea, when a lot of countries simply do not have capacity and resources to test in the same way, they are having to build them up from a very low base. Germany and South Korea were increasing capacity from an existing higher base).

But yeah, so lets trust German data. When they had 78k cases they had around 580 dead. When Italy had 580 cases (around March 10th) they were only reporting 10-11k cases. But they weren't able to do anywhere near the number of tests that Germany are.
I think its a credible assertion to suggest that Italy had x7 or x8 the number of reported cases back on March the 10th and that Germany has managed to flatten their curve more successfully just on the basis of having better insight into where their cases were. Germany's critical numbers are still ramping up, so they haven't peaked yet. In general though, they also have better treatment capacity than the rest of Europe too. However, the whole globe decided to globalise and become as specialised as they did. Whether you have an existing industry that is useful during their crisis is partly luck.

Best comment on this entire thread, GN. Take a bow. I'm of the exact same opinion re asymtomatic folks, now recovered, tested with antigen, issued certificate, back to productive work.

The tricky bit: working at What? Because there's a whole swag of 'jobs' (everyone has their favourite list) which are - shall we say - MakeWork.

Vaccines will take too long. To limit financial ruin we need to establish herd immunity ASAP while providing good treatment for everyone who gets seriously sick in the process. That means training up 10's of thousands as best as possible to help in looking after patients, and building huge amount of surge hospital capacity - 20-50x current number of ventilators if New York is anything to go by. That would be most cost effective way for govt to spend it's money, and focus on industries that will still be viable in a year when world is poor - agriculture, not tourism or foreign students. Build Oslow pumped storage and 4 lane some state highways.

Waymad, yes that's the big question really. We have for several decades lost skills and talent in favour of... how shall I refer to it... decadence and asset inflation?

We cannot afford decadence in the short term. We need functionality. At a guess, it might be some time before tourism and hospo industries recover. Like after the wars, they will be dead in the short to medium term, and then at some point they will enter into some kind of golden age (like after the wars) when people finally feel safe to relax and travel again. So all those people need alternative work for the next 1-5 years.

So if we are playing fantasy re-building NZ after Covid-19 then here is mine; I am of the opinion that NZ has a wholly insufficient infrastructure, but as a small and nimble country, could use this crisis to borrow big (every government will be borrowing their way out of this anyway) but borrow constructively in a way that will eventually pay back in improved productivity and efficiency..... spend big on infrastructure projects that increase energy sustainability and efficiency (entire nationwide electric car infrastructure, solar panels on everything for example). Get all the tradies back into work ASAP. Get universities back to work training ASAP essential courses, we need more doctors, nurses, engineers, scientists, farmers and technologists of all kinds. The economic devastation of this is baked in. It's unavoidable. So why not take this opportunity to turn NZ around, make it a small cutting edge nation rather than just a tourist destination? We do also need to send bodies to support all the other essential industries, farming especially. I would like to see farming returned to NZ ownership, writing down of farmers debt and government incentives for sustainable farming initiatives. And for farming to be more diverse and less concentrated.

A girl can dream.

With the mass casualisation of the workforce over the last decade, it's no surprise so many are unemployed. Casual workers (or "self employed" contractors) are first to go...

Gold suckers rally. Beware folks!

Can you tell us when it will hit USD$800?

More than $800 over spot price for physical, if you can find it that is.
One kilo of silver on Trademe $2000, double spot price.

Yes I hope your right I will be loading up.

I'm seeing this anti China sentiment being pushed and China has been stacking gold to take on the US.
If gold goes up and the USD down China becomes the new power house of money. So the US needs to keep gold down and not let it explode higher and even destroy it completely. Am I on the right track?
Can you post a link to explain your train of thought.

I don't think this is right, the US holds more gold than any other country be a long way, in terms of reserves.

If the gold price goes up, the US is in an even better position...

Deepest recession on record says Bank of America. Unfortunately the talk is being walked with those horrendous jobless claims..

But the DOW is up for now
I am guessing some businesses will be happy to fire everyone and rehire them on lower rates???
Even that magazine company here just closes down after a couple of days to take advantage of the chaos.
Watch carefully in 6 months a lot of people are going to rehired working for less meanwhile the company will be able to lift profits in 3 years time.
The governmnet needs to watch carefully who is taking advantage of this market.

Who will buy their goods and services, then?

There is a divergence of perspectives on the future outlook of the US economy

1) V shaped recovery
2) Swoosh shaped recovery (tick shaped)
3) U shaped recovery
4) L shaped recovery

Those believers of the V shaped recovery are the most optimistic
Those believers of the L shaped recovery are the most pessimistic.

Which perspective will ultimately be correct?

Similarly, the same set of economic scenarios are being applied to the NZ economy.

How is L a recovery? That's like saying the guy recovered from his fall off the building by hitting the ground.

You're right. I suppose that is the deep prolonged recession scenario (or Depression) scenario where it takes a long time for the economy to recovery ..

Experienced the Asian Financial Crisis in 1998 firsthand. There was deflation in some places from 1998 to 2003 - about 5 years before bottoming.

Ah so more like a cursive L

Good news potentially. Not so good news for the Democrats if Trumps ‘let’s try it because we have nothing to lose’ strategy works.

Some French doctors have been using the hydroxy whatsit and another drug in combination. 1677 treated only 2 deaths (0.12%). Pretty encouraging:

David, what doe this look like per capita, and how does it compare to the Great Depression? I know this is difficult to measure, as labour markets bust wide open after WWII, but 6 million doesn't mean much to me because I don't know the size of the labour market in the US

The US unemployment "jobless" rate was 3.5% in February. Based on just the last two weeks of initial unemployment claims from those that could actually register as the state systems are overloaded they now estimate it to be 10% in April. As I type this message more states here have just announced total lock downs so more people will be registering in the days and weeks to come. Estimates are we will hit 25% unemployed in May.

Anyone thinking about magnitude and rate of rising unemployment in the US with respect to estimating the potential unemployment numbers in NZ?

BNZ estimated 9% unemployment, yet might that seem low in context of yesterday's data point coming out of US? The most recent unemployment rate before any virus impact was 4.0%.

The high number of work visa people in NZ makes any estimate of unemployment difficult. There are reportedly 200K in this category not eligible for direct welfare support (outside the wage subsidy regime) and it's hard to know how they will react. I just reviewed a touching email from a migrant worker sponsored by one of our businesses in which this high calibre person is offering to take a pay cut to preserve their job. A return to shitholesville is for them a horrifying prospect yet that'll be the reality for many.

Many in Queenstown are sharing a bed, double shift wise.
The hole might be closer than you think.

Yes, there'll be few places to go for visa workers previously employed in tourism or hospo. An underground cash slave labour market may develop such as that for Mexicans in the USA but in a much smaller more homogenous society such as ours this will be limited. The govt has also been clear that jobs in the recession must go to kiwis so a mass exodus looks inevitable.

Heard that some Queenstown workers have some work in the vineyards.

Also others in the Bay of Plenty area might find work in the kiwifruit industry.

"In fact in those four weeks 6.9% of their employed workforce has applied for jobless relief"

David, which news outlet states there is an agreement between Saudi’s and the Russians? I’d like to find out more.

“ The US President has managed to get the Russians and Saudis to agree on output cuts.”

I can only find conflicting info that there isn’t a deal yet just talks to take place?

Fake news from the Twitter in Chief, debunked by the Russians, bought buy the markets. Who cares about facts anymore. Bullish!

The US President has managed to get the Russians and Saudis to agree on output cuts. How this helps the average American is unclear, but it may help their domestic oil companies, the Saudis and the Russians.

In other words Trump got on the phone and said.
You heard me say that there was a sneeky attack planned against us, we will false flag it and bomb their oil wells flat. Your call.

"After giving informed consent, they were assigned at random to either the hydroxychloroquine or the control group. ...Coughing and fever eased a day or so earlier in the patients who received hydroxychloroquine, and pneumonia improved in 25 of 31, as opposed to 17 of 31 in the controls.

The illness turned severe in four patients — all in the control group."

"“Together with aspirin, it’s probably the most used medicine in human history. Billions of people have taken this medicine. And it costs nothing: 10 cents a tablet.”

Find a Dr not taking it.
+ the virals others

"The American mortgage industry is bracing for as many as 15 mln mortgage holders who stop making payments on their loans, the biggest wave of delinquencies ever. Falling mortgage interest rates mean nothing in a sector grinding to a halt."

Still RE Agents in NZ are trying to create FOMO by propagandize that shortage of supply and low interest rate will avoid any downturn in Housing market in NZ.

Thick Skin..... not realizing that what is halpening now has never happened before and the damage to economy will be such that many are not even able to imagine just like in January who could have imagined that the entire will come to a full stop with so much uncertaninty and helplesness.

We have had panedemic in past also but the world did not come to a screeching halt - Similary we have had recession / downturn in past also but........

So comparison with earlier event are meaingless in current situation (Though can use as guide as have no other options) and will only know the carnage that has been caused after the event which hopefully comes soon but seems will take time as at present no one in the world is able to forcast When and How it will end.


Yeah, the old "shortage of supply" argument thrown around.

We have probably 50k (it was over 40k in 2018) AirBnB properties in NZ. We no longer have the tourists to occupy them. We have 7% empty homes in Auckland, potentially a similar percentage around the country.

Let's see if it's really a shortage of supply, or just a mis-allocation of resources.

Over 4000 in Queenstown alone, a town that will crash in a spectacular way along with Wanaka.

Cancel all work visas and that will be the end of the housing shortages and take care of a lot of the unemployment.
End all foreign ownership right now before China goes on a buying spree here.

This may be the reason that property owners hold on.

Property investors have been conditioned to believe that house prices do not fall by much. This was a similar belief that lead to the property price bubble in the US in 2006. I also recall the housing shortage argument being repeated in the US before prices fell and the willingness to take on large amounts of debt to finance the purchase.

If property prices fall by 20%, then the property owners may question their belief whether there is a housing shortage in light of that price move.

After all a 20% price fall, isn't consistent with a housing shortage, and strong underlying demand.

Prices can be a feedback loop.

Here is what the government department was saying about the housing shortage in Las Vegas . Note that this estimate is for underlying demand and not effective demand.

Housing shortage in Las Vegas area as estimated by government department as at January 1, 2006

The sales market continues to be tight. Although single-family construction and condominium conversions have increased supplies, sales prices have continued to increase dramatically since 2004. Due to the limited supply and high cost of buildable land and the expectations of increasingly stronger demand, the shortage of new homes is expected to continue during the forecast period.

Overall, the Las Vegas economy has been growing rapidly, and this growth is forecast to continue. During the 3-year forecast period, demand is expected for approximately 88,000 units of new sales housing and 18,000 new rental units.

Source: US Department of Housing and Urban Development - Policy and Development Research - Analysis of the Las Vegas, Nevada Housing Market - As of January 1, 2006

Also refer to this article about the US market -

This one about Ireland and the housing shortage there as written in January 2007. Note that they are referring to underlying housing shortage and not effective housing demand and effective housing supply

The shortfall of housing supply within the Dublin area is set to continue despite a record level of house construction in 2006, according to the latest AIB housing market report.

This is going to be hilarious. The market has no doubt reacted to this shortage of rental/housing stock by building more, hence 12 month consents recently hit a 45 year high.

Take 40k houses out of the market for another purpose. Market builds 40k houses to compensate. Put 40k houses back into the market......I hope there's 40k homeless families (120k people?) that can move out from their bridges/cars into this re-acquired stock. What of the 200k work visas issued each year? What happens to those properties if these people return home? Oh dear.

We have to hope that one or two of these promising medicines work out in the very near future, and are produced en masse. That would help get us out of lockdown.

Here we are again, market crash Friday.

Stimulus will for a time sustain scores of uneconomic enterprises, at the cost of prolonging the workout process. Nonetheless, with Bubbles popping in shale, technology, leisure and entertainment and elsewhere, millions of job losses will prove permanent.
Negative wealth effects will also wreak havoc on consumer spending patterns.
Every segment of the economy will be impacted – many deeply. Expectations for a quick recovery are wishful thinking. And I doubt it will be possible for the Fed and global central bankers to step back from market liquidity support operations. We should not be surprised by ongoing weekly Fed balance sheet growth of several hundred billion. Household, business and market confidence have been shaken – and will be slow to recover.
..the markets: markets will do what markets do. And global market dynamics are incredibly unsound.
The U.S. economy is in trouble. Europe is in greater trouble. EM economies face a disastrous combination of financial and economic hardship. And just as China moves to restart its economy, the massive Chinese export sector is confronting collapsing global demand
(Etc Etc Etc...)

If suppression is not successful the coalition will be forced to make a trade-off decision between deaths of the elderly and those with co-morbidities, and the extreme social costs of extending the full lockdown. We have one 4 week shot only at suppression. The princess appears to be moving from dressing in St Teresa white to more sombre hued dark colours and her supporter MSM acolytes are printing fewer photographs of her in their articles. We impressionable social media children are now being conditioned in case of failure.


Failure was baked in when she left arrivals quarantined and people mixing in supermarkets - wasting the opportunity to really quell the outbreak.

Yes, I'll not forget her treating recent international traveller Patrick Gower's public sniffles as a joking matter at the same time her government was aware NZ was facing a mortal threat from this highly contagious virus. They knew that countries such as Singapore had imposed tight controls yet dithered during that critical early period.

Here is a Guardian item on Trump

What's NZ any different.

US equity markets recorded a seven-sigma move last week. Under a normal distribution, the expected occurrence of this event is equal to one day in 3,105,395,365 years, a period almost five times longer than complex lifeforms have existed on planet. Clearly, we are not assessing these probabilities correctly. Not only has risk been misgauged due to the prior decade of financial repression surpassing volatility and spurring complacency, but the assumptions upon which we build our asset allocations are wrong and vastly understate true risk.
We are probably nearing peak panic, but that does not necessarily coincide with the market bottoming.
We are in uncharted waters with respect to both the global public health crisis and financial market conditions: hence the heightened cross-asset volatility. To have real confidence in a relief rally, volatility must reset meaningfully lower.


If our scientists do not know, nor our politicians, then we are flying blind. Titanic [overconfident] ,Mt Erebus?
How long before we disagree with authorities about what destruction they are bringing to our lives?
"Science was plainly suffering herd disagreement – leaving politicians floundering. For the present, all we know is that the world is conducting a massive real-time experiment in state authority."

Just had a look at rentals on TradeMe. Lots of crappy one bed apartments in Auckland’s CBD listed at $400 to $500. Good luck landlords is all I can say. Those rents will need to come down at least 30% to have any chance of letting.

If I were a landlord, I would drop my rate intially to secure tenants to try and bet the race to the bottom. Take the short term hit to ensure your place is tenanted. 30% reduction is better than 100% reduction

Scary times - this is the second time in a week I have found myself strongly agreeing with a Hosking column...

Ha! - Yes, the Hosk is onto it this time. I share your feeling of surprise when listening to Robertson. I can no longer abide his leaders word stew hyperbolic ('go-first go-hard', ah, no, neither, 'gold plated response' ,the evidence says bollocks) presentations but the finance ministers calmly thoughtful style is impressing me.

Peter Schiff (goldbug alert...) likens the current kerfuffle to the Other side of a big, scary hurricane. He thinks 2007-10 was the leading edge, 2010-20 was the Eye, and now there's the Other Edge. Batten yer hatches, she's gonna be a wild ride.

This [the notion that we just flick the Big Economy Switch to ON and we're Fine] is all wishful thinking. It’s all part of the delusion. It’s not going to be fine. Because it wasn’t fine before the crisis. We didn’t have a solid economy. We had a bubble. That’s the problem. And the bubble has been pricked. There is no way to go back to where we were. It’s like trying to unscramble an egg. It can’t be done.

As the old saw goes - ye can make fish soup from an aquarium, but ye cannae make an aquarium outta fish soup......

Really the shock for me was not so much the virus but the complete lack of stamina in our economy. Seriously can we not even shutdown for a month without the wheels falling off ? I will admit the problem is likely to be that companies see the lockdown being extended but really there has been total failure in trying to keep a cool head during a crisis. Basically our economy was a like a strung out junkie who has spent all his cash.

Great points.

If the economy goes into a deep prolonged recession with high unemployment for a long period of time, then the psyche of a generation may change with respect to debt.

The Depression of the 1930's changed the psyche of one, if not two generations. Some people may recall the experiences of relatives who experienced the Depression and they subsequently had cash for a rainy day.

When lockdown ceases, fatalities will increase as elimination is likely to fail.
Hooten in NZ Herald today:"If offshore experience with Covid-19 is instructive, around 90 per cent of our fatalities would be people aged 60 or over, with the death rate rising starkly for people over 80." Reality already is Ozzy and NZ health systems are already bracing themselves for having to choose young over old,[according to my friends in the field]. It becomes a public decision really whether we overload the young with massive debt or become realistic about letting older ones go in the face of the option to relinquish lockdown.Let's not leave it to JA.

Re oil: the current situation is one of super-contango, and those likely to make super-profits are tanker and storage operators. Hope we've ordered enough to top off our local storage.....or get about building and filling some more.....

There are currently 170 bln dollars held by resident New Zealanders in Term deposit accounts. That means it is surplus to day to day requirements for those people. Many of whom will be retired and living off interest and or still working or running businesses to supplement national superannuation. The New Zealand government can no longer preserve the capital of individuals so they may leave inheritances to their families. The money must be spent to maintain lifestyles and stimulate the economy.

Also people's gold, shares, investment properties, boats, holiday homes, art works, stamp collections?

Edit: I got a lot of flak about people giving up leave earlier but you seem to be getting a free pass for suggesting outright Red Guards style theft. Or are you suggesting an inheritance tax of some sort? Or are you suggesting people should be forced to spend term deposits before receiving superannuation?

You highlight a socialist dilemma - it's OK if govt thieves assets off the wealthy for redistribution to those deemed needy but not OK if workers are required to make similar sacrifices.

Social democracy is not socialism.
And taxation is not theft
What would you have pay for education, NHS, roads, law and order, clean air, environmental legislation, etc?
NZ has pretty low tax for an OECD country anyway.

Good value Joe Rogan

With a good Dr Hotez.
Good message for the 20 to 45year olds.
And the pills

JRE is always a good listen

Media. Trump says..... Well i guess if what Trump says so quickly becomes enshrined as fact, then were all going to be ok.
Kremlin says no talks with Saudi Arabia happened, after Trump’s tweets claim Moscow and Riyadh will cut oil production
The article, from rt, is interesting, to say the least. The Kremlin deny any such conversations took place, and there is most certainly no agreement to cut oil production. And yet we can all see that in fact the price of oil went up. It would seem that the disconnect between east and west, between actual, and reported is growing wider every day. Price discovery has fast become pointless. Like gold. Try buying some gold today for the apparent spot price. Paper gold (comex and lmba) are what london and New York use to manipulate the gold price, and they have been doing so for a long time. Ultimately the paper price of gold gets burned, and the value of the funds with paper gold in their portfolios also go up in smoke.
But don't worry, I'm sure Walt himself will rise from the grave, and pencil some wonderful fantasy to take our minds from that dreadful reality causing so much uncertainty and concern.

Dow will be 17000 by end of April and will not bottom pre 12000, which is likely pre end of August

Your Dow prediction is a guess Mike, the same as everyones opinions including mine. We are yet to see the trajectory of this virus in a modern developed state where it has been effectively let loose. The clown Trump may yet prove to have made in ignorance the best economic call for a continental non island super economy. After the immediate human toll and harrowing scenes that now seem inevitable in the US are traversed, history could well show that in overall net human misery terms herd immunity was the least bad option. The gargantuan flood of QE unleashed in the USA propels us into uncharted territory, rendering unreliable the predictions informed by economic history.

Not a guess. 62% fibannaci retraction series, just like in 2008

Once again, David, thanks. These are such excellent summaries.

Really..2.3 km..hardly far away and not being close to other people, just common sense...many of the rules are ambiguous at best, the rules don't make sense for eg between rural areas with very low population density vs cities and towns.... this is just stupid politics and stupid people blowing this all out of proportion...more important things to worry about