Here's our summary of key economic events overnight that affect New Zealand, with news the policy choices Australia are making are likely to drive a long-term wedge between us.
But first up today, we should note the overnight dairy auction. The most important point to note is that it wasn't negative. Prices rose +1.2% in US dollar terms and were up almost the same in NZ dollar terms. Leading the way was butter with a healthy +4.5% rise and a nine month high. WMP also rose, up +2.1%. Other categories didn't fare so well but these two were enough to bring a rise in overall prices. Perhaps the impact was blunted by low volumes on offer, just on 20,000 tonnes, but that is almost 20% more than we had in April a year ago.
The ILO says that the pandemic is having a catastrophic impact on working hours and earnings, globally. More than 200 mln people have been thrown out of work already and 80% of workers have been affected in some significant way - that more than 2.7 bln people.
In Canada, more than 3 mln people are on job support benefits as their labour market gets crushed. That is 16% of their labour force.
China's foreign currency reserves fell more than expected in March but are still above US$3 tln. They actually used up -US$46 bln in the month when the expectation was that they would fall only half of that. It takes them back to levels last seen in November 2016. (And they didn't add to their modest gold holdings either. Gold makes up only 3% of their official reserves.)
International credit ratings agency Fitch has downgraded all the main Australian banks, taking their AA- ratings to A+. It has done the same with their New Zealand subsidiaries. Fitch says unemployment will spike sharply and remain very elevated relative to pre-pandemic levels even after the recovery is underway. There is no notice yet from the other big two credit rating agencies, Moody's and S&P, but a similar move would not be a surprise now.
But this downgrade action is minor compared to the record wave of downgrade cuts to junk bond issues.
In climate news, the US Government has reported that global levels of methane keep on tracking up to new record levels. And essentially, they don't know why.
There are now 1160 Covid-19 cases identified in New Zealand, with another +54 new cases yesterday and lower than the +67 increase the prior day. That is the lowest daily increase in 13 days. The number of clusters has risen to 10. Only one person has died here. There are only 12 people in hospital with the disease now, but four are now in ICU. 21% of all cases have recovered (25% of all confirmed cases).
Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 1,390,500 and up +81,000 this time yesterday. More than 27% of all cases globally are in the US and they are up +33,000 since yesterday to 380,000. It is a faster rate of increase. China's recovery rate is now 94% and they claim they only have 5300 active cases nationwide now. Wuhan is fully reopen now. Australia has now over 5900 cases, 4800 active, and while the rise in infection is slowing, deaths are not and now exceed 45. It appears Australia is planning to live with the disease rather than eradicate it. And if New Zealand does achieve eradication, that is likely to be a major impediment to normal relations between the two countries for a very long time.
Global deaths now exceed 79,000. Death rates in Europe are frightening and keep on rising; the death rate in the UK has leaped to over 11% of all those infected, now nearly the highest of any country apart from Italy. But they are much lower elsewhere in Europe; in Germany it is only 1.8%. The US rate is up to just on 3.1% and now exceeds 12,000 people. China is holding at 4.0% with 3,300 deaths. Death rates in the rest of Asia are modest by comparison at about 1.4% in their developed countries.
In Australia, and following New Zealand's lead, a banking regulator has written to all banks telling them to cut their dividends.
Yesterday, the RBA held its policy positions at its regular rate review. But it did say it was expecting "large increases in unemployment" soon. The fear of that is spurring their Federal Government to talk about restarting their economy and moving out of lockdown. And SME businesses hurt by the coronavirus economic downturn will be exempted from paying part of their rent, and given at least two years to catch up. That is likely to cause pain for most property investors.
Globally, most equity markets are extending yesterday's rally, but with noticeably less enthusiasm today. The S&P500 is up +1% so far today although larger gains were recorded in Europe overnight
The UST 10yr yield has jumped again to just on 0.74% and a +6 bps rise in a day. Their 2-10 curve is more positive today at +46 bps. Their 1-5 curve is unchanged at +28 bps, and their 3m-10yr curve is also up, to +67 bps. The Aussie Govt 10yr yield is now at 0.95% and a rise of +7 bps. The China Govt 10yr is down -10 bps at 2.52%. The NZ Govt 10 yr yield is up at 1.10% in international markets, a rise of +7 bps in a day.
Gold is down slightly today, dipping by -US$6, to US$1,652/oz.
US oil prices are sharply lower again today at just over US$24/bbl, another -US$1.50 fall. The Brent benchmark is also lower at just over US$32/bbl.
The Kiwi dollar is still rising as the greenback fades, up another +½c to 59.9 USc. On the cross rates we are much softer at 96.7 AUc as the Aussie has risen even more. Against the euro we are holding at 55 euro cents. That means the TWI-5 is at 66.5 and back to the same levels were had two weeks ago.
Bitcoin is now at US$7,357 and up +2% in a day. 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 ».
224 Comments
Bank behaviour is yet to fundamentally change. They clearly still think they are above it all. The aussie regulator's letter will be a request. What will be the consequences if they choose to ignore it? What if their big share holders demand their dividends?
Parallels in NZ with the power companies, with people having had their living standards ripped out from under them, (and business's losing their income streams but still consuming some power) will the Government forego their dividends to support the power consumers? Will they argue they can't afford to? The entire capitalist model on which organisations and business's have been built is beginning to crumble into dust.
Interesting, but foolish analogy.
Especially seeing as last time I checked, the power generators and distribution companies haven't claimed any government assistance and the bs 'winter energy supplement' has been doubled.
So, why should the power companies not pay dividends?
They doubled the payment. Last time I checked, energy costs aren't expected to double.
And 'only beneficiaries' is a dangerous term going forward. Judging by the amount of the workforce being subsidised currently, that could be quite significant going forward.
So you still haven't answered my question as to why you would treat companies standing on their own two feet as if they were companies sucking on the sweet tit of a corporate welfare system.
I would expect energy costs to drop, significantly. I didn't get that question in your comment. But the Government is still the main shareholder of most if not all of the power companies and demands significant dividends from them, same as the major shareholders of banks. But as I indicated a significant portion of the power companies customer base will now be struggling to pay all their bills, so it would be reasonable for the Government to take some pressure off the power companies with respect to expected dividends? This is not handing out welfare per se to them, just giving them the OK to lighten up a little on their customers. After all none of the promises made by the National Government which privatised the power companies, about cheaper power have ever been realised.
...I never said prices were to change. I said the ability to pay has doubled.
So when you say 'power companies', who do you mean? The generators, retailers, or distribution networks?
Cutting dividends from 'power companies' would also imply that many would lose their local trust distribution network dividend.
Cutting dividends from the generators effectively punishes shareholders as it doesn't remunerate them for their risk.
Of course enforcing a no dividend policy is not corporate welfare. That's the point. You are bunching power companies with those who have received corporate welfare.
You've got a pretty topsy-turvy argument here, murray.
I've never suggested they get welfare. I also don't believe the ability to pay has doubled. It has increased somewhat, but doubled?
As to power companies, I mean all whose majority shareholding is the Government, where the payment of a dividend is mandated. I suggest that in this time it is worthy to set aside that dividend requirement to enable power prices to drop. I am talking about looking after the people, not organisations. This is one of the fundamental changes I feel our economy needs to make.
Transmission (Transpower) and local distribution (network companies) are monopolies and regulated by the ComCom. Generation and retail are competitive to a certain degree albeit there are enormous barriers to entry for wholesale. Take a look at the return on capital invested which I haven't done for a few years and it'll give you a fair idea on the level of competition.
I would prefer it if the government put all retirees and beneficiaries on the minimum wage and got rid of all these hang on benefits. The only reason they do it is because they dont want to pay these benefits to kiwis living outside NZ. I dont know why they didn't act on a NZ First draft 18 months ago. I guess all will all will be revealed on election day, whenever that may be.
Mates of ours whose already meagre income dropped by 50% or so, just received notification from Genesis power that the kWh rate will now double. Needless to say, not impressed. This is on top of care for a severely disabled grandchild (needs 24 hour care and medication, can't walk, talk, feed, toilet, do anything and they get no government support for that) - the child of their daughter, a former P addict. Awesome. Some people are really doing it extremely tough now.
Interested to hear more about different policies and outcomes between here and Australia now.
Capitalism is dead … it should be pretty obvious now
There are no viable customers at scale
And scale has been our only workaround
It remains to be seen how long such a major contraction in economic activity can hold...
Govts will try all sorts of prop ups and sleight of hands …. but return on capital is now just a quaint notion
The power companies will be nationalised like everything else
These big 4 Oz/NZ bank downgrades is very very significant.
With the NZ govt printing money and essentially keep employment at an artificially high level at the moment it's a surreal time where we all know that it is only delaying the inevitable which will be a huge sharp shock to NZ. Unemployment will be massive. With all the issues that come with that. House prices will tank.
But don't worry, Goff will increase residential rates in Ak by 4.5% regardless. (Sorry, the Herald link is paywalled).
Agreed about house prices and any other asset but we may dodge a bullet with medium & long term unemployment - when all foreign workers have their work visa disabled there will be about 250,000 available jobs. It will take time to get foreigners back home unless they are going to wealthier countries of origin and it will take time to get wages and accommodation suitable for a Kiwi workforce before fruit picking, carehomes, Uber, fuel stations, etc are staffed by Kiwis. A govt that issues work visas when there are hard working Kiwis looking for work will be in trouble.
Kiwis haven’t taken those jobs because of poor pay and conditions, and often because it doesn’t make sense to e.g. work in Katikati for minimum wage half the year when all your family is in Auckland. I’m all four reducing the number of jobs taken by visa holders when we have mass unemployment, but we have to expect that the consequence will be higher prices and a less ‘competitive’ economy. I’m OK with that, but there will be cries of anguish from the primary sector, construction etc if they have to pay wages that are realistic for actually living in NZ rather than flying in for six months at a time and living ten-to-a-house.
This is why housing and accommodation costs in NZ need to drop. These are the biggest impediment to low wage earners 'getting ahead'.
If there was only some way to keep the billions of profit the commercial banks have been bleeding out of our economy in the hands of New Zealanders instead. We also not to stop handouts to landlords (accommodation supplement).
"Kiwis haven’t taken those jobs because of poor pay and conditions"
How many of those low paying jobs that immigrants currently fill are going to be filled by Kiwis?
1) do the Kiwis have the necessary skills to do the job required?
2) do the Kiwis have the willingness and desire to do the job at the same wage rate currently paid to the immigrants?
3) do the Kiwis have the necessary work ethic (such as reliability, attitude, productivity, etc)
Employers want good hardworking employees. Sometimes that may be an immigrant who is motivated to work, otherwise they face returning to their home country where employment opportunities are poor and even lower paying.
I have relatives who refuse to work unless the hourly rate is adequate. If the hourly rate is too low, then they refuse to work and may prefer a government handout.
Similarly in the UK. Many builders and labourers, cleaners etc in labour intensive jobs are filled by Eastern Europeans, not by the local English. Brexit may mean a shortage of people filling those jobs.
Can employees choose to leave their current employer and establish their own businesses and potentially earn more?
Some people may choose the illusion of stability of employment (businesses are laying off staff), over the risks and rewards of establishing their own business. That is the trade off choice that they make.
"The only winners were the greedy bosses. "
Are employees also winners? They get income to spend on groceries, power, phone, pay for accommodation, transportation, buy a car, spend on entertainment, spend on clothing, takeaways, etc
If businesses do not survive, then they close down and employees are laid off. There are business owners who care about the welfare of their employees.
There is a balance of benefits between providers of labor and capital under the current structure of the economy.
Look at employees who have been laid off as businesses have closed down. Now they have much less income. Some are now unable to pay for accommodation, food. Business managers (bosses) have lost their income, business owners have lost their business, and source of income. Doesn't look like any obvious winners there. For example look at car assembly in NZ, that business has shut down in NZ, and a relative who worked in that industry lost their job. Also apparel manufacturing in NZ, much of it has now closed down and done elsewhere - had relatives working in that industry before losing their jobs and were too near to retirement to retrain. Also the Cadbury factory in Dunedin closed down, and employees lost their jobs there.
If employees want to earn higher amounts, perhaps they should start their own businesses? That is their choice if they want take that route. Otherwise they can choose to remain as an employee, subject to the business economics of their employer. Entirely the choice of the person.
Or are you referring to the income disparity between high income employees and low income employees? That's an entirely different issue.
What would be your solution to the issue that you raise?
Let's focus on what the 'have nots' can do to improve their situation.
1) Can the 'have nots' choose to improve their situation and earn more?
2) Can the 'have nots' choose to upskill themselves to earn more?
3) Can the 'have nots' choose to start their own business?
4) Can the 'have nots' choose to learn important life skills to make better life decisions?
5) Can the 'have nots' choose to learn to be financially literate and about how to handle their money and personal finance more effectively?
People are free to choose. However people are not free to choose the consequences of their choice.
The first choice is do people who are 'have nots' want to improve their situation? And what do they choose to do about it?
Grew up in a renter household in a low socio-economic area, so fully understand starting from below zero, and being a 'have not'. Have been an employee in a few businesses, so understand that also.
People have life choices available to them. Some of the people from school had get up and go, made good life decisions and have become financially independent.
Others had a lack of focus, lack of self motivation, and made some poor life choices.
If the economy goes into a protracted recession, some of the 'haves' might become 'have nots' due to:
1) business closure (e.g Bauer Media, tourism affected businesses) - note job losses also
2) losses on their highly leveraged investments (e.g residential real estate, financial investments, etc)
I totally agree that granting visa to people to work in Burger Fuel and Pizza Hutt is mad. Close them down if they cannot find local work force. But at the same time, NZ minimum wage is already third highest in the world, if the pay rate is what stopping kiwis to take these jobs, I guess $3 more an hour will not do the trick. how much should the minimum wage increase by? and what the impact of that increase will be on the job hierarchy (as more skilled people will want to keep the same distance with minimum wage as they do now) and the cost of the finished goods or services to the consumer?
It's not just pay but also flexibility. Who hires a Kiwi who might want the breaks they're entitled to, the odd day off, perhaps some occasional flexibility in shifts, when instead they can just hire someone who will work however many hours they're asked to (and only record the allowed amount, of course) while accepting that they can't ask for too much else...their visa depends on it. That's what I hear from inside accounts of the Auckland hospitality scene, anyway.
I honestly do not think the kind of business practices that you are describing will be around if there are no migrants to exploit. So they will either do more work themselves or close down. Both very good outcomes and valid reasons for a stronger control over immigration. However, stopping the immigration wont increase the job uptake by kiwis for reasons explained (these "businesses" are parasites who will die once deprived of bodies. So they will be killed (good) but their death will not increase Kiwi employment (the point of discussion).
" granting visa to people to work in Burger Fuel and Pizza Hutt is mad" true that. Though INZ doesn't care if an Indian civil engineer ends up flipping burgers after exhausting his job-seeking visa. NZ's immigration economy needs people, and it is more about quantity than quality.
Not point doing a job if it's not enough to afford to live in your own country. So do wages rise for those jobs, or does the cost/price of living fall? (houses, other general expenses?) And if those other costs fall (e.g. electricity, insurance, consumer items) do we find ourselves in a nasty deflationary cycle?
Having attempted to squeeze blood from a stone the last 5 years or so, now we will start to see what's real, what is sustainable. And perhaps the lifestyle that some/many were living was a bit of a fantasy (young Mums driving Range Rovers on the school run with the kids.. etc)
This just in from Martin North on Australia’s house prices. 60% probability of 30% to 45% drop in house prices over the next 24-36 months. 8.75% to 10% unemployment. Bail in and bail outs coming to the banking system. Undated and broadcast last night on his “walk the world” youtube channel.
Cashed up or not, if a returning kiwi has seen properly built houses in different countries for 30 to 50% of NZ prices there is no way they will buy until 50% is wiped off the cardboard boxes we call homes over here. NZ is the only country in the world that tells the story of the 2 little pigs, because solid brick houses are so rare.
2021 reckoning onward, '.. either you with us.. or with them..' - watch it in slomo, you can make this affiliations as: countries, money/investment, Capitalist, Socialism, Neoliberal, .. hope NZ will start to realise what they have been ushered into.. the past 30years. But honestly? we are too deep into it, ask every politicians, economist, banks, central bank.. every soul have entrenched into this FIRE economy (Finance, Insurance & RE) self-reliance future assurances.
David, I see you're really asking for contributions for Intetest, when your staff buy bread, petrol, rent etc... they're not asked if they'd like to contribute" there is a price to pay for goods and services we receive, that's how the world works. Charge a subscription for Interest.co.nz, you guys are absolutely worth it.
If you really don't want to do that, you must provide a benefit to people who contribute, like limiting the commenting sections to them, it's only fair that contributors get something in return over free-loaders
Perhaps interest believe that no one commentor's opinion is more important than another's, simply because they contribute a nominal amount. Evidently some of us think that they should be recognized for having higher willingness to pay for the recognition associated with being a paying member. The only tag they should receive is one of a narcissist.
Now of all times is probably not the right time to be asking people for payment....and remember where their income comes from - probably banks and real estate sites who have made record profits blowing a property bubble. It was one of the first things I noted when looking at this site - was who was doing most of the advertising and it was mostly about property and taking on debt.
Like many NZ business owners, they believe there is unlimited demand for their product at what ever cost, and they have zero competition.
When you point out the reality - they get a bit upset.
Example:
I may want a drink at a pub, but if I only have $50 that week, and I also want brunch out, or to go to a Movie, or I need a new shirt for work, or the car needs a warrant, or the kids have a school trip. Then I have to prioritise.
The Pub thinks it is only competing with other pubs - But the reality is they are competing against everyone.
DC, going by the high number of thumbs up for the posts resisting any contributions, I wouldn't hold my breath for your call to be answered. Shame really, I think all the staff at Interest do a sterling job which, in my opinion at least, deserves reader contributions
Everyone everywhere is generally doing a sterling job. No one is saying otherwise. Interest is one of the better sites out there.
What they are saying is that there is a finite amount of money to go round. If I paid $10 a month to every website I visited I would be bankrupt.
Is this not the capitalist system you seem to want?
Everyone who reads Interest regularly and is not willing to pay $10/month should be ashamed of themselves. People who cannot afford to pay $10/month to Interest should definitely abstain from commenting on financial matters since they're clearly not doing well in that field.
It would be like if went on a cooking website and dared to comment despite the fact that I'm hopeless in the kitchen
Interest authors have a bias like any publication. I see these authors as pro National, pro farming and real estate while anti equities (little mention at all during the 2009-2019 boom but now its "ghoulish rallies" ??? . This is when boys like Buffett get busy) and pro China propaganda from one particular author.
A bit more equal reporting and I will be supporting Interest.
There was I thinking Interest.co had a decidedly lefty culture; but that much of this bias was unconscious and the unfortunate consequence of the lefty culture we all grew up in. Most importantly they all seem decent, honest types.
Our thinking has been very warped by lefty paradigms and by our appallingly poor understanding about both what is good about capitalism and what is bad, and by what makes for a civilised society. I keep being astonished by discovering that much of the conceptual framework I imbibed in my youth is complete nonsense.
As far as I can tell the most civilised countries are highly capitalistic with a strong safety net. They also tend to be democratic, constitutional monarchies (with the exception of Switzerland which has a very direct form of democracy).
Roger, I've done a little time in the military. Although there is a central command structure, at the ground level the work is collobarative. It was the best place I ever worked. It is a model most don't consider in amongst the standard left vs right diatribe. You wouldn't take the military as the model, just an example of something different that works.
Nassim Taleb (of black swan fame) said that the military were the only people who seemed to be able to understand what he was talking about. Mind you, I am wary of which bit of the military, the more tactical and fluid parts seem to me to be more likely to encourage good practise than the massed force parts (which would seem to encourage more groupthink). You cannot substitute for actual experience, either.
Theres the issue mate, and its confirming what people already know - you view yourself as above everyone else based on your contribution.
Ironically, its so counter productive to what youre trying to achieve. Youre not exactly selling the whole concept of donating when that concept has clearly polluted your mind. No one with half a brain will part ways with money if the end result is having the frame of mind you have. Its increadibly offputting.
Either that, or youre a narcissist.....
No, its just acknowledging that you're the issue.
Asking someone to donate is one thing. Asking people to donate when all youre really looking for is priviledges based on your donation is poor form.
People saw through it from the get-go, and rightly called it out.
Paywalls don’t tend to work for niche sites. NZME has around 15,000 paying subscribers (I think) out of a claimed 1m plus daily readership. Is that 1.5% are prepared to pay? Stuff hasn’t gone down that road fearing an impact on ad revenue. I do agree though that interest.co.nz’s content is excellent and encourage readers to contribute financially as I do (through presspatron). At to comments, it’s a pretty small gene pool already....
The reason I keep bringing it up Zach is because every time I log onto Interest I see a bigger banner, which has now turned red, which makes me think Interest is getting under increasing financial pressure. I don't want Interest to close down due to lack of funding, therefore I'm trying to help.
It is a great site and while I've read it at times for sometime I only signed up recently and don't comment often. I wonder about some alternative ideas such as more adverts for non-contributors (I'd be fine with that). Also is there a benefit to interest if I click those adds, use one of the advertisers services? I might therefore contribute by doing that (as I do at times on youtube to support content creators.
Potentially I'd pay if forced to by a pay-wall but I highly doubt it (hate me if you will but again I am not here all the time / more so in the LD). I did just take over a camping ground and had the family home listed (prior to shutdown) as part of my purchase plan. You best bet I'm not spending anything I don't have to right now.
Its a good question I think worthy of discussion. Would I watch youtube if I had to pay, would I use FaceBook, should there still be adds if I pay....
Removing adds for payers and making them more invasive for non-payers seems fair in harder times - that might be quite expensive to put in place (ask for contributions from payers to make it so?). Only paying commentators? That would put me off the site faster than anything (my only contribution being to advertiser revenue and all).
I contribute $5 per month - $60 PA..I'm retired so careful with my money but frankly I get more entertainment from this site than I do from NZME so I think it's worth it.
I have no problem with ads. They are similar to those that come in the letterbox; a quick overview and if of no interest to me then into the recycle bin they go.
The pop-up banner disappears as quickly as it appears on my browser and there's no other 'plea' advertised on the website to alert me to their request, or provide a link to donate.
Maybe sticky the pop-up banner on the home page, but not the articles, so it has to be dismissed each time unless you donate?
DC will know how much he is actually getting. Was $50 the right amount to use in the survey? ...I don't know, but figure $1 a week should capture most people that would pay something.
Personally I only started contributing a week or two ago when the request was made by DC. He will be waiting to see how that pans out before taking the risk of putting up a paywall and losing eyeballs.
I have "reported" the survey so he should be aware of it.
And thanks Yvil for kicking off the discussion.
Those who make contributions should get a smiley face next to their comments. Mine would be a small face but happy to read and happy to get whatever is bugging me online for all to see. BTW there are one or two commentators I'd be willing to assist if they fall on hard times.
I don't agree with your proposed fix but absolutely support your sentiment towards helping interest.co, so thank you.
We all need to chip in to help where we can but if you can't or won't then I'd still value your argument here in the comments as we would be the poorer without them.
I think NZ is coming right on testing. I would hope that in last few weeks of lock-down they can start to look at people with more minor symptom at home as normal colds and flus must have waned significantly during this time. The more (and faster) testing we can do the more normalcy we can restore to our economy.
Come on Rick, this is a very recent change in affairs. It was very bad up to recent weeks. To the degree that even the woman who died was refused testing as she did not meet the (then) criteria. It is totally unfair to use your very recent experience to discredit comments relating to a totally different time.
My point was more that I was impressed that we've progressed to this level in this short a time frame, from being just one of many countries that was under prepared for a pandemic. I was genuinely expecting it to be more difficult to get a test, and slower to receive the result.
Perhaps I should have said "given some folk are still moaning we're in a dire state" instead.
I got one 3 weeks ago that returned a negative result. I was questioned closely by the practice nurse and it was decided to be prudent and test me because I'm asthmatic. I exhibited some of the symptoms but had no travel history, nor had been in contact with anyone travelling. Ultimately it came down to whether discretion, or following the rules to the letter was permitted.
Given the pertinent fact that our public health system has been chronically underfunded for 40 odd years, it's no wonder that ramping up for this level of testing didn't/couldn't happen overnight.
I think NZ is coming right on testing. (Although sounds like there are critical shortages of some items) I would hope that in last few weeks of lock-down they can start to look at people with more minor symptom at home as normal colds and flus must have waned significantly during this time. The more (and faster) testing we can do the more normalcy we can restore to our economy.
The Gupta study. So many high profile people infected that you wonder about the underlying Infection figures. The death rate figures should not be so hugely disparate between countries with relatively similar health care systems, with our very low serious case ratio a case in point. I think that with hindsight this pandemic will be dissected and factors such as the underlying China/US tensions, globalisation, the role of unregulated social media, and the role the somewhat flawed Imperial College study played In shaping global response, will come under intense scrutiny. Good is quickly forgotten, bad isn’t.
and the train wreck continues, hope we can pull out of this. I think of the economy like an organism, trying to shut it down to save a corner could be fatal. I think all non risk people should go back to work and we should all respect those at risk and keep our distance.
https://www.zerohedge.com/health/michael-big-short-burry-blasts-unjusti…
"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."
https://www.latimes.com/science/story/2020-03-22/coronavirus-outbreak-n…
Extremely low risk, yes, agreed. But then you'll get articles like this one https://edition.cnn.com/2020/04/05/health/young-people-dying-coronaviru… and certain individuals will make a song and dance out of 'non risk' people dying even if the guy's chance was one in 200,000 (just plucking a number there).
Christopher Monckton of Brenchley has proposed a post-lockdown plan. It relies on three levels of testing:
- An antigen test, which looks for the presence of the pathogen. That test shows whether the subject is currently infected.
- An antibody test, which shows whether the subject, having previously been infected, is now resistant to the pathogen.
- A serological, preferably using the polymerase chain reaction method, which is capable of detecting not only whole virions in the blood but also, where a successful method of either boosting the immune system so that it destroys the offending particles or of destroying them chaotropically has been found, the fragments of the destroyed pathogens. This form of serological testing does not need to be done at population scale, though where it is available it yields more precise results than the quick and easy swab tests now being performed. But it is a vital research tool.
The plan involves data-led decisions based on those three forms of testing, and progressive release of non-shedding, known-to-be-immune people back into the workforce as soon as possible, to blunt the economic effects of cooping up large fractions of the populations on basic welfare.
US IPO of Chinese company
https://wolfstreet.com/2020/04/07/another-u-s-ipo-of-a-chinese-company-…
3am this morning, and the Dow was +3.5%; up +10% in two days, and looking towards the Heavens again....
It closed down.
I wonder if this sentiment had anything to do with it?
A billion workers to lose out as coronavirus ravages jobs market
https://www.telegraph.co.uk/business/2020/04/07/billion-workers-lose-co…
"the pandemic is having a catastrophic impact on working hours and earnings, globally. More than 200 mln people have been thrown out of work already"
Again, this is caused by our reaction the the pandemic (shutting everything down), not by the pandemic itself.
We may want to give this some more thought.
Next year, when someone sneezes in Guangdong , what do we think the World will do?
Take a Swine Flu approach; let it pass through and cross our fingers, or a Covid19 one; "Lock the place down!"?
My money is on - it won't matter! The Borders will still be closed - everywhere; China first off the rank, and will be for years from here.
You would hope so, but at the next APEC conference I suspect they will be lining up to polish Mr Jingpings shoes. In fact as China has proclaimed they nearly virus free (not that we believe that) they be the first invited back into the country and encouraged to invest.
A. people can do there own research but people are simply looking for their own biases confirmed and not doing so
B. there is a very, very obvious bias running rampant amongst some interest.co.nz comments
C. people on this website, who never cared previously about suicide rates or deaths linked to homelessness and poverty suddenly cite that as their opposition to lockdowns and never cared about poverty or mental health when their own capital was merrily making them rich at the expense of those without capital
I think we should all be a bit more humble about our positions. There's pros and cons to all of them, a lot of moral judgements, and a lot of unknowns. It's a balancing act in decision making and all of us are underestimating its complexity.
I hope you are right that history will prove the lockdown to be the right call. I don't want all the downsides of this lockdown to have offered minimal upside.
Be advised that this is a general comment and should not be taken as support for either side of this argument, a waiver to pre-empt the likely rebuttal.
I long ago tired of the statements beginning in the vein of "there is no evidence to..." as used ad nauseum by many professionals who would seek to laud their authority while keeping the scientific facade in the face of what would seem common sense and at least worthy of investigation. It differs from"there is clear evidence...", at best it simply means that there has been an oversight for valid reasons, as we are all prone to. At worst, deliberate ignorance and provision for culpable deniability to preserve image when truth would be damaging, a lie of ommision.
My sister lives in Sweden and people are not 'begging' for lockdown. Most people there agree with the approach, or at least that's her take on it. Obviously there's a strong voice in the medical sector there calling for it. But this isn't simply a medical issue is it? It's a multi-dimensional one.
I'm surprised you are still grasping to this view, inspite of the evidence to the contray. Almost every country that initially went down the "herd immunity" strategy very quickly reversed that decision and implemented a lock down when they saw how quickly the virus began to overwhelm health systems.
Ignoring the problem doesn't avoid a lockdown. It simply delays it at the cost of thousands of lives.
More likely this..... >> As stocks soared overnight and into the open this morning, pundits quickly appeared to proclaim the bear is dead and a new bull market had begun (as The Nasdaq completed a 50% retracement of the Feb-April drop)...
Good link.
When I took my young daughter shopping a few years back, I said " Silly Daddy! I forget my wallet and we don't have any money"
She looked at me quisically and replied, " But Dad. Money comes from that hole in the wall"
How right she was! The Global ATM has been harder at work than ever....
Death rates in Europe are frightening and keep on rising; the death rate in the UK has leaped to over 11% of all those infected, now nearly the highest of any country apart from Italy. But they are much lower elsewhere in Europe; in Germany it is only 1.8%.
I would suggest these very high death rates are likely down to the variation in criteria for receiving a test rather than anything else. The actual rate worldwide is probably hovering around 2% (e.g. Germany) which means the number of people infected to date is probably a magnitude 5 plus greater than the quoted figures.
I have two friends in France who developed "flu-like"symptoms, alongside 9 others who had attended a gathering together. Docs refused tests saying it was "just normal flu". Lasted two weeks and was fairly unpleasant. One of the friends was finally hospitalised and then tested - result positive! Subsequently my friends have privately obtained test kits - all positive!
New Zealand's current death rate less than 0.1%. I suspect we're on the right track.
So having previous experience with pandemics and/or having industries equipped to respond (like Roche) is competence? No. This pandemic has instead revealed how vulnerable the globalised world is. If you happen to be a country that produces what is needed, you are lucky. Did Germany choose to have industrial diagnostic companies just in case there was ever a pandemic and they would be better situated? No. They had massive diagnostic companies because they were profitable on the global market, and had been selling those services globally. In the pandemic, they have focused on upscaling but rolling out mass testing to their own population first and foremost.
The EU agreed to buy and pool resources for this pandemic in February and placed the orders for tests, masks and ventilators then. And they have still not managed to physically get hold of ANY of what was ordered, despite the fact that Germany can mass produce. Ask yourself why.
"U.S. Surgeon General Jerome Adams on Tuesday said he “absolutely” expects the U.S. death toll from the coronavirus will end up lower than earlier projections from the White House of between 100,000 and 240,000 deaths.
...Dr. Adams‘ comments echo Monday statements from Dr. Robert Redfield, the director of the Centers for Disease Control and Prevention.
“I think you’re going to see the numbers are, in fact, going to be much less than what would have been predicted by the models,” Dr. Redfield told an Arizona radio station."
https://www.washingtontimes.com/news/2020/apr/7/surgeon-general-jerome-…
David I notice that you (and perhaps others) quote death rates as deaths/current cases. This is actually a fallacious calculation because an unknown percentage of current cases will die in the future. The effect of this calculation it to bias the death rate downwards for countries with rapid escalation (for example the US death rate looks lower than China's - it surely isn't). A better measure would be to estimate the average time to die and use the case numbers that many days previously.
Korea is a good baseline, big surge of cases a month back, now dropped to 10% of that peak. They are effectively in a balanced stasis with new and recovering and slowly falling number of active cases (just about only country in world with that). They have about 2% death rate to date, which is probably a bit above reality due to the large number of invisible asymptomatic.
Worldometer quotes resolved cases (total cases resolved = Number recovered circa 79% + number died circa 21%). The rest of the cases are still active. Deaths lag positive cases by several weeks, so the peak in deaths lag the peak in actual cases by some time.
The problem is that this, like the NZ data, only covers the cases identified through testing. At best a limited picture.
It completely misses cases who are asymptomatic, places where there is no testing regime, those who died before identification (many countries), those that didn't come forward, or because they didn't meet a flawed case definition, predicated on the fact that if they were not connected to a known case. This has been proved wrong many times, the Marist school case was a classic example.
Covid 19 coronavirus: Washington Post - New Zealand isn't just flattening the curve, it's squashing it
New Zealand's cautious optimism over its battle against coronavirus is now front and centre of the world, with the influential Washington Post reporting "a triumph of science and leadership".
Science or muddlin' through. "An Auckland woman caught Covid-19 from her daughter, then infected her manager who went on to infect her husband - and all of them spent days trying to get tested and being put off or refused.
The Ministry of Health's Healthline, and a community testing station - though informed of the Marist College link by one of the two women who were sick - still refused to approve tests.
The husband found out yesterday he has the coronavirus. He has been to the supermarket during the lockdown.
Yesterday, Prime Minister Jacinda Ardern said the country must have "watertight" systems to get out of the coronavirus lockdown in two weeks, on 22 April."
https://www.rnz.co.nz/news/national/413727/auckland-woman-frustrated-af…
Iceland has tested 5% of it population - "Although fewer than 1% of the tests came back positive for the virus, the company's founder Dr. Kári Stefánsson told CNN that around 50% of those who tested positive said they were asymptomatic, confirming multiple studies that show that asymptomatic, or mildly symptomatic, people have played an important role in spreading the virus."
https://edition.cnn.com/2020/04/01/europe/iceland-testing-coronavirus-i…
International credit ratings agency Fitch has downgraded all the main Australian banks, taking their AA- ratings to A+. It has done the same with their New Zealand subsidiaries.
NZ depositors will demand risk compensation.
Credit Suisse Turned To Its Own Rich Clients For Emergency Funding
Credit Suisse turned to its own ultra-high-net-worth clients to bolster its balance sheet and its ability to lend as markets sank last month and companies started drawing down credit lines to weather the coronavirus pandemic, according to Bloomberg, which reported that institutional clients, family offices and billionaires were offered notes that pay a 2% interest on money that’s kept with the Swiss lender for a least a year, according to a person familiar with the matter.
With negative interest rates of 0.75% on deposits in Switzerland, Credit Suisse and its biggest rival UBS Group AG had previously begun to charge wealthy clients for excess cash holdings, leading to some outflows as investors sought better returns.
You have to assume they want the virus to do its thing, then they get back to work with widespread immunity.
If NZ is still bouncing around with strict border controls, quarintines, lockdowns and consequently a hobbled economy we may see a mass exodus of our young newly unemployed to Aussie.
Interestingly, in spite of their approach:
Australia has slightly fewer cases, per million population, than New Zealand has.
Australia has done MORE tests, per million population, than New Zealand has.
Australia's mortality, so far, is 10 times higher than New Zealand's (2 vs 0.2 deaths/million popn).
Sources (and these may have changed in the last 24 hours):
https://ourworldindata.org/covid-testing
https://www.worldometers.info/coronavirus/
Not just the politicians ignoring the rules...
https://www.odt.co.nz/star-news/star-national/west-coast-cop-caught-hun…
and all while his colleagues were putting a farmer mate through a heavy handed roadside KGB like interrogation because they suspected he had been hunting. Damn hypocrite. He'll be trembling in his boots though about the coming heavy punishment modelled on Adern's response to the serial law breaking minister Clark; probably have to wash a couple of patrol cars.
Australia is lucky in that (apart from Melbourne) much of the country isn't coming into a cold wet winter such as awaits NZ therefore they can probably more easily maintain social distancing measures without full lockdowns throughout the coming months. Thus a mitigation approach may be better for them than an elimination approach. For NZ it's eradicate now or endure a painful winter.
Exactly, based on yearly infection rates for viruses, depending on what climate area you live in NZ, now or within the next month is the end of the time when you are least likely to catch a virus.
If they don't get on top of it now, or come out of lockdown in the wrong way, then we would be expect an increase, or at least a 'long tail, on the curve of further infections.
NZ's eradicate now - that's what they said about m bovis. 3yrs on and we are still getting new cases. Approx 45,000 livestock farms in NZ. 245 have been declared positive for m bovis - majority beef farms. That's 0.54% of farms infected. Has the cost, suicides etc been worth it?
Is eradication the right path for coronavirus - or is it a virtue signalling govt just trying be able to make the claim of 'the first country in the world to eradicate - just like we are with m bovis.
Would you want to know?
Put an answer below.
How much should mobile phone data be used for contract tracing and inform these contacts to get tested?
https://youtu.be/ap3lTbmJ174
London Real.
Henry I've been commenting the civil liberty aspect of this, so I'll give a hopefully informed opinion.
I think this would be acceptable if carried out under section 70(1)(fa) of the Health Act. "if the spread of the disease would be a significant risk to the public, require people, places, buildings, ships, vehicles, aircraft, animals, or things to be tested as he or she thinks fit:" I'd suggest that it falls under 70(2) of the Act, where the service provider is the subject of such an entry without warant. My support is becuase it is an evidence gathering approach to track information in regard to a specific and named threat. The power only exists in relation to the specific threat. The power rests with the Health Officer, and Ministry of Health, no other agency. The information should be destroyed as per the privacy act, once the emergency is over.
One trouble is though is that New Zealand law has no power if the contact was outside New Zealand.
I'd further proffer that this is what they should be doing instead of banning(unlawfully imo) the freedom of movement of people who aren't infected.
Ben Hunt on the future of money
https://messari.io/podcast/ben-hunt-on-the-future-of-money-crypto-and-p…
We may become very isolated very soon as USA/EU/OZ/everyone else are going to be able to travel to each country and we will be stuck at the bottom of the world virus free but unable to accept tourists/business travellers and may become a back water producing primary products.
We are going to see prices for houses and tourism products head south in a big way.
I may have to move to Australia if this is the path we choose.
I know but that is why they have not locked down as the winter will be very kind to Australia except of couse Tasmania who have shut the border showing that the science is supporting more spread in winter.
Also a lot of NZ this year has been in drought and not painted green haha.
They have had a lot of rain since bushfires and now farmers very positive maybe the most in the last 20 years so they are in a good postition.
Also add all thoses resources that will rebound in the future I am sure they will be strong again very soon.
The biggest risk for NZ is assets prices stay high and people are crippled by the debt/high prices for food etc.
Australia has lower fuel new car prices / lower food prices e.g Aldi /and a tourism market that will rebound as they will live with the virus.
We live in strange times and every choice made now is going to make life very different for a long time.
Our only hope it seems is a vaccine which is a big gamble or get over weight people into shape check link below.
https://www.aljazeera.com/indepth/features/doctor-note-obesity-risk-fac…
41 and not overweight.
https://www.aljazeera.com/indepth/features/doctor-note-obesity-risk-fac…
Less tourists and house prices heading south might be a good thing for a few years and NZ becoming an isolated, virus free, backwater at the bottom of the world is quite appealing.
Less tourists will give the environment time to heal and lower house prices could mean more renters becoming owners.
Spain goes insane
https://moneymaven.io/mishtalk/economics/spain-announces-guaranteed-fre…
David,
Just wondering, does interest.co.nz receive revenues for the advertisements that show when viewers are reading a page on interest.co.nz? Want to help the team at interest.co.nz out every way I can, so if disabling an ad blocker on your site helps you in terms of revenue generation then best to let people know so they can make a fully informed decision. Otherwise people may be unknowingly reducing your possible revenues by enabling an ad blocker.
Worth reminding people, in case they're new or infrequent readers on interest.co.nz and didn't get the memo ...
I had previously been using a browser which automatically blocks ads, and have since changed browsers after interest.co.nz started alerting readers to a fall in revenues.
The American government don't know why global methane levels are rapidly increasing? Should be don't want to know why and don't actually care? The reason is their FRACKING INDUSTRY! https://www.nationalgeographic.com/environment/2019/08/fracking-boom-ti…
NZ's policy means that they have to lock down and wait for a vaccine that may never come. Pride and fear of criticism from the Nats will lock in this position and could very easily turn NZ into a country that is effectively walled off to the rest of the world. It will completely turn on its head the globalist policy which have pushed milk prices and house prices so high. Next year NZ will be a different country. The NZD will tumble and NZ will be left behind, whilst the rest of the world becomes an immune herd. We need to drop back to level 2 or 3 or else maybe NZ could twin with North Korea and start a good trade partnership?
I am intrigued by the view that we are likely to move apart from Oz over long period.
The bonds are too strong in my view ,and we have always fiercely guarded our independence while keeping those links.
I see the Aussies more like an older brother that could be a nasty selfish bugger, looking after himself rather than anyone else, but still a brother
My daughter in Qld is caught up in this mess has had her 'bonds of friendship' with Australia sorely tested when she was effectively told to 'Go Home!' as we aren't paying for you to stay here.
It didn't (doesn't?) have to be that way. "Lest we forget" and all of that in a few days time....
You're joking, of course?
You'll have to explain to me who those particular parties represent for me to understand otherwise.
Who is "Mum and Dad' first off?
Ardern is standing up for the rights of YOUR fellow citizens; caught by an unexpected situation in a foreign land. Which bit of that is 'snitching'?
AC Quote
"Sadly, there’s a section of our society which seems to revel in anticipating the worst possible outcome in any situation and writing in a way which perpetuates that view only seems to feed the hungry beast.
We see it at the end of property booms, with the inevitable flurry of predictions that the market is about to crash. We see it leading into recessions, with commentators breathlessly regaling us with stories of how terrible it’s all going to be."
It's not true.
"Sadly, there’s a section of our society which seems to revel in anticipating the worst possible outcome in any situation and writing in a way which perpetuates that view only seems to feed the hungry beast.
We see it at the end of property booms, with the inevitable flurry of predictions that the market is going to keep soaring out of reach of the working class"
I've fixed the statement for whoever originally said it.
What's not true? or are you being sarcastic?
Link for others to original article quote above.
https://www.oneroof.co.nz/news/five-reasons-nz-economy-will-bounce-back…
"Sadly, there’s a section of our society which seems to revel in anticipating the worst possible outcome in any situation and writing in a way which perpetuates that view only seems to feed the hungry beast."
Can apply to all types of asset price where price risks are elevated where warnings were given:
1) internet stock market bubble
2) current stock market bubble
3) bitcoin / internet coin offerings
4) shares of marijuana companies in the US
5) Irish property bubble
People should be informed of both sides of the issue to make a fully informed decision. Not just a one sided perspective
Below is Ashley Church in his own words essentially - only one word has been changed.
"Sadly, there’s a section of our society which seems to revel in anticipating the BEST possible outcome in any situation and writing in a way which perpetuates that view only seems to feed the hungry beast."
With his mantra of "property prices double every 10 years", does Ashley Church even know about exponential growth and its mathematical limitations in the real world? This is something that a seventeen year old mathematics student would know.
a 30% decline in (Australian) dwelling prices would be on the cards. .... Modelling in this environment is almost impossible. It is simply based on my experience and study. The most overvalued cities would be hit the hardest, that being Sydney and Melbourne....some of you will note that during The Great Depression, the Australian housing market did not correct by this magnitude. Nor, during the Spanish plague of 1919 did the Australian housing market record such a correction. However, those two markets were not laden with the debt burden our current housing market has. Not even close. The only market that comes close in Australia was the massive boom/bust of the 1890s
https://sqmresearch.com.au/7%204%2020%20-%20Looking%20back%20at%20our%2…
And we know what happened during the 1890's 'bust' dont' we? It wasn't 30% fall but....90% fall!
Assuming 70% LVR financing for a property investor, and the property is substantially unchanged, this owner is highly likely to go into negative equity. They could lose about 166% of their initial deposit if they are unable to hold on for the property price recovery (about $850,000 possible loss), assuming the property is substantially unchanged.
https://www.qv.co.nz/property/107-frankton-road-queenstown-9300/1469607
Here's the listing. Stunning views and allowed to sub-divide but still you couldn't time the purchase any worse.
What type of owner lists their property for sale during a nationwide lockdown? Perhaps the impatient, the fearful?
Lockdown date: 26 March,
Property listed for sale date: 2 April 2020.
Property in Auckland just listed for sale by a property trader. Bought on 30 Jan 2020 for $430,000 (massive 38% discount to RV of $630,000). Now listed for sale after 2 months of ownership.
Some observations: external wooden stairs not painted, decking not painted, fence not painted, unable or unwilling to get home staging in. Perhaps urgent to get to a basic sellable condition?
https://www.trademe.co.nz/a.aspx?id=2594393889
https://www.qv.co.nz/property/12-broadfield-street-massey-auckland-0614…
More property traders likely looking to get out, as their expected sales price after selling costs may now be lower (under current conditions) than their cost of purchase plus cost of renovations and financing costs for the period.
Agreed. While leverage is cheap, it has been used to artificially balloon assets values all in the name of protecting speculators proxy on bank profits. Tourist town will be the worst effected. Still seeing people in Taupo that paid bucks in 2016 wanting to sell now for double that. Taupo (as and example) took a long time to pull out of the GFC with very depressed values that have only just looked like catching up. Add a big ticket prices, no Air BNB, and a destruction of the tourist economy, good luck mate.
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