American consumers lead policymakers with pull-back actions; contemplating the other side of the peak; China key to NZ's economic rebound; UST 10yr yield at 0.77%; oil and gold lower; NZ$1 = 60.2 USc; TWI-5 = 66.7

American consumers lead policymakers with pull-back actions; contemplating the other side of the peak; China key to NZ's economic rebound; UST 10yr yield at 0.77%; oil and gold lower; NZ$1 = 60.2 USc; TWI-5 = 66.7

Here's our summary of key economic events overnight that affect New Zealand, with news we are starting to contemplate where the 'peak' is and what happens after that.

First, the latest set of US Fed minutes for their March 15 meeting shows them increasingly concerned about the pandemic emergency, but not fully engaged. Full forceful actions came after this meeting, emphasising just how quickly the economic side of the emergency developed.

And it developed, not because of official policies, but because consumers recoiled at the implications. American policy makers were downplaying the seriousness but American consumers were acting. The NY Fed tracked sentiment weekly in March and it clearly shows consumers led policymakers with their concerns. Lack of preparation is probably why the US economy is being hit so hard. One analyst sees US GDP falling -30% in Q2-2020 after falling -10% in Q1, and for all of 2020 it will be down more than -5% because they bravely assume a U-shaped recovery in the second half.

Heading into this crisis, American consumers were pulling back on consumer debt. In February, these levels fell a massive -US$108 bln from January, the largest month-on-month decline in four years. It will be massively lower when March and April data is published, you can assume. The point is, the crisis came to reinforce consumer pullback decisions.

US mortgage applications dropped -18% from one week ago and are down a third compared to a year ago. The severest decreases are in the coronavirus hotspots of course, but with today's revelation that infection rates are jumping worryingly in the middle of the country now, this market may yet drop twice as far.

Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 1,465,000 and up +74,000 this time yesterday. Now, more than 28% of all cases globally are in the US and they are up +23,000 since yesterday to 403,000. This is a slower rate of increase. Less than 6% of all US cases have recovered so far. China's recovery rate is now 94% and they claim they only have 5200 active cases nationwide now. Australia has now over 6000 cases, 5000 active, and while the rise in infection is slowing, deaths are not and now exceed 50.

Global deaths now exceed 85,000. Death rates in Europe are frightening and rising; the death rate in Italy is up to almost 13%, in the UK to just under 12%, and in Spain is touching 10%. But they are much lower elsewhere in Europe. The US rate is up to just over 3.2% and now exceeds 13,000 people.

There are now 1210 Covid-19 cases identified in New Zealand, with another +50 new cases on Wednesday and lower than the +54 increase on Tuesday. That is the lowest daily increase in two weeks. The number of clusters is 12. Only one person has died here, but there are 12 people in hospital with the disease, with four in ICU, and two of those are in a critical condition. 23% of all cases have recovered.

World trade will bear the brunt of the recession coming. But it may also be what brings us out of it. Certainly, it will be vital for New Zealand. But it won't be a fast recovery.

China is flooding its financial markets with liquidity, like most other economies, but theirs has the best, earliest chance of working, and working in a way that could help New Zealand. Perhaps we saw the first effects of that in yesterday's dairy auction.

In New York, equity markets are extending Tuesday's rally, and with more enthusiasm today. The S&P500 is up +3.4% so far although there were no such signals in Europe overnight nor Asia yesterday. What seems to be driving today's rally extension is American modelling that deaths will peak sooner than earlier predicted and at a lower level. No-one seems to be concerned that they didn't need to have got out of control in the first place. And they are ignoring the new rapid spread of the disease into heartland America.

The UST 10yr yield is up +3 bps at just on 0.77%. Their 2-10 curve is more positive today at +49 bps. Their 1-5 curve is less positive at +23 bps, and their 3m-10yr curve is also flatter at +62 bps. The Aussie Govt 10yr yield is now at 0.98% and a rise of +3 bps. The China Govt 10yr is down -1 bp at 2.51%. The NZ Govt 10 yr yield is also down -1 bp at 1.09%.

Gold is down today, dropping by -US$8 to US$1,644/oz.

US oil prices are a little lower at just on US$24/bbl. The Brent benchmark is also lower at just on US$32/bbl. Updated data shows American crude oil and petrol stocks jumping to near record-high levels. The Russians have rejected US overtures for steep output cuts.

The Kiwi dollar has strengthened even further against the greenback, up another +¼c to 60.2 USc. On the cross rates we are little-changed at 96.6 AUc. Against the euro we are firmer at 55.4 euro cents. That means the TWI-5 is at 66.7 and its highest in a month.

Bitcoin is now at US$7,317 and little-changed 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 ».

Our exchange rate chart is here.

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

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

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



'After the 'PEAK, What then ?

What then = Face the reality, how hard economy has been hit.
What then = Many lose jobs
What then = Many business shut down
What then = Social and Mental issues
What then = Government going into deficit, struggling.
What then = Sorry RE Agents despite all your false promotion/spin, house market tanks
What then = Worst recession in last 100 years

Year 2020 = Health and economy = blood bath


China is the key. Aye, perhaps economically but what to do about its people. How can we safely entertain hordes of tourists from China if any one of them is potentially a walking bio bomb. Not just now nor the aftermath, but years into the future. For example 7 days after China finally cracked down on the virus, a Chinese national arrived at Washington DC airport with a poly bag of dead birds in his suitcase. He just didn’t know or think there was anything wrong with that. And it’s not what might be go undetected in a suitcase it is what an individual may have eaten or rubbed up against prior to getting on the plane. Until China can demonstrate to the world that it has its population under control in terms of hygiene and good health practices, they should need to stay at home otherwise to quote Yogi, it will be de ja vu all over again.



Simon is backing the wrong horse

Chinese attitudes are definitely different.


Cheer up, Stu! It's all good - or will be.
All those points you note? All true. But....that just means we will have to rebuild our System, and if we have the courage, it will be different and better than what we had before.
Most of us know what The Future should be based upon - less debt - but only time will tell us how brave we have been in the face of adversity.

The future should be based upon less debt, sure but what the govt is doing right now is the complete opposite to that. On a scale that will blow away any small steps in that direction whereby private debt is reduced over time.

Bank influence. For "less debt" to be a significant part of the picture, then the banks are going to have to radically change the way they do business!

I've told this one before, but quite a few years ago I had a contract with a small business in Whangavegas. The owner had built it up from a one man band (him) to employing around 15 - 20 people, and he had done it without debt to a bank (probably helped that he was dyslexic!). Anyway he told me that every month his bank manger would rock up for a morning or afternoon tea and spend an hour trying to talk him into taking out a loan, which he always declined. I was very impressed - but suggested to him that next time the banker turned up to make an offer instead. Offer to sell to the bank up to 45% of the business, at a suitably inflated value of course! He thought this was funny, but agreed that the bank wanted to get their claws into him, not the other way around!

Bank managers are really just salesmen. Their job is to sell a product (debt) to the client, not unlike a car salesman.

Here's another of a bank manager helping a businessman by selling the farmer a financial product who was unaware of the risks embedded in the financial product.


"Most of us know what The Future should be based upon - less debt …"

Debt pays our incomes (ie puts buying power in consumers hands) and keeps commodity prices up (so producers stay viable)
That's the rub
So we need to "tell" the farmer that he will have to now sell his milk for $1 so that the buyer can still afford it
And when the farmers cost of production is $2?

Less debt and more ownership is the key. And just like when you had that first big mortgage back then, sqeezing the few dollars you can off the mortgage is hard, but hugely beneficial.
But government will let the team down on that one.

Less debt and more ownership is the key. And just like when you had that first big mortgage back then, sqeezing the few dollars you can off the mortgage is hard, but hugely beneficial.
But government will let the team down on that one.

The biggest on farm cost is debt as a hefty mortage is needed to buy expensive NZ land. If you had a freehold farm, you'd go pretty close to be able to sell milk at a dollar a litre as milk solids only make up 10~% of the milk's volume.

The reason land prices are high is SYSTEM WIDE leverage .. caused by credit ( ie ever more debt creation )
All Money is Debt

Without this leverage Asset prices wouldn't have rocketed …. which means fake wealth wouldn't have flowed through the system ELEVATING commodity prices to (what appeared) to be viable levels

Debt has been a workaround to make the system appear viable

But you cant shrink a debt based system

Unless consumption can be returned to previous levels (impossible) … then debt will ultimately collapse


I am surprised at how many farms in Southland have brand new houses on them. So its not just the dairy tanks, chillers etc, its having a nice new warm house built. But will they really want to retire there.......?

Cheap easy credit. Then down the track when they move off farm the new house adds value

Lots of bolt hole properties with high debt, we could call them.

Thats the problem with leveraging for capital gains. You can only monetise the gains if you can sell the property

Bread and water till it's paid off has always been my train of thought.

Borrowing from the future on the premise of exponentially growing debt? Doesn't the growth trend line indicate zero is approaching, even before the pandemic? So what will be used to pay the interest on the debt? More debt? Hmm! Sounds like an Egyptian building scheme to me?

No. Paid the cost of production plus a margin, avoid paying the banks anything except for services. Paying mortgage and o/d interest simply adds to the costs for consumers with banks simply clipping the ticket for actually doing nothing.

Are you saying you can run a farm without the Debt based financial system we have ?

Because you can.

But you will have no external inputs and will be making deliveries on a horse and cart to you neighbours.

You cant operate outside the very complex, highly efficient, supply chain we have now a AND not have a debt based financial system

Then attention shifts towards the bubble and away from the pin.

Could be worse Stuart, you could be in the USA right now. BBC Coronavirus: US records highest death toll in single day. The US recorded the most coronavirus deaths in a single day with more than 1,800 fatalities reported on Tuesday. It brings the total number of deaths in the country to nearly 13,000, according to data from Johns Hopkins University.

The US has more than 402,000 confirmed cases, the highest number in the world. Global cases have exceeded 1.4 million.

Not too mention that it is basically only really in one city at present and they are under reporting deaths.

They have ten states that reported over 1000 new cases yesterday, and ten states with over 10,000 cases.
Its not only in one city, almost the entire US mainland is a war zone, or about to become one.

As I said. It's basically one area that is in full swing. The other areas are starting and not in full swing yet.

Actually the “States” are more or less by international measurements, countries in their own right. Eight states have individually economies as large as or larger than Russia. Phoenix AZ is the same size as New Zealand. So free and easy travel from one to another etc etc and thus it snowballs out of any sort of control.

And their testing rate, per capita, is pretty low. I suspect its worse that the numbers show.

After the peak? The virus will magically disappear. From NZ and the globe. Alternatively, NZ will become sleeping beauty for ? 2 years until a vaccination is found. Or until some asymptomatic Covid carriers start another cluster....which could be hard to pick out amongst the winter coughs and colds. Maybe impossible. So, maybe another peak...with only 1 more death and only another 4 weeks at 3+ billion/ week. Now that makes sense.[ 12 billion / fatality, which could have occurred naturally anyway].

I think about two months ago I've said that the bank gives you an umbrella when the sun shines. And takes it back when it rains.

Well, folks, it pours!

House prices will probably tank but turnover may eventually be fairly high.

Uninterested you say that house price will PROBABLY tank....

Do you still have doubts ?


Now is the best time to buy. Not much competition in the market. Prices in NZ are diffrunt. We are special. Prices double every 7 years guaranteed..... blah blah blah

No, but its a disclaimer like: "I am not a financial adviser..."

Anyone who thought world debt was at absolute historic highs before the coronavirus will have a migraine now
Will be interesting to see levels of loan defaulters & bankruptcies both business & personal from this world pandemic
Time will tell

We don't need to wait and see. It's coming and coming hard and fast.

Sad to hear that Bernie has had to suspends presidential campaign. Trumps f###up the US economy so much there would be no way to add the much needed infrastructure to support Bernie's policies. Quote from Sanders: "If I believed we had a feasible path to the nomination, I would certainly continue," he said. "Please also appreciate that not only are we winning the struggle ideologically, we are also winning it generationally."

Mr Sanders noted that across the country, his campaign received "a significant majority of the votes...from people not only 30 years or younger, but 50 years or younger".


Bernie should now stand as an Independent.
He's be white-anted by both 'sides' of politics ( we know they are one the same; Clinton last time, Bush next, supposedly Clinton again, Bush again next's all an agreement) and threatening the status quo by splitting the Democrat vote might just make them take notice.


USA...where the Democrats are undermining democracy and the Republicans are undermining the republic.

You would have to be stupid to put your hand up to dig way out of the hole that the US is in.

No Trump?


The economy has been a confidence trick all along, now that the confidence has evaporated it will never be the same again.

Yes indeed.

I’m reminded of the old trope that says you find out who’s swimming naked when the tide goes out.

In this case the entire global economy has been caught starkers.

I love that saying.

“Insurance companies exist to make a profit”. I’d rather support trump than insurance profits. They should pay for treatment imho.


Nice wee shake in CHC this morning...a little bit bigger and it would be the last thing the government would want right now...


You wont be able to give a house away there soon.


TM2 will be busy ringing his tenants to check everything is ok....oh, and your rent is due soon...

He has already told us he will be out madly buying houses like a Dutchman at a Tulip auction.

Stay classy TM2! P.S whatever happened to DGZ?

He went sporadic for a while, then his mum cut off his internet connection completely.

Well, earthquake effects differ hugely. The shake was 10km SW of Christchurch central, and here on the NE beach it was scarcely noticeable. I was making our Lockdown Condensed-milk Morning Coffee and did not feel a thing.

Christchurch house prices (thanks to a certain Mr Brownleee blowing a hole through the Plannerz dreams and opening up land supply to Buzz Lightyear proportions) have remained essentially stable for a decade now. An experiment that demonstrates a way out for certain other NZ cities and their hundreds of Planners.....

And of course, the last earthquakes mean they have put together plans to mitigate the effects of the next one. NOT.

Sounds familiar with what we have done since the GFC to where we find ourselves now.


Quarantine at the border will begin tomorrow it looks like (about time, but understand logistics need to be prepared). Just praying we can stamp out Covid-19, get the domestic tourism going in full force and come out the other side. If dairy prices start rising with a low dollar our farmers should be in for a huge payday but again I hope this is what it takes for Labour that our farmers are the back-bone of our economy and go a bit easier on them cause WE NEED THEM!


The downside of that is expensive food for people without jobs.

BBC Coronavirus: Why Canada dairy farmers are dumping milk. Dairy farmers in one of Canada's largest milk-producing province are poised to dump millions of litres of milk due to coronavirus.
Dairy Farmers of Ontario has told farmers to get rid of raw milk to keep prices stable and prevent oversupply. The industry group says demand has crashed as restaurants and other bulk buyers shutter due to Covid-19.

Just goes to show the fragility of our systems, elsewhere, UK, States, milk is being dumped due to transport/processing problems.
Maybe despite our remoteness we may have a advantage if our logistics are good. Dare I express that Fonterra has been described before now as a excellent logistics company.

Should be getting unoccupied Canadians making their own butter and cheese. Unfortunately the seasons are wrong for them to store them in the ice outside.

which is the same as no (viable) customers


you are right there, had to go shopping yesterday with three teenagers at home, they think it's a constant smorgasbord here...300 plus...was looking for specials but were not too many been offered by supermarket. Sigh...people will feel the pinch especially if the unemployment rate is going where they say it will.

Buy just ingredients to make food lol

$300 with three teenagers is just buying ingredients.

Try the diary then if you think SMKts are over priced. I had to walk out after trying to be charged 12$ for two packs of mini Easter eggs. Easter bunny should be quarantined so parents
Don’t have to spend excessive $ on chocolate. Inflations meant to be under control?

The supermarkets swear they have the same number of specials as normal... except it's 10c off, not $1 off.

With a full house of people eating all day, the price gouging of supermarkets and independent food retailers closed feeding the fam is a very expensive business.

$13 per kg for zucchinis yesterday at New World. Luckily there were other much more affordable options.

In order for food prices to be kept artificially low and population expansion high, much has been sacrificed.

Well you don't want the market setting prices you need to manipulate production to always be at least equal to demand, and accept environment damage while you chastise farmers for it.

"Much sacrificed"? Only the future!

The problem farmers have employing millennials

The youngest millennial is 24, the oldest is 40. The young people in that tweet could be Gen Z.

In the US cash buyers sometimes have to pay more vs paying by finance.


Good question for comrade Xi. "Third, after it became clear that there was a full-blown epidemic spreading from Wuhan to the rest of Hubei province, why did you cut off travel from Hubei to the rest of China — on January 23 — but not from Hubei to the rest of the world?

January is always a peak month for travel from China to Europe and America because of the lunar new year holiday. As far as I can tell from the available records, however, regular direct flights from Wuhan continued to run to London, Paris, Rome, New York and San Francisco throughout January and in some cases into February. You have lost no time in restricting international travel into China now that Covid-19 has gone global; your approach was conspicuously different when you were exporting it to us."

Because they were protecting Beijing. Always have and always will. The same reason they built The Wall, which to this day remains an incredible feat of engineering/labour and resources.

FYI, the wall is facing the other way, not the way you think


There must be by now an international consensus arriving at the conclusion that China, and the motives of its leadership, are hardly trustworthy. The remainder of the planet may now have to move in concert, literally to save the planet in terms of civilisation.


"an international consensus arriving at the conclusion" Extreme capitalists aren't really concerned about motives, morals, human rights, etc. The quick dollar is the primary, actually only, objective. Tomorrow has a discount rate of 100%. Everyone remember the Chinese ambassador telling us "closing our borders demonstrated who Chinas' friends were"?

Good point, so many questions: BBC Coronavirus: Why China's claims of success raise eyebrows. "China has reported no new deaths from coronavirus anywhere in the country, for the first time since the beginning of the outbreak. But as the BBC's Robin Brant writes, there are lingering questions over how far these figures, and therefore China's narrative on the outbreak, can be trusted".

Every culture and civilisation has its gaping flaws. Sometimes the leadership is its greatest asset, sometimes its greatest handicap.

We as a species have a terrible habit of becoming habituated to circumstances and over-normalising whatever culture we exist in. We under-expect threat, risk, change. But they always come and we are almost always caught with our pants down.

CPC is not China.

History agrees with you certainly. The problem now is that it used to be that a problem of this nature, say 50 or even less years ago, would have remained well hidden behind the bamboo curtain. But the mass human movement of the high speed industrialisation of China has created an urban type of peasant by the millions. Deliberately under educated and especially unworldly, and with all the old habits of peculiar cuisine etc, hence the example in my earlier post arriving at Washington DC. Consequently this outbreak has been able to be rapidly transported, unwittingly mostly one would hope, to all corners of the world. If to look at it historically, then this is a very new and modern set of circumstances

In scale, yes certainly. Although the European empire builders, before that the Silk Road and before that, the Roman Empire were able to spread consumption memes, disease and eventually dark ages.
Many also believe that the Bronze Age Collapse may also have been as devastating in the same way and for the same reasons. Human civilisation reaches a zenith of interconnectedness and globalisation and eventually, inevitably, something comes along to reveal how vulnerable that system is/was.

Agreed, but history = cause and effect. The collapse of secure Silk Road trade routes to the Far East seeded the era of European maritime exploration for instance. Yes we got horrible diseases, but we also got lots of really cool stuff like Hindu numbers, so we could ditch those cumbersome Roman numerals and voila, algebra, with some major Arabs/Persian input.

We excel at creative workaround solutions. I have no doubt that a phoenix will rise from the covid-19 ashes.

Species survive based on their ability to adapt and we are certainly a tenacious and adaptive one. In our evolutionary history, our periods of greatest progress have been the times of most suffering and hardship. So yes, homo sapiens have great survival potential, for what that is worth and for what that might cost. I'm sure many a British dark age peasant looked upon the exquisite ruins of a Roman villa, complete with heated baths, toilets and marble statues and wondered wtf happened. At the time, Rome was considered eternal because it had existed so far beyond living memory. The Roman Empire lasted a millennia (add another 1000 if you include Byzantium) the modern globalised financial juggernaut by comparison is an infant. And yet, some genuinely believe that there is some eternal laws to govern stock value and Auckland property.

Why was it called the dark ages GN?

Good question. The virus was almost certainly here well before we thought it was.

Once all this is over, China will have a lot to answere but will follow their policy of offence is the best form of defense ( if bribe fails) as a result world will be diveded between countries which are with Chinav v/s countries against/upset with China and have a feeling that except small countries in africa and pacific Like NZ whose economy / very survival is based on China or countries like Pakistan and few others who totally depend on China, will be in minority compare to countries demanding lot from China like USA, UK, Europe.........and will also not be influnced by their money or muscle power.

The WHO is also culpable. They should have been telling countries to shut their borders to people from China at the first sign of trouble, would have saved a lot of grief.


Awful effort from them.
Trump sometimes talks sense, and his rebuke of WHO is justified.

Something we can agree on Fritz.

When I was at uni, the preeminence of the WHO in global human health was a necessary feature of every essay written. Now I would question their survival as an organisation. Their job is to look at the global trends and diseases that effect the world, to take a step back and look at global impacts. On that front, they have failed on such a monumental scale, it will be hard to even quantify. Talk about existential crisis, they have failed at their main job.

IHME model has been down graded again. Now projecting 20k less than the 2018 US flu season.
"60,415COVID-19 deaths projected by August 4, 2020"
"Influenza killed about 80,000 people in the 2017-2018 season, according to figures released by the Centers for Disease Control and Prevention."

CNN up there with the WHO and China for reporting the facts.

Hi Kezza
From the Journal Of Infectious Diseases:
Italy had 68,000 deaths from flu over four years, from 2013/14 to 2016/17. Nothing fake there.
That’s 17,000 a year.

From Wikipedia, re the 2009 swine flu pandemic:

(11 -21% of the worlds population) contracted the illness. This was more than the number of people infected by the Spanish flu pandemic,[12][13] but only resulted in about 150,000 to 575,000 fatalities for the 2009 pandemic.[14] A follow-up study done in September 2010 showed that the risk of serious illness resulting from the 2009 H1N1 flu was no higher than that of the yearly seasonal flu.[15] For comparison, the WHO estimates that 250,000 to 500,000 people die of seasonal flu annually.[9]

The health care system is stretched to the limit in the standard flu season. That is with a certain amount if heard immunity and a host of measures / drugs to limit the death rate.
The issue with the WuFlu is that there is no heard immunity, very little know how / drugs for treatment that results in a massive in flux to hospitals at the same time the existing standard flu is in progress as well. That results in a massive amount of deaths, which in turn has a disastrous effect on the economy that could collapse the money system and cause the death rate to explode due to health care workers risking their lives for money that has become worthless.
Comparing the standard flu to the Wuflu has been talked to death and found lacking.

2009 swine flu epidemic figures make for interesting reading. North Shore hospital was putting patients (not necessarily flu victims) in ambulances in the car park and filled corridors with temporary beds. Same true across Auckland, I think. No helicopter money back then.

US consumers in the driver's seat.
The narrative of late had been that the US has this under control and numbers will peak in a week and then decline and their medioca lockdown restrictions will be released.
The stats and logic shows that this is not the case and numbers will continue to climb and death rates to skyrocket once other big cities infection rates take hold.
The constant 'light at the end of the tunnel's PR narrative only has a limited life span and the US consumer and overseas investors will redouble their efforts not only in the hotspots but all over the country and throw the country from the turmoil that exists at present to utter chaos. The US has only just entered the tunnel.
423000 cases, a slow down of cases and deaths will start to decline when they are about 100,000,000 cases. Then if they are extremely lucky they will not get a second and third round as the virus mutates.

Are we still in level 4?
" Sustained and intensive transmission
Widespread outbreaks."
Should we be at 3 already?
" Sustained and intensive transmission OR
Widespread outbreaks."

No. Doing that would put us back into level 4 after a few weeks or just give up.

We just can't trust people to do the right thing. A lot of idiots out there. Severe penalties for those blatantly breaking the rules. They're costing me money!


Yep lots. The trouble with NZ is that we pamper these people and continue to hand them money that makes them even more reliant and stupid.
Yes Jacinda has a dream to lift these people out but there will always be a fairly large element that don't want to come out.

Totally agree with the pamper and handouts -- funny that the kiwi fruit industry could not get any workers from the 140.000 unemployed - but hard working kiwis who lost their jobs have jumped into that work immediately -

wrong on Jacinda i think -her dream is to make virtually everyone dependent on some form of state handout -- paid for by business and property owners -- so that the state has a massive hammer hanging over people to vote for her to continue the subsidy and handouts - instead of standing on their own two feet -- They have been killing democracy since day one -- oil and gas decision without talking to her cabinet - shane jones billion slush fund - no accountability - - this crisis is working perfectly for her top goal of UN secretary general!

I am always conflicted between your description of the left and the right, who believe in destroying the planets life support systems, to satisfy the insatiable demands of lord market. Seeing as I have an interest is preserving something of a future for my family and humanity in general, I tend to ignore that conflict and vote for a future.

Everyone would if the left could limit the side effects.

Well no, they're too comfortable in their holiday homes and drives hours to get there.

CCP Wuhan Virus COVID-19: Flattening the Curve.
Sometimes the cure can be worse than the disease.
Most countries talk about flattening the COVID-19 infection rate curve, but in doing so, they also flatten their respective economies, and flatten their citizens lifestyle, which can create a much worse problem than the disease itself, such as: Mass business failures, mass unemployment, a collapse in property values, poor healthcare, a rise in natural deaths, a rise in suicides, a rise in child abuse, a rise in home violence, a rise in marriage breakdowns, a rise in serious crime, a rise in murders, a rise in alcoholism, a rise in gambling, a rise in misery and desperation, and that’s just the beginning! Even a politician should be able to understand that.


Swamping the hospitals with patients that they can not handle that results in a much higher death rate isn't exactly an amusement park. Stopping our lock down now would give us the worst of both worlds.

Exactly. Once all this is over will realise the extent of carnage caused as it may be beyond one imagination though will see light at the end of the tunnel but the tunnel is too long and will depend who and what survives in the tunnel to see the light at the end of it.

What a lot of people don't seem to grasp is that say we had the infected numbers down to zero today we would not be going back to business as usual. Large portions of the world are locked down and are not spending. We also can't open up tourism while the rest of the world has infection rates that are out of control, and in some cases a second wave of infections has been triggered. The damage that we will see is going to carry on for around 2 years.

Yip and reading the news just now that Airways is looking at closing up shop in a number of regional airports (and may not reopen). More people (probably with mortgages) not earning. The slow down is everywhere. And it may take years to get back to where we were (if at all, or in a different form).

If New Zealand does a good job of eliminating the virus we could see things bounce back pretty quickly, even have the economy boosted.

After WW2 the Western World transformed into something quite remarkable. NZ houses could be quite desirable with their large sections. Expect to see a minimal drop in house prices, even increases. Not sure about apartments though.


If NZ does a good job and rest of the world suffer, our economy will prosper and house price will rise............... Really do you believe in should be positive but not stupid.


I reckon Taiwan will see some benefits from their effective counter measures.
We will too. Got to keep the troop's morale up!

True that. If our economy is halved, we may briefly see growth rates above 5% again. Starting from a low base would make this possible. Whether the size of the economy returns to 2019 levels? That's a different question.

Why would you think that we bounce back fast?

Tourism is 14% of our economy. It's basically gone for the foreseeable future. We can't risk re-infection from other parts of the world that haven't got the virus under control, so likely we will have close enough to closed borders until it's sorted everywhere. There will probably be a minimum 2 week quarantine for tourists coming from anywhere for a while that they have to pay for, so tourists are unlikely to come. And that will likely be enforced for a long time... that's 14%, OK say 10% of our GDP contracted right there.

But NZers will become tourists in their own country right? There appears to be a great deleveraging going on, in that case people save money, not spend it. Things like holidays are luxuries. With high unemployment numbers even internal tourism will be limited as people scramble to pay for just the basics.

There is light at the end of the tunnel, hopefully we can rid ourselves of unproductive organisations and come out stronger. But there will be a lot of pain before we get there. We are just approaching the tunnel economically!

It's always darkest before the dawn. We will overcome and come back stronger.

Its always darkest before the vaccine.

The true heroes are not slimy ex PMs or thuggish Rugby coaches but those that are holding the defenses and preparing the super bullet.

Also the people working in the supermarkets.

We are seeing the best and worst of humanity right now. Just heard on National Radio that there have been cases of supermarket workers being bitten, scratched...

Welcome to the amygdala.

Good news: There's light at the end of the tunnel.
Bad news: This is a single track and it's an oncoming train!

I dont buy it, my business budget looks like this April - 100% down on last year. Rest of this FY 30% down. Housing needs to become less attractive as an investment, we need to pour money into producing things, not swapping non productive assets between ourselves at ever increasing prices - that is an abject waste of time, energy and resource (I include oxygen under the resource department)

Who's going to buy this "massive increase in production"?

Countries that are having their 2nd and third lock downs and are struggling with getting food to the masses.
Search US food shortages in YouTube. All is good according to the videos but then you read the comments from the locals and supper market staff...
It paints a totally different story.


Spruikers are quiet nowadays. They were calling everyone DGM's. How'd that go?


oh shit - 7 years on here and only just realised DGM - doom and gloom merchants :)

Thanks, that was one I didn't get.


We DGMs experienced a lot of ridicule, even abuse from them.
Hopefully some people listened to us not them.

"experienced a lot of ridicule, even abuse from them."

- the property price bulls were unable to successfully rebut the arguments of the property price bears. They didn't know what they didn't know. They didn't see the potential vulnerabilities or they dismissed the potential vulnerabilities as a non event, based on historical property price patterns over the last 50 years.

Here is a reminder of the property price bull case provided (and comments that have been made by property price optimists):

These are some reasons given in the mainstream media, property market commentators, property market promoters, bank lending promoters masking as bank economists, real estate agents, property market mentors & other sources as to why property prices in Auckland will not fall by much and that there is a low probability that property prices will fall dramatically:

1) during the GFC, house prices in Auckland fell only 7-10%

2) over the past 50 years, house prices in Auckland have averaged 7.2% per annum (or commonly referred to as house prices doubling every 10 years). This trend can be expected to continue into the future -
b) Firstly FHB are in for the long term and short term fluctuations are irrelevant; same house - go outside and check. If the past 150 years of market history is an indicator, house prices will increase.
c) Real estate is a long term investment and I don't know anyone who regrets buying!
d) Every time you meet someone who owns their own house, whether they bought it 3 years ago, last year, 10 years ago etc… ask them the question: "Are you happy today that you bought your own house or do you regret it?"
The factors at play are never exactly the same, but the NZ property cycle is very reliable. So no, I don’t think this time is different. I don’t think the cycle that has been going for the past 40 years (rise/plateau/slight fall) is going to drastically change all of a sudden. I’ve picked bottom of current cycle due 2021/22, but trying to time the market isn’t a good strategy. If you are in it for the long term, it is always a good time to buy NZ property. It always feels like prices are too high, until you’re looking back 10 years later. There will be another recession, but the DGMs on this site have said it will happen every year for the past decade. When it finally arrives they will say “I told you so”, but they will be no better than blind squirrels that happened to find a nut. publishes a housing affordability report - it may not feel like it, but a lower quartile house is well within reach for most couples looking to buy their first home.

f) Patterns are a hard thing to believe in but history reveals all.
I was introduced to patterns 40 years ago and they have served me well.
Auckland has proven to be very regular on the 9 years cycle +/- 6 months, up cycles starting in the following years 1984, 1993, 2002, 2011, 2020 ?
The market peaking approx 5 years later 1989, 1998, 2007, 2016. I think people can get to analytical needing reason that sometimes is difficult to explain, stepping back and looking at cycles without being analytical can be of great benefit.
I have trusted these enough to make sales and purchases which has made me wealthy.
In this down cycle I have purchased 2 properties.
The cycle suggests 2020 as the start of the next upswing I suspect it will be summer 2020/2021 but time will reveal all.

 It's been a bubble for a number of decades but has be exceptionally resilient in the face of adversity .
If one believe's as most DGM's do that a collapse is about to happen, then one will not buy into the market a personal choice.
If one believe's that the market is just that a market then one would be much more likely to buy into the market.
I guess my main point is that at any point in time there are always reasons not to buy ( internal and external factors ) and plenty of people preaching doom.
My experience has been as a generalisation the people who preach doom have already missed the boat and are envious of those who have ignored the doom predictions and gone on to have very comfortable financially secure lives.

h) I bought my first property in AKL in 1983 and the first cycle I experienced started in 1984.
If I look over numbers from my families properties I can trace the pattern back to 1957, not as clear but still a clear trend.
I think the variation looking forward is probably the % increase will not be as great as the past but the timing will remain.
Humans are shocking at remembering events and joining the dots, the price increases in say the last 2 cycles are well known but most people do not know previous history.
Between 1970 and 1974 as an example house prices doubled, as a kid I couldn't believe it but seeing the same happen as an adult one has to take notice, or miss out on easy money.
I don't make the rules or create cycles but being aware and opened minded can certainly help grown personal wealth.
Always always there are DGM's predicting DOOM, well at some stage they will be right, there will be an event that could cause total collapse of the housing market and our economy, foot and mouth, invasion, massive tide wave ?
But if we live in the fear of 'what if' as many do on here we achieve nothing except envy for those who made decisions and got on with their lives and ignored the DGM's !

i) I have owned investment property in Auckland since 1991.
Yes there is an economic cycle, yes there has been times when property prices have stayed static (or even dropped a bit) over those years.
Yes I am still alive, warm and breathing.

For almost all owner-occupiers and residential landlords it is just a matter of sitting out those periods with a good book and a glass of wine. There are always a few unfortunate or careless souls who get caught at the margins, but as someone has already said, the overwhelming majority of people don't actually have to sell.

For an investor, providing the rent is still be paid and he is still making at least $1 per week he just waits patiently for the (entirely expected) winter storms to pass and then spring invariably arrives.

Hardly ever is the sky actually falling in.

j) The property clock and historical trends are valuable indicators, but dare mention that here and you're sure to be accused of being stuck looking in the rear view mirror. Those hoping for a crash see no need to learn from the past because "this time is different".

In nominal terms, NZ property has risen every decade since records began in 1963. I'd love a DGM to explain to me why "this time is different"

k) for population centres, NZ's property price will reach a level where price to income ratio is around 15 to 20 while for popular provincial centres, the ratio would be 10 to 15.

l) There are alot of people here who want this market to fail. We are yet to see a major drop in prices for the last 50 or so years but by the sound of all these 'experts' on the comments section, we can expect to see big falls in Auckland prices. Yea right.

3) there is a shortage of underlying housing in Auckland, so property prices won't fall by much -


4) there is a growing population which means that there will be more demand for houses -

5) we have inward immigration which means more demand for houses
a) For me, chiefly with current levels of immigration, what is seemingly continuing low interest rates, housing shortages (although an increase in consents this will probably be still short of meeting existing shortages and continuing high levels of immigration) not matching needs in the short term of 3 years or so, and reports of increasing investor activity (possibly due to poor returns from other secure investments such as TDs); I see Auckland house prices increasing at around the rate of inflation or possibly around 3%. This is consistent with the RBNZ governor and possibly slightly less than some commentators such as Westpac. I don't see any bull run of considerably more as I feel that the RB will intervene with LVRs due to the associated affordability and risk issues; and for the for economic stability reasons RB is likely to act on LVRs if prices fall.

6) Auckland is an attractive city with an attractive lifestyle - that makes it desirable and attracts foreigners to move to Auckland and hence raise the demand for houses

a) Net immigration level is still high!
NZ's desirability to live is still high!
House price to income ratio is not high enough (from 2 to 6 to 10 to 20)!
Politicians are still very useless.
Available land in NZ remain unchanged.

So, price will keep going up around NZ if not in AKL.

b) We may have high house prices, but NZ is still a paradise.

7) lower interest rates are supportive of rising house prices

8) lower interest rates make debt servicing easier for borrowers

9) Low interest rates were also forcing retirees and those nearing retirement to look for investments that would produce income, such as rental property. "Plans of the baby boomers to retire and live off a conservative yet well-yielding portfolio have evaporated with low interest rates," he said. "[They] are seeking assets and buying investment properties. They are also seeking assets they can hold and live off of for three decades in retirement rather than just 15 years given advances in health and medicines." -

10) we mustn't forget either the vested interests in ongoing stability. No government, central bank or trading bank with mortgage exposure wants materially lower house prices. Nor does an incumbent Beehive want falling house prices going into an election campaign

11) the economy is doing well, with low unemployment -

12) there has been insufficient construction of new builds to meet the housing shortage -

13) there are high construction costs to building a house. House prices cannot fall below their construction cost. -

14) people don't sell their houses at a loss -
a) "due to the concepts of loss aversion and anchoring, few vendors are prepared to sell at a loss, instead holding on until growth returns"

15) continued inflation means that house prices will continue to rise in the future

16) The fact is, debt levels have barely changed from the beginning to the end of those 10 years, compared to GDP levels, compared to household assets, compared to household disposable incomes. And much more importantly, debt servicing is very much easier now, an item that is almost universally overlooked. We are not pushing out to unsustainable levels now, and even if they creep up a little, we are far from that point.

17) in aggregate household debt servicing is low in New Zealand - currently at just under 8% of disposable income of households -

18) property market participants & commentators who have been correct in their predictions about recent property price trends have more credibility and hence their predictions of upward prices are believed by a wider audience (such as Ashley Church, Tony Alexander, Ron Hoy Fong, Matthew Gilligan, etc). -

19) previous warnings about a house price crash have been wrong - property prices have continued rising upward significantly since these warnings were given, so there is little reason to believe these warnings.(such as Bernard Hickey) -
a) I have read and heard of this all before in the eighties and 90s, wait until a financial crash happens, these people run and hide, property wins in the end, sure it will take a hit, but will win in the end.
I remember these finance people saying say away from the Government super schemes and go private. THEY WERE WRONG and fooled many people,

20) its unlikely Auckland prices collapse. I think the main two reasons though are:a) Affordability has been this bad, and worse, in the past and it only resulted in about a 10% drop. b) The number of homes built over the last decade has been too low and will take some time to recover -

I am still getting abuse from bulls!!!! I mentioned on here years ago that a member of my family (under 30 at the time) had over 3 million in debt on property investments and negatively geared. He bare faced laughed at me when I suggested NZ had a property/debt bubble and that eventually something would come along to pop it. I asked how resilient his financial plan was in the event of a Black Swan event, he said "if I lose my job, I will get a new one (at the time he had to top up all his rental income from his own employment income to get the tax perks) and I can sell a property if needs be".

He just got made redundant. But isn't worried because he just invested equity from his property portfolio in a property development project, so is going to focus on that full time.

Human beings love cults. We recreate them over and over. Love Island, Zeus, Jesus, Jonestown, Tulips or NZ property. Doesn't matter, it's all still irrational belief.

The good old NZ boom and bust cycles.
Ostriche farms was a great one. Head in the sand pub intended.

Another bit of common ground!

Adversity is a great leveler.

Just watched an interview Tony Alexander did with Ray White on 6th April 2020 (3 days ago)

Tony Alexander - now after 2 weeks of COVID 19 lockdown, massive 180 degree change after the horse has bolted - "opportunities" = price drop which Tony missed.

Now calling for "opportunities" (euphemism he uses for house price falls) when he has been telling people to that property prices are expected to rise. Recent buyers who took Tony Alexander's advice and bought property with high heels of debt will be potential collateral damage. Property is illiquid and will take at least 1 month to sell.

He is hoping that the returning Kiwi expats will fill the demand ...

I know of several Kiwi expats living abroad in US, UK, France, Asia, Australia - NONE are currently or planning to return to NZ. They have already established their careers in their current localities. Their families are integrated with the local community. Perhaps younger expat Kiwis who are not yet established, on their OE, and lose their jobs may choose to return to NZ - it will be unclear whether they have sufficient funds for a deposit to buy a house. Also they will not have jobs upon returning to NZ, so will be unable to meet bank debt servicing criteria (which require an income).

Tony Alexander is claiming he has been telling people for the past 2 years of potential risks. He is now backtracking and trying to protect his reputation. That behaviour is so deceitful & dishonest, and is what one can expect from a slick oil salesman. He has potentially ruined so many lives, caused so much loss of financial security (potential bankruptcies, loss of funds for use in retirement), psychological trauma and mental health issues (such as depression, and anxiety), and potential suicides.

Many commenters have been warning on to give people a different perspective so that people could make a fully informed decision and this gave sufficient time for people to act. People made their choice and acted accordingly. People now face the consequences of their choice.

Is this the beginning?

What type of owner lists their property for sale during a nationwide lockdown? Perhaps the impatient, the fearful?

Lockdown date: 26 March, 2020
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?

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.

I think people should try and carry on as normally as possible. Looks like they bought this place a little run down and have spruced it up for sale. Maybe that's their job? It's a good thing to do, making things better. Best of luck to them

What a BS merchant. No shame.

A collection of Tony Alexander's views on the housing markets. Remember property investing is a long term game (not short term day trading, or monthly trading of properties by most property investors) ...

2 April 2020:
Factors which will mitigate this decline include low interest rates, no housing over-supply apart from in some parts of the regions, existing city shortages, and first home buyer and investor preference for new builds to get around LVR restrictions on deposit size. But aggravating the downturn will be the pullback of banks from new lending as they concentrate on servicing their existing client bases. Banks in particular will have very little and perhaps no appetite, for new property developments. If so then the decline will end up between 20% and 50%. Whatever the decline, what does history tell us will happen? Shortages will eventually appear. Prices react to those shortages. For those with a focus on the long-term the fundamentals have not changed, apart from in our tourism hotspots. Their booms have passed and hopefully the magnitude of foreigners we’ve seen crushing our beautiful landscapes these past five years will never return to the same degree.

30 March 2020:
We entered this turbulent period with shortages of property in our main centres – but probably oversupplies in many regions, especially now. This main centre shortage means not just a physical shortage of property, but a shortage of listings also, Given the low interest rates and mortgage holiday it is extremely unlikely that listings will massively surge when our economy opens up again

26 March, 2020 :
Our housing markets are going to go on hold for the remainder of this year as we wait out the virus. Buyers will clearly pull back because of income concerns. But how many sellers are likely to come forward trying to sell their property because they have to?

19 March: 2020:
What does this suggest to us? Will average prices fall? Possibly not outside the tourism hotspots and some other parts of the country where investors may have got ahead of economic and population growth reality, given the shortages, the firm population growth, and low interest rates. Will the three years following the start of the economic recovery produce little price growth? Probably the outcome will be better than flat given the fundamentals just cited and the absence of a period of strong price rises heading into the decline – except in the regions.

12 March 2020:
Do I think that Auckland prices are going to almost double over either the five year period which started in the middle of 2019, or over the time period I had been expecting an upturn to commence and roll of 2021-26 (but then the RB slashed rates 0.75% and brought the upturn forward)? No
Auckland house prices won’t surge near 90% this “cycle”. But upside does beckon. What about the regions? They have undergone a number of years of catching up with Auckland. That period will be just about ending now through natural relativities, potential over-building in some locations, and the fact that the Covid-19 hit to tourism will proportionately affect the regions more than the cities. The chances are that in our tourism hotspots we will see falling house prices for a while. I don’t as yet have data to hand disaggregated below the regional level so can’t draw graphs for the likes of Rotorua and Queenstown.

5 March 2020:
It is a near impossible task to try and accurately balance the various factors affecting our housing market as a result of the virus outbreak, alongside the usual uncertain factors. But the chances are the various things in play will balance each other off and leave the market still with rising prices – in the cities. For the regions I would suggest the boom is over.

27 February 2020:
No new data which I pay attention to were released this week so let’s take a look at a longer than usual list of reasons why house prices around New Zealand entered a new upward phase from the middle of 2019. And it is useful to note something interesting about the upturn – it is happening in both Auckland and outside Auckland on average.

20 February 2020:
A reader asked for my comments regarding a report released last week by a research foundation set up by ex-Prime Minister Helen Clark looking at housing affordability. So, I had a quick look just in case it offered something with a realistic chance of being introduced to the effect that prospects for future house price gains would be reduced. It did not.
Do I think price growth will continue? Yes. Interest rate rises lie a long way down the track. Our population continues to get a 0.9% boost per annum from net migration flows. Wages growth has accelerated. Construction growth is strong but will be retarded by shortages of labour and also shortages soon of some materials because of factory shutdowns and supply chain disruptions associated with China’s latest virus.

Then on 6 April 2020

"... we have to anticipate that the prices generally are going to decline, I'd suggest everywhere around New Zealand " (18:47)

This seems appropriate and has a large degree of truth to it ..

As a reminder, first home buyers put down 20% deposit to buy a house.

1) If property prices in Auckland fall 20%, then the first home buyers would see their equity value evaporate. How many years did it take first home buyers to save for their deposit?
2) If property prices in Auckland fall more than 20%, then the first home buyers would be in negative equity.
i) If they keep their job, the payments the first home buyers make will be to reduce the negative equity hole, (i.e to get back to zero equity) before gaining any equity value.
ii) if they lose their job, then the first home buyer may need to sell and realise the loss. And then when they get a new job, they may have the loan shortfall to keep paying (as the house value is less than the loan value)

Tony Alexander 12 April 2020

Where the cheap houses are likely to be. (note that the sellers are those property owners he told that property prices are going up less than 30 days ago)

His view on expats returning is rubbish, wishful thinking on his part.
As you say, many or most expats are settled in to permanent lives overseas. Most are unlikely to return unless they lose jobs, but then what do they return to?

I'm amazed he points to expats returning, while completely ignoring the massive numbers of immigrants on short term working visas.

As unemployment rises immigration from people on work visa's will largely dry up. And many of those already here will be forced to return home if they don't have employment. The sad truth is that we have done no one any favors by bringing in massive numbers of low skilled workers, simply to help drive down costs to businesses. We are about to pay the price for that short term thinking.

A family member (by marriage) landed back in NZ, just before the lockdown, with his wife and kids. He was just about to start an impressive job in NZ after half a decade in Oz. The job was withdrawn the day he landed. He is currently looking for work.

Reset. Many agencies and so called experts will become worthless going future be it like of WHO or Tony A and it's breed.

Ah yes. The so called 'trusted advisors'.


"Many commenters have been warning on to give people a different perspective so that people could make a fully informed decision and this gave sufficient time for people to act"

The potential dangers of house price vulnerabilities to raise awareness to first home buyers were highlighted by commenters on this article back in August 2019. Given the current environment, the comments may now been seen in a different light.

They're hunkered down using up all that toilet paper

What next: an intermission of 3m followed by another wave, a la 1918.
Unfortunately, world financial stocks want to tell people and delude themselves that it is all going to be fine and go back to "normal" after we do our 4 weeks.
NZ need to recall that 70% of GDP is consumer led, not by exports.
Also, that exports have to be bought by nations taking a massive hit to GDP and confidence.
Who is predicting a 33% hit to trade.
NZ looks like it will do better than many countries but the world economic system will take 2-5 years to get back to where it was at end of 2019. People need to read some more on course of the 1918-20 pandemic. It lasted 3 years and came at a time of massive dislocation, war and migration between nations, poverty and death en masse etc. Sound familiar?

And the decade ended in a crash, a depression and another sorting-out.

And that was with only 2 billion on a much more pristine planet.

Never mind MK, noted epidemiologist, Mike Hosking with his PHD in everything from a West African university, is on it in the Herald advising on the way forward. Someone yesterday lamented that this epidemic would spell the end of the Herald. I thought, at last, a ray of happiness amidst the gloom although I did need some more weed mat material and probably could use some paper for the coming winter fire starting...

MikeK. No, actually it doesn't. In 1918 there was virtually no understanding of the behaviour of viruses, governments were lax on movement control ( NZ's particularly complacent) and govt high level understanding of complex modern economics rudimentary. NZ enters this environment with government receiving almost unanimous buy in from the population for strict movement controls, our medical knowledge and treatment capability is light years advanced from 1918 and we have government and opposition united in willingness to deploy whatever monetary and fiscal tools are available to ameliorate the effects of the difficult times we are facing. The differences between now and 1918 are profound.

"NZ need to recall that 70% of GDP is consumer led, not by exports
NZ need to recall that 70% of GDP is consumer led, not by exports
NZ need to recall that 70% of GDP is consumer led, not by exports
NZ need to recall that 70% of GDP is consumer led, not by exports ...

Its worth repeating.

Unless you get consumption levels up to previous levels we are in a whole lot of pain...
But you cant just keep putting it on the tab …

Dead right, pain a plenty is coming at us real fast and the borrowing will have to stop sometime. But our economy operating at 90 or even 80% of previous GDP is not comparable to the sugar bag days of 1930 - 32, as the dark web people on this site would have us believe.

I haven't seen anyone saying things will be like 1930's. Who are these dark web people?

Its a facetious label for the apocalypse brigade who insist the present recession is a revisiting or worse of previous economic calamities.

You can bag China all you want but they know how to get things done. If you watch Aljazeera then you would see them all now running an App on their phone that gives you either a Green, Red or Yellow QR code and it allows you to travel and also track where you have been so that if anyone is later found to be infected it can go back through the record and then contact everyone thats been in contact. You have to show it on the bus, on the train and in restaurants so its time stamping you and your location.


The Uighurs wouldn't need the app given they are all happily living together in their government university campuses receiving a higher education.

Or if you insult Xi, they can trace you and make you disappear

I think its underappreciated the lengths China went to do ensure compliance with the Wuhan lockdown, and how unlikely we will ever see the same draconian measures in other countries.

So while china looks to have gotten the virus largely under control, the question is whether countries (with greater personal freedoms) can expect to contain the spread as effectively. The only examples so far appear to be those countries that have had the capability to roll out extensive testing. Those that don't may struggle to get the same sort of results.

Now that they have re-opened the Wuhan borders we can expect that the true story of what happened there will start to permeate out. The govt might have cut off internet to people who complained or who were otherwise affected, but damning information can still make it's way out on physical media.

It also helps that China has a single financial transaction hub, which enables Der Gubmint to track every citizen, all the time, in close-to-real-time. Add massive CCTV coverage, facial recognition, AI, phone tracking and humungous databases busily relating all of this, and the Chinese citoyen are actually living under Skynet....

Not our way, Emperor Xi (oh, darn, I'm a Target for the algo's now too).

I'd rather catch Covid19 and take my chances than live like that.

Article in bloomberg reports that 'Australia's Huge Household Debt Threaten to Worsen Recession'

What happens to NZ ?

Glass half full (of serum from recovered WuFlu bods): Johns Hopkins teams who have just had their century-old treatment derivation approved for fast-tracking by the normally somnolent FDA.

Here is the Head of WHO.

The leader of WHO has gone on a bizarre rant attacking Taiwan while claiming to be the victim of racist comments and death threats.

Really great news today with lowered new cases - just 29 down from 89 four days back. If this rate of fall keeps up then there is some chance that we could get to zero cases in another coupe of weeks (assuming no slip-ups from known infected). If that can be achieved it is worth doing so that we can get back to normal life. And we finally have proper border quarantines! Feeling very optimistic :)

Agree. Great news.
Along with quarantining, hopefully it means that in 4 weeks almost everything can reopen.
If that is achieved I will take my hat off to the govt and also to advocates like GingerNinja. Labour will be an election shoe-in.
We will still have economic carnage, but overall it would be a good outcome.

Fritz, on the balance of evidence and expert opinion, I had tended to believe that earlier and harder intervention would be less economically harmful than the other options. But it is just a belief. No one really knows. It's all modelling and best guesses.

My perspective is heavily biased towards psychology/behaviour, because that is my background and I tend to see behavioural economics as having as much, if not more impact than fiscal/monetary policy (although these things are not mutually exclusive either). I'm also a massive history geek so look to longer term human trends. The narratives of human culture tend to lead and eventually dominate politics and economics over the long term and it is my deduction that when people are afraid, they are prone to dangerous and extreme behaviour. So it has been my hope that in the paternal lock down that NZ gov has enforced, it will reassure people who would otherwise have been scared and panicked. A hope that trust in the system will be reinforced and a less psychologically scarred Kiwi will re-emerge. NZ doesn't have a perfect government, leader or system, but it is a considerably better than most of what history has delivered.

I don't think the global economic and psychological harm was avoidable once the virus escaped Wuhan and I just happen to believe that the hard lockdown and early intense government intervention is more likely to enable the V rather than the L recovery. Again though, that is based on my own assessment of the economic modelling and my own bias towards understand human behaviour.

And whilst this pandemic will be misery for many, I still have some hope that this could be the reset that GFC never was. Especially for climate change and the longer term sustainability of our species.

At present they are a shoe in BUT how the economy is managed is the elephant in the room. Can they manage it with a fair hand helping business and helping the poor? Not the best history in the last 2.5 years.

3 more years for you to moan and complain then.