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Surge in Chinese bank lending; US unemployment leaps; Fed adds huge new bank stimulus; Korea suffers trade blowback, commercial property sags, UST 10yr yield at 0.75%; oil stays low but gold jumps; NZ$1 = 60.8 USc; TWI-5 = 67.1

Surge in Chinese bank lending; US unemployment leaps; Fed adds huge new bank stimulus; Korea suffers trade blowback, commercial property sags, UST 10yr yield at 0.75%; oil stays low but gold jumps; NZ$1 = 60.8 USc; TWI-5 = 67.1
14th Apr 20, 7:21am by David Chaston

Here's our summary of key economic events over the weekend that affect New Zealand, with news the virus spread may be easing off but the economic fallout is deepening.

There was a lot going on economically over the long weekend and we have covered much of it in our special weekend editions.

So now is a good time to summarise the really big items.

Firstly in China, new loans extended by Chinese banks surged in March, their aggregate financing hit a record high and their money supply grew at the fastest pace in three years, after a big pump of liquidity to support their economy. New bank lending climbed to NZ$670 bln in March, surging from NZ$215 bln in February.

Going the other way in the US, new jobless claims exploded again, adding +6.6 mln people last week to the prior week's +6.9 mln (itself revised higher). And don't forget the +3.3 mln in the week earlier than that. In these three weeks that is almost +17 mln people suddenly out of work on top of those that have had hours or pay cut but still retain their jobs.

And the US Fed has vastly expanded its backstop lending to companies that are now in dire straits, chiming in with a new US$2.3 tln program on top of the trillions previously announced. It's a move so big that essentially, the US Fed now controls the US bond market. And it is a move that has the Fed supporting companies with risky debt situations. The Fed finds itself completely unsupported by the fiscal authorities, applying monetary solutions to a fiscal problem.

South Korea is getting a wave of severe cutbacks, not because their virus situation is out of control - it isn't - but because demand has plummeted in its key export markets, especially the USA and Europe, for its industrial products. And although their virus situation seems under control, they are still going to the polls tomorrow in national elections.

Japan is ramping up its social distancing efforts again as signs grow of renewed spread. Economically, domestic Japan hasn't been hit hard, but export wise it will be.

Back in China, their commercial property sector is under increasing stress. The vacancy rate for Grade A office buildings in Beijing, Shanghai and Shenzhen rose to 14%, 21% and 25% respectively, at the end of March and involved sharp rises everywhere.

In Australia, the RBA has also pointed to commercial property as an ugly risk for banks. (see page 22.) They say it is not a killer risk for banks, but as they pull back from the commercial property sector, that sector is facing a very tough future as valuations dive and vacancies surge.

The New York equity markets are open today, and lower. The S&P500 is down -1.5% and falling. Yesterday, only Asian markets were open and Shanghai was -0.5% lower, Tokyo was -2.3% lower. Hong Kong was closed.

Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 1,897,400 and up +70,000 this time yesterday which is a slower rising tide. Now, 30% of all cases globally are in the US and they are up +26,000 since Saturday to 568,100. This is a slower rate of increase. The level of US cases that have recovered is up to 7.5%. The UK now has more cases than China and three times the death level, in fact a death rate of 12.7%. Australia has now over 6300 cases, 4500 active, and while the rise in infection is slowing quite quickly now, deaths are not and now exceed 60.

Global deaths now exceed 118,000. Three mutations of the virus are now spreading.

There are now 1349 Covid-19 cases identified in New Zealand, with another +19 new cases yesterday and about the same as the +18 increase on Sunday. These are the lowest daily increases since March 22, three weeks ago. The number of clusters is up to 15 however. Five people have died here, all geriatric patients, while another four are in ICU and one in a critical condition. Fifteen people are in hospital. 40% of all New Zealand cases have now recovered.

The UST 10yr yield is holding at just on 0.75%. Their 2-10 curve is little-changed today at +50 bps. Their 1-5 curve is also still at +16 bps, and their 3m-10yr curve is marginally steeper at +56 bps. The Aussie Govt 10yr yield is now at 0.97% and down -2 bps overnight. The China Govt 10yr is at 2.56% and a rise of +2 bps overnight. The NZ Govt 10 yr yield is unchanged at 0.98%.

Gold is up strongly today, up US$32 to US$1,718/oz.

US oil prices are a little softer at just under US$23/bbl. The Brent benchmark has stayed low at just under US$32/bbl. The expected rise after the OPEC/Russia output cut deal hasn't happened. There still is no demand.

The Kiwi dollar will open the week higher at 61 USc. On the cross rates we are lower at 95.4 AUc and against the euro higher at 55.9 euro cents. That means the TWI-5 will start at 67.1 and its highest in a month.

Bitcoin is now at US$6,768 and a -4.9% fall from where we left it yesterday. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Our exchange rate chart is here.

We welcome your 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.

206 Comments

by  Thinker  |  14th Apr 20, 7:38am 1586806708

I still can’t see how there isn’t going to be another 2nd wave across the world. Their populations are just too big not too. Even with no international travel it’s just too hard! Expect a massive sell off in markets once that happens. Just hoping NZ eradicates and demand for our dairy exports sky rockets

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by  bw  |  14th Apr 20, 7:50am 1586807418

(Forget which) TV programme in the middle of last night suggested that 'there may not be Next Waves as such, but random "Hit-and-Run' type outbreaks'. Now, that would be a disaster. It's bad enough to anticipate a Wave but to not know when or where the next Outbreak would come; only that it would, would see borders closed ad infinitum.

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by  Kezza R  |  14th Apr 20, 8:01am 1586808067

It is how the Spnish Flu worked and it is a standard virus evolution to mutate into a more verilant killer of young people which enables a better spread by the host. i.e older people do not spread it as far as younger people when they die sooner.

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by  leila  |  14th Apr 20, 8:24am 1586809461

Source please? Ie for "standard virus evolution". I'm not sure that mutations always benefit the virus, many mutations actually weaken the virus (peak prosperity interviewed a virologist on this)

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by  Kezza R  |  14th Apr 20, 8:23am 1586809385

I read it somewhere and watched a video from a virus professor stating that this is the case. Iots of info out there on this.

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by  youngdumbandbroke  |  14th Apr 20, 8:44am 1586810668
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by  Kezza R  |  14th Apr 20, 8:48am 1586810914

Cheers, I am on, being a teacher duty.

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by  gingerninja  |  14th Apr 20, 9:07am 1586812078

There is a lot of misunderstanding of genetics and mutations out there. Evolution is accidental, not designed, not intended, not purposeful.
Viruses mutate randomly, just like every other living thing on the planet, but they mutate much more rapidly than most life forms. Viruses do NOT necessarily mutate to become more lethal or virulent... it just *seems* that way because the less lethal and less virulent mutations die out or go unnoticed because they have less extreme symptoms. There will potentially have been many strains of SARS-CoV-2 that have already come to a genetic dead end, because the random mutation was not successful. If a virus mutation is more virulent but not more lethal, that strain will replicate and the virus will potentially become less lethal. If the virus mutation is more virulent and more lethal, many more people die and frankly, it can go either way, there is no rhyme or reason and that is the nature of random mutation. The more times a virus replicates (ie the more people it infects) the more opportunity we give it to mutate, which could be good or bad, you can't know. The more people it infects, the more opportunity we have to build immunity, however so far, human immunity to Coronoviruses has been short lived and sketchy.

Everyone appears to be clinging to narratives on either side of an extreme paradigm but none of us can know. This is a novel virus and our ignorance, inexperience and lack of immunity to it, poses the greatest risk. We may get lucky or unlucky.

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by  Kezza R  |  14th Apr 20, 9:13am 1586812430

All in all there is a substantial risk it will mutate into something that is worse.

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by  CJ099  |  14th Apr 20, 9:37am 1586813825

Yes and I agree with you it has strong similarities to the 1918 Spanish Flu which mutated several times as it spread gradually from country to country. Good documentary link here from Cambridge University: https://www.youtube.com/watch?v=3x1aLAw_xkY

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by  Kezza R  |  14th Apr 20, 9:29am 1586813393

Two options risk it or not to risk it. Safety first.

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by  youngdumbandbroke  |  14th Apr 20, 9:39am 1586813984

https://www.youtube.com/watch?v=E3URhJx0NSw

Michael Ostenholm explains why the Spanish flu killed many between the ages 19-25 in the podcast and draws some comparisons to the current virus in regards to the way it spreads but it differs in other aspects

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by  youngdumbandbroke  |  14th Apr 20, 9:42am 1586814139

He also predicted that a new more catastrophic virus would come from China after his work done on the SARS outbreak

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by  waymad  |  14th Apr 20, 10:09am 1586815788

A educated Voice of Reason...keep 'em coming.

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by  leila  |  14th Apr 20, 9:06am 1586811966

https://www.livescience.com/amp/coronavirus-mutations.html - links and references to studies here

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by  CJ099  |  14th Apr 20, 8:56am 1586811378

Leila; Re virus mutation - It's right there in this article "Global deaths now exceed 118,000. Three mutations of the virus are now spreading". If you click the link on the highlighted text, it takes you to the SCMP article. Quote: "Types A, B and C are all derived from the pathogen first found in bats but have evolved in different ways, according to a report by British and German geneticists. Findings show the virus has become well adapted to human transmission and mutates as it spreads, Chinese epidemiologist says".

SCMP Link: Deadly coronavirus comes in three variants, researchers find https://www.scmp.com/news/china/science/article/3079491/deadly-coronavi….

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by  leila  |  14th Apr 20, 9:42am 1586814141

This is from my livescience.com link aboce: "The word mutation "naturally conjures fears of unexpected and freakish changes,"... "In reality, mutations are a natural part of the virus life cycle and rarely impact outbreaks dramatically." RNA viruses, or those that have RNA as their main genetic material instead of DNA, including SARS-CoV-2, mutate constantly and do not have the mechanisms to fix these "mistakes," as human cells do, for example.

But most of these mutations negatively affect the virus. If mutations are not beneficial to the virus, they are typically eliminated through natural selection, the mechanism of evolution whereby organisms better adapted to their environment tend to survive. Other mutations survive and get embedded into the "average" genome of a virus.

Typically, multiple genes code for traits such as a virus's severity or ability to transmit to other people, Grubaugh wrote. So, for a virus to become more severe or transmit more easily, multiple genes would have to mutate. Despite high rates of mutation among viruses in general, it's unusual to find viruses that change their mode of transmission between humans over such short time scales, he wrote.

So, what does all of this mean for the development of a possible vaccine?

These viruses "are still so genetically similar that these mutations shouldn't alter a new vaccine," Grubaugh said. It's "unlikely that the developers have to worry about this." Once the vaccine is out, however, the virus could adapt to it and develop resistance, he said, but considering that other RNA viruses — such as those that cause measles, mumps and yellow fever — didn't develop resistance to vaccines, that scenario is unlikely.

In fact, these mutations help scientists trace the steps of the virus, Grubaugh said."

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by  murray86  |  14th Apr 20, 8:43am 1586810620

Don't forget the early reports of people who had recovered from COVID, but then tested positive again. This perhaps suggests an ability of the virus to go dormant, or the individual to continue to infect others even though they themselves had recovered from it, in effect they become a carrier.

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by  Foxglove.  |  14th Apr 20, 8:51am 1586811080

Yes that is the grave concern for all seniors especially if you add to that, individuals in Iceland for example are walking around with CV19 on board, but showing no symptoms at all.

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by  theglc  |  14th Apr 20, 9:41am 1586814080

Or does it just highlight the inaccuracy of testing

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by  The Person  |  14th Apr 20, 9:48am 1586814516

Or it reflects that the current test is not very reliable and gives lots of false negatives. I.e. the patient had never recovered, they just got a test failure.

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by  gingerninja  |  14th Apr 20, 10:27am 1586816850

That was the original hypothesis back when it first happened in Japan. But the recent 111 cases in South Korea have now challenged that. Korean CDC suggest that it's either the revived virus that survived treatment or fresh exposure to the virus after recovery.

https://www.koreatimes.co.kr/www/nation/2020/04/119_287752.html

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by  Dale Smith  |  14th Apr 20, 10:03am 1586815383

Or like we do in NZ, just allow the infected to declare themselves virus-free when they don't show any more symptoms. IE we don't even retest them to show they are clear, and we let a nonprofessional self diagnose whether they are clear or not.

We close down the economy to then do this?

Everyone that has been diagnosed as having the virus should be retested to show they are clear before they can claim they are.

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by  Lanthanide  |  14th Apr 20, 1:32pm 1586827949

1. Because the medical evidence is that once you've been free of symptoms for 48 hours and it was at least 10 days since you first started having symptoms, you're no longer infectious, even if you do still have residual levels of infection in your system.
2. There's no point wasting a test on someone who is highly likely to still be infected but not infectious. We already knew they were sick, we don't need a positive test to decide they need to self-isolate further, that decision can be made in absence of a test.

What matters is whether someone is infectious or not.

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by  taimaiakka0  |  14th Apr 20, 10:55am 1586818538

Problem may nit go untill vaccine is discovered and rill that time can only try to contain it and for that international borders will be closed or will have restriction for some time.

Surreal world.

Social and Economy Disaster.

Hope everything gets over soon.

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by  scarfie  |  14th Apr 20, 7:42am 1586806935

Talking with my brother over the weekend & he'd picked up that Russia can't dial back oil production because the systems are not engineered for that. No link though so not corroborated.

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by  dictator  |  14th Apr 20, 8:04am 1586808248

It takes a lot of effort and resources to shut down a well. Where the russians drill for oil there is a compounding problem of the well freezing over. They would need to redrill to open the wells, they just don't work like taps.

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by  Zachary Smith  |  14th Apr 20, 8:09am 1586808572

Probably the same for our economy as well.

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by  dictator  |  14th Apr 20, 8:14am 1586808872

There were businesses going under the week before the lockdown. Once the country is down to Level 2 I'll likely be back in the office seeing which companies still exist. I'm expecting a drop is demand for my services, but I've been running overcapacity for 2 years now.

I'm sure banks will take the same approach when reviewing all the defaults to see which investors or other borrowers still have an income. No doubt many will be told to sell and a number will be forced to sell over the next year.

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by  redcows1  |  14th Apr 20, 8:18am 1586809111

Not before the banks try and unload them onto the taxpayer no doubt.
(Sorry just can't find the cynicism off button)

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by  dictator  |  14th Apr 20, 8:22am 1586809343

Most don't realise how brutal the banks get when they don't get their money. The banks will just list them from worst to best and work their way through collections. When someone has no income the banks will freak out but the Government's various payments should counter the worst of it. Also people contacting the banks to organise some measure to mitigate income issues will delay the bank worrying about them.

I'd assume any bank bailouts will happen directly through RBNZ.

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by  sharetrader  |  14th Apr 20, 8:48am 1586810903

there are a lot of businesses in NZ structured around low cost imported workers to keep the cost down, without that source they not viable ie fruit picking. too things may happen with a bigger supply of unemployed there may be more people willing to do that work at the wage offered and or wages may increase a little.
as for the café/takeaway/restaurant scene many of those will never reopen, they will be hit with the double wammy of less customers and having to pay more for staff rather than import them.
I see the national party are already lining up to get people with working permits that are overseas back into the country, I agree if the are healthcare workers but for the rest sorry we are going to have plenty of people citizens and residents that will be looking for work in the coming days and they need to be front of the line

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by  Kezza R  |  14th Apr 20, 9:47am 1586814459

After a decade of very low interest rates we have had very few businesses failures. We were due a correction to cull out business and that is what we have. It is called a cycle.

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by  profile  |  14th Apr 20, 7:44am 1586807050

" The COVID-19 death risk in people 65 years old during the period of fatalities from the epidemic was equivalent to the death risk from driving between 9 miles per day (Germany) and 415 miles per day (New York City). People 65 years old and not having any underlying predisposing conditions accounted for only 0.3%, 0.7%, and 1.8% of all COVID-19 deaths in Netherlands, Italy, and New York City. CONCLUSIONS: People 65 years old have very small risks of COVID-19 death even in the hotbeds of the pandemic and deaths for people 65 years without underlying predisposing conditions are remarkably uncommon. Strategies focusing specifically on protecting high-risk elderly individuals should be considered in managing the pandemic."
https://www.medrxiv.org/content/10.1101/2020.04.05.20054361v1

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by  Kezza R  |  14th Apr 20, 7:56am 1586807788

After your bombardment of stop the Lock Down propaganda yesterday, I guessing everyone has had enough of your PR machine.
Yes 'Strategies focusing specifically on protecting high-risk elderly individuals should be considered in managing the pandemic." will be considered but at present we are trying for a total elimination. Yes we know that you do not think that is possible as you have stated several times but that is what is happening. Looking at new info that is showing a second wave in countries, it is a very prudent approach.
Whatever the equivalent driving death risk rate is in NZ, please go and walk that arround your immediate area and chill the hell out please.

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by  Zachary Smith  |  14th Apr 20, 8:02am 1586808136

I appreciate profile's contributions. It's obvious your agenda is the destruction of NZ society so that 20K+ of survival gear you bought doesn't go to waste.

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by  Kezza R  |  14th Apr 20, 8:15am 1586808926

Whatever.
The lockdown stays inforce and will continue for as long as it continues for with or without Profile spouting off at everything.
All in all him carrying on is a waste of time at best.

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by  profile  |  14th Apr 20, 8:21am 1586809306

Death stats from C19 in Italy to 9th April.
0-9 years 1 death
30 years 8 deaths
40 44
50 197
60 835
https://www.epicentro.iss.it/coronavirus/bollettino/Bollettino-sorvegli…

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by  Kezza R  |  14th Apr 20, 8:27am 1586809633

Stop the lock down and let the old people die.
Please post what business you are in Profile so the older people and others with families can stay well clear of your enterprise.

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by  profile  |  14th Apr 20, 2:08pm 1586830088

"stop the lockdown and let the old people die". Please. As you highlighted in one of your posts - and as I linked above "Strategies focusing specifically on protecting high-risk elderly individuals should be considered in managing the pandemic."
As for elimination I outrageously agree with Dr. Amesh Adalja - Senior Scholar, Johns Hopkins Center for Health Security. Perhaps have a read or a listen? Rather than target people's businesses (!) perhaps just come up with a sounder argument? Less hassle.
https://www.magic.co.nz/home/news/2020/04/infectious-disease-and-pandem…

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by  Kezza R  |  14th Apr 20, 9:32am 1586813573

https://youtu.be/E3URhJx0NSw
3.30 mins in. Dr's have to decide who lives and who dies. Over 65's do not get a ventilator.
Profile. This is what you are advocating for NZ. please post what business you are in so older people can stay well clear.
Come on Profile.. what is your business so people can vote with their feet in you wanting to expose them and family to death for your own profit.

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by  FCM  |  14th Apr 20, 9:16am 1586812584

I think there are two sides to this, one side we have seen a lot of modelling and scenarios based graphs. For the sake of a balanced argument it would be good to see some modelling for the other side (and unfortunately the real side now) of suicides, Domestic violence (1 call every 30 mins in CHC over the weekend),mental health issues, anxiety issues, etc etc..we have seen governments plan for the virus, now it would be good to see the plan for the fallout of the lock-down, which will be just as damaging to society.

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by  Kezza R  |  14th Apr 20, 9:54am 1586814883

I just did a combat exercise class on TV1 at 9.00 as recommended by the Ministry of Education. Yeah pumped up for a day at home practicing my new moves isn't exactly what is needed. I have done more than my fair share of fighting and bouncing work. After 5 mins I had to stop because they were saying visualize your punches and kicks. How is that conducive to a chilled or population on lock down???
The family violence issue will get a lot worse once the real money issues come home to roost. That dose not change if we lift the lock down.

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by  frazz  |  14th Apr 20, 8:41am 1586810480

How about you (Zach) and Profile can go set up your own site and push your views there. It is obvious most of the commentators here support the efforts currently in force (which is about saving lives first). As Yvil and you harp on about been taken hostage please push the mute button for 10 days.

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by  Zachary Smith  |  14th Apr 20, 8:47am 1586810852

I think we will save more lives in the long run by preparing better for the post lockdown period and the return to work.

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by  printer8  |  14th Apr 20, 9:03am 1586811838

Zachary
Don't kid yourself.
I don't think that you have all the necessary information to be the expert - I will wait and have more confidence in Jacinda and her advisers making the call.

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by  Kezza R  |  14th Apr 20, 9:01am 1586811690

So 'you think'.... no evidence, no links bit it is what you think. OH JOY, you decide about NZ deaths by saying 'I think'.

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by  Kezza R  |  14th Apr 20, 1:12pm 1586826738

https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12324…
There we go Zachary, 10 times worse than the standard flu. That is what you, Profile and Houseworks want to let go in the community.

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by  Kezza R  |  14th Apr 20, 8:59am 1586811567

& Houseworks.

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by  bw  |  14th Apr 20, 7:57am 1586807854

Comparing the death rate/ infection rate with the population SIZE is pointless. It's comparing it to CAPACITY to handle the sick and dying that matters.
Malawi, as an extreme example, has ~20 million, people and ( last I looked ) 20 cases. Calculate those odds! Until you know that in the whole country they have 25 ICU beds and 7 ventilators.
Once the infection rate gets above those 25 beds, what it going to happen?
It's the same for every country and why we are all taking such 'extreme' measures.

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by  bw  |  14th Apr 20, 8:05am 1586808341

This is what happens! Fear and Misinformation take over.
https://www.theguardian.com/world/2020/apr/09/vigilantes-kill-eight-peo…

“Dangerous myths and misinformation are feeding these vigilante attacks,” the UN’s resident coordinator in the country, Maria Torres, said in a statement. “[The killings] constitute serious breaches of Malawian criminal law and human rights standards.Malawi was one of the last African countries to detect cases of the virus, announcing its first three on 2 April.”

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by  powerdownkiwi  |  14th Apr 20, 8:05am 1586808315

Profile is a well-pinged propagandist.

But others still believe the economic growth forever narrative. From a long-view perspective, both are wrong'uns.

We are starting to see proactive initiatives forming, which is promising. the question is how much Government (and Local Government) will listen.

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by  FCM  |  14th Apr 20, 9:39am 1586813963

I think what will be interesting is how much will those industries/companies listen to the Government (and Local) on the initiatives to get the economy to grow etc again..or will they just try and take from the front end, and still slash and burn the employees to claw back profits lost in this, I am hoping there will be some strings attached if they are going to benefit from government investment.initiatives.

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by  Roger the dodger  |  14th Apr 20, 9:15am 1586812534

There is a good modelling tool for that capacity here:
https://covid19-scenarios.org/

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by  Foxglove.  |  14th Apr 20, 7:59am 1586807968

The first decree from our government was along those lines, elderly & pre-existing to get out of harms way. Why then were all the rest homes with residents in that exact category immediately not ring fenced. We have a relative in those circumstances but it was virtually business as usual, ingress & egress, right up to level 4. Nobody has told us to do otherwise was the answer. Go figure!

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by  Zachary Smith  |  14th Apr 20, 8:05am 1586808327

Many folk in the medical profession have been very blasé. Weren't staff told off for wearing masks?

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by  leila  |  14th Apr 20, 8:48am 1586810932

I went to my GP last week and was asked by the reception lady to remove my home-sewn mask. Naturally I refused.

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by  MadMax  |  14th Apr 20, 11:10am 1586819450

Claim you're Muslim

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by  gingerninja  |  14th Apr 20, 9:27am 1586813253

Elderly people in nursing homes are being abandoned.

Staff in nursing homes are often poorly paid, significantly less training than other healthcare staff and reliant on profit-focused managers for PPE, so they are terrified and some are abandoning their posts.

There will be a lag in reporting nursing and residential home deaths. The annual flu death count has always managed to capture these figures eventually, if not retrospectively, as the heath systems are experienced with the system for reporting flu deaths. But this is not the case for the current pandemic where there is a global shortage of tests, staff to undertake tests and overwhelmed diagnostic centres. Not to mention that there was no system in place and that recording paperwork becomes the last thing on your to-do list when you are clinically overwhelmed and people are dying.

Its infuriating how quickly people jump to compare seasonal flu deaths to SARS-Cov-2 deaths without realising that the flu death annual figure is arrived at retrospectively and with a tried and tested reporting process in place, compared to now where hospitals are overwhelmed and nursing homes are at the bottom of the priority queue to the extent that there are abandoned nursing homes being discovered.

https://www.bbc.com/news/world-europe-52014023

https://www.theguardian.com/world/2020/apr/09/care-homes-across-globe-i…

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by  Roger Witherspoon  |  14th Apr 20, 10:00am 1586815226

Personally, I greatly value your contribution Mr Profile. Carry on the good work. The dark force of Fearful Fashionable Groupthink is strong. You always provide excellent links that call into question the rubbish, sorry, opinion, no, sorry, dangerous propaganda stories we are spoonfed at every turn.

You help me to ask "Why am I being told this?" and "Who benefits from this point of view". Usually there is a bureaucrat protecting his reputation, his income and his tribe. Often he is someone else's useful idiot, often without realising it.

https://www.youtube.com/watch?v=k9GYTc53r2o

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by  waymad  |  14th Apr 20, 10:14am 1586816045

Indeed. Cui bono? (not the musician, Tacitus IIRC)

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by  Kezza R  |  14th Apr 20, 12:22pm 1586823739

Their is an articial showing economic outcomes. He could argue his point there. Making comments all over the show then not replying isn't the way to go.
Not everything is a conspiracy.
Apparently he is having trouble getting used to climate change and it is not happening as well.
Basically he's trolling.

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by  Andrewj  |  14th Apr 20, 8:01am 1586808093

Jonathan Tepper on Wuhan Flu, a really good read
you are going to have to copy and paste, sorry about the extra work.

https://medium.com/@tepper_jonathan/ground-zero-when-the-cure-is-worse-…

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by  Miguel  |  14th Apr 20, 12:44pm 1586825042

The author raises some very valid points about how the crisis should have been dealt with initially. However he fails to recognise that most countries didn't have the testing, contact tracing, supplies of medical equipment available to follow a best practice approach.

The lockdowns are simply an acknowledgement that most governments were simply unprepared to deal with a pandemic. The lockdowns can only be removed once the levels of infection are low enough that the health services have the capacity and equipment to follow the best practice approach.

*edit* it should also be noted the author is NOT an epidemiologist or a statistician. They are the founder of a Investment Management firm, so they have a clear vested interest in doing what is best for the stock market, not doing what's best for the population.

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by  dictator  |  14th Apr 20, 8:38am 1586810319

I read a timeline of Taiwan's approach (posted on twitter by Remi who is a part of RealVision) and it was early, as well as highly effective. They had a procedures and resources in place which were activated in January. Taiwan didn't shut down and they wear masks in public.

After this we are going to have to be a lot better prepared to act.

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by  NZChinese  |  14th Apr 20, 9:02am 1586811756

You can find an interview with their Vice President online. He talks about Taiwan's preparation towards another SARS-like epidemic during the past 17 years. Interestingly, Taiwan's approach can be described in one sentence: "Do the opposite of what China says."

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by  Fritz  |  14th Apr 20, 8:59am 1586811599

So the big question is why the f$%k countries weren't prepared? Something like this was inevitable...

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by  gingerninja  |  14th Apr 20, 9:31am 1586813516

Are you not aware of the DECADES of research on the human brains flawed abilities in risk assessment? Why on earth would you assume that we, as a species, make exclusively rational decisions? Sometimes we do, sure. But whether you look at behavioural psychology, sociology or history, given enough time, we just make the same mistakes over and over.

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by  Dale Smith  |  14th Apr 20, 9:32am 1586813549

It's the same reason NZ still is not prepared for the inevitable big earthquake in spite of us having the Christchurch Earthquakes.

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by  VeryInterested  |  14th Apr 20, 1:13pm 1586826830

It’s about being more proactive rather than reactive. Most are reactive - We’ll do something when we have to..... when “it” happens.

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by  Miguel  |  14th Apr 20, 12:34pm 1586824466

Same reason we are doing next to nothing to seriously address climate change. Same reason we are doing nothing to address a massive build up of systemically risky debt in the economy.

Because humans are bad at assessing risks unless they are immediate and we have a wide plethora of vested interests (with deep pockets) that profit off the status quo.

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by  sit23  |  14th Apr 20, 1:53pm 1586829191

How dare you call it climate change. It is Climate Emergency now. Until Coronavirus took it off all the headlines. We have snow on all the hills around us at present. No warming. No change. No emergency. It would appear it only exists while the news people are running with it. As soon as they find a new toy it is discarded. A new toy will be found that pushes Coronavirus off at some stage too. I just hope I can go back to earning some money before my house , and all our Council infrastructure falls down. Because that is what will happen if some peoples' philosophy is allowed to rule us.

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by  Carlos67  |  14th Apr 20, 2:19pm 1586830788

Countries are not prepared because there is no money to be made in what "might happen". Its been nearly 100 years since the last global pandemic so why would it even be on the radar ? What now needs to be done is a re-evaluation in the risk assessment because you can guarantee the next Pandemic will not be in another 100 years time. As the world population continues to grow and living standards and conditions decline I would suggest the chances of a new virus are growing exponentially. Highly likely the next BIG one will come within the next 10 years. Its now clear that some serious funding is required in this sector.

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by  Mr T  |  14th Apr 20, 8:06am 1586808372

Just wondering how much effect NZ's lower testing rates over the last few days has to do with our lower reported cases numbers...

Day Tests
9 Apr 4520
10 Apr 3061
11 Apr 2421
12 Apr 1660

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by  profile  |  14th Apr 20, 8:08am 1586808538

The pandemic is so bad we are going to shut down the country - but not so bad we are going to test on public holidays. You couldn't make it up if you tried. There are unemployed medical staff out there at the moment who could have been testing and earning some money.

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by  Zachary Smith  |  14th Apr 20, 8:11am 1586808669

Could it be because far fewer people were presenting?

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by  Kezza R  |  14th Apr 20, 8:18am 1586809082

Maybe it was because they were given some time off and people were in isolation anyway.
Enough with the conspiracy.

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by  Zachary Smith  |  14th Apr 20, 8:22am 1586809338

How is that a conspiracy? You're basically saying the same thing as me that fewer are presenting because they have the day off. People are only presenting if they have symptoms. I think there are now far fewer people with symptoms due to the lockdown. Fewer cold and flu symptoms as well.

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by  Kezza R  |  14th Apr 20, 8:28am 1586809737

It was to Profile.

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by  Zachary Smith  |  14th Apr 20, 8:36am 1586810166

Ah, makes sense now. All good.

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by  Mr T  |  14th Apr 20, 8:32am 1586809955

Maybe fewer people presenting or just fewer tests carried out over the long weekend, we may never know. However the real test will be this Thursday's case number following what could well be a return to more typical testing levels today and tomorrow - will be watching with interest

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by  RickStrauss  |  14th Apr 20, 8:37am 1586810277

Yeah, would imagine so. It's very easy to get a test now if you're showing any symptoms (or are connected to an existing case).

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by  BadRobot  |  14th Apr 20, 9:27am 1586813271

Bloomfield said yesterday that all respiratory illnesses (eg common cold, standard flu etc) are down due the lock-down. Take away the path of transmission and what happens...

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by  Pietro  |  14th Apr 20, 10:27am 1586816830

I think that is what Bloomfield sad yesterday.

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by  Pietro  |  14th Apr 20, 10:27am 1586816834

I think that is what Bloomfield sad yesterday.

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by  sit23  |  14th Apr 20, 1:56pm 1586829409

Great Freudian slip there!!! A lot of people will be sad if this whole project withers and dies away, just when they were trying to make it their live's project.

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by  Dale Smith  |  14th Apr 20, 8:20am 1586809207

yes, that is why they should also be giving us a rate of infection per 1,000 tested.

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by  King of the whiners  |  14th Apr 20, 9:20am 1586812803

There is a clear and obvious reason why test numbers have fallen (which was alluded to in the press conference yesterday). The lock down is now severely constraining the transmission of ALL respiratory infectious agents - seasonal flu, colds etc - ergo people are now having far fewer respiratory problems - and therefor far fewer are turning up at testing stations thinking they have COVID.

Profile - stick to your climate change denialism - I wouldn't say you are much good at that either but at least you are familiar with your own propaganda on the subject.

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by  gingerninja  |  14th Apr 20, 9:34am 1586813651

*throwing shade skillz intensifies*

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by  Kezza R  |  14th Apr 20, 9:37am 1586813846

Oh so he is also in denial about climate change as well.
He doesn't like replying, it's a run and post more PR somewhere else.

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by  FCM  |  14th Apr 20, 10:06am 1586815597

thought exactly the same, wonder what all the restaurant owners etc who would normally be trading heavily over this time thought.

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by  northman46  |  14th Apr 20, 10:25am 1586816753

Dr Ashley Bloomfield said this was due to fewer people turning up to be tested over the bank holiday, not that medical staff were taking time off.

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by  Andrewj  |  14th Apr 20, 8:00am 1586808003
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by  redcows1  |  14th Apr 20, 8:08am 1586808494

"you have to wash these people out"
If only.

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by  Smalltown  |  14th Apr 20, 10:06am 1586815617

Going to be a bit hard when one of them has a lot of hotels and other RE investments, has a hand in decisions and yeah has orange hair. There is a feeling that this probably delayed the shutdown (claytons) in the US.

Bit like NZ where RE was a major part in our pollies investments. How were they ever going to crack down on the excesses?

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by  Kadath  |  14th Apr 20, 8:10am 1586808615

There is a lot of talk and modeling how to prevent spread and fatalities of the virus. I have graphed the average NZ life expectancy as a function of NZ GDP and performed a regression analysis. Now It is easy to ‘model’ the fatalities or decrease in average expectancy with GDP fall, and it isn’t pretty. This is far worse when you consider that GDP will not recover for several years.

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by  bw  |  14th Apr 20, 8:24am 1586809452

Using GDP might a problem with your graph?
Perhaps Real Household Income might be a better measure? (ie: it's going to take a massive hit over this mess)
GDP had a good bounce when the earthquake(s) hit Christchurch, and I'd guess that given all the worry then, and since, has done little to extend the life expectancy there.

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by  Miguel  |  14th Apr 20, 1:02pm 1586826155

I love that huge swaths of hard right neo-liberals, who have spent years allowing unfettered capitalism destroy the standard of living for the majority of the population, all of a suddenly care about the well being of the population and don't want a recession in case it "harms the average person".

Just look at the rates of "Deaths of despair" in the US, and you will see these have been rising MASSIVELY during times of economic growth, simply because the standard of living is going backwards for most of the lower/middle class.

This narrative of "we have to get back to work, or it will harm the average person" is such a crock of absolute shit.

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by  Tom Joad  |  14th Apr 20, 11:44am 1586821469

The talk of relaxing restrictions in some of the worst affected areas such as Spain, Italy, US seems utter madness. Their new daily case and death numbers are still frightening even in lockdown.

Even if you assume that for every confirmed case there are 9 others not reported you only get to an infection rate of less than 2% of their populations. There is no herd immunity and lifting restrictions is likely to bring on a huge second wave of infections in those countries.

NZ has a real chance at elimination. Stick to the plan - it's the best option we have at the moment for the nation's health and economy. We only get one shot at this.

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by  Kezza R  |  14th Apr 20, 8:20am 1586809242

Exactally!
Some on here have decided that because they have watched some YouTube clips that it should all end and end now. Their money situation out weighs older people's lives.

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by  Zachary Smith  |  14th Apr 20, 8:27am 1586809631

Now Kezza R, I do appreciate your input and please don't think I am picking on you but I cannot resist pointing out that above you write:

I read it somewhere and watched a video from a virus professor stating that this is the case.

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by  Pragmatist  |  14th Apr 20, 8:31am 1586809871

There is so much irony, China wants to melt it down and turn it into cheap steel.

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by  RickStrauss  |  14th Apr 20, 8:39am 1586810340

And falsely certify it and sell it to NZ roading / bridge projects?

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by  Kezza R  |  14th Apr 20, 8:32am 1586809971

And to continue with that I said it could be searched.
The continued self centered stop the lock down PR from Profile is old news and just a continuation of 'no lock down'.

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by  youngdumbandbroke  |  14th Apr 20, 8:57am 1586811452

If you can't provide a source to back up your statement, how do we know you didn't make it up?

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by  Kezza R  |  14th Apr 20, 9:04am 1586811845

I have read several articial that reported the same. I thought it would be common knowledge by now.

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by  youngdumbandbroke  |  14th Apr 20, 9:13am 1586812384

I've seen several flying kiwis since the airlines have been closed up. That makes my statement as credible as yours

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by  Kezza R  |  14th Apr 20, 9:59am 1586815155

If I wanted to know more I could go and look. Yes there are still Kiwi's flying despite the reported airlines being on lock down.

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by  Smalltown  |  14th Apr 20, 10:12am 1586815923

Indeed, still flights coming in from up north.

https://www.aucklandairport.co.nz/flights

Flights today from Shanghai, Hong Kong, Bangkok and Singapore. Hopefully mostly cargo.

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by  youngdumbandbroke  |  14th Apr 20, 10:16am 1586816217

Youre trying to make a point to us, not yourself. Quote your source otherwise its bologna

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by  Kezza R  |  14th Apr 20, 12:25pm 1586823947

Or the reader could actually do it theirself.

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by  youngdumbandbroke  |  14th Apr 20, 12:30pm 1586824210

So we should research your claims to prove your point? Lazy

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by  Alittlebit  |  14th Apr 20, 10:06am 1586815595

Everything is up for grabs. The responses to this global [ and national ] crisis are an experiment with insufficient data. And the rules change while the game plays [ virus mutation and political change etc]. Science and experts always are critiquing each other. It is called a discussion. I appreciate this site for its unbridled debate and appreciate whatever insights are tabled, whether I agree or not. Silence Profile as you demand and is Silence what you want is a time of crisis?

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by  dictator  |  14th Apr 20, 8:44am 1586810694

We should head in the direction of Taiwan, which we most likely are at this point. In the US Trump has appointed a panel of cronies (including his own daughter and son in law) to reopen the US economy. To an extent they haven't fully locked down across the country and there's rapid spread heading into rural areas of the US. The unfortunate direction of the US will show us what will happen without taking appropriate measures to mitigate infections, at the cost of many lives.

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by  Noncents  |  14th Apr 20, 9:11am 1586812260

While I don't necessarily agree with this, it is something I have heard from Contacts in France.

The death toll in their village is significantly higher than the "official" stats say. A nearby old persons home was abandoned and over 90% of residents were found dead. None of which made it into the stats as they were not a "Hospital" admission.

Having seen the damage first hand this couple now see nothing wrong with coming out of the lockdown. Their reasoning is quite simple. There are no more old/sick people that can die of the virus in their village. Yes the virus will continue to spread, but the ongoing health impact will be minimal.

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by  Kezza R  |  14th Apr 20, 12:28pm 1586824088

PROFILE, Zach and Houseworks. Here you go, this is the kind of thing you want above.

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by  rastus1  |  14th Apr 20, 8:31am 1586809860

Gold starting to do what it does. The digital nothing btc getting exposed like the man swimming naked. Inevitable when something is backed by nothing but clunky software.

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by  frazz  |  14th Apr 20, 9:32am 1586813565

Thats funny - Gold is starting to do what it does ..whats that be bright and shiny? Don't get me wrong it has its place as a store of value (I own some), but still needs to be stored and markets (ETFS) have been manipulated for years. With bitcoin I can settle a contract anywhere in the world in seconds and no storage fees - and it has a limit (unlike Fiat paper currently being printed like theres no tomorrow).

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by  Believer1980  |  14th Apr 20, 2:18pm 1586830729

What limit? does it not devide into smaller and smaller parts? sure it moves in the opposite direction: 1 bit coin (purchasing power) constantly increase as it contains more and more of smaller units of higher value. The opposite of fiat currency where the unit measure of the currency is losing its purchasing power by more supply of it. But the end result is the same. If you need more virtual currency and the supply of the coin is to be fixed at a number, then say the coin has 100 parts, 1000parts, 10000parts etc. This will never end and creates the same "infinite" supply of money

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by  Farce Majeure  |  14th Apr 20, 9:30am 1586813413

Bitcoin is backed by the largest computer network on earth (10,000+ full nodes).

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by  blobbles  |  14th Apr 20, 11:24am 1586820268

Which have a lot of gold on their motherboards :-p

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by  Pragmatist  |  14th Apr 20, 11:56am 1586822189

Backed by rapidly depreciating energy consuming hardware.. okay, now why is that a good thing?

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by  youngdumbandbroke  |  14th Apr 20, 8:47am 1586810829

If anyone gets a chance, here is an extremely informative and interesting podcast from Joe Rogan with Michael Osterholm - a recognized expert in infectious epidemiology and advisor for 5 US administrations

https://www.youtube.com/watch?v=E3URhJx0NSw

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by  chris_t  |  14th Apr 20, 9:50am 1586814605

And as counter balance to that piece, perhaps some healthy dose of mistrust of "experts" who my have some conflicts of interest that have not yet been questioned hard enough...
https://www.zerohedge.com/health/explosive-report-wuhan-biolab-captured…

For good measure, have a quick read how the lovely mr. Bill Gates is so concerned about the good people (and particularly our children!) of this world...
https://childrenshealthdefense.org/news/government-corruption/gates-glo…

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by  youngdumbandbroke  |  14th Apr 20, 10:03am 1586815393

"China and the UK exchanged views seriously on the origin of the virus and reached consensus."
Does that mean the UK has chosen to side with China?

That whole article looked to be a pro-China piece designed to blame the US for the whole scandal. Typical

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by  youngdumbandbroke  |  14th Apr 20, 10:05am 1586815508
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by  Pragmatist  |  14th Apr 20, 10:53am 1586818412

childrenshealthdefense . org.. interesting site. Is the tinfoil hat mandatory or voluntary? Anti-vax, anti-5G, anti-fluoride.. All your favourite conspiracy theories in one spot.

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by  chris_t  |  14th Apr 20, 1:26pm 1586827606

Voluntary, just like being vaccine'd, or heaven forbid, thinking critically and using your own common sense should be... :)

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by  B-practical_not_PC  |  14th Apr 20, 12:03pm 1586822622

Just take a look at the pictures of the 'wuhan biolab' from that zerohedge 'report'. The Getty image has English signs on the doors?
If this lab was in fact in china surely there would at least be signs in Chinese. Come on readers...

"Sprayed by blood". Huh? If you read this stuff and believe it, you hold the media in higher regard than I!

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by  Keen Observer  |  14th Apr 20, 8:46am 1586810787

Worldwide debt is unsustainable enough before this bug and it's being passed on liked hot iron between participants/musical chairs game. Then now, also these worldwide lending being thrown by every countries - where, all those numbers came from? - very relative view my guess... works just for 'assurances'.

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by  Petey  |  14th Apr 20, 9:06am 1586812013

Agree with lockdown but can't help looking at Victoria's case announced 3 new cases population 6 million less total cases than nz less restrictions more like our level 3 I think if they are going to extend as they are pushing for on breakfast this morning they need to ease up on letting people go to beaches to allow household pressures to ease but maintain distances and open hardware stores allowing people to move on projects to ease boredom also to get some economic movement

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by  Smalltown  |  14th Apr 20, 10:20am 1586816413

Yes, I have to admit that I thought it was going to be horrific over there with their comical attempts at a Clayton's lockdown but they are doing better on some measures than NZ. Per capita deaths are slightly worse although with the low numbers involved this is statistically noise. On total infections they are about the same (per cap) but on new infections they are doing surprisingly well.

They are doing something right.

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by  gingerninja  |  14th Apr 20, 10:49am 1586818172

Maybe but not necessarily. With a novel virus, I would suggest it is way too soon to start making any assumptions.

The recent genetic mutation tracking has shown 3 strains of the virus that have mutated to particular effectiveness within different ethnic populations. The South Asian strain has been predominantly trapped within South Asian ethnic genetic profile but we don't know quite how or why yet. The European strain is potentially a more lethal strain, although again, that is a new hypothesis and yet to be proven.

We are making assumptions about governments doing things wrong or right but there are so many factors yet unknown that could have a much bigger impact on fatality;
* is there a particular air quality (humidity/temp) conducive to higher rates of infection or lethality?
*is there seasonality?
* is there a genetic factor between genders that makes the virus more lethal in men or is it a lifestyle factor?
* viruses are usually more deadly in those with weakened immune systems but the virus is not killing children (who have MUCH weaker immune systems than adults). Why is this? What about the virus is more fatal to certain demographics (I have said on here previously that I suspect it is related to endocrine function, insulin sensitivity and inflammation)
*Germany had the infection in Europe first, yet their fatality rates are nominally thousands less than their neighbours. Their fatality rates have been lower compared to every stage. Early on, before Italy and Spain's healthcare systems were overwhelmed, their fatality rates were *still* higher than Germany's so it's not so easy to just assume it is related to a superior health system. We can all agree that Germany has done more tests but that that does not explain that lower number of nominal deaths.
*are there other ethnicity factors as yet undiscovered?
*are there lifestyle factors as yet undiscovered... for instance, the majority of your immune cells are located in your intestines and increasing research is showing the function of the gut biome to immunity and inflammation. The genetic population of you gut biome is largely determined by how and where you were born and to what degree and type of bacteria you are exposed to as a child, so your gut biome is potentially adapted more specifically to digesting certain foods and not others. Does this impact resilience to the virus?

These are only a few questions. There are probably thousands.
https://www.researchsquare.com/article/rs-20304/v1

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by  Miguel  |  14th Apr 20, 1:09pm 1586826574

Thank you gingerninja. I appreciate your efforts to keep combating the wild spread of misinformation, with detailed well thought out posts. Please keep it up.

There are SO many factors that will impact the rate of spread its difficult to draw conclusions between countries... literally all it would take is one or two super-spreader events to completely skew the results

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by  Brock Landers  |  14th Apr 20, 2:14pm 1586830483

Internet rumours say Germany is less bad because of widespread tuberculosis vaccinations.

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by  Keen Observer  |  14th Apr 20, 9:03am 1586811839

Most neolib vested interest comments are suggesting for exceptional capital funds move back to NZ from CCP, means allowing the opening border soon for this exception. Their capital injection only happening with the people movement; tourism, student, hospitality, workers.. oh airlines is up too.
Guess what NZ, if you think that way.. specially to keep afloat the RE ponzi, you must compete hard with OZ, Canada, UK, US. - So, go hard the F.I.RE economy cannot flare up with closing up border for Oxygen.

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by  bw  |  14th Apr 20, 9:09am 1586812144

Until recently a 300 point drop in the Dow would have made people shuffle in their chairs. Today? Nothing. Who even looked!
We regularly get 500 points these days ( yawn); 1,000 points ( oh, really?) 2000 points ( So we did. It's going to bounce from here!).
Somethings lurking out there in the darkness of the financial future, waiting to make those chairs shuffle again, and it's not going to be just 10 times the previous instigator; not "just" 3,000 points....

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by  Noncents  |  14th Apr 20, 9:56am 1586814963

I think a lot of the change is that "everyone" is now in the stock markets via Super schemes.

Australia as a whole invests 9% of the total monthly payroll in shares. NZ while not compulsory is still over 3% (due to company cont).

More people = more income = more investing. There is no personal evaluation of companies. The money must find a home regardless.

This will clearly change as a result of Covid. I expect a big dip in the markets in a month or two when the unemployment figures filter down to the actual investment purchases by the super funds.

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by  The Lark  |  14th Apr 20, 12:45pm 1586825114

With 618000 of those Australians about to withdraw $20,000 ($10,000 now, $10000 in June), that's going to have some impact on markets. Same for kiwisavers, making hardship withdrawals, only process much harder for the, so time for withdrawal drawn out.

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by  Gallowmere  |  14th Apr 20, 9:38am 1586813936

Okay gentlemen, level with me: First home buyer in AKL, single, approx 120k in a deposit with all the kiwisaver and first home grants.
there is a 1 bedroom i'm looking at for myself and my repayments would be very affordable if I were to buy this thing. Question:Do I hold off because of covoid? Or should I see what happens to the market and see what else is out there? note this is a place to live, i'm not looking at investments properties :)

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by  youngdumbandbroke  |  14th Apr 20, 9:45am 1586814306

What is the chance you will be unemployed due to current circumstances? That would be the biggest consideration

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by  bw  |  14th Apr 20, 9:51am 1586814684

Spot on! A lot of FHBers are going to be in that 17.5% - 27% that's being bandied about.
Some are even going to be 'asked' to take a pay cut to keep their job. That needs to be factored in. What might the new pay rate be?

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by  CN  |  14th Apr 20, 1:59pm 1586829586

"A lot of FHBers are going to be in that 17.5% - 27% that's being bandied about."

Here are 3 questions worth thinking about that might affect some property owners:
1) how many negative cashflow property investors are in that 17.5% to 27% [unemployment rate] that's being bandied about?
2) what will they do with their negative cashflow property investment?
3) where are those negative cashflow property investment located?

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by  Gallowmere  |  14th Apr 20, 10:00am 1586815208

Good question!

to be a little cheeky/self-depreciating i'm in the public sector - so my income has not dropped at all despite not working a whole lot recently

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by  youngdumbandbroke  |  14th Apr 20, 10:09am 1586815769

Thats great for you! What I would say is if you do buy, interest rates are likely to fall as are prices in the short term, so holding off may get you a better rate and price. On the other hand, if you have found the ideal place and can easily afford it, the rate and price saving might be negligible compared to missing out on something that suits you.

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by  Gallowmere  |  14th Apr 20, 10:21am 1586816489

I was actually about to change jobs literally as the lockdown happened but my current job said they'd take me back anytime if things didnt work out so there's something to fall back on and my upcoming job said there was no worries about to when I start so I feel very lucky.

Yeah that's spot on the dilemma i'm facing, and your advice has been great and Ive taken it on board. I think I will spend the next week or so to really write up the numbers and hypothetical numbers and think more carefully on this.

Cheers heaps mate.

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by  Smalltown  |  14th Apr 20, 10:25am 1586816714

Galloway, hold off.
The cost of being wrong is maybe 5%.
The benefit of being right is up to 20-40%.

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by  Kezza R  |  14th Apr 20, 12:34pm 1586824448

Being a cash buyer soon will be a major plus. You will be bidding against investors who want it for very cheap and you only need to come in about that.

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by  CN  |  14th Apr 20, 12:43pm 1586824995

"The benefit of being right is up to 20-40%."

Assuming the property is purchased at true market value, the benefit of being right could be an avoidance of loss of 25-200% of ther equity deposit.

Why?

House purchase is financed with debt.

An example
Assuming an 80% LVR, for a $100 property purchase, $20 initial deposit, mortgage $80.

Scenarios of impact of leverage on equity:
1) property price rises 5% to 105, mortgage 80, equity 25, so 25% rise in equity value from 20.
2) property price falls 5% to 95, mortgage 80, equity 15, so 25% fall in equity value from 20.
3) property price falls 10% to 90, mortgage 80, equity 10, so 50% fall in equity value from 20.
4) property price falls 15% to 85, mortgage 80, equity 5, so 75% fall in equity value from 20.
5) property price falls 20% to 80, mortgage 80, equity is zero, so 100% fall in equity value from 20.
6) property price falls 25% to 75, mortgage 80, equity is NEGATIVE 5, so 125% fall in equity value from 20.
7) property price falls 30% to 70, mortgage 80, equity is NEGATIVE 10, so 150% fall in equity value from 20.
7) property price falls 40% to 60, mortgage 80, equity is NEGATIVE 20, so 200% fall in equity value from 20.

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by  Miguel  |  14th Apr 20, 1:12pm 1586826720

This is VERY pertinent to FHB who often are not able to afford the house they will live in for the next 30 years. Often they are "getting on the ladder" and will buy a house that works for them now, but if they have kids in the future they will quickly outgrow.

If you find your equity disappears due to house price falls you will be locked into living in that property for years (or even decades).

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by  Rubb3rduck3y  |  14th Apr 20, 9:56am 1586814982

I’m 29 and brought last winter 60k below CV. Me and my partner are lucky because this virus doesn’t effect our income at all and we get to work on a side hussle. If it was me and single I’d get a two bedroom and rent one room out the only suggestion i make is that sure mortgage repayments are no more that 33% of your take home pay. So actively watch the market to see you can get a two bedroom is my advice.

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by  Kezza R  |  14th Apr 20, 10:01am 1586815307

We done, you did your homework and acted. Too few just decide to buy a house and want something that is suitable to their image first off.
2 beds are good as there is always very good demand for them.

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by  Gallowmere  |  14th Apr 20, 10:14am 1586816059

Im thrilled to hear that went well for you!

Yeah I was always tossing between a 1 or 2 bedroom because a 1 bedroom would be ideal but later down the track may not be as easy to upsell for the next stage of my journey, then again personally who's to say I dont get in a relationship down the track?

thank you for your advice though I've taken it on board

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by  Nzdan  |  14th Apr 20, 8:04pm 1586851488

Probably a dumb question because family, social networks, work etc, but considered looking outside of Auckland? That is, if your position has the potential to be done remote. I bought 2.5 years ago in the Wairarapa, an 80 sqm 3 bedder on 1/5 acre a short stroll to the train station into Wellington. Sure, house is on the small side but who cares when your grocery bills are bigger than your mortgage payments? Your deposit would almost completely pay off my mortgage.

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by  sharetrader  |  14th Apr 20, 9:54am 1586814871

I will make the call , housing in NZ will reduce in value in the short term, we will have high unemployment, less imported workers so less demand, unless supply also crashes which I don't think will happen because part of the government core policy to get us out of this will be building houses

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by  MadMax  |  14th Apr 20, 11:24am 1586820266

Banks definitely not interested in new residential development though, so that could possibly hamstring supply for a while

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by  CN  |  14th Apr 20, 1:54pm 1586829248

Yes underlying supply may not increase by much in the near term.

Yet property prices may fall. Why?
Effective supply will likely increase in the market, and cause an imbalance of effective supply over effective demand.

How?

Desperate and time constrained sellers listing their property in the secondary market for sale.

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by  Basil brush  |  14th Apr 20, 10:06am 1586815569

Timing the market exactly is tricky however I would sit and wait. That same property is going to be cheaper in a few months time in my opinion.

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by  Gallowmere  |  14th Apr 20, 10:18am 1586816281

Hi Basil,

yes I was kind of thinking that too, I'm not necessarily concerned about timing the market as such but we're quite early into Covoid so there's not a lot of indicator (well to me at least, I'm just your everyman at these sorts of things) as to what is going on.

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by  Lapun  |  14th Apr 20, 10:29am 1586816946

I agree. In the next few months the property market may stay flat, may drop modestly or may collapse (say 50% of CV), what is unlikely to happen is it will increase or increase wildly. So the best choice is to wait. However if your finances are really strong it could be worthwhile jumping in and buying simply to have a decent place to inhabit during lockdowns and severely restricted socialising.
That was the rational paragraph and this the 'my gut feel'. Property will tank and then high inflation will hit so property as an investment or hedge against inflation would be wait while studying the market but buy before money becomes worthless.

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by  MadMax  |  14th Apr 20, 11:21am 1586820068

I think inner-city apartments should drop in value in 12 months, because of over supply being built, post mortgage holiday and with students not arriving and people working from home.
Good deposit and a good low interest rate - go for it.
Watch those bloody body corporate fees though!

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by  blobbles  |  14th Apr 20, 9:50am 1586814625

The interesting thing about the new 2.3t in free Fed "loans" is that they can defer principal and interest payments for a year. So after a year they will be able to payback accrued interest as well? Companies will be in a position to pay back MORE than they could have before? Keep dreaming.

The loans will be extended forever if we keep on going with the same mantra that has infected central banks since the GFC.

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by  Pietro  |  14th Apr 20, 10:04am 1586815445

This is the big problem with social media and comments. Such ignorance, panic, and self interest. Who gives a f***** f**** about property investors and the inequality of housing at the moment. Keeping a job is paramount. Focus on the indisputable facts: Covid in the main kills elderly people and those with underlying conditions. We cannot know the true death rate as mild cases, asymptomatic ones, are hard to quantify. From my extensive reading, it seems a rate of between 0.2% to 0.4% is probable for those who contract it in some form. The flu kills more people in bad years. With even moderate measures, such as helping the vulnerable to self isolate in comfort and dignity, a ban on 50+ gatherings, masks, gloves, sanitiser at work, 2m social distancing, daily temperature checks, transmission would likely be slowed to the point where most modern health systems could cope. Today's unemployment forecasts are truly far more frightening than the outcome of a carefully managed campaign to control Covid until it's run its course, or effective treatments are found. I don't think any other course is feasible. And let's get back to fishing, surfing, swimming and playing golf. Far safer than whizzing down a hill on a bike at 50km/h.

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by  Kezza R  |  14th Apr 20, 10:05am 1586815516

If property tips over the entire NZ economy tips over.
How dose that stack with not giving F F about property investors?
So far property investors actually supplied more houses than Kiwi Build. If we had relied on Jacinda to supply houses NZ would be very bad off right now.

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by  youngdumbandbroke  |  14th Apr 20, 10:14am 1586816067

"So far property investors actually supplied more houses than Kiwi Build." We know kiwibuild is a fizzer but dont make out investors are knights in shining armour.

Spruiker Alert!!!

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by  sharetrader  |  14th Apr 20, 10:27am 1586816874

I hear this garbage all the time, rental property investors add very little to the supply of houses, the biggest category of buying is at the bottom of the existing market so mostly compete against the FHB and have the advantage of leverage.
we have needed to change the tax rules for ages to change the behavior so that there is more advantage for them to invest in new builds not existing houses
but with the foxes in charge of the hen house (Mps owning rentals) change will come very very slowing, only once the rate of OO falls below 60% will we see some meaningful change

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by  Kezza R  |  14th Apr 20, 12:43pm 1586825015

If there is that much money in it and it's a hero's job, you could jump in there and build away. It is money for jam apparently, fill your boots.
I've done it, it isn't that easy.
So Kiwi Build was crap and investors did the Labours job bit they are heroes. Well we would be on a lot more crap if they sat back and waited on the non delivery crew.
Where do you get your info from, mine is first hand from doing it myself. No one made me out as a hero including myself but I did get painted as a rich lister that should be taxed to the eye balls along the way while doing Labours job.

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by  youngdumbandbroke  |  14th Apr 20, 1:12pm 1586826739

So you think by pricing FHBs out of the market for a yield you are performing a public service? Boy you sure are drinking your fair share of the property boomer kool aid

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by  bw  |  14th Apr 20, 10:19am 1586816378

"If property tips over the entire NZ economy tips over"

There, right there in that one sentence is everything that is wrong with our economy!
New Zealand shouldn't be in peril if the property market falls. But it is.
So. What happens from here? We make sure that in the future we aren't at risk from ANY one segment of our economy falling. And that means a whole set of new rules for the property market!

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by  ham n eggs  |  14th Apr 20, 12:43pm 1586825031

its completely arse about face

if the economy falls over …. property is affected
not the other way round
INCOMES People! INCOMES
that's what counts

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by  CN  |  14th Apr 20, 1:07pm 1586826441

If highly leveraged property owners are unable to continue to meet debt service payments, then banks can seize the house, and auction off via a mortgagee sale.

The restriction on banks to lend at maximum debt to income ratios by the RBNZ would reduce the amount of debt taken on by households.

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by  B-practical_not_PC  |  14th Apr 20, 1:35pm 1586828124

Sheds some light on the what and why..

https://www.youtube.com/watch?v=EC0G7pY4wRE

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by  CN  |  14th Apr 20, 2:02pm 1586829735

This is exactly what a lot of property promoters didn't know that they didn't know ...

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by  frazz  |  14th Apr 20, 10:20am 1586816422

I'm quite glad Kiwi saver was a flop - with the Air BnBs flooding the market who needs more houses?

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by  Kezza R  |  14th Apr 20, 12:45pm 1586825152

A few hotels are going to get a wall or two removed soon and made long term as well.
Or just a hell of a lot more 'emergency' housing.

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by  Chairman Moa  |  14th Apr 20, 10:12am 1586815959

I am surprise that no one mentioned 5G network for the spread of Corona Virus..!

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by  scarfie  |  14th Apr 20, 10:24am 1586816687

Oh haven't you heard the rumour, that the lockdown was planned so they can instally all the 5G hardware unopposed.

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by  Small Kev  |  14th Apr 20, 11:35am 1586820946

5G? Also they will announce the working vaccine once everything is “done” including this artificial economic downturn? Stir stir?

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by  delboy  |  14th Apr 20, 11:24am 1586820269

In 1348 innocent women are called witches and burned at the stake for using their spells to create the Black Death.
In 2020 innocent 5G cell towers are burned for using their non-ionising radiation to create the Coronavirus.

You would think in 672 years all of humanity would have become more intelligent but alas.

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by  youngdumbandbroke  |  14th Apr 20, 12:40pm 1586824800

Radiation isnt the issue. Its mass surveillance is what we all should worry about. Snowden tried to warn us

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by  Pacman_46  |  14th Apr 20, 6:30pm 1586845859

Nothing new there...they've been able to ping off cell phone towers for ages to track movements. St John's ambulance can do it off old tech. As for what you look at via your phone and computer...that's like an open book to those who know how to look or care. If you don't want to be surveilled, you need to unplug from the matrix lol

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by  scarfie  |  14th Apr 20, 10:26am 1586816768

Bob Jones - We seemingly have no grown-ups in charge.

You always have to treat his commentary as a thought piece. I like him because he pushes into the discomfort zone.

https://nopunchespulled.com/2020/04/13/the-coming-economic-crisis-and-i…

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by  sharetrader  |  14th Apr 20, 10:36am 1586817415

nice article but some of his conculsions are just wrong he is showing hes has not keeping up with the reality of NZ now,
now in NZ with our changing demographic we have three generations living in one property this is quite common to Build one big house and all live under one roof,
we also have a lot of overcrowding due to cost of rents.
the NZ he described was twenty years ago before the high immigration.
as an aside when I tell my coworkers the traffic is now like when I was very young and travel times are very similar, the idea of crawling along at 10km an hour is only a recent event

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by  redcows1  |  14th Apr 20, 11:09am 1586819349

Not to bad, but I do take issue with some conclusions.
Bach's. No, two reasons, firstly they end up praying on locals resources worst case being Great Barrier and the boaties. Secondly many of the Bach communities are composed of vulnerable. Definite no.
The not doing things that tend to result in a percentage being rescued, boating, swimming etc, Jones underestimates stupid people with spare time.

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by  scarfie  |  14th Apr 20, 2:30pm 1586831441

Yeah you have to take his articles as provocative, but they are good questions to ask.

As for Bach's, a whole bunch out this way got to them before the lockdown.

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by  powerdownkiwi  |  14th Apr 20, 10:28am 1586816885

Rod Carr making some clear and valid points.

Particularly interesting to hear someone like him noting the limitations of GDP

https://www.rnz.co.nz/national/programmes/ninetonoon/audio/2018731409/c…

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by  Audaxes  |  14th Apr 20, 10:45am 1586817911
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by  Audaxes  |  14th Apr 20, 10:49am 1586818163

Japan is ramping up its social distancing efforts again as signs grow of renewed spread. Economically, domestic Japan hasn't been hit hard, but export wise it will be.

Japan Short-Term Fund Rates Jump as Virus Hurts Company Mood

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by  Audaxes  |  14th Apr 20, 11:18am 1586819919
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by  Theoracle  |  14th Apr 20, 11:19am 1586819954

COL handling of this = last straw for us.

Starting online qualification for skilled-shortage jobs to move to Australia within two years.

Cost of living in NZ was already totally out of control. New taxes to pay for all this spending will make it untenable. Mortgage-belt, working-poor, middle-class battlers will get hit hard for this. I'll bet money on it.

Now we have James Shaw saying we can't do lots of investment otherwise going to get more climate change.

I have friends in Australia and life is basically continuing as normal. They all have their jobs, can easily shop and do almost everything they could do before and it looks like things will be soon back to "normal" there.

Yes there will be massive unemployment in Australia as a result of this too. Australia's borrowing and spending heaps too and will tax, tax, tax no doubt. Property in Melbourne will probably suffer a bit, for a while.

However, Australia have made a massive call to focus on developing the internal economy, in particular agriculture and support its own and still export stuff as well. They are providing tons discounted university courses online to quickly up-skill the adult working population newly unemployed. They are in the enviable position of having their own raw resources. NZ shut that down, although we had tons of resources we could have accessed. But NO - JA and James Shaw don't want that. They want to make this an eco-socialist paradise [nightmare].

Now we see JA ignoring health experts with the plan-B option saying we must get back to level 2 ASAP - the response to the virus risk is totally out of proportion. But NO - again, she's totally ideologically compromised.

She's going to put us in the waiting room alright - forever. For all eternity.

I have NO confidence in our government being able to navigate the post-Corona economy well. This year's election will now be extremely interesting.

I predict in only a few years to come, NZ going to be a socialist's paradise (nightmare) and will be [even more] swamped with a massive disparate population comprising mainly of beneficiaries and public servants, with a few uber-rich able to afford life in the new Switzerland of the south. I see nothing good for NZ's future sadly.

Sorry to be so negative.

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by  Pragmatist  |  14th Apr 20, 11:54am 1586822096

Bye.. now just remember not to come running back when Oz treats you like a non citizen, as it will.

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by  morphyoss  |  14th Apr 20, 1:14pm 1586826878

Yes enjoy paying more tax and getting less in return

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by  Chairman Moa  |  14th Apr 20, 12:28pm 1586824094

In Queensland, we have been on a semi lockdown level, roughly between levels 2 and 3 of NZ. The infection rate is about the same as NZ but death rate is a tad higher but some victims were passengers on that Princess Ruby cruise ship. So provided everyone is behaving nicely, NZ can ease off a little.

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by  Kezza R  |  14th Apr 20, 12:47pm 1586825247

Have fun in country soon to be ground zero of death.

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by  T-Bone  |  14th Apr 20, 1:21pm 1586827281

Don't let the door hit you on the way out :)

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by  powerdownkiwi  |  14th Apr 20, 2:21pm 1586830891

Sounds like something Bridges would get his staff to put out.

There are commentators here, who have left Australia for Climate (and other compounding ones, like political ignorance, on doubt) reasons. You seem to have a short memory. Bushfires ring any bells?

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by  Casual Observer  |  14th Apr 20, 12:37pm 1586824625

Burger King placed in to receivership - is this what we are going to see companies do in order not to have to pay their suppliers/landlords.
"As you know we have applied and received the Government wage subsidy, and this is assisting to pay all staff during the lockdown, however with no sales since lockdown commenced, the Company does not currently have the cash flow to fund trade creditors and rent payments," Alexander said.
Alexander explains that the aim of putting the business into receivership is restart the business and then find a new owner.
"We believe that this is the best way forward for the business and are committed to finding a new owner who is confident in the long-term prospects of the Burger King business in New Zealand," she said.
Alexander assured staff that these developments would not affect their terms of employment and that they would stay on at least 80 per cent of their usual earnings.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…

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by  Beanie  |  14th Apr 20, 12:41pm 1586824890

Dominoes. And I don't mean pizzas.

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by  Smalltown  |  14th Apr 20, 1:14pm 1586826870

Well that's the end of fine dining for a lot of Aussies

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by  CN  |  14th Apr 20, 2:08pm 1586830129

This is how capitalism works.

Shareholders take on business risk. If they mismanaged the business, used a lot of debt to purchase the business and didn't have sufficient cash in an emergency fund for a rainy day (& the shareholders are unwilling to financially support the business by injecting in more cash), then the business may be purchased from receivers by new shareholders.

Note that the existing major shareholders are a private equity fund.

The same goes for any business operating under current business rules.

Look at businesses which recently went to their shareholders for cash injections to support the business - Kathmandu, Auckland International Airports.

Owners of businesses have to manage their businesses in such a way that they are prepared for rainy days. (they are also known as business cycles)

Many business managers seek to maximize returns on capital, returns on equity, whilst also increasing the financial vulnerability of the business, leaving the business potentially unable to withstand a rainy day or unexpected shock.

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by  The Lark  |  14th Apr 20, 1:25pm 1586827505

Civil servant jobs are safe, apparently. I fail to understand this one, the govt just took on a massive amount of debt,(and at least for awhile, that will only increase) and somehow that has to be paid back. There's an election on the horizon, and an indeterminate outcome. It's like people that work in banks. I would think that all people that have a job should think very carefully before making any big financial commitments. Most, if not all, sectors of the economy are going to be cutting costs, and looking for new levels of efficiencies.

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by  Fritz  |  14th Apr 20, 3:59pm 1586836791

Remember that the civil servants are Labour's 'army'. There's no way they will cut it back, even if it makes a lot of sense to do so quite heavily.
The policy analyst sector is ridiculously bloated in Wellington. Huge wastage. I'm confident they could cut by 33% and there would be no drop in effectiveness.

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by  Nzdan  |  14th Apr 20, 8:15pm 1586852132

How much of that 33% is just redundant fat or substance into built into "work flows"?

Our Public Sector's own Sarbanes-Oxley Act.

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by  Casual Observer  |  14th Apr 20, 1:30pm 1586827845
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by  Fritz  |  14th Apr 20, 3:13pm 1586834002

Unfortunately they will retain their biggest idiots...

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by  Fritz  |  14th Apr 20, 3:11pm 1586833917

Ginger, there's a growing number of 'expert' voices who are questioning lockdown strategy. I don't think it's as clear cut as you and others have been making it. Here's an article referencing some local experts, some one posted an article quoting European and American experts yesterday.

https://i.stuff.co.nz/national/health/coronavirus/120984583/coronavirus…

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