American economic data increasingly dire, Canada embarks on major QE; China prepares for massive GDP fall; Aussie consumer confidence collapses, UST 10yr yield at 0.64%; oil and gold lower; NZ$1 = 60.9 USc; TWI-5 = 66

American economic data increasingly dire, Canada embarks on major QE; China prepares for massive GDP fall; Aussie consumer confidence collapses, UST 10yr yield at 0.64%; oil and gold lower; NZ$1 = 60.9 USc; TWI-5 = 66

Here's our summary of key economic events overnight that affect New Zealand, with news that if you are already shell-shocked from relentless bad economic news, don't read any further.

The data out of the world's largest economy is getting worse, as expected, but it is blowing by analysts expectations which have already been set very low.

First, retail sales in March were worse than feared and February data was revised lower.

February factory data wasn't flash, and March industrial production data was worse, both lower than analysts were expecting and both before the real crisis hit.

So it is no surprise that the NY Fed's business survey in the powerhouse Northeast region was grim - only that it was far grimmer than expected and far, far worse that what was recorded in the GFC.

And the US Fed's Beige Book reported economic activity contracted sharply and abruptly across the whole country with perhaps that New York report the worst. All districts reported loan demand was high, both from companies accessing credit lines and from households refinancing mortgages.

In fact the latest data shows mortgage applications up +7% in just one week as homeowners start to tap their equity to weather the crisis. That can only last as long as house prices hold, and they are unlikely to given the huge surge in layoffs and joblessness.

Unsurprisingly, all this data, much of it only for March, paints a picture of an economy under enormous stress. The snippets of April data out already paint a far worse picture.

The Bank of Canada issued its latest Monetary Policy review and held its rate at 0.25%. It also announced a large money printing program to shore up both Federal bonds and Provincial bond programs.

China has cut its one-year medium-term lending facility by -20 bps to 2.95%, releasing NZ$22 bln into their economy in extra banking system stimulus.

China will release its Q1 2020 GDP data later tomorrow and it is expected to be very weak. The +6.0% year-on-year growth in Q4-2019 is expected to be a -6% contraction in Q1-2020. The policy responses at the same time will be watched closely.

Iron ore prices are holding higher in anticipation of massive Chinese stimulus announcements. Chinese actions probably can't save the world, but they will be important for both Australia and New Zealand.

In Australia, the latest consumer sentiment survey shows a very sharp plunge, deeper than for the GFC. Some key sectors like retail are pushing hard for official signals that they can re-open.

Meanwhile, one respected analyst (UBS) says Aussie house prices could fall by -10% or more, while new housing starts could drop to a level not seen since the 1960s. Their whole real estate market is in turmoil.

Equities are down -2% in New York today so far. They were down more in Europe overnight, and fell in Asia yesterday too. The NZX50 Capital Index rise of +2.5% was a complete outlier on the global stage.

Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 2,016,100 and up +46,000 this time yesterday which is a slower rising tide. That is a doubling of cases in just two weeks. Now, more than 30% of all cases globally are in the US and they are up +29,000 since yesterday to 613,200. This is a slightly faster rate of increase. The level of US cases that have recovered has crept up to 8%. Australia's infections and deaths have stalled. Their recovery rate is also unchanged at 34%.

Global deaths now exceed 131,000, 20% of them in the US and 52% of them in the four core European countries - Spain, UK, Italy and France.

There are now 1386 Covid-19 cases identified in New Zealand, with another +20 new cases yesterday and more than the +17 increase the day before. The number of clusters is up to 16. Nine people have died here now. There are now 13 people in hospital with the disease today, with three in ICU. Our recovery rate is now up to 52% and rising fast.

In money markets, the UST 10yr yield has fallen to just 0.64% and a -10 bps retreat since this time yesterday (the record low was 0.32% on March 10). Their 2-10 curve is flatter today at +45 bps. Their 1-5 curve is also flatter at +15 bps, and their 3m-10yr curve is flatter too at +51 bps. The Aussie Govt 10yr yield is now at 0.82% and down a very chunky -12 bps overnight. The China Govt 10yr is at 2.55% and virtually unchanged overnight. The NZ Govt 10 yr yield has gone the other way, up +4 bps to 1.01%.

Gold has moved back down today, down -US$16 to US$1,721/oz.

US oil prices are a softer again today at just on US$20/bbl. The Brent benchmark has dropped harder, down -US$1.50 to US$28/bbl. And that is after the US purchased 19 mln barrels for their strategic reserve, an action which probably stopped the price from falling further.

The Kiwi dollar will open almost -1c lower at 60 USc. On the cross rates we are unchanged at 94.7 AUc after yesterday's fall, while against the euro we are down another -½c at 55 euro cents. That means the TWI-5 will start today at 66 and wiping out all the rises over the past two weeks.

Bitcoin is now at US$6,762 and down -2.4% up from this time yesterday. The bitcoin rate is charted in the exchange rate set below.

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

Our exchange rate chart is here.

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

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

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


The US is considering paying its oil producers NOT to produce oil. Between this and paying people to stay at home, the US has nuked what is left of the economy and free market.

Isn't this what much of the world, including NZ is doing? We are currently paying ~1M people to stay at home...

And more the government pay and longer it pay will delay the full impact but the tsunami of virus has done the damage and will only know what is salvaged after it is over and what price was paid for it.

It's ok when intermittent energy does it. "A new monthly record was set in September this year, when £28,434,560 was paid out by National Grid to stop electricity generation. Most cash was paid to Scottish wind farms, with some earning more than £1m a month for not supplying power.

Whitelee and its extension on the outskirts of Glasgow, the biggest onshore wind farm in the UK, has received almost a fifth of the entire pot since 2010, with payments totalling more than £96m to date."

BTW, in regards to the comment about nuking the economy and free market... that happened a dozen years ago during the GFC. Okay, the origins of the hollowing out of the US economy happened in the '80s and '90s when the corporates embraced offshoring of production. Wage arbitrage is great for the short term bottom line... not so good for the long term.

The bailout of numerous entities that fully deserved to fail a dozen years ago was reprehensible. Sadly we get to see this cycle repeat.


We are paying 1 million people to stay at home to save thousands of lives and hopefully stopping 2nd and 3rd waves going through the community causing even more damage to the economy. As in the past NZ makes big calls that totally go against the global train of thought and gets the job done.

Well said Kezza. And for those who think we should have done what Sweden is doing, I suggest you go take a look at their death rate. 114 deaths yesterday, equaling their highest day a week ago, and it looks like they'll have around 170 deaths today. USA daily death rate is up around 2500, and still seems to be increasing. This thing is fast and has sharp teeth - best to treat with extreme caution.

10 years ago a friend of mine was paid (and paid well) not to open his oil well in the US.


After our CV19 status address by our PM yesterday the very first media question was what are the details for the plan to help the media. Really a bit of an indictment that. Unprofessional and subjective. These are troubled and grave times for NZ and all of us. There is much more than that subject at stake and we don’t need utterances that are of no more substance than self interest and self importance.

It'll happen and at least another round after that. We aren't that far into this.

The first wave isn't remotely accurately captured either. Take the Middle East and South Asia as an example. The rest of the world estimates that Iran really has x 5-10 the number of deaths that they are reporting. And its neighbour Turkmenistan apparently doesn't have a single case (but then they also claim to have never had a single case if HIV in 40 years either)! India, Pakistan and Indonesia are not physically able to test or even identify anything like its real number. And that is doubly true for Afghanistan.


Who ends up owning/controlling the media will be one of the enduring legacies of this mess. One of the things the covid has highlighted is what to believe in the media.


A part of that problem is that the media has also been captured by globalisation. After all isn't Media Enterprises an international concern? The Government could act to maintain local media, but also ensure that the results aren't pumping profits that will go overseas. After all why can't a media company owned by Kiwis and informing Kiwis be profitable here? My concern is their independence and integrity. So many seem to be too biased these days where journos seem to be too keen to suck up to power and money and have forgotten the need for balanced unbiased reporting.


Journalism use to be a trade, now its click pulling headlines, seemingly to drive political agenda, or trigger emotive responses.

Here are two examples from yesterday, one mocking political media use, one showing msm media omissions.

One of RPs papers, in Sydney got redacting.

The defunding story could equally be, WHO under pressure to change senior management.

the U.S. would work with the WHO to reform its failings but would direct its funding elsewhere in the meantime, saying, “for the time being, we will redirect global health and directly work with others.”

This story had 3 elements.
1. Reform WHO.
2. Defund
3. Continue to fund WHO activities directly.

Yesterday it seemed MSM reported item 2. only.

Ahh you'll be a Trump supporter to the very end Henry even when he pushes you off the cliff. Trump is just trying to pass on blame as usual for ignoring the WHO's advice and that's why he's removing their funding. And yes no organization is perfect but I suggest you read this BBC article to get your facts right: Coronavirus: Is President Trump right to criticise the WHO?

Trump’s triumphant trumpeting was to be that he had fixed the economy. CV19 has harpooned any such possibility. Somehow cannot escape a childhood image of Humpty Dumpty on the wall and the next passage.

Yes and looking at the US's recent political history, wasn't it natural disasters like hurricane Katrina that finally dislodged President Bush due to his inaction in helping their citizens. Trump is likely to fall in the same way. Hopefully when he's finally falls (if they can ever drag him out of the White House) they'll be able to nab him for all that tax evasion.

No it didn’t exactly tip him out of office. He was then in the first year of his final term anyway. But it was a failure that certainly weighed heavily on an already tarnished President and administration making him more lame duck than most.


Tony Blair ripped apart the old BBC, nothing much to see there anymore.
I think if Trump got one thing right it's his treatment of WHO.


[Posting this again in case it was missed yesterday] "With separate studies finding that the world’s death toll would have shrunk by 95 per cent if China and the World Health Organisation acted just three weeks earlier, Chinese censorship likely killed most of the 125,000 people confirmed dead today"

Aj agree, think though this is part of the beginning of the international pressure campaign on China. Yesterday in the Guardian former Foreign Ministers Lord Hague UK, A. Downer Australia, strong words implying China must firstly cooperate with investigations of Wuhan etc and secondly get its act together. In other words if it wants to be, and its product to be, on the world stage then it cannot export CV19s and expect to be accepted.

Accepted by whom and what stature - the NATO bombers?

as the global economy is trashed -- and unemployment in the US and other places will sky rocket -- maybe time for countries to think about making many of the goods they currently import from china -- it may cost more -- but if its putting your own people back into work and jobs -- be cheaper than subsidy bailouts and unemployment claims -- Hard fro NZ -- given that we export way more produce than we can consume -- but for many countries -- making clothes, whiteware, machinery etc would ba a smart option - here we could easily upscale and uptool for all our whiteware, domestic appliances, clothing - The US in particular might just go even further down trade wars - isolationism - especially from china -- hell no need to do tarrifs -- just keep reminding people that the 250000 deaths all came from china - and kaboom!

We'll need Australia, then, because they are largely self-sufficient in metals and could supply us with raw materials. Australia is also likely to benefit from the 'return to localism' of some Anglosphere countries - manufacturing in particular and supply chains in general. Oz produces about 40% of the world supply of lithium from two modest holes in WA (Greenbushes and Mt Cattlin), is looking at rare earths from a polyminerals site near Dubbo, and of course produces iron ore (Tom Price and the NW of WA generally), tin (Renison Bell in TAS), gold (everywhere) and so on. Localising manufacturing needs raw materials to smelt, purify, mould, bash, cast etc, and these aren't evenly distributed around friendly nations. Australia matters.

Perhaps - but is now the right time should he be not focusing on the task at hand - USA and the outbreak. Would like to see him at least visit some front line workers or talk about some of the folks who have already passed. He seems to have zero empathy apart from his business pals losing money?

Maybe the WHO should have taken their own advice and shutdown China earlier LOL


I remember in the early days of the pandemic, when despite Covid19 meeting their own official definition of a pandemic, the WHO refused to declare it as a pandemic. And I remember the WHO condemning countries that put travel bans from China... it is only in the last week where the WHO has changed their stance from the public shouldn't use masks... I'm not sure that WHO is entirely blameless here.


I disagree, Trump is on the money here. Remember when WHO refused to call it a pandemic when it was obvious to anyone with a pulse that it was? They lost all credibility at that point. This BBC article is ridiculous - if we listened to this nonsense we'd open up our borders again!

Trump calling out the WHO! Talk about pot calling kettle black.

Well, there is that aspect... doesn't mean that the underlying message is incorrect.

Yes, the messenger in this instance can be rather messed up (I personally think of him as an uneducated buffoon, he may have some intelligence but is missing the education). It doesn't mean that anything from this messenger is automatically incorrect, just that one needs to be quite discerning when hearing from said messenger..

What’s more, only $611.1 million of that funding came from “assessed dues” required by participating countries. The U.S. government voluntarily sent the WHO roughly $2.9 billion more than their required contribution. It’s no surprise that, annually, the United States is the largest funder of the WHO.

I see the leader of WHO come on TV, I don't listen. They are not worth listening to a total lack of faith and I'm sure a good portion of people feel the same.

Morning CJ.

What is the WHO advice that you refer to, in saying Trump ignored WHO advice.


Should have been defunded years ago.
"Robert Mugabe's WHO appointment condemned as 'an insult'
Dr Tedros Adhanom Ghebreyesus had previously praised Zimbabwe for its commitment to public health.
He said it was a country that "places universal health coverage and health promotion at the centre of its policies to provide health care to all".
Mr Mugabe's appointment as a "goodwill ambassador" to help tackle non-communicable diseases has attracted a chorus of criticism."

Totally agree.

The media problem has been the outrageous prices paid for local media by the international barons. (Murdoch et al). Who then needed to strip assets to get cash and reduce costs by eliminating ( of all things ) journalists.
These people made money for themselves in the short term (seen as clever by some) but the long tern outcome has been ridiculous.
Take zillions out of any industry, then trouble begins.
Taking out the journalists. Mindless.

And it wasn't just 1 question, but many. I'm sure that many viewers watching were wishing that they would change tack.

I was dismayed when listening to the live broadcast. A less positive day than the prior few days, along with a bunch of new deaths that nearly doubled the overall death toll. And the first few questions were about whether the .gov would be bailing out the media... my view of journalism is getting far lower than that of used car salesmen. Maybe I'm looking to the past with rose colored glasses, I remember when there was long form journalism, discernment amongst journalists, and a pride about being objective with the reporting. It seems that those days may be gone.

Be fair, the question was about maori media. Nobody listens to it, so they gotta harass the government.


The comments about the media questions was in regards to yesterdays 1 PM conference, not todays covid presentation. Go listen to yesterdays QA and see what we are talking about...

The Epidemic Response Committee yesterday was hearing from media companies. So perhaps not so surprising reporters were asking about it. Self interest and self importance are often what rises to the top when humans feel threatened/fearful. It isn't professional for a journo, but is a very human trait.

At least one person in a position to be heard is saying let them fail. Problem is while he rightly points out that it is ordinary people who are suffering, many of those hedge funds have taken those ordinary peoples retirement savings and are managing them. So if they fail a lot do lose. But I guess it is the cream they're raking off the top that he is criticising, not the source of their money itself.


Why not report gold in nzd? We are NZ afterall
Looking at price of gold in local currency throws a different light on the subject. The link is to reasonably good site, can seevin different currencies, see silver and also in weights.
Also shows different time periods, which is interesting viewing.
Price in nzd at time wrote this $2868.53/Oz

And show Silver as well.
Today it's ~ NZ$26. A far cry from the idiocy of ~NZ$60 ten years ago when it was supposed to be a 'safe haven' and every Kiwi and their dog bought it as it was 'cheap' and on its way to $100! Bunker Hunt would have been proud.
At some stage, the historical ratio between the two is going to 'normalise'. Given silver's movements over the last few years, I don't see it being the one to appreciate. But, we never know!

I see your point. Buying something because everyone else is, and simply believing it will go that way because that was what everyone was saying, isn't really a constructive way to manage something an individual may have invested in, even though I guess the nz housing market certainly would seem to support what you are telling me about every man and his dog. Gold is quite different from silver, in as much as it has many different applications, and gold, while having some industrial applications, is really just gold. That is, gold is not an investment. It's simply money, that's all it is. And when central banks are printing endlessly, with a new battle cry called MMT, then gold is a good way to protect your wealth against that. Of course, in times of deflation, which we could well be heading into, at least for a while, gold is probably not best.
The gold chart in nzd is interesting, 400% over 20 years, seems to suggest something wrong with our basic money supply.
I would not advocate, or advise anyone simply buy gold, or anything else for that matter, without a complete investigation and education first.
I simply feel that in the west gold in particular has been derided because central banks need the public to believe in the currency they are printing.

I asked them to do this a few months ago - making the point that anyone buying from NZ buys with NZ$, and that a major reason why someone might buy gold in NZ$ was as a currency hedge. For a very brief time they did do exactly that, and then they stopped again.

The owner of this website is very one eyed about gold (his comments on the metal almost invariably have a negative slant). It seems a remarkable position to take on any asset class of such long standing. Mind you I'd imagine holders of gold in NZ haven't been too worried by his prejudices as the NZ$ price of gold has set new high after new high.........over the period 2005-2015 NZ$ gold prices average out at a return of about 10% a year which I imagine they have been enjoying.


The data is only going to get worse and if there is a 2nd wave stocks are going to retest those lows. I still feel the stock markets are not pricing in enough risk. NZX especially has been rocketing the last 4 days.

Globally - including NZ - after the shock and reality of the virus and lock downs, it seems that influence of QE has been driving market sentiment and bounce back in past week. I agree when impact on earnings and closures become more apparent there is likely to be more downside to the markets.
For KiwiSavers and managed funds with exposure to shares, there will be currently some temporary sense of relief as account balances recover somewhat but the ride is not over yet.
Interesting to see what happens in Australia with withdrawals allowed (up to $20,000 from memory) from superannuation accounts; there is expected some providers hemorrhaging as they are forced to sell and some impact on their markets.

Current relief rally can be used to book profit or minimize loss.

Current rally could end this week or maximum next week

We live in interesting times.

Yes the US still seems to be spinning out of control in regards to how the virus is spreading. According to the world meter statistics the US just increased with +21,957 new cases.

World, By countries:

World, By US state:

Money losing it's meaning? This is straight forward enough
And a lot more countries are turning away from the usd. Led by China and Russia of course, Russia who developed an alternative to the SWIFT, in conjunction to the fact that the BRICS nations not long ago completed laying their own global fibre optics.
Quite interesting.


Wishful thinking, the US is the least bad of all the major economies & won't be usurped anytime soon. My pick they'll get the virus over & done with faster than anyone else & get on with things again.

Time will tell I guess. Either way, it's individuals that have to live through it all. Not a great fan of nation states, not that I know an alternative. The cold war was bad enough. Trump is one crazy character, and I thought Reagan was going to be hard to beat. Personally, I think the days of getting away with being a global bully are over, the new age wants more polite, gentlemanly behaviour, possibly Confucian. I only watch, read and listen.

I think it helps to separate idealism from realism so as to avoid confirmatin bias.

Probably right there scarfie. Must be a real concern that it hasn't even started here in NZ. There will be plenty of carriers out there who are asymtomatic - the winter flu season will be the real test. NZ back slapping itself prematurely perhaps?

Impressive. A great piece, and a great eye opener. Scarfie, you should try to read this, maybe with such a rigged "democracy", you have good reason to feel confident in the continued
dominance of the good old usa.
Anyway, great read, will read other links and pass on.
Ideology, politics etc, it's taking back power from the 0.1% that is so needed, and yet we would appear to be so far away from realising. Thanks for the link.


Living through this drought and collapsing markets is going to leave an imprint on the minds of many a farmer.
We have had three frosts, works backed up for weeks. Nearly impossible to buy feed, it's one thing to have no feed in the warm, that is very different to having no feed in the cold.
I am slowly going green but we haven't had enough rain to save us, with snow on the hills and dry to the high country it's going to be a very interesting time to say the least.

The USA beef market it getting hit


I really appreciate your posts, Andrewj. In a sobering way. I find myself opening the curtains each morning looking out for rain, despite the fact I'm in a city, and appreciating how much we need it right now both in regions and cities, but especially the regions.

Yes, his farm posts really hit home.

Read the articles, oh s#@t, was my reaction. Thanks for bringing my attention to this. I sure feel for you with drought as well. I have no idea what sort of contingencies you may have, yet reading your comments, I imagine you have a few.
I'll pray for rain (join the many on that front) and hope the works get back to full operation.


I'm going to be ok, I took back my farm which was leased for the past three years in early Jan, it was empty and I never got around to stocking up, just a handful of lambs.

I purchased a disk drill and planted 60 hectares in short term Italian rye grasses which grows very well in winter. I also have a farm that faces well and is in a warm valley so can grow all year if given a few fine days.


It is pretty hard for the New Zealand economy to do well if farmers aren't.

Belle was saying last night the banks want cash.

'Hi Aj, I shall read your links shortly. In the meantime an update. Despite 40 mm of rain, the river is as low as it has ever been in my time here. I hear both the beef and lamb schedules have headed down again.
I had a chat with my bank. Scary talk. Cash is king. Whatever equity you have does not matter, you must have cash flow. Drought is the biggest problem right now. Dairy farmers need to buy and pay for feed. PK knocking on $400 if you can get it.
Cull cows need to go. But getting space is problematic. Buying feed for them while the price is dropping. And yes it has got a bit cold here too.
Yet we are in a better spot than most. I have Thrones on in the background, sky boxsets. Suddenly winter is coming sounds very ominous for us all.'

Feel for you. Going back in the nineties I remember a terrible drought in Canty on our farm. Works backed up, could not buy feed anywhere, store lambs only selling for $8-12, a lot farmers ended up shooting stock to save the capital stock. It took 4-5 years to recover from that, broke my dads heart.
If our Productive side now fails worse than forecasts (as that's all we got left for next 18 months) then we are in big trouble if job losses also follow in this sector. Once the JL start the pressure will really start on households, banks and property prices. (and by the stats of those who have already applied for mortgage holidays-which is the last card in the pack to play-this will be sooner rather than later)
I just have no confidence that this government can delivery any growth or bounce in the productive side of economy. Kiwi build being the yardstick

yep, I had some friends farming down south who had to dig a big hole and shoot their old ewes, scarred him for life.
Like you I think the gov't has got themselves in a corner, regards getting out of this lockdown in one piece.

Some down south are considering it again Aj (start at 30secs if you don't want to listen to Queen)

C/O, at the saleyards here after X-mas ,there were Sth Island trucks backed up, Stk to heading to the deep south. Sometimes you have to think of the ' worst case scenario' you need that 10th man. What if it doesn't rain what's my fall back in a bad season with extra stk on? Covid 19 makes this year a bit different but you get my drift.

I'm doubtful about applying N this time of year, the response would be marginal from experience. In a drought all the N is unused,the old dry vegetation is lying on the ground, N levels are normally naturally high and not a limiting factor, putting on N makes no difference even if the Fert rep tells you it does and says he has the research to prove it.
The best thing is to act soon and fast, that day was a few weeks ago too. All the grazing has disappeared around here so that's going to complicate things a little if you banked on it.

I know farmers that thought they would get in early in January and booked their culls (apprx 200) to progressively go and be gone by now. All that's gone so far is one unit load. Of the ones still remaining approx half 'will go sometime in the next three weeks, maybe' and as for the rest - min time - not until sometime in the middle or later of June. This is huge on a dairy farm especially when on top of having been given late notice of cancellation of herd winter grazing, and been asked to take your young stock back (mainly due to graziers not being able to get their own stock off to the works, so now needing what was going to be dairy grazing feed, to feed their own stock.), you are suddenly left carrying culls and having to winter cows on farm. When it comes to getting stock away this season - it didn't matter how early you booked COVID came, and on top of a flood that was the worst in over 20years (which has caused substantial winter feed losses) has royally stuffed up wintering plans.) Grazing disappeared down south a while ago and even up here in Central it is impossible to get.
No one's fault - it is, what it is.
Dairy heifer market has died and I saw a young farmer, good stockman, on social media a few weeks back, saying he had a few surplus heifers - no market for them so he had them booked in to the works. Watching well bred young stock go to the works is not an easy thing for young farmers to have to watch. Though this young farmer won't be the only one in that situation.

Like you, we personally, are ok on farm as we have our own winter grazing block.

It looks like the works have a good market for grinding meat, bulls and cows appear to be getting preference over prime steer. Thats at least in the Nth Island and it came from an agent this morning ,who told me some prime farmers are having to wait a lot longer than bull/ cows.
Sounds like some tough decisions being made.

There is an advantage now for manufacturing beef. Easier & quicker boning, bulk solid pack cartons rather than IW. Frozen product, 12 mths storage OK. Whereas for prime you need, on top of the complicated process for chilled and shelf life, to have top end markets in full swing.


I think that many small businesses are really struggling at the moment. They are all just under the radar, the Media is more concerned with it's own survival.

Had a crap night's sleep just couldn't seem to stay asleep long. Inevitably you start thinking and planning around feeding and grass growth. Even though we have been green for a while growth is still poor and not looking good, I know from experience I can manage through it but damn it's tough knowing you simply cannot feed at the levels you and you stock want.

That is what has surprised me, we had 12ml of rain followed by 4ml, which would normally get us going but it was so dry it wasn't enough to fill the deficit after those 40 degree days.
We had another 4mls two days ago but it's all on the top inch and not sinking in.


Those who hocked themselves to a never-ending supply of outside inputs (phosphate, PKE) were always going to be vulnerable. And those who bet on the system lasting indefinitely (particularly those who laid their bets post-2008), have only themselves to blame. Collectively, they bid up the land costs which are now their debt. We can sympathise/emphasise with individuals, but as a whole, not. It was unsustainable.

Lot of truth in that comment PDK.


Cheers AJ. Actually, farmers were also forced into being price-takers but supermarket forces. Food should be much more expensive, to represent it's true cost if produced sustainably. As should litres of fossil energy.

But that clashes with the bleatings of the masses, demanding instant lowering of both. I sense we are on the cusp of a change to local food, more biodiversity and more circular nutrient-trails. But the agricorporates won't go down without a fight, more likely they just drown as the ship (global finance) sinks.

Go well

Unfortunately there is always the human side, same as with the housing crisis, young people cannot get on the ladder without years of struggle and hardship, often putting off having children or starting their own businesses till it's too late.

Those agri-corporates are becoming a potent force for evil in the farming community.

Great comments I concur completely. If we want to starve the multinationals of profits in return for more profits locally.If we also want to reduce our impact on the planet our new motto as a country should be ...

"Buy less. Buy local".

Buy locally made? Tried that in the last few years?
We sold all that stuff and they took manufacturing overseas because profits.....

Grass is the cheapest feed and always will be. Many have found that out the hard way after the last dairy price collapse.

This is NOT a normal farming year. Grass is the cheapest - until you don't have it.
As an all grass farmer I can tell you that being an all grass dairy farmer is a disadvantage when it comes to nutrient budgets. PKE is better from a nitrogen point of view, but not from an emissions point of view, and therein lies the conundrum.

Yes, we stopped growing grass here in mid December and we are still waiting to go green, I suspect it will be mid May before that happens. Those soil temperatures become critical.

Indeed a perfect storm is developing if you also include the likely every increasingly bad droughts followed by torrential downpours which wash away all the topsoil. Include climate change and it's a perfect storm.

Hi Aj - you send some of your sun our way and I will send some of our unwanted rain your way - sigh....if only. ;-)

Suns out now, sitting outside with family having coffee in a shirt and I'm warm. That's one thing we get in this part of Hawkes bay, lots of good old sun.
These years come occasionally but this year some of the bush is dying in the Ruahines ,which means it's probably a one in a hundred year event. Which means I shouldn't see it again in my lifetime but somehow I think I will. In the first world war there was fire on Morecocks ridge which was left to burn as all the young men were away at war, leaving no one left to fight it. The fire burnt to the top of the Ruahines, you can still see the scars when you look at the mountains from alongside Norsewood. That's 100 years ago

Decades-long cycles do indeed exist, and that's what's missing from the models, which really have only 30-45 years of solid data to draw on. And vegetative cover change also affects climate over many decades. Example: Southland's central plains. Started out as extensive peat swamps and braided rivers, then drainage boards set about draining water tables, farmers ran tiles up to every tussock, one farmer I knew just outside Otautau told me he had run his household fires on branches out of the old swamps for all his life.. Took the best part of a century to lower the water table, and now it's irrigation country because the ditches are all dry. I suspect the bush clearance all the way up the Wairarapa will have had a similar effect, Several human lifetimes, so not particularly observable unless one has a bent for Local History. Very similar to the East Coast of the South Island - forested from mountain to sea before the earliest inhabitants burnt most of it chasing food.

The swamps and wetlands are the plug in the bath, throw the plug away and never shall you have a bath. And it was one of those flash as plugs with a filter to stop the other crap going down the drain blocking the pipes

Beautiful day here in Central Otago too.

"mortgage applications up +7% in just one week as homeowners start to tap their equity to weather the crisis. That can only last as long as house prices hold."
Quite right.
Borrow as much as you can, while you can - and don't spend it! Because tomorrow, there may be no headroom to borrow against.

Simply a throw away line.
Equity in a home is something that can be used as bridging finance in these relatively short term (1 to 2 years) periods of financial difficulty.
It is not an option available to renters nor those with low equity; however it clearly illustrate one of the ways that home ownership does provide financial security.

I am not going to be surprised at the reaction to this comment given the anti-housing sentiment.

That's very true printer8, however when you purposefully exclude swathes of society in being able to participate in that financial security, you will get anger. People aren't anti-housing, they are simply against the use of housing as a speculative finance vehicle which bars much of society from having it.

I agree totally with your comment regarding anger.
I have posted numerous times that home ownership has been a New Zealand aspiration and value, and it is of concern that home ownership for 25 to 35 year cohort has fallen from 65% in 1985 to 35% currently. I can understand the frustration and the anger that results and I have previously posted regarding this.
However in making rational economic decisions, emotions - especially anger and envy - have no place and I believe there are many instances in comments this is clouding posters judgement.
Worse still, I see ridiculous comments which simply shifts personal blame and sadly that is counter productive to getting on with life. I also see scaremongering ridiculous comments.
When a comment that "all landlords are leeches are need to get off their butts and do some honest work" gets 40 up-ticks it shows how sad many of commentators are and have a bitter tainted view.
I posted many times over the past year that the drivers were showing a substantiated upturn in the Auckland market - the reaction was one liner "bubble burst" is coming. In many instances those comments were simply seemed self-appeasement and excuse for not making a commitment or effort. Over the past three years RBNZ figures show that there has been over 70,000 mortgages to FHB and I wish them well during these difficult times.
I also often commented that one should be prudent and pay down one's mortgage as quickly as possible (such as shorter term or additional payments) and those recent FHB that have will be in a good place to take advantage of the financial security that now brings.
To those who are frustrated and angry, I also wish them well but they need to start to focus their thinking on how to achieve their goals rather than being besotted with anger and envy.

Have you considered that you've missed a shift in sentiment in society?

And I'll get angry now in a comment if you like?

If you are going to judge others and their views (per above post), then I will make judgment of you - its only fair. You come across as patrionising. Perhaps instead of being so patronising you should work on some self reflection and think about how you will help younger generations into home ownership, without potentially destroying their futures via negative equity/high debt, higher taxes, higher unemployment. Any solutions on that front, or will you just sit on your high horse and judge other people falsely for being angry and envious?

Sadly, exactly what I have been saying.

So any policies on how to improve home ownership rates?

While not a past supporter of the current coalition, I am heartened by Robertson’s comments over the previous few days about a reset in the economy including addressing inequalities.
I look forward to the detail on this, and despite the failure of KB, I feel that this is our best bet and one we can all influence on 19 September.

Clearly low interest rates in response to an attempt to minimise the effects of the GFC have been a driver of asset prices including housing over the past decade.
However, as I have previously posted there is a deeper socio-economic structural change. In the mid seventies home ownership was in the reach of blue collar workers and even recent Pacific Island immigrants without capital or qualifications. There was little homelessness. During the eighties there was a clear economic structural shift - such as in the IEA - which has led to considerable inequality.
Singular policies - such as KB etc - are not going to address the underlying inequality and housing affordability issues. For that reason I am hopeful of a reset.
I am not being patronising; I am very concerned and have a personal wish for my children and grandchildren. Previously personal and financial security has been based on home ownership and I want that for them.
Irrational comments on this site that are simply clouded and fuelled by anger, envy and blaming are not constructive to achieving anything either at the personal or wider scale.

Think about your situation. It's easy to be one of the "haves" and to say to the "have nots" something like "don't be angry, it will cloud your judgement". But when many of those people have to give up all hopes of financial security, having a family, fulfilling their dreams... how can they not be angry? Year after year these people see their hopes further and further quashed as prices fly higher and higher while their wages comparatively dwindle.

Asking them not to be angry is unbelievable. In the very least you are ignorant of the problem. Otherwise you are simply out of touch with the reality most young people now face. Let's just say that you are very lucky NZ offers enough distraction and the ablity to focus on other things. Otherwise the haves may have faced (or about to face) a revolt of the people against the new landed gentry.

I have children and grandchildren so don't tell me that I am out of touch.

Are they angry they will never be able to afford houses? Or are they part of the new dynasties of landed gentry who will pass on property ownership via untaxed money printed gains?

Because that is where the conversation with many young people now head. If they have parents/grandparents who already own property, they are set for life. If not, prepare for starvation wages, a life of lost dreams and indebtedness. I can see the anger and resentment rising in young people every day, be prepared for an explosion of it if something doesn't change.

@DavidChaston, any sign of stresses in our own mortgage markets?

Thorough and damning indictment of US institutional response. Basically a lot of bureaucrats out to save their reputations, jobs and tribe; with deadly consequences for all:

What happens if weekly US jobless claims are worse than expected? Like 15m? I have never seen anything this bad:

If its worse than expected then markets will go to another new high!

Until they don't. Change happens slowly and then all at once.

Or, as Vladimir Ulyanov put it, “There are decades where nothing happens, and there are weeks where decades happen.”

And there was two decades worth of chickens looking for an excuse to come he to roost.

Taleb in full flight.

Interesting about Monsanto and probability. Time we dropped the double-or-quits approach

As soon as I saw the "crush the curve" graph, I realized that the article would be lacking in rational thought. Unless one plans on never interacting with the rest of the world again, the area under all of the curves will be relatively constant (unless the holy grail vaccine appears, possibly as soon as two years from now). There is a valid argument that the "do nothing" curve will have a slightly higher AUC due to overallocation of required resources for a short period of time. By the same token, there will be an increase in deprivation (and associated deaths) with the flattened as well as the crushed curve.

The idea of a crushed curve requires months of lockdown, near zero inbound overseas travel (as well as in-country travel), and rather strict and extended isolation for any overseas entrants into the community. That isolation of travelers requires that all inbound travelers are isolated from each other as well, otherwise there is a possibility for an asymptomatic transfer that would reset the requisite 14 day (or more) isolation period. All it takes is a single superspread event, and we are back in lockdown for an extended period of time until that cluster dies down.

..... expectation which has been set very low.....

Even the LOW that experts or government may have set in worst scenario may be HIGH and the real low may be far below that one cannot even imagine at the moment. Just like few months ago no one could have imagined that the entire world will be shut down with people hiding in their home, world over with most economy activities comming to a halt similarly no one can imagine what is in store in fututure in this Surreal times.

Difficult period will pass and their is light at the end of the tunnel BUT question is where we stand in the tunnel, is it at begining or middle or...... No one knows and that is more worrying and frightful.

Who thinks we have inflation ahead and who thinks we have deflation?

Deflation of the bubble assets, inflation of necessities.

Don't guess, follow the money. Money once created (as debt) has to find a home somewhere. Does it find it's way into the real economy? or sit on a balance sheet somewhere? M2, or M3 if published, are what to watch. Real inflation is the expansion of the money supply, but as I say you have to follow where it is going.

If you start getting debt defaults, then that is definitely deflationary. Money printing to buy insolvent assets holds things up for a while, but doesn't find its way into serious inflation. It is simply replacing corporate borrowing. Any cancelling of treasuries is going to be deflationary.

Of course consumer borrowing is going to be dead, and that is deflationary unless the slack can be picked up somewhere else.

Track the money back to consumption. It is increased, flat, or does it decline?

Anyone know if our PM, ministers/MP's, public service CEO's etc have ever had such a dramatic pay reduction before?

Is this a sign that we're already in a deflationary spiral? i.e. its being broadcast from the very top of our society - but isn't visible in our metrics yet.

A 20% reduction in spending (or more) as a result of a pay cut of that significance by all those people is just representative of what's happening or going to happen across our whole economy.

And then the question becomes - when will it be 'okay' for those groups to raise their wages back to where they were before this crisis? I'm assuming it won't be palatable at all and will need to increase again in line with inflation? But how do you increase wages in line with inflation if you're experiencing deflation?

Should be an across the board 15-20% cut for all public servants (incl crown entities/councils) with the exception of front line medical. Our nurses in particular have been screwed over for years, time to consider them and give them a relative catch-up.-up.

I have heard that a lot of the workers in Gov't departments are not on great pay often on contract.

This is how it works, sign workers up for a short term contract, anything from 3 to 12 months. Then don't talk about renewal until it's just a few weeks away, basically a perfect environment for psychopaths to flourish.
A friends husband works for a local council and she is always on about these one year contracts and the stress it puts her husband under, with house mortgage etc and never knowing what next year holds.

Weeks away, often days.

Got the bit about contracts right but not the pay.

I worked for a govt dept and the lowliest contractors who did very little got $90/ hour. A lowly marketing person might get $130K for fluffing about on Facebook and booking hotels.

Most of the time we spent was in meetings, or planning meetings or talking about what we did in meetings. Not a lot ever got done. The taxpayers funded around $35M pa. Most of senior management were on over $200K. They would fly around the country feeling important including to lots of unrelated overseas junkets.

Some people had one main task in their remit yet after several years the task still never got done. No matter. That person ended up getting a golden handshake or threatened doing a PG.

Young, inexperienced ineffective managers got $160K. Many couples and family members. Company cars... yep. And fuel allowance. For what. Driving 5km from home to free carpark.

The other thing we did was eat. A lot. The catering was unbelievable. And continuous. For the most random events.

We had the latest everything. The best tech. If we broke a $2,000 phone no matter just get another one. Colour copying no limit $1/ page.

It might sicken you but I'm not making this up. Why I'm extremely cynical of socialists like JA.

Forgot to mention, tons employees were many multiple house owning property investors.


Yes I've spent time in Wellington a while back working for a few different government agencies. Great coffee culture. Terrible work culture. I was blown away by the incompetence and (lack of) productivity. Couldn't stand it so I left as it all felt corrupt. We wasted millions of tax payer funding (10's of millions - if it became public there would likely be inquiries - I considered being a whistle blower that's how bad it was...instead I just walked away). Everyone reporting to ministers who only care about polling - not doing the right thing. So it all just became a giant self licking ice cream cone. And remember this was across multiple government agencies - not just one. In the end, I realised what it would be like to live in a communist state. That's what the Wellington environment felt like (this was under a National government by the way...). No one willing to stand up to the Ministers or effectively spend tax payer money.

I was frustrated by the fact that they have rhetoric about providing 'free and frank advice', but in reality you are required to provide advice that bows to the whims of the minister.

Having done some contract work for agencies, I agree with all of that.
The only thing I disagree with is your description of Ardern as a socialist. She's not (she might have been way back in the day). She is a woke centrist.

Been there, done that too, My impressions: exactly the same, except for the finance folks I usually worked alongside: accounting deals in real data and tends to ground people, somewhat, because it is inherently linked to external organisations and suppliers who supply reality checks.

But on the revenue side, no clues. Pencil it in on 1 July, it arrives, to the nearest thousand, by 30 June, with fairly much zero effort. Same with salaries: they arrive with the regularity of sunrise, with zero effort, review, performance criteria or the usual private-sector constraints (where, if you aren't making the boat go faster, you're soon floating in the water astern). This probably is also true of the largest private-sector playaz, where a similar disconnect between attendance and result may well obtain....

Otago mayors etc are donating 10% of salary for 6mths to charities within the community

"Is this a (another) sign that we're already in a deflationary spiral?

Post lockdown, we’ll announce a 50% drop in our charge out rate and you can bet your boots we’ll be asking our suppliers (both commercial and private)to do the same.


It is just the begining. Real effect of corina virys on data will start when the lockdown are over in most part of the world as now in freeze mode.

"Welcome back! How was your Staycation?. Now. You know how you got the gross $585 per week subsidy via us from the Government? Well....the thing is...until we get up and going again, and that could take us a while as I'm sure you appreciate, that's all we can afford to keep paying you. Of course, you can hunt around for another job. But let us know what you think. Thanks"

Holy cow. It looks like the Fed is corrupt. Now buying up Blackrocks junk bond ETFs. Isn't that against it's own mandate?

Why is it corruption? Guess who manages all the Fed's special purpose vehicles it is creating... yep you got it... Blackrock!