Dairy prices down; US housing down; Wall Street down; China tax and profits down; Virgin down, nearly out; Aussie rental market down; UST 10yr yield at 0.57%; gold down; NZ$1 = 59.7 USc; TWI-5 = 66

Dairy prices down; US housing down; Wall Street down; China tax and profits down; Virgin down, nearly out; Aussie rental market down; UST 10yr yield at 0.57%; gold down; NZ$1 = 59.7 USc; TWI-5 = 66

Here's our summary of key economic events overnight that affect New Zealand, with news of grim tales everywhere, and no rebound in oil prices. Bond markets are worried.

But first up today, there was another dairy auction overnight and it was a wobbly one. Overall prices were -4.2% lower in US dollar terms and -3.8% in New Zealand dollar terms. Most products took falls at these levels with WMP down -3.9% and SMP down -4.9%. This adds to a string of chunky falls since the beginning of February with only one auction in the past six able to hold the line. These falls are mounting so that since the start of 2020 overall prices are down -11% and year-on-year they are down -17%. The growing retreat won't be able to be ignored in the farm gate milk price.

Wall Street is sinking today, with the S&P500 down -2.8% so far. Overnight, European markets fell harder, down more than -3%. And yesterday, it was red ink all the way in Asian markets, Australia and New Zealand.

In the US and prior to the real bite of the pandemic, March data for American home sales dropped by the most in almost five years. They tumbled almost -9% from February, back to levels of a year ago and snuffing out their interim recovery. It will get worse of course because April was at a virtual standstill and both realtors and economists expect a further deterioration in housing market activity through the second quarter.

And thousands of small trucking companies that move the vast majority of the goods in American freight markets face a grim future with suddenly shrinking cash flows, limited reserves and uncertain access to credit. They mirror the prospects of most American SMEs as their vaunted bailout funds look like they have raided by large businesses first.

In China, their tax revenues fell -21% in February in the heart of their pandemic outbreak. And then they fell -26% in March when they were supposed to be recovering. Further, profits at their large SOE companies fell -60% in the first quarter of 2020. China has taken a severe economic hit. Despite that, and fanning scepticism of their official data, they say their jobless rate is only 3.7%.

Worldwide, the latest compilation of Covid-19 data is here. The global tally surpasses 2.5 mln, now at 2,531,800 and up +91,300 this time yesterday which is a rising tide. Now, 32% of all cases globally are in the US as caseloads rise faster elsewhere. The US caseload is up and they are up +38,000 since this time yesterday to 804,200 and also a faster rate of increase. Just on 9% of all US cases have recovered so far, and virtually unchanged. The disease is now spreading into the American heartland.

Australia has now over 6500 cases and little-changed over the past week, and their recovery rate has been unchanged for a week as well.

Global deaths now exceed 175,000 and this rise is slowing although it is clear that many countries report these in quite different ways.

There are now 1445 Covid-19 cases identified in New Zealand, with another +5 new cases yesterday and less than the prior day's +9 increase. The number of clusters is still at 16 and there are 569 people in those clusters and 349 have recovered. 4 of the five new cases are in two of these clusters. Thirteen people have died here now, one more than yesterday, all geriatric patients. There are now 12 people in hospital with the disease, with three in ICU. Our recovery rate is now up to 70% and rising.

In Australia, they are rolling out some very big guns to try and save the Virgin airline. But it doesn't look positive.

Also not positive is the outlook for their landlords, including residential landlords. A flood of properties on to residential markets from AirBNB is a key factor.

We should also note that Beijing is using the cover of the coronavirus emergency to arrest Hong Kong democracy activists, and pushing China's "basic law" over the top of the protections Hong Kong citizens currently enjoy. The plan seems to be to imprison them in a group more likely to contract the disease, and at a time group assembly to protest is unwise on a health basis.

The UST 10yr yield is falling, now down -7 bps to just under 0.57% and nearing its all-time spike lower on March 9. Their 2-10 curve is higher today at +47 bps as short rates take a beating. Their 1-5 curve is similar at +19 bps, and their 3m-10yr curve is now at +49 bps. The Aussie Govt 10yr yield is now at 0.82% and down -2 bps. The China Govt 10yr is unchanged at 2.59%. The NZ Govt 10 yr yield is down -1 bp at 0.91%.

Gold is lower today, down -US$15 to US$1,678/oz.

Oil prices have stayed very low, especially US crude prices. They are currently at just US$9/bbl and while that is a rise from yesterday's collapse, it is still at a level the industry can't survive at. Now international oil prices are falling too, and even faster, with the Brent benchmark down -US$8 to US$18/bbl and a -30% drop in one day. That's now at a level below almost every country's cost of production.

The Kiwi dollar will start today weaker. We are now at 59.7 USc and a full -1c lower than this time yesterday. On the cross rates we are -¼c lower at 94.9 AUc. Against the euro we are also almost -1c lower at 54.9 euro cents. That means the TWI-5 has slipped back to 66 and now below its rolling four week average.

Bitcoin has changed very little in the past 24 hours, now at US$6,880. The bitcoin rate is charted in the exchange rate set below.

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

Our exchange rate chart is here.

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

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Mainland Chinese leaving Hong Kong housing market.



Still half asleep, I misread your comment as "Mainland Cheese leaving Hong Kong housing market."

Could be, could be, they have their own brand now, Meadow Fresh

PA you might recall Muldoon singing out in parliament, a debate concerning the then The Dairy Board, “ Oh what a friend we have in cheeses.”

Drunken revelling, eh?


Just like Virus .....responsible for house price rise world over and may be single important reason.

Well the HK unrest led to them going in to a recession so not a free or economically attractive as HK use to be. Not only that but China has recently been arresting its Hong Kong pro-democracy activists. BBC article: Hong Kong: High-profile democracy activists arrested. https://www.bbc.com/news/world-asia-china-52338493

It will be a bloodbath if the Mainland Chinese decide to start offloading their property in NZ. The article seems to suggest the Hong Kong sell off relates to slumps in rental income though, so it probably depends on what happens with the rental market.

It is looking like they will have to unload in NZ to get by in China.

Thought lots Chinese "investors" in the Auckland market kept their rentals empty.

The Chinese are going to Singapore now and guess what people of Singapore can still buy property in NZ.

Yeah doubt it considering the economic hit that China has taken due to the coronvirus. The Chinese Government is likely to continue to clamp down of their capital flight restrictions even more now. BBC China's virus-hit economy shrinks for first time in decades. "The world's second biggest economy contracted 6.8% according to official data". https://www.bbc.com/news/business-52319936


Wow. Heaven forbid those investors be personally responsible for managing the risk of their own behaviour. Surely taxpayers should be responsible for that instead. Nothing but full socialism with some animals more equal than others at that point. "We're the elite! Money should be taken from them and given to us - it's only fair!"


bring out the pitchforks.

Oil has begun sell off number 2. Once the bad data comes out over the next 2 weeks we will retest new lows. In NZ my guess is house prices in NZ won’t drop more than 10% and will stagnate for 2-3 years around that level. Cities and towns like Dunedin, Queenstown, Rotorua that have had absurd price rises will be taking on more falls around 15%. Auckland will hold somewhat firm with a 5% fall - given its only moved 5-7% in the last 3 years.

Who knows? Maybe this big work from home experiment might show that not so many people need to reside in Auckland? Although it has other things going for it.

Yes, how many First Home Buyers in Auckland might end up getting the nod from their employer "You can work from home indefinitely now". Suddenly their choice of housing market has grown, might see a surge in demand in the regions due to affordable housing? That is, if they don't mind leaving their friends/family behind.


At this juncture, it's more likely to be "You can home from work indefinitely now"


And so it should be, having done the two hour commuting each day for many years (even by train) it's such a waste of time and energy. The tech for working from home is so easy. Our Government should use it as a tax break incentive to encourage people to work from home, lessen stress on road building expansions and pollution.

My commute is typically 4 - 5 hours a day (train & bus). I've recently moved into a "remote-able role", yet my company was still apprehensive of the idea of working from home for even just 1 day a week.

Tax incentives are a GREAT idea to hammer home a new, better reality. Where there's less pressure on transport systems, less CO2 emissions, more work-life balance etc. Everything that the government talks up, but does jack-all about.
You should write to a couple of ministers with the idea.
It's far too good an idea for the current muppets to come up with. And to probably implement.


We understand that the 'work from home' measures instigated by Sky TV NZ (500+ staff) at the start of the Level 4 lockdown have been so successful that they've just asked their employees if they would like to work permanently from home for the future - we also understand the offer has been enthusiastically received - welcome to the future indeed (commercial landlords take note).


2008 -10% and this time we had a bigger rise and for longer, that plays out as a larger decline and this situation is much larger. 20% plus decrease on some areas.
I see Alk dropping by a good percentage. The general feeling from people I talk to is that they are revaliating their lives.
That may play out as work from home, move cities, less CBD demand. People don't want to spend 2 / 3 hours of their own unpaid time in a car per day.
Companies will be looking to down size / relocate their CBD office space to keep prices down.

The company I work for is already looking at downsizing their CBD office space post lockdown after a rapid move to working at home.

If others do the same it could see the bottom fall out of the business property market

talking to my boss yesterday and she can see us going forward having a mix of work and home and work in the office, maybe one or two days each working from home, if that happens they can downsize office space and moved to shared desks and save some money.
working from home means the power bill goes up but then that is offset by travel time and car costs.


If it has taken this event for businesses to see the sense in such rationalisation, quasi capitalism as we know it does not allocate resources efficiently enough to save society.

Great point.

We travel the country seeing our customers, we have been having regular zoom meetings since lock down, I think we will likely reduce travel by 50%, sales staff can work from home extensively. Its not only office space, I am normally away from home on sales trips 2 months of the year, motels, fuel, rental cars, food and drink (entertaining customers) through all those regions.

A great saving for the company but a hell of a hit the economy, especially if we factor it by quite a few.

Let's see how that plays out. People have talked about remote working for more than 20 years, it's obviously caught on to an extent.
It will be really interesting to see if things really do change, or if we go back to status quo.
I think we will land somewhere in the middle.
My view is that a lot of businesses could have staff in the office just 1-2 days per week. Face to face can still be really valuable. So we will still need 'offices', just different kinds, and not as large.
Will we get localism benefits from this? Does the local cafe do better because on any given day in Meadowbank a large number of people work from home?
Just questions and thoughts.

Will we get localism benefits from this?

Possibly, a lot of the CBDs (Even in regional NZ) are designed around people coming "into" work. Cafe's, retail, banks, Local Govt, etc...

So I see two options:
1. A dispersed workforce could either see the cafe's/retail relocate to the 'burbs, or
2. they could simply disappear due to the spread of the market being too thin in any given place.

It would also have big implication for Public transport.

Interesting times...

maybe just one central hub of different food and drink options that are all delivered could be the norm.

Instead of thousands of car loads of people on a Saturday driving into retail stores, we could have a domestic delivery service that collates orders from a selection of major retailers/supermarkets into one delivery to your door. Instead of retail malls, we have central distribution hubs. Order some beer, meat, a mobile phone charger and 3 pairs of socks on a Friday, have it all turn up at your door 10 am on a Saturday morning.

But then how else will people spend time with their families?

Work from home works OK once you are established in a role, but plays havoc with coming up to speed in a new job.

Good point, and as well the culture of team spirit hard to build up remotely. But judging by some of the standard of service and persona you get nowadays, that’s a fast diminishing requisite it seems.


I think 15% for Auckland, 20-30% for many smaller centres. Unemployment, no tourists, pressure on rents, prices already defying fundamentals...

Official Australian data monitoring their labour market shows that now nearly 800,000 people have lost jobs there in three weeks. Young people are the first to go.”

Not sure what our comparative figure is, but it won’t be far off pro rata.


Agree, this is much bigger than 2008.

I just got an email of a house that was a renovation and now 'the owners situation has changed'. The price is still to high but this is only the first of many 'owners situation has changed' properties going online..
Builders hate taking on someone else's partly fone job and charge higher.


Lockdown has freezed price fall as well as vendors expectation to pre virus era.

Give a month or two after the l9ckdown and both will change, price as well as vendors expectation along with RE Agents attitude towards buyer as will be King.

Wait and Watch.

Food for thought regarding Auckland house prices

A) December 2007 - September 2008 (GFC period)
i) NZ unemployment 4% (peaked at 6.7% during GFC),
ii) NZ GDP growth for the period say 3.0-3.5% (bottomed at -2.0%)
iii) median house price fell from $460,000 to $420,000 (or by 9%)

B) March 2017 - Jan 2019
i) NZ unemployment 4%,
ii) NZ GDP growth for the period March 2017 to Jan 2019 averaged say 3.0% p.a,
iii) median house price fell from $905,000 to $805,000 (or by 11%)

C) March 2020 - ??
i) NZ unemployment expected to be 10% or higher,
ii) NZ GDP growth - expected to be negative - supposed to be the worst economic performance in 150 years (Ken Rogoff, economist, economic historian)
iii) median house price falls forecasts of 10% by banks - is this forecast inconsistent with the previous economic scenarios?

not so sure about young people first. I know of several who have held their jobs over their higher paid middle managers (and effectively getting a claytons promotion). Business making the most of cleaning out overpaid dead wood.
There is a opportunity out there right now for younger brighter ones who couldn't get ahead due to restrictive employment law and oldies who were double dipping and would not retire.

Anyone seeing same?


Hopefully this happens in the local councils

Hopefully this happens in Parliarment.

Hopefully this happens in the public service.

Our company does a lot of google analytics work, so can't report on who businesses are making redundant but can report on which type of businesses are taking more of a hit and those who are thriving both via google data, client reports and via the ones that have had to sack us in their cutbacks!
*businesses who are run by young, more nimble people who maximised online potential are doing better
*businesses who are run by older people with less emphasis on online optimisation, are tending to do significantly less well
*businesses who are completely reliant on footfall and physical clients are suffering yes, but some are also trying to use this time to optimise or dominate over competition and come back swinging
*our clients are global so there are different trends in different countries and some of this reflects different government responses but universally all our sex shop clients are doing very, very well hahahah

We've lost about 30% of clients so far but gained at least half that in new clients who have decided this is an opportunity to make strides in their market share and search engine rankings.


Only 10% decrease ? This is so optimistic as to border on the utter delusional. I would be greatly relieved if we saw a decrease of only 20% in Auckland and in the main cities, with bigger slump in some tourist spots.
With unemployment touching 10% (and this in the most optimistic scenario!) a decrease limited to 10% defies economic reality. And assuming only a 5% decrease in Auckland is almost Trumpian in its delusional ignoring of factual reality - it is not even wrong.


You under estimate the depravity of the RBNZ.


Salvation Army today stated that there is a refugee crisis unfolding in Queenstown.


Yep and there is no sign of the governments great recovery plan....just all talk to the media. Putting Phil Twyford in charge is another massive mistake. He could'nt deliver KB he won't be able to deliver this either, once the wage subsidy goes then watch business fall like dominoes.

Agree, sadly. Such an incompetent minister, in an incompetent government.

Muppet like I might suggest, Fozzie perhaps.

The Swedish Chef.

yes the immigrant workers dont qualify for anything and that city is run by people on short term work permits.
the government should have helped those that wanted to go home,

Can't work due to lockdown, can't fly home due to lockdown, I assume they can't even access welfare due to being on visas. Horrible.

Time for people to leave as Queenstown as jobs will be very scarce for the next 2 years minimum maybe forever.
It will become a giant retirment village once prices drop down with a few retail jobs etc.
The local mayor is asking for tax payers money to keep short term visa holders in town just in case they are needed which is crazy.
I think he is trying to prop up housing market by using tax payers money to pay non New Zealanders to stay on which in my view is wrong.
If the jobs are gone for short term visa holders then they need to go back home too and let the market decide what happens next

Return home - easier said than done in some cases. Non New Zealanders they may be - but they are NZ taxpayers if they have been employed. The PM requested Australia to allow kiwis working over there to access benefits etc, so we in NZ need to not just talk the talk, but walk the talk. https://www.rnz.co.nz/national/programmes/ninetonoon/audio/2018743464/co...

Former customers of mine in a previous role I had proudly told me how they'd bought more than one $1M+ property in Queenstown specifically for AirBNB.

I remember expressing concerning that was a lot of money to pay (so, minimum $2M for at least two houses a few years back and who knows what/ how much else since) to rely solely on tourism income and the houses not even being suitable in case they needed to become standard residential rentals.

Have had more than a passing thought in recent times about those sorts of customers and the situation they might be in now.

Just pop them onto planes and away home, it's not like AirNZ has much else to do.

There is still fruit to pick around the country...

"I would be greatly relieved if we saw a decrease of only 20% …"

True - because that would mean things are holding together...
Because where house prices go is pretty much irrelevant … It all comes down to what happens with incomes
If we see a deflationary spiral take hold buyers/seller/prices will be non existent

Typical mortgages for FHB's in auckland are 70-90% of after tax on median salary. Lose an income (which could easily happen to 1 in 10 households) and suddenly you have a lot of mortgagee sales and very depressed prices. I think 20-30% drop is realistic in next 1-2 years, country wide.
Out of work NZers repatriating from OZ might compensate by increasing demand for housing.

Bring back Bernard Hickey who suggested a residential price fall of 30% after GFC.
This time there are more and stronger reasons to get to that figure.
*AirBNB units released to the rental market.
*Foreign/Newer resident owners quitting.
*Continuing upgrade requirements forcing the sales option
*Nil immigration. OK some returning citizens.
*Temporary work visa holders in collapsed tourism exiting.

Do we need any more reasons?


China v Hong Kong; any means to assert the jack boot! In the face of growing anti-China sentiment they continue to stomp on their own! They clearly believe nothing can touch them.

It is surprising that there has not been a more physical display of anti Chinese generally internationally. We were in the USA on 911 and a terrible backlash against Muslims in some communities coast to coast. CV19 of course not same the sudden fiery shock but emotions must be starting to percolate by now one might think.


All countries in the world and it's people are in lockdown so wait and watch though head of countries like Australia, Germany, Italy, UK, USA......have started to voice their anger and concern against....

BBC Coronavirus protests: The moment a man in scrubs confronts drivers. "People protesting against the stay-at-home orders in Colorado were confronted by a man and woman dressed in medical uniforms - apparently issuing a silent rebuke to participants."

I think most people can tell the difference between Chinese people and the Communist party of China. We also realise that a person who has the appearance of being Han Chinese may be from Taiwan or Hong Kong or be a Falun Gong refugee. I interpret every Chinese person I meet doing their exercise walk as someone who was sensible enough to get out of China (just as I was bright enough to leave England).

Not so much in the USA afraid to say. Already exists high racial tension, between native americans, hispanics, african americans, orientals, muslims and the perceived privileged caucasians. If push comes to shove or worse, the whole lot could turn on one of the other without a second thought or glance.

This is so important Lapun. Criticism of the CCP is not hatred of the Chinese people.

I am a fierce critic of the CCP but have never had any cause to dislike a Chinese person. Which is more than I can say for many other nations (including my own British one).

Yes, it appears the CCP does think it is untouchable. This article from the viewpoint of H R McMaster:


The evil CCP using COVID-19, which they caused, to invade more territory in South China Sea. These bullies must be stopped. No more dealings with China. By dealing with them we empower them. NZ companies must now cease China trade for all our sake or face huge tariffs.


Tks TB. Whole thing exacerbated by the simultaneous burgeoning of global corporatism and the associated greed. Cheap labour means cheap components and no questions as to how they get to arrive on your table. That availability turned to reliance to over reliance. Regardless of Trump’s contorted way of approaching matters he now has the ability to say to his fellow Americans. and the NATO lot as well, see what has happened we have very unwisely put our trust in the untrustworthy, now is the time to turn to self containment, self reliance, get back control, take care of and build our own business first. Might too be round about now that the western powers think Japan rearmament would be a good idea.


The most "Telling" point in that missive is how NZ has been targeted and "Bought".

The Chinese Communist Party has also pursued a broad range of influence efforts in order to manipulate political processes in target nations. Sophisticated Chinese efforts have been uncovered in Australia and New Zealand to buy influence within universities, bribe politicians, and harass the Chinese diaspora community into becoming advocates for Beijing.

The geopolitical implications will be interesting if North Korea's Kim carks it.

Already a vassal of China in every sense of the word. Whatever might become necessary, China will control it.


This drought is heading for the record books. I have lambs booked in and Im hoping they will go end of next week. Talked to a few farmers last night all trying to offload stock without luck. Im continuously getting quoted animals over the phone. As I'm waiting to kill my lambs Im going to go through three schedule drops, already had the first two. Talk is a dollar off lamb schedules.
Wait lists in meat works are not going away, and are two weeks longer in the South than North Island.

Im looking at replanting 20 hectares of young grass as it's looks like it's not going to make it, no rain in forecast for next two weeks, my options are limited probably to rye-corn or oats.

Problem now is that people I follow and friends in the US are saying that the oil problems are going to flow into the soft commodities. Farmers are saying that in the supermarkets there is often only one or two packs of meat, there is a blockage, when it's opened there will be massive product looking for markets. Farmers who complained about $3 corn are now complaining about $2.50 corn.
Everyone will be trying to sell product forward to, lock in some insurance in a chaotic world.

Here is a pig farmer in the States, jump to 10 mins in.


Yesterdays radio NZ rural news

Was an interesting Country Calender last Sunday - regenerative farming via diverse planting in harsh environment - could probably hybridize with traditional ag for added resilience??

Linnburn Station, shown on Country Calendar is possibly better described as a hybrid as it uses irrigation (pivot by the look of tracks on the ground) - which the owner acknowledged in the programme. There was also a drench container in the back of his ute - Arrest. There are farms that are 'dryland' farming without irrigation in dryland country. A key to regenerative farming appears to be little or no debt. Beef and Lamb NZ are currently undertaking research in to regenerative farming.

CC is farmer advertising using taxpayer money. Waiting for an episode showing the real face of rural life.

C/O, I'm like you regards regenerative, I'm trying different things but I feel deep down I need to move from animals first to soils first to do regenerative well, by then I suspect my family will be complaining about our lifestyle on half the income. I have been brought up to do always do animals first, to make it work it's going to involve me hackingh my numbers to bits, then depending on the store market to add stock when I need it, that's a risk you take every year.
As always there will be lessons learnt and things we can bring over to traditional farming. I'm getting into solar capture, unfortunately you still need some rain for it to work but I like the options a lot and it's interesting.

Aj, Down South we may also have to consider, physiographics (https://ourlandandwater.nz/future-landscapes/physiographic-environments-...)- as that is more likely to inform mitigations/system changes re water quality. Regional council decided to initially put it in the Water and Land Plan and then decided after submissions to have it outside the formal rules - which the Environment Court interim decision has now said it's to go back in. No longer as farmers can we just consider soils/animals etc in silos (individually). We need to look at our farms as a complete system - animals/physiographics/soils/water/carbon/emissions/staff. Unfortunately the govt hasn't got that memo about you can't silo these things individually, as in practice it all is integrated, and the way regulation is written for some types of farming we may have to decide which trade offs we are willing to make.
I like the idea of solar capture and am aware of some farmers making good $ from selling back power to the grid - if it is a 3phase system. One system gets enough in credits that there's no real incentive to put in battery storage.
Ag is always evolving, no two regions are the same so there's no one size fits all answer. Milk taint is something we need to be careful of when using mixed pasture species.
We share our milk cheque 50% with our sharemilkers so any changes we may look to make needs to be considered in how it will also affect them.

there shouldn't have been a bucket of Arrest on the back of his ute, that means to me, animals under stress. I just think the cut in stocking numbers requires that low debt, it becomes a lifestyle more than a business.

Hi Aj I tried rye corn last year after the drought. Not much good really, it needed much more moisture in the soil. The damp patches did well. The dry, awful. I have checked out a lot of on line stock. The yearling beef strs are going ok, but most of everything else just sits there. We had rain. But half what was forecast. The pigs and deer are having a fielday with not many hunters around. Hmm yes, still a few. Feeding their families. Why not.
Heard rumours we could be looking at a $5 lamb schedule.
I am beginning to think I may sit this autumn out. Kill what I can and not replace til June. Catching knife and that sort of thing. Could miss the boat too. Argh....decisions decisions.

Reminds of my grandparents who farmed through the depression, sheep and beef farm with a lot leasehold bush out the back, they ate greatly from there, venison and wild pork, occasionally killed a sheep for themselves but almost never a beef that I can recall even years after the depression and war.
This is the sort of thing doing well out of this https://www.facebook.com/whollycowcambridge

Mind you they had no electricity till 1960

We had electricity but more off than on until Roxburgh came on stream. Still I as a child fascinated with the power and intricacy of a tilley lamp, no I didn’t burn the farmhouse down, and the destructor of course, heat and hot water. pine cones were always stashed ready to go. Would have liked those things on hand post the EQs.

They were midway between Alfredton and Tinui in the Wairarapa, I was very young, but I can recall it, built a new house and with that connected to the power. Not sure if it was available prior.

Not many are going to be making money at $5 especially with the wool market shot to pieces. I don't think there is going to much money in anything for a bit and like you I'm killing and not replacing.
Interesting to see what it does to farm values.

I'm thinking about waiting till it rains and then either planting in front of the rain if the forecast is good, or waiting till moisture levels are back up. At present it's hard to imagine it ever raining again.

AJ and Belle - always good to hear the unadulterated sitrep from the front. Keep it up.

the Brent benchmark down -US$8 to US$18/bbl and a -30% drop in one day. That's now at a level below almost every country's cost of production.

So at a roughly long term avg of US$60/barrel producers were making 200% profit for years! Not a bad business

It's marginal cost that matters in oil production.
At $18 a barrel, it's over break even for probably 80% of the world's oil production.

"At $18 a barrel, it's over break even for probably 80% of the world's oil production."

Sorry - that's complete Bollocks

"As that chart shows, Saudi Arabia only needs to spend $3.50 in capital to pull a barrel of oil out of the ground. This amount includes money invested in drilling new wells as well as the associated equipment.
Meanwhile, the location and size of Saudi's oil fields also help keep its production costs down. While it's not the cheapest in the world, as several nations have production costs around $2 per barrel, it's still a fraction of the production costs of a country like Canada, which pays $11.56 to produce a barrel of oil."

Ha … Yes the Saudis are absolutely LOVING these low Oil prices …


"Saudi Arabia expects its budget deficit to widen to 187 billion riyals ($49.86 billion), or 6.5% of gross domestic product (GDP), next year from a projected 131 billion riyals for this year, or 4.7% of GDP, the finance minister said on Thursday, as lower oil prices hit revenues.

Al Rajhi Capital said in a research note that the government would need oil prices at $71 per barrel to balance its budget next year. "

The point being made is not what price the producers need to balance their budgets. It was about the marginal cost of production of a barrel.

It's about as pointless as noting that Saudi Arabia could probably balance it's budget by halving it's military spend.

So fool.com is where I can get this info ?

Getting empty.com, more like it


Like the post I seem to have misplaced hereabouts....

Wonder how the three big mid east airlines will fare now. No great subsidies from oil profits to fly half empty wide bodies all around the world.

"Braziel explained that the phenomenon in the oil market reflects a “paper-market” problem, rather than an issue with physical barrels. Futures contracts trade by the month, and the June WTI contract, which expires about one month from now, remains above $20 per barrel.

“It was a squeeze in the futures market,” he said, adding that any company that bought a contract is “obligated to receive physical barrels” on Tuesday “unless they get out of it before the market closes.”

“That’s what they call convergence. The future market and the cash market converge on the final day of contract.”

If current conditions persist, however, the challenges in the “paper market” can bleed into the physical barrel market, Braziel said.

The West Texas Intermediate Light Sweet Crude Oil futures contract is cash settled against the prevailing market price for US light sweet crude.

NYMEX WTI futures contracts are not cash settled, that's the reason for the panic yesterday as no-one wanted to be left with a contract taking physical delivery as there is no oil storage capacity.

Jun WTI crude oil (CLM20) on Tuesday closed down -$8.86 (-43.37%) at $11.57, Jun Brent crude oil (CBM20) closed down -6.24 (-25.20%) at $19.33, and Jun RBOB gasoline (RBM20) closed down -0.1560 (-21.50%).

The petroleum complex on Tuesday today sold off sharply once again. The Jun WTI crude oil futures contract fell to a contract low, although the nearest-futures May contract, which expired on Tuesday, surged back into positive territory and settled up +$47.64 at $10.01 a barrel.

Is QE/The Fed that good at distorting the markets? Look at Wall Street vs. Brent Crude. The dead cat bounce has been sinking for a while for oil. Wall Street has been ignorant, "everything is fine!". Maybe we're hitting a turning point?

When reading the headline, only word prominent was DOWN.

Roller Coaster ride is on and now the time to prepare for the deep Fall going ahead........Hold on tightly.


Agree, what is appearing at present are only cracks that can be swept over. When the rent, mortgage holidays come home to roost in 8 months it will be ugly. That is if the ugly dosen't pop it's head up before then.

Log prices are fine. Pity Jacinda wiped 2 business days = another week of production - off our third largest export earner.


the ports are full of logs, and there are very few ships on the way so unless you are selling locally they will just sit there for awhile

Oh lord - Tauranga has 7 truck loads in stock. Note truck loads - not ship loads. A tad silly to lock in a ship if the port is tumble weed empty and the industry is at the whim of a secretive government coterie.

Production of logs?? What are you on about - cut them down - truck em to a port - load and gone. China have a backlog of orders for logs which will be cleared in about a month. You really love to moan alot.

After much excitement and faith in Didier and Malaria drugs, another study submitted for publication has unfortunately resulted in hydrochloroquine more than doubling the death rate in the study.

And this is after the Brazil study had to be cancelled after 11 people died from the drug

And this French study that showed that it didn't work anyway

Perhaps a reminder to be patient and give science time to provide the data rather than getting too excited about individuals.

Some good news though, the UK Oxford vaccine has gone into human clinical trials! Fingers crossed.

Wonder if this will worry the Orange guy or will he keep peddling snake oil hunches?

Does he worry about much aside from his Approval Ratings?
He's massively toned down and reduced mentions of hydroxychloroquine recently too.

But it wasn't just Trump. The same fads and trends make their way into the comments here too. With the same people, sharing the same links or sudden interests, as the meme makes its way through certain media outlets with specific political biases (both on the left and on the right).

The Madness of Crowds, just in a modern context...and too much ingestion of Hopium.

Are you referring to the Douglas Murray book Waymad? I read that (and others) from him and found him to present a very strong and convincing case. I'm less keen on Jordan B Peterson (the other Neo-Conservative darling) although I have ploughed my way through Maps of Meaning and found plenty of provoking though there. JBP has perhaps become a little too cult-leader for my tastes to have value as a cultural critic, let alone a heretical one.

No, the rather more ancient one: Extraordinary Popular Delusions and the Madness of Crowds - Charles Mackay. Perhaps the Mark Twain notion of history not repeating but certainly rhyming is in there too...

He was looking especially orange yesterday..I wonder how much time he spends in the sunbeds? Probably has Fox playing in there as well?

Think it's more like Ross in the spray tan booth

More likely to start throwing missiles

The first link has numerous inaccuracies (eg Brazilian trial was chloroquine not hydroxychloraquine). Didn't look at second. Ongoing use in a French hospital has now seen 3000 treated with hydroxychloraquine + zithromax and only 0.4% dead. Pretty good stats, compared to typical 1-2% dead (0.8% in world-leading Iceland). I believe they are administering it immediately after diagnosis to slow progression and give time for immunity to build, not after hospitalization when it does less good. https://www.mediterranee-infection.com/covid-19/

So who do we believe? Ginganinga with 4 hyperlinks or Foyle with 1 hyperlink? If you include 3 trump comments, then GN has a total of 7 exogenous ‘facts’. Bwaa ha ha. Unfortunately we will never know because the facts will be buried under the weight of opinion and agenda which is what has just happened in front of your very eyes in the above exchange.

Not really to those who matter. As a health practitioner, we follow best practice when prescribing/or treating, which is based on evidence-based research, not the outcome of a financial website forum debate.

Great work you do. So, thanks. Is there such a thing as ‘best practice’? Honest question.

I don't think we can know anything yet. We have to wait for the scientific community to arrive at consensus over time, as we do with everything. But with so much bias in these comments evident (there was mild hysteria on here regarding Didier), I like to share a counter narrative links on occasion. I would love cheap malaria drugs to work. Let's hope they do. However, there is currently insufficient evidence either way to suggest anything yet.

I do strongly dislike Trump as a person. I also strongly dislike Bojo and Corbyn too. However, that isn't about which end of the political spectrum they sit on, it's about who they are as individuals. I vote for both blue and red teams. I am a radical centrist and detest tribal politics. Most of the time I don't like the choices any of us get. I don't dislike Sanders as a person but I don't think he'd make good POTUS for example. Whereas Boris could at least delivery a majority consensus after 3 years of chaos. And whether I like a leader or not, they are democratically elected, represent what the populace most support and therefore, I support it. Governments going against what the populace wants is usually MUCH worse.

I'm not at all against malaria drugs because Trump suggested them. I am against everyone jumping hysterically on malaria drugs (which can be dangerous in high doses) without due scientific process and think it's irresponsible of Trump to encourage use of a drug with no clear efficacy on SARS-CoV-2.

Interesting NYT article from Doc treating patients for ten days.
"...A vast majority of Covid pneumonia patients I met had remarkably low oxygen saturations at triage — seemingly incompatible with life — but they were using their cellphones as we put them on monitors. Although breathing fast, they had relatively minimal apparent distress, despite dangerously low oxygen levels and terrible pneumonia on chest X-rays.
...All patients who have tested positive for the coronavirus should have pulse oximetry monitoring for two weeks, the period during which Covid pneumonia typically develops. All persons with cough, fatigue and fevers should also have pulse oximeter monitoring even if they have not had virus testing, or even if their swab test was negative, because those tests are only about 70 percent accurate. A vast majority of Americans who have been exposed to the virus don’t know it."

"In Australia ...A flood of properties on to residential markets from AirBNB is a key factor."

I can't see much if any evidence of a rental glut here in nz yet. In fact the contrary had appeared in queenstown. Queenstown rental listings have actually fallen by approx 4 percent since the beginning of the month. Across the country and in most major centres except Wellington, listings are at the same level as the beginning of April.

As the end of the month approaches it's hard to predict but there could be a lift in available rental properties. No evidence of a stampede for quick income anyway


Simple. No evidence because we are in lockdown.

Especially with a moratorium on evictions still in play for the short term.

Yes surprising, when I looked at the Queenstown rentals on Trademe a couple of weeks back they were at around 140. Now it's 118.

Perhaps they are getting them ready to sell...?

They are leaving them vacant. The wealthy elite own a lot of the qnstwn properties and more dire rental laws discourage houses being rented

Yep that will be happening a lot.

118 is still a lot. Used to be about 20, pre Covid.

Was that the first millennia AD or the second

Start of this year.
I was seconded down there a couple of years ago, and around 20 listed (or even less) was pretty commonplace.


Queenstown is shortly to see an exodus as lots of now jobless folk have to relocate to earn some income. The domestic tourism proportion of around 30% will not be enough to enable many businesses to turn a profit, meaning that remaining closed so as to not lose more capital will happen or more likely just go into liquidation. I remember in the 1996-2001 bust residential properties reduced in price by up to 30%. Fernhill was sliced in value by that amount or slightly more at the absolute low and many owners had to sit in negative equity until 2003 or so. That is quite a stretch of time. The bottom of the market was strangely enough September 2001 just after 9/11. So there are some very tough times ahead in tourism-focused places.


Queenstown is in big, big trouble. I agree with your assessments. I know Queenstown quite well.
Wanaka is in trouble too.

You would have recognized the landmarks on TVNZs One Lane Bridge. It made me glad I'm not in qnstwn full of that sort of neurotic people who have too much money.

Construction and all its related professional services (design, engineering, planning, property) has also been a boom industry in recent years in the district. That will be whacked too, and will have its own very nasty consequences - that will hit permanent residents hard. At least with tourism, most of the workforce are on work visas and will simply 'go home' (eventually)

However the Queenstown-lakes/ Southland region also has $12billion approved infrastructure spending in the pipeline coming up. They were already short at least 3,000 construction workers to carry this out PC so anyone with a few skills will be snapped up in the projects coming up.

Dunnie hospital and Invercargill tart-up among other big projects, all approved due to kick off.

Rotorua is a worry too, given that there are already lots of social issues there. Will be a big rise in unemployment there.

...... and burglaries

Try looking at Wellingtons listings - so many old cold villas for $850 a month...good luck. Students have fled the town to Dad/Mums place..next door 3 bedroom now vacant over 3 weeks and landlord decided to finally clear out the back overgrown garden (first time I have seen him do maintenance in 3 years).

Ha! Yup, also can confirm! My closest next door neighbours is a student let, converted into 2 flats. Hasn't seen any maintenance (apart from cutting the grass) for 20 years. Both flats have been empty since before the lockdown (5 people living there previously). The landlord had just been forced to instigate a major schedule of renovations, including new roof and external paint. The tradies were telling me that they quoted for the job years ago and he'd never got back to them, and it had considerably deteriorated in that time with much of the weatherboard completely rotten and needing replacement. The house has been left with scaffolding up for the whole lockdown.

I just don't understand the sense in letting a valuable asset deteriorate like that, it's costing a heap more now than it would have done a few years ago. Either he's just a rubbish landlord or else he wasn't running enough cash flow to set aside for maintenance costs.


So with petrol prices on way down, government tax take with it, Business tax deferred, business going under, less paye as unemployment starts to climb, more beneficiaries, plus all other benefits and loans being thrown around its getting ugly. Its a Bit like standing on Mt Hutt throwing the snow ball down from the top, its building nicely.

Yes. So what's the economic plan?
Heard zilch.
Is GR keeping it for the Budget?

Coalition has Cart Blanche to borrow and spend whatever they feel like, the shackles are entirely off with unprecedented wuflu crisis to be their boilerplate excuse to rival '9 long years' and plaster over all sorts of bad decisions (like bumping up min wage a few weeks back). There will be little to no effective criticism of their choices by majority of NZ media - now reliant upon govt for survival. The final extra bill for Labour's mismanagement through this will amount to many 10's of billions in additional debt and depressed growth compared to what would have been achieved by National.

Yes. On thr RNZ interview this morning, GR was notably cool about direct answers to any assistance to SME's. Kept reciting 'but they have the wage subsidy'. Yes, but a) that is (or should be) handed straight on to employees, and b) does not help with fixed costs such as rent, equipment lease, inventory holding or acquisition or disposal costs etc etc. I suspect the Great Resetter is saving his powder for the Budget... We'll just have to Pass it to find out what's in it.


That's what we've got to look forward to.

Yep the only good thing with this is that some people have managed to keep their jobs on reduced pay for now, maybe not at the end of June. Otherwise these big boys/companies would slash and burn and the first sight of them losing any $. So it's brought some time.

Looking at the dairy industry Lewis Rd Creamery $140k, Green Valley Dairies $541, Miraka $896k, Yashili $970k, and Mataura Valley Milk $615k have received the wage subsidy. Fonterra, Tatua, Yili, Open Country and Danone haven't. So are those processors who have, using the subsidy to prop up their payouts? How viable are the subsidy receivers if they need the subsidy to continue business when they are still operating and others don't?


What is with the IQ of people who become Nat Party Presidents?
As reported by others Michelle Boag says we shouldn't worry about C-19 as we obviously have seen 18 other versions which apparently didnt affect us much.
Reminds me of Ol Pete Goodfellow running around in small circles down in Clueless Swiftyland desperately trying to hide from the press the relationship between Farmer and Glenis


Michelle Boag has been well past her "sell by" date for many years now. Most media have dropped her with good cause. Out of touch and adds nothing to the debate.

Heard that, and it was nearly word for word, what Kellyanne Conway had uttered a day or so before. Clearly Boag did not see any of the reaction to that, otherwise she might not have swallowed it hook, line and sinker. Remote stuck on Fox, methinks

Anyone else have no sympathy for bondholders in Virgin?

Why invest in such a debt ridden mismanaged business unless you are aware of and accept the risk associated with that, especially when you sit so far down the food chain behind secured investors.

According to RaboBank, "Virgin Australia’s main owners are China’s HNA Group, China’s Nanshan Group, Singapore Airlines, and Etihad Airlines. Sir Richard only has 10%"

Do I hear tiny violins?


Why does the RBNZ get its kicks out of slow waterbording potential FHB's?

My understanding is that (LVR) the RBNZ move is more to stop the flood of mortgagee sales that would be legally caused if there is a sharp drop in housing values causing a move towards negative equity values.
Let's face it whether there is LVR or not banks aren't going to be interested in marginal mortgage approvals atm.

How does the LVR have any impact on mortgage serviceability? It's a prerequisite for new lending ratios.

Refinancing a mortgage is exempt from the LVR rules. So why would there be a flood of mortgagee sales?


Refinancing of existing residential mortgage loans (switching banks) is exempt from high LVR restrictions, as long as the loan balance does not increase.

Okay, so what was explained to me (by a bank lender) was that many people are on short term fixes and there is always a steady stream of renewals. People have been anticipating dropping rates so kept fixes short.
So then if your value massively drops and your LVR worsens, the bank will no longer offer the most preferable rates, so you might end up with much higher serviceability costs.

This is exactly what happened in many countries after the GFC and they were referred to as "mortgage prisoners". You can google the term for loads of media reports.

Yes, but loosening LVR restrictions won't mean low equity borrowers will suddenly gain access to preferable rates those with above 20% equity enjoy.

Renewals are exempt from LVR measures, this includes bank to bank, it's only new lending that's going to benefit the loosening of LVR's.

Oh really? So once you have a mortgage you can just trash your LVR and load up on debt with no LVR restriction to worry about? I wonder what the bank lending staff member was going on about then? (this was elsewhere online).

From the RBNZ link i posted and quoted earlier:

Refinancing of existing residential mortgage loans (switching banks) is exempt from high LVR restrictions, as long as the loan balance does not increase.

When I refixed 9 months ago, my broker was quick to tell me how much equity I had and was I aware that I can use that equity via mortgage top up to 80% LVR, if I wanted to do some renovations, buy a car or go on holiday.

Wowzers. I mean not unexpected I guess, but sounds a helluva lot like "exuberance".

"As LVRs have been done on a historical basis, removing the restriction is unlikely to affect existing borrowers, unless they go through a 'credit event' where the value of the asset (home) is reassessed."
Pls reassure me this "credit event" has (is) just not going to happen.


I can offer no reassurance, sorry, was just passing on what a bank lending employee stated. However, every time you re-fix or move your mortgage (as so many do) .... is potentially an occasion where the LVR is assessed or reassessed, which I assume is what he means by a "credit event"?. Currently, very few people will have lost significant value in their home yet, but I should think that over this year, many most certainly will. Which means when the fixed rate period ends, they essentially become trapped with their existing mortgage provider or else have to be "reassessed" by another bank as a new customer. New customers are not just new buyers obvs. People have tended to fix for quite short periods in NZ because interest rates kept going down, so there will be many people coming off their prior fixed rate this year and experiencing a "credit event". And you can believe that banks won't be just making assumptions this time. They will want to assess your employment status, outgoings, LVR. The lending landscape has changed.

Q: Is a mortgage payment deferment considered a "credit event"?

People have to apply to bank for mortgage payment deferment and fill out details.

This may be the reason for potential change in LVR restrictions.

I suppose it would allow a bank to open up more access to the equity a homeowner has in their house. Giving a mortgage holiday is not just deferring the cost but is adding to it with interest, and maybe living cost withdrawals, etc.

As an example, if your LVR was set at 80% and that was your mortgage equivalent, then you wouldn't be able to access your equity in the remaining 20%.

This way the banks can lend against that equity, taking into account how much they expect the prices to fall, so if you had to use up 10% of your equity and the value also fell 10%, then you have used up all your equity. Any further requirements beyond this might mean you need to sell, with the banks (of course) getting all their capital back.

If they didn't do this and it caused you to go into default, and therefore mortgagee sale, then there is a possibility both you and the bank could lose out.

This shows you how serious (and worried the RBNZ) is to allow this to happen as it is a measure to help the banks. The fact that the homeowner gets some benefit out of it, is almost a happy coincidence.

Good point. A long enough mortgage holiday has the potential to push a borrower from a low to high LVR. When the borrower comes out of their mortgage holiday, it's a refinance at a high LVR with an increase in the loan balance which does breach the limits.

At the detriment of the loan book quality of course, but not to worry they'll be packaged up and sold to the market as securities. The bond holders only need to know how much the houses are worth when borrowers default so it's all good.

Their next kick to the FHB's nuts will be when they allow the overseas Chinese buyers back into the housing market.

Yep. Human response to AI is and will be much the same as it has been for Wuflu - weak and late. Difference being there will be no vaccine to look forward to and there is a significant possibility of 100% fatality rate.

Well, that came out of the blue. Sure AI shows up in manufacturing and weapons, but wait until it distributes itself across the web into servers everywhere and then it just might save the planet and humanity from itself albeit with a lot fewer people. How much pain it takes to reduce the population is the question.

OMFG!!! Just look what our damned coalition is doing to the ENTIRE WORLD!!

Taxinda fush and chups worker's incompetent coalition of LOSERS killing BOTH the economy and hundreds of thousands of people worldwide!

united airlines just raised 1 billion to carry them through


Trouble is, that without tourism and tourists there is no "through" for airlines and the whole tourism industry tbf.

I suspect USA internal flights are way bigger market than what we see as international. I visited Dallas/Fort Worth airport 40 years ago and it made our current Auckland airport look like a garden shed. If I had shares in a major american airline I wold hang on to them because however bad the epidemic nobody will drive those long distances. Business will return that is certain.


I see wolfstreet has a new article up with some US data points on how their economy is tracking, saying that early indications are that this will be three times worse then the 2008 recession, ie for the US.

If RBNZ is committed to maintaning house prices, is there any reason why they can't announce a guarantee for all new mortgages, thereby encouraging/rewarding banks to make high risk loans? As someone pointed out, the only way to maintain a ponzi is with more entrants.

Good idea!
Then, if the home buyer fails, and the Government ends up with the collateral on its hands, it can just reallocate it to the State Housing Portfolio, thereby expanding the amount of accommodation for those unable to buy their own home.
The Failed Buyer at the front end, does end up doing their deposit and any payments they may have made. But, hey! there are winners and losers in every scheme.
"First Home Buyers to subsidise new State Housing!' Sounds like a winner of a political message to me; in this an election year.

See here a very timely article by Ellen Brown about how UBI is necessary now and how it can be funded successfully.

She has had such a positive influence in recent years.

After someone posted a limit of $300 at their BNZ atm yesterday I cycled down to the ASB atm and withdrew a lot more as a test.
No problem to get the normal limit it seemed.
This was in the early afternoon.

Different ATM's have different settings anyway. Some let you take out more, some less and this was true before the virus. So the interesting info would be whether the settings have changed at the same machine. ie what was the BNZ machine at prior to the pandemic compared to the current limit of $300 etc?

That's reassuring. I guess the local ATM must be a hotspot, as the next nearest one is a good 2-3 km away... So the $300 limit was probably just due to a logistical issue.

Most people think that "If what I have bought goes to $0, then the most I can lose is what I've paid"
But what happens when 'things' go negative?
Oil, being a good recent case. Do those who bought futures contracts at $20 stop losing at $0? Nope. They are up for the settlement cost at whatever the negative price was.
What else might this apply to over time?
It's like those who think "The most I can lose if I default on a property purchase is the deposit I've paid". Wrong. It's the difference between ultimate sale price, to a replacement buyer, and what 'you' contracted to pay that you're up for. etc.

Went to my local petrol station the other day, you wouldn't have thought oil prices had changed at all over the last three months as there is certainly no pass-through of pricing to consumers yet. I wonder if ComCom went on holiday again?

Theres a responsible minister somewhere, probably just sitting around picking his/ her nose while in lockdown
Time for a pls explain comm to go out to the Marsden Pt cartel.

Well my local NPD station in the last three months has seen 100 octane go from $2.36 to $1.89, a 20% reduction. 91 octane is $1.62 there today and diesel $0.92.

Truck-stop diesel - the lifeblood of the transport industry - is low 80c/l before volume discounts. KiwiFuelCards go 8c/litre off, cooperatives like Farmlands, RuralCo etc go 12c, and I have no doubt that the big end of town has negotiated much steeper discounts than those.

Anz picks unemployment to go to 11%, house prices to drop 10-15%. Note how their house value narrative is deteriorating.


I am really looking forward to the election, for a change. For a change, it will need to be a contest of ideas and policy. With the big obvious question being 'what will your party do to steer us out of this economic catastrophe?'
The Gnats will need to show some creativity in policy for a change. I don't think they have got it in them.

As this thing is world wide, and would have happened whether we locked down and (hopefully) eliminated this virus or went down the herd immunity thing, it's going to wreak havoc. IMHO we have done the right thing, it is going to take much work to even ride this out, leave alone recover and you can completely forget traditional growth for some time (forever I hope) that we do not need to be battling a pandemic laying waste to the population, and a completely overwhelmed health system as well as having to find a way to prosper in a much smaller world.

Fritz, what sort of policies would you vote for? What do you think will help NZ economy most during and global post-pandemic?

I believe a mix of 'leftist' and 'rightist' policies are necessary. Unfortunately, with tribal politics, I don't think we will ever get that.

On the 'leftist' side:

- introduce land / wealth taxes
- increase income tax on higher earners
- govt to get much more involved in building houses

On the 'rightist' side:

- sell residency (with condiions)
- reduce business tax
- radical RMA reform (not National style tinkering)
- cull the Wellington bureaucracy

Mostly agree. Although not sure about land/wealth tax *and* increase in higher earner income tax unless both were quite moderate and slowly introduced, I would go either./or. High wealth individuals are incredibly talented at tax minimisation and there has been some research that mild increases incur less of that behaviour and lead to more tax revenue (eventually).

I'd also like to see some really big infrastructure spending. Especially electric car infrastructure and more household solar. And some investment in sciences, maybe science and medicine university degree incentives for potential students and more funding for labs and research projects (while there is appetite for that). And renewable tech R&D.

Agree with your second paragraph, I didn't write it down but I was also thinking there needs to be some of that sort of stuff.
But we'll need tax revenue for that.

Your first paragraph is very cautious on increasing taxes. That's fine, and I understand your logic. However my counter to that would be how are we going to pay for the things in your paragraph 2? Would you suggest more borrowing, for example.
In terms of either/or, I think land/wealth tax is preferable to higher income tax.
How about increasing GST, other than on food (as many countries do).

Also, my proposal of increasing those taxes is to at least partly allow for reduction in business taxes, to try and incentivise more business creation.

Fritz, yup, I am conceiving of this as a wartime economic strategy. But also, hopefully a canny one. But also assuming that, similarly to other war and pandemic eras, will be followed by MOTHER LOAD growth, productivity and innovation.

I would think that the government could carry a fairly sizeable deficit for now, pump like crazy into areas of potential future productivity and maybe get away with it over the longer term. That is the kind of reset we probably need and might potentially carry in voter sentiment.

But, in regards to tax changes, i do agree with you, but I am mindful to behavioural economics, as ever. Lower business taxes will offset some of the tax avoidance, I agree, but my preference would be to take the boiling frog approach and slowly, slowly increase wealth taxes. Any big sudden shocks would risk too much push back both in tax avoidance behaviour but politically too. Can we devise stealth wealth taxes even? Stealth taxes are so much more politically digestible in the short term LOLOLOL.

As long as you don't expect them to actually fulfil their promises, then it's a fun game.

ha ha

Definitely cut the Wellington bureaucracy and their pay packets would get my vote.

My point is not at all related to what we have done or haven't done to date. You can argue both ways.
My point and question relates to how we rebuild our economy now that we are in this state.

Eh? I wasn't attacking you, there's no need to be adversarial. I was asking a genuine question.

I am also extremely disappointed by Labour's failure to deliver on key policies but that was all pre-pandemic and I was trying to ask what you would like to see in the policies on offer come voting day that might help us out of this hole?

Look. I disagreed with you on lockdown. I believed a big early intervention would be positive (on balance only) for the long term good of the economy. Other than that, I generally agree with you.

My reply at 12.17 was to Picketaces who implied my points were regarding the costs and benefits of lockdown.
Cool bananas.All good.

You didn't reply to me, you replied GN, but never mind, no not necessarily making implications about your points, just stating mine, which are basically, it's all going to the dogs anyway, even if NZ was somehow or other, the only country in the world to not have so much as one case, we'd be along for the ride anyway, that the rest of the world is on. I don't think people in general, not necessarily you, actually understand that.
PS I upvoted you on your comment about mixed economies.

That Air bNb trend in Aus if related in NZ will add to excess stock, and hence depress prices further.
Note that USA sales were already falling pre virus.
Note also, China figs on unemployment clearly a lie, given its other declining indices.
The impact incoming tide from shutting down economies is now on the beach.
I also note, with amusement, that new cases recorded in USA is still RISING.
Trump thought NYC decline was signal for other states to improve
His geography not good. Obvious that rest of USA is now going to get hit just not as hard.
Criteria for re-opening thus NOT met and doing so will mean huge increase in recorded cases and deaths.

The oil 'price' is the biggest point today.

Essentially, we were running a system which has been increasingly unable to afford itself. That was always going to end in disbelief-by-debt, or collapse. Measuring the real amount f energy going into a system, tells us how much debt can be underwritten (can be converted to physical activity) and how much has to remain virtual. The non-underwriteable portion is increasing, so a reckoning was due.

Below $80/barrel, it appears the now and future finds (notably fracking) are 'not economic'. Sociey can indeed agree to pull them out of the ground, go further into debt, and write said debt off. But the reality is it will be doing less and less physically, using said energy (due to lowering EROEI).


Michael Moore: Must See. Just Released.
Planet of the Humans
Perfect Lockdown Viewing

Fascinating view on green energy

Hats off to Michael Moore.

"Everything is sinking" - as good a headline as "Its a wreck". You are fast becoming my favourite journalist.

I wonder what everything is sinking about? Sorry , cant find the muppets , pigs in space sketch.

Everything is sinking ...............including the cost of everything from mortgages to fuel to food .

Everywhere except New Zealand , where fuel has not dropped at all , fresh food remains ridiculously expensive when every restaurant , fast food joint and hotel is closed .

I really dont understand how market fundamentals in New Zealand simply dont follow any of the orthodox economics of the rest of the world

Ah ha, maybe we really are special...Since our prices don’t fall, maybe our house prices won’t fall?