Here's our summary of key economic events overnight that affect New Zealand, with news it's all downhill on the factory floor.
US factory orders fell more in March than previously indicated, down almost -15% and that was before the widespread lockdowns started.
Part of this pre-lockdown weakness is from the Boeing woes, and today GE's aviation division said it will cut a quarter of its staff or up to -13,000 people worldwide. They won't be the only GE manufacturing cuts. Another very large company with lockdown indigestion is Disney, especially its theme parks.
The American troubles are mirrored worldwide. The global factory PMIs show output and new orders are falling at near-record rates, new export intakes have fallen the most on record, and manufacturing confidence is at its lowest ebb in the history of this survey.
China is the least affected so far after taking its medicine early. Europe is more affected than even the US with some grim country reports there. The most affected are emerging economies like Russia, South Asia, and Indonesia.
Australia is not immune. Not only has factory activity dived, job ads there fell more that -50% in April from March and are down -62% year-on-year. This is a fall far greater than during the GFC.
Later today, the RBA will release its monthly rate review decision and no change is expected in the rate. But there will be considerable interest in their non-rate actions.
In Hong Kong, they reported an almost -9% contraction in their economy in Q1-2020. And their economy is not being 'helped' by the vanishing of mainland buyers in their housing markets.
In China, they are claiming trade by ship is losing out to trade by rail. The number of overland trains from China to Europe rose by more than +50% in April from the same month a year ago, and this is despite the sharp cutback in overall trade. But it is not all it seems. That rail trade is equivalent to just four large container ships, and not anything like a game changer.
The latest compilation of Covid-19 data is here. The global tally is now 3,476,000 and up +77,000 from this time yesterday which is an unchanged rising rate.
Now, just under 33% of all cases globally are in the US, which is up +28,000 since this time yesterday to 1,170,700. This is a marginally slower rate of increase. US deaths are now more than 68,000 and the growth is slowing but their recovery rate is still only 15%. Global deaths are about to exceed 250,000. Another country we haven't mentioned before that is in trouble is Canada, and they will be the next to pass China's infection rate. Caseloads are rising there and now exceed 61,000. Their recovery rate is only 44% and 3900 people have died there so far and not that much less than in China.
In Australia, there are now 6825 cases (+24 since yesterday), 95 deaths (unchanged) and a stable recovery rate of just under 86%. 70 people are in hospital there (-5) with 28 in ICU (unchanged). The Aussies are having issues with cases at meat processing plants (+15).
There are still only 1487 Covid-19 cases identified in New Zealand, with zero net new cases, and less than yesterday (+2 on Sunday). Twenty people have now died (unchanged), almost all geriatric patients. There are four people in hospital with the disease (-4), but none are in ICU. Our recovery rate is now up over 86% and stable.
And one financial metric we will be following is the rise in borrowing by businesses. Early evidence is that credit lines are being drawn down fast as businesses struggle to survive the cashflow consequences of the downturn. There are extreme economic and financial system risks building here if business doesn't restart and recover soon.
And we should note that Wall Street has opened the week flat, unsure of the next direction. But Europe has no doubts. Overnight their equity markets tumbled hard, down about -4% in most markets. Yesterday Hong Kong (-4.2%) and Tokyo (-0.8) closed lower whereas there were gains for the ASX200 and the NZX50.
The UST 10yr yield has firmed in opening trade in New York, now just over 0.64%. Their 2-10 curve is marginally steeper at +46 bps. Their 1-5 curve is also marginally steeper at +19 bps, and their 3m-10yr curve continues the trend at +54 bps. The Aussie Govt 10yr yield is down -2 bps at 0.84%. The China Govt 10yr is unchanged at 2.52% because they are still on a long weekend public holiday. But the NZ Govt 10 yr yield is down further, down another -4 bps to 0.58% and has opened a huge gap with both the Aussie and US equivalents. New Zealand swap rates were lower and flatter yesterday too.
Gold is up marginally again today, this time by +US$4/oz to US$1,707/oz. And this is despite a virtual shutdown in one of the world's largest gold markets, India.
Oil prices are up marginally again today. In the US, they are currently at just on US$20/bbl. International oil prices are just under US$27/bbl.
The Kiwi dollar fell -¼c yesterday but held overnight, and is now at 60.3 USc. On the cross rates we fell -½c to be at 94 AUc. Against the euro we are up strongly however to 55.3 euro cents. That means the TWI-5 is largely holding at 66.3.
Bitcoin is treading water today, virtually unchanged at US$8,815. 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 ».
204 Comments
People should hunker down and retire ALL debt , this is going to be a long slide downhill
To think that we are going to recover quickly is simply foolhardy , and we should plan for the worst and hope for the best.
The negative knock-on effect of industries in trouble have not yet manifested themselves .
Afraid to say easier said than done. Too much credit card debt arising from an inability to appreciate the difference between money earned and money borrowed. This is going to be a critical negative factor. Sure the government is going to generate wages by public works as they did post the 1930s depression. Big difference, that worker back then didn’t have a maxed out credit card hanging round their neck.
@foxglove Did you see what Warren Buffet said about credit card debt two days ago ?
Its also been as topic on the news this morning on Breakfast , 20%+ interest rates on credit cards are destructive to household finances , and will exacerbate poverty and cause poverty to creep up into the "middle class"
Basically its the worst debt you could imagine , and you need to pay it off as soon as possible .
We really are in serious trouble . Most Kiwi companies employ less than 6 people , and the wage payer is in trouble. The Government does not understand what its facing because it cannot see it yet
The fact fewer cars are on the road does not only affect fuel stations , there are also no accidents , so no work for panelbeaters , resulting in cars parts companies taking a hit . WOF shops are closed so no income there .
The sheer number of Companies not paying their rents is astonishing and then the landlords take a hit .
And its not just small landlords , if you look at Westfield Group they have a pile of debt on their malls and if my memory is correct they also issued Bonds in Australia a few years ago , and the interest HAS to be paid , or the debt paper becomes junk , and credit ratings collapse .
Spending on advertising in all medias has dropped significantly , and those who are contracted for the next 3 months are the only ads we are seeing this will decimate the ad industry .
Car sales are in terminal decline , no one in New Zealand NEEDS a new car , its an optional purchase .
Add up all the staff in the examples above who are about to earn nothing , and then you realize how much trouble we are in
Youre describing a deflationary spiral
which ultimately decimates commodity prices
which ultimately drives producers bust
you cant ride this out
The Only solution is more Debt until debt breaks
Then collapse
So ALL efforts now should be targeted to how to make a "collapse" normal more palatable / comfortable / resilient
But instead we will see
- more convention centre construction
- more brainless roading projects
- more stadium think bigs etc
- more trash talk about rebuilding and coming back stronger
Wrong, I think. The other solution is inflation. Helicopter print money. Those who think like Aussies waste it, some of us buy assets with debt, and watch inflation add price to our asset, and watch our debt plummet, as does our countries' debt. As repeated ad nauseam, it worked real well in the 80s for us.
Haha, it worked real well in the 70's and 80's because Interest Rates were already high keeping a lid on asset prices. Everyone was getting exorbitant pay rises each year, hence the wage freeze. Take out a mortgage, in 5 years your debt burden was halved through wage inflation alone.
Imagine 15% mortgage rates today on even a modest $300k mortgage, $900 per week. $500k = $1500 per week.
@ Ralph , this is true , but for starters it would be a good idea for those with Credit Card Debt to STOP using the card and CUT IT IN HALF as a first step .
Then pay off whatever they can............as soon as possible .
As Warren Buffet says , you should even go so far as to use your savings to get rid of the Credit Card debt
Well, it was coming anyway
https://www.resilience.org/stories/2020-05-03/oil-flows-spell-deep-depr…
We are approaching the EROEI level at which society cannot afford itself. That is made worse by the forward betting overshoot. so we're going to see more and more unrepayable debt, and/or more and more unmaintained infrastructure.
Get used to it.
“society cannot afford itself.” nicely put. The phenomenal level of global debt is a mountain looking for an avalanche. Inevitably massive write offs and write downs to come. Those concerned and involved will be forced to come down the mountain of their own creation and start again. Will not be angels singing!
Sure was, I work with a lot of younger people in their early/late twenties, credit card debt, borrow to go on holiday's, have a nice new EV on tick, then instead of trying to climb the property ladder and start with a smaller house and pay some debt off, they go straight for the 600-750k new house. Up to the eyeballs in debt, but you question them, the answer is we are young we earn 80 odd k a year so why not, but to be fair that's all they know, they start with the Iphones or new samsungs always wanting the latest/greatest, then treat houses, cars/holidays the same. No such thing as a rainy day for them as they have only ever known the sunny days...well they are about to enter the Monsoon season.
Your anecdotal evidence and my own are opposite. My millennial friends and myself we're stung when we left education and hit the job market around 2008. We won't be forgetting that any time soon. But we've hit 30. Maybe you're right and the early 20s have yet to experience anything like that. But they've been fed the cheap debt narrative their whole lives. It's what has kept economies growing and benefited Boomers, after all.
And trust me, we don't want to be buying $750K houses. Good luck finding a starter home in Auckland or Wellington in the 500Ks, when you're against other first time buyers, down-sizers and investors.
Inspired by this little exchange to finally get a username. Lucky to start my career in 2008, literally just under the wire for the GFC. Stable employ, lots of savings since then, moved to Chch from Vancouver in '16. So some lived experience on what uncontrolled foreign billions of hot money can do to property. I *will* not pay for overpriced crap, and most of my friends are at least tempered by the GFC frugality. Currently doing some bodgy carpentry and insulation to get through lockdown and improve comfort in our below-median price house in a nicer-than-median neighbourhood. Have family in some hard-hit states in the US too. So glad to be here.
Lots of commentators have not noticed that 'Millennials' are now in their 30s with kids. My little prediction for AKL post-Covid, based on >10 friends in Vancouver aging from 20s to 30s: If given the option to leave for cheaper locations, we'll do so in droves. We all had an exit plan. Anyone with job security and ability to work from a distance, anyway.
Thanks to those running this site - its near the top of my regular daily reads.
$600K won't even buy you the modest first house in Auckland anymore. Perhaps you should look to blame the people responsible for that state of affairs before having a go at young people for the crime of *checks notes* wanting somewhere to live. I guess lazy cliches about young people are easier.
Sorry not talking about AKL, they have a whole list of other issues they are going to need to deal with. But I would think most people (outside of this forum) have two or three forms of debt on the go. One may be the house, the others are for consumer products or nice to haves.
It's all part of the same pot. Easy to rationalise a $1000 smart phone when you're going to have a mortgage 500x that if you want to buy a house. After a while the debt side of the numbers start to trivialise themselves with scant regard for real incomes. Now who do we talk to about those being largely at a standstill for years?
How people handle their finances depends on a lot of factors. There will always be examples of both extremes. I'm not very frugal, but I earn 115k, have a 4 year old phone that I bought for $250 (no stupid subscription plans, all pre-paid), drive a $4000 car, have zero debt, have enough savings for a 20% deposit on the average Auckland house. I'm a lazy millennial. Most of my millennial friends live within their means.
It would be interesting to see a breakdown of household savings by age group.
Same here Jester. I found a $500 phone in many ways better than the $1800 phone from the same company when I last needed one. My biggest debt is my mortgage. I too am a lazy millennial. I have a twenty year old Corolla that won't die, no matter how many hundreds-of-thousands of kms it does. I earn enough, but not by much. I'm comfortable, but moving ahead is borderline impossible. In days gone by, my role would have been comfortable upper-middle income by a long way. These days, the industry pays largely the same as it did, but living costs have inflated to the point where I'm not sure I'd qualify as middle-of-the-middle anymore. The scary thing is I'm secure and probably won't ever struggle for work. How people who aren't manage it is beyond me. I'm just worried I'll go down with the ship when our day of reckoning comes, and as with most things, as millennials we'll get handed the bill.
Jester and GV great pieces! Provides an interesting insight into the erosion of living standards, and how people are continually driven down. COVID19 offers an opportunity to fix that, but even on this site there are many 'capitalists' who clearly don't want that to happen.
Eh, that's not to say I haven't made mistakes or made life harder for myself (I have a toy car sitting in a garage I am antsing to turn into cash, pronto, lessons learned there), but the difference between people my age and those a few years older who graduated before the GFC and could access 95% finance on houses that cost almost a third as much as mine did is night and day. They have kids and pets, and we're staring at negative equity before we can start a family. Many millennials are getting close to 35 - 40; we don't really have time on our side anymore.
It doesn't matter which age group you're from GV, I think we can all point to mistakes we have made in our life decisions. What matters is how well we have lived our life, after all it is for living. How we treated others and how we planned and provided for ourselves and our families, both materially and philosophically.
P.S. as a longtime petrol head, what type is your toy car?
I wanted a small car for commuting when I worked in the city, but I wanted a manual because *reasons*. So I imported a 2007 Mini Cooper S and while it's intoxicating to drive on tight and twisty roads, the build quality is worse than my commuter Corolla and getting parts is a nightmare. If I'd just bought another Corolla - or even something nippier that was Japanese - I wouldn't be about to take a bath on disposal. But the cash is more important than pride at the moment.
I ended up ditching our 300km astra due to computer issues. Car wasn't worth even $1k but body was great, engine was great, just held hostage by a computer mounted on the engine block which was slowly frying the circuitry. The scrapyard that took it off my hands had already had over a half dozen of the same model in the last month, all same issue. Such a waste.
My "mistake" was a 1998 Porsche Boxster about 7 years ago when I was still living in Europe. Amazing car on country roads, fast but too loud on the motorway at a constant 140-150 km/h (5 speed manual), a nightmare in the city traffic due to the stiff clutch. I bought it, got half of the suspension parts, clutch and air-oil separator replaced, then sold it after a year due to moving to NZ. I lost about $5000 on the whole transaction, so about $1/km lol. I don't regret it, but I also learned a valuable lesson about having a professional check out the car before I buy it.
I'm facing a similar bath, but I've also come out ahead on older cars (the 1990s Japanese specials) when that wasn't the plan at all. A real tragedy of this whole asset bubble has been erstwhile cheaper classic cars now costing stratospheric amounts. I would love to run a cheap Nissan Leaf to work and back and have something like a big old XJS for longer drives and weekends to keep me out of trouble, but the Leafs are too impractical for how much they cost and the Jags cost three times as much as they used to before you've spent dollar one on repairs.
I think I'm going to end up swapping both my cars for another Corolla and just being thankful I still have a way to fill the tank.
The way things are going we're gonna see lots of bargains on the used car market in the next 12-18 months. As long as you can keep your job during this crisis, you're golden. I personally wouldn't touch a British car (if I had to, it would be a Lotus Elise) because I'm too clumsy to even do an oil change. That said, an old fixer-upper "fun car" in the $10-15k range is so much more enjoyable to me than a brand new Corolla for twice the price.
I think like many, we're hoping this restores some balance. But so far for my peers, COVID19 has only delivered on pay freezes, pay cuts, hours cut and job losses. Personally I've only had hours cut and pay freeze (so far at least). I'm highly sceptical that my friends who had 20-25% pay cuts will have those rates restored once this all calms down.
Yep. Paying out grievances may be cheaper than putting wages back to where they were for many. If people don't like it, they can quit. Plenty of people willing to work for less at the moment if it means having a job. God help us if the global economy tanks and our erst-while ex-pats decide to return.
The other sad reality for millennials is that rampant immigration of people willing to work for any wage is undermining your bargaining power.
Employers say why should I give you a pay rise when I can hire this new arrival and pay them much less than you're getting now.
My generation Gen X and the Baby Boomers were the fortunate ones because we had good incomes before mass immigration drove wages down, houses were in reach and cost of living was much less.
Unfortunately unions have lost their way. The union reps of old came from the work face like the mines or the factory floors.
Modern union reps are left wing uni graduates who've never got their hands dirty. The workers they represent are secondary to their own political agendas.
The unions havent made any noise about mass immigration undermining kiwis wages and conditions. The unions of the 1970s would have been up in arms.
Interesting experience FCM! Mid 20s here - I'd estimate 80-90% of my friends (myself included) wouldn't go near credit card debt nor borrow to go on holidays. I have a cheap run around car, my phone is currently being run into the ground and I have ~ 1 years income in savings. Debt has never sat well with me which is at odds from which we're sold by previous generations - eg "If you're interesting in wealth creation read 'Rich Dad Poor Dad'", "Get on the housing ladder, leverage for more debt".
I do think that these perspectives by people around my age vary. From my experience in Auckland, what you have seen can be more prevalent.
Good attitude, I think spending 3-4 years as a uni student on the bones of your arse is a great way to reduce desire for expensive tat in your life - certainly sculpted my attitudes in that respect. Be thankful your family have instilled good 'learnings' in you, many aren't so lucky in their foundations.
Hilarious. I'm early thirties and don't know anyone who fits your profile, acquaintances or otherwise. Why would "a lot of younger people" open up to you about the state of their personal finances? What starts that conversation? Sounds like the same old Boomer Copy + Paste crap being recycled again. "Avocados and Ipods"....
Mid twenties here, never had an overseas holiday or OE. Only use my credit card to pay for recurring services like internet bill etc, paid off in full as it comes through. Have one cheap car shared between my partner and I, I take the bus to work. I do have a nice new iphone though, bought it for myself as a treat for reaching a savings milestone, two years gross income in the bank. I'd say a lot of my mates in the same age group are pretty similar with their attitudes to saving, although I do know a fair amount like you described too. I'd say a lot of them are disillusioned with ever getting ahead.
Yeah. We're also the ones sharing annoyed memes about how WE are supposed to have a months-long rainy day fund, but billion dollar corps are crying for a bailout after weeks. And yes, I know how company cash flow generally works and they don't keep much on hand. OK, fine - offer me cheap shares, don't take it out of my taxes. I'll invest in the businesses I want to survive.
Totally agree. We have functioning capital markets for exactly this purpose - if you need cash, raise some. I participated in a MOA rights offer last week, that is exactly how it should be done. They needed cash, so the shareholders stumped up with some. This is how risk and reward works. Taking taxpayer money to support businesses means there is no risk, only reward.
About those trains. "China’s provinces are sending empty freight trains to Europe. Chinese media explains why."
https://pandapawdragonclaw.blog/2019/08/23/empty-trains-on-the-modern-s…
Years before the advent of the Belt and Road Initiative, the instigator of this change was in fact the American computer company Hewlett-Packard
So American companies came up with the Silk Road Initiative - now the likes of Xiaomi, Lenovo and Huawei will use it to run companies such as HP into the ground!
To borrow a phrase. Winter is coming.
As a new Kiwi, I am gobsmacked by the PR stories masquerading as news in NZ. The level of spin and distortion from vested interests is outrageous.
House prices have risen dramatically since I arrived. Flipping property has become the norm with people putting a coat of paint and tidying up the garden and asking for an extra 100K for a shed. Late last year I sold my property overseas and I am now cashed up.
One Agent told me at a viewing early March that he wouldn't give me a price range as the market would determine the price after priming me with a story of scarcity of supply in Waikato.
A week ago I was contacted by someone who knows that I am in the market for a house and suggested that I have a look at their property as they are in a distressed situation and they would rather let me have first option over an Agent.
I'll be waiting for another 6 months at a minimum before I will buy. All of these Agents and speculators will be shaken from the trees and all I can say is good riddance. As my professor taught me about "moral hazard" and experiencing it first hand with an old boss at a MNC I am more than happy to obtain a property from some Flipper or Agent who has been caught with their pants down when the music stopped in March.
500K for some ex "P" house in Whangarei. Tiny apartments in Auckland, or the so called townhouses in Hamilton near the university......or the Sydney or Melbourne markets.
About time that some normalcy has been imposed on the Housing market.. irrational exuberance, 89, dot-com, 08. Now 2020. Let's see some more rational price to income ratio's.
If the government starts throwing cash at commercial landlords I may relocate to a communist country!! Checking my passport and eligibility for a visa to other regional countries.
I find most NZ'ers quite naive ANZAC888. Everything is fine, everything is lovely. Any other view point is 'doom and gloom'. Many living in mental and financial bubbles.
I lived through the GFC in USA, then came back here to witness NZ pump a property bubble. Pretty painful to watch, knowing the possible (or probable?) outcome.
The question is: When you have bought at the bottom of the bust, are you happy enough for that level of median multiple income to become the new norm, or are you too expecting to ride the next boom wave to the top in overinflated house prices if we are to resort back to the status quo?
Good question. My goal is to be as unaffected as possible. Mortgage free home, cash savings (much now in Kiwi Bonds) to last between 10 and 25 years (depending on lifestyle and benefit eligibility) and the health and skills to earn money, if need be. Apart from living like survivalist growing pumpkins I'm well positioned to ride this out, and hopefully take opportunities as they arise.
Graph visual on Death per day in Spain 1941 to 2020 for anyone who likes data. Might be helpful for those that are struggling to distinguish why SARS-CoV-2 is different to seasonal flu deaths. Also worth remembering that 2020 deaths are significantly less than they would be because of social distancing and quarantine measures so this could have been much worse.
https://www.reddit.com/r/dataisbeautiful/comments/gdc3ts/oc_total_death…
ZS Errrrrm. But it shows the death rates for every year *between* 1940 and 2020, the daily death rate over 60 years... so absorbs many demographic factors and captures the rise each year of population, including the improvements in life expectancy and all manner of other factors. What a bizarre comment.
You've forgotten about respite care!
Reminds me of a lecture we got in the Airforce prior to a Vanguard deployment to Malaysia in 1978. The Base MO was talking to us about the pleasures of the exotic diseases that can be caught in the flesh pots of Asia at the time. He finished it off with the line.."And then there is the ultimate sexually transmitted disease. There is no cure for this one and it is always fatal! There is just no getting out of it. It will kill you! Life itself, so go out and have fun, enjoy yourself!"
A large but short peak in deaths (which probably would be meaningless on a yearly scale) and then it gets under control again (obviously due to isolation measures). I guess the question is how long and high would that peak have been without isolation. Maybe some Swedish data will tell us...
But I have to agree it looks like something much worse than the flu (and much worse than 10x the flu as its often considered).
Sweden has some restrictions in place as well. Not as strict as many other western countries, but their data won't show what zero restrictions would have resulted in.
https://www.krisinformation.se/en/hazards-and-risks/disasters-and-incid…
In China, they are claiming trade by ship is losing out to trade by rail. The number of overland trains from China to Europe rose by more than +50% in April from the same month a year ago, and this is despite the sharp cutback in overall trade. But it is not all it seems. That rail trade is equivalent to just four large container ships, and not anything like a game changer.
Exactly, why our northern allies wish to show the flag: So, What's The News?"
Boatman, why do you think we should be retiring all debt at this stage.
At this time with interest rates so low, borrowing to expand if you have a profitable business is what you should doing!
Not all business is bad business although there is going to be a lot of blood on the floor as the fallout from being in this government enforced lockdown plays out!
Personally believe that it is going to be far more difficult for this totally incompetent government to even look at handling.
The thing is that there are still many that believe that Ardern and co. Have done a good job but the halo is going to disappear from her head in the future.
People are going to see that the people who have said how nil this lot are, were correct all along.
The socialists who want all this so-called inequality gap to be closed will see that they are going to be moved to poverty when they lose their jobs.
They need to remember that the people who have got wealth are needed, as they are the ones who employ!
If they are being screwed then they close shop and their workers are in the dole queue, they will soon realise that unfortunately!
It is going to get extremely difficult for many in NZ and set NZ back 5 years due to the stupid decision by our government to extend this lockdown, when it wasn’t necessary!
Maybe we need an ideology filter.
I happen to think this lot are on the wrong track too. But I think everyone who thinks we can grow forever is deluded - and that includes every political hue from yellow to green. Steve Keen was worth listening to on Sunday. Those who haven't:
It’s not ideology. It’s just calling it as one sees it. The huge shut down of our society was an abysmal over reaction, as many here called it. Yes, the borders could have been closed earlier and sensible quarantine measures put in place but to destroy our economy and futures in such a rabid way, does sound a bit ideological, I suppose.
The test is going to be how our leaders actually lead the recovery. If, as many predict, unemployment does go to 20% or so, social unrest will be our near term challenge.
Most countries are shutdown. Even the ones that decided not to have also shutdown. It's not our society but globally.
If you want to see how bad things get look to the US. They have over 65,000 dead, 30 million unemployed, estimated 20 million unable to get unemployment (through their difficult system) since the outbreak. Before this all happened they had 180 million employed out of 330 million. Their country was hardly functional before and now only 130 million will actually be working.
There is no point arguing with people who already decided to ignore all evidence. These people are emotionally so invested in pushing their agenda (DICTATOR Taxcinda BAD!) that no amount of cold hard evidence of the contrary will convince them to use their brain.
I'm 100% sure if the govt did exactly what these people were suggesting (which is actually still unclear, and always changing), they would come up with the exact opposite argument.
So you're saying these people are Mike Hosking, but without the platform?
Watch him debate himself on COVID-19: https://www.youtube.com/watch?v=RP2S-IzLoWo
Saw that one a couple of days ago, golden. Trump is the perfect example of this twisted "I know it all and I know it better" mentality.
https://static.independent.co.uk/s3fs-public/thumbnails/image/2020/03/2…
Fake contrarians are unimaginative at best. They don't discuss that New Zealand has marginally less hospital beds per capita than the US. If we had followed their path we would also have bodies piling up. They also don't discuss how food supply is vulnerable to sick workers. The US freezing works have been hit with large numbers of viral infections and cannot process meat. The Idiot in Chief has ordered the freezing works to stay open when there is a shortage of healthy workers. Now they are running low on meat with fears of a run on meat (and to think people were worried about bank runs a couple of months ago).
https://nypost.com/2020/05/04/meat-shortages-are-here-costco-kroger-war…
its ironic that one of the leaders of the protests against shutdown in the USA has now tested positive for covid 19 and is in isolation
and now is complaining about that
https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12328…
Believe me, Homer. it's ideology. Your comments are classic of that kind. Totally predictable.
You have to understand that 'our economy' (which you take as an unquestioned fait accompli) is simply the extraction, consumption and ejection of resources, using energy to do the work. That's it. Period. All those who think of 'jobs' and 'income' and 'employment' miss the point; we have come to societal agreements as to who gets what bite at the resource.energy stream. That's it.
So before you mention 'your future', you have to have a look at the resource and energy stream. Both are from finite sources, both were tapped best-first, both are in demand by ever-more people. So that phase ends, and ends with exponential suddenness - round about 1/2 way through the stock-depletion. Is any of this beyond you?
I regard all growth-forever-believing commentators, techno-optimists included, as ideologues. Simple as that. They believe (and therein lies another comment - re the tendency to need to believe) in something that is simply false.
So your 'economy' was near-term stuffed anyway.
Depending on what is meant by growth. The unharvested vegtables in my garden grow bigger day by day and then turn sickly and die. I think that is what you mean. But my Oak tree and Kauri grow bigger for about 10% of their life and then reach a maximum height but that is followed by a millenium of steady growth matched by branches dying and falling. That is the analogy I'd prefer and if our govts took that approach we would have a declining population and reduced resource consumption and plenty of recycling. Or maybe we have overshot too far.
TM2, we all bow down at the financial gods, why don't we listen and respect the public health gods for just a couple of months then HOPEFULLY we are out of the woods on the disease front and can concentrate and focus again on the economic front, and the financial gods can go back to the top of the pyramid and us wage slaves can look up to them, so thankful that they are there??
Pretty good chance that future will see punctuated flare-ups in clusters of 5-20 cases as has been seen in Taiwan. We can by pretty confident of eradication over course of a few months so long as we maintain some degree of distancing controls, but I doubt we will have total freedom for at least weeks but more likely months to come - at least until all cases in NZ have resolved one way or another. Possibly moving all infected people to a single isolated location would be helpful to ensure no slip-ups and so overall quicker eradication.
Surely we need to let it slowly work it's way through our population, in a controlled way as much as possible?
If we eliminate, but the world doesn't, and there is no vaccine (because it's not a given there will be, and if most countries achieve herd immunity funding for a vaccine will reduce dramatically and take longer to develop) then we become prisoners on our island, and are just delaying the inevitable.
In viruses it is the second wave that kills the most.
That is what we are insulating ourselves from. NZ could capitalize on being WuFlu free and still functioning.
With o land boarders ee have a choice, most dont. Great that NZ is carving it's own path instead of being a follow the rest of the world sheep.
If we are only missing the second wave by either staying in international lockdown having eliminated the virus or by having herd immunity.
Having a domestic only economy is not going to work.
This interview is well worth listening too and covers so much ground. https://www.youtube.com/watch?fbclid=IwAR0cE4eaHBmN6Pw_YwMgbrOOeTjWkWWn…
Yes Mr Bond.
Your plan.
And after a couple of months, what is the healthscape?
Do you think social distancing for 2 or 3 or 5years.
No crowd size greater than? 10, 20, 100 for 2 to 3 or 5 years.
Temperature testing upon entry to every building/gathering.
Annual antibodies testing for 5 years (if there is ever a test).
On demand (you or authorities or employer) of virus test (snap shots test) at whose cost (if there ever an accurate test).
Window visits for aged care folk, for how long?
Like so many you think this might be a one off. The population is well out of control, crammed into bigger and bigger ghettos making conditions ideal for these viruses to just keep on coming.
As brutal as it sounds, stopping this virus is counter productive. We need it to take out millions and millions. If we prevent the virus doing it’s work...then what? Perhaps a global war instead? Take your pick ...... we didn’t go for birth control.
Sorry, I just cannot agree with you on this. Everything has risk. However the economic risk is disproportionate to the health risk in this instance.
A bit like the addict choosing heroin or methadone... do you want the quick death or the slow death.
This government and their inept decision making and inexperience will kill us all slowly.
LOL now the government is "killing us all"?! Yeah, Jacinda is committing GENOCIDE of her own people! She's literally killing thousands! Gulags and mass executions coming up after next election! 5G irradiating people's brains while Taxcinda bathes in the blood of virgin HARD WORKING KIWIS!
Lol come on, get a grip guys...
Theoracle. You miss an important element though. The slowly progressive deaths from economic disaster will not be attributed to C19. Not being immediately visible they are no use to preening politicians in justifying their lockdown policies. And they do not have the same tabloid fascination for the media generation as do bodies of the elderly or those with co-morbidities, often lifestyle caused, being removed on shrouded gurneys.
Up in value, down in value? One thing that is steadily down value is a currency that is constantly being printed. So all global currencies are losing their purchasing power, as they are now being almost endlessly printed. Because $1NZ dollar yesterday = $1NZ dollar today, it makes it hard for people to see. All the global currencies have been in a competitive race to the bottom, because they all want to give their exports a price competitive edge. It gets even more confusing when we enter a deflationary period, and the govt still want to print currency.
It's this constant loss of purchasing power that separates fiat currency from money. Money should act as a store of value, which fiat currencies never are. That's why the majority of gold bugs are gold bugs. Those that buy only when times are bad, are "safe haven seekers", and those that don't buy, consistently see gold as a non returning investment. Which is weird, because both gold and currency are not yield returning.
In monetary history not a single fiat currency has survived. They all ultimately go to "0". In comparison, even over a few thousand years, gold still has purchasing power today. It's an interesting thought anyway.
I found this summary from Dalio on the topic of money vs fiat currency a great review.
https://www.linkedin.com/pulse/money-credit-debt-ray-dalio?trk=portfoli…
Dalio is good, a nice insight. Yet he doesn't tell us the fact that the Federal Reserve is a private bank. Incredible, yes. You can see for yourself if you go to the fed's website. It's a truth that puts quite a different view into the mix. Michael Maloney, "The Hidden Secrets of Money". You tube, it's worth looking at.
Still unsure? The fed reserve is a private bank? It makes the repayment of debt impossible, because all debt in today's fiat currency has interest payable. Add near zero fractional reserve requirements for banks, and we get the "infinite creation of money" that the modern monetary theorists so want us all to believe is true. It sounds complete conspiracy theory nuts, I know, that's why I refer you the fed's own website, where you can see that the shareholders get a 6% return, and Michael Maloneys videos.
This is a problem
https://www.rnz.co.nz/news/national/415842/ashley-bloomfield-defends-st…
The MoH has must accept the Courts decision, or appeal.
This is very poor. (Read the whole text)
Bloomfield said.
But the High Court ruling didn't mean the team had failed to apply the criteria, he said.
"What the judge was saying is that they didn't feel from the information that was presented that it was obvious that that process had been followed."
The ministry was reviewing all the previous cases to look at why it wasn't clear it had applied the criteria objectively and to make sure the process was followed. Bloomfield did not know how many of those applications related to relatives have since died.
As aside.
What also is problematic is the guy at one stage needed a negative covid test, but no one would attend a test, as he didn't have symptoms.
Note: if we want covid19 to dissapear, let's have MoH change the disease definition. :(.
Given we have no "response" budget, not bothering to work out what each step costs. Makes perfect sense.
https://i.stuff.co.nz/national/300004126/government-suspends-financial-…
Some of the most expensive decisions ever made by a New Zealand government will receive no scrutiny from its economic watchdog after Cabinet suspended Regulatory Impact Analysis (RIA), due to Covid-19.
Government decisions are [ but not now ] accompanied by an RIA published by Treasury, which analysis the impacts of any changes, including an estimate of how much they're likely to cost.
And police have been placed in a precarious position.
I hope they accept our apology.
https://i.stuff.co.nz/national/health/coronavirus/121400826/coronavirus…
... With police’s stated organisational purpose being that people and communities should be safe and feel safe, we have been careful to understand and respond appropriately to the fear that this situation has created for many. Whilst we can bring many rational and legal arguments to this situation, the action in these communities was driven by their strongly perceived (and likely actual) vulnerability, which defined the context in which we were policing.....
It's not good is it.
I don't need a medical officer to explain what the judge "really meant" (spin). I read what the judge actually did say.
What they did was an utter disregard of compassion or common sense. They didn't even consider how to make it happen safely, they just fobbed off suffering in the name of their rules.
Meanwhile the coalition spin shifts from boasting that NZ's 'gold standard' response is world leading, with a barely disguised innuendo that we are showing those knuckle draggers across the ditch how to do it. The narrative has now morphed to a more inclusive 'Anzac spirit, in it together' pitch. Even Peters flushed with success at getting a gullible media to promote a non story about cabinet rejecting departmental advice (happens all the time) is pushing the line that 'we',as in Australasia, are smashing C19. The awful reality of the catastrophic damage to NZs economy compared to OZ is dawning.
Apparently, there's an asteroid out there that's going to get mighty close to Earth soon.
https://au.pcmag.com/communication/66730/asteroid-passes-earth-in-one-o…
What if 'experts' told you that it was in fact going to hit us, head on; wipe out humanity.
What would you do today?
What would the New Zealand Government do; and the Australian one and all the other countries?
Most likely - all something different.; some 'gold standard', others, nothing depending on their capacity and their view of the facts.
Then, if it misses us, we could all look back and say 'Well! That was an overreaction" or not.
That's what we were all faced with in Corvid19. China in lockdown; building thousand-bed hospitals in 10 days etc. Differing expert opinions of facts and history.
New Zealand took the measures that it did. All countries did something different because they thought it was the right thing to do for their people. There was no, and isn't, a defined way of handling this issue.
That the NZ approach might be seen as 'over the top' is an easy call to make - in hindsight.
Fully agree - a decision can't really be right or wrong in hindsight, a decision is based off the data that was presented at the time. If I decide to put $100k on red at the casino and it comes up red, that doesn't change the fact that it was actually a bad decision (unless of course that money needed a bit of laundering).
The Aussies easily could have had a lot of contagion from the workplaces that we closed. They still might.
Picking up your asteroid analogy, the impact of NZs full shut down vs alternative risk/benefit assessment based approaches was always able to be approximately calculated. But it would have required a cabinet capable of understanding the consequences of the alternatives and the courage to take other than the politically safest option.
"alternative risk/benefit assessment based approaches was always able to be approximately calculated."
And the result of that analysis was ....the policy we have in place this very day!
You may disagree with the results of that calculation; there is, after all, a myriad of inputs into the equation, but for whatever reason, those 'facts' were looked at and the result was what eventually became Level 4. Cabinet had "the courage to take other than the politically safest option."
And here's the thing - we STILL don't know that it was the wrong call. It looks like it was heavy-handed today, but tomorrow? None of us know.
So until we do, then perhaps caution is as good a policy as any?
I think the big difference between our response and Australia's is that we have the chance to fully eliminate but I don't think Australia will. If we can fully eliminate and go back to level 1 for a long duration that will be far better for the economy than constantly being in lockdown. If elimination isn't the goal then I'm not sure I even see a point in lockdown - it's just delaying the inevitable.
JimboJ. Yes, I think eradication is worth a shot, despite the economic damage. But lets not dress it up as the outcome of careful consideration of the alternatives. Ardern made a captains call that was strongly influenced by media optics of bodies now vs bodies later. The health minister was missing in action and apart from three reasonably solid performers the rest of her team is decidedly average to woeful. What is as much an economic decision as a health one was heavily influenced by an unelected health technocrat.
The point of lockdown is to prevent healthcare services being overwhelmed. Which would result in many multiples of additional deaths, both directly from Covid-19 and from all the other services that would become inaccessible from a healthcare system collapse.
All initial global lockdowns were also about buying time to ramp up healthcare, testing, research, staff recruitment and treatment facilities as well as flattening the curve. Any subsequent lockdowns will just be about reducing the R0 to keep the infection rate within the healthcare system capacity, ie flattening the curve.
This is very well evident by the current policies of many countries who are now easing up restrictions despite still having thousands of active cases. The main metric for lockdown is the R0 vs demand/supply or surge/capacity of resources.
NZ is one of the few countries in the world who are even attempting eradication/elimination (or whatever they are calling it). Eradication is not even remotely possible in most countries. But NZ has the luck of low population density, being an island on the edge of the world and a comparatively compliant population. It may fail but obviously government decided it was worth a punt. NZ does not have the scientific or medical chops to come up with any of our own solutions so will be hoping some other country invents the diagnostics, treatments and vaccines that will be required to slay this beast.
Of course, all of that may also come to nought and we might all end up at Covid-19 parties next year trying to get mild doses of the disease during summer and trying to build immunity that way. But we probably want to do a bit more research before taking those type of risks with a highly contagious novel virus merrily mutating ;-)
I'm not convinced that lockdowns are needed to flatten the curve. Lockdowns do way more than flattening and because they are only temporary in nature they are really just a stalling technique (a very expensive one). As soon as the lockdown is inevitably stopped (assuming elimination not achieved), you just go back to the day in time when you had that number of cases and the acceleration starts from then again. Then they either have to employ a proper long term strategy (like social distancing measures) or go back into lockdown in a few weeks time.
Have we really achieved any of these in the last 6 weeks (ramp up healthcare, testing, research, staff recruitment and treatment facilities). Testing maybe. I think lockdowns are just a very easy thing to sell to scared and uneducated voters...
Flattening and stalling are surely two different things. Instead of trying to make sure our hospitals were not overloaded, we made sure they were empty. But we have used a lot of economic and social credit in doing that and I am not convinced we can keep doing it over and over for at least 1 1/2 years. If we have eliminated the virus that is a fantastic outcome that is well and truly worthwhile. If we haven't and we go back to a more normal life for a month, the virus rapidly spreads again, we end up where we were pre lockdown, and then have to go back to lockdown again, I just don't see that as a viable solution. I think we will need to find some kind of middle ground that is not lockdown but where not too many people are dying. I think that will involve properly isolating the elderly in some way.
Agree 100% JJ. They have misinterpreted what flattening the curve means. It did mean keeping the spread of the virus within our capacity to handle it both in the hospitals (without any detriment to other hospital admissions) and the general economy. By keeping the curve falt means that the tail is extended and controlled so that we can gain herd immunity naturally and/or until it can also be supplemented by a vaccine.
But they have chosen to eliminate the curve and chop the tail of at the expense of other hospital admissions and the greater economy. We now have no ability for herd immunity other than wait for a vaccine. And in the meantime?
If you get a chance to watch that video I linked to, it discusses that.
All good points, many of them covered in this video.
Dirt-Cheap U.S. Mortgages Thwarted by $5 Billion in Margin Calls
Mortgage lenders promise to lock in interest rates for borrowers weeks before loans are finalized, then hedge that risk by shorting mortgage-related securities. But the Fed’s buying drove up prices for those assets, turning the safeguards into sudden demands for cash. Quicken, among the largest U.S. mortgage lenders, met its obligations during the period, spokesperson John Perich said.
Interested to know perspectives on the migrant crisis unfolding, this piece on Stuff this morning.
https://www.stuff.co.nz/business/121395546/coronavirus-unfair-for-kiwis…
I find it strange that this video was taxpayer funded? And whilst I think we are a compassionate people, Covid is a different beast. We have Kiwis in other countries returning for the same reasons. I don't think we can afford to add the burden of these non-resident migrants to the pool of those with their hands out already.
As an immigrant myself, I find it really weird that some people stay here for several years yet don't apply for residency. Like the one in the article you linked. Been here for 3 years, yet still on a short term work visa. She was either too cheap or lazy to apply for the resident visa, or decided to not apply because she knew she wouldn't qualify. The former is entirely on her, and the latter is proof that her work is not needed in NZ.
I know a girl who has been here for 5 years now, having to renew her work visa every year or two. It's extremely stressful for her every time, yet she still hasn't applied for residency because it's "expensive". Decided to spend $3000 on a plane ticket to Europe around Christmas though...
The issue will be gradually self solving. Tourism dying and the running out of the taxpayer funded wage subsidy will force many work visa categories to leave the country. Obviously we need to support them meantime but Peters needs to move on from his self congratulation about organising expat kiwi repatriation flights and make some progress on repatriating work visa people here from those countries with governments who have less of an incentive to get their people home.
Shocking hit to retail, could be fatal.
https://www.newshub.co.nz/home/new-zealand/2020/05/coronavirus-brings-c…
Who would have thought that closing all shops would have created a hit to retail? It shouldn't be a big deal. Assuming that they don't need to pay staff anymore and assuming they have renegotiated their rent with their landlord and assuming they had a sound business to begin with, they should be able to survive a couple of months.
Cashflow is a thing. Paying for March's purchases pre-alert levels with Aprils receipts is harder when there are no April receipts. Add in the fact that many will have been stocking up for end-of-year sales and Easter events.... there's more to it than just rents and payroll.
The key is China and what is happening there. If China stumbles into a slowdown, then almost every consumer product will be in shorter supply and go up in price. This would lead to a period of reduced output and inflation.
The problem is, we cannot get good info out of China.
Our currency has been our only insurance against ticking-clipping inefficient local distributors and people taking the absolute piss when it comes to local pricing. Now we don't have that anymore. Lower wages but more expensive goods? I'm picking we'll see inflation as people spend whatever money they have on the basics and bugger all past that point.
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