Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Both Kiwibank and ASB cut key fixed mortgage rates below 3%. Details here. Also, non-bank lender Pepper Money cut their Essential floating rate.
TERM DEPOSIT RATE CHANGES
No changes today.
NOT THE TIME FOR NEWBIES
The FMA is warning new investors against piling into the NZX if they haven't done their homework, as its Aussie counterpart proves retail investors trying to time the market are failing miserably.
REVEALING THE 'RELIEF' SO FAR
Since March 26 until May 7, banks have loaned 12,261 customers $7.2 bln, plus they have reduced loan payments for another 11,836 customers on loans worth $10.5 bln, plus they have deferred payments for 3013 customers on loans worth $1.0 bln, plus for another 2681 customers they have restructured their loans (changed to interest-only or changed their payment levels) for loans worth $4.6 bln. This is data supplied by the NZBA covering all banks.
GOING SOUTH
The Crown financial statements for the nine months to March reveal a sharp deterioration, not only in underlying investment asset valuations, but also in OBEGAL operating results. Expenditure grew far faster than revenues. Of course this is just the start of a sharp deterioration in these accounts and the first full month impacts will be seen in the April accounts. Still, these March results are sobering.
DOWNSIZING
Dunedin headquartered Scott Technologies have announced a major 'resizing' of their company worldwide which will involve closing some operations, putting others up for sale, and an unknown level of layoffs. Their shares fell -4.4% today.
CALLED OFF
AMP has called off its planned divestiture of its NZ "wealth" division. It is just too hard to get a transaction done in this economic climate, it seems.
WHERE THE BIG RISKS ARE
Queenstown's property market has been ranked as being the most at risk of a downturn by a substantial margin while Whangarei is the least risky city, according to CoreLogic.
LOOKING TO A BRIGHT SIDE
Like their Kiwi cousins, the RBA is an optimistic lot, seeing a strong rebound after an awful Q2-2020. They revealed their forecasts in today's Monetary Policy Statement.
RUPERT ON THE ROPES?
Acerbic culture warrior, the global Murdoch News empire, is in a fight for survival. It has to be desperate - Rupert Murdoch is giving up his bonus (but not his pay) as his lieutenants slash costs worldwide. Sports rights are a particular focus. Of course, they don't have this fight on their own.
LOCAL UPDATE
There are 1490 Covid-19 cases identified in New Zealand, with one new case today in an Auckland aged care cluster (yesterday was +1). Twenty-one people have died, unchanged yesterday, almost all geriatric patients. There are now three people left in hospital with the disease (+1), and none are in ICU. Our recovery rate is now up over 90% and still rising.
AUSTRALIA UPDATE
In Australia, there are now 6896 cases (+21 since yesterday), 97 deaths (unchanged) and a stable recovery rate of just over 87%. 58 people are in hospital there (-4) with 23 in ICU (-4).
GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 3,845,600 3,753,800 and up +91,800 from this time yesterday which is an unchanged level of growth. Now, just under 33% of all cases globally are in the US, which is up +29,000 since this time yesterday taking the total to 1,257,000 and the only country to exceed 1 mln cases. This is a rising level of increase. US deaths now exceed 76,000. Global deaths are about to exceed 270,000. The infection accelerations in Russia, Brazil and India are looking very grim indeed. There is also a worrying trend in Peru. As an update, Sweden's death toll has now topped 3000 and the daily new infection rate isn't slowing.
EQUITY UPDATES
Despite the travails of some companies (above), both the NZX50 and AXS200 look to close out the week with a minor gain. Earlier, the S&P500 closed up +1.2%, and Europe closed up +1.5%. So far today, Shanghai is up +0.9%, Hong Kong is up +0.9% and Tokyo is up +1.8%. All markets these days trade on stimulus expectations, and now a 'healthy dose' of optimism about what is ahead when the virus passes (assuming it will).
SWAP RATES UPDATE
Yesterday, wholesale swap rates were little-changed. We don't have wholesale swap rates movement details today yet. We will update this later in the day if they show a significant movement. The 90-day bank bill rate is unchanged at a record low 0.26%. The Aussie Govt 10yr is down -2 bps to 0.91%. The China Govt 10yr is up +4 bps to 2.60%. The NZ Govt 10 yr yield has fallen further, down another -6 bps to 0.57%. The UST 10yr has fallen -5 bps today to 0.64%.
NZ DOLLAR RISES
The Kiwi dollar has strengthened a full +1c since this time yesterday, now at 61.2 USc. Against the Aussie we are little-changed at 93.7 AUc. Against the euro we are much firmer at 56.4 euro cents. That means the TWI-5 has risen to 67.1.
BITCOIN POWERS UP
The price of Bitcoin is up another +5.7% from this time yesterday to US$9,872. The bitcoin price is charted in the currency set below.
This soil moisture chart is animated here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
81 Comments
And the sun rolls on from day to day
https://www.tvnz.co.nz/one-news/new-zealand/hawkes-bay-farmers-desperat…
The organisation is called Government, and it's ball-dropping on Climate (both major Parties, for 30 years) is the failure.
Let's talk about why the sinking, rather than whether a particular (offending arrogantly, avoiding blatantly) echelon should get first dibs on lifejackets. These folk are the same ones dricing the abandonment of the 'Fart Tax' and duck-shoving responsibility still.
Sorry AJ - you're undoubtedly a nice fellow, but truths is what truths is. I planted trees flat out in 1994/5, purposely don't claim carbon credits, and did it for the physical planet - my contribution to my kid's generation's future. So I have a fairly short fuse when it comes to Climate-drivers complaining about climate. Go well
PDK, I used to plant 1000 trees a year for 20 years, I have left my mark. The farm here is covered in trees, I mean every paddock has multiple stands, I have blocks I use for posts and others for shelter or shade. I have specimen trees, Macs, Eucalypts and Robinia, Oaks are one of the real survivors, also Oaks are one of the few trees that the faster they grow the harder is the timber, there are others but rare.
I have a lot more to plant over the next few years. The losses are high sometimes %80 but every year I replant, this year almost nothing made so I will be out in June replanting. I also have an orchard I planted on a hillside to avoid frosts, all with old species sourced from around the country. My farm at present would be one of the best off in the district partly due to shading.
Trees are expensive to fence and plant so I just chip away at it.
Such a tough year for stuff planted out. So heartbreaking watching the ground crack and turn to dust. Feel for you Aj... its not an option to abandon the land after dripping blood and sweat into it for so long. Powerdown sounds a bit righteous though i know he means well. We gonna rain dance for you.
As Andrew made very clear a few days ago - he's a climate change denier. Rubbished NIWA's projections about what would happen going forward to NZ's climate ('my guess is as good as theirs') and effectively called climate change a con.
And yet he's on here everyday moaning about drought. Oh the irony............
He's a boomer I guess.
https://www.stuff.co.nz/environment/climate-news/300003806/six-new-zeal…
What is a climate change denier? Someone who denies the climate is changing? Or one who questions the theory that climate change is driven by anthropogenic factors?
If Andrew denies that the climate is changing, and also laments the drought, that would indeed be irony. However, if he is challenging an established paradigm trying to explain the causation of climate change, and laments the drought, that would be coherent, and would unfortunately put King of the Whiners in the position of being in irony while calling out someone else for being ironic.
Time will tell
Yes, I think their prediction is nothing more than a guess perhaps an educated guess, but yes obviously climate changes. yes we have droughts like this before and worse. The great thing about mankind is our adaptability. If it goes to hell I'm turning up at PDKs with a gun and taking over his pad, that's if I can get there first and he hasnt thought about his defenses.
This guy in Aussie was talking about it, not sure which video. It amazed me that the best pines in NZ are from Northland and Nelson, Pines in Nelson almost grow on no soil at all.
https://www.youtube.com/watch?v=dbkN_EAfmwI&t=399s
https://academic.oup.com/forestry/article/81/4/465/525407
This is a desparate situation for many but the ambiguous comments from Fed Farmers seem no more than an attempt to defy some inconvenient truths. Jim Galloway says - "We need to get things moving and water storage for stock water better on farm storage for that maybe community schemes also for irrigation and that allows people to diversify."
Who are the 'we' he refers to? Are they the farmers of the land who need to get things moving, many of whom are/have been multi generational farmers and have lived through previous droughts and if so what did they do about future proofing their business? Is it the local Regional Council that needs to tap the ratepayer to help fund dam building so a handful of farms can benefit from our largesse? What does the word 'diversify' mean in this context? Does it mean moving from one enterprise type to another which relies on increasing amounts of freshwater?
Regardless, his comments seem oblivious to the fact that this Hawkes Bay drought has been building for a number of years with already low water tables receiving the killer punch this summer. Instead of trying to divert scarce and increasingly valuable natural resources to try and defy nature, maybe it's time Fed Farmers recognised that certain enterprise types are simply not suited to evolving climatic conditions. This applies not just in Hawkes Bay but throughout NZ.
Was impressed with the effectiveness of regenerative farming practices as described on CC a couple weeks back. I know you would be very familiar with these types of methods Andrew, and obviously you're forward thinking and persistent with your tree planting program. Is there any reason why haven't you tried the the full system. If something makes life easier and better then you will have less that gets you down.
DOH has told people there is no need to wear masks. I would have gladly exchanged levels 3 and 4 for masks but if approved that would have helped the economy and the govts finances.
GR and JA have already announced this is their big chance for a reset ... of housing asset prices and rents which they can blame on the virus but still claim the credit for at election time. They don't want to ruin it with an early and full return to work. Those being hurt by the slowdown include the young and the poor. I feel for the hundreds of loyal guys out of work at James Hardies.
Yes please. The 122 active is a carefully hidden number. And it's the most illustrative one
We are being played by Government PR, who like to headline the total cases, which by it's nature always climbs. Frankly deceptive.
Newsroom publish it, it would be excellent if Interest.co also do.
Newsroom do a really excellent daily piece charting cases, clusters, locations etc. And worldometer have the active cases and daily cases chart, which gives a really good visual guide to the progression of the pandemic. You can easily see the evidence of those lower R0's and the peaks are very easy to identify, particularly in much of Europe recently where their numbers are well past peak (despite the overall high numbers).
Like their Kiwi cousins, the RBA is an optimistic lot, seeing a strong rebound after an awful Q2-2020. They revealed their forecasts in today's Monetary Policy Statement.
Demand destruction.
The Federal Reserve’s job, as it sees things, is to minimize the first order effect so as to neutralize any second and thirds before what you see above happens. This is not a debate or argument as to what “should” take place; whether or not the savings rate was “too low” during 2005.
From the official perspective, it’s about confronting an exogenous shock and making sure its effects don’t change the whole trajectory of the economy (potential). That once the system absorbs that shock, when it’s all over everything can and does go right back to normal (defined as what was going on before the shock arrived) as quickly as possible.
Second (and third) order effects complicate that effort, and can end up thwarting it entirely (see: below). The lack of credit growth (yes, lack) post-2008 related to mostly asymmetric liquidity risks (no matter the level of bank reserves) has left very deep scars on the global economy. Thus, shock ($ shortage leading to Great “Recession”), second order effect (cut off of credit flow) and then the more direct third (grossly higher savings rate, meaning less spending). And these then create positive feedback loops; lower aggregate spending because of higher saving (and liquidity preferences) mean lower revenues for businesses who don’t hire back the same number of workers confirming frugality and the same negative effects.
If the US central bank had been anything like a dollar central bank rather than a US domestic banking authority, perhaps the liquidity shock in the first order could’ve been more appropriately handled and maybe even circumvented (and that’s debatable, though beyond our scope here).
These faults should have been studied carefully, but instead they’ve been discarded or ignored so as to otherwise reverse engineer (R*) failure into a great success for QE and “emergency” monetary policies (colloquially “money printing”). And it is upon those same polices, exactly the same, that we are all supposed to expect a very different outcome this time around.
The exogenous shock has already happened, as has the dollar shortage (GFC2). We arrived in May 2020 already deep in the hole.
And yet, the idea of an immediate “V” shaped recovery has taken ahold of the collective imagination even though we’ve yet to see any second or third order effects. Tens of millions have been laid off in a very short period, thousands, tens of thousands of businesses closed, but so long as they go right back to work, these people say, then all is economically forgiven and financially forgotten.
Is it really that simple? Fat chance. Link
Note: This advice wasn't provided to the committee who had been asking for it, repeatedly, while parliament was suspended (making the committee the only source of accountability for Govt actions). Instead it's a cynical 'bury the lede' approach right before a weekend.
Rat poison (Bitcoin) has been pumping. Legendary macro trader Paul Tudor Jones has made the leap of faith.
https://www.marketwatch.com/story/hedge-fund-boss-who-called-the-87-cra…
Before you get too excited.... he is buying futures contract positions, not actual bitcoin. But... I hear Jack Dorsey is upping his weekly buys to $100k and that Greyscale and Cash App combined are buying more than 50% of all newly mined bitcoin. So what happens if the price remains the same but they are putting the same amount of fiat in, after the halvening... hmmm
Terrible news from New York.
This is how the US State Governors operate.
https://www.foxnews.com/media/devine-gov-cuomo-nursing-home-coronavirus…
New York Democratic Gov. Andrew Cuomo's handling of his state's nursing homes during the coronavirus pandemic has been "reprehensible," New York Post columnist Miranda Devine charged Thursday
In an interview on "Fox & Friends" with host Ainsley Earhardt, Devine said that COVID-19 patients were transferred back into nursing home facilities because of an order from Cuomo in late March.
Compare to Texas
https://gov.texas.gov/coronavirus
Texas ring fences aged care facilities.
Data & funding.
There are questions about data. USA hospital get paid more for covid patients. Covid deaths do not need a covid test, rather need display one of a number of covid symptoms.
https://www.statesman.com/news/20200422/fact-check-do-hospitals-get-pai…
Compare to.
Nebraska State.
LINCOLN, Neb. (KTIV) -- Nebraska Gov. Pete Ricketts says the state won't release specific numbers of cases at meatpacking plants, like Tyson's facilities in Dakota City, or Madison.
https://ktiv.com/2020/05/06/watch-live-gov-ricketts-provides-daily-upda…
During his daily news conference Wednesday, Ricketts said its a matter of privacy, and the Health Insurance Portability and Accountability Act, also know as HIPAA.
And
https://www.militarytimes.com/news/your-military/2020/05/06/coronavirus…
Mindless, here are some further sauses.
https://www.politico.com/states/new-york/albany/story/2020/05/06/cuomo-…
https://www.nbcnews.com/news/amp/ncna1191811
Three states hit hard by the pandemic — New York, New Jersey and California — have ordered nursing homes and other long-term care facilities to accept coronavirus patients discharged from hospitals. The policy, intended to help clear in-demand hospital beds for sicker patients, has prompted sharp criticism from the nursing home industry, staff members and concerned families, as well as some leading public health experts.
Just looked at Trademe rentals again, out of the 10 properties I am monitoring for one week only one has been let or withdrawn.
Looking through the listings, landlords clearly haven't got a grasp of the new reality. Still some stupidly high rents, landlords will have to lower them or they won't shift.
Compare & Contrast
ABC News, here is Austalian Plan to get open & operating.
https://youtu.be/c-zOmSrJtUg
Given this, what Australia is doing, I suspect the moving of NZ to Alert level 2 next week is less than 50% chance.
Of note. Before Morrison became Prime Minister, Morrison was Federal Treasurer (Finance Minister for us).
Those Big Scary Numbers of Dead Citizens 'models' are reviewed by someone who actually knows how models should work....At the very least, results should be replicable. They aren't.
Adding new features to a codebase with this many quality problems will just compound them and make them worse. If I saw this in a company I was consulting for I’d immediately advise them to halt new feature development until thorough regression testing was in place and code quality had been improved.
Conclusions. All papers based on this code should be retracted immediately. Imperial’s modelling efforts should be reset with a new team that isn’t under Professor Ferguson, and which has a commitment to replicable results with published code from day one. On a personal level, I’d go further and suggest that all academic epidemiology be defunded. This sort of work is best done by the insurance sector. Insurers employ modellers and data scientists, but also employ managers whose job is to decide whether a model is accurate enough for real world usage and professional software engineers to ensure model software is properly tested, understandable and so on. Academic efforts don’t have these people, and the results speak for themselves.
"Lockdown Sceptics by Sue Denim (not the author’s real name) " NB: An attempt at wit, pseudonym , I guess!
Not an inspiring start to reading the article!
From one comment amongst many in the article:
Firstly, I’ll stress this again, I’m not going to defend Ferguson’s model. I have not seen it. I don’t know what it’s like. I don’t know if it’s any good.
I don’t share Ferguson’s politics, even less so those of his girlfriend.
His estimate of the number that would likely die if we took no public health measures IMO is not an over-estimate. There are EU countries which have conducted tests of large random, unbiased, samples of their population to estimate what percentage of their population has had the virus. The number – in case of those countries – comes out at 2%-3%. If the same is true of the UK, then 30,000 deaths would translate to 1 million deaths if the virus infected everybody. Of course, we don’t know if the same is true of the UK.
But now I am going to criticize this criticism of Ferguson’s model, because it deserves criticism.
I’ve been writing software for 41 years. Including modeling and simulation software. I wrote my first stochastic Monte Carlo simulator 37 years ago. I have written millions of lines of code in dozens of different programming languages. I have designed many mathematical models, including stochastic ones.
The actual comment is far longer, but you get the gist!
Yes there are plenty of criticisms of all the models, some have been accused of under-predicting, some over predicting. This link is critiquing several.
https://www.cnbc.com/2020/04/17/influential-covid-19-model-uses-flawed-…
Who is writing this "lockdown sceptic" blog though and who here can verify their credentials and claims? It's just a random anonymous blog. There is no way to hold anyone accountable. Not meaning to be rude, be the internet is full of unverified, anonymous blogs making claims of all sorts.
Unfortunately there is no answer - the world has always been full of people using scary big numbers to justify any and everything. It has got to the point where I just don't believe anyone. I'm not convinced the government is acting in our best interest's, especially when the opposition and the media are asking questions that should be asked and making threats and acting in a dismissive attitude toward the general public. In some ways it is showing Labours arrogance.
https://www.stuff.co.nz/national/health/coronavirus/121452782/coronavir…
https://www.stuff.co.nz/national/politics/300008734/ministers-told-to-d…
People don't want debate - they want certainty. People want certainty in an uncertain world.
What a total debacle Commercial Bay is:
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
Looks like the Kelvin Davis & Willie Jackson interviews have left a mark.
Watch the short video.
https://www.newshub.co.nz/home/politics/2020/05/leak-jacinda-ardern-gag…
Newshub has been leaked an internal memo sent to all ministers from the Prime Minister's office instructing them not to speak to the media about Friday afternoon's document dump.
It directs that ministers instead respond with brief written comments that must be signed off by Prime Minister Jacinda Ardern.
The gag order was sent ahead of a Friday afternoon document dump of official papers relating to the Government's COVID-19 response.
Thing is who felt motivated to make the leak on this Big Nurse move.
Level 2 next week. Then back into full contact sports training and games, sweating, touching at bottom of a ruck. But we can only use one ball and have to keep 2 meters away from each other after game. You couldn't make this stuff up...just go level 1cindy..it's so ridiculous now.
Let bars open and cafes with contact tracked register and save some jobs and businesses and sports clubs. No point having full contact anatuer sport then turn around after game and so now keep distance... pathetic contradiction of rules. They must really hate the hospitality industry.
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