Breakfast briefing: Ignoring key signals

American recovery 'wildly uncertain'; US housing delinquencies rise sharply; Wall Street only sees roses; China doubles down on stimulus; UST 10yr yield at 0.71%; oil and gold up; NZ$1 = 64.9 USc; TWI-5 = 69.7

23rd Jun 20, 7:18am by David Chaston

Here's our summary of key economic events overnight that affect New Zealand, with news the Kiwi currency is rising as markets ignore some key economic signals.

In the US, Fed officials are cautioning that real recovery is a long way off and "wildly uncertain".

The Chicago Fed's national activity index bounced back in May after a severe drop in April, but that prior month's level was revised even lower.

And the number of new housing starts fell sharply in May from a year earlier even if they were up marginally from April. That is a ten year low and much lower than analysts were expecting.

This official data perhaps should not have been surprising. Unofficial foreclosure tracking shows that mortgage delinquencies climbed at the same time. The number of borrowers more than 30 days late swelled to 4.3 mln, up +723,000 from the previous April. More than 8% of all American mortgages were past due or in foreclosure. That is its highest level since 2011.

None of this is inhibiting Wall Street. Even after futures pricing indicated the S&P500 would open sharply lower, in fact it is up +0.5% in late trade to start their week. Europe got that futures message however, falling -0.5% overnight. Yesterday the ASX200 was flat, as was Shanghai. Hong Kong fell -0.6%, Tokyo retreated a bit less.

The OECD reports that there was a record collapse in world trade in April, down -20% year-on-year.

China kept the benchmark lending rate unchanged for the second straight month at its June fixing late yesterday. The one-year loan prime rate remains at 3.85%, while the five-year is at 4.65%. Markets didn't expect a change.

But China is going all-out on its well-worn stimulus playbook, with a new warchest of NZ$150 bln for ever more local authority infrastructure projects. Real reform is well off the agenda now.

Unless this works, we may be coming to the end of the golden run for iron ore prices - and perhaps other base commodities. China's inventory of unsold steel is at a record high and without new demand appearing from somewhere, both output and prices are probably about to retreat.

In Australia, the RBA has opened the door to reviewing the three-decade-old inflation targeting framework, saying it could be worth reconsidering in a "few years" after the virus crisis passes.

The latest compilation of COVID-19 data is here. The global tally is now 9,006,800 which is up +164,000 since yesterday and a faster rising pace. We seem sure to exceed 10 mln by the end of this week. Global deaths now exceed 469,000.

A quarter of all reported cases globally are in the US, which is up +24,000 since this time yesterday to 2,291,300. US deaths now exceed 120,000.

In Australia, there have been 7474 cases, +13 since yesterday. Their death count is unchanged at 102 deaths however, but their recovery rate has slipped to under 93%. There are now 469 active cases in Australia (+6).

The UST 10yr yield is little-changed at 0.71%. Their 2-10 curve is marginally firmer at +52 bps. Their 1-5 curve is holding at +15 bps, while their 3m-10yr curve is holding at +57 bps. The Aussie Govt 10yr yield is up +2 bps to 0.88%. The China Govt 10yr is also up +2 bps at 2.92%. But the NZ Govt 10 yr yield has hardly moved at 0.89%.

The gold price is higher again, up another +US$12 to US$1,756/oz.

Oil prices have inched up again, now just over US$40/bbl in the US. The Brent price is just under US$43/bbl.

The Kiwi dollar is noticeably stronger this morning at 64.9 USc and a gain of almost +¾c. On the cross rates we are stable at 93.8 AUc but against the euro we are firm at 57.6 euro cents. That means our TWI-5 is up to 69.7.

The bitcoin price has moved out of its recent range today, up +2.7% to US$9,593 today. 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 currency charts are here.

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

179 Comments

by Foxglove. | 23rd Jun 20, 7:37am 1592854650

CV19 numbers globally are accelerating. It is clear NZ will require to remain in the current virtual isolation for a long time yet. That status is now obviously perceived and accepted. We have an election in three months time. Could our political parties therefore please put before the electorate some substance as to their plans and projects for the future to manage and/or mitigate the crisis that is upon all of us, economically and socially. People need to know to some degree at least, what lies in store and how it will affect them.

by Uninterested | 23rd Jun 20, 7:37am 1592854631

.............without running cap in hand to China.

by blobbles | 23rd Jun 20, 8:20am 1592857217

Have been saying this for a while. We are probably in the middle of the beginning phase of the pandemic, with a drawn out middle phase of at least a couple of years and an unknown end phase (which seems is only going to be through population immunity now). It was/is irrationally hopeful to expect things to go "back to normal" with migration/immigration/tourism in the short term. People should not be expecting to go overseas and come back without severe restrictions for 2-3 years IMO. People should be preparing themselves for that sort of time frame including financial hardship or at least low levels of spending for that amount of time. If you aren't and are still living pay check to pay check, you are likely going to get in trouble. Remember most people are 2 events away from destitution, we all are experiencing or about to experience (once the government subsidies run out, if they ever do) the first one.

by Fritz | 23rd Jun 20, 8:43am 1592858612

I did see something in passing yesterday that was suggestive that the virus is weakening and may die out, but I don't know how authoritative that was.

by HeavyG | 23rd Jun 20, 9:53am 1592862815

Some Italian doctor with zero evidence (https://www.newshub.co.nz/home/world/2020/06/doctor-says-coronavirus-lo…).

Covid 19 is relatively stable so unlikely it will mutate itself into a care bear.

by stuart786786 | 23rd Jun 20, 8:48am 1592858885

Yeah economic consequence of panedemic will be felt on the roads once governments freebies run out as cannot run forever.

Being election year will run till election time so real affect will be felt from October onwards.

by Mike1 | 23rd Jun 20, 9:14am 1592860461

blobbles your time frames seem like a solid framework. Your 2-3 year middle period is likely to look optimistic once this is all done but that is about as long as I can take mentally without my brain short circuiting! The middle period will depend on politics I can see the "we must let people in" group gaining the upper hand after three years of heavy restrictions.

by Foyle | 23rd Jun 20, 8:52am 1592859137

Nobody knows how this plays out. Plans have to be malleable. But seems pretty clear that the disease is going to remain endemic throughout the world, and unhappily it seems that a lot of people who recover don't have immunity that lasts more than a few months suggesting that vaccines are less likely to work. If that is the case then we will inevitably have to accept the virus, and related deaths, though treatments to reduce their harm (when infected) will improve.

by scarfie | 23rd Jun 20, 9:34am 1592861660

Correct, the same people at risk of death are the same ones that vaccines won't work for and that won't keep immunity. Thing is they'll catch it and spread it again.

by donny11 | 23rd Jun 20, 10:29am 1592864957

I agree. The NZ people deserve a see a COVID19 policy platform from all major parties. NZ businesses & people, specifically those that depend on foreign tourists need to know where they stand. Specifically how long are parties willing to wait for a vaccine? Will they be willing to set up bubbles with countries that have only suppressed the virus but not eliminated it. Will they be willing to close NZ boarders indefinitely in the absence of a vaccine. Will they lock-down again if an outbreak occurs in NZ?

by CJ099 | 23rd Jun 20, 7:41am 1592854871

Yep time to get rid of Trump: BBC Coronavirus: Why US is expecting an 'avalanche' of evictions. "As hair salons, churches and restaurants reopen across the US, so are eviction courts. Advocates and experts say that an unprecedented crush of evictions is coming, threatening millions of Americans with homelessness as a possible second wave of the pandemic looms." https://www.bbc.com/news/world-us-canada-53088352

by murray86 | 23rd Jun 20, 7:51am 1592855516

...leading to the collapse of at least a part of the capitalist economy?

It's funny how the religious core of US society (essentially all of it) believes strongly in the christian principle of charity, but there is no way in hell they'l let that into their business model!

A little socialism can go a long way!

by Foxglove. | 23rd Jun 20, 8:26am 1592857617

It’s pretty basic. When we lived and worked there for a time, we were taken by the great number of those participating in unfair and unsavoury business practices during the week, going to church for a cleansing on Sunday, and starting in on it all again on Monday. Someone noted that the forefathers and many others were deists. That meant that they believed in god but didn’t go to church. In other words, the complete opposite of how it is today.

by murray86 | 23rd Jun 20, 8:16am 1592856966

Yes. My observations are that the majority of active participants in a faith (any) are usually the biggest hypocrites!

by General HubHub | 23rd Jun 20, 8:46am 1592858785

Wow, this deteriorated into a diatribe against people of faith pretty fast...

by murray86 | 23rd Jun 20, 8:51am 1592859087

Not really. Attitude and actions count above all else. Going to church does not at all!

by General HubHub | 23rd Jun 20, 9:07am 1592860023

Bring on the hate speech...

by Kezza R | 23rd Jun 20, 9:19am 1592860750

So you change your comment hubbub. Now it is hate speech to talk about religion?
It is not hate speech to talk about the actions of people who claim to be religious but lead very different lives to what they say. You jumped on this fast to stop people from talking about religion, heaven forbid that we have open and Frank conversations about religion and our experiences with it.
To your first comment. Morals and religion in one sentence lol. In this day and age hubbub we see the church for what it is and the murder and other atrocities that it has built it.

by General HubHub | 23rd Jun 20, 9:20am 1592860821

lol... you are a funny man... it's a little world you live in... have a nice day...

by Kezza R | 23rd Jun 20, 12:38pm 1592872732

So hubbub you jumped on this to try and stop further comments, then run when it continues. No it is a large world that takes everything on it merits and moral high ground. Unfortunately the 'pillar' of society the church is not what it claims to be and it is built with the blood of others.
I've read your books, seen your churches decorated in paintings depicting murder in the name of god and the stolen gold that it was built from.
Next you will be saying we can not talk about the rape and pedophilia that the catholic church allowed. That church actually allowed pedophiles and then and moved them arround to other churches to allow them to continue their manipulation and fiddling with innocent children.

It is high time that we all talk openly about religion, instead of speaking about it in hushed tones. Bring it into the open and let the truth be told.

by Kezza R | 23rd Jun 20, 9:20am 1592860831

Tax the churches, they are a business and should pay tax.

by murray86 | 23rd Jun 20, 9:36am 1592861771

It's not hate speech, it is an observation of behavioural traits. The exclusive attitudes, the holier than thou attitudes, the supposed charity (giving money), not out of a desire to do good, but out of a sense of superiority, with no charity in their attitude towards those who need it, the taking advantage of others because they are somehow better. And every one of these behavioural traits ignore biblical lessons. And don't get me started on active christian inability to critically think about their own taught verse...

by Philby | 23rd Jun 20, 11:37am 1592869048

Sounds like the global warming zealots eg Gore and Goldman Sachs now richer from carbon credit trading and still flying around the World. If carbon is the villain then any scheme in NZ must not involve large sums of money being paid to overseas parties.

by Kezza R | 23rd Jun 20, 12:18pm 1592871518

Critical thinking and religion are not compatable but we allow church schools. It is the height of selling out for votes.

by Foyle | 23rd Jun 20, 8:59am 1592859572

It's a fair commentry. Matches my person experience too, that some of the least trustworthy people I've encountered - who will lie to your face for advantage, were fundamentalist christians (exclusive bretheren in my case). Though I also recall a church going catholic at university (in halls) who while feigning chastity was actually the most promiscuous women I knew, using weekly absolution to manage her hypocrisy.

by Foxglove. | 23rd Jun 20, 9:09am 1592860152

Yep and the short lived political careers of some of our evangelical type MPs, or aspirants, is due testament to that indeed.

by Kezza R | 23rd Jun 20, 1:14pm 1592874850

Today muller is openly catholic. A church that allowed and actively hid pedophiles. Just because a religion is mainstream they should not be viewed as such, they are still evangelical, just pre the invention of term 'evangelical' to try and stop the fragmentation of the bigger religions.
NZ is now less than 50% religious. Our plans for the future should include a hell of a lot less involvement from religion in any shape or form.

by Weld | 23rd Jun 20, 9:38am 1592861898

Maybe she was self-medicating on Catholicism.

by RickStrauss | 23rd Jun 20, 10:23am 1592864601

Exclusive brethren...the crowd National were in bed with.

Catholics do seem to be a little like that. It's possible the easy availability of forgiveness without the real need to behaviourally repent. Along with the priesthood's condoning of promiscuity and abuse in deed if not in word.

by Kezza R | 23rd Jun 20, 1:14pm 1592874887

Comunisium and religion. One we can all talk about as being bad and the other we should stay silent about.
They are the very same! A select few power hungry inderviduals making deals behind everyone else's backs, suppressing the masses and making a very good living from it and the masses can not question them.

by RickStrauss | 23rd Jun 20, 11:39am 1592869159

Any form of totalitarian or ideological rule, really. You see similar happening with the Trumpian right, with willing propaganda arms frothing up the followers through daily Two Minutes Hate, and abandonment of critical thought and old fashioned liberalism in favour of tribalism.

by Kezza R | 23rd Jun 20, 12:27pm 1592872050

If I've got this right the Dem's are socialists, which are the very same but at the other end of the spectrum. Both are toteiterian and in it to sever themselves.
BLM is only the start of a social uprising of the masses that are sick and tired of the brainwashing PR machine that only favours the rich and powerful.

by RickStrauss | 23rd Jun 20, 12:32pm 1592872358

I don't see much socialism in either the Dems or Republicans, with the possible exception of the likes of Sanders who the Democrats will never allow to run for power. They're both comfortably to the right of NZ politics. Agree they're both poor at representing the lower and middle classes of the USA though, although the Republicans seem even worse in recent years despite Trump's rhetoric. E.g. this present money scramble without accountability or transparency is weird and brazen.

by Kezza R | 23rd Jun 20, 12:41pm 1592872864

This isn't Trumps fault, it was built up over decades. He is just the one holding the baby.

by RickStrauss | 23rd Jun 20, 2:10pm 1592878232

Absolutely agree. (Although his was a truly magnificent betrayal of voters. Like campaigning on the urgent need to address the housing crisis then proclaiming that no such housing crisis exists.)

by Kezza R | 23rd Jun 20, 2:51pm 1592880660

Anyone who wants to take one job like that must be unstable in the head.

by wee willy winkie | 23rd Jun 20, 7:49pm 1592898575

The spirit is willing but the flesh is week.

by Kezza R | 23rd Jun 20, 9:50am 1592862629

hubhub. Oh that's right, we can't talk about religion in public but it is perfectly acceptable for religion to affect our lives in conversations behind our backs.

by theglc | 23rd Jun 20, 12:05pm 1592870709

I think deep down inside we all know there is no god, no allah, no heaven & no hell.

There will be a time when we grow up and leave religion behind and that will benefit everyone.

by meh | 23rd Jun 20, 1:13pm 1592874826

Material wealth and/or power to rule has been the religion for millennia...

Those that speak out against religious dogma are usually crucified one way or another... or, if their ideas begin to gain traction amongst the general populace it is often perverted into political power...

by Hans Brink | 23rd Jun 20, 8:13pm 1592899989

Yep religion is well past it's use by date.

by murray86 | 23rd Jun 20, 12:03pm 1592870617

What is fundamental about this discussion and religion, is that religion is just another form of politics. I am not disrespecting a belief in God, as I would be one of the 'deists' referred to above. But with an open minded observational view of behaviour, the majority of adherents of most faiths exhibit classic human tribalistic traits within a political spectrum. They are generally exhorted to do so by their 'churches', and in the process create misery all around them. Terrorists, irrespective of their origin can usually point to some form of religious mantra that inspires them into their actions. As pointed out above, business leaders often have some shocking practices, yet still rock up to church on Sundays (or Fridays) to purge their souls of sin.

by Tradersam | 23rd Jun 20, 9:30am 1592861412

Socialism is the precursor to fascism - The Orwellian state is here and happening.

by meh | 23rd Jun 20, 9:55am 1592862921

Imperialism, feudalism, colonialism, capitalism... fascism is imposing ones beliefs on an other by authoritarian means...

At what point does an individual born into a time recognize the difference between learned beliefs and chosen beliefs? Human nature is as much a byproduct of environment/culture as it is inherent.

by bender | 23rd Jun 20, 10:53am 1592866395

No, true Socialism is applied Christianity.

by powerdownkiwi | 23rd Jun 20, 11:07am 1592867277

Ah, no. It might be applied kindness of a morally-admirable kind, but it's not Christianity.

That involves an arrogance (mankind is superior) and an abdication of responsibility (someone bigger is writing the script).

by Jock Silver | 23rd Jun 20, 1:04pm 1592874240

Then let this "enlighten" you:
http://www.vatican.va/content/francesco/en/encyclicals/documents/papa-f…

dominion ≠ domination

by middleman1 | 23rd Jun 20, 11:14am 1592867691

Bender. Yeah, central tenets of christianity are thieving assets from citizens, suppression of individual rights and freedoms, forcing group think, limiting individual lifestyle and freedoms and delivering widespread misery.

by RickStrauss | 23rd Jun 20, 11:40am 1592869201

But today we have Supply Side Jesus supporting crony capitalism: https://imgur.com/gallery/bCqRp

by middleman1 | 23rd Jun 20, 11:50am 1592869807

Excellent!. The prosperity gospel rules. It's probably a standard theological seminary text in the US.

by Kezza R | 23rd Jun 20, 2:54pm 1592880855

It staggers belief that people can read more than one sentence of that, it is all it takes to see the brainwashing.

by middleman1 | 23rd Jun 20, 2:09pm 1592878146

My beliefs have the staggers after doing so.

by mikekirk29 | 23rd Jun 20, 3:09pm 1592881789

yes, of course, I remember now, Hitler was preceded by Socialism....er, no actually.
And when historically it has happened its because the fascists over-throw the predecessor socialist government that was elected, to the distaste of military people who overthrow them.
Was Mussolini preceded by socialists? No, but he killed plenty.
Do some reading

by Foxglove. | 23rd Jun 20, 3:27pm 1592882857

National Socialist German Workers Party morphed into the Nazis. It is claimed Herr Hitler only got involved there because he was enlisted by the Friekorps to infiltrate the goings on. Whatever the case may, be the word socialist stayed only in name, being soon replaced by fascist in reality.

by meh | 23rd Jun 20, 11:10am 1592867421

What's really funny is that the gospels, books of the bible accepted many cultural beliefs of the time as normal accepted behaviour. Not only did the church hierarchy impose their rule on the masses, they acted contradictory to their teachings. Eventually only "the word" matters. It didn't help that the people were prevented from reading the books themselves and when they were, half the stories were left out. Independent thinking not allowed... The prophecies must not be questioned...

It would appear that many societies with "christian" origins are in fact following the actions of the church hierarchy, rather than fundamental values and are at various points along a spectrum. Case in point, the US at the extreme end.

Travel forward a few centuries... a few people "observe" current cultural beliefs as normal accepted behaviour, as truth, and behold we have a new book of prophecy and the accompanying prophets... Economic Theory, the book of truth!

It's almost as if "economics" was written to justify cultural beliefs...

by Masher | 23rd Jun 20, 11:22am 1592868166

Whats the difference between the bible and a superman comic, apart from date of publication?

Genuine question that. Catholic schooled here from 5-15. Once got a week of detentions for questioning how hell could exist if Jesus forgives all and we all end up in heaven, and how does anyone know what it looks like.

Still waiting for an answer on that.

by middleman1 | 23rd Jun 20, 11:34am 1592868873

Masher. Your parents or caregivers signed you up for what was back then a christian equivalent of an islamic madrassa, I'm surprised you're surprised that you were required to toe the Taliban line. Not a place for your perfectly (still ) valid theological challenge.

by Masher | 23rd Jun 20, 11:36am 1592869006

Thanks mate. Imagine me sprouting this nonsense in the 60s!

by middleman1 | 23rd Jun 20, 11:41am 1592869278

Bet your past life cringe is not as utterly embarrassing as mine. I blush with shame at the shit I used to talk back then.

by Masher | 23rd Jun 20, 12:06pm 1592870786

I was an alter boy for 3 months.

Pay up.

by middleman1 | 23rd Jun 20, 12:26pm 1592871973

Desperate stuff on this bleak afternoon !!

by Foxglove. | 23rd Jun 20, 12:46pm 1592873179

I asked, at a private christian school, during scripture lessons, how come in one of the gospels it was said to pick up your cross and follow, if at that point, the subject matter having not yet been placed on a cross, why was then the cross such a symbol. Got told if I ever asked a question like that again I would get three across the tail. Had then vague notions about becoming a lawyer, so quickly realised good cross examination did not necessarily mean a good result.

by Masher | 23rd Jun 20, 2:19pm 1592878759

Gold. And people give 10% of their pay to believe this stuff!

by middleman1 | 23rd Jun 20, 2:36pm 1592879777

Fox. Great question showing excellent critical thinking skills but responded to with ignorant thuggery. Carrying ones own cross to execution was a Roman convention that would have been witnessed by many.

by Foxglove. | 23rd Jun 20, 3:34pm 1592883259

True. Suppose just as well then, the corresponding practice of carrying the cane to the study, had disappeared by 1955! Often wondered how the brits got away with a TV comedy titled “Wacko!”

by middleman1 | 23rd Jun 20, 3:54pm 1592884474

Not so in NZ. I attended an all boys high school in the late sixties where it was still common practise. One was sent across to the rectors office to pick up a cane, return to the classroom site of offence, be caned outside in the corridor by the teacher and then made to return the cane. Looking back, some of the dysfunctional pricks got off on it. Ritual humiliation. I'm a bitter and twisted emotional cripple to this day.

by Foxglove. | 23rd Jun 20, 4:18pm 1592885910

Yeah, but our lot were so keen and willing, they each had their own weapon at the ready. Some had a spare. As well there was the ability of school prefects to measure out the same punishment. In those days it was a great school to leave, by my count anyway.

by middleman1 | 23rd Jun 20, 11:28am 1592868497

'books of the bible accepted many cultural beliefs of the time as normal accepted behaviour' ... as do most philosophical works. They are created within the social and moral contexts of their times. Presentism, the judging of previous periods by application of contemporary moral perspectives, is a flawed approach. Churches 'imposing their rule on the masses' during feudal times is repugnant to us but such a view would have been regarded as quaint back then.

by meh | 23rd Jun 20, 12:14pm 1592871252

I agree. I attempt to understand current social and moral concepts by learning from history...

The statement that humans never seem to learn from history only holds true if individuals choose not to learn... his story, which seems to be the prevailing "truth" at any given time is only half true, lies or statistics...

Hmm... the idea that those who ever had "rule" imposed on them by threat and use of death or force would regard it as quaint...

by middleman1 | 23rd Jun 20, 12:25pm 1592871911

Re your last para - yes, hard for us to accept but that is the reality. The life of the feudal peasant was one of passive acceptance that the aristocracy and church had a divine right to direct every facet of life. God required it, who were they to question the righteous ones will. The concepts of resistance or individual liberty to chart ones on course though life would not even have occurred to them which is why revolts were extremely rare. To understand their mindset requires suspension of presentism.

by meh | 23rd Jun 20, 2:14pm 1592878452

You're saying you understand their mindset, that passive acceptance of servitude was met willingly? Based on what? Because we're not that way today? History would suggest uprising against forms of rule are standard throughout time, but not the peasants of feudalism?

How many centuries of rule does it take for apathy and passive acceptance to become the norm? One only has to look around to see a predominant passive acceptance of rule, of blind obedience by the majority, a majority descended from feudalism.

History shapes our beliefs and therefore today's mindset and cultural morals are an extension of what came before... learning from the past to understand where we are today is why I don't have uncritical adherence to present-day attitudes.

by middleman1 | 23rd Jun 20, 4:09pm 1592885397

Based in Europes case on centuries of widespread continuing peasant servility with few serious challenges to the divinely instructed order. Probably the most well known but relatively modest scale exception is the UK revolt in the late 14th century against a backdrop of the black death, war and extortive taxes. The society wide impacts of the bubonic plague, reformation and ushering in of the age of reason were to consign this submission to history.

by Foxglove. | 23rd Jun 20, 4:04pm 1592885067

Well before that too. For instance, within the said cradle of democracy, Greece. Sparta subjugated the Helots. Still if you are going to go for a religion the Greeks & Romans would be my pick. Their immortal guys and gals had a pretty high time of a lifestyle. Why not pursue similar pleasures then.

by Foxglove. | 23rd Jun 20, 11:39am 1592869195

The reality is people en masse tend to need to believe in something as to how the whole damn shooting box we exist in arrived and what lies beyond. That desire and insecurity has been easily manipulated throughout history by all manner of cults and creeds. To try and fathom it as an individual is likely to drive you nuts, so folks join flocks readily enough. Golding went into it a bit, how it manifests, in the Lord of The Flies for instance. Religion was a essential asset for the pilgrims in the USA. Escaping persecution but facing immense obstacles and dangers in establishing in the new world. Religion, belief in the faith, was a force that bound communities together. And then of course, it went ahead and completely undid itself with the like of the Salem witch trials.

by middleman1 | 23rd Jun 20, 11:39am 1592869162

Foxy. 'completely undid itself with the like of the Salem witch trials'..... think you've been a bit spielberged there old son, I doubt Rome felt even a tremor from the exaggerated prominence given by creatives to a relatively minor long ago american event.

by Foxglove. | 23rd Jun 20, 11:50am 1592869833

Well in that particular situation it did just that, but admit my previous over generalisation. Try and get a copy of Paul Johnsons History of the American people wherein lies the point that religious groupings, cults etc especially when isolated, will inevitably get unbalanced because of the pecking order that humans entertain. The strong will dominate the weak by whatever vehicle at their disposal given half a chance.

by middleman1 | 23rd Jun 20, 12:13pm 1592871180

Yes, the isolationist nature of fanaticism, religious or otherwise, always results in oppression by one faction of the other. Not sure I'd describe the pecking order hierarchy as being 'entertained' by humans. I see it as an inherent evolutionary outcome of sapien dominance and thus inevitable.

by Mike1 | 23rd Jun 20, 9:15am 1592860558

CJ099 you have TDS.

by Pragmatist | 23rd Jun 20, 3:16pm 1592882168

What is Trumps diagnosis Dr Mike?

by northman46 | 23rd Jun 20, 8:09am 1592856542

Nasdaq closes at an all time record high.

by Tradersam | 23rd Jun 20, 9:43am 1592862204

Usually when the stock market goes up
Gold goes down - that’s not happening which indicates the fragility of geopolitics, and the global financial system.

by murray86 | 23rd Jun 20, 9:49am 1592862572

Here's a question; will gold really be worth anything if the world order collapses?

Can't eat it, can't use it to keep you warm, need an awful lot to provide shelter, won't heal you. Sure looks pretty stacked in a corner though.

by meh | 23rd Jun 20, 10:03am 1592863437

I've often wondered where this fixation on gold has come from. There are many other shiny rocks that are much prettier.

Sounds like an imprinted belief passed through generations and any origin of meaning has been lost...

by Kezza R | 23rd Jun 20, 10:22am 1592864562

Do you have materials to barter with if money is worthless? Gold and silver will be an acceptable form of barter, FIAT currency little to no worth.
Yes you will be able to feed yourself with gold. For example one Oz of silver in the countries that have had hyperinflation of late, buys you a weeks food.

by Tradersam | 23rd Jun 20, 10:56am 1592866577

Well said Keeza! - Venezuela, Greece, Argentina, Zimbabwe, Philippines.

by Kezza R | 23rd Jun 20, 11:20am 1592868001

In the system collapses you have to have something to exchange for what you need to live. Unless you have excess vegetables, meat you are at the mercy of the mercy of others. Sitting back and waiting for Jacinda to provide is not where I will be.
When you are sitting watching your family starve, your toys aren't worth much at all. Try rocking up to a farmer and offering a Bitcoin for a cow and watch his reaction. Gold, silver, other PM's and barterable goods amd services are the only thing that will be accepted.

by Masher | 23rd Jun 20, 12:16pm 1592871414

Cryptos are working very well in Venezuela at present. Fuel, groceries, Burger King etc. Pretty much a testing ground for the world.

Agree with all of your other views though.

by Kezza R | 23rd Jun 20, 1:28pm 1592875703

I get your point. If cash is trash something needs to be used and a pocket full of PM's is hard to transport fast and relibally.
I am slowly coming arround too think that I should get at least one.

by Masher | 23rd Jun 20, 2:21pm 1592878904

I am a converted cynic.

Research and invest wisely.

by Kezza R | 23rd Jun 20, 2:59pm 1592881171

I think I'll have to pay someone to set it up as I'm guessing it will beyond my skills?

by Masher | 23rd Jun 20, 3:19pm 1592882368

That was my main concern, and the answer to that is no.

Buy an external wallet and follow the directions. I was petrified Id end up on a page saying I had a zero balance, but the process is/was far easier than expected.

by Kezza R | 23rd Jun 20, 3:47pm 1592884067

Cheers that makes me feel better. I'll do the You Tube watch then pause till I'm at the next stage to press plat again.

by Pietro | 23rd Jun 20, 12:33pm 1592872433

Why? Gold is only worth something because we say it is worth something. It’s silly to compare it with something of actual use. Mind you, ‘precious’ metals can be used to make bullets when you lot head back to the hills to survive the zombie apocalypse.

by Masher | 23rd Jun 20, 12:38pm 1592872697

"Why? Gold is only worth something because we say it is worth something. It’s silly to compare it with something of actual use"

What, like paper?

by Kezza R | 23rd Jun 20, 2:25pm 1592879116

BOOM.

by youngdumbandbroke | 23rd Jun 20, 2:28pm 1592879286

It can't be printed like Fiat can, only extracted from finite stocks. It's very malleable, doesn't corrode and is very conductive, it even has medical applications i think maybe arthritis?

by RickStrauss | 23rd Jun 20, 10:09pm 1592906987

it even has medical applications i think maybe arthritis?

Also as anesthesia when applied rapidly to the head in a large, heavy quantity.

by meh | 23rd Jun 20, 11:15am 1592867744

Ha and if someone only has a week's food they will swap it for a shiny rock...

by Masher | 23rd Jun 20, 12:18pm 1592871539

Common sense there mate. If he/she only has a weeks food I doubt a conversation about selling a weeks food would even occur.

by Kezza R | 23rd Jun 20, 3:48pm 1592884135

Only a deal if they could trade it for two weeks food.

by murray86 | 23rd Jun 20, 12:39pm 1592872793

Try excess food, grown or hunted. Or maybe hides or other manufactured items.

by Independent_Observer | 23rd Jun 20, 10:26am 1592864796

No but its all about its relative worth to the fiat currency you're dealing in. And it appears everyone is willing to destroy the value of their fiat currency in order to try and keep the current system alive.

by Tradersam | 23rd Jun 20, 11:25am 1592868346

PM’s will buy a whole lot more than any
fiat currency when hyperinflation kicks in

by Kezza R | 23rd Jun 20, 11:29am 1592868574

Where hyperinflation has occurred you need a wheel barrow of Fiat paper to buy a weeks supply of food. You will need a dump truck to get an Oz of gold, if you can find someone who will sell it to you. The time to buy is now.
If this really gets going no one will exchange PM's for FIAT, wood burns better.

by Masher | 23rd Jun 20, 12:11pm 1592871111

People who don't hold gold either don't have an understanding of history or dont understand economics. Likely both.

by meh | 23rd Jun 20, 11:45am 1592869550

Usually, according to theory, more demand equals higher prices equals inflation and vice versa.

Hmm... more demand for debt equals lower price... Maccas increased many prices by 20% in level 2 yet demand no more than before lockdown. I realise that supply is a factor but nor do I expect a price reduction once "equilibrium" is found again.

Is this a fragility in economics or "money" supply?

by Kezza R | 23rd Jun 20, 1:37pm 1592876235

All well above my pay grade and the more I dig into it the more I understand that it is a massive subject that the professionals who have studied this for decades haven't got a clue either and are taking stabes in the dark predictions of where this all goes. Basically all I need to understand is this has a high potential to play out very badly and I should cover my ass.

by Newbie | 23rd Jun 20, 8:15am 1592856901

U.S money printer is faster than ours, so strong NZ dollars.
Perhaps, it is time for us to print more money, lower OCR rate.
Strong currency is not all good in this crisis.

by northman46 | 23rd Jun 20, 8:15am 1592856957

There's not too much wiggle room left, without negative OCR.

by richard1965 | 23rd Jun 20, 8:38am 1592858321

For the first time saw a sponsered advt by IRD does it means that have got signal from government to go after it.

https://www.ird.govt.nz/property/buying-and-selling-residential-propert…

Just like buyers who have to fill OIO form/declaration, why not make it mandatory for sellers to fill a form declaring if they own any property in single or joint name either independently or in company or trust account and is RE Agent to get the form filled just just like OIO form.

Does the government has a will to impliment BLT (If BLT is CGT as argued by many opposing CGT than why oppose CGT if we already have it in another name). Simple solution just pass a law like OIO.

by rastus1 | 23rd Jun 20, 8:38am 1592858339

No political party will tell it like it is with an election upon us. Would you vote for a party that tells the tourism industry or the education industry that they are rooted and to forget it? Would you vote for the party that says it expects house prices to collapse and employment to go to all time highs? Nope. And that’s why most kiwis remain ignorant of the disaster that is upon us.

And Covid is nothing compared to the impacts of global warming.

by stuart786786 | 23rd Jun 20, 8:54am 1592859269

Yeah tourism and hospitality industry is dead atleast till early next year (Being positive) along with education sector - international student and with migration coming to a halt wait and watch as is bound to have a rippling domino affect in the economy.

So worse is yet to come.

by powerdownkiwi | 23rd Jun 20, 9:39am 1592861969

We need to talk about being more resilient as a country.

We offshored a lot of our skills and capabilities (with knock-on impacts on those who once had buy-in to society via doing useful stuff) choosing instead to pay someone else peanuts.

The problems are two - we did it with debt (mostly by a housing bubble) and an ever-increasing amount of parasitic activity which we called ' work'. So adrift from reality were we, that we worried about 'productivity' of those parasitic activities. And the real skills - the Railway people who could build a loco from a blueprint, the Shacklocks, the Champions, the Woollen Mills, the F&P's - are held in heads dying in rest-homes. While youngsters wouldn't know one end of a hacksaw from the other.

Time we got real.

by murray86 | 23rd Jun 20, 9:06am 1592860005

Too right PDK. The Government would be better off long term spending some of it's COVID response funds to help some of these industries restart.

We have our own trained engineers who could probably design a loco to meet our needs better than the Chinese, and a steel mill that could develop to provide the steel required. FPA has the technology centre to prove our own engineers are innovative and can design and build our own appliances. So time for FPH to go back there? So many things that prove we have the capability, we just have to have the faith too.

by youngdumbandbroke | 23rd Jun 20, 9:12am 1592860365

Don't forget the massive household debt that has eaten away at financial resilience

by Hamish | 23rd Jun 20, 9:16am 1592860580

We might have offshored lots of ours skills and capabilities, but for the last few decades we have been upskilling in landlording. Or whatever the correct name for that is.

by Independent_Observer | 23rd Jun 20, 9:46am 1592862411

Parasiting.

by Pragmatist | 23rd Jun 20, 3:19pm 1592882358

Not sure "upskilling" is the right word.. theres SFA skill involved.

by iconoclast | 23rd Jun 20, 12:02pm 1592870567

The economics got in the way

The Dunedin Railway Workshops quoted to build locomotives at $60 million each. The Chinese quoted a FOB price (not free-into-store) of $30 million each. Two outcomes. The economics looked too good on a capital outlay basis. What they didn't take into account was the circulation of money into the local community. The $60 million on a standard circulation of x7 would be worth $420 million to the local economy. The $30 million was a net drain on the economy in overseas reserves multiplied by a similar but lower circulation factor. The Workshops were closed with the loss of jobs and skills. After the locomotives were delivered it was discovered that there was an asbestos problem. The assets were isolated in a boneyard awaiting a solution. Has anyone heard of a solution? What was the opportunity cost while the assets were mothballed.

by redcows1 | 23rd Jun 20, 10:21am 1592864497

Are they being used to repair the breakdowns, I read a article recently that they haven't exactly met expectations on the hat front either.

by Uninterested | 23rd Jun 20, 11:32am 1592868742

Information on the Chinese rail failure Britomart has likewise been withheld.
Where the train ended up metres from a solid concrete wall so it was pure chance that people did not die en mass.

by waymad | 23rd Jun 20, 5:40pm 1592890835

The 'local' locomotives with Caterpillar diesels, GE electric traction motors, and Hitachi controllers? Still, NZ steel - er - Steel, and perhaps Resene paints. Local, schmocal....

by Pietro | 23rd Jun 20, 12:38pm 1592872732

Sadly, hacksaws, steam engines and the other things you refer to aren’t much use these days. We will export grass and wood and import technology until the end of days, I think.

by iconoclast | 23rd Jun 20, 1:28pm 1592875738

You are wrong about hacksaws and steam engines - check out how NZ turns geothermal steam energy into electricity - and - I have used my old hacksaw twice recently - still useful

by Pragmatist | 23rd Jun 20, 3:20pm 1592882450

Geothermal steam doesn't go via a reciprocating engine, its all turbines. And that turbine is not made in NZ, imported for sure.

by murray86 | 23rd Jun 20, 9:02am 1592859744

Would you vote for a party that says we'll open the borders to get the economy going again, and that the impact of COVID will just be collateral damage that we have to live with?

Many are calling for this.

by GV 27 | 23rd Jun 20, 9:04am 1592859874

The problem is the ones who are shouting down any criticism at all because they like red better than blue, even though Team Red is leading us to this exact scenario, just with slogans suggesting otherwise.

by Masher | 23rd Jun 20, 9:26am 1592861160

You know how lots of NZers get excited about State of Origin, having a team they support, despite no logic or connection to that team, and disliking the other team?

Its just like politics. Tribalism brings out the dumb dumbs.

by iconoclast | 23rd Jun 20, 9:30am 1592861404

Try listening to talkback radio. Kate Hawkesby, Mike Hosking, Kerre McIvor, Helen du_Plessis-Allen and Bruce Russell and podcaster Leighton Smith. The Blue Team. They are the ones shouting and screaming the loudest

by Kezza R | 23rd Jun 20, 10:26am 1592864761

I don't watch those people but what I do see is Jacinda singing her and Labours PR praises on the mic daily.

by FCM | 23rd Jun 20, 11:19am 1592867945

Yep JA and GR issue is they have an 80 minute match, they are at half time and think they have it won. They have no game plan at all for the second half, the sub's dressed in blue don't seem to have one either. The worry is the opposition called CV19 may well win after all, it may not be on the direct death rate, but economic catastrophe and other health related impact's resulting from this, it's playing an 80 minute game, and has multiple ways to win the game.

by Kezza R | 23rd Jun 20, 1:48pm 1592876912

Lol nice one. It's a game of two halves and looking likely that we will enter the next half under a new set of rules and weather conditions on a completely different playing pitch.

by blobbles | 23rd Jun 20, 3:17pm 1592882234

Actually I suspect we are only 5 minutes into the first half. Pandemics have, in the past, run on for years if not decades. There is no reason (at the moment) to expect this one will be any different.

by scarfie | 23rd Jun 20, 10:09am 1592863760

It is an aspect of this that wasn't thought out well from the start, no exit plan. I asked someone privately the other day "at what level of unemployment do the borders get opened".

It is somewhat predictable that the borders can't stay shut and we won't keep Covid-19 out simply based on human psychology.

If you go back to one of my early predictions I said the government actually want people to get it, they know it must happen. They've just put out a propaganda campaign so successful they don't know how to get out of it. That Covid-19 will do the rounds of New Zealand would be a good wager. It has to be let to do it's rounds as herd immunity is the only way forward.

I'm sorry to say that if people are sitting in a comfort zone thinking we've eraticated it might be a safer bet to work on their lifestyle. Eat well, sleep well, get out in the sun to get vitamin D, and get some exercise.

by middleman1 | 23rd Jun 20, 10:40am 1592865604

'a propaganda campaign so successful they don't know how to get out of it'.... sums up the CoL. Skilled at the big gesture PR puffery but little long term strategic thinking and incompetent at execution. Perhaps like the Japanese Tokugawa shogunate NZ could keep itself isolated for 200 years.

by murray86 | 23rd Jun 20, 10:57am 1592866665

A part of the cost of opening the borders and accepting COVID as an unavoidable occurrence will be ongoing health impacts, not just the deaths. Scientific reports are starting to emerge. The Herald has an article here which details that the UK are finding around 30% of people who caught COVID and "recovered" have ongoing health impacts. the question you must ask yourself if you are clamouring for the borders to reopen, is do you want to be one of those? You might believe you have an iron constitution Scarfie, but the real test is to actually test it.

by scarfie | 23rd Jun 20, 1:05pm 1592874346

I have Murray, I few to Africa via Dubai and back late Feb early March. I was working with people for ten days that had traveled from Asia, Europe and South America. Then a week before lockdown I picked up a hitchhiker outside of hospital that was highly likely infected, he'd been in hospital for pneumonia (wrong time of year for normal flue and pneumonia). 20 mins in the car with him.

The Australian Doctor working on a cruise ship has the best proof so far that healthy people done get it, ten people isolated in a cabin with an infected person, including himself, that did not test positive. He tested himself for antibodies and didn't even have those. So that is probably the scenario with myself, I've been exposed, didn't get it, so don't have antibodies. I'll beat it next time also.

But what you say also backs up my theory, those with ongoing impacts are going to be immune to reinfection. They'll get it again and reinfect others to keep it spreading. It is a good example of how the efforts to quarantine should always be going towards those that a sick of vulnerable, and leave healthy people out of it. You'll see with time the logic was wrong.

Doesn't matter how bad you think it is, nothing is worth trashing civil rights.

Btw I'm not clamouring for borders to reopen, a quarantine when coming back into the country is probably legal. Management of that is a total disaster, if we were going to do it then it should have been early, rigid, and well managed. It is proving anything but. What I've pointed out is that the mass lockdown that was totally unlawful. So you get me wrong on management, I'm just saying work within the law.

Btw. I'm less interested in what I want but in what is going to happen. In my post above I'm saying that the most likely scenario is that we won't keep the borders closed and keep the virus out, whether you or I like it or not.

Do you have any good links that show how it spreads yet? Information I'm seeing is they actually still don't know.

by murray86 | 23rd Jun 20, 1:41pm 1592876504

I don't think they know definitively how it spreads. Everything I have read is based on theory rather than actual research with COVID. So even though you think you have been exposed at an infecting level, you may not have. It'd be nice to think a robust immune system can resist it, but a lack of antibodies suggests you haven't been in contact with it.

Agree the early border controls were not good. But that I think is the Government struggling as they endeavoured to establish firm control without the agencies to check that they were working. This I suggest is a consequence of Chris Trotters 'light hand of Government' that the current Government has inherited. Like you I am ex-military (Airforce), but also in risk Management and Audit now, and I figured pretty quickly, early on that the Government didn't appear to be putting any checks on how well it was all happening. Government appointed leaders tend to be all 'Yes Men' and they'll always say it is sunshine and roses when it usually isn't. i think with the Airforce in charge, it will be well run and controlled.

by meh | 23rd Jun 20, 12:30pm 1592872226

Or we could ask the question differently... at what level of unemployment does the concept of a UBI become ideal?

Human psychology... is that the part where the rulers are adored for creating jobs, telling others to be more productive, do as I say not as I do... that human nature is inherent and not influenced by their environmental/cultural institutions?

by redcows1 | 23rd Jun 20, 9:12am 1592860337

Yes, yes I would.
They would need a plan too.

by muzled | 23rd Jun 20, 9:23am 1592860983

I hadn't actually thought I would vote like that, but you're making me think now rc.

Do you think it's possible to open the borders and acutally keep this virus out?

If it could be done there is no reason not to do it, but the risk reward seems fairly unfavourable no?

by Advisor | 23rd Jun 20, 9:41am 1592862105

I envy the Swiss for their decisiveness. Parties from across their political spectrum are working together on a recovery plan that involves repatriating substantial portions of agriculture and reindustrialising the nation wherever possible, breaking their reliance on international supply chains.
In other words, their parties are smart enough, unlike ours, to understand this is no time to play politics against one other. Hopefully, the government's fee-free trades training could make re-skilled Kiwi workers available for similar localisation efforts of our own.

by FCM | 23rd Jun 20, 9:34am 1592861691

You would hope so, but with the silence coming from wellington from both parties, it's looking dubious that we have any plan other than keeping the borders shut and hope ag exports can limit the damage. I feel really sorry for any tourism and hospo (construction which is starting to hit and manufacturing) workers as the horizon is looking bleak and when the WS runs dry its not going to be pretty, unless you work in the public sector.

by PaulO | 23rd Jun 20, 9:54am 1592862863

Tourism is going to be down worldwide for a long time to come, likely to be many years. I think the sooner that some involved in the industry realise that and move in to something else, the better. Sounds harsh but I just cannot see any scenario where it will turn around. Some of the slack will be taken up by domestic visitors where international visitors once trekked but I am not sure the number of visitors and their spending will be anywhere near what it was for, well, a good number of years.

by Hamish | 23rd Jun 20, 9:59am 1592863165

The government sure seems to be snookering themselves in a long drawn out fashion. And by extension all of us.
Which is probably why so much concern around how our borders have been managed. With no forward plan laid out yet, most of us would expect the border, being a quite narrow pinch point for the re-entry of covid, to be watertight.

by oldbloke1 | 23rd Jun 20, 11:24am 1592868252

How many cases have been caused by those coming through the border, leading to community transmission, since the lockdown? None! What are you going on about?

by GV 27 | 23rd Jun 20, 11:55am 1592870119

How confident can you be that's actually the case?

Because if you are confident that is 100% for certain, you're asking me to ignore the following statistical probabilities:
1) That we weren't finding cases because there we no cases in arrivals during a global pandemic.
2) That we weren't finding cases has nothing to do with people leaving quarantine without being tested.
3) That every single person who didn't show symptoms didn't have it at all, and wasn't just asymptomatic and untested.
4) That the people who may have been asymptomatic didn't infect others in their uncontrolled quarantine facility.
5) That those people who may have been asymptomatic didn't spread it to the general public when they were mixing with Aucklanders during exercise.
6) That there has been enough time for any community cases to build to a point where they would be picked up in the community
7) That we are still testing widely enough in the community to for us to pick it up when it does hit critical mass.
8) That there weren't other flaws in this process that we didn't know about because the media didn't find out about them.

These are all of the circumstances that have to align for you to be right; that there is definitively no CT and we are just, again, apparently incredibly lucky.

by oldbloke1 | 23rd Jun 20, 3:20pm 1592882453

It could be, of course, that your "probabilities" are just so much - imagination, and no reflection of how the real world works.

by Foxglove. | 23rd Jun 20, 9:53am 1592862784

To Advisor. Think you would have great difficulty finding any honest NZ citizen disagreeing with those sentiments and directions, except perhaps politicians and high ranking public servants.

by middleman1 | 23rd Jun 20, 10:17am 1592864266

Foxy. Yes, plenty of agreement with those sentiments no doubt but in this small scale short production run nation very little agreement to paying the resulting sharply increased prices for goods.

by Foxglove. | 23rd Jun 20, 11:09am 1592867344

Agreed but the compromise might then have to be less of the flashy stuff and more of the essential stuff being present in household budgets.

by GV 27 | 23rd Jun 20, 11:56am 1592870197

We pay through the nose for essentials already. Good luck getting consumers to agree to being fisted even more for locally-produced items while our food and dairy is cheaper on overseas supermarket shelves.

by middleman1 | 23rd Jun 20, 11:59am 1592870354

Sounds like my 1950's/60's childhood where only the privileged few could afford decent household appliances etc. Row upon row of miserable state built housing where exotic luxuries such as TVs cost many weeks wages and ancient creaking cars were nursed along for 25 years.

by Rhumline | 23rd Jun 20, 1:02pm 1592874174

As Eliza Higgins once said "Wouldn't it be luverly!" Politicians working together, producing real things in preference to importing them, paying less for our milk and butter than someone buying the same product in the UK.

by Mike1 | 23rd Jun 20, 10:10am 1592863851

Well covid is real and global warming is a religious belief for unhappy people so the impacts are going to be a little different.

by bender | 23rd Jun 20, 11:04am 1592867057

I really hope that was meant sarcastically. The former is immediate and eventually recoverable versus the latter.

by powerdownkiwi | 23rd Jun 20, 11:11am 1592867489

He got it wrong.

Economic Growth is the religion for those who are unsatisfied with their lot.....

by Doris | 23rd Jun 20, 10:29am 1592864996

Was mass tourism, residencies for sale masquerading as education, rapid population growth through low-skill immigration and "wealth" generating through property speculation really that good though? For NZ, its current inhabitants and for the environment?

Maybe it gives us a chance to rethink some things.

by Philby | 23rd Jun 20, 12:16pm 1592871366

Economists and politicians are quick to tell us how GDP is growing from the likes of tourism and education but we still run a current account deficit and have done since 1972. So how much of the gains from these activities goes back overseas. While we ruin our environment. We need better metrics to measure how well we are doing. Not ones promoted by bank economists.

by Hans Brink | 23rd Jun 20, 8:38pm 1592901526

Yes Rastus and people have forgotten about climate issues. It is still with us. And please don't start that this is some new age religion , climate change caused by fossil fuel emissions is a clear and present danger to the well being of humanity.

by Andrewj | 23rd Jun 20, 9:16am 1592860617

We have had more rain and are growing grass. Creeks are still dry. Send some decent lambs to the works yesterday and the driver told me they are still killing capital stock in lamb ewes and in calf cows, sad stuff.

I'm buying a few cattle now i have some feed, price is up on a month ago but at least I can feed them now.

i don't have clue what markets are going to do, covid-19 has thrown spanner and two bags of sand in the gearbox.

From the States, I just don't know how important this market is to us anymore.

'This afternoon’s USDA Cattle-on-Feed report will show historically low marketings, even when adjusted for less slaughter days, and expectations for placements are 2% below last year. The net result will be an increase of 670k head, give or take, of cattle on feed June 1 compared to May 1. Normally analysts don’t look at cattle on feed data this way but because a true black swan event made it impossible to slaughter fed cattle at a normal pace for 8 consecutive weeks, the number of head placed on top of cattle that did not die on schedule becomes of paramount importance.
This out of synch supply/demand dynamic will be painful and time-consuming to correct.

Fed cattle prices this week were generally another $3 lower and next week or certainly the week after, the average price will slip below $100 for the fifth time since 2011. For the first time since 2010, the quarterly average for Q3 fed cattle prices will be sub-$100 due to the massive backlog of fed cattle supplies and floundering wholesale boxed beef prices. The Q3 prices for fed cattle were that cheap was 2010 when they averaged $95.

If that is what it takes -prices to get their cheapest in a decade and stay cheap for 3-4 months- what are the implications for the rest of the cattle industry? Stocker and rancher?

Cleaning up an oversupply of front-end cattle and recovering lost consumer demand are the two most bearish fundamental factors the cattle industry can face. Those two factor are front and center for the remainder of 2020.'

by polygonalvector | 23rd Jun 20, 9:43am 1592862222

8% of American Mortgages past due or in foreclosure.

That is a very high number given the size of the American Mortgage market. And factoring in that American mortgages are typically very long term and quite low repayments compared to ours - very sobering. US banking system in real trouble.

Do we have a similar metric for mortgages here in NZ that is comparable?

EDIT: Typo. And I just read that BBC article on US evictions - the flow down effects of the financial impacts of this are hard to read - for renters living paycheck to paycheck without a safety net there's just nowhere to go.

by ShoreThing | 23rd Jun 20, 9:46am 1592862387

Possibly the C35 Residential Mortgages series from the RBNZ? Repayment deficiences / scheduled repayments = ~4%. Not really the same thing but a similar metric.

https://www.rbnz.govt.nz/statistics/c35

by A.Reader | 23rd Jun 20, 9:54am 1592862861

The RBNZ dashboard has asset quality metrics. You can see non performing loan percentages for each bank.

by Miguel | 23rd Jun 20, 10:26am 1592864792

But the mortgage deferral scheme specifically allowed banks to record deferred loans to be reported as "performing". We do know that 25% of loans are on either interest only or payment deferral, but this masks the true rate of non-performing loans.

by Uninterested | 23rd Jun 20, 11:36am 1592868969

Yeah exactly. NZ may be just as bad as the US.

by CN | 23rd Jun 20, 10:20am 1592864406

FYI, approx 40bn in loans have had their payments amended in some way (lower payments, payment deferral)

by Audaxes | 23rd Jun 20, 9:50am 1592862602

In Australia, the RBA has opened the door to reviewing the three-decade-old inflation targeting framework, saying it could be worth reconsidering in a "few years" after the virus crisis passes.

Couldn't come a moment too soon.

To investigate, we test the received belief that lower interest rates result in higher growth and higher rates result in lower growth. Examining the relationship between 3-month and 10-year benchmark rates and nominal GDP growth over half a century in four of the five largest economies we find that interest rates follow GDP growth and are consistently positively correlated with growth. If policy-makers really aimed at setting rates consistent with a recovery, they would need to raise them. We conclude that conventional monetary policy as operated by central banks for the past half-century is fundamentally flawed. Policy-makers had better focus on the quantity variables that cause growth.
Link

More central bank nonsense unveiled as nothing more than commonsense.
BOE’s Bailey Signals Dramatic Shift Toward Stimulus

Bank of England Governor Andrew Bailey signaled a major shift in the central bank’s strategy for removing emergency stimulus, stressing the need to reduce the institution’s balance sheet before hiking interest rates.

Of course, the government would end up paying more floating rate interest, as rates rose, to the banks in receipt of reserves for QE bonds previously sold to the BoE. Genius.

by Independent_Observer | 23rd Jun 20, 10:23am 1592864623

Its mind boggling what this might mean. Rising rates will destroy asset prices and how high is to high? And how could we have got this wrong for so long?

I've been banging my head against a brick wall looking at CPI targeting and not having land values included in the basket, yet it is where all our debt has been created against and inflation of money supply.

by meh | 23rd Jun 20, 12:51pm 1592873479

Ha coz it messes with peoples beliefs... standard answer is "that's life", or "that's the way we've always done it". It means having to question "authority" and we can't have that.

You can't learn independent thinking at school if you're only taught half the information... and who these days is able to sort through it all... easier to follow group thinking... blind obedience...

by Audaxes | 23rd Jun 20, 10:08am 1592863696

The Best Fraud Is in Plain Sight

by murray86 | 23rd Jun 20, 11:06am 1592867206

I know gambling is supposedly a big part of Asian culture, but that woman from Nanjing definitely put a twist on it. She made insurance companies look like a dumb version of the TAB! Innovative and clever! Struggle to see it as fraud though, other than there being no intention to fly. The local airlines would have made money as well.

by Uninterested | 23rd Jun 20, 11:49am 1592869753

Insurance in general has lots of unanticipated consequences. Incl fraud.
Another example just watch the "Snapped" program on TV and you will see that life insurance is responsible for a high proportion of murders.

by murray86 | 23rd Jun 20, 12:25pm 1592871930

That's always been the case Uni. Insurance being a motivator for a crime. But is it a crime to book an airline seat with no intention of actually using it?

by Uninterested | 23rd Jun 20, 11:46am 1592869585

“Many high-rise buildings, they have toilets that have a lot of torque.”
Haha, sounds very painful...

by Audaxes | 23rd Jun 20, 10:26am 1592864772

The Eurodollar in all but name

by SailorRob | 23rd Jun 20, 11:00am 1592866833

Always interesting Audaxes, following your comments. You really understand how the system works. Particularly interested in your commentary on NZ banking system deposits, the way people describe them including economists and bankers, if you buy another asset with your money, then the banking system loses that money as a deposit. This is obviously nonsense, the money never leaves the system just becomes the asset sellers deposit. Hence the need for cash as it's the only way I know of holding the system to account. The only way to withdraw money form the banking system in aggregate.

by iconoclast | 23rd Jun 20, 12:52pm 1592873538

A BBC podcast "The Real Story" discussed the combined impact of Covid-19 and the Black-Lives-Matter movement. And the parallel turmoil around the globe. One panelist addressed both issues in explaining the outcome of the "Truth and Reconciliation Commission" in South Africa. It fixed the Apartheid and race issue at the political level but left the economic power intact in the hands of the financial and economic elite. Suspect the same will happen with the current uprisings. Political change while the power of financial elite will remain the same

by meh | 23rd Jun 20, 12:55pm 1592873721

Don't they go hand in hand? Can you have political power on either side of the coin without the "financial elite"?