China data better than most but still somber; US Fed restricts big banks further; US households spending unsustainable; IMF warns; US COVID cases out of control; UST 10yr yield at 0.64%; oil soft and gold up; NZ$1 = 64.2 USc; TWI-5 = 69.2

China data better than most but still somber; US Fed restricts big banks further; US households spending unsustainable; IMF warns; US COVID cases out of control; UST 10yr yield at 0.64%; oil soft and gold up; NZ$1 = 64.2 USc; TWI-5 = 69.2

Here's our summary of key economic events over the weekend that affect New Zealand, with news we are in a time when 'unchanged' is about the best we can do.

Chinese markets will be back later today after their four day Dragon Boat Festival holiday. They will no doubt be back in a somber mood. In 2019 almost 96 mln people used this public holiday to visit events. But this year things got off to a very slow start with barely 17 mln people turning out on the first day, about half the level Beijing was hoping for.

Part of the restrained enthusiasm may be because of severe flooding in southern China.

Also somber is that Chinese company profits in the January to May period were down about -20%. That was less of a decline than in the January to April period because May profits rose +6% from April. But they were still down -7% year-on-year.

And Chinese unemployment levels fell marginally in May from April, declining from 6% to 5.9%. Even though the locals won't feel this is much of a relief, it is a much better outcome than is happening in the rest of the world.

Not all is well in the Middle Kingdom, obviously, and getting funds out is still a key objective of their wealthy. But one of the ways they move their money out of the country is being threatened with the annexation of Hong Kong into the Beijing security orbit. Via Thailand is becoming the favoured exit now.

In the US, in its annual stress tests, the US Fed said a long economic recession could saddle the country's largest and globally important banks with up to US$700 bln in losses from bad loans. It has told them to restrict dividends and temporarily end share buybacks so that they conserve funding for the coming increases in financial stresses. The price of bank shares fell.

Also falling is the Fed's balance sheet, which shrank for a second straight week as foreign central banks cut their use of currency swaps rather sharply, and American banks reduced their use of Fed repurchase agreements. The reductions seem odd when their economy clearly needs additional support, but maybe it is their way to get the fiscal authorities to act and do their part.

The latest consumer sentiment index rose in June from May but at a generally underwhelming rate and far below expectations. The best gains were in the northeast where the pandemic is under better control. But the rest of the country is clearly increasingly anxious.

And data for personal income in the US is concerning too. It jumped in April on the income support that Congress rushed through. But that support hasn't been followed up and new efforts are mired in partisan gridlock and resisted by Republicans. That has resulted in a very sharp -5% fall in real disposable income in May while at the same time personal spending rose more than +8%. Obviously it can't continue on like this very much longer and there is an economic reckoning coming, and soon. Past lifestyles can't maintained by such a huge mismatch for very long.

And that coming earthquake in consumer demand is getting the attention of equity markets. The S&P500 was down -2.4% on Friday capping a week that got lower as it wore on. The weekend futures trading suggests another -2.2% fall is on the cards when Wall Street re-opens tomorrow.

And the IMF is warning of the risks readers of these reports will have recognised months ago: "The disconnect between financial markets and the real economy can be illustrated by the recent decoupling between the soaring US equity markets and plunging consumer confidence" which they say can only end in tears. Every day, that quicksand quivers more violently.

The latest compilation of COVID-19 data is here. The global tally is more than 10 mln, and the last million added took just a bit more than 30 days. The official record now shows 10,044,731. Global deaths reported now exceed 500,000.

A quarter of all reported cases globally are in the US, which is up a very sharp +85,000 since this time Saturday to 2,531,700. This is now growing faster again than the global rate of infection. US deaths now exceed 125,700. The number of active infections in the US is now up to 1,726,700, up +68,300 since Saturday. And the Centers for Disease Control (CDC) is now saying that they have only been counting about 10% of the actual infections in the US community, maybe less. Tensions and risks are growing as testing centers are overwhelmed. It is an uncontrolled surge that has global implications, and the financial ones may be the least of our worries unless they get on top of it.

In Australia, there have been 7686 cases, another +45 since yesterday and up more than +128 since this time on Friday. Their death count is still at 104 but their recovery rate has slipped back to just on 91%. There are now 589 active cases in Australia (up +31 overnight).

The UST 10yr yield is lower at 0.64% and a -4 bps pullback from Friday as market fears build. Their 2-10 curve is flatter at just under +47 bps. Their 1-5 curve is also flatter at just under +14 bps, while their 3m-10yr curve is down to +52 bps. The Aussie Govt 10yr yield is also down by -2 bps at 0.87%. The China Govt 10yr is down -3 bps at 2.89%. And the NZ Govt 10 yr yield is down -2 bps at 0.94%.

The gold price is marginally firmer, up another +US$9 from Friday to US$1,771/oz.

Oil prices have softened marginally. It is now just over US$38.50/bbl in the US and the Brent price is just over US$41/bbl.

The Kiwi dollar is softer in a minor move down, now just on 64.2 USc. On the cross rates we are slightly firmer at 93.6 AUc and against the euro we are holding at 57.3 euro cents. That means our TWI-5 has held at 69.2.

The bitcoin price has stayed down, and is unchanged at US$9,154. During June this crypto has fallen -4.7%. 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.

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

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

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

121 Comments

Many will not be pleased with this news

Revealed: Impact of the lockdown on the nation's housing market
Revealed: Impact of the lockdown on the nation's housing market
https://nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12343718

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Revealed : Impact ......

'"While the full impact of Covid-19 won't be clear until mortgage deferrals and the wage subsidy scheme come to an end, it seems the housing market has rebounded from the lockdown.'

It is wait and watch as various subsidies and measures have flooded the economy with liquidity and economy as of now is not based on fundamentals but how much and how fast government can print and distribute money.

So one has to wait to know if the party continues or is over.

I am off in a second to pay my tenants a routine visit. I hope the party this weekend is over and all tidy

Hope you gave them the required notice. Does it have to be tidy to your standard?

No notice surprise visit teehee

Hope you don't intend to enter the property.

Oh yeah the nazis would have a field day there

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I hope you are being sarcastic, but even if you are uts pretty disgusting that you find the idea of breaking tenancy law like that so amusing. And people wonder why there's such resentment towards landlords.

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He is basically a troll with a sad little life thinking he is lord.

He boasted on here about not lodging a tenant's bond last year. His behaviour is the kind that brings the whole industry into disrepute and makes it so much harder for conscientious and law-abiding landlords.

I get it with you frazz.. after putting up a patsy question you wait for a response that you can latch onto to then have a go. Baiting isnt it. Pretty cheap shot too. I trust you're happy there in wgtn in your rental as the number of properties available to rent is falling rapidly.

No. Just remember everyone makes mistakes which is why we have laws. I wouldn't be too quick to judgement of him

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Its all about timing and its still too early to call the full effect of the virus on the housing market, however governments around the world are now officially artificially propping up the markets. The question is how long can this go on for ? basically it can go on and on right up to the point the USD collapses then the party is over. At the moment its just ever increasing numbers in a debt machine and there is no end to that, its just numbers spinning relentlessly higher. At some point the people will rise up and declare the emperor has no clothes. Possibly a war or revolution is the only way its going to end.

Yes agree with you Carlos. The system is reliant on further debt creation but without so called aggregate demand to turn that new debt into additional products and services that generate income to pay the additional interest on the new debt....well if we can't do that, and I don't think we will, then that new debt just becomes a bigger burden and the system more likely to fail. Liquidity trap in my view.

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Dead cat bounce, fundamentals don't justify prices, wait another couple of months, predicted drop will come

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NZ Herald and Valocity create new price index which miraculously finds support that the impact of Covid-19 has been minimal.
Interestingly, no detail/methodology is released on the new 'index'.

Wow. Such shock.
An index with no published methodology is an index with absolutely no inferential properties, whatsoever.

The month of July HPI stats will confirm either way then. Hold your fire a little so we can confirm if these are wayward figures from an enemy or more accurate and from a friendly source.

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That's not my point.
It doesn't matter what the REINZ HPI results are. My point is that NZ Herald/Valocity have come out with a new 'index' without disclosing any of the methodology.
For an index to make sense, ya actually have to be able to identify what it is actually measuring - here we have no idea.

Only for sceptics and deniers like yourself nymad. So in a couple of days/weeks the HPi will be available and YOU can double check. "Ready.... aim .... hold fire"

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I wouldn't frame myself that way.
I'm just saying that if you don't know what something is measuring, what use is it?

*EDIT* Sorry, I know what the use is - to bait in the likes of yourself.

I'm watching with amusements the rents plummeting in Auckland...some dreamers still holding out however as their property sits vacant.

Many examples? I doubt it. Demand is actually increasing and if its means higher rents in the future, many people will freak out. The govt (whichever colour) better have their ears to the ground and not think they can rely on covid to do the work of killing housing and rental demand

Well in that case, here's an interesting insight for you. The CJDGI* is down 69.69% this year compared to a year ago.

Note for all "sceptics and deniers" (not you, Houseworks!): CJDGI (Court Jester's Doom & Gloom Index) is a very scientific index which directly measures the predicted house prices based on wishful thinking and other random stuff.

One can picture them testing it....
'Now, will this one paint a reasonably positive picture? Nah, we need to tweak the model a bit this way...'

That's all the economics profession has ever done - why expect better of second-echelon believers?

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At the individual level, what's coming is going to be tragic. That, as a country, we allowed so many people to put themselves in harm's way is an indictment on our economic policies, and was so avoidable and unnecessary. But at the national level, 'what's coming' is the creative destruction that we need. We should have 'held' prices at 2012 levels when we had the chance; and as John key indicated that we should ( until he was told to get us all borrowing again, or else!). But we didn't. We will reap what we have sewn.

"The most common factors that generate highly motivated sellers are divorce, death in the family, job transfer, and financial distress (the big one!). These are people for whom relocating is a higher priority than profiting. They won’t all list their homes below market value, but you would be amazed at what some people are willing to accept after only a few minutes of negotiating. "
https://www.biggerpockets.com/member-blogs/1232/8079-real-estate-investi...

The financial stress portion inflaming the death, divorce, relocation aspects.
Agree that it is going to be massive. When will people get to grips with the ebb and flow of the 8 to 10 year property cycle...

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I'm sure we are going to see plenty of articles trying to keep the housing market afloat for the next 18 months by those with vested interests.

And there will always be some that are fooled into believing it.

I don't think anyone expected a short term drop. Especially the way the RB and government are essentially printing money and propping up anyone and everyone. Until all the "emergency" support runs out, we won't see much of a change in any market, retail spending, sharemarket or anywhere. Of course that is if it ever runs out, which means the government will be directly propping up the markets it chooses. Not impossible and I wouldn't put it past them.

Dalio thinks we could be heading towards a lost decade in the sharemarket - yes a decade. Given Shillers CAPE ratio that wouldn't surprise me. Wouldn't be surprised to see a lost decade (or more) in the housing market here either.

The world of fake news....
What info do we take on board and what to discarde?
I'm sticking with history.
We were at the top of a market and now we will see a drop.
The 2 to 10 year dipped, we will get a recession.
Printing money doesn't work.
Debt always has to be paid back, which will increase interest rates.
Figures stacking up to be worse than 2008 and looking like the Great Depression.
The current FIAT currency is at the end of it life expectancy.
PM's are money, FIAT is paper.

'This time Is different' YEAH RIGHT!!!!!

"Debt always has to be paid back.."

Close to a myth
It only has to be serviced & inflated away
We havent collectively paid back debt since aons ago

But i agree - fiat is going to implode (which historically it always has)

Failed leadership in China will go to extreme to divert attention :

https://www.indiatoday.in/amp/india/story/china-is-attacking-india-becau...

Same applies to US but being democratic country has its checks and balances.

End of year will be important as many countries will run out of distributing free money to one and all besides looming war which may be forced by Chinesses leader to protect himself domestically and to divert attention.

Tis the playbook of tyrants. While many will see it for what is is - a majority will support any action as being patriotic and ignore that nagging feeling that all is not well.

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Goes for any US leader too.

We are entering a period of consequences.

Pity we are entering it in ignorance - self-imposed in many cases - but there you go. It is what it is. Too many of us are headed for a scrap over too little remaining planet. We will fight along racial, religious and cultural lines; every one of us think our lives 'matter'.

UK, also a so called "democracy" fails to apply the checks and balances when US says so - British foreign secretary accused of hypocrisy for praising UN ‘values’ despite UK treatment of Assange

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Meanwhile for those concerned with China flexing its influence . . .
An interesting geopolitical development last week of relevance to New Zealand picked up by some US, UK and Australia media but seemingly not in NZ.
Last week China officially opened an embassy in Kiribati. Australia, NZ and Canada were previously the only countries with embassies.
Also last week were the bitter Kiribati Presidential elections with the central issue being ties to China rather than Taiwan. There were claims of bribery and corruption and foreign (China) influence. The pro-Beijing President was reelected.
Although Kiribati only has a population of 120,000 and consists of scattered atolls totalling 800km2 (equivalent to land area of 20 x 40 km); significantly the islands are spread over an area equivalent to a half that of continental USA giving it an EEZ of ‎over 3,400,000 km2 covering the central and north Pacific.
In the past Australia and NZ – along with the EU - have been the main “aid” donors to Kiribati. Tarawa, the main atoll, is littered with signage recognising NZ’s aid projects ($30million for 2020/21) – persuasive donations.
September last year Kiribati switched recognition from Taiwan (after period of “aid”) to China. In anticipation of this increasing Chinese influence, Winston Peters visited Kiribati in February 2019 during a flag waving Pacific tour – and announcing increased aid - to a number of island nations somewhat neglected by NZ.
Surprisingly TVNZ isn’t giving this more recognition to events in Kiribati as its Pacific reporter Barbara Dreaver was raised on Tarawa.
Of note is that Kiribati (previously the Gilbert islands) had significant past geopolitical importance to NZ. Tarawa was the site of the beheading of 17 New Zealand coast watchers rounded up by the Japanese from throughout the central Pacific during the early stages of WW2.
https://edition.cnn.com/2020/06/26/asia/china-australia-pacific-islands-... - includes an interesting China Central TV video clip.

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I don't know if he should have to 'front'. Questions could be put to the leader.
Has there been any parliamentary questioning? I guess Labour won't want to piss off China.
Sigh.
And no doubt if Muller is asked questions he will just bat them away...

Nothing says 'speak the truth to power' like the media applying heavier scrutiny to an opposition backbencher than the government's own $20b mystery fund that totally isn't a campaign slush-fund, no sir.

Except the media have questioned the $20b slush fund from the day that it was announced and Grant Robertson hasn't been hiding under a rock to avoid the questions.

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Why be surprised. This type of news is just tip of the iceberg. Why blame media or journalist instead of major political party as would not be possible in the first place if not supported and promoted by that political party.

Fact is that China has peneterated NZ politically, economically, socially in all walks of life. NZ like many small countries / islands has been corrupted and sold to China by many politicans besides many in high position /Rich.

Corruption at high places is becoming a way of life in NZ, supporting so called Rock Star Economy

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A Samoan friend told me the other day that their prime minister is selling their soul to China. Apparently a lot of land has been sold.

Not surprised at all, I agree with everything you say. Doesn't make it any less unacceptable. Responsibility lies at the feet of the MPs tip-toeing around it. I'm glad MSM is actually reporting on it.

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Too True - "Corruption is becoming a way of life in NZ"

To rephrase that - "Corruption HAS become a way of life in NZ"

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A vote for National is a vote for the CCP increasing its influence in NZ.

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Please remember that it was Helen Clark that cut the trade deal with China and screamed 'look at me' from the roof tops.
Labour is in bed with China as well.

Yep. But the Nats took it to another level.

That leaves only one party that puts NZ first.

So is a vote for Labour. Just it might be faster under National.

Where is the investigation.

"This is a Labor issue and it needs to be the Labor Party that fixes this issue," Ms McKay said.

Mr Moselmane was suspended from the party on Friday after his properties were raided by federal agents as part of an ASIO investigation into possible Chinese Communist Party influence.

https://www.smh.com.au/topic/chinese-communist-party-influence-1m29

World is taking note of Debt Trap by non other than Ch...

https://en.m.wikipedia.org/wiki/Debt-trap_diplomacy

Wow - yes I have real concerns about the stability of the US. It appears to be coming apart at the seams.

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Printer8. Thanks for bringing this to attention. I've long argued that NZ needs to support Oceania neighbours develop beyond a charity discourse as Oceania becomes a battleground for resources and transit access. When China invested in Fiji's IT and comms infrastructure in the early 2000s no-one thought much of it, perhaps because many Kiwis are so introspective in their international outlook. There's very little international analysis here and certainly not in the so-called mainstream. I guess that's a result of info-tainment..

https://resourceinsights.blogspot.com/2020/06/our-conversation-with-coro...

"The modern environmental movement reintroduced the idea that we humans must align ourselves with the natural world or perish. But much of that movement is now focused on technical fixes such as electric cars designed to enable humans to live pretty much as they have been in the recent past".

Humans are ultimately selfish and are really not interested in the planet, if we were we wouldn't be where we are now. Unless its seen as growth or progress its BAD so anything seen as going backwards or control by the masses is a no go. The outcome is inevitable, don't go beating yourself up on a daily basis trying to prevent it, party on until it all hits the fan.

I don't see this as a human trait per se, I see this as arising from existing vested interests. Discourses (who gets to say what within power relations) are often culturally informed or held to be self-evident without critique. Defeatism simply enables existing discourses to perpetuate - lack of action, is also, an action.

I agree. We need behavioural changes rather than technical ones, otherwise just delay the inevitable and we still end up with the same result.

Meanwhile the Greens crunch tax figures that are way over their heads, instead of concentrating on their main objective.

The Greens are exposing how inept their thinking is...

Actually it's quite strategic as it's a bargaining chip for a coalition deal. National seems to lack any bargaining chips.

Also Paul Goldsmith has been providing a heap of incorrect calculations on the tax as he doesn't understand progressive taxation. He has the same lack of understanding that Simon Bridges had with the 33% tax bracket, and his mathematics knowledge is second only to Steven Joyce. I believe he calculated the wealth tax on $2m as $40k when the first million is only charged at 1% which is $10k. Given this failure any numbers put out by National are suspect, as usual.

Have you got the link? Thanks.

Yep, and he admits responsibility for making the mistake.

"I quite frankly admit I got it wrong ... but when you look at the details in the press statement and all the policy documents it's not clear as to where the threshold came through.

Its great - my respect goes up for a politician who will admit they got it wrong.

Stephen Joyce was basically correct - 'mitigating' a fiscal hole by being completely shithouse at delivering your own policies isn't exactly a sign of a responsible, capable government.

If Labour had built and paid for what they said they would, there would have been a hole.

'basically correct' i.e. completely wrong. His calculations were not backed by a single commentator or economist.

...until after the election:
https://www.newshub.co.nz/home/politics/2019/05/steven-joyce-s-11-7-bill...

"He [Joyce] said what they haven't taken into account are the wage demands or the pay rounds of Labour's old mates... Joyce was right," Garner said, to which Bagrie agreed.

"He is going to be right, technically I think his number of $11.7 billion - the real number is going to be a little bit bigger than that," said Bagrie."

From your article, there is no evidence of a hole, obviously things have changed a little since then...

"But currently, despite wage demands, the Government hasn't been left without cash. While Joyce claimed it's net core Crown debt wouldn't fall below 23.5 percent of GDP by 2022, Treasury is forecasting it will reduce to 19.1 percent of GDP in 2021/2022.

The Government's decision to change the crown debt target also wouldn't come into force until after June 2022 - beyond the period Joyce was referring to when he said there would be an $11.7 billion hole"

Note that Joyce failed to understand the spending over time which turned into a giant screw up. It's as if he raised the issue while having no grasp of how anything works. Yet National try to claim they would manage the country well when they can't even understand a budget, or how taxes work.

They don't need to open their mouth to show that.

We've disagreed in other areas, but I'm interested in how you would enable these behavioural changes. Legislature can be one strategy, but what do you think would be a good way to change people's behaviour?

Remove interest and eliminate debt.

:)

Exactly. Living within our means and borrowing from the future.

A challenge we now have is that if debt doesn't expand, the system breaks and the quality of life we/you currently know, doesn't exist.

Note how Adrian Orr is pleading with retail banks to keep lending as they know if it slows down (debt creation), we head into a very deep recession/depression that would result in mass unemployment, housing market apocalypse, business failure...

So we continue to kick the can down the road and make it 10x worse for the next generation?

We'll put it this way - what do you think if central banks don't save the current system? (and I agree with you by the way..) There will be consequences of allowing the system to fail. You or someone you know would lose their job and not be able to pay rent or their mortgage. They will go through years of financial hardship.

If the current system can't survive without massive central bank manipulation, then it needs to be scrapped and replaced. Its a dilemma for sure and plenty of people will experience hardship but to carry on as would be reckless and unsustainable. A reset is inevitable, the longer we put it off the harder it'll hit

Yes I agree but you'll need to break that news to all the voters out there, and there are many, who will stand to lose significantly from those decisions. They would probably rather have a civil war than agree to a change in economic policy that would impact their wealth.

Well then so be it. We are at the crossroads, either we take a new direction and start over or we carry on down the same old path with the same old result.

Unfortunately that isn't how democracy functions. As daft as it might sound, it may need to run the course and self implode as the wealth owning persons will vote for whatever is required to main status quo and preserve the system and their wealth.

People change behaviors based upon sticks and carrots. What sticks and carrots would you use to change behaviors? And what behaviors do you think would be 'better'?

The most useful behaviour would be to realise that if we continue to draw down on our limited resources, we all cease to exist. Excessive debt allows us to consume more than we can afford and more than we need, accelerating the depletion of resources. I'd start there. Also, at some point, we have to figure out a sustainable carrying capacity for our planet or nature will do it for us through disease, famine or war.

Great - agree! So what sticks and carrots (policies/reforms) do we need to achieve this?

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Not sure. But whacking the middle class with a tax stick whilst the big boys/corporates e.g. AJ Hackett rob the future taxpayer blind aint it. We need a proper reset of the economy. Because endless debt creation was never sustainable

Agree with you on that one..need it now as well

Well keep thinking - because we live in a democratic society and we need policy to create those sticks and carrots (that we each get to vote for) to shape our behaviour. Greens have come out with theirs so if you have ideas down track it would be great to hear them.

I'm fine with having stick and carrots, as long as they are used on everyone fairly and equally

Ok - tell me in policy terms what settings you would have to make things fair and equal?

No more political donations would be a great start

More than half the population earn less than $40k a year, and contributing less than 20% of income tax. In 2019 1.1 million were living on benefits (including superannuation), 400k more civil servants. We are in a situation where the takers are pretty close to outnumbering the net contributors. After that occurs is is only a short distance to being Venezuela. Long term, with progressive technological elimination of jobs it is likely the only way to stop that is linking vote power to net tax pay. No representation without taxation.

Haha are you serious? Removal of voting rights or influence of citizens due to wealth/income would result in complete anarchy and society (as we know it) would collapse. That would be the end of democracy as we know it and would be a very corrupt, unpleasant situation.

So all civil service - including for example nurses teachers and police - are 'takers' rather than contributors? You've got a very narrow view of what 'contributing' looks like.

I like your thinking, but why not keep it one vote per adult, but instead of giving each person one vote free, auction them off in blocks to the highest bidder, like we do with radio spectrum?

No need to keep up pretenses then that govt is there to serve the people.

Yet hourly incomes have been flat since early 70s and the average Joe is working harder than ever..and the net contributors basically sit on their arse every day while their wealth increases.

Interesting trend with Gold at the moment. No matter what happens in other markets it continues to creep towards $1800

https://tradingeconomics.com/commodity/gold

Wait until the Robinhood gamblers get burnt and look for alternative punts.
They are all sitting on their FB chats telling of the money they are making, few posts of WHOOPS and we will see a haisty exit to the next 'big thing'.

Excellent article, thanks.
We need more agreements like Singapore CEP. I would say India too, but we have little they want. Except perhaps our creative knowledge exports and shared experiences of colonialism as part of our international education packages. Two things are clear, NZ needs turn based system and absolutely secure comms. And of course, diversify, diversify, diversify.

"Every day, that quicksand quivers more violently."
Haha. Nice phrase. Alas, I have never seen quicksand quiver!
Not once.

It does when you are thrashing about in it trying to get out!

I have encountered quicksand a lot less than I was led to believe I would as a child

I blame Tarzan. He had an uncanny ability to find it.

The UST 10yr yield is lower at 0.64% and a -4 bps pullback from Friday as market fears build.

ECB's PR-lady says there's no point in letting markets find appropriate bond prices for the eurozone government bonds - it's much better to let the central planners at the ECB ensure artificially boosted bond prices for all, without reflecting actual risk Link

[Fed's] MR. FISHER. In summary, I want to mention that, as I said earlier, most of these variations that have been suggested are very un-Bagehot-like. And what I mean by that is, twisting [or QE] entails purchasing assets that investors are fleeing toward, not assets that they are fleeing from. Link

The fantasy of a V-shaped recovery has evaporated, and expectations for a W or L-shaped recovery are increasingly untenable. So forget V, W and L; the letters that will shape the future are N, P, B: there is No Plan B....All the hopes for recovery were based on a quick return to the economy that existed in late 2019. All the bailouts and stimulus programs were based on this single goal: a quick return to The Old Normal. This was Plan A. For all the reasons that have been laid out over the past six months, The Old Normal is gone for good. As the only plan, the Plan A "solution" was to push destabilizing extremes to new extremes, i.e. doing more of what failed spectacularly and increasing the fragility of precariously fragile systems.

(CH Smith)

Explains the price of gold.

You buy it when you think it's going up and sell it when you think it's going to fall.
Why, is up to anyone who participates.
Most gold buyers don't buy it to use. (We do. We manufacture jewellery and sell it for 3 times the constituent cost - that's where to good money is to be made! Buying it back as scrap just adds to the return). Most people buy it as a hedge against something unknown - or of concern.
The second that disappears or liquidity needs in the 'real world' arrive, gold gets sold. (eg: Like as not if the stock market sheds 10% today, gold will sell off as well.)

The second that disappears or liquidity needs in the 'real world' arrive, gold gets sold.

One thing we do know is that gold is leaving the custody of the Bank of England again. It is a pretty reliable signal that commercial banks are using the metal for other means. What other means? Collateral as last resort. Link

Even sovereign nations acting on behalf of their $ impoverished domestic banks.

Where dose the money exiting the stock market go....
Not into bank accounts at no return or a loss.
Not into property at the top of a cycle.
A decrease creates a buy opportunity for gold and it will behave like it always has done. Drop at the start but bounce back hard till it gets to a close value ratio to the stock market then it will be sold again and stocks will increase.
This isn't reinventing he wheel, it is just part of the revolution cycle.

Not a sign of wellness.

Power Play - The country's isolation and quarantine system isn't broken according to a new review but the litany of failures uncovered at the border shows it's anything but watertight.

https://www.rnz.co.nz/news/political/420042/managed-isolation-a-system-i...

But if the system ain't broke, then why are so many people trying to fix it?

She said the former system had worked in terms of stopping the spread of the coronavirus in the community.

https://www.odt.co.nz/star-news/star-national/nz-isolation-process-syste...

https://i.stuff.co.nz/technology/121959937/heres-why-dropping-contact-tr...

When NZ COVID Tracer was finally revealed, given its similarities to Rippl and other QR code apps, there was – to put it mildly – frustration from the private technology sector. Software developers at home during lockdown had been willing and ready to help, but had been shut out of the ministry's process.

https://i.stuff.co.nz/national/politics/opinion/121968524/why-nz-risks-b...

[Without an open border] we could find ourselves in a comfortable national quarantine of our own making, too scared to re-engage with the rest of the world for fear of losing the war against Covid, which could turn out to be a pyrrhic victory anyway.

Honestly, I don't believe in China's data at all, especially given Xi has disappeared from the media again. Since the beginning of Covid19, he would only surface when something "good" happens.

The fake because...

She said New Zealanders should have confidence in the government's response because it had "adjusted our settings every step of the way based on what we've learnt, based on what we know is working and based on what needs to be done. So while there is no playbook, we have been very agile."

https://www.rnz.co.nz/news/political/420064/prime-minister-jacinda-arder...

This is like the linguistic tricks used last week,
https://www.odt.co.nz/news/politics/pm-backs-clark-keep-job

This was tricky, as everyone saw the video and most caught the duppers delight. So no talking of the actual, all talk of the imaginary.

Ms Ardern said Dr Clark was on the same page as Director-General of Health Ashley Bloomfield.
It comes after Dr Clark was accused of throwing Director-General of Health Ashley Bloomfield under a bus.
Asked if she Dr Clark would keep his job at least until the election, she confirmed he would.
She said he had been part of a team which had successfully fought Covid-19.
He and Dr Bloomfield had the "same perspective" on Covid-19 and Dr Clark had huge respect for him. "He is an exceptional public servant.
"I know that Dr Clark feels that way to."

It was not Dr Clark's intention to throw him under the bus.

The talk of Clark's feelings and intentions, opposite to his actions and the reactions of Dr B. - classic mind reading. Very wooden.

In terms of empirical evidence, she is running the tank on empty.

"What we've learned" always seems to be the result of earned wisdom, and never the media asking questions or the opposition pointing out the gap between what we're being told and what is happening. Look at the intense push-back of one claim of Woodhouse's (the homeless dude everyone wants to be real anyway) vs. all the actual documented issues that National raised this week. The one thing they know is wrong is strongly refuted and ridiculed. The stuff *they* got wrong is just wrapped up as part of an 'agile response' that proves how great they are.

It's double-speak, pure and simple. The opposition gets things wrong and lies outright, while we're 'constantly and improving our processes'.

"The opposition gets things wrong and lies outright, while we're 'constantly and improving our processes'." That's about right - heard Goldsmiths, and Woodhouse's interviews today?

Sky news report with further imagines.
https://youtu.be/8De0PaquC5A

And yet no community transmission - this must really bug you Henry?

The US$ is , according to some , going to tank and lose as much as 35% of its value against other currencies .

"...the last million added took just a bit more than 30 days"

Huh? The JH data shows we were at 8.96M on the 21st, just 8 days ago.