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US inflation disappears - sort of; US banks brace for much bigger run of defaults; aircraft industry shrinks; China trade rises; Aussie rebound weak; UST 10yr yield at 0.61%; oil and gold unchanged; NZ$1 = 65.3 USc; TWI-5 = 69.7

US inflation disappears - sort of; US banks brace for much bigger run of defaults; aircraft industry shrinks; China trade rises; Aussie rebound weak; UST 10yr yield at 0.61%; oil and gold unchanged; NZ$1 = 65.3 USc; TWI-5 = 69.7

Here's our summary of key economic events overnight that affect New Zealand, with news things seem to be on the 'up' economically in China, but not elsewhere.

But first, inflation in the US has virtually disappeared. In their June update however there have been some key shifts, with food prices up +4.5% over the year, rents are up +2.4%, medical costs up +6.0%, but petrol prices declining -23%.

American retail sales rose +3% last week from the prior week although they are still -5.5% below the equivalent week a year ago. Still, that is the first time in a while where the week-on-week trend isn't lower.

The US earnings reporting season has started with reports from three major banks. They provisioned almost US$28 bln for bad loans in the June quarter, a mark only surpassed by the last three months of 2008, during the depths of the GFC. The total was higher than analysts had expected, with all three lenders saying their economic outlook had deteriorated as the pandemic continues to rage through the US. They are all bracing for a coming wave of defaults by companies. And in about two weeks the roll-off of additional crisis support in unemployment cheques will start, triggering new pressures on households. In addition, 'hero pay' boosts for essential workers are now disappearing.

Boeing only sold ten aircraft in June and lost another 183 from its order book, highlighting how the manufacturing sector is shrinking in the US. Airbus delivered 36 new aircraft and had 298 cancellations. Further, another major airline, Delta, has 'shifted' 15,000 employees into 'early retirement'.

China's merchandise trade surplus fell in June and by more than expected. But for the rest of the world, the signals are relatively positive. Their exports were expected to fall -1.5% year-on-year, but in fact they rose +0.5%. While that was encouraging for them, for suppliers to China their import data was even more encouraging. Imports were expected to fall -10% but actually rose +2.7% year-on-year. China is supplying some impetus to world trade at present. Their overall surplus fell from +US$63 bln in May to +US$46 bln in June. For New Zealand, they recorded a growing deficit with us of US$945 mln in the month (a surplus for us). But with the US, China's trade surplus actually rose to +$10.4 bln in the month (from +US$9.3 bln in May) as Americans just can't stop buying from their arch-rival.

And the growing trade is extending into July. Total cargo throughput in China's eight major coastal ports increased more than +12% in the first ten days of July from the same period last year, boosted by strong imports of commodities including crude oil and iron ore.

While Australian business confidence rebounded in June, continuing the improvement from May, the current levels are still negative and have risen to levels that are still very weak. And the re-emergence of pandemic risks isn't particularly encouraging for July.

Wall Street is currently up +0.6% after a shaky start. Yesterday Shanghai (-0.8%), Hong Kong (-1.1%) and Tokyo (-0.9%) all fell. Overnight European markets were all lower by almost -1%. And yesterday the ASX200 was down -0.6%. Only the NZX50 managed a gain (+0.5%) which seems to have been repeated on Wall Street today.

The latest compilation of COVID-19 data is here. The global tally is 13,165,700 and that is up +181,000 since this time yesterday. Global deaths reported now exceed 575,000 (+5,000).

A quarter of all reported cases globally are in the US, which is up +63,500 overnight to 3,507,600. US deaths now exceed 139,000. The number of active infections in the US is now up +32,000 to 1,803,400.

In Australia, there have now been 10,251 cases reported, another +271 since this time yesterday, and still concentrated in Victoria and NSW. Their death count is unchanged at 108 but 27 people are now in ICU (+9). Their recovery rate has slipped back further to 76%. There are now 2308 active cases in Australia (up +205 in a day).

The UST 10yr yield is -3 bps lower at 0.61%. Their 2-10 curve is flatter at +45 bps. Their 1-5 curve is also flatter at +12 bps, and their 3m-10yr curve down to +49 bps. The Aussie Govt 10yr yield is down -1 bp to under 0.90%. The China Govt 10yr is marginally softer too, down -2 bps at 3.13%. And the NZ Govt 10 yr yield is down -4 bps at 0.94%.

The gold price is holding at US$1,809/oz.

Oil prices are holding if marginally lower today. They are now just under US$40.50/bbl in the US and the international price is just under US$43/bbl.

But the Kiwi dollar is almost -½c lower at just on 65.3 USc. We are more than -½c lower at 93.6 AUc. Against the euro we are down -½c as well at 57.3 euro cents. That means our TWI-5 has fallen to 69.7.

The bitcoin price is also softer at US$9,254, a -½% dip. 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 ».

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123 Comments

Why are we so low against the AUD when we have Elimination and a better economy?

21
up

Because the NZD is a mouses fart in a cathedral?

Better economy? Didn't NZ shut down for a month?

11
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I once heard a mouse fart in a cathedral and with the quietness, good high ceiling acoustics and lack of curtains, it ended up similar to a lions one.

Lions only fart when they are sedated or about to fall asleep.

Look it up. Nice irony.

That just reminded me of the 'woof' of a good size boar let's out when the dogs have just found him in his bed and the tingling fear and adrenalin that flows in your body as you know you will be in a huge fight any second.

A huge fair fight.... with three pig dogs, a shotgun and a knife. You guys are looked at by the general public as nothing more than bullying, cruel, egotistical, weaklings who have to prove what a man you are. The damage that the dogs do to the poor pigs is disgusting and would be banned in any civilised country. The future will question what type of person we had in NZ.... What sort of person got off on this cruelty?

So what are you doing for conservation? Other than bullying someone who is actually on the ground doing it?

Dogs that go in a pack to tear bits off a pig as it fights for its life is pretty gruesome. And the dogs often come off second best. If you deliberately put your dog onto another animal in the same way it would be jail time for you. Pig hunting without that level of cruelty is fine, and necessary.

How about we just poison them. It takes days for them to die in extrem pain. The people that advocate poison should be made to sit down and watch it first hand and see how that feels. Who is cruel, not me mate.
Do you think twice when selecting your meat at a supermarket that it was once living? I do as I know that what that animal went through in it's lifetime on the farm and the slaughter was exactally a fun existence.

You have stated before you are also a hunter, but I am having my doubts you are?
The easiest death a wild animal could hope for is a quick kill by a skilled hunter. Dogs holding a pig by its ears tail and nuts is unnecessary cruelty. As for poisoning we agree, and I oppose 1080 on the grounds of cruelty having seen the area around the carcasses of 1080ed deer where they have been obviously thrashing around as they die.

You have no idea my friend. Hunting with dogs is still the preferred and most effective control method for pigs. https://www.bionet.nz/assets/Uploads/A10-Feral-Pigs-minr-revisions-2020.pdf

Ok, genuine question to all the conversationalist pig hunters. Would you like NZ to be completely pig free?

From sensitive, native ecosystems? Yes. Although, I find humans far more damaging to the environment

That is not a possibility at present, so it is a waste of time thinking about it. How do you propose to control pig numbers other than poison that is a by far worse death than hunting? Do we just get the pig numbers explode and the farmers go bankrupt on any areas with bush that would see your meat prices go sky high? I bet you would be against that.

FB. Question. You are a wild animal in the bush living your life. It is not an option that you live in peace and die of old age due to the destruction that you cause. Would you rather pit your knowledge and skills against a hunter or ingest poison in something you ate? With the hunting option you could grow old and live your life if you are good and lucky, with the poison option you have very little chance of living till old age. Your call, one or the other.
You will not reply though and try silence to sweep it under the carpet.

I hunt with bailing dogs that do not bite the pigs. They contain it untill I am there and then hold it and I either despatch it with a knife or shoot it if it is big.
To shoot pigs in the bush they need to be in prolific numbers and they are already out of control. It may sound easy to shoot them but that could not be further from the truth.

Thank you Youngdumb. They eat meat but dont like the thought of an animal dying. Somehow they think that hunters are blood thirsty and that is what makes them tick. The truth is very far from that.

They pay for someone else to kill it then call us cruel. Cowardly

And donate away to add poison them and get a warm fuzzy feeling inside that they are doing good but do not think for a second of the slow death in mass that they created.

I love meat, and have earned a living both killing and processing animals in as humane way as practical. But you can't deny the cruelty of poison or a pack of holders on a pig. Respect to kezza for only using bailers.

Poison or dogs. Pick one if it was you on the receiving end. I know I would take my skills against dogs over poison any day.

"as practical" - how long's a piece of string??

I guess it's a question of empathy for the animal. The more you have, the more lengths you will go to to make it a "comfortable" death.

Thats the nature of wild animal/pest control. So many environmental variables make it a difficult proposition.

Mate, as I've said before, I feel bad about cutting a head of broccoli. Poor bugga sitt8ngvthere growing well I come along and cut all that effort off.
FB saying I'm a blood thirsty killer is far from the truth but it is the Green narrative that they love to spout off.

That old conservation chestnut. So, you kill because your are conversationalists, not because you love the feeling and buzz of the kill? Sure...

And you keep donating to 'conservation' to allow them to poison them inflicting a long slow agonising death over days and get a warm fuzzy feeling that you are doing good. Stunning stuff.

Stick to your armchair conservation mate. Easier to reach your latte

So, besides enjoying killing things and because you are such a dedicated conversationalist, what other conservation efforts are you undertaking? Or is killing things for fun coincidentally your only contribution?

I'm actually employed in conservation. What's your contribution, other than berating those putting in the work?

I am an astronaut. It is so good that nobody lies on here and we all tell the truth about what we do in real life isn't it?

Well at least we know one thing for certain, you have no idea how it works at the coal face.

That is outstanding FB.

We could just poison them and they can experience the slow agonizing death that occurs but that is out in the back blocks and no one sees that and we can all think that we are doing a great job and being so ethical. Maybe we could just have a talk with them and ask them not to destroy the farm land that the farmers need to produce their product or they go bankrupt, forcing more hardship on the country.
I eat meat and you most likely do as well. My view is that if you eat meat you should be able to deal with the coal face reality of that.

It is obvious from your initial comment that you get a kick out of it. That is a sickness in my opinion.

Actually no that is your perception. I am really scared about the dogs, myself and my ability to handle the situation. I have very real remorse for that animal once it is over. Do you spare a second to think of the animal when you stop to pick up a meat pack in the supermarket? No you dont give a second of thought what so ever except that you got the best deal possible. I feel bad about cutting a head of broccoli off but I'm the blood thirsty one here.

Almoat all animals in nature die by being ripped apart by predators or scavengers.

Great argument. I didn't actually think of that. All good then. Maybe use a chainsaw on the pig next time. More fun.

Hope you're a vegan, otherwise you're a massive hypocrite

You have zero clue about this subject other than what you have been fed but know it all. I know a lot of hunters and none of them actually get a buzz from killing.
I dont know what you do in your spare time, I am willing to bet that it involves an area that has had habitat destruction for your enjoyment.

I also know A LOT of hunters. Several in my extended family. They absolutely LOVE the kill. Their eyes light up when they talk about it.

Stick with your warm fuzzy slow, painful death that takes days with poison, feeling, but that death is out of sight and mind with you.

Poison and the use of vicious pig dogs should be banned. Only professional hunters or genuine conversationalist amateurs, who are interviewed and certified as sane, respectful of animals, not psychotic killers and who do not get a warped thrill out of the kill should be utilised. All hunters must wear body cams at all times during the hunt. Anyone who gets a thrill out of killing a defenceless animal needs to be prosecuted and on a list that is accessible by 'normal' members of the public.

I am keen. We can start with locking up National, Labour the Greens, then move to DoC, Forest & bird and the poison pushers that fund them.

Should change your screen name to Redtape Man

@ Foreign Buyer .............FYI , feral pigs are vermin .

That wild youngsters hunt them as a bloodsport is not "uncivilised" as you suggest , man has hunted for food since the start of the human race

Where would NZ be now if pig hunting didnt happen?
No where, farmers would not been able to farm. NZ would have dwindled and died export wise from being over run from pigs. They are happy with the fruits of Kiwi hunters labour but heaven forbid that we talk about it.
Question what is New Zealands oldest sport? Pig hunting. It is more Kiwi than L&P and pavlova and it enabled you to be sitting in NZ earning a living.

What colour is your cape?

It's a lot greener than DoC's.

What was the smell like, Uninterested - did the congregation runout of the church thinking god had a negative reaction.

Both mice and cathedrals are introduced to NZ. Could you please come up with imagery that is more inclusive ?

Slight digression from original question.

Try responding to the rebuttal then.....

Probably most things are introduced to NZ, @paashaas!

14
up

https://wolfstreet.com/2020/07/14/delta-issues-mother-of-all-earnings-re...
GaiusMarius
Even with this absolutely disastrous report, DAL is only down 2%. Boeing, after reporting 78% fewer deliveries than this quarter last year is actually up 1.2% today.

This stock market is absolutely out of its mind.
some 2 Million new retail brokerage accounts have so far been created in 2020 in the US.

John Authers
Just how well is Elon Musk’s electronic vehicle company Tesla Inc. doing? It is just over a decade since it went public, on June 30, 2010. Anyone who put $100 into the MSCI World Autos index at that point would now have $177; and anyone who put the same amount into Tesla would have $6,482.
Another important factor boosting Tesla is that so many are betting against it. Total money “shorted” is now above $20 billion, the first time any company has suffered such heavy speculation against it. As Tesla doesn’t have a large outstanding float, this means that shorts capitulating and buying back stock help to push the price up further. Some even happily buy the stock on the basis that they can lend it to short-sellers at huge rates of interest.

Yes Boeing is an example of the market that is just nuts! Although a big part of their business, and not the biggest, is their military sales, this cannot and will not be sustainable. Under the current economic models the US Government debt is out of this world, and Boeing is one of the companies they cannot allow to fail, as their military is to reliant on it's products. Having said that there is no way it's current share price reflects it's actual value.

Tesla releases short shorts (clearly a piss take for all those with short positions against their stock):

https://shop.tesla.com/product/tesla-short-shorts

Teslas daily trading volume is now 5x that of the entire ASX daily trading volume.

Staggering.

The Delta Airline piece gives perhaps gives us a clue as to what's coming, everywhere. White-Collar, Middle management jobs are at the front line of redundancy.

"(businesses) that can encourage more senior people to leave could have generally lower labor costs as they brace for a slow rebound."

'Breakfast briefing: A wave of defaults coming'

Still asset class is all time High.....Funny but True.

29
up

As I've noted before, I'm sure you've seen someone go bankrupt?
If not, my observation is that when the person about to go belly-up realises the game is up, they spend like crazy! Run all the credit cards up to the max and buy that E-Type Jag they always wanted on credit.
All because - it doesn't matter anymore. Going broke for $10,000 is the same as going broke for $10,000,000.
And that appears to be where the markets and economies are right now. Buying that Jag.....

And hiding money too...

#bw , its an interesting observation , but I have seen caution being thrown to the wind too, when folk are in trouble .

I wonder if research has been done on the topic , and whether empirical evidence exists to support what we see ?

I've seen it as well. They only want cash for their untraceable goods.

At least we know Collins will look after landlords
https://www.rnz.co.nz/news/national/392577/judith-collins-takes-legal-ac...

11
up

The bigger question is where she would take us

https://thefederal.com/international/beijings-claims-to-offshore-resourc...

We need to keep ou eye on the ball. Journalism in NZ has been throw a bone and it's not smart enough to do anything but chew on it. But the bigger picture is one of a pending scrap over 'what's left' in planetary-resource terms. There is no other game in town, even if the mainstream narrative is still 'growth is possible forever'. There isn't enough for China to get to US consumption levels, even if the US collapses. And India was too late, too later.

But we are so behind the 8-ball that a Party though Brownlee was a viable offering. Sad reflection sapience-wise.

have you seen this Weinstein clip?

https://www.youtube.com/watch?v=XbKXeVOUQYY

"Every graph tells the same story"

"They provisioned almost US$28 bln for bad loans in the June quarter, a mark only surpassed by the last three months of 2008, during the depths of the GFC. The total was higher than analysts had expected, with all three lenders saying their economic outlook had deteriorated as the pandemic continues to rage through the US"
Prepare for the worst and hope for the best...
I am hopeful that the number of coronavirus deaths is dropping off and those who have caught the illness are recovering

12
up

Why are you hopeful..based on what...religion?

The number of serious cases being one point one eight percent of total current cases. I dont believe in the tooth fairy or little green men

House. There are articials that show that numbers are dropping off and articials that show the US hospitals in some States are close to saturation point. In this world of media that is a minefield of fiction and nonfiction, I'm sticking with the hospitials version of events as they are on the coal face. With the way that the US is handling this, it is going to get a hell of a lot worse.
In here from the very start we have gone over this weekly that it is not as bad as expected but it continues to rage away unabated despite that.

Do you realise that you are stuck in a mantra ?

"from the very start we have gone over this weekly"

Kezza you have to adapt and move with the play

This is like your call on the NZ / OZZY bubble in a couple of months (6 or so weeks ago). As I said there was no chance, Ozzy wasn't doing enough to counter it and they didnt have not under control. From what I had read about the transition of the virus, there was very little chance logically that it would happen.
You've stuck with your mantra and I've stuck with mine and time has confirmed which theory was correct.

There is little to no AU interest in an NZ-AU bubble. It is an NZ figment aimed at the local audience particularly the "open the NZ borders" cabal - you know who they are

"You've stuck with your mantra"

Read my 8.48am post (which you commented on) again and you might want to reword your above post. Enjoy.

You know exactally what I'm getting at House.
Take these 10 words from here add them to this and read between the lines, this is sounding like a bible study class.

You're worse than impossible.

Most likely as much of a hard, no nonsense meathead as yourself, I would say. No offence intended.

That stat has been a joke since Brazil India and S America figs exploded

The people are dancing. The people are laughing. The crusher will crush NZ.

10
up

Dancing is a little difficult with zimmer-frames

Collins is younger than you.

Doesn't look it.

And I wouldn't health-insure Brownlee.

I would think he is uninsurable. If he was then then his penalty increases would be very high.

1.8 mill active cases in the USA and steadily rising. It is dire. Our elderly former neighbours in NJ have now resumed, after three months virtual isolation, family interconnection, grandchildren because that is part of the fabric of their life. Their decision puts them in harms way and is hardly unique amongst the populace nationwide. The danger is worsening, rapidly.

19
up

Exactly and do the math 1.8mil is a tiny fraction of the 330mil population. Even if 10x this actually have it then that's still tiny. The potential is for this to get 10x worse for them still exists. There is a threshold at which point you have lost any possibility of bringing it under control and the USA is probably past it.

The psychology of fear is a co-traveler.

I have no doubt the pollies will be playing the fear flute... "follow me little children, aunty J.. will look after you"

Hope not HW. NZ is small and a little news goes far. CV19 has been controlled and contained through the early, most critical stage. Despite some admin slip ups and the inevitable fools on the loose, our country has done very well. To start politicising the status quo would be a very negative action by any party, inexcusable in fact.

....any how many infected people have actually passed on. These infected stats are getting really tiresome. Its just something else the press wants to scare us with. They really are profiteers of bad news.

But first, inflation in the US has virtually disappeared.

Hmmmm. - outright annual deflation disappeared to be replaced with disinflation for the month of June.

It's called negative growth - feels better

Where is that inflation when there has been significant central bank QE money printing?

Foreigners are dumping their Treasuries! The Fed is monetizing the debt! The federal government has gone insane! Mass fiscal hysteria!

Yet, yields on these things are comfortably within sight of their record lows as prices have never been higher. Supply is very obviously off-the-charts, but so, too, must be demand. Every time we hear about “too many” Treasuries the market yet again proves it nothing more than fallacy, a myth that just won’t die.

The demand comes first. That’s the thing. So long as it does, supply can’t be an issue.

In other words, the federal government’s fiscal insanity is a secondary (if not tertiary) factor in all this. What governs the whole dynamic is that demand for the safest, most liquid instruments. And if you stop and think about it, truly and honestly think about it, then supply makes sense, too.

Why has the federal government gone crazy in the first place? To try to combat the very problem that has supercharged demand for its debt. Rather than being inconsistent or contradictory, supply and demand are, in this way, perfectly complementary. Link

Who is doing all the buying?

The average Ken and Barbie playing Robinhood (US). They are deep in a utopia of 'we cannot loose, the Fed will not let this fail, free money for all'. They are going to be the ones holding the baby when the music stops. Very much like what was happening before the Great Depression but much worse because people had the ability to dig deep, suck it up and keep going in those days. The little Johnnie's and Sara's will still want their latest iPhone and avo smash followed by a double espresso half vanilla swirl with Himalayan yack milk.

You are suggesting it is main street doing the buying

I don't know who you mean by 'main street'. Average Joe is in there betting up a storm while the big boys who can exit cash out.

That doesn't really answer the question
BNZ, UBS, Morgans, Westpac
Those Syndicate Launches look like turnkey operations

Are they staging-posts to get the money into the hands of Main Street, or a 2 week $million turnkey to the Central Banks

I believe they monetise the debt by writing up both sides of the balance sheet - government gets the deposits (bank liabilities), banks get the bond assets (government liabilities), Thereafter, banks can swap the bonds for RBNZ reserves and parcel out the bonds to those wishing to buy them.

Nontheless, there is a consistent up trend of large US banks retaining pristine UST collateral for liquidity provisioning.

10
up

Australia are now a mess because two private security guards got in a hot tub with returnees in a managed isolation in victoria
the NSW premier has stated that they will not lockdown this time and they will have to live with covid, their new cluster (30 people) has already been linked to the Victoria outbreak, so now she is facing anger from locals for not closing the border earlier.
Victoria is looking at moving to stage 4 lockdown
SA are now not going to open there border and Queensland is starting to ban certain areas of NSW having just opened the border. i expect Queensland to close the border to NSW again in the coming weeks
WA will not open the border at all
no travel bubble with Australia this year because of the infighting and different strategies, elimination against control.
the NRL will flee shortly to Queensland as NSW turns into another Victoria
its time the rest of Australia cut off NSW and VIC and go it alone so they can open safely with each other and NZ

Australian states cant make their minds up whether they should be closing down or learning to adapt. As for the travel bubble I was one of the first to promote it, I realise now that local demand is much stronger than expected which makes the travel bubble an old story.

that has been a sore point with many of us kiwis that like to travel locally, we got treated as cream and the tourists were treated as the bread and butter of most operations so the price points were set wrong.
case and point this operation has now had to take on more staff because they have priced for locals, the ski fields are the same lowered priced and locals are flocking there
Queenstown is now getting people from all over NZ because the pricing has dropped
https://www.stuff.co.nz/travel/back-your-backyard/121651419/wildwire-wan...

Will we get a slow down of Kiwis traveling due to the lack of available holidays and an ever decreasing liquidity of money? It's a bit of a 'let's do our bit and goo on holiday's at present but that could take a decisive turn to 'look after number one' and 'I've used up all my holidays'.

A good bit of insight cheers sharetrader

The US earnings reporting season has started with reports from three major banks. They provisioned almost US$28 bln for bad loans in the June quarter, a mark only surpassed by the last three months of 2008, during the depths of the GFC.

The war on banks is entering the final phase.

Gosbank is taking over. Link

But there is no intention of starving China into submission.
China Books Record Deal for U.S. Corn, Stepping Up Buying

News coming out of China is that their corn stockpiles are mouldy.

https://www.reuters.com/article/us-china-corn-stockpiles-quality/chinas-...

There is also immense flooding of the Yangtze and it looks like it could affect their domestic food production badly.

Starve China in submission?
That would risk starting a war!

The significant changes in law put in place by the CCP, which materially alters the rights of Hong Kong citizens, would give all nations cause to review their dealings with Hong Kong. A reasonable person might expect that changes could come from that. It would be the prerogative of all nations to act as they see fit and, while a number have, only Trump as an individual gets a mention here. With regard to your statement "Trump Ends Hong Kong’s Special Status With U.S. to Punish China", are we to assume that you are aware that this is the decision of one person alone? and that, in fact, it was as punishment out of spite rather than a considered response to their actions in depleting the rights of yet another group of non compliant citizens?. Or maybe you have simply taken the opportunity to express a view you hold. If so, could you please advise for clarity whether your motivation is pro CCP or anti Trump?

The UK should be re-evaluating their entering into the 1997 agreement with Mainland China that they won't enforce, or unwilling to enforce, or unable to enforce. They have been played

The history of the Chinese Communist Party, which next year will turn 100, is the story of China’s long attempt to become more Western, or at least it was this story until a few years ago.

https://asiatimes.com/2020/07/chinas-broken-bridge-to-western-ideals/

I know from my Corporate Banking days , a wave of defaults will lead the banks to scramble to "reschedule " loans for longer terms and re - fund the loan with cheaper funding capital if they can so that it protects their Balance sheets and ratios , and keeps the Registrar of Banks from having sleepless nights

Quite often it just leads to can - kicking, but the kicker runs out of road or energy eventually , and reality bites

Of course , while provisions for impairments have TAX benefits , the sting in the tail is that it usually affects the executive Bonus pool

GOTCHA !

All those articles saying the " Oracle of Omaha ' was too old , lost the plot , losing his marbles , senile , suggesting he was not moving with the times , etc , should read the DELTA AIRLINES link posted by andrewj

He was wise to have exited all his airline holdings, even at a loss , the man remains a genius .

Never under-estimate the stored wisdom of older folk who have been knocked around in life and seen it all before .

We tend to err on the side of caution , but we understand risk far better than a 20 or 30-something year -old.

Funny you say that Boatman as it appears to mostly be older folk on here trying to talk younger folk into housing investment - which given pricing, may the opposite of erring on the side of caution. Interesting how confirmation, hindsight and recency bias can distort ones ability to have effective paradigms to process data or interpret situations eh?

True, but anyone who has read Porter knows that Airline's are not an attractive industry to enter. Look at Australia recently. The US for years, Pan Am? Where are they now?

Its a miniscule short distance from ZERO inflation to ZERO deflation .

Like a seesaw with both sides in the air , it could go either way .

My bet is it will go the wrong way

Inflate there debt away or make it harder to pay off?
We know which way they will be fighting hard for.
Helicopter money as a last resort. If the election looks close, Jacinda will be dangling that carrot well and truly.

This is what USA unemployment is doing to their mortgage delinquency rate: it is highest since 1999
https://wolfstreet.com/2020/07/14/it-starts-mortgage-delinquencies-sudde...

Gee - this could just be the start of it.

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Days to the General Election: 38
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